SUPREME COURT.

Press, Volume LI, Issue 8963, 29 November 1894, Page 3

SUPREME COURT.

SITTINGS IN BANCO.

Wednesday, November 28.

(Before hie Honour Mr Justice Denmston.) His Honour sat in banco at 11 a. m.

CCKLETT V OSBORNE.

Mr Russell applied herein for the adjournment, or this case, which was an argument of points of law, as the case now before the Court would take some time.

His Honour granted tbe'applicaUon. STCDEXTS OF TRUTU (,\PrEUA>"TS) V INGRAJI

{RE;?OSD&ST)

This was a case on appeal from the judgment of Mr Beet ham, S. Mi , ia a case in which Mrs Ingram was plaiutiffand the Students of Trutn were defendants. The plaintiff sought in the Court below to recover a sum of money alleged to be due for interest on debentures issued by the Trustees of the Students of Truth. The Stipendiary Magistrate held that the plaintiff was entitled to recover. This was now appealei against.

Mr Bruges in support (if the appeal, Mr Haast contra.

Mr Bruges opened the case in support of the appeal ana stated tUe grounds. The action was not brought against the original trustees, who issued the debenture, but against the Incorporated .Board, who, he submitted, were not liable. There was no contract made between the respondent and the appellant, as the present Board had its bulb when it was incorporated. He submitted that the origiutvl trustees had got rid of their liability. It must be shown th&t the old been discharged, and that the present body had taken over the liability, which he contended j had not been done. Tliern waa no evidence j of the acceptance by the Board of the new j contract. No interest, had baen.paid by the Board, but Mr Worthmgton. had before the incorporation discharged certain claims for interest, receipts for which had been accepted by the trustees pro tanto as payment of rent. Since the incorporation the Board had requested Mr Worthington to pay the rent direct to them, aits* nob through the payment of interest to other parties. " The only evidence or the contract between the parties was a letter dated 6th January, 1894, from Mr Stringleman, Secretaryof the Board, to Mrs Ingram, stating that the trustees regretted that no mouey was available for the payment of her interest, but that the trustees intended devoting the money as il came in to the payment of back interest and division amougst the debenture holders. This was the ouly evidence as to the contract. In I June, 1894, a letter was sent regrettipg that there were no funds in the hands of the trustees to pay Mrs Ingrain's interest. He submitted that th&i<ej was no evidence to show that the- Secretary was authorised to ..make the admissions contained therein. Even supposing it were so, then he submitted that there was no consideration and' that there was no novation. It might be put on the ground that the trustees signing the debentures were agents of the incorporated Board, but this was not so under the Act.

His Honour said that Hie incorporated body did nob exist. It could not, therefore, be that the trustees signing the debentures were agents of a nou-exiatent body. ;.■.■,.•■ Coming to the Religious "and Charitable Trusts Act, 1884, ander-Whiott. the appellants were incorporated, 'he >(Mr Bruges) would refer his ; Honour to section 3. Hβ submitted that the words.in the section that the Board took over trusts subject to the contracts, &c, and liabilities meaut that the Board would indemnify the other trustees for any actions brought against them. The proper course to have taken w»s to have come Co the Court and. applied for the appointment of a Receiver, and the giving an equitable lien over, the property, as the Court below could not do justice between the parties.

His Honour pointed out that every holder of a debenture on which £5 was due would, under Mr Biugea'a contention,; have to bring an equity suit. Mr Bruges contended that a contract made by a previous body waa not enforce • against'the <>» direct action at law. '■> C- .-". v

His Houour asked Mr Bruges what was 1 the meaning of the words '** subject to aDy contract attesting the * Mr Bruges submitted thatahe obligation was takea over, but that the creditor could not cue the Board. The trustee could be sued, but not the Board. He eubinitted | further that the? debentures were" not chargeable on the property, but that it was merely a personal liability between the persons authorising the issue and the holder. The statement that the trustees were only liable to the extent ot the funds iv hand did not constitute a charge on the property, as he had already submitted the ,proper method for the respondent to pursue .was by a suit in equity. Putting aside the last clause in the debenture as to the trustees only being liable to the exienS of goods; in hand, he submitted that "the"'contract by the respondeat with the persons named therein created only a personal liability with them. Hβ submitted that the proper method would be for ore debenture holder or more to come to that ; Court in equity and have a receiver appointed with, if necessary, a sale of the Droperty and an equitable distribution ambtt£st the debenture holders. Tne Board were now: resisting the claim of ono debeuture holder only to be recognised in priority to all the others. He 'submitted that there was no evidence before the Court below to show that the Board had any funde in hand to pay this [ interest. ' ' •■■'''■ W^v-','',.' , His Honour said the Magistrate had found that the Board were possessed of chairs which could be converted into cash more than the amount of the claim of the respondent. Mr Bruges submitted that there were no 1 innds, as chairs were not funds. He also submitted that " funds in hand" meant money on deposit or investments, or income which was left over after paying all the expenses in connection with" the property. As to the Kindergarten or Social Hall the j appellant Board had no control over it. On I these grounds he submitted that the.appeal 1 should be • ■':. Mr yon Haaat submitj&d%hat the Appellant Board wero liable in two ways. The first of these was that the Board, by incorporating, showed their, willingness to accept the liability to the appellant, and the correspondence showed clearly that Mrs IngrWn accepted the Board as her debtor in place of the old thafc the liability had never throughout the negotiations been repudiated by the appellant ■ Board; all that the appellants said was that they had no money* He submitted that the liability of Trustees had been accepted by;-the, appellants, and that the liability Bad passed to the appellant Board on ihe dictum that no, one was entitled to get the benefit of property without taking also the liabilities. The I trust Board could not cay "We have got the Temple of Truth paid for out of your money, and sat on chairs paid for by you, but we will not recoup you. , ' He eubmitted that eection 7 of the Act of 1884 contemplated the present position, as the words weie wide and could include the transfer to the Board of the property with its liabili. ties, moie particularly the sum spent in acquiring it. He also submitted that the property under the control of the Board was that which came from the old body, viz. the Temple and its appurtenances. I&e provision in the debentures was merely to secure the trustees from personal liability and to give the debenture-holders a claim on the property then held by the trustees. He submitted that the words "funds in hand" meant realisable property, and not money or investments, and that the term "fonds" should be taken in it* widest sense. He woula submit that the liability of the trust Board wss the same as of an ordinary debtor. It was no answer fortheßoafdtoaaytbonecreditor that it had not money enough for all, but if a creditor hud taken tie proper steps he had « right to proceed to execution irrespective of the claims of the other creditors. The proper method would be for the Beard to bind up or assign the property for the benefit of the creditors. „ Mr Bruges then replied. His Honour took tune to consider.