Ex parte Henry Boulton, Willlam Atkin Rayson and Theophilus Carrick Samuel Sketchley, a Bankrupt
| Jurisdiction | England & Wales |
| Judgment Date | 27 March 1857 |
| Date | 27 March 1857 |
| Court | High Court of Chancery |
English Reports Citation: 44 E.R. 685
BEFORE THE LORDS JUSTICES.
S. C. 26 L. J. Bk. 45; 3 Jur. (N. S.), 425. See Ex parte Stewart, 1864, 4 De G. J. & S. 549, Société Générale de Paris v. Tramways Union Company, 1884, 14 Q. B. D. 424; Colonial Bank v. Whinney, 1886, 11 App. Cas. 433.
[163] Ex parte henry boulton, willlam atk(n rayson and theophilus carrick. In the Matter of samuel sketchley, a Bankrupt. Before the Lords Justices. March 6, 27, 1857. [S. C. 26 L. J. Bk. 45 ; 3 Jur. (N. S.), 425. See E.e parte Stewart, 1864, 4 De G. J. & S. 549, KodM CUnerale i!e Paris v. Tramways Union Company, 1884, 14 Q. B. D. 424; Colonial Bank v. 1-fHdnney, 1886, 11 App. Gas. 433.] A holder of shares in a railway company, which was subject to the provisions of the Companies Clauses Consolidation Act, 1845, was one of the secretaries of the company and a solicitor. He borrowed money of a client on a deposit of the certificates of the shares, but no further notice of the deposit was given to the company. On the solicitor becoming bankrupt: Held, that the shares were in his order and disposition with the consent of the client. Whether an equitable mortgage, valid against assignees in bankruptcy of the mortgagor, can be made of railway shares, qiuere. Ex parte Smyth, 3 Mont. Deac. & De Gex, 687, observed upon and distinguished. This was an appeal of the assignees of the above-named bankrupt from an order of Mr. Commissioner Ayrton made on the application of the Respondent Mr. Henry Bowman Bacon, and the question was whether an equitable mortgage of eighty £10 shares in the Horncastle Railway Company was valid against the Appellants. Previously to and in the year 1851, the bankrupt practised as a solicitor at 686 EX PAKTE BOULTON 1DEO. &J. 164. Horncastle, and was the brother-in-law of the Respondent, who employed him as his confidential solicitor and agent. In November 1854, the bankrupt requested the Respondent to lend him £800, which the Respondent agreed to do, upon having the repayment with interest secured by the bond of the bankrupt, and by the memorandum and deposit next mentioned. In pursuance of such agreement, on the 29th day of November 1854, the Respondent paid to the bankrupt £800, and the bankrupt gave to the Respondent his bond of that date and a memorandum signed by him, which was as follows :- "Horncastle, 29th November 1854.-Memorandum, [164] that I, the undersigned Samuel Sketchley, of Horncastle, solicitor, in consideration of the sum of £800 sterling this day lent and advanced to me by the Rev. Henry Bowman Bacon, of Newark-upon-Trent, clerk, have made and executed my bond, bearing even date herewith, for securing the repayment of the said principal sum with interest at five per cent.; and I have also deposited as further security eighty certificates or coupons of £10 each in the Horncastle Railway Company, and a policy for £500 on my own life made with the Minerva Life Assurance Company.-samuel sketchley." At the same time the bankrupt delivered to the Respondent the following certificates or coupons, of £10 shares each, in the Horncastle Railway Company, and bearing date respectively the 24th of August 1854, viz., fifty certificates in the name of the bankrupt, and numbered respectively from 451 to 500 inclusively, and thirty certificates in the name of Walter Marr Brydone, and which by a transfer dated the 10th of September 1854, lodged at the secretary's office of the company, had been duly transferred to the bankrupt, and were numbered respectively from 611 to 640 inclusively. The adjudication took place on the 2d of July 1856, and the Respondent presented a petition to the District Court, stating the above circumstances, and praying to be declared to be a mortgagee of, and to have a lien upon, among other things, the certificates and policy of assurance comprised in the memorandum of the 29th of November 1854, and for the usual consequential directions. On the 4th of February 1857, the Commissioner made the order under appeal, declaring that the Respondent was an equitable mortgagee of, and had a lien upon, the [165] certificates, but was not an equitable mortgagee as to the policy of assurance. The assignees, by their petition of appeal and affidavits in support of it, stated that the Horncastle Railway Company was a public company established by an Act of Parliament, incorporating with its provisions those of the Companies Clauses Consolidation Act, 1845 (1): that [166] Edward Babington of Horncastle, attorney at law, and the bankrupt were appointed joint-secretaries of the company in 1854 : that they jointly acted from the time of their appointment up to the time of the bankruptcy of Sketchley : that on the 5th of August 1854, the directors [167] of the company, at a meeting duly convened, made the following resolution, which was entered in the books of the company :-" Resolved, that the certificates for shares be forthwith issued, and that Mr. Edward Babington be and is hereby appointed secretary to sign the same :" that Edward Babington, in pursuance of the resolution of the 5th of August 1854, signed all the certificates for shares in the company solely as the secretary of the same company appointed for that purpose : that Babington in all other matters acted jointly with the bankrupt in the secretaryship of the company and took an active part therein : that Babington signed jointly with the bankrupt all certificates of transfers of shares, and all calls upon shares and dividend warrants of the company, and attended the meetings of the directors of the company as frequently as the bankrupt: that the books of the company were usually kept at the office of the bankrupt, but that Babington used, whenever occasion required, during the time that he and the bankrupt were joint-secretaries of the company, to go to the bankrupt's office to inspect and refer to the books and papers relating to the business of the company, to confer upon the correspondence which had passed between himself and other parties connected with the company, and to inspect and confer upon the correspondence which had passed between the bankrupt and other parties relative to the company, 1DEO. ftJ.MS. EX PARTE BOULTON 687 and generally to transact business connected with the company as one of the secretaries thereof: that Babington never had any notice, nor had the directors of the company any notice or knowledge, that the bankrupt had deposited with any person or persons any certificates of any share or shares in the said railway company, or that he had transferred to any person or persons any share or shares which he held in the said railway company, and which stood registered in his name at the...
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