CHAN.] Re COMMERCIAL BANK Corporation of INDIA. Ex parte SMITH, FLEMING, & Co. [CHAN. as the present; and set-off in bankruptcy does not, I think, apply. Where the law of bankruptcy was intended to be applied it was specially referred to by the Act. To hold that the right of set-off exists in such a case as the present would, as it seems to me, be in effect to alter the contracts between the parties. As to any right independently of the statute to insist on the acceptances being retained, I can see no foundation on which it can rest. There is not, as it seems to me, either contract or obligation to support it. I am much confirmed in the opinion that the case depends wholly upon the statute by the M. R.'s having so dealt with it throughout. Taking then the case to depend upon the operation of the statute, the material section to be considered appears to me to be the 95th section. By the 94th section of the Act it is enacted, that the official liquidator shall take into his custody or under his control, all the property, effects, and things in action to which the company is, or appears to be, entitled, and shall perform such duties in reference to the winding-up of the company as may be imposed by the court. And by the 95th section of the Act, power is given to the official liquidator, with the sanction of the court, to do a variety of things specified in the section, and, amongst others to which I shall presently advert, to indorse any bill of exchange or promissory note in the name and on behalf of the company. There can be no doubt therefore that an official liquidator is not authorised to indorse bills without the sanction of the court; but then comes the question which appears to me to be the real question on which this case must depend, by what principles the court is to be guided in granting or withholding this sanction. It cannot of course be supposed to have been intended that the court should exercise a mere arbitrary discretion in this respect; that it should grant or withhold its sanction at its mere will and pleasure, but yet the Act is silent as to the circumstances under which the sanction is to be granted or withheld. There is nothing which I can find which can determine this question except the context of the Act, and I think, therefore, that it is to the context of the Act we must look for determining it. Looking then to the context of the Act, it is to be observed, in the first place, that almost all, if not all, the other cases specified in this section in which the sanction of the court is required to the proceedings of the official liquidator, are cases in which his proceedings might involve the estate in expense or litigation, and it is therefore reasonable to suppose that in this particular case of indorsing bills the court was intended to be guided by the same consideration; in effect, that this section was intended to operate as a check upon any proceedings of the liquidator which might operate to the prejudice of the estate. I may add that the Legislature would of course trust the court not to sanction anything which would be improper or contrary to the ordinary course of trade. Here, therefore, is one principle by which, in my opinion, the court ought to be guided in the exercise of this discretion, and another principle is, I think, to be deduced from the general purposes of the Act. The main purpose of the Act, as I understand it, is the collection and distribution of the assets of companies for the general benefit of their creditors, and amongst the creditors pari passu, and this discretion of the court ought therefore, as I think, to be exercised not for the benefit of any particular creditor or creditors, but for the benefit of the general body of creditors interested under the Act. Applying then these principles to the case before us, would there be any prejudice to the estate by the official liquidator indorsing these bills? I cannot see that there would, there not being, as I think, any legal or equitable right on Vol IV-No. 88, the part of Messrs. Smith and Fleming to stop the Some question was raised in the course of the argument before us whether the order in question could properly be made in the matter of the Act; but as my opinion is against the order on the merits of the case, I do not enter into that question. I desire, however, not to be understood as intimating any opinion in favour of the jurisdiction. Upon the whole I think that the proper order to be made upon this motion is to discharge both the orders of the 29th May and the 21st June, and if the official liquidator's summons of the 15th June for the court's sanction to his negotiating the bills_was before the M. R. when the order of the 21st June was made, to give liberty to the official liquidator to discount or sell the bills; but if the above summons was not before the M. R. on the 21st June, then to give him liberty to make a further application to the M. R. to indorse the bills. The costs of all parties of both the orders and of the appeal should, I think, come out of the estate. Solicitors for the official liquidator appealing, Freshfields and Newman. Solicitors for Messrs. Smith, Fleming, and Co., Murray, Son, and Hutchins. CHAN.] TAYLOR 2. SPARROW-Ex parte SAVIN, re SAVIN. Tuesday, July 3. (Before the LORDS JUSTICES.) TAYLOR v. SPARROW. Will-Construction -Period of distribution— The testator by his will gave his residuary estate to trustees to pay the income to M. for life, and after her death to distribute the capital among his twelve nephews and nieces by name. And he directed that if any of them should die " before the distribution of his estate and effects" leaving issue who should die before twenty-one, the share to which such nephew or niece would have been entitled was to be equally | divided amongst his surviving nephews and nieces. One of the nephews died in the testator's lifetime, leaving children: Held (reversing the decision of Stuart, V. C.), that the gift over took effect in favour of the children of the nephew so dying. This was an appeal by the children of John Taylor, a nephew of the testator in the cause, against a decision of Stuart, V. C., declaring that they took no share in the residue of the testator's estate, inasmuch as their father John Taylor had died before the testator. The hearing before the learned V. C. is reported in 13 L. T. Rep. N. S. 494, where the will, so far as is necessary, and the other circumstances are stated. John Pearson and William Renshaw were for the apps. [CHAN. creditors, under which the winding-up of his estate and the carrying into effect of his various contracts was proceeded with, and certain non assenting credi tors, alleging informalities and omissions which rendered the deed invalid, moved, but not until the 31st May, to cancel the registration: Held (differing from the commissioner), that, whether the objections were otherwise valid or not, they could not be maintained on the ground of excessive delay. The Act of Parliament states in the 192nd and other sections the matters which are to be observed in order to render such a deed binding, and states the consequences to ensue on their being observed: Queere, whether the General Orders professing to be made in pursuance of the Act, but which require additional conditions before the benefit of registration can be obtained, are entitled to any effect whatever: Quære also, whether it was competent to the court so to review and cancel the acts of its own officers as to annul the consequences which the statute prescribed should follow upon those acts being done. This was a motion by Mr. Thomas Savin, to discharge an order of Mr. Commissioner Goulburn, under the following circumstances :— The applicant was a railway contractor of Bankbuildings, and was, at the time of his execution of the deed presently mentioned, engaged in railway works of the greatest magnitude in various parts of England and Wales. On the 9th March of the present year he executed a trust-deed for the benefit of his creditors, and he was at that time indebted to several creditors in a sum of 2,297,4234, and to unsecured creditors in a sum of 243,2447. So much Bacon, Q. C. and Renshaw for the surviving of the effect of the deed as is material for this nephews and nieces, and Osborne Morgan for other parties. The authorities referred to were: Humberston v. Stanton, 1 V. & B. 385; Walker v. Main, 1 Jac. & W. 1; Hannan v. Sims 2 De G. & J. 151; Loring v. Thomas, 1 Dr. & Sm. 497; 5 L. T. Rep. Butler v. Ommaney, 4 Russ. 70; Thornhill v. Thornhill, 4 Madd. 377; John Pearson having replied, Their LORDSHIPS expressed their opinion that the question was one of grammatical construction of the words," shall depart this life before the distribution of my estate and effects;" and that the court had held those words to mean, should depart this life at any time before the distribution, whether in the lifetime of the testator himself, or subsequently to his death. There appeared to be no sufficient reason in this case for departing from that usual construction, and therefore the children of the nephew John, who had predeceased the testator, were entitled to share in his residuary estate. Solicitors for all parties, Elsdale and Byrne. July 20 and 21. (Before the LORDS JUSTICES.) Ex parte SAVIN, re SAVIN. Creditors' deed-Registration - Consequences of Cancelling by the court-B. A. 1861-General Orders, 22nd May 1862. In a case where a railway contractor, indebted to the extent of two millions and a half, had, on the 16th March, registered a deed of arrangement with his report is stated by Turner, L. J. below. The creditors numbered 505 in all, and of these 385 assented to the deed; the debts due to those assenting amounted to 2,050,2821. The deed was registered as soon as it was executed, and the certificate of registration was dated the 16th March. At the date of the deed it was estimated that a sum of 200,000l. would be required to complete certain works then in progress, and many of the most important of the secured creditors having become satisfied that the estate would be benefited by such an outlay as would suffice for their com pletion, subscribed a sum of 207,110. for that object, of which 118,210l. was actually received by the inspectors before the middle of June, and the works were pushed on. On the 31st May, however, Messrs. Worsam and other non-assenting creditors gave notice of motion before the Court of Bankruptcy to cancel the regis tration of the deed upon various grounds which are sufficiently stated in the order of Mr. Commissioner Goulburn, dated the 2nd July, and which was to the following effect: That the registration of the said deed of arrangement made pursuant to the 192nd and 193rd sections of the Bankruptcy Act 1861, and the rules and orders of the court, dated the 22nd May 1862, should be and the same was thereby vacated and rescinded, and that the certificate of the chief registrar issued in pursuance of the 198th section of the said Act, should be recalled and cancelled on the ground that the account delivered to the chief registrar with the above-mentioned deed was not in compliance with the rules and first, that the residences of the persons alleged to be orders of this court in the following particulars: creditors of the said Thomas Savin are not suffi ciently set forth therein, and as to some of such creditors that their residences are not set forth at all; and, secondly, that the nature of the security held by the several persons alleged to be creditors CHAN.] Ex parte SAVIN, re SAVIN. [CHAN. either wholly or partially secured is not sufficiently | statute gives power to enable an amendment to be stated in such account. It is unnecessary to do more than thus state the grounds upon which the applicants to the court below relied, because it will be seen that the judgment of the Lords Justices depended upon none of them, but was based solely upon the laches of the applicants. It should, however, be observed that the statute does not require any of the particulars the omission of which is mentioned by the learned commissioner as the reasons of his decision. In the 192nd section of the Act it is provided that the deed shall be as valid and effectual as if all the creditors had executed it upon the observance of sundry conditions which are there set forth; the 193rd and 194th sections provide for entry and registration of the deed by the proper officer, and the following sections define what are to be the consequences of a deed so executed and registered and when duly advertised. De Gex, Q. C. and Beresfora now appeared on behalf of Mr. Savin, the debtor, seeking to discharge the order of his Honour. Bacon, Q. C. and Higgins supported that order. Lord Justice KNIGHT BRUCE said:-In this case, a case of some importance, several points have been raised upon which I think neither my learned brother nor myself consider it necessary to give an opinion. For the purpose of the present controversy I believe we both assume that the registration is open to objection, and that it was competent to the learned commissioner in point of law to decide against it s validity. When I say competent, I do not mean to say, or to have it inferred, that, in my opinion, he was bound to give effect to the objection. There was no absolute invalidity. There was, I repeat, the competency or power to decide in favour of the validity of the objection made to the sufficiency of the registration, but I think that it was not incumbent on the commissioner so to decide. Now, in that view of the case, the time allowed to elapse before bringing the objection before his Honour was, I think, of great materiality. The time, I think, was ten weeks, or about that time. During that period, in an estate of this description, much that was very material may have happened, and in all probability, or certainly, did happen, and I apprehend that those who intended to avail themselves of the invalidity or possible invalidity of the registration were bound to bring the objection forward much sooner than they did. That being so, I think the time is a sufficient objection to acting upon it, and therefore respectfully, and fully sensible of the value of the learned commissioner's experience and opinion upon a question of this description, I think, with deference to him, that in this case I should not have acted upon the view of the invalidity of the registration, but should have declined to interfere with it, and should have decided that matters ought to be left as they are. I think, therefore, speaking I repeat with great deference and respect to the opinion of the learned commissioner, that the order should be discharged, and that the registration should remain. made of the account which has been rendered? Certainly, I should not think it right to give an opinion upon any of those points unnecessarily, and it seems to me, in concurrence with my learned brother, that the time which was permitted to elapse before the application was made to the commissioner is sufficient to dispose of the whole case. I will merely observe on the question of the form of the account, and the power to prescribe that form of account by the general order which was framed that it involves this question: that, if the 45th section of the Act is to be considered as merely extending to modal alterations in the form and practice of the court, or to instances of modal alterations in instruments, it must be a most serious question whether it authorises modal alterations to be made which alter the effect of other provisions contained in the other Act of Parliament; whether, in fact, under the 45th section, a modal alteration could be introduced which has the effect of adding another condition to the 192nd section, prescribing the mode and the requisites of registration. With reference to the power to cancel, it may be quite true, as the learned commissioner suggests, that every court has the power of setting right errors which have occurred in its own practice, or by non-observance by its officer of any particular rules. This case does not stand wholly upon that jurisdiction which may be said to be necessarily inherent in every court over its own officers, because the statute has prescribed particular effects consequent upon the act done by the officer. The question is, whether the statute, having prescribed those particular effects, it is competent to the court, in the exercise of that jurisdiction which, as it is stated, every court must possess over the acts of its own officers, to undo provisions which are contained in a statute directing the effect of the acts which have been done by its officers? On the question of the right to amend it is a question of minor importance, and I do not think it necessary to say anything upon it. The real question on which, in my judgment, the case rests, is time. This deed was registered on the 9th March. I think the certificate was on the 15th March. The nature of the case is, that there are debts due from this debtor to the amount of 2,500,000l., and there are enormous works in progress by the debtor, which this deed, as I understand it, warranted the inspectors to carry on, and to borrow money for the purpose of carrying on; and it must be taken that at least as early as the middle of March the applicant to the commissioner to cancel the registration had the means of knowledge. Whether he did in fact avail himself of those means or not, he had the full means of acquiring a copy of the deed, and knowing all the provisions that were contained in it; and among others the provisions for carrying on this business, and borrowing money for the purpose of carrying it on. The complaint before us is this, that there is not a sufficient description in the account which was rendered by the debtor of the places of abode of the creditors, or of the securities which were held by the creditors. Now, the same power which the applicant to the commissioner had to obtain a copy of the deed extended also to a copy of the account; and as early, therefore, as the middle of March the applicant had the means of ascertaining what defects there were in that account. He must be taken, therefore, to have known as early as the middle of March everything which is now brought before us, every objection which arises upon the description of the creditors which was contained in the deed, and upon the insufficiency of that description, and upon the insufficiency of the deed as to the statement of the securities. With that knowledge he rests till 31st May, allowing the proceedings under the deed to go on during the whole of that period, eight weeks at least, without, according to the evidence before us, having given any intimation of his intention to dispute the deed, or to question anything that was done under it; and according to the explanations which have been given at the bar, the outside to which it can be carried is, that he did, three weeks before the 31st May, intimate to the solicitor on the other side that he intended to question the deed. Well but now then, even if he is not to be considered as fixed with a knowledge of the deed and of the account, and of all the details of it which are brought before us, and which constitute the objections, as early as the middle of March this at least is clear, that on the 16th April, according to the statement in the evidence before us, he had it as a fact that the registrar of the court had forwarded letters to a variety of the creditors who are mentioned in the deed, and that those letters had been returned through the Deadletter office. Now in a transaction of this description, with concerns of the enormous extent of those which are involved in this deed, I think it is not going too far to say that it was the duty of this applicant | either to go to the Court of Bankruptcy at once to make the application which he ultimately made on the 31st May, or at all events to have given notice of what his intention was. But no step appears to have been taken by him before the middle of May, and giving him the benefit of not knowing anything till the 16th April, and giving him the benefit of the three weeks stated at the bar (not upon the evidence before us), notice of which was said to be given, it is too much for him to lie by and to wait for the whole period of a month, I think even for a longer period, because, according to the evidence, at all events there would be seven weeks, and according to the duty incumbent on him there would be nearly ten weeks within which he ought to have applied to the court. It appears to me, therefore, that there has been too much delay in this case to sustain the order, and upon that ground I think the order ought to be discharged, without giving any opinion upon the other questions in the case, the importance of which I am not disposed to underrate. I think there should be no costs. Discharge the order; deposit to be returned. Solicitors for the app., Tilleard, Son, Godden, and Holme. Solicitors for the resps., Harrison and Lewis. Wednesday, July 25. (Before the LORDS JUSTICES.) DOWLING v. DOWLING. Will-Construction-Gift by implication. The testator in the cause by his will directed collection and investment of his estate, and that "the interest therefrom should be divided half-yearly between his four sons, and at the decease of either without lawful issue such share revert to the remainder then living, their child or children :" Held (reversing the decision of Stuart, V. C.), that each of the four sons took an absolute interest, subject to their being divested in the event of any of them dying without lawful issue. This was an appeal by four sons of the testator in the cause from a decision of Stuart, V.C., reported 13 L. T. Rep. N. S. 553. The suit was one for the administration of the [CHAN. estate of Richard Hoare Dowling, who, by his will, dated the 18th Nov. 1859, gave to each of his four sons, nominatim, a legacy of 100%, together with the remainder of all his household furniture and effects to be equally divided amongst them; and he directed that his freehold estates and all other property should be disposed of as his trustees should think best, and be added to and invested with his other personal property, either in railway debentures, or any other stock they might think best, "the interest therefrom to be divided half-yearly between my four sons above named, and at the decease of either without lawful issue, such share revert to the remainder then living, or their child or children." The testator died in May 1860. His trustees relied and invested his estate, and for several years divided the income amongst his four sons; but more recently a doubt had arisen as to the true construction of the will, and the present suit was instituted. The question before the Court of Appeal was as to the nature and amount of interest which the four sons took under the clause of the will above set out, and the learned V.C. decided that they took an estate for life only, and that their issue took by implication a vested interest in the capital as joint tenants. Malins, Q. C. and Cracknall supported the appeal. Bacon, Q. C. and Aikin, for the children of one of the testator's sons, supported the decision. Lord Justice KNIGHT BRUCE said:-We have both made up our minds as to the true construction of this will. Each of the four sons takes an absolute interest, subject to being divested in the event of his dying without leaving issue. It is unnecessary at the present stage to go beyond that. Lord Justice TURNER said:-I am of the same opinion. The gift to the sons is a limited gift, but not expressly a gift for life. The expression is, "the interest therefrom to be divided half-yearly between my four sons above named, and at the decease of either without lawful issue, such share to revert to the remainder," which seems to assume that the share of each son was considered by the testator to be vested in the original person to whom he had given it. There is therefore, in my opinion, an absolute gift to the sons, but this absolute gift is subject to this, that upon the death of either of them without lawful issue, the share is to revert to the remainder then living or their child or children. I do not know whether I am right as to this; but it appears to me, upon the true construction of the will, that the children are not to take any interest against their parents. If the parents are out of the way, then the children are to take in the place of the parents; but so long as there are parents, their children are to take nothing. This agrees with the view that the sons take absolutely; but this absolute gift is not cut down in favour of the children, because they take nothing as against their parents. I do not know that we differ from the learned V. C. as to the rule of construction applicable to this case, but he has drawn an inference in favour of the children from the fact of the gift over being to the surviving sons or their children, but as the gift over to the children of the other sons is not except in the event of the parents being out of the such as to interfere with the gift to the parents way, no inference can be drawn in favour of the children of a son dying leaving children as against their parents. The case of Ex parte Rogers, 2 Mad. 449, which has been so often commented upon, does not govern the present case. The mere fact of ROLLS.] Re COMPANIES ACT 1862. Re THE LOndon and Mediterranean Bank (Limited). [ROLLS. giving over property in case of death without issue does not show an intention to give to children as against the parent. The testator might well suppose that the children would be sufficiently provided for from other sources, or that the parent would himself be able by means of the gift to provide for his children. The result is that, in our opinion, each of the four sons takes an absolute interest, subject to their being divested in the event of any of them dying without issue, leaving it undetermined how the shares will devolve in that event. Solicitor for the app., Oliver Richards. | bank, had no jurisdiction under the Companies Act 1862 now to make another to wind it up compulsorily. In fact, the first order must be discharged, by an appeal in the regular way, before another could be made in the matter. They cited the Companies Act 1862, sect. 124, as to appeals, and also sects. 145, 146, 147, 148, 149, 150, 151, and 152, and submitted that this question was a new and very important one. Moreover, they contended that all the objects of the petitioners would be obtained by a continuation of the voluntary winding-up. Lord ROMILLY.-Mr. Jessel, I have no doubt as Solicitors for the resps., Taylor, Hoare, and Taylor. to the authority which the court possesses in these ROLLS COURT. Reported by H. R. YOUNG, Esq., Barrister-at-Law. MICHAELMAS TERM 1866. Nov. 3 and 7. Re THE COMPANIES ACT 1862. Re THE LONDON AND MEDITERRANEAN BANK (LIMITED). Companies Act 1862-Sects. 124, 145, 146, 147, 148, 149, 150, 151, and 152-Order for voluntary windingup under supervision of court-Petition for compulsory order-Jurisdiction-"Official" official liquidators. Where an order has been made for the voluntary windingup of a company, under the supervision of the court, the court has power, if it thinks fit, to discharge such order, and make one to wind-up the company compulsorily. Where parties are dissatisfied with the course of proceedings taken in chambers, in obedience to an order for the voluntary winding-up of a company under the supervision of the court, the proper step for such parties to take is to proceed by way of summons in chambers, to regulate the proceedings there, and not to present a petition for a compulsory winding-up order. Observations of the court as to "official" official liquidators. This was a petition presented by two creditors of the above-named bank for the sum of 2000l. and interest, and of a shareholder in it, praying for a compulsory winding-up order. The main grounds on which the petition rested were, that a voluntary winding-up of the bank was now in the course of proceeding, but that such voluntary winding-up was not calculated to insure complete justice in this particular instance to all the creditors and shareholders in the bank. It was also insisted that the directors and official liquidator of the concern had been guilty of mismanagement in their respective positions; that they had paid some bills which they ought not to have paid, thereby wasting the assets of the bank; that they had not discharged other claims which they might and could have advantageously met; and that they had in other respects been guilty of delay and misconduct in the affairs of the bank. A further reference to these facts will be seen from the subsequent part of this report to be unnecessary. It appeared that an order was made on the 2nd June 1866 to continue the voluntary winding-up of the bank, subject to the supervision of the court. That order was still in force, and the winding-up under it was still pending. Baggallay, Q. C. and Lindley appeared in support of the petition. Jessel, Q. C. and Karslake, for some of the resps., took a preliminary objection, that the court having made an order for the voluntary winding-up of the cases, to discharge any one order which it may have made in the course of a voluntary winding-up, and to make another instead of the former one. No appeal, in the ordinary sense of the word, is necessary for the purpose. The 146th section of the Companies Act 1862 applies to both classes of winding-up cases. I mean both voluntary and compulsory. But if I am right in my view, I have power now to make an order for the compulsory winding-up of this company. There is nothing in the 152nd section of the Act to show that the court cannot discharge an order which it has made. In my opinion the intention of the Legislature, when those sections were enacted, was to give to the court the fullest possible power to regulate and modify the proceedings of winding-up matters as it might deem most expedient in each case. Baggallay, Q. C. then proceeded with his argument in further support of the petition; and in the course of the discussion, Lord ROMILLY said :-I have always been of opinion that it would be a highly desirable thing if official liquidators of companies were to be now appointed, and attached officially to each branch of these courts. The great increase in winding-up matters, and the importance into which that class of business has grown, would render such appointments, in my opinion, most useful and beneficial. Cole, Q. C. and J. N. Higgins appeared for the London and Bombay Bank, who were creditors of the London and Mediterranean Bank for about 150,000l., and supported the prayer of the petition. They also cited the Gen. Ord. 11th Nov. 1862, r.61 (Orders as to companies). Lord ROMILLY.-Why, Mr. Cole, if your clients approve of the principles involved in the presenting of this petition, and therefore must be taken to have disapproved of what has been done in chambers under the voluntary winding-up, did they not take proceedings accordingly in chambers with respect to the winding-up there? Cole, Q. C.-They were desirous of saving expense. They considered that part of the case one of form only, and that they would not burden the assets of the bank with the costs of supporting this petition and also of proceedings in chambers. Lord ROMILLY.-I think, Mr. Higgins, that the question which you say is one of form, is in reality one of substance. The question is this, whether a voluntary winding-up of a company, under the supervision of the court, is, in fact, no more than a mere voluntary winding-up? And, further, if the supervision of the court is necessary, and an order has been made for winding-up a company thereunder, can that order be discharged by me in favour of an order to be made for a compulsory winding-up? Now, even assuming the existence of every possible irregularity in the proceedings under the voluntary order, why was |