Form 317. but as it was argued fully on behalf of the company, all I will say is that I think with Mr. Justice Manisty that it is a very clear case, and I go further and say a very gross case, and that the only way to deal with it is to dismiss the appeal with costs."

Form 318.

Another. Accounts directed.

Form 319.

Judgment setting aside

sale of concession and ordering repayment.

Sir James Hannen.-"I entirely agree."

Lord Justice Lindley." I also agree; the less said the soonest mended."

For other cases of rescission, see Ross v. Estates Invest. Co., B. 2420, 3 Eq. 122, as varied on appeal, L. C., 22 July, 1868, B. 2850, 3 Ch. 682; Seton, 1355; Henderson v. Lacon, A. 2753, 5 Eq. 249. And see supra, pp. 231, 361.

Let the register of members of co be rectified by omitting name of plt. as a shareholder. Injunction to restrain proceedings for calls. Deft co to take all necessary steps to vacate judgmt already entered up. And let the following accounts be taken : 1. An account of all sums pd by the plt to the deft co, or to the late deft T. and the defts P., &c., or either of them, or any person or persons on behalf of or for the use of the deft co, with interest at 5 p. c. p. a. on such sums from the respive days when the same were so pd. 2. An account of all sums pd by the deft co to the plt, with interest at 5 p. c. p. a. on such last-mentd sums, from the respive days when the same were so pd. Let the deft co and P., &c., and M. T., the executrix of the late T., within one month after the date of the chief clerk's certificate, pay to the plt the amount certified to be due to him upon the balance of the sd accounts. Defts to pay plt's costs of suit. And in case deft M. T. shall not admit assets of late deft T. deceased, for the ppse of this decree [account of personal estate to be taken]. And let plt be at libty to prove under the winding-up of co for what shall be certified to be due to him from deft co upon the balance of sd account, and also for such costs as afsd, and to apply at chambers as to any such costs. Notice of decree to be given to registrar. Libty to apply. Kent v. Freehold Land Co., Wood, V.-C., 3rd Aug., 1867. A. 2239, 5 Eq. 588; 3 Ch. 493.

In the above case the bill was not filed until after the presentation of a winding-up petition, upon which an order was subsequently made, and accordingly on appeal, following Oakes v. Turquand, L. R. 2 H. L. 325, the bill was dismissed on the ground that it was filed too late, but the order was to be without prejudice to any claim by the plaintiff against the directors in some other proceeding. See supra, p. 232.

Declare that the sale to the plt co of the concession of 8 May, 1869, in the pleadings mentd was fraudulent, and ought to be set aside, and order and decree the same accordingly. Declare that H. and the estates in liquidon and sequestration of the defts B. and P. L. & Son as a co, and C. L., &c., the only partners of the sd co as individuals in the pleadings mentd, are jointly and severally liable to make good to the plt co the sum of 65,000l. so pd for the pchase of the sd concession, together with interest thereon at the rate of 4 p. c. p. a. from 31 May, 1871, and the costs of this suit. Declare that the defts E. and K. are jointly and severally liable to make good to the plt co the sd pchase money to the extent of 15,0007. improperly pd to the sd

defts as in the pleadings mentd, together with interest on the sd sum of Form 319. 15,0007. at rate afsd from 31 May, 1871, and the costs of this suit. And deft H. not electing to take an account of the profits (if any) made by the plt co from the working of the Island of A. V. since 31 May, 1871; let deft H. on or before 1 June, 1876, pay to the plt co 65,0007., together with interest at 4 p. c. p. a. from 31 May, 1871, to the time of paymt. Libty for co to prove against estates of the deft B. under the liquidon proceedings initiated by him, and also under the sequestrated estates of P. L. & Son as a co, and C. L., &c., as individuals, for the said 65,000l. and interest at 4 p. c. p. a. from 31 May, 1871, up to the dates of the liquidon and sequestration respectively, and for the costs of this suit. And let defts E. and K. on or before 1 June, 1876, pay to the plt co sd sum of 15,000l. with interest, &c., to the day of paymt. Declare that the persons paying the said 65,000l. and interest and plt's costs of suit as afsd shall be entled to the benefit of the letters patent granted, &c., and of the documt or concession, &c. And plt co shall at the expense of such persons paying as afsd deal with sd letters patent and concession as sd persons shall reasonably require, or, in case of difference, as the Ct shall direct. And declare that any sum which shall be pd to the plt co by the defts E. and K. or either of them on account of the 15,000l. and interest shall be taken in satisfon pro tanto of the 65,000l. and interest payable by the deft H., and provable, &c., and that any sum or sums over and above 50,0007. with interest, &c., which shall be pd to plt co by deft H., and the estates of, &c., shall be taken in satisfon pro tanto of the 15,000l. and interest. Defts to pay costs of suit. Dismiss bill as against L. without costs. And plt co having arranged to pay the deft R. 1507. for the costs of suit, dismiss bill as against him. Libty to apply. Phosphate Sewage Co. v. Hartmont, Malins, V.-C., 22 Mar., 1876. B. 481.

In the above case, the promoters had formed the company and sold to it a concession which they knew was voidable; the real ownership was concealed; the persons who agreed to buy on the company's behalf received a secret bonus of 15,000l.; the directors were nominees of the promoters, and the prospectus contained serious misrepresentations. Upon discovery of the facts, a bill was filed by the company against the promoters, including the owners of the concession, the members of a provisional committee, the solicitors, secretary, and others, and a decree was made as above. The decree was affirmed on appeal. See report in 5 C. Div. 394.

In the New Sombrero Phosphate Co. v. Erlanger, 5 C. Div. 73; 3 App. Cas. 1218, the promoters sold a property to the company without disclosing the fact that they were getting double what they had paid, and without disclosing the real ownership; the directors were nominees of the promoters, and the prospectus contained misrepresentations. Upon discovering the facts a bill was filed, and on appeal a decree was made as below mentioned. An appeal to the House of Lords was dismissed with costs.

The decree of the Court of Appeal declared that the contract ought to be set aside, and decreed the same; declared that the defendants were liable to repay the purchase money, and were liable for the shares issued in part payment; ordered them to pay the purchase money with interest; gave liberty to prove for amount against estates of bankrupt defendants; directed inquiries as to

Form 319. which of the shares still belonged to defendants, and of proceeds of sale of those sold; directed a transfer of the former, and payment of such proceeds; gave liberty to prove against estates of bankrupt defendants for such proceeds; declared that company entitled to be paid the purchase money and said proceeds out of estate of deceased defendant; declared defendants and estates of bankrupt and deceased liable for costs of suit, and directed payment, &c.; directed account of profits, if any, made by company in working the island; ordered company upon payment of the purchase money, &c., to deliver up island, and pay over such profits, if any; directed inquiries as to estate of deceased defendant; adjourned further consideration: dismissed bill with costs as against D. & W. Seton, 1358, where the decree will be found more fully set out.

Form 320.

Contract for sale of mine set aside.

This action coming on for trial against the defts W. M. and M. on the 25th and 26th April, 1882, &c., and counsel for the plts this day also moving for judgmt on the default of the defts S. and G. in delivering a defence and upon hearing the pleadings, &c., order that the contract dated 2 April, 1879, in the pleadings mentd be set aside, and declare that all shares received by any of the defts, other than the deft S., as pt of the conson for the sale agreed upon by the sd contract which have not been sold, but have been retained by them or any of them, or by any persons in trust for them or any of them, ought to be surrendered to the co, and order and adjudge the same accordingly. And declare that the defts, other than the deft S., are jointly and severally liable to pay to the plt co the amount of the pehase-money pd by them under the contract, together with interest at the rate of 4 p. c. p. a. from the date of the respive paymts, and also to pay to the plts the nominal value of all shares which were allotted to the sd defts or any of them under the sd contract, and which they have sold, together with interest thereon at 4 p. c. p. a. from the dates when such shares were sold. And let an account be taken of what is due from the defts, other than the deft S., to the plts, having regard to the afsd declons. And order the defts W. M., G., and M., within one month after the date of the chief clerk's certificate, to pay to the plt co what shall be certified to be due to them on such account. And order them to pay to the plt co their costs of this action to be taxed. And declare that plt co are entled to a lien on all the interest of the defts in the ppty, comprised in such contract for the principal moneys and interest payable under this judgmt and order, and for the costs of this action. Libty to plts to apply to enforce such lien as they may be advised. Plympton Mining Co. v. Wilkins and others. Kay, J., 27 April, 1882. B. 942.

In the above case a mine had been purchased from the liquidator of a company for 1,000l. and resold shortly afterwards to a new company, promoted by the purchasers, for 4,500l., payable part in cash, and part in shares. Due disclosure was not made, and the directors were not independent. Kay, J., was of opinion that the defendants, except S., the nominal purchaser, against whom no relief was claimed, were promoters and partners in carrying out an inequitable, and, therefore, fraudulent scheme; that the directors, who were mere nominees of the defendants, had no opportunity of forming a separate judg ment as to the propriety of carrying out the contract entered into by the defen

dants; that the defendants, as promoters, stood in a fiduciary position to the Form 320. company; that the increased price was exorbitant; that the plaintiff company

was not disentitled on the ground of delay, because the knowledge of the trans

action complained of was improperly kept back; and, accordingly, judgment as above was entered. See W. N. 1882, 66.

As to lien where contract rescinded, see Aberaman Ironworks v. Wickens, 4 Ch. 101; Mycock v. Beatson, 13 C. D. 385.

See supra, pp. 239, 363. That a claim against a person in a fiduciary position may be lost if proceedings are not taken within six years of discovery, see supra, p. 239.

refund secret

Declare that the defts C. and G. are jointly and severally liable to Form 321. pay to plt co the 85,0007. in the pleadings mentd, together with interest Judgment at 4 p. c. p. a. from 26 Ap., 1873, till paymt. And declare that the against deft R. is also liable to pay to the plt co 10,000l. (pt of the 85,0007.) promoters to with interest [as above]. And declare that the deft J. N. is also liable profit. to pay to the plt co 5007. (further pt, &c.), with interest, &c., from 9 July, 1873, till paymt. Declare that defts E. N. and J. N., as the leg. per. reps. of W. S. N. deceased, if they shall admit assets of the sd W. S. N. sufficient to answer the sd sum and interest hereinafter mentd, are also liable to pay to the plt co 5007. (further pt, &c.) with interest, &c., from 9 July, 1873, until paymt. And declare that the liability of the sd several defts, C., &c., to pay the 85,000l. and interest on the several proportions of sd sum and interest for which they are hinbefore declared liable, or any pt or pts thereof respively, may be discharged pro tanto by such defts respively transferring to the plt co debentures of the plt co which the sd defts respively may have originally received in respect of the sd 85,000l. or the pt or pts thereof which they are hinbefore declared to be liable to pay respively, and accounting to the plt co for the interest which may have been received by such defts respively on such debentures. And declare and adjudge that defts C. and G. do jointly and severally on or before 25 July, 1877, pay to plt. co sd sum of 85,000l. together with interest at 4 p. c. p. a. from 26 Ap., 1873, until paymt. Order against R. as to the 10,000l. and against J. N. as to the 5007. with interest. Order that defts E. N. and J. N. as the leg. per. reps. of W. S. N. deceased, if they admit such assets as afsd, do, on or before 25 July, 1877, pay to plt co the 5007. (further pt, &c.) together with interest, &c., from 9 July, 1873, until paymt. And in case defts E. N. and J. N. do not admit assets of the estate of W. S. N. sufficient for that ppose or for the ppose of the paymt of the costs hereinafter directed to be pd, let [usual account of personal estate of W. S. N.]. And order C. G., &c., and the sd J. N. and E. N., as such leg. per. reps. as afsd of the sd W. S. N. deceased, if they admit assets of his estate to answer the sd costs, pay to the plt co the costs of this suit up to and including this trial, and also the costs of the motion for injunction of 21 Dec., 1875. To be taxed. Libty to apply. Bagnall v. Carlton, Bacon, V.-C., 25 Ap., 1877, A. 869.

Form 321.

Order on appeal.

Form 322.

Director ordered to pay value of shares.

In the above case, the promoters, R. C. & G., formed the company and effected a sale to it of a colliery belonging to B. and others. The promoters received secret payments of large amount from the vendors. The prospectus contained misrepresentations. Upon discovering the facts, the company sued the vendors, the promoters, and the vendors' solicitors, who became solicitors to the company, praying rescission and repayment. Before the suit came to a hearing, it was compromised as regards the vendors upon their paying 31,000l., and rescission was abandoned. At the hearing the promoters were held liable for the secret profits they had made, and all the defendants were held liable for the costs of the suit. On appeal, the decree was varied by allowing the promoters certain deductions, and dismissing the bill with costs as against the solicitors. See Form 199. See this report in 6 C. Div. 371.

Upon motion by way of appeal, &c., and it appearing by the evidence that sums amounting to 6,2507. were pd by the defts C., G., and R., some or one of them, in respect of charges and expenses connected with the formation of the plt co, and the plts by their bill having submitted to have deducted from the sum claimed by them from the same defts a reasonable sum by way of commission for their services in the formation of the co, and also a reasonable sum in respect of the sd charges and expenses, and the plts' counsel not objecting to amount of such charges and expenses being fixed at 6,2501.: And the Ct being of opinion that 9,000l. is a reasonable amount to be allowed to same defts for such commission: And defts C. and R. not claiming any part of sd commission nor any repaymt in respect of sd 6,2501.: And plts electing to take and the defts C., G., and R. respively, consenting that the plts shall take several judgmts against the same defts for the sums hereinafter mentd. Order, that judgmt of 25 Ap., 1877, be varied as follows, namely, Deft. C., within fourteen days after service of order to pay to plt co 12,000l., with interest at 4 p. c. p. a. from 26 Ap. 1873. And [like order on R. for 7,000l. and on G. for 57,7501.] being the sd sum of 85,0007., which by the sd order the sd defts C., G., and R., were jointly and severally ordered to pay less, &c. And in case G. shall duly and fully pay sd 57,7507. and interest, sd deft is to be at libty to deduct therefrom 9,0007. in respect of such commission as afsd. But [option to G. to have inquiry in chambers as to expenses of forming co, and if amount found more or less than 6,2501., direction for paymt of difference by him or the co, as the case may be]. Defts not to be prejudiced in respect of appeal by anything in the judgmt. Variation of order of V.-C. as to costs. Bagnall v. Carlton, Ct. of App., 8 Aug., 1877, A. 1742.

See also Emma Mining Co. v. Grant, M. R., 26 Feb. 1879, A. 921; 11 C. D. 941; 17 C. D. 122.

Minute of judgmt: This Ct doth order and adjudge that the deft John Grove do, within one calendar month after service of this order, pay to the plts, the Nant-y-Glo, &c., Co, the sum of 4,0007., being 801. per share on each of the 50 shares so transferred to him as in the pleadings mentd, together with interest thereon at the rate of 4 p. c. p. a.