Court was bound, by the decision in the Darlington School case, to hold that a resolution come to in this manner was legitimate and operative. That case undoubtedly created great difficulty, because there the parties had, as they conceived, an absolute right, only subject to what was called sound discretion, to eject the schoolmaster, without, in truth, any cause shewn, except that in their discretion it was right and proper, and for the benefit of the school that he should be removed. They accordingly did remove him, and in removing him mentioned several charges which had been made against him, and which in their judgment had been established. He said they had no power to do this, in consequence of a byc-law which limited their discretion, giving him, in fact, a freehold in his office. That bye-law was held to be invalid, being inconsistent with the letters patent, and the Court therefore held that the governors had this sound discretion. His next course was by plea to traverse all the allegations made against him, and to allege that he had no opportunity of answering, and therefore was improperly convicted of those charges, and upon these points it was found that he had not had an opportunity of answering the charges, and also that he was not guilty of them. In the replication the governors insisted on these charges, and, further, that they being fully satisfied of the truth of the charges, removed him, deeming him an unfit person in the exercise of their best discretion; and upon this the Court held, that though they might be guilty of misconduct, and perhaps render themselves liable to a criminal prosecution if they exercised their discretion in an oppressive manner, or from any corrupt or indirect motive, there was nothing to restrain them from exercising such discretionary powers whenever they honestly thought fit to do so; for there might be many causes which might render a man unfit to be a schoolmaster, which could not be made the subject of a charge before a jury, or otherwise of actual proof. His Lordship was not altogether satisfied with the judgment of the Court of Queen's Bench in that case, but at all events, he did not think it was conclusive in a case

The Corporation of Oldham had paid. into Court the purchase-money of land they had taken for the purposes of their Corporation. This was a petition by the tenant for life for the reinvestment in land under section 69 of the Lands Clauses Consolidation Act. The land which it was proposed to buy was in the Isle of Man. Mr. Rotch, for the petition.

Mr. Bardswell, for the Corporation, suggested that the Isle of Man was out of the jurisdiction, and that it might be impos

sible to settle the land to the same uses, owing to differences in the real property

law.

The VICE CHANCELLOR thought that the purchase being otherwise unobjectionable, land in the Isle of Man might be purchased.

Solicitors-Messrs. Wright & Venn, agents for Messrs. Payne & Son, Liverpool, for petitioners; Messrs. Chester & Urquhart, for the corporation.

Company-Amalgamation-NovationProof by Policy-holder.

S. was holder of a policy of the M. Assurance Society, and entitled under it to participation in profits. The M. Society amalgamated with the A. Company, handing over its assets, and the A. Company undertaking its liabilities, a fund, part of the M. assets, being set apart as a trust fund to guarantee certain policies of the M. Society including S.'s policy. Under the arrangement for the amalgamation proposals were made to S. to cancel his policy and accept in substitution a policy upon similar terms of the A. Company. This S. did not accede to; he simply paid his premiums to the A. Company, which company was, according to the arrangement between the companies, authorised to receive the premiums. Two years after the amalgamation a division of profit for the three preceding years was declared by the A. Company. A bonus was declared upon S.'s policy, notice of which was given to S. S. accepted the bonus in the form of a reduction of the premiums upon his policy, and he subsequently paid the reduced premiums. The M. Society being (as well as the A. Company) ordered to be wound up, S. claimed to prove against the M. Society as a creditor in respect of his policy: Held, affirming one of the Vice Chancellors, that he had by taking the bonus accepted the A. Company as his debtors in lieu of the M. Society, and his claim was disallowed.

This was an appeal from a decision of Bacon, V.C., rejecting the claim made by the appellant as holder of a policy granted by the society in 1858, with participation in profits. The case was brought before the Court upon admissions made by the parties, in substance being as follows:

The society was constituted by a deed of settlement dated the 7th of February, 1844, which contained provisions common to such deeds in the case of assurance companies for the appointment of directors, trustees, &c., to conduct the business.

By the 43rd clause it provided that all policies issued by the company should refer to the deed. By clause 103, the funds and property of the company were to be divided into the "Guarantee fund" and "The Life Assurance fund," and the guarantee fund was to consist of the moneys paid for shares and arising from the sale or forfeiture of shares, and such further sums as the directors might order to be consolidated with the guarantee fund. The other the assurance fund-was to

consist of the produce of premiums and profits arising from the business of the company and the improvements and accumulations thereon. Other clauses provided for the division of profits every five years; one-third of which was to be added to the guarantee fund, the residue to constitute a bonus for those entitled to participate in profits eitheras policy holders or otherwise. The deed also contained powers to dissolve the company, and to transfer its business and assets to some other company (by clauses 127 and 128). In August, 1851, a branch establishment in India was established by opening an office in Calcutta, with branches in Bombay, Madras, and other places, prospectuses and circulars were issued by the directors setting forth the advantages of the company, and policies of assurance were issued in India.

In May, 1855, an Act of Parliament was passed enabling the society to sue and be sued in the name of the society, and granting other powers to the society not, however, affecting the question now before the Court.

In June, 1857, a report was published by the directors and circulated amongst the policy holders, giving a favourable account of the advantages held out by the society. The claimant's policy was granted by the Indian directors, and marked "Indian Branch," on the 27th of January, 1858, being a policy for 10,000 rupees, with participation of profits. In July, 1839, a life insurance company had been formed under the name of the Freemasons' and General Life Assurance, the name of which was changed in January, 1850, to that of the Albert Life Assurance and Guarantee Company. It being doubtful whether, under the existing rules of that

company, the directors had power to acquire by purchase or otherwise or to amalgamate with its business, the business of other insurance companies, resolutions were duly passed and confirmed conferring such power upon the directors.

By resolutions in July, August, and September, 1860, in pursuance of the powers contained in the deed of settlement of the Medical Society, it was resolved that that society should be and it was accordingly dissolved. In the same month of September, 1860, an agreement was made between the directors of the two companies. The material provisions of the instrument then executed, which copied in extenso in the admissions, were in substance as follows:

was

That policy holders in the Medical Society shall be invited to take policies to be issued by the Albert Company in substitution for their subsisting policies, the substituted policies to be or be deemed to be of the date of the original policies, and upon similar terms. Holders of participating policies, who should accept substi tuted policies were, in lieu of the rights belonging to them in respect of profits in the Medical Company, to be entitled to share in the next and all subsequent bonuses to be declared by the Albert Company in exactly the same manner as if the policies had been originally issued by the Albert Company. Policy holders who should decline to accept substituted policies were to be entitled to keep on foot their subsisting policies by paying their premiums to the Albert, and the Albert was to undertake all liabilities in respect of such policies. The Life Assurance Fund was to be transferred to trustees, and held on trust for ten years to secure the obligations of the Medical Company in respect of Medical policies, but portions of it were to be transferred to the Albert Company from time to time as the obligations of the Medical Company should cease either by substitution of Albert policies or otherwise, the remainder to be in all events transferred to the Albert at the expiration of ten years from the date of the agreement. The Albert Company was to discharge all claims upon the Medical Society, and indemnify that company against all obligations of every kind which

it might have entered into, except certain immediate demands which were to be paid by the Medical Society.

By a resolution of the 26th of September, 1860, it was resolved that the amalgamated business of the Albert and Medical Invalid and General Life Assurance Society should be carried on under the name of the Albert and Medical Life Assurance Company.

By a deed dated the 8th of October, 1860, made between the directors of the two companies of the first and second parts, and Thomas Caird and others of the third part, reciting that the Albert Company had offered to take upon themselves the claims and engagements of the Medical, and that policy holders in the latter society should be invited to substitute for their subsisting policies other policies of the Albert, and that such policy holders as should decline to accept substituted policies should be entitled to keep on foot their present policies by paying the premiums to the Albert who should uudertake the liability in respect of such policies, and that both sets of directors had agreed to appoint Mr. Caird and the other persons named as trustees of such part of the funds of the Medical as consisted of moneys or investments in India, the parties of the first and second parts assigned to Caird and the other trustees all such part of the Life Assurance fund as belonged to the society in India on the 21st of September, 1860, and the trusts declared were for securing during ten years thenceforth all claims against the society in respect of insurances effected with them, and after the expiration of ten years upon trust for the Albert Society, with a proportionate reduction of the fund as any of the claims should be satisfied or should have ceased by the acceptance of the substituted policies. Under this deed a sum of 30,000l. was transferred by the trustees to the Albert Company in 1863. In March, 1861, a similar deed was executed comprising that portion of the Life Assurance fund which was in England.

In October, 1860, a circular, headed Medical Invalid and General Life Assurance Society, was addressed to the policy holders of the Medical Society,

inviting them to accept policies in the Albert Company, and pointing out the terms of the arrangement and the advantages derived from it.

In November and December, 1860, a notice was published in the Indian and Ceylon newspapers to the following effect :

"Albert & Medical Life Assurance Society, Head Office: Pall Mall, London. Established 1838. Indian Branch.

"Preliminary Notice.

"The directors beg to announce that the business of the Medical Invalid and General Life Assurance Society has been amalgamated with that of the Albert Life Assurance, and that henceforth the operations of both companies will be carried on under the above name or style. The combined office, which is now one of the largest life assurance institutions in the world, has an annual income from premiums of 22 lakhs of rupees, its accumulated fund exceeds 50 lakhs, while the new business from premiums is progressing at the rate of 2 lakhs per

annum.

"The Indian branch will continue under the same administration as heretofore. A secretary is on his way to Madras to act with the board there, while a board of directors and secretary are also about to be appointed for Bombay. The funds of the branch will be put up in trust as an additional security to policy holders in this country; all claims occurring after the 21st of September last, the date of the amalgamation, being paid from the funds of the new association.

"Policies in this country will be issued free from expense in exchange for those in the Medical Society, without any alteration in the terms and conditions of the latter; and if any policy holder should have assigned his policy by any legal instrument, in settlement, mortgage, or otherwise, so as to render substitution difficult, an indorsement will be made on the policy, securing the responsibility and guarantee of this company for the fulfilment of the existing contract.

"The directors in this branch would recommend policy holders in the Medical to convert their policies into policies of NEW SERIES, 40.-CHANC.

this company, or to have them indorsed as above suggested. Under the deed of settlement the Medical profits are not divisible until 1863; but under that of this company profits are divisible in 1861, and future estimates of profits will be made triennially thereafter; a proportion equal to five-sixths of the profits being, at the option of the assured, paid in cash, added to the policy, or applied in dimunition of future premiums. By the combination of the two companies a very considerable saving to the expenses of management will be secured, which must materially increase the bonus-giving power of the amalgamated company, and thus afford improved prospects to the assured."

On the 28th of November, a circular was addressed to policy holders, headed Medical Invalid and General Life Assurance Society, dated Calcutta. Upon it was indorsed a copy of the preceding advertisement, and it invited the policy holders to fill up and return an inclosed form for the purpose of surrendering their Medical policies, in which case Albert policies were to be immediately issued in

return.

On the 3rd of November, 1860, a notice, headed Albert and Medical Life Assurance Company, Pall Mall, was issued to the agents of that company in England.

On the 26th of November, 1860, a circular was issued to the agents in India of the Medical Invalid and General Life Assurance Company, headed Albert and Medical Life Assurance Society, giving them notice of the amalgamation to enable them to answer enquiries.

In December, 1860, at the annual meeting of the Albert Company, the report of the directors then read stated that the society had recently acquired the business of the Medical, by which the premium income of the Albert was raised to 220,0007. a year, and that it had been agreed that the Albert should be distir guished by the new name of the Albert and Medical Life Assurance Company, and a copy of this report was sent to the policy holders in both companies. Afterwards, in 1862, the name was again changed to that of the Albert Medical and Family Endowment Life Assurance Company, which

3 N

title was again changed to that of the Albert Life Assurance Company, which name was retained until the date of the winding-up order.

During the interval the receipts for premiums were headed in different modes according to the circumstances. In 1861, the old Medical Society's receipts were used, the words "Invalid and General" being struck out with a pen, and the word "Albert" prefixed. In 1862, the title Albert Medical and Family Endowment Life Assurance Company was used. The last change, as regards Mr. Spencer's receipts, was by substituting the heading "Indian Branch, Albert Life Assurance Company."

Mr. Spencer during these various changes, so far as the evidence shewed, remained quiescent; he paid the premiums upon his policy to the amalgamated company, but did not send any answer to the circular announcing the amalgamation, nor did he sign the form for surrendering his policy or send it in to the company, nor did he receive any substituted policy. He, however, in 1862, adopted an arrangement made by the Albert, and which under his policy he was not entitled to, which was that during a temporary residence in Europe his premium was reduced.

In June, 1863, a circular was sent to Mr. Spencer, inclosing some accounts and actuary's valuations, and announcing in the following terms a division of profits in the Albert for the three years ending 31st December, 1861, which had been resolved on in December, 1862:

"Indian Branch,

Calcutta, June, 1863. "Sir, I have the pleasure to send you, by desire of the board, a report of proceedings at the annual meeting of proprietors of this company, held on the 24th of December last, by which you will perceive an allotment of the surplus profits of the company has been made to the assured.

"The share pertaining to the abovementioned policy may be applied in either of the following ways: 1st. In adding to the amount assured when payable the sum of rupees; 2nd. In the present payment of rupees; 3rd. In reducing

the premium payable during the three years subsequent to this year. 4th. In reducing all premiums subsequent to this year. I shall be obliged by your informing me which of the above modes you select, and a form is enclosed for that purpose. I may state for your guidance in making your selection, the reduction of premiums under No. 3 would be somewhat more than one-third of the amount named under No. 2. The reduction under No. 4 would, of course, be much smaller, and shall be determined if you wish it. Should I not hear from you before the 31st of August next, it will be assumed that you adopt the first of the preceding modes, and the sum annexed under No. 1 will accordingly be added to the sum assured. In conclusion, I desire to call your attention to the gratifying fact that the new business of the company which, as per annexed report, recently reached in one year the unprecedented amount of 2,235 policies assuring 845,6221, and yielding an annual premium 34,2907., is still progressing very satisfactorily, and at a rate which must materially augment the future. profits of the company."

Mr. Spencer, in reply to the circular, elected, by letter, to take the bonus in reduction of future premiums, and in accordance with this the premiums which he thenceforth paid were at a reduced rate.

On the 17th of December, 1869, the Albert Company was ordered to be wound up, and a similar order was made on the 18th of December, 1869, as to the Medical Society.

Mr. Spencer having claimed to be a creditor of the Medical Society in respect of his policy, and to have a charge upon the trust fund representing the life assurance fund of the Medical Society, his case was brought before Bacon, V.C., as being a representative case.

His Honour decided that he had accepted the liability of the Albert Company in lieu of the Medical, and disallowed the claim (1). From this decision Mr. Spencer now appealed.

(1) His Honour gave judgment as follows:

BACON, V.C., after mentioning that he was about to give judgment in two other cases, each involving a claim made by a policy-holder against the com