of £1,000 as a bonus among the members; and on the 28th of the same month there was a meeting of the officers and trustees of the lodge, at which it was decided that the secretary should have extra remuneration for making out the scale of payments for the proposed division of the bonus. On the 17th of February, 1881, it having come to the knowledge of the Board, who were assembled in Manchester at the time, a telegram was sent by them to the secretary of the Loyal Strangers' Refuge Lodge, stating that intimation had been received that the lodge intended to divide £1,000 among its members, and warning them that this would be illegal; but notwithstanding that notice the division was proceeded with, and £998 5s. 3d. was paid away, a resolution being passed by the members that they would indemnify the trustees against any legal proceedings that might be taken. Before such division no application had been made to the Grand Master or the Board of Directors, nor were any particulars furnished, nor was the division consented to or authorised by the directors of the Unity. The plaintiffs had also ascertained that five lodges or district branches had followed, or threatened to follow, the example of the Loyal Strangers' Refuge Lodge, and they, therefore, were desirous of obtaining the declaration of the court to put an end to further distribution of the funds, except consistently with the general rules.

Mr. Cozens Hardy, Q.C., and Mr. Chadwick Healey appeared for the plaintiff's; Mr. W. Barber, Q.C., and Mr. Stallard for the defendants.

For the defence, Mr. Barber said that the trustees had acted in good faith, and it was not a case of misappropriation of moneys to their own use, as they had divided it amongst the 98 members of the lodge.

Mr. Cozens Hardy: They have taken their share with the rest.

Mr. Justice Chitty said he was sorry to hear that other lodges intended to divide their surplus funds; it showed the influence of a pernicious example.

Mr. Barber said at the time the money was divided there was much distress amongst some of the members of the lodge. Under the circumstances he suggested that the defendants should only be called upon to replace the money to the benefit of the lodge, and not be required to pay it to the Sick and Funeral Fund of the whole Order, as asked by the statement of claim.

After stating that he did not want to hear Mr. Cozens Hardy in reply, unless he had been instructed to make any concession, to which the learned counsel replied in the negative, Mr. Justice Chitty delivered judgment. He said: This is a very plain case. At the same time I may regret personally I have to make an order of the nature I am about to make against trustees. I am willing to accede to the argument adduced on their behalf by the counsel, who has argued it most temperately and properly, and who says that what has been done has been done by these defendants in good faith. That is an argument which of course I cannot listen to, because the acts done have been done contrary to and in violation of the rules, and were done after ample warning, because these gentlemen who have proceeded to make the division were told that if they did so proceedings would be taken against them. They have acted on their own notion of what is right. All I have to do is to act upon the true construction of the rules. The

only point which I think I need mention is this: The 62nd rule provides that "In the event of a lodge at any time making a division of its funds contrary to this and the 3rd section of the 1st rule, the amount so divided shall be forfeited to the Sick and Funeral Fund of the Order.” It has been faintly argued, because counsel was really too sensible to endeavour to make much of the argument, that the word "and" must be read so that there was no right to sue unless the division was made as well contrary to the 62nd rule as to the 3rd section of the 1st rule. In my judgment that argument, if it had been put before me-although it has to some extent been put before me, and therefore I must deal with it is absolutely untenable. The proper way to read the rule is this: "In the event of a lodge at any time making a division of its funds contrary to this rule," and " In the event of a lodge at any time making a division of its funds, contrary to the 3rd section of the 1st rule." That is rendered necessary by the substance of the 62nd rule and the substance of the 3rd section of the 1st rule. The 3rd section of the 1st rule deals with a case of a society that secedes, and that is not the case now before the court. The rule in question, the 62nd, deals with appropriations, and has a distinct clause, the substance of which is that no appropriation is to be made by a particular lodge unless it has the previous sanction of the directors of what has been called the Unity; but there is no question that the directors have not given such sanction, and there is no question therefore to my mind but that these trustees are liable. The fund which they have divided according to this rule is, they say, forfeited. I do not think that the term has been used in its strict sense; to my mind it is not very material whether it is or not. The fund they have divided is to go to the Sick and Funeral Fund of the whole Order. That is a fund which exists for the benefit of the whole Order, including members of this particular lodge and all the other lodges affiliated. There is nothing else for me to do except to make the order declaring the trustees are jointly and severally liable according to the language of the rule itself, to order them to make payment and to pay the costs of the action. Mr. Cozens Hardy will probably give them some time, and I shall see they have some reasonable time, because I will not say what are the rights of the trustees against absent parties, but there can be no doubt the whole of this £1,000 has been divided between the members of this particular lodge in certain portions, and each one of the members who received his portion of the £1,000 ought to refund it to the trustees. I must leave that matter to the trustees and to those persons who received the money. As regards the plaintiffs, I only suggest that a certain reasonable time should be given. I do not know what condition of life these people are in, but it is unnecessary to bring ruin on the trustees who are now made liable by my order.

Mr. William Barber: I suggested that it would be a much easier thing for these trustees to get the money back.

Mr. Justice Chitty: I will give you time.

Mr. William Barber: It would be easier to get it from them to repay it to the funds of this particular lodge than to pay it over to the Sick and Funeral Fund of the Order.

Mr. Justice Chitty: What I mean is, you must get it back from the persons to whom you paid it. I cannot do it.

Mr. Cozens Hardy I will assent to any suggestion your lordship makes as to time; whatever time your lordship thinks is reasonable.

Mr. Justice Chitty: What is the position in life of your clients, Mr. Barber?

Mr. William Barber: We have divided this money among people who are very poor. Judging from the letters of the high officials of the Order, I should think they are rather illiterate people.

Mr. Cozens Hardy: One is an innkeeper, another a carrier, another a builder, another a carpenter, and another a farmer.

Mr. Justice Chitty: What do you say to two months?

Mr. Cozens Hardy: I assent to that at once. of paragraph 1 and paragraph 3 of the prayer.

It will be in the terms

CASE 155.

HOLMES V. TAYLOR.

Friendly Society-Illegal division of Funds-Rules— Order for repayment-Injunction.

This was a case which raised an important point as to the relations of individual lodges in the Manchester Unity of Oddfellows Friendly Society to the Order itself. The plaintiffs are John Joshua Holmes, Thomas Walton, John Tucker Cox, and John Schofield, who are trustees of the society, and Robert Thomas Eastwood, the Grand Master of the Order, together with others, who sued on behalf of themselves and all other directors of the Order. The defendants are Thomas Taylor, William Dudworth, John Haworth, George Haworth, and James Pilkington, trustees of the Loyal Prosperity Lodge of the Haslingden District, connected with the said Order. Mr. Maberly (instructed by Messrs. Cobbett, Wheeler, and Cobbett) appeared for the plaintiffs, and Mr. Jones (instructed by Messrs. Atkinson, Saunders, and Co.) for the defendants.

:

Mr. Maberly May it please your Honour. This is a motion for judgment in the non-delivery of defence by the defendants. The plaintiffs, as set out in the statement of claim delivered, are James Joshua Holmes, Thomas Walton, John Tucker Cox, and John Schofield, trustees of the Independent Order of Oddfellows, Manchester Unity, Friendly Society; Robert Thomas Eastwood, Grand Master of the said society, and the said James Joshua Holmes and Thomas Walton, directors of the said society, on behalf of themselves and all the other directors thereof; and the defendants are Thomas Taylor, William Duckworth, John Haworth, George Haworth, and James Pilkington, trustees of the Loyal Prosperity Lodge, No. 52, of the Haslingden District Independent Order of Oddfellows, Manchester Unity, Friendly Society. The action is not dissimilar from one which your Honour had before you some time ago, in which the decision which was come to in this court was taken to the Court of Appeal, and there confirmed. As

your Honour sees from the statement of claim, the parties are members of the Oddfellows' Order, and in this case the question is between the Order-which, as your Honour knows, is at the head of the hierarchy altogether-and one of the lodges which, in the view of the officers of the Order, has been committing a breach of the rules of the Order; and, in fact, which has been committing a breach of contract. Now, sir, the statement of claim sets forth that the plaintiffs are trustees and directors and Grand officers of the Independent Order of Oddfellows, Manchester Unity, as I have read to your Honour. The Order is registered under the Friendly Societies Act. The defendants are the trustees of the Loyal Prosperity Lodge, 52, of the Haslingden District of the Order, and they are the members of the committee of management thereof. So that your Honour sees we have three grades or steps: first of all we have the lodge, then the district to which the lodge belongs, and above that, and behind all, we have the Order. Then, by rule I of the rules of the lodge, it is provided as follows: "The whole of the objects and rules of this lodge shall be carried into effect under the control of and subject to the provisions made in and by the general and district rules, and the whole of the said rules of the district and general rules of the Order, and any alteration or amendment thereof hereinafter made and duly registered shall be as binding upon the members of this lodge as if the said district and general rules were inserted in the rules of this lodge." Then, your Honour, proceeding to the district rules, we have provided by rule 1, amongst other things, as follows: "The whole of the objects and rules of this district branch shall be carried into effect in conformity with, and subject to, the provisions made in and by the general rules of the Independent Order of Oddfellows, Manchester Unity, Friendly Society, and the whole of the said rules of the Order and any alterations or amendments thereof hereafter made and duly registered shall be applicable to the members of this district in the same manner as if the said rules were inserted in these rules." So that that again carries us onwards by the rules of the Order. Then by rule 62, sub-section 1, of the Order it is provided that lodges desirous of appropriating surplus capital must make application to the Grand Master and the Board of Directors in the manner which is mentioned in the rule. Then the rule provides certain forms which are necessary to be gone through; and by rule 62a, sub-section 1, of the same rules, it is provided that the directors shall allow appropriation of surplus capital on the conditions in the rule mentioned; and by sub-section 4 it is provided as follows: "In the event of a lodge at any time making a division of its funds contrary to this and section ƒ (section f, rule 1, relates to a lodge desiring to secede) of rule 1, the amount so divided shall be forfeited to the Sick and Funeral Fund of the Order, and the trustees of such lodge allowing the same to be distributed, or any member receiving any portion thereof, shall be held personally responsible for the amount so misappropriated, and the directors may take proceedings for enforcing such forfeiture, and the expenses incurred by them in enforcing against the offending lodge the provisions of this rule shall be paid out of such forfeited amount.' Then paragraph 6 of the statement of claim states, that "on or about the 24th March, 1888, without any application having been made by or on behalf of the Loyal Prosperity Lodge to the plaintiffs, and without the knowledge and consent of the plaintiffs, the defendants, in breach of the said rules of the said Order, wrongfully appropriated and divided the sum of £350 16s., part of the funds of the said lodge, among themselves and others, the members of such lodge. On becoming aware of such appropriation and division the plaintiffs, pursuant to a resolution in that behalf duly

passed, caused a notice dated the 27th of November, 1888, to be served on the defendants, demanding immediate repayment to the funds of the said lodge of the said sum of £350 16s., but the defendants have neglected and refused and still neglect and refuse to comply with such demand, and they now threaten and intend to deal in like manner with other funds of the said lodge, contrary to the said rules and without the sanction of the plaintiffs.

The Vice-Chancellor: These funds you hold to be funds generally; that is to say, sick list funds.

Mr. Maberly: Yes, under rule 62a of the Order, the officers of the Order are entitled to come upon the officers of the lodge to meet this improper and wrong appropriation out of their own pockets.

The Vice-Chancellor: I am afraid, Mr. Maberly, I am personally interested. In case of sickness, I believe, I should be entitled to a weekly payment as an Oddfellow from money of the Order; and the grant is not restricted to the particular lodge of which I am a member, but comes from the general funds.

Mr. Maberly: Yes, that is so.

The Vice-Chancellor: It comes from the Sick and Disabled Fund.

Mr. Maberly: I do not think my friend Mr. Jones would consider that on that ground your Honour is disqualified to deal with this matter.

Mr. Jones: No, not at all.

The Vice-Chancellor: That being so, I had better dispose of it.

:

Mr. Maberly Then the statement of claim proceeds in paragraph 7, to state that, "By a resolution of the Committee of Management of the Order, duly passed on the 16th of February, 1887, the amount improperly divided by the defendants as aforesaid was forfeited to the Sick and Funeral Fund of the Order." Then, in view of these facts which stood now admitted by the defendants, we ask for "a declaration that the appropriation by the defendants as trustees of the said lodge of the said sum of £350 16s., part of the funds of such lodge, and the division thereof among the members of the said lodge without the sanction of the plaintiffs, as in that behalf provided by the said rules of the said Order, was and is a breach of trust by the defendants, and that the defendants are personally liable to make good the sum so divided for the benefit of the Sick and Funeral Fund of the said Order." Then we ask for an order upon the defendants "for payment of the sums so appropriated, as aforesaid, in breach of trust."

Mr. Jones: You do not ask for an injunction, I presume?

Mr. Maberly: Yes, we do. Then we ask for an injunction-an injunction restraining the defendants from further appropriating and dividing or permitting to be appropriated and divided, the funds of the said lodge, or any part thereof, without complying with the rules of the said Order in that behalf made." And fourthly, "to have the costs of this action paid by the defendants personally." Now, in this case, your Honour, I am afraid I must press for the full relief which is asked for,