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Roxburgh, for the motion, cited Taylor v. The motion now came on to be heard, Hughes (1).

before the Lord Chancellor, by way of Mr. Russell, Mr. James Parker and Mr. appeal. Terrell, for the official manager, contended Mr. J. Russell, Mr. Terrell, Mr. Bacon. that, under the deed of settlement, it was Mr. G. L. Russell, and Mr. Toller appeared not within the power of the company to for the different parties. enter into the arrangements under which Mr. Morgan sought to escape from his The LORD CHANCELLOR.—There is no liability as a shareholder, and referred in doubt this is an extremely hard case. It this respect to the 22nd and 23rd clauses is quite clear no harm was meant by the of the deed of settlement. If, however, it transaction which took place. The party was competent for the company to enter thought that by the arrangement he entered into such arrangements, as the meeting at into he was relieved from all responsibility; which the resolutions were passed was in- but the difficulty occurs, and a very great formal, such resolutions were a nullity. difficulty, considering the ground on which

the Vice Chancellor proceeded, from the KNIGHT BRUCE, V.C.-The counsel for shape and form in which this question arises. Mr. Morgan very properly have not entered The way in which it arises is, that the into the question, whether he is liable or Master is called upon under the act to not liable to any or all of the unsatisfied make out a list of contributories, that is to creditors of the company, who became so say, a list of all persons who may be liable after the 18th of June 1844. He may or to contribute to the exigencies of the commay not be so. I give no opinion upon it. pany, to make good the funds of the com

That question I consider not before me. pany. It is quite clear, therefore, that he was Several questions relevant to the present bound to include in that list all those who discussion have been raised during the may be liable under any circumstances; argument, upon which I do not think it although as against any particular sharenecessary to express an opinion, as there is holder there may be an equity to protect one view of the case upon which my mind him. Suppose, for instance, it should apis made up, and which renders it quite imma- pear, a shareholder was conusant of all terial in my judgment to enter into any this, that he was present at all the meetings, other. I am of opinion that it is a just that he assented, and that he was privy to inference in point of law and fact, from all the purchase, and that that particular indithe particular circumstances of the case vidual should hereafter, upon the winding taken together, that every individual share. up of affairs, call on Mr. Morgan to contriholder, present or not present at the meet bute in respect of his liability subsequent to ing of the 10th of April 1844, and repre- 1844 towards the loss he is called upon to sented or not represented at that meeting, pay; in such a case as that there may be an has acquiesced in the resolutions passed at equity that may arise between individuals, that meeting, whether they were well passed although I cannot tell what; for we have or not well passed. Being of that opinion not the facts of such a case before us. I the consequence is, that I must hold every think the Master was bound, under the individual shareholder bound by the trans- act to place this individual upon the list action of which the assignment or transfer of contributories. He cannot enter into the of the 18th of June 1844 was a completion. question between each individual shareMy judgment therefore is that, as between holder. The question is, is he shareholder the several persons concerned in this com- as between himself and the company? Is pany, between whom alone the present he, under any circumstances, liable to conjurisdiction is to be exercised, it ought to tribute towards the fund ? Now, this is a be taken, that as to any losses which have company; it is no corporation ; it is a mere arisen since the 18th of June 1844 Mr. partnership ; and although the majority of Morgan is not liable. I think, therefore, the partners may bind the minority upon that the list should contain such qualifi every point which the deed authorizes, by cation.

their common contract, yet they have no (1) 2 Jon. & Lat. 24.

authority whatever to bind the minority

upon any matter that is not within the common contract. Now, the question is, what was the common contract? I find a deed prepared which is the origin of the company certainly, and under that deed (because there is no other contract in existence but that deed) certain persons come in and are shareholders (whether they became shareholders originally or by purchase is not very material) by which they take on themselves the liability of the company. They take on themselves the liabilities of the contract under which the company is acting; it is equally binding on those who sign the deed as on those who become shareholders with them. I should think this deed, although not executed by this individual, was a deed binding on him. We all know, unfortunately, that parties enter into these arrangements without knowing anything at all about the contract, or what the liabilities are into which they are entering; and there fore when any question arises upon it, you must look and see what has been done.

Now, here is a deed regularly executed by the directors, not executed by Mr. Morgan himself it appears ; but still it was a deed that constituted the formation of the contract between the parties. Under that deed I find certain provisions made; I find that a party, once a shareholder, has only certain modes by which he can be relieved from the effect of the liabilities which that situation imposes upon him. He may assign his shares; but that assignment will not relieve him, if it is done without the assent of the directors. If he assigns, and the party to whom he assigns is accepted by the directors, and the assignment is with the approbation of the governing body, no doubt from that moment he would be relieved from any liability subsequent to that transaction; because he ceased to be a party under the provisions of that deed. Not only may he escape in that way, but it may be by an arrangement with the directors themselves; but then that arrangement must be under the circumstances provided for by the deed. The 22nd section provides that the directors shall keep in the hands of their bankers a balance equal to the current expenses of the company, and that whenever the balance exceeds the current expenses it shall accumulate and constitute a surplus fund, and shall remain invested in a prescribed mode;

but then the directors were to be at liberty under the 23rd section to invest, not any partnership funds, but only the surplus funds. They may from time to time by and out of the surplus funds hereinbefore mentioned purchase and buy up any share or shares in the capital stock of the company which shall be offered for sale, and shall at their discretion either sell the same or merge it in the company. That being the only clause under which the directors could purchase shares at all, -I mean generally, because no doubt there are particular cases provided for;—but that being the only clause under which generally they could purchase shares, they are only authorized, as between themselves and the shareholders for whom they are acting, to purchase shares by having a certain fund out of which the purchase could be made. Then the 44th section provides, that " whenever any share or shares in the capital of the company shall become actually forfeited, or shall be duly and effectually vested in any new proprietor, and such entry or alteration in regard to such share or shares shall have been made in the share register book as herein before required, then and not before, the responsibility of the previous owner, as a proprietor of the company, with respect to the same share or shares, shall from and after the completion of such entry and certificate granted as aforesaid, and the payment of all instalments on such shares previously called for, cease and determine as to the same share or shares." Now, that is an express provision, though it was not necessary to make an express provision for any such purpose, stating that anything that was done that was not within the power of the deed should not exonerate the person assigning. It is quite clear, therefore, that, under the deed itself, the directors had no power to purchase under the circumstances in which they did purchase, because they were only to purchase out of a surplus fund, and there was no surplus fund. The case is, that there was the reverse of a surplus fund; for all this was done for the purpose of creating, not a surplus fund certainly, but a fund that was necessary for the objects of the company. It was a transaction therefore in which the shareholder had not adopted that course, by which alone under the provisions of the deed he was to escape from the responsi

bility incident to his position as a share and every of its members, by what took holder; and that seems to have been the place at a meeting which was called ostenopinion of the Vice Chancellor; because, sibly for a purpose different from that which no doubt, if he had thought that the was the conclusion to which they came ? liability ceased under any of the powers The object, no doubt, was to raise money; in the deed, he never would have re but there is no specification in the notice as sorted to the ground on which he did to the mode in which it was to be raised. put it; namely, that he escaped, not Then as to acquiescence. The thing is not from any power in the deed authorizing it, binding on the company as such, and therebut on account of the transaction that took fore cannot operate as any release to Mr. place. I think there was a common mistake Morgan. Then, what is there to bind each on the part of Mr. Morgan and those with and every member of the company? bewhom he was dealing that under the powers cause though the partners may, no doubt, of the deed, what did take place would however numerous, as other partners may, exonerate him. He did not sell to a stranger depart from the general contract, yet they with the concurrence of the directors; nor cannot depart from it without the consent did he deal with the directors under the of every individual member of it. If what only power they had of dealing ; namely, they do is not done within the limits of the that which was conferred by the 23rd contract which they had originally entered section; but a meeting is called for the into, it is not binding on their co-partpurpose of raising a fund. It was argued, ners. Undoubtedly they may form a that this was a mode of raising a fund; and new partnership. Having entered into that the company was in want of funds. a partnership for certain purposes and To be sure, under a general notice that under certain conditions, they may, if you want to raise a fund, you might suppose they please, among themselves alter the the most extraordinary resolutions to be contract and enter into a new contract; but passed, which might be about as equally then they cannot bind any one individual : valid as if they were to vote that it should and it cannot be said the partnership, as be taken out of the first man's pocket they such, is bound unless all the individuals are might meet in the street. They do not bound. They may change the constitution specify what they propose to do to raise of the company, but that is not what is done. funds; but merely state that the com- As a partnership, consisting of each and pany propose to call a meeting to say every member who constituted the partthey want funds. The question is, how nership, they are not bound by any resoluthose funds are to be provided. That tion of a majority or of those who may is what the parties meeting has to con- think proper to attend the meeting ; least sider. The parties are merely told in of all can they be bound when they were the notice that they are to meet to con- not invited to attend the meeting with a sider the propriety of raising funds. The view of doing that which was ultimately only way in which they can raise a fund is done. It appears to me, therefore, that to raise it by some legitimate means. There what was done was no release to Mr. Mors was no notice whatever that such a thing gan under the deed ; and that the directors would be done as was done ultimately at had no power to depart from the deed; this meeting. I am also of opinion that the and as to the company being bound by meeting had no power to do what they did. acquiescence, I cannot enter into that unless If the deed was binding, it is admitted that I have it proved that each individual conthey had no power. Being of opinion the stituting the company was present; and deed was binding, they could not go out of I do not understand that to have been the the power of the deed. The directors and case. those who were then met together bound It is a hard case, no doubt. If any cauthemselves not to dispute what was then tion were wanting in these cases, I think agreed upon. That may or may not this might be quoted as an instance, shewbe binding upon individuals. I am not ing how hazardous it is to have anything to looking at what individuals are bound by; do with establishments of this sort, unless but is the partnership altogether bound, each the parties choose to look after and to make

estates were not well devised by the testatrix to the uses of her husband's will, but that they fell into and formed part of her residuary estate.

themselves masters of all the transactions which may be entered into. No doubt Mr. Morgan has considered that no respon. sibility attached to him after he had assigned his shares; but in my opinion he continued liable in respect of transactions from which he considered himself entirely free. Such is the law for the present purpose ; and in saying that, of course I do not mean to say, that as between himself and individual members he may not have a good defence; but as between himself and the company, as such, I am of opinion that there was nothing in the transaction that operated to relieve him from the situation of a shareholder; and, therefore, in the present position of the question, namely, whether he is a contributory or not, I am of opinion that the Master was right in think ing he was not released from the liabilities of the company by the transaction that took place.

The Vice Chancellor's order, therefore, must be discharged, and the Master's report must be confirmed.

WIGRAM, V.C.)

CULSHA V. CHEESE.

By indentures of the 15th and 16th of April 1790, made on the marriage of John and Mary Woodhouse, certain hereditaments were settled by J. Woodhouse to the use of himself for life, remainder to the use of M, Woodhouse for life, remainder to the use of the issue of the marriage, and in default of issue, remainder to the use of the survivor of them, J. and M. Woodhouse, and his or her heirs in fee.

Certain other property was likewise settled by indentures of the 2nd and 3rd of August 1797, which it is not material to specify.

There was not any issue of the marriage. J. Woodhouse died in the month of January 1829 and in the lifetime of his wife, who then became absolutely entitled to the settled estates, under the ultimate limitations in the settlements.

J. Woodhouse, by his will of the 4th of June 1816, gave all his real estate to his wife for life, and after her death to his executors John Cheese, Thomas Jeffries and John Fletcher, upon trusts for sale and payment of certain annuities and legacies. One fourth of the residue of the proceeds the testator gave upon trust for such persons as his wife should appoint, and in default thereof, for her next-of-kin; the remaining three fourths he gave equally to his executors.

J. Cheese died in January 1826; J. Fletcher in December 1833 ; T. Jeffries in November 1839; and Mary Woodhouse in April 1843.

Mary Woodhouse in her will of the 31st of December 1839, after reciting, inter alia, the will of her husband to the effect above stated, and that part of the hereditaments thereby devised by him had been so settled as to have descended upon herself by reason of her having survived him, thus proceeded :-"And whereas I believe it was his wish that the settled lands, &c. should pass by his will to the uses and upon the trusts thereby declared, and I am desirous of fulfilling his wishes, now I do hereby give and devise all and singular the same lands, &c. whatsoever and

March 2, 6.

Will Construction - Devise to Uses Lapse Residuary Clause Wills Act, i Vict. c. 26.

Certain real estates were settled, on an event which happened, to the use of the sur vivor of the intended husband and wife in fee. The wife survived. The husband, by his will, devised all his real estates to his wife for life, and after her death to executors upon trust to sell, and subject to certain bequests, &c., gave one fourth of the proceeds to such persons as his wife should appoint, and the remainder equally amongst his executors. All the executors died in the life time of the wife, and previously to the date of her will,

The wife by her will (made since the passing of the Wills Act), acting upon the supposition that her husband had intended to include in his will the settled estates, which came to her by survivorship, devised them to the uses concerning the same declared by him in his will :-Held, that the seliled

wheresoever, to, for and upon such uses, They cited :trusts, intents and purposes, and under Youde v. Jones, 13 Mee. & W. 534 ; and subject to such charges, powers, pro

S. c. 14 Sim. 131; 14 Law J. Rep. visoes and agreements as are in and by (n.s.) Exch. 70. the will of my late husband expressed, Easum v. Appleford, 10 Sim. 274 declared and contained of and concerning (affirmed, 5 Myl. & Cr. 56); s. c. the same."

10 Law J. Rep. (N.s.) Chanc. 81: The will then recited that the testatrix Maybank v. Brooks, 1 Bro. C.C. 84. had since the death of her husband, Hutcheson v. Hammond, 3 Ibid. 128. acquired considerable real estate. This Sibley v. Cook, 3 Atk. 572. property the testatrix devised to her Jarman on Wills, vol. i. 293, 1st edit. executors upon trust to sell, and directed The New Statute on Wills, 1 Vict. c. 26. the proceeds to form part of her residuary

ss. 24, 25, 26, 27. personal estate. The testatrix then referred to the power given to her by the Mr. Hodgson, for the defendant John will of her husband to appoint one fourth Cheese, to whom the trust estates, devised part of the monies to arise from the sale of by John Woodhouse had been conveyed his real estates, and in execution of that by the heir-at-law of the surviving trustee, power appointed the same unto the trustees and also executor of Mary Woodhouse. or trustee for the time being of her will, The testator made a general devise which upon trust to pay and dispose of it to and could not embrace the settled estates. If amongst such person or persons, in such he had survived his wife (the testatrix) he shares and proportions, and subject to the would have become entitled to them. The same trusts as she thereinafter gave and wife, supposing that her husband intended bequeathed her own residuary estate, of to include the settled estates in his devise, which she thereby directed the same to be expressed a desire to fulfil his intentions. considered and form part. The residue was She created a power which she supposed afterwards bequeathed to certain persons her husband intended to give her. She in eight equal shares.

brought the power, and the husband The bill was filed for the administration expressed the intention ; the Court might of the estate of the testatrix, and charged combine the two. She afterwards executed inter alia, in regard to the settled estate that power, and gave the settled estates to and hereditaments specifically devised by such uses as she believed her husband her will, the three devisees in trust and intended. So that to that extent her will residuary legatees named in the will of might be considered to operate. Although John Woodhouse being respectively dead the cestui que use were dead, the uses at the time of her decease, that to such remained, and the testatrix devised to extent as the devise in her will of the said existing uses. She said that only one settled estates and hereditaments to the fourth should go to her residuary legatees, uses declared by her husband's will had from which it was evident that she did not failed or become incapable of taking effect, intend the remaining three fourths to go the same formed part of her residuary in the same way. This was not a gift to estate devised by her will.

persons individually, but to certain uses,

Mr. Lee, with whom was Mr. Lloyd, for Mr. Kenyon Parker and Mr. J. T. James Cheese, the heir-at-law of Mary Humphry, for the plaintiff, said that the Woodhouse, submitted that there was no main question related to the settled estates. clear intention or necessary implication The testatrix had attempted to devise on the will of the testatrix sufficient to them to the uses of her husband's will; disinherit her heir. The devise of the but all the legatees having died in her settled estates, although it failed (for in a lifetime, the devise to them failed, and the devise to uses, there must be cestui que lapsed legacies, unless a contrary in- use) shewed that the testatrix did not tention was shewn, fell into the residue, intend to include them in the residuary and passed by the residuary clause in the clause. Besides, the residuary clause was will of the testatrix.

confined by the introductory recital to

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