Maynard, in support of the plea.-The cases of Giles v. Hutt, and The Edinburgh Railway Company v. Hibblewhite, are authorities to shew that the remedy of forfeiture is alternative, and the Company is bound to elect their remedy. It is true that the 29th section gives the power of forfeiture, whether the Company have sued or not; but the 25th section does not empower the Company to sue where there has been à forfeiture. [Parke, B.—If the declaration of forfeiture deprives the Company of their right of action, how are they to get their costs in the event of an action being pending?] The act of forfeiture in that case would be an abandonment of the costs. Phipson replied. POLLOCK, C. B.-I think, upon the true construction of this Act of Parliament, that the Company have not by the forfeiture barred themselves of their right of action. That remedy appears to me not to be alternative. PARKE, B.-I quite concur. This case differs from Giles v. Hutt; for on looking at the deed of settlement there, it gave the Company in express terms the alternative remedy either of suing or of declaring the shares forfeited; and the Court held, that, having obtained judgment against the defendant for the calls, they had elected their remedy and could not afterwards declare a forfeiture. Whether their bringing an action only would have been an election was not decided, although I think that it would. But, looking at the 8 & 9 Vict. c. 16, it appears clear that the power to declare a forfeiture is not given as an alternative remedy, but as a further security for the calls until payment. The shares forfeited are in the nature of a pledge or mortgage, and until the claim is satisfied the action may be maintained. There would still be the right to the costs if payment was after action brought. I therefore think that the forfeiture is no bar to the action. 1849. THE GREAT NORTHERN RAILWAY CO. v. KENNEDY. 1849. THE GREAT NORTHERN RAILWAY CO. บ. KENNEDY. ALDERSON, B.-By sect. 29, the shares may be forfeited whether an action has been brought or not, and this seems a legislative declaration that the Company may do both; and if so, the one remedy is cumulative upon the other. ROLFE, B.-I agree with the rest of the Court. The holder is liable for all calls accruing before the shares become the property of another person. The power of declaring the shares forfeited was given to secure the payment of the calls. Judgment for the plaintiff. COURT OF EXCHEQUER. Hilary Term, 1849. Jan. 30th. The 68th section of the 7 & 8 Vict. c. 110, does not apply by shareholders to proceedings merely, but to all cases where a creditor may sue a Company. THOMPSON V. THE UNIVERSAL SALVAGE COMPANY. THIS was a rule which had been obtained by Lush, calling upon C. Lund, a former shareholder in the Company, to shew cause why the plaintiff should not be at liberty to issue execution against him upon a judgment obtained against the above-named Company. From the affidavits it appeared that the Company was The Court will completely registered under 7 & 8 Vict. c. 110, and that give leave to not, however, issue execution under that section, unless the creditor has used due diligence to obtain satisfaction out of the property and effects of the Company. Therefore, where the affairs of an insolvent Jointstock Company, completely registered under the 7 & 8 Vict. c. 110, were directed to be wound up by the Court of Chancery under the 11 & 12 Vict. c. 45:-Held, that a judgment creditor was in the first instance bound to prove his debt before the Master under the 73rd section of that statute; but that, if that remedy proved abortive, this Court would, in the exercise of its discretion, permit the creditor to proceed directly against the persons liable to contribute under the 7 & 8 Vict. c. 110. Semble, per Platt, B., that a proceeding under 7 & 8 Vict. c. 110, to obtain execution against a shareholder of a Company, is a proceeding in an action within the 73rd section of the 11 & 12 Vict. c. 45. the plaintiff, on the 16th of May, 1848, had recovered a judgment against the Company, on which he had, on the 25th of that month, issued a fieri facias, and to which the sheriff had returned nulla bona. It was also sworn that 1631. 3s. 6d. was due to the plaintiff, and that any further execution against the property of the Company would be unavailing, and that the plaintiff's only prospect of obtaining satisfaction of his debt, was by proceeding against the individual members of the Company. On the 10th of November an order was made in the Court of Chancery, under the 11 & 12 Vict. c. 45 (the Joint-stock Companies Winding-up Act), for the dissolution and winding up of the Company, and a reference was made to the Master of its affairs to be wound up, and an official manager was appointed. Phipson now shewed cause.-First, the 68th section of the 7 & 8 Vict. c. 110, does not apply to the present case, but is confined to the case of a shareholder endeavouring to reimburse himself by reason of his having been compelled to satisfy a judgment of the Company. [Parke, B. -Is that so? The Court of Common Pleas thought differently in Peart v. The Universal Salvage Company (a). Alderson, B.-To make the statute intelligible we must read the words "suit" and "recover," in the 67th and 68th sections, in a somewhat qualified sense. The course contemplated by the three sections is this:-A creditor recovers against the Company and obtains execution against their property unsuccessfully; and he then applies to the Court, under the 68th section, to have execution against the property of the shareholders. He gets execution and his debt from the property of a shareholder, who then becomes entitled, under the 67th section, to recover from the Company, and under the 68th section may apply to (a) Ante, Vol. 5, p. 347; S. C., 6 C. B. 478. 1849. THOMPSON V. THE UNIVERSAL SAL VAGE CO. 1849. THOMPSON V. THE UNI VERSAL SAL- the Court, on the ground that he has been obliged to pay the debt of the Company, and have execution against the property of the Company. If he cannot get his money in that way, he must go to a Court of equity to recover contribution from his co-shareholders. If we read the words "at the suit of," in the 68th section, as meaning "on the application of," and "to recover," in the 67th section, as "entitled to have," it makes all clear.] Secondly, the plaintiff ought to have gone before the Master under the 11 & 12 Vict. c. 45, s. 73; and if creditors are enabled to proceed against shareholders under the 7 & 8 Vict. c. 110, whilst proceedings are pending before the Master, the object of the first-mentioned Act will be defeated. Lush, contrà.-The dissolution of the Company, and the reference to the Master, under the 11 & 12 Vict. c. 45, does not deprive the plaintiff of his remedy under the 7 & 8 Vict. c. 110. The object of the reference to the Master is to ascertain the amount of liability; and where the amount is ascertained, as in this case, or where the Master has not the means of ascertaining it, as in actions of trespass, then the Act does not apply. [Alderson, B.—Where the Company's affairs are not before the Master, a creditor has a right to have his debt satisfied from shareholders for the time being, or from former shareholders; but if, on a reference before the Master, the plaintiff is entitled to be paid out of the Company's assets, or from the contribution of the shareholders, the Master would exhaust one source before having recourse to the other, and so he would be enabled to do complete equity between the shareholders, making those pay who ought to pay, and also between the creditors themselves, which we cannot do; and if it is in our discretion whether we will act or not, and there is another tribunal that can do complete equity, ought we not to refer you there?] It is submitted that the Court is bound to do justice; and if the plaintiff has a legal right the Court ought to assist him in enforcing it. [Alderson, B.-You have the power of going before a tribunal who can pay you out of the assets of the Company, and you cannot have execution against a shareholder until you have used due diligence against the common fund. Have you used due diligence until you have resorted to that tribunal?] It is submitted that we have, seeing that the Company is insolvent, and has no funds; and the Court will not saddle the plaintiff with a useless expenditure in going before the Master. The permission of the Master, required by the 58th section, before bringing an action against a shareholder, refers to actions in their popular sense, and not to the case of a judgment recovered. [Parke, B.-You may come here again, after you have exhausted your remedy before the Master; and, as to there being no assets, the Master has the power of creating them by making calls on the shareholders.] PARKE, B.—This rule must be discharged. The first point is, whether, since the 7 & 8 Vict. c. 110, execution ought to issue under circumstances like the present; which raises the question, whether the Court of Common Pleas was right in Peart v. The Universal Salvage Company. The question there was, whether, under the 68th section, the proceeding by scire facias or suggestion, on a judgment obtained against such a Company as this, was abolished only in cases of execution sued against the Company by shareholders; and the Court there decided, according to what I consider to be the true construction of that section, that the remedy was not confined to such a case. The 68th section provides [His Lordship read the section.] No doubt the words "at the suit of any shareholder or former shareholder," must refer either to all the antecedents, or to the last. The Court of Common Pleas properly said, that if those words referred to all 1849. THOMPSON v. THE UNI VERSAL SAL VAGE CO. |