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When winding-up order will be made.
when deemed unable to pay its
(d) The date of the registrar's certificate, s. 18, ante, p. 24. (e) See ss. 6, 48, ante, pp. 5, 52.
(f) The same words in 11 & 12 Vict. c. 45, s. 5, were held to include all cases not before mentioned, which are not to be interpreted otherwise than in reference to matters of the same genus in the previous clauses. In order to justify a windingup order there must be something in the management and conduct of the company to convince the court that it should be no longer allowed to continue. Ex parte Spackman, re Agriculturist Cattle Insurance Company, 1 Hall & T. 229; see p. 235; 1 Mac. & G. 170, 174; see Latter's Cases, 3 De G. & S. 604; Re National, &c. Live Cattle Insurance Company, L. J. 1858, Ch. 669; Sherwood Loan Society, L. J. 1851, Ch. 177; James' Case, L. J. 1851, Ch. 275; Re Monmouthshire, &c. Banking Company, 15 Beav. 74.
In winding-up the affairs of a company the court, notwithstanding the opposition of a large shareholder, has jurisdiction under the Joint Stock Companies Acts to direct a compromise of any claim against the company to be carried into effect, if apparently it is for the benefit of the greater number of shareholders. Re the Risca Coal and Iron Company, 31 L. J., Ch. 283.
With reference to the winding-up, Turner, L. J., expressed an opinion that a winding-up by the court, rather than a voluntary winding-up, should be adopted in cases of enormous magnitude, where vast interests are at stake-where the most ample powers which the law has given must be required to be exercised-where there have been transactions justifying, if not requiring, investigation-where it may be doubtful whether the property of the shareholders will answer the liabilities, and where there is danger to the creditors of the shareholders escaping from their liabilities. He also expressed an opinion that the legislature not having thought proper to provide that the majority of creditors should have power to bind the minority in the choice of proceedings (a provision which, although introduced into the bankrupt acts has not been introduced into the Winding-up Act), he should not be disposed to give any decided weight to the opinion of the majority of the creditors against the minority, upon the question as to the choice of proceedings, without being fully satisfied, not merely by the votes of the majority, but by the facts of the case, that there would be secured to the minority the full dividend which they might obtain if the course of proceedings which they desired were adopted. Re Northumberland and Durham District Banking Company, 2 De G. & J. 378, 379; see ante, pp. 78-81.
80. A company
under this act shall be deemed to be unable to pay its debts,
(1.) Whenever a creditor, by assignment or other
wise, to whom the company is indebted,
or to secure or compound for the same to
(2.) Whenever, in England and Ireland, execu-
(3.) Whenever, in Scotland, the induciæ of a charge for payment on an extract decree, or an extract registered bond, or an extract registered protest have expired without payment being made;
(4.) Wherever it is proved to the satisfaction of the court that the company is unable to pay its debts (d).
(a) This section is nearly the same as 68th section, 19 & 20 Who may apVict. c. 47, which does not contain pl. 4.
(b) A person claiming to be a creditor of a limited company, served a demand under the corresponding section 68 of the 19 & 20 Vict. c. 47, and the company not having paid, secured or compounded for the claim, he presented a petition for winding-up. It did not appear that there was any ground for supposing the company unable to pay its debts, and the company disputed the debt, there being unsettled accounts between the company and the petitioner, so that it could not on the materials before the court be ascertained whether any thing was due to the petitioner or not it was held, that the petition ought not to be dismissed, but it was ordered to stand over till it had been ascertained by proceedings at law whether the petitioner was a creditor or not. Ex parte and re Rhydydefed Colliery Company, 3 De G. & J. 80.
Any creditor or contributory may take advantage of a de
ply for winding-up order.
Definition of "the court."
mand requiring payment of his debt served by another on a company, and the neglect of the company to pay, secure or compound for the same within the time prescribed by sect. 68, clause 1, of the 19 & 20 Vict. c. 47, as a foundation for a pe tition to wind-up the company. Ex parte Owen, Re Island of Anglesea Coal and Coke Company, 4 L. J., N. S. 684-Hol. royd, Com.
A joint stock company completely registered became bankrupt. One of the members of the company had previously been declared a bankrupt and had obtained his certificate. The master placed the bankrupt's name on the list of contributories, and calls were made by the master upon him for contribution to discharge the liabilities of the company incurred before his bankruptcy: it was held, on appeal, that the certificate was a bar to the liabilities, to satisfy which the calls had been made, and that the bankrupt's name ought to be removed from the list of contributories. Chapple's Case, 5 De G. & S. 401; see Roper's Assignees' Case, 3 Id. 113; Ex parte Brown, Re Fenwick, 3 Id. 590.
(c) An assignee of a debt from a company to an amount under 501. upon which judgment had been obtained and execution issued, petitioned in his own name and as attorney of the original creditor for a winding-up order under the Joint Stock Companies Act, 1856, 1857. The commissioner dismissed the petition as the debt was under 50%. and the petition was not presented by the legal creditor; but upon appeal this was reversed, the court considering that there having been execution the amount of the debt was unimportant, and that the petition was regular, it being presented in the name of the original creditor. Re London and Birmingham Flint Glass Company, 28 L. J., Bank. 17; 7 W. R. 539; 1 De G. & J. 257.
(d) A shareholder in a new company gave notice to a third company, to whom the new company had assigned its business, not to pay certain monies due from them to the new company, in consequence of which litigation ensued. The shareholder then presented his petition to wind up the new company it was held, that the existence of suits against the company was not, per se, proof of its insolvency, and the petition was ordered to stand over, with liberty to apply. Re Anglo Australian and Universal Family Life Assurance Company, Ex parte Smith, Re British Provident Society, Ex parte Collins, 1 Drew. & Sm. 113.
A company will not be regarded as unable to pay its debts simply because it had not paid a debt which it disputes, and which the creditor has not established by action. Ex parte Owen, 4 L. T., N. S. 684--Holroyd, Com.
81. The expression "the court," as used in this
part of this act, shall mean the following authorities, (that is 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 which case "the court" shall mean 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 (a) 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 (b); and thereupon such last-mentioned Court of Bankruptcy shall, for the purposes 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 (c).
(a) See form of order under this section, No. 3, post. (b) As to the jurisdiction of the courts of bankruptcy, see Shelford's Law of Bankruptcy, pp. 21-41, 3rd ed.
(c) In the case of a company registered in 1852 as an unlimited company under 7 & 8 Vict. c. 110, and registered in 1856 as a limited company under the Joint Stock Companies Acts, 1856, 1857: it was held, that the Court of Chancery had no jurisdiction to make a winding-up order, the Court of Bankruptcy alone having jurisdiction in such a case. suit which was instituted by an official manager of a company appointed under an order of the Court of Chancery to wind
Application for winding up to be
made by petition.
it up, a defendant may contest the validity of the order and show that the court had no jurisdiction to make it. Plumstead, Woolwich and Charlton Consumers Water Company (Official Manager) v. Davis, 28 Beav. 545; affirmed on appeal, 29 L. J., Ch. 388; 6 Jur. N. S. 309; see Shelford on Law of Bankruptcy, pp. 500-502, 3rd ed.
Where the Court of Chancery had made an order in a winding-up case for the further proceedings to be taken in a particular court of bankruptcy: it was decided, that such court had jurisdiction to commit persons disobeying its order in such further proceedings. Ex parte Hirtzel, Re United General Bread and Flour Company, 30 L. J., Ch. 88.
The Joint Stock Companies Acts, 1856, 1857 and 1858, did not take away from the Court of Chancery the jurisdiction to adjudicate upon a disputed claim against a company which is in course of voluntary winding-up. Lowndes v. The Garnett and Moseley Gold Mining Company of America ( Limited), 31 L. J., Chanc. 451.
A savings bank not registered under the Banking Act must be wound up in bankruptcy. Ex parte Coe, Re the District Savings Bank (Limited), 31 L. J., Chanc. 319.
A petition for winding-up a company was presented before its bankruptcy, but was heard afterwards. There having been no application by the assignee to wind it up, the court held, that notwithstanding the 11 & 12 Vict. c. 45, s. 6 (which prevents any other person than the assignee applying for a winding-up order after a fiat), it had jurisdiction to make the order, and it made the order accordingly. A petition presented by a shareholder to wind-up a company after a petition to make the company bankrupt has been presented, but before any adjudication, is irregular and will be dismissed with costs. Re Mitre General Life Assurance Association, 29 Beav. 1.
Any society registered under the Industrial and Provident Societies Act, 1862, may be wound up under this act either by the court or voluntarily. The court having jurisdiction in such case will be the county court of the district in which the office of the society is situated. 25 & 26 Vict. c. 87, s. 17.
82. Any application to the court for the windingup of a company under this act shall be by petition (a); it may be presented by the company, or by any one or more creditor or creditors, contributory or contributories (b) of the company, or by all or any of the above parties, together or separately; and every order which may be made on any such petition shall operate in favor of all the creditors and all the contributories of the company in the