Compromise of Suit-Agreement--Decree-Suit to enforce-Demurrer-Equity.

Where by reason of a circumstance not provided for in an agreement for the compromise of a suit, affirmed by decree, the plaintiff was not able to obtain the benefit of the compromise, and the defendant, who had entered into possession of an estate under it, refused to take the steps necessary to have it carried out :-Held, on demurrer, that the plaintiff could maintain a second suit to have the agreement for the compromise carried out, or in the alternative to have it rescinded and to obtain the same relief as but for the compromise he might have obtained in his first suit.

This suit came on to be heard upon two demurrers to the bill for want of equity.

In the year 1862 the plaintiff, as the heir-at-law of his late mother, had instituted a suit for the purpose of setting aside a conveyance of an estate called the Ludford Estate, which his mother had, in June, 1850, made to two of the defendants, on the ground of undue influence and fraud, they having been her solicitors; the other defendants were incumbrancers on the estate.

The defendants put in their answers to the bill; but before any other proceedings were taken the parties, on the 21st of July, 1863, agreed to compromise the suit upon terms which, so far as material, were the following: first, that the bill should be dismissed, with costs, against two of the defendants; secondly, that the estate should be sold, under the direction of the Court, and the purchase-money paid into court; fourthly, that the purchase-money should be applied as therein mentioned, the plaintiff to receive thereout the sum of 4,000Z. in lieu of all claims; seventhly, that the plaintiff should concur in the sale, and should furnish the requisite evidence in support of his title as heir-at-law of his mother and of Isaac Wood, the person under whom she claimed as heir, and should obtain the concurrence of all necessary par

ties to the conveyance; and, tenthly, that all further hostile proceedings in the suit should be abandoned, and no further proceedings taken other than were necessary to carry out the said agreement.

A decree on the footing of this compromise was afterwards made, by which, after directing certain accounts as to what was due to the several mortgagees to be taken, the estate was ordered to be sold under the direction of the Court. Pursuant to that decree the estate was put up for sale in lots and sold. The buyer of the largest lot objected to the title on the ground, in fact, that the plaintiff was illegitimate. The question coming on ultimately before the Lords Justices, they held that as between vendor and purchaser, and without giving any opinion as to the probability or improbability of the fact on which the question of the plaintiff's legitimacy or illegitimacy depended, the title was too doubtful a one to force upon a purchaser; and they accordingly discharged him.

At the time of the sale the plaintiff had been wholly ignorant of the fact on which the alleged defect in his title rested, and consequently no provision had been made in the conditions under which the estate had been put up for sale, precluding any objection being made to his title on that ground. After the purchaser had been discharged, he requested the defendants to concur with him in an application to the Court for an order that the estate should be again put up for sale, pursuant to the said agreement for compromise and the decree, according to the former conditions of sale, with such additional conditions as might be requisite for precluding any objections being taken on the ground in question; but they declined to do so, and claimed to be entitled to retain the estate against the plaintiff.

The plaintiff thereupon instituted this suit, charging that he was entitled either to have the estate again put up for sale under the agreement and decree, with such conditions as aforesaid, or to have the said agreement rescinded; and praying, first, that the defendants might be decreed specifically to perform the agreement for a compromise so far as the same remained unperformed, and that pursuant to that agreement and the decree in the former suit the estate might

be sold under the decree of the Court, and according to such conditions of sale as might be suited to the present state and circumstances of the title, and the purchase-money paid into court, and that such accounts as were directed by the decree in the former suit might be taken, or, secondly, in the alternative, that the agreement might be rescinded and the several indentures referred to in the former suit might be set aside, declared void and ordered to be delivered up, and that the defendant Stephens and other defendants might be ordered to deliver up possession of the said estate, and to account for rents and profits.

To this bill two several demurrers for want of equity were put in, one by Stephens, who was a second mortgagor and in possession, and the other by Hussey and Kane, who were the first mortgagees.

The demurrers now came on for hearing.

Mr. Jessel and Mr. Rawlinson, for the demurrer of Stephens.-The bill is based on a mistake. The question, in fact, desired to be raised is, whether the plaintiff is heirat-law of his mother or not; but that cannot be argued now, as the plaintiff has alleged himself to be heir-at-law. This is a bill to carry into effect a decree pronounced only two years ago, but such a bill in the case of so modern a decree is quite useless. The plaintiff might go in under the decree in the old suit and get all he wants (1). There is no allegation that the other purchasers under the former decree have been discharged.

Mr. E. F. Smith and Mr. Druce, for the demurrer of Hussey and Kane.

Mr. Baggallay and Mr. Beales, for the bill, were not called upon.

The MASTER OF THE ROLLS said that, so far from thinking that the plaintiff ought not to have burdened the defendants with this suit, as had been argued, he could not see how the plaintiff could get on at all without it. The plaintiff had instituted a suit to set aside a conveyance made by

(1) As to this, see Richardson v. Eyton, 2 De Gex, M. & G. 79; Askew v. Millington, 9 Hare, 65; s. c. 20 Law J. Rep. (N.s.) Chanc. 508.

his mother to her solicitors on the ground of fraud. The defendants, and all persons claiming under them, entered into the contract stated in the present bill, which shortly was, that the bill should be dismissed, the estate sold, and the money paid into court. An attempt was made to sell the estate, but, for the reasons stated in the bill, the contract for sale could not be enforced. No sale did then, or could now, take place under the conditions framed under the former decree, and yet the essential part of the compromise was that a sale should take place. Under these circumstances the plaintiff made a proposal that the defendants should join with him in having the estate sold under proper conditions, but this they declined. Then the plaintiff, finding that, as the case stood, the compromise, which depended entirely on a sale being had, could not be carried into execution, filed this bill, asking that the compromise might be enforced, or that the agreement for the compromise might be rescinded, and the same relief given him in this suit that he had sought in the former. To this bill the defendants, who had got the benefit of the contract, for they were in possession of the estate in consequence of it, demurred generally for want of equity. But his Lordship was of opinion that the plaintiff had a good equity. For, as against one party in possession of any estate under an agree ment, the other party was entitled either to have the agreement carried out, or, if that was refused, to have it set aside; and that being so, the plaintiff in the present suit was at liberty on the latter alternative to ask, in addition, for the same relief that he might have obtained in the former suit if it had not been for the agree ment. The demurrers must be overruled, with costs.

Solicitors-Messrs. Walter & Moojen, for plaintiff; Messrs. E. & F. Bannister and Fache, for defendant Stephens; Messrs. T. & W. B. Nelson, for defendants Hussey and Kane.

STUART, V.C. In re ANN PARRY, ex parte March 9.

THE DUKE OF BEAUFORT.

Jurisdiction-Escheat for Want of Heirs -Inquisition, Traverse of Petty Bag Office.

The Court, upon the petition of the lord of a manor, ordered that he should be at liberty to traverse an inquisition, under which it had been found that certain hereditaments held of the manor had devolved on the Crown for want of heirs.

This was a petition, by the Duke of Beaufort, as lord of the manor of Monmouth, and it prayed for leave to traverse or to demur to an inquisition taken on the 5th of August, 1865, under which it was found that a messuage situate within that manor had escheated to the Crown for want of heirs of the person last seised thereof.

By a grant from the Crown in the time of Charles the First, the manor of Monmouth, with all escheats, was granted to Charles Harbord, Christopher Favell and Thomas Young. The manor was now vested in the Duke of Beaufort, including, as alleged by him, all escheats.

In March, 1851, Ann Parry, widow, died seised of a messuage situate within the manor and without an heir, and thereupon a commission was issued, under which it was found that Ann Parry was in her lifetime seised of the messuage called the Red Lion, and two pieces of land situate in the county of Monmouth, subject to a mortgage; that she died in March, 1851, without having devised the same, and without leaving any heir of her body or any right heir her surviving; that the messuage was of the annual value of 201.; that it was in the occupation of Ann Parry's husband, and was holden of Her Majesty in free and common socage, but not subject to rent or service, except fealty, and by reason of the premises the same had devolved on Her Majesty, subject to the mortgage, as an escheat by virtue of her prerogative royal.

The petitioner alleged that he was altogether ignorant of the inquisition having been held, and he claimed to be entitled, as lord of the manor of Monmouth, and independently of any grant of the escheats

NEW SERIES, 35.-CHANC.

that might arise therein, to the above mes

suage.

Mr. Malins and Mr. Cracknall, for the petitioner, asked for leave to traverse the inquisition, and referred to In re Kane, before Lord Justice Turner when Vice Chancellor, but not reported (1).

Mr. Wickens, for the Attorney General, submitted that the Court had not jurisdiction to quash the inquisition. It could do no more than give leave to traverse it.

STUART, V.C. said that he thought the evidence which would entitle the petitioner to traverse the inquisition would entitle him to quash it. He would, however, consider the matter, and mention it on a subsequent day.

STUART, V.C. said he had no doubt that the Court had jurisdiction to give leave to the petitioner, not merely to traverse the

(1) The order in the matter of Kane was as follows:

"In the Petty Bag.

"In Chancery, July 31, 1852. "Order to be at liberty to traverse inquisition. "Vice Chancellor Turner.

"Friday, July 30, 1852. "Whereas Mary Kane, spinster, did, on the 22nd of July, 1852, prefer her petition unto the Lord Chancellor, setting forth as therein set forth, and praying that the petitioner might be admitted by his Lordship at full liberty to traverse the inquisition and return in the petition mentioned, or to demur to the same, or either of them, as she might be thereto advised, in such manner as his Lordship should be pleased to order and direct, and that the said inquisition might be quashed and set aside. Whereupon all parties concerned were ordered to attend his Lordship in the matter of the said petition, and counsel for the petitioner and for Her Majesty's Attorney General, and for James Child and Charlotte A. Walton and her trustees this day attending accordingly, upon hearing the said petition, a commission of escheat in the matter of the said Kane and the inquisition taken thereupon, bearing date the 19th of May, 1848, an order, dated the 11th of December, 1833, the Master's report, dated the 23rd of May, 1834, an order, dated the 10th of February, 1834, letters of administration with the will annexed of the goods, chattels and credits of Charles Kane granted to Thomas Kane, an affidavit of Charles James Partington and several other affidavits, the Court doth order, that the petitioner Mary Kane be at liberty to traverse the inquisition taken on the said inquisition of escheat in the matter of the said Thomas Kane in the said petition mentioned.-A. 1851, fol. 1289, L.C."

40

inquisition, but to quash it. The proceedings on this petition were taken, not under the equitable jurisdiction of the Court, but under its ordinary legal jurisdiction, and they issued from the Petty Bag Office.

Mr. Malins said that he proposed merely to take an order to traverse the inquisition.

STUART, V.C. accordingly made an order merely that the petitioner should be at liberty to traverse the inquisition.

Order. This Court doth order that the petitioner be at liberty to traverse the inquisition and return taken on the commission of escheat in the matter of the said Ann Parry, in the said petition mentioned, or demur to the same, or either of them, or to such part or parts of the said inquisition and return as she may be advised.

Solicitors-Messrs. Watkins, Baker & Baylis, for petitioner; Messrs. Raven & Bradley, for the Crown.

M.R. LORD ROMILLY.

May 2, 24.

[In re THE LONDON, HAM

BURGH AND CONTINENTAL

EXCHANGE BANK (LIMITED). (Ward and Emmerson's case).

Company Companies' Act, 1862, s. 153. Sale of Shares after Presentation of Winding-up Petition, but before Advertisement Practice Appointment of Provisional Liquidator.

A sale of shares in a company made after the presentation of a winding-up petition, but before its advertisement in the Gazette, will be sustained where the transaction appears strictly bona fide, and the vendor had, at the time of the sale, no knowledge of the infirm state of the company.

The first appearance of the advertisement determines the position of all parties.

The Master of the Rolls will not appoint a provisional liquidator unless the application be made with the consent of the com

pany.

The Court will not sanction a transfer by a company of shares held by it in another

company known to be insolvent, into the name of a trustee, when such transfer is made for the purpose of concealment.

On the 25th of March, 1865, a petition for the winding up of the above company was presented by the directors, which was not advertised in the Gazette till the 11th of April following. On the 4th of that month, Colonel Toombs, through his broker, sold twenty shares in the company, of which he was the registered holder, to Mr. R. J. Emmerson, for 1707. Mr. Emmerson paid the money to the broker, and a proper transfer was then executed by Colonel Toombs, and forwarded to Mr. Emmerson for execution by him. The transfer had not been executed by Mr. Emmerson on the 19th of April when, as he stated in his affidavit, he first heard of the presentation of the winding-up petition, whereupon he refused to execute the deed and allow the transfer to be completed.

Other shares of the company had also been sold to Mr. Emmerson by one Mr. Ward under circumstances which were the same in all material points, the sale having been made on the 6th of April, and the consideration paid having been 907. for twenty shares. On the 22nd of April the winding-up order was made, and Colonel Toombs and Mr. Ward were placed on the list of contributories in respect of the above shares, which were still in their names. Both Colonel Toombs and Mr. Ward, as well as the broker whom they had employed, positively denied having had at the time of the sale any knowledge whatever of the fact that the petition had been presented or was intended to be presented.

The 84th, 114th and 153rd sections are as follows: "A winding-up of a company by the Court shall be deemed to commence at the time of the presentation of the petition for the winding-up."

"Any petition for winding up a company by the Court under this act shall constitute a lis pendens within the terms of the act passed in the session holden in the 2 & 3 Vict. c. 11, and intituled 'An Act for the better Protection of Purchasers against Judgments, Crown Debts, Lis pendens and Fiats in Bankruptcy,' provided the same is duly registered in manner required by such act concerning suits in equity."

"Where any company is being wound up by the Court, or subject to the supervision of the Court, all dispositions of the property, effects and things in action of the company, and every transfer of shares or alteration in the status of the members of the company made between the commencement of the winding-up and the order for winding up, shall, unless the Court otherwise order, be void."

Mr. Everitt, for Colonel Toombs, contrasted the 153rd section of the act of 1862 with the 163rd and 164th sections. In the latter cases the prohibitions were absolute transactions, and were intended to be absolutely void; in the former case a discretion was given to the Court to confirm the transactions where perfect bona fides existed. Here the most perfect bona fides was proved. The transferee was as solvent and substantial a person as the transferors, and it would be impossible to suppose a case where the discretion ought to be exercised if not in the present case. It would be monstrous if the mere fact that a secret petition had been presented, even though not advertised or in any way divulged, should make all sales and dealings after that void.

Mr. E. R. Turner, for Mr. Ward, adopted the same arguments, and cited

Shaw v. Fisher, 5 De Gex, M. & G. 596.

Cheale v. Kenward, 3 De Gex & Jo. 27;

s. c. 27 Law J. Rep. (N.s.) Chanc. 784.

Walker v. Bartlett, 18 Com. B. Rep.

845, 861; s. c. 25 Law J. Rep. (N.s.) C.P. 263. In the Court below, 17 Com. B. Rep. 446; s. c. 25 Law J. Rep. (N.S.) C.P. 156. Costello's case, 2 De Gex, F. & J. 302, 307; s. c. 30 Law J. Rep. (N.S.) Chanc. 113.

Beckett v. Bilborough, 8 Hare, 188; s. c. 19 Law J. Rep. (N.S.) Chanc.

522.

Mr. Baggallay and Mr. E. K. Karslake, for Mr. Emmerson, argued that even assuming that the transfer had been executed by him and the shares registered in his name, yet the Court ought not to overrule the

express words of the act, which declared every transfer and alteration of the status of the shareholders made after the commencement of the winding-up void; but in fact, and apart from the 153rd section, the Court would here have to decree specific performance of a contract which had been entered into by both parties under a common mistake, and where the subjectmatter had at the time of the contract no real existence. Lastly, they argued that the Court could not on a winding-up look behind the register, and that the only person it could recognize was the registered holder, be he trustee, mortgagee, or what

not

Birch's case, 2 De Gex & Jo. 10; s. c. 27 Law J. Rep. (N.S.) Bankr. 4. Whittet's 's case, 2 De Gex & Jo. 577. Hoare's case, 2 Jo. & H. 229; s. c. 31

Law J. Rep. (N.S.) Chanc. 504. Drummond's case, 2 Giff. 189. Bunn's case, 2 De Gex, F. & J. 275; and the remarks of Turner, L.J. 300.

Mr. Selwyn and Mr. Roxburgh, for the official liquidator.

Bargate v. Shortridge, 5 H.L. Cas. 297; s. c. 24 Law J. Rep. (N.S.) Chanc. 457, was also referred to.

The MASTER OF THE ROLLS remarked, that if a petition was presented on the 1st of August and answered for the next day, it need not be advertised till October.

The MASTER OF THE ROLLS (May 24), after stating the facts and that they gave rise to a very important question on the 153rd section of the act, as the sales were perfectly bona fide, and all parties were ignorant that a petition to wind up the company had been presented, and believed it to be a solvent and going concern, said,

I have hitherto determined, and further consideration of the subject confirms me in that opinion-I have hitherto held, that the first appearance of the advertisement determines, ipso facto, the position of all the parties, and that it must be treated as notice to all the world, not that it necessarily informs the persons who are dealing with the shares of the company of what has occurred, but because I am of opinion that everybody who sells such shares ought