and Bramwell, L. JJ., is traceable in part to the word "creditors in the Annuity Act; an expression which the Court of Appeal regarded as not inclusive of a trustee in bankruptcy, but rather of such creditors as have some special right or remedy against the land, as, for example, execution creditors. INFANTS. See MINORS. INTEREST. See PROSPECTIVE PAYMENTS; also DIVIDENDS. INTERROGATORIES. 1.-Interrogating a Member. (i.)-It is unnecessary to make a member of a company a party to an action for the purpose of interrogating him; and, if so joined, he will be struck out.Wilson v. Church, 1878, Jessel, M. R.; L. R. 9 Ch. D. 552. (ii.)-Per Jessel, M. R.: "It is for the Court to decide which member [of a company] is to be interrogated; and [if reasons are shown] why one member can give the information and not another, or why one member can give information on one set of questions, and another member on another set of questions, the Court can direct which member or members shall be examined to give information." (Ibid. L. R. 9 Ch. D. 557.) 2.-A Vendor and Director liable to be interrogated. Upon an affidavit stating that T. was a vendor to, and until recently a director of, the defendant company, and that he is still a member, and well acquainted with all its affairs, leave was granted to the plaintiff to serve T. with interrogatories.-Berkeley v. Standard Discount Co., 1879, Ct. of App. (Jessel, M. R., Baggallay and Thesiger, L. JJ.); L. R. 13 Ch. Div. 97; 41 L. T. (N. S.) 374; 49 L. J., Ch., 1. (Fry, J., reversed.) 3.-Costs of the Members. (i.)—A member of a company, to whom interrogatories have been delivered under the Rules of Court, 1875, Order XXXI, r. 4, is not entitled to his taxed costs of answering those interrogatorics before delivering his answers; nor will the Court make any order as to the payment of his costs separately from the costs of the company. (ii.)-Per Jessel, M. R.: "The ordinary practice is for the company's solicitor to act for the officer or member who is directed to answer and to charge the costs against the company." Berkeley v. Standard Discount Co., see supra. 4. As between First and Second Mortgagees. In an action for redemption by a second mortgagee against a first mortgagec, the defendants answered that part of an interrogatory, in which they were asked to set forth the amount due for principal, interest, and costs, but declined to answer further. The interrogatories asked, in addition, whether the defendants held any and what securities for their debt other than the security upon which the plaintiffs' debt was charged. The plaintiffs excepted to the defendants' answer, Held, that the defendants must set forth what security they possessed for the debt. West of England, etc., Bank v. Nickolls, 1877, Malins, V.-C.; L. R. 6 Ch. D. 613. 5.-Costs in connection with unreasonable, vexatious, or too lengthy interrogatories. Rule 2 of Order XXXI of the Rules of Court of 1875 provides that: "The Court in adjusting the costs of the action shall, at the instance of any party, inquire or cause inquiry to be made into the propriety of exhibiting such interrogatories, and if it is the opinion of the taxing master or of the Court or Judge that such interrogatories have been exhibited unreasonably, vexatiously, or at improper length, the costs occasioned by the said interrogatories, and the answers thereto, shall be borne by the party in default." 6.-Interrogatories may be delivered to Members and Officers of Societies and Companies. This is provided by rule 4 of Order XXXI of the Rules of Court of 1875, as follows: "If any party to an action be a body corporate or a joint stock company, whether incorporated or not, or any other body of persons, empowered by law to sue or be sued, whether in its own name or in the name of any officer or other person, any opposite party may apply at Chambers for an order allowing him to deliver Interrogatories to any member or officer of such corporation, company, or body, and an order may be made accordingly." INVALID CONTRACTS. (See MEMORANDUM OF ASSOCIATION.) Contracts outside the scope of business for which a company is formed-even where they receive the unanimous confirmation of all the shareholders-are invalid. This was decided in the case of Ashbury Railway Carriage Co. v. Riche, 1875; L. R. 7 H. L. Cas. 653. The directors of a Railway Carriage Company had entered into an agreement to buy the concession of a projected railway in Belgium, and to finance the undertaking. This was not included within the range of the company's business as defined by its registered memorandum of association; but it was maintained that the agreement was brought to the notice of every shareholder in the company after it had been made, and they, one and all, assented to it. The point involved was not decided without a display of remarkable difference of opinion on the part of the judges. When the question was raised in the Court of Exchequer 2 out of the 3 judges held that the company was bound by the agreement, while the third considered that the company was free. This difference of opinion continued when the case was carried on appeal to the Exchequer Chamber. Six Judges sat upon it in that Court, and they were equally divided. The necessity of a second appeal, so stoutly denied in the first discussions of the Judicature Bill, may be thought to be demonstrated by this example. Thesiger, L. JJ.); L. R. 13 Ch. Div. 169; 41 L. T. (N. s.) 717; 28 W. R. 417. (Fry, J., affirmed.) DIRECTORS' QUALIFICATION. DIVIDENDS GUARANTEED. Guarantee Fund created to secure payment of Dividends. 1.—Where a fund was to be provided out of the purchase money, and paid to the directors in order to guarantee dividends, it was held to be the property of the company, and not of the shareholders individually, and that it should be paid to the liquidator of the company, Bacon, V.-C., observing that it was the duty of the company to pay its debts before dividing profits.Re Stuart's Trusts, 1876; L. R. 4 Ch. D. 213; 46 L. J. Ch., 86; 25 W. R. 295. 2. In the next case, under somewhat different arrangements with the vendor, a different decision was arrived at by the Court of Appeal. By an agreement for the sale of a colliery to a trustee for a company in course of formation, the vendor ageeed to pay to the company during two years from the date of its incorporation, such a sum as, together with the net profits of the company, should be equal to interest at five per cent. per annum on the paid up capital of the company. This agreement was stated and adopted in the articles of association of the company. One of the articles provided that no dividend should be payable except out of the profits arising from the business of the company. |