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the Duke of Buccleuch, Mr. Murray of Cringletie, Mrs. Singleton
Scott (the appellant), and Lord Napier (the respondent). The
question, moreover, was not only interesting to them, but also
to the owners of property on the banks of the river Yarrow
issuing out of these lochs, which appeared to be its main feeders.
The Court of Session (First Division) pronounced judgment in L. J. Giffard.
favour of Lord Napier; one, however, of the learned judges
(Lord Curriehill) strongly dissenting.

Mrs. Singleton Scott appealed to the House

The Lord Advocate (Mr. Moncreiff), and Pearson, Q.C., for the appellant.

Sir R. Palmer, Q.C., Anderson, Q.C., and Mark Napier, for the respondent.

In delivering his opinion:

THE LORD CHANCELLOR (LORD HATHERLEY) examined the title-deeds on both sides with great care and minuteness, expressing a clear opinion that neither in them nor in the evidence as to possession was there anything to justify Lord Napier's exclusive pretensions. The Lord Chancellor was followed to the same effect by LORD CHELMSFORD, LORD COLONSAY, and LORD CAIRN, who all concurred in holding that the position of Mrs. Singleton Scott was that of an ordinary riparian proprietor, of which position she was entitled to enjoy all the benefits claimed by her. The decision, therefore, pronounced by the Court of Session was reversed.

Solicitors for the appellant: Connell & Hope.
Solicitor for the respondent: Preston Karslake.




July 16.

Fraudulent Conveyance-13 Eliz. c. 5—Fraudulent Preference. This was an appeal from an order of Vice-Chancellor Stuart. The defendant T. L. Harrison was a trustee, against whom an order in this Court had been made on the 8th of June, 1868, for the payment, on or before the 2nd of November, of a sum of 13277., being the balance due from him to the trust funds.

On the 24th of October Harrison called a meeting of five of his creditors, and on the 29th of October he executed a deed, by which he assigned the whole of his property to trustees, by way of mortgage, for the benefit of those five creditors, with a proviso that he should be allowed to remain in possession for six months, "but not so as to let in any execution, sequestration, or any other process; and in case any such process should be enforced, or attempted to be enforced, his possession should cease and determine." On the 18th of December a writ of sequestration was issued for non-payment of the money due from him under the order of the 8th of June, 1868, but the sequestrators were met by the claim of the trustees of the deed.

The Vice-Chancellor directed an inquiry into the circumstances, and, on the matter being brought before him, held that the deed, although executed for the purpose of giving preference to the five creditors, was not void under the Statute of the 13th Eliza

H. L. FOREMAN v. FREE FISHERS OF WHITSTABLE. July 13. beth; and from this decision the sequestrators appealed.

Anchorage Dues-Port.

This was a proceeding in error in respect of a judgment in the Exchequer Chamber, which had sustained the right of the defendants in error to levy a toll of 1s. on each vessel that cast anchor within the limits of the port of Whitstable. There had been a previous litigation-Gann v. The Free Fishers of Whitstable (11 H. L. C 192)-in which the allegation of the Free Fishers was that an anchorage due in respect of the ownership of the soil of the manor of Whitstable, in which the bay of Whitstable was situated, was leviable from vessels casting anchor in this spot. This House had decided that the right of navigation was a paramount public right, which could not be affected by the interest of the Crown as lord of the manor of any place where such right could be exercised, or by the grantee of any such manor. But it was intimated at the same time that such a toll might be sustainable in respect of anchoring within the limits of a port. The present proceeding was, in fact, the result of that intimation, and the Free Fishers alleged the existence of a port, and gave evidence in support of that allegation. The judgment of the Court was in their favour, and hence this proceeding in error. The judges who were consulted had given an unanimous opinion in favour of the present claim of toll.

Prentice, Q.C., and F. M. White, for the plaintiff in error.
Hon. G. Denman, Q.C., Mellish, Q.C., and Raymond, for the de-

fendants in error.

THE LORD CHANCELLOR, adopting fully the previous decision of this House, and declaring the right of navigation and safe anchorage to be paramount to any interests of the Crown or its lessee in the soil of any manor, held that, if the existence of a port was proved, the right to demand toll in respect of the use of that port would have a legal origin. He went through the evidence to shew that the existence of a port had here been proved, and consequently that the demand for toll was legally justifiable.

Judgment affirmed.

Attorney for the plaintiff in error: Towne.

Attorneys for the defendants in error: Nethersole & Speechly.

Muckeson, Q.C., and W. W. Cooper, for the appellants. Dickinson, Q.C., and Solomon, for the respondents. THE LORD JUSTICE GIFFARD said the only question was whether the deed was hond file. He was of opinion that there was nothing in the present case to shew that the debtor intended any benefit to himself, although the effect was to give a preference to the five creditors. The fact that the possession was reserved to the debtor for six months, which was consistent with the frame of the deed as a mortgage deed, and that the whole of the debtor's property was comprised in it, did not, in His Lordship's opinion, invalidate the deed. The appeal must, therefore, Solicitors: Scott & Co.; F. H. Jeanneret.

be dismissed with costs.



July 16.

Appropriation of Payments-Trust Fund-Bankers' Account. This was an appeal from a decision of Vice-Chancellor James. William Hale, late a solicitor at Bristol, received a sum of 5000!. from the plaintiff Mrs. Brown, who was his client, for the purpose of investment in mortgage. He paid it into his bankers, Messrs. Drummond, to his general account, on the 29th of October, 1868. At that time about 4000l. was standing to his account, and between that time and his death, which took place in May, 1869, he paid in various other sums amounting to more than 12,000, and drew out sums to the amount of more than 18,000l., at his death there was a balance standing to his account of 28471. He never applied the sum of 5C00l. to the purpose intended by his client; and she filed the present bill against his administra tor, claiming the balance at the bankers as trust-money. The Vice-Chancellor granted an injunction till the hearing, restraining the defendant from drawing the balance from the bankers ; and the defendant appealed from this decision.

so that

Kay, Q.C., and Roberts, for the appellant. Willcock, Q.C., and C. Browne, for the plaintiff. THE LORD JUSTICE GIFFARD said that there was nothing to take the case out of the ordinary rule, that in bankers' accounts the first sums drawn out must be appropriated, in the absence of



July 13.

special directions, to the first sums paid in. The sum of 50007. | M. R. had been drawn out long before the death of Hale, and no part of the balance could be considered trust-money. The injunction Winding-up-Time when Second Creditor must send in his Claim must, therefore, be dissolved.

Solicitors: Surr & Gribble; W. Hitchcock.

M. R.


- General Order of the 11th of November, 1862, Rule 20. In this case, which came before the Court on an adjourned summons, Messrs. Forwood claimed to be creditors of the above company for the sum of 15,000l. It was admitted that they July 6. were entitled to prove for that amount if their claim was sent in at the time they alleged.

Settled Account-Setting Aside-Action at Law. In this case the plaintiff had employed the defendant Slaney and his late partner as his solicitors from 1860 down to the beginning of 1867. In January, 1867, the defendant sent to the plaintiff a bill of costs, shewing a balance of 4537. due from the plaintiff. In April, 1867, the defendant commenced an action at law for the amount of the balance. On the 27th of April, 1867, this action was settled by the plaintiff giving his acceptance at six months for 3951. 3s. 6d., and on that day a memorandum was signed by the defendant, stating that such settlement had been made "with the understanding that, in the event of any moneys being found to have been wrongly entered as against Mr. Woollis- to pay, a transfer of the securities. croft" (the plaintiff), "or any credits omitted in the account hereunto annexed (marked A.), that the same shall be refunded

In March and April, 1866, Messrs. Forwood advanced two sums of 90007. and 60007, to certain ship-owners on the security of two ships, and took bills for those amounts, payable respectively at three and four months after date.

to him."

At the same time they took two guarantees from Barned's Banking Company, dated the 27th of March and the 4th of April, 1866, whereby, in consideration of their accepting the drafts for those two sums and agreeing to renew the same, the banking company agreed to provide them with funds to meet the drafts seven days before maturity, on having, if called upon On the 27th of April, 1866, an order was made to wind up the banking company, and the usual advertisement was issued for claims against the company to be sent in by the 22nd of July following. On the 25th of June, two days before the draft for 90007. reached maturity, the clerk of a notary public employed by Sir R. Baggallay, Q.C., and Chester, for the plaintiff. Messrs. Forwood presented the guarantee of the 27th of March, Jessel, Q.C., and Bevir, for the defendant, were not called upon. 1866, at the office of the banking company, and requested payTHE MASTER OF THE ROLLS said that no case of fraud was ment; which was refused by the official liquidator, and he then alleged, and that the plaintiff had, by entering into the agree-affixed to it the notarial memorandum, "Cannot be paid." ment of the 27th of April, 1867, deprived himself of the right to The same was done with the second guarantee. have the account taken over again. If any errors were discovered in the account, the plaintiff would be entitled, under that agreement, to bring an action at law, and recover any amount which might be found due to him; but he had no further right, and the bill must be dismissed with costs.

The plaintiff subsequently, as he alleged, discovered serious errors in the account, and filed this bill, seeking to have the sottled account set aside and a proper account taken.

Solicitors: W. A. Greatorex; G. L. P. Eyre & Co.


M. R.
July 13.
Will-Trust "for any other Religious Institution or Purposes as
A. and B. may think proper."

No further claim was made till a formal account was sent in on the 18th of March, 1868, after the ships had been sold for a sum less than the amount secured, for which smaller amount the claimants were admitted to prove.

The question was whether the notarial presentment constituted a claim sent in within the meaning of the 20th Rule of the General Order of the 11th of November, 1862, and the decision in Kellock's Case (Law Rep. 3 Ch. 769).

Jessel, Q.C., and Hemming, for the claimants, contended that the claim was duly sent in at the time when the guarantees were taken to the office, and that they were entitled to prove for the full amount.

tended that no proper claim was sent in till the 18th of March, Southgate, Q.C., and Kekewich, for the official liquidator, con


This case (noted ante, p. 174) was reargued. The question arose on the construction of a will, whereby a testatrix gave legacies to various religious societies and institutions, and bequeathed her residue to her executors, T. Fletcher and J. Wil-in when the guarantees were presented, and that the summons kinson, upon the following trust:

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To divide the same to and amongst the different institutions, or to any other religious institution or purposes as they, the said T. Fletcher and J. Wilkinson, may think proper, which disposition I leave entirely to their discretion."

The question was whether the residuary gift was void, as being a trust for uncertain objects.

Sir R. Baggallay, Q.C., and C. Hall, for the trustees. Southgate, Q.C., and Bunting, for the charities interested under the will, contended that the gift was good, as the word "religious" was to be extended to the word "purposes." Roxburgh, Q.C., and Phear, for the next of kin, contended that it was a gift "to any other purposes generally, and was therefore void.

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THE MASTER OF THE ROLLS held that no claim had been sent

must be dismissed. No costs to be allowed to the claimants.
Solicitors for the claimants: Haigh, Herbert, & Co., agents for
Haigh & Co., Liverpool.
Solicitors for the official liquidator: Freshfields.

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Winding-up--Contributory—Liability for Shares allotted to a Vendor to the Company as Purchase-money.

This was an adjourned summons.

The question was whether George Pell was to be put on the list of contributories for 1350 shares.

By the memorandum of association it was stated that the capital of the company was 120,000., in 6000 shares of 20. each, and Pell's name was mentioned in the list of subscribers as having agreed to take 1350 shares.

By clause 86 of the articles of association an agreement was ratified, and declared to be binding on the company, by which Pell sold to the company the goodwill and stock-in-trade of certain businesses carried on by him, and it was agreed that, as

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The books of the company shewed ro payment for the shares standing in his name except the handing over of the goodwill and stock-in-trade of the business.

part of the consideration to be paid to him, the company were | request, upon the understanding that the shares were fully paid
"to issue to Pell or his nominees 1500 shares, of the nominal up, and that the transfer to the purchaser should be registered
value of 201. each, which shares should be credited in the books immediately. Accordingly, on the 20th of August, Bailey exe-
of the company as fully paid up, in part payment of the purchase- cuted a transfer by Blakely to himself of shares, the numbers of
which were left in blank. The numbers were afterwards filled
up by Blakely with shares not fully paid up, and the transfer
was registered on the 31st of August. On the 31st of August
Bailey executed a transfer from himself, the numbers of the
shares and the name of the transferee being left in blank. In
May, 1866, Bailey discovered that the second transfer had never
been registered; and he applied to Blakely to cause it to be
registered, which he accordingly did, filling in his own name as
transferee. In June, 1866, the company was ordered to be
wound up.
Sir R. Baggallay, Q.C., and Higgins, for the official liquidator.
Jessel, Q.C., and Springoll Thompson, for Bailey.

Roxburgh, Q.C., for the official liquidator.
Westlake, for Pell, contended that he was not liable, as the
public had notice from the articles that the shares were to be
treated as fully paid up.

THE MASTER OF THE ROLLS held that he must be put on the
list for all the shares, and was entitled to an inquiry as to what
was the value of the property handed over by him to the com-
pany, and to be allowed such value, but no more,
towards pay-
ment of his shares.
Solicitors for the official liquidator: Denton & Hall,
Solicitors for Pell; Elmslie, Forsyth, & Sidgwick.

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Company-Contributory-Past Member-Forfeiture of Shares-
Companies Act, 1862, s. 38.

This was an application on the part of the official liquidator of
the above-named company to settle Mr. Creyke on the list of
contributories as a past member of the company. Mr. Creyke
had been registered as a holder of forty shares, and these shares.
while standing in his name, had been forfeited within a year
from the commencement of the winding-up.

The clause of the articles of association which related to the

THE MASTER OF THE ROLLS held that Bailey could not be put on the list, as he had never agreed to accept these shares. The transfer he accepted was a nullity, being in blank; and the only contract to take shares, which was proved, was a contract to take fully paid up shares, which these were not. Solicitors: Lewis, Munns, & Co.; Powell, Thompson, & Groom.

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Company-Contributory-Past Member-Debts of Company-
Payment in Debentures.

of the above-named company to settle Colonel Holland on the list
This was an application on the part of the official liquidator
of contributories as a past member.

The application was resisted on the ground that all the existing debts or liabilities of the company had been contracted after the time when Colonel Holland ceased to be a member; and it was admitted that this was the case, unless the debt due on certain debentures issued after the time when Colonel Holland ceased to a member could be regarded as having been contracted before

effect of forfeiture was as follows:-"The forfeiture of any share
shall involve the extinction at the time of the forfeiture of all
interest in and all claims and demands against the company in
respect of the share, and all other rights incident to the share;
but any member whose shares have been forfeited shall notwith-be
standing be liable to pay to the company all calls owing on such
shares at the time of such forfeiture."

Sir R. Baggallay, Q.C., and Higgins, for the official liquidator,
relied on Bridger's Case and Neill's Case (Law Rep. 4 Ch. 266).
Jessel, Q.C., and Speed, for Creyke, contended that the effect
of the articles of association was to provide that by forfeiture the
shares should be extinguished, and, consequently, that no one
could be made liable in respect of a forfeited share.

THE MASTER OF THE ROLLS held that the case fell within Bridger's Case and Neill's Case, which in effect decided that, in determining whether a person was to be put on the list of contributories as a past member, the Act of Parliament must be looked to, and not the articles of association. Consequently

Creyke must be settled on the list.

Solicitors: Lewis, Munns, & Co.; Taylor, Hoare, & Taylor.

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Company-Contributory-Past Member-Agreement to take Shares.
This was an application by the official liquidator of the above-
named company to place Mr. Bailey on the list of contributories
as a past member.

that time.

By a contract entered into in June, 1865, Messrs. Blakely & Dent, then carrying on business under the firm of the Blakely Ordnance Company, agreed to sell their business to the abovenamed company (when formed) for 350,000%., of which 150,000. was to be paid by the issue and delivery to Blakely of debentures to that amount, payable to bearer, and the residue as in the agreement mentioned. Subsequently to the time when Colonel Holland ceased to be a member the requisite debentures were issued in pursuance of the agreement, and were assigned by Blakely to holders for value. The rest of the purchase-money was paid in accordance with the agreement. contended that the debentures were not payment of the debt to Sir R. Baggallay, Q.C., and Higgins, for the official liquidator,

Blakely, which must be treated as still subsisting.

Jessel, Q.C., and Jackson, for Colonel Holland, contrà. THE MASTER OF THE ROLLS held that the debt had been paid by the debentures, and that Colonel Holland could not be put on the list.

Solicitors: Lewis, Munns, & Co.; Uptons, Johnson, & Upton.

July 15.

M. R. In re HORSLEY AND KNIGHTON'S PATENT. It appeared that in August, 1865, Captain Blakely, the Patent-Assignment-Entry in Register-Expunging EntryPatent Law Amendment Act, 1852, ss. 35, 38. managing director of the company, applied to Mr. Bailey to accept a transfer into his name of certain fully paid-up shares, This was a motion by Thomas Horsley, under the 38th and then to execute a transfer of them to a purchaser, to whom section of the Patent Law Amendment Act, 1852, that an entry Captain Blakely alleged he had sold the shares, and from made under colour of that Act in the register of proprietors whom he was desirous of concealing the fact that he (Blakely) kept at the patent office might be expunged, vacated, or varied. was the real vendor. Bailey agreed to comply with Blakely's It appeared that a patent for improvements in core bars or

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July 16

barrels, dated the 8th of November, 1866, had been granted to | M. R. In re SOUTH BLACKPOOL HOTEL COMPANY.
Thomas Horsley and George Knighton, their executors, ad-
ministrators, and assigns. By an indenture dated the 24th of
December, 1868, and made between George Knighton of the one
part, and Thomas Haden Oakes of the other part, Knighton
assigned his estate and interest in the patent to Oakes, cove-
nanting for title in the usual manner, and he also purported to
release and discharge Oakes, his heirs, executors, administrators,
and assigns, "from all incumbrances, suits, causes of action or
suit, claims or demands whatsoever, which they, the said George
Knighton and Thomas Horsley, or either of them, or their or
either of their executors or administrators," had, or but for the
indenture might have had, against Oakes, his heirs, executors, or
administrators, for or by reason or on account of the letters
patent, or the invention, the subject thereof, or any matter
or thing in anywise relating thereto. This deed was entered
in the register at full length; and such entry was the subject
Jessel, Q.C., Rodwell, and Aston, for the motion, said that, by
s. 35 of the Patent Law Amendment Act, copies of the entry
were admissible as prima facie evidence; and, that being so, the
entry might seriously prejudice the rights of Horsley against
Sir R. Baggallay, Q.C., and Crachnall, for Knighton and Oakes,
contended that one of two joint owners of a patent was by law
entitled to give such a release as was contained in the indenture;
but, if not, Horsley could not be injured by the entry, and there-
fore was not entitled to have it expunged.

Ex parte JAMES.

1007. issued by the company, to prove against the company for
This was an application by the holder of three debentures for
the amounts due thereon, The official liquidator claimed a

of the motion.


THE MASTER OF THE ROLLS held that Horsley was entitled to have all matter prejudicial to his rights expunged; and inasmuch as the whole deed had been entered verbatim, and the Court could not alter the deed, the whole entry must be removed from the register.

Solicitors: F. T. Dubois; F. C. Greenfield.

the directors were authorized to pay a certain sum to the proIt appeared that by clause 56A of the articles of association moter of the company, as remuneration to him for all costs and expenses incurred about the promotion of the company, he “indemnifying the directors from all costs, damages, and expenses, down to the allotment of the shares." The debentures in question were three out of seventeen such debentures issued to the promoter in payment of such sum, and had been by him assigned to the present applicant. The promoter had not paid all the costs and expenses against which he was to indemnify the company; and such costs had been proved to a considerable extent against the company in the winding-up. that the debentures were not such as to exclude a right of set-of, Jessel, Q.C., and Dundas Gardiner, for the claimant, admitted if there was ore, but they contended that a claim for damages arising out of a breach of agreement to indemnify could not be set-off against the debt due on these debentures. North, for the official liquidator, was not called upon. THE MASTER OF THE ROLLS held that the company was entitled to set off against the debt due on each debenture one seventeenth part of the amount of the claims proved against the company, but against which the promoter was liable to indemnify the company under clause 56A of the articles of association. Solicitors: Le Blanc & Co.; Westall & Roberts.


V.-C. S.


July 6, 13.

THE LONDON, CHATHAM, AND DOVER RAILWAY COMPANY. July 15. Railway Company-Administration-Specific, General, and Loan Accounts with Bankers-Cash Credit-Rent-charge- CreditorsPriority-Shareholders —Trust to pay all Debts due excludes Debentures not then payable, though Interest in Arrear.

Company-Winding-up-Debt-Principal and Interest-Double


This was an application by the official liquidator of the Joint Stock Discount Company Limited, that the Warrant Finance Company, who were creditors of the Joint Stock Discount Ccmpany, might be excluded from further participating in any dividends paid to the creditors of the company until all the creditors had received 20s. in the pound.

The Warrant Finance Company were the holders of certain bills of exchange drawn upon and accepted by the Contract Corporation (also in liquidation), and indorsed by the Joint Stock Discount Company. The bills had been proved both against the Contract Corporation and the Joint Stock Discount Company. By the former company, 4s. 6d. on the principal due on the bills had been paid, and by the latter 15s. 6d., so that the principal debt was satisfied, but not the interest thereon.

Jessel, Q.C., and Locock Webb, for the official liquidator, relied on In re Humber Iron Works Company (ante, pp. 115, 138).

Sir R. Baggallay, Q.C., and Langley, for the Warrant Finance Company, contended that this was the case of a creditor having security for his debt, who was entitled to take interest only out of his security, and proceed against the debtor for the principal, as in Kellock's Case (Law Rep. 3 Ch. 769); consequently their clients were entitled to go on receiving dividends until both principal and interest were satisfied.

THE MASTER OF THE ROLLS held that the case was governed by that of the Humber Iron Works Company, and made the order as prayed.

Solicitors: Lawrance, Plews, & Boyer; Flux, Argles, & Rawlins.

a certain deed for the benefit of creditors, and in which one These causes, which were instituted for the administration of decree was made, and the carriage of it given to the plaintiff Gardner, now came on upon a motion to vary the chief clerk's certificate.

In taking the accounts, the London and County Banking Comthe sum of 65,480l. 7s. 7d., but the claim was opposed on the pany sought to come in as creditors of the railway company for grounds that the moneys had been advanced as a loan to the company by their bankers, and that the railway company could not, under their Acts of Parliament, obtain advances from their bankers, or otherwise borrow money than upon mortgages or bonds.

The question in reference to the claim came on upon an adthat the railway company had been constructing their works and journed summons on the 11th of June, 1868, when it appeared ment, and that they had thirty special and separate accounts, carrying on their undertakings under numerous Acts of Parliaand one general account, with their bankers; also that the bankers had allowed the railway company to overdraw their account to a fixed amount, and that the sums so from time to time overdrawn had been entered in the books of the bank under an account headed "Loan Account." It further appeared that the bankers relied for payment upon the railway company's income. On that occasion, after hearing

Sir R. Palmer, Q.C., and F. Waller, for the bankers, and
Bacon, Q.C., and Martineau, against the claim:

THE VICE-CHANCELLOR, being of opinion that an entry in the

books of the bank of sums of money under the heading "Per takings were to be paid to the holders of these new shares. Loan," against which the railway company could draw cheques, After a time the company desired to, and did, infuse these was a cash credit, and that he could not assume there was nothing branches into the general undertaking, and the consideration for due to the bankers, ordered that the bankers should be admitted the fusion was the giving to the branch shareholders a rentto the benefit of the deed, and to prove as creditors of the rail- charge. way company for any sum that might be due to them as bankers of the railway company.

On appeal the Lords Justices considered that this order left the question open, and directed the petition to stand over. The chief clerk now certified that the bankers were creditors for 64,7697. 19s. 11d.

The question was whether this sum was really a loan in excess of the borrowing powers conferred on the railway company by their Acts of Parliament or not.

Dickinson, Q.C., and Martineau, for the plaintiff Gardner's motion to vary the certificate:

The evidence shews that this large sum is made up of clear and distinct advances of money just as much as if they had been advanced upon a mortgage or bond, but the chief clerk has allowed the sum claimed as being due upon a drawing account. Our proposition is that this sum is not due to the bankers from the railway company upon proper banking transactions.

THE VICE-CHANCELLOR :-I was of opinion last year that a cash credit was not a loan. I have repeatedly considered the question since that time, and am of opinion that a private account with bankers, though called a loan account, does not make it a less proper transaction with bankers.

Dickinson-Though the claim may have the appearance of arising as upon an overdrawn account, yet in fact, at particular dates, credit was given by the bankers to the railway company for sums which carry interest, and if the bankers had placed in the hands of the directors the whole sum on a certain day, it would have been in every sense of the word a loan.

F. Waller (Sir R. Palmer, Q.C., with him), for the London and County Banking Company.

THE VICE-CHANCELLOR:-The bankers allowed their customer to overdraw to a certain extent. I still hold the opinion that this was an overdrawn account, and not a loan.

The question was whether these persons, who were original shareholders in the branches, should be considered as creditors with the other creditors of the railway company, and their claims allowed on that footing.

Dickinson, Q.C., and Martineau, moved to vary the certificate
to the extent that the holders of Common Fund and Western
Extension Stocks did not rank equally with the other creditors.
Hemming, for Mr. Drawbridge, supported the motion.
Bristowe, Q.C., and Speed, for the plaintiff Waterlow.
Greene, Q.C., and Stock, for holders of Common Fund Stock, and
Cookson, for holders of Western Extension Stock, opposed the

Bagshawe, for the trustees of the deed of January, 1867.
Fry, Q.C., for the General Credit Company.
Kekewich, for the railway company.

Higgins, Langworthy, and Westlake, for other parties.
July 6. THE VICE-CHANCELLOR, in delivering judgment this
day, said that, as to the claim of the bankers, there was no suffi-
cient reason for varying the certificate; the being permitted to
overdraw, but not beyond a fixed amount, was in the ordinary
course of dealing between bankers and customers. Although
this was called "Loan Account," there was no borrowing or
lending in the proper sense of the word "Loan," or within the
meaning of the Acts of Parliament. The motion as to this
claim must be refused, with costs to be added to the debt. As to
the right of the holders of the Common Fund Stock, he was of
opinion that they ought to be admitted to prove as creditors.
The company were bound to pay the money called the Common
Fund. The shareholders in this fund had a right to compel
payment, and, that being so, they were properly certified as cre-
ditors. As to the right of the holders of Western Extension Stock,
the company were bound to pay them a rent-charge, and he knew
no other character in which they could stand than that of creditors
when they claimed payment. The right to vote at meetings did
not interfere with the right to payment. Their position as
creditors was conclusive, as they had a right to distrain on the

July 13. These causes now came on upon further consideration, and two questions were raised as to the construction of a deed dated the 19th of January, 1867.

The chief clerk also certified that the debts of the railway company ranked equally, and amounted in the aggregate to 5,192,1567. 6s. 4d. Included in that amount were the holders of Common Fund and Western Extension Stocks, whose claims had been allowed for 36,8741. 18s. 2d. and 14,1597. 17s. 11d. respectively. By an Act passed in 1861, provision was made that the Western Extension undertaking might, by a resolution of the holders of shares and stock therein entitled to dividend out of profits, be united with the general undertaking for such consideration, by way of perpetual rent-charge, which should be By a deed dated the 30th of June, 1866, the company assigned subject to all mortgages, bonds, and dividends, stock created by its rolling stock to trustees for the benefit of all its creditors. the company before the time at which such union was to take One of the trustees, who was a creditor, executed, and some other effect, and then charged on the profits of the general undertaking. creditors assented. On the 19th of January, 1867, the company On the 15th of November, 1861, the necessary resolution was assigned the rolling stock to trustees upon trust "to pay to the passed, uniting the Western Extension with the general under- creditors of the said company the several sums now payable to or taking for the consideration of an annual sum, by way of rent-receivable by them respectively pari passu, and without any charge, equal to the interest payable in each year upon the preference or priority whatever." This trust the Court, by its existing mortgages, bonds, and debentures charged on such decree, ordered to be performed; and the question was whether undertaking, and also a further sum per annum by way of rent- debentures, on which interest was in arrear, but the principal charge for the payment of interest or dividend upon the shares or stock in such undertaking, and such holders of shares or stock were not to participate further in the profits of the


An Act passed in 1862 carried into effect such resolutions, and such holders had a right to vote at meetings, and they also had a right to recover what was due, by distraint on the company. As to the holders of Common Fund Stock, they were in a similar position to the holders of Western Extension Stock.

not yet payable, were entitled to be paid rateably. The second question turned on the construction of the 6th clause of the deed, in which the principle of payment was declared to be that "of the Court of Chancery in the administration of intestates' estates."

Dickinson, Q.C., and Martineau, for Gardner, and Hemming, for Drawbridge, now contended that the Court must put such a construction on the deed as was consistent with the decree and with the practice of the Court. It was quite clear The railway company, by various Acts, were empowered to that the first deed included all creditors, and therefore the second construct particular undertakings. Having expended the capital deed, unless it was held co-extensive, was void, or, at all events, raised by shares and borrowing, they required, and the Act impeachable. The Court, therefore, was bound by its con of 1862 enabled them to obtain, additional capital by the issue struction to exclude that which involved a breach of trust and of new shares, and the profits of the particular branch under-fraudulent preference.

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