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L. J. G. 1869

BROWN

V.

ADAMS.

Mr. Willcock, Q.C., and Mr. C. Browne, for the Plaintiff:

The injunction was granted simply to protect the fund pendente lite. There is no evidence at the present stage of the suit of the circumstances under which Hale drew the various sums which were drawn before his death. The case ought, therefore, to be considered as if the trustee had done what he ought to have donenamely, to have kept the £5000 as a separate account. So long as any part of the trust fund remains, it must be taken that all the sums drawn out by Hale were from his own money. When his own was exhausted, the trust fund would of course be applicable. And even if he had drawn out some of the trust fund and then paid in money of his own, it must be taken to have been paid for the purpose of repairing the breach of trust: Lord Chedworth v. Edwards (1); Lupton v. White (2); Taylor v. Plumer (3). Some of the observations of Lord Justice Knight Bruce in Pennell v. Deffell (4) are in our favour, especially where his Lordship says (5): “ When a trustee pays trust money into a bank to his credit, the account being a simple account with himself, not marked or distinguished in any other manner, the debt thus constituted from the bank to him is one which, as long as it remains due, belongs specifically to the trust as much and as effectually as the money so paid would have done had it specifically been placed by the trustee in a particular repository and so remained.”

SIR G. M. GIFFARD, L.J.:—

If I had the least expectation that by continuing this injunction I should enable the Plaintiff to make a better case at the hearing, I would not hesitate to give her that advantage. But I cannot doubt but that the case is now as good as it can be made. I assume in her favour, for the present argument, that this sum of £5000 ought not to have been drawn out by Hale for his own purposes. The result of the evidence is as follows:-Hale had an account of his own at Messrs. Drummond's, and this sum was paid to his general account on the 29th of October, 1868. After that the account goes on in the ordinary way of bankers' accounts; and, sup(1) 8 Ves. 46. (3) 3 M. & S. 562. (2) 15 Ves, 432. (4) 4 D. M. & G. 372.

(5) 4 D. M. & G. 383.

posing this sum of £5000 were not trust money, it is clear that it was drawn out again and again. It was argued that the case of Pennell v. Deffell (1) does not decide that in such a case trust money is to be treated like an ordinary sum, and some observations of Lord Justice Knight Bruce were referred to as tending to prove that this case was like money placed by a trustee in a chest ; but if we look at the words of the Lords Justices in that case, there can be no doubt as to the effect of the decision. There can be no question that at law, as between a banker and his customer, the debt is extinguished by the first payments made, and it would be an extraordinary thing if the debt could be in existence in equity when it is extinguished at law. Then what are the words of the Lords Justices in Pennell v. Deffell? [His Lordship then read passages from the judgments of Lord Justice Knight Bruce (2) and of Lord Justice Turner (3), and from the judgment of ViceChancellor Wood in Frith v. Cartland (4), and continued:-] If any case can be bound by authority I think this is. But, even without this authority, I should have no doubt in this case. If the injunction were left to stand I should be doing a great injustice. I am of opinion, therefore, that the motion ought to have been refused with costs, and must now be so refused; but there will be no costs of the appeal.

Solicitors for the Plaintiff: Messrs. Surr & Gribble, agents for Messrs. Whittington, Gribble, & Gouldsmith, Bristol.

Solicitor for the Defendant: Mr. W. Hitchcock.

(1) 4 D. M. & G. 372.

(2) Ibid. 383, 384.

(3) 4 D. M. & G. 391, 393.

(4) 2 H. & M. 422.

L. J. G.

1869

BROWN

v.

ADAMS.

L. J. G. 1869 July 9.

In re JOINT STOCK DISCOUNT COMPANY.

FYFE'S CASE.

Company-Contributory-Transfer of Shares-Registration-Laches of
Contributory.

F., a registered holder of shares in a limited company, transferred them to S., but the transfer was not registered, through the default of the company. An order was made to wind up the company in March, 1866, and in June F. appeared in person at Chambers on a summons to place him on the list of contributories, but no order was made on the summons. In June, 1867, S. died, and had no legal personal representative. In May, 1869, F. received notice from the official liquidator that his name was placed on the list of contributories. He then applied to have it removed :

Held (reversing the order of the Master of the Rolls), that there was no laches on the part of F., and that his name must be removed from the list of contributories:

Held, also, that the fact that the transferee had no legal personal representative, and that, consequently, there was no person who could be put on the list in F.'s place, was not material.

THIS was an appeal from an order of the Master of the Rolls in the winding-up of the Joint Stock Discount Company, Limited, placing the Appellant, Dr. Andrew Fyfe, on the list of contribu tories in respect of twenty shares.

The following admissions had been agreed on :

1. That a transfer by Dr. Fyfe to James Strawbridge of twenty shares was executed by both parties prior to the commencement of the winding-up.

2. That such transfer was lodged at the office for registration on the 15th of February, 1866, but was never registered.

3. That J. Strawbridge died on the 28th of June, 1867, intestate, and that letters of administration of his personal estate had not been granted to any one.

The Petition for winding up was presented on the 7th of March, 1866, and an order for winding up made on the 17th of March.

On the 2nd of June, 1866, Dr. Fyfe attended an appointment before the Chief Clerk to shew cause why his name should not be placed on the list of contributories. According to the statement in Dr. Fyfe's affidavit he "successfully resisted" his name being

placed on the list; but all that appeared was that his name was not then put on the list. It was not, however, removed from the register of shareholders.

No steps were taken by Dr. Fyfe to have his own name removed or Strawbridge's substituted, and in May, 1869, he received a notice from the official liquidator that his name had been settled on the list. Under these circumstances the Master of the Rolls was of opinion that Dr. Fyfe's name ought to be retained on the list, and from this decision Dr. Fyfe appealed. In the course of the argument the 8th and 10th clauses of the articles of association were referred to.

By the 8th clause it was provided that the transferor of shares "shall be deemed to remain the holder of the shares until the name of the transferee is entered in the register book in respect thereof;" and by the 10th, power was given to the company "to decline to register any transfer of shares in any case where the directors consider the transferee to be an irresponsible person, or that the transfer is made for purposes not conducive to the interests of the company."

Mr. Jackson, for the Appellant:

The omission to register the name of the transferee was the fault of the company, for which the Appellant was not responsible, and he is entitled to be in the same situation as if the transfer had been duly registered before the winding-up: Nation's Case (1); Hill's Case (2) (both which cases were under the same windingup as the present); Shepherd's Case (3).

(1) Law Rep. 3 Eq. 77.
(2) 1867. May 1st. M. R.

In re JOINT STOCK DISCOUNT COM-
PANY.

HILL'S CASE.

THIS was an application by H. Hill

to have the name of C. Branch substituted for his name on the list of contributories of the Joint Stock Discount Company, Limited, in respect of forty shares. The facts were as follows:

Hill sold the shares to Branch on the 15th of February, 1866, and the transfer, executed by both parties, was left for registration on the 24th of February, all calls on the shares having been previously paid. The practice of the company was for one of the directors on one day in every week to inspect and, if he approved, to pass all transfers left for registration during the last preceding week, and for the board at their next meeting to confirm the transfers so

(3) Law Rep. 2 Ch. 16.

L. J. G.

1869

FYFE'S CASE.

L. J. G. 1869

With respect to the delay on the part of the Appellant, he took no steps, because he considered that it was the duty of the official FYFE'S CASE, liquidator to rectify the register, after what had taken place on the 2nd of June, 1866. When a company is being wound up the parties are not affected by delay in the same way as they are in a working company, because no one is prejudiced by it: Shewell's Case (1). The reason why the official liquidator did not remove the Appellant's name was simply because, in the absence of a personal representative of Strawbridge, he had no one to place on the register in his place, but that did not justify the omission.

Mr. Locock Webb (Mr. Jessel, Q.C., with him), for the official liquidator :

In Shewell's Case the company was formed in 1835, and there was no register; that case, therefore, is not similar to this. In the present case the articles of association provided that the transferor should be considered the holder of the shares until the name of the transferee should be substituted. And the directors had power to refuse to register a transfer if the transferee was irresponsible. The transferor cannot, therefore, claim to be removed from the register, unless he shews who is to be substituted for him: Shipman's Case (2). It was the duty of Dr. Fyfe, not of the official

passed. For several weeks before the
27th of February, 1866, the director
had neglected to attend, and conse-
quently there was a great accumulation
of transfers in the office. On that day
the director attended and passed as
many transfers as he had time to in-
spect, taking them in alphabetical order,
but left a great number, including the
transfer of Hill's shares, uninspected.
The directors held a meeting on the
1st of March, and also on the 3rd of
March, on which latter day they resolved
that no transfers should be registered
without their express sanction. The
company was shortly afterwards wound
up, and Hill's transfer not having been
registered, he was placed on the list of
contributories.

Mr. Jessel, Q.C., and Mr. Locock Webb, for the official liquidator.

Mr. Southgate, Q.C., and Mr. Hig gins, for Hill.

The MASTER OF THE ROLLS held that as, but for the neglect of the director to attend in the previous weeks, the transfer might have been inspected and passed on the 27th of February, 1866, and confirmed on the 1st of March, and as no objection could have been made to the transfer, there had been unnecessary delay within the 35th section of the Companies Act, 1862, and that the transferee and not the transferor must be placed on the list of contributories. (1) Law Rep. 2 Ch. 387. (2) Ibid. 5 Eq. 219.

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