KEMP v. WRIGHT, App.

before the Act, nor to alter vested rights. The deed of dissolution operates under the Act of 1874, and has the same effect as a winding-up order. The whole of the mortgage debt becomes immediately payable. In Brownlie v. Russell (8) the House of Lords ordered an advanced member to pay at once.

[LORD HERSCHELL, L.C.-He wanted to redeem, and could not do so till he had paid everything. He was not ordered to pay forthwith if he did not redeem. In Tosh v. The North British Building Society (9) the question was whether members were to pay more than their advances, not whether they were to pay sooner. I did not say in that case that they could be compelled to pay at once. In both those cases there was a winding-up. Here there is a dissolution and a covenant under seal to pay by instalments.]

The covenant is to pay according to the rules, and their position under the rules has been altered by the instrument of dissolution.

THE LORD CHANCELLOR (LORD HERSCHELL). With all respect to the learned Judge of the Court below, I am quite unable to agree with the conclusion at which he has arrived. It is not necessary to discuss the question whether the effect of a winding-up order is as extensive as is contended for by the respondents. This is not the case of a winding-up, but of an instrument of dissolution. By section 32 of the Act of 1874 the dissolution of a society may take place with the consent of three-fourths of the members holding not less than two-thirds of the number of shares in the society. By such consent a society may be dissolved against the will of the minority. In this case the requisite majority have agreed to the dissolution of the society. That is purely a matter for the shareholders, a matter in which the majority of the members can bind the minority. What they can bind them to is a dissolution. The instrument of dissolution is to set forth certain matters mentioned in section 32, sub-section 3. There is no provision further than that for determining the rights of members on a dissolution, or that they should be other than they are under the rules of the

society which created the contract between the members. The contention is that, whereas certain members of the society are advanced members-that is, that they have obtained advances from the society, and have covenanted to repay those loans according to the rules-that is to say, by instalments-upon a dissolution their liabilities are immediately altered and they become bound to pay not by instalments, but at once. There is nothing in the section to indicate anything of the sort. There is nothing in the deed itself to say that this was to be the effect of the deed of dissolution; but it is said that this has been held to be the effect when the Court makes a winding-up order, and that, therefore, it must also be so when the dissolution is the act of the members. That is a consequence which I am not able to follow or to see the force of. A winding-up order is the act of the Court; it is a vis major, however it be procured. All the parties have a right to be heard on it; a minority likely to be affected by the result would be entitled to appeal to the Court in opposition to an order which would benefit one class of members at the expense of another. But it is said that where a dissolution is decreed by the majority, the minority are at their mercy; and according to the contention of the respondents and the judgment of Mr. Justice Kekewich, a majority who may consist entirely of unadvanced members may dissolve the society and bind the advanced members to liabilities they have never undertaken. Unless there is distinct authority in favour of that proposition, I should decline to assent to it; it is clearly unjust, and I find nothing in the provisions of the Act with respect to the deed of dissolution to support it. The proposal for the division of the funds of the society is to be set out in the deed, and the liabilities and assets of the society are to be stated. Amongst those assets are the liabilities of the members to the society, and the same sums would be included in the funds and property to be divided. But there is nothing to affect the covenants in the mortgages to pay by instalments or to make the loans immediately repayable. Therefore I think that the instrument of dissolution did not

KEMP v. WRIGHT, App. operate in that way to the prejudice of the advanced members. I think that the point raised under the statute is also a good one, but it is perhaps unnecessary to go into that after the opinion which I have just expressed. The society is being dissolved, and is not yet completely dissolved. It cannot be disputed that the words "is being dissolved" in section 10 of the Act of 1894-in the sense in which they are used in the statute-must apply to this society. The Legislature has said that in such a case advanced members are only to pay according to the contract contained in their mortgages. The only answer made is that the legislative enactment came into force some months after the commencement of the dissolution, and therefore does not apply. But inasmuch as these advanced members have not yet completed the payments in accordance with their contracts, the Act must have been intended to apply to them. I see no reason why effect should not be given to the obvious intention of the Legislature. The appeal must be allowed.

If

LINDLEY, L.J.-I am of the same opinion. If a man borrows money and stipulates to repay it by instalments, the majority of the members of his society. would obviously have no right, under any intelligible principle of law, to compel him to pay the whole sum straight off. they have any such right, it must be given by statutory enactments. It is said that, if this were a winding-up under the Companies Act of 1862, a borrowing member could be compelled to do so, and that the Court did this in Brownlie v. Russell (8). I do not think that that case went so far; but if it did, the matter has been set right by the recent Act. Section 32 of the Act of 1874 draws a distinction between dissolution and winding-up. But what we are dealing with is a dissolution and not a winding-up. It appears to me that there was some misapprehension as to the point decided in Brownlie v. Russell (8). But in my opinion, apart from the point under the Act of 1894, the decision of Mr. Justice Kekewich was wrong.

SMITH, L.J.-Mr. Justice Kekewich

arrived at his conclusion on this case by holding that a deed of dissolution was equivalent to a winding-up order of this Court. There is no authority to support that view, and after what has been said I need add nothing. On the other point, under section 10 of the Act of 1894, I read that as meaning that after the 25th of August, 1894, no matter what any Court has said about dissolutions or winding-up-from and after that day, when any society is being dissolved or wound up, no advanced member shall be called upon to pay his debt otherwise than according to his contract.

Solicitors-Halses, Trustram & Co., agents for J. F. Read, Liverpool; Wynne & Co., agents for R. J. Jones & Co., Liverpool; Chester & Co., agents for Alfred Stephenson, Liverpool; W. Harper, Liverpool; Solly & Marshall, Birkenhead.

CHITTY, J. 1894. Nov. 9.

[Reported by H. C. Roper, Esq., Barrister-at-Law.

THE CLEVELAND WATER COM-
PANY V. THE REDCAR LOCAL
BOARD.

Local Government-Public Health ActWater Supply-Construction of Waterworks -Company Empowered to Supply WaterNotice to-Public Health Act, 1875 (38 ď 39 Vict. c. 55), 8. 52.

Section 52 of the Public Health Act, 1875, which requires a local authority, before commencing to construct waterworks in a district, to give notice to any water company empowered by Act of Parliament to supply water to such district, does not apply to a case where, previously to the passing of the Act incorporating the company, the local authority already had substantial waterworks in existence for the supply of the district.

Motion, treated by consent as the trial of the action.

In 1856 the defendant board, in pursuance of the powers conferred by the Public Health Act, 1848, erected waterworks for the supply of their district.

By the exemption clause of the Charitable Trusts Act, 1853, in the case of a charity "maintained partly by voluntary subscriptions and partly by income arising from any endowment," the Act is to apply to the income from endowment only to the exclusion of voluntary subscriptions, and no donation or bequest unto or in trust for any such charity of which no special application or appropriation shall be directed or declared by the donor or testator, and which may be legally applied by the governing body of such charity as income in aid of the voluntary subscriptions, shall be subject to the jurisdiction of the Charity Commissioners or to the Act:-Held, first, that "income arising from any endowment," except so far as qualified by the subsequent context, meant income derived from any invested funds belonging to the charity; but, secondly, that in the case of a charity partly maintained by voluntary subscriptions and partly by the income of any endowment, bequests and donations for the general purposes of the charity which might be lawfully applied as income consistently with the terms of the gift were exempt from the Act; and, thirdly, that such gifts and the income thereof were not brought within the jurisdiction of the Commissioners by being invested in land or otherwise by the governing body of the charity:-Held, therefore, that the consent of the Charity Commissioners was not required to the sale of lands purchased by a charity of the above description out of moneys derived from donations and bequests capable of being applied as income for the general purposes of the charity, and

sold by them to a railway company under the provisions of an Act of Parliament.

The ratio decidendi of LORD ROMILLY in The Corporation of the Sons of the Clergy v. Sutton (27 Beav. 651; 29 Law J. Rep. Chanc. 393) overruled.

This was a petition by the Clergy Orphan Corporation for payment out of Court of a sum of 5,000l. paid in under the Lands Clauses Consolidation Act, 1845, to the credit of Ex parte the Manchester, Sheffield, and Lincolnshire Railway Company; In the matter of the Manchester, Sheffield, and Lincolnshire Railway (Extension to London &c.) Act, 1893, in respect of land at St. John's Wood, Middlesex, belonging to the corporation known as the Clergy Orphan Corporation, in fee-simple without power of sale. The corporation were incorporated by an Act 49 Geo. 3. c. xviii.

Section 1 of the Act incorporated the Clergy Orphan Corporation as a charitable corporation for maintaining and educating poor orphans of both sexes of clergymen of the Church of England until of age, and enabled it to hold for the purposes of the Act and in trust for its own benefit all sums of money paid, given, or bequeathed, and without licence in mortmain to purchase and hold any lands, tenements, or hereditaments for the purposes of the charity.

Section 2 of the Act gave to the governors of the corporation full power in the name of the corporation to apply and dispose of moneys and funds already given and which should from time to time be contributed and given by any person or persons on account of the corporation to and for the purposes of the corporation, and to, for, and on any other purpose, way, matter, or thing, relating to the said corporation and for the benefit thereof, at their discretion.

The Act conferred no power on the corporation to sell land.

By an indenture dated the 9th of February, 1859, in consideration of 5,8007. paid by the corporation, certain schools and buildings erected by the corporation, and other lands and premises in St. John's Wood Road, in the parish of St. Maryle