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all reports except the "authorized " opes; but I cannot Mr. Walker's two lines, for he does not attempt to quote any concede that there is any obligation on him to read re- passages in the judgments corresponding to the singular state. ligiously the various journals issued in connection with those ment he "adopted” from the head-note, viz., that compound other reports. Truly, to maintain the contrary would be interest will only be charged where the money has been to lay on the shoulders of the profession a burden grievous employed in trade. to be borne. This matter seems to me, Sir, to involve an (5) We said that on another point Mr. Walker had important principle of criticism, as applied to legal works." been misled by the head-note to Burdick v. Garrick into
saying, in the exact language of the head-note in
that case, that “there was no proof that a person in a fida. Having allowed Mr. Walker to have his say, we will
ciary position had made any interest or profit on money in
his bands”; and we referred to the argument of counsel to now consider seriatim the specific charges we made
show that the money was stated “to have been employed by against his book, and the reply he has to make to them.
the fiduciaries in their business, and had been mixed up (1) We adduced, as an illustration of the incompletenegs with partnership fonds.” Mr. Walker's lofty remark, “For of the book, the fact that all the information vouchsafed my facts, Sir, I looked to more authentic sources," is
as to the question of when compound interest will be somewhat unfortunate, for in return we will point him to a :cbarged was contained in about two lines.
more authentic source even than the defendants' answer Mr. Walker does not deny this.
viz., the judgment of Lord Hatherley, where it is stated that (2) We said thut these two lines were taken verbatim “the Vice-Chancellor has directed interest to be charged at from the hond.note in Burdick v. Garrick (L. R. 5 Ch. the rate of five per cent., which appears to me to be per
fectly right, and for this reason, that the money was retained Mr. Walker admits that they were.
in the defendants' own hands and was inade use of by them." (3) We said that these two lines were inaccurate in In saying that Lord Hatherley expressly distinguished the stating that “compound interest will only be given against business of a solicitor from trade, Mr. Walker mixes up the an accopating party when he has employed money in
y when he hag employed money in two totally distinct questions of compound interest and the business.” “Surely," we said, “the author cannot be
ve said. “the anthor cannot be rate of interest to be charged. What Lord Hatherley said unaware of the cases in which it bas been held that com. | was that a solicitor's business was not a business in which pound interest will be charged against a trustee or the partners could make compound interest. executor who, notwithstanding an express direotion in the (6) We said that Mr. Walker had reproduced a portion of will to accumulate the income, keeps trust funds in hand
the head-note in Blogg v. Johnson (L. R. 2 Ch. 225). without endeavouring to invest them-cases which were
Mr. Walker admits that he“ followed” the head-note. recognized by Lord Selborne in Vyse v. Foster (23 W. R.
(7) We further said that he had reproduced this head-note 355, L. R. 7 H, L., at p. 346).”
without regard to the question of whether it accurately Mr. Walker does not deny that he was wholly unaware of
represented the doctrine laid down in that case. these cases-whiob, by the way, isolude suob a well.
Mr. Walker does not allege that the head-note accurately known decision as Raphael v. Boehm (11 Ves. 92, 13 Ves.
| represents the whole doctrine laid down in that case. 407)-but he thinks it a sufficient answer to our remark
* Following" the head-note, he says in his book that to raise a quibble as to whether the word “recognized"
" the court will not charge an executor who has been guilty
of delay in accounting with interest on arrears of income is a proper description of the notice bestowed on the doctrine by Lord Selborne in Vyse v. Foster. “Referred
unpaid by him." We will simply ask whether that to" would have done just as well for our porpose, which
statement accurately represents the doctrine laid down was to show that the most corsory examination of a leading
in Blogg v. Johnson (p. 229) that “if the accounts had recept case might have led the author to the cases which
been taken immediately upon the death of Mary J. in he bad overlooked. Unfortunately for Mr. Walker, how.
October, 1861, the defendant would have been proved
to be a debtor to her estate in a sum of £4,380 16;. 1d.," and ever, his quibble is wrong, for “recognized" was a perfectly accurate expression. Mr. Walker has apparently
in that case the claim for interest would have been allowed,
since, as Lord Chelmsford said, “it is immaterial how the either not observed, or, at all events, has not stated, that in the observations he quotes from the judgment of Lord Sel- ja
sum [retained by the executor uninvested] has arisen,
whether from a legacy, or a distributive share, or a residue, or borre bis lordsbip is not referring to the doctrine we mentioned the arrears of income. In the latter case the claim for at all, but to what he terms “a different ground" viz., that interest is not made on account of the arrears, but for the "a trustee who suffers money, which be ought to call in, to
improper keeping back of a sum of money, from whatever be used in a business in which he has an interest,
| source derived, which the executor or the trustee ought to may be chargeable with compound interest. Of that,” said
bave paid over." bis lordshir, “I say nothing." Quite so ; neither did we.
1 (8) We said that Mr. Walker must be unaware of the If, as Mr. Walker says, he has re-read the report of Burdick | Indian Act 2 of 1874, relating to the non-allowance of v Garrick, he must have seen the observations of Lord
commission to executors in India. Selborne on the opposite page to those he quotes, which was,
i Mr. Walker admits that he was ignorant of the Act, moreorer, the page we mentioned in our review. These are
and he also obligingly admits that "it bas an important ibe observations to which we referred. As Mr. Walker has
bearing on the subject." We shonld rather think it not quoted them, we will do 80:-"The trustee there [i.e., in
bas. But he asks, Was he bound to know of the Jones v. Foxall], being bound by the terms of his trust to call
Indian Act? And he waxes eloquent ou the “burden" in the debt at a particular time, and being also bound, by
which such an extravagant requirement would impose reason of the infancy of the cestui que trust, to accumulate tbe income of the trust fund for the benefit of the infant
“ upon the shoulders of the profession.” We have never plaintiff, was charged with compound interest, which the
said or implied that Mr. Walker was bound to know the
Indian Acts. What we do say is that, before an author very existence and neglect of the obligation to accumulate might make perfectly proper." If this is not a “recognition"
tells his readers that" an executor in India is entitled here, of ile doctrine we referred to, we do not know what would out of deference to the practice of the Indian courts. to a
commission of five per cent. on all assets of a testator be such a recognition. (4) We implied that in his two lines Mr. Walker
collected by him there," he is bound to take some pains had teen misled by the portion of the head-note which he
to verify the statement. Now let us see how much trouble * adopted" from Burdick v. Garrick. Mr. Walker does
it would have taken Dr. Walker to correct his erroneous not expressly say that the portion of the head-note
statement. The Act of 1874 consolidated and amended wbich be "adopted” is an accurate or "sufficient" state
former Acts relating to tbe same matter, enacted with ment of the law as to compound interest; he contents reference to the Presidencies of Bengal, Madras, and himself with affirmirg that, in his opinion, the whole head
Bombay respectively. Now, Mr. Walker quotes 112 pote is "a correct note of the decision of the court."
a foot-note to the part of his book relating to this very subject "The question of compound interest,” he says, “came
the case of Matthews v. Bagshaw (14 Beav. 123). At formally before a strong court in Burdick v. Garrick (on
the end of the report of tbat case there is a note (ap. wbich Jones v. Focall amongst many other cases was cited),
parently written by Mr.J. F. Leith, Q.C.) calling attention and the question [sic] was expressly decided in terms which,
to these Zocal Acts. If it is too much of a burden" for the I submit, are accurately summed up in the head-note above text-book writer of the present day to expeot him to read mentioned." What question ? Not the question stated in the report of a case which he cites, we may say that in a
tolerably well-known book, called Lewin on Trusts, 7th
PRACTICE – CLAIM BY DEFENDANT TO CONTRIBUTION
OR INDEMNITY AGAINST THIRD PARTY - LEAVE TO p. 199. If Mr. Walker had taken the trouble to look into these tolerably accessible sources he would have bad sufficient
ISSUE NOTICE TO THIRD PARTY-DiscreTION OF JUDGEwarning to enable bim, with the help of the chronological
JUDICATURE Act, 1873, s. 24, SUB-SECTION 3-ORD. 16, RR. table prefixed to the Indian Revised Statutes in the Lincoln's.
17, 18.-In a case of the Wye Valley Railway Company v! inn Library (wbich contains a statement of the subject-matter
Hawes, before the Court of Appeal on the 15th inst., a of each Act), and with the assistance (if necessary) of the
question arose as to the propriety of giving leave to the ever-cbliging and most intelligent librarian, to arrive in a few
defendants to issue & notice, under rule 18 of order 16, to minutes at the general consolidating and amending Act of
some persons, not parties to the action, from whom the de1874. So much for the “burden” we are charged with at
fendants claimed indemnity against liability to the plaintiffs
in respect of the claim in the action. The action was tempting to impose on text-book writers !
brought by a company, against their past and present directors, We believe we have now, at a reckless expenditure of to recover certain moneys which it was alleged the defendants space, substantiated all the specific objections we made had improperly paid to the shareholders, out of capital, to Mr. Walker's book. It is happily the first time, we by way of dividend or interest on their shares. The believe, for many years, that any review in the SOLICITORS' defendants claimed to be indemnified against liability JOURNAL has been called in question; and we beg to give
to the plaintiffs by the sbarebolders who had received the notice that we are not going to continue the practice of
moneys in question, and they applied to Hall, V.C., for unravelling and exposing objections of the kind of those
leave to issue a third-party notice and serve it upon all the
past and present shareholders to whom any part of the made by Mr. Walker.
moneys in question had been paid. It was stated that the shareholders were as many as 450 in number. Hall, V.C., refused the application (29 W. R. 120), on the ground that the
proposed proceeding would materially embarrass the plaintiffs, CORRESPONDENCE.
and this decision was affirmed by the Court of Appeal
(JESSEL, M.R., and COTTON, and Lush, L.JJ.). JESSEL, THE INTERMEDIATE EXAMINATION. M.R., said that the judge had a judicial discretion as to [To the Editor of the Solicitors' Journal.]
granting such an application, and in his opinion it was
not in every case in which the question to be decided Sir,-I beg, for the information of your readers, to between the plaintiff and the defendant in the action would Enclose you a copy of a letter I have to-day addressed to also be the question to be decided as between the defendant the secretary of the Incorporated Law Society sending and some third person that, as a matter of course, the dehim a numerously-signed petition. I also enclose a copy fendant should have liberty to serve a notice on that person. of the petition.
JOHN INDERMAUR. It must not be forgotten that, if the person served did not 22, Chancery.lane, Dec. 21.
choose to appear, he would still incur a certain amount of [The following is a copy of the petition referred to,
costs, which, so far as his lordship could see, he would not which is stated to have been signed by 466 articled
be able to recover. If the judge could see that the claim clerks :
for contribution or indemnity was prima fucie bad, he might,
in the exercise of his discretion, refuse the application. All To the Council of the Incorporated Law Society.
these roles were in favour of the defendant, subject to this, The petition of the undersigned, being articled clerks
observation that it was not intended to embarrass the plainto solicitors in England.
tiff in his action. It was intended to help the defendant as Whereas at the intermediate examination for articled
against third parties, but not to delay the plaintiff, or to subclerks there are at present no rewards in the shape of ject him to further costs. If to allow the notice to be prizes, nor is there any distinction made as to the merit given would unfairly hamper the plaintiff, the leave ought of the candidates who pass that examination.
not to be given. In the present case his lordship was by And whereas your petitioners are of opinion that it no means convinced that the claim to indemnity was well would be a great incentive to study, and an encourage founded. But it was proposed to serve 450 people, every ment to junior students, if some such rewards and dis
one of whom might be disposed to dispute the claim. There tinctions were given and made.
might be 450 new defendants, and 450 summonses for the Now your petitioners respectfully request that the
direction of the judge as to the mode of trial. Each of them
might ask for liberty to defend the action, and each of them matter may receive attention and consideration, and that,
would then be entitled to call his own witnesses. This was if possible, prizes may be awarded, as at the final ex
possible, though not probable, but, it only a tithe of the persons amination ; and that there may be some reasonable
served came forward, the plaiutiff's would be seriously emclassification according to merit of successful candidates barrassed. Under the circumstances, his lordship thougbt at the intermediate examination; and that, even if that the discretion of the judge had been rightly exercised, prizes cannot be awarded, such classification may be ob COTTON, L.J., thought that the case was within rule 18, but served.]
that the judge had a discretion in the matter, and that the leave ought not to be given when the result would be to
hinder or embarrass the plaintiff in the prosecution of his The following advertisements from the Daily Cluronicle
action. The rule was intended for the benefit of the defendhave been forwarded to us :
ant. The probability of tbe defendant's success in his claim
(unless it was clearly impossible that he could succeed) ought Law, Mr. Beetholme, Law Accountant, with a Solicitor, acts for those in difficulties. County Court, Bankruptcy, and Divorce Cases
not to influence the judge in the exercise of his discretion; but pursued or defended. Rents and debts legally recovered. Consul. the Vice-Chancellor's decision was right, on the ground that tation free. Letters, with advice, to those in country, 69, Frith the issuing of the notices would tend to embarrass the street, Solo, W.
flaintiffs. Lush, L.J., said that the court must be satisfied Notice.- Private and Confidential.-Messrs. LEWIS, of 123, Chan
that there was a question in common between the plaintiff cery-lace, give advice and legal assistance, and also undertake the settlement of the affairs of all those who are in debt or difficulties,
I and the defendant, and between the defendant and the third without pablicity or stoppage of business. Probate and Divorce | party, which ougbt to be decided in the action. In the precases atended to. Hours, 10 to 4; Saturdays, 10 to 1.
fent case the benefit which would result to the defendants Mr. J. D. Rogere, late scholar of Balliol College, Oxford, from deciding the question as against the third parties in this has been elected to the Stowell Law Fellowship in Univer action would be infinitesimally small compared with the sity College.
embarrassment which would be caused to the plaintiffs by The Washington Republic says that one of the most im
bringing in all these parties.-SOLICITORS, Wilson, Bristows, portant duties the new President of the United States will
& Carpmael; Newman, Stretton, & Hilliard. have to perform will be the appointment of four associate justices of the Sapreme Court of the United States in place of RECEIVER IN BANKRUPTCY-REMUNERATION-PRIORITYJustices Clifford, Hant, Swayne, and Strong.
I APPLICATION FOR PAYMENT-LOCUS STANDI_BANKRUPTCY
RULES, 1871, RR. 2, 3, 7.-In a case of Ex parte Browne, 1 (Russ. & Ry. 237). In Harvey v. Farnie a marriage was, before the Court of Appeal on the 16th inst., a question in 1861, solemnized in England between a domiciled arose as to the right of a receiver in bankruptcy to apply to Scotchman and an English woman wbo at that time was the court for an order that the trustee should pay him the domiciled in England. Immediately after the marriage, the taxed amount of his charges. By rule 2 of the Bankruptcy wife went with the husband to Scotland, where they lived Rules of 1871 it is provided ibat, “Where a receiver or together until the year 1863, when the wife obtained in a manager of the property or business of a bankrupt shall have Scotch court a decree for a divorce a vinculo matrimonii, on been appointed, he shall, upon the appointment of a trustee, the ground of the husband's simple adultery-a ground upon deliver to such trustee all money and property which may | which a divorce could not have been obtained in England. bave come to his hands, unless the court shall otherwise In the year 1865, the husband was married in England a order"; and by rule 3, “ A receiver or manager, in cases second time to another English lady. The petition was preeither of bankruptcy or liquidation, shall not have any lien sented by the second wife, claiming a declaration of nullity whatever for his remuneration on any money or property of marriage, on the ground that the Scotch divorce was wbich may have come into his bands"; and rule 7 provides inoperative in England, and that, consequently, the husband that, “ Where the receiver or manager is not continued as had a wife living at the time wben the second marriage was trustee, or is continued as trustee but without remo. solemnized. It was contended on behalf of the petitioner neratiin, he sball be allowed out of the estate such that, because the marriage was celebrated in England it was sum for his services as receiver or manager as indissoluble in Scotland, or indissoluble except for some the taxing officer of the court shall, having regard to the canse for which it could be dissolved in England, reliance views of the trustee, and committee of inspection (if any) being placed on Lolley's case, in which it was said "that thereon, think fit. In the present case a liquidation do sentence or act of any foreign State could dissolve an petition was filed on the 2nd of April by a licensed victualler. English marriage a vinculo matrimonii for grounds on wbich On the 4th of April ope Browne was appointed receiver it was not liable to be dissolved a vinculo matrimonii in of the debtor's property, and on the 10th of April he was England.” In that case, however, the marriage which was appcinted manager of the debtor's business. On the 5th of in question had been contracted between two persons domi. June the creditors appointed a different person trustee, and ciled in England, and had been solemnized in Eagland, and on the 12th of June the receiver delivered over the debtor's a divorce on tbe ground of the husband's adultery was deproperty to the trustee, and gave up possession of the busi- creed by a Scotch court on the application of the wife during ness to him. The receiver's expenses out of pocket were paid a temporary residence in Scotland, where the parties were to bim. The trustee carried on the business for some time, and not domciled. Sir James Hannen held (24 SOLICITORS ultimately sold the public-house and other property, and out JOURNAL 507, L. R. 5 P. D. 153) that Lolley's case was disof the proceeds of sale be paid off sowie large mortgage debts tinguishable from, and did not govern, the present case, and on the house. In the following March the receiver applied that the deoree of divorce by the Scotch court was valid in to the court for an order for payment to bim by the trustee England as well as in Scotland, and, consequently, that the of the amount of his charges as receiver and manager, which second marriage was valid. The decision was affirmed by the had been taxed at £60 158. He alleged that the trustee bad Court of Appeal (JAMES, COTTON, and LUSH, L.JJ.). JAMES, not realized the estate to the best advantage, and that, if he L.J., said that the judgment in Lolley's case must be couhad done so, there would bave been ample funds to pay the strued with reference to the particular facts which were amount claimed. And be asked to have the trustee's accounts then before the court for its determination-viz., a taken. The trustee said that he had in hand a balance of only case in which the parties were domiciled in England £122 on account of the estate, and that he did not expect to at the time when the status of husband and wife was realize anything more. And he said that there were still | originally constituted, and continued domiciled there at the unpaid auctioneers' charges and solicitors' costs in relation time when it was sought to dissolve the status. The applito the realization of the estate which would more than catiou of the decision to a case like the present had been exhaust the £122. The application was refused by the re. much questioned by the highest autbority-by Dr. Lushinggistrar, and his decision was affirmed by the Court of Ap. ton in Conway v. Beasley (3 Hagg. Eccl. 639), faod by the peal (JAMES, COTTON, and LUSH, L.JJ.). JAMES, L.J., said ) lords who decided Shaw v. Gould (L. R. 3 H. L. 55), and he thought it would be a monstrous evil if a receiver was there was an express decision by the Irish Lord Chancellor entitled to come to the court to complain of the Blackburne in Maghee v. McAllister (3 Ir. Ch. Rep. 604), conduct of the trustee in the administration of the estate, that Lolley's case did not apply to a case in which the facts either to prevent him from dealing with it in a particular | were identical with those of the present case, substituway, or to make him account afterwards for an improper ting Ireland for England. No doubt, iu McCarthy v. administration. If the receiver suffered by a mal-adminis De Caix (2 R. & M. 617, Lord Chancellor Brougham held tration, he did so in common with the trustee himself, the that Lolley's case applied to a case like the present. But, solicitors, and the creditors, and if there was any ground of when the facts of McCarthy v. De Caix were investigated, complaint it was much safer to allow the complaint to be it appeared that the poiat did not really arise there for decimade by the creditors, the persons who would really soffer. sion, and, therefore, what he said must be regarded as having It was not desirable to allow the receiver to come to the fallen from him per incuriam, and could not be looked upon court as a litigant party to question the propriety of the as an authority. On principle, James, L.J., said that he trustec's management of the estate. Cotton, L.J., said could not doubt that Sir James Hannen's decision was right. that the receiver had no lien on the assets for his charges; If a foreigner domiciled in his own country came to this his right was only to be paid out of the net assets. And, in country for the parpose of taking an Eoglish wife, the order to ascertain what the net assets were, the estate moment the vinculum of marriage existed the wife acquired must first be administered for the benefit, not of the re the domicil of the husband, and all the rights and conseceiver, but of the creditors. If the trustee had acted im quences arising out of the status would bave to be deterproperly in the administration, the creditors were the proper mined by the law of that domicil which became the persons to question his conduct. Lush, L.J., said it would domicil of both husband and wife-agsuming, of course, be setting a very mischievous precedent to allow the receiver that the domicil was a real bona fide domicil, and not á to question the trustee's management of the estate, he being fictitious one, resorted to for the sole purpose of altering under the control of the creditors. The receiver could the status. When the domioil was the natural bonâ fide not come to the court to ask for payment unless he could show that there were net assets.- SOLICITORS, Nash & Field;
| domicil of husband and wife, the forum of the domicil
must determine whether the status was origioally properly Champion, Robinson, & Poole.
constituted, and whether any ground bad sipoe arisen for
dissolving it. Cotton, L.J., said that a great deal of the DIVORCE_VALIDITY-MARRIAGE BETWEEN FOREIGNER
difficulty had arisen from the use of the word “marriage AND ENGLISH SUBJECT SOLEMNIZED IN ENGLAND-D1880 in two senses, as meaning tbe solemnity, and also the LUTION BY FOREIGN COURT.-In a case of Harvey v. Farnie,
status. The validity of the solemnity must depend on the before the Court of Appeal on the 20th iost., an important law of the place wbere the marriage was celebrated. The question arose as to the validity of a decree for the dissolu. country of domicil always (i.e., in the case of Christian tion of a marriage pronounced by a foreign court, the mar. countries) recoguized the parties as married if they had riage bet a een the parties having been solemnized in followed the forms presoribed by the law of the country in England. The decision of the court is of importance, as which the marriage was solemnized. Bat the status must explaining the meaning of the well-kuown Lolley's case be determined by the law of the actual domicil, and the domicil of a wife was always that of her husband. Act, 1869, which, it was urged, protected the appointment of Divorce was not an incident of the marriage contract, in the receiver in the action as being an equitable execution the sense that the lex loci contractus governed it; against the land of the debtor, executed in good faith and it was an incident of the status, and was to be determined without notice of an act of bankruptcy. But the court said that by the law of the domicii. In the present case there was on the appointment of the first receiver the property of the ihroughout a real domicil in Scotland, and the Scotch court debtor came into the custody of the law, and therefore the tad jurisdiction to determine the status of the parties, not subsequent execution could not affect it. The receiver aponly in Scotland, but in every other country. The decision pointed under the second order could not interfere with the of the Court of Appeal in Niboyet v. Niboyet (27 W. R. 203, rigbts of the receiver appointed by the prior order of the L. R. 4 P. D. 1) did not conflict with this view, for it | Baokroptcy Court.-SOLICITORS, Stevens & Co.; Layton de turned entirely on the construction of the English Divorce Jaques. Act. LUSH, L.J. said that in Lolley's case ibe marriago in question was called an "English marriage." But
COMPANY, WINDING UP - CONTRIBUTORY-Power OF that term might refer, eitber to the place where the marriage was solemnized, or to a marriage between
COMPANY TO PURCHASE ITS OWN SHARES-COMPANIES persons who were domiciled in England. In that case
Act, 1862, s. 12–COMPANIES ACT, 1867, s. 9.-In a case the marriage was an English one in both senses; in
of In re The Dronfield Silkstone Corl Company, before the the present case it was English only in the sense of having
Court of Appeal on the 21st inst., the question arose whether been solempized in England. The decision under the cir
a company limited by shares can purchase its own sbares comstances of the present case, that the divorce by the Scotch
when the articles of association expressly authorize the court was valid in Eogland, seemed to be a logical sequence
purcbase, but the memorandum of association contains no of the decision of the House of Lords in Warrender v. War
such power. The meniorandum of association of the comrender (2 C. & F. 488). There a domiciled Scotchman was
pany in this case contained the powers usual in the case of a married in England to an English lady, and his Scotch domic
coal company, and there was also a general clause authorizcil continued, and it was held by the House of Lords that a
ing the doing of “all things conducive to the attainment of Scotch court could dissolve the marriage in Scotland. To hold
hold the above objects." The articles of association provided that the dissolution extended to Scotland only, and that the
that “the directors may from time to time purchase for the divorced husband could, if he married again, be indicted in
company any shares in the company, at such price as the England for bigamy, would be a shocking thing. No doubt
directors think reasonable, and such shares su purchased tbat consequence followed in Lolley's case. But that decision
may from time to time, and at any time or times, be by the ought not to be extended. There were anomalies enough
directors dealt with in the same way as if they had never already in the law of marriage, and the court ought not to
been before issued, and the purchase-money payable by the create anotber. The observations of Lord Brougham in
company for any shares so purchased may be paid out of any WeCarthy v. De Caix had been shown to be obiter dicta, and
assets of the company, aod such shares may be transferred the decision of Lord Chancellor Blackburne ia Maghee v.
to the company or to such person or persons as the directors McAllister commended itself to one's sense of what was right
shall determine, and any profit arising on the re-issuing and just.-SOLICITORS, S. A. Tucker; J. S. Ward.
or subsi quent sale of any sbares purchased by the company shall be considered as profits of the year in which such shares shall be re-issued or sold for the company.” In
March, 1872, the company, in pursuance of the resolution of ACT OF BANKRUPTCY - PROTECTED TRANSACTION - a general meeting, agreed to purchase 549 shares belonging APPOINTMENT OF RECEIVER IN BANKRUPTCY_EQUITABLE to a Mr. Ward for £5,000, and Ward executed a transfer of EXECUTION-SUBSEQUENT APPOINTMENT OF RECEIVER BY the shares to the company. Ward's name was removed from HIGH COURT-BANKRUPTCY Act, 1869, 8. 95.-In a case of the register of shareholders, and tbe company was registered Salt v. Cooper, before the Court of Appeal on the 21st inst., as the holder of the sbares, and way so returned afterwards to a question arose as to the validity of an equitable execution the Registrar of Joint Stock Companies. It was admitted on lands of a judgment debtor, by means of the appointment that the transaction was bona fide. It took place in 1872, and of a receiver by the High Court, as against the title of a re- in 1879 an order was made to wind up the company. The ceiver who had been previously appointed by the Court of liquidator tben sought to treat the purcbase as iaralid, Bankruptcy of the property of the debtor. Judgment was and to place Ward on the list of contribuitories. Jessel, recovered against the defendant on a specially.indorsed writ | M.R., held (24 SOLICITORS' JOURNAL, 465) that this must be in an action in the Queen's Bench Division, on the 2nd of done. He was of opinion that the effect of the power was to September, aod on the same day a writ of elegit was iesned authorize the company to traffic in their own shares, that for the amount of the judgment debt and costs. The defend this was inconsistent with the business of the company ant's land was in mortgage and the mortgagee was in posses as defined by the memorandum of association, and sion, and the sheriff made a return to the writ that there were that the provision in the articles, heing inconsistno lands, nor any goods or chattels of the debtor which he ent with the memorandum, was invalid. He also could seize. The plaidsiffs then obtained froin Stephen, J., thought the transaction was io valid, on the ground that the an ex parte order in tbe action appointing a receiver of the company could not be a “member" of itself, and that the rents and profits of the del tor's lands, without prejudice to effect of the purchase was to diminish the capital of the the rights or possession of any prior incumbrancer. This company. This decision was reversed by the Court of Aporder was made at four p.m., on the 14th of September, witb peal (JAMES, COTTON, and Lush, L.JJ.). Cotton, L.J., said out notice of any act of bankruptcy committed by the debtor. that reliance had been placed on the fact that, by reason of In fact a bankruptcy petition had the same day (without the winding up, the rights of the creditors bad intervened, the knowledge of the plaintiffs) been presented against the and that the liquidator represented them. But the right of debtor in a county court, founded upon an act of bankruptcy the creditors was to make every present member of the committed by him on the 13th of September, and at 3.45 company, and every past member who bad ceased to be a p.m., an order had been made by the county court, appoint member within a certain time, contribute to the payment of ing & receiver of the debtor's property. The bank the company's debts. Their right was only against members raptey proceediogs afterwards resulted in a liquidation by of the company, and the question who was a member must arrangement, under which a trustee of the debtor's property depend on the memorandum and articles, and on the general was appointed. The mortgagee sold the mortgaged property, | law. The question was whether Ward had effectually ceased and the question then arose who was entitled to the surplus to be a member. The transaction in question did not of the proceeds of sale after payment of the mortgage debt, make the company a member in respect of the sbares ; it the plaintiffs in the action or she trustee in the liquidation. could not be a member of itself. The transaction must be Jeesel, M.R., held (ante, p. 74) tba', as the receiver in considered as equivalent to a surrender of the sbares bankruptcy had been first appointed, his appointment gaveļ for the benefit of all the other shareholders, not a cance bim a legal right against everybody except the mortgagee in lation of the shares. The directors could have disposed actual possession. The subsequent appointment of a re of the shares again for money. The purchase was ceiver by the Higb Court was therefore inoperative, and not justified by the general clause in the memorar. the trustee was entitled to the surplus of the proceeds of sale.dom, but only by the provision in the articles. This decision was affirmed by the Court of Appeal (JAMES, The difficulty of the Master of the Rolls seemed to Cottox, and LUSH, L.JJ.). The argument on the appeal bave been that the article would allow trafficking in the turned mainly on the effect of section 95 of the Bankruptoy company's shares. Of course, nothing in the artioles could
authorize that, if the memorandum did not. What won was cured by the fact that the company had for seven actually done was authorized by the artioles, and the years adopted the transaction and laken the benefit of it, question was whether it could be effectually done. His and nobody thought of questioning it antil the winding-up lordsbip thought the article was not intended to authorize | order. After the lapse of time the company could not any trafficking in shares for the purposes of profit, but I have called the transaction in question, and if so, the only to authorize a purchase of shares, if for any reason creditors could not question it, for the liability of the the directors should think this desirable. It was not in sbareholders was only a liability to the company, and the tended to add a new kind of business to that whioh was creditors could take only that which the company could authorized by the memorandum and the making of profit legally or equitably have recovered from the shareholders. thereby, though profit might incidentally arise. The -SOLICITORS, Pilgrim g Phillips; Emmet & Son. principal argument in support of the proposition that the power could not be effectoally given was that such & purchase of shares was tantamount to a reduction of the
COMPANY_WINDING UP-JUDGMENT CREDITOR-DELAY capital of the company, which was an illegal thing. If it
IN ISSUING EXECUTION OWING TO REPRESENTATION BY THE was equivalent to a reduction of the capital, his lordship
COMPANY AS TO PAYMENT - PAYMENT TO SHERIFF ON failed to see how a surrender or a forfeiture of shares was
ACCOUNT OF DEBT-COMPANIES ACT, sy. 85, 87, 163.- In a not equally a reduction of capital, and get it was admitted
case of Re Firth House Paper Mills Company, before the
Master of the Rolls on the 17th inst., a motion was made by that sbares could be forfeited or surrendered. If a com
certain creditors that the liquidator of the company might pany was to disable itself from carrying on the business for which it was formed, no doubt that would be illegal, and
be ordered to pay to them a sum of £100, paid to the sheriff if the purchase of shares by the compa y was part of a
of Yorkshire on the 4th of June, 1880, and a sum of
£383 5s. 6d., for which execution had been issued against the general scheme for returning the capital, it would stand
company on the 8th of June, 1880. The debt was in respect on quite a different footivg. There was no such scbeme in
of the costs of an action of tort, and which were taxed at a the present cage, and it was admitted that the parobase
sum of £483 59. 6d., and on the 24th of May, 1880, the was bona fide. No doubt the articles did not limit the
solicitors of the creditors applied to the solicitors of the power of purchase, and if it was used to an unlimited extent tho exeroise of it would be bad.
company for payment. On the 28th of May the creditors'
But the exercise to a limited extent would not necessarily be ultrà
solicitors again wrote, stating that unless the amount were
paid in the course of the next day, they should assume it was vires. It was said that the power was contrary to
not intended to pay without further proceedings, and should the spirit of thy Companies Acts of 1862, 1867, and
act accordingly. On the 29th one of the firm of the creditors' 1877. But this transaction was not expressly prohibited by
solicitors met the managing director of the company, and he the Acts. It was not really a reduction of the capital. The
said to the solicitor it would be a great convenience to the number of shares remained the same; there was power to
company if the payment were allowed to stand over until Te-issue them; they were not in any way cancelled. A re
the 7th of June, and on the faith of the director's statement duction of capital, which did not involve an alteration of the
that it would then certainly be paid, it was arranged that memorandum, did not violate the Act. It was urged that the
the matter should stand over until thut day. On the 7th of Act contemplated only one way in which a shareholder could
June the London agents of the creditors' solicitors were get rid of his liability-viz., by a transfer of his shares to
instructed to issue a fi. fa. for the amount of the debt. On another person. But the power of transfer was given to
the 8th of June the managing director of the company wrote enable a shareholder to retire from the company against the
stating that he had been prevented from raising money on will of the other shareholders ; & power to retire which had
mortgage as he had anticipated, and that this would prevent been assented to by all the shareholders ought not to be held
his paying the above debt, as he had intended, but that he was illegal unless it was expressly prohibited by the Act. No
going to London in the hope of effecting the mortgage there. doubt the power was a dangerous ope; and might be so used
On the 9th of June the deputy-sheriff entered on his fi. fa. for by the directors as to enable the shareholders to escape lia
the amount of the debt. On the evening of the same day the bility, and to reduce the capital, so as to prevent the company
managing director of the company went to the deputy-sheriff from cerrying on its busine-s. But the answer to the objec.
and paid him a sum of £100 on account of the debt, and tion was that such an exercise of the power would be illegal.
asked him not to proceed to advertise a sale for a few days, as On principle his lordship thought that the power was not
he should shortly be paid the balance, and by consent the invalid, and that Ward was released from his liability by the
advertisement was postponed. On the 10th of June the transfer to the company. And his lordship could not help
creditors' solicitors received notice that a petition to wind up thinking that the opinion of the lat: Lord Justice Giffard in Zulueta's case (18 W. R. 778, L. R. 5 Ch. 444) was in favour
the company had been presented by a creditor on the 8th of
June and, later in the day, notice that a petition had also of the validity of such a power, for he held that a purchase
been presented on tbe same day by the company for a windingby a company of its own shares was not valid unless it was
up order. On the 4th of June the secretary had issued notices distinctly authorized by the articles. JAMES, L J., said that
for a meetiog on the 14th of June to pass a resolution for the fallacy of the judgment of the Master of the Rolls lay in
the voluntary winding up of the company. By an order supposing that the creditors had some peculiar right. A
made in the action on the 10th of Jane, ex parte, the sheriff creditor quâ creditor had no right against the shareholders.
was restrained, until further order, from proceeding with the He had no right against the sbarebolders but through the company, and no right but such as the company would have
execution. By another order of the 15th of June, 1880, had, with the exception of the statutory right aguinst
made in the action, it was ordered that the plaintiffs should be past shareholders. The case must be treated in exactly the
in the same position as if the sheriff had sold, but without pre
judice to any question. Notices to the deputy-sheriff not to same way as if the company itself had been applying to bave Ward's name restored to the register of members, as having
pay over the £100 were given by the provisional liquidator
and also by the creditors, and the question now was argued been improperly removed. To such an application by the
whether the official liquidator, who was also the deputycompany ibere would have been abundant answers. The
sheriff, was bound to nay the plaintiffs' solicitors the £100 articles directly authorized the purchase, and tbe purchase
and the remainder of their debt on a preferential claim out of had been, in fact, made. It was said that the power was
the assets, on the ground that the creditors, by the representa80 large in its terms as to enable the company to traffick
tion of the company, bad been prevented from issuing execu. in its own shares, and that therefore it must be held bad
tion, which they would have done had it not been for the altogether. If the directors had spent the company's
promise of payment made by the company. They relied on money in any such business, it might possibly be open to
the various cases commencing with Great Ship Company's the shareholders to make them personally liable. But
case (12 W. R. 139, 4 D. J. & S. 63) and ending with Re there would be no other result. The person wbo had bought Richards (L. R. 11 Cb. D. 676). JESSEL, M.R., said he had the sbares could not escape liability, nor could the company great difficulty in reconciling the cases botb with one another get the gbares back. The parcbase of shares in the pre
and with the Act of Parliament. It had been decided that sent case was authorized by the articles, it was made, and
the 163rd section of the Companies Act, 1862, did not really it was assented to by the great majority of the share
avoid every "attachment, sequestration, distress, or execu. holders. If the transaction was in any way questionable, tion" put in force against the company, and that all the secstill it was a mere matter of internal management of the tion meant was that the "attachment, &c.,” would be void company-a domestic transaction between the share unless the court otherwise directed. Moreover, the 85th and holders. If it was ultrà vires the company, the illegality | 87th sections enabled the court to say whether an execution