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CHAN.]

DE HOGHTON v. MONEY.

[CHAN.

Stock, for the deft. Cotton, took no part in the | accordingly, on the same 3rd March 1862, wrote to argument.

The following authorities were referred to during the arguments:

On the question of maintenance and champerty:
Story on Equity, 400;

Strahan v. Brander, 1 Eden, 308;
Stevens v. Bagwell, 15 Ves. 156;

Prosser v. Edmunds, 1 Y. & Coll. Ex. 481, 496;
Bayly v. Tyrrell, 2 Ball. & Beat. 362;
Stone v. Yea, Jac. 436.

As to the voluntary character of the letter of March
1862, and undue influence by the deft. Money, as
commanding officer, in obtaining it :

Huguenin v. Baseley, 14 Ves. 273;

the plt. to the effect that the memorandum would not do to found anything upon, and that he held his cheque safe, and would not let it out of his hands. The performance of the agreement of the 22nd Feb. by the deft. Cotton was, however, pressed on the part of the deft. Money, for some few days longer, when it was abandoned by him on the deft. Cotton writing to him a letter in these terms. [His Lordship read the letter dated the 11th March 1862, which see.] Upon the receipt of this letter the deft. Money added his signature at the foot of it, and affixed an agreement stamp to it, and he soon afterwards told the plt. of the contents and effect of this letter, and returned him his cheque for 5361.

Townend v. Toker, 14 L. T. Rep. N. S. 531; 35 Afterwards, and on the 21st March 1862, the plt.

L. J. 608, Ch. ;

Cooke v. Lamotte, 15 Beav. 234.

As to parties to the suit. &c. :

Tasker v. Small, 3 Myl. & Cr. 63, 69, and 71;
Mole v. Smith, Jac. 490;

Vernon v. Wright, 7 H. of L. Cas. 35.

The appeal was argued before the late Knight Bruce, L. J., and Turner, L. J., and judgment was reserved by them. After the death of the late L.J., the parties agreed to take the judgment of the present senior L. J., as in all respects the judg

ment of the court.

On the 18th Dec. accordingly,

Lord Justice TURNER said:-This suit relates to a leasehold plot of land at Hoxton, lying between the head-quarters and drill-hall of the 6th Tower Hamlets Rifle Volunteers and the Royal Standard Tavern. The plt. in this suit became in the month of March 1861, and continued until the month of Dec. 1864, to be the honorary colonel of the regiment. The principal deft. in the suit, Geo. H. Money, became in the month of Feb. 1861, and has ever since been, the lieutenant-colonel of the regiment. Geo. Cotton, another deft. in the suit, was, in and before the month of March 1861 and continued until some short time before the month of June 1865 to be, the landlord of the Royal Standard tavern. St. Pierre Butler Hook, the other deft. to the bill, is a solicitor and an officer in the regiment, who, throughout the transactions to which this suit relates, acted on behalf of the deft. Geo. H. Money. On the 1st Aug. 1861 the deft. Geo. Cotton forwarded to the deft. Money a donation for the regiment, and at the same time suggested to him that a reading-room would be a valuable addition to their conveniences, and offered to build them one, and in the month of Nov. 1861 he was appointed to be an ensign in the regiment. In the month of Dec. 1861 the deft. Cotton entered into a treaty for the purchase of the leasehold plot of land in question, and by an indenture of under-lease dated the 26th Feb. 1862 it was, in consideration of the sum of 500l. which he paid, demised to him from the date of that indenture until the 22nd June 1897. On the 13th Feb. 1862, when the under-lease was in the course of completion, the deft. Cotton, who, as it is alleged by the deft. Money, but denied by the deft. Cotton, had repeatedly promised to buy the land, and present it with the reading-room to the regiment, refused to assign his interest in the land to the regiment, stating that he was willing to lend it, but that he would not bind himself in any way. In this state of circumstances the deft. Money, on the 16th Feb. 1862, wrote to the plt. as follows: [his Lordship here read passages from numerous letters, the greater part of which appear in the report referred to, which showed the earlier negotiations between the parties.] In the meantime the deft. Hook had been apprised of the memorandum which the deft. Money had given to the plt. by his letter of the 2nd March, and had raised objections to it, and the deft. Money

sent to the deft. Money, towards the building to be erected on the land, a cheque for 2001; but in the result the building was not erected, and the 200/ was returned to the plt. in the month of Aug. 1863. The regiment, however, had possession of the land, laid out some money in levelling it, and occasionally used it for drill and parade. On the 24th May 1864, the plt. entered into an agreement with the deft. Cotton for the purchase of the plot of land in question. This read the agreement; see the report at the Rolls, agreement is in these terms: [his Lordship here which does not, however, state (what was the fact) that by the agreement the deft. Cotton was to per mit the free use of his name, and to afford to the plt. every facility for proceedings at law or in equity, or otherwise which the plt. might consider it advisable to institute in order to have the letter of the 11th March 1862 delivered up, or to set aside any rights which the deft. Money or the regiment might claim under it.] Upon the execution of this agreement the plt. paid to the deft. Cotton the 300l. agreed to be paid by him, but on the same 24th May 1864 both the plt. and the deft. Cotton were served on the part of the deft. Money with notice of the document of the 11th March 1862, and that the deft. Money was in the possession of the land and claimed under the document to be entitled to it. The deft. Money also in this same month of May 1864 published some letters in a newspaper proposing to establish a guild and refectory for working men, and offering to give the land in question, to which he stated himself to be entitled, for that purpose, and the plt. answered these letters in the same newspaper denying the deft. Money's title. Subsequently, and by indenture of the 10th June 1864, the deft. Money assigned the land to himself and the deft. Hook. In this state of circumstances the plt. on the 20th July 1864 filed the bill in this suit against the defts. above mentioned. The bill, after stating the purchase of the land by the deft. Cotton, and that differences had arisen between him and the deft. Money in consequence of his refusing to give up the land to the regiment, proceeds to state the correspondence between the deft. Money and the plt., which led to the agreement of the 22nd Feb. 1862, and to the advance by the plt. of the 536 and after stating that agreement and the plt.'s advance, it alleges that the plt. by his letter of the 3rd March 1862 constituted the deft. Money his agent for the purpose of paying the cheque for the 5361. to the deft. Cotton and completing the arrange ment agreed on, and that the deft. Money accepted the agency and trust, and ought forthwith to have paid the cheque accordingly to the deft. Cotton. The bill then states the letter of the 11th March 1862, and contains a series of allegations impeaching the conduct of the deft. Money towards the deft. Cotton with reference to that letter, and particu larly in having by retaining the cheque for 5364 induced the deft. Cotton to believe that the agree ment of the 22nd Feb. had been abandoned. The

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bill then further states that, during the early part of 1864 the plt., being desirous of putting an end to the existing relations between the deft. Cotton and his regiment with respect to the land which he considered to be unbefitting the character of the regiment and his own position as colonel, and being desirous also of reimbursing the deft. Cotton (who was ill able to afford any loss or take legal proceedings) his outlay, proposed to purchase his interest in the land, and it then states the agreement between the plt. and the deft. Cotton of the 24th May 1864, and after referring to the claims of the deft. Money above mentioned, it charges that Money's claims to the ownership of the land are unfounded and untrue, and that he has no estate or interest whatever in the land. [His Lordship then stated the prayer of the bill, the full effect of which will be found in the report at the Rolls, p. 449, and continued:] The deft. Money, by his answer, in substance denies the allegations of the bill which go to impeach his conduct towards the deft. Cotton with reference to the letter of the 11th March 1862, and states his belief that this letter was intended by the deft. Cotton to assign to him on behalf of the regiment his entire beneficial interest in the land. He alleges that the plt., when he entered into his contract for purchase, had notice of this letter. He claims on behalf of the regiment the benefit of the agreement contained in the letter, and contends that the plt.'s agreement for purchase is void on the ground of champerty, and further that there is no privity between him and the plt. in respect of any of the relief prayed by the bill, and that he has been improperly joined as a deft. to the suit. By his further answer he says he had the consent of the regiment to the proposals contained in his letters to the newspaper. The deft. Cotton, by his answer supports the plt.'s case. [His Lordship then briefly referred to the evidence in the cause, stating that he had no doubt that the plt. entered into the agreement of the 24th May 1864 with full notice of the letter of the 11th March 1862.] Upon the hearing of the cause before the M. R., his Lordship dismissed the bill against the defts. Money and Hook with costs, and decreed a specific performance against the deft. Cotton. The appeal before us is by the plt. from so much of the decree as dismissed the bill against the defts. Money and Hook with costs.

The first point to be considered upon this appeal seems to me to be, upon what ground the app.'s claim to relief in this suit is founded by the bill in this cause, and I think it must be taken to rest wholly upon the agreement of the 24th May 1864. It is, indeed, alleged by the bill that the deft. Money became the agent of the plt. for the purpose of paying the 5361. to the deft. Cotton, and of completing the arrangement made by the agreement of the 22nd Feb. 1862, but the bill does not seek the specific performance of that agreement, nor would it be consistent with the allegations and prayer of the bill that such relief should be given, for the bill states and prays the specific performance of the agreement of the 24th May 1864, which differs in many respects from the agreement of Feb. 1862, which the deft. Money is alleged to have entered into as the plt.'s agent. This alleged agency, therefore, does not seem to me to bear upon the case further than as it may bear upon it when taken in connection with the agreement of the 24th May 1864, in which point of view it falls within the observations I shall presently make. Taking the plt.'s case, then, to rest upon the agreement of the 24th May 1864, the first question we have to consider is, whether that agreement is one of which specific performance ought, under the circumstances of this case, to have been decreed by this court? for, if not, the equity of this bill, so far as it rests upon

[CHAN.

specific performance, drops to the ground. That the court has decreed specific performance against the deft. Cotton, who has not appealed from the decree, cannot alter the case as against the other defts. against whom the bill has been dismissed. Ought then the court, under the circum[stances of this case, to have decreed the specific performance of this agreement? In my opinion it ought not. I do not say that what appears in this case amounts in strictness to champerty or maintenance, nor do I even say that there may not be cases in which a purchaser who has completed his contract may be well entitled to impeach a title founded upon fraud committed upon his vendor; but I do not hesitate to say that in my opinion the right to complain of a fraud is not a marketable commodity, and that if it appears that an agreement for purchase has been entered into for the purpose of acquiring such a right the purchaser cannot call upon this court to enforce specific performance of the agreement. Such a transaction, if not in strictness amounting to maintenance, savours of it too much for this court to give its aid to enforce the agreement. Looking to the pit.'s own statement contained in the bill and in his affidavit, I am satisfied that this agreement was entered into for the purpose which I have indicated; and if, therefore, this case had rested upon this ground alone, I should have thought that this bill was proper to be dismissed. That the plt. in entering into this agreement intended to do what in his view of the case was right to be done by the deft. Cotton, I see no reason whatever to doubt; but this cannot, I think, alter the effect of the agreement or render it proper for this court to enforce it.

The case, however, does not rest here. Assuming the agreement to be free from the objection to which I have referred, there is still this difficulty in the case. The defts. against whom this bill has been dismissed, and against whom this appeal insists that it ought not to have been dismissed, were not parties to this agreement. They were entire strangers to it claiming under an adverse title, and I take it to be well settled both upon principle and authority that a mere stranger claiming under an adverse title cannot be made a party to a suit for specific performance. There is no equity against him independently of the agreement, and the agreement to which he was not a party cannot create such an equity: Tasker v. Small, 3 M. & C. 63, seems to me to be decisive upon this point. It was attempted on the part of the plt. to distinguish this case from Tasker v. Small, but the argument failed to satisfy me that in principle there was any distinction between the cases. It was argued for the plt. that independently of the right to specific performance, he was entitled to come to this court to have the rights in the land, and the effect of what is called the letter or licence of the 11th March 1862, declared; but the plt. has no interest in the land except under the agreement, and here again his case is met by Tasker v. Small, in which case it was distinctly laid down that a purchaser cannot, before his contract is carried into effect, enforce against strangers to the contract equities attaching to the property-a rule which, as it seems to me, is well founded in principle, for if it were otherwise, this court might be called upon to adjudicate upon questions which might never arise, as it might appear that the contract either ought not to be or could not be performed. The bill in this case asks that it may be declared that the so-called letter or licence of the 11th March 1862 conveyed no estate interest to the deft. Money. That is a question into which I do not enter. If the plt. is right upon it he may complete his contract with Cotton and proceed at law to enforce his rights. All that we have to decide is whether this bill was properly

or

V.C. K. WATERS v. WATERS-Re FREEN AND COMPANY (LIMITED). ELLIOT'S CASE. [V.C. K.

filed against the defts. Money and Hook. If it was
not, the case is not within Mr. Rolt's Act, and we
have nothing further to do with it. For the reasons
which I have given, my opinion is that this bill was
improperly filed against these defts., and was there-
fore properly dismissed against them, and I think
this appeal should be dismissed with costs.

Solicitor for the plt., Compton Smith.
Solicitor for the deft. Cotton, F. C. Pike.
Solicitor for the other deft., St. Pierre Butler
Hook.

V. C. KINDERSLEY'S COURT. Reported by G. T. EDWARDS, Esq., Barrister-at-Law.

Nov. 17 and 19.

WATERS v. WATERS.

Vendor and purchaser-Sale under decree of courtTitle-Proceedings in suit-Condition of sale-Jurisdiction.

Where a sale has been directed by the court under a decree in a suit, the purchaser is entitled to see so much of the proceedings in the suit as will show that the jurisdiction of the court has been properly exercised. But a purchaser cannot take the objection that the court has miscarried in the exercise of its jurisdiction. This was an adjourned summons. Under a decree

of the court in this suit a sale of certain houses at Bristol had been directed, and had been made. Several questions as to title had been raised in chambers, and were now brought before the consideration of the court. The only question of importance arose upon the following condition of

sale:

All recitals and statements in deeds and other documents, dated more than twenty years since, shall be conclusive evidence of the matters and things so recited or stated, or hereby implied. And all attested, office, or other copies, abstracts, or extracts of and from any deeds, wills, proceedings in Chaucery, parochial or public registers, or other documents, and all evidence of deaths of parties, intestacy, or heirship, or other matters of pedigree, or of identity of parties or parcels, and generally all documents, or other evidence called for by the purchaser, shall, whether required for verification or supple- | menting of the abstract of title to the purchaser, or for any other purpose, be at the expense of the purchaser.

Schomberg, for the purchaser, maintained that the pleadings in the suit should be furnished as part of the title, to show generally that the matter had been properly carried out under the proper authority. G. N. Colt, for the vendor, contra.

The VICE-CHANCELLOR.-With respect to the pleadings, I do not think that they should be furnished; but I do think that the purchaser is entitled to see so much of them as would show that the court had jurisdiction to decree a sale. It is not necessary to show that such jurisdiction was properly exercised, because we know that a purchaser cannot take the objection that the court has miscarried in the exercise of its jurisdiction. But it is a sufficient objection to a title that there is nothing to show that the court had jurisdiction to sell at all; and wherever there is a sale by the court, it is a necessary part of the title to set forth in the abstract so much of the pleadings as to show the jurisdiction to sell.

Saturday, Nov. 17.

Re FREEN AND COMPANY (LIMITED).
ELLIOT'S CASE.

Company-Shares-Allotment—Signing memorandum of association-Winding-up-Contributory—Transfer.

Where a party signs the memorandum of association of a company for X shares, and afterwards applies for, and is allotted, Y shares, a number greater than X, the shares for which he signed the memorandum form part of the allotment, and he will not be table as a contributory for X and Y shares.

Where a transfer of shares had been executed, but had not been registered before the winding-up of a company, the transferor is not, in the absence of any contrary provision in the company's articles of association, liable to be placed upon the list of contributories in respect of the shares thus transferred.

whether a Mr. Elliot was to be placed upon the list The question upon this adjourned summons was of contributories in the winding-up of this company, and if so, in respect of how many shares? Mr. Elliot had signed the memorandum of association in respect of one share, and had afterwards applied for and had been allotted ten shares. One of the questions was, therefore, whether the one share for which he had subscribed was included in

the ten allotted shares, or whether he must be held

to be liable for the one share in addition to the ten shares allotted.

Elliot had executed a deed of transfer of the ten shares to a Mr. Bagshawe, but the transfer had never been duly registered before the order to wind-up the company was made. The company's articles of association did not state that registration was necessary to complete a transfer.

Baily, Q. C. and Cracknall, for the official liquidator in support of the summons.-Mr. Elliot must show that he had ceased to be a member of the company previous to the winding-up. The transaction between Elliot and Bagshawe was colourable, and was not a complete transfer, which could not be effected until registration had been made. They referred to

25 & 26 Vict. c. 89, ss. 23, 38 (Companies Act 1862). Glasse, Q. C. and Higgins, for Elliot, were not called upon.

The VICE-CHANCELLOR said that an actual transfer of Elliot's ten shares was made to Bagshawe, and was brought before the authorities of the company, but was never registered. In the absence of actual registration, approbation by directors in the shape of a minute was sufficient, but it did not appear from the articles of association of this company that even any minute was necessary to validate the transfer. There was no reason why the transfer should not be valid, notwithstanding there was no registration. He would assume that the transac tion between Elliot and Bagshawe was merely colourable; that did not vitiate the transfer of the shares, for whatever the impropriety of the transaction, it was irrespective of the intention of the parties as to the validity of the transfer. The only remaining question was, whether Elliot was to be considered the owner of eleven or ten shares. He had signed the memorandum of association for one share, and he was of opinion that that share must be considered as included in the ten shares subsequently allotted to him, as when he applied for the ten shares the intention of both parties was that he was to have ten shares in all, and not eleven, and he was therefore the holder of ten shares. His name must be struck off the list of contributories.

Solicitors: Blake; Snell.

V.C. W.] Re ANGLO-DANISH STEAM NAVIGATION Co.-STEWART v. AUSTIN AND OTHERS. [V.C. W.

V. C. WOOD'S COURT. Reported by W. H. BENNET and R. T. BOULT, Esqrs.. Barristers-at-Law.

Friday, Nov. 23.

Re ANGLO-DANISH STEAM NAVIGATION COMPANY. Practice-General Order of 11th Nov. 1862, rule 4

Extension of time for filing affidavit.

Where a person who had made an affidavit in support of an application for winding-up a company, resided in Dantzic, the Court extended the time allowed for filing from four days to ten days.

E. E. Karslake moved that the time for filing the usual affidavits in support of an application to windup the Anglo-Danish Steam Navigation Company might be enlarged from four days (the time prescribed by the General Order of 11th Nov. 1864, rule 4), to ten days, on account of the petitioner being resident in Dantzic, which made it impossible to file the affidavit within the four days.

The VICE-CHANCELLOR made the order, considering that he had power to do so, as the time of filing the affidavit was prescribed by the General Order and not by Act of Parliament.

STEWART U. AUSTIN AND OTHERS. Demurrer-Bill for repayment of deposit money on shares.

The plt. applied for shares in a company and paid 1007 as deposit. The directors of the company, instead of forming a company with the objects set out in the prospectus, on the faith of which the plt. applied for shares, formed a company for larger and different objects, and handed over the 1004 to the new company. The plt. successfully applied to the court to have his name struck off the register of the company, and then filed a bill against the company and the directors, praying that they might be declared trustees of the 100% for the plt.:

Held, on demurrer, that there being no frand alleged against the defts., the plt. was not entitled to relief in equity.

This was a demurrer.

The bill alleged that the defts. issued a prospectus of a company called the Russian (Vyksoundsky) Ironworks Company (Limited), of which they were to be directors, accompanied by a form of application for shares, which was as follows:

Gentlemen, Having paid to your bankers the sum of £ being a deposit of 11. per share on shares in the above company, I hereby request you to allot me that number, and I agree to accept such shares or any less number you may allot to me, and I agree to pay the sum of 47. per share on allotment, and I authorise you to insert my name in the register of members for the number of shares allotted to me.

On the 22nd April 1865 the plt. applied for 100 shares in the form prescribed, and on the same day paid 100%. to the defts.' bankers.

On the 28th April 1865 the memorandum and articles of association were registered, and on the 29th the plt. received a notice that twenty shares were allotted to him, and on the 20th June 1866 the plt. applied to the V. C. to have his name removed from the register of the company on the ground that the objects of the company, as stated in the memorandum and articles of association, differed widely and materially from the statements contained in the prospectus.

The V. C. directed the plt.'s name to be removed from the register (see 14 L. T. Rep. N. S. 659), and the order was subsequently affirmed by the Lords Justices (see 14 L. T. Rep. N. S. 817; 1 Law Rep. Ch. App. 574.)

The bill set forth the memorandum and articles,

and alleged that they differed widely and materially from the prospectus, and embraced divers purposes which were not contained therein; that the directors registered the memorandum and articles without consulting the plt., with full knowledge of the variance; that the plt. never applied for shares in any company established for such objects as were specified in the memorandum and articles; that the company received or allowed the application, and benefit of the 1007. for its purposes, and prayed that the defts. might be declared trustees of the said sum of 1007., and ordered to pay the same to the plt. To this bill the defts., the directors, and the company had demurred.

The Attorney-General (Sir J. Rolt) and Fischer, in support of the demurrer, contended, first, that no trust had been created; secondly, that there having been no fraud or misrepresentation on the part of the defts. they were in no way liable; thirdly, that even if the defts. were liable, the remedy of the plt. was at law. They cited

1

Mackenzie v. Johnston, 4 Mad. 373;
Navalshanr v. Brownrigg, 1 Sim. N. S. 584; and
2 De G. M. & G. 459;

Barry v. Stevens, 31 Beav. 258; 6 L. T. Rep.
N. S. 368;

Greenwood's case, 2 Sm. & Giff. 95.

J. N. Higgins (Giffard, Q. C. with him) contended that a case of equitable fraud had been established against the defts. He cited

Foley v. Hill, 2 H. of L. Cas. 35; Case v. Roberts, Holt N. P. 500; Colt v. Wollaston, 2 P. Wms. 154; Navalshaw v. Brownrigg, 1 Sim. 573. Fischer in reply.

The VICE-CHANCELLOR said that the demurrer of the company must be allowed.

Fischer was then heard in reply on the demurrer of the directors.

The VICE-CHANCELLOR said that he thought that there had been no such trust as that alleged by the bill made out, and that the bill could not be sustained against the directors. The bill did not allege any preconcerted scheme of fraud. The allegation was that the defts. having obtained the money for the purpose of forming company A., handed it over to company B., constituted not for different, but only for larger and more extensive objects. There was no averment in the bill that the directors contemplated a bubble company. The defts. received the money, with no intent at the time to register a company with larger objects than those stated in the prospectus, and they received the money bonâ fide to carry out the objects of the company. There had been, therefore, no fraud on their part; nor was it alleged that the defts. had embezzled the money, or applied it to their own purposes. It was only the simple case of an agent who, receiving money without fraud for a specific purpose, either through misconception of his instructions, or miscarriage in fulfilling them, applied them to another. The case of Colt v. Wollaston went upon this, that the whole thing was a bubble ab initio. The allegations in the bill, which had been properly confined to the case as made when Mr. Stewart's name was struck

off the list of contributories, made out nothing more than the case of an agent who had exceeded his authority. The case was, therefore, one for an action at law only, and the demurrers must be allowed.

Solicitors for the plt., Harrison, Lewis, and Co.
Solicitors for the defts., Rickards and Walker

V.C, W.]

Re THE AGRA AND MASTERMAN'S BANK.

Tuesday, Dec. 18.

Re THE AGRA AND MASTERMAN'S BANK. The Companies Act 1862-Voluntary winding-up under supervision-Sale by official liquidator.

The A. and M. Bank having stopped payment, an order was made for a voluntary winding-up under supervision. On an application to the court for its approval of a scheme adopted by the majority of shareholders and creditors for the resuscitation of the bank by the transfer of its assets to a new company: The Court being of opinion that everything had been fairly laid before the shareholders and creditors, and that the success of the new bank was entirely a matter of speculation, thought itself bound to follow the views of the majority, and sanctioned the arrangement. This was an application adjourned from chambers on behalf of Sir Geo. Pollock, Mr. William Brocken, Sir Proby Thomas Cantly, and the other gentlemen forming a committee of shareholders, appointed at a meeting of shareholders, held on the 18th Oct. 1866, for the purpose of obtaining the sanction of the court to a conditional agreement dated the 1st Dec. 1866, for the resuscitation of the Indian portion of the business of the bank.

The bank had stopped payment on the 7th June 1866. On the 22nd June a special resolution had been passed for a voluntary winding-up of the bank. On the 23rd June an order was made for continuing the voluntary winding-up under the supervision of the court. On the 15th Sept. Mr. Cannan, the official liquidator, had declared a dividend of 5s. in the pound. Meetings of the shareholders and creditors were subsequently held in October, at which a plan was submitted and ultimately adopted for the resuscitation of the business by the formation of a new bank, to be called the Agra Bank (Limited), which was to take over the assets and liabilities of Agra and Masterman's Bank and liquidate the same as a working bank, and continue that portion of the business formerly carried on by the Agra and United Service Bank. The capital of the new bank was to consist of 1,000,000l., of which 400,000l. was to be raised in 40,000 shares of 101. each, to be fully paid up, while the remaining 600,000l. was to be derived from the surplus assets (estimated at that amount) of the Agra and Masterman's Bank, which were to be handed over as the basis of the arrangement. The creditors were to be paid by four instalments: the first, of 5s. in the pound, in Jan. 1867; the second, of 3s. in the pound, in July 1867; the third, of 3s. in the pound, in April 1868; the fourth, of 4s. in the pound, in Oct. 1868, all to be paid with interest at 5 per cent. from the 7th June 1866. The first of these instalments was to be paid in cash, the other three to be secured by promissory notes of the Agra Bank (Limited.)

A prospectus of the new bank had been issued, and considerably more than the 40,000 shares had been subscribed for by bona fide applicants. None of the shareholders had expressed their dissent to the proposed arrangement; 689 out of 1256 had assented, no reply having been received from the remaining 567. Of the creditors, 3516, whose debts amounted to 4,417,937, had assented; 1525 in the United Kingdom had sent no reply; while eleven, whose debts amounted to 141,000%, dissented. There were 5914 creditors in India, Australia, and China, from whom no reply had as yet been received; but telegrams had been received announcing that at various meetings held at Calcutta, Madras, Bombay, Kurachee, Lahore, and Agra, the proposed scheme for the resuscitation of the bank had been cordially accepted.

The application was supported by the affidavits of several merchants and others, shareholders or

[V.C. W.

creditors of the bank, in which they stated their opinion that the assets, many of which consisted of large advances to persons engaged in the cultivation of tea, coffee, indigo, and silk in India, would be best realised by a working bank in a gradual and and cautious manner, and that if it were attempted to realise this class of assets by the summary process of liquidation they would be greatly depreciated in value. The same opinion was expressed by them with reference to those portions of the assets which were locked up in foreign securities or shares of companies, or were secured by consignment of steam-vessels, which securities, owing to the state of the market, were at present almost unsaleable. affidavit that he had now in hand in cash, convertible Mr. Cannan, the official liquidator, stated in his securities, and other assets, sufficient to pay the credi tors in the United Kingdom a dividend of 6s. 8d. in the pound in the first week in Jan. 1867. If he were allowed to proceed with the liquidation, he thought he should be able to pay the creditors the balance of their debts and interest by the following instalments: 3s. 4d. in April or May 1867; 2s. 6d. in July 1867, and the remaining 2s. 6d., with interest, within nine or twelve months after July next. He thought it would be unnecessary to make any call on the shareholders, as the assets exceeded the liabilities, and that the creditors would be paid the balance of their debts in the course of 1867 or early in 1868. The capital of the new company was not, in his judgment, sufficient, and unless the creditors agreed to accept the credit of the new company in absolute discharge of the liability of the bank, it would not be prudent, even with the consent of all the shareholders, to transfer its assets to the new company.

Sir R. Palmer, Q. C., H. W. Cole, Q. C., and Westlake appeared for the committee of shareholders, in support of the application, and contended that the court had power, under sect. 95 of the Companies Act 1862, to sanction a sale of the property and effects of a company by the official liquidator. The creditors would obtain far better security under the proposed arrangement than under the winding-up.

W. M. James, Q. C., Ferrers, and Langworthy ap peared for different creditors who assented to the

scheme.

Druce, Q. C. and A. G. Marten, for Mr. Shipman, the creditors' representative, stated his desire to facilitate the scheme, subject to the following provisions for the protection of the general body creditors :-(1) The order confirming the agree ment to provide that the arrangement should not prejudice or affect the rights of the creditors as against any sureties or person not bound by the order. (2) The order also to provide that, as between the purchasers and the creditors, the purchasers should be principal debtors in respect of the instalments, and, accordingly, should not be discharged by their being given to the vendors, or by any other act which, if the purchasers were sureties only, would discharge them. (3) The cash and notes for the instalments to be handed over to the liquidator or creditors' representative before possession was given of any of the vendors' property, with provision by covenant, before completion of the sale, in cases of disputed claims or claims not capable of being expressed as an immediate debt. (4) The purchasing company to enter into a covenant with the liquidator or creditors' representative, and with all the creditors (as in the case of a common deed for securing payment of a composition under the B. A. 1861) for the due performance of the terms of the agreement.

Giffard, Q. C. and Bedwell, for the Chartered

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