Form 634.

Order for

repayment of

MONEY

improperly paid for preliminary expenses

ordered to pay nominal value of shares taken and paid for by him, with fees improperly paid him by the board.

S. 165 does not create any new liability or right, but only provides a more convenient means of enforcing rights and remedies which would have been enforceable by action if there had been no winding up. Canadian Land, &c., Co., Coventry & Dizon's case, 14 C. Div. 666; 28 W. R. 775. In this case Jessel, M. R., had ordered directors who had acted without the requisite qualification shares to pay to the liquidator the amount which they would have had to pay therefor, but the order was reversed on appeal. See also Forest of Dean Co., 10 C. D. 450; 27 W. R. 594; and Re Cape Breton, W. N. 1884, 54.

An order under s. 165 cannot be made against the executors of a deceased director. In re British Guardian, &c., Co., ubi supra. But they may in some cases be made liable in an action, see supra, p. 389, and Form 340.

As to delay barring a claim, see Metropolitan Bank v. Heiron, 5 Ex. Div. 319, and Flitcroft's case, 21 C. Div. 519; Re Alexandra Palace Co., 21 C. D. 150, and supra, p. 239; Buckley, 367.

Where a director was ordered, under s. 165, to pay the full nominal value of the shares, it was held that he was not "a trustee or person acting in a fiduciary capacity," within the third exception to s. 4 of the Debtors Act, 1869, and accordingly could not be committed to prison for default in paying. Diamond Fuel Co. (2), 13 C. D. 815; 28 W. R. 435.

The summons usually seeks a declaration of liability. See the orders below, and British Seamless Co., 17 C. Div. 470; Alexandra Pal. Co., 21 C. D. 150; Re Great Wheal Polgarth Co., 49 L. T. 20.

Prima facie the company's solicitor is not an officer within this section. Re Great Wheal Polgarth Co., 49 L. T. 20.

Non-feasance is not misfeasance within this section. Forest of Dean. 10 C. D. 450; Wedgwood Co., 47 L. T. 612; 31 W. R. 181.

No set-off is allowed upon a proceeding under this section. Flitcroft's case, 21 C. Div. 519; Anglo-French Soc., 21 C. D. 492; Milan Tramways, 22 C. D. 122; 31 W. R. 107, and Addenda.

A claim under s. 165 is a chose in action, which may be sold and assigned under s. 95. Park Gate Co., 17 C. Div. 234. Accordingly, parties who are liable to proceedings under that section sometimes find it worth while to buy the whole assets, paying a composition to creditors, and the costs of the winding up.

Upon the applicon of, the off. liq., &c., Declare that the sd C., H., P., S., and W., directors named in the prospectus of the sd co, are jointly and severally liable to pay the sum of 3000l., being the balance after giving credit for the sum of 500l. already received by the sd off. liq. of the sum of 35007., the amount pd to S. in respect of preliminary expenses and retained or applied by the sd S. for pposes other than preliminary expenses properly payable, together with interest at the rate of 3 p. c. p. a. on the sd 3500l. from the respive dates of the paymt of the cheques to the sd S. as shown by the sd afft of, &c., as follows, namely, 12007, on, &c. [and so forth], And order that the sd C., &c., do within 14 days from the date of this order, or within 4 days after service of this order, jointly and severally pay the amount of the sd sum of 30007. and such interest as afsd to the sd S., the off. liq. of the sd co, And order that the sd C., &c., do pay to the sd off. liq. the costs of and incident to this applicon and consequent thereon, such costs to be taxed, &c. Englefield Colliery Co., Limtd, Malins, V.-C., 28 July, 1877. A. 1720. 8 C. Div. 288.

Upon the applicon of B., the liq of the above-named co, &c., and Form 635. the Ct being of opinion that the persons named in the schedule hto are Order on jointly and severally liable to refund the sum of 9001. in respect of directors to monies of the sd co improperly retained by them while directors for the repay monies improperly ppose of paying up the 20 shares held by each of them therein, and retained to interest thereon as hereinafter mentd: Order that the sd several persons tions. pay qualifica named in the schedule hto pay to the sd B., the liq of the sd co, at his office, No.Street, &c., within 4 days after the service of this order on each of them respively, the sum of 10537. 13s. 7d., being the sd sum of 9007. so retained by them as directors with the sum of 1537. 138. 7d. for interest, less income-tax, due to the date of this order at the rate of 5 p. c. p. a. from the date when the sd monies making up the sd sum of 9001. were respively retained after deducting income-tax, And order that the sd several persons named in the sd schedule do also pay to the sd B. interest at the rate afsd on the sd 9007. from the date of this order until paymt. Patent Cocoa Fibre Co., Bacon, V.-C., 1878.

B. 645.

invested.

Upon the applicon of the off. liq. and of, &c., Declare that each of the Form 636. sd directors of the co is jointly and severally liable to the extent of half Order on the premiums received by them respively during the respive periods directors to half premiums when they were such directors after deducting the amount of death which ought claims pd under policies and any sums pd for surrender value of policies, to have been And let the persons named in the first column of the schedule hto (being the sd directors) on or before 17 Dec., 1877, or subsequently within 4 days after service of this order, pay into Ct to the credit of this matter, "In the matter, &c.," to an account to be intituled "Policy Guarantee Account," the sums in the second column of the sd schedule set opposite the names of such persons respively amounting in the whole to 6287. 188. 5d., And let C., &c., pay to the applicants their costs of the applicon in chambers and of and incident to this order, to be taxed, &c. National Funds Co., M. R., 17 Nov., 1877. B. 3675. This order is referred to in Re British Guardian Co., 14 C. D. 335.

directors to

inquiries.

Upon the applicon of H., the off. liq., &c., Declare that all persons Form 637. being directors of the co, who in any manner authorised, sanctioned, or Order declarparticipated in the paymt to shareholders of interest on their respive ing liability of shares out of the capital of the sd co are jointly and severally liable to refund divirepay to the off. liq. of sd co the amount so pd without prejudice to the dends paid out rights of the directors so liable after they shall have pd to the off. liq. of capital with the amounts due from them respively to recover the same from the shareholders who received such paymts; And let the following inquiries be made: 1. An inquiry what were the amounts of the various paymts so made respively, and when and to whom the same were respively made. 2. An inquiry what persons were directors of the sd co at the respive times when such paymts were made and which of them in any way authorised, sanctioned, or participated in the making of such paymts ;

Form 637. And costs of off. liq. of applicon to be taxed and allowed out of assets of British Imperial Insurance Corporation, Hall, V.-C., 4 Aug.. 1879. A. 2173.

Form 638.

Order against directors after inquiry.

Form 639. Order on

CO.

See Flitcroft's case, 21 C. Div. 519; Re Alexandra Palace, 21 C. D. 150.

Upon the applicon of off. liq. of co and of B., a whole life policy holder of co, to further proceed with the summons in these matters issued 26 May, 1879, and upon hearing, &c., Order that pursuant to the sd order of 15 Mar., 1880, and the chief clerk's certificate dated 27 July, 1880, the several persons named in the 1st column of schedule hto, being some of the directors of co., do on or before 31 Mar., 1881, or subsequently within 14 days after service of this order, pay to off. liq. at his office, situate, &c., the respive sums set opposite their respive names in the 2nd column of schedule, being the sums for which such persons respively are liable in respect of uninvested premiums on whole life policies of sd co, and [respondents to pay costs of applicons]. Schedule showing bonus and amounts. British Guardian Life Assurance Co., Hall, V.-C., 17 Mar. 1881. A. 643.

Upon the applicon of W. & B. by summons dated 21 Feb., 1877, that G. the off. liq. of co, or the sd co might be ordered within 7 days to give application by security for the costs of the applicants of certain proceedings instituted respondents for by the sd G. as such off. liq. for the recovery of the sum of 55,0007. from security. the late directors of the sd co, and that in the meantime such proecedings might be stayed as against the applicants, and upon hearing counsel, &c., and upon reading, &c., and the sd G. undertaking personally to pay any costs to which the applicants, being the respondents to the sd applicon made by him, may be held to be entled and paymt whereof they shall not obtain from the sd co, The Judge doth not think fit to make any order upon the sd summons except that the costs of the applicon be costs in the sd proceedings taken by the sd off. liq. against such respondents. Baseye Consolidated Silver Co., Hall, V.-C., 16 Ap.. 1877. A. 811.

160. The liquidators may, with the sanction of the Court, where the company is being wound up by the Court or subject to the supervision of the Court, and with the sanction of an extraordinary resolution of the company where the company is being wound up altogether voluntarily, compromise all calls and liabilities to calls, debts, and liabilities capable of resulting in debts, and all claims, whether present or future, certain or contingent, ascertained or sounding only in damages, subsisting or supposed to subsist between the company and any contributory or alleged contributory, or other debtor or person apprehending liability to the company, and all questions in any way relating to or affecting the assets of the company or the winding up of the company, upon the receipt of such sums, payable at such times, and generally upon such terms

as may be agreed upon, with power for the liquidators to take any security for Form 640. the discharge of such debts or liabilities, and to give complete discharges in respect of all or any such calls, debts, or liabilities."

The Court has no jurisdiction to compel a liquidator to compromise. Pearson's case, 7 Ch. 309. In sanctioning a compromise, the Court is exercising a judicial discretion, and accordingly evidence of the propriety of the compromise must be forthcoming. Ex pte. Totty, 1 Dr. & Sm. 273; 6 Jur. N. S. 849. But the sanction of the chief clerk is sufficient, though, of course, any of the parties can require the matter to be heard by the judge. Ex pte. Garstin, 10 W. R. 457. See further Buckley, 313.

A contributory who is unable to pay the calls made on him generally endeavours to effect a compromise. In such case he is very commonly required to make an affidavit as to his means, and if it seems desirable he can be crossexamined thereon. If the official liquidator is satisfied, he will enter into a provisional agreement with the contributory embodying the terms of compromise, and will then apply for the sanction of the Court. See Rule 19 and Form 50 in Schedule to Rules. See also Buckley, 317 et seq.

The following are some examples of affidavits made by contributories with view to compromise.

1. I am the holder of 100 shares in the above-named co, and I am Form 640. unable to pay the two last calls of 57. per share lately made upon me in Affidavit of respect of the sd shares.

2. The paper writing now shown to me and marked with the letter A contains a full and true account of all the ppty and effects, real and personal, which I possessed, or in which I had any share or interest in possession, reversion, or expectancy at the time of the stoppage of the sd co on the and also of all such pts of my sd ppty as have since been sold or contracted to be sold, and the price at which such sales or contracts have been made, and as nearly as I can ascertain the full and true value of all such pts thereof as still remain to be sold.

of

3. I have no ppty whatsoever, real or personal, of any description, nor am I entled either in possession or reversion to any share or interest in any ppty whatsoever which is not included in the sd statemt.

4. I have not made away with, incumbered, or charged, settled, or in any manner parted with any pt of my ppty or effects, real or personal, since the failure of the sd co on the 16th of October, 1876, save as appears by the sd account.

5. The paper writing now produced and shown to me marked B contains a true and just account of all sums of money received and pd by me since the 16th of October, 1876, down to the 6th of July instant.

6. My income is derived from a salary of 1607. p. a., which I receive from my employers Messrs. D. & C., and such income has not for the last two years exceeded the sum of 1607. p. a.

contributory with a view to compromise.

1. I am settled on the list of contribs of the above-named co in respect Form 641. of 30 shares in the sd co.

2. The sd shares were pchased and held by me in my own right and not as trustee on behalf of any other person whomsoever.

Another.

3. The paper writing now produced and shown to me marked A contains a full and true statemt of all the ppty and effects, real and personal, which I possessed or in which I had any share or interest in possession, reversion, or expectancy at the time of the commencemt of the windingup of the sd co on the of and of all such pts of my sd ppty

as have since been sold or contracted to be sold, and the price at which such sales or contracts have been made.

4. I have no ppty, &c. I have not made away, &c.

5. My income is derived from my occupation as a commercial traveller, and amounts to the sum of 4007. p. a. and no more, which sum it has not exceeded for two years last past. Out of the sd sum I have to apply the sum of 507. p. a. in paying the premium on a policy for 1,0007. effected on my life in the year

6. My sd income is barely sufficient for the support of myself and my family, consisting of my wife and three children, and I have no other means of support, and have no ppty in possession, reversion, remainder, or expectancy, or any prospect of coming into any money or income from the death of friends or otherwise other than that mentd in the sd paper writing marked A.

7. I owe for money borrowed some years ago 5007. and have no means of paying the same.

On the pt of the off. liq. of the above-named co that an agreemt of compromise dated, &c., and made between the sd off. liq. of the one pt. and N. one of the contribs of the co of the other pt may be sanctioned.

The following form is an example of an affidavit of a liquidator in support. See supra, p. 511. Where the agreements are numerous the liquidator and the contributory should make a joint affidavit to save expense.

Formal parts: see supra, Form 383.

1. H. of has been settled on the list of contribs of the abovenamed co in respect of shares therein, and by an order in these matters dated, &c., a call of 207. per share has been made on him in respect thereof, amounting to 2007.

2. The sd H. has applied to me to accept a compromise of 50l. to be pd as follows, &c., and five guineas towards the costs of the agreemt for the sd compromise in full discharge of his liability in respect of the so call of 207. per share, and all liability as a contriby of the sd co.

3. I have investigated the affairs of the sd H., who has made an afft as to his means, filed the day of, and have caused him to be cross-examined on such afft before the examiner of this Ct, and as the result of such investigation and cross-examination it appears that the sd H. cannot pay the sd call, and I believe that if I cause him to be made a bankrupt I shall not obtain from his estate as much as I shall by the sd compromise. I believe that it will be beneficial to the sd co that the sd compromise shall be accepted.