Page images
PDF
EPUB

Actions and suits to be

stayed after order for

When the order for winding up is made the Act itself provides that no further proceedings shall be taken.

Sect. 87. When an order has been made for winding up a Company under this Act, no suit, action, or other proceeding shall be proceeded with or commenced against the Company winding up. except with the leave of the Court, and subject to such terms as the Court may impose.

Power of
Court to

restrain fur

ther proceedings.

In the case of a Company registered only under the Act of 1862, or the Joint Stock Companies Acts, it is provided as follows:

Sect. 197. The Court may, at any time after the presentation of a petition for winding up a Company registered in pursuance of this part of the Act (part 7), and before making an order for winding up the Company, upon the application by motion of any creditor of the Company, restrain any further proceedings in any action, suit, or legal proceeding against any contributory of the Company, as well as against the Company, as hereinbefore provided, upon such terms as the Court thinks fit.

198. Where an order has been made for winding up a Company registered in pursuance of this part of the Act, in addition to the provisions herein before contained, it is hereby further provided that no suit, action, or other legal proceeding shall be commenced or proceeded with against any contributory of the Company in respect of any debt of the Company, except with the leave of the Court, and subject to such terms as the Court may impose.

In the case of an unregistered Company the following provisions are made.

201. The Court may, at any time after the presentation of a petition for winding up an unregistered Company, and before making an order for winding up the Company, upon the application of any creditor of the Company, restrain further proceedings in any action, suit, or proceeding against any contributory of the Company, or against the Company

as hereinbefore provided, upon such terms as the Court thinks fit.

winding up

202. Where an order has been made for winding up an Effect of unregistered Company, in addition to the provisions herein- order for before contained in the case of Companies formed under Company. this Act, it is hereby further provided that no suit, action, or other legal proceeding shall be commenced or proceeded with against any contributory of the Company in respect of any debt of the Company, except with the leave of the Court, and subject to such terms as the Court may impose.

The difference between the provisions for restraining actions in the case of a Company formed and registered under the Act of 1862, or the Joint Stock Companies Acts, and in the case of Companies registered only under the Act of 1862, or the Joint Stock Companies Acts, and of an unregistered Company, will be noticed. In the first case, proceedings against the Company are to be stayed; in the other cases, proceedings against any contributory of the Company or against the Company. Again, the order is to be made in the first case at the instance of a creditor or contributory, in the others at the instance of a creditor only. It may be important to notice this difference, and, in the case of Companies merely registered and of an unregistered Company, immediately apply for an injunction on the presentation of the petition, at the instance of a creditor. It will be observed that after an order had been made, no action, suit or other proceeding is to be proceeded with except with leave of the Court.

This opens at once the question how far, and in

Petition to be

what cases the Court will give leave. It is apprehended that in no case would such leave be granted unless it is shewn to the Court that the person prosecuting the action is entitled to payment of his claim in full in priority to the other creditors, as if he be a landlord suing for rent. In a case of that kind leave has been given by the Master of the Rolls and the Lords Justices to the landlord to proceed with his distress. (The Exhall Mining Company, 12 W. R. 727.) The Court, in granting leave, may impose such terms as it thinks fit. In Thomas v. Wills (L. J. 1864, 211), the Court of Common Pleas stayed an action commenced by a creditor of a Company against a contributory after the order to wind up.

Other instances where proceedings have been stayed will be found in the Table of Cases.

The next section of the Act of 1862, to which attention is to be drawn in this Chapter, is :

114. Any petition for winding up a Company by the lis pendens. Court under this Act shall constitute a lis pendens within the terms of the Act passed in the session holden in the second and third years of the reign of Her present Majesty, chapter 11, and intituled An Act for the better protection of purchasers against judgments, crown debts, lis pendens, and fints in bankruptcy, provided the same is duly registered in manner required by such Act concerning suits in equity.

To give effect to this provision as a charge upon the lands of the contributory, the lis pendens must be registered at the Common Pleas Office for the registration of judgments.

In most cases, to carry out this provision involves a large expenditure, but notwithstanding that, its effect may be extremely useful as giving an opportunity for the official liquidator to obtain information of any contributory attempting to dispose of his property before payment of his calls. The course has been adopted in Re The Northumberland and Durham District Bank and The Leeds Banking Company. We now come to some provisions introduced to assimilate the law of Companies to that of bankruptcy in reference to the property of bankrupt estates. By the sections next mentioned it is provided as follows:

commence

Sect. 153. Where any Company is being wound up by the Dispositions Court or subject to the supervision of the Court, all dispo- after the sitions of the property, effects, and things in action of the ment of the Company, and every transfer of shares, or alteration in the winding up status of the members of the Company made between the avoided. commencement of the winding up and the order for winding up, shall, unless the Court otherwise orders, be void.

Certain at

163. Where any Company is being wound up by the Court or subject to the supervision of the Court, any tachments, attachment, sequestration, distress, or execution put in sequestraforce against the estate or effects of the Company after executions to the commencement of the winding up shall be void to all be void. intents.

tions, aud

164. Any such conveyance, mortgage, delivery of Fraudulent goods, payment, execution, or other Act relating to pro- preference. perty as would, if made or done by or against any individual trader, be deemed in the event of his bankruptcy, to have been made or done by way of undue or fraudulent preference of the creditors of such trader, shall, if made or done by or against any Company, be deemed, in the event of such Company being wound up under this Act, to have

been made or done by way of undue or fraudulent preference of the creditors of such Company, and shall be invalid accordingly; and for the purposes of this section the presentation of a petition for winding up a Company shall in the case of a Company being wound up by the Court or subject to the supervision of the Court, and a resolution for winding up the Company shall in the case of a voluntary winding up, be deemed to correspond with the act of bankruptcy in the case of an individual trader; and any conveyance or assignment made by any Company formed under this Act of all its estate and effects to trustees for the benefit of all its creditors shall be void to all intents.

It will be seen that these provisions are most important in protecting the property of the Company from being dissipated or taken by preferential creditors. For the law of bankruptcy, as it affects the provisions of section 164, the writer would refer the reader to the works published on that law, but the pith of it is contained in the following note to the section now under consideration in Mr. Wordsworth's edition of the Act of 1862: "If a bankrupt, knowing himself to be on the eve of bankruptcy, voluntarily gives or assigns goods, money or other property to a creditor, with a view of giving him a preference over other creditors, such transfer or assignment is void as against the other creditors; and upon the bankruptcy of the debtor, his assignees may recover the property from the creditors thus preferred on the ground that it is a fraud upon the bankrupt laws. (Crosby v. Crouch, 11

« EelmineJätka »