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(59 L. J. Ch. 631 ; 44 Gh. D. 678 ; 62 L. T. 633 ; 38 W. E. 503 ;

2 Meg. 120.)

The plaintiffs were a registered company carrying on the
business of a wax-work exhibition in London under the name
of " Madame Tussaud and Sons, Limited." Their exhibition
was a very old-established one. The defendant, Louis Tussaud,
was a wax-modeller, who had formerly been employed by the
plaintiff company, but had never carried on any business on
his own account. He promoted a company, of which he was to
be manager, to carry on an exhibition similar to that of the
plaintiffs, but in another part of London. It was proposed to



2 18 EQUITY.

register the new company under the name of " Louis Tussaud,
Limited." The plaintiffs moved for an injunction to restrain
the defendant from proceeding with the registration of the new
company under the proposed name or any other name so nearly
resembling that of the plaintiff as to be calculated to deceive.

Held, that the plaintiffs were entitled to an injunction.



The Vendor of the Goodwill of a Business may not canvass his
former Customers. The same applies to a retiring Partner,
who has no share in the Goodwill. An Injunction will be
granted to prevent such Canvassing.

TREGO v. HUNT. [1896]

(65 L. J. Ch. 1 ; (1896) A. C. 7 ; 73 L. T. 514 ;
44 W. R. 225— H. L. (E.).)

The plaintiff and defendant entered into an agreement of
partnership to carry on the business of varnish and japan
manufacturers under the style of Tabor, Trego & Co., for a
term of seven years. The agreement provided that the goodwill
should nevertheless be and remain the sole property of Trego.

Just before the termination of the partnership, the plaintiff
found that the defendant had employed a clerk of the firm out
of office hours to copy for him the names, addresses and
businesses of all the firm's customers, his object admittedly
being to acquire information which would enable him, when the
partnership came to an end, to canvass these persons and to
endeavour to obtain their custom for himself.

The plaintiff moved for an injunction to. restrain the
defendant.

//'A/, the plaintiff was entitled /<> an injunction.
Neither the vendor of the goodwill of a business nor the
retiring partner^ who has !/•> share in the goodwill of the
business, is entitled to solicit the old customers of the
business.



ACCOUNTS. 249



ACCOUNTS.



Settled Accounts will only be opened by the Court on the ground
of Fraud. Where there is no Fraud, and the Settled Accounts
are of some years' standing 1 , the Court will only give liberty
to surcharge and falsify.

GETHING v. KEIGHLEY. [1878]
(48 L J. Ch. 45 ; 9 Oh. D. 547 ; 27 W. E. 283.)

The plaintiff and defendant had been in partnership together
as solicitors for some twenty years A general balance sheet
which was signed by both the parties had been made up by the
defendant some years before and had long been treated as settled.

A considerable error having been found in the account, the
plaintiff claimed that he was entitled to reopen the account.

Held, per Jessel, M. R., the plaintiff is not entitled to
open the settled account, but the ordinary partnership
accounts must be taken, and the plaintiff may have leave
to surcharge and falsify the balance sheet.

In seeking to open settled accounts, the Court acts on
the following principle : —

Where a single item complained of is a fraudulent
item, the proper order to make is to open the accounts
altogether ; where the item complained of is not fraudulent,
and the accounts are of some years' standing, the proper
order to make is to give liberty to surcharge and falsify.

Where there is a question of surcharging and falsifying
settled accounts, the case alleged must be clearly proved,
by the person impeaching them, and if there is any doubt
it will be determined against him.



250 EQUITY.

RECE1 VERS.



A Receiver and Manager appointed by the Court is an Officer of
the Court, and an interference with him in the discharge of
his duties constitutes a Contempt of Court, punishable by
Imprisonment.

HELMOEE v. SMITH. [1886]
(56 L. J. Ch. 145 ; 35 Ch. D. 449 ; 56 L. T. 72 ; 35 W. R. 157— C. A.)

In a partnership action, the Court ordered a dissolution and
the usual accounts to be taken, and appointed the defendant
interim receiver and manager. On the next day, H. W.
Helmore, a son of the plaintiff, who had taken an active part in
the dispute between the plaintiff and defendant, sent a circular
to all the customers of the firm which would lead the customers
to infer that the business was in a failing state or would fail
shortly.

Held, this was a libel on the business, and an inter-
ference with the receiver and manager in the discharge of
his duties, and is a contempt of Court which the Court
will punish hj sending the sender of the circular to prison.



The Court has Jurisdiction to appoint a Receiver and Manager of
a Partnership Business to preserve the Assets and to sell it
as a Going Concern.

TAYLOR v. NEATE. [1888]
(57 L. J. Ch. 1044 ; 39 Ch. D. 538 ; 60 L. T. 179; 37 W. R. 190.)

By a partnership deed made in May, 1883, the plaintiff and
defendant agreed to carry on, in partnership, a business of
mechanical engineers and contractors from that time until Sep-
tember, L902, with power to determine same on the 30th of
June, 1888, at the option of either party upon notice.



RECEIVERS. 251

On the 13th of July, 1888, the plaintiff commenced the
present action to have the partnership wound up, and for the
appointment of a receiver and manager.

It was agreed during the hearing that there should be judg-
ment for dissolution and for the sale of the business as a going-
concern or otherwise.

Heavy contracts were outstanding which would take several
months to complete, and the defendant resisted the present
motion, for the appointment of a receiver and manager to carry
on the business, on the ground that the Court by appointing a
receiver and manager to carry on the business would be in effect
making an order for the continuation of the business although
the partnership had been dissolved by express agreement
between the parties.

Held, the Court has jurisdiction to appoint a receiver
and manager of a partnership business, with a view to
selling the business as a going concern, notwithstanding
that the partnership has expired in pursuance of pro-
visions to that effect contained in the partnership detd.



ADMINISTRATION OF ASSETS.



An Executor de son Tort is subject to all the Liabilities but has
none of the Privileges of an Ordinary Executor.

CARMICHAEL v. CAEMICHAEL. [184b]
(2 Phil. 101 ; 10 Jur. 908.)

On the death of the testator, the executors all having re-
nounced probate, his widow took out letters of administration
with the will annexed. At the time of the death of the testator
his son was in Demerara, and before letters of administration
had been granted to the widow, and without authority, he
collected the testator's effects in that colony and paid all his



252 EQUITY.

debts. The son, who was sued as executor de son tort, together
with his mother as administratrix, pleaded that before the action
was brought he had accounted to his mother for his receipts and
expenditure and paid the balance due.

Held, that such a settled or stated account was not
binding on the plaintiff, and the Court would not insert
in the decree the usual order that settled or stated accounts
were not to be disturbed.

An executor de son tort is subject to >tll the liabilities,
but has unite of th" privileges of an ordinary executor.



The Personal Estate of a Testator is primarily liable to the pay-
ment of his Debts and Funeral and Testamentary Expenses,
unless exonerated expressly or by implication.

TEOTT v. BUCHANAN. [1885]
(54 L. J. Ch. 678 ; 28 Ch. D. 446 ; 52 L. T. 248 ; 33 W. E. 339.)

A testator, hy deed, conveyed and assigned certain real and
personal estate to trustees in trust for himself for life, and after
his death upon trust to sell and convert and stand possessed of
the net proceeds on trust to pay all the debts which should be
due from him, and after such payments as aforesaid, on trust
for his two sons.

The testator, by his will, after reciting the deed, devised and
bequeathed all the residue of his real and personal estate not
comprised in and subject to the trusts of the deed to his wife
for life with remainders over.

Held, first, that the personal estate comprised in the
deed was the primary fund for payment of debts ; second///,
that the general personal estate must then be resorted to,
and then the realty comprised in the deed; and finally, the
residuary realty under the will.



PROBATE. 253



PROBATE.



An Oral Declaration by a Soldier on Active Service will constitute

a Valid Will.

IN EE SCOTT. [1903]
(73 L. J. P. 17 ; (1903) P. 243 ; 89 L. T. 588.)

The deceased, who served as a volunteer in the South African
War, died in South Africa on March 3, 1902, of wounds
received in action.

The commanding officer had directed squadron officers to
submit rolls to orderly room showing the next of kin of all men
under their command, or the person they desired their effects
should go to in case of death. In accordance with these in-
structions the deceased made an oral declaration to two non-com-
missioned officers to the following effect : —

" In the event of my death in South Africa, I desire all my
effects to be credited to my sister, Miss N. Scott, 39, Hanley
Road, London, N."

Held, by the President of the Probate Division (Sir F. H.
Jeune), the declaration having been made on active service,
may be admitted to probate as a soldier's will.



Intention to revoke Will has no effect unless Will actually
destroyed or otherwise formally revoked.

IN RE HARRIS, CHEESE v. LOVEJOY. [1877]
(46 L. J. P. 66 ; 2 P. D. 251 ; 37 L. T. 294 ; 25 W. R. 853— C. A.)

The testator made a will and codicil, each bearing date the
3rd day of July, 1852, and a second and third codicil each bearing



254 PROBATE.

dale the 'J 1st day of September, 1852, and appointed as his
executor a person who predeceased him, and the plaintiff, under
certain contingencies which happened, became a beneficial legatee.
Previous to his death, the testator made several alterations and
obliterations in his will which were not formally attested by the
witnesses to the will, and left the will about, treating it as waste
paper, but did not destroy it.

Held, that the plaintiff was entitled to probate of the will
in solemn form, excluding all the alterations and interlinea-
tions.

The tvords of the Wills Act, 1837, s. 21, " otherwise
destroying" must be construed as intending some mode of
destruction ejusdein generis with the preceding tvords, not
an act which is not a destroying in the primary sense of the
ivord.

Striking through words tvith a pen, unless initialled as
required by sect. 21 of the Wills Act, 1837, is not valid,
and the ivill stands as though the alterations had not been
made.



A Testator may revoke a Will conditionally, in which case the
Will is not revoked till the condition is fulfilled.

DIXON v. SOLICITOR TO THE TREASURY. [1905 J
(74 L. J. P. 33 ; (1905) P. 42 ; 92 L. T. 427 ; 21 T. L. R. 145.)

The deceased shortly before his death sent for a solicitor, to
whom he proceeded to give instructions for a new will, and
having sent for the existing will there and then cut off the
signature of the same. On the solicitor objecting the deceased
replied " I meant to " (cancel this document) " because I am
going to make a new will." And the deceased further made
use of expressions to the effect that the cutting out of the
signature was a necessary preliminary to a new will. Having
cancelled his existing will, the deceased gave as a reason for



PROBATE. 255

making a new will his desire to increase a certain legacy. The
solicitor having then taken instructions in respect to this legacy
and other matters, used the existing document as a basis for
instructions, saw the deceased on the next day, went through
the instructions with him, and the new will would in the
ordinary course have then been executed. The deceased,
however, expressed a desire to have a draft prepared in the first
instance. This was accordingly done, but on the third day,
before it could be submitted, the deceased died.

The jury found that the deceased mutilated his will with the
intention of revoking it conditionally on a new one being
executed.

Held, per Gorell Barnes, J., in the circumstances the old
will stands.

In order to apply the doctrine of dependent relative revo-
cation, it is not necessary that at the time of the actual
revocation there should be in existence an earlier valid docu-
ment which the testator intends to revive. The doctrine may
extend to cases where there is an intention not in fact ful-
filled to execute afresh testamentary paper. The question
of intention is one of fact, to be determined on the circum-
stances of each individual case.



The Intestates' Estates Act, 1890, does not apply to cases of Partial
Intestacy so as to enable the Widow to claim £500 as her
provision in addition to her Distributive Share of the Residue.

IN EE TWIGG'S ESTATE, TWIGG v. BLACK. [1892]
(61 L. J. Ch. 444 ; (1892) 1 Ch. 579 ; 66 L. T. 604 ; 40 W. E. 297.)

A testator died in November, 1890, leaving a widow and no
issue. He stated in his will, that his widow was amply provided
for by settlement, and made no further provision for her. The



256 PROBATE.

residuary legatees under the will died before the testator, so
that there was a partial intestacy. The gross value of the
testator's estate was sworn under 5,038/. 2h. 5d., and the net
residue was over 50 <)l.

The widow having died in March, 1891, her legal representa-
tives now claimed the sum of 500/. as the widow's provision
under sects. 2 and 4 of the Intestates Act, 1890, in addition to
her distributive share of the residue remaining after payment of
such provision.

Held, the Intestates Act, 1890, does not apply to cases
of partial in testae//.



Where there is a Gift of Property to a Husband and Wife and a
Third Party in equal parts, the Husband and Wife only take
half the Property between them.

IN RE JUPP, JUPP v. BUCK WELL. [1888]
(57 L. J. Ch. 774 ; 39 Ch. D. 148 ; 59 L. T. 129 ; 36 W. R. 712.)

The testator by will made in 1887, directed a share of residue
to be divided between " my sister Mary Buckwell, Daniel
Buckwell her husband, and Harriett Buckwell her step-daughter
in equal parts."

Held, that independently of the Married Women's Pro-
perty Act, 1882, the husband and wife would have taken
only one share between them ; that this rule based on the
unity of persons was not affected by that Act ; and that
Mary Buckwell and Daniel Buckwell each took a quarter
share and Harriett Buckivell a half share, the quarter share
of Mary Buckwell being her separate property.



PROBATE. 257

A Legacy payable or to be paid at the age of twenty-one vests at
death of Testator. A Legacy bequeathed to a person at
twenty-one, or if or when he shall attain the age of twenty-
one, does not vest till that age is attained, unless the Legacy
carries interest during that person's infancy.

STAPLETON v. CHEALES. [1711]
(Prec. Chan. 317 ; 2 Vern. 673.)

A legacy of 50/. was bequeathed to J. Stapleton when of the
age of twenty-one. Interest was in the meantime to be paid
quarterly. J. Stapleton died before he was twenty-one years
old.

Held, the legacy vested became it carried interest, and
therefore went to the executors of the deceased.

A legacy bequeathed to an infant payable or to be paid
at the age of twenty -one is an interest vested, so that it
shall go to the executors or administrators of the infant
though he dies before that age. If, however, a legacy is
bequeathed to a person at twenty-one, or if or token he shall
attain the age of twenty-one, it does not vest till that age is
attained unless the legacy carries interest during that
person, s infancy.

Note. — This case only applies to purely personal legacies.



A Bequest to a Class, contingent on each reaching the age of
twenty-one, vests as each attains twenty-one.

IN EE HOLFOED, HOLFOED v. HOLFOED. [1894]

(63 L. J. Ch. 637; (1894) 3 Ch. 30; 7 E. 304; 70 L. T. 777;

42 W. E. 563.)

A testator bequeathed the residue of his personal estate on
trust to be divided amongst the children of Thomas Holford

j. s



258 PRO HATE.

living at the testator's death who should attain the age of
1 w enty-one years. Thomas Holford had six children living at
the date of the testator's death, one of whom attained the age
of twenty-one years on the 5th of June, 1893 ; the others were
still infants. There was no maintenance clause in the will.
The first child to come of age claimed to be entitled to one-sixth
of the capital absolutely and, until another child attained twenty-
one, the income of the remaining five- sixths.

Held ^ by the Court of Appeal, that the eldest child on
attaining twenty -one years took a vested interest in and tvas
entitled to receive a one-sixth share only of the trust fund,
and that the trustees were authorized by sect. 4-3 of the
Conveyancing Act, 1881 (43 6f 44 Vict. c. 41), to apply
the income of the other shares for the maintenance of the
infant children contingently entitled thereto.



COMPANY. 259



COMPANY.



A One-man Company is Legal.

SALOMON v. SALOMON. [1897]
(66 L. J. Ch. 35 ; (1897) A. C. 22 ; 75 L. T. 426 ; 45 W. E. 193.)

Mr. Salomon was a boot and shoe manufacturer, trading on
his own sole account under the name of A. Salomon & Co., in
High Street, Whitechapel.

Mr. Salomon formed a limited company with a nominal
capital of 40,000/. The company consisted of himself, who
took 20,000 shares, and of six other persons, who were members of
his family, and held one 11. share each. The company so formed
purchased Salomon's business, which at that time was perfectly
solvent, at an over value, paying the price, 30,000/., by giving
Salomon 20,000 fully paid 1/. shares and 10,000/. in deben-
tures.

Owing to bad trade the company failed, and it was found
that the assets of the company were only worth 6,000/. ; while,
in addition to the 10,000/. due to Salomon on the debentures,
there was a sum of 7,000/. due to unsecured creditors.

The unsecured creditors claimed to have the debentures set
aside on the ground that the transaction was not a bond fide one
but a sham.

Held, the debentures ivere valid and the company pro-
perly constituted. Where a trader who is solvent converts
his business into a limited liability company, and all the
statutory requirements for the constitution of the company
are fulfilled, the Court is not entitled to go behind the
register and memorandum, and upon a speculative analysis

s2



260 COMPANY.

of motives and the exorbitance of the price paid, to decide
that the company is not validly constituted on account of
the non-fulfilment of conditions whieh are not found in the
Companies Acts.

The mere fact that the trader is virtually sole owner of
the concern, the other shareholders having only a nominal
interest and being members of his ovm family, and that he
has received debentures secured on the business as part of
the purchase-money, do not constitute the company his agent
or trustee, so as to entitle the company to an indemnity or
authorise the Court to rescind the agreement for the sale of
the business to the company, or to deprive the founder of
his security so as to postpone his claim on the assets to that
of the unsecured, creditors.



The Powers of a Company are limited by its Memorandum, and
anything done beyond those Powers is ultra vires and void. The
Memorandum can only be altered with the leave of the Court.

ASHBUEY BAIL WAY CAEEIAGE CO. v. EICHE. [1874]

(44 L. J. Ex. 185 ; L. E, 7 H. L. 671 ; 33 L. T 451.)

The memorandum gave the company power " to make and
sell, or lend on hire, railway carriages and wagons, and all
kinds of railway plant, fittings, machinery and rolling stock ;
to carry on the business of mechanical engineers and general
contractors ; to purchase, lease, work and sell mines, minerals,
land and buildings; to purchase and sell, as merchants, timber,
coal, metals or other materials, and to buy and sell any such
materials on commission, or as agents."

The articles contained the following clause : " An extension
of the business beyond, or for other than the objects or purposes
expressed or implied in the memorandum of association, shall
take place only in pursuance of a general resolution."



COMPANY. 261

The directors entered into a contract with Riche for the
purchase of a railway concession in Belgium, and the company,
by special resolution, duly ratified the contract. The question
now raised was whether this contract was a good one.

Held, that the contract was ultra vires the company,

and therefore altogether bad. The rights and powers of a
company incorporated muter the Companies Acts are limited
by reference to the objects and purposes specified in the
memorandum of association as those for which the company
is established.

The company exists only for those objects and purposes,
and any act done or contract made by the company in
attempt to extend them, or which is at variance with or goes
beyond the scope of the memorandum of association, is ultra
vires the company and absolutely void and incapable of
ratification, though the whole body of shareholders should
assent to such extension, act, or contract, and although such
extension with such assent may be expressly contemplated
by the articles of association, for the office of the articles of
association is only to define and regulate the internal
management of the company and the duties of its directors
in carrying on its business.



Where the Rights of different classes of Shareholders are set out
in the Memorandum, they are only alterable with the consent
of the Court.

ASHBUBY v. WATSON. [1885]
(54 L. J. Ch. 985 ; 30 C. D. 376 ; 33 W. E. 882.)

By the memorandum of a company the rights of the
preference and ordinary shareholders in respect of dividends
were expressly defined. By special resolutions passed in 1872 it



262 COMPANY.

was resolved that the application of the revenue as between the
preference and ordinary shareholders should be altered in a
manner beneficial to the preference shareholders.

These resolutions were acted on for more than ten years with-
out any objection being raised on the part of any shareholder.

Subsequently other special resolutions were passed restoring
the original appropriation of the revenue prescribed by the
memorandum of association.

Held , that even if the resolutions passed in 1872 had
been ratified by all the shareholders, yet the resolutions
altered a condition contained in the memorandum, and were
therefore invalid, and that the net revenue ought to be
applied in the manner prescibed by the memorandum.



Persons dealing with a Company are bound to see that a proposed
transaction is not inconsistent with the Registered Documents
of the Company, but are not bound to see that all the internal
proceedings are regular.

THE ROYAL BRITISH BANK v. TURQUAND. [1857]
(25 L. J. Q. B. 317 ; 6 E. & B. -327 ; 1 Jur. N. S. 1086.)

By the deed of settlement of a joint-stock company, the
directors were authorized to borrow under the common seal of
the company such sums as should from time to time, by a reso-
lution passed at a general meeting of the company, be authorized
to be borrowed, not to exceed a certain sum. At a general
meeting the directors were authorized to borrow such sum and
at such interest and for such periods as they might deem ex-
pedient in accordance with the provisions of the deed of settle-
ment and the Act of Parliament. The directors borrowed
1,000/. on bond under the common seal of the company.

Held, that the company were liable to repay the amount
whether the resolution was or was not a sufficient authority



COMPANY. 263

to the directors to borrow, for though parties dealing ivith
joint-stock companies are bound to read the deed or statute
limiting the directors' authority, the// arc not bound to do
more. The plaintiffs, therefore, assuming them to have read
this deed, would have found, not a prohibition to borrow,
but a permission to borroiv on certain tilings being done.
They have a right to infer that the company which 'put for-
ward their directors to issue a bond of this sort have had
such a meeting and such a resolution passed as was requisite
to authorize the directors in so doing.



Online LibraryPhilip Bertie PetridesStudent's cases : illustrative of all branches of the law → online text (page 20 of 29)