V.-C. H. Mr. J. S. Colquhoun, for the incumbrancers. SIR CHARLES HALL, V.C.: As the practice seems to be in an unsettled state, I shall in the present case order the company to pay the costs of the incumbrancers served, but I wish it to be understood that I do not consider it necessary on a petition for the interim investment of purchase-moneys paid in by a railway company under the Lands Clauses Consolidation Act, and for payment of the dividends to a tenant for life, to serve persons having charges on the inheritance, and that in future I shall disallow the costs of such incumbrancers as against the company. Solicitors for the Petitioner: Messrs. Horn & Murray. Solicitors for the Company: Messrs. Markby, Tarry, & Stewart. 1875 In re MORRIS' SETTLED ESTATES. HARLOE v. HARLOE. [1868 H. 262.] Will-Construction-Testamentary Expenses-Costs of Administration Suit. A direction in a will to pay testamentary expenses and debts includes the costs of an administration suit. In re Biel's Estate (1) distinguished. CHARLES HARLOE, who died in March, 1867, by his will, made in August, 1862, after making certain specific devises and bequests, bequeathed seven leasehold houses, subject to the payment of the rents and the performance of the covenants, unto trustees upon trust to sell and to stand possessed of the moneys to arise from the sale, and to pay his funeral and testamentary expenses and debts, and also the costs and expenses of and relating to the sale, and out of the residue to pay certain legacies. The ultimate residue of that fund he bequeathed upon trust for his reputed son absolutely, and the residue of his real and personal estate to other persons. One of the specific legatees, in December, 1868, filed the bill in this cause for the administration of the real and personal (1) Law Rep. 16 Eq. 577. V.-O. H. 1875 July 5. V.-C. H. 1875 HARLOE v. HARLOE. estate of the testator. The seven leasehold houses were sold, and out of the proceeds the funeral and testamentary expenses and legacies were paid. The principal question was whether, under the direction to pay the testamentary expenses and debts, the costs of the suit could be included. Mr. Ince, Q.C., and Mr. Dundas Gardiner, for residuary legatees, after referring to Morrell v. Fisher (1) and Miles v. Harrison (2), submitted that there was a distinct trust to pay the funeral and testamentary expenses and debts out of the proceeds of sale of the leasehold houses, and that upon the authority of those cases the costs of administration of the estate by the Court were included, and ought to be paid out of the same fund; though they admitted that in the case of In re Biel's Estate (3) it was held by Vice-Chancellor Wickens that the costs of administration were not included in a direction to pay funeral and testamentary expenses. But in principle, the administration of an estate, whether by the assistance of the Court or not, was the same; and therefore the costs of administration were included in testamentary expenses and debts. Mr. W. Pearson, Q.C., and Mr. E. Ward, for the Defendant, contended that the costs of administration were not included in the direction to pay funeral and testamentary expenses and debts, and that they ought to be paid out of the general residue; that the decision in In re Biel's Estate was a distinct authority for that proposition, and that it supported the view taken in Webb v. De Beauvoisin (4) and in Gilbertson v. Gilbertson (5). They also submitted that the decision in Morrell v. Fisher could not be considered as an authority on the general question; and that in Miles v. Harrison the question was one of marshalling; and they referred to Morgan and Davey on Costs (6) to shew that their view of the law was the correct one. SIR CHARLES HALL, V.C.:— I am of opinion that I cannot view the decision in the case of Miles v. Harrison otherwise than as an authority for holding that (1) 4 De G. & Sm. 422. (4) 31 Beav. 573. under a direction in a will to pay testamentary expenses and debts the costs of an administration suit are included. The main question which arose in that case was one of marshalling assets in favour of charities; but there were other questions, including that of costs. There was in that case a trust to pay funeral and testamentary expenses and debts, and legacies, and to invest the remainder in the manner in the will mentioned; and the Lord Chancellor, after referring to that trust, said: "That appears to me to be a charging of the whole aggregate fund in the hands of the trustees with all his debts and legacies and administration expenses;" and subsequently, after a contention in reference to the fund out of which the costs of administering the estate should be paid, the Lord Chancellor said: "The estate could not have been administered without the direction of the Court. We think that all the costs of the suit in the Court below, and the costs of the executors of the appeal, must be paid out of the impure personalty." In the cases of Gilbertson v. Gilbertson (1) and Stringer v. Harper (2), the late Master of the Rolls considered that, under the direction to pay testamentary expenses, the costs of administration by the Court were not included; but in the earlier case of Webb v. De Beauvoisin (3) the same learned Judge held that the words "and other expenses" were sufficient to include such costs. I consider that under the words used by the testator costs of the suit are included, and, notwithstanding the attempt made to distinguish this case from Morrell v. Fisher (4) and Miles v. Harrison (5), I do not think the distinction is sufficiently substantial for me not to follow them. The case decided by Vice-Chancellor Wickens depended upon its own special circumstances, and is not applicable to the general question: at any rate, I think the present case is covered by the decision in Miles v. Harrison, and therefore I hold that, under the words testamentary expenses, the costs of the suit are included. Solicitors: Mr. F. Kent; Mr. T. Angell; Messrs. Dean & Taylor. V.-C. H. 1875 HABLOE V. HARLOE. M. R. 1875 May 28. RUSSELL v. WAKEFIELD WATERWORKS COMPANY. [1875 R. 43.] Company-Suit by Shareholder on behalf of Himself and other Shareholders— Where a shareholder in an incorporated company filed his bill on behalf of himself and all other shareholders against the directors and the promoters of a bill in Parliament for a rival purpose, alleging an illegal payment of the company's money to such promoters to buy off their opposition, and praying that it might be replaced :: Held, on demurrer, that it was not sufficiently alleged in the bill that the payment was ultrà vires: Held, also, there being no allegation that the company would not sue, that it was not a case in which the suit could be maintained in its present form; and that the demurrer must be allowed, with leave to amend. Observations on the exceptions to the general rule, that the company and not an individual corporator must sue when the trust funds of the company have been misapplied. DEMURRER. The bill was filed by the Plaintiff Henry Edward Russell, on behalf of himself and all other the shareholders in the Wakefield Waterworks Company, except such of the Defendants as were shareholders therein. The Defendants were the said Wakefield Waterworks Company, the six directors of the same company, and the six promoters of an undertaking called the Wakefield and District New Water Bill. The bill alleged that in the year 1874 the Plaintiff became, by purchase, the duly registered owner of two fully paid-up shares in the Defendant company; that he afterwards heard of the payment of £5500 to the promoters of the Wakefield and District New Water Bill to buy up their opposition; that in the balance-sheet for the half-year ending the 30th of June, 1874, there was the following entry in the capital account: "Parliamentary expenses, £8517 14s. 9d."; and that the balance-sheet for the half-year ending the 31st of December, 1874, contained the following entry: "Parliamentary expenses, £9083 10s. 11d."; but that neither the balance-sheets nor the reports contained any explanation of these entries: M. R. 1875 w RUSSELL That the Plaintiff's solicitor was informed by the secretary to the company that the sum of money paid to the promoters of the New Water Bill was included in the said sum of £8517 14s. 9d., and charged to the capital account of June, 1874, and was paid WAKEFIELD by the directors in accordance with a resolution of the share- WATERWORKS holders, authorizing them to do all necessary acts, and in exercise of the lawful powers of the directors, and that the accounts containing the payments had since been passed and confirmed by the shareholders: That the Plaintiff had ascertained the following facts with reference to the transaction in question:-During the session of Parliament in the year 1874 the Defendants, the directors of the waterworks company, introduced a bill into Parliament authorizing them to make new reservoirs and works, and to raise more money, and to extend their limits of supply. During the same session a bill was introduced by the Defendants, the promoters thereof, intituled the Wakefield and District New Water Bill, whereby it was proposed to erect waterworks of a similar character to those proposed by the Defendant company for the supply of Wakefield and its neighbourhood, and the promoters lodged a petition against the bill introduced by the said directors. On the 9th of April the promoters of the Wakefield and District New Water Bill withdrew their bill, such withdrawal being, as the Plaintiff alleged, the result of a corrupt agreement made between the promoters of that bill and the directors of the Defendant company, and which was in the following terms: "Terms of arrangement between the Wakefield Waterworks Company and the Wakefield New Waterworks Company made this 7th of April, 1874. The directors of the Wakefield Old Waterworks Company pledge their words as men of honour to proceed with their present application to Parliament for a supply of water from Langsett, and to use their utmost endeavours to secure the passing of their new bill in both Houses of Parliament during the present session, and will also pay to the directors of the Wakefield New Waterworks Company the sum of £5500 for the costs and expenses incurred by them in connection with their present scheme, on condition that the Wakefield New Waterworks Company do forthwith withdraw their bill now before Parliament, and v. COMPANY. |