by which B. covenanted to hold the sum due from him in trust for C. during the joint lives of R. and C., and if C. should survive then for her absolutely, but if R. should survive then to R. for life, with remainder after the death of the survivor for H. their infant child.

R. and C. resumed cohabitation in 1871. C. filed a bill praying that the deed might be carried into execution, or that she might be declared entitled to an equity to a settlement in respect of the fund. Held, on demurrer, that the separation deed was not avoided by the renewal of cohabitation; held also that B. had, by becoming a trustee, converted the debt into an equitable debt, and that C. was entitled to have the trusts of the deed carried out or to assert an equity to a settlement out of the fund.

DEMURRER.

The plaintiff, Clementina Ruffles, at the time of her marriage with Alfred Ruffles in Jan. 1865 was entitled to a sum of 7281., which was retained for her by her brother Alfred Bullock, and was secured by his promissory note, he paying her interest thereon at 51. per cent. There was issue of the marriage one child, the infant plaintiff, H. J. Ruffles, who was born in July 1866.

On the 5th Nov. 1867, a deed of separation was executed between Alfred and Clementina Ruffles by which Alfred Ruffles covenanted with Arthur Bullock as trustee that his wife should be at liberty to live apart from him; that Alfred Ruffles would during the joint lives of himself and his wife pay to Arthur Bullock the sum of 631. 12s. for the maintenance of their child; that it should be lawful for Arthur Bullock, during the lives of Alfred and Clementina Ruffles to pay to Clementina Ruffles the interest of the said sum of 7281. secured as aforesaid, and that all real and personal estate to which Clementina Ruffles then was, or which Alfred Ruffles in her right should at any time during their joint lives become, seised or possessed of or entitled to, should be held and enjoyed by Clemen. tina Ruffles during her life for her sole use, and in the event of her surviving Alfred Ruffles the same might be sold, given away, devised, bequeathed, or disposed of by Clementina Ruffles, and that if Alfred Ruffles should survive his wife then that all such real and personal estate should be held upon trust for Alfred Ruffles for life, and after his decease for H. J. Ruffles, his heirs, executors, administrators,and assigns absolutely; and Arthur Bullock covenanted with Alfred Ruffles that he would stand possessed of the said sum of 7281. and the interest thereof upon trust during the joint lives of Alfred Ruffles and his wife, to pay the interest thereof to Clementina Ruffles and her assigns during her life, and after the decease of Alfred Ruffles in the lifetime of his wife upon trust for the wife absolutely. But in case of the death of Clementina Ruffles in the lifetime of Alfred Ruffles, then upon trust to pay the interest for the said sum of 7281. to Alfred Ruffles and his assigns during his life,and after the decease of the survivor of them then upon trust to pay the principal money and interest to H. J. Ruffles absolutely; and Clementina Ruffles, with the intention of binding her separate estate, covenanted with Alfred Ruffles that she would not take any proceedings for compelling Alfred Ruffles to allow her any support or maintenance, or to cohabit with her.

Alfred Ruffles and his wife continued to live separate until the year 1871, when they resumed

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cohabitation, and had ever since continued to live together, but Arthur Bullock had retained the said sum of 7281. in his hands, and paid the interest thereon to Clementina Ruffles on her sole receipt until his death which occurred in April 1873.

Arthur Bullock made his will in March 1873, and thereby appointed the defendants Alston and Garrard, his executors, and they admitted assets sufficient to pay the said 7281.

Alfred Ruffles was in partnership with Thomas Andrew, and the firm having become insolvent a petition was filed for the liquidation of their property, and the defendant Goulding was appointed trustee of their estate. The defendant Goulding claimed to have the said sum of 7281. paid to him as such trustee, alleging that it formed part of the estate of Alfred Ruffles, but Clementina Ruffles submitted that under the circumstances she was entitled to have the same held upon the trusts of the indenture of 5th Nov. 1867, or settled for the benefit of herself and issue. The bill prayed that the trusts of the indenture of Nov. 1867, so far as it related to the sum of 7281. might be carried into execution, or that the plaintiff Clementina Ruffles might be entitled in equity to have a settlement made upon her and her issue of the said sum.

The defendant Goulding demurred to the bill. Glasse, Q.C. and F. Thompson, for the demurrer. --The separation deed was the only thing that intercepted the husband's right. A wife cannot assert an equity to a settlement out of a legal chose in action:

Bosvil v. Brander, 1 P. Wms. 459.

[Miller, Q.C., for the plaintiff.-We contend that the separation deed converted the debt into an equitable debt.] The deed has been avoided by the subsequent cohabitation

Webster v. Webster, 21 L. T. Rep. O. S. 192; 1 Sm. &
Giff. 489;

Bindley v. Mulloney, 20 L. T. Rep. N. S. 263; L. Rep.
7 Eq. 743,

and the character of Bullock as a trustee has come to an end. [The VICE-CHANCELLOR.-In Webster v. Webster it was a mere separation deed. There is no doubt that a mere separation deed is put an end to by subsequent cohabitation, but this goes further. A deed executed as a separation deed may be so framed as to form a settlement of property. In Bindley v. Mulloney the deed was executed in contemplation of a separation which never took place. It was like a marriage settlement which is made in case the marriage shall take take.] There may be further issue which shows that the deed was intended to take effect only if the separation continued. They cited also

Bateman v Ross, 1 Dow. 245;
Burdon v. Dean, 2 Ves. Jr. 607;
Bright on Husband and Wife, 231;

Wortham v. Pemberton, 1 De G. & Sm. 644. Miller, Q.C. and W. W. Cooper, for the bill, were not called upon.

The VICE-CHANCELLOR said that he needed no authority to show that the resumption of cohabitation put an end to a separation deed, but the deed in the present case seemed to go beyond the usual scope of separation deeds by providing for the case of the husband surviving the wife, and also making provision for the child of the marriage, and he was of opinion that it was not rendered void by the subsequent cohabitation. It was agreed that if the money in question was money which could be recovered in a court of equity, then Mrs. Ruffles

was entitled to an equity to a settlement out of it, and in his opinion the trustee had turned himself from a legal debtor into a trustee, which would give a remedy against him in this court, which would not have existed against him if he had been merely a legal debtor. On both grounds the demurrer must be overruled. He was by no means sure that, if a wife had owing to her a legal debt which her husband could recover, and her husband deserted her, she could not establish an equity to a settlement in respect of it. He was of opinion, therefore, that either the settlement was valid, and might be carried into effect, or if not then that Mrs. Ruffles was entitled to have part of the fund settled.

Solicitors: Walter, Moojen, and Son; Simpson, and Cullingford.

Thursday, March 18.

PRYER V. GRIBBLE.

Redemption suit-Agreement to compromise-Motion to enforce.

Plaintiff filed a bill to redeem mortgaged premises consisting of a brickfield, and plant, and stock, defendant mortgagee being in possession. An agreement for compromise was entered into, plaintiff to pay a certain sum by a given day and defendant to hand over the property on payment, defendant meanwhile to carry on the business, keeping an account, and both parties to execute all necessary documents.

The sum not being paid by the day appointed, defendant moved to have the agreement enforced, or that plaintiff's bill might be dismissed. Defendant had in the meantime sold some of the bricks, and had parted with some of the plant and tools. Held, that the agreement might be enforced by motion,

and plaintiff ordered to pay the amount into court, less the value of the plant and tools.

THE bill in this suit was filed by a mortgagor for redemption of certain premises used as a brickfield, of which the mortgagee was in possession, the sum advanced being about 57711.

On the 29th Sept. 1874, a compromise was entered into and an agreement signed, by which, in consideration of 4500l. to be paid by the plaintiff, the defendant agreed to give up the land, plant, machinery, bricks, and other materials, and to release the plaintiff from all sums then due. The plaintiff was to pay the 45001. by the 15th Jan. 1875, and the defendant to carry on the business until the completion of the purchase, receiving all moneys for the sale of bricks up to that date, and accounts were to be mutually settled. Each party was to pay his own costs of the suit, and they were to execute all legal documents for giving effect to the agreement. The money not having been paid by the plaintiff on the day appointed, and various applications having been made for a settlement, a motion was made by the defendant that the agree ment might be carried into execution, or that the plaintiff might be ordered to pay the amount by a short day, with interest from the 15th Jan. 1875, or that the bill might be dismissed with costs. The plaintiff alleged that since the agreement, the defendant had sold a considerable quantity of bricks, and had parted with some of the plant and materials which were part of the consideration for the 45001. The defendant answered that the agreement provided for his selling the bricks, and the

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only other articles parted with were an engine and a few tools for which he was willing to allow a deduction.

Higgins, Q.C. and Kingdon, for the motion, cited Dawson v. Newsome, 2 Giff. 272;

Tebbutt v. Potter, 4 Ha. 164;

Whalley v Lord Suffield, 12 Beav. 402;

Rowe v. Wood, 1 Jac. & W. 337.

Romer, for the plaintiff.-The defendant contracted to sell the plaintiff certain goods, some of which he has parted with, and thereby broken the contract. But if this agreement, by which the parties undertake to execute documents, and to carry on the business, could be specifically enforced at all in this court, it must be by bill and not on

motion.

Askew v. Millington, 9 Ha. 65:

Richardson v. Eyton, 2 De G. M. & G. 79.

The observations of Turner, V.C. in the former casc apply here. Here the court has to adjudicate on equities distinct from the equities in the cause. The question now before the court has nothing to do with the question in the cause. Our case is that the property has been so destroyed that it cannot be restored. In Dawson v. Newsome the parties had stipulated that the agreement might be taken as an order in the cause. Forsyth v. Manton (5 Madd. 78), was also referred to.

The VICE-CHANCELLOR said that the mortgagee having entered, and being accountable as mortgagee in possession, a most reasonable arrangement had been entered into. If a decree had been made it must have resulted in finding a certain amount due to the mortgagee, a day for payment would have been fixed, and if default had been made in payment the plaintiff's bill would have been dismissed. The parties by their agreement took the case out of the hands of the court, and themselves fixed the amount due and the day for payment. It had been argued that this agreement could be carried into effect only by filing another bill. Such a doctrine would be utterly absurd. All the authorities agreed that if the parties came to terms to settle that which was the only object of the suit, those terms might be enforced by motion. All the observations of Turner, V. C. in Askew v. Millington might be referred to the fact that the agreement in that case referred to matters that were no part of the suit. So far the case was, in his Honour's opinion, perfectly beyond doubt. But it was said on the part of the plaintiff that the defendant had parted with some of the property. As to the sale of the bricks, that was necessarily done because the agreement provided that the business should be carried on. As to the engine and tools which had been parted with, the value of them must be deducted from the 45001., and the balance paid into court by the plaintiff within one month, or the bill must be dismissed. The plaintiff must pay the costs of the motion.

Solicitor for the plaintiff, W. Lund. Solicitors for the defendant, Bridges, Sawtell, and Co.

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after date of contract- Rescission of contract,

ab initio. The plaintiff company entered into an agreement with the defendant company on the 12th Jan. 1870, which gave the plaintiff company the option of having a telegraph cable made and laid by the defendant company, the work to be paid for by instalments, the first instalment to be paid when the order was given, and the subsequent instalments as the work was certified by the plaintiff's engineer, B..

The order was given on 4th Feb. 1870, and the first instalment of 40,000l., paid to the defendants, and 6001. commission thereon also paid by the plaintiffs to B. The plaintiffs afterwards discovered that B. had a secret sub-contract with the defendants that he should lay the cable himself. The plaintiffs filed a bill to rescind the contract ab initio, and to recover the two sums paid. There was a conflict of evidence (1) whether B. was the plaintiffs' engineer on the 12th Jan. 1870, and (2) whether the sub-contract or an expectation of

a sub-contract was in existence on the 4th Feb.

1870. It was admitted that B. was the plaintiff's

engineer on the 27th Jan.

The court held upon the evidence that B. was the plaintiff's engineer on the 12th Jan 1870, but that the question was immaterial, as the contract between the companies did not become binding until the 4th Feb., when the order was given. Also, that the sub-contract between B. and the defendants, or an understanding or expectation to that effect was in existence on or before the 4th Feb., and that the plaintiffs were entitled on its coming to their knowledge to have the contract declared void, and to have returned to them the sums of 40,000l. and 6001.

Per Curiam: A contract may be just as well avoided by the fraudulent conduct of the parties to it in executing it as if the fraud had existed at the time when the contract was entered into, and, in fact, led to the contract itself.

Dietum of Wood, V.C., in Onions v. Cohen (2 H. & M. 361) that, "except in the case of Gwillim v. Stone (14 Ves. 129), there is no instance of a contract being delivered up to be cancelled, unless there was fraud in obtaining the contract itself," disapproved.

Is the early part of 1869 Don Mariani Felipe Paz Soldan, a native of Peru, obtained from the Peruvian Government a promise of a concession to lay a submarine cable from Tumbez, in Peru, to Panama, in connection with the system of the National Telegraph Company of Peru at the Peruvian end, and at the other end with other projected lines which would, when laid, place it in connection with the West Indian, North American, and Atlantic cables. Don Mariana Soldan, with the expectation of obtaining such concession, entered into negotiations in England for the construction and laying of the proposed cable. Then after some negotiations in other quarters, he eventually, through the agency of the defendant, John Studdy Leigh, entered into an arrangement with the defendants, the India Rubber Company, to make and lay the proposed cable for 300,000l. The arrangement was made by certain letters dated the 24th June and the 9th July 1869, and part of the arrangement was that the defendant company should pay out of the 300,000l. 16,0001. to Don M. F. P. Soldan, and 3000l. to John

[V.C. M.

Studdy Leigh, in addition to 1000l. to Don M. F. Paz Soldan for expenses incurred by him.

Don M. F. Paz Soldan resigned all his interest in the proposed undertaking, and in the sum of 16,000l. to the defendant Den Carlos Paz Soldan; and on the 9th Nov. 1869 the Peruvian Government granted to Don Carlos Paz Soldan a concession of that date to lay from Tumbez and other ports of Peru (a submarine cable that might reach to Panama, or other northern points, with the object of being put in connection with the cables which terminated in Europe and North America, on the basis and conditions therein mentioned. The projected cable was intended to be in connec tion with a system of telegraphic communication between New York and Panama, which was then about to be established by the following com panies, i.e., the portion between New York and Havanna by the International Ocean Telegraph Company, the portion between Havanna and Santiago de Cuba by a company then in course of formation, and afterwards incorporated under the name of the Cuba Submarine Telegraph Company, Limited, and the portion between Santiago de Cuba and the Isthmus of Panama by the West India and Panama Telegraph Company, Limited. Arrangements had been entered into between the last mentioned company and the company working the railway across the Isthmus of Panama, for continuing the system of telegraphic communication across the Isthmus to Panama, where the line from that place to Peru was intended to commence. The defendant company were the projectors and promoters of the West India and Panama Telegraph Company, which was incorporated on the 30th July 1869, and were the contractors for making and laying the last named company's cable, and the defendant company afterwards projected and promoted the formation of the Cuba Submarine Telegraph Company, which was incorporated very shortly after the plaintiff company, and became the contractors for making and laying the Cuba company's cable. The defendant, Sir Charles Bright, was the engineer of both the West India and Panama company and the Cuba company.

The directors of the defendant company had caused a company with the same object as the plaintiff company to be registered on the 23rd Nov. 1869, with a nominal capital, and without any articles of association; but that company was intended only to be temporary, and was wound-up by arrangement, and the plaintiff company was registered and incorporated on the 12th Jan. 1870, with a share capital of 320,000l. The subscribers to the memorandum of association of the first company so registered were the defendant Gray (the manager of the defendant company), General Smith (the chairman of the International Ocean Telegraph Company), Sir Charles Bright, Thomas Hughes, and Messrs. Bannatyne, Beattie, and Silver, the last three being directors of the defendant company. The plaintiff company's memorandum of association was signed by the same seven per sons (except General Smith) and A. F. Low. One or more of the directors of the defendant company, including Mr. Bannatyne, became directors of the plaintiff company. Previously to the registration of the plaintiff company, meetings were held of the subscribers to the first mentioned memorandum of association under the name of provisional directors; the defendants Gray and

V.C. M.J

Sir Charles Bright were usually present; and at a meeting of the 4th Jan. 1870, at which the defendant, Sir Charles Bright, was present, the prospectus of the plaintiff company was settled and ordered to be printed, and the name of Sir Charles Bright appeared in the prospectus as the engineer of the company.

By an agreement dated the 12th Jan. 1870, and made between Don Carlos Paz Soldan of the one part and the plaintiffs of the other part executed by the defendant Leigh as agent of Don Carlos Paz Soldan, Don Carlos Paz Soldan in effect agreed to transfer the commission to the plaintiffs, and the plaintiffs agreed to pay Paz Soldan 10001. in respect of and in full for his actual expenses within one month after the order was given for the manufacture of the submarine cable. This agreement was prepared by Mr. Mackenzie, the solicitor of the plaintiffs.

By another agreement dated the 12th of Jan. 1870, between the defendant Company therein called the contractors of the one part, and J. E. G. Barrow on behalf of the plaintiffs, therein described as a company about to be constituted and therein called the company of the other part, it was agreed as follows:

1st. The contractors shall and will, on the payment of £40,000, as hereinafter mentioned, commence to manufacture, and, subject to the due and punctual performance by the company of the obligations on their part hereinafter contained, will continue to manufacture, and will complete, and use their best endeavours to lay the submarine cables hereinbefore referred to, and more particularly described in the detailed specification contained in the schedule hereto, which specification is hereby declared to be part and parcel of these presents, and as binding as any portion hereof. The contractors agree to have the cables made within six months after the payment of the said 40,000l., and to have the cables laid within ten months of same date, inevitable accidents excepted.

2nd. The company shall and will pay to the contractors for the materials, and manufacturing and laying as aforesaid of the said cables the sum of 300,000l. sterling, namely 25,000 in fully paid-up shares of the company at par, and 275,000l. in cash, and the said contract price, or sums shall be paid at the times and in manner hereinafter provided, that is to say:

On the order being given

In twelve instalments of 15,000l. upon certificates from the company's engineer that the manufacture of the cables is making sufficient progress to entitle the contractors thereto

On shipment

...

...

On the cable being completely laid, and certified by the compan's engineer

In cash ... In shares

£25,000 25,000

£40,000

180,000 30,000

50,000 £300,000

and the company agree that their engineer shall duly give such certificates as aforesaid upon reasonable evidence being offered by the contractors of the fact to be certified. The contractors shall also fully and sufficiently insure against damage to the cables by fire, while any part of the cables is upon their premises, and shall take out a policy or policies of marine insurance upon the cables while on board the ships, such policies against loss by fire or at sea to be deposited with the company, and the contractors will on shipment deliver and endorse to the company such policy of marine insurance, and the bills of lading; and in the event of loss by fire or sea covered by any such insurance the contractors shall, with all reasonable despatch, replace the cable lost, and shall be paid for the new cable by the company according to the rates, terms, and manner hereby agreed upon for the whole of the original works (so far as applicable, and all insurance moneys recovered shall be applied in or towards such payments.

[V.C. M.

3rd. The engineer of the company, or such other person or persons, as he or the company shall appoint in writing, shall be entitled to inspect all and every stage of the process of manufacture of the cables, and at all times to have free access to all such parts of the works of the contractors for the purpose of inspection, and the contractor shall afford every facility to him or them in the performance of his or their duties, and the contractors shall at their own expense supply all usual and proper means of testing the iron wire, and of electrically testing the core and the cable at each stage of manufacture, but such inspection and examination as aforesaid shall not in any way commit the company to the approval and acceptance of any cable which shall not be strictly in accordance with the specification hereinafter written. 4th. The company shall provide the requisite land, stations, easements, and rights of way at all necessary places for the purpose of enabling the contractors to lay the cables, but the contractors shall lead the wires into the stations, and supply all the necessary electrical in. struments and fittings.

5th. Should any difference arise between the parties hereto touching any of the provisions of these presents, the same shall be referred to arbitration in manner provided by the "Railway Companies Act, 1859," and as though the parties to such reference were railway com. panies.

6th. This contract may be varied from time to time by mutual agreement of the board of directors of the respective companies.

7th. Sir Charles Tilston Bright shall be the engineer to the company for the purposes of this contract. [Then followed the schedule referred to.] The contract did not contain any specification as to the laying of the cable.

Para

This agreement was settled by Mr. Mackenzie, the plaintiff company's solicitor, but before approving of it he submitted it to Sir Charles Bright, who approved of and signed it. graph thirteen of the bill stated: "In fact, the directors of the plaintiff company entered into the said last mentioned contract under the advice of the defendant, Sir Charles Bright, as their engineer, that the same was a proper one in its terms, and that the specification contained in the said schedule to it was sufficient, and that the contract was in all respects such an one as would secure the proper construction and laying of the plaintiff company's cable by the defendant company. The plaintiffs, however, have recently been advised (as the fact is) that the said contract does not make proper provision for the laying of the cable by the defendant company, and that it is defective in not containing any specification for the shipping, transfers, and laying of the cable. The defendant, Sir Charles Tilston Bright (who in fact had entered into or was then negotiating the terms of a secret sub-contract with the defendant company to lay the cable) neglected to point out these omissions to the directors of the plaintiff company, as he ought to have done, and in fact he was not in a position (as the defendant company and their directors and officers well knew) to give the plaintiff company disinterested or unbiassed advice, and was disqualified from giving such advice." In pursuance of a resolution passed at the meeting of the directors of the plaintiff company on the 12th Jan. 1870, the secretary on the 13th Jan. wrote to Sir Charles Bright as follows: I am instructed by the directors of the Panama and South Pacific Telegraph Company to request that you will be good enough to inform them the terms on which you are willing to execute the work of engineer to their company, the same to include all expenses in connection therewith.

And on the 14th Jan. Sir Charles Bright replied as follows:

In reply to your letter of yesterday on behalf of the

V.C. M.]

Panama and South Pacific Telegraph Company, I beg to say that my charge for executing the work of engineer to the company, including all expenses and the necessary staff for supervising the manufacture of the line would be one and a half per cent. upon the company's outlay; to be paid monthly as the disbursements are made.

At a meeting held on the 25th Jan. 1870, these terms were formally accepted.

Paragraph 15в. of the bill stated as follows: "The defendants now pretend (contrary to the fact) that the defendant Sir Charles Tilston Bright was not and did not act as the engineer of the plaintiff company until after the receipt of the aforesaid letter, of the 13th Jan. 1870, notwithstanding that the said defendant attended the meetings at which the draft prospectus of the plaintiff company (containing the name of the said defendant as the engineer of the plaintiff company) was settled, and personally approved of such prospectus and perused and approved of the said contract of the 12th Jan. 1870 (containing the provision that the said defendant should be the engineer of the plaintiff company), and in manner aforesaid approved of the said specification on their behalf. In fact it was before the incorporation of the plaintiff company agreed and understood (with the knowledge and acquiescence of the defendant, Sir Charles Tilston Bright) that the said defendant, who was also the engineer of the West India and Panama Telegraph Company, should be the engineer of the plaintiff company; and the arrangements for the formation of the plaintiff company (with the knowledge and approval of the defendant Sir Charles Tilston Bright) proceeded on the understanding that he was to be the engineer of the plaintiff company; and the said defendant acted as the engineer of the plaintiff company in manner hereinbefore appearing before the date of the said letter of the 13th Jan. 1870." According to the terms of the concession of the 9th Nov. 1869, part of the plaintiff company's share capital of the aggregate amount of 60,000l. was reserved for subscription in Peru; and, until it was known whether this amount had been actually subscribed for, the directors of the plaintiff company did not consider it prudent to commence business. On the 4th Feb. 1870, however, the defendant Gray, the manager of the defendant company, represented to the directors of the plaintiff company, that he held a guarantee of the defendant, Paz Soldan, that the shares of the aggregate amount of 60,000l. had been actually subscribed, and the plaintiff therefore on the same day gave to the defendant company the order for the commencement of the cable, and paid them 40,0007., according to the agreement of the 12th Jan. 1870; and paid also to Sir Charles Bright 6001., being his commission of one and a half per cent. according to their agreement with him. The defendant company accordingly proceeded with the construction of the cable. Sir Charles Bright acting as the plaintiff's engineer.

It was shortly afterwards discovered that the capital which had been reserved for subscription in Peru had not been subscribed, and accordingly the directors of the plaintiff company determined not to proceed with their cable; and on the 3rd Aug. 1870, a resolution to that effect was passed, and was on the 4th Aug. communicated to the defendant company, who replied on the 5th.

We have your favour of the 4th instant, with copy resolation of your directors instructing us to stop the manu. Vol. XII, N. S., 806.

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facture of your cable. We regret that our engagements will not permit of our stopping the manufacture, but in accordance with the verbal request made by your chair. man some time ago, we are proceeding with it much slower than was contracted for.

Sir Charles Bright had left England in Feb. or March 1870 on business of the West India and Panama Company, and his brother, Edward Brailsford Bright, acted for him in his absence, and, notwithstanding the resolution of the directors of the plaintiff company, he certified that work had been done by the defendants entitling them to be paid 90,000l. by the plaintiffs. In the month of Jan. 1871, as the plaintiffs were not in a situation to perform their contract, the cable, or so much of it as had then been manufactured for them, was sold by the defendants to the French Government. Negotiations were afterwards begun and attempts made in the months of Nov. and Dec. 1871, to renew and modify the agreement of the 12th Jan. 1870, between the two companies, but the bill stated, before the draft agreement as to the modifications was settled, circumstances came to the knowledge of the plaintiffs in consequence of which the agreement was not proceeded with.

In the month of Sept. 1871, the plaintiffs received information that Sir Charles Bright had resigned his position as engineer of their company, and thereupon Sir Samuel Canning was appointed their engineer in his place.

In his report to the plaintiff company, dated 13th Oct. 1871, Sir Samuel Canning pointed out that in the contract with the defendant company, plaintiffs' cable, and recommended that a specificathere was contained no specification for laying the

tion should be inserted in a form which accompanied his report.

It subsequently turned out that the defendant, Sir Charles Bright, had, unknown to the plaintiffs, entered into a sub-contract with the defendant company that he should lay the plaintiff's cable for the sum of 80,000l., such contract being entered into by the following letters which passed previously to Sir Charles Bright's departure from England.

Feb. 8th, 1870.

J. A. Brand, Esq., Secretary, India-rubber, Gutta-Percha, and Telegraph Works Company. Dear Sir,-I am concluding my arrangements for laying the West India and Panama cables, and it is necessary to provide for the laying of the Cuba cable, which has to be completed first. It will also be convenient for me before leaving to have everything settled relating to the laying of the Panama and South Pacific cables. The letter then stated the terms on which Sir Charles Bright would lay the Cuba cable, and proceeded.

As regards the Panama and South Pacific cables I should be willing to lay them under the same conditions as your contract with the Panama and South Pacific Company, and my arrangement for laying the West India and Panama cables for the sum of 80,000l., the payments to be made as follows: 5000l. upon the receipt by your company of the 5th, 6th, 7th, 8th, 9th, 10th, 11th, and 12th instalments of 15,0001. each, payable by the Panama and South Pacific Company under the contract, and 15,000l. upon the shipment of the cable, making a total of 55,000l.

The balance of 25,000l. to be paid me in cash, or fully paid-up shares of the Panama and South Pacific Com. pany, at your company's option, upon the receipt by your company of the last payment under the contract due when the cables are completely laid.

Any extensions in the Pacific which can be sent out with the same expedition, to be upon proportionate terms to the length of cable.

I propose that the sum of 10,000l., which I have de