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if your Lordships will hear me for a few minutes, to state the view which I take upon one part of the case.
The suit, which is instituted by the plaintiff in Ireland, is a suit in a Court of Equity, calling for an account; but it is in the nature of an action of covenant. It is in faet to have an account taken in the same terms as upon a covenant; and the form on which this is framed is this: It is desired that an account may be taken of the sum due to the plaintiff on account of the purchase money of the said lease. Then we look to see what the said lease is, and how it is to be performed. The act of Parliament which has been referred to, is an Act giving power to the company, or rather to the partners, for they are not incorporated quasi a corporation, and allowing them to sue or to be sued in the name of one of the directors. The Act having given that power, very wisely and properly, as I conceive, limits the cases in which parties may be so attacked through one of the members, by providing in a very special manner a clause which points out the terms and the manner and the formalities with which the company shall be allowed to take leases. They are to take leases of mines only after seven days? notice given to all the directors, and in the name of three directors at least. That appears to me to be a very wise limitation. In a company or partnership where there is a very large number of persons, of course those who reside at a distance may not and cannot be cognisant of all the transactions of the directors. They must, to a certain degree, confide in the discretion of those who take the management, and they may be liable, to a considerable extent, for their foolish acts. But, at any rate, this Act of Parliament bas protected them against being liable for covenants contained in any lease of mines that may be taken,
unless that lease is taken under circumstances which 1842. give them an opportunity of forming an opinion VIGERS upon it.
In this case, the lease in question is not made with any of these formalities. The lease is made between 11
Devon. Lord Audley, and an individual, who afterwards became executor of Lord Audley, and who himself is the plaintiff, seeking by this bill to have the obligations contained in that lease enforced against the shareholders. I do not, however, rely upon that circumstance; because, unless there are circumstances of fraud made out much more clearly than they are made out in this case, that makes no alteration in the view which I conceive ought to be taken of it in point of law.
Lord Audley having entered into the original lease with one individual, does not obtain payment of the whole of the purchase money; and after his death a bill is filed by his executor, the prayer of which is, “ that an account may be taken of the sum due to the plaintiff as executor of Lord Audley, on foot of the purchase money of the said lease.” And the decree is, that that account shall be taken, and that all the shareholders are liable for the payment of what is due on the account so taken. Undoubtedly I agree with what my noble and learned friend has said, that that would have no effect to make the shareholders personally liable. If this decree is substantially right, there is no objection whatever to its form. But I cannot for myself think that a Court of Equity ought to give a relief which will only have effect against the whole body of shareholders by the means and force of the Act of Parliament, when the contract upon which the relief is founded has been entered into in a manner that is not in accordance with the provisions of that Act. That
shortly is the ground upon which I felt unable to concur in the view taken of this case by my noble and learned friends, and have felt it my duty to call your Lordships' attention to it (t).
It was then ordered that the appeal be dismissed, and the decree affirmed, with costs.
(1) See Lord Cottenham's observations on this point, supra, pp. 649, 650.
1843: April 27.
The Respondent (Mr. Pike) proceeded, in his suit in Ireland, to take the accounts before the Master, with a view to fix the shareholders personally with the debt, notwithstanding the Lords' expla. nation of the effect of their order. The Master having made his report, the Appellant (defendant in that suit) took exceptions ; whereupon both parties came to an arrangement, and the following order was made by the Court :
“By consent, let there be no rule on the exceptions, and let the deposit be paid back to the defendant, and let the report of the Master be confirmed. Let the said West Cork Mining Company pay to the plaintiff out of the property of the said company (it not being intended by this decree to charge the members of the said company personally) the sum so found to be due by the said company, together with the costs of this suit, within one month ; and declare the said sum and costs to be a lien and charge upon the said deed of 18th February 1834, and the indentures of the 29th and 30th of August 1834, in the pleadings mentioned, and all other property belonging to the said company: and by the consent of the defendant, let the Master forthwith set up and sell the lessees' interest in said indentures of the 29th and 30th of August mentioned, and the premises thereby granted and demised, in such manner as he may be of opinion will be most beneficial; with liberty to the parties to apply, &c.—This order not to affect the question of costs under the Lords' order on the appeal.”
William PARROTT Carter, Esq.
1841: May 11. 13. 17.
Sir William Henry Palmer, Bart. - Respondent.
The employment of counsel as confidential legal adviser disables
him from purchasing for his own benefit charges on his client's estates, without his permission: and although the confidential employment ceases, the disability continues as long as the reasons
on which it is founded continue to operate. C., a barrister, who had been for several years confidential and
advising counsel to P., and had, by reason of that relation, acquired an intimate knowledge of his property and liabilities, and was particularly consulted as to a compromise of securities given by P. for a debt which C. considered not to be recoverable to the full amount, purchased these securities for less than their nominal amount, without notice to P., after ceasing to be his counsel.Held, that C.'s purchase, while the compromise proposed by P. was feasible, was iu trust for P.; and that C. was entitled only to the sum he had paid, with interest according to the course of the Court.
In the year 1809, Alexander Oswald and George Howell, then carrying on the business of army clothiers, on Ormond Quay in Dublin, and in Deanstreet, Soho, London, under the style of Oswald & Company, proposed to the Respondent, that if he would procure for their house the clothing of the regiments in the King's service in Ireland, by his influence with the colonels, a per-centage should be allowed him upon the profits they would derive from such contracts as should be obtained through him. The Respondent acceded to their proposal, obtained several contracts for them, and his connexion with them in that way continued for three or four years. The firm of Oswald & Co. became embarrassed within that time; and Oswald then residing in London,
or elsewhere abroad, Howell alone was declared a bankrupt in Ireland.
In the year 1811, Mr. Roger Palmer, a kinsman of the Respondent, died, having, by his will, devised his estates in Ireland, which produced upwards of 20,000 l. a year, to his sister, Mrs. Elizabeth Budworth (who thereupon took the additional name of Palmer), for her life, with remainder, after her decease, to the Respondent for his life, with limitations over for the benefit of his family.
In consequence of the estate in remainder so de, vised to the Respondent, his credit was partially established; and the firm of Oswald & Co. induced him to join them in various securities, which led to such embarrassments on his part, that in 1814 he was obliged to leave Ireland and reside abroad during the lifetime of Mrs. Budworth Palmer.
The firm of Oswald & Co. had various dealings with Messrs. Sheppard & Mackmurdo, traders in London, who had a claim against Oswald & Co. on the foot of an alleged balance of accounts. The firm of Sheppard & Mackmurdo having been afterwards dissolved, this claim was transferred, in the allocation which took place, to Sheppard, as a portion of his share of the general assets. In the year 1816, Mr. Carpenter, a solicitor, made a communication to the Respondent, who was then residing with his family at Bruges in Belgium, and informed him, on behalf of Sheppard, that, from the nature of his connexion with the firm of Oswald & Co., he had, as a partner, made himself responsible for their engagements, and that, unless Sheppard's demands were either discharged or the payment of them secured by him, proceedings would be immediately taken for the purpose of making the Respondent a bankrupt, and