11 & 12, BELL YARD,

TEMPLE BAR,

LONDON.

May 25, 1912.

"THE LAWS OF ENGLAND.”

By the EARL of HALSBURY and a Distinguished Body of Lawyers.

Managing Editor: T. WILLES CHITTY, Esq.

IV.

UPHELD BY THE COURTS.

Volume XVII. of Lord Halsbury's "Laws of England" was published in July 1911. On pp. 483, 484, the learned contributor— The Right Hon. Arthur Cohen, K.C.-deals with the question, whether, in determining a case of constructive total loss, the assured is entitled to add to the cost of repairs the value of the wreck, and submits that, in a case governed by the Marine Insurance Act 1906, 'the value of the wreck ought not to be taken into account."

66

(Headnote of the case as reported in [1912] 2 K. B. 5.)

"The law laid down by the House of Lords in Macbeth and Co. v. Maritime Insurance Company [1908]· A. C. 144) is altered by sect. 60, sub-sect. 2 (ii.), of the Marine Insurance Act 1906. In determining whether a ship, which is seriously damaged by perils insured against, can be treated as a constructive total loss within the meaning of that enactment, the assured is not entitled to add the value of the wreck to the cost of repairs."

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Vol. 133. No. 3608.

The Law and the Lawyers.

Business in the King's Bench.

MR. JUSTICE BRAY, in charging the grand jury at Huntingdon this week, expressed the hope that the Government would see their way to fill the two vacancies in the King's Bench Division, because, as he pointed out, there were still arrears, and the sooner the appointments were made the better it would be for the administration of justice. The state of the cause lists at the end of the sittings which have just terminated show that common jury actions set down in the middle of March and non-jury actions at the beginning of April are still untried, while the fact that the special jury list only dates back to the middle of April is largely due to the fact that several heavy actions are standing over until next sittings. The Civil Paper arrears go back to the beginning of March. In the coming sittings, if the staff of judges is maintained at its reduced strength, very little progress can be looked for, inasmuch as the circuits commence next week and a large proportion of the judges will be absent from London until the Long Vacation.

Notes of Evidence on Appeal.

WE are glad to see that Lord Justice VAUGHAN WILLIAMS has again drawn attention to the unsatisfactory state of the practice with regard to the use of the judge's notes and shorthand notes on the hearing of appeals. Apart from patent and certain analogous cases, he pointed out that the old Common Law practice still prevailed, that the Court of Appeal should use

only the judge's notes of the evidence at the trial, but that the parties had no right to see those notes before the case came on to be argued. Such a practice is both inconvenient and undesirable, and we quite agree with the learned Lord Justice that it is a grave mistake that the parties are not allowed to have copies of the judge's notes. In all courts, as at present in the Divorce Court, there should be an official shorthand writer, a copy of whose notes every litigant should be entitled to have at a reasonable price; for this system has proved exceedingly useful in the only division in which it obtains, and it certainly ought to be extended to all the other branches of the High Court.

Judges and Criticism.

ONE does not expect to find in the observations made in an after-dinner speech the care and circumspection which is forthcoming on more formal occasions, bnt the observations of Mr. Justice AVORY, as reported in the Press, at the dinner of the Law and City Courts Committee of the Corporation of London were both indiscreet and injudicious. So long as a judge holds his position it is eminently necessary that by act and word he should maintain a position of strict impartiality and give no cause for any suggestion of any appearance of prejudice. No doubt the objectionable criticism that has sometimes been passed quite unjustly upon some of our judges must raise a strong feeling of personal resentment, but it has hitherto been the invariable practice of judges so maligned to treat such criticism with the contempt it deserves, knowing full well that their strongest defence lies in the full support of public opinion.

The Suffragist Trial.

AFTER a lengthy and impartial trial the jury at the Old Bailey came to the only possible conclusion and found all the accused guilty. Having regard to the attitude adopted by the defendants, it cannot be said that the sentences imposed erred on the side of severity, and, however much one may sympathise with the desire of those who wish to see the franchise extended to women, the conduct of those who have now been made to feel the strength of the law can in no way be defended. It is certainly satisfactory that the principal instigators have been brought to book, their conduct being far more worthy of punishment than that of the rank and file of the women they incited to commit the acts of violence.

STAMP DUTIES ON VOLUNTARY TRANSFERS. THE new stamp duty which is the subject of this article was imposed by sect. 73, sub-sect. 1, of the Finance (1909-10) Act 1910. This sub-section runs as follows: "Any conveyance of transfer operating as a voluntary disposition inter vivos shall be chargeable with the like duty as if it were a conveyance or transfer on sale, with the substitution in each case of the value of the property conveyed or transferred for the amount or value of the consideration for the sale."

The term 'conveyance or transfer" is nowhere actually defined either by the Stamp Act of 1891 or the Finance Act of 1910. The latter Act does not attempt a definition, while the nearest approach to one that can be found in the Act of 1891 is contained in sect. 62, which runs as follows : Every instrument and every decree or order of any court or of any commissioners whereby any property on any occasion except a sale or mortgage is transferred to or vested in any person is to be charged with duty as a conveyance or transfer of property." A very similar description of a conveyance is given in sect. 54, which refers to conveyances for value. It is quite clear, however, that the term includes a great deal more than merely the documents which

are known to conveyancers by the names of conveyances or transfers; for instance, it doubtless includes an assignment of a lease, and the case of West London Syndicate v. Inland Revenue Commissioners (77 L. T. Rep. 797; (1898) 1 Q. B., at p. 240) has decided that it includes a declaration of trust. The Commissioners of Inland Revenue hold—quite rightly, it is submitted -that it includes an appointment under a general power of appointment, but they say that it does not extend to an appointment under a special power. There is a great deal to be said for the fact that if an ad valorem duty of £1 per cent. had to be paid on the exercise of a special power of appointment it would be a very appreciable hardship, and the opinion of the commissioners is one of considerable practical convenience, but, at the same time, it is difficult to see how such an appointment is not an ment " whereby property is "vested in any person." The question of a lease is one of more difficulty—the assignment of a lease is certainly a conveyance or transfer," and, that being so, there seems, at any rate, some grounds for saying that the lease itself comes within that category; but in the schedule to the Stamp Act of 1891, under the heading "Lease," it is stated that under certain circumstances a lease has to be stamped "as if it were a conveyance or transfer, so that this seems to imply that a lease is not within the definition. At any rate, the Somerset House authorities do not claim the duty at £1 per cent. on the voluntary granting of a lease.

instru

Previously to the passing of the Finance Act of 1910, conveyances or transfers were stamped, under sect. 1 of the Stamp Act of 1891, according to which of the following four classes they happened to fall into, for (1) conveyances or transfers, whether on sale or otherwise, of stock of the Bank of England or of certain colonial Governments were changeable in the former case at the fixed rate of 7s. 9d., and in the latter case at the rate of 2s. 6d. per £100; (2) conveyances or transfers on sale of any property, except as aforesaid, paid duty at the rate of 10s. per £100; (3) conveyances or transfers of any property, except as aforesaid, by way of security, which included mortgages, transfers, &c., paid a smal} duty, seldom exceeding 2s. 6d. per £100; and (4) all other conveyances paid a fixed duty of 10s. This being so, sect. 73 of the Finance Act 1910 provided that "The stamp duties chargeable under the heading Conveyance or Transfer on Sale of any Property"" (clearly those only in the class secondly above mentioned) “shall be double those specified in the schedule" to the Stamp Act; and sect. 74 as set out above enacts that any conveyance or transfer operating as a voluntary transfer inter vivos shall be stamped as if it was a conveyance or transfer on sale.

The Commissioners of Inland Revenue take the view that under these circumstances the meaning of sect. 74 above mentioned is that all conveyances or transfers of any sort which operate by way of voluntary disposition have to be stamped as if they were conveyances or transfers for value of the particular kinds which fall within the second class above mentioned. It is quite obvious that conveyances or transfers on sale of some species of property-for instance, stock of the Bank of England and also conveyances or transfers by way of security when for value-do not come within this second class at all, and it is submitted, although with some doubt, that the true meaning of sect. 74 is simply that every document which carries out a gift has to be stamped in the same way as a document which carries out a sale of the same property.

If this is not so, a transfer of mortgage, to take an example, is stamped at the rate of 6d. per cent. if the transfer happens to be for value, and at the rate of £1 per cent. if not. That is to say, when the transaction happens to be a gift the document is stamped as if the transaction were a "transfer on sale," and when the transaction actually happens to be a sale of the security the document is stamped as something else. Moreover, in this case the Legislature must be presumed to have described the same thing in two different ways in two different sections of

the same Act.

In estimating the amount of the consideration on which in the case of a transfer for value the stamp duty has to be paid, any mortgage or charge to which the property sold is subject has under sect. 57 of the Stamp Act of 1891 to be added to the amount actually paid. That is to say, if property subject to a

Of

mortgage for £400 is sold for £200, then stamp duty has to be paid on £600, the aggregate of the two sums; and sect. 74 of the 1910 Act provides that, in the case of the ad valorem duty which has to be paid on voluntary transfers, the value of the property transferred shall be substituted for the amount or value of the consideration for the sale; on this authority the Commissioners of Inland Revenue are only claiming stamp duty in this case on the net value of the property after deducting the mortgage. course, as a matter of fact, if, in the case above, the property had been given, the value of the gift was only £200, but, at the same time, sect. 74 provides that a conveyance or transfer operating by way of voluntary disposition shall be liable to the like stamp duty as if the property has been sold, and it is certainly submitted that a volunteer obtains just as much interest in the property as would a purchaser in this case. More than that, sect. 57 of the Act of 1891 was undoubtedly passed with the object of protecting the Revenue, and, in the case above, when the purchaser has paid off the mortgage he has paid £6 2s. in duty, being £1 per cent. on £600 and 6d. per cent. on £400, while, if the view of the commissioners is right, a volunteer in doing so would obviously have only paid £2 28.

In order to prevent the very obvious method of avoiding the new stamp duty by inserting in the deed of gift a very small consideration and then stamping the document as a transfer on sale for that amount, the same sect. 74 goes on to provide in sub-sect. 5 that any document shall be liable to the new voluntary transfer duty where, because of the inadequacy of the consideration or for any other reason, in the opinion of the commissioners a substantial benefit accrues to the grantee. It is on this subject that the only case yet decided with reference to this duty-Re Weir and Pitt's Contract (55 S. J. 536)—arose; and Mr. Justice Warrington then decided that, when property has been conveyed for a consideration less than its full value, the fact that stamp duty has only been paid in respect of the consideration mentioned in the conveyance, and not in respect of the value of the property, will not affect a subsequent purchaser for value. It will be interesting to observe what the effect of this decision will be it is possible that it may go far towards nullifying the sub-section.

COMMENTS ON CASES.

Personal Disfigurement Causing "Incapacity for Work."

WHEN commenting upon the want of unanimity in the decision arrived at by the learned judges of the Court of Appeal in Ball v. William Hunt and Sons Limited (see 130 L. T. Jour. 594), we ventured to predict that the adoption by the House of Lords of the dissentient view entertained by Lord Justice Fletcher Moulton was more than probable. But the doubtfulness of the point there raised made such want of unanimity by no means surprising. On the contrary, in the absence of anything even remotely suggesting a clue as to the intentions of the Legislature on the point, a wide divergence of opinion in regard to its decision was only to be expected. Our anticipations, however, as to what would take place in the event of an appeal to the House of Lords have been borne out by the unequivocal opinions expressed by the learned Lords: (see ante, p. 56). They have accepted the broad view of the question that was expressed by Lord Justice Fletcher Moulton, rather than that of the two other members of the Court of Appeal, the Master of the Rolls (Cozens-Hardy) and Lord Justice Buckley: (see 104 L. T. Rep. 327; (1911) 1 K. B. 1048). In other words, they have given an extended meaning to the language of sect. 1 of the first schedule to the Workmen's Compensation Act 1906 (6 Edw. 7, c. 58). In this way, they have filled up the gap left in the statutory provisions by what seemed to be a glaring casus omissus therefrom. "Total or partial incapacity for work "is by the section to be the reason for awarding compensation to a workman who has been injured by accident arising out of and in the course of his employment. The learned Lords have boldly read into those words that which the majority of the learned judges of the Court of Appeal shrunk from doing-that is to say, "ineligibility for Second Sheet.

THE CONVEYANCER.

Unreasonable Conditions Attached to a Licence to Assign.

COVENANTS by lessees not to assign, underlet, or part with the possession of the property without the consent in writing of the lessor, "but so that such consent shall not be unreasonably or arbitrarily withheld," are of frequent occurrence in leases, and the practitioner is not infrequently faced with the question what conditions the lessor is entitled to impose when he is asked to give his licence or consent to assign or underlet. It is clear that he cannot exact a fine, or sum of money in the nature of a fine, for such licence or consent! (sect. 3 of the Conveyancing Act 1892); but it is impossible to lay down any hard-and-fast rule as to what other conditions he may impose. The words "arbitrarily" and " unreasonably," though different in their primary meaning, seem in this connection to have much the same effect. It is not proposed here to enumerate the various conditions which have been decided to be reasonable or the reverse. They will be found collected and summarised, up to the present time, in the sixth edition of Mr. Redman's Law of Landlord and Tenant. We only propose to point out what courses are open to the lessee or assignee, as the case may be, if he considers that the conditions sought to be imposed by the lessor are arbitrary or unreasonable. It is, no doubt, well settled that in such a case the lessee or assignee may assign without consent: (see Treloar v. Bigge, L. Rep. 9 Ex. 151, in which it was held that a refusal "upon advice," though the grounds of refusal were not specified, was not "arbitrary "”). In that case Chief Baron Kelly defined arbitrary refusal as one given "without fair, solid, and substantial cause, and without reason.' And that case was followed in Sear v. House Property and Investments Company (43 L. T. Rep. 531; 16 Ch. Div. 387) and in other cases; but the lessee cannot recover damages against the lessor as on the breach of an implied covenant. If, however, the lessee takes the law into his own hands by assigning without leave, the assignee runs the risk of an action being brought against him by the lessor to recover possession under the proviso for reentry on breach of covenant which is usually inserted in leases. If

there is any reasonable doubt as to whether the consent of the lessor is being unreasonably withheld, the safest course for the lessee to adopt appears to be to issue an originating summons under Order LIV.A to determine the question, as was done in Re Sparks' Lease; Berger v. Jenkinson (92 L. T. Rep. 537; (1905) 1 Ch. 456), in which it was held that where a landlord occupies part of a building with only one entrance and lets off another part with a covenant by the tenant not to assign or underlet without the landlord's licence, such licence not to be "unreasonably withheld," it was reasonable for the landlord, before granting a licence to underlet, to ask for what purpose the portion to be underlet was to be used, and to stipulate for a similar covenant between the undertenant and himself. The same mode of procedure was adopted in Evans v. Levy (102 L. T. Rep. 128; (1910) 1 Ch. 452), in which it was held that a condition requiring the assignee of a lease, who desired to assign it to his wife, to enter into a covenant at all times during the continuance of the lease to pay the rent and perform the covenants thereof was unreasonable. In both of the last-mentioned cases the order was made without costs, on the ground that there was no cause of action against the lessor. But it would seem from the recent case of West v. Gwynne (104 L. T. Rep. 759; (1911) 2 Ch. 1) that the costs ought to be given to the successful party in such a case. There the action appears to have been commenced by writ; as it was also in Young v. Ashley Gardens Properties Limited (88 L. T. Rep. 541; (1903) 2 Ch. 112). But the procedure by originating summons is less expensive.

The Declaration of Title Act 1862.

IT is, perhaps, singular that the above-mentioned Act (25 & 26 Vict. c. 67) should have been almost a dead letter from the commencement of it; particularly having regard to the complaint which is sometimes made that the procedure under the subsequent Land Transfer Acts is not always convenient when an estate is put up for sale in numerous lots for building The Act was, no purposes subject to restrictive covenants. doubt, intended to assist the working of Lord Westbury's Act (25 & 26 Vict. c. 53). The preamble recites that "it is expedient to enable persons having interests in land to obtain in certain cases a judicial declaration of their title to the same, so as to enable them to make an indefeasible title to persons claiming under them as purchasers for a valuable consideration." It enabled an persons entitled to estate in fee simple to petition the then Court of Chancery for a declaration of title. If the court was satisfied that the petitioner had made out a prima facie case, the court would make an order for investigation of his title. And if the court was satisfied after such investigation that the petitioner had shown such a title as it would have compelled an unwilling purchaser to accept, it would, after certain advertisements had been issued, make the declaration asked for. The petitioner had the option of registering such declaration as an indefeasible title under Lord Westbury's Act, but he was not obliged to do so.

There appears

to be only one reported case under the Act-namely, Re Roberts (22 L. T. Rep. 262, 699; L. Rep. 10 Eq. 402). There the petitioner, an infant, prayed a declaration that he was entitled to one moiety of a house in Windmill-street for an absolute estate in fee simple in possession free from incumbrances, subject only to a lease to one Proger. The chief clerk had certified that the petitioner was entitled to an estate in fee simple in possession subject only to the lease, and the Vice-Chancellor ordered the declaration establishing the petitioner's title to be made at the end of three months; security to be given by the petitioner to the amount of £40 for payment of the costs of any person who might successfully oppose the petitioner's right to the declaration asked for, and notice of the order to be given by advertising three times at three days' interval in each of three London newspapers. The Encyclopædia of the Laws of England, vol. 4, p. 443, 2nd edit., mentions another case-namely, Re Keen (V.-C. M., 1873, A. 250), cited in Seton on Decrees, 5th edit., p. 2084, in which an application was made to the court under the same Act. There is a short notice of the Act in Morris on Land Registration, p. 18. Except in one or two unimportant points, the Act seems to be still unrepealed, and it is conceivable that there are cases in which it might usefully be resorted to.

MISCELLANEOUS PRECEDENTS (continued).

Agreement for Sale of Reversionary and other Interests under a Settlement for a Sum sufficient to pay the Vendor's Debts.

day of

BETWEEN

191 AN AGREEMENT made the A. B. of in the county of (hereinafter called "the vendor") of the one part and C. B. of in the county of (hereinafter called "the purchaser ") of the other part SUPPLEMENTAL to an indenture of resettlement dated the day of 190 and made between the purchaser of the first part the vendor of the second part E. F. of the third part G. H. of the fourth part and the said G. H. of the fifth part (hereinafter called "the said resettlement") being a resettlement of the moneys stocks securities investments and property specified in the schedule thereto (of which the first part of the first schedule hereto is a copy) and of the net moneys to arise from the sale of certain hereditaments specified in the second part of the said first schedule hereto under an indenture recited in the said resettlement and bearing even date therewith. WHEREAS the sum of £a mentioned in the said resettlement was Stock and raised some time since by sale of the £ Consols respectively mentioned in the said first schedule hereto and was paid to the purchaser. AND WHEREAS the property now subject to the trusts of the said resettlement consists of the hereditaments mentioned in the first part of the second schedule hereto and the trust funds and securities mentioned in the second part of such schedule. AND WHEREAS the purchaser is now aged

£

Stock and £

years or thereabouts, AND WHEREAS the said G. H. is now aged years or thereabouts. AND WHEREAS the said E. F. is now aged years or thereabouts. AND WHEREAS I. J. in the said resettlement mentioned is now aged years or thereabouts. AND WHEREAS a petition in bankruptcy has recently been presented against the vendor in the High Court of Justice in Bankruptcy and a receiving order was made on the day of

19 AND WHEREAS short particulars of the vendor's debts and liabilities (except the costs of and incidental to the said bankruptcy proceedings and of winding-up the same and of these presents and of carrying out and completing the purchase hereinafter agreed to be made) and the names and addresses of his creditors are set forth in the third schedule hereto and amount together to the sum of £b or thereabouts and the said costs are estimated at £c making together the sum of £d. AND WHEREAS with a view to paying the creditors of the vendor in full and of getting the said receiving order rescinded the purchaser has agreed to purchase all the interest of the vendor under the said resettlement upon Now the terms hereinafter appearing. PRESENTS

of the annuities of £

and £

THESE

WITNESS AND IT IS HEREBY AGREED as follows:1. The vendor agrees to sell and the purchaser agrees to purchase at the price of £d ALL those the annual sums of £ and £ payable or to become payable to the vendor under the said resettlement. AND also all that one equal third part of the funds and property comprised in the said resettlement to which the vendor is or will become entitled upon the death of the purchaser or upon the death of the survivor of the said E. F. and G. H. or on any other event but subject to a proportionate part in the said resettlement mentioned. AND ALSO all that the reversionary life interest of the vendor expectant on the death of the survivor of the said E. F. and G. H. (subject to an annuity of £r to the said I. J. as in the said resettlement mentioned) of and in the remaining two third parts of the funds and property comprised in the said resettlement. AND ALL other (if any) the annual sums share estate interest and property whatsoever of the vendor whether present or future vested or contingent of and in the hereditaments stocks funds and securities respectively mentioned in the first and second parts of the said second schedule hereto and of the proceeds of the sale thereof and the investments for the time being representing the same and all other (if any) the interest and benefit of the vendor under or by virtue of the said

resettlement.

2. The purchaser shall forthwith pay and satisfy the said purchase money of £d by paying and providing for the debts of the vendor mentioned in the said third schedule hereto and the said

costs.

3. As soon as such debts and costs have been paid or provided for the vendor shall take all necessary steps for having the said receiving order rescinded and immediately thereupon the vendor and all other necessary parties shall execute to the purchaser a proper assurance of all the said property and premises hereby agreed to be sold such assurance to be in such form and to contain such covenants clauses powers of attorney and provisions (including a release of the vendor's power to withdraw part of the said settled funds from the said resettlement in contemplation of or after any marriage he may enter into) as the purchaser's counsel shall reasonably require.

JUDICIAL COMMITTEE OF THE PRIVY COUNCIL. Marine Insurance-Perils of Seas-Goods stored in Hulk-Damage by Leakage.

Goods belonging to the appellants were stored in a hulk moored in a tidal river in smooth water, and were insured (inter alia) against perils of the seas. In consequence of natural decay, which could not be detected by ordinary examination, the hulk became leaky, and the goods were injured by water which found its way through the decayed woodwork of the bottom of the Lulk.

Held, not to be a loss by the perils insured against. Judgment of the Supreme Court for China at Shanghai affirmed. [Sassoon and Co. v. Western Assurance Company. Priv. Co. May 17.-Counsel: Atkin, K.C., Bailhache, K.C., and Raeburn; Sir R. Finlay, K.C. and Mackinnon. Solicitors: W. A. Crump and Son; Thomas Cooper and Co.]

Mortgage Provisions as to Redemption by Instalments—Mortgage practically irredeemable.

The appellant, the tenant of a public-house belonging to the respondents, mortgaged his leasehold interest to them. By the mortgage deed it was provided that the mortgage should be paid off by monthly instalments, so arranged that the last instalment only became payable six weeks before the expiration of the lease. The mortgagor was desirous of paying off the mortgage, but the mortgagees refused to accept repayment except by the instalments provided for by the deed.

Held, that the provision in the deed was bad as making the mortgage in fact irredeemable, and that the mortgagor was entitled to pay off the mortgage if he wished to do so. Judgment of the Supreme Court of Western Australia reversed.

[Fairclough v. Swan Brewery Company. Priv. Co. May 17. Counsel: Danckwerts, K.C. and P. F. Wheeler; Sir R. Finlay, K.C. and E. Beaumont. Solicitors: Trinder, Capron, and Co.; W. H. and A. G. Herbert.]

COURT OF APPEAL.

Building Society-Unincorporated Society-Objects of SocietyBorrowing Powers-Banking Business-Ultra vires-Windingup-Priority of Payment Position of Depositors—Building Societies Act 1836 (6 & 7 Will. 4, c. 32), s. 1.

A building society registered in 1851 under the Building Societies Act 1836, and not subsequently incorporated under the Act of 1874, had by its rules unlimited borrowing powers, and received extensive deposits. Thus, in addition to the ordinary purposes of the society, a large banking business was created, which was not distinguished in the annual balancesheet from the main objects of the society. A winding-up order was made against the society on the 20th June 1911.

At the commencement of the winding-up, the society consisted of (1) unadvanced "A" and "B" shareholders, some of their shares not being fully paid; and (2) advanced shareholders. The depositors consisted of (1) current account holders; (2) holders of deposit receipts, some payable at twelve months' notice and others at seven days' notice; (3) deposit account holders, who could withdraw money twelve times a year. In addition, there were ordinary trade creditors of the society. No contingent fund out of profits had been formed as directed by the rules. It was contended on behalf of the "B" shareholders that the society's rules could not apply to the banking business, which was ultra vires. A scheme of arrangement having been rejected, the official receiver asked for the ruling of the court as to the priority in which payment was to be made to the respective depositors and shareholders; and, secondly, as to the liability of the respective shareholders to contribute to the assets of the society. It was decided by Neville, J. (105 L. T. Rep. 780) that the directors had no power to carry on the banking business, and that the depositors had notice of the illegality; and that, therefore, they were only entitled to equitable relief. The assets were accordingly ordered to be distributed as follows: (1) Costs of the liquidation; (2) ordinary trade creditors; (3) unadvanced shareholders; the surplus to be distributed ratâ among the customers of the bank—i.e., the pro depositors. No order was made as to the liability of members to contribute to the assets. The depositors appealed, and in Jan. 1912 the appeal came on to be heard. After the arguments in support of the appeal had proceeded for a long while, the appeal was, with the consent of all parties, ordered to stand over generally with a view to the adoption of a scheme of arrangement which was proposed to be introduced by the official liquidator for the distribution of the assets of the society among the several shareholders and depositors respectively. The proposed scheme of arrangement come to, however, did not touch, or in any way affect, the rights of the "B" shareholders; it only got rid of the claims of the "A" shareholders. The appeal was accordingly restored to the list for the purpose of dealing with the claims of the "B" shareholders. Held (dissentiente Fletcher Moulton, L.J.), that the depositors had no legal or equitable debt which would entitle them to be paid before the shareholders whether of the A" or "B" class; and that, therefore, the order of Neville, J. declaring priorities must be confirmed. Appeal dismissed.

[Re Birkbeck Permanent Benefit Building Society. Ct. of App.: Cozens-Hardy, M.R., Fletcher Moulton and Buckley, L.JJ. Jan. 22, 23, March 25, 26, 27, and May 18.-Counsel: for the appellants, Buckmaster, K.C., F. E. Smith, K.C., and Tomlin; for the respondents, Clauson, K.C., Sargant, and C. W. Turner; Jenkins, K.C. and H. E. Wright; Jessel, K.C. and Seligman; P. Ogden Lawrence, K.C. and J. F. W. Galbraith; Upjohn, K.C., Younger, K.C., and A. M. Wells; Gore-Browne, K.C. and Vaughan Williams. Solicitors: for the appellants, Burton, Yeates, and Hart; for the respondents, Freshfields; Nunn, Popham, and Co.; Lewis and Yglesias; Ashurst, Morris, Crisp, and Co.; Rubinstein, Nash, and Co.; R. Vaughan.]

Insurance (Marine)-Reinsurance-Risk-Intention of assured.

The plaintiffs claimed against the defendant, an underwriter, for a loss sustained under a reinsurance policy subscribed by him. The steamship Kynance was insured under three policies issued by the plaintiffs. The three policies covered the whole round voyage from Newcastle, N.S.W., to the West Coast of South America and home to the United Kingdom or other ports. The first two, for £500 each, were dated the 6th and 11th May 1910; and the third, for £1000, was dated the 4th Aug. 1910. The voyages were described substantially in the same way as in the policies in the case of Steamship Kynance Company Limited v. Young (104 L. T. Rep. 397). In the first two the ship was valued at £12,000, and the risk was to continue for thirty days after arrival at final port of discharge, however employed, or until sailing on next voyage, whichever may first occur; and in the third the ship was valued at £10,000, and the risk was to commence from the expiration of the previous policy. Under the decision of Scrutton, J. in Steamship Kynance Company Limited v. Young (ubi sup.), the liability of the plaintiffs for the loss which occurred between Valparaiso and Tocopilla arose under the first two policies and not under the third. The plaintiffs paid under the first two policies, and claimed to be paid under a reinsurance policy dated the 9th Aug. subscribed by the defendant. Certain instructions in writing were given by the plaintiffs to J. A. P. and Co., and through them to H. S. and Co., the brokers who negotiated the insurance with the defendant. These instructions were in writing and dated the 14th July 1910, and in which the voyage was described as at and from Valparaiso and (or) West Coast of South America or h/c (held covered) to United Kingdom and