1854. FLEMING ย. SELF. Judgment. the rules to limit any period for its duration; but the 33rd rule (a) provided for the termination of the society when "the sum of 100l. for each share, with all other expenses and liabilities of the society, shall be fully paid and satisfied," which was consistent with the 6 & 7 Will. 4, c. 82, s. 1, which says, that the very object of these institutions is to provide a mode by which persons may raise shares not exceeding the value of 150l., and may advance moneys to each member desiring it, out of the funds of the society, to erect or purchase houses or real estate, to be secured "by way of mortgage to such society until the amount or value of his or her share or shares shall have been fully repaid to such society, with the interest thereon, and all fines or other payments incurred in respect' thereof; and further provides, that no member shall receive any "annual or other periodical profit upon any shares in such society until the amount or value of his or her share shall have been realised, except on the withdrawal of such member according to the rules of the society then in force." His Honour observed, that what the legislature contemplated was, that some members of such societies would take their shares in advance, allowing a discount upon them according to the second clause of the statute, and that others would withdraw; and that the society would continue in operation until their funds were sufficient to pay the remaining members the full amount of their shares; and that such being the scheme of these societies, independently of the fact that the Plaintiff had entered into his contract with the society long before the resolution which affected to fix a period for its duration, and, therefore, could not have been in any manner influenced thereby, he must be taken to have known, that, in making such a resolution, the directors were acting ultra vires, and that the resolution was simply void. The Plain (a) 1 De G., Mac., & G. 790. tiff's claim, therefore, could not be sustained; but he must be bound to continue a contributor to the society until every member who was not previously advanced by this kind of mortgage like the Plaintiff, should be paid his 100%., or should withdraw from the society. His Honour then considered the difficult question of the meaning of the word "profits" in the ignorantly framed rules of this society, and particularly in rule 14 (a), upon which the Plaintiff's claim to a share of profits was founded; and he observed, that, in Mosley v. Baker (b), the Court had directed an inquiry, to determine, upon the basis of the mortgage deed, how long the party ought to contribute; and that the 62nd rule in that case (c) was similar to the 14th rule here, except that it provided that the directors should allow to an advanced member desirous of redeeming his security "the profits of his share," and not as here, referentially, "the same proportion of profits per share" as was allowed to withdrawing members, which made the case of the Plaintiff in Mosley v. Baker (d) rather stronger than the present. His Honour said, that he had examined the Registrar's Book, to discover what was ordered in the decree with respect to profits, but the decree contained no direction concerning them. Mr. Hardy suggested that the society in that case had not existed long enough to entitle the Plaintiff to any profits. The VICE-CHANCELLOR remarked, that, in the argument, the Plaintiff had made a claim for profits, relying on that 62nd section. His Honour then proceeded to examine the rules of this society, observing, that it had been de 1854. FLEMING V. SELF. Judgment. 1854. FLEMING v. SELF. Judgment. cided, in Seagrave v. Pope (a), that the Plaintiff must be taken to have received his whole share in advance; in which decision his Honour entirely concurred, for, in truth, the transaction would otherwise be void as usurious, being only freed from that objection by the 2nd section of the 6 & 7 Will. 4, c. 32, which contemplated in terms an advance of the whole share. Then, the scheme of the society being to raise shares of 100l. each for every member, in a longer or shorter period, there were provisions that members who had actually had their shares advanced were to have a portion of "profits." First of all, the rules provided for the sale of shares (b); and then, by the 13th rule (c), in case of any sale being made of any property mortgaged, the directors were empowered to add to any surplus moneys remaining in the hands of the trustees "a proportion of the profits of the society;" but there it was not made imperative upon them to do so, but optional merely. By rule 16 (d), persons desirous of withdrawing in the first four years of the society were to pay a fine for the privilege of so doing, in order to prevent all the money being drawn out; but in the fifth or following years the directors were empowered to allow, "out of the profits which the society shall have realised," a bonus to withdrawing members; and then, by the 14th clause, which, in point of construction, ought to have followed (a) 1 De G., Mac. & G. 783. (c) "13. Directors may add to poses above mentioned, a proportion of the profits of the society made up to the time of such sale or sales, equal to that which shall at the time be allowed to members withdrawing; and the directors may order the trustees to pay the same to the member with and in addition to the surplus moneys to which he shall be entitled." (d) 1 De G., Mac., & G. 788. the 16th, the directors were ordered to award to an advanced member desirous of redeeming his securities, one month after notice, "the same proportion of profits per share as is allowed on the withdrawal of unpurchased shares;" and that direction was imperative. His Honour said, that it was difficult to discover the meaning of the word "profits" as there used, but he had no doubt that the framers of the rules intended by it any amount of money in the hands of the society ultra the amount of payments made, which clearly were not profits properly so called. However, that these societies were in the habit of considering such moneys as profits, was shewn from some remarks upon the usual form of their balance sheets by Mr. Scratchley, in his Treatise on Benefit Building Societies (a). Here, the directors had not taken into consideration their liability to pay anything to the advanced members, but had divided their funds received into money paid out and profits. But members who had been paying in contributions would expect interest on their payments, and that must be allowed for before the real profits of the society could be ascertained. His Honour, therefore, thought it impossible to bind the society by what had been done, except upon the footing of giving them a longer period to continue in operation, in order to realise the additional sums which would be necessary to pay the advanced members their shares of the so-called "profits." In truth, the directors had miscarried in their plan for allowing the amount of profit (a) Pages 76, 77 of the edition of 1849. 1854. FLEMING v. SELF. Judgment. 1854. FLEMING v. SELF. Judgment. which they proposed and fixing the duration of the society, and that mistake could not be remedied in this suit; and, therefore, as the society could not be bound by what they had done, and as, from the nature of the rules, it would be impossible to ascertain what would be due to the Plaintiff as profits, with reference to the probable duration of the society, and any future allowance which might be made to withdrawing members, the amount of which, or whether any should be made at all, would be entirely at the option of the directors, his Honour said that he could not give the Plaintiff the account which he required; and he had come to the conclusion that he could only make a similar decree to that made in Mosley v. Baker (a), but that he could not go beyond it. (a) 6 Hare, 87; 1 H. & T. 301. March 17th; Devise-Con WALCOT v. BOTFIELD. WILLIAM BOTFIELD, by his will, dated the 5th of ditional Limit- November, 1849, gave and devised to the Plaintiffs and ation-Resi their heirs all that his capital messuage or mansionhouse of Decker Hill, and all his freehold and copy hold estates whatsoever at and near Decker Hill, and at Wood Green and elsewhere, in the parish of Shiffnall, in the county of Salop, and all other his real estates not by his said will otherwise devised (except only such estates as he was seised of as mortgagee or trustee): To hold unto and to the use of the said Plaintiffs, their heirs and assigns, though he may not go there for years. But the meaning of the word "residence" is different from "domicil," for an infant has the domicil of his parents until he attains his full age and does some act to acquire a new one, and thus his domicil may be in a country in which he has never personally been; whereas "residence" implies personal presence at some time or other. A proviso in a will, requiring the devisee for life of a mansion house and estates to "reside" there for six months in every year, and imposing a penalty for breach of such condition; and if he should neglect to observe it for five years, devising the estate to others, rendered it necessary for the devisee to be personally present in the house 168 days in each year, in order to escape the penalty or forfeiture; but held, that it would be sufficient, if, keeping up an establishment at the house, he were merely to visit it each day, and that it was not necessary for him to spend a night there. |