official liquidators of the above named company, on the 16th day of Prec. III. November, 1875, preferred into H. M. High Court of Justice, and upon hearing counsel for the petitioners, and for W. S. D., and upon reading the said petition, an order dated, &c., the agreement dated, &c., in the said petition mentioned, an affidavit, &c. This Court doth order that (without prejudice to any existing security or charge upon the assets of the said company or on any call made or to be made on the shareholders thereof,) the said agreement be sanctioned and confirmed by this Court, so as to be binding on all the creditors of the company, and on the petitioners and the contributories of the company, and that the said agreement be carried into effect, and that all deeds, documents, acts, matters, and things, necessary or expedient for the carrying out of the said agreement, be executed and done by all necessary parties under the direction of the Court." Malins, V.-C., 27 Nov., 1875, A. 1807. The following are examples of other orders made under the above Act: "Upon the application of the liquidators of the above named company by summons, dated the 25th Nov., 1875, and upon hearing the solicitor for the applicants, and upon reading an affidavit of, &c., filed, &c., and the exhibits, A. and B., therein referred to, being respectively the proposals for arrangement hereinafter mentioned, and the list of creditors of the said company, an order dated the 12th Nov., 1875, the report of the result of the meeting of creditors summoned pursuant to the said order, an affidavit of filed, &c. It is ordered that the arrangement proposed between the said company and its creditors, contained in the said proposals, (being an agreement dated the 4th day of Nov., 1875, and set forth in the schedule hereto,) be approved and carried into effect.

"THE SCHEDULE REFERRED TO IN THE FOREGOING Order.

"Memorandum of agreement made the 4th day of November, 1875, between the liquidators of the above named company of the one part, and W. C. of the other part. [The agreement is too long to be given here: it provided for the sale of the assets of the old company to an intended new company which was to pay the costs of the winding up, and to issue to the creditors of the old company debentures of the new company, bearing interest at 5 per cent. per annum, to the amount of 10s. in the pound on their allowed claims; the principal secured by the debentures to be payable five years after date. The agreement also provided that application should be made to the Court to direct a meeting of creditors under the Act of 1870]." Wernstill Colliery Co., Hall, V.-C., at Chambers, 2 Dec., 1875, 1911 B.

"Upon the application of J. F. P., the liquidator of the above named company, and upon hearing the solicitor for the said liquidator, and upon reading an order dated the 8th August, 1876, [calling meeting, see infra]. It is ordered that the scheme of compromise or arrangement, pursuant to 33 & 34 Vict. c. 104, resolved upon at the meetings of the shareholders and debenture holders of the above named company, held at the Hotel, at, on the 23rd day of August, 1876, and duly confirmed by the shareholders of the said company at a meeting of shareholders held on Monday, the 11th day of September, 1876, at the offices of the company situate at, be sanctioned and carried into effect, which said resolutions are as follows, that is to say,

(1.) That J. T. P., the liquidator of this company be, and he is hereby authorised to sell to a new company to be formed for

Prec. III.

the purpose of acquiring the same, all the property of this company, subject to the debts and liabilities thereof, in consideration of 8,000 shares of 107. each in such new company, with 67. per share credited as paid up thereon, such shares to be divided among the shareholders of this company in the proportion of one share in such new company for each share now held in this company.

"(2.) That the debenture holders of this company accept in satisfaction and discharge of their claims against such company perpetual debentures to the same amount respectively in a new company intended to be formed for the purpose of acquiring the assets and property of this company, bearing interest at 47. 10s. per cent. per annum from the 30th day of March, 1876.

"(3.) a. That a composition of 128. in the pound be accepted in satisfaction of the debts due to the creditors of this company (other than the debenture holders). b. And that such composition be payable by three instalments at 3, 6, and 9 months respectively from the date of the confirmation of these resolutions by the Court." Northampton Coal, &c., Co., Malins, V.-C., at Chambers, 12 Sep., 1876, B. 1598. The following are examples of orders made calling meetings : "Upon the application of the liquidators of the above named company, and upon hearing the solicitor for the applicants, and upon reading the affidavit of J. H. E., one of the said liquidators, filed, &c., and the exhibits A. and B. therein referred to. It is ordered that a meeting of the creditors of the above named company be summoned by the said liquidators under the provisions of the above named statutes and the Joint Stock Companies Arrangement Act, 1870, for the consideration and approval or rejection by them of the arrangement proposed between the said company and its creditors embodied in an agreement dated, &c., being the said exhibit A. to the said affidavit of the said J. H. E.; and it is ordered that the said meeting be held on, &c., at &c., at the hour of two of the clock in the afternoon, or at such other time as the said liquidators shall appoint, and that the chair shall be taken at such meeting by the said J. H. E., one of the said liquidators, who is to report the result thereof to the Court." Wernstill Colliery Co., Hall, V.-C., at Chambers, 12 Nov., 1875, B. 1693.

"Upon the application of J. F. P., the liquidator of the above named company, and upon hearing the solicitors of the said liquidator, and upon reading an order dated, &c., [supervision order], and an affidavit, &c. It is ordered that the said liquidator be at liberty to call a meeting or meetings of the creditors and debenture holders of the said company for the purpose of considering a scheme of compromise or arrangement to be made between such creditors and debenture holders and the company, and that the said liquidator be the chairman of such meeting or meetings." Northampton Coal, &c., Co., Malins, V.-C., at Chambers, 8 August, 1876, B. 1433.

WINDING-UP PETITIONS.

INTRODUCTORY NOTES.

It would not be within the scope of this work to enter at length into the law and practice relating to the winding up of companies under the Acts of 1862 and 1867, but it may be convenient to state or refer to some of the material points which must be borne in mind in preparing a winding-up petition, and to give a few precedents of petitions, and of the orders usually made thereon or in relation thereto.

By Section 81 of the Act it is provided as follows:

"The expression 'the Court,' as used in this part of the Act, [i.e. Part IV., which by Section 5 of the Act is declared to relate to the winding up of companies and associations under this Act,'] shall mean the following authorities; (that is to to say,)

"In the case of a company engaged in working any mine within and subject to the jurisdiction of the Stannaries-the Court of the Vice-warden of the Stannaries, unless the Vice-warden certifies that in his opinion the company would be more advantageously wound up in the High Court of Chancery:

"In the case of a company registered in England that is not engaged in working any such mine as aforesaid, the High Court of Chancery: "In the case of a company registered in Ireland, the Court of Chancery in Ireland:

"In all cases of companies registered in Scotland, the Court of Session, in either division thereof :

"Provided that where the Court of Chancery in England or Ireland makes an order for winding up a company under this act, it may, if it thinks fit, direct all subsequent proceedings for winding up the same to be had in the Court of Bankruptcy having jurisdiction in the place in which the registered office of the company is situate; and thereupon such last mentioned Court of Bankruptcy shall, for the purpose of winding up the company, be deemed to be 'the Court' within the meaning of the Act, and shall have for the purposes of such winding up all the powers of the High Court of Chancery, or of the Court of Chancery in Ireland, as the case may require."

Meaning of

"the Court."

The expression "engaged in working any mine within and Where subject to the jurisdiction of the Stannaries" in the first Stannary jurisdiction paragraph of the above clause means "formed to work." exists.

Q Q

Petition to
High Court.

Reference to

East Botallach Mining Co., 34 L. J. Ch. 81; 34 Beav. 82; 13
W. R. 197.

The fact that the company has no such mine or has ceased to work it, does not oust the Stannary jurisdiction. Ibid.

It would seem that the Stannary Court has exclusive jurisdiction in the case of a company formed to work mines within the jurisdiction of the Stannaries, although some of the objects of the company are to be carried out beyond the district. Penhale, &c., Co., 2 Ch. 398.

By the joint effect of Sections 16 and 34 of the Supreme Court of Judicature Act, 1873, petitions for the winding up of companies within the second paragraph of the above section must now be presented to the High Court of Justice, Chancery Division.

As to ordering further proceedings in the winding-up, to be County Court. taken in the County Court [See infra, p. 641.]

When winding-up order

will be made.

Sub-section (2).

As to the circumstances under which a company may up :

wound

By Section 79 of the Act it is provided as follows:

be

"A company under this Act may be wound up by the Court as here. inafter defined," [see supra, p. 493, Section 81], under the following circumstances: (that is to say,)

(1.) Whenever the company has passed a special resolution requiring the company to be wound up by the Court.

(2.) Whenever the company does not commence its business within one year from its incorporation, or suspends its business for the space of a whole year.

(3.) Whenever the members are reduced in number to less than seven. (4.) Whenever the company is unable to pay its debts.

(5.) Whenever the Court is of opinion that it is just and equitable that the Company should be wound up."

An order under sub-section (1.) is rarely made.

With regard to sub-section (2.) the jurisdiction given by this sub-section to the Court is a discretionary one, and the circumstance that the business has not been commenced within the year does not give a member a vested right to a winding-up

Metropolitan Ry. Warehousing Co., 15 W. R. 1121. Hence where the delay is sufficiently accounted for and there appears to be a reasonable prospect that the company, if allowed to go on, will succeed, or if the great majority of the members desire to go on, an order may be refused. In re Heaton's Steel and Iron Co., W. N. 1870, 85; Metropolitan Ry. Warehousing Co., ubi supra; Petersburg, &c., Gas Co., W. N.,

1874, 196. But in a proper case an order may be made although the company has purchased a large property and has no debts. Tumacacori Mining Co., 17 Eq. 534; 43 L. J. Ch. 417; 22 W. R. 510.

A company does not suspend business within the section because it abandons one out of several objects, unless it abandons its principal object. Norwegian, &c., Co., 35 Beav. 223; Patent Bread Co., 14 W. R. 907; New Gas Co., W. N. 1877, 65.

With regard to sub-section (3.): The expensive machinery Sub-section of a compulsory winding up will not, where the number of (3). members is small, be applied, unless special reasons for making an order be shown. Hence, where a petition was presented for winding up a company consisting of only seven members and not alleging the existence of debts, it was dismissed with costs. In re Sea and River, &c., Co., 2 Eq. 545.

But an order may be made in a proper case though the number of members be small. In re West Surrey Tanning Co., 2 Eq. 737, where an order was made although there were only 10 members. See also Sanderson's Patent Assoc., 12 Eq. 188. In a recent case an order was made for the winding up of an abortive company (Lacy & Co., Limd.) consisting of seven members only, each holding one 17. share. The petitioner had obtained judgment on an acceptance of the company. Hall, V.-C., 9 Mar., 1877 (W. N. 1877, 71).

Sub-section

(4).

With regard to sub-section 4, see infra, p. 597, et seq. With regard to sub-section (5.), viz.: "Whenever the Court is of opinion that it is just and equitable that the company equitable." should be wound up."

It is well settled that in order to bring a case within the above words it must be of the same description as the cases pointed out in the preceding sub-sections. In re Wear Engine Works Co., 10 Ch. 188; In re Suburban Hotel Co., 2 Ch. 737; 15 W. R. 1096.

The mere fact that the business of a company has been carried on at a loss, and appears likely to be a losing concern, is not sufficient to authorise a winding-up order against the wish of the majority of the members. Suburban Hotel Co., ubi supra; see also Hop and Malt Co., W. N. 1866, 222.

The misconduct of the directors and managers of a company is not necessarily a ground on which the Court will consider it

"Just and