CHAN.] Ex parte LowENTHAL; Re LOWENTHAL. confirming it, and he granted an injunction restraining the completion of the proposed sale. From this order the defendants appealed. Kay, Q.C. and Millar for the appellants, contended that the plaintiff was not entitled to an injunction. But for the filing of the bill the necessary resolutions for a winding-up would have been passed. The directors had been prevented by the bill from having those resolutions passed. The rights conferred upon dissentient shareholders by the 161st section of the Companies' Act 1862 did not arise till after the passing of the resolution, which the plaintiff had impeded by his bill. Eddis, Q.C. and S. Dickinson for the plaintiff, contended that there was no power to sell to an individual, but only to another company. To effect such a sale it was necessary to wind-up the company; resolutions had been passed for that purpose, but had afterwards been abandoned. The whole arrangement was therefore ultrà vires. Dauney for the purchaser. Millar having been heard in reply, Lord Justice JAMES said that he was of opinion that the Vice-Chancellor's decree ought to be affirmed. It appeared to him that the company were altogether wrong in entering into the original agreement, as one to be carried out under the 161st section of the Companies' Act 1862. Under that section the liquidator could not have sold the property of the company to Mr. Alsop, and that section alone gave the power to bind dissentient shareholders. It was not proposed to sell or transfer the property and business to a new company, but the sale was to be to an individual, who was to be a speculator, and who was to be at liberty to make as much profit as he could by the formation of the new company. Under the 161st section dissentient shareholders had a right to know something more than that there was a proposal to sell to any company that Mr. Alsop could get together. The company, on finding that their proceedings had been wrong, ought, as soon as the bill was filed, to have submitted to an injunction, and then to have put themselves right by passing proper resolutions under the 161st section. The Vice-Chancellor's decision was right, and the appeal must be dismissed with costs. Lord Justice MELLISH was of the same opinion. He had come to the conclusion that the agreement of the 16th October 1871 was not valid as a preliminary arrangement for the winding-up of the company, and the sale of its assets and business to a new company. He thought that, according to the true construction of the 161st section, the sale must be a di ect sale from the one company to the other. The agreement of the 16th October was not of that kind; it was an agreement for a sale to Mr. Alsop. Then a meeting was called, which passed a resolution professing to confirm the agreement, and to make it binding on the company, independently of any resolution for winding-up, and the 2501. was paid by Mr. Alsop. No doubt it was intended that a new company should be formed to work the patent, but Mr. Alsop was to remain the purchaser of the property of the old company, and was left to make any bargain he pleased for the sale to the new company. In his Lordship's opinion that was not a valid arrangement within the 161st section of the Act. Appeal accordingly dismissed with costs. [CHAN. Solicitors for the appellants, Parker, Watney andi Clarke; Solicitors for the respondents, Valpy and Co.; Waterhouse and Winterbotham, agents for Winter-botham, Bell and Co., Cheltenham. Friday, Feb. 27. (Before the LORD CHANCELLOR (Cairns) and LORD JUSTICE MELLISH.) Ex parte LowENTHAL; Re LOWENTHAL. Debtor's summons-Affidavit by public officer of banking company-Bankruptcy Act 1869 s. 7Bankruptcy Rules 1870, r. 15. In the particulars of demand accompanying a debtor's summons taken out on behalf of a bank, the public officer of the bank described himself as such public officer, and demanded payment to himself of the amount of certain dishonoured bills of exchange which had been indorsed to the bank. He also (being a Quaker) made an affirmation in which he described himself as the public officer of the bank, and stated that he was authorised to affirm that the debtor was duly indebted to the bank in the amount claimed, but did not state that he was authorised to take out the summons: Held (affirming the decision of the Chief Judge in Bankruptcy) that the demand and affirmation were sufficient under rule 15 of the Bankruptcy Rules 1870. THIS was an appeal from a decision of the Chief Judge in Bankruptcy. The hearing in the court below is reported in 29 L. T. Rep. N. S. 895, where the facts of the case. are sufficiently stated. The Chief Judge held that the demand and affirmation were sufficient, and dismissed with costs the appeal to him from the order of the Judge of the County Court at Liverpool. From this decision the debtor again appealed. Little, Q.C. and Yate Lee, for the appellant, contended that there was not sufficient evidence of the debt; that the same rules as were in force at common law with regard to proof of debts, presentment of bills for acceptance, &c. in an action upon bills of exchange, must be strictly ings upon a debtor's summons in respect of bills applied in the Court of Bankruptcy to the proceedof exchange. Here there was no evidence that the bills were ever presented for acceptance. The particulars of demand were insufficient, as they did not show how and when the bank became indorsees for value of the bills. And the affirmation of the public officer of the bank did not comply with the requirements of rule 15 of the Bankruptcy Rules 1870, as it did not state that he was authorised by the bank to sue for or demand the debt. They cited. Ex parte Leathley, re Hodges, 28 L. T. Rep. N. S. 323; Allen v. Thompson, 2 Jur. N. S. 451; De Gex, Q.C. and G. W. Lawrence, who appeared in support of the order of the Chief Judge, The LORD CHANCELLOR (Cairns) said that the main question for decision was whether there was sufficient evidence of the debt to justify the County Court Judge in requiring security. The public officer of the bank had made an affirmation, in which he stated that the Sheffield Banking Com pany were the holders of the bills, and that the debtor was the drawer of them and the banking company indorsees for value, and he stated the dates and the amounts of the bills. It was quite clear on the face of the document that the banking company claimed the amount of the bills as indorsees for value. In his application to have the summons dismissed, the debtor filed an affidavit in which he did not swear that he was not the drawer of the bills, whereby he would have shifted the burden of proof to the other side, but argued that he was not liable at law in respect of the bills. That was far from a denial of the debt, and the County Court Judge was right in requiring security. The appeal therefore failed on that point. But two other objections of a technical nature had been raised to the summons. In the first place, it was said that the affirmation did not state with sufficient distinctness that Mr. Barber was the public officer of the banking company. There was no weight in that objection, for he described himself as the public officer of the bank, and he would have been guilty of perjury if he had not really been the public officer. In the second place it was contended that Barber did not say that he was authorised to take out the debtor's summons, but only that he was authorised to make the affirmation, in other words, that he was authorised to initiate the proceedings. That was substantially the same thing as a statement that he was authorised to take out the summons, and there was therefore nothing in the objection. But if there was any doubt upon the point, it was removed by rule 19 which provided that no objection should be allowed to the particulars of demand unless the court should be of opinion that the debtor had been misled by them. And in the present case there was no pretence for saying anything of the kind. All the objections to the summons therefore failed, and the appeal must be dismissed with costs. Lord Justice MELLISH was of the same opinion. As to the form of the particulars of demand, it was sufficient to state that the banking company were indorsees for value of the bills of which the debtor was the drawer, and to state the dates and amounts of the bills, and it was not necessary to set out the details as they would be set out in a declaration at law. As for the objection that the affirmation did not state that Barber was the public officer of the banking company and therefore did not comply with the requirements of the 15th rule, there was no force in it, for in the affirmation Barber described himself as the public officer and Allen v. Thompson (2 Jur. N. S. 451) showed that that was sufficient. Then it was said that the affirmation did not state that Barber was authorised to take out the summons, but only that he was authorised to make the affirmation. But authority to make the affirmation was virtually authority to take out the summons. That objection, therefore, also failed. Appeal accordingly dismissed with costs. Solicitor for the appellant, H. S. Field, agent for Etty, Liverpool. Solicitors for the respondent, Phelps and Sidgwick, agents for Sale, Shipman, Seddon, and Sale, Manchester. [ROLLS. ROLLS COURT. Reported by G. WELBY KING and H. GODEFROI, Esqrs,, Barristers-at-Law. Wednesday, March 4. GAINSFORD V. DUNN. Will-Power of appointment-Gift of legacies followed by gift of residue of property subject to power. By a settlement the trustees thereof were directed to hold the trust funds in trust for five persons, or their respective issue, in such parts, shares, or proportions as A. D. should by will appoint. A.D., by her will, gave to three of the objects of the power the snm of 51. each, and gave all the residue of her property of whatever kind, and over which she had any power of appointment, to the two remaining objects absolutely: Held, that the legacies were charged on the settled property, and that the appointment was a valid exercise of the power. THIS was a special case. Mary Dunn, Anne Dunn, Elizabeth Gainsford, Sarah Rebecca Dunn, and Jane Isabel Dunn became entitled on the death of their father in 1839 to a sum of 20,7501. in equal shares. By a settlement dated the 31st Aug. 1841 the trustees thereof were directed (in default of issue of Anne Dunn) to hold the trust funds in trust for Thomas Dunn, Mary Dunn, Elizabeth Gainsford, Sarah Rebecca Dunn, and Jane Isabel Dunn (the brother and sisters of Anne Dunn), or their respective issue, in such parts, shares, and proportions, and in such manner as the said Anne Dunn should by will appoint. Similar settlements were at the same time executed by each of the sisters of Anne Dunn of their shares. Anne Dunn made her will, dated the 20th Nov. 1869, which (so far as is material) was as follows: "I give and bequeath to my brother T. Dunn, and to my sisters Elizabeth, the wife of R. J. Gainsford, Esq. and Jane I., the wife of H. T. Stainton, Esq., the sum of 51. each. All the rest and residue of my property of whatever kind and wheresoever situate, and over which I have any power of appointment or disposition, I give, devise, and bequeath unto and to the use of my sisters Mary Dunn and S. R. Dunn, their heirs, executors, administrators, and assigns, respectively, for their own absolute use and benefit as tenants in common.' Anne Dunn died on the 28th July 1871. The questions submitted for the opinion of the court were: First, whether the will of the said Anne Dunn, dated the 20th Nov. 1869, was a valid exercise of the power of appointment in default of issue of the said Anne Dunn, reserved to the said Anne Dunn by the settlement of the 31st Aug. 1841 of the trust funds comprised in such settlement; secondly, whether if such will was not a valid exercise of such power, the respective shares of the said Mary Dunn, Elizabeth Gainsford, Sarah Rebecca Dunn, and Jane Isabel Stainton, in the trust funds comprised in such settlement passed to them absolutely, or were subject to the trusts of the several settlements respectively made by them of their respective snares in the said sum of 20,7501; thirdly, whether, if the will was a valid exercise of such power, the respective shares of the said Mary Dunn and Sarah Rebecca Dunn, in the trust funds comprised in such settlement, passed to them absolutely, or were subject to the trusts of the said several settlements respectively made by them the said Mary Dunn and Sarah Rebecca Dunn of their respective shares in the aforesaid sum of 20,7501; fourthly, out of what funds the costs were to be paid. Southgate, Q.C. and Owen, for the plaintiffs. Kenyon S. Parker for the defendants in the same interest. Roxburgh, Q.C., Ince, and Morshead, for the other defendants were not called upon. Sir G. JESSEL-Certainly there never was a better illustration of the extreme technicality of our law than the case I have before me. One must really state what the law is in order to understand the point raised. Under the old law of appointment, when a power of appointment was given to a person among others in such parts or shares as the appointor should direct, it was held, irrationally, that the meaning of the person creating the power was, that the appointor should appoint a substantial share to each object of the power. It was what was called a non-exclusive power, and it was therefore considered that the author of the settlement intended everybody to take a substantial share. That was not according to the literal wording of the power, but it made sense of it; because if the appointment of a farthing would do, on the principle of de minimis non curat lex it would make every non-exclusive power an exclusive power. However, that doctrine was found inconvenient. No one knew exactly how much a substantial portion of the property was, and it was impossible to say without resorting to litigation what the least sum was which the appointor was authorised to appoint. That inconvenience led to an alteration of the law, and the Legislature, under the guidance of a very great lawyer, made this very remarkable alteration. It directed (1 Will. 4, c. 46) that in future no appointment should be objected to on the ground of its being illusory-that is, on the ground of the smallness of the sum or share appointed, but it did not alter the effect of the power; and the consequence of the remarkable alteration of the law has been this, that when the power is non-exclusive, if the appointor forgets to appoint a shilling or even a farthing to every object of the power, the appointment is bad because someone is left out. One would have imagined that the reasonable mode of altering the law would have been to make every power of appointment exclusive, unless the author of the settlement has pointed out the minimum share which every object was to get. However, that is not the state of the law, and in the present instance an appointment by a lady, who had a power of appointment between her brother and sisters, is objected to because it is said she has forgotten to appoint a shilling to the brother and other sisters, she intending that two sisters should take the whole of the property. That is the first and most importance question I have to decide, as to whether this appointment is bad on that ground. That again depends on the construction of the lady's will, and that again depends on the rules of construction which have been adopted, certainly not with a view to the exercise of a power of appointment, but with reference to a very different subject matter. Now the first point is not arguable. There is no doubt that this is a non-exclusive power. The power is in trust for the said Thomas Dunn, Mary Dunn, Elizabeth Dunn, Sarah Rebecca Dunn, Jane Isabel Dunn, or their respective issue in such parts, shares, and proportions, and in such [ROLLS. manner as the said Anne Dunn shall by her last will and testament direct or appoint. Therefore she can only appoint among those persons named, and she can only appoint such shares in such manner as she may desire. She made her will, which is very short. She was a spinster. It was stated that she had some personal estate, and that it was small; but my judgment does not turn on the amount of it, and the special case does not state the amount of it. She says in her will "I appoint my sisters Mary Dunn and Sarah Rebecca Dunn, executors. I give and bequeath to my brother Thomas Dunn and to my sister Elizabeth the wife of Robert John Gainsford, Esq., and Jane Isabel Stainton the wife of Henry Tibbats Stainton, Esq., the sum of 51. each." There was a brother and four sisters. "All the rest and residue of my property, of whatever kind and wheresoever situate and over which I have any power of appointment or disposition, I give, devise and bequeath unto and to the use of my sisters Mary Dunn and Sarah Rebecca Dunn, their heirs, executors, administrators, and assigns respectively for their own absolute use and benefit as tenants in common." Now it was conceded in argument that if the lady had given a shilling out of the appointed fund to the brother Thomas and to the sister Elizabeth and the sister Jane, then, under the words I have mentioned, the two other sisters, Mary and Sarah Rebecca, would have taken the fund over which she had a power of appointment absolutely. But it was said that the will would fail altogether, because she had given nothing out of the appointed fund to the brother and to the two sisters; and that, as I said before, is a question of construction of the will. It was opened as if it was incapable of argument; but I think it not only capable of argument, but, upon consideration, I have not even called on the other side. The question is whether any part of the 51. each given to the brother and the two sisters is or is not payable out of the fund, subject to the power of appointment. The gift is no doubt of 51. only at first, and if nothing else had occurred it would have been a common legacy payable out of her personal estate. Then she gives the rest and residue of her property, of whatever kind, and wheresoever situate, and over which she has any power of appointment or disposition, to the use of her sisters Mary Dunn and Sarah Rebecca Dunn, their heirs, executors, administrators, and assigns, for their own absolute use and benefit. So she has given the residue, first of her property, and next of property over which she has a power of appointment, and has given them together. Now this kind of gift has been the subject of frequent judicial decision. I may refer to the case of Bench v. Biles (4 Madd. 187), the case of Greville v. Brown (7 H. of L. Cas. 689); and the later cases of Francis v. Clemow (Kay, 435) and Williams v. Gyett (2 J. & H. 429) before Vice-Chancellor Wood. Those cases were cases of a gift of residue of real and personal estate, but the result of the cases is this, that where you find a legacy, followed by a gift of the residue of real and personal estate, the word residue is considered to mean that out of which something given before has been taken, and the result is, I think, in the words of Vice-Chancellor Wood, but certainly the words of Sir John Leach, to make the residue a mixed fund and to distribute the legacies proportionably and rateably, as taken out of the mixed fund. The question has ROLLS.] ELDER V. THE NEW ZEALAND LAND IMPROVEMENT COMPANY (LIMITED). generally arisen when the personal estate has 66 66 or to of [V.C. M. of 20,000l." The lady appointed to two sisters absolutely, but it is said that because they took absolutely under that appointment, the shares given them under the appointment, which by the settlement they had expressly settled-that is the shares of the other sisters, whether under, or in default of appointment, are not affected by the settlement. I am utterly unable to follow the argument. It appears to me that plainer words could not be used, whether they take by appointment, or in default of appointment. Whatever they take is to be the subject of settlement. Of course the costs of the special case must come out of the fund. Southgate, Q.C.-Then the first question will be answered in the affirmative; there will be no answer to the second, and the third will be answered in the affirmative. Sir G. JESSEL.-Yes. Solicitors for the plaintiffs, Dobinson and Geare. Solicitors for the defendants, Tanqueray Willaume and Hanbury. V.C. MALINS' COURT. Reported by F. GOULD and JAMES E. HORNE, Esqrs., Monday, April 20. ELDER V. THE NEW ZEALAND LAND IMPROVEMENT Limited company-Amount of capital subscribed The Z. company issued their prospectus stating their proposed capital as 500,0001. in 25,000 shares the first issue to be 250,0007. The plaintiff applied for 200 shares and paid the deposit, but afterwards discovered that not more than 900 shares, including those allotted to him, had been applied for and alloited, with which capital the directors proposed to commence business on a more limited scale. The plaintiff applied to the company to have his name removed from the register, and to have his deposit returned, which was refused. Held, on demurrer to a bill filed by the plaintiff against the company, that the company was not justified in commencing business, and that the plaintiff was entitled to a return of his deposit, and to have his name removed from the company's register. THE bill in this suit was filed against the defendant company, praying a declaration that the plaintiff was induced to apply for 200 shares in the company under circumstances of misrepresentation and deception on the part of the company, and that the contract for taking the shares might be declared void, and the name of the plaintiff removed from the register, and that the company might be restrained from bringing any action against the plaintiff for recovering any sum of money or call in respect of the shares. The company was registered and incorporated on the 15th July 1873, with a nonimal capital of 500,000l. in 25,000 shares of 201. each, its object being the purchasing eligible Crown and other lands in New Zealand, with a view to improving them by fencing and planting them so as to render them valuable and available for immediate profitable occupation. In the month of November 1873 the plaintiff received from the company a prospectus headed as follows. V.C. M.] ELDER V. THE NEW ZEALAND LAND IMPROVEMENT COMPANY (LIMITED). New Zealand Land Improvement Company (Limited), Incorporated under the Limited Liability Acts 1862 and 1867; Share capital 500,000l. divided into 25,000 shares of 201. each. First issue 250,000l.; Payments 11. on application, 1l. on allotment, and 31. within three months after date of allotment. The prospectus stated that All expenses connected with the formation of the company, legal and other charges, and disbursements of every kind, exclusive of brokerage up to the allotment of the shares for the first issue, will be limited to 1 per cent. on the nominal capital. The bill stated in par. 3 that the plaintiff was induced to believe, and did in fact believe, by a perusal of the prospectus, and the plaintiff charged that the prospectus contained, or amounted to a representation by the company, that they would not make any allotment of shares or commence business unless sufficient capital were subscribed; and the plaintiff charged that by the expression" sufficient capital" was meant that at least two-thirds of the 12,500 shares proposed to be issued by the company in the first instance, as stated in the prospectus, such being the proportion of shares required by the rules of the London Stock Exchange to be issued or allotted before a settling day would be granted by the Stock Exchange. The bill also charged that the objects of the company, as stated in the memorandum of association, could not be carried out without the subscription of at least two-thirds of the capital of the company offered to the public in the first instance, and that the defendant company intended to represent to the plaintiff, by printing the objects of the defendant company on the said prospectus, that no allotment of shares would be made unless sufficient capital were subscribed for to enable the aforesaid objects of the defendant company to be carried out. In the month of November 1873 the plaintiff received the prospectus together with a form of application for shares in the company, and on the faith of the representation contained in the prospectus and memorandum and, as the bill stated, believing that the company and directors would not allot shares or commence business unless at least two-thirds of the 12,500 shares should be subscribed for, applied for 200 shares, and paid 2001. as the payment on application. On the 22nd Nov. 1873 the plaintiff received from the company a circular letter dated the 21st Nov. 1873 as follows. Sir, The directors consider it right to inform the shareholders of the position of the company and the -course they propose to pursue. The number of shares subscribed for considering the pressure in the money market and high rate of interest ruling of late has not been otherwise than satisfactory though not so large as they hoped for or expected still they consider a sufficient amount has been taken up to justify their commencing operations on a limited scale and therefore they propose to go forward under the sanction and consent of the shareholders and trustees who have been informed of the position of the subscribed capital. Instead therefore of calling the shareholders together the directors forward this circular to intimate that they do not intend to call up more than 51. per share for the present and they believe this will be sufficient for some time to come taking into consideration the very favourable circumstances under which land can be acquired. Everything will depend upon the selection of the lands and the directors believe they have in the Board of Advice in the colony the very best guarantee that the interests of the company will be protected.-I am, yours faithfully, J. CARRINGTOn Palmer, Chairman. Alexander Lang Elder, Esq. [V.C. M. letter induced the plaintiff to believe that a much larger number of shares had been subscribed for than was the fact, and that he, believing a sufficient number to have been subscribed for, took no notice of the letter. On the 28th Nov. 1873, the plaintiff received a letter from the company, stating that 200 shares had been allotted to him, and requiring him to pay the further sum of 200l. in respect thereof, to which he replied by asking to be informed how many shares had been applied for. To this letter the plaintiff received no answer, and on the 30th Nov. 1873 he was for the first time informed that the company had received applications for, and had allotted not more than 900 shares, including the 200 shares allotted to the plaintiff, and the plaintiff subsequently wrote to the chairman of the company, declining to become a shareholder, and demanding back his deposit of 2001. The bill also charged that the capital already subscribed would be greatly diminished by the payment thereout of the preliminary expenses, which, according to the prospectus, amounted to 5000l., which, as appeared by an agreement, would be, or had been paid half in cash and half in shares to Charles Edward Pritchard. The plaintiff filed his bill on the 13th Feb. 1874, stating further that the company refused to remove his name from the register of members, or to repay him the 2001., threatening to commence an action against him for the sum of 11. per share payable on allotment, and praying as above. The company demurred to the bill. Cotton, Q.C. and A. T. Watson for the demurrer.-There is nothing to prevent a company from car rying on its business, although the whole capital is not called up. It is in the discretion of the directors, whether they will carry on the business on a smaller scale than was originally intended. The statement in par 3 of the bill is the plaintiff's own gloss. There was no misrepresentation or deception, and that is the whole ground of the bill. The bill is not to restrain the company from carrying on business, but to relieve the plaintiff from his shares. He must show some fraud in order to escape from his contract. They cited Mac Dougall v. Jersey Imperial Hotel Company (Limited), 2 Hem. & Mill. 528; Re The English, &c. Rolling Stock Company, Lyons' Case, 35 Beav. 648; 14 L. T. Rep. N.S. 507; North Stafford Steel, &c. Company (Limited) v. Ward, L. Rep. 3 Ex. 172; 18 L. T. Rep. N. S. 445. Glasse, Q.C. and Graham Hastings for the bill, were not called upon. The VICE-CHANCELLOR, after referring to the prospectus, said that the directors had formed their own estimate of the capital required for the undertaking, namely 250,000l., but it appeared that application having been made for 900 shares only, they had felt themselves justified in going through the farce of allotting only 900 shares of the value of 18,000l. in a company which required at least 250,000l. The directors were not justified in allotting the 200 shares to the plaintiff. It was a deception under such circumstances to make any allotment, and they ought to have returned the plaintiff his deposit, which was most improperly withheld from him. It was stated that the preliminary expenses were 5000l.; the plaintiff therefore holding nearly one fourth of the capital of the company would be liable to nearly one fourth of this sun. It was said that the directors were |