A

DIGEST OF DECISIONS

IN ALL THE COURTS OF LAW AND EQUITY

RELATING TO

THE LAW OF JOINT STOCK COMPANIES,

FROM THE DATE OF THE PASSING OF

THE JOINT STOCK COMPANIES ACT (19 & 20 VICT. c. 47).

AMALGAMATION.

Amalgamation of insurance Companies.] An agreement, to which the common seals of the two Companies were attached, was made and executed by two directors of the A. A. Insurance Company and two directors of the B. P. Insurance Society, for the purpose of amalgamating the two companies, the name of the A. A. Company being retained; and the indenture contained a proviso that the shareholders in the A. A. Company should become shareholders in the B. P. Society, and should execute the indenture of settlement of that Company for the same or an equivalent number of shares as they then held in the A. A. Company; that the said execution should be completed by a certain date; and that such of the shareholders as should fail to execute should be precluded from all participation in the benefits of the amalgamation. By a subsequent deed, which recited the former, and also that the union and amalgamation of the A. A. Company, and the business, agencies, property, capital, and "shareholders" thereof, were effected and perfected with the B. P. Society, the property of the A. A. Company was duly assigned, &c. The bill was filed by the A. A. Company against the B. P. Society, alleging that the defendants had received the plaintiffs' assets, but had not satisfied their debts and liabilities, and praying for specific performance of the agreement. A plea that the deed was invalid, on the ground of its non-execution by twenty-eight of the shareholders of the A. A. Company, was overruled, with costs. The Anglo-Australian Insurance Company v. The British Provident Society, 5 Jur. (N.S.) 1280, Ch.; 1 L. T. (N.S.) 126.

a

Amalgamation-Articles of Association.

Amalgamation of Companies-Deed of transfer-Indemnity to shareholder of selling Company.] By a deed of amalgamation dated 1st June, 1858, and entered into between two Companies incorporated under 7 & 8 Vict. c. 110, to which the common seals of both Companies were affixed, all the business, property, effects and liabilities of the plaintiffs' Company were assigned to the defendants' Company, and it was thereby agreed that the shareholders in the plaintiffs' Company should become shareholders in the defendants' Company, and should execute the deed of the latter. It was also agreed that the shareholders in the plaintiffs' Company should, out of the funds of the defendants', be held harmless and indemnified against any and all liabilities in respect of the plaintiffs' Company. Actions and suits were afterwards brought against the plaintiffs' Company, and a bill was filed for a specific performance of the agreement for indemnity contained in the deed of amalgamation. Stuart, V.C., held, that, there being a common fund, composed of the assets of the two Companies, the Anglo-Australian Company and the shareholders in the plaintiffs' Company, both those who executed the deed of the defendants' Company, and those who did not, were entitled to be indemnified out of the assets of the defendants' Company. On appeal, the decree was varied, limitating the indemnity to those only who had executed the deed. The AngloAustralian Assurance Company v. The British Provident Assurance Society, 6 L. T. Rep. (N.S.) 68, 517.

Compensation to directors.] Directors of a Company, when amalgamated with another Company, received from the latter a large sum for compensation, the particulars of which they withheld from their members. Held, that they were trustees of the money for the members, and they were ordered to pay it into court. Gaskell v. Chambers, 26 Beav. 360.

See CONTRACT, INSURANCE COMPANY, POWERS.

ARTICLES OF ASSOCIATION.

Minutes of meetings-Evidence-Action for call-19 & 20 Vict. c. 47.] By the Articles of Association of a Joint Stock Company a call was to be deemed to have been made at the time when the resolution authorising it was passed; but notice of it was to be given to every shareholder, notifying that it had been made, and in any action for a call it should be sufficient to prove that the defendant was holder of the shares, and that such notice had been given, and should not be necessary to prove any other matter. And further it was provided that minutes should be made of all resolutions of directors, and any such minutes, if signed by any person purporting to be chairman of any meeting of directors, should be receivable in evidence without further proof. The minute of the resolution for a call was not signed, but at a subsequent meeting a minute was signed (not by the same chairman) confirming the former one. In an action for a call, this second minute being the only evidence that the call was made: Held, that the articles did not dispense with proof of the call, and that the proof was not sufficient. And, semble, that there was no

Articles of Association-Banking Company.

valid call, the minute of it not having been signed. The Cornwall Great Consolidated Lead and Copper Mining Company v. Bennett, 29 L. J. 157, Ex.

BANKING COMPANY.

Scire facias-Bankruptcy.] A plaintiff who has obtained judgment against a Joint Stock Bank, established under the 7 & 8 Vict. c. 113, may proceed by scire facias on the judgment against the shareholders in the Company, and is not limited to the remedy given by the 13th section of that act. The provision in the 7 & 8 Vict. c. 111, s. 10, that no execution in respect of any debt proveable against a banking Company under that statute shall be issued against any member or former member of the Company till after the debt shall have been proved, only prohibits the issuing of the writ of execution, and not the obtaining judgment on scire facias. Cleeve v. Harwar; White v. Farmer, 3 Jur. (N.S.) 190, Ex.; 29 L. T. 12.

Execution against shareholder.] Where a party has obtained judgment against a Joint Stock Banking Company, and it appears to the court that there would be no answer to a scire facias against a shareholder, the court must, on the application of the creditor, issue execution against such shareholder under 7 & 8 Vict. c. 113, s. 13, and has no discretion. Thompson v. The Universal Salvage Company overruled. Morris v. Royal British Bank, 28 L. T. 124, C. P.

Execution against shareholder-Fraud-Register, effect of, as evidence.] Where the name of a person is on the register of shareholders of a Joint Stock Banking Company, it is no answer to an application by a creditor for leave to issue execution against him upon a judgment obtained against the Company that he was induced to become a shareholder by fraudulent misrepresentations, he not having repudiated his character of a shareholder until after the bank stopped payment, when he demanded back the money paid by him. The fact of the name of a party appearing on the register of shareholders is primâ facie evidence of his being a shareholder, although the register may be informal. Henderson v. Royal British Bank, 26 L. J. 112, Q. B.; 3 Jur. (N.S.) 111; 28 L. T. 286.

Pleading several matters of defence to action by banking Company.] In an action by a banking Company established under the 7 Geo. 4, c. 46, and suing as a Company registered under the 20 & 21 Vict. c. 48, s. 6, the court allowed the defendant to plead, together with pleas going to the merits,-first, traverse of registration of Company; secondly, traverse, that the Company was carrying on business as bankers until registration; thirdly, that before registration the Company had stopped payment and ceased to carry on business as bankers; fourthly, nul tiel corporation. But the court refused to allow the defendant also to plead-that before registration the Company had lost their reserve fund and more than one-fourth of their paid-up capital, whereby they ceased to carry on legally the business of bankers. Liverpool Borough Bank v. Mellor, 3 H & N. 551.

Banking Company-Calls.

Termination of project-Return of deposits.] The directors of a projected banking Company, not being able to carry out the project to its full extent, determined upon winding-up the affairs and returning to the applicants for shares the full amounts of the deposits made by them. Deposits amounting in the whole to two-thirds of the amount deposited had been returned to the depositors, and the remainder was in course of payment. On bill filed by purchasers of shares or intended shares, who were dissatisfied with the termi nation of the affairs of the proposed Company: Held, that the directors were justified in the course they had taken, it being morally impossible that the project could have been carried out in its integrity, from the events which had happened. Bank of Switzerland v. Bank of Turkey, 5 L. T. (N.S.) 549, Ch.

How far the branches of a Joint Stock Bank at different places are to be regarded as distinct banks-Cheque.] A Joint Stock Banking Company carried on business by means of branches, at various places; amongst others at G. and B. The Company was one; but each branch kept separate accounts, had separate customers, and in all respects transacted business like a separate bank. Defendant, holder of a cheque, drawn on the G. branch, by a person who kept an account there, got cash for it at the B. branch. The cheque was without laches forwarded by the B. branch to the G. branch. When it was cashed the balance in the G. branch to the credit of the drawer exceeded the amount of the cheque; but when it arrived at G. the balance had been paid away, and the cheque was dishonoured. The Company having sued for money had and received, on the ground of failure of consideration: Held, that they were entitled to recover, as the B. branch could not, under the circumstances, be considered as honouring the cheque, nor as purchasing it, but as taking it from the defendant on his credit, as they might have done a cheque drawn on any other branch: the circumstance that the banks at G. and B. were branches of the same Company, being for this purpose immaterial. Woodland v. Fear, 7 E. & B. 519.

33 Geo. 2, c. 14-Joint Stock Companies.] The Bankers Act, 33 Geo. 2, c. 14, does not apply to Joint Stock Banking Companies, formed under the 6 Geo. 4, c. 42. O'Flaherty v. M'Dowell, 6 Ir. Eq. R. 350. Affirmed on appeal.

See CONTRACT, EXECUTION, SHAREHOLDER.

CALLS.

Charging shares in one Company with call due to another.] A contributor to the liabilities of a Joint Stock Company in course of being wound up under the Joint Stock Companies Winding-up Acts, 1848 and 1849, was ascertained by the official manager to be the owner of shares standing in her name in the books of another Joint Stock Company; it was ordered, that such shares should stand charged with the amount due from her in respect of a call made upon her as such contributory, but without prejudice to a claim of lien upon such shares in respect of a debt claimed by the Company

Calls.

in whose books the shares were standing from the Company in course of being wound up. Re Royal Bank of Australia, re Connell, 25 L. J. 649,

Ch.

Action for calls where part only of shares subscribed for.] A Company, registered under the Joint Stock Companies Act, 1856, brought an action against a shareholder for calls under the 22nd section of that act. It was proved that the Company was formed to consist of 240 shares of 207. each; that it was provided by the articles of association, art. 44, "The number of directors shall be five, three of whom shall form a quorum, and the names of the first directors shall be determined by the subscribers of the memorandum of association." Art. 45. "Until directors are appointed the subscribers of the memorandum of association shall for all purposes of this act be deemed to be directors." Seven persons subscribed the memorandum of association. At a meeting at which three only of them were present, five of their number, of whom the defendant was one, were appointed directors of the Company. The defendant attended meetings as a director. A call was made at a meeting at which three only of the persons so chosen as directors were present. At this time only sixty-eight shares had been subscribed for. Held, that the defendant was not liable to an action for calls, because the directors had not been duly appointed; and the persons who made the call were not a quorum of the subscribers of the memorandum of association. Semble, per Martin B., if a Company is formed to consist of a certain number of shares, and hardly a fourth of the shares are taken up, it cannot be competent to a small portion of such shareholders to make calls and insist on carrying on the Company. The Howbeach Coal Company v. Teague, 5 H. & N. 151; 29 L. J. 137, Ex.; 6 Jur. (N.S.) 275 ; 2 L. T. (N.S.) 187.

Action for-Proof of making.] By the articles of association of a Joint Stock Company, incorporated under the 19 & 20 Vict. c. 47, it was thus provided :-Art. 8. A call shall be deemed to be made at the time when the resolution authorising such call was passed. Art. 10. On the trial of any action against a shareholder to recover any debt due for any call, it shall be sufficient to prove that the name of the defendant is entered in the register of shareholders as a holder of the number of shares in respect of which such debt accrued: that twenty-one days' notice of such call was advertised: that a letter notifying the call has been delivered or sent to the defendant: and it shall not be necessary to prove the appointment of the directors who made such call: nor that a quorum of directors was present, nor any other matter whatsoever. Art. 84. The directors shall cause minutes to be made in books provided for that purpose of all resolutions of the directors; and any such minutes, if signed by any person purporting to be the chairman of any meeting of directors, shall be receivable in evidence without further proof. In an action for calls: Held, first, that, notwithstanding the language of Art. 10, it was necessary to prove the making of a call. Secondly, that minutes not signed by the chairman were not evidence of the call; and that the minutes of a subsequent meeting, confirming the acts of a prior