Imágenes de páginas
PDF
EPUB

Grand Trunk Stafford and Peterborough Railway Company v. Brodie.

as between the plaintiff and the other shareholders, whom he had assumed to represent? How could the plaintiff compel the other shareholders to refund the sums which they had received? Each of them might at least have a right to elect whether he would abide by the transaction, retaining the moneys, or impeach the transaction and refund the moneys. What right would the original plaintiff, Warren, have had to make this election for them? If, therefore, the bill rest solely on the right of the original plaintiff to sue, it cannot be sustained. Several other points affecting the same result were brought forward in argument on the part of the defendants, and some of them were not less unfavorable to the right of the plaintiff to sue on behalf of himself and the other scripholders and subscribers. Some of the objections, indeed, were scarcely attempted to be answered on the part of the plaintiff. The conclusion to which I have arrived on this part of the case, therefore, without reference to the question of the merits, is, that this bill could not be sustained by the original plaintiff, Warren.

It remains to be considered what is the effect of the order for the prosecution of the suit by the official manager. This order depends on the construction of the stat. 11 & 12 Vict. c. 45, s. 53, which enacts, that where any action, suit, or other proceeding shall have been brought or instituted, or shall be pending, by or on behalf of the company in respect of which the official manager shall have been appointed, or by any person duly authorized to sue as the nominal plaintiff on behalf of such company, or by any one or more members or contributories of such company on behalf of himself and the other members or contributories thereof, it shall be lawful for such plaintiff to substitute the official manager as the plaintiff in such action, suit, or other proceeding, by entering a suggestion on the roll to that effect in an action, and by obtaining an order to that effect in such suit, such order to be obtained on motion or petition, without notice; and that it shall be lawful for the official manager thenceforward to prosecute such suit or other proceeding, in the same manner and with the same effect, to all intents and purposes, as if such suit or proceeding had been commenced by the official manager as plaintiff, under the provisions of the act.

It has been insisted, on the part of the defendants, that the case did not at all fall within the provisions of the section in question. But I think that it would be difficult to answer some of the arguments which have been urged on that point, particularly as to the character of the suit, which was instituted on behalf of the scripholders and shareholders, and not on behalf of all, but of all except the defendants. I do not, however, think it necessary to give any opinion upon the question, whether the case falls within the provisions of the section, because what the official manager has to make out to entitle him to maintain the suit is, that he has a better right than the original plaintiff. I am of opinion that the official manager had no better right when he became plaintiff than the original plaintiff had; but the moment he took the suit upon himself, he adopted it, with all the infirmities attached to it, and by these he must abide.

Grand Trunk Stafford and Peterborough Railway Company v. Brodie.

According to the provisions of the section, he was thenceforward to prosecute the suit in the same manner, and with the same effect, as if it had been commenced by him as plaintiff under the act. What he is to prosecute is the original suit, and by that, or by any amendment of it, he must, in my opinion, abide. To construe the words of the section, "as if the suit had been commenced by him," as freeing the suit from objections to which it would have been open if carried on by the original plaintiff, would lead to the most palpable injustice. If that is to be the construction put upon these words, the defendants might find themselves called upon, at the hearing of the cause, to encounter equities which they would have had no opportunity of meeting. It would, in my opinion, require the strongest proof of such an intention on the part of the legislature to warrant the Court in adopting this construction, as contended for by the official manager. I find nothing in the act which at all points to the conclusion that the legislature had any such intention. Independently of the merits of the case, therefore, I am of opinion that the frame of the pleadings is such, that the bill must be dismissed; but as the merits of the case very materially affect the characters of the parties, and are proper to be taken into consideration on the question of costs, I have felt it to be my duty to look into them.

The case made by the bill is, that the company's certificates were, in the first instance, printed in blank, as to the numbers, and as to the names of the two directors by whom they were to be signed; that these certificates were bound up in books, with counterfoils to the certificates, each book containing certificates to the amount of several thousands of pounds; that as they were thus bound up the directors signed their names to the certificates, and put their initials to the counterfoils, and then handed back the books to the secretary for the purpose of countersigning the certificates when issued; that the company had also a share register-book, in which were entered the names of parties who had signed the agreement, and the number of shares which had been issued to each subscriber; that as the signature of the certificates occupied a considerable time, the directors occasionally took the scrip-books home with them for the purpose of signing the certificates, and returning them to the secretary to fill up and sign as they were wanted; that since the time when the defendant Harman became secretary, the scrip-book, No. 39, was in the hands of the defendant Brodie, for the purpose of signing the scrip certificates, which had already been signed by Harrison, or some other provisional director; that it contained certificates for 2,000 shares, none of which had ever been issued; that it was suffered to remain in Mr. Brodie's possession, and was never returned to the office of the company; that the plaintiff, Warren, had lately discovered that the defendants Brodie and Harman had entered into some secret arrangement, by which they might make use for their own benefit, and in fraud of the company, of the scrip certificates contained in the book No. 39, so taken from the office by Mr. Brodie; that the defendant Harrison had assisted Brodie and Harman in their acts or proceedings which were to enable them to practise

Grand Trunk Stafford and Peterborough Railway Company v. Brodie.

these frauds; that the scrip certificates so made use of by Brodie, Harrison, and Harman amounted to 1,490, and the same were spurious scrip certificates, and had been cut from the missing book, No. 39; and that the remuneration they had paid themselves had not been sanctioned by any meeting of the company.

[His honor, after going through the details of the charges, proceeded:]

If the case had to be decided upon the merits, the plaintiff could not have obtained any decree grounded upon these charges; for, in the first place, as to the case against the defendant Mr. Brodie, which I deal with as being the one most strongly relied on, and' which certainly is the strongest case in the plaintiff's favor, I see nothing in the evidence which could justify the court in considering him to have been a party to any such fraud as was alleged, nor indeed any evidence which could lead to the inference of participation in it, beyond the fact of his having been for some time in possession of the book or collection of documents by means of which the fraud was alleged to have been committed, and not accounting for the book, nor for the fact of such possession or retention.

But it would be going beyond authority and beyond principle if I were to hold a party chargeable for a fraud on the mere ground that the document, by means of which the fraud had been perpetrated, had been in his possession, and was not accounted for. And as to the case of wilful default on the part of Mr. Brodie, I think the statements do not raise the question. If such a case were raised, it would be inconsistent with the case of fraud as alleged. As to the defendant Harman, who, being merely secretary of the company, cannot be charged on any other ground than that of fraud, the evidence fails to show that he has ever had possession of the document by means of which the fraud was or could have been perpetrated.

As

Without looking to the defence, therefore, the plaintiff, I think, has failed to substantiate his case. But whatever might have been the result as to this part of the case if the question had depended solely upon the evidence to which I have referred, some passages read by the plaintiff from the answers seem to remove all doubt, for the answer of Mr. Brodie shows that he knew nothing of the matter. I am of opinion that if the case could have been determined upon the merits, the bill must have been dismissed as to the 1,490 shares; and it must also have been dismissed as to the directors' remuneration. to this part of the case, the plaintiff has read the statements in the defendant's answer which completely and satisfactorily explain it. Having regard to the charges of the bill, whatever relief might have been given as to the other matters, these parts of the bill must have been dismissed, with costs. To what extent any decree as to the other matters could have been serviceable to the plaintiff I am unable to judge. But under the circumstances I feel it my duty to dismiss this bill, with costs, to be paid wholly by the official manager. I find it alleged in the answers of some of the defendants, that this suit was instituted by one who had formerly been the solicitor of the company, and that the plaintiff was indemnified by him; and although the

Roberts's Case.

former has been examined on the part of the latter, I do not find that he contravenes that allegation. The character of his evidence satisfies my mind that the suit had its origin in other motives than the benefit of the shareholders of the company. It is not within my province to decide whether the costs the official manager will have to pay ought to be made good to him out of the assets of the company; but after having read through the pleadings more than once, I have no hesitation in stating my opinion to be, that the bill contains charges which (looking at the evidence given in support of it) ought never to have been made; that the suit was improperly constituted in its inception; and that whether it be looked at with reference to its frame, or upon its merits as to the principal question at issue, it ought never to have been adopted by the official manager. The bill must, therefore, I repeat, be dismissed, with costs, to be paid by the official manager.

ROBERTS'S CASE.1

June 25, 1852,

Contributory-Costs.

R. had agreed to become a provisional committee-man, and in answer to a notification that he might have 100 shares, had applied for 100 sharès. The managing committee had resolved that cach provisional committee-man must take twenty-five shares. The managing committee afterwards resolved not to proceed with the company, and applied to R. for 1051. treating it as a call of 41. 4s. on each of twenty-five shares, and stating, that on payment of 105/. R. should be protected from the creditors. R. paid the 105l.:

Held, that he was not a contributory.

Costs of appeal from the master's decision paid out of the estate.

KINDERSLEY, V. C. This case comes on by way of appeal by the official manager from a decision of the Master, excluding the name of Mr. Roberts from the list of contributories. On the part of the official manager it is contended that the case falls within the princi ple of Upfill's case, 14 Jur. 843; s. c. 1 Eng. Rep. 13; because as in that case, so here, there is the concurrence of two conditions: first, that Mr. Roberts was a member of the provisional committee; and, secondly, that he had agreed to take shares. Now, that Roberts was a member of the provisional committee is not in dispute, and it is contended by the counsel for the official manager, that the agreement to take shares is established on three grounds: first, that Mr. Roberts signed the agreement required by the Registration Act, by which he agreed to take shares; secondly, he applied for shares, and had a letter of allotment; and, thirdly, he paid a deposit or call upon the shares thus allotted. On the other hand, it is insisted by Roberts that there was

1 16 Jur. 681.

Roberts's Case.

never any final acceptance of shares, and that the payments were only to free himself from legal liabilities to the creditors, according to his notions of the law then applicable to his case. The question really is, whether it is within the principle of Upfill's case.

Now, as I understand it, the principle of Upfill's case amounts to this-that although a provisional committee-man is not liable as such to contribute to the expenses incurred in endeavoring to form a company which has failed; on the other hand, any individual agreeing to take shares, and even paying a deposit, was not thereby made liable, because they were shares in a company never formed; but still, notwithstanding this, if a provisional committee-man says, "I agree that if the company is formed I will take shares," and that is final and conclusive between him and the promoters, that then he does become liable, for some reason, to contribute to the expenses of the endeavor to form the company. Now, the principle of Upfill's case involves this as a necessary ingredient, that there should be an actual allotment and acceptance of shares; and if there be not, then this does not come within the principle of Upfill's case; and I mean to follow what Lord Cranworth said with reference to such cases, that he would not do anything to extend the principles of Upfill's case. Now the facts are these: On the 10th October, 1845, Mr. Roberts sent a letter to Smith, the secretary, requesting that his name might be placed upon the list of the provisional committee, and his name was accordingly so placed. It does not appear that he ever attended meetings or took part in the management, still he was, with his own concurrence, a member of the provisional committee. On the 10th October, 1845, a meeting, calling itself the acting committee, passed a resolution to the effect, that every provisional committee-man must take twenty-five shares to qualify himself for his office as provisional committee-man. Now, considering that it has been determined that the office of provisional committee-man does not imply that anything has been committed, but only means that out of his kindness and love of mankind the committee-man has published his name and his opinion of the scheme, - it is not easy to see how a man should be required to hold twenty-five shares in order to qualify himself for that function. However, that was the conclusion come to, but whether the resolution was ever communicated to Mr. Roberts in distinct terms does not appear, except so far as the letter of the 28th October goes; and it will be observed, that that letter does not in the slightest degree allude to the resolution as to the twenty-five shares. Annexed to that letter was a form of application for shares, intended to be filled up by Mr. Roberts, which was accordingly filled up and sent by him.

Now, the question is, what was the intention of the letter sent by Smith, and of the letter filled up by Roberts. The letter sent by Smith was a notification that Roberts might have 100 shares, and the form is not," I send you 100 shares, will you accept them?" and then Roberts accepted them; but it is, that, in answer to the notification, Roberts applies for 100 shares, and says, that if they are allotted he will accept them, and pay the deposit. This letter did not clench the matter, so that both parties were bound; but Roberts seems to have

« AnteriorContinuar »