Watts v. Salter. v. Todd, 1 Exch. 268, the plaintiff signed an application for shares in a railway provisionally registered: the application contained the usual undertaking to sign the subscribers' agreement and parliamentary contract, when required: the plaintiff had no letter of allotment, but, having paid the deposit, received scrip certificates in the usual form, stating that "the subscribers' agreement and parliamentary contract had been signed by the person to whom the certificate was issued:" the plaintiff, in fact, never signed either the subscribers' agreement or parliamentary contract: the scheme having proved abortive, the plaintiff brought an action for money had and received, to recover back the deposit; and it was held that he had placed himself in the same situation as if he had signed the subscribers' agreement and parliamentary contract, and could not recover. Vane v. Cobbold, 1 Exch. 799, is almost identical with the present case. There, in an action by an allottee of a railway company, for the recovery of his deposit, it appeared that the company issued a prospectus which stated the capital to consist of 60,000 shares of 251. each, and the plaintiff, after having paid his deposit, executed the subscribers' agreement, which contained the usual terms as to the disposition of the deposits at the time when the plaintiff executed the deed, the deposits upon 18,160 shares only had been paid, although 35,000 shares had been allotted, which fact was not communicated to him and it was held, that the withholding of the above fact did not amount to such a fraud as to avoid the deed, and that the plaintiff was not entitled to recover back his deposit. None of these cases had been decided at the time this cause was tried, 'except Wontner v. Shairp. In Jones v. Harrison, 2 Exch. 52, in an action by an allottee of a railway company for the recovery of his deposit, the project having been abandoned, it appeared that the shares had been allotted to him upon the terms of the following letter of allotment,— "The directors assume the right to carry out their intentions by the adoption of all such measures as they may deem requisite for obtaining the necessary parliamentary powers to form a company for the construction of the entire railway, or any part of it, with such branches, extensions, or alterations as they may find expedient, and to apply the amount paid for deposits, in discharge of any liabilities incurred by them under the general powers vested in them for the prosecution of the undertaking. A subscribers' agreement and parliamentary contract, in such form and with such powers as the committee may think necessary, will be prepared, and lie at the company's offices for signature" and it was held, that, upon the true construction of this letter of allotment, the directors had authority to lay out the deposits in such necessary expenses as had been incurred by them in the prosecution of the scheme, and, all the deposits having been so expended, that the plaintiff was not entitled to recover. Jarrett v. Kennedy, 6 Com. B. 319, is also an authority to show that the proper question has not been presented to the jury in this case. - Kinglake, Sergt., (with whom was Greenwood), for the defendant in error. The plaintiff below was entitled to recover, there having Watts v. Salter. been a total failure of the consideration upon which he paid the deposit. The question is, what was the real contract between the plaintiff and the provisional directors of the proposed company. The plaintiff, on the 24th of September, 1845, in a letter in the form directed by a prospectus published in that month, applied for an allotment of fifty shares in a scheme such as that described in the prospectus, that is, with a capital of 600,000l. in 30,000 shares of 201. each. On the 8th of October, the managing committee determined to increase the capital to 700,000l., and the number of shares to 35,000. On the 9th, the plaintiff received an intimation that twenty shares had been allotted to him, no reference being made in the letter to him of the altered amount of capital. The plaintiff was thus led to believe that he was to have twenty shares allotted to him in such a scheme as before advertised. On the 9th of October, therefore, there was a condition to pay on the 16th, in default of which, the allotment was to be void, and the shares otherwise disposed of. It has been decided that an application for shares, if not responded to in the terms of the application, does not constitute a binding contract between the parties. Wontner v. Shairp, 4 Com. B. 404; Vollans v. Fletcher, 1 Exch. 20. On the 10th of October, there came a further prospectus, which stated that the allotment of shares was completed, and that the letters had that day been posted. On the 20th, for the first time, an act was done by the plaintiff from which a contract could be inferred, he paid the deposit upon the shares allotted to him; and this could only give rise to a contract according to the terms of the letter of allotment: Willey v. Parratt, 3 Exch. 211; Chaplin v. Clark, 4 Exch. 403. [PARKE, B. The question is, whether the plaintiff can recover back the deposit, after having executed the deed, his execution not having been obtained by fraud, by which he has agreed that the provisional directors may do what they like with the money.] The deposit was paid upon the faith of the assertion by the directors that the plaintiff was to have shares in a concern in which there were 35,000 shares actually allotted, and that each of the allottees should pay 21. 2s. towards the exigencies of the undertaking. The scheme so constituted never in fact had any existence. The total number of shares taken up by the allotees, and upon which the required deposit had been paid, was about 19,000 only. [PARKE, B. The deed authorizes the appropriation of the money to the purposes of the railway. The plaintiff' was bound by that deed, unless he can impeach it on the ground of fraud.] The deed which the plaintiff executed, was only applicable to the undertaking which he contemplated subscribing to. The deed must be construed with reference to the contract which had been entered into. The plaintiff, by signing the deed, gave the directors no authority to apply the money to any other scheme than one which was to go to parliament with a subscribed capital of 700,000. [COLERIDGE, J. The undertaking is fully described in the deed itself. Why construe it with reference to the previous parol contract? PARKE, B. There is no provision that the capital shall amount to Watts v. Salter. a given sum before the provisional directors can apply the money subscribed.] There is an express finding here, that the deposits were not paid upon all the shares subscribed. · [PARKE, B. That signifies nothing. COLERIDGE, J. Do you contend, that, so long as the deposit upon a single share remains unpaid, the directors have no power to deal with the fund?] It is so contended. Wontner v. Shairp, 4 Com. B. 404, is the only case that is materially applicable. There, the plaintiff undertook, in his application for shares, to accept a certain number, or such less number as the provisional committee might appropriate to him, subject to the regulations of the company, to sign the necessary legal documents, and to pay, when required, the deposit thereon. Upon the trial of an action brought to recover back the deposit paid, on the ground of fraud and failure of consideration, Erle, J., told the jury that the plaintiff was entitled to a verdict, if the defendant knowingly made a false representation, which was a material inducement to the plaintiff to pay the deposit: and this direction was upheld by the court. Wilde, C. J., in delivering the judgment of the court of Common Pleas in that case, said, p. 441, "The plaintiff, having asked for shares in a practicable scheme, received shares in a scheme that was impracticable, and which was rendered so by the act of the company, in refusing to allot more than 58,000 shares, although more than the whole 120,000, had been applied for by responsible parties. That which was allotted not being in truth that which the plaintiff had asked for, he was not bound to take it." In the last case upon the subject, Ashpitel v. Sercombe, 5 Exch. 147, s. c. 19 Law J. Rep. (N. s.) Exch. 82,-it was held that an allottee of shares in an undertaking for the formation of a railway, which afterwards proves abortive, and is abandoned, without fraud or misconduct, may maintain an action for money had and received against a member of the committee of management, to recover back the amount of his deposit paid to the credit of such committee, unless it can be shown that he has consented to or acquiesced in the previous application of the money by the committee to the purpose of the undertaking; and it is for the defendant to prove such consent or acquies cence. Crowder, in reply, was stopped by the court. PARKE, B. I am of opinion, and all my learned brothers agree with me, that the judgment in this case must be reversed, and a venire de novo awarded. Whether the jury would have been warranted in finding fraud, if all the facts had been submitted to them, it is unnecessary to say. Wontner v. Shairy proceeded entirely on the ground of fraud, Erle, J., having told the jury that the plaintiff was entitled to a verdict, if the defendant knowingly made a false representation which was a material inducement to the plaintiff to pay the deposit and the court thought that direction correct. Here, the question of fraud was not submitted to the jury at all: but it was Watts v. Salter. contended, that, upon the state of facts existing before the execution of the subscription contract, the money was paid upon a consideration which had failed. It is unnecessary to say how the case would have stood if no deed had been executed; for, it is clear that the plaintiff by executing the deed, authorized the committee to dispose of the money in the manner thereby contemplated; and, if the powers given to the committee by the deed were bona fide executed, the plaintiff could not complain of their exercise of them. The lord chief justice thought that this deed did not apply to the scheme upon which the plaintiff paid his money. But we are all of opinion that the deed must be looked at by itself. Its terms are express. It states that the plaintiff, amongst others, agreed to subscribe certain sums for the purpose of making and maintaining the railway in question, with power for the provisional directors to alter and vary the termini, &c., and to make application to parliament for such purposes as they should think fit. Then there is a provision that a capital not exceeding 700,000l. shall be raised (not that it shall amount to that sum),that the deposits shall be paid in a given manner, and that the money so raised shall be subject to the disposal and control of the directors. And the eleventh clause of the deed provides that the provisional directors shall have power to take such measures as they may deem expedient, to carry the undertaking into effect, and gives them most extensive powers as to the applying to parliament, and generally for the disposal of the funds of the company to the furtherance of the undertaking. The plaintiff, having executed that deed, has agreed, under his hand and seal, that the provisional directors shall do all that is therein contained; and by that deed he is bound, unless he was induced by fraud or misrepresentation to execute it. The question of fraud was not left to the jury. It has been contended, that the directors had no power under the deed to deal with any part of the money until the whole amount had been subscribed. I do not, however, agree in that construction. If such had been the plaintiff's intention, he should have taken care not to execute a deed which did not express it. No such express stipulation is to be found on the face of the deed; and none can be implied. For these reasons, we are unanimously of opinion that the lord chief justice was wrong in the direction which he gave to the jury, and, consequently, that there must be a Venire de novo. Rashleigh v. The South Eastern Railway Company. CAUDWELL V. COLTON, Clerk.1 January 18, 1851. Sequestration-Issued without Motion. In this court, a writ of sequestration issues without motion. C. JONES, Sergt., moved for a writ of sequestration to be awarded to the Bishop of Chichester, to sequestrate the ecclesiastical profits of the defendant's living in Essex. He referred to Rex v. Hind, Clerk, 1 Dowl. P. C. 286, 1 C. & J. 389, 1 Tyrwh. 347; and Rex v. Armstrong, Clerk, 3 Dowl. P. C. 760, 2 C. M. & R. 205, 5 Tyrwh. 752. And see Rex v. Powell, 1 M. & W. 321. JERVIS, C. J. (after conferring with Tootell.) The officer informs us that the practice here is, for the party to issue the sequestration, without the authority of the court. This being so, we will not create a new practice for the mere purpose of creating additional costs. Jones took nothing.2 GEORGE RASHLEIGH and WILLIAM TWOPENNY V. THE SOUTH EASTERN RAILWAY COMPANY.3 1851. Covenant, Construction of. A declaration in covenant recited a deed of the 2d of March 1841, whereby two pieces of land were conveyed to the defendants, subject to the performance by them of certain agreements; in this deed, the piece of land in question was described as "a slip of land then being intended to be formed into a new course for the river Beult. The declaration then made profert of the deed of covenant upon which the action was brought, and stated that the defendants thereby covenanted with the plaintiffs, that they, the defendants, should and would, within a reasonable time, "at their own costs and expense, make and cut the said intended new course for the said river Beult, and also, within such like reasonable time as aforesaid, divert the stream of the said river into the said intended new course for the same." It then went on to state a covenant to make a bridge over the intended new cut, for the plaintiff's use, within a given time, and a covenant to make good the banks of the new cut, and, after the same should have been so made good, and the railway completed, to reconvey to A., one of the plaintiffs, the slip of land which should form the new course of the river, and also to fill up and level the then existing course, so far as the same should have been diverted. The declaration then charged breaches of covenant, in not making a new cut, in not diverting the stream of the Beult, in not constructing a bridge over the new cut, in not perfecting its banks, in not reconveying to A. the slip of land "with the water of the said river duly diverted into the said new course," and in not 1 10 Common Bench Rep. 575. 2 The motion was after a special capias utlagatum; in which case, the proceeding should be in the Exchequer. See Lush's Practice, 682. 3 10 Common Bench Rep. 612. |