L.C. Dec. 16.

In re THE BOROUGH OF ST.
MARYLEBONE JOINT - STOCK
BANKING COMPANY.

Ex parte WALKer.

Ex parte TROUtbeck.

Joint-Stock Companies Winding-up Act, 11 & 12 Vict. c. 45.-Pendency of Suit.

A suit was instituted on behalf of the shareholders in a joint-stock banking company, for the purpose of making the directors personally liable for certain losses which had been sustained. The suit was still pending, but no decree had been obtained, and it appeared that there were no debts of the company remaining unpaid :-Held, that this state of things did not preclude any of the contributories to the company from obtaining an order under the Joint-Stock Companies Winding-up Act for the dissolution and winding up of the affairs of the company.

This was a motion on behalf of Mr. Abraham, one of the shareholders in the Borough of St. Marylebone Joint-Stock Banking

(2) 1 Mer. 320.

(3) 1 Russ. 517.

NEW SERIES, XVIII.-CHANC.

Company, that an order made by Vice Chancellor Knight Bruce, on the 8th of December 1848, by which it was ordered that the banking company should be dissolved as from that day, and be wound up under the provisions of the Joint-Stock Companies Winding-up Act (1), might be discharged. The company was formed in 1836, and carried on business for several years; but in 1841 their affairs became much embarrassed, and in 1842 a suit of Deeks v. Stanhope (2) was instituted on behalf of the shareholders to make the directors personally liable for certain losses which had been sustained. That suit was still pending, but no decree had yet been obtained.

Two petitions were presented to the Vice Chancellor Knight Bruce, under the JointStock Companies Winding-up Act, one by Mr. Edmund Walker, who had been one of the directors of the company, and was a defendant in the suit of Deeks v. Stanhope; the other by Mrs. E. Troutbeck and Miss Maria Stephenson and Miss Margaret Stephenson, praying for the dissolution and winding-up of the affairs of the company. All the petitioners were contributories within the meaning of the act, and the Vice Chancellor made one order upon both petitions to the effect before stated.

Mr. Glasse, in support of the motion, contended that as there were no debts of the company remaining unpaid, this case did not come within the act; that as the suit was still pending, this Court ought not to interfere; but if the Court should decide otherwise, it ought to be referred to the Master to make preliminary inquiries before any order was made upon the petitions.

Mr. Bacon and Mr. Hetherington appeared in support of the Vice Chancellor's order, but were not called upon.

The LORD CHANCELLOR.-I do not see that there is any ground for doubt on the construction of the act of parliament. First of all the objection is that the company, with respect to which the application is made, does not appear to have any persons claiming as creditors. That is not at all essential to the jurisdiction

(1) 11 & 12 Vict. c. 45.

(2) 14 Sim. 57; s.c. 13 Law J. Rep. (N.s.) Chanc. 280, 453.

M

given under this act of parliament, which is not confined to companies who have creditors, or merely to pay debts; but it is for the purpose of enabling those who have entered into these speculations to escape from them as far as possible. The description is, "if any company shall have been dissolved, or shall have ceased to carry on business." Here is a company which has not been dissolved, except so far as they have dissolved themselves; but they have ceased to carry on business. They have not only ceased to carry on business, but a suit is depending for the purpose of winding up the affairs of the company, and realizing what are supposed to be the assets of the company, by establishing claims against individuals. But the act says, that notwithstanding the pendency of such a suit, it shall nevertheless be competent for the Court to exercise the jurisdiction given to it by this act. Therefore, as far as the description of the company goes, it falls directly within the seventh head of the 5th section, of a company which has ceased to carry on business, or which is carrying it on only for the purpose of winding up. Here it is not carrying on business for the purpose of winding up, but there is an actual cessation of business, and an actual pending application to a court of equity for the purpose of dissolving the company.

It is therefore a case in which those who constitute the company shew that they are not in a condition to go on with the undertaking a fact evidenced by one of the acts of these subsisting partners. That is exactly the case which the act contemplates. The act never was intended to apply to those persons who associated themselves together, and were going on with their business; and to enable any dissatisfied member to come to the court and say, you shall no longer go on-let us wind up. But when such evidence is afforded that the company cannot carry on the business, and that the difficulties are found to be insuperable in disentangling the parties from the concern in which they so engaged, you then find the description of persons for whom the act was intended, and this company, as it appears to me, comes distinctly within the provisions of that seventh head.

With regard to Mr. Walker, assuming all that is stated, that he is a party against

whom claims are made for the purpose of making him individually contribute a sum of money towards the claims by the other members of the company, what is there that disqualifies him from applying to the Court? It does not interfere with the claims against him. It is true that the Court will probably not be able to come to a final decision under that reference, until in some way or other that is disposed of; nor will the amount of assets be ascertained till it is settled whether the individuals sought to be affected by that suit are or are not liable to their co-adventurers. Those who prosecute that suit are quite competent to go on with it. They undertook it, not looking to the assets, but only looking to their own purposes in carrying on the suit. If they succeed, the funds will be not only for the purpose of paying the expenses of the suit, but for division among the contributories. This proceeding does not interfere with that. The clause which contains a provision that the pendency of a suit shall not interfere with the jurisdiction under the act, must have contemplated every description of suit, unless the circumstances shall appear to be such as to make it inexpedient to make an order for winding up the affairs until the suit is determined. I cannot think that is necessary here. That suit, so far as it seeks to affect individual members with personal liability, remains in full operation. With regard to the other portion of it, namely, the winding-up, it is much more speedily and effectually obtained by an order under this act, than it would be by any decree; so that I consider that suit, so far as it is essential to the winding-up, not only not interfered with, but as to the greater portion of that suit a much more speedy remedy is afforded under the act than there would be by enabling that suit to go on, to the extent at least of asking a decree for a general winding-up.

With regard to the other point, as to whether I should make a preliminary inquiry as to the expediency, unless it is laid down that that sort of preliminary inquiry is always to precede the exercise of the jurisdiction, I do not see any ground for it or any special case. No doubt there may be circumstances brought before the Court which the Court might think require investigation before it would come to a

conclusion. But when I find the company actually among themselves agree that they cannot go on, I think that is enough to shew that it is expedient that they should be dissolved, and that the distribution should take place and that is all that the order provides for. It only provides for an effectual, expeditious, and comparatively cheap mode of effecting that which all parties agree must be carried into effect between themselves.

Therefore, without adverting to what may be the proper order in other cases, I do not see any ground on which I can require any further information in order to justify the order which the Vice Chancellor has made; and I think that the order must be affirmed, with costs.

Vendor and Purchaser-Covenant—Injunction.

In 1808 the plaintiff was the owner in fee simple of a piece of ground forming a public square in London and also of several houses in the same square. He conveyed the piece of ground to E. in fee simple, and E. covenanted for himself, his heirs, executors, administrators, and assigns, with the plaintiff, his heirs, executors, and administrators, to keep the piece of ground and the iron railing round the same in its then present form and in proper repair, as a pleasure ground, in an open state, uncovered with any buildings, in neat and ornamental order, and that the plaintiff and his tenants might have keys at their own expense, and the privilege of admission therewith into the pleasure ground. The neighbourhood of the square had become thickly populated, and a thoroughfare had been made through it by act of parliament. The piece of ground had become greatly neglected, and was in a ruinous condition, and for many years neither the plaintiff nor his tenants had used or claimed to use it as a pleasure garden. The defendant, who claimed by purchase under E, removed some of the iron railings, and intended to make foot-paths across the ground,

and claimed the right of building thereon : -Held, that this was a breach of the covenant, and he was restrained by injunction, although the plaintiff had not established the validity of the covenant, at law, as binding upon the assignee of the land.

In July 1808 the plaintiff was seised in fee simple of the piece of ground which formed the garden of Leicester Square, and of several houses in the same square, and he contracted with Charles Elms to sell and convey that piece of ground to him.

By an indenture of release, dated the 15th of July 1808, and made between the plaintiff of the one part, and Charles Elms of the other part, it was witnessed, that in consideration of 210l., the plaintiff conveyed to Elms, his heirs, and assigns, all that piece or parcel of ground or garden, commonly called or known by the name of Leicester Square Garden or Pleasure Ground, situate, lying, and being in Leicester Square aforesaid, together with the equestrian statue then standing in the centre thereof, and the iron railing and stonework round the said garden, and all appurtenances thereto, to hold the same to Charles Elms, his heirs, and assigns for ever. And in the indenture there was contained a covenant by Elms as follows: -"And the said Charles Elms, for himself, his heirs, executors, administrators, and assigns, doth covenant, promise, and agree, to and with the said Charles Augustus Tulk, his heirs, executors, and administrators, in manner following, that is to say, that he, the said Charles Elms, his heirs and assigns, shall and will from time to time, and at all times for ever hereafter, at his and their own proper costs and charges, keep and maintain the said piece or parcel of ground and square garden, and the iron railing round the same in its present form, and in sufficient and proper repair as a square garden and pleasure ground, in an open state, uncovered with any buildings, in a neat and ornamental order, and shall not nor will take down, nor permit or suffer to be taken down or defaced, at any time or times hereafter, the equestrian statue now standing or being in the centre of the said square garden, but shall and will continue and keep the same in its present situation as it now is. And

also that it shall and may be lawful to and for the inhabitants of Leicester Square aforesaid, tenants of the said Charles Augustus Tulk and of John Augustus Tulk, Esq., his father, their heirs and assigns, as well as the said Charles Augustus Tulk and John Augustus Tulk, their heirs and assigns, on payment of a reasonable rent for the same, to have keys (at their own expense) and the privilege of admission therewith, annually, at any time or times, into the said square garden and pleasure ground."

The piece of garden ground had continued in an open state and uncovered with any buildings, with trees and shrubs planted in it. The defendant became the purchaser of the land, under a title deduced from Elms, and proceeded to cut down the trees and shrubs, and removed part of the iron railing, and erected a hoarding upon the ground.

The bill charged the defendant with notice of the covenant, and prayed that he might be restrained from cutting down the trees and shrubs, and from removing the iron railing, and from erecting or continuing on the piece of garden ground any house, shop, or other building, or any scaffolding, hoarding, or boards for the purpose of building, and from taking down the equestrian statue, or committing any waste upon the piece of garden ground.

The plaintiff applied to the Master of the Rolls for an ex parte injunction, which was granted.

The defendant then put in his answer, and thereby stated that a thoroughfare had been made through the square by act of parliament, which greatly altered its character as a place of residence; that the piece of ground had long been in a ruinous and dilapidated condition, and had ceased to be used as a pleasure garden; that the plaintiff and his tenants had taken no steps to have it kept in repair, but had acquiesced in its remaining in such condition; that he intended to make two footpaths diagonally across the square, and claimed to exercise such rights over the land as he might think fit; and he submitted that the covenant did not run with the land.

The defendant thereupon moved, before the Master of the Rolls, to dissolve the injunction.

Mr. Roundell Palmer, in support of the motion.

Mr. Turner and Mr. Shebbeare, for the plaintiff.

The effects of the argument is stated in the judgment of the Master of the Rolls, and in addition to the cases therein referred to, the following were cited :

Kimberley v. Jennings, 6 Sim. 340;

s. c. 5 Law J. Rep. (N.s.) Chanc. 115. Hemingway v. Fernandes, 13 Sim. 228; s. c. 12 Law J. Rep. (N.s.) Chanc.

130.

Rankin v. Huskisson, 4 Sim. 13. Squire v. Campbell, 1 Myl. & Cr. 459;

s. c. 6 Law J. Rep. (N.s.) Chanc. 41.

Dec. 6.-The MASTER OF THE ROLLS. -Two very important questions seem to have arisen in this case: the first of them is an important legal question, whether such a covenant as this runs with the land; and, secondly, whether, if such a covenant does not run with the land, it can be enforced in this court, or rather, how the violation of it can be prevented by this Court, for it is not quite the same thing. These questions have been very elaborately and very ably argued; and however inconvenient such a contest as this may be to the parties, it certainly would be a benefit to the public if this suit and these discussions should lead to an authoritative final determination on these questions; but I am of opinion that they cannot be determined here or now. The order that is to be made here must depend upon the state of authority, or, if authority does not precisely exist, upon the indications of opinion which have been expressed by persons in authority.

I think that it is not alleged that there was any decision of this question in the case of Keppell v. Bailey (1). There was in that case a dictum, no doubt of very great importance. But we have indications, to say the least of them, of the opinion of Sir John Leach, not in conformity with that dictum. We have the opinion expressed of the Vice Chancellor of England not in conformity with that dictum; and what I consider to be of very much more importance for me to attend to, we have the case of Mann v. Stephens (2), (1) 2 Myl. & K. 517. (2) 15 Sim. 377.

before the present Lord Chancellor. Now it is not for me to criticize precisely the form of the order, or the particular words in which the Lord Chancellor expressed his opinion in that case. I must see what he did, and gather from that what his intention is fairly to be presumed or implied to have been. That was a case in many respects similar to this, before the Vice Chancellor of England; and for reasons which are not stated in detail he granted an injunction in the words of the covenant which was said to have been violated. Upon an allegation of a breach of injunction, an application was made for the committal of the contemnor. It was brought under consideration by appeal or rehearing before the Lord Chancellor; and the only information we have upon the subject is the report given in Mr. Simons' Reports, where, beyond all doubt, it is stated that the Lord Chancellor did make an order upon those applications. There had been an application to discharge the order to commit and an application to dissolve the injunction; he directed the order for the injunction to be varied by omitting certain words, "and which shall be ornamental rather than otherwise to the surrounding property;" and for the reasons shortly given, there he left it. Then he directed the order for the commitment of the defendant to be discharged, because the evidence of the breach of the injunction was not sufficient. Now, what was the result of all that? That the injunction was varied by omitting words which appeared too indefinite, and nothing is said as to the rest. Therefore, the variation leaving the rest in force, there was a continuation of so much of the injunction, and there was an order discharging the order for committal. It goes on here "that the motion should stand over:" some slip undoubtedly; the reporter has indicated that by putting in the margin "sic," shewing that there is an error in his opinion, and that he is not the person to whom it is to be attributed. suppose the meaning of the word "sic" to be "thus in the authority from which I have taken it. I will not presume to give any opinion upon it; what it was, or what was meant by it, I cannot take upon myself to say it must be such as in the course of this judgment has been attributed to it." Then the plaintiff was to be at liberty to

I

bring an action on the covenant. I think that if this had been considered by his Lordship to be a case in which a court of equity ought not to interfere, unless it appeared that there was a legal right, he would not have left the injunction standing, with liberty to the plaintiff to bring an action, but that he would have taken care, that whilst he was restraining the breach of the covenant for the time, thinking it necessary or proper in the exercise of his duty to do so, in order ultimately to decide how the rights of the parties were to be maintained, there should be such an action brought, and not have left it with liberty to the plaintiff to bring the action. See the consequence that has happened here. Of course I could not have known it if I had not been indebted to Mr. Palmer for what he told me this morning. The parties having got a clear decision of the Lord Chancellor, there stop; the plaintiff does not proceed, he does not avail himself of the liberty of bringing an action, he does not call upon the defendant for an answer. Now, this must not be considered as a case where the defendant is not to put in his answer until he is called upon; the defendant has a right to put in his answer when he pleases. If the object was to get rid of the cause for the injunction, the answer would undoubtedly have been put in.

Of course now, after they have had the benefit of Mr. Palmer's very able and learned argument (I do not know that it will be communicated to them), they will consider what is to be done in that case. I must consider that as a case in which the Lord Chancellor thought it was very clear, and did maintain the injunction, only varying that part of it which was granted by the Vice Chancellor, which seemed to him too vague and indefinite, but did not imperatively call upon the parties to bring it on for trial in a court of law for the purpose of having the legal question there determined. I think this is sufficient indication of the opinion of the Lord Chancellor to induce me to say that I ought not in this court to act upon a contrary opinion. That being so, I think there is some injunction to be maintained, unless there be other defences in this case.

Now the defences which are set up in this case are of this kind. First of all, that there