The MASTER OF THE ROLLS, without calling upon the other side, said: I think I can dispose of the question of forfeiture at once. It is important to distinguish between these classes of cases. A man may unquestionably give a limited interest in realty or personalty; he may give an estate for life or he may give money for life, and he may in either of such cases direct the property to go over to another person on the occurrence of a particular event, such as, for instance, upon the person becoming insolvent or assigning the property, or the like, or upon the happening of any other event; and, also, he may, at the same time, direct that the estate shall determine upon the happening of a particular event, even though he does not give it over to another person; both of these propositions I admit to be perfectly clear. He may also do this, in giving either money or land either for an absolute or a limited interest: he may require the donee to fulfil a particular condition before taking the estate, as in the case of In re Dickson's Trusts, where the testator required his daughter not to be a nun. In such case I should be of opinion that it would not be exactly a case of forfeiture; the legatee would simply not be entitled or would cease to be entitled; but I apprehend that a testator may not give property, and then say that the legatee is not to dispose of it, as that is a condition repugnant to the gift. The law does not allow a man to give another a property, and then say that he shall not dispose of it. So, also, a person cannot give an estate for life to another person and say that he shall not dispose of it. He may do this in another form; he may say the estate shall be for life or until the happening of a particular event, or he may say that the estate for life shall depend upon the happening of a particular event, and that he may do whether there is a gift over or not; but he cannot make it a condition that that person shall not dispose of that property: that is repugnant to the nature of things. A person cannot be said to be in the enjoy ment of property if he cannot dispose of it. He may undoubtedly, in particular cases, which I need not here mention, restrict to a certain extent the power of alienation, as by giving a power of appointing a fund to any persons except one. However, as he

cannot give 1,000l. to A, and say he shall not dispose of it as he pleases, neither can he give 1,000l. to A. for life, and afterwards to B, and say that B. shall not afterwards dispose of that property.

The simple question here is, whether the manner in which this forfeiture clause is used amounts to a condition which the legatee is to fulfil before getting the property, or is it a fetter imposed by the testator to prevent alienation? I think it is a mere fetter on alienation. An absolute vested interest is first given, and then comes a proviso, that if any of the legatees shall sell and dispose of their legacies before the time of payment the executors are not to pay such legacies. There is no condition introduced there; it is simply a statement that, having given absolute interests in the produce of certain real estates, the legatees were not to dispose of them, and that if they attempted to do so they should not have them. I think that is repugnant. He might just as well say, if they sell and dispose of it or mortgage it after they get the property they will be bound to refund it. I think, therefore, that the forfeiture is of no avail.

ment and commence business when they should think fit; they also provided that when the allotment of the first issue should take place, the promoters should receive 10.000Z.

When 5,419 shares had been subscribed for the directors made an allotment, and out of 5,4191. which had been paid in on the shares applied for, they paid 5,000l. to the promoters, out of which they received back 2,000l. for themselves, by virtue of an agreement made with the promoters before the company was established, but which was not disclosed by the articles. The company being in course of being wound up, and the promoters having put in a claim for the rest of their 10,000l. :-Held, that under the circumstances the allotment could not be considered as made bona fide, and that the promoters were not entitled.

This company had been formed and registered, in May, 1863, to carry on business in London and Madrid, Seville, and elsewhere in Spain, with a nominal capital of 1,200,000l., in 60,000 shares of 201. each. The prospectus stated that the first issue of shares should be 30,000.

The articles of association provided that in consideration of the great labour, expenses and risk which the promoters had incurred and been put to in and relating to the promotion and formation of the company, and in registering the memorandum and articles of association, and otherwise in forming and bringing the company into operation in Spain as well as in England, the directors should, when and so soon as the allotment of shares under the first issue should take place, pay to the said promoters the sum of 10,000%. in full of all charges of whatever description incurred by the said promoters, either on their own behalf or on behalf of the company prior to the day on which such allotment of shares should be made. The articles further provided that the directors should be at liberty to commence the business of the company as soon as they should see fit, notwithstanding the whole capital might not then have been subscribed for or taken.

The applications for shares only amounted to 5,319, and 5,319 shares were accordingly allotted by the directors on the 29th NEW SERIES, 35.-CHANC.

of June, 1863, on each of which 17. deposit was paid. deposit was paid. Out of the sum of 5,319. so subscribed by the public, the directors at once paid 5,000l. to the promoters, in part satisfaction of the 10,000. payable under the articles; and they subsequently borrowed 2,000l., which they also paid over to the promoters. The company did very little business, only one transaction appearing on the books, and in 1865 it was ordered to be wound up.

Mr. Williams, on behalf of the promoters, now claimed to stand as a creditor of the company for the remaining 3,000l.

The official liquidator resisted this claim on the ground that out of the 7,000l. paid to the promoters 2,000l. had been paid back by them to certain of the directors in pursuance of a secret agreement made with them before the company was formed, but which was not disclosed by the articles or prospectus; and Mr. Williams was crossexamined in court with respect to the 2,000., and stated that four of the directors, when asked to act as such, had refused to do so unless they were "qualified" out of the promotion money, and that consequently an agreement had been entered into with them, in pursuance of which they had received 500l. a piece. He further stated that each of these directors took 200 shares, and that 17. 10s. was payable on allotment, besides the 17. deposit.

Mr. Selwyn and Mr. Roxburgh, for the official liquidator, argued, first, that the 10,000l. was not payable till after the whole of the first issue had been allotted; and, secondly, that if the directors had a discretionary power of making the allotment sooner, such discretion must be honestly exercised and for the benefit of the company, whereas they made the allotment as soon as 5,319 shares were applied for, and then paid over 5,000l. to the promoters, of which they received 2,000l. back themselves, leaving 300l. to commence business with.

Mr. Matthew, of the common law bar, for a committee of shareholders, supported their contention.

Mr. Druce (Mr. Baggallay with him) insisted that the claim of the promoters could not be resisted if the allotment was made bona fide; the arrangement had been

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made before the formation of the company, and was embodied in the articles. There was nothing improper in the promoters paying the deposits on the shares taken by the directors.

The MASTER OF THE ROLLS (May 8), after stating the nature of the application, and that the prospectus provided that the first issue should be 30,000 shares, not that there should be no issue before, and reading the clause in the articles under which the claim was made, said-In my opinion, all persons who enter into a company must be bound to know what is contained in the articles of association. They are bound by the contract so entered into. But there is another ingredient, another matter to be mentioned, which is, that where an agreement is stated in the articles, the whole of that agreement should be stated. There ought not to be a subagreement, of which the public know nothing, and of which no inkling can be obtained until a later period.

There was here a sub-agreement (as it appears by the evidence of Mr. Williams), prior to the establishment of the company, prior to the issue of these articles of association, that out of the 10,000l. 2,0007. should be paid and divided among four directors, for the purpose of rewarding them for their conduct in the matter. Now the money was not, as it appears to me, to be paid directly into their own pockets, but it was to be paid for the purpose of giving them shares in the association, upon which the deposit and first call upon allotment were to be paid.

Accordingly, the 2,000l. was so employed, as far as I can make out, from the bankers' book; these four directors received 5007. apiece, of which 8007. was applied in payment of the deposit, and the rest in payment of the 30s. a share, as I understand it, payable on allotment, which, amounting to 1,2007., would make up in all 2,0007., so that they took 200 shares apiece. Another evil is this, which is a very serious one, that it appears as if 5,319 shares in the company had been taken, when in reality only 4,519 shares had been taken, because it is obvious that you ought to deduct these 800 shares up to the time when the first call was made after the

allotment, as the deposit and allotment money for these shares was paid out of the deposit and allotment money paid in by others.

Well, then, another question is, whether they were justified in making this allotment of shares at the time. Now, there is the 109th section, which says the directors shall be at liberty to commence the business of the company as soon as they shall see fit, notwithstanding the whole capital may not have been then subscribed for. Now, I am disposed to take that clause liberally. If they had bona fide exercised their own judgment apart from personal interest, I should have been disposed to have allowed them to exercise their discretion; but I think it is impossible to say that this was a bona fide exercise of their judgment. The promoters are apparently exceedingly anxious to get the promotion money, and they cannot get it until the business of the bank has begun; the consequence of which is that, although upon these 4,519 shares when paid up the utmost amount that could have been received was about 11,2977, the promoters wish to get the whole of their money, which would practically leave nothing with which to carry on the business.

His Lordship then said that he saw nothing of a bubble character in the company, and that he thought it might have carried on business successfully had not the directors been in such a hurry to make an allotment and to pay the promotion money; after which he continued: Although I consider the directors had full power to make an allotment, if they did so bona fide, and by such allotment the promoters became entitled to receive their 10,0007; yet as the directors were not entitled to receive anything out of that money without the sanction of the shareholders, with that and the other circumstances I cannot treat this as a bona fide transaction, and accordingly I am of opinion that the thing is cancelled, and that the promoters cannot insist upon the performance of the contract, respecting which they have not divulged the whole truth to the world, and of which they have pressed the completion for their own personal benefit. I shall therefore hold, that no sum ought to be paid to the promoters. Costs of the

Statute, Construction of Municipal Corporation-Compulsory Powers of taking Land for Public Improvements-To what extent to be exercised-Meaning of the word "Street."

A public body intrusted by the legislature to construct a public work for the public advantage and with no profit to themselves, was authorized to take compulsorily more land than was required for the purpose of effecting the improvements specified in their act, with certain powers of disposing of superfluous lands: Held, that they were entitled to take the whole of the lands scheduled in their act, even though with the avored object of re-selling a portion of such lands to a railway company; one of the purposes of their act being to obtain money for the improvements.

Held, also, that they were not incapacitated from taking the whole of the lands comprised in the schedule, although before they obtained their power to take land they had contracted conditionally upon their obtaining such power to sell the lands for a certain sum.

In such a case the intention of the legis lature may be gathered from the clauses of the act generally.

The word "street" means a thoroughfare with houses on both sides, not merely a road or footway.

The first of these appeals was from an original decree made by the Lords Justices

of Appeal, dismissing the appellant's bill, without costs; the second from a decree made by Vice Chancellor Wood, ordering a perpetual injunction, as prayed by the plaintiff, the appellant in the first and the respondent in the second of these appeals.

The question in these appeals was, whether the respondents in the first appeal were entitled under the compulsory powers of purchase which by the Metropolitan Meat and Poultry Market Act, 1862, and the Holborn Valley Improvement Act, 1864, were vested in them for the purposes of that act, to take the whole of certain freehold and leasehold property of the appellant in the city of London, pursuant to two notices of their intention to take the same; or whether the corporation had not improperly included in their notices a large portion of the appellant's property, which they required merely for the purpose of re-selling it to the respondents, the Metropolitan Railway Company, in pursuance of an agreement made between the corporation and the railway company, who claimed it by virtue of that agreement; and whether, such being the case, the corporation should not be restrained from proceeding on such notices to take more of the appellant's land than they bona fide required for the purposes of the acts.

It was admitted that the corporation only required the lands now in dispute in order to re-sell them to the railway company; unless, therefore, such a re-sale was one of the purposes of one or other of the acts, the corporation could not be said to require them for any purpose of either of their acts.

It will be seen, from the following statement of the case, that in truth not only the corporation but the railway company itself were by their acts empowered to take the appellant's lands; but the Model Act of 1847, which governs the City Acts, only provides for the valuation of lands taken under those acts by a jury, whereas by the Railway Acts the vendor was entitled to have them assessed by arbitration. This constituted one of the plaintiff's grievances; another was that as by their previous contract with the railway company the corporation had fixed the price of these lands, a jury might be thereby prejudiced in assessing their value.

The following was the state of things out of which these questions arose. For several years negotiations had been in progress for the purpose of effecting public improvements in the neighbourhood of Smithfield, having principally for their object the construction of a new meat and poultry market, and the provision of increased railway accommodation to that part of the city, and to the new market in particular.

In 1854 an act was passed, called "The Metropolitan Railway Act, 1854," authorizing the respondents, the Metropolitan Railway Company, to construct what is popularly known as the Underground Railway, and by section 94. of this act the company were empowered "to make contracts or arrangements with the corporation of London in reference to the sale and purchase of lands and the construction and carrying out of the said railway and works, and for the transfer for that purpose to the railway company of the land held by the corporation, either in their own. right or as trustees" under the Clerkenwell Improvement Acts therein mentioned.

In 1859 the company obtained another act, known as the Metropolitan Railway Act, 1859. Under this act the company had powers to take all the plaintiff's lands now in dispute. [When the case was heard in the Courts below these powers, though in fact renewed by subsequent acts, were understood to have expired in August, 1862.] This act also conferred on the corporation further powers for the sale of their lands to the company.

In 1860 three acts of parliament were passed with the view of promoting the construction of the Meat and Poultry Market, with access to it by railway and by street. Of these acts, one was "The Metropolitan Railway Act, 1860," which conferred, by section 15, (in the event of the Meat and Poultry Market Act, then pending, passing into law) further powers on the corporation and the company for carrying into effect the intention of the acts by mutual action and agreement.

The second of the acts of 1860 is cited as "The Metropolitan Meat and Poultry Market Act, 1860." It incorporated the powers, provisions and enactments for taking of land contained in "The London City

Improvement Act, 1847," commonly called the Model Act, and the clauses of the Lands Clauses Consolidation Act, 1845, incorporated therewith. It provided for the erection of a market-place, and by section 10, the corporation were empowered to enter into arrangements for the use of the under-surface of the markets and the

approaches thereto by a railway company. Section 15. empowered the corporation to dispose, at their discretion, of such lands as should be purchased and cleared by virtue of this act and not be wanted for the site of the market, nor be laid into the streets to be made, widened or improved under that act.

The 18th section was as follows: "It shall not be lawful for the mayor, aldermen and commons to open the said market, or any part thereof, for the exposure and sale of meat, poultry or other provisions, or to permit the use of the said railway station, until a road sixty feet in width shall have been made and opened from Victoria Street, at or near West Street, in the parish of St. Sepulchre, Middlesex, to the intended. market-house, in the parish of St. Sepulchre, London."

This 18th section was inserted at the instigation of the Governors of the Charter House, and against the wishes of the respondents, the corporation.

It is proper here to observe that the London City Improvement Act of 1847, called the Model Act, which was incorporated with most of the subsequent City Acts, excluded so much of the Lands Clauses Consolidation Act, 1845, as relates to the purchase of lands otherwise than by agreement, and empowered the corporation to let on building leases the lands acquired under the powers of the act, and afterwards to sell the ground-rents.

The third of the acts passed in that year, 1860, which obtained the royal assent on the 13th of August, is cited as “The London Railway Depot and Storehouses Act, 1860." It had for its object the authorization of the formation of the new street and of a railway to connect the Metropolitan Railway with the proposed meat-market, and also of a depot and storehouses.

The proposed "London Railway Depot and Storehouses Company" was never