150 (Specific Performance - Evidence of Authority to Agent - Costs Prac- tice Examination of Witnesses under the 15 & 16 Vict. c. 86, s. 39.) Woolmer and Others, ex parte, - (Partics Agreement between Railway Companies ultra vires.) - (Will-Construction of Bequest to Husband and Wife and a third Person.) CASES ARGUED AND DETERMINED IN THE COURTS OF CHANCERY; DURING THE YEAR 1852, THE GRAND TRUNK STAFFORD AND PETERBOROUGH RAILWAY COMPANY (Official Manager of), v. BRODIE & others.1 Pleading January 13, 15, 22, 27 and 28, 1852. -Bill by one on behalf of several Official Manager, The bill was filed in December, 1846, by W., a subscriber to an abortive Railway Company, (which never had complied with the Standing Orders,) on behalf of himself and all other seripholders and shareholders except the defendants, against the defendants, (the promomoters, directors, and secretary.) alleging, among other frauds, a fraudulent issue of spurious shares, upon which no deposit had been paid, but in respect of which a repayment of a pretended deposit was made: and praying among other things, that all such fraudulent payments might be made good by those charged with the fraud. W. was a subscriber for forty shares, had paid 21. 2s. per share deposit, and had placed his scrip shares in the hands of the secretary (a defendant to the bill) as a security for advances made by the secretary to him. In May, 1846, it was resolved to wind up; half the deposit of 2/. 28. was repaid, and thereupon the original scrip certificates were delivered up to be cancelled, and new certificates issued; and subsequently a fusher return of 2s. 2d. per share was made to the scripholders, on which occasion these new certificates were called in, and the scripholders signed a memorandum engaging to release the promoters. Afterwards, however, the bill was filed, and in the course of the suit an official manager was appointed. In July, 1849, an order was obtained for the official manager to carry on the suit in the place of W.: Held, first, that W. could not have maintained a suit if he had still continued the nominal plaintiff. Secondly, that the official manager was not in a better position to maintain the suit than W., Grand Trunk Stafford and Peterborough Railway Company v. Brodie. the original plaintiff; in adopting the suit, the official manager took it with all its infirmi ties. And, Thirdly, that the suit being improperly constituted in its inception, and the evidence not justifying the institution of the suit on the merits, the bill ought to be dismissed, with costs, to be paid by the official manager, without prejudice to the question how far he was entitled to have these costs made good to him out of the assets of the company; and bill dismissed accordingly, with costs to be paid by the official manager. THE statement of the facts in this case fully appears in the judg ment. The Solicitor-General, (Sir W. P. Wood), Stuart, Rolt, J. Baily, J. Nicholl, Selwyn, Collier, Roxburgh, W. Morris, Stevens, Rogers, Osborne, and Welford appeared for the different parties. TURNER, V. C. The bill in this case was originally filed by Mr. Warren, on behalf of himself and all other scripholders and shareholders, against the defendants, who were several of them provisional directors, and one of them had been secretary to the company, which had been projected in 1845. 21. 2s. had been paid as a deposit by each subscriber. Mr. Warren, the plaintiff, had subscribed for forty shares, and had paid his deposit upon them. The company, which had been provisionally registered, failed to obtain an act of parliament, in consequence of being too late in complying with the standing orders of the house. Under these circumstances, a meeting of the company was called in the month of May, 1846, and it was resolved not to prosecute the scheme. It was at the same time also resolved that the sum of 17. 1s. per share should be repaid to each subscriber as the first dividend or instalment, and afterwards a further dividend of 2s. 6d. per share. These were paid through the defendant Harman, the secretary, by checks on the company's bankers, signed by some of the provisional directors. The bill alleged that a dividend of 11. 1s. had been paid upon each of the 1,490 shares which had been fraudulently issued, and on which the deposit of 21. 2s. had never been paid. The bill prayed that the defendant Harman might be decreed to repay, with interest at 5l. per cent., the sum of 1,5647. 10s. alleged to have been received by him out of the funds of the company by means of twenty-four bankers' checks, given in respect of the alleged spurious scrip certificates, and 2351. received or retained by him in respect of dividends upon 200 shares belonging to the company; that he might be decreed to repay all other moneys belonging to the company, and retained by him for his own use, which had been received by him, and for which he was accountable; that proper accounts might be taken for the purpose of ascertaining what was due from the defendant Harman to the company; that it might be declared that the several payments in respect of such alleged spu rious scrip certificates were breaches of trust on the part of such of the defendants as had signed the checks, and that they might be ordered to make good all losses upon the same; that the directors might be directed to refund with interest all moneys of the company retained or applied by them to their own use, by way of remunera Grand Trunk Stafford and Peterborough Railway Company v. Brodie. tion for their services, or for purposes not authorized by the subscribers' agreement. In December, 1846, the bill was filed, and after several of the defendants had put in their answers, an order for winding up the affairs of the company was obtained. An official manager was appointed, and on the 31st July, 1849, an order was made in the cause, and in the matter of this company, that the suit should be prosecuted by the official manager as the nominal plaintiff. Two questions, not involving the merits of the case, were much discussed at the hearing of the case, namely, first, whether the original plaintiff, Warren, could have maintained the suit; and, secondly, what was the effect of the order for substituting the official manager as plaintiff. As to the competency of Warren to maintain the suit, it appeared by the bill that about the latter end of 1845 he had deposited the scrip certificates for his forty shares with the defendant Harman for securing a sum of money; that on the dividend of 17. 1s. per share being repaid, the original scrip certificates were called in, and new certificates were issued; and that on the payment of the further dividend of 2s. 6d. per share, these new certificates were called in, and the parties who brought them signed a memorandum, undertaking to execute a release to the directors when called upon to do so. It was stated that the defendant Harman had signed this memorandum. It appeared, therefore, that both on the original and on the new certificates being delivered up, new contracts were entered into by the parties. These contracts the bill did not seek to disturb, but it went on the footing of the original partnership, as if the scripholders and shareholders who had entered into these new contracts were entitled to recover beyond the amounts and conditions stipulated under these contracts; and the first question, therefore, to be considered was, whether the plaintiff, suing on behalf of himself and the other scripholders and shareholders, could have maintained any such right. It may, I think, on the evidence, be assumed that the defendant Harman is to be considered merely as the agent of the plaintiff, Warren, in delivering up the certificates, and that both were ignorant of the alleged frauds, but some of the other defendants were cognizant of and participators in such alleged frauds. Upon this assumption it can hardly be denied that the original plaintiff and his mortgagee would be entitled to undo the contracts which were entered into in the manner I have mentioned on the occasion of the new and original certificates being delivered up. Nor would they have been held bound by the undertaking to release the directors. But does it follow that they can undo the contracts, and at the same time retain the moneys received under those contracts? I think not; and if the contracts are to be undone at all, they must be undone in toto. What then, would be the position of the original plaintiff, Warren, as between himself and his mortgagee, and as between himself and the other shareholdAs between himself and his mortgagee, there would have been an obligation on him to bring back at least the instalment paid on each share; and the difficulty might have been surmounted by making the relief conditional-on his doing so. But how would it have been ers? |