appears

12

second count they pleaded never indebted. Issue on the pleas. The cause was tried at the Manchester Spring Assizes, before Mellor, J. The plaintiff is a cotton spinner, and at the time in question he had a quantity of cotton waste in his possession. Towards the end of December, 1863, the defendants' buyer commenced a negotiation with the plaintiff for the sale of some of the cotton waste. He was shewn five stacks, and ultimately the parties agreed for the sale of certain four of them at 1s. 9d. per lb.__The agree ment was never reduced into writing. The plaintiff refused to give samples of the cotton waste, but he allowed the agent to examine the stacks and take samples for himself. It is usual, although not a uni

to be undisputed. In the present case I think it is clear, under the charterparty, that the freight, less 8007., was to be advanced, and that there was no arrangement by which it was to be returned on the non-completion of the voyage. The freight could not be recovered back; therefore, there was no risk to the shipowner in respect of the larger sum, but the risk was with the defendant. The question then arises, who is to contribute in respect of this freight? and it seems to me that the charterer is the person who ought to contribute. The insurance was by him, the risk was his, and it was to his interest that the ship should arrive at her destination. Under these circumstances, and applying the general rule, the charterer must be held the person to contribute general average in re-versal practice, for the purchasers to send their own spect of this amount.

WILLES, J.—I am of the same opinion. With respect to whether the money paid in advance could be recovered back, that is concluded by the terms of the charterparty; I think that it was not to be returned if the ship failed to arrive at her destination. It is from the underwriters that the charterer must seek his indemnity. The next question is, whether the person who has advanced money in respect of freight for goods shipped on board, is liable to contribute general average, and I think he is liable. This is not a question between the charterer and the underwriters. It was a common peril to the persons interested in the freight, ship, and cargo. The charterer in this case is interested in the cargo, and he has an interest in the freight; it is an interest which he has purchased, and in this respect he stands in the position of the shipowner. That being so, it is clear that the defendant is liable to contribute.

BYLES, J.-I am of the same opinion. The charterer here, is in fact, a purchaser of the freight, and he must be liable for a portion of the loss which has been sustained in saving what he had purchased. A view of this question also is that, by the payment of freight in advance, his interest has been increased; but into that view of the case it is not at present necessary

to enter.

SMITH, J.-I am of the same opinion. According to the terms of this charterparty, I think the freight paid in advance could not be recovered back on the non-arrival of the ship. The defendant, therefore, had an interest in the goods and ship, which were both at his risk, and in respect of this interest he is liable.Judgment for plaintiffs.

COURT OF EXCHEQUER.
EASTER TERM.

[Coram POLLOCK, C. B., MARTIN, and BRAMWELL,
BB.]

KERSHAW v. OGDEN.-May 8.

Statute of Frauds—Acceptance. The defendant having agreed to buy four particular stacks of cotton waste, and having sent a man with sacks, into which some of them were put: in an action for goods bargained and sold, the jury having found that what passed amounted to acceptance, the Court refused to interfere with the verdict.

This was an action for not accepting or removing cotton waste, bargained and sold, according to contract. The declaration also contained counts for goods sold, &c. The defendants denied the sale alleged in the first count of the declaration, and also pleaded to the same count, that they were ready and willing to accept and remove the goods, but that the plaintiff was not ready and willing to deliver them. To the

sacks and packer, and take away such goods; and ascordingly the defendants sent their own men with eighty-one sacks, and the four stacks chosen were packed by the defendants' packers, assisted by two of the plaintiff's men; and two days afterwards twentyone of the sacks were weighed and taken away in a cart of the defendants' to their premises, the usual delivery order being given to the carter, and the usual receipt for them being signed by him. On their ar rival the defendants refused to accept the goods, a being of inferior quality. They were sent back to the plaintiff's premises, and after some time he took them in. The learned judge directed the jury in the first place to find whether the defendants did or did not receive part of the goods into their possession, so as to bind the bargain, whatever it was; and, secondly, whe ther the contract between the parties was for a guirantee. The jury found a verdict for the plaintiff for the full value of the goods at the price agreed upon; and leave was reserved to the defendants to move to set aside the verdict, and enter a nonsuit, on the ground that there was no evidence of an acceptance and receipt of part, so as to take the case out of the Statute of Frauds; and also on the ground that no property passed in the goods to support the count for goods bargained and sold. Against this rule,

E. James and Holker shewed cause. This is a sale of specific goods. The vendor may be the agent t the purchaser for the purpose of accepting the goods. [Pollock, C. B.-The question of acceptance and re ceipts of goods is in most cases a question of fact. It is laid down in Turley v. Bates (2 H. & C. 200) that it is a question for the jury whether it was the intes tion of the parties that the property should pass [They also cited Cusack v. Robinson (1 B. & S. 299)

Brett and T. Jones, contra.-The plaintiff can c recover for not accepting, if at all. But there neve was a binding contract. (Bell v. Bament, 9 M. & W 36). There may be receipt without acceptance packed the goods, whether the plaintiff's or defer well as acceptance without receipt. The men whe ants' servants, were not the defendants' agents to ac cept them. Cusack v. Robinson (ubi sup.) and Cas v. Sworder (4 H. & Norm. 828) are distinguishable

self are clearly of opinion that this rule ought to POLLOCK, C. B.-Both my Brother Martin and my discharged, and my Brother Bramwell, who left the court during the course of the argument was of t from the case of Turley v. Bates, which has been c same opinion. This case is quite undistinguisha in argument, and it really was a question for the ja what was the character of the delivery of the goods the defendants' man; his taking the goods to the fendants' warehouse; their being sent back by the fendants to the plaintiff's mill; and the plaintiff su sequently housing them to prevent mischief occurri to them from the weather. The jury have decided what is to be considered the result of all those facts and I own I do not see any reason to question the

the Master of the Rolls given on the 21st February, 1863.

propriety of their finding. With respect to entering a nonsuit, I think the direction of the learned judge at the trial was perfectly right, and, as I before The Hope Mutual Society was formed in April, said, I do not at all quarrel with what the jury has 1852, for the purpose (inter alia) of granting assurances found. I think, therefore, the rule should be dis-on lives, annuities, and endowments, and of guarancharged. teeing the fidelity of persons entering upon offices of trust.

The only creditor of a company which had ceased to carry on business recovered judgment against the company, upon which execution was issued, and a return of nulla bona made. The judgment creditor then presented a petition for a winding-up order against the company, but the debt being doubtful, and it being alleged by the company that the judgment was obtained by fraud, the Court ordered the petition to stand over for a limited time, to give the company an opportunity of taking proceedings to impeach the judgment.

Per Lord Cranworth.-Where there is clear proof that a debt upon which a winding-up order is sought is valid at law and in equity, the Court will ordinarily make the order, but where the debt is impeached the Court will

The words "registered companies" when used in the Companies Act, 1862, mean companies registered under that act, and the words "unregistered companies" in part 8 thereof, mean companies registered antecedently to that act t.

This was an appeal from an order of the Court of Appeal in Chancery, made on the 19th March, 1863, whereby the Lords Justices reversed a decision of

this being their only debt, and that an opportunity plied equally to all registered and (sect. 199) unregis should be afforded them to file a bill for the purposo tered companies.] We contend that sects. 175 and of setting aside the judgment. His Honor, however, 176 must override sect. 199. (Re Torquay Bath Conon the 21st February, 1863, made an order for wind-pany, 32 Beav. 581). But, thirdly, this was not ing up the society, from which order the society ap- a proper case for winding up, because the power pealed to the Lords Justices. The Lords Justices given by the Companies Act, 1862, of directing a conoffered Mr. Bowes an opportunity of going into fur-pany to be wound up was discretionary, and ought ther evidence as to his claim, but he declined the offer, not to be exercised in a case where the company is and insisted that the society ought to take proceed-perfectly solvent, and where there is only one alleged ings to impeach the judgment. Their Lordships then creditor of a company, and even his debt is indischarged the order of the Master of the Rolls, with peached. A disputed debt ought not to be made the costs. From that order Mr. Bowes now appealed. foundation of a winding-up order. (Catholic PrSelwyn, Q. C., and Cracknall, for the appellant, con- lishing Company, 10 Jur., N. S., 301). In Ex pre tended, that the ground upon which the Master of the Wylde (1 Mac. & G. 1) Lord Cottenham applied the Rolls proceeded in making the order of the 21st March same principles. They contended, fourthly, that the was right, and that the judgment was binding on the judgment was collusively obtained by Strousberg, the respondents. The word "may" used in the Companies agent of the Mitre Company, which was bound to irAct, 1862, sect. 79, in specifying the circumstances demnify the Hope Company, and that nothing was under which a company "may" be wound up, is im- due from the latter in respect of the policy Fifthly, perative, and is to be read as "shall." (Dwarris Stat. the appellant, as assignee of a chose in action, stood 604; Rex v. Barlow, 2 Salk. 609; Macdougall v. Pater no better position than Strousberg, and must be treated son, 11 C. B. 755, 766, 773). The judgment could not in the same way. He was a bare trustee, and as such be impeached without active proceedings (Scott v. Col- could neither maintain a bill nor a petition. They burn, 26 Beav. 276; 5 Jur., N. S., 183); and though the submitted that the order of the Lords Justices was a appellant offered to give time to the respondents to proper order, and that their Lordships ought not ta take any proceedings to impeach it, and they under-put the company to the great expense of a winding took to do so, yet they had taken no such proceeding. up before ascertaining whether its only creditor had i They argued that the appellant had no effectual re- real debt or not. [They cited, as to the remedies of medy for recovering the amount due to him on the the appellant against the unpaid capital of the cojudgment except under an order for winding up the pany, and the limited liability of the shareholders, company under the provisions of the Companies Act, Evans v. Coventry (2 Jur., N. S., 557); Hutchinson v. because the company had no longer any assets in Wright (25 Beav. 444); and Lord Talbot's case (5 De existence which the appellant could pursue, and the G. & S. 386).] clause in the policy relieving the shareholders from personal liability prevented his having any remedy against them. They contended that it would be unjust to compel the appellant to go into evidence for the purpose of establishing a judgment which had remained so long unimpeached.

Selwyn, Q. C., in reply.

LORD CHANCELLOR (Lord WESTBURY).-The Hope Insurance Company (the respondents in this case) ap pear to have been formed in the month of April 182 It was one of the conditions of that company, that the shareholders should be exempt from all personal liaHobhouse, Q. C., and Beavan, for the respondents.- bility, and that parties to whom the company were First, there is no bonâ fide debt due from the re-indebted should have recourse for their claims against spondents to the appellant; secondly, as the Hope the property of the company; but inasmuch as the Society was registered in 1852, and ceased business amount of the shares has not been paid up by the in 1855, there is no statute under which it can be shareholders, of course the amount of unpaid calls cu wound up, and the Court has no jurisdiction, ex- the shares would fall under the character of property cept by statute, to make the winding-up order. The of the company. [His Lordship here stated the facts first statute of 1844 (7 & 8 Vict. c. 110) simply pro- of the case.] That being the state of the case, Mr. vides for the regulation and registration of joint-stock Bowes presented his petition to the Master of the companies, and under it this company was registered. Rolls, for the purpose of obtaining an order for the The subsequent statute of 1848 (11 & 12 Vict. c. 45) winding up of this company. And by that petition first gave the Court power to make an order to wind he alleged (and I think quite rightly in point of law) up a company, but only upon the application of a con- that the company comes within the 8th part of the tributory; and it was not until 1856 that the act (19 Companies Act, 1862 (25 & 26 Vict. c. 89, ss. 189& 20 Vict. c. 47) was passed which gave (sect. 69) the 204), the company being included under the denominaCourt power to make a winding-up order on the appli- tion of "unregistered companies," which is the term cation either of a contributory or a creditor. This act found in the 8th part of the act, and which I think did not apply to the Hope Society, because sect. 2 pro- plainly includes all companies that had been registered vides that it shall not apply to insurance companies. other than companies registered under that particular If, then, this company can be wound up, it must be act of 1862. The meaning of the phraseology of that under the act of 1862 (25 & 26 Vict. c. 89). Now, the act appears to be this-that the words "registered con 79th section of the latter act provides, that a "com- panies" when used in the act, mean companies regi pany under this act" may be wound up; sect. 176 tered under the act itself; and "unregistered conlimits this application of the act to companies regis-panies" mean those companies which had been rege tered under "the Joint-stock Companies Acts;" which tered antecedently to the passing of the act. Now the expression is defined in the 175th section, and in the Hope Insurance Company had been registered undz acts enumerated in that section the act of 1844 is the original act of 1844. It was, therefore, what the not included. This company, therefore, cannot be act called an unregistered company. The act defirs wound up at all upon petition to the Court. [Lord the cases in which a winding-up order may be mak Westbury, L. C., observed, that the provisions of the And the cases that are so defined by the act are prt act of 1856, enabling creditors as well as contribu- as criteria of the insolvency of the company, and tories to obtain an order for winding up a company bringing a company, to which any one of the criteria were (sect. 59) retrospective, and applied to all exist- applies, within the category of a company that ought ing companies. These provisions were, however, swept to be wound up under the act. Now, one of those away by the act of 1862, the provisions of which ap- | criteria is this-where a judgment has been recovered

19

against the company and execution issued upon the tainly cannot agree with the Lords Justices in imjudgment, to which execution there is a return of nulla posing upon the present appellant the obligation of bona, that is accepted as a sufficient proof of the in- adducing further evidence, but that, under the circumsolvency of the company. That appears to have oc- stances of this case, and particularly having regard to curred in this case. An execution was issued under the manner in which this judgment was obtained, your the judgment which had been obtained in the manner Lordships will probably think it just and right to that I have described, and the sheriff returned nulla afford to the respondents now an opportunity of giving bona upon that execution. Under these circumstances, an undertaking, and of redeeming that undertaking, application was made to the Master of the Rolls for by filing a bill to impeach the judgment, and that your the purpose of obtaining a winding-up order. And Lordships will, on the present occasion, substitute for the Hope Insurance Company appearing upon the oc- the Lords Justices' order, and for the order of the casion, insisted very strongly that, under the circum- Master of the Rolls, that order which, under the cirstances of the case, an opportunity should be afforded cumstances of the case, your. Lordships would have to them of impeaching the judgment, by filing a bill thought it right to pronounce, if you had been hearing for that purpose. His Honor appears to have thought this petition originally instead of his Honor the Master that the same opportunity of inquiring into the merits of the Rolls. I must, therefore, now, bowing to your of the debt would be afforded to the company perhaps Lordships' opinion, submit to your Lordships the prein a more efficient manner, under an order for winding sent form of order:-"That this House doth discharge up, if that order were at once made. His Honor ap- the order of the Lords Justices, except so far as that pears, therefore, to have declined to accede to the re-order discharges the order of the Master of the Rolls; quest, that the petition should stand over upon the and in lieu thereof, the House doth order that the undertaking of the respondents to file a bill, and his petition for the winding-up order shall stand over Honor made the order for winding up. The order until the 8th May, 1865, the respondents undertaking, being made, and the company thereby being no longer in the meantime, to take proceedings for impeaching in a condition to file a bill, carried that order, by way the judgment. And either party is to be at liberty, of appeal, to the Lords Justices. And I think your after the said 8th May, to apply to the Master of the Lordships will agree with me, that the order made by Rolls. And the costs of the appeal to the Lords Justhe Lords Justices can in nowise be sustained, because, tices, and of the present appeal, to be costs in the although it might have been, and perhaps it will ap- winding up, in case an order for winding up the compear to your Lordships that it would have been, very pany shall be made." My Lords, I submit to your right to have afforded to the respondents, under the Lordships that form of order in lieu of the orders particular circumstances of this case, the delay that pronounced by the Courts below. they desired, in order to give them the opportunity of Lord CRANWORTH.-I believe there has been no filing a bill to impeach the judgment, yet it cannot by difference of opinion at all amongst any of your Lordany means be a correct thing to impose upon the judg-ships, that the order pronounced by the Lords Justices ment creditor, the petitioner for the winding-up order, is one which cannot be supported, and the only questhe obligation which the Lords Justices have imposed, tion is, what order ought the House to make, starting of still further adducing evidence in support of his from the point, that the order of the Lords Justices ere. The order made by the Lords Justices, by which cannot stand. Now the real question here is, whether they discharge the order for winding up the company, the Master of the Rolls, before whom the matter oriwhich had been pronounced by his Honor the Master ginally came, had before him a case in which there of the Rolls, is distinctly based upon this foundation, was such a clear proof of a valid debt both at law and that inasmuch as their Lordships had offered to the in equity, that he had no other course to take, but imwinding-up creditor an opportunity of going into fur-mediately to direct the winding up; because I agree ther evidence as to his claim, and inasmuch as he had with what has been said, that it is not a discretionary declined to accept that offer, and insisted that the matter with the Court when a debt is established, to Company ought to be put to file a bill, or take pro- say whether the company shall be wound up or not, ceedings to impeach the judgment, their Lordships at that is to say, if there be a valid debt established, once decided that the order of the Master of the Rolls valid both at law and in equity. One does not like should be discharged. Now, unquestionably, my Lords, to say positively that no case could occur in which it whatever may be thought of the propriety of the order would be right to refuse it, but, ordinarily speaking, of the Master of the Rolls being at once pronounced, it is the duty of the Court to direct the winding up. without regard to the request of the respondents, there But here I must confess I cannot say that this debt is can be no doubt that there was a miscarriage here in so clearly made out to my mind as being a valid debt discharging the order for the winding up, unless the at law and in equity, that I think the Court was appellant, who had obtained the order, would under- bound to direct the winding up, if there be any mode take to go into further evidence as to this debt. I by which the validity of the debt could be better esthink your Lordships will agree with me, although I tablished before that order was made. And I think confess I come to the conclusion with some hesitation, that if a discretion is ever to be exercised as to the and in submission to the opinion of the majority of course to be pursued preliminary to deciding whether your Lordships, but, at all events, I think you will there is to be an order for winding up or not, it is such agree with me, that what the present appellant in- a case as this, where ex concessis this is the sole debt. sisted upon before the Lords Justices was quite right. When I say "the sole debt," there are also two small I find it stated that he insisted that the society (that annuities upon the lives of two parties, amounting tois the Hope Insurance Society) ought to be put to file gether to about 401. a year; but I think those may be a bill, or take other proceedings to impeach the judg- disregarded in considering this question. Therefore ment debt. Now I apprehend that your Lordships, this is, in fact, a single creditor claiming under a judgfounding yourselves upon the principle, that oppor- ment of a rather suspicious character, to put the matunity should be given for ascertaining the equal jus- chinery of the Joint-stock Companies Act in motion tice of the case, will accede to the proposition which for the purpose of winding up this company, in order has been contended for by the appellant, and will tell that he may have this debt paid. I must confess that, the respondents, that although you cannot agree with although there are two modes in which this investithe Master of the Rolls in the propriety of at once gation might take place, I think the one which has pronouncing the order for winding up, yet you cer- been suggested by my noble and learned friend, is by

far the most convenient, because I think it is by far the least expensive. The debt may be investigated either by proceedings instituted by those who impeach it, in order to set it aside, or by making a winding-up order, so that the official liquidator, under the windingup order, may himself institute proceedings to investigate the matter. In general, perhaps, that would be the cheapest and wisest course. But here, considering that this was the only debt to which the attention of the official liquidator would have to be directed, I think that by far the cheapest and most expeditious mode would be to leave it to the person impeaching this debt within a very short time to raise the question by filing a bill. If he successfully impeaches it there will be an end to the case, and if not, the form of order which has been suggested by my noble and learned friend, provides very properly for the case. And all the costs that have been incurred will then fall upon the company, if the winding-up order is established. Otherwise, it will be in the discretion of the Court to direct by whom they are to be paid.

19

capital until the works were completed, and that a foreign government had guaranteed interest at 9l. per cent., whilst, in fact, the contractor's liability was limited to 20,0001., and the guarantee by the foreign government was only whilst the line did not produce 91. per cent, from no default of the company-Held, that a shareholder who had taken shares on the faith of the prospectus would be relieved from them in equity. Observations on charge of fraud in pleadings.

The bill in this case was filed by Joseph Kisch, a shareholder in the Central Railway of the Venezuela Company, against the company, praying a declaration that the plaintiff had been induced to take shares in the company by fraudulent misrepresentations, and that the company might be ordered to repay him what he had already paid in the way of calls, and that the company might be restrained from proceeding in an action for 2081. in respect of another call.

The company was formed in 1864, for the purposeof constructing a railway in Venezuela, the first secLord KINGSDOWN.-I entirely agree with my noble tion of which was to be from Puerto Cabello to San friend who has last addressed your Lordships. Every- Felippe. The capital was to consist of 500,0001, dibody must feel that this is a case (as it is here stated) vided into 10,000 shares, of 501. each. The prospectus in which there is the greatest possible doubt as to the published by the company stated that the Government genuineness and fairness of this transaction. It is of Venezuela had, by a concession granted to the comclear that it must be investigated, and thoroughly in-pany, the right of making the Central Railway from vestigated, and the only question is, in what manner Puerto Cabello, westward to San Felippe, and souththat investigation will best take place. Now, if it be ward to Valencia'; and that the concession had secured the fact, as I presume it is, that under a winding-up to them, among other things, a guarantee of 9. per order the expenses would come out of the estate, and cent. interest on calls paid on account of the subthe costs of those proceedings were to be included in scribed capital of the company for twenty years, amply those costs, it might turn out-I do not say at all that secured by a cession of the import duties of La Guayra it will, but it might turn out-that the grossest injus- and Puerto Cabello, and a free grant of 30,000 acres tice would be done, and that, in fact, an alleged cre- of land in the provinces through which the railway ditor, who really had no debt at law or in equity, had to pass, and for which land warrants were to be would have thrown upon this company the expenses issued to the company on the completion of the line: of winding up, in a case in which there was really no in addition to which there was to be a free grant of foundation whatever for the charge against them. I all lands required for the construction of the railway, quite agree, therefore, with my noble and learned and for the stations and other buildings connected friend, who has last addressed your Lordships, that therewith. The prospectus also stated, that the conthe order proposed by the Lord Chancellor is the tract had been entered into by the company with a proper order, and I trust that the result of that order respectable contractor, who, in consideration of receiv will be, that justice will be done.-Order of the Lords ing a large quantity of timber along the line for his Justices reversed, and order made as proposed by the own use, guaranteed 27. 10s. per cent. on the paid-up Lord Chancellor. capital during the construction of the works. To the prospectus was appended a form of application for shares, by which the applicant agreed to be bound by all the conditions contained in the memorandum and articles of association of the company.

Notes for reference-Torquay Bath Company (32 Beav. 581); 25 & 26 Vict. c. 89; Wordsworth on Joint-stock Companies, 209; Shelf. Companies Act, 230; Lind. Part.

1050.

COURT OF APPEAL IN CHANCERY.

This prospectus was left at the house of the plaintiff, and upon the faith of the statements contained in it, the plaintiff on the 13th July, 1864, paid 1007 to

KISCH v. VENEZUELA RAILWAY COMPANY.-June 3, 5, the company's bankers, and applied for 100 shares in and 6, and July 21.

· Prospectus - Fraud Misrepresen

tation.

the company. The 100 shares for which the plaintif thus applied were allotted to him on the 14th July, Public company · 1864, and on the 25th July, 1864, he paid to the bankers of the company the 2001. which was payable Allowance will be made for some latitude of statement, and on the allotment of the shares. Before this time, how some errors and inaccuracies in a prospectus, but still ever, he had applied to the company to reduce the where persons are induced to become holders of shares number of shares held by him from 100 to 10, on the by untrue or deceptive statements in a prospectus, there ground that he had not expected that so large an is an equity to undo the contract. allotment would be made to him, and that he had not Where one party makes statements as to the contents of the means of meeting it. The company, however, documents, he cannot afterwards say that those state- had declined to reduce the allotment, the secretary ments were known by the other party to be untrue, unless telling the plaintiff that he might sell the shares in he shews that the business proceeded on that footing. the market. The plaintiff had also before this time Where an applicant for shares agrees to be bound by the heard some rumors affecting the credit of the comarticles and memorandum of association, he must be pany in the affidavits of the secretary of the company, taken to have notice of their contents, but not of docu- and in the cross-examination of the plaintiff, but took ments referred to in them, and misrepresented by the no steps in the matter until the month of September, prospectus. 1864, when the company applied to the plaintiff for Where a prospectus stated that the contractor had gua-payment of the 2007., which became payable one month ranteed interest at 21. 10s. per cent. on the paid-up after allotment. The plaintiff then began to make