A company director had committed suicide; the claim was brought by his estate. The company had been established in England to work a Prussian coal mine, and the director had personally advanced a large sum towards its purchase. The company agreed to buy the Prussian mine, as planned, but the director’s suicide intervened before completion. The result was that his estate was temporarily short of funds, further instalments he was supposed to pay according to the contract were not paid, and the property was in danger of being lost. Accordingly, the other directors caused the contract to be cancelled and they set up a new company instead, which acquired the mine under a replacement contract. The shortfall was made up by crediting the vendor with the monies already advanced by the deceased director. The deceased director’s estate had no shares in the new company, and nothing to show for the large sum advanced. The plaintiff brought two suits, one in Prussia and the other in England. The English claim was for a declaration that the plaintiff had a lien on the coal mine, an account, and a declaration that the defendants had purchased the mine subject to the lien and as his trustees, and that unless the money was repaid the mine should be sold in order to generate the sum required for that purpose. It will be obvious to the modern reader of the reports that England was a forum non conveniens. Indeed by the date of the first-instance hearing the Prussian suit had already succeeded.
Held: ‘I am told that according to late decisions, and according to the law of England, if a man sell an estate to B and receive part of the purchase-money, and then repudiate the contract, and sell the estate to C, who has notice of the first contract and of the payment of part of the purchase-money by B, B shall, in that case, have a lien on the estate in the hands of C, for the money paid to the original owner. But assume this to be so, this is purely a lex loci which attaches to persons resident here and dealing with land in England. If this be not the law of Prussia, I cannot make it so, because two out of the three parties dealing with the estate are Englishmen, and I have no evidence before me that this is the Prussian law on this subject, and it if it be so, the Prussian Courts of Justice are the proper tribunals to enforce these rights. If the owner of an estate in Prussia mortgage that estate to an Englishman, it is new to me that the Courts of Equity in this country will administer, as between those persons, the law obtaining in England with relation to mortgages, and foreclose or direct a sale of the Prussian estate, if payment be not made of the amount due . . . there is no equity between the parties; here the Plaintiff is entitled to no decree against the Defendants for payment of any sum of money, nor is any such claimed, but the equity and relief sought begin and end with a prayer to make a certain transaction between other persons, one of whom is a stranger to the Plaintiff, an interest to an estate in Prussia, belonging to that stranger, and this independently of all personal equities attaching upon him. I never heard of any such case, and I will not be the first Judge to create such a precedent, which if adopted, for ought I see, would go to assert a right in the Courts here to determine questions between foreigners, relating exclusively to immoveable property in their own country.’
Judges:
Sir John Romilly MR
Citations:
(1861) 29 Beav 246
Jurisdiction:
England and Wales
Cited by:
Cited – R Griggs Group Ltd and others v Evans and others (No 2) ChD 12-May-2004
A logo had been created for the claimants, by an independent sub-contractor. They sought assignment of their legal title, but, knowing of the claimant’s interest the copyright was assigned to a third party out of the jurisdiction. The claimant . .
Appeal from – Norris v Chambres 1862
A company director had advanced part of a loan for the purchase of a mine in Prussia. He died, and because of lack of funds, his estate risked losing everything. His estate sought its recovery.
Held: ‘With respect to this advance, I think . .
Cited – Macmillan Inc v Bishopsgate Investment Trust Plc and Others (No 3) CA 2-Nov-1995
The question of ownership of a company is to be decided according to law of country where the company is incorporated. Conflict of laws rules are to be used to look to the issue in the case not the cause of action.
Staughton LJ said: ‘In any . .
Lists of cited by and citing cases may be incomplete.
Land
Updated: 23 November 2022; Ref: scu.199476
