in the first codicil. It is said that that is an exception from the general rule, for that the rule is that gifts of the same sum to the same person for the same cause are to be construed as substitutionary and not cumulative. It is very difficult to my mind to apply that rule. I don't know exactly what is meant by "the same cause." When a man leaves a legacy to a child, it is because he is a child; if he leaves a legacy to his friend, it is because he is a friend, and if he doubles it, the same state of facts and the same cause exist: so that, as it appears to me, it is very difficult to apply that rule, because it would apply to every case of testamentary bounty, excepting the case of a certain sum being given to an executor for his trouble as executor. Except in that case I really do not know how I should apply the rule: at all events, I am unable here to see any reason whatever to dissent from the conclusion which the Vice Chancellor came to, that the servants are entitled to the additional bounty in the same manner as the friends are. That being the view I have arrived at, it is not necessary to go through the long roll of cases that have been cited to us. Two, however, I will mention, one is the case which struck me on the first opening of the case, The Duke of St. Albans v. Beauclerk (ubi supra), in which there were some similarities to the present case. Upon careful consideration of that case, it appears that there were a great number of indicia by which the Court was asked to arrive at the conclusion which it did in that case, and Wigram, V.C., has also pointed out in commenting upon it in the case of Lee v. Pain, (1) that the ratio decidendi there was that the Court was enabled to come to the conclusion, from the peculiar manner in which the will referred to the codicil, and the codicil to the will, that the case was to be brought within the rule applicable to gifts in the same instrument. Then there was the case in the House of Lords of Heming v. Clutterbuck (ubi supra), in which, although the Vice Chancellor had decided it as being a very clear case in favour of substitution, Lord Eldon in giving judgment expressed his opinion that it was one (1) 14 Law J. Rep. (N.s.) Chanc. 144. of the most difficult cases he had ever had to deal with, and in giving his judgment, proceeded entirely or almost entirely upon the fact that the two codicils were admitted to probate by the Ecclesiastical Court as one will, and that the second instrument began with the words, "This is my last will and testament," from which he derived the conclusion that it was intended to be substitutionary. I cannot help thinking that in both those cases the Court of construction did act upon a sort of feeling that in truth the one was intended to be an entire substitution, and not partial substitution, with regard to the particular instruments therein mentioned. But those cases are so entirely distinct from this, that I do not think it necessary to make any further observations upon them. I would only add this, that I cannot help thinking that this case has occupied more time than it otherwise would have done if I had confined myself strictly to that which is my duty in these matters, that is, if instead of endeavouring to find out what the testator meant, I had confined myself to ascertain what was the meaning of the testamentary papers which the testator left behind him. I am therefore of opinion that the Vice Chancellor's decision must be affirmed. I think it is necessary to add, that we are clearly of opinion that that letter from the solicitor to the testator is wholly inadmissible for any purpose whatever. The question being a mere question of construction of documents, nothing that was contained in a letter either of advice or anything of that kind from the solicitor to the testator, is in our judgment legitimately admissible for the purpose of such construction. Therefore we have entirely discharged our minds of that letter as if we had never heard of its existence. LORD JUSTICE MELLISH.-I am of the same opinion. Solicitors-Messrs. Stephens & Langdale; Messrs. Nicholl, Burnett & Newman; Mr. R. J. Bowerman; Messrs.. Needham and Messrs. Williams & James, for various parties interested. The M. company being in want of money for a particular purpose, and having large borrowing powers, applied to the C. company for a loan. The negotiations for the loan were conducted by a director of the M. company, who was also director of the C. company. The object for which the loan was required by the M. company was not fully disclosed by the negotiating director to the board of the C. company. It was alleged that this object was an illegal one:— Held, reversing the decision of MALINS, V.C., that even if the object of the loan was an improper one (as to which their Lordships were not satisfied by the evidence), still the C. company were not affected by notice of the impropriety, and a claim by the C. company in the winding up of the M. company founded upon the loan, was allowed. This was an appeal by the Credit Foncier and Mobilier of England from a decision of Vice-Chancellor Malins against a claim made by them in the winding up of the Marseilles Extension Railway and Land Company limited (in this report called the Marseilles Company). The Marseilles Company was registered in December, 1864, for the purpose of making a railway to Marseilles under a concession, with other subsidiary objects. It was promoted by W. Bowles, who, shortly after its incorporation, contracted with the company to sell to it a concession from the French Government for the railway, and also certain lands which he had acquired. This agreement was afterwards altered by another agreement, by which 120,000l. was to be paid to the original owner of the lands from whom Bowles had purchased, and 88,0001. paid to Bowles, which latter sum was afterwards credited to Bowles in his acNEW SERIES, 41.-CHANC. count with the company. It appeared, however, that the company never had the lands. Shortly before this, Bowles had, for the purpose apparently, amongst other things, of giving a value to the shares of the Marseilles Company, speculated to a considerable extent in them on the Stock Exchange, and had bought shares for which he became liable on the settling day to pay a considerable sum of money. He then applied to the directors for an advance on account of the sum credited to him. The directors were not prepared to pay the money, but were anxious that no default should be made on the Stock Exchange by Bowles, lest the prospects of the company should be injured. They therefore applied to the appellants, the Credit Company, for a loan. Two directors of the Marseilles Company were also directors of the Credit Company. Mr. Heritage was solicitor of both companies. Under these circumstances, Mr. Newbon, one of these directors, and Mr. Heritage were deputed by the Marseilles Company to negotiate the terms of the proposed loan. The evidence as to these facts, and as to what took place at a meeting of the Board of Directors of the Credit Company on the 14th of November, 1865, was given by Mr. Newbon as follows-"The 7,000l. mentioned in the minutes of the 15th of November, 1865, as having been lent by the Credit Foncier, was wanted to pay Bowles under his contract. We were advised that he was entitled to it. I made the proposal to the Credit Foncier for the 7,000l. I made it to Mr. Grant, who was the managing director at that time. It was brought before the Credit Foncier Board. I was no doubt present. I do not remember who was present except Mr. Grant and myself. ́I told Mr. Grant, in his private room, what the money was wanted for. I have no doubt that Mr. Grant stated to the Board what the money was wanted for, but I have no recollection of hearing him do so. I told Mr. Grant that Bowles had entered into engagements to pay money which I believed he had no means of paying unless he received some payments from the directors under his contract. I told Mr. Grant that these engagements were to pay stockbrokers for shares in the company in 2 Y question, which he had bought. The company was anxious to preserve its reputation on the Stock Exchange, and therefore we were desirous of assisting Bowles to meet his engagements." An advance of 10,000l. by the Credit Company to the Marseilles Company was resolved upon on the 14th of November, the loan being secured by a mortgage of lands at Marseilles, which had been contracted for by the Marseilles Company. This was afterwards carried out, and the money paid, Mr. Heritage being employed as solicitor for both companies in the completion of the matter. The security, however, afterwards became worthless. Out of the sum thus obtained, the Marseilles Company paid Bowles 7,0007. Both companies were, in 1866, in liquidation under a voluntary winding up. The liquidators of the Credit Company sent in a claim against the Marseilles Company for the 10,000l. This was resisted by the liquidator of that company as regards 7,000l., upon the ground that the loan was effected for purposes which were unauthorised, and that the Credit Company were affected with notice of the impropriety of the loan. His Honour held that the claim for the 7,000l. could not be sustained, from which decision the present appeal was brought. The arguments in part turned upon the powers of borrowing possessed by the directors of the Marseilles Company. The following clauses of the articles of association were cited as affecting this question: Art. 23. "The directors may issue debentures, bonds or obligations of the company at any time, and in any form or manner, and for any amount which the directors may from time to time determine. Art. 57. "The directors shall, subject to the powers of the general meetings, have the entire management of the company. ... "Without limiting the general authority hereby given to the directors, they shall have the following specific powers: viz., they may, for the purposes of the company, make, draw, accept or indorse any promissory note, bill of exchange or other negotiable instrument, and may borrow on behalf of the company from any person or persons, any sum or sums of money, either by way of mortgage of any of the property of the company, or on bonds or debentures, or by receiving moneys on deposit or otherwise, as they may think fit." Mr. Glasse, Mr. Cotton and Mr. Jackson, for the appellants. Whatever may have been the object of the directors of the Marseilles Company in seeking to borrow, they effected the loan in a manner authorised by their articles, and the Credit Company had nothing to do with the application of the money. The fact of Mr. Newbon and another person being directors of both companies, and that Mr. Heritage was solicitor for both companies, cannot affect the Credit Company with notice of any impropriety. We do not, however, see that there was any impropriety. Bowles seems to have been a bona fide creditor, and his dealing on the Stock Exchange was not a dealing by the company. The company did not buy their own shares. But this question is immaterial to us, because we are not affected by notice— In re European Bank, Ex parte Orien- which was a case of fraud. Mr. Higgins and Mr. Gill, for the liquidators of the Marseilles Company.The payment of the money to Bowles for the purpose of enabling him to purchase the company's shares was in reality a purchase by the company of their own shares, and was unlawful. The whole transaction with Bowles is tainted with illegality, as it is clear that no money was then due to Bowles. In substance, the transaction amounted to the directors dealing in their own shares by the intervention of Bowles. This, therefore, was wholly improper. Now the Credit Company were affected with notice of the impropriety. The directors of that company had in fact actual notice. Two of them were directors of the Marseilles Company, and the chairman, Grant, was distinctly informed of the nature of the whole transaction. The two companies were closely allied, they had common officers, 1 and there is no doubt, as the fair inference from the circumstances, that they had common interests, and an injury to the Marseilles Company would have been an injury to the Credit Company, therefore they must be taken to have acted in this transaction with knowledge of all the facts, and as a consequence with the legal bearing of these facts. They referred to the following cases- N.S. 601; s. c. 28 Law J. Rep. Rolland v. Hart, 40 Law J. Rep. (N.S.) Chanc. 701; s. c. Law Rep. 6 Chanc. 678; London, Hamburgh, &c., BankZulueta's claim, 39 Law J. Rep. (N.S.) Chanc. 598; s. c. Law Rep. 5 Chanc. 444. LORD JUSTICE MELLISH.-This is a claim on behalf of the Credit Foncier Company to recover the sum of 10,000l. against the Marseilles Extension Railway and Land Company. The 10,000l. was money lent in the year 1865, on the security of promissory notes given by the Marseilles Company to the Credit Foncier. By the fifty-seventh clause of the articles of association of the Marseilles Company, without limiting the general authority given to the directors, it is provided that they shall have the following specific powers they may for the purposes of the company draw, accept or endorse any promissory note, bill of exchange or other negotiable instrument, and may borrow on behalf of the company from any one or more of the directors or members, or any other person or persons, any sum or sums of money, either by way of mortgage of any of the property of the company, or on bonds or debentures, or by receiving money on deposit or otherwise, as they may see fit. Therefore, they had the most unlimited authority, no doubt, for the purposes of the company to borrow money upon the security of bills of exchange and promissory notes. Then it is proved, and indeed it is not denied, that they did borrow money from the Credit Foncier Company upon these notes, and therefore there is a perfectly plain prima facie case. Substantially the defence is, that this money was really borrowed for a purpose that was ultra vires, that either it was borrowed to "rig the market," or was borrowed for the purpose of buying up the shares of the company itself, there being a clause in the articles of associa tion by which the Marseilles Company were not allowed to buy up their own shares, and that the Credit Foncier had notice that this was the purpose at the time the money was lent and the bills of exchange taken. Two witnesses are called for the purpose of proving this defence. One was Mr. Newbon, a director of both companies, the other the secretary. Now, Mr. Newbon does not really prove the case at all, because what Mr. Newbon says is, that Mr. Bowles, the contractor, as he understood it, had a claim of more than 10,000l. against the company, and that it was extremely desirable that that money should be advanced to him, because he, Bowles, had been speculating very largely in purchasing shares and that if the money was not paid, to enable those shares to be taken up, they would not get a settlement on the Stock Exchange, and the company would not be enabled to start. Although that was the way in which the money was to be expended, still, according to Mr. Newbon's statement, it was money which was due to him, Bowles, on the existing contracts with the company. Then it is proved by Mr. Newbon, that he and Mr. Heritage, the solicitor of both companies, went to the Credit Foncier for the purpose of negotiating the loan, and he says that he told Mr. Grant, the managing director of the Credit Foncier, those facts; that he told them they wanted to borrow the money for the purpose of making a payment to Bowles their contractor; that the money he believed was due from them; but the real object why they wanted to pay him the money was, that it would be prejudicial to the company, and I think he said also, to the Credit Foncier, who were about to start another land company at Marseilles, if those shares were not taken up and the company was not started. That certainly does not by itself make out any case. Then what is the case that is made out? The Vice Chancellor appears to have come to the conclusion that all this was a sham and that there was nothing whatever due to Bowles. But it is very difficult to say that there is any proper evidence of that in the evidence now before us, and the Vice Chancellor himself refers to the fact that he had acquired a great deal of knowledge in other cases which had been before him of the affairs of the Credit Foncier, and appears to have drawn some inference in this case from the knowledge he had gained in previous cases. It appears to me, that we must decide this case on the evidence that is before us, and I do not think it is necessary to go into a minute examination of the deeds to see whether any money really was due to Bowles. It would rather appear that none was actually due to him at that time, although there were contracts on which money might hereafter become due, and this would rather appear to have been an advance to him in anticipation of those sums that might hereafter become due. But in my opinion there is no evidence at all, which could properly be left to a jury, if this were being tried at Common Law, to shew that the Credit Foncier had notice of any one of these transactions, so as to make this loan on the security of this negotiable instrument, to be in itself an invalid loan. In the first place, it is said that the one company was an emanation from the other. That is a statement which it is difficult for me to follow. The evidence, as far as there is any on the subject, is that the Marseilles Company was not a company started by the Credit Foncier. It appears, no doubt, that many of the original promoters of the Marseilles Company had been directors in the Credit Foncier, and that at the time when this transaction was going on there were two common directors, one of whom was Mr. Newbon. What does the circumstance of there being two common directors prove? I need hardly go into that, for Mr. Newbon directly denies himself that he had notice the money was not due to Bowles, or that there was any impropriety in the transaction. I am not aware that there is any evidence to contradict him, even if that were not so. I cannot think, because he is a common director to two companies, It that therefore you are to say that the one company has necessarily notice of everything that is known to the common director, and which knowledge he has acquired as director of the second company. appears to me that a director is simply a person appointed to act as one of a board, with power to bind the company when acting as a board, but having otherwise no power to bind them. And when he goes on behalf of the Marseilles Company to deal with the Credit Foncier, and the Credit Foncier Company negotiate with him, and come to a certain resolution, it would be, it appears to me, contrary to sound principle to hold that the Credit Foncier had necessarily notice, or that their board of directors had necessarily notice of every fact that happened to be known to Mr. Newbon. That appears to have been laid down by Lord Justice Giffard in the case of Zulueta's claim, which was referred to. Then it is said that there was a common solicitor, and therefore everything known to one company must be taken to have been known to the other. Mr. Heritage is not called, and all that is said is that he was the solicitor of both companies, and used to attend their boards; but what, as matter of fact, he actually knew, or what conclu sions he drew from what he knew, we have no evidence of. I It appears to me it would be going very far indeed to say that they had notice, not of any facts which had happened, but that the Marseilles Company were to be bound by any knowledge that Mr. Heritage might have of what it was their intention to do, or that they had the intention of expending this money, which they were professedly borrowing for a purpose quite legitimate, for some other purpose. cannot see that there is any evidence at all, when the loan was agreed upon, that Mr. Heritage had begun to act, or was acting, as solicitor for the Credit Foncier Company. He goes with Mr. Newbon to negotiate the loan. That loan was only negotiated with Mr. Grant, the managing director of the Credit Foncier Company, and it was brought before the board of the Credit Foncier Company, and the board, as a board, came to the resolution to make that loan, not, as far as appears, |