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to the bankruptcy, on which the assignees disclaimed. The master then placed the name of the bankrupt, who was certificated, upon the list as liable in respect of calls made subsequently to his bankruptcy. It was held, that shares in a joint stock partnership were not property as the shares in an incorporated company, but that they were an interest determinable on bankruptcy, and that the bankrupt's name ought not to be on the list in respect of liabilities subsequent to his bankruptcy, by which the partnership was dissolved, and from that time the bankrupt ceased to have any interest in the concern except for the purpose of ascertaining what was due from or to him at the date of the bankruptcy. Re Liverpool Marine Insurance Company, Greenshield's Case, 5 De G. & S. 599; 16 Jur. 517; 21 L. J., Ch. 733.

The official managers of a defunct banking company in course of winding-up under the Joint Stock Companies Winding-up Acts claimed to prove the sum of 300,000l. against the estate of a bankrupt, who had been reported by the master a contributory to the company, but had offered to take 17,000l. in full discharge of the claim made. Actual proof had not been made against the estate by the official manager, but it appeared there was every probability of their establishing by legal proof the debt claimed. At a meeting of the creditors duly convened for the purpose they approved of the proposed compromise, and authorized the assignees to enter into it subject to the confirmation of the court. The court upon proof of the facts confirmed the resolution of the creditors, and directed the 17,000l. to be paid out of the estate before the actual proof of the debt, it appearing the compromise would be highly beneficial to the creditors. Jones, 23 L. T. 52.


A railway act prescribed a form of instrument for the transfer of shares, and provided that a memorial of the transfer should be entered in the company's books, and that until such memorial should be made, the purchaser should have no share in the undertaking. A shareholder in the railway borrowed money on a deposit of the certificates of his shares, with an assignment executed by him, but with the name of the transferee left in blank, and the blanks were not filled up before the shareholder became bankrupt. It was held, that the depositary had a lien on the shares, and that the lien extended to sums paid by him in respect of calls. Ex parte Dobson, 2 Mont., D. & D. 685.

A shareholder in a company, the settlement deed of which prescribed a specified mode for the transfer of shares, and excluded from being shareholders all who are not shippers of goods, deposited the certificates of his shares by way of mortgage with a person not of the prescribed description, and without following the prescribed mode of alienating it was held, that the deposit created a valid lien as against his assig

Equitable assignment

of shares in a company.

nees on his becoming bankrupt. It seems that reputed ownership of shares must be proved to have existed, and is not conclusively to be inferred from the absence of notice of a lien upon them. Ex parte Pooley, 2 Mont., D. & D. 505.

Trust funds were invested in the purchase of transferable shares in a banking company, in the name of one of the trustees, who executed a declaration of the trusts thereof (the rules of the company not allowing shares to stand in the name of joint owners, cestuis que trust). The trustee was also a proprietor of shares in his own right in the same company, and made various sales and purchases of shares therein. There was nothing to distinguish which were the individual shares held by the different proprietors, the same being in the nature of a capital expressed by quantity. The trustee contracted to assign a certain number of shares to the banking company as a security for advances which they made to him; he afterwards became bankrupt. It was held, that the trustee must be presumed to have transferred or pledged such shares as belonged to himself, and so far as he had shares of his own, and not to have transferred or pledged the shares of his cestuis que trust. That therefore the cestuis que trust were entitled to so many of the shares standing in the name of the trustee at the time of his bankruptcy as could be presumed to be identical with the shares in which the trust funds were invested, from the fact that such a number of shares had always thenceforward stood in the name of the trustee. That, having regard to the deed of association, the banking company had no lien founded on the general relation of partnership on the shares of a proprietor in respect of a debt owing by the proprietor to the company. That the right which the directors of the banking company might have under the deed of association, of withholding their approval of the transfer of the shares, cannot be exercised for the purpose of previously obtaining payment of a debt due to the bank from the proprietor whose shares are proposed to be transferred. That the equitable title of the cestuis que trust to the shares purchased with the trust funds was perfected without notice to the banking company, by the execution of the declaration of trust thereof. That the special contract by the proprietor to assign his shares to the banking company as a security for their advances, gave the bank a lien on the shares then standing in the name of the proprietor, of which he was the beneficial owner; and it seems that the same were not in his order and disposition at the time of the bankruptcy. Pinkett v. Wright, 2 Hare, 120; 12 L. J., N. S., Ch. 119.

Where a bankrupt had contracted to buy some shares in the United States Bank, the certificates of which were left in the hands of the vendor as a security for the payment of the greatest portion of the purchase-money: it was held, that the vendor was entitled, as in the case of an equitable mort.

gage, to an order for the sale of the shares in satisfaction of the unpaid purchase-money, with liberty to prove for the difference. Ex parte Sheppard, 2 Mont., D. & D. 431.

Although the Joint Stock Companies Act, 1856, provides, that unlimited companies shall be wound up in chancery, and limited companies in bankruptcy, yet where a company which existed with unlimited liability before 1856 was, upon the passing of that act, registered under it with limited liability, with no other change in its constitution, and was subsequently ordered to be wound up, the jurisdiction is in the Court of Bankruptcy to deal with it, both before and after such registration. A company so registered and re-registered remains the same throughout, and although the shares are fully paid up the Court of Bankruptcy can make a call upon the shareholders at the time of the second registration to discharge debts which were due from the company at that time. Ex parte Stevenson, re Liverpool Tradesman's Loan Company (Limited), 7 L. T., N. S. 453.

of mar

78. If any female contributory marries either Contribubefore or after she has been placed on the list of tories in case contributories, her husband shall during the con- riage (a). tinuance of the marriage be liable to contribute to the assets of the company the same sum as she would have been liable to contribute if she had not married, and he shall be deemed to be a contributory accordingly.


(a) A woman was, before her marriage, the registered pro- Female conprietor of shares in a banking company. Upon her marriage a settlement was executed, by which the shares were assigned to trustees upon trusts for her separate use, but the trustees did not accept the trusts and the shares continued to be registered in her former name. It was not proved that the company had notice of the marriage or of the settlement. The company was afterwards registered under the Joint Stock Banking Companies Act, 1857, and wound up under the Joint Stock Companies Acts of 1856, 1857: it was held, that the name of the husband, in right of his wife, must be placed on the list of contributories as well as that of his wife.

It seems that notice to the company of the marriage and of the settlement would not have altered the case. Re Northumberland and Durham District Banking Company, Ex parte Luard, 1 De G., F. & J. 533; 29 L. J., Chan. 269.

A man who marries a woman who is an actual shareholder at the time of the marriage and allows her shares to continue in her name, will be liable as a contributory. Robinson's Case, 3 De G. & S. 18; Sadler's Case, Ib. 36. In such a case both the husband and wife ought to be placed on the list, in order


Lunatics and minors.

that she may be liable if she be the survivor. Sadler's Case, supra. A husband not being by law liable after his wife's death for her debts contracted before marriage, is only liable as a contributory to the extent of the debts or liabilities of the company incurred during the marriage, unless the shares have become his property. Fenwick's Case, 1 De G. & S. 557. See Ness v. Angus, L. J., 1849, Exch. 470; Ness v. Armstrong, Ib. 473; Bosanquet v. Shortridge, 4 Exch. 699; Straffon's Executors, L. J., 1853, Ch. 194.

The 38th section of the act 1848, 11 & 12 Vict. c. 45, s. 39, provided, that any contributory being an idiot or lunatic should be sufficiently represented in winding-up proceedings by his committee. Any contributory being a minor was to be sufficiently represented by his father or guardian, if any, or by his mother or otherwise by a next friend, but an order might be made for appointing a guardian of a minor contributory, or to represent any lunatic contributory not so found by inquisition. That section recognized the probability of an infant being a contributory. It is conceived that, in the absence of special circumstances, an infant cannot be considered as a contributory, except where it may be beneficial to him to hold shares with the consequent burdens. See Shelford's Law of Railways, pp. 137, 138, 3rd ed. The infant's shares in an insolvent company would be repudiated. Reed's Case, 24 Beav. 318. But an infant who had represented himself to be of full age would be estopped by his own misrepresentation. Wright v. Snowe, 2 De G. & S. 321; Ex parte Unity Banking Assurance, 3 De G. & J. 63; Ex parte Bates, 2 M., D. & D. 337; Ex parte Watson, 16 Ves. 265. See Shelford's Law of Bankruptcy, pp. 113, 114, 3rd ed.

Where shares were sold to a minor and transferred to him, upon the vendor's declaration that he was of age, and the minor's father covenanted that his son would execute the requisite deed when of age, and indemnify the company against costs, by reason of the minority: it was held, that the father was a contributory. Ex parte Reaveley, 12 Jur. 1065; 1 De G. & S. 550; see observations on this case, Straffon's Executors, L. J., 1853, Ch. 199; Litchfield's Case, 3 De G. & S. 141; as to notice to the company of the infancy of a person to whom shares were transferred, see Stikeman v. Dawson, 4 Railw. C. 585.

It has sometimes happened that shares have been transferred into the name of an infant by some person, with the view of evading the obligations attached to a shareholder, but such a device is ineffectual, as the party beneficially entitled will be held to be liable as a contributory.

Shares were purchased by a father in a joint stock company for his two infant sons, in the name of their uncle as a trustee, and the name of the latter was so entered in the company's register. It was afterwards admitted by the uncle that the

father was entitled to the profits of the shares until the infants came of age, and the uncle agreed thereupon to assign the shares to the infants, and the father agreed to indemnify the uncle in respect of the shares. The father, having received the dividends through the uncle, was removed from the list of contributories. Fenwick's Case, 1 De G. & S. 557.

As to contributories in general, see post, sect. 99, p. 114, note.

Winding-up by Court.

stances under which company may be

79. A company under this act may be wound up Circumby the court as hereinafter defined (b), under the following circumstances, (that is to say,) (1.) Whenever the company has passed a special wound up resolution (c) requiring the company to be by court (a). wound up by the court;

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

(3.) Whenever the members are reduced in number to less than seven (e);

(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 (f).

(a) See 19 & 20 Vict. c. 47, which did not contain pl. 5, but contained the following words," whenever three-fourths of the capital of the company have been lost or become unavailable:" on the construction of which words, notwithstanding the above words, it was held, that by the 72nd section of that act a discretion was given to the court to make such order, upon a petition to wind-up a company, as it thought fit. Re Metropolitan Saloon Omnibus Company, Ex parte Hawkins, 5 Jur. N. S. 922; 28 L. J., Ch. 830; 7 W. R. 636. The petition by a shareholder to wind-up a company on the above ground was dismissed, as the evidence showed a want of bona fides on the part of the petitioner, and it was not clearly shown that three-fourths of the capital of the company had been lost. Ib. The above words appear to be omitted to prevent similar applications by dissatisfied shareholders.

Under what circumstances an unregistered company may be wound-up, see post, s. 199.

(b) Sect. 81, post, p. 103.

(c) As to special resolutions, see ss. 50, 51, ante, p. 53.

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