Ex parte Preece; in re The Rugby, Warwick, and Worcester Railway Company.

Russell and Field, in support of the motion, contended that the order ought to be discharged, as it had been made, not in respect of debts, for none had been established or allowed, but for the purpose of providing for costs, which costs had not been ascertained, and in respect of which no bill had been delivered or taxed. No person had been found liable to costs; and the 83d section of the Winding-up Act of 1848 provided, that the master should make calls on contributories, or classes of contributories, "so far only as such contributories respectively should be liable at law or in equity to pay the same." No scripholder could be liable, either at law or in equity, in respect of an inchoate company. These scripholders had surrendered their rights in the company upon receiving the 15s. per share, and they were not, therefore, parties on whom a call should be made. If, however, they were to be considered in any degree liable, the call was bad, as it was not made upon all the members or contributories, but only on those included in certain classes. The 103d and 104th sections of that act, and the 12th section of the Winding-up Act of 1849, did not authorize the course adopted, but merely enacted "that the costs of all proceedings which shall take place in and about the winding up, as to which the court shall have made no order, shall be in the discretion of the master, and it shall be lawful for the master to award a single sum or fee for any costs awarded by him, or otherwise to settle the principle and the scale of fees, upon or according to which such costs shall be ascertained and settled."

Swanston and W. T. S. Daniel, for the official manager, were not called on.

Knight Bruce, V. C. It is quite clear the master had jurisdiction to make this order, therefore it is only a question of discretion. Before I come to interfere with the discretion of the master, I must have a prima facie case made, showing that that discretion has been erroneously exercised. I mean erroneously in my judgment. I must think it erroneous, although it may really be very right. Now, no impression has been made upon my mind that the discretion of the master has been erroneously exercised. I am of opinion that it is not the intention of these acts of Parliament, or either of them, that the master should delay making a call for costs until there has been a taxation, or until the court has adjudicated upon the case. I am of opinion that it was within the jurisdiction of the master, viewing all the circumstances before him, and upon an estimate of all the facts within his knowledge, to make a call for costs. That call might be either improperly made at the time, or it might be made upon persons not liable. No ground whatever has been established for inducing me to hold that the call is too great in amount. Then, has it been made on improper grounds? It has been suggested that it was made upon improper persons, as to the two gentlemen who made this motion, for, having been only purchasers of scrip, they are not liable for debts in the same sense as members of the company original members were or would have been. I am not aware, however, of any such difference. They are placed generally by the

Hunter's Case.

master on the list as contributories. When I add to these considerations the knowledge of the fact, that these two gentlemen have already received 15s. a share from the directors, in respect or by reason of 21. 2s. per share paid by those who originally held the shares so now held by them, all difficulty vanishes from my mind entirely. This is an application which ought never to have been made, and I refuse it, with costs.1

HUNTER'S CASE.2

June 5, 1851.

CallCosts.

Where no debts have been established against a contributory, though costs have been incurred in winding up, a call cannot be made on the contributory.

In this case an order for winding up the affairs of the Direct Birmingham, Oxford, Reading, and Brighton Railway Company had been made, and the list of contributories had been settled, William Hunter being one of them. The official manager made an affidavit that there was due from him to his solicitor the sum of 1180, costs incurred in winding up this company, and that there was due to him for his own costs, properly incurred, the sum of 700l., making together 1880.; that a call of 12s. 6d. per share would not realize more than 8007.; and that that amount at the least ought to be raised towards the payment of the costs of winding up. On this statement the master made a call of 12s. 6d. per share on Hunter in respect of 100 shares. It did not appear that any debts or liabilities had been established against the concern. Hunter now moved that the order for a call on him might be discharged.

Rolt and Shapter, in support of the motion. It has not yet been shown that Mr. Hunter is liable for any debts whatever. As to the costs, they must be, at all events, taxed pursuant to the 105th section of the act, or awarded pursuant to the 12th section of the amended The 83d section only directs calls to be made on those who are liable to the debts. Upfill's Case, since reported, 15 Jur. 481; s. c. ante, p. 128.

act.

Roxburgh opposed the motion, and cited the case of The Rugby, Warwick, and Worcester Railway Company, now reported, 15 Jur. 528; s. c. ante, p. 161, in which no debts had been proved, and a call for costs made; and Knight Bruce, V. C., there decided, that the master was right, and that it was not the intention of the acts that he should delay his

1 But see Upfill's Case, 15 Jur. 481; s. c. ante, p. 128, and Hunter's Case, in the Direct Birmingham Railway Company, 15 Jur. 532; s. c. post.

2 15 Jur. 532.

Askew v. Millington & others.

discretion. The case of costs differed from debts, for the number of shares made no difference, it being a liability which was equal to all.

LORD CRANWORTH, V. C., said, that he was sorry for the official manager, that he could not help him. It appeared to his lordship a corollary from the other position, that before the master, in the exercise of his discretion, could make a call, he must ascertain the sum for which the call was made, and the costs which the parties were liable for; it did not follow that 8007. was the sum to which they were liable to contribute. It was doubtful whether any call for costs could be made until the debts for which each party was liable had been ascertained. The call was to be made so far as the contributor was liable at law or in equity. At law, strictly speaking, the costs would not be payable, but that was rather the result of the act. The master surely had no proper data whereon to exercise his discretion until he had ascertained the proportion. In these assemblages, erroneously called companies, the official manager undertook a most onerous duty. It was a problem, unsolvable by his lordship, why a man was liable for more in respect to one hundred shares than in respect to fifty. The master's order must be discharged; the official manager to have his costs out of the estate.

ASKEW V. MILLINGTON & others.1

May 12, and 27, 1851.

Agreement to compromise a Suit- Cannot be enforced by interlocu tory Application to stay Proceedings in the Suit.

The plaintiffs filed their bill against A and the executors of B, to charge A and the estate of B with the loss occasioned by a breach of trust on the part of A and B. After replication filed, the plaintiffs and A entered into an agreement to compromise the suit. On drawing up the agreement, the plaintiff's refused to complete, unless the representatives of B were joined as parties. A, on the other hand, insisted that it was no part of the understanding that they were to be parties, inasmuch as the estate of B had become the subject of a decree of the court in an administration suit. The plaintiffs then set down the cause for hearing; whereupon A presented a petition praying that the cause might not be heard, and that, in pursuance of the agreement for compromise, the bill might be dismissed. The court dismissed the petition, with costs, holding, first, that it was wrong in point of form, the proper proceeding to enforce the agreement being by independent bill for specific performance, and not by interlocutory proceeding in the suit; and, secondly, that the agreement appeared to be one which the court could not enforce even on bill filed.

THIS was a petition presented by one of the defendants in the suit, praying that the cause, which it was stated had been set down for hearing in contravention of an alleged arrangement and compromise, might not be heard; and that, in pursuance of such alleged agree

1 15 Jur. 532.

Askew v. Millington & others.

ment and compromise, the bill might be dismissed without costs as against the petitioner, and with costs as against the other defendants, the petitioner being willing and thereby undertaking to perform the said agreement for compromise on his part in all respects. The bill was filed in December, 1848, against the petitioner and the executors of one James Chambers, deceased, alleging that Chambers and the petitioner were the trustees under certain indentures of covenant, whereby certain sums, amounting in all to 6000l., were covenanted to be paid by one Benjamin Tidswell to the trustees, upon trusts, to the benefit of which the plaintiffs had become entitled; that by the neglect of the trustees in making a proper investment of the trust fund, a loss had been occasioned to the plaintiffs; and praying that such loss might be made good to the plaintiffs by the petitioner and the estate of Chambers. After the defendants had appeared and answered, and replication had been filed, a treaty was commenced between the plaintiffs and the petitioner for a compromise of the suit. To this treaty the other defendants were not parties, those defendants having instituted a suit, Gratrix v. W. Chambers, for administration of their testator's estate, in which a decree for the usual accounts had been made. The treaty above mentioned broke off early in July, 1850, but was almost immediately renewed, and on the 19th of July, it was arranged that Mr. Charlewood, of the firm of Cunliffe, Charlewood, & Co., as the solicitor and agent of the petitioner, should submit to the plaintiffs fresh proposals for terminating the suit. Accordingly, on the 23d of July, Charlewood, as the solicitor and duly authorized agent of the petitioner, left with Mr. Faulkner, the solicitor and agent of the plaintiffs, proposals for compromise of the suit, which were in the following terms: "Proposals by Mr. William Milnes Millington for settlement of the suit Askew v. Millington & others. That the bill be dismissed with costs; that Mr. Millington shall pay all the costs of the defendants; that the plaintiffs shall pay their own costs; that Mr. Millington shall pay to the plaintiffs the sum of 500l.; that Mr. Millington shall, at the plaintiffs' expense, take in a charge against the estate of Mr. James Chambers, in the suit Gratrix v. Chambers, in respect of the trust moneys and interest owing to the plaintiffs, and shall use his best exertions to substantiate the greatest claim that can legally be admitted; that from the first moneys to be received by the said William Milnes Millington from the estate of James Chambers, in respect of such proof, the said William Milnes Millington shall retain the sum of 500l. in repayment of the above sum of 500l., and also interest thereon after the rate of 41. per cent., and also the sum of 1007. in part payment of the costs of the defendants in the suit Millington v. Askew; that the said William Milnes Millington shall undertake that the plaintiffs shall receive the whole amount of the sum for which he may be allowed to prove as aforesaid against James Chambers's estate, (after deducting the said sum of 500%. and interest, and 100l. so to be retained as aforesaid,) from James Chambers's estate at the distribution thereof, and shall pay to the plaintiffs the deficiency; that no proceedings shall be taken against

Askew v. Millington & others.

the said William Milnes Millington until the deficiency shall be ascertained; that the balance of trust moneys in Messrs. Loyd, Entwisle, & Co.'s bank, and moneys to be received from Tidswell's estate, shall belong to the plaintiffs, after deducting therefrom Messrs. Cunliffe & Co.'s accounts against them and their trustees, amounting to £. These proposals submitted without prejudice in any way to Mr. William Milnes Millington, if not accepted." On the 2d of August, 1850, Faulkner, as solicitor and agent of the plaintiffs, wrote and sent to the said Messrs. Cunliffe, Charlewood, & Co., as the solicitors of the petitioner, a letter of that date, in the words and figures following:

"104 King Street, Manchester, Aug. 2, 1850. "Dear Sirs, Askew v. Millington & others,- My clients will agree to your proposals for a settlement, with the exception of a deduction of 100l. on account of the defendants' costs. With a view, however, of meeting you, and ending litigation, I have prevailed upon them to consent to 501. being deducted, in addition to the 500l. and interest, out of the moneys to be received by Mr. Millington from Chambers's estate, but beyond this they will not go. As they are already making great concessions, I hope your clients will at once consent that the necessary agreements may be drawn up. This letter is without

prejudice.

"Yours truly,

"E. C. FAULKNER."

On the 13th of August, 1850, the Messrs. Cunliffe, Charlewood, & Co., as the solicitors of the petitioner, in reply to such last-mentioned letter, wrote and sent to Faulkner a letter of that date, in the words following:

"Princes Street, 13th of August, 1850.

"Dear Sir,- Millington & others v. Askew,- We are glad to say that Mr. Millington consents to the modification of the terms of the proposals as expressed in your letter of the 2d instant. This suit may now, therefore, be considered as at an end. We will prepare and send you a draft agreement. The sum to be retained out of the balance in bank and any moneys from Tidswell's estate will be 217. 8s. 4d.

"Yours, &c."

On the parties proceeding to draw up a draft agreement, embodying the terms of the proposed compromise, a difference arose as to whether the executors of Chambers should be parties to the agreement or not. It was insisted, on behalf of the plaintiffs, that the executors should be parties, and on behalf of the petitioner, that this was not intended, and that it could not be expected, having regard to the position of those executors with reference to their testator's estate, which had fallen entirely under the control of the court. The result was, that the parties being unable to come to terms, Faulkner, on the 26th of October, 1850, wrote and sent to Messrs. Cunliffe & Co. a letter, in the following

terms: