meaning to give to the children of one of the other of them; but on the other hand, the other construction seems to me equally to require the introduction of the word "to;" and, on the whole, seeing that this brother and sister of the testatrix are placed in exactly the same position in other parts of the will, I see no reason for preferring the parent in one case and not in the other, and I must, therefore, hold that the children of Richard and Mary take this residue equally.

[571] ATTORNEY-GENERAL v. MURDOCH. May 7, 1856.

Costs. Trustees. Religious Congregations.

Trustees of a congregation, which, by the terms of its trust, was to be in connexion with the Established Church of Scotland, adopted the opinions of the Free Church of Scotland, and refused to retire from the trust. They were ordered to pay the costs of the appointment of new trustees.

The information and bill were filed to have the Defendant, Murdoch, removed from being minister of the Low Meeting-house at Berwick-upon-Tweed, and to have the Defendants, Wilson, Smith and Thompson, three trustees of the meeting-house, declared guilty of a breach of trust, and removed, and to have new trustees appointed, the above-named Defendants having adopted the opinion of the Free Church of Scotland, whereas, by the trusts of the meeting-house, the congregation was to be in as strict connexion as practicable with the Established Church of Scotland.

The facts and proceedings on the hearing of the cause are reported in Mr. Hare's Reports (vol. vii. p. 445).

By the decree, which was affirmed with costs, on appeal, by the Lords Justices, it was declared that the meeting-house was subject to trusts for the appropriation thereof as a place of worship on the model of the Established Church of Scotland. It was ordered that the Defendant, Murdoch, should be restrained from officiating as minister, and that the Defendants, Wilson, Smith and Thompson, should be removed from the trusteeship. It was referred to the Master to appoint new trustees in their place and in the place of two deceased trustees; and it was ordered that the congregation of the chapel should elect a new minister and new trustees. It was also referred to the Master to inquire as to two debts incurred for repairs of the chapel and secured by two promissory notes of the trustees.

In pursuance of the decree the congregation elected a [572] minister and new trustees, who were approved by the Master.

The Defendant, Thompson, was out of the jurisdiction.

The cause now came on for further directions.

Mr. Little and Mr. T. Deere Salmon, for the relators and Plaintiffs, asked that the Defendants, Murdoch, Wilson and Smith, might be ordered to pay such of the costs subsequent to the decree as had been caused by the appointment of the new trustees, as being costs occasioned by them, their breach of trust having caused the suit and the necessity for their removal. They referred to the order as to costs in The Attorney-General v. Munro (not reported on this point), as being in totidem verbis with that which they sought.

Their only

Mr. Rolt, Q.C., for the Defendants, Murdoch, Smith and Wilson. The Defendants are entitled to have their costs out of the estate. fault (if fault it be) is that they have changed their religious views, and thereby became, in the opinion of the Court, disqualified for this particular trust.

The rule is that even where there has been a direct breach of trust on the part of a trustee, he gets the costs of all proceedings subsequent to his retirement, although

all such proceedings were caused solely by his misconduct.

In The Attorney-General v. Munro the trustees had allowed a colourable ejectment, whereby the legal estate became vested in parties who were never intended to have it; and the case is distinguishable on that ground.

[573] Mr. Lewin, for Defendants in the same interest with the Plaintiffs. A reply was not heard.

VICE-CHANCELLOR Sir W. PAGE WOOD. If a trustee voluntarily retires from a trust like the present on account of difference of opinion, he pays no costs, whether he will receive costs is a question for the discretion of the Court, and may depend upon the circumstances of his retirement.

view.

But here all the proceedings in the suit have been occasioned by the trustees' refusal to retire from their trust. They took what the Court considered an improper and perverse view as to the duties imposed upon them, and the suit for their removal and all proceedings consequent thereon have been occasioned by their taking that All the costs now in question have been caused by this improper conduct on the part of the trustees in refusing to retire from the trust. Whatever differences there may be between this case and that of The Attorney-General v. Munro (2 De G. & S. 122) were disposed of by the decree. The hostile Defendants, therefore, must pay the costs of the appointment of the new trustees, except any costs occasioned by the Defendant, Thompson, being out of the jurisdiction.

The hostile Defendants were entitled, however, to appear before the Master, to shew that the debts secured by the promissory notes were properly incurred, and were not a breach of trust, and that they ought to be a charge upon the trust property. The relators and Plaintiffs must therefore pay [574] those Defendants their costs of the inquiry as to the promissory notes and debts on the trust property. The above costs must be set off against each other. No other order will be made as to the costs of the hostile Defendants.

The costs of Mr. Lewin's clients will be paid by the Plaintiffs.

Ordered accordingly. The Plaintiffs to be at liberty to raise, by a mortgage of the trust property, the costs paid by the Plaintiffs to the Defendants, and the Plaintiffs' extra costs, charges and expenses of suit not paid by the hostile Defendants, and the debts owing on the promissory notes.

An order was also made for the appointment of new trustees, and vesting in them the trust property, including the interest of the Defendant, Thompson, who was out of the jurisdiction.

[574]

ARNOLD V. THE MAYOR, ALDERMEN AND BURGESSES OF THE BOROUGH OF
GRAVESEND. April 17, 18, 22, 1856.

[S. C. 25 L. J. Ch. 530; 2 Jur. (N. S.) 703; 4 W. R. 478. See Attorney-General v. Mayor, &c., of Newcastle-upon-Tyne, 1889, 23 Q. B. D. 498; In re Thompson, 1890, 45 Ch. D. 176.]

Bond

Municipal Corporations. Judgment. Charge. 5 & 6 Will. 4, c. 76, ss. 92, 94. Debt previous to. 6 & 7 Will. 4, c. 104. 7 Will. 4 and 1 Vict. c. 78. 1 & 2 Vict. c. 110, ss. 13, 121.

Judgment upon a bond given by a municipal corporation before the passing of the Municipal Corporation Act (5 & 6 Will. 4. c. 76) held, under 1 & 2 Vict. c. 110, s. 13, to operate as a charge upon all lands and hereditaments of the corporation, whether acquired before or after the passing of the Municipal Corporation Act, the Court being of opinion that, even if the latter statute standing alone would have prevented the judgment creditor from charging after-acquired lands, which, semble, it would not, that objection was removed by the 6 & 7 Will. 4, c. 104, s. 1; and that the power by that section given to municipal corporations of charging their lands and hereditaments for securing repayment and satisfaction of any debt. contracted by them before the passing of the Municipal Corporation Act, is a power which they might exercise "for their own benefit," within the meaning of 1 & 2 Vict. c. 110, s. 13, the words "for his own benefit" meaning no more than "for his own use,' 99.66 not as a trustee."

Observations on Arnold v. Ridge (13 C. B. 745).

Before the passing of the Municipal Corporation Act, 5 & 6 Will. 4, c. 76, the Defendants borrowed from the Plaintiff, at interest, ten sums of £100 each, for the

purposes of [575] an Act for rebuilding and maintaining the Town Quay of Gravesend, and executed and delivered to the Plaintiff ten mortgages or assignments of certain shares of the rates, tolls, or duties by the said Act authorised to be levied.

As a collateral security for the £1000 and interest, the Defendants, in pursuance of an agreement made upon the treaty for the loan, delivered to the Plaintiff a bond, dated the 16th of October 1828, whereby they bound themselves and their successors to the Plaintiff, his executors, administrators and assigns in the penal sum of £2000, conditioned to be void if the Defendants should pay to the Plaintiff, his executors, administrators or assigns, by half-yearly payments, interest at £5 per cent. upon the sums secured by the said mortgages or assignments, or upon so much thereof as might from time to time remain unpaid.

Interest was duly paid to the Plaintiff up to the 16th of April 1850, inclusive, but not subsequently. In January 1852 the Plaintiff brought an action to recover the penal sum secured by the bond; and on the 19th of March 1852 he recovered judgment in the action for £2000, the penalty of the bond, and £15, 10s. 6d. damages. The judgment was registered by the Plaintiff on the 20th of March 1852 pursuant to the statute.

The bill was for a declaration that the Plaintiff's judgment was a charge upon certain leasehold hereditaments demised to the Defendants since the passing of the Municipal Corporation Act, subject to five judgments prior to the Plaintiff's; and for an account of what was due to the Plaintiff for principal, interest and costs upon his judgment. It also prayed that the leasehold premises might be sold, and the proceeds of the sale applied in payment of the amount so due to the Plaintiff, and that the deficiency, if any, might be raised by sale of other hereditaments of the Defendants, subject to prior charges and incumbrances.

[576] It appeared that, since the passing of the Municipal Corporation Act, two freehold estates had been acquired by the Defendants in addition to the leaseholds mentioned in the bill.

Mr. Rolt, Q.C., and Mr. Speed, for the Plaintiff.

The judgment, upon being entered up, became, under 1 & 2 Vict. c. 110, s. 13, and now is, a charge upon all the lands and hereditaments of the Defendants, whether acquired before or since the passing of the Municipal Corporation Act, 5 & 6 Will. 4, c. 76.

The Defendants will rely on the decision of the Court of Common Pleas in Arnold v. Ridge (13 C. B. 745). But the decision in that case is not conclusive as to the present, the proceedings there being under the 11th section of 1 & 2 Vict. c. 110, whereas we are proceeding under the 13th section of that Act. And with regard to the reasoning upon which that decision was founded, we submit, first, that the interpretation put by the Court of Common Pleas upon the 5 & 6 Will. 4, c. 76, is erroneous, inasmuch as that Act was not intended by the Legislature to prevent persons, who, before it was passed, were creditors of a municipal corporation, from charging lands acquired by the corporation after the passing of the Act; secondly, that such reasoning, even if sound, proceeded solely upon the 5 & 6 Will. 4, c. 76, without reference to either of the subsequent statutes, 6 & 7 Will. 4, c. 104, and 7 Will. 4 and 1 Vict. c. 78, s. 28, under which the Defendants clearly have the power of charging the lands in question with debts contracted before the passing of the Municipal Corporation

Act.

[577] Mr. Willcock, Q.C., and Mr. H. Stevens, for the Defendants.

The present case is concluded by the reasoning of the Judges, if not by their decision, in Arnold v. Ridge (13 C. B. 745), where the point in dispute was the effect of this very judgment. The Borough Fund, into which, by the 92d section of the 5 & 6 Will. 4, c. 76, all the fruits of the corporate property were required thenceforward to be collected, is not applicable for payment of a debt like the Plaintiff's. The words "subject to the payment of any lawful debt" in the 92d section must mean a debt capable of being "redeemed," as is clear from the use of the words "redeemed " and "unredeemed" in the immediate context; and with regard to the clause "saving all rights, &c., by virtue of any proceedings either at law or in equity," that clause must apply to rights existing when the Act passed, and at that time the Plaintiff had no claim against a particle of the land of the corporation. He had a

right to sue for a penalty if his interest was not paid, but so long as interest was paid he could not sue, and interest was paid down to April 1850. And if he had no right at the passing of the Act, the proviso at the close of the 92d section shews clearly that he acquired none by virtue of the Act. The Borough Fund is simply a trust fund, and the trusts upon which it is to be held are wholly foreign to a purpose like the present Attorney-General v. The Mayor of Norwich (2 My. & Cr. 406), Attorney-General v. Aspinall (2 My. & Cr. 613, 619), Attorney-General v. Wilson (Cr. & Ph. 1).

Then as to the Act 6 & 7 Will. 4, c. 104, the deeds which, by the 1st section of that Act, corporations are empowered to execute must be executed subject to the restrictions imposed by the 94th section of the former Act. The power [578] given by the 6 & 7 Will. 4, c. 104, is a power which they must exercise as trustees with due discretion, with proper regard to the number of debtors who may be in a similar position with reference to antecedent debts, and all other matters to be submitted to them for deliberation, and, further, with due regard to that public trust which, since the passing of the Municipal Corporation Act, attaches to all corporate property.

The Act 7 Will. 4 and 1 Vict. c. 78, s. 28, only empowers the corporation to pay out of the Borough Fund, and that fund cannot be touched by execution. The Act does not introduce any new word, such as bond, mortgage or charge, or anything amplifying the powers given by the preceding Acts. It has only made such powers applicable to a substituted debt instead of to the original debt of the corporation.

As to after-acquired property, the Defendants' case is, if possible, stronger; for, since the passing of the Municipal Corporation Act, the corporation has been a new body, new in all its qualities, powers and capacities: and the rights (if any) against property acquired by such a body must be restricted to rights arising out of the powers given to the body by virtue of the Act which called it into existence.

The corporation, therefore, was found by the Act 1 & 2 Vict. c. 110 in the position of simple trustees, with certain powers, it is true, but powers to be exercised by them not as owners but as trustees, for the benefit of others, not for their own benefit; and even if the Court should be of opinion, upon the construction of the Acts of Parliament, that the consent of the Lords Commissioners of the Treasury was not requisite to their exercise, still they are not such powers as the Legislature contemplated when it proposed to give to a judgment at law the effect of a charge executed by the owner of the estate.

[579] [They cited the judgment of Lord Justice Knight Bruce in Hawkins v. Gathercole (6 De G. M. & G. 1 (in the press)).]

Mr. Rolt, Q.C., in reply.

[Holdsworth v. The Mayor, &c., of Dartmouth (11 A. & E. 490) was also cited.] Judgment reserved.

April 22. VICE-CHANCELLOR Sir W. PAGE WOOD. I should have felt great difficulty in determining the matter before me, regard being had to the judgment of the Court of Common Pleas in Arnold v. Ridge (13 C. B. 745), had it not appeared to me that, even if I entirely concurred in that judgment, the case before me depends upon a very different view resulting from a statute which was passed after the Act 5 & 6 Will. 4, c. 76, usually called the Municipal Corporation Act, namely, the Act 6 & 7 Will. 4, c. 104, a statute which was not cited during the argument before the Court of Common Pleas, and which seems to me to have, at least with regard to the matter now before me, a conclusive bearing as to the remedies of parties who were creditors of old corporatious anterior to the passing of the Municipal Corporation Act.

The case upon which the present question arises is a simple case of a bond debt, by which the Corporation of Gravesend, before the passing of the Municipal Corporation Act, secured the payment of annual interest upon a sum of £1000, advanced by the Plaintiff for the benefit of the corporation. The £1000 was secured by ten several mortgages or assignments of certain shares of the rates, tolls or duties, which the corporation were empowered by Special Acts of [580] Parliament to mortgage or assign for that purpose; and it was collaterally secured by a bond in the penal sum of £2000, conditioned to be void upon payment of interest at the rate of £5 per cent. upon the respective sums secured by the mortgages or assignments, or upon so much or such part thereof as might from time to time remain unpaid. The Plaintiff being possessed of that security, the following Acts were passed, viz., the 5 & 6 Will. 4,

c. 76, commonly called "The Municipal Corporation Act," the 6 & 7 Will. 4, c. 104, intituled "An Act for the Better Administration of Borough Funds in Certain Boroughs," and the 7 Will. 4 and 1 Vict. c. 78, which also has in some respects a bearing upon debts contracted anterior to the Municipal Corporation Act. In March 1850 the Plaintiff recovered judgment, which he registered on the 20th of March 1852, in respect of an arrear of interest upon his bond, and the question is whether, by virtue of the Act 1 & 2 Vict. c. 110, the judgment operates as a charge upon property acquired by the corporation after the passing of the Municipal Corporation Act.

I will assume, in the first instance, that I am bound to follow the decision of the Court of Common Pleas in Arnold v. Ridge (13 C. B. 745), and I will consider what would be the effect of following that decision.

The Municipal Corporation Act, by its 92d section, provides, in effect, that, after a given time there mentioned, all the income arising from the property of the borough, whether real or personal, shall be paid to an officer, to be called the treasurer of the Borough Fund; that the fund arising from such payments shall be called the Borough Fund; and that such fund, "subject to the payment of any lawful debt," as described in a clause on which I will make some observations presently, and saving certain rights, -which the [581] corporation might consider, upon the authority of Arnold v. Ridge, as not comprising the claim of the bond creditor in this case upon after-acquired property--shall be applied so as in effect to make the new corporation trustees for public purposes, whereas, previously to the Municipal Corporation Act, corporations had been owners of the corporate funds and capable of disposing of them in any manner they pleased. The 92d section having thus, as it were, fastened a trust upon the whole income of the property of the corporation, the 94th section proceeds to secure the due execution of that trust, by providing that it shall not be lawful for the council of any body corporate to be elected under the Act to sell, mortgage or alienate any part of the lands, tenements or hereditaments of the body corporate, except in pursuance of some contract, covenant or agreement bona fide made or entered into on or before the 5th of June 1835. It then provides that, in every case in which the council shall deem it expedient to sell and alienate or to demise and lease their property for more than thirty-one years, it shall be lawful for them to do so, with certain consent on the part of the Lords Commissioners of the Treasury.

I cannot read the first part of the 94th section as doing less than prohibiting absolutely all dealing whatever with the land of the corporation except under some covenant, contract or agreement fixing the land, which of course a bond would not do; and in this respect the wording of the 94th section appears to have occasioned, in some degree, the subsequent Act 6 & 7 Will. 4, c. 104. The 94th section of the former Act had expressly provided that there should be no mortgage whatever of the corporation property, but it allowed selling, alienating and demising or leasing, with the consent of the Lords Commissioners of the Treasury; and it might well be doubted, having regard to the express prohibition against mortgaging, with a permission only to sell or alienate with certain consent, whether a mortgage [582] was within that permission of sale or alienation with such consent; and that was one of the objects intended to be met by the Act to which I am now about to refer.

But besides that, it appears to have occurred to the Legislature-I am now assuming for the purpose of this discussion that the intention of the Legislature, as expressed in the Municipal Corporation Act, was such as it has been declared to be by the decision of the Court of Common Pleas in Arnold v. Ridge-that persons who were creditors of corporations before the passing of that Act might be seriously injured, for at the time when such debts were contracted the creditors would consider the corporation as they would an individual, viz., as a body competent to deal with their property present or future, and would therefore expect to exercise their rights against future as well as present property. It appeared to the Legislature that it was right to make some provision in respect of such bona fide creditors, besides giving power to mortgage as well as to alienate with the consent of the Lords of the Treasury; and accordingly, in the following year, they passed the Act 6 & 7 Will. 4, c. 104, intituled "An Act for the Better Administration of the Borough Fund in Certain Boroughs." That Act commences with this preamble, "Whereas, by an Act passed in the last session of Parliament, intituled An Act to Provide for the Regulation of Municipal