L. JJ. Equity. Ex parte JAMES. In re CONDON. July 10. Bankruptcy-Execution Creditor-Bankruptcy Act, 1869, s. 87Failure of Liquidation Proceedings-Subsequent Bankruptcy. This was an appeal from a decision of Mr. Registrar Roche sitting as Chief Judge in Bankruptcy. On the 14th of November, 1873, judgment for 2747, was signed by Henry Bradshaw against John Condon, a coal merchant at Millwall. Execution was issued, and on the 17th of November the sheriff seized Condon's goods. On the 18th of November, Condon filed a liquidation petition. On the 22nd of November the sheriff sold the goods, realizing by the sale 142. 15s. 6d. On the 3rd of December notice of the petition was served on the sheriff. On the 5th of December the first meeting of creditors was held, and was adjourned to the 16th. On that day the debtor failed to attend, and the creditors separated without passing any resolution. On the 17th of December the sheriff paid the 142. 15s. 6d. to Bradshaw. On the 19th of December a petition in bankruptcy was presented against Condon, founded on the act of bankruptcy committed by the filing of the liquidation petition, and notice was given to the sheriff and to Bradshaw. On the 10th of January, 1874, an adjudication was made, On the 23rd of February, Bradshaw being advised that he could not retain the money, repaid the 142/. 15s. 6d. to the trustee in the bankruptcy. He now claimed to have the money returned to him, as having been paid under a mistake. The registrar decided that he was entitled to it, and ordered the trustee to repay it. The trustee appealed. Thesiger, Q.C., and E. Cooper Willis, for the appellant, contended that the proceedings in liquidation were not at an end when the creditors failed to pass any resolution, but formed the foundation of the adjudication in bankruptcy which was subsequently made. The debtor had therefore been adjudged a bankrupt on the petition, notice of which had been served on the sheriff, within the meaning of the 87th section of the Bankruptcy Act, 1869, and the sheriff was not justified in paying the proceeds of the sale to the execution creditor. At any rate the money, having been paid to the trustee under a mistake of law, could not be recovered. De Gex, Q.C., and Finlay Knight, for the execution creditor, relied on Ex parte Villars (Law Rep. 9 Ch. 432), and contended that the liquidation proceedings being entirely at an end, the execution creditor was entitled to the proceeds of the sale. THE LORD JUSTICE JAMES said he was of opinion that the registrar was right. Looking at s. 87 and the rules, he thought it was impossible to say that the adjudication of bankruptcy was made on the petition of which the sheriff had notice before he paid away the money. The result of what occurred at the meeting of the 16th of December was that the whole thing came to an end. There was nothing in the nature of a resolution, nothing which could result in the appointment of a trustee. His Lordship, therefore, thought that the execution creditor was entitled to the proceeds of the sale. As to the other point, he thought that a trustee in bankruptcy was in truth an officer of the Court, and the Court, finding that money in the trustee's hands really in equity belonged to some one else, ought to do in equity just as any one else would be bound to do it, and to direct the money to be paid to the person entitled to it. The appeal must be dismissed, but without costs. done or not. This would be a very inconvenient construction of s. 87, for the consequence would be that the sheriff might have to keep the money for six months. As soon as it became impossible that a trustee could be appointed under the liquidation petition, as it did when the creditors dispersed on the 16th of December, his Lordship thought that the sheriff was authorized in paying the money to the execution creditor. His Lordship agreed, also, in what Lord Justice James had said as to the other point. Solicitors: Chorley & Crawford; Ravencroft & Hills. Contributory-Fraud-Removing Name-Recovery of Money paid. This was an appeal from an order of Vice-Chancellor Malins directing the name of Askew to be removed from the list of contributories to the company, as noted ante, p. 149. Cotton, Q.C., and Kekewich, for the appellants. Glasse, Q.C., and Graham Hastings, for Askew. THEIR LORDSHIPS thought that the Vice-Chancellor had not sufficiently considered that his order would be conclusive in any action brought by Askew to recover from the company what he had paid. Their Lordships directed the motion to stand over with leave to Askew to take any proceedings at law which he might be advised. Solicitors: Harper, Broad, & Buttcock; Markby, Tarry,& Stewart. M. R. The Rev. Henry Bellairs, by his will, dated the 14th of June, 1861, gave his residuary real and personal estate to trustees upon trust to sell, call in, and convert into money all his real estate, and all his personal estate not consisting of ready money, and to invest the proceeds, and also his ready money, as therein mentioned, and to divide the income into forty shares, and pay and distribute the same between his seven children as follows:that is to say, to his daughter Laura Parker Bellairs, ten shares, to his daughter Nona Maria Stevenson Bellairs, ten shares, to his daughter Frances Lake Brown, four shares, to his daughter Agnes Hulbert, four shares, and to his sons the shares therein mentioned. By a codicil dated the 3rd of November, 1871, after reciting that by his will he had given to Laura Parker Bellairs ten shares of the income of his residuary estate, and had also given to his daughter Nona Maria Stevenson Bellairs the like number of ten shares, the testator declared that on the marriage of either of his said daughters the bequests so given to them and each of them should absolutely cease and determine, and in lieu and substitution thereof he gave and bequeathed to such one of them as should have so married four shares only of his said residuary estate. The testator died on the 17th of April, 1872; and this suit | was instituted for the administration of his estate. He died entitled to a large amount of real estate (which had been sold and the proceeds invested), and also entitled to some personal estate. Subsequently to the death of the testator Laura Parker Bellairs intermarried with John Price; and the question arose on the further consideration of the cause whether the clause of forfeiture contained in the codicil was void. Marten, Q.C., Bagshawe, Q.C., Chitty, Q.C., B. B. Rogers, Kekewich, and Dyne, contended that it was good, at all events as to so much of the fund as had arisen from real estate. Wilbraham Ford, for Mr. and Mrs. Price. shares was 67. each, being 51. premium. The transfer was completed and the money paid on the 29th of September, when the certificates of ten shares in the company, numbered 9801 to 9810 inclusive, were handed over to the plaintiff, and were left at the company's office for registration on the 7th of October. On the 4th of October the company passed a resolution "that 15,000 new shares be issued to the shareholders now on the register, in the proportion of one share for each share held, allowing them fourteen days to accept or refuse; at the expiration of that time the shares not taken up by the existing shareholders to be dealt with by the directors at their discretion, and that 5s. be payable on each share on acceptance." The time for the shareholders to THE MASTER OF THE ROLLS held the forfeiture clause was accept or refuse the new shares was afterwards extended to the bad. Annuity-Charge on Capital-Combined Effect of two Wills. This was a petition for the advice of the Court. W. H. Hedges by his will, dated the 23rd of June, 1851, after making certain specific dispositions, gave all his estate to trustees upon trust, in addition to certain other benefits, to pay an annuity of 1000l. a year to his wife so long as she remained his widow, and provided as follows: "But should, from any circumstance, there not be sufficient interest to pay it, then as long as she remains my widow and annually certifies in writing what income she derives from any property she may inherit, I hereby fully authorize my executors for the time being annually to dispose of and sell such a part of the principal of my residuary estate as to make up, including the interest on the property she may inherit, the aforesaid annuity (10007.), the same to be for her own absolute use and benefit." The income of the testator's estate was insufficient to pay the 1000, and portions of the capital had been from time to time sold to meet the deficiency. William Hedges, the father of the testator, W. H. Hedges, by his will gave Mrs. W. H. Hedges an annuity of 2001. a year, and a legacy of 1000., and by a codicil to his will, dated the 22nd of November, 1869, after referring to the annuity and legacy declared as follows: "Now I declare the same shall be in addition to any benefit which she may derive from any other source, and shall not be taken into account in regard to any other income, it being my express will and desire that such annuity shall be a clear beneficial addition to her." The question was whether Mrs. Hedges was bound to include in the annual statement of her income the annuity and the income of the legacy received under Mr. William Hedges' will. Robinson, for the executors of W. H. Hedges. Karslake, Q.C., and Knox, for the widow. THE VICE-CHANCELLOR held that the widow was entitled to receive the benefits given her by the will of William Hedges in addition to the 1000%. annuity given by the previous will, and that she was not required to include in her annual statement of income the annuity of 2001. a year or the interest of the 10001. legacy. Solicitors: Combe & Wainwright. 26th of October. On the 4th of October a circular stating the effect of the above resolution was sent to all the shareholders on the register of the company, and amongst others to the defendant, who was then the registered owner of eighty-two shares, including those sold to the plaintiff. The defendant signed letters of renunciation as to sixty-seven of these new shares, which were subsequently handed over to purchasers from him of those shares, but the remaining fifteen shares he applied for in his own name, and they were accordingly allotted to him. The plaintiff alleged that he had no notice of the intention of the company to issue new shares until the 26th of October, on which day for the first time the shares were quoted on the Stock Exchange "ex new." The plaintiff, through his brokers, applied to the defendant on the 4th of November for a transfer of ten new shares in respect of the ten shares so purchased from him, which application the defendant refused to comply with, on the ground that either the plaintiff or his brokers as his agents must have known before the 26th of October that the company had issued new shares, and consequently that he was guilty of laches in not applying for the shares earlier, and also, that he had neglected to comply with the 101st rule of the Stock Exchange, which required that where new shares of this nature were applied for to the vendors of old shares, the application must be made within a reasonable time. The bill prayed that the defendant might be declared a trustee for the plaintiff of the ten new shares of the company issued to him in respect of the ten old shares numbered 9801 to 9810; that an inquiry be directed to ascertain the highest market price of the new shares at any time after the issue thereof; and that the defendant might be ordered to pay to the plaintiff the value of ten of the shares at such highest price; or that it might be declared that the plaintiff was entitled to damages for the loss occasioned by the non-transfer of the said ten new shares; and that such damages might be ascertained and paid to the plaintiff. Higgins, Q.C., and Cookson, for the plaintiff. THE VICE-CHANCELLOR said there could be no doubt whatever that the plaintiff was entitled to all benefits accruing upon the shares purchased by him from the defendant, and in which the defendant ceased to have any interest on the 29th of September. It was the duty of the defendant, knowing he had sold the shares, to send on the circular respecting those shares to the plaintiff, or to inform him through his broker that new shares were to be allotted. Instead of doing this, he possessed himself of what belonged to the plaintiff, and thus committed a fraud upon the plaintiff. It had been proved to His Honour's satisfaction that neither the plaintiff nor his brokers knew of the issue of these new shares until the 26th of October, when the old shares were quoted "ex new." It was not an honest course of conduct on the part of the defendant to refuse to transfer the shares when they were demanded of him, and he did not consider the delay in the application unreasonable. Under these circumstances the defendant must be held to be a trustee for the plaintiff of these shares, and the decree must be in the terms of the first and second paragraphs of the bill. Solicitors: Abrahams & Roffey; Phillips & Son. judication ―Jurisdiction —Ultrà vires Resolutions —Registration-Proof-Secured Creditor-Non-production of Securities— Validity of Vote-Adjournment of Meeting-Bankruptcy Act, 1869, ss. 16, 28, 80 (sub-s. 10), 84, 125-Bankruptcy Rules, 1870, rr. 260, 266, 271, 275, 295. This was an appeal from a decision of the deputy judge of the Southampton County Court. In July, 1873, the voluntary winding-up of this company was ordered to be continued under supervision; and in August, 1873, James Cooper was appointed an additional liquidator of the On the 11th of March, 1874, a bankruptcy petition was precompany with Frederick Benjamin. Benjamin and Cooper did sented by E. Ashworth against P. M. Hoare. The 2nd of not agree; Cooper claimed a right to employ a separate firm of April was fixed for the hearing. On the 31st of March Hoare solicitors with one set of costs between the two, the solicitors of filed a liquidation petition. The first meeting of the creditors his choice being a firm who, it was alleged, had been the solici- was summoned for the 30th of April. On the 24th of April an tors of a person against whom the company had claims; and adjudication was made on the bankruptcy petition, the advertiseBenjamin had, without the sanction of Cooper, obtained the ment being stayed till after the 30th of April. On the 30th of leave of the Court to the filing of bills in Chancery, one against April the first meeting of the creditors under the liquidation the person above referred to. In this state of things the share-petition was held, and was adjourned to the 22nd of May. Some holders met and resolved that Mr. Cape, the accountant, should of the proofs tendered were objected to, on the ground that the be appointed an additional liquidator. A notice of motion on creditors did not produce bonds, bills of exchange, and promissory behalf of Cooper for an injunction to restrain Cape from acting notes of the debtor, and other securities, which they held. If was served upon Benjamin and Cape, whereupon Cape offered to these creditors' votes had been excluded, the adjournment would submit to an injunction with costs up to that date. not have been properly carried. On the 1st of May an order was The motion was nevertheless proceeded with, and a summons made staying the advertisement of the adjudication till after the on behalf of a shareholder named Oppenheimer and others, ask- 29th of May. At the adjourned meeting on the 22nd of May, ing that the appointment of Cape as liquidator might be cou- the creditors resolved on a liquidation, appointed trustees, and firmed, either in conjunction with, or in substitution for Benjamin resolved that the adjudication should be annulled. They also or Cooper, or both, came on to be heard at the same time. The passed a second set of resolutions, authorizing the trustees to solicitors for the applicants on the summons were the same as sell all the debtor's property to his father (who was the largest those who had been acting for Benjamin and Cape. creditor and was to release his claim) for 10,000l., and resolving that on payment of the 10,000l. and execution of the release, the trustees should certify to the Court that the debtor was entitled to his discharge. It was understood that the assets were sufficient to pay the claims of all the creditors. Jackson, Q.C., and Cookson, for the motion. Kay, Q.C. (Bradford with him), for Benjamin and Cape, on the motion, offered to submit to the injunction on the terms of Mr. Cape being appointed joint liquidator, if Mr. Cooper would pay the costs of the motion. Jackson, Q.C., for Cooper, declined. Kay, Q.C., and Bradford, for the summons. Jackson, Q.C., and Cookson, for Cooper, opposed. Eddis, Q.C., for a large body of shareholders, and Bond Coxe, for two creditors, supported the summons. THE VICE-CHANCELLOR said that the claim of Mr. Cooper to have a separate solicitor from his co-liquidator was an absursity in itself, although it was proposed that the two sets of solicitors should have only one set of costs. The great object was to have unanimity in the proceedings, and there was no reason why the costs of one set of solicitors should be diminished by the intervention of others. Then it was said that the Act of Parliament did not authorize the shareholders to meet and resolve on the appointment of a new liquidator. His Honour thought that this course was the very best the shareholders could adopt in order to inform the Court of their wishes. The result was that Mr. Cooper must be removed, and Mr. Cape appointed liquidator with Mr. Benjamin. The costs of the motion would be paid by Mr. Cape up to the date to which he had offered to pay them; the subsequent costs and the costs of the summons would come out of the assets, with the exception that Mr. Cooper would have no costs of the motion after the date above referred to, and no costs of the summons. Solicitors for Cooper: Wilkins, Blyth, & Marsland. Solicitor for Benjamin and Cape: W. Webb. Solicitors for the shareholders: Linklater & Co. Solicitor for the creditors: M. Pope. On the 27th of May an application for the further stay of the advertisement of the adjudication was refused, and on the 2nd of June the advertisement was published. On the 2nd of June the registrar ordered the first set of resolutions passed at the adjourned meeting to be registered, but refused to register the second set, on the ground that they were ultrà vires. Before the registration the securities held by the creditors whose proofs were objected to had been produced. On the 18th of June the deputy judge affirmed the decision of the registrar, and also made an order annulling the adjudication. The petitioning creditor appealed. De Gex, Q.C., and Yate Lee, for the appellant, objected that when an adjudication had been made the creditors could not resolve on a liquidation; that the Court could not annul an adjudication except under s. 28 or s. 84 of the Act, neither of which applied; that the adjournment of the first meeting was not properly carried, inasmuch as the votes of the creditors who did not produce their bills and other securities ought to have been rejected; and that there was no power to register a part of the resolutions passed. As some of them were ultrà vires registration of all ought to have been refused. Little, Q.C., and Bagley, for the debtor. Benjamin, Q.C., and Northmore Lawrence, for the trustees and for creditors who supported the liquidation. THE CHIEF JUDGE held that notwithstanding the prior adjudication the creditors had power to resolve on a liquidation; that rule 266 enabled the Court to annul the adjudication; and that, besides, there was a general jurisdiction to annul in a proper case; that though a secured creditor who did not produce his security would forfeit it, his vote would not be invalidated; and that as to bills of exchange and other documents which did not create any charge on the debtor's estate, it was enough that they should be produced before registration. His Lordship also held, on the authority of Ex parte Browning (ante, p. 111), that when some of the resolutions passed are ultrà vires, those which are intra vires may be alone registered. The appeal was therefore dismissed. Solicitors: Gregory, Rowcliffes, & Rawle; Lawrance, Plews, & Boyer; E. F. & B. Davis, Equity. M. R. PAGE 173 174 BNKCY. 176 L. JJ. 174 acted in this country. After the bills became due Overend, Gurney, & Co. pressed for payment, but McHenry had an interview with two of the directors, gave a guarantie in the name of himself and his company, and deposited other bills as a collateral security, and Overend, Gurney, & Co. consented not to sue on the first-named bills during the currency of the last-named bills. They did sue afterwards upon the bills, and then this giving of time to the principal was set up, in a suit to restrain the action, as an answer, and was decided by Lord Chancellor Hatherley to be so (Law Rep. 7 Ch. Ap. 142). This was an appeal against that decision. Sir J. B. Karslake, Q.C., and Mr. Stewart Ferrers, for the appellant company. Mr. Cotton, Q.C., and Mr. Juson Smith, for the respondent company. THE LORDS affirmed the judgment of the Court below. DE SERRE v. CLARKE (Appointment—Commencement of Interest of 175 174 L. JJ. V-C. M. 175 M. R. 175 During the sittings of the Courts THE WEEKLY NOTES will be published on Saturday, and will generally comprise Notes of the Decisions up to and including those of the previous Wednesday. All cases of permanent interest noted herein will be reported in full in THE LAW REPORTS. House of Lords. July 17. Overend, GubNEY, AND CO. APPS.; ORIENTAL FINANCIAL CORPORATION, RESPS. Overend, Gurney, & Co. had discounted, at the instance of a person named McHenry, certain bills of exchange; they were not paid at maturity. At that time Overend, Gurney, & Co. did not know the real character of the parties to the bills except as their names appeared upon the bills themselves. They afterwards became informed that the Oriental Financial Corporation (the name of which company appeared as accepting the bills) was in fact only a surety, the real principal being McHenry for himself, and as agent of a transatlantic company for which he No. 27.-1874. This was an application to have a patent sealed, and the petitioner alleged that there had been an agreement between him and the respondent that all objections should be withdrawn. Roxburgh, Q.C., and Langley, for the petitioners. Aston, Q.C., and C. James, for the respondents. HIS LORDSHIP, after hearing evidence vivâ voce, thought that the agreement was established, and directed the applicant's patent to be sealed, and to bear the date of the application. Solicitors: T. H. Smith; Collette & Collette. This was a suit to restrain the defendants from injuring the house and lands of the plaintiff by coal smoke. The Master of the Rolls thought that the plaintiff had not made out his case and dismissed the bill with costs. The plaintiff appealed. II. Matthews, Q.C., Edmund James, and Trevelyan, for the plaintiff. Sir H. James, Q.C., Waller, Q.C., and Maclachlan, for the defendants. THEIR LORDSHIPS said that in order to have works like those of the defendants stopped, the plaintiff must shew substantial damage done to his lands. There was a conflict cf evidence, business in Norfolk Street, Sheffield, against Rhoda Rodgers and J. Rodgers, also carrying on business in Sheffield, to restrain the defendants from using as a trade-mark "Rodgers' Cutlery, Norfolk Works, Sheffield." The Vice-Chancellor Malins dismissed the bill without costs, and the plaintiffs appealed. Glasse, Q.C., and Maidlow, for the plaintiffs. Cotton, Q.C., Cracknall, and B. B. Rogers, for defendants. THEIR LORDSHIPS said that it was shewn that the defendants had used these marks for twenty years; that it had not been shewn that the plaintiffs had suffered any injury, and that in such a case the Court would not interfere. The appeal must be dismissed with costs. Solicitors: Church, Son, & Clarke; Dobinson & Geare; J. & J. Hopgood. L. JJ. This was an appeal from a decision of Vice-Chancellor Malins allowing exceptions to the answer of the defendants on the ground of insufficiency. J. B Hurst, by his will, dated the 23rd of September, 1867, gave certain real estates to trustees in fee, upon trust for his son for life with a gift over if he charged or incumbered them. One of the trustees filed a bill for the administration of the trusts of the will, and filed a supplemental bill against the trustees of the Birkbeck Permanent Building Society who were in possession of part of the estates, alleging that they claimed under a charge made in their favour by the tenant for life, which had created a forfeiture. The defendants were interrogated as to the particulars of all charges in their favour on the property. The defendants stated in their answer that they claimed under no charge made by the tenant for life, but under a lease at a rack rent which he had granted to a lessee who had mortgaged the lease to them. The plaintiff excepted to the answer on the ground that the defendants had not set forth the date of the lease, which was material, because the plaintiff's case was that the tenant for life had forfeited his estate by incumbering it, and he, therefore, wished to ascertain whether the lease was granted previously or subsequently to the alleged forfeiture. The ViceChancellor allowed the exception, and the defendants appealed from his decision. Cotton, Q.C., and Hemings, for the appellants. Cookson (Glasse, Q.C., with him), for the plaintiff. THE LORD JUSTICE JAMES said that the case was one of first principles. It did not turn on the rule of the Court excusing a defendant from answering in cases of forfeiture. The plaintiff was a trustee who was administering the estate of his testator, and the defendants claimed to be his cestuis que trust. He had a right to know under what title they claimed. They must, therefore, answer fully, and set forth the date of the lease under which they claimed. The appeal must be dismissed with costs. THE LORD JUSTICE MELLISH concurred. Solicitors: Mercer & Mercer; Poncione. In this case the Vice-Chancellor Malins had declared the estate of an administrator to a will liable to pay interest at the directed his executors to pay the costs of the suit, which was for rate of 5 per cent. on certain balances in his hands, and had the administration of the estate of the original testator. The executors appealed. Karslake, Q.C., and Begg, for the appellants. The THEIR LORDSHIPS said that this was not the usual case. balances were not merely money in the hands of the administrator, but money which he had raised from the estate of the testator and had lent to himself. Moreover, he had kept no accounts, and the suit was therefore rendered necessary. The appeal must be dismissed with costs. Solicitors: Coode, Kingdon, & Cotton; J. E. Fox; Whitakers & Woolbert. M. R. July 17. GRAVELY V. BARNARD. Bond-Condition in Restraint of Trade-Consideration-Continuation of previous Engagement-Right to dismiss at will. The plaintiff was a surgeon at Newick, in the county of Sussex, and in 1864 engaged the defendant, who was not then qualified to practise, but was studying with the view of passing the examination of the Society of Apothecaries, to assist him in his practice. In 1870, the defendant was about to go up to pass his examination, and the plaintiff required him to execute, and he did execute, a bond, dated the 12th of March, 1870, in the penal sum of 1000l. The condition of the bond contained a recital that the plaintiff had some time since taken the defendant into his employ, which employment was to continue so long as the parties thereto should agree, and was expressed to be that the defendant should not practise in Newick, or within the distance of ten miles thereof, the town of Lewes excepted. The defendant failed to pass his examination, and the plaintiff subsequently gave him notice to leave his employ, and the engagement between the plaintiff and defendant ended in June, 1870. In March, 1874, the defendant passed his examination, and began to practise within the limits mentioned in the bond; and this suit was instituted to restrain him from so doing. A motion was now made for an injunction. Waller, Q.C., and Horton Smith, for the plaintiff. Southgate, Q.C., and Locock Webb, for the defendant, contended that there was no consideration for the bond, which was not given at the commencement of the defendant's engagement by the plaintiff, and being in restraint of trade was consequently bad. THE MASTER OF THE ROLLS held that the bond was given in consideration of an agreement to continue the employment, July 28. though with a right of dismissal at will, and that the employment having been continued till June, 1870, the bond was good, and he granted an injunction. This was a suit by Rodgers & Sons, Limited, carrying on Solicitors: H. M. Phillips, for H. J. Jones, Lewes; James Mote. |