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Nov. 27. 1886.
But how could there be such a duty towards the plain the original registration, unless there has been a re-registration tiff in any legal sense ?
within five years before the execution of the conveyance (2 & 3 Vict. The question that at once arises is, why is the plaintiff to be c. 11, s. 4; 18 Vict. c. 15, s. 6; ante, p. 58). But 1 & 2 Vict. c. 110 affected by the knowledge of the first agent, the policy not having did not repeal the earlier statutes, and, where a judgment was not been effected by such agent but by another? It is quite obvious, registered, purchasers remained liable to the old law, so that the as it seems to us, that there is need of some further reason than creditor was entitled in such a case to enforce such rights as he that which governs the case where it is the agent through whom would have had before the Act of 1 & 2 Vict., either by docketing the policy in question has been effected who has been guilty of the his judgment or by affecting the purchaser with notice (ante, p. 25). concealment, for the reasons there given will not apply: What is By 2 & 3 Vict. c. 11, however, the dockets were closed, and by the the principle suggested by the judgments of the majority ? It effect of 18 Vict. c. 15, s. 4, judgments entered up before 1 & 2 appears to be that of general expediency; that it is expedient, Vict. c. 110 were required to be registered in order to affect having regard to the general results, that insurers should stand in purchasers (ante, p. 58). no better position by reason of the concealment from them by their servants or agents of material facts which, in the ordinary course Vict. c. 82, s. 2, from the operation of 1 & 2 Vict. c. 110, unless
Purchasers with notice of judgments were protected by 3 & 4 of business ought to be, and would be, communicated. We can, and until such judgments were registered under section 19 of the to some extent, understand the application of this view to servants last-mentioned Act; but they remained liable to the old law until like the captain of the ship or general agents, but it seems to us 18 Vict. c. 15 protected them in that respect also. They were going rather far to extend it to an agent employed casually for also protected by 18 Vict. c. 15, §. 5, from the new law, where the the one particular purpose of effecting an insurance on a particular judgment, though registered under 1 & 2 Vict. c. 110, s. 19, had ship on a particular occasion. There is a vast difference between not been re-registered under 2 & 3 Vict. c. 11 within five years the position of an agent or servant who is employed to conduct a before the conveyance, though there may be some doubt whether business in general or generally to conduct a particular branch of the protection so given extended to the remedies under the old law it, such as the affairs of a particular ship, and a person employed to (ante, p. 58). effect one particular contract. We can understand that it may
be expedient, having regard to the ordinary probabilities of business | 1 & 2 Vict. c. 110 by 2 & 3 Vict. c. 11, s. 5, but in such terms as
Purchasers without notice were protected from the operation of and the general effect, to impute the knowledge of a captain to his to leave them still liable to such rights as were enforceable under owner, as in Gladstone v. King (1 M. & S. 35), but it does not the old law upon a docketed judgment (ante, p. 58). It has been seem to us to follow that it is so necessary from the
expediency of often pointed out (see Dart
. V. & P., 5th ed., 456) that want of the thing to impute to the insurer the knowledge of anybody he notice is very difficult to prove, and cannot in practice be safely 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 Effect of contract for sale.—The rules above stated fix the insurers by their employés, in order to put them in a better position rights of the parties as to judgments prior to a contract of sale. But to insure, of which it would be inequitable, under the circum- when A. has contracted to sell lands to B., the latter has become stances, that they should take advantage, and also the possibility in equity the owner of the lands; and it follows, from the princiof pretended ignorance which it would be impossible to disprove, ples laid down above (pp. 4, 42), that a creditor, under any judgment but in cases similar to that which we are discussing we do not coe entered up after the date of the contract, can have no rights en. that the same risk arises. It seems to us very arguable that it forceable against the beneficial interest in the lands sold, for it has was, as it were, a mere accident that the plaintiff had previously ceased to belong to the judgment debtor. But (ante, p. 4) if B. tried to effect a policy through a broker who happened to obtain has notice of such a judgment, he cannot safely pay his purchaseknowledge of a particular fact
, and when that broker's employ- money to A., or, as it is sometimes put, the creditor has a lien upon ment terminated it was, for this purpose, as if it had never
been; the unpaid purchase-money, though he cannot take the land itself and that it is stretching the doctrine of concealment to a most (see Dart. V. & P. 472). Moreover, where a judgment, though unreasonable length to impute to the insurer the knowledge of entered up before, is not registered until after a contract of sale, sich an agent so as to avoid a contract which was honestly section 19 of 1 & 2 Vict. c. 110 deprives the creditor of the benefit effected
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. CONCERNING SEARCHES.
23 8. 24 Vict. c. 38.—This Act, which was passed for the benefit (XVI.) JUDGMENTS.
of purchasers and mortgagees, and does not affect the rights and II. THE MODERN LAW OF JUDGMENTS (continued).
liabilities as between a judgment creditor and the debtor himself,
applies to judgments entered up after the 23rd of July, 1860 (and
or equitable, as are capable of being delivered and customary estates on the same footing with leasehold estates in in legal execution under an elegit (ante
, p. 41) can be taken as respect of judgments as against purchasers and mortgagees, and to against the debtor from the date of entering up the judgment, and enable them
to ascertain when execution
had issued, and to proagainst purchasers from the date of registration in the register tect them from delay in the execution of the writ. It enacts of judgments (1 & 2 Vict. c. 110, ss . 11, 19, ante, pp. 42, 57). (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 tion, as where there is not a simple trust of the whole beneficial or mortgagees, whether they have notice of such judgments or not, tion (ante, pp. 4, 42), the creditor can, from the same dates respec- been issued and
registered (in the manner mentioned in section 2) tively
, obtain equitable execution by the appointment of a receiver before the execution of the conveyance or mortgage and the pay (ante, p. 42) as under the old law (ante, pp. 24, 25).
ment of the purchase or mortgage-money, and unless such execution The creditor also acquires, from the same dates respectively, a
or other process shall be executed and put in force within three charge (enforceable at the expiration of one year from entering up calendar months from the time when it was registered. ing estates and interests therein which are incapable" of being orders of courts of equity and bankruptcy, and
other orders having
246 June 3
74 the operation of a judgment. “Rules” are not mentioned. There collecting agency of the Trade Protection 3ociety. It is not very is no provision for re-registration of executions.
difficult to see through these transparent devices. That there is an This Act does not repeal 1 & 2 Vict. c. 110 or 2 & 3 Vict. c. understanding between the parties in each case is apparent. 11; and it would appear that judgments coming within it must be this practice, as I was under the impression that people of this class
I shall be glad to hear what the opinion of the profession is on registered and re-registered in the registry of judgments under those Acts. This seems to be assumed by the terms of the 2nd house agents
, debt collectors, &c.-were in the profession kept at a
distance, and generally looked upon with suspicion. section, which directs the execution to be registered in the name Nov. 23.
A SOLICITOR. 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.
NEW ORDERS, &c. It has been suggested that 23 & 24 Vict. c. 38 applies only to
HIGH COURT OF JUSTICE-CHANCERY DIVISION. interests which can be taken in legal execution under an elegit,
ORDER OF COURT. and that, therefore, a purchaser might be liable to the creditor's
Wednesday, the 24th day of November, 1886. charge under 1 & 2 Vict. c. 110, s. 13, upon a registered judgment, though no registered writ of execution be found. But Justice Chitty, Mr. Justice North, Mr. Justice Stirling, and Mr.
Whereas, from the present state of the business before Mr. similar words in 27 & 28 Vict
. c. 112 (post) were held not to be so Justice Kekewich respectively, it is expedient that a portion of the limited : Hatton v. Haywood (9 Ch. 233). The Act mentions causes assigned to Mr. Justice Chitty, Mr. Justice North, and Mr. “other due process of execution,” and it has been held that Justice Stirling should for the purpose of trial or hearing only be the appointment of a receiver is a delivery in execution of such transferred to Mr. Justice Kekewich; now I, the Right Honourable interests as cannot be taken in legal execution: Hatton v. Haywood Hardinge Stanley, Baron Halsbury, Lord High Chancellor of Great (ubi sup.). The words of 23 & 24 Vict. c. 38 are that no judgment Britain, do hereby order that the several causes set forth in the “shall affect any land" until a writ or process of execution is regis- schedules hereto be accordingly transferred from the said Mr. Justice tered ; and it is submitted that for the protection of purchasers, Chitty, Mr. Justice
North, and Mr. Justice Stirling, to Mr. Justice such registration is required in order to give the creditor a right in the cause books accordingly. And this order is to be drawn up to enforce the charge under 1 & 2 Vict. c. 110, s. 13 : see Wallis by the registrar and set up in the several offices of the Chancery v. Morris (12 W. R. 997), where Romilly, M.R., said that "the Division of the High Court of Justice. Act would not allow the creditor to keep his judgment hanging over the heads of other people. He must issue execution or his
First SCHEDULE. charge could not affect a purchaser; the Act expressly stated that,
From Mr. Justice Chitty (Witness Actions). and applied whether the interest was legal or equitable.” It was Abbott v Abbott 1885 A 1,609 May 13
231 May 20 held in that case that the Act applied to an equity of redemption, Jeakes - Tibbits 1886
462 May 20 which is incapable of being taken in legal execution. The chargę Williams v Martin 1885 W 2,887 May 20 under section 13 of 1 & 2 Vict. c. 110 could not, however, be enforced Howlett v Medway Navigation Proprietors 1885 H 3,327 May 20 until the expiration of one year from the entering up of the judg- In re Turner, deceased Cork v Hutchinson 1886 T 550 May 20 ment, whereas process of execution registered under 23 & 24 Vict. Perren v Baker 1886 P
W 4,279 June 4 4. 38 is not to affect a purchaser unless it is put in force within Wright y Horrocks 1885
1886 W 816 June 4 three months. Where legal delivery in execution was impossible, Smethurst v Sir C Lindsay & Co, Limited 1885 s 2,774 June 5 the Act might be complied with by obtaining the appointment of Childs v Warren 1885 o 5,813 June 16 a receiver pending the expiration of the year, as in Yescombe v.
Burr v Wimbledon Local Board 1886 B 1,920 June 17
1883 S 869 June 21 Landor (7 W. R. 534, 28 Beav. 80, Dart, 474), and thus the Stephenson Banks
Charlwood v Evans 1883 C 350 June 22 object of limiting the length of search in all cases under the Duke of Marlborough v Equity and Law Life, &c, Society 1886 Act to a period of three months would be attained. And, though a writ of execution cannot be re-registered, yet, apparently, a Newman & Co v Pinto & Son 1886 N 175 June 23 second writ, or subsequent writs on the same judgment, could Mellor v Thompson 1885 M 3,181 June 24
P81 June 28 be registered: see Pask on Judgm. Suppl., p. 9n.
“The real Pidgley v Ellis 1886
Young v Greenfield 1886 34 June 25 object of the Act was to prevent the issuing of writs and the non- Shore v Pratt 1884 S 1,396 June 25 execution of them. It was to protect purchasers from that state Patey v Davis 1885 P 1,744 July 1 of things : per Lindley, L.J., in Re Pope (34 W. R. 693, 55 Midland Railway Co v Micklethwait 1886 M 449 July 2 L. T. 369).
Under this statute a registered judgment, under Stone v Smith 1886 S 1,883 July 2 which the land has not been actually delivered in execution, was
Carter v Walls 1885 C 2,653 July 7
In re M Watson, deceased Watson v Duncan 1885 made a charge upon the land only while a writ of execution was in In re J Darby, dec Vaughan v Pennefather 1886 D 641 "July 10
W 1,773 July 8 force-viz., for a period of three calendar months from the date Smith v Harding 1886 S 1,466 July 13 of registration of the writ”: Dart, V. & P. 485).
James v Pearless & Sons 1886 J 353 July 21
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 [To the Editor of the Solicitors' Journal.]
In re Mellodew, Davies v Mellodew 1884 M 1,564 April 1 Sir,-Some months ago the legal profession here was pained and sur- Lagerwall v Gritten 1885 L 3,255 April 6 prised by seeing that a solicitor, practising
in the town from which I write, l'Anson v Mowatt 1885 I 1,514 April 7 had caused his name as a solicitor to be affixed to the entrance of certain Grogan v Sutton, Bart 1886 G 106 April 7 house agent's offices, who carry on their business in one of the suburbs, Attorney-General v Metropolitan Railway Co 1886 A 86 April 10
Armitage v Newsum 1885 A 1,198 April 9 about a mile and a half from the solicitor's own office in the town. London and County Banking Co, Imd v Harvey 1886 L 165 April 10 The solicitor has no office on the premises, so far as is known, apart Wilkinson v Alcock 1885 W 1,441 April 16 from the house agent's offices. Undignified and objectionable as this method of obtaining work is, Burroughs v Wood 1885 B 6,368 April 21
Ager v Blacklock 1884 A 1,607 April 21 it appears to be growing here. A firm of solicitors who are practising Sequin v Dangars & anr 1883 s 5,329 April 21 and have offices in the centre of the town, have affixed their names Bankes v Small 1886 B 37 April 22 as solicitors to the office entrance of a trade protection society not a
JO Gostling & Co, Imd v JC Gostling 1886 6 273 April 28 quarter of a mile from the solicitor's own offices. The manager of Tucker v Bennett 1885 T 1,252 May 6 the Trade Protection Society is an ex-law clerk, and has nearly all In re E W Jones, Jones y Cottier 1885 J 112 May 8 Society. In this case the solicitors whose names appear at the Hartopp » Hartopp 1885 H 4,817 May 21 the tradesmen of the town as subscribers to the Trade Protection Hammond v Robertson 1884 H 3,320 May
Ghirelli v Pryor 1885 G 1,516 May 20 entrance have no offices on the premises apart from the debt Parker's Trustees * Hartopp 1883 P 3,131 May 21
100 June 23
James v Lovel 1886 J 236 June 3
there existed a doctrine that a description of the thing assigned might be Penrith Farmers' Auction Co, Imd v Harrison & Son 1884 P 578 June 4 so vague that the court would hold that nothing passed under the assign. Shield v Winder 1886 S 735 June 9
ment. Book debts meant debts arising in a trade or business where it Metropolitan District Ry Co v Metropolitan Ry Co 1886 M 99 June 10 was usual to keep books in which the debts ought to be entered, and were Metropolitan District Ry Co v Metropolitan and District Joint Committee not confined to debts which had been actually entered in the books. If and Metropolitan Ry Co 1885 M 1,557 June 10
the description had been confined to book debts arising in the same Wylson & Long v Dunn 1886 W 634 June 11
business, carried on in the same premises, or perhaps carried on any. In re Denston, Denston v Denston 1886 D 155 June 11
where, the description would not be too vague. But here the description London Portland Cement Co, lmd v Northfleet, &c, Brickfields Co, Imd was altogether too vague, and the assignment was consequently invalid. 1886 L 456 June 17
The plaintiff, therefore, was entitled to judgment. LINDLEY and Lopes,
L.JJ., concurred.- COUNSEL, Sir E. Clarke, s.G., and Muir Mackenzie ; THIRD SCHEDULE.
Finlay, Q.C., and Adkins. SOLICITORS, Solicitor to the Board of Trade ;
Robinson, Preston, & Stou, 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 mort. Phillips v Williams 1885 P 1,349 April 9
gagee, applied to North, J., for an order of foreclosure absolute against Levi v Champion & Co, lmd 1886 L 388 April 10
the mortgagor. The second mortgagee had been already absolutely fore. Firth v Slingsby 1885 F 1,868 April 13
closed. A receiver had been appointed in the action, and he bad received Audin v Audin 1885 A 1,052 April 14
rents and royalties (the property being mining property), the greater Turner v Meakin 1885 T 2,097 April 14
part of which had been paid into court, but a balance remained in his Harvey . Meynell 1885 H 3,779 April 19
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 v Cowland 1885 L 3,130 May 3
gagee and the mortgagor successive periods för redemption, and it conParker v Brown 1885 P 164 May 6
tained a provision that any person redeeming, or the plaintiff in the event Amott v Hayes 1885 A 1,226 May 6
of foreclosure, should be at liberty to apply in chambers for payment or Williams v Alt 1886 W 544 May 10
transfer of any money in court or in the hands of the receiver. It was Pickersgill v Booth 1885 P 2,994 May 11
contended on behalf of the plaintiff that this special provision distinguished Stanley Jones v Jones 1886 S 470 May 14
the case from Jenner-Fust v. Needham (34 W. R. 409, 709; 31 Ch. D. 500, 32 Real Property Trust, lmd v Harrison 1885 R 399 May 14
Oh. D. 582 ; 30 SOLIctors' JOURNAL, 255, 271, 418, 449), and that the plaintiff Manchester, Sheffield, &c, Ry Co v Denaby Main Colliery Co, Imd 1885 was entitled to have the forclosure made absolute at once, without directing M 1,321 May 17
any fresh account or enlarging the time for redemption, and that he was In re Morris Lewis v Prosser Prosser v Lewis 1883 M 936 May 17 entitled to the whole of the money in court and in the receiver's hands. Sheppard, on behalf, &c v Scinde Punjaub, &c, Co 1885 S 3,667 North, J., held that the case could not be distinguished from Jenner-Fust May 19
V. Needham. And he directed a further account to be taken, and allowed Crofton v Wood 1886 C 983 May 20
the mortgagor one month from the date of the fresh certificate, for redempWinter v Davis 1886 W 418 May 20
tion. In re Ogle Evett v Ogle 1885 0 221 May 21
The Court or. APPEAL (Cotton and Fry, L.JJ.) reversed the decision, Prior v Essex 1886 P 122 May 21
holding that, by reason of the above special provision in the judgment, Powell v Vickerman 1885 P 2,554 May 24
the plaintiff was clearly entitled to that which he asked.
The court Nash v Hayward 1885 N 1,302 May 27
go behind the judgment, but probably the reason for inserting Davey v Moody 1886 D 47 May 28
this very special clause was that the judge thought that the royalties were Alexander v Mollison 1886 A 329 May 29
in the nature of corpus of the estate.-CounSEL, J. G. Wood SOLICITORS, Debenham v Pickess 1885 D 1,756 May 29
Peacock & Goddard.
Re STRANGWAYS, HICKLEY v. STRANGWAYS-O. A. No. 2,
19th November. Stuckey v Coleman 1883 S 139 June 1
SETTLED LAND-PERSON HAVING PowerS OF TENANT FOR LIFB-TENANT Heath v Brooks 1885 H 2,980 June 1
FOR LIFE SUBJECT TO TRUST FOR ACCUMULATION OF RENTS-SETTLED
LAND Act, 1882, ss. 2 (7), 58 (1) (vi.).
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 CASES OF THE WEEK.
for twenty years, and apply them in improving and managing and increas
ing the estates, and at the end of that period to convey them to his son. OFFICIAL RECEIVER (as Trustee of IZON, A BANKRUPT) v.
Section 58, sub-section 1, of the Act provides that “Each person as TAILBY-C. A. No. 1, 20th November.
follows shall, when the estate or interest of either of them is in posses. BILL OF SALE-ASSIGxMENT OF FUTURE Book DEKTS_VALIDITY OF.
sion, 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.) In 1879 Izon, a packing case manufacturer, carrying on business at A tenant for his own or any other life
is Birmingham, made an arrangement with his creditors for the payment of subject to a trust for accumulation of income for payment of debts i composition on his debts by instalments, for the last of which Tyrrell or other purpose”; and by section 2, sub-section 7, a person being became surety. As security for the payment to Tyrrell on demand of any tenant for life
shall be deemed to be such notwithstanding sums which he might be called upon to pay under his guarantee, Izon, by that, under the settlement or otherwise, the settled land, or his estate or a bill of sale, in May, 1879, assigned to him his furniture, fittings, stock: interest therein, is incumbered or charged in any manner and to any in-trade, &c., and also all the book debts due and owing, or which extent." Chitty, J., held that the son was not a person having the might, during the continuance of the security, become due and owing to
powers of a tenant for life. the mortgagor (Izon).” Tyrrell paid the instalment due under the compo- THE COURT OF APPEAL (COTTON, L.J., HANNEN, P., and Fry, L.J.) sition; and, default having been made in repayment to him, Tyrrell's affirmed the decision. Corton, L.J., said that any of the persons executors, Tyrrell having died-assigned the book debts to the defendant. enumerated in section 58 must be able to say, if he was to have the Aotice of the assignment was given to the debtor. Certain book
debts powers of the Act, that his estate or interest was in possession. Subhaving arisen since the date of the bill of sale, the defendant received section 7 of section 2, and the decisions upon it, shewed that mere payment of them. In January, 1885, Izon became bankrupt, and the charges would not prevent a man frym being tenant for life in possession, official receiver of his estate brought this action to recover the amount of because he had a present immediate right to pay off the charges, and the one of these debts so paid to the defendant as a test case, contending that court would not inquire into their amount. But under the present will the assignment was not sufficiently specific to pass the property in the 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 county court judge of Birmingham, gave judgment for the defendant. On sub-section 1 (vi.) of section 58 was to apply,
the son must shew an immehead, 13 W. R. 867, 3 1. & C."955; Lazurus v. "Andrade, 29 W.R.'15; mulation. Here the entire rents were to be taken for particular purposes 5.C. P. D. 318 ; Re d'Epinueii, 30 W. R. 423, 20 Ch. D. 758; Clements v. Mattheus, 11 Q. B. D. 808, were cited.
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 The Corkt allowed the appeal. Lord Esher, M. R., said that the true of freehold. But the legal estate was in the trustees, with the whole construction of the clause in the bill of sale
as to the book debts was that it beneficial mterest, for twenty years, during which time the son had no aiter in any part of the world. In every case it had been assumed that his future interest
, he could come to the
court to restrain them ; but that
did not make his future estate or interes: 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.O., 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 BANNATYNE 1. THE DIRECT SPANISH TELEGRAPH 00.- entered into contracts with the company ought to be considered as C. A. No. 2, 23rd November.
knowing the provisions of the Act of 1867, s. 9, and that these proCOMPANY-REDUCTION OF CAPITAL-PREFERENCE SHARES.
visions applied to preference as well as to ordinary shares.
contended, however, that the Companies Act, 1877, had rendered it The question in this case was whether a company, having under the impossible to do effectually what was proposed to be done by, these provisions of their articles of association issued preference shares with a resolutions. But, when the contract was entered into in 1874, the Act fixed preferential dividend, can afterwards, without the consent of all the
of 1867 only was in operation, and there had been decisions under that holders of preference shares, reduce the whole of their capital, including Act that the proposed reduction of capital could be legally effected. the preference capital, with a corresponding reduction of the dividend on Opposed to those decisions was that of Jessel, M.R., in The
Ebbw Fale Co. that capital. The company was registered
in 1872 for the purpose of (1 Ch. D. 827). The Act of 1877 did not deal with that as being the law, establishing telegraphic communication between this country and Spain, but declared what was to be the operation of the Act of 1867 in questions with a nominal capital of £130,000 in £10 shares. By the articles of of reductions of capital. And, 'if it were necessary to determine the association power was given, with the previous sanction of a special question, his lordship was by no means satisfied that the view taken by meeting, to increase the capital by the issue of new shares with a prefer. Jessel, M.R., was correct. On the true construction of the resolutions of ential dividend, and also from time to time to reduce the capital and to 1874, which'embodied the bargain with the preference shareholders, he alter the amount and denomination of its shares. In 1874 the directors was of opinion that there was no rescission of that contract in what was were authorized by special resolutions to increase the capital by 6,000 proposed to be done by the directors, and nothing to prevent that which new shares of £10 each, such shares to be entitled to a preferential was a simple reduction of capital. In his lordship's opinion a judge had dividend of ten per cent. per annum, and the deficiency in payment of full discretion to sanction an order for reduction of capital, and the order such dividend in any year to be made up out of the profits of any succeed- might be refused when it would bear hardly upon existing interests or ing year. All the 6,000 new shares were issued and paid up in full. No
was not being done for an honest purpose. Fry, L.J., concurred. The dividend on the ordinary shares had been paid since the 30th of June, words of the Act of 1867 were wide and general, and, at the time when 1882, but the ten per cent. dividend on the preference shares was paid that Act passed, it was a well-known fact that preference shares were in down to the 30th of June, 1884, since which time the company had existence.
It was impossible, therefore, to conclude that the Legislature, ceased to pay it, and had placed to a reserve fund nearly the whole of with full knowledge of that fact, did not intend that preference, equally their annual profits. One of the company's submarine cables had broken with other shares, should
be included in its operation.–Counsel, Rigby, down, and in September, 1886, the directors called a meeting of the Q.C., and Phipson Beale ; Buckley, Q.C. ; Marten, Q.C., and H. B. Howard. shareholders to consider a proposed reduction of capital. The circular Solicitors, Murray, Hutchins, & Stirling ; Blunt & Lawford. calling the meeting pointed out that the examination of the cable having resulted in shewing that it could not be advantageously restored, the EASTON v. THE LONDON JOINT STOCK BANK-C. A. No. 2, 12th company had now to adopt one of two alternatives advised by
November. counsel, and either discontinue the payment of dividend on all the PLEDGE OF STOCK AND Boxds-BLANK TRANSFER-RE-PLEDGE BY PLEDGER shares, including the preference shares, until sufficient money was
FOR HIS OWN DEBT-RIGHT OF HOLDER FOR VALUE WITHOUT Notice. 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 In this case an important question arose as to the rights of bankers the former alternative would involve the suspension of all dividends for with respect to securities deposited with them by a person who holds ten years, the better course appeared to be to reduce the capital by them for a limited purpose.
The action claimed a declaration that writing off £5 per share on all the shares—in other words, to reduce the certain bonds and securities, the property of the plaintiff S., which he capital by one-half. At a meeting of the shareholders on the 30th of had handed over to the plaintiff E. as his agent for the purpose of September it was resolved, by a majority of the ordinary and preference raising money, were a security in the hands of several banking comshareholders, that, in consequence of the abandonment of the company's panies, who were defendants, for such an amount only as was actually original cable, the capital should be reduced in the manner proposed. owing by S. and
E. to M., a 'money-dealer. M. had advanced money to This resolution was duly confirmed. The plaintiff, who was a holder of the plaintiffs on the bonds and other securities deposited with him by E., both preference and ordinary shares, protested and voted against the and had afterwards deposited them with the banks as security for resolution on the ground that the effect of the resolution would be to advances made by them to himself. The banks claimed to hold the deprive the preference shareholders of £3,000 per annum, or half the securities as a security for what was due to them by M. They alleged a dividend they would be entitled to receive under the conditions upon general custom or practice in the City of London for money-lenders to which the preference shares were issued, and to put it into the pockets of pledge securities deposited with them by borrowers to bankers en bloc, so the ordinary shareholders. The resolutions having been carried, the as to make the securities a pledge, not merely for the actual advances plaintiff brought this action, on behalf of himself and the other holders made to the original borrower by the money-lender, but for the whole of preference shares in the company, against the company and their amount which might be owing by the money-lender to the banks with directors, to restrain the defendants from acting on the resolutions. whom he had deposited the securities. In November, 1882, S. supplied Bacon, V.O., granted the injunction.
E. with certain securities to be used in raising a loan of £20,000 for a The Court of APPEAL (COTTON and Fry, L.JJ.) reversed the decision joint speculation. E. informed S. that he would get the money from and diesolved the injunction. Cotton, L.J., said that, at the time when M., a money.dealer, who, in conjunction with a bank or banks, would this company was formed, the Companies Act, 1867—which enables any find the money. S. accordingly executed blank transfers of certain company limited by shares, by special resolution, if authorized so to do by railway stock, which were given to E. and handed over by him to M. in its regulations as originally framed or as altered by special resolution, to exchange for a loan. M., in accordance with his usual practice, pledged reduce its capital—was in operation; and the operation of the articles of the stock with certain banks, filling in, as transferees, the names of association, which authorized the company, by special resolution, from officers of the banks, and the transfers were duly registered. Bonds time to time to reduce its capital, must be regarded in respect of that Act. payable to bearer were also supplied by S. to E. for a similar purpose, The question really was whether, having regard to the contract between and in April, 1883, a further advance was obtained from M. M. pledged the company and the preference shareholders, it was competent by sub- the securities of S. with three banks who were defendants to the action, sequent resolution to reduce the amount of the capital. It was argued together with the securities of other customers, on the terms that each that the mere existence of preference shares entitled "to a fixed prefer- and all of the securities should be answerable for the debts due by him to ential dividend of ten per cent. per annum was in itself conclusive the banks respectively, the securities being changed at the Stock against the power to reduce it. In bis lordship's opinion that contention Exchange settling-day, and M. being bound, when required, to keep up a could not prevail. Under the Act of 1867 (section 9) power was given margin. There was evidence that this was done in accordance with a generally to reduce the capital, and the articles of association of this practice prevailing in the City of London. M. stopped payment in May, company provided that all capital raised by the creation of new shares 1883. There were then in the hands of one of the banks certain railway should be considered as part of the original capital, and should be subject stock supplied by S. ; in the hands of another bank certain bonds payable to the same provisions in all respects as if it had been part of the original to bearer; and in the bands of the third bank certain railway stock and became subject to a winding-up order, the loss must be borne, not only brought by S. and E., as co-plaintiffs, against the three banks and the capital. If the capital should be lost, wholly or partially, or the company bonds. The securities had been realized by the hanks. The action was by the ordinary shareholders, but by the preference shareholders also. trustee in bankruptcy of M., to redeem the securities on payment only of But it was said that the contract between the company and the preference the balance owing to M. from E. sbareholders would be broken unless the preference shareholders were to contended that, under the circumstances, the banking companies must
On behalf of the plaintiffs it was continue to receive the same amount of dividend as they had hitherto have known that M. was dealing with securities which were not his own, done; that it must be regarded as if there had been a contract to grant a and that, though some of the securities were negotiable and the others perpetual anpuity 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 equity of the real owner remained. On behalf of the banks it was con;
were actually registered in the names of trustees for the banks, the t at annuity, though, so long as the full amount of the annuity should tended that s. and E. both knew in fact what M. was doing, and be preserved, the company might,
if they pleased, reduce their capital. authorized him to do it, and that, at any rate, E. knew it, and was acting While the effect of the Act of 1867 must not be destroyed, the directors within the authority given him by s., which was to raise the money ought to be prevented from evading their contract. It could not be quocunque modo ; and, further, that, even if neither of them knew .M.'s successfully contended that the contract for the issue of 6,000 new shares, I course of dealing, inasmuch as they had gone on the London market to Nov, 27, 1886.
THE SOLICITOKS' JOURNAL.
broken by dividend
dividend jugh that
reducing those who
idered as деве рto
It 79 idered it by these
the Act nder that effected.
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
CHITTY, J., said that, so long as anything remained for working out the THE COURT OF APPEAL (COTTON, BOWEN, and Fry, L.JJ.) affirmed judgment, service on the solicitor on the record was suflicient. It was the decision, though on a more general ground. COTTON, L.J., also immaterial that the breach complained of was of an undertaking and said that, although the evidence shewed the
of dealing not of an injunction, for it was not necessary to shew that the person adopted by M. and other money-dealers in the City of London, yet no sought to be attached had knowledge of his undertaking, for he must be such general practice had been proved to exist as would be binding presumed to have known that he had given the undertaking, whereas in upon the borrowers who dealt with them unless they had notice of the the case of an injunction obtained against him, service of the order upon practice. That E. knew what the course of practice was, at any rate, him gave him knowledge of the order made. He therefore gave liberty to in April, 1883, was proved by the evidence. s. placed the securities issue the attachment as asked, - Counsel, Romer, Q.C., and Oswald. absolutely in the power of E. and authorized him to raise money on the SOLICITOR, Herbert F. Oddy. security of them. But did S. do more than authorize E. to raise à certain sum of money? Pearson, J., thought that E. borrowed the money as a
Re FOWLER-Chitty, J., 20th November. principal, and not as an agent of S. But, in his lordship's opinion, the APPOINTMENT OF NEW TRUSTEES–DIMINUTION OF ORIGINAL NUMBER. 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
This was an application for the appointment of three new trustees of they should be mortgaged, but when the mortgage was paid off they a settlement made on the marriage of Mr. and Mrs. Fowler in 1871 in the 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,
was rendered necessary as the power to appoint new trustees in the transfers in blank had been signed by S., and the banks had, therefore, settlement was exerciseable by the husband and wife jointly and the the legal estate in them. Some of the bonds were payable to bearer, and husband was in Queensland, where he had been
since 1874, and without the others, although not perhaps in law negotiable instruments, bore on
any fixed abode. It appeared that four trustees were appointed when the the face of them statements from which persons were justified in assuming children of the marriage. Great difficulty was experienced in obtaining
settlement was executed, but one of them disclaimed. There were no 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 consent of any persons to act as trustees in the place of the gentlemen the City of London these particular bonds were treated as negotiable who wished to retire. securities; but his lordship would hesitate to hold that they became
Chitty, J., referred to the case of Re Gardiner's Trusts (W. N., 1886, negotiable securities merely on that account. He thought, however, that p. 140), where North, J., had declined to decrease the number of trustees the case came within what was said by Lord Cairns in Goodwin v. Robarts
and said that he was inclined to think that the court could, even in the (1 App. Cas. 489):
:-" The appellaut might have kept this scrip in his absence of special circumstances, reduce the number of trustees, and that own possession, and, if he had done
so, no question like the present many such orders had been made. If, however, special circumstances could have arisen. He preferred, however, to place it in the possession,
were required, he considered that the fact of one trustee having disclaimed and under the control, of his broker or agent, and, although it is stated and the difficulty of getting persons to act were special circumstances, that it remained in the agent's hands for disposal or to be exchanged for
and the order should be made according to the prayer of the petition.the bonds when issued, as the appellant should direct, those into whose Counsel, W. E. Mozley. SOLICITORS, Taylor, Mason, f. Taylor. hands the scrip would come could know nothing of the title of the appel- BAILEY v. THE SUNDERLAND EQUITABLE BUILDING SOCIETY lant, or of any private instructions he might have given to his agent.
-Stirling, J., 17th and 20th November. The scrip itself would be a representation to anyone taking it-a repre- MORTGAGE TO SECURE ADVANCES TO SECRETARY OF ADVANCING Societysentation wbich 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
“OTHER MONEYS"-Sums EMEEZZLED.
West, included such sums.
goods supplied were not ejusdem generis with the moneys specified to be
secured, that they were not included in the mortgage, and that PETTY v. DANIEL-Kay, J., 19th and 20th November. the assignee, consequently, could redeem without paying the moneys PRACTICE—NOTICE OF Motion–NOTICE OF PLACE WHERE MOTION WOULD
embezzled and the moneys due for goods supplied. --COUNSEL, Graham
STOKES v. STOKES-Stirling, J., 18th November.
ORDER FOR EXECUTION OF FIRST MORTGAGE-DELIVERY OF TITLE Deeds.
of irregularity and that the applicant might The question in this case was whether an order directing the defendant be liberated. The notice of motion stated that the court would be to secure the payment of a sum of money by the execution of a first moved." at the Royal Courts of Justice," and it was contended that this mortgage was suficiently obeyed by the mere execution of the mortgage was not a sufficient description. The second point was that the affidavits without handing over the title deeds. ?wo actions had been brought by ine support of the motion had not been properly served, inasmuch as they the plaintiff against the defendant,
one in the Queen's Bench Division for were not served with the notice of motion on the London agents at the damages for breach of promise of marriage, the other in the Chancery address for service, but were served separately on the country solicitor,
Division by which she claimed a partnership in the defendant's business. Kay, J., said that the notice of motion was sufficient, but the affidavits had
Both the actions were compromised, and the terms of compromise were not been properly served within ord. 52, r. 4; ord. 12, r. 10; ord. 67. 1. 2.
embodied in an order, dated the 28th of June, 1886, by which it was They should have been served with the notice of motion at the address for by consent ordered that the actions should be stayed, and that the plain. service. Therefore, the order was voidable under ord. 70, r. 1; but it was tiff should, among other things, pay to the defendant a certain weekly thoroughly deserved and he would not set it aside, but would, in the
sum so long as she should remain unmarried, such weekly payment to exercise of bis die cretion, order the deferdant to be set at liberty. No be secured by a first mortgage on certain leasehold houses to which the J. W. Briggs, Nottingham. Gribble 4 Oddie, for Wells & Hind, Nottingham ; Johnson of Weatherall, tror plaintiff and executed by the defendant, but he declined to hand over the
STIRLING, J., said that he read the order as an undertaking on the part CALLOW v. YOUNG-Chitty, J., 19th November.
of the plaintiff to give to the defendant such a security as first mortgagees R. S. C., XLIV., 2, and LXVII. 7-ATTACHMENT—BREACH OF UNDER
ordinarily have. To execute the mortgage without handing over the TAKING-PERSONAL SERVICE-SERVICE ON SOLICITOR ON THE RECORD.
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 This was a motion to attach the defendant for breach of an undertaking might be committed, or
, at all events
, the rights of the mortgagee might contained in an order of December, 1885, whereby the defendant under be prejudiced. The defendant was, therefore, entitled to have the title took not to carry on a certain business in breach of his covenant
with deeds delivered up to her. -COUNSEL, Pearson, Q.C., and R. Norton ; the plaintiff. It appeared that the undertaking was given at the hearing Hastings, Q.O., Stutfield, and H.
Terrell, SOLICITOTK, R. Chapman; of a motion for an interim injunction, and that the registrar's book was Lumley & Lumley.