Henry Westmacott had deposited the deeds granting the annuities with the executors of the late Lord Beauchamp by way of equitable mortgage. Henry Westmacott was dead, and his executors, who were the defendants in the suit together with Lord Beauchamp's executors, submitted to a decree of redemption. The minutes had been drawn in accordance with the form of decree in "Seton on Decrees," p. 473 (3rd ed.). Baggallay, Q.C., and C. Barber, for the plaintiff, objected to this form. in order that certain questions, arising upon the discharge brought in by the inspectors, whereby they accounted for the application of the moneys received by them, might be argued in Court upon an agreed statement of facts. One of these questions related to certain payments made to Messrs. Pewtress, Low & Pewtress, paper manufacturers, for paper supplied by them for the "Sun" newspaper, while Low, one of the inspectors, was a partner in that firm, i.e. until December, 1851. Messrs. Pewtress & Co. had received the regular trade price for the paper so supplied, but the Cole, Q.C., and Macnaghten, for Westmacott's exe- plaintiff and the creditors contended that they ought cutors. Selwyn, Q.C., and Lea, for Lord Beauchamp's executors, supported the minutes as proposed. THE MASTER OF THE ROLLS said that the plaintiff could not be compelled to be kept out of his estate until the equities and accounts between the original mortgagee and the sub-mortgagee were settled; and ordered that, on the plaintiff paying into Court what should be found due to the defendants, the original mortgagees, for principal, interest, and costs, the estate should be conveyed, and the title-deeds delivered up to him by all the defendants. Creditor's Deed-Profit by Inspector. Under the provisions of a creditor's deed, a newspaper belonging to the debtor was managed by him under the control of two inspectors. A firm in which one of the inspectors was a partner, supplied paper manufactured by themselves, and were paid at the regular trade price: Held, that in the absence of any clause authorising the employment of the inspector's firm, these payments could not be allowed to the inspectors, except to the extent of the cost price of the paper. The hearing of an adjourned summons in this case is reported ante, p. 449, and the facts are there fully stated. Murdo Young had carried on the "Sun" newspaper from October, 1848, till March, 1862, under the provisions of an inspectorship deed. In July, 1862, the Lord Chancellor made a decree, directing an account of all moneys received by the inspectors, Low and Clayton, &c., in respect of the newspaper, and of the application of such moneys under the provisions of the inspectorship deed. The result of the decision upon the adjourned summons was, that the inspectors were liable to account for the application of a sum of 158, 2007. 11s. 11d., paid to their account with certain bankers; but not for a further sum of 65401. 5s. 2d. which had been received by Young, but which he had not paid to their account. The case was now again adjourned from Chambers, only to have received the cost price. Apparently, Messrs. Pewtress & Co. had supplied the paper for the "Sun" newspaper previously to October, 1848. At any rate, they were creditors of Young for a large amount. It was alleged in evidence, on behalf of the inspec tors, that shortly after October, 1848, the question who should supply the paper for the newspaper was discussed between the inspectors, the plaintiff's testator, Harmer, and several of the other creditors; that Clayton, the other inspector, and several other creditors, claimed the right of supplying part of the paper; that Low threatened to retire from the inspectorship if his firm were not allowed to continue to supply the paper; and that Harmer, who under the inspectorship deed could resume the management whenever he thought fit, decided that Low's firm should continue to supply the paper. But all the creditors were not parties to this discussion. It appeared that all the paper supplied by Pewtress & Co. to the "Sun" newspaper had been manufactured by that firm, and that no part of it had been bought from any other manufacturer. Selwyn, Q.C., and G. L. Russell, for the plaintiff, contended that the payments made by the inspectors to Messrs. Pewtress & Co. while Low was a partner, could only be allowed to the extent of the cost price of the paper supplied. A trustee could not be allowed to make a profit, Bentley v. Craven, 18 Beav. 75. that at any rate only Low's share of the difference It had been suggested on behalf of the inspectors, between the trade price and the cost price should be disallowed, but this was clearly untenable. Cecil Russell, for fifteen other creditors, supported the same contention. Baggallay, Q.C., and W. Morris, for Clayton and the executors of Low, contended 1st. That the general rule did not apply to inspectors of a creditor's deed. Inspectors were in a different position from trustees, particularly where they were only to see how the business was carried on, and not themselves to carry it on, Chaplin v. Young, ante, 449, 451. The persons appointed trustees or inspectors of creditor deeds were now usually some of the larger creditors, but these would be virtually excluded from such offices if this rule were held applicable; the prospect of profits to be derived from subsequent dealings with the debtor being always a principal inducement to creditors to allow a business to be carried on under inspection. It was generally supposed that the rule did not apply to inspectors, and this accounted for there being no special clause authorising Low's firm to supply the paper at the regular price. Wood, V.-C. 17, 19 FEB. 1864. LOWNDES v. THE GARNETT AND Company-Advance by Directors for Necessaries If a company has incurred a debt for necessaries supplied to it, then, whatever may be the extent of its borrowing powers, any director or shareholder is justified in paying off that debt: and, if he does so, he has an equity to contribution from the other shareholders. This equity is postponed to the claims of regular cre 2nd. That Harmer's having sanctioned the employment of Low's firm on the understanding that they were to make a profit, the plaintiff, his representative,ditors of the company. could not now complain thereof. 3rd. That the rule only prevented a trustee from making a profit in respect of his personal trouble, Matthison v. Clarke, 3 Drew. 3. Here the profit received by Low's firm was not a remuneration for trouble, but a compensation for the risk of carrying on a manufactory. If Low's firm had bought paper, and re-sold it at a profit, then such a profit might perhaps have been disallowed, on the ground that buying the paper was part of the business which the inspectors had undertaken to superintend; but manufacturing the paper was clearly no part of such business. THE MASTER OF THE ROLLS held that only the actual cost of making the paper could be allowed. Although the question had usually arisen with reference to the charges of a solicitor or an auctioneer for personal trouble, the principle of all the cases was that a person in a fiduciary position could not make profits by employing himself instead of employing others. He remembered the case of the York and North Midland Railway Company v. Hudson (unreported on this point; see 18 Beav. 76), where Mr. Hudson being the chairman of that company had bought a quantity of iron, and had resold it to the company at a profit. Upon the case coming before him, he held that Mr. Hudson was the agent of the company, and must therefore refund the profit he had made. Of course, the general rule might be excluded by a special contract either embodied in the instrument creating the trust, or entered into subsequently. He thought that the facts very nearly established such a subsequent contract as regarded Harmer, but that would not have affected the other creditors, and it did not appear that the rule of the Court was present to Harmer's mind. Note.-See Collins v. Carey, 2 Beav. 128; Christophers v. White, 10 Beav. 523. Assuming that a resolution of a board of directors of a company, signed by the chairman, may, if sufficient in its terms, constitute a proper acknowledgment, so as to revive against the company a debt originally due from the company, but barred by the Statute of Limitations, yet, Semble, the acknowledgment will be vitiated, if only three or four directors were present at the meeting, and one of them was the creditor in whose favour the debt was being revived. The The Garnett and Moseley Gold Mining Company of America was established in 1853, and registered in 1854, under the 7 & 8 Vict. c. 110. By its deed of settlement, dated May 30, 1853, the borrowing of any money on bonds or mortgages of the property of the company was to be authorised by two successive extraordinary general meetings of the shareholders. plaintiff was a shareholder from the year 1854, and a director throughout the years 1854 and 1855. The mining speculation required a large outlay of capital, and the company incurred considerable debts. During the years 1854 and 1855 the plaintiff accepted four bills of exchange for the accommodation of the company, and paid to the holders in respect of principal or interest the following sums, viz., 1,2477. 14s., 10007., 6017. 17s. 9d., and 4007., and the bill alleged that all these sums were still due to the plaintiff. All these payments, however, were made more than six years previous to the filing of the plaintiff's bill, with the exception of two sums, viz., 4007. principal, with 287. 16s. 6d. interest, paid on the 17th of December, 1855, and 600l. together with 17. 17s. 9d. interest, paid in February, 1856. The company received for their own use the proceeds of the various bills of exchange when discounted. None of these loans, however, received beforehand the sanction of the shareholders. The arrangement on each occasion was authorised by the board of directors, there being present at the meeting not more than three or four directors, and of these the plaintiff was always one: and the plaintiff relied on the resolutions in the minute book of the board of directors, signed by the chairman, as constituting so many agreements by the company to repay to the plaintiff the sums paid by him, together with interest at 57. per cent. The resolution as to the acceptance of the first bill of exchange for 1,2007. was dated May 24, 1854, and was as follows.— plaintiff attended a meeting of the board of directors, at which were present three other directors besides himself; and what took place was recorded in the following minute, duly entered in the minute-book, and signed by the chairman "Mr. Lowndes (the plaintiff) brought before the board the question of his claim upon the company, and called upon the board to hand over to him 2,400 shares mentioned in the resolution 3 of the meeting held on the 24th of May, 1854, resolved, "In reference to resolution 5 of last meeting"As there were no funds to meet the bill of exchange for 10007. due this day, it was arranged and agreed that Mr. Lowndes should give his acceptance for 1,2007. at three months from this date, to Mr. Cornelius Boyle, and that that gentleman be requested to discount the same at his banker's, the company agreeing to pay the interest; and, upon this arrange-hand over such shares to him, but give him the option ment being carried out, the secretary is to be autho- of taking any number of shares not exceeding 1,600, rised to hold 2,400 scrip shares as security to the at par, in liquidation of 1,6007., part of his claim, payee of the acceptance at maturity on 27th of August within one month from this date.' next.' "The chairman having succeeded in discounting Mr. Lowndes' acceptance for 1,2007. at 67. per cent., handed a cheque to the secretary for the amount, less the discount 187. 14s. 9d., or 1,1817. 5s. 3d., which he paid into the company's bankers, resolved "That the arrangement respecting the 2,400 shares be carried out, and that the same be handed over to Mr. Lowndes upon his paying the said acceptance as a collateral security, and that a copy of this resolution be given to Mr. Lowndes.'" No shares of the company were ever set apart in pursuance of this agreement, as security to the plain "That the board consider they have no power to On the 3rd of September, 1856, the company was duly registered in England as a company with limited liability, under the Joint-Stock Companies' Act, 1856. At two extraordinary general meetings of the shareholders, held respectively in November, 1860, and January, 1861, resolutions were passed requiring the company to be wound up voluntarily, and three persons were appointed liquidators. The plaintiff applied to the liquidators for the satisfaction of his claim, but on the 23rd of July, 1861, the liquidators formally declined to entertain it, on the ground that it was barred by the Statute of Limitations. The plaintiff then, on the 30th of November, 1861, filed his bill against the company and the three liquidators, alleging the above facts, and praying-1st, for a declaration that the said debts, with interest thereon respectively at 5l. per cent. per annum from the respective times of payment by the plaintiff, were valid subsisting debts of the company to the plaintiff; 2nd, for an injuuetion against the defendants, restraining them from plaintiff any other debts of the company of the same degree, and from completing such winding up without paying or providing for the debts due to the plaintiff.; 3rd, that (if necessary) the voluntary winding up of the company might be continued, subject to the directions of the Court. The plaintiff also contended, that these agreements had been subsequently ratified by the share-paying in preference to the said debts due to the holders. At a general meeting held on the 7th of September, 1854, a report and balance sheet were submitted to the shareholders by the directors. The report informed the shareholders of the necessity of raising money to meet the large debts already incurred by the company, and plainly intimated that the directors had made advances out of their own pockets, and in the balance sheet the company was debited with the sum of 1,2007. to the plaintiff. Again, at a subsequent meeting of the shareholders, held on the 28th of August, 1856, another report was submitted to the shareholders which contained the following sentence, "There has also been expended in machinery and works the further sum of 12,2341. 3s. 7d., of which 4000l. was borrowed on the security of the mines, and which still remain charged therewith, and 8,2347. 3s. 7d. is due upon simple contract debts." The balance sheet accompanying the report, debited the company to creditors with the sum of 12,234l. 3s. 7d., and evidence was given on behalf of the plaintiff to show that this sum included all his advances; and that the fact was so stated in the course of the discussion at the meeting. On the 4th of June, 1856, the The defendants put in a general demurrer to the bill for want of equity, and also a plea to the jurisdic tion, on the ground that by the Joint-Stock Companies' Acts of 1856, 1857, and 1858, the cognisance of the plaintiff's claims belonged properly to the Court of Bankruptcy in London, and not to the Court of Chancery. The Vice-Chancellor overruled first the demurrer, on the ground that it was incompatible with a plea to the jurisdiction, and then the plea, as not sustainable at law. The arguments and judgment are reported 2 John. & Hem. 282. The cause now came on to be heard upon motion for a decree. Sir Hugh Cairns, Q. C., and Homersham Cox, for the plaintiff. 1st. The company received the benefit of the ad vances, and cannot therefore dispute the original validity of the debts to the plaintiff, Sir Hugh Cairns, Q. C., in reply. Ex parte Chippendale, Re German Mining Com-powers of the directors. The plaintiff, having advanced pany, 4 De G. M. & G. 19; money to pay the debts of the creditors of the com Re Magdalena Steam Navigation Company, John. pany who had supplied necessaries to the company, 690; stands in their shoes-is their equitable assignee. The Ex parte Bignold, Re Norwich Yarn Company, plaintiff has a right to have his debt constituted. 22 Beav. 143; Troup's Case, Re The Electric Telegraph Company of Ireland, 29 Beav. 353; Baker's Case, Re The National Patent Steam Fuel Ex parte Sedgwick, Re The Court Grange Silver (a) The promise to pay, which constitutes an essen- | tial part of a valid acknowledgment, need not be express; nor need the exact amount of the debt be specified, Prance v. Sympson, Kay, 678; Sidwell v. Mason, 3 Jur. (N. s.) 649. (b) The signature of the chairman was that of an authorised agent within 19 & 20 Vict. c. 97, s. 13. Rolt, Q.C., and J. Pearson, for the defendants. 1st. The debt never was the debt of the company, and the resolutions of the board of directors, on which the plaintiff relies, were only so many acts of assumption on the part of the directors, by which they borrowed money in violation of the deed of settlement. The shareholders never ratified this borrowing, nor indeed were they sufficiently apprised of it by the vague reference contained in the reports and balance | sheets submitted on the 7th of September, 1854, and 28th of August, 1856; certainly not, considering that the person making the advances to the company was a director, 7 & 8 Vict. c. 110, s. 29; WOOD, V.-C.-The chief point at issue in this case is now settled by the decision in the case of The German Mining Company. No company which carries on business as a going concern, involving large current expenditure, can so use any provisions in its deed of settlement, which fix the amount of its capital and calls or limit its borrowing powers, as to relieve itself from liability to creditors who have supplied labour or materials to carry on the business of the company. The only effect of such provisions is, that if the borrowing powers have been exhausted, the directors are disabled from borrowing money on the security of the company; in other words, if persons advance money to pay off these debts, they cannot acquire the rights of creditors against the company. But the company is not the less bound to pay these debts. Under these circumstances, any director or shareholder is justified in advancing money for the purpose of paying the debts; and, if he does so, he has an equity for contribution from the other shareholders; only this equity is postponed to the rights of the regular creditors of the company. The existence of this equity, so far from enlarging the liability of the shareholders, as was contended at the bar, is highly beneficial to their interests. Were it not allowed, directors would have no option but suddenly to stop the company, whenever there was a temporary lack of funds to meet a pressing demand, even if it was certain that funds would come in the next week. The first question, then, is-whether these moneys were advanced by the plaintiff to satisfy existing debts of the company? On this point the liquidators are entitled, at their own expense, to an inquiry; but, Murray's Executors' Case, Re Universal Salvage looking to the reports and the balance sheets delivered Company, 5 De G. M. & G. 746. The debt, if a debt at all of the company, was a legal debt; the Statute of Limitations was therefore applicable. 2nd. But the resolution of the 4th of June, 1856, was an insufficient acknowledgment. Assuming that they were so, the next question is with respect to the Statute of Limitations. I think (a). It is an admission, not of a debt, but a claim, that this Court would consider the period of time fixed and is no promise to pay, by the statute for a bar in the case of a legal debt, to be a bar to the enforcement by the plaintiff of his equity to a contribution. Two of the sums, however, advanced by the plaintiff were clearly advanced within six years previous to the filing of his bill-viz., the sum of 4001. and interest paid on the 17th of December, 1855, and the sum of 6007. and interest paid in February, 1856. With regard to the claim for the Hart v. Prendergast, 14 M. & W. 741. (b). It is not made by the company which it is now sought to make liable, nor by persons duly authorised to represent the company for the purpose of making the acknowledgment. The directors could no more revive than create a debt of this kind against the company. 3rd. The plaintiff should seek redress in the Bank- other sums, the lapse of time is a fatal objection, unruptcy Court. less the resolution of the board of directors, on the Held, that the plaintiff in the cross-suit was entitid to have his bill answered first. Whether this would have been so, if the interroga tories in the original suit had been filed in proper tim, quære. The bill in the suit of Garwood v. Curteis was filed that in Curteis v. Curteis, which was in the nature of a on the 3rd of December, 1863, and served on the 9th; and the interrogatories in the latter suit on the 23rd cross suit, was filed on the 10th of the same month, of December. No interrogatories were filed in the original suit within the time limited by the Con solidated Order XI. but, on the 7th of January, 1864, the plaintiff in that suit obtained, on summons at Chambers, an order extending the time for filing interrogatories, which were filed accordingly on the 4th of June, 1856, is a sufficient acknowledgment. the defendants filed a cross-bill and interrogatorie Under no circumstances could it be an acknow-within the same period :ledgment for more than a part of the plaintiff's debt, to which alone it refers. But I am of opinion that it is not an acknowledgment at all, such as the law requires to revive a debt. The resolution speaks of "the claim" of the plaintiff, not of a liquidated or admitted debt. It simply amounts to this- a statement that a claim has been made, and that the directors offer terms for a settlement of part of the claim: it is not an admission of the claim, or a promise to pay the whole or part thereof, whether or not the terms offered are accepted or not. There is also another objection. Assuming that in ordinary cases a board of directors is capable of giving an acknowledgment on behalf of the company, and that the chairman in signing a resolution represents all the shareholders, I think it very questionable whether a board, constituted as this was-of only four directors, one of them being the plaintiff-could pass a resolution protracting the liability of the company to one of themselves, who was himself present as director, and who voted in favour of the resolution. The plaintiff, therefore, cannot claim repayment of any sums advanced by him more than six years previous to the filing of the bill. I regret to come to this determination, for the plaintiff's is a righteous claim and, as the company has thought fit to resist all his demands, even those which are not only just, but which can be enforced in this Court, I shall give the plaintiff the costs of this suit. Minute. Declare the plaintiff entitled to be repaid the sum of 4287. 16s., paid by him on the 17th of December, 1855, and interest upon 4007. at 57. per cent. as from that date; and 6017. 17s. 9d., paid by him in February, 1856, with the like interest upon 6001. from that date. Declare him not entitled to the repayment of the other sums mentioned in the bill, the payment thereof having been made more than six years previous to the filing of the bill. An account, in case the parties differ, of what is due from the company to the plaintiff on the footing of the above declaration, after allowing such sums as may be due from the plaintiff in respect of calls or otherwise; the defendants, the liquidators, to pay the same to the plaintiff, after providing for the debts of the company; the plaintiff to be at liberty, under the directions of the Judge in Chambers, to take steps for the recovery from the shareholders of the residue unpaid by the liquidators. Tax the costs of the plaintiff the defendants, as liquidators, to pay A plaintiff having filed a bill, neglected to file inter 11th. On the 18th of January an order was obtained by the plaintiff in Garwood v. Curteis, extending the time for answering the cross-bill. On the 30th of January, an exparte order was ob tained by him to stay all proceedings in the cross-suit till the plaintiffs in the cross-suit should have put an answer in the original suit. Giffard, Q.C. (B. B. Rogers with him), now moved that this order should be discharged, 1st. Because the plaintiffs in the cross-suit had been the first to file interrogatories. 2nd. Because the suits were not strictly cross-suits. Batten, contrà, contended that formerly, when the interrogatories formed part of the bill, it was the right of the plaintiff in the original suit to have an answer to his bill before he answered the cross-bill; and that now the plaintiff in the original suit stood in the same position, whenever he filed his interrogatories so as to make them part of the record. The right to priority of answer could only be lost by amending the bill, and even then, not till the plaint.f in the cross-suit obtained an order staying proceedings in the original suit till the cross-bill was answered. He cited, Harris v. Harris, T. & R. 165; Smith's Chancery Practice, 744 (7th ed.); If the plaintiff in the original suit were to lose Lis right of priority in this case, it must follow that if a bill and cross-bill were filed, and the interrogatories to the cross-bill were filed before those to the original bill, the priority would be lost, even though the interrogatories to the original bill were filed within the proper time. He also contended that the suits were properly crosssuits. WOOD, V.-C., said, that under the old practic rogatories within the time fired by the Orders. One of when the interrogatories formed part of the bill, and |