1840.-Preston v. Grand Collier Dock Company. the other by seven of those nine persons who were parties to transactions which are termed fraudulent in the bill. Now the cases of the demurring parties differ in this respect, that Mr. Hall is said not to be a director, and, therefore, the same relief cannot be administered as against him as can be against the seven. But it appears to me that, as to the seven, in respect of their being directors, relief certainly can be administered; I mean that relief which is asked, that they may be restrained from taking any further or other steps to declare or procure the forfeiture of the plaintiff's 20 shares. It appears that there was a deposit of 17. paid; and a call was subsequently made, by the directors, for 5l. per share; and that was paid. Then another call was made, in October, 1839, for 21. per share; and that call was paid to the bankers of the Company and though it is true that, under the Act of Parliament, in case a call on a share had not been paid, the directors might proceed to declare the share to be forfeited; yet in a case where, before any declaration of forfeiture is made, the whole amount of what was due in respect of the call has been paid, and where, as this bill states, no offer has been made to repay the amount, this Court would not allow the directors to proceed to declare the share forfeited; because it is contrary to com [*345] mon equity *and to plain sense and justice that the parties should receive and keep in their possession the amount of the call, and, after that, proceed to declare the share to be forfeited. I think, therefore, that, if there was nothing else in the case, the demurrer of the seven defendants must be overruled. But, inasmuch as the case of Mr. Hall stands distinguished from the case of the other defendants who have demurred, I have got to consider, with respect to him, what will also apply to them, namely, the general equity of the case. I must preface what I have to say on that subject by observing that the word fraud is a term, which, in fairness, is hardly applicable to the transactions in question: and I must also observe that there is a little difficulty, upon the face of this bill, in determining the fact whether there was such memorandums 1840.-Preston v. Grand Collier Dock Company. as are mentioned of the 4th and 5th of July, 1837. It is stated in the first instance, that it is alleged that there were such papers; which is no allegation of their existence. Then it is alleged that the defendants pretend that there were such papers; and the contrary of that pretence is charged to be true. I observe, however, that the bill states that the memorandums were fraudulent, and that they were made and entered into for a fraudu lent purpose. Now they could not have been fraudulent or have been made and entered into for any purpose, unless they had been made. They must have existed to have had any character at all and moreover, the bill prays that the two memorandums, dated respectively the 4th and 5th of July, 1837, and all the acts, &c., by which it had been attempted to give effect to them or to the trust thereby attempted to be created, might be declared to be illegal, fraudulent and void; [*346] which they cannot be, unless they exist. I take it then as a fact which is represented on this bill, with sufficient plainness, that, for the purpose of enabling the bill for forming the Company to pass through the House of Lords, the nine gentlemen did procure further subscriptions to the amount of 9,000 shares; of which each of those nine gentlemen took 1,000 shares. Whether they subscribed the Parlia mentary deed or not, is quite immaterial. They became the subscribers for the shares; and, admitting that they did take the shares in trust for the Company, what then? they were the owners of the shares; and, if they were trustees for the Company, they were liable still, by the very provisions of the act, to all those operations which were to be performed, by virtue of the act, by those who held shares; and though they might, like all other trustees, have a right to be reimbursed, by their cestuis que trust, all expenses they incurred in the execution of their trusteeship, they were primarily liable. It is quite impossible to read this Act of Parliament without seeing that it was the intention of the legislature that those who became shareholders should, all of them, pay rateably. Then what was done? The parties do not seem to me to have managed their case in the way in which it ought to have 1840.-Preston v. Grand Collier Dock Company. been. As I understand the case, even at this day, there has been no transfer of those shares by those nine subscribers. The consequence of which is that, let them state what they please with respect to an acknowledgment of the trust, and with res pect to an intention to exonerate them from any liability as trustees, under the provisions of the Act they were [*347] clearly *liable, when calls were made by the directors on other shareholders, to have calls made upon them. For this Court never would allow the directors of a company so to proceed as to require some shareholders to pay a deposit and calls, and not to require others to make similar payments. It is quite obvious to me that no fraud was intended; and that the thing really meant was a benefit to all the subscribers, namely, that the subscribers should get the Act of Parliament they wished for. But, nevertheless, as that purpose was accom. plished by these nine gentlemen becoming shareholders of 1,000 shares each, my opinion is that that there has been an error which this Court will set right, namely, that, when the directors thought proper to make the calls as they did, they stopped short of that which was their duty, and that they ought to have gone on to direct the same sums to be paid upon each of those shares as had been directed to be paid upon the other shares which were held by those who were called the registered shareholders. Therefore it is evident that, in whatever manner it is to be done, this Court will rectify the error that has been made, and will take care that all the shareholders shall be put upon the same footing with respect to the liability to pay calls. My opinion, therefore, is that there is a plain equity for the plaintiff to be relieved; and, on that ground, the demurrers must be overruled. My opinion also is that the bill could not have been constructed otherwise than as it is; and that the objection made for want of parties, is answered upon the face of the bill. For the bill avers that there are upwards of 100 other members of the Company, and that it would be impossible to make all [*348] of them parties. Therefore, according to the deci sions which have been made on the point, that objec 1840.-Lister v. Payn. tion cannot prevail: and the consequence is that, on both grounds, the demurrers must be overruled. 1840: 1st December. LISTER v. PAYN. A ship at sea was mortgaged, by the owner, to the plaintiff. The ship having be come unseaworthy, it was condemned and sold in a foreign port. The purchaser drew, upon a person in England, a bill of exchange for the proceeds, and indorsed and delivered it to the captain. The captain claimed a lien upon, or a right of set-off against the amount of the bill, for disbursements which he had made on account of the ship, and threatened to bring an action against the acceptor, for. the money due on the bill. The Court granted an injunction to restrain the action. A mortgage of a ship is good as between the mortgagor and mortgagee, although the particulars of the mortgage are not indorsed on the certificate of registry, as required by 3 & 4 Will. 4, c. 55. On the 10th of March, 1837, James Waddle, a merchant in London, mortgaged a ship, of which he was owner, to a joint stock bank at Liverpool, for securing 6,000l. due from him to the bank. On the same day, the mortgage was duly registered; but, the ship being then at sea, the particulars of the mortgage were not indorsed on the certificate of her registry, nor was such indorsement made afterwards; although the ship returned to England in August, 1838.(a) Waddle, after the ship's return, sent her on a voyage to Calcutta, where she arrived safely; and, afterwards, having obtained a cargo, she set sail for England. On her homeward voyage she encountered severe weather, and sustained' considerable damage; in conse quence of which she put into the Mauritius, where she was condemned as unseaworthy, and sold; and her [*349] cargo was sent home in another vessel. The net proceeds of the sale of the ship, amounted to 9577.: and the purchasers drew upon the defendant Dunbar, who was a resident (a) See 3 & 4 Will. 4, c. 55 (for the registering of British vessels,) sect. 34. See also sects. 32, 33, 35, 36, 42, & 43. 1840.-Lister v. Payn. in England, a bill of exchange for that sum, and indorsed and delivered it to the defendant Payn, the captain. On the 23d of November, 1839, a fiat in bankruptcy issued against Waddle, under which he was declared a bankrupt. Payn arrived in England, in March, 1840; and, being about to bring an action against Dunbar for the amount of the bill of exchange, the bill in this cause was filed by the bank, in the name of one of their public officers, against him, Dunbar and Waddle's assignees, for an injunction to restrain an action. Payn, by his answer, claimed a lien, on the amount of the bill of exchange, for disbursements which he had made on account of the ship, at and during her voyage to Calcutta. A motion was now made for the injunction. Mr. Knight Bruce and Mr. Rolt, in support of the motion, said that notwithstanding the particulars of the mortgage were not indorsed on the certificate of the ship's registry, yet the mort gage was good as between the mortgagor and the mortgagee; for the 35th sect. of 3 & 4 W. 4, c. 55, enacted that, so soon as the particulars of any bill of sale or other instrument by which any ship or vessel, or any share or shares thereof, should have been entered in the book of registry as thereinbefore [*350] directed, the said bill of sale or other instrument *should be valid and effectual to pass the property thereby intended to be transferred, as against all persons and to all intents and purposes, except such subsequent purchasers and mortgagees who should first procure the indorsement to be made on the certificate of registry; that the lien claimed by Payn was for ordinary disbursements on account of the ship; but the captain of a vessel had no lien on it, even for necessary repairs, although, if the repairs were made abroad, he might hypothecate the vessel for the expense incurred; Hussey v. Christie,(a) much less had he any lien for ordinary disbursements on account of the vessel. Mr. Jacob and Mr. Anderdon, for the defendant, Payn, said that, (a) 13 Ves. 594; and 9 East, 426. |