THE STUDENTS OF TRUTH CASE.

Press, Volume LI, Issue 8964, 30 November 1894, Page 6

THE STUDENTS OF TRUTH CASE.

THE APPEAL DISMISSED.

The case of Students of Truth (appel- I fonts) v Mrs Ingram (respondent) came on I in banco yesterday morning for judgment. I This was a case on appeal from the judgmeat of Mr Beetham, S.M.. in favour of the respondent who sued for interest due on debentures held by her. Mr Bruges for the appellant, Mr yon Haost for the respondent. His Honour said that he saw his way clear to a conclusion on the matter, and nothing would be gained by reserving his judgment. After giving a short resume ot the facts and setting out the proviso in the debenture as to the trustees only being liable to the extent of the funds in their hands, his Honour went on say that the proviso further amounted to a charge on the property of the Students of Truth to the extent of the sums intended to be secuted by the debentures. It was an undercaking by the trustees on the | part of the Students of Truth to ] pay the principal aud interest at the prescribed times out of any property j of the Students of Truth in their hands. It did not say tbat tbe Students of Truth I would pay if they had funds. It was an , absolute undertaking on their behalf to pay. but with the limitation of the Trustees' liability to " funds in their bauds.*' He did not mean by a charge on the property anything giving any superior or prior rights to the debenture holders, but only that there was enough to enable them by proper steps i to make the property available in satisfac- | tion of the debt. It was argued that the words " Goods in hand " meant only j money, or at least did not extend to property generally, but he did not think, the ! words should be given so limited a meaning. He thought the sense in which it must be takeu to have been used was any property I available, or which could be made available to pay liabilities. Referring to the, memo- , rial for the incorporation of the ap- j pellants, his Honour Bald that it was to be observed that it was the trustees and not the Society that filed I tbe memorial and -were incorporated, and. it' was the property held by them which vested in the Board. There was nothing in the j application to show that any other persons ' than the trustees were interested in the Society. Tbe effect of the certificate of | incorporation was to make the trustees a' corporate body, with perpetual succession, and a common seal, with the right to hold real and personal property, and to sue and be sued, &-. Immediately upon incorporation all property, whether *real or personal, was to be deemed to be vested in the Board upon and subject to the same trusts, powers, contracts, and equities as would affect the same. That was, he took it, they were to stand in the position or place of the trustees as trustees. They did not, of course, assume any personal liabilities of the trustees, or relieve them from any such liabilities. But they took all the trust property, with all the obligations connected with it. One of these obligations was the undertaking of tbe .trustees, on behalf of the Students of Truth, to pay the principal and interest secured j by the debentures out of tbe property in the hands of the trustees. Surely this was " a contract affecting the property held by the trustees " and to which the trust Board became by statute subject. Who, then, was to enforce such contract 1 Surely the other contracting party. And how was it to be enforced ! Surely by action against the body which had become by Statute possessed of tbe property and subject to the contract. The holder of the debentures could not effectively sue the old trustees. They had negatived any personal liability, and they had by the force of the | Statute been divested of the property out of which alone they undertook to discharge the obligation. This was the view taken |by the defendants when applied to for payment of interest. They did not repudiate the liability to perform the contract, but | said they had no funds. Mr Bruges had -argued that the only remedy of the debenture holders was an equity suit against the j Trust Board to obtain a charge on the property. Why should every holder of a £50 debenture, when £5 interest was due 'on it, be compelled to begin an equity i suit to obtain what the terms of the Act give him. If the matter had stood where it ' did before the incorporation, there might ihave been some difficulty. The plaintiff | would probably have . had to allege and prove the existence of funds.. But the result i or the object of the Act was to remove such a I difficulty. The trustees had undertaken to pay to the extent of the property in their i bands. Tbe incorporated body was neoesI sarily limited to obligations in respect to such property. .An action against i them was therefore -limply an action foa that undertaking. . There was .no necessity in such an action to prove that the Society had funds available. If it had not, then the plaintiff's judgment was inettective. Mr Bruges argued that the effect of the action would be to give the plaintiffs priority over other creditors. But the original undertaking was au obligation to pay absolutely, not pro rata. If the trust Board could, not meet all its obligations, then there were probably means by Which claims could be adjusted.. Even if there were not, that would be no ground for interfering with the plaintiffs. The appeal would be dismissed with £10 10s costs.. ;. ■■ :'

' Mr Bruges applied for leave to appeal. Mr yon Haast said that he thought, under the circumstances, that tbe appeal should be granted on terms. His Honour asked Mr yon Haast what terms he wished for. No stay of proceedings had been asked for. Mr Bruges said he would apply to his Honour for stay of proceedings in addition to leave to appeal. There were a number of other coses of a similar character.

His Honour said that in view of the number of other cases pending, it would be as well for them to enter some mutual arrangement.

Mr yon Haast said that he thought that the condition imposed should be that the trustees entered into & band not to expend any peodiaz tbe appeal. & U If H* His nonour saii that ia an ordinary case where £12 10a was > in* volved he should not give leave to appeal, but as this 'was a test case, and atfecled a good deal more than the amount involved, He would do so. Aβ to the stay of execution, he thought that perhaps some conclusion could be arrived at between the parlies, and to enable this to be done be would adjourn this matter lor a week. The Court then rose.