deprives execution creditors, where the sheriff has notice of a bankruptcy within fourteen days, of the fruits of their execution applicable to the winding-up of companies. [Richards & Co., 11 Ch. D. 676.]

Amongst the claims generally admitted to proof against the company are those made by officers of the company for compensation for loss of employment.

In all cases of appointments for fixed periods the rule adopted is to allow the officer or agent to prove for his full salary for the unexpired term, less an estimated sum, in consideration of his being free to accept another appointment. [Yelland's Case, 4 Eq. 350; Ex parte Clark, 7 Eq. 550.]

Any special stipulation must also be taken into consideration; thus, where by the articles it was provided that in case of the dismissal of the manager he should be paid the full amount of money paid upon his shares, and the company was wound up voluntarily, the manager being appointed liquidator, it was held that the winding-up was equivalent to a dismissal, and that he was entitled to prove for the amount paid on his shares, subject to a set-off as to his remuneration as liquidator. [Shirreff's Case, 14 Eq. 417.]

But where an agent was appointed for five years to transact no business except for the company, at a fixed salary and a commission on all business, it was held that he was not entitled to prove against the company for the loss of his prospective commission. [Ex parte Maclure, 5 Ch. 737.]

Another class of claims ranking against the company are claims by landlords in respect of premises occupied by the company. A lessor is entitled to enter a claim for the whole value of the future rent, but he is not entitled to receive more than the amount which the company might become liable to pay under the covenant. [Haytor Granite Co., 1 Ch. 77.] But the lessor is not entitled to have impounded out of the assets a sum equal to the dividend upon the amount at which the future rent is estimated. [Horsey's Claim, 5 Eq. 561.]

Unless, therefore, through arrears of rent, he has a present right to a dividend, he will receive none.

Neither can the claim of a mortgagee of a lessor to a company to have impounded, out of the assets of the company, a sum sufficient to provide for the liabilities of the company under the lease, be admitted until breach. [Westbourne Grove Drapery Co., 5 Ch. D. 248.]

Thus,

Claims for damages are also admissible for proof. where a company agreed to issue £1000 fully paid-up shares in exchange for its debentures to a like amount, which were not then due, and omitted to register the contract, whereby the contractee became a contributory for £1000, he was held entitled to a proof for damages for all calls on the shares. [Ex parte Appleyard, 12 Ch. D. 587.]

Where a company entered into a contract to repair a ship within a certain time, and the company was then wound up, the liquidator completing the contract long after the time agreed upon, it was held that the shipowners were entitled to prove for damages against the company for the delay, and that these damages continued to run after the winding-up. [Ex parte Cambrian Steam Co., 4 Ch. 112.]

Where an action against a company had been, during the winding-up, dismissed for want of prosecution, it was held that the plaintiff was not debarred from bringing forward a claim in the same matter in the winding-up. [Orrell Colliery Co., 12 Ch. D. 681.]

In claims under policies the measure of proof in estimating the value of a current life policy is the sum which would be required to purchase a policy of the same amount at the same premium in a solvent office. [Holdich's Case, 14 Eq. 72.]

It is to be observed that a sum payable on a policy before the winding-up which has not been paid, has no priority over the claims of policy-holders, the moneys assured by whose policies have not become payable. [McIver's Claim, 5 Ch. 424.]

Where the full amount of a policy became payable after a winding-up, but before the day fixed for sending in claims, the policy-holder was entitled to prove for the whole amount of his policy. [Macfarlane's Case, 17 Ch. D. 337.]

If a creditor omits to prove his claim at the time fixed he will subsequently be admitted to prove, but he must not disturb any dividend already declared. [Kit Hill Tunnel Co., 44 L. T. 336.]

A contributory of a company in course of liquidation who has bought up a debt of the company at a discount may prove against the company for the full amount of his debt, and not merely what he has paid. [Humber Iron Works, 8 Eq. 122.]

A creditor of a company in liquidation who is also a shareholder in the company, is entitled to receive a dividend on his debt if he has paid all the calls made upon him. [West of England Bank, 12 Ch. D. 823.]

SET-OFF.

The rule that a contributory of a limited company cannot set off a judgment debt against calls made upon him in the winding-up, applies equally to a voluntary, compulsory, or supervision liquidation. [Government Security Co. v. Dempsey, 50 L. J. C. P. 199; Sankey Brook Coal Co. v. Marsh, 6 Ex. 185; Gill's Case, 12 Ch. D. 755.]

By the operation of sect. 10 of the Judicature Act, 1875, and Order XIX., r. 3, the defendant to an action brought by a company in liquidation may, in the same action, set off against the claim of the company a claim for unliquidated damages to an amount not exceeding the claim of the company; so sect. 10 imports into the liquidation of a company the mode adopted in bankruptcy of mutual credits. [Bankruptcy Act, 1869, s. 39; Mersey Steel Co. v. Naylor, 9 Q. B. D. 648.]

CHAPTER XIX.

EXAMINATION OF WITNESSES.

THE Court may, after it has made an order for winding up a company, summon before it any officer of the company or person known or suspected to have in his possession any of the estate or effects of the company, or supposed to be indebted to the company, or any person whom the Court may deem capable of giving information concerning the trade, dealings, estate, or effects of the company; and the Court may require any such officer or person to produce any books, papers, deeds, writings, or other documents in his custody or power relating to the company; and if any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come before the Court at the time appointed, having no lawful impediment (made known to the Court at the time of its sitting and allowed by it), the Court may cause such person to be apprehended and brought before the Court for examination; nevertheless, in cases where any person claims any lien on papers, deeds, or writings, or documents produced by him, such production shall be without prejudice to such lien, and the Court shall have jurisdiction in the winding-up to determine all questions relating to such lien. [C. A., 1862, s. 115.]

The Court may examine upon oath, either by word of mouth or upon written interrogatories, any person appearing or brought before it in the manner aforesaid, concerning the affairs, dealings, estate, or effects of the company, and may reduce into writing the answers of every such person, and require him to subscribe the same. [C. A., 1862, s. 117.]

The powers contained in these sections afford the liquidator

ample opportunity for elucidating any transactions of the company which he may consider suspicious and requiring explanation. Any person whom the liquidator may desire to examine can be summoned and examined under these sections. It is usual for the Court to appoint a special examiner, most frequently a practising barrister, to take the evidence of any witnesses so summoned. The proper course for a liquidator to adopt is to apply by summons for leave to examine any persons whom he may think capable of supplying information. [English Joint Stock Bank, 3 Eq. 203.]

This summons must contain the names of the persons whom it is proposed to examine, and is granted almost as a matter of course. The liquidator must file an affidavit stating in general words his reasons for desiring the examination. He is not bound to give particulars of any case he may consider he has against the witness. [Bloxam's Case, 36 L. J. Ch. 687.]

The liquidator is the proper person to apply, but if he refuses or neglects to do so, it is open to any contributory to make the application.

The following persons have been held liable to be summoned under sect. 115. The mother-in-law, sister, and nephew of a contributory; the banker who kept his account; the broker who transferred shares to an infant; the reputed owner of shares; any person indebted to a contributory, and a creditor who had claims against the company for commission. [Fricker's Case, 13 Eq. 178; Swan's Case, 10 Eq. 675; Druitt's Case, 14 Eq. 6; Clement's Case, 13 Eq. 179, n.; Massey v. Allen, 9 Ch. D. 164; Trower & Lawson's Case, 14 Eq. 8.]

A mere creditor, however, is not a person to be examined under this section. [Accidental and Marine Insurance, 5 Eq. 22.] The person so summoned is not entitled to any voice in the appointment of a special examiner. [Contract Corporation, 13 Eq. 27.]

A witness cannot refuse to answer all relevant questions on the ground that his depositions may be used against him in a