become payable on such 1st of December or 1st of June (as the case may be). . . . But no interest shall be payable on any drawn bond after the day fixed for its redemption." Upon default on the part of M. & Co., it was provided that the trustees might foreclose and take possession, and pay any moneys coming to their hands in defraying the cost of running the road and their own charges and expenses, and the residue towards the payment of the principal moneys and interest on the loan as follows: first, in payment of all arrears of interest actually due on such of the said bonds as shall be outstanding and bearing interest; secondly, in redemption of such an amount of the said mortgage bonds as ought to have been redeemed on any previous 1st of June or first of December, but may not have been redeemed; . . . and, lastly, in the payment of the future interest on the said bonds, and the redemption of the same in any future half year . . ." and hold the surplus in trust for M. & Co. M. & Co. failed to remit; the trustees went into possession, and made payments on account of interest on undrawn bonds only, bonds having been drawn but not redeemed. This action was brought to determine how the trustees should apply the funds coming into their hands. Held, reversing the decision of the Master of the Rolls, that the funds should be applied pari passu to pay the interest on the undrawn bonds, and on drawn bonds that remained unredeemed by the fault of M. & Co. - Gordillo v. Weguelin, 5 Ch. D. 287. 1. Charter-party between plaintiff, owner of the ship, and defendant, for a voyage between Cardiff and Callao to carry coal consigned to defendant's agent. Ship to be loaded at an average of seventy-five tons a day, commencing when wholly unballasted. Stiffening coal to be supplied at the rate of forty tons a day; and all days on which stiffening coal is taken on board, or the ship is detained for the same, are to be excluded in the computation of the said days allowed for loading. The vessel to be discharged at the rate of forty tons a day. "Demurrage to be paid for each day beyond the said days allowed for loading and discharging, respectively, at the rate of 3d. per registered ton per day." "The master to have a lien on the cargo for all freight and demurrage under this agreement." "All liability of the charterers under this agreement shall cease as soon as the cargo is on board; . . . and all questions . . of demurrage to be settled with the . . . agents of the charterers at the port of destination," and to be binding on the owners. "The owners and master to have a lien on the cargo for all freight, dead freight, and demurrage." The ship was detained by the failure of defendants to furnish stiffening coal. Plaintiff requested defendant's agent at Callao to settle the demurrage claim, and he refused; but plaintiff's agent delivered the cargo, without enforcing his lien. Held, that there was no liability at all on the charterers after the cargo was loaded. — Sanguinetti v. The Pacific Steam Navigation Co., 2 Q. B. D. 238. 2. Under a charter-party a vessel was to carry a cargo to a good and safe port in the United Kingdom, calling at Queenstown for orders, which were to be forwarded in forty-eight hours, specifying such port. It was agreed that the liability of the charterers should cease as soon as the cargo was on board; provided the same was worth the freight at the port of discharge, but the owners to have an absolute lien on the cargo for all freight, dead freight, and demurrage. The owners brought an action on the charter-party, alleging that the charterers, the defendants, failed to give orders as to said vessel's port of discharge, and also that the charterers gave orders for discharge at a port which was not good and safe within the meaning of said charter-party. Held, that the charterers were not liable under the charter. — French v. Gerber, 2 C. P. D. 247; s. c. 1 C. P. D. 737; 11 Am. Law Rev. 498. See FREIGHT. 1. In 1864, the L. Company and three other companies were consolidated into the C. Company. The C. Company had power to raise any capital which any of the four consolidated companies had had power to raise, by issuing of stock, &c. The L. Company had had power to issue £100,000 preference stock, besides common stock. At the date of the amalgamation it had issued £85,000 preferred, which was called "No. 1 Preference Stock," and the common stock was called "No. 2 Preference Stock." The Directors of the C. Company undertook to issue the remaining £15,000 stock, as No. 1 Preference Stock, under a bona fide impression that they could do so. The court having held that this stock ranked not only below the original No. 1 Preference Stock, but also below the common stock, action was brought by some holders of the £15,000 stock so issued against the C. Company, its directors and secretary. Held, reversing the decision of the Master of the Rolls, that the C. Company, its directors and secretary, were not liable to make it good, all the parties having acted under a common misconception of the law. — Eaglesfield v. Marquis of Londonderry, 4 Ch. D. 693. 2. Action by owners of a coal mine against the owners of an adjoining mine for breaking the barriers between the two mines. The boundary line between the mines was fixed in 1862, the defendants' mine being then owned by the H. Company, previous to which time there had been encroachments; and, in 1864, an agreement was executed, under which all claims for previous acts of trespass were declared settled. The depreda tions complained of occurred in 1863. In 1865, the H. Company, under act of Parliament, passed in 1863, requiring it to sell its mines within five years, was merged in the defendant company, and the latter assumed all its liabilities, and received its assets. The plaintiffs had no knowledge of the depredations made in 1863, till 1870. Held, that though it was ultra vires for the H. Company, being a railway company, to work mines, yet the provision in the act of 1863, that the company should sell, impliedly legalized the holding of the colliery by the H. Company, and under the amalgamation the defendant company was liable for the wrongful acts of the H. Company; that the defendants were not relieved by the agreement of 1864, since the plaintiffs had no knowledge that the settlement of 1862 had been infringed; that the plaintiffs were guilty of no laches in not discovering the depredations before 1870; and that the Statute of Limitations only began to run from that date. — Ecclesiastical Commissioners for England v. North-eastern Railway Co., 4 Ch. D. 845. 3. R. took fifty shares in the allotment of shares of a company, - the number necessary to qualify him as director. Subsequently, being chairman of the board of directors of the company, he signed an application for 450 shares more; but he struck out of the printed form the clause providing for the payment of 5s. deposit in respect of each share. Seven or eight months after, the directors voted to allot R. 450 shares. R. was present, and after the vote presented a paper withdrawing his application for shares. On the winding up of the company, R. was made a contributory, and he applied to have his name stricken out as contributory with respect to the 450 shares. Held, that R. was not liable with respect to the 450 shares. In re Universal Non-Tariff Fire Insurance Co. Ritso's Case, 4 Ch. D. 774. --- 4. Nine persons signed the memorandum of association of a new company. At a preliminary meeting, attended by four of the signers, it was voted that three others should be allotted no shares, and the deposit made by them should be repaid; which was done, and the three had nothing more to do with the company. The directors, under the articles of association, had power to issue and dispose of shares as they thought fit, but had no power to accept surrender of shares. Held, on the winding up of the company, that the three were contributories. Co., 5 Ch. D. 525. -- - In re London and Provincial Consolidated Coal 5. The proprietors of a lease and concession of the Island of Alto Vela from the Republic of Santo Domingo, for the working of guano and other deposits on the island, became liable to forfeit the same by failure to perform some of the conditions thereof. They then went to work to get up a company, to the trustees of which they sold the property; and the trustees made it over to the company. For their part in the transaction, they received £15,000 commission" in shares. The company, through the trustees, employed the same counsel employed by the sellers and promoters; and they passed the title to the property as good. The directors, who were chiefly composed of the promoters, speculated in the shares. One of them, the defendant H., got up a pretended sale of certain patent rights belonging to the company, for a large sum, to a person who turned out to be a tool of H.; and all the money paid down by him was furnished him by H. Meanwhile the Dominican government proposed to take advantage of the forfeiture. The condition of things came out. The shares fell from £60 to £3, and the deluded stockholders brought suit against the original proprietors of the property, the trustees, promoters, directors, and counsel. Held, that the proprietors must repay the whole purchase-money, the trustees their "commission" (called by the court a bribe); the counsel and directors, who were not proprietors and promoters, their proportion of the costs of suit. Phosphate Sewage Co. v. Hartmont, 5 Ch. D. 394. 6. P., director of a company, took some shares in order to qualify himself for director from a promoter of the company. The company was formed to purchase of the promoters and work a colliery; and P. labored, after being made director, to have a conditional contract for such purchase carried out. Under section 165 of the Companies Act, 1862, it is provided that "where, in the winding up of a company, it appears that any director has been guilty of any misfeasance or breach of trust in relation to the company, the court may, on application of any liquidators, examine into the conduct of such director, and compel him to contribute such sums of money to the assets of the company, by way of compensation in respect of such misfeasance or breach of trust, as the court thinks just." Held, that, under the act, the court might require P. to pay in the par value of the shares. In re Caerphilly Colliery Co. Pearson's Case, 5 Ch. D. 336. 7. Action to recover a sum on a guaranty. By agreement made May 28, 1873, the defendant sold the promoters of the plaintiff company certain patents, and the business or trade then carried on under them by the defendant. The defendant was to be managing director of the company for five years, and be paid a salary, and he guaranteed the company an annual dividend of £15 per centum during said time. The articles of association of the company, incorporated the agreement, and expressly made it part thereof. Provision was made for the removal of a director; but this was not to affect the defendant during the five years, or until he should fail to carry out his part of the agreement. The directors were vested with power to make any contracts or agreements upon any terms, and to alter or modify any, in their discretion. The defendant held 200 shares, which he was not at liberty to dispose of during said five years. The company carried on business under defendant's management for a year; and, under his guaranty, he paid it a sum sufficient to make up a dividend of £15 per centum. During the next year, it was duly voted to relieve the defendant from his guaranty, on his surrendering his shares and his rights in some patents. The defendant accordingly surrendered his shares, made over said rights, and retired from the directorship. The company proceeded to sell some of their property; and, not finding it as profitable as they wished, brought suit on the guaranty, claiming that the defendant had fraudulently misrepresented the property. Held, that the vote retiring the defendant, and releasing him from the guaranty, was not ultra vires; and that, apart from the question of fraud, the company could no longer repudiate its contract after the position of the defendant had been so changed toward it. The Sheffield Nickel and Silver Plating Co. v. Unwin, 2 Q. B. D. 214. 8. A syndicate composed of ten members was formed to purchase the Island of Sombrero, in the West Indies, then offered for sale by the liquidator of an unsuccessful company holding a lease thereof. In pursuance thereof, a purchase was made by one Evans, a paid agent of Baron Erlanger, one of the syndicate, and the sale was confirmed by the court. About the same time the syndicate determined to get up a company. The said Erlanger had charge of the matter; and finally an agreement was signed between the said Evans and one P., on behalf of the proposed company, for the purchase of the island by the latter, for double the price paid by the syndicate. The company was registered the same day. The directors, five in number, were as follows: Drouyn de Huys, the French statesman, a resident in France; Eastwick, M. P., resident in Canada; T. Dakin, Lord Mayor of London; the said Evans, and Macdonald, a British rear-admiral, without means, to whom the said Erlanger advanced money enough to pay for the shares, by virtue of holding which the said Macdonald could be a director. Dakin was not a member of the syndicate. The first two did not attend the meeting at which the purchase was confirmed. It appeared that the entire board of directors was made up by Erlanger. At the end of a year, the affairs of the company were in a bad way; and, the truth about the price paid having leaked out, a committee was appointed to examine into the company's affairs, and, on their recommendation, the old directors were retired, and suit brought against Dakin and the members of the syndicate for repayment of the difference between £110,000, the price paid Evans by the company, and £55,000, the price paid by the syndicate. Held, reversing the decision of V. C. MALINS, that the syndicate were promoters of the company, and stood in a fiduciary relation to it; and, as the company had no knowledge of the real facts attending the sale of the property to it, it was not bound by such sale, and could recover the difference from the syndicate; and that the estate of a deceased member thereof was liable. - New Sombrero Phosphate Co. v. Erlanger and Others, 5 Ch. D. 73. 1. A testator gave his residuary personal estate in trust to "all and every the children " of his uncle R., or their issue, in equal shares. He then devised to the trustees all his real estate in trust for A. for life, and after her death to sell the same, and hold the proceeds" upon trust for all and every the children of the said R., or their issue, in equal shares per capita." R. had six children, of whom four had died before the date of the will, each leaving |