litigation have been paid and take what is left for the debentureholders. I am afraid that will be nothing. It will be cruel to say they must add their costs to their security, and yet in effect I must say that. Of course I say the same with regard to the Finance Corporation. Solicitors: The Solicitor to the Thames Conservancy; Michael Abrahams, Sons & Co.; Baker & Nairne; Cattarns, Jehu & Co. J. R. CUMMING v. METCALFE'S LONDON HYDRO, LIMITED. 1895, May 4. NORTH, J. Company Debenture-holder's Action-Foreclosure-Form of Judgment. A judgment in a foreclosure action should contain a direction that moneys in Court, or in the hands of a receiver, shall on the defendants' application be applied towards payment of the amount due. THE plaintiff was the registered holder of the whole of a series of first mortgage debentures issued by the defendant company. The company had made default in payment of principal and interest, and on 24 April, 1894, the plaintiff issued a writ, claiming the usual relief in a debenture-holder's action, and the holders of a second series of debentures were subsequently added as defendants. A receiver had been appointed of the property and effects comprised in the charge, and had carried on the business at a profit. No defence had been delivered, and the plaintiff now moved for such judgment as upon the statement of claim he might be entitled to. The proposed minutes contained the following direction : "Let any person redeeming the premises under the provisions of this order, or the plaintiff in the event of foreclosure, be at liberty to apply to the Judge in Chambers for payment and transfer of any money or securities in Court to the credit of this action, or in the hands of the receiver." Beddall, for the plaintiff : I ask for an order in terms of the minutes, following Coleman v. Llewellin (1), Smith v. Pearman (2). C. W. Bardswell, for the defendants. NORTH, J.: In the absence of any special circumstances, I decline to make an order in these terms. Such a direction by itself might operate very hardly on a person entitled to redeem; for, though he might not be able to pay the total amount due out of his own pocket, he might be able to find such a sum as with the balance in Court, or in the receiver's hands, would suffice to redeem the property charged. The following additional direction must be inserted in the minutes:-. "Let the defendants be at liberty at any time before foreclosure to apply to the Judge in Chambers for payment and transfer to the plaintiff on account of the moneys due to him of any money or securities in Court to the credit of this action, or in the hands of the receiver." Solicitors: Albert Myers, for the Plaintiff. Hughes & Sons, for the Defendants. A. L. M. (1) 34 Ch. D. 143; 56 L. J. Ch. 1; 55 L. T. 647; 35 W. R. 82. PARKINSON v. WAINWRIGHT & CO. 1895, March 30. NORTH, J. Company-Debenture-holder's Action to enforce Security-Form of Order—Declaration of Charge-Immediate Sale-Order LI. r. 1B. In an action by a debenture-holder, which is brought on as a short cause, the Court can preface the judgment with a declaration that the plaintiff is entitled to a charge on the property designated in the debentures as a security for the money thereby secured, but the plaintiff will not be entitled, as a matter of course, to the order granted in Perry v. Clutton Coal Co. (1), if he sues on his own behalf only. THE plaintiff Parkinson was the holder of all the first, but only the first, mortgage debentures, issued 3 May, 1892, by the defendant company, Wainwright & Co., which was engaged in working a colliery. The defendant Wainwright was the holder of all the second mortgage debentures of Wainwright & Co., except 2001., which were held by a person named Church. About the beginning of 1895, Wainwright & Co. became financially embarrassed and failed to pay interest on the first mortgage debentures. The plaintiff thereupon commenced an action for sale or foreclosure. The fact that Church held 2001. of the second mortgage debentures was not known to the plaintiff until after he had delivered his statement of claim. The action now came on, on motion for judgment in default of defence, as a short cause. The minutes contained a declaration that the plaintiff was "entitled to a charge upon all the undertaking, property and assets of the company, including uncalled capital," and asked for an order for immediate sale, but contained no inquiry as to other incumbrances. R. Wright Taylor, for the plaintiff : In Charlwood v. Leasehold Investment Co. (2) VAUGHAN WILLIAMS, J., refused to make the declaration proposed in the minutes, but in Brinsley v. Lynton and Lynmouth Hotel and Property Co. (3) KEKEWICH, J., took a different view. (1) Seton on Decrees, 5th edit. p. 1685. (3) 13 R. (April) 240. As regards ordering the immediate sale, Perry v. Clutton Coal Co. (1) and Order LI. r. 1в, are in point. W. Howland Jackson appeared for both the defendants and consented to the order being made. He suggested that it might be made under section 25 of the Conveyancing Act, 1881. NORTH, J.: The proposed declaration is a convenient preface to the judgment of the Court, and I shall continue to insert such declarations following the usual practice of the Chancery Division. I do not see how section 25 of the Conveyancing Act, 1881, enables me to make the order which is asked for, because here it is admitted there are some persons who are not parties. This case differs from Perry v. Clutton Coal Co. (1), because there the plaintiff was suing on behalf of himself and all other debenture-holders, while here the plaintiff is the holder of the only first mortgage debentures. The inquiry as to persons interested can be answered quickly. I will give leave to apply in Chambers for a sale. If Mr. Church's consent is obtained I will make the order and will not set any limit as to time. The registrar will draw up the order, and there will be no necessity to apply again in Court. The minutes include no inquiry as to other incumbrances. I think there ought to be such an inquiry. If Church's consent cannot be obtained, he might be added as a defendant and the action set down as a short cause. Solicitors: S. S. Seal, for Wade, Bilbrough, Booth & Co., Bradford, for the Plaintiff. Barton & Pearman, for Scatcherd, Hopkins & F. T. H. ROBSON v. SMITH. 1895, March 26; April 9. ROMER, J. Company-Debenture-Floating Charge-Going Concern-Garnishee Order— Notice to Garnishee-Priority. A debtor to a limited company is justified in paying a judgment creditor of the company under a garnishee order, notwithstanding that he has notice of a debenture charging all the assets of the company with the repayment thereof as a floating security, so long as the company is carrying on its business as a going concern. A debenture-holder, therefore, so long as the company is a going concern, cannot by notice to a debtor of the company single out any particular debt and require that it should be paid to him in order to satisfy his debenture. Hubbuck v. Helms (1) followed; In re Standard Manufacturing Co. (2) and In re Opera, Limited (3), distinguished. Where a debenture of the kind in question contains a provision that the company should not be at liberty to create any mortgage or charge upon any property in priority to the debenture, garnishee proceedings, being only a form of execution, do not lead to any "charge," in the true sense, being created by the company on the debt garnished. The word "charge" in a provision of this class is construed strictly. THE plaintiff was the holder of a first mortgage debenture of the Empire Printing and Publishing Co. (Limited). This debenture, after reciting that the company would pay the bearer of the debenture 3,000l. on 4 June, 1890, or six calendar months after the bearer by notice in writing should have required the payment, and in the meantime paying interest at the rate of 81. per cent. per annum in quarterly payments, ran as follows: "The company hereby charges with such payments its undertaking and all its real and personal property (both present and future), including its uncalled capital for the time being. This debenture is issued subject to the conditions herein endorsed." These conditions were as follows:- (1) 56 L. J. Ch. 536, 537; 56 L. T. 232; 35 W. R. 574. (2) [1891] 1 Ch. 627–639; 60 L. J. Ch. 292; 64 L. T. 487; 39 W. R. 369. (3) [1891] 3 Ch. 260; 60 L. J. Ch. 839; 65 L. T. 371; 39 W. R. 705. |