The Express.
London, England, 1864-06-23 00:00:00

LAW INTELLIGENCE.

COURT OF QUEEN'S BENCH.—Jrnts 22.

Sittings is Bsams.—(Bsitors Justices Crompton, Blackburn,
sad Bbas.)

ClitAllol=3 V. TEO

WHAM= AND NWVID RUMAT
00VP AWL

This was an article hi/ought to recover 1501. for interest
upon ix railway hoods which had been given to the plain-
tiff, each for 1,0001. The plaintiff, who resides near
Aberystwith, in Wales, had ben the chairmen of the
company, acid had been active in getting it up, about 1860.
The medial was to be 55,0004, but only • small amount of
the capital was actually subscribed, and as great expense
bad been incurred it wee proposed to borrow from the
Union Bank 10,0001., and the bank agreed to lend the
amount on the peorsimory notes of the directors. There
was, however, no anent of a general meeting of the share-
holders, and nly 12,0004 of the capital was subscribed.
In March, 1861, accordingly, the bank advanced
10,0001., deduction, however, • discount of 5001. ; and the
plaintiff and a director named Burrow gave their promis-
sory note for the amount, the plaintiff giving his note for
9,5001. In 1863 the bask required repayment of the money
and ware repaid by Burrow, on which he sued the plaintiff
onhis note to repay himself half the amount thus paid,
and then three bonds were given to the plaintiff to enable
him to borrow the amount, and so to reimburse him. The
bond, were drawn in what is now • common form, ongi-
sally devised by Mr. Lloyd, an eminent railway counsel,
and they are knows as Lloyd's hoods. They were issued
profeesedly under the authority of the following reeolu-
don of May, 1863, agreed to by the plaintiff
as chairman of the board of directors, and two
other directors, three of the directors forming a
quorum : " Resolved, that to discharge the liability
of the chairman in the action against him by Mr. Burrow,
the secretary be authorised to seal Lloyd's hoods for 7.0004,
to be deposited for twelve months, together with the chair-
man's note to secure 5,0001. and interest M 5 per cent."
The bonds were is the following form :—" The Manchester
and Milford Railway Company. Bond for 1,0001. No. 3. The
Manchester and Milford Railway Company do hereby ac-
knowledge that they stand indebted to William Chambers,
of Rabid, in the county of Cardigan, Faq., in the sum of
1,0001., for money due and owing from the said company to
the said William Chambers, and the said company for them-
selves, their suocesson, and their assignees, hereby
with the said William Chambers, his executors, and adminie-
trston, to pay him, his executors, administraton,
at assignees, the said sum of LOON. upon the
28th day of 167,1866, and also interest thereon, at the rate
of W. per ant. per annum from the date hereof, until pay-
ment, such interest to be payable half-yearly upon the Ist
day of January sad the let day of July in each year.
Given
under the common seal of the said compsoy, the 28th day
of May, 1863.—A. BKIDTOII. Secretary." The holder now
sued for interest, and thus the question was raised whether
the bonds were valid. The General Railway Act of 1844,
17 and 18 Vic., cap. 85, reciting that railway companieshad
borrowed money in • manner unauthorised by their act' of
incorporatioo or any other acts relating to such companies
upon the security of loan litotes or other instru-
meats, enacted that if any railway company bend
auy loan note, or any other negotiable or assignable
instrument purporting to bind the company se •
legal security for money advanced to the company, otherwise
than under the provisions of some act of parliament autho-
rising the company to raise such money and issue mach eon-
rity, the company should be liable to • heavy penalty.
The Companies Clauses Act, of 1856, Bth Vie., chap. 16,
contains a provision that if • company be authorised by its
special act to borrow money on mortgage or bond, it may,
subject to the restriction contained in the specislact, borrow
on mortgage or bond such sums as shall be authorised by a
general meetiog of the company, not exceeding, however, the
sum prescribed by the special ma, and for securing repayment
to mortgage the undertaking mid the calls and to give bonds.
And the company's special act. 1860, monies a clause
that the company may borrow ow mortgage any sum not ex-
needing in the whole 185,0001., but no part until the whole
of their capital, 565,0004, should have been subscribed for,
nor until half of the capital should have been paid op. This
clause applies only in terms to borrowing on mortgage, and
this was a one of borrowing upon bonds. The question
therefore was, whether the bonds were lawfully given in
the name of the company, which depended on their
authority to borrow money, and that turned upon the 000-
struction of their act, coupled with the Companies Clauses
Ant. The case was tried before Lord Chief Justice Erie at
the last Kingston assizes, end the objection was taken that
the bonds were not valid in law. The point was reserved,
and was argued on Friday Usk.
Mr. Bovill, Q.C. sod Mr. L. Kelly appeared for the
plaintiff ; Mr. Lush, Q.C., and Mr. C. Wood for the de-
feaciante.

Mr. Bovill said these bonds had been honed to a very
large extent by railway companies, and the question foe the
ooeeideration of the court wee one of considerable tm-

Mr. Justice Crompton said the bonds were very skilfully
drawn, and if any such securities could by law be valid,
these probably would be so.
Mr.,Boeill contended that though the question of their vali-
dity was not expressly settled, yet the principle in the cases
decided ou the subject was in favour of their validity.
Prime facie they were valid, being sealed with the seal of the
company, and unless express authority to the contrary, they
were legal by the common law. The special act
only applied to borrowing on mortgage, and the Companies
Classes Act did not make the securities void or in-
valid, but merely made the company liable to penalties for
issuing them, thereby implying that they were valid. They
were not bonds or legal securities upon a borrowing, but
merely acknowledgments of an equitable liability.
Mr. Lush urged that the hoods were illegal, because the
company were prohibited from borrowing upon bonds ex-
cept under certain conditions, and those conditions had not
been complied with. The company were prohibited from
borrowing, whether to pay their debts or to carry out their
undertaking by adding to their capital. It was of the
utmost public importance that there should be an express
prohibition against its being dose exempt under 'Walsh'.
authority. These borrowings were, in fact, by the directors
sod not by the general shareholders. and the prohibition
had a salutary effect is promoting a due regard to economy
on the part of the directors. It was the simple act
of the directors ; and the question was of more
importance as these hoods, if valid, were amigo-
able and negotiable, and were no doubt negotiated.
The directors in this case had given these bonds behind the
backs of the shareholders, at the suggestion of the chairman,
who was the holder of the bonds, for the object of reliev-
ing him from his liability, end the hoods were false upon
the face of them. They were pot within the authority con-
ferred by the resolution, and the secretary had no power to
of
the seal of the onsapany to the bonds.
Mr. Justice Crompton said there could be no doubt the
hoods were ingeniously invented and devised in order to
evade the railway acts, and give the railway companies the
mid IL of raising or borrowing mosey which they did not by
law parses. There could be so doubt the device was most
ingenious, and after hearing the arguments he was of opinion
that their judgment should be for the defendants.
Mr. Justice Blackburn concurred in the came opinion.
The expedient was very clever. and the question was
whether it would be succeeshil. The instruments were not
made negotiable upon the face of them, or sseignable. sod
probably the learned gentleman who drew them avoided
making them so in express terms, under the idea that the
prohibition in the Companies Clauses Act applied only to
et must
assignable instruments. He also thought their
Pi et must be for the defendants.
r. Justice Shoe, who did not hear the whole of the
arguments, refrained from giving a decided judgment in the
01144, but he intimated that from what he bad beard he was
inclined to concur with his learned brother.
Rule absolute for the defendants.

COURT OF COMMON PLEAS.--Jurri 22.
Sittings et Nisi Prins In Middlesez—(Bsfore Lord Chief
Jostice Erie and s Special Jury.)
WILLIAMS S. WALK= -LIBEL.

This was an action a—jaiOatthe proprietor of the Shore-
dath Observer to recover damages for an alleged libel, and
the &dewiest pleaded in justification that the staternenta
which had been made in the paper were true. The action
tame on for trial some tints ego before Mr. Justice Dylan.
when the jury were discharged without having been able to
epee to a verdict. The case was accordingly set down for
trial again, and the second trial commenced yesterday and
lasted the whole of the day.
Dr. Digbv Seymour, and Mr. Hydd appeared for
the plaintiff, and Mr. Serjsent Parry, Mr. Pearce, and Mr.
Philbrick for the &readapt.
At the oonolaeion of the evidence a conference took
place amongst the jurymen which was taken as indicating
that they had already *formed an opinion upon the case.
Mr. Seymour expressed his readiness to accede to anything
which the court might think was right.
. . .

The Lord Chief Justice said be did not know bow the
evidence had affected the minds of the jury, but be would
ask them whether they believed that it was substantially
proved that the plaintiff bad uttered unfounded charges
against vestry men and officiate without any reasonable ground
for believing them to be true.
A jurymen said that he did not think that they were
unanimous upon that matter.
Mr. Seymour said that the plea charged the plaintiff
with having wilfully made false charges, and if any arrange-
ment wild be come to In reference to that plea, he should
be satisfied ; but, of amuse, he could Dot admit that the
plaintiff had wilfully made false charges.
Several commosications in written pared between the
beech and the bar, and ultimately it was announced that an
arrangement had been come to, and in pursuance of this
arrangement the plea of justitcatioc was withdrawn, and a
verdict waa taken for the defendant.

COURT OF PROBATE AND DIVORCE.
Joe! 22.
(Before the Judge Ordinary.)
PICKARD r. PICKARD.
- •

Jos. Edward Picir;;ll;;yea for a judicial separation, on
the ground of his wife's cruelty. Dr. Spinks appeared to
@vapor' his petition.
The marriage wes in 1837, and the parties lived together
Ulnas* year. They had eleven children. The petitioner
was a spinner at Korbury, in Yorkshire, and afterwards at
Leicester. He oomplaieed that hie wife was a person whose
bad temper was 111101111111 VIN and he stated that she had often
seesulted him. She had /truck him on the feat with
thick stick, mad bed brakes hie nose. Fifties years ago
be Jenard the baptists, but the respondent larked no his
clothes when he wanted to go to be baptised, and swore she
would guarder him if he left the house th►t sight. At the
slow of last year las wished to Massa a atalliadist chapel,