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THE

LAW QUARTERLY

REVIEW.

No. LVII.

January, 1899.

NOTES.

IN

N future the Law QUARTERLY REVIEW will be published on the

15th instead of the ist of the month in which it is due. This will enable us to deal before the long vacation with the cases reported in the July reports, or the more important of them, instead of having to keep them till October. We also think that Oct. 15 and Jan. 15, as coinciding more nearly with the resumption of active work, will be more convenient dates. As to April, we cannot avoid the caprices of that supra-legal fiction the ecclesiastical moon, but the mutability of Easter will at any rate be no worse than before.

THE DREYFUS CASE AND THE COURT OF CASSATION. We call the special attention of our readers to the exposition of the powers of the French Court of Cassation in the revision of criminal proceedings which our learned friend Mr. Thomas Barclay contributes to this number. A legal and non-political review is of course precluded by obvious reasons of discretion and professional comity from expressing or admitting any controversial opinion on the merits of a case of which that Court is still in possession.

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Kerry v. England, '98, A.C. 742, 67 L.J.P.C. 150 (J.C.), is anything but a satisfactory case to those lawyers who desire to see questions of principle adequately discussed by the highest Courts of the Empire. An action had been brought in Montreal which, if the facts were found in the plaintiff's favour, raised the precise question decided in 1852 by the Court of Appeals in New York (Thomas v. Winchester, 6 N. Y. 397)—whether a wholesale dealer in drugs who negligently sends out a dangerous drug under a wrong name is liable to the ultimate consumer who suffers by taking it as what it purports to be. Here tartar emetic had been sent out to a retail druggist, and innocently

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sold by him, as subnitrate of bismuth. The Province of Quebec, it is true, is not under the common law, so no decision in this case could have been exactly in point in a common-law jurisdiction. Still a judicial consideration of the principles involved would have been of great value. A Montreal jury, however, was pleased to find that the patient's death was accelerated by taking the tartar emetic,

but not to any appreciable extent. And the Judicial Committee disposed of the appeal on the short ground that, whether the patient's representatives could have had a right of action on principle or not, the law can take no notice of damage which in the particular case is found as a fact not to be appreciable.

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Ever since the great Maxim-Nordenfelt case the discretion of the Court in enforcing covenants in restraint of trade has been steadily widening. The old rule that there must be some limits of space is abrogated; or, if we prefer to put it so, set aside as never having been a fixed rule, but only a test of unreasonableness formerly sufficient when trade was local, but inapplicable to modern commerce. Only the general rule of equity remains that the Court will not either directly by decree or indirectly by injunction grant specific performance of an agreement for personal service. On these principles the Court of Appeal acted in William Robinson & Co. v. Heuer, '98, 2 Ch. 451, 67 L. J. Ch. 644. Here a covenant by a confidential clerk, which was in effect not to compete with his employer during the term of service, was enforced by injunction, being held severable from a general agreement not to engage in any other business. This latter agreement was admitted to give only a remedy in damages, and the Court thought it valid to that extent.

Hold to your bargain,' was one of Lord Bramwell's favourite aphorisms, and not a few of his genial sarcasms at the expense of equity were prompted by its propensity to tamper with the sacredness of contract or make bargains for people. The doctrine against clogging the equity of redemption was a sample of this meddling. Yet viewed historically the doctrine had its justification. It belonged to a time when money was scarce, the lending of it in bad hands, the rate of interest limited by laws which were constantly evaded, and borrowing facilities very different from the open market of to-day; and the consequence was that the lender, when the borrower did find him, took advantage of the situation to drive a hard bargain. Then equity, as the dea ex machina, descended to the rescue and declared he should have merely `justice and his bond, that is principal, interest, and costs. The whirligig of time brings about strange revenges. Now it is the mortgagor who is become the quasi-oppressor-trying to defeat the just right of the mortgagee and to back out of an honest bargain on the strength of this time-honoured doctrine of clogging (Biggs v. Hoddinott, '98, 2 Ch. 307,67 L. J. Ch. 307, C. A.). Equity is however quite up to date, and the Court of Appeal, which administers it, had no intention of allowing its own relief to be thus wrested to the frustration of a just and reasonable bargain, because the bargain contained a collateral term for the mortgagor taking his beer from the mortgagee. Whatever disabilities the mortgagor may have laboured under in medieval England he is in these days usually a grown-up man, with a very clear vision of his own interests, and quite able to take care of himself even without the solicitor who is generally found at his elbow. It is doing no service now to mortgagors—rather the reverse—to set aside their contracts, unless they are unconscionable, because the risk run by the mortgagee only issues in harder terms for the mortgagor. Bills of Sale are everyday illustrations of the fact.

Apropos of equity it is 'pretty to observe'—for the philosopher -how the jurisdiction which was designed to relieve against the harshness of the common law has itself hardened into a system as rigid as the common law, so that it has in its turn had to be released from the fetters of its own forging by the intervention of the legislature. Thus for centuries the wretched race of trustees has been immolated—the guilty and the innocent alike-under the Juggernaut car of its exacting virtue. Now at last the Judicial Trustees Act, 1896, enables the Court to discriminate between honesty and dishonesty, between the reasonable and the unreasonable in conduct, and to apportion the punishment to the offence. In re Grindey ('98, 2 Ch. 593, 67 L. J. Ch. 624, C. A.) is a good illustration. The trustees there had allowed a debt of £160 due to their testator's estate to remain outstanding under a will which gave a large discretion. The debtor was in good credit at the time, but he died suddenly insolvent and the money was lost. Under the old regime of Chancery the fate of the trustees would not have been in doubt for a moment. They would only have been askedlike the unlucky Plataeans-a summary question, 'Have you or have you not committed a breach of trust?'

But trustees must not run away with the notion that they can safely leave trust funds outstanding on unauthorized investments. It was only the peculiar terms of the will in In re Grindey which rendered it reasonable, coupled with the fact that the sum was so small that it would not have been right for the trustees to waste

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it in getting the advice of the Court. The danger of relief is the demoralizing effect it has on trustees. Leniency tends to encourage laxity. Severity may be unkind-even unjust-but it is bracing.

Seldom has the Court of Appeal had a finer opportunity of sticking in the bark 'than in In re Sefton ('98, 2 Ch. 378, 67 L. J. Ch. 518, C. A.). There was no doubt what the lunatic himself, if sane, would have done. All considerations concurred to recommend election. Pecuniarily it was to his interest, morally it became him as a dutiful son to respect the wishes of his father, socially there was the pride of family to urge him to keep the estates together, and the Court's duty was to act for the lunatic as he would, had he been able, have acted for himself; supposing, that is, the Court were free to act on its own judgment and the well-established principles in lunacy; but was it—that was the very pith and marrow of the case? There in the statute known as De Prerogativa Regis were the awkward words, ‘so that such lands and tenements '—of the lunatic-'shall in no wise be aliened.' In the strictest sense election does mean alienation. If the Court accepted the condition on behalf of the lunatic, it was certainly giving up to another-aliening-his land ; but it would have been a much worse act of alienation if the Court on this narrow technicality had sacrificed the lunatic's true interest-given away the substance and kept the shadow-and accordingly with a wise independence of judgmentsplendide audax—the Court preferred to break the statute in the letter and fulfil it in the spirit. If lunacy has any consolations, one of them must surely be the lunatic's knowledge that his mundane affairs are in such excellent keeping.

When the dividend barometer falls low, or angry faction divides the shareholders, company meetings become the scene of stormy controversy. Then the chairman must do his best to control the warring elements, but the chairman is no iron-sceptered Æolus. He has to allow the discontented or cantankerous shareholder to say his say on any question arising in the carrying on of the business. It is the shareholder's right as a partner, for in every partnership, as Lord Eldon pointed out in Const v. Harris (Turn. & Russ. 496: 24 R. R. 108), the partners are bound to act upon the joint opinion of all, and the discretion and judgment of any one cannot be excluded, though what weight is to be given to it is another question. But this right must not be abused, as it too often is in these days, by the self-assertiveness of minorities (like small dogs—the most snappish) If it is, the muzzle must be applied, and it is satisfactory to find the Court of Appeal deciding (Wall v. London & Northern Assets Corporation, '98, 2 Ch. 469, 67 L. J. Ch. 596) that & chairman is not obliged to adjourn a meeting at the instance of a dissentient shareholder to enable him to carry his point by importunity if the other shareholders are in possession of his views and plainly negative them. A chairman is the mouthpiece of the majority, and business would be rendered next to impossible if a majority could not coerce a refractory shareholder in this way. It would end in the topsyturvydom of the minority tyrannizing over the majority.

It was quite time that an Act was passed to meet the constantly recurring difficulty of unregistered agreements for paid up shares. The principle embodied in s. 25 of the Companies Act, 1867, is sound enough, that shares may be paid for in something which is not cash, but its equivalent-a mine, a going business, or a foreign concession ; but the public must have an opportunity of knowing what this equivalent for cash is, and of judging for themselves of its value. The Kharaskhoma case brought this statutory condition into very clear relief by declaring that it was not enough to state in the filed contract the consideration for which the shares were issued as fully paid merely by reference to a contract which was not filed-it must be set out in the filed contract. There was a flutter in promoting circles over this decision, for it meant, where the consideration had not been duly set out, paying for the shares over again, as if no contract at all had been filed-a heavy penalty for what was often only inadvertence. While the company was young and solvent the Court could and did relieve by allowing a fresh contract to be filed and the shares re-issued (In re Maynards Limited, '98, 1 Ch. 515,67 L. J. Ch. 186; In re Frost, '98, 2 Ch. 556,67 L. J. Ch. 691), but on winding up creditors' rights intervened, and the Court could not disregard them, nor ought it to do so now in exercising the power of discretionary relief given by Beaufort Palmer's Act, that is to say it ought not to allow a shareholder under an unregistered contract to wait until winding up before coming to ask for relief; because as long as there is no contract or no sufficient contract on the file, persons are being induced to deal with the company on false pretences—the assumption that the capital is paid up in cash when in fact it is not, but in something, alas ! often not much better than Moses' gross of green spectacles.

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When an ordinary person shuffles off this mortal coil he leaves an executor or administrator behind him to represent his rights and liabilities. When a company, on the contrary, is wound up,

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