Bright v. Hutton. partnership before the court. The first act of parliament which it is necessary to refer to is the 7 & 8 Vict. c. 110. I cite this to show that nothing but a company for a "commercial purpose, or for any purpose of profit"- that is, properly speaking, a partnership-was intended to be the subject of this act of parliament; but here the only company that could be said to be formed was a company or provisional association, for the purpose of endeavoring to procure an act of parliament for the formation of a company, which might, perhaps, come within the meaning of a commercial purpose, or for any purpose of profit. Then came the first Winding-up Act, 7 & 8 Vict. c. 111, "An act for facilitating the winding up of the affairs of jointstock companies unable to meet their pecuniary engagements;" but it is clear that this act could only apply to such a company as that any creditor could proceed at law against any shareholder; and the act might be well applied to such a partnership, but not to such a company as the present. Then came the 9 & 10 Vict. c. 28, “An act to facilitate the dissolution of certain railway companies;" but that speaks throughout of a company where a "subscribers' contract" had been executed; and that could never be considered as applicable to an abortive company like the present; for where the subscribers' contract has been executed, there is a partnership inter se. Then came the Winding-up Act of 1848, 11 & 12 Vict. c. 45, and it applies only to all companies, corporate or unincorporate, within the provisions of the 7 & 8 Vict. c. 111. . . . and to all companies which, under the 9 & 10 Vict. c. 28, shall have become bankrupt before the 1st March, 1848, and to all companies, associations, and partnerships to be thereafter formed. Therefore, if this company was not included in either the 7 & 8 Vict. c. 111, or the 9 & 10 Vict. c. 28, it cannot be included within the Winding-up Act of 1848. The interpretation clause of that act does not carry it further. By sect. 3, "the word company' shall mean any partnership, association, or company, corporate or unincorporate, to which this act applies." Then came the 12 & 13 Vict. c. 108, "An act to amend the Joint-Stock Companies Winding-up Act, 1848;" and after reciting that act, it enacted, "that notwithstanding any thing in the said act contained, importing a more limited application thereof, the same shall apply to all partnerships, associations, and companies, whereof the partners or associates are not less than seven in number, whether incorporated or unincorporated, &c., other than and except railway companies incorporated by act of parliament, to which companies such act shall not apply." It is clear, from the language of this act, that it was speaking of something in the nature of a formed company, and not a mere proposal to form a company. Barber's case, 1 Mac. & G. 176; s. c. 13 Jur. 395, will probably be relied on by the other side to prove that this company is within the Winding-up Act, 1848; but there the company was not so completely in fieri; in that case the parliamentary contract and subscribers' agreement had been executed. [He referred here to pp. 431 and 433 of the Appendix to Wordsworth's Joint-Stock Companies Acts, 6th ed.] I submit that the Winding-up Acts of parliament were intended only to apply to cases where there were classes Bright v. Hutton. of persons having like liabilities, and against all of whom the general creditors had legal rights, in which cases it was thought that one or two decisions of the court, either of law or equity, would have settled the legal or equitable rights of the parties; but that they were not intended to apply to such cases as the present, where every individual member, even of the provisional committee, might raise a distinct defence, such as that he had not ordered the goods or authorized the contract. The test of liability in these cases must always be, what would be the result of an action against the party to compel contribution. In Lefroy v. Gore, 1 Jo. & Lat. 571, Sir E. Sugden said, p. 581, "As to the test of liability, I think the case has been fairly put... I agree that unless Mr. Vignoles could have maintained an action against the particular defendant, the plaintiff has no right to call on him for contribution." The liability of parties in actions of contribution is perfectly well known at law, and it is clearly settled, that if one of three sureties pays the whole of the debt, and another of them becomes insolvent or unable to pay his shares, the one who paid the debt can only sustain an action. against the third surety for the third of the debt. Cowell v. Edwards, 2 B. & P. 268; Browne v. Lee, 6 B. & Cr. 697. But the doctrine of the court of chancery is different in that respect; and there is nothing in the Winding-up Acts to show that any shareholders are to be liable except in respect of their own shares. [Upon Mr. Cooper entering upon his argument on the second point, their lordships said that it would be more convenient that the house should hear the arguments on the first point consecutively.] Bethell, for Hutton. Before going into the argument upon the first point, he submitted that the question upon that point did not arise upon those appeals, for that the order for the winding up of the company was not appealed from, neither was the order of the Master placing Mr. Bright upon the list of contributories; that, in fact, under the 102d section of the 11 & 12 Vict. c. 45, this house had no jurisdiction to entertain an appeal from an order of the Master, but only "from all orders to be made by the court;" and that, therefore, it must be assumed, for the purpose of these appeals, that the company was properly ordered to be wound up, and that Mr Bright was properly placed on the list of contributories. To decide this question upon the acts of parliament, the purposes for which the company is formed must be considered, and these considerations are not to be confined to companies actually and completely formed, but to companies intended to be formed; and looking at the prospectus of this company, it is impossible to say that this was not a body of persons associated together for commercial or trading purposes, as described in the 7 & 8 Vict. c. 111, s. 1; and whatever company would be included in that act must also be included in the Winding-up Act, 1848, for that act is embodied in the latter act. Lord Cottenham decided this in Barber's case, (ubi sup. ;) and it was for the very purpose of including every description of partnerships and associations, except incorporated railway companies, within the Wind Bright v. Hutton. ing-up Acts, that the amending act of 1849 was passed, and to escape from any doubt as to whether the company was for commercial or trading purposes; but, in fact, we do not require the assistance of the amending act. [He cited Ex parte Sharpe, 16 Jur. 579; s. c. post; Barnett v. Lambert, 15 M. & W. 489; Besley's case, 2 Mac. & G. 175; s. c. 14 Jur. 704; In re The St. James's Club, 20 Law J. Rep. (N. s.) Chanc. 650; s. c. 3 Eng. Rep. 218;1 The Sherwood Loan Company, 1 Sim. (N. s.) 165; and Ex parte Woolmer, 5 De G. & S. 117; s. c. 8 Eng. Rep. 128.] C. P. Cooper, in reply, on the first point. At the close of the argument the Lord Chancellor moved that the following question should be put to the judges, which was agreed to by the house: "A railway company was projected and provisionally registered by the promoters; a prospectus was published, containing a list of the provisional committee, which consisted of more than seven persons, appointed with their own consent, in which prospectus it was proposed to establish a railway company, with a capital of 2,000,0007., in shares of 251. each. A meeting of more than seven of the persons whose names had been inserted in the prospectus as the provisional committee was held, at which a provisional committee, and also a managing committee, were appointed, each consisting of more than seven persons, nominated with their own consent. At that meeting it was resolved to establish the company, as proposed by the prospectus for constructing the railway therein mentioned, and to apply for an act of parliament to establish such company, and to procure the necessary plans, &c. for that purpose. 5,000 shares were allotted to different persons, in various numbers, but 500 only were accepted by the allottees. It was ultimately found to be impracticable to procure subscribers for a sufficient number of shares to enable the parties to carry the project into effect, and it was, therefore, by an order under the Winding-up Acts, ordered that the company should be dissolved. Are the provisions of those acts applicable to this case?" The judges asked for time, retired to consider the question, and upon the 26th June the following opinion was delivered by PARKE, B. In answer to your lordships' question, I have to state that we are of opinion that the persons who acted together for the purpose of obtaining an act of parliament to make a railway in the manner therein stated were a company or association within the meaning of the Joint-Stock Companies Winding-up Acts, 1848 and 1849, and that the association of those persons may be dissolved and wound up under the direction of the Court of Chancery, if that court consider that it is fit and proper that it should be so dealt with. The first of these two acts, the 11 & 12 Vict. c. 45, reciting the previous act of the 7 & 8 Vict. c. 111, and the Irish Act, the 8 & 9 Vict. c. 98, and the 9 & 10 Vict. c 28, and the propriety of amending them, and giving further facilities for the dissolution and winding up of joint 1 Since reversed. Bright v. Hutton. stock companies and partnerships, enacts, that the act shall apply to all companies, corporate or unincorporate, within the provisions of the two first-mentioned acts; to other companies not material to the present inquiry; and, lastly, to all companies, associations, and partnerships to be formed after the passing of that act, whereof the capital or the profits is or are divided, or to be divided, into shares, and such shares transferable without the express consent of all the copartners; and by sect. 2, to all associations and companies formed for the purpose of working mines, and benefit societies not certified and enrolled. By the interpretation clause, the word "company" in the act is to mean any partnership, association, or company, corporate or unincorporate, to which the act applies. The body of persons or association in question is not within the latter part of the first section above referred to, for it has no stock divisible into shares; whether it is with in the former (7 & 8 Vict. c. 111) is a more doubtful question. It clearly does not fall within the other act referred to, for it is an act confined to Ireland. The 7 & 8 Vict. c. 111, comprises in it various companies. It embraces commercial or trading companies incorporated; this is not one. But it also applies to any company or body of persons associated together for commercial or trading purposes to which privileges have been granted under the 7 Will. 4 & 1 Vict. c. 73, or which is registered provisionally or completely under the 7 & 8 Vict. c. 110. Now, this is not a company or body of persons associated together directly for commercial or trading purposes-if the making of a railway be such a purpose, which may be questioned; the immediate object of this association is, not the making of a railway, but the obtaining an act to enable them to do so, after subscriptions have been obtained, and a company has been formed. But as the act speaks of such a body being provisionally registered as a condition and a complete company, practically, never is the probable meaning of the section is, that a body of persons associated to obtain an act of parliament to enable them to act as a company for commercial or trading purposes, whose ultimate, though not immediate purpose, is commercial or trading, is within this act; and if so, it would be within the 11 & 12 Vict. c. 45, as that act is expressly made applicable to every company within the provisions of the former act, 7 & 8 Vict. c. 111. If the question depended upon this company or association being within the 7 & 8 Vict. c. 111, we should have to decide whether the construction of a railway were a "commercial or trading purpose;" but it is not necessary to do so. It is, however, material, as it seems, to show that an association of promoters may be dealt with by the Court of Chancery for the purpose of being wound up, if their object is to form a company for commercial or trading purposes. The stat. 9 & 10 Vict. c. 28, shows this more clearly. It provides that persons or companies who, before that act, have entered into a subscription contract, or any other agreement or agreements, in writing or otherwise, for the formation of a company or partnership for making any railway which cannot be carried into effect without obtaining the authority of parliament, and in respect of which no act had been obtained to dissolve the company or partner Bright v. Hutton. ship contract or agreement, whether or not such contract or agreement shall contain any provisions for the dissolution of the company or partnership intended to be thereby formed this statute provides (sect. 2) that it shall be lawful for the committee, provisional directors, or other persons by such contract or agreement intrusted with the management or carrying on of the undertaking, to call a meeting to ascertain if the company shall be dissolved, and whether such dissolution shall be deemed an act of bankruptcy; in which case the af fairs of the company shall be wound up under the provisions of the 7 & 8 Vict. c. 111, otherwise as an ordinary partnership. No such proceeding appears to have been taken in the case supposed in your lordships' question, and therefore that particular statute is not applicable to it. But the statute shows that an undertaking by projectors to form a future company is capable of being dealt with under the 7 & 8 Vict. c. 111, as a company, and may have its affairs wound up and settled by the Court of Chancery under sect. 22 of that act if that court shall think fit. It does not follow that every case of projectors of an intended company ought to be or would be so dealt with. This statute was followed by the 11 & 12 Vict. c. 45, which extended the operation of the prior Winding-up Acts, and gave the Court of Chancery the power, on the application of a contributory, by petition to the Lord Chancellor or Master of the Rolls, to order the dissolution or winding up of the company or association therein referred to, not merely in case of bankruptcy, but in case of insolvency, or a judgment or a decree against the company unpaid, or on a proceeding by a creditor of the company, or if any other matter or thing should be shown, which, in the opinion of the court, should render it just and equitable that the company should be dissolved. This statute, as has been before stated, does not in terms embrace this company, unless it be a company or body of persons formed for commercial or trading purposes, under the 7 & 8 Vict. c. 111; and it contains many provisions which are inapplicable except to regularly-formed companies. In this case of provisional committees, or the projectors of a company, it is now perfectly well-settled law, and acted upon in every court of law in Westminster Hall, that there is no partnership between them, no common power of binding each other merely by such a relation; each binds himself by his own acts only. There are, therefore, very few creditors of such a body collectively, though many of one, two, three, or more of the acting individuals who compose the committee, or are projectors; and so there may be a series of contracts to which there are different contributories, according as they have been authorized by different persons, very few binding all, and those only upon the rare accident of each individual authorizing that particular contract. These inchoate undertakings have generally no joint estate, effects, or credits, of which there can be a manager, (11 & 12 Vict. c. 45, ss. 19, 20); no person can have a judgment or decree against the whole body, except in the rare case that all the projectors have jointly contracted, so that no proceedings could be taken under that statute, (sect. 5;) nor are there any contributories of the entire com |