2 HARE 4a, ROSS; v., HARBOTTLE 189 ‘ha psiton and achodalo, bo be given to three citint clases of eroditors: Sra, the creditors at whoso suit the prisonor shal‘bo in custody ; secondly, the other ere-litors in tho sohedule;_and, thitdly, all crodivors (if any) not tamed in the schedale ; fo-, after expressly direoting that’ tke: Coen, shall decree. notice to be given to the firs? and second olasses, the Act add, “rnd vo bo insertad in the Lonilon Gazette; and also, if the ead Court shall think ft, in the 24indurgh and Dublin Gazettes, or either of them ; and also in such other newsaper ur uerspapors as the ssid Court sball direct.” ‘Now, adverting to the svopo of the petition; namely, that the prisoner may be dis- hergad fm puso in respect of al dubia wir gas imo of presenting pation that the schodile is to contain all dobts end claims ; that notice is to be pabiiely given of the hearing of the, petition, and conz‘deration of the schedule generally, as well as particularly te the creditors therein oaravd : that any creditor upon proviy his debt Fray opvote the prisoner’ discharge, an challange, he corrects of the acho that the Act contemplates the case of the achedulu requiring amendment, that its trath may be the rubject uf examaination and report, and that the prisoner is ultimately [HO] te ewear to th trath of it (eaniaring wht te truth go to Be sovn wo aus, e), aac the differen’ rules for-mak'ng dividends beiore and after adjudication, i cen- not discover the foundation for the arguments of the Plaintiff's couasel, that no coroditor: of. the insolvent. at the time of filing is petition have any interest iu is ‘estate ander the insolvency, unlers the insolvent has volunteered to put the'r names uupon huis schedule, - ‘The obvious purport of the Act appears to be that all tue debts of the inwolven’ shall be ascertained ; and T presume the Court would 2t adjudicate that be be discharged unless and unti; he submitted to make his schedule trae, So fur; therefcre, as the ease depetds upon the toucer alone, I think the assignees were no® guilty of a-breach of duty in proceeding to a sale after the “eader was made, ‘In tneee circumstances, without refeconce to the question whrtker che purchase to be effected by the deed was proposed wo be made for the benefit of a Plaintiff or of a stranger, and whatever the result, of any inquiry as to that fact might be, even supposing the cass were. now open t any such inquiry, it is impossible that a Court of Equity ean say that the assignees wore guilty of a breach of trust, of which a purchaser was bound to fake noties, because, they made. no better offer, as a condition upon whien the sale should be stayed, then tbat which vas made on their bebalf by their solieicor, Mr. Anton, and refused by M>. Hughes, on the part of the proposed pur- caaser, "Tae hill must.be dismissed a6 against Babb, with costs, and as against the assignees without costs. I leave tho costs of the ascignees to the judgment of the Cour. or the Relief of Insolvent Debtors, to whom :t will properly belong to deter- mine, with reference te the question of costs, whether they have or rot taken the proper course in dealing with the insclvent’s estates. [461] “Foss », Hamnorres, Maren 4, 6; 7, 8, 25, 1843. [See Llallows v: Fernie, 1867-68, 1. R. 3 Bg. 582 ;L. P. 3 Ch. 467 ; Hoole v Great Western Railucy Company, 1867, L. R 3 Ch. 2745 Seaton ¥. Grant, 1867, 36 L. J. Ch, Clinel, v, Financial Corporation, 22%, "Ry 5 Eq 482; L. Re 4’Ch, 117} Ati ‘Merryueather, 1868, L. it. 5 34.467, n.; Turguanz v. Morshull, 1869, L. R. 4 Ca, 386 Gray v. Lewis (No: 1), 1869-74, ©. R, 8B 541, L, R, 8 Ch. 1050; Pickering vy, Stephenson, 1873, L. Re 1h Eq, 382, Menier v. Hooper's Telegraph Works, 187s, Lb. 3 Ob $585 Ward v. Sittingboine 2? Thorrnoss Railway Company, 1874, L, Re 9 Ch. 493, n.5 Macdougali v. Gardirer (No. 1), 1875, L. R. 20 Eq. 393; LR. 10.Ch. 606; Macdoupuil v. Gerdiner (No. 2), 1875, 1.Ca. D. 13; Russell v, Wakefiid Water: tworks Sompany, 1875, L. Kk. 30 Eq. 480; Duckett v. Gover, 1877, 26 WR. 554, Poncir v. Lushington, 1877, 6 Ck. 1. 80; Ise of Wight Rainoay Company v. Tahoundin, 1838, 95 Ch. D. 883 ; Shuldert v. Grosvenor, 1886, 33 Cd. D. 5355 La ie de Mayville v. F7hidlay (1896), 1 Cx 907; Tiessen'v. Henderson (1899), 1 Cb, 866; ‘Alcear der v. Aulomalse Telcphoce Company [1900], 2 Ch. 69 5 Burland v. Barle (1902), AC. 985 Punt v. Symons & Conipcny Did. (1908), 2 Ch. £16.) ‘Bill by twro of the proprietors of sharvs in a company inco-porated by Act of Purliament, ‘on bohalf of themselves and al otlec the proprietors of shares except the Defendaats,190 £08$ Y. HARBOTTLE 2 HAGE 48, against the vo directors (thzee of whos bad bacomie-bankrupt), and agains’ x pro: Histor who wos net's dicertor, and the aulctor and architect of the sompeay, charging the Defendants with coneerting aud effecting various fraudulent anc illegal trarsactions, whereby the property of the company was misapplied. +lioned aud wasted ; that there had ceased to be o eufficient number of qualified directors tu constitato a board ; that the company bad no ele:i or office; that in such siremn- stances the propritors lad no power to Sako the property out of the hande of cho ‘Defendants, or satisfy tho liabilities or wind up the affairs of tha company ; pray'a, that the Defendants might be decreed to make good:to the eompany the * ses an expenssa catseloued by tho atta conplaisse of Sor praying” the ppointancos of reteiver to teke and apply the property. of th. compeny in discharge oF its Habil.ties, ‘and secore tho surplus! the Defendants demurred. Held, that, upon the facts stated; tho routinued existence Gf a board of Givestore de ‘facto must. be intended ; that the possibility of eorvening a generel nieeting of roprietors capable of controlling the ects of the. existing ‘was no? excluded Ey tho allegations of tho bill; that ir scch cixeumetances there was nothing to event the empeny from onsning ein erga haracer rsp Eon utcare complained of; tbat theratory, the Patutiteoould nov eue ins form of leading which assumed the pructica! dissolution of the rorporation; and thnt che Amurrere must be allowed ‘When the relation of trusteo and cestui que ost begins, as between the’ projectors of public companies and such eumpanies. Some forme preseribed for the government 2f a corporation may be imperative, ard ctLereuirestory only, On argument of a demcrrer, facie not averred in the bill, and which might possibly have been denied by plee, i they had beer averred, intended against the pleader. ‘The bill was filed in October 1842 by Richard Foss and Edward Starkie Turton, ox Lehalf of themselves and all other the shiacebolders cr Bro nietors of sbares in the company called ‘The Viotorie Pack Jompaay,” except such of the same rharcholders or proprietors of shares as were Defendants ‘uereto, against Tomax Harbotle, Joseph adsbead, Henry Byrom, John Westheed. Richard. Bealey, Joseph Derison, ‘Thomas Banting and Richatd Lao; and also against. F, Rottou, E. Lloyd, T. Peet, J. Bi and S. Brooks, the several assignees of Byrom, Adshead and Westhead, who had become bankrupts, The bill stated, id effect, that ia September 1835 certain persons concsived the design of associating for the purchase.cf ahcot. 18 acres of land, situated in the parisl. of Manchester, belonging to the Deferdans, Joseph Denison, and others, and nf enclosing and planting the sam° in an ornamental and park-like manner, aud erecting, Louses thereon with attached gardens ané pleasure-grovnds, and selling, letting oF otherwise disrocing thereof; ard tne Defeadants, Sarbottle, Adshead, Byrom, West- head, Bealey, Denison, Brnting and Lane, agreed to form a joiny stock ecmpany, to Conkistf takseray an others, for tho a puro at in October 189546] plans of the Jand, and a design for laying it out, were prepared’; that, after the undertaking had been projonted and agreed t yen, Denson pareteaed « coosiderstle portion of the said land.of the other original owners wish the object of reselling it at a profit, and Harbottle, Adshead, Byrom, Westhead, Buatjig and Lane, and ore: P. Leizester, and several other persons, nét members of the sssocistion, purchased the raid land in rele of Denigon and thy other owners ao,than af the time of pasting che Act of Incorporation Harbottle. Adsheac, Byrom, Westneo, Bantiag and Lane owned ‘ure thon half of the land in question, the remsindsr beiag the property of persons who ware not shareholders : ‘bat Denison and the last-named five Defendants made con- siderabie profits by reselling parte of the said ‘and at increased chief rents beiora the ‘Act was passed. sere, : + adhe Bil tated het, between Soptmbe:1885 ond the hogining of 1893, various preliminary steps were taken for enabling the projectors of. the said cotapany vo set .t on foot: that in April 1856 advertisemsiw, cescribicg the objects of the propored ‘company andthe probabiivies of its profitaule result, were published, ia whica it wes propoved t6 form the association on the prineiglé of tontine: that the sirst eight2 ARS 4, WOSS-%, HARBOTTLE 191 named Defendants and several other péreuns ‘enbscribed for shares ia the proposed company, and, among others, the Plin+'4, Wiss suoseribed fer two shores, and the Plsinéiff, Turton, for twelve suures of £190 each, and pened the.contract, aud paid the deposit of £5 per share: that’ at g prblic meeting of tho subscrivers called in May 1886. it was resolved that tho repor’ of th provisional committee should be received, ‘and the various suggestions therein conteined be adopted, subjec’ to the approval of the “Tirectera, who were requested to cov rlre such purohases of land, and als» such otaer ‘acts as they might [483] consider nasty fo carryiny he objets of the nndertakin, into efect; and it also resolved that. bottle, Adshead, Pyrom, Westhead an4 Braley should be appoiated directors, with power zo de such acts as they might consider necessary or desirable ‘or the inverests of the sorapany ; and Westhead, W. Grant and J. Lees were appointed anditors, Lane archiceet, and Banting soliton: that, in erdar to avoid the responsibilities of an ordinary partnership, the Defendants Haubottle and others: muggestel to tke subsoribers the propriety of applying for ar. ‘Act of Incorporation, whisa was accordingly do ‘tLut in compliance with such application, by an Ae intitaled * Ar fet for Kstaoliching »Compary for the Purpose of Laying Out «ad Maintaining an Ormarvental Park within the Townships of Rusholme Chariton-upon Medlock and Mose Site, in the County of Lancaster,” which received the Royal assaat.on the 5th of May 1887 (7 Will. 4),1t was enacted that certain ‘persons named in the Act, including Herbottle, Aashead, Besley, Westhead, Bunting ped Denison and others, and all cod svery stich uther persoas or person, bodies or body peliti, corporate or colleginie. ar had already subscribed ‘or should thereafter frou Hime te time become subscribers ur « subscriter to the ssid undertaking, and be doly adanitted propristors or a proprietar as thereiuafter mentioned, and their reepec- tive suoxessors, executors, adminiscravors and. sesigns, should be and they were thereby ‘united into a company for the purposes of the.said Act, and should be and they wero thereby declared to be one body politic and-corporete by the name of “The Victoria, Park Company,” and by that naine should heve -perpetaal succession and a commva seal, and by that name skould and might sue and be sued, plead cr be impleaded, os lew or in equity, and should and rmght prefer and prosecute any bill or bills of {akctment cr iaformation against any: person or [464} persons who shonld commit any felony, misdemeaour, or otber clience indictable cr punishable by the lawa of this reelms, and anould alse bave full power and suthority-to purchase and hold Jens, tonemencs and nerecitaments to them, and their successors and assigns, for the nse of the said undertaking, in manner thereby directod. [The bill stated severa! otber clauses of the Ant (@) Tho substance of the Act, a+ etuted in the bill, was as follows -—Section 3. ‘The company empowered to purcbace the lands mentioned in the schedule 5 5, And “other lands within a mile from the bou~ thereof ; but in case the direotors shall refure or negiect for fourteen days, after such recu‘sitior shall bo s0 left. as aforesaid, to call such eatrao-dinary meoting, chen the p:doriet es signing tie requinition may, for the purposes mentioned in’ such requisition, call an oxtenurdinary general’ mecting of the proprieto.s, by notice signed Ly then., and advertised in’ one or more of the Manenéster newspapers, at least toni(een days before the time fixed for holding the meeting ; and in avery such. advertiso- ment the objest of such extiaordinary medting, and the day and hour and place in the town of Manchester of hoiding the same, and the delivery of the requisition to the said board, and of its refusal to call sucb extraordinary meeting, shall de spec fied. 65. Tyo of the directors selected By lob amongst them:elves to retire fom offi-e at eer) emTARE, 408, FOSS’ ¥, -HARBOTTLE 198 rnd Byrom, and the laid’ vo-stated vo 'bé purchased of “Mr. Laoy-aud another” was at the time.of the passing of the Act vested partly in Mr. Lacey and partly in Lanw. ‘Tho Dill ‘stated ‘that the purchas> and sale of she said land as aforesaid was the resilt of an arrengeinent ‘raudulently ecnoerted and agreed upon between Harbottle, Avishead, Byrom, Westheac, Denisoa, Bruting and Lave, at or after the formation of the company was agreed upon, with ths object of enabling themselves to derive a the annual general meeting in July 1841, aad be replaced by two qualified proprietors, t5 be than elected, by the majority of votes xt euch moeting, and two others, the longect in ciice, or £0 aclected to retirs, at svéry subsequent annual general meeting ; tout the retiting directors io.bo reeligible. 67. No person shall be a director who shall not be a holder in his own right-of che numnber of ebsres horeinafter montioned in th2 capital of the company, vis., who shall not be a holder of ton shares at least, co long a8 the total nutaber of the’ shares shall exceed 500 ; end from and ofter the totul namber of shares of the compary snall be reduced to and shall uot exceed 100, thon who shall not be'a holder ot ve shares at least ; and, if any of the then or futare direotors shall cease tn nold-the respective aumber of shares aforesaid in bis corn righty is offco a6 direcior shall serenpon aud thenceforth become vacated. 68. Directors may vacate by resigning their offers. 70. Board of direccors to appoint qualified persons. to. Al’ up the offs of duwors dying, rasigning, removed or Becoming “disqualified before cbeir time of .retirenient; such appointments to be subject to the approbation of. the next general-_meeting. 73. Cheques, bills, notes and otbe- negotiable securities to be signed. &e., by the treasurer 0. such other officer of the company athe Beard should by nalts appoint and no others to be binding a the company. "74 That all‘ act*one suits and other proceedings at law or in ty wo be commenced and proseontet) by or on bebalf of the company shall ond lawfully may be commenced and iostituted or prosecuted in the name of the treasurer, or-any one of the directors wt the -ccmpany-for the tims cing, a8 the nominal Plainti®’ for and on behalf of the company ; aid all notions, ce, against the company shall be commenced and instituted au prosecuted. egaics: the treasurer, or any one of the dirsetors of the company for the: tinue -being, as the nominal Defendanc for ‘ang on behalf of the company. 78. Direotors to have power to sell or declare forfeited shares: for aon-psyment’ of debts or liabilities to tke company. 83, 84, 85. Shares vested in executors, tegatscs and assignees of proprietors, upon being treusferred and-dnly registerec, end svch exentors, legatees, assignees, &o., to be liahle to cails, &e,, as if criginal proprietors. 90. after one-balf of the capital of £500,900 should iusve been paid un, tho borré of directors, with the sanction of a general mooting,empowere vo barr at in'erost any sum, or sams of aoney, not exceeding £150,000 in the who's, om the security of the lands, property and effects of ube company, by deed or writing under their common seal entries of all such moregages,-and the particulars thereof, to be.made in a book to be kept by the clerk of the company, and such b2ok to bs open for tine perasal at all reasonable times of any propritor ot radio. of the company. $9. Mortgages not roqire to see to the noeessity for or application of tte mortgage money. 105. Board of di-ectors, ‘with the sonction of. two successive ceaeral meeting, and the proportion in-number aud value of, the proprietors ond stares therein’ mentioned, empowered to put an end to the tenure by way of tontine, and disvbarge.the shares from all benefit of survivor- ship. 17, 108. Power to dissolve: tke company; end wind up the affairs thereof, i manner. therein mentioned, onder the sanction of sueis general me T12, Notioes to proprietors sent by post anconding to their aidrsces in the register, to be suflicient, » 129. That in all cases wherein Ye may be requisite or necessary for any. person or party to serve any-notice, ot any writ or other legal ‘proosedings uon the said company, the vervive thereof upor the clerk or secretary to the company, o° .ny agent or officer employed by the. sxid direstor, or leaving ‘the samo as the ofice of such cleric or agout or officer, or at his last or usual place of'aborte, or pon any one of the said directors, or delivery: thereof to some inaace at his last nr usual place of abode; sual! be deemed good an sufficient serviec of the same respactively 6a the company cr their directors. v0 x—7194 FOSS: 1 HAL-ROTTLE 2 RARE, 36% ‘profit or personal benefit from’ the establishment of the said sompany 5 and that the errangement emougst. the persons who wore pares to the plan was that a certain number from aiaongst themselves should 9 apzointed directors, and shovld purchase for the compauy the said plote of land frcm tty persons in whom they were vested, ‘at greatly increased and exorbitant pricey: that it waa with a view to carry the arrangement into, effect. that.Herbottle, Adskead, Byrom’ and Westhese procured themselves to be appointed dircetors, snd Denison procured himes'f to be appointed audivor: that accordingly, aflar the ‘said lots of land had bevome vested in the several persone named in the sobedale, aad before tie passing cf the Act, the said directors, on bohalf of the ecmpany, agreed +0 purchase the same from the persons named in the echedule ot rents. or’ prices greatly exroeding those at which the sid cons had purchdsed the same : chat efter the Ax was passed Harbottle, Aidsbead, Byrom, Westhead and sealey continued to. act, us dirgtors of the ineonporsted company in the same mariner as bafore: toat Adshead continued to act as director until the 18th of July 1389, Byrom.until the 2d of December 1889, and [469} Westhoad until the 2d of ‘January 184C, at which dates respectively flats it bankraptey were issued against them, and’ they. were respectively declcred bank rupts, and ceased to be qualified to act as directors, and their offices 2s director. ‘became “vacated. ‘The bill stated that upwarcs of 3000 ehares of £100 in the capital of the company were subscribed for: that the principle of toctine was abandoned : that 'efore 1840 calls wete made, amounting, with the deposit, to 225 per share, the whole of which were not, uowever, paid by all tae proprietors, bat that a sum exeoeding £35,000 in the waole was paid. The bill stated that, after the passiuy, of the Act, Harvottle, Adsneai, Byror» ‘Westhead, Bunting and Lan, with tio ecncarrerce of Denison and cf Besley, proceeded’ to carry into execution the derign which had been forme proviou:ly to the incorporation cf the comyany, of frandulently profiting and enabling the other persons who had purobased aud shen ‘held the ea land, to, profit by the ateblsh tment of the company and at its expente; arc that the said directurs accordingly, ‘on behalf of the company, purchased, or agreed to purchase, from theraselves, Harbottls, Adshead, Byrom anc. Westhead. und from Banting and Lane, and the citer persous in whom the said land was vested, the same plots of land, for astates corre Sponding with snose purchased by and granied to the seid vendors, br the origins! owners thereof, charged with chief or fesfarm rents, greatly exceedidy the Tate payable te the persons from wiuom the seid vendors bad so purchased the came: that ‘of some of such plots the conveyances were taken to che Victoria Park Com- any, by its covporate name ; of others, ‘0 Harbottle, -Adshead, Byrom, Westhead aad Bealcy, as directors in trust,for the company ; [370] and ucuors rested iu agresment < niy, without conveyance : that by these meant the company took the land, charged not only with the chief rents reserved to the oviginal landowners; but also with acdit‘o.i rents, reserved and payable to Harbotile, Adshead, Byrom, Westhead, Denison, Banting, Lane and others: that. in.farshe> persuance of the,ssme fraudulent design, the said directors, after purchasing the sid iand for the company, epplied abcat £27,000 of the monies in, theie hands, ‘belonging to the company, in the purchase ‘or redemption of the rents so reserved to themselves, Harbottle, Adshead, Byron, Sroubead, Daccoca, Banting, ane aad thers, lecring the land eibjooe aly te the chief rent resurved to the original landowners, ‘Tho bill ctated. that the z ans of the.par't werv contrived and-designea by Lane, in concert with: Denison, the directors and Punting, oo as to render the formation of the park ‘Le means of greatly iucreasing the value of certain perce’s of lend, partly belonging to Danison and partly to Lané, situated on. the ovtaide of the toundary line of ts par, but batwen augh, bonniray Jin and one of tho lodges nad entrance gates, called. Oxford Lodge and ate, ecve'ed on a small part of the same land purchased by the company ; and throngh which entranze, and the land so permittec to be retained oy Denison and Lane, one-of cho princips! app-oaches to the park wes wade: ‘hat che said land so retained by Denison, and Lane-was ossentially nexessary te the establistment of the park, accordinis to the plans prepared by Lans, and tho same vas virtually incorporated in the pack. and houses erected thereon would enjoy2 ARR, 4, FOSS v, HARBOTTLE 195 all the avantages of thepark, and plots thereof wero in- consequence sold by Denison and Lana fer building laud at enbanoed oricee, [471] ‘Tho bill stated that, aftor tvs ourchaso of the land as aforesaid, the directors proceeded to carry into effect the design of converting the same inty a park, and they ecordingly eréotod lodges and gates, mazked ont with fences the differenc crescents, terrace, strots rod ways; formed. craius and cower and mace roalwaye, anc planted ornamental trees and shrnbs; that thoy also caused to be erected fu diffeceut parts of the park several houses ant buildings, anme of which only were completed ; and tha: the directors alleged the mooiss expended in the roads, rai. and vewers amounted to £12,000, and-in the hoser and Luildings to £89,000, or theveanouts: that the said directors sold and let s~eral piots of land, and also sald and let severa! of the houses and buildings, aad reosived the rents and purchase-riousy of the same. ‘Tho bill stcted that Hasbottlo, Donon, Bunting and Lane did not ay up their calls, but some of them retained part, and others tus whole thereot; Harbottle and Lave cla'ming to sot off the amount of the calls against the chief ren's of the lands which they sold to the company, Bunting claiming to set off the sane against the chief rents, and the oosta and charges die to him irom the company ; ind Denison claiming to set off the amornt of the calis egainst tho rents payable to him out of tha Tand which he eolé to persons who rorold the same tothe company. Tho bill stated that owing to the ierge sums retained out of the calls, the sums appropriated by the said directors to thomselves, and paid to others in reduction SP tbs iuoreased chief rents, aod payment of auch rents. and orring wo their having ouberwivt wastod and misapplied a conciderable part of the monies belonging to the ‘ocmpany, tae funds of the compsuy which came [472] to their hands shortly after its establishment were exhausted: that the said civectors, with the privity, know- Tedge aad eoneurrenee of Davison, Banting and Lane, borrowed liege sums of money from their bankers -upon the credit of the company: that, as curther means of suising money, cbe eaid directors, ond Bunting and Lane, with the eenctrrence of Denivon, deow, made and negotiated “variots bills of exchange and prom'ssory notes; and that, the said directors also cased ‘several bonds to be exeevted under the componate seal of the eompaay for sevwriag severa) sums of money to the obligoes thenof: that by the miadle or latter vart of the yea 1899 the directors, and Bunting and Lane, had come under vecy Feavy liabilities ; the shief rents payable by the onpany were greatly in arrear, and the board of directors, with the concucrence of Devivon, Buatig aad Lane, appli! to the United Kingdom Life. Assurance Conpany to advence the Vietoris Perl: Company a large sum of money by way ‘af mortgage of the lands and-hixeditcraents comprised in the perk; but thc ‘Assurance Company wore advised that the Victoria Park Company’ were, by ‘the 90.8 seotion of ‘their Avt, preclu2¢ from w-rowing monay on mortgage, tmtil one-half of their rapital (naueiy £500,900) bad ben paid up, and on that ground declined to make tho required loan: that the directors, finding it impossible to raise meuey by mortgage io a log'tirate manner, resorted to stveral contrivances for the purpose of evading the provisions of the Act, and raising money on mortgage ‘of the property of the company, *y which means soveral large aims of money had buer charged by way of morigege ot lien upon the same: thas to effecu such mrégages or charges, the directors procured the person: who Lad contractet to sells plots of land to the enmpeny, but had pot executed conveyance, to con- vey the same, by the direction of the board, to some [473] other person ct persons in mortgage, and afterwards to convey the equity of redemption to the directors in rast for the company :. that the directcrs also conveyed sorne of the plota of land which had beea conveyed to them in srust for the company to some other persons by way of mortgage, and stood poszsed of ths equity of redemption in trust fr the company: that, for the same purpose, the board of diseotors caused the common seal of the company to be fixed to several conveyances of plots cf land which kad been conveyed to the company by their corporate name, and to the Jireoturs in trust for the company, whereby the saia plots of land were expressed to be conveyed for a pretended valuanle ‘consideration to one or more of the aiid directors absolutely, and. the said directors ‘or director then conveyed tho same to cther persons on,mortgege to secure sometimes196 FOSS 0, TARBOTTLE RARE, monies advanced te the said cirectors, aud by them paid over to the. Loard in satis- faction of the conside:ation monies exprossert vo be paid for the said prior conveyances under tae common seal, sometimes antecedent deoi« in respoct of monies orrowed by the board, and sometimes monies whizh had brea advanooa by. the mortgazees upon the security of the bills +-2 noics. which. had been made or discounted as aforesaid : that, in other cases, the said ciactors and Bunting dezosited the title-dec. of parcels of the land and buildings of the company -vith the holdere of such bills ane notes to secure the repayment of the mon‘es due: thereon, and ia order to reliev tho pasties thereto: that, by the means aforraif. the dirctors, with the conearrence of enison, Bunting and Lane, mortgaged, cl-aiged or otherwite ineumkered the greater tof the propeiy of tke company: thet nanny of such mortgages and Tneatn raneers had ootee that che eid board of Greate had not power under the Act ¢> ‘mortgage or enargs the property of the smepany, and that the [474] said n.ortgaces, Shang inoumbrancts were fraudneat aud id a0 against the company, We ths the Defoudants allege that somo of the said inentabrances, were ec pleuned and contrived that the persovs in whose favou vhey wero ereated had not such notic ‘That the snid directors having exhausted every moaus which euggested themselves to them of raising money upon oredit, or npon the soourity of the property id effects oi the cowpany, and belog unable by trove weans to provide for the who's of -he monies due to the holders of the said hille ond nuves, aad the other persuns to whom the enid directors in the said transsotions hod become indebted as individuals, ad to satisfy the debts which were due to tho persuns in whcse favour the said mortgages and ineumbrances had been inproperle ereated, and in order (o release thernselves from the responsibility which they, had persnaally incurred by taking conveyances or demises of parts of the said land to tho said directors as individuals in trast for the company, containing covenants on their pasta for payment of the reserved rants, tn said ciree:ors cesolved to convey and dispose of the property of the company, and ‘they accordingly themselves exeouted and caused to be exeented. ande: tie com:non, seal of che company, divers conveyances, assigntuents aad other assurances, wher.by divers parts of the ssid lacs and effects of the company wore exprested to te coaveyed o: otherwise assured absolutely to the holders of some of the said hills ad notes, and some of the said mortgagees and ivoumbraucers, in cousiderasion of the monies thereby purported to be secured ; and also exeoated, aud cansed to he executea undec thy common seal of the ecmpany, auvers conveyances and assurances of other parts of the said lands to tho porsons who sold the same to the company, in cousidera- Hon of their oleasing them from [476] the payment of the rents revved ant payable out of the said lands that many’ of sach conveyances bad been eccuted Ly Harbotsie,, Adshead, Westhead aad Besley, and a few by Byrom, who bud bee induced *0 execute thom by being'threatened with suits for the reserved vents: that. Harbcttle, Adsheed, Byrom, Westhead and Realey threstened and intended. to eoney ‘ond assure the, remaining parcels of land belonging to the company to thr holders oF others of the said bills and notes, and to ctiers of the said mortgagers and incum- brancets and owners of the chief rents, in su‘isfac’ion and discharge of tue raid monies and rents due end to become dve to thom respectively. ‘The bill stated that, upou the bankreptey of Byrom, Adshead and Westhoai, their shares in the company heoame vesvod ia the Defendants ther ssiguecs, a that they (the bankrupts) had long since ceased to be, and were not, shareholders in. the company : that the whole of tholand resold by them was vested in some persons unknown to tie Plaintiffs, bat whose namcs. ihe Defendants knew and: refused to iscover: that, upon the bankruptoy of Westhead, there ceased to-be a sufficient number of directors of tke company to constitate a board for transaating the ousiness. of the company in manner provided by-the Avr, and Harbottle and Bealey. became ‘the only remaining direotors whore office bad rob become vacated, and no pereon or persons hed been. appointed to supply the veconcies in the board of directors occasioned by sch bankrapteies, and. consequently thee never had been arproperly constituted board of direoto:s of the company since the bankruptey of Westheu. "That Eyrown, Adsheed and Westhead, noverthelosa, aftr their respective benk- rupteies, executed the soveral [476] absolute conveyances ond other aasuresices of th> lands ard property of the company, which were co exscuted “or the purposss aid in g &2 maRS; a2 FOS3.0, HARBOTTLE 197 manner cforesaid, -after the diseotcrs' had éxhausted their: mosins of Taisiug moriey ‘upon eredit or upcn the.scourity of the property of tho company. + ‘That about tho end of tke year 1935, or commencement of the year 1840, the said dhvectors discharged Brammell, the secretary of the company, and gave up the office taken by the company. in Manchester, and transferred the whole or the greater part of, the titledeeds,-bocks and:papors cf the naid-compauy into the bands of Bunting ; ‘and frora that tite to the.presont the company had bad no office ci its own, but the fain ofthe com pany hod been principally condied as the offs of Bunting. That, the coly ‘of tho land bought by he company which bed not been conveyad away either absolutely or by way or mortgage, and the ouly pars of the Sther propery and effcets of the conpiny which had not been diapcset of and mode favay With fa manpor afore, rwnainnd vested i and ia the ores and disposition of, Bartottle, Adshead, Byrom, Westhead, Bealey and Bunting, ir. ‘chose custody or ‘power the greater part of the beoks, dees and papeis belonging to the company which had not been made away with remained : that by the fraudalent acts rd proceeding: in the oremises to which Farbottle, adshead, Byrom, Westhead, Bealey and Bunting were pasties, the property and effects of tho said company had been and then wers Involved in almost inextricable difficalties, and if such property and effectr wero any longer eilowed to.xemain in their ordei and disposition, the seme would be its deuger of being; wholly. dissipated and ireetrievebly [477] lost: that the said’ compat.y were then largely indubted to their bankers and other persons who bad bond i's sdvanced money t9 the company, and to the bm'ders and other persous who had executed 2ome cf the works in tae park, and provided materia forthe same; whi in. onsequonse of the property of the company having been westec and improperly disposad of by the dintong thsre’ wore at present ro available fonds which eould be applied :n satisfection of the debts of the emmpany, snd that rome of. the eradilors of the said ‘eompany had obtained judgmenta in actions at law brought by them egainst the company for the’ amount of their Cebts, on which judgments interest wa: daily acoumnu.ating. ‘Tho bill Satod tha’ in the preset vireumstunees of the company;'and the board of dirctors therscf, the propristo.s of shares had ro power to take the property and effecte uf the company out of the bands of Hatoottle, Adshead, Byroa, Westhead, Bealey and Bunting, and they hai no power te appoint directors te’ supply the vacaneive in the board occasioned by the said baakruptcies, and the proprietors of shares ja the company had vo pow vo wind up Tiguidate or sete the aezounts debts or affairs of the company, or to dissolve vhe company, nor had they any power to provide for and satisfy the existing engagements and liabilities of the company with a view to ita continuance, and the prosecution of the undertaking for which it ‘was established without. the aasistanee of tho Conrt: that if a proper person were appointed by the Court to take possession of and manage the property and effects of the company, aad if the company were to be repaid the amount of all losses and expenses which it bad sustained or incurred by resson of the fraudulent a:ad improper avis and proceedings of the. Deferdante ia the premites, and [478] which the Defer. Gant or an of hom, wer able ea gud to the aid company as hersralar pray-’; and if the company were decreed to take and have conveyea to them 30 Thoth of the said lend wtich wag retaine! by Detison and Lane 2s aforeaid, upon {ying or aggounting to them for the fair valio thoroof nt the time when the under. taking was first projected ; aud Denisor. and Lene were to yay ot acecuut to the said company for the price reosived by tuem: for so mech of the sec land as had been sold by “hem, over and above what wns the fair price for the eame at che time the and-riaking Was first projected ; aad if the mortgages, charyos, iacumorances ent liens, and the said conveysuces and other assurances, by means of which the property and effects 0: the company had Leen improperly incvmbered and disvosed of, which could b3 redeemed or avoided, .. -gcinst the persons claiming thereunder, were redeemed and set aside, aud th> property end effects of the company thereby affectec ‘wore restores to it, and the Defendants, who had ast bevome bankrupt and who had ‘aot paid op, but ought to have paid uo, iuic the joiat. stock eapital of the company. the au wuts of the several calls made by viz d'-vetare on their respective shaves, were to pay up the same, the lan’ propery and effects of the company would.no’ only be198 FOSS 0, HARBOTTLE 1 ARE, 3, sufficiens to'satisfy the whole of its existing debts and liabilities, Lut leave a sur plas, which would enable the company to procend with, and oither wholly or in pert sccomplish, the undertaking for which it -var incorporated. ‘Tho bill stated that the Defendan‘s concealed from the Plaintiffs, and the other sharehotJers in the company, who were no! personally partier thereto, tho several fraudnient and improper acts snd proceedings of the seid directors and the seid otbor Defeudanss, and [470] the Plsintifs ard tho other shareholders bad oaly recently ascertsined the particulars thereof, 20 far 23 they were therein stated, anc they were uneble to ect forth the same more particularly, the Defendants having refused to make any discovery thereof, or t” allow the Plaintifis to inspect the books, wccounts or pepere of the company. ‘The bill charged that Harbottle and Bealey, and the estates cf Adshrad, Byron and Westhead, in respect of that whieh ocourres before their said bankruptcies, and AdsLead, Byrom and Westhead, as to Lut oocurred sinco their said -barkroptcies, ‘were liable to refund and make good to the company the amouns of the losses aud expenses whicb it bad sustained in respect of tho fraudulent and improper dealivss cof the said directors of the eoapany witt ‘ts lands and property: tirt Denison, Bunting and Lane bad evunseled and advised tne directors i their sid proceedings, and had derived considerable personal beneiit and advantage therefrom : that Denise, Bunting and Lane wore all parties to the said fraudulent scheme planned and executed te Morea, by which the several plots or parcels of lad in the purl: wenn parohased and resold to the said compeny at a pruft and at a price considerably exceeding the real value of the same, aud that Denison, Bunting and Lane had derived considerable roi from the ierensd prie or obief rents made payable out of the sora plots cr reals of land which were pnrebassé and resuld by them in manner aforesaid, and ‘rom the monies which were paid to then. os a-consideration for the reducticn of the same chiof rents as before mentioned. ‘Lhe bill charged that severel general moecings, and extraordinary gencrai meetings. and other mectings of [480] the shareholders of the company, were duly convened and held at divers times, between tho time -vhen the company was first rstablishod and the year 1641, and nartieu‘arly on ot soout the several days or times shereinaiter mentioned (naming ten differeut dates, from July 1837 to December 1831), snd that at such meetings false and delusive statements respecting the cieumstances and prospects of the company were made by the directors to ‘he proprietors who attended sach meetings, and the rath of the several frenduloni and imprcper acta and p-o ceedings therein complained of was not disclosed. ‘The till cnarged thet, under the circuzstances, Denison, Bunting and Lane, having participated in and personally beretited by ‘and soncéaled frow the otber shareholders the several iraudulent and in.oroper acts aforesaid, were all joint!y av severally liable togethe-, with the said divectors, to make good to the comp.ny the amount of the losses and uxporses which had been ov might be inourred in vonsequcnee of such ofthe said wrongful and fraudulent acts and proceedings as thay rer partes rivies to: that Harbotsle, Byrom, Adshead, Westhead and Bealey, respective'y had still some of the property and effects belonging to tie company: thet the sai Test nmaed Defendants bal not paid up the elle nnd payable on their respect sharss: that the Plaintiffs had as yet paid onlv three of the calls on their chares, roo having paid the remainder in consequence of learning that, owing to some misconunct of the directors, thy affaire of the company ware in difiealties, the caus of which ifficutties the Plaintt’s had tut lately, and with considerable difficulty, ascertainsd to bave arisen ‘rom the procee‘ings aforesai3, but in all otber respects the laintitis had eouformed to the provisions of the Act: that liere were not any [481] share- jaoldors in the company whe had ct cwid up the ails on their shares Fosides the Plaintiffs and the said Defendants: thai the names anc. places of abods cf the otlcs persons who are not shareholders in the company, out are interested iu or liable ir respect of any of the ssid matters, were ungrown tc the Plaintifs, and the Defend ints ‘ought to discover the same: that the numbe> company, and to promote the underwicing, but not to extinguish any of che rights of the proprietors inder se. The director: weve trastees for the Plaintiffs to the extent of their sires in the company ; and the fact thatthe ecmpaay he? taken the form nf corporation would not be allowed to deprive the cestui que trusts of a remedy agains. their trastees for the abuse of their powers, The Aci of Incorporation, snoreover, expcosaly exempted the proprietors of the company, or persons deaiing with the company, from the necessity of adopting the form of proceuding applicable to a pera corporation ; for the 74th section eae p. 454, n.) enabled them to aue aud be sued3 HARE, sa, HOSS 0, RARBOTTGE 201 1a the name of the treasurer, or any one of the directors for the time being: the bill alleged tht the two remaining directors had refused to instivate the suit, and chewed; in fact, tasb it world be against their pe.sonal diaterest to do so, inasmuch av they were an:werable in respeot of the transactions in question; if the Plaintif’s could not, vherefcre, institute the suit themselves thoy would be remediless, The directors were madu Defendants; and, under ths 74th clause of the Act, any one o{ tho directors might be mace the [487} nominal revresentative of the company ; the corporation was therefore distinctly represented in the suis, ‘The present proceeding was, in fach, the only fcrm in which the proprietors could now imprach the conduct of the Eody to whom their affairs had been intrusted. The 98th section expressly excluded any. Froprietor, not being a direotor, from interforing in the management of th» business of the company on any pretence whatover. The extinction of the board of directars hy the tmckraptoy and Gonsegucat diogoalfention of arse of thee (sect. 67), and the. want of any clerk or ofice, eflectually prevented tho fulfilment of the form which the {6ch, £°th ud 48th sections of tae Act required, in order to the due couvening of ‘2 general meeting of proprietors competent to secure tho remaining propercy of the s.Srncel mening of pore nape he Following ase were cited during the argamost Phe Chait Ompoaton v. ‘Suton (2 Atk 400), Adorney Goueal veto (11 on, BeOh Adley v. Tae Whitstable Congany (17 Ves. 315; 2M. & Sel. 83; 19 Ver. C4; 1 Mer. 101, 8. C.), Blackurn ¥, Jepaun (o Swans. 138),: Hichers v. Congreve (4 Russ.’ 562), Blain’ v. lpr (2 Sim, 289), chards v, Davies (2B. & M. $41), Ranger v, Great Weslers Pailicay Company (1 Railway Cases, 1), Seddon 7. Conneid {10 Sim, 58, 79), Preston v. Grand Collier Dock Gop (21 Sim, 337, 8. O.- 2 Realy Cases, $85) “Attorney Gineratv, Hilton (Cr & Ph. 1), Walhworth v, Holt (4 Myl. & Or. 619), Bligh v. Brent (2 Y. & Coll. 295; por Alderson, R), Viner, Ab, $96, tit. Corporation, U., Bicon, Ab. tit, Stavute, L$ [488] March 95, Trax Vice-Caanc==0n (Sir James Wigraim]. The relief which the Dill in this cute cocks, as against the Defcndarts who uave demurred, is fcunded on several alloged grounds of complaiut, of theve it ic om necessary that I should meation two, for tke ocnsiderction of those io grounds involves the principle pon which I iin: alt the de,aurzers must be devo..3i="" ae ground is that the dirccvors of the Vietoria Park Company. the Letendanta Harbottle, Adshead, Byrot and Boaloy, have, in their charactor of directo.s, purchased their own land's of thercelves fcr the-uso of the company, and have peid for them, or sather taken to themselves out of the snonies of the vompany a prive exceeding the value of euch lands: the other gcound is that the Defendants have razed money ina manner not authorized by their Dowers under the'r Act of Incorporauon,, and especially that they Lave mortgaged » inounr ber d the lands and preperty ef the company, snd applied the monies thereby saised in cffect, hough cireuitously, to yay the price of the lund which they had to Bought of themselves. do not now express any opinivn upon the question whether, leaving out of view he special form in which the Plaintifis heve nroccedel in the’ suit, the bill alleges cats in which & Court of Equity would sey that the sraucaetions in question are to bn orened or dealt with in the wacner which this bill seeks thet they should bes but J certainly would not be understood by anything I seid during the argument te do otberwrive than express my cordial ccncurrenoe in the doctrine laid down iu. the case of Hichons v. Congrove (4 Russ. 562) aud other oases of that class, I take. those ceses to be in aorordance with the principles of this Court, and to be founded on [480] justice and commonsense, Whether particular cases fall within the principle of Hichons v. Congreve is another question. In Hickens v. Congreve property was scld to 8 comprny by persons in a fiduciary cnwacter, the conveyance reciting that £25,090 hed been paid for the purctaso; the faet being that -£10,C00 only had been paid, £18,000 going into the bands of the perrcns to whom the purchaso wae entrusted. { should not oe in the least degree dicpored to limit the operation of that doctrine i, any ase in which porson projecting the f2rmetion of a sompany invited the public to join him in the project, on a represeniation that he had. acquired property whic! was Intended to be appied for the purposes of the company: I should stroagly incline to hold that te be an invitation to the puble to partisipute inthe benefit ofthe property parchased, on the terms on -vaich the projector had acquired it ‘Tho Aduciaty V0. xm—7*20° FOSS v. KARBOTILE 12 RARE, 490 character of che projector would, in such a ease, commance from the t'me when he rst began to deal with the pablic, and wonld of course be controlled ‘n equity bj the reprenentation he ther made to the public. if persons, on the other band, in-cad- ing to form a company, should purchace land with « view to the formation o, “t, and atato ab once shat they were the owners of auch land, and proposed to sali it ata prico fixed, for the purposes of the rompany about to 1/9 formed, the transaction, so far as ‘the public are concerned, commencing with that statement, might not fall within the principle of Hickens v. Congreve, A. party may have a clear right to say: “I begin Boe transaction at this time; Thave purchase lead, 20 matter how or hom whom. ¢ at whab price; Iam willing to soll it s ce-te'n price for a given parposr.” It ir aot necessary that I should determine the effert of the transactions that are stated to bive occurred iu the present ease, I make these observations only that 1 iay not be supposed, from anything whicd fell from me during the argu[400]-ment, to entertain the slightest hesitation with regard to the application, ir» proper case, of the principle: T have referred to. For the present norvoso I stall assume that’ a case is stated gating the company, a8 nadie ws 3nd, to complain of the tansactics. mentioned ‘The Viotoria Park Company isan incorporated body, and the eon‘tuct -vith which the Defeudants are chacged ir this suit ie at. injury not to the Plaintiffs exclusi-ely ; itis an injury to the whole corporation by ind::iduala whom the corporation nntrusied ‘with powers to be exercised ouly for the good of the corporation. And {rom tne case of Ths Aliorney General v. Wilcon (Cr. & Pb. 1) (without going further) it may be stated ‘as undoribted law that a bill or information by a corporation will lie to be relievd ia respest of injuries which the ecrporation uias cufferpd at the hands of persons standing in the sitnation of the directors upon this secerd... This bill, however, ditfere from bat in The Aitrmey-General v. Wilson in this that, insteac of the corporation being formally represented as Plaintiffs, the Wil in this oxse is brought by two iadividual eorper.tore, professadly on behalf of themselves and all the other riembers of the corporation, exept those who comanitied the injuries ecmplained of —the Plaintifls cssuming tn wwemselves fhe right ond power in chat mwnner to sue on behalf of and represent the corperation itsel Tt-wss not, nor could it suetessfully be, argued that it, was a matter of course for any individoal members of a eorporation thus to assume to themselves the right uf suing in the name of the corporation. In law th> corporation and tke aggregate members of the corporation are not the sane thing for purposes like tis; and the [491] oniy question can be whether the facus alleged ia this case justify a departrre from the cule which, primd fecie, wonld require that the corporatior shculd sue in its ‘own uame and in its corporato cheraeter, or in the naise of someone whom the law hhas appointed to ba its representative. ‘The domurrers.are—first, o! three of the directors of the compan, tvho are :1so alleged to have scld lands’ to the corpcration under the ciroamstaners charged ; secondly, of Bealey, also a dirretor, alleged to have mado himself amenavl> to the jutisdietios, of the Court to rewedy the alleged injuries, though he was nct a solier of land; thirdly, of Denison, a sellar of lo-4 ia tike manner alleged to be implicated jn the frands-charged, chough he was not 4 directo; fourtaly, of Mr. Punting, the solicitor, and Mr. Linc, she atehiteot of the company.’ These gentlemen are neitkor Alrzetore nor tallrs of lend, bu all the francs are alleged ro have been commit’ with their privity, and they also ero in this manner sought to be implicated in them. ‘The most convenient course will bo to consider the demurrer of the throe against whoa the strongest case is stated; and the cousideration of that caso will apply to the whole. The frst objection taken in the argument for the Defendants was that the individual mercbers of tha corporation cannot a auy case sue in the form in which this bill is framed. During the argument I intisaated an- opinion, to rhich, upon farther consideration, I fully adhere, that the rule was much too broad stated on the pat of the Defondants, “think there ar cates in which a soit might prop. be so framed. Corporations like this, of a pivate nature, aro in trath littl. more than. privavo partnerships; and in eases which tay easily bo st; it vould be too much to hoid that a society [492] of private persons: associated together in undcr-. MARROTTLE 203 2 ARE, 6, FOSS takings, which, taough certanly beneficial to the yr.blic, are nevertheless matters of private pcoperty, are to be deprived cf thair civil “ights, inter se, because, in onder to make their eanmon objects ra0re a%tzinable, the Orown or the Legislatcre may bavo conferred upon thom the benefit of a corporate character. If a rase should arise of injury co a corporation by some of ion members, for which no adequate remedy romaboed, xcept that of a suit by individaal corporators iw-their private characte:s, and asking in such charactor the oroteation of those rights to. wlica in thelr corporate character they were entitled, { cannot but think that the principle so f xreibly lnid down by Lord Cottenhara in Wallworth v, Holt (4 Myl. & Cr. 636; seo also 17 ‘Ves, 320, per Lord Eldon) and other cases would apply. and the claims of justive would. be found ‘uperior to any difficulties arisiug ovt of technical rales respecting tle mode ‘in which Corporations are required to sue Bat, oa the other hand, it must not bs without reasons of a very urgent character that established rcles of law and practice are to be ree from, rules which, though in'a seme toghuieal ars founded en geueral principles of justice and convenience 5 and the qnestion is whether a case is statcd in this bill entitling the Plaintiffs to cue in their private characters. {His Honoz ctated the substance of the Act, scoticns :, 38, 29, 43, 48. 47, 48, 49, 67, 70, 1i4 and 129 (supra, p. 464, n. et eq.).] The result 3f those clauses is that the directors are made the govermmy body, subject to the supsrior control of the proprietors acsembled in general meecings ; and, as I understend the Act, the proprietors co assembled have power, due retice being given of the purposes of the mecting, to originate 158 for any purpors within [493] the srope of the ‘company’s powers, 2s well as to control the direvtors in any Acts whica they may Lave criginated. "Ther may possibly be some exceptions vo this proposition, but >aok je the goneral effot of the ‘provis.ons of the statut= Now, that my opinion upoa this case may be el-arly understood, I will consider separately the to. principal grand of eompiaint tc which I have adverted, with reference to a very marked distinction between them. The first ground of coraplaint is one which, thoagh it might zrimd facie entitle the corporation to rescind tha trans. actions complained of, does not jutely and of necessity fall under the description ot a void transaction. The corporation mighe sleet to adopt those transactions, and hold the directors bound by them. In cthur words, che transactions rdmit of con- firmation *t the option of the corporation. ‘The second ground of complaint may stand ir, a ditferent position ; T allude to the mortgaging in a manner not authorized Dy rhe powers of the Act. ‘This, bei g beyoad she powers of the corporation, may almit cf no confirmation whilst any oae dissenting vcice is raised agaizst it. This distinet’-n is found in the vase of Preston v. The Grand Collier Dock Company (11 Siva. 821, 3. C.; 2 Railway Cases, 335). On the first point ic is only necessary to Te‘er io the clauses of the Act to shew that, whilst the supreme govern.ng body, ‘be proprietors at a special geuiera: meeting acsempled, retain the power of exereising the functions conferred upon theim by the Act of Jncorporation, it eanuot be compatert to individual corpocators to sue in the minne> proposed-by the Pleintifis ou the present record. This in effect purports to be a suic by cestui que trusts complaining of a fraud committed or [494] alleged to have bem committed by persone in a Bduciary character. The complaint is that thoes trustees have cold lands’ to tixcuse'vas, ostensibly for the benefit of the cast {i rude ‘She proposition 1 Lave advanced is that ltnough she Act should prove to 2 voidahle the vesui que trusts may elect-co confira. it. Now, who are the cestui yue ‘-usts in this vaseT The corporation, in @ serve, is urdoubtediy the cesiui que ‘rust + but the rajurity of the proprietors at « sneesi :=csal meeting assembled, indeper. dently of any general rules = law upon the tubject, by the very terms of tho incorperation in the preseav case, bas power to viud the whole ody, and every individual corporator must bo taken to keve come int» tho corporation upea the tarms ‘of being liable to be so bound. How then ean this Court act in a suit constituted as ‘nis is, 188 is-to be assumed, for the pazpcses of the argument, thet the powers of ‘tae body of the popristors are still in existence, and may lawfully be exercised for a ‘Farpose liks that T'have suggostels Whilst the Court may be declaring the acts complained of to'be void at the sntt of uke presont- Plaintiffs, who in fact may be the ‘enly proprietors who disapprove of them, the governing body of proprictors may204 FOSS 0, TARsorty.e HARE, 495, defeat the decree by lawfully resolving 1p¢.. -Se ecnfizmation of the ver7 ants which are she subject of the suit. ‘The very tact thai the governing borly of proprietors tsemblog at the special_genoral meeting may so bind even a reluctant ‘ainoriey ie © to show that tho freme of this suit cannot be sustained whilst that voc ty faotinn In order chen “bx this anit may be surtained ft mst be shown tither that there is no such power as I have supposed. remaining in tie proprietors, syn tha meee re reg ee laeee rt body in motion: this latter yoint is nowhere suggested in the bill: thore is no suggestion that an attempt bus been made by any proprietor to set the body of proprietors in [496] motion, er to procare a mecting to be corvened for (.v purpose of revoking the acts complained of. The question then is whether this bill is so framed as of necessity to exelude the supposition that the supreme body of prop. jetors is now in a condition to confirm the transactions in question ; oF, it those craus- actions are to be impeached in a Ccurt cf Justice, whether the proprievoce have not power to set the corporation in motivn for the purpose of vindicating its 2wn rights, (His Honor recapitulated che histozy and present situaticn of the ecimpany, 08 it ‘appeared upon the bill.) T pause here to examine the difficulty which is supposed by the bill vo oppose. itself to tne body of -proprievors assembling and acting at an extraordinary genvral meeting. ‘The 48th, section of the Act snys that a certain number of propriet rs may call such a meeting by means of a notice to be addressed to the board cf d'rectors, and Ine wilh ths ler or seareary, at tho rvin.ipel oe of the vompany, ane month before tho time of mesting, or the board is not bound vo notice it. The bill rays tat there is nc board of airectars proverly constitaced, no clerk, no principal o'Bee of the company, no power of electing mare direr‘ors, and that, tha appcintment of the clerk being in the beard of directors, no clerk can in fact now be appointed. T imu certaialy tos prepared to go the vhole Length of the Plants angument founded pon the 48th section, Lacmit that the month required would probably ve considered imperative 5 Unt is not the mode of service directory only? Could the board of dizectors de facto, fox the time being, by nogletng to appoint ser or have a principal offen, deprive the superior body, the body of proprietors, of the power which the Act gives that body over the board of directores Wonid not a notice in substance, n notice for exeurzle such as the 129th sec-[496]}tion provides fcr in other eases, be a sufficien: notice? ‘Is not the particular form of notice which is pointed ont by the 48th section a form of notier given only for the convenience of tie proprietors and directors? And if an impediment saould exist, and, a ford’, if that impediment. should exist by the miscorduet of the board of directo:s, it would be diffzult to contend with success tuat the nowers of the corporation are to be paralyzed, because there js no ele-k on whoa service can be made.” I require more eogont argoments than I have yet heard to satirfy me tbab the mode of service prescribed by the 48th section, if that were the only point in the case, ia mere than directory. “The like observations ‘will apply to the place of sevvico; but, as te that, I think tho raso is relieved from difficulty by the fact that the business of the company ix staced to be prinéipally conducted at the olfice of the solicitors, for I am not aware that there ‘s anything in the statute which attasbes suy peculiar character to the spot. designated as the principal office. In substance, the board of directors de facie, whether cualifiad or not, carry on the business of the company at a given place. and ander this Act of Parliauent it is ronnie that service at tha plage would ie lesmed good service on the company. If that didiculty were removed, aod the Plaintiff should say that by che death or bankruptey of directors, and the carelessness of propsistors (for that term must be added), the goveruing Body bay lat its poe fo acy Tahould repute inguiiesT ove before suggested, ond at whethe:, ii such » case. also, the 48th section is not directory, 60 far as it apgcars to require the ~efusel or neglect of the board of directors to cal a general mestiny, beiore the proprictors can by advertisemen’ cail such a meetiug for thems-lves. Adverting to the undoubted ‘powers conferred upon th’ proprietors to holl special general meetigs without the consent and [47] again the wili of the board of directors, and the permanent powers which the body cf proprietors must of necessity have, T au yc. to be persuaded that the existence of. this corporation (to witnout 4 lawful governing body it cannot usefally or practically‘HATS, 8, 7088 0, RARBOTILF: 205 continue) oun be dependent upon tho accents which ab any given moment may xoduoo “ha oumber of diteotors below tra Tho board of directors, as I have already ooscrved, have no power to pu: « :elo upou the will of any ten proprietors ‘who’ may desire'vo call a speciat general meeting; and if ton proprietors cannot be found who are willing to call « special goneral meeting, the. Plaintits’ can scarcely contend that this-euit ean be sustamod. At all events what is there to proveat the ‘ecrporators from suing in'the name of the corporation? It cannot be contended that the body of proprietors have aot su interest in these questions to iustitnte'a scit in the uame of the corporation. ‘The Intter observations, Lam aware, aro little ‘nore thay: another mode ot putting the fo.mer questions which I have suggerted. I am strongly inclined to thiuk, if it were recessary to docide these points, it could not oe successfully contended that the clauses of the Act of Parlicment which are raferred to are anycbing more than directory, if it be, indeed, impossible from accident to pursie the form directed by the Act,” I auiribute to the proprietors no power which the Act does not give them: they have the power, without the-consent and against the will of the directors, of calling s meuting, and of controiling their acts ; and if by any inevitable accident the prescribed form of calling a meeting should becomo impraoticabie, thera is still » mode of calling i, which, upon the geveral principles that govorr. the powers of vorporations, 1 think would be held to be sufficient fo~ the pur t is uot, howover, upon such considerations that I [498] shall decide this case. ‘Toe view of the case whick has appoaved to me conclusive is that the existence of a board of directors de focto i eufficieutly cpparent upon the statements in the bill. The bankruptoy of Westhead, the last of the three directors who became bankrupt, took place on the 2d of Janusty JE40: the bill alleges that he thereupon ceased to qualified to act sa director, and his ofuee became vacated ; but it does not say that he ceased to act as a director ; nor, althouga it is said that theneeforward there was no board “ properly constituted,” is it alleged that there was no board de facin exercising tke functions of directors. 'Taese, and ceveral other statements of the bill, are pregnant with the admission of the existeove cf a boas de facia. By whom was the company governed, and its affairs couducted, between the time of Westhead’s bankruptoy snd thab of the filing of the bill in October 18427 What directors or managers 0{ the business of the company have lent their sanction to the mortyages and ‘other tranractions complained of, as haviug talcen place since January 1840, and by which the corporation is sa‘d or supposed. to be, at least to some mxteut,” level’ Vound? Whatever “he bil may say of tho legal epnstvution of the board of direc rs, hecause the individual direetors are uot dely qualified, it does not anywhere s:aggect hat there hus not been curing the whole period, and vbat there was aot ‘when ‘be bill was filed, & bocrd of directors de facto acting in and carrying on the affairs of bo corporation, and-whosc acting must have beer acguiesocd in by the body of proprietors; 2° least, ever since the illegal coustitasion of the boare of directors becam: k:no'ra, and the acts in question were discovered. Bat if there has been or is a board de facto, their acte may be valid, although the persons 30 acting may not have been duly jalified. ‘The 124th ‘section (not stated in the hill) of the ct provides {40} that al act, deed and things, dene of executed at ane ‘meeting of the 1, shall, ‘notwith- ditcoters, hy any persoa acting as a director of the caid com standing it may afterwards be discovered thet thore was some defect ‘or exror in tho eppointment of such director, or that such director was disqualified, ot being an interim divector, was disapproved of by an anoucl ganecal testing of preptictors, £2 oe valid and effectual aa if such person had boow dely appointed and was qualified to be a director. ‘he foundation upon whieh I ccasider the Plaintiffe can slors have » right to ave in the roma of tbis bill must wholly fail, if therv has beon « governing hody ‘of direotors we fad. ‘There is uo longer the impediment to convening & most'ag.of proprietors, who by theit vote might diract proceodings like the present to bo talon in the name of the corporation 3¢ of a treasurer of the corporation (if thas wer" necessary); oF who, by recting such a proposal, would, ia sheen desioa ‘thac the corporation :ras riot aggrieved by th> transactions in questions. Now, since the 7a-of January 1849, there must, have besn three annual general meetings ‘of the vompany held in July in every year, according to the provisions of the Act” Those206 ‘FOSS U,. KARBOTTLE 2 HARE, 902. ansual general mestings can only be regulary called by the board of directors Tho Dill does not suggest: that the requisitions of the Act hav not been complied with in this respoct, cither by omitting to eall tho meeting, or by calling it informally ; but the bill, on the contrary, avers that several general mectngs and oxtranrdinary general iestings, and other mestngs of the shTebolders of the vompany, mere duiy Convened and held at divers times betwen the time whea the company’ was es!a- lished and the wear 1842 ; including, therefore, in tais period of formality of procecd- jing, as well ai of capacity in constitution, an ‘entire year after Wosthead’s bark ruptey. [500] Anotier statement. of the bill leading to the same inference —the existonce of un acting board—is that which avers thot since the year 1809 down, in face, to the time of tiling the bill, that is, during these three years, tao company bas had no office vf its own, but the affairs of the company have been prinipally conducted at the cffice of Mr. Bunting, Now tis, as '-mnct read it, ia @ direct adm‘ssim that the affairs uf the company bave been carried on by some persons. By wlora then have they heen carried ou? The statute makus tLe board of directors the boty by whom alone those affuirs are to be ordered and conducted, ‘There ia no other porson or set of persons empowered by the Act to conunet tho affairs of the company ; and thero is _no allegation in the bill that any persuns, other than the board of directors originally appointed, have taken upon themselves that business. In the absence of any special allegation to the contrary Tam Vound to cssume that the aifairs of the company have been carried on by the body in whora alone the powers for that purpose wore vested ky the Act, namely, a board of dircetors, ‘Agnin the bil alleges tha, since the bankrpy of Westhead, the banirunts have joined in executing the conveyances of tn uruperty of the compan” to mortgages. Tt cculd only bave been in the character oi directors that they could confcr any title by the coaveyanee; in that chavacter, the wortgagees would have requized them to be parties, and it is in thet chacaoter that I vaust assume they exceuted the deeds If the ease rested here, I must of necessity assume the existence of a board of ‘rectors, and in the abserce of any allegation that the board de facto, in whose soting the company mect, upon this bill, Le taken to bare aoguiesced, ‘have beon applied to and have refused tu ap[501}point + clerk and treasurer (if that be necessary) or take such othe saps #8 ny bo necessary fr calling a special general meeting, or had refused sc call suck special enersl meeting, the bill does not exclude every ease which the pleader was bound to exclude in order to justify» snit on behalf of a corporation, in e form which rssuines its practical dissolution. But the Dill goes on to shew that special general mectincs have been holden sinca Jannary 1840, The bill, as [ have before observed, ctate> that several general rnertings au extraordinary general meetings have been in-iden besween ‘the establishment of tne company and the year 1841, not excluding the year 1840, which was duriig Westinead’s disqualification, “ard that at such meetings false and delusiv« statements rospecting the circumstances and prospecis of the company were made by the said direocors of the company to the proprietors who tended suea meetings, and toe ‘ruth of tine several fraudulent an# ‘prope: acts and proceedings hereir complained of was not digclosed ;” and the bill specities come meetings in partieular. Against tha ppleader I must intend that some gueh the.tings may have been holden at a fime wiuen here wae no board propery constituted, and no clerk or teamuer o principal off of the company, save such a8 appear by ihe bill to huve existed ; and if that weve s0, the swhole of the case of the Plaintiff, rounded on the impracticabitity of cal'ing < special general meeting, fails. Assuming the: as Tam bound to do, the existence, for soma time at least, of a state of thinys in which the eompany wan governed by a, doard of directors de faclo, some of the snembers of whiok were individvadly dis- qualified, and in which, notwithstendg the want of a clerk, treasurer or office, the powers cf the proprietors wore called into exoccise at: genoral’ meotings, the question Ie hea aid that state cf things esase to exist 90 a6 to juttily the extmordi ary proceeding of the Plain [502}iife by this sait? "The Plaintiffs have not stated by their bill any fac.s to shew that such was not the acvuai state of things at ‘he time their bill was filed, and, in tke absenon of avy statement to the coutrary I must intend that it was so,