Oct. 16, 1897.]

...

up the deed as an act of bankruptcy. A creditor so estopped cannot set up the circular convening the meeting of creditors as a notice of intention to suspend payment, if the circular formed part of the scheme. (Re Woodroff; Ex parte Woodroff.) ...page 502 Legacy-Forfeiture - Domicil.-The interest of a fund was given to a legatee for life, or until he should become "bankrupt," or do or suffer something whereby the same become " vested in or payable to" some other person. The legatee, being a domiciled Englishman, was adjudicated bankrupt in New Zealand on a creditor's petition. Held, that the interest was not forfeited by the colonial bankruptcy. (Re Hayward; Hayward v. Hayward.)...

...

383

330

Practice-Receiving order granted on appeal-Date of.-When a receiving order is granted on appeal, it is dated as if it had been made on the date of the application to the court below. (Re Raatz; Ex parte Carlhian.) Principal and surety-Joint and several promissory note-Payment at maturity by surety-Right of surety to prove for interest on the amount paidMercantile Law Amendment Act 1856 (19 & 20 Vict. c. 97), s. 5.-A claim for interest on the amount of a joint and several promissory note paid by a surety at maturity is a claim on an instrument in writing, viz., on the promissory note, within the meaning of rule 20 of the rules of the 2nd schedule of the Bankruptcy Act 1883, which embodies the provisions of sect. 28 of the Civil Procedure Act 1833. (Re Evans; Ex parte Davies.) 530 Refusal to make receiving order-Costs likely to absorb the assets.-The fact that the costs will probably absorb the assets is not a sufficient cause for refusing a receiving order. (Re Jubb; Ex parte Barman.)

...

...

Retired officer of the army-Half-pay or pensionAppropriation to creditors. A colonel in the army having voluntarily retired, received a "gratuity or retired pay "under Article 1057 of the Royal Warrant (Pay and Promotion) of 1887. Under other articles of the same Warrant he was liable to be recalled to serve in case of emergency. He was subsequently adjudicated a bankrupt. Held, that, under sub-sect. 2 of sect. 53 of the Bankruptcy Act 1883, the court had jurisdiction to make such order as it thought just for the payment of part of such "gratuity or retired pay to his trustee in bankruptcy for the benefit of his creditors. (Re Ward; Ex parte Ward.) Sale to a partner of a member of the committee of inspection-Rule 316 of the Bankruptcy Rules 1886.-Rule 316 of the Bankruptcy Rules 1886 has no application to the sale to a partner of a member of the committee of inspection, in which the member of the committee takes no interest directly or indirectly. (Re Gallard; Ex parte Gallard.)

Scheme of arrangement-Composition on unsecured debts-Due payment in full of composition secured by promissory notes-Over valuation of security by secured creditor.-The debtor's estate was vested in the trustees under a scheme of arrangement approved by the court under the Bankruptcy Act 1890 (53 & 54 Vict. c. 71), s. 3. The net proceeds were to be applied in payment of (1) the expenses, (2) the preferential debts, (3) of a composition of 78. 6d. in the pound on the unsecured debts in three instalments. The payment in full of the instalments at their respective dates was further secured by the joint and several promissory notes of the trustees. The applicant, who was a creditor, had made no claim for a year, and then had over-valued his security. Held, (1) that he was entitled to revalue his security, and prove for the balance (2) that the trustees having entered into no contract apart from the promissory notes, he was not entitled to payment in full of the composition. (Re Morter; Ex parte Nichols.) 532 Settlement of damages awarded to husband in the

Divorce Court-Settlement approved by the court

37

329

[Index-xli

-Interest of husband determinable on bankruptcy -Intention to defeat creditors.-Damages obtained by the debtor in the Divorce Court were settled with the approval of the court. The settlement subject to a life interest to the wife gave a life interest to the debtor determinable on bankruptcy. On a motion by the trustee in bankruptcy for a declaration that this limitation was void as against him. Held, that the case did not come within the principle of Higginbotham v. Holme (19 Ves. 88), as the damages were not the property of the debtor, who had no control over the form of the settlement, and could not have intended to defeat his creditors. (Ex parte Stephenson; Brown v. Stephenson.) ...page 328 Suspension of debt by giving bill of exchange-Act of bankruptcy during currency of bill-Proof that petitioning creditor was the holder at the date of presentation of petition-Petitioning creditor's debt.-Where a creditor is the holder of an acceptance of the debtor, the commission of an act of bankruptcy by the debtor determines the period of credit given by the acceptance, and the creditor for the purpose of presenting a bankruptcy petition is entitled to treat the acceptance as dishonoured, and can present a petition based on the original debt. The affidavit of verification ought to mention the existence of the acceptance, and to state that the petitioning creditor is the holder. But where the affidavit swore to the existence of the original debt, and the acceptance was produced at the hearing of the petition, it was held that there was sufficient evidence that at the date of the presentation of the petition the petitioning creditor was the holder of the acceptance. (Re Raatz; Ex parte Raatz.) 503

Suspension of discharge-Exercise of discretionRight to review.-Suspension of discharge for five years is a severe sentence which should be reserved for very bad cases. (Re Swabey; Ex parte Swabey.) 534 Voluntary conveyance to make good breaches of trust-Revocable mandate-Motive of debtorFraudulent preference Evidence Notes of bankrupt's public examination-Deposit of share certificates in box-Memorandum of depositAppropriation.-A trustee, who had misappropriated trust funds, by a deed executed two days before a receiving order was made against him, conveyed an estate upon trust to raise money thereon, which was to be applied in making good the breaches of trust committed by him in respect of the trust estates mentioned in the deed. He executed this deed with the object of shielding himself as far as possible from liability to any proceedings to which he might be exposed by reason of the breaches of trust referred to in the deed. The execution of the deed was not communicated to the cestuis que trust. Held, that the deed was not a revocable mandate, and that it was binding on the trustee in bankruptcy of the grantor. Held also, that the deed was not a fraudulent preference within sect. 48 of the Bankruptcy Act 1883. The trustee in bankruptcy having made an application to the court that the answers made by the bankrupt upon his public examination should be allowed to be read for the purpose of showing the bankrupt's object in executing the deed: Held, that the answers would not affect the question of the bankrupt's true object in executing the deed, and that, in the exercise of the discretion of the court, they should not be read. The bankrupt, a few weeks before the receiving order was made against him, deposited in a box certain share certificates with memoranda that the certificates were there deposited as security for money due by him to certain trust estates. The box remained in bankrupt's control, and the fact of the deposit was not communicated to the cestuis que trust. Held, that there was a valid appropriation of the ertificates for the purposes mentioned in the memoranda. (The Trustee of the Property of New, Prance, and Garrard v. Hunting and others.) 196, 742

[Oct. 16, 18

BOROUGH FUNDS. Chief constable respondent in licensing appealsPower to pay costs-Municipal Corporation Act 1882.-On the 13th Aug. the watch committee resolved to authorise the chief constable to obtain legal assistance at the licensing sessions. On the 21st Aug. the council passed a like resolution. The chief constable successfully opposed some licensees, five of whom appealed to quarter sessions. On the 10th Oct. the watch committee, having taken the opinion of counsel, refused to authorise the chief constable to act as respondent. On the 15th Oct. the council resolved to allow him to so act, and to pay his costs. When the appeals came on he appeared and opposed them, and they were dismissed with costs. The amount recovered on taxation was 1321. 58. less than he had to pay. On the 19th Nov. the watch committee resolved to pay these costs. This aetion was brought by the plaintiffs as ratepayers to restrain this payment. Held, that, under these circumstances, there was no right to use the borough funds for this purpose, for one watch committee has no power to apply to the council to pay certain moneys which a former watch committee has said ought not to be paid. Semble, that in certain cases a watch committee may have power to incur legal expenses in connection with the opposition to licences either at brewster or quarter ses

Perpetual curate-Violent and indecent conduct in parish churchyard-Liability to temporal court. -Sect. 2 of 23 & 24 Vict. c. 32 applies not only to persons not in holy orders, but also to persons in holy orders, and a clergyman whose conduct in his own church or churchyard is riotous, violent, or indecent, may be convicted of an offence under it. (Vallency, app., v. Fletcher, resp.)... ...page

BUILDING CONTRACT. Construction-Power to building owner to order extras-Penalties for delay in completion of work -Delay caused by extras-Clause that addition to works should not vitiate the contract.-A building contract provided for the execution o certain specified works and of any additiona works that might be ordered by the building owner. The whole of the works were to be com pleted by a specified date under certain penalties as liquidated damages, for delay beyond tha date. There was also a provision that the addi tional works should not vitiate the contract. Th building owner subsequently ordered additiona works, with the necessary result that the builde was unable to complete by the stipulated date Held, that, upon the true construction of the con tract, the builder had not bound himself to com plete both the specified and the additional work by the stipulated date; and that, by ordering additional works which rendered impossible th completion of the specified works by the stipu lated date, the building owner had deprived him self of the right to claim the penalties provide for in the contract. (Dodd v. Churton.)

Mines under and near canal-Subjacent coalAdjacent coal-Liability under special Act-Righ to support-Undertaking by public body. A cans company was incorporated by a special Act whic contained the usual clauses, reserving to th owners of land taken for the canal the mines an minerals thereunder, with power to work the "not thereby injuring, prejudicing, or obstruc ing" the canal and works; and giving a right t the canal company to treat for the purchase such coals and minerals as might be "near under" the canal and works and which might b thonght proper to be left for the security preservation thereof; and failing agreemen between the parties, it was provided that th compensation should be assessed by a jury. Th plaintiffs were the owners of coal mines lyin under the canal, and also under adjacent land Held, that they were under no statutory liabilit towards the canal with respect to adjacent coa and might work it, notwithstanding any dang or damage to the canal; and that on the defe dants giving an undertaking to release the plai tiffs from their statutory liability with respect the subjacent coal, and themselves to make go any damage, the plaintiffs were not entitled compensation. (New Moss Colliery Company Manchester, Sheffield, and Lincolnshire Railw Company.)

Mortmain-Impure personalty-Metropolitan Boa of Works (Loans) Act 1869.-Metropolitan Boa of Works Consolidated Stock being charged land is impure personalty within the Mortma Acts. (Re Crossley; Birrell v. Greenhough.) Will-Bequest for or towards the purchase advowsons or presentations.-A testator gave much of his residuary estate as should be appl able to charitable purposes to special truste upon the trust to invest the same and "apply t

aid no nd that t

llant could not himad

for sale.-An action was brought by debe: holders to enforce their security, which con of a floating charge upon the property of a li company. One of the debenture-holders wa a party to the action. The Court refused, the application of all the other debenture-ho to make an order of foreclosure, but ma order for sale under the direction of the jud chambers. (Re The Continental Oxygen Con Limited Elias . The Continental Oxygen pany Limited.)

Debenture-holder's action-Uncalled capitalficate Shareholder-Liability in action-Pra -Where in a debenture-holder's action the inquiries were directed of what particula property comprised in and charged by the d tures respectively consisted, and in whor same was vested, and the district registrar that the property consisted in part of 13,70 called capital in respect of which the plaintif liable for 26901, and that seven other shareho not parties to the action, were liable for the Held, that, notwithstanding no call bad made, and the company was not in liquidatio a matter of procedure, the certificate contai proper finding in answer to the inquiry dire and the plaintiff could not object to the que being determined in her action rather than independent proceeding. (Madeley v. Ross, man, and Co. Limited.)

re

Declaration of dividend-Ordinary general ing-Business-Articles of association-In tion. The articles of association of a li company provided that the ordinary ge meeting should be held in July or August; the business of an ordinary general me should be, amongst other things, the declar of a dividend, and also that at every ord meeting the directors should lay before the pany a statement of the income and expend of the company, made up to a date not more three months before the date of the meeti balance-sheet, auditors' report, and a mendation as to the amount of dividend (if to be declared. The company carried on ness in South Africa. The first ordinary ge meeting of the company was held on the 21st 1896. The directors then reported that, owi the outbreak in South Africa, they had unable to procure accounts, and no dividend proposed. On the 1st Feb. 1896 the dire issued a notice for an extraordinary ge meeting to be held on the 11th Feb., proposin declare a dividend, and to alter the articl association of the company by fixing the da future ordinary general meetings in Dacer To this notice were annexed accounts instru to be presented to the meeting, made up t 31st Aug. 1896. Held (on a motion by a s holder to restrain the declaration of a divi and the alteration of the articles), that the pany could not declare a dividend at any me at which accounts were not presented up to a not more than three months before the mee or, semble, at any meeting other than an ord general meeting; but that the company coul be restrained from altering their articles in

valid way.. (Nicholson v. Rhodesia Tr Company Limited.)

English company-Jurisdiction of colonial co Dividend duty on preference stock-Incider duty on different classes of stockholders. English company carrying on business in a cr under the powers conferred on it by a contra co-partnery, issued 6 and 5 per cent. guara cumulative preference stock. An Act of colony subsequently imposed a duty on divi paid on capital employed in the colony an ceived by shareholders of companies carryi business in the colony. Held, that the con being an English contract was not aff

[Oct. 16, 187.

Oct. 16, 1897.]

debentureh consisted Of a limited

Prs was not

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147

322

dividend anything on account of the dividend duty imposed by the colonial law.

(Spiller v.

132

[Index-xly

...page 300

underwriting letter contains a condition that it is to be irrevocable provided that a certain number of shares are underwritten or applied for, and allotment made on or before a specified date, that condition is fulfilled if the company proceeds to allotment on or before that date, although no notices of allotment are sent out until the following morning or even later. (Re The Consort Deep Level Gold Mines Limited; Ex parte Stark and Elliston.) ... Voluntary liquidation-Contributories-Transfers of shares with sanction of liquidator-Change of status-Liability of transferees.-A company went into voluntary liquidation in 1893 with a view to amalgamating with another company. At the time when the voluntary winding-up commenced a number of persons were on the register of members holding shares which were not fully paid up. T. was one of this class. After the winding-up had commenced a number of the shareholders, including T., with the assent of the liquidator (given under sect. 131 of the Companies Act 1862), transferred their shares to other persons who were then registered as members, one of this class of transferees being P. A number of these transferees, including P., again with the consent of the liquidator, transferred their shares to other persons, who were then put on the register, and one of this class of transferees was R. It became necessary to make calls on the shares, and the liquidator put all three classes, i.e., the original shareholders and the two classes of transferees, on the list of contributories. Thereupon T., P., and R., as representing the three classes, applied to the court to have their names removed from the list. Held, (1) that the register of members had been from time to time correctly altered by the liquidator, and that R. was the person to be on that document; (2) that R. was the person, and the only person, to be on the A. list of contributories in respect of the shares in question; (3) that T. and P. ought both to be on the B. list, so that in case of need they might be had recourse to for payment of the debts and liabilities of the company, and the costs of winding-up, in accordance with sect. 38 of the Companies Act 1862. Held also, that this would be obviously right if the company were being wound-up by the court or subject to its supervision, and if the court had sanctioned the transfer under sect. 153; and that there was no sufficient reason for deciding that the position of the parties to duly authorised transfers of shares in a company after the commencement of its windingup depended upon whether the company was being wound-up in one way rather than another. (Re The National Bank of Wales Limited.).

Turner.) ...page 622 Memorandum of association-Articles of association No provision for priority of shares Alteration of articles-Issue of preference shares -Validity.-A limited company was empowered by its memorandum of association to increase its capital as provided by the articles. The articles provided that the company might increase its capital, any such increase to be considered as part of the original capital, and to be subject to the same provisions. There was no provision in the memorandum or the original articles for the priority of any shares. The company altered their original articles, and under the provisions of the articles as altered issued preference shares by way of increase of capital. Held, that the issue of the preference shares was intra vires, as a limited company has power by special resolution to alter its articles of association so as to enable it to increase its capital by the issue of preference shares, although there is no power in its memorandum or original articles of associa tion to create any preference between the shareholders. (Andrews v. Gas Meter Company Limited.) Shares-Underwriting letter-Contract-Offer and acceptance-No communication of acceptancePrincipal and agent-Authority to apply for shares -Estoppel.-On the 11th Sept. 1895 S. signed an underwriting letter addressed to the M. Company (which was promoting the C. company), whereby he undertook to subscribe or find responsible subscribers, on or before the day after the day appointed for the closing of the list for subscriptions for shares, for 10,000 shares in the C. company, or such less number as might be accepted by the M. company, and he agreed that the underwriting letter should be irrevocable, provided that 40,000 shares were underwritten or applied for prior to the public issue of the prospectus of the C. company and allotment made on or before the 30th Sept.; and, in the event of his failing to comply with the terms therein stated, he authorised the M. company as agent, on his behalf and in his name, to apply for the number of shares (full or reduced, as the case might be) guaranteed by him. On the 12th Sept. the M. company, through its secretary, wrote its acceptance of this offer on the face of the underwriting letter, but did not communicate such acceptance to S. On the 15th Sept. the C. company was registered. The day for closing the list of subscriptions for shares was the 20th Sept. On the 27th Sept. the M. company, without any notice to S., applied for 10,000 shares in his name, and the allotment of 9000 was duly made. On the 28th Sept. the M. company wrote to S. informing him of its application for an allotment, and asking for a remittance. On the 30th Sept. S. repudiated his liability on the ground that his offer had never been properly accepted by the M. company, no notice of acceptance having been sent, so that the M. company had no authority to apply for shares in his name, and that he had done nothing which estopped him from denying the authority of the M. company. Held, that the offer by S. required acceptance by the M. company in order to convert the offer into a binding contract; that mere acceptance of an offer, unless it was brought to the knowledge of the person making it, did not as a rule, and subject to certain exceptions, convert the offer into a contract; that, until S. was informed that his offer had been accepted, he could not be treated as having failed to perform his obligation to apply for shares; and that, therefore, the authority of the M. Company to apply for them in his name never arose. Held also, that there was no proof of any conduct on the part of S. which amounted to any representation that he had failed to comply with the terms of the underwriting letter so as to give rise to the authority of the M. company to act for him, and that, therefore, the doctrine of estoppel was inapplicable to the case. Where' an

WINDING-UP.

Claim for interest on debenture stock-Period of limitation.-The Cornwall Minerals Railway Company, in 1883, entered into a scheme of arrangement with its creditors, by which certain debenture stock was issued to certain persons, bearing interest from the 1st July 1883. A "deferred warrant," under the hand of the secretary of the company, for interest on his stock to the 31st Dec. 1884, was issued to one H. (among others), but was never presented by him for payment. By an Act passed in 1896, the undertaking of the company was transferred to the G.W.R. Company, and power was given to the old company to appoint liquidators for a voluntary winding-up. This was a claim now made by H.'s executors for payment of the interest above-mentioned; and the question arose whether, after this lapse of time, the claim was not barred under the Statutes of Limitation. Held, that the interest claimed must be paid, as the scheme of 1883 incorporated sect. 27 of the Companies Clauses Act 1863, making the interest recoverable by action or suit: that the issue of the warrant did not amount to satisfaction of that cause of action; and that, as the original cause of action was statutory, the period of limitation was twenty years within 3 & 4 Will. 4, c. 27 as in the case of a specialty