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dates of same being advanced, and costs of aj)plicon and costs of
action. Hoss, on behalf, ^-c. v. Medical Electrical, ^t., Eomor, J.,
13th June, 1895.



Upon applicon, &c., order that B., the off recr and liqr of dft coy, Form 491c.
be at liberty to institute and prosecute such proceedings under sect, 10 Liquidator to
of the Cos ("Winding-up) Act, 1890, against E. and D., the above- proceed under
named pits and two of the directors of the sd coy, and against W. & Co., of ^§90 and'^
the auditors of the sd coy, and each or any of them as he may be l"> indemni-
advised, and order that the sd B. be indemnified against any costs to
be incurred by him in connection with such proceedings out of the
funds in Ct to the credit of this action and repaying assets of the
above-named coy included in the debenture holders' charge, and order
that costs of applicant and of pits and dfts of this applicon be costs in
action. Robinson v. Montgomery sliire Bretcery Coy^ Limtd, Yaughan
Williams, J., 13 May, 1896.

In actions to enforce debentures and debenture stock wbicli cover the whole
assets, it often happens that there is some primd facie case for proceedings against
the directors or other officers of the company for misfeasance or breach of trust. The
debenture holders may prefer not to engage in such litig-ation, although the amount
recovered would belong to them, and the liquidator may have no funds with which
to proceed. Nevertheless the Court sometimes brings great pressure to bear
on the parties to insure the institution and prosecution of the proceedings. The
motive, apparently, is to make an example of those who appear to have miscon-
ducted themselves, even thoiigh the enforced litigation is in the nature of a specu-
lation conducted at the risk and expense of the debenture holders and against their
wishes.



Upon applicon by summons dated, &c., of F., a debenture holder of Form 491d.
dft coy, having leave to attend the proceedings in this action by order t ■■ ,, ,
dated the 23rd May, 1894, and upon hearing counsel, »S:c., order that compromise
B., the off receiver and liqr of the dft coy, be at liberty to compromise ^i-'^f'^-'^^^ce
the proceedings commenced by him under sect. 10 of the Cos Winding-
up Act, 1890, against E. and D., the above-named pits and two of the
directors of the sd coy, and against W. & Co., the auditors of the sd
coy, on the terms of the memdum dated, (fee, and being the exhibit
to the sd afft of M., and order that the costs of all parties bearing



440



WINDING-UP BY THE COURT. [ChAP. XXXVIII.



misfeasance.



on this applicon be their costs in this action. Rohinson v. Montgomery-
shire Brewery Co., Cave, J., 30th Sept., 1896.

Sale of right For order for sale by tender of the interest of the debenture holders and debenture
to proceed for stockholders in any moneys that may be recovered from the directors and others in
respect of any claim by the official receiver and liquidator of the company under
sect. 10 of the Companies (Winding-up) Act, 1890, with several extraordinary pro-
visions with a vie-w to compelling the purchaser to proceed under penalty of forfei-
ture of his rights to the liquidator, see order of Vaughan Wilhams, J., in Wood v.
WoodJiouse and Raiuson, 17th Jan., 1896 ; W. N. (1896) 4 (4).

In the above case the debentiore holders were unwilling to have the proceedings
taken, and in the end the judge made an order for sale of the assets as above-
mentioned.



Order on ap
plication to
enforce pro-
ceedings for
misfeasance.



Form 491e. Upon applicon, &c., of liqr \_for hy'unction to restrain pit from com-
mitting breach of undertaking to proceed against directors for misfeasance'],
and the debenture holders afsd by their counsel undertaking to proceed
■with due diligence with the pending summons against directors of the
coy under sect. 10 of Act of 1890, and undertaking not to compromise
■with any director -without the leave of the Ct, and to present a report
to the Ct every t-wo months, and also undertaking that if the Ct at
any time should consider that the sd debenture holders are not pro-
ceeding with due diligence ■with the sd proceedings, the Ct should be
at liberty to take the conduct of the sd joroceedings out of such hands
as they might then be in, and to place them in the hands of such
person as the Ct might nominate for the purpose. No order on the
applicon, and costs of liqr reserved. Graham on behalf, Sfc. v. Bywater,
Tanqueray, Limtd., Vaughan Williams, J., 6th Feb., 1896.
The above is another instance of the pressure which is exercised.



Reducing
receiver's
security.



Form 491f. Upon the applicon of pit, &c., order that the security given by the
sd J., as receiver in this action, by the recognizance entered into by
him dated, &c., and the bond also dated, &c., entered into by the sd

J., together -with the Society as his sureties be reduced from the

sum of L, the amoimt mentd in the sd bond, to the sum of 1.,

and that the sd bond of the sd society shall as from the date of this

order stand as a security for the sum of /. and no more, and that

the liability of the sd society in respect of the matters mentd in the sd

bond bo, as from the date of this order, limtd to the sd sum of 1.

Orove, on behalf Sfc. v. Ford, Lloyd, ^-c. Co., Vaughan "Williams, J.,
9th Dec, 1895.



Form 491g. Upon applicon of pit, &c., order that C, the receiver and manager
appointed by sd order dated 11th July, 1895, be discharged, and
order sd C. forthwith to pass his first and final account as such receiver



Order to dis-
charge re-



DEBENTURES AND DEBENTURE STOCK. 441

and manager, and that lio do lodgo in Ct as diroctod in the lodgment eoivor and
schedule hereto the amount of the balance, if any, that may be certified ™^'^'*&<^^-
to be due from him on passing such account, and in the event of its
being certified that there is a balance duo to the sd C. as such receiver
on passing the sd account, order that the amount of such balance be
pd to the sd C. as directed by the payment schedule liereto, and upon
the lodgment in Ct by the sd C. of the balance, if any, that may be
certified to be due from him on passing his sd first and final account,
or upon its being certified that there is a balance due to him on the
passing of such account, order that the recognizance dated, &c., entered
into by sd 0. together with, &c., as his sureties, be vacated, and order
that the funds in Ct bo dealt with as directed in the lodgment and
payment schedules hereto. The lodgment schedule provided in the
first column for lodgment of "The balance, if any, that may be
certified to be due from the receiver on passing his first and final
account," and the payment schedule provided in the first column,
* ' Out of money on deposit and any interest, pay the balance, if any,
due to the receiver on passing his first and final account, the amount
to be certified by the Registrar Cos (Winding-up)." Strachey, on
hehalf, 8fc. v. The Carrie Schools, Limtd., Vaughan Williams, J.,
12th Aug., 1896.

Upon motion this day made unto this Ct by counsel for the pit M., ^^^^ ^^^-
and upon hearing counsel for B., the liqr of the above-named deft coy. Order to
and upon reading the order of 27th April, 1892, and a joint afft of S. da'tofor^'""
and X., filed 31st May, 1892, and the exhibit therein referred to contempt,
(whereby it appears that B., on the 24th May, 1892, assaulted and
used violence to the sd X., a clerk in the employ of the pits' solors,
whilst serving the sd B. with a copy of the sd order of this Ct, dated
the 27th day of April, 1892), and a joint afft of the sd B. and H., filed
the 14th June, 1892; And this Ct, being of the opinion, upon con-
sideration of the facts disclosed by the sd affts, that the sd B. has been
guilty of contempt of this Ct, doth order that the sd B. do stand com-
mitted to prison for his sd contempt ; And it is ordered that the sd B.
do pay to the pit M. his costs of this applicon and consequent thereon,
to be taxed by the taxing master. Nichols v. Armstrong Cycle, ^-c. Co.,
Chitty, J., 24th June, 1892. B. 765.

For forma of advertisements convening meetings of debenture holders, and of
sanction to their resolutions, see Part I., p. 903.

In pursuance, &c. I hby certify that the result of the account and Form 493.
inquiry which has been taken and made in pursuance of the judgment Certificate of
herein, dated 4th March, 1881, is as follows : — amount due

The pits and dfts have attended me by their respective solors. holders^ "^^

1. In the third column of the schedule hereto are set forth the



442



WINDING-UP BY THE COURT. [ChAP. XXXVIII.



Form 494.

Another foi-m
of certificate.



particulars of tlie ppal and interest moneys resply secured by and duo

under or in respect of the debentures of 100^. each, issued by the

dft coy in the sd judgment mentd.

2. The present bearers of sd debentures are the several persons or
firms whose names and descriptions are set forth in the second column
of schedule.

The evidence produced consists of the several affts of, &c., and the
sd several debentures.

Schedule.



Serial
No.


Names and Descriptions of
present bearers of Debentures.


Amount of Pi-incipal
and Interest secured and
due under Debentures.


Number of

Debentures,

and their

Numbers.


Total
Amount due.






£ s. d.




£ *. d.


1.


To the plaintiff 0., of ,

merchant.


2,000


20

numbered,

&c.






Interest at 6 per cent, per


202 17 9


, ,


2,202 17 9




annum from 1st July,










1879, to 12th April, 1881,










the date of certificate, less










income tax.








&c.


&c.


&c.


&c.


&c.



inCt.



As to master's [formerly chief clerk's] certificates, see R. S. C, Ord. LV. rr. Go
et seq., and supra, p. 8.

1 . Having regard to the declaration contained in the sd judgment, the
ppty comprised in the charge to which the pit and the other holders of
such of the debenture bonds of the dft coy as were duly issued, are by
the sd judgment declared entitled, consists of —

1,640/. 2s. 3d. consols
and 48/. os. lOd. cash
to the credit of this action.

2. The debenture bonds of the dft coy which were didy issued are
those numbered 1, 2, 4, 5, 6, and 8, the particulars whereof are set forth
in the first part of the schedule hereto. The present holders of such
bonds are the several persons whose names are set opposite to such
numbers resply in the third column of the sd first part of such schedule.

The bonds numbered 3, 7, 9, and 1 0, the particulars whereof are set
forth in the second part of the sd schedule, were not duly issued.

3. Tlicro is duo and owing to the pit and the other holders of sucli
of the sd debenture bonds as were duly issued for princii)al, the
sums sot ojiposito their respective names in the fourth column of
tho sd first part of such scliodulo, amounting altogether to 2,020/.
I have forborne in the statement of the assets to compute interest on
tho sd bonds.

A time was fixed by advertisement for all persons claiming to be



DEBENTURES AND DEBENTURE STOCK. 44'

holdei's of debenture bonds of the sd coy to come in and prove thoir
claims at the Chambers of the judge, which time has elapsed, and no
other person has come in and made any such claim.

By order dated &c., J. P. was appointed recr, without giving
security, of the ppty comprised in the charge, in the place of J. C,
deceased.

Schedule — showing in first part (1) number of debenture ; (2) date ;
(3) names and addresses ; (4) amount duo; (5) total. And in second
part, number of debenture, date, and names and addresses of holders.

For certificate of chief clerk as to result of inquiries in debenture holders' actions,
see Part I., p. 905.

Upon the applicon of the recr in this action, and liqr in the wind- Form 495.



ing-up, &c. Order that the applicant shall be at liberty to pay to Diyijend to
each holder of debentures whose name is stated in the second column debenture-
of the first part of the schedide to the chief clerk's certificate, a ° ^''^•
dividend of bl. in respect of each 100^. debenture held by him, out of
the moneys in his hands as such recr and liqr. Limhert [on behalf &c.]
V. Mineral Hill, 8fc. Co., 27th Mar. 1877. B. 668.

Upon the applicon by summons, &c. of the dfts the C. Bank, &c.. Form 495a.
order that the funds in Ct to be dealt with as directed in the payment Order to pay
schedule hereto, the several payments and carryings over thereby dividends to
directed to be made being in respect of a dividend of 10^. p.c. on the holders,
amount of the principal sums found due on the several debentures
referred to in the third schedule to the registrar's certificate dated, &c.,
and order that the costs of applicants, of the pit and of the dfts and of the
sd M. on sd applicon be taxed, and that such costs when taxed be pd by
J., the receiver in this action, out of any moneys in his hands available
for the purpose. The payment schedule provided : " Sell new consols
— out of proceeds of sale, cash dividends, interest, and so much of the
money on deposit as may be necessary, make the payments to the
several persons and the carryings over to the several accounts resply
mentd in the second column of this schedule, being a dividend at the
rate of 10/. p.c. on the principal sums due in respect of the debentures
referred to in the third schedule to the certificate of the Registrar of
Cos Winding-up, dated the 24th Dec, 1895. Stubher, on behalf, Sj-c. v.
Thomas Daniel 8f Co., Limtd, Vaiighan Williams, J., 20th Oct., 1896.

Upon applicon, &c., order [discharge receiver, taxation of costs~\. And Form 496.
order that the residue of the funds in Ct, after payment of the costs Xnotheir
hereinbefore directed to be taxed, be apportioned amongst the deben-
ture holders named in the first schedide (Parts I. and II.) to the regis-
trar's sd certificate, dated 20th Nov., 1895, in proportion to the principal
sums appearing by the sd certificate to be due to them resj)ly, and that
the amounts so apportioned and the names of the persons to whom



444



WINDING-UP BY THE COURT. [ChAP. XXXVIIl.



sucli amounts are payable resply, be certified by tbe Registrar Cos
(Winding-up), and order tliat the funds in Ct be dealt witli as directed
in the payment schedule hereto, and any person interested is to be at
liberty to apply as he or she may be advised. The payment schedule
provided : " Pay costs to be taxed under this order. Pay sums to be
apportioned to debenture holders by the certificate of the Registrar Cos
("Winding-up) ; " and the payee's column stated, payees to be "Persons
to whom such sums shall by such certificate be certified to be payable."
Eoss, on behalf, Sj-c. v. Medical Electrical, Sj-c, Yaughan Williams, J.,
13th Dec, 1895.



Form 497.

Furtlier con-
sideration in
Chambers.



Upon applicon of pit by summons for the further consideration of
this action, and upon hearing the solors, &c. Tax costs of pit of this
action, including his costs of the applicon, for liberty to commence
this action, and his costs of and relating to the applicon for liberty to
proceed with this action, &c. And order that the funds in Ct be dealt
with as directed by the schedule hereto. Adj oui-n further consideration.

Liberty to apply.

Payment Schedule.

Title : Ledger credit as above.

Funds to be dealt with : — 11,231/. 3 p.c. Annuities.



Particulars, &c.


Payee, &c.


Amounts.


Money.


Securities.


Sell so much of the consols as
will raise £6,062 : 10«., being
the amount of the dividend
of 5s. in the £ on sums men-
tioned in 5th column of 1st
schedule to C. C. C.

Out of proceeds pay

Sell so much more of the consols
as will raise the costs of the
plaintifE M., of S. and E.,
the trustees, &c., to be taxed
under this order.

Out of proceeds pay the said
costs.

SeU so much more of the consols
as will raise £712: 10*., re-
presenting' dividend of 5.?. in
the £ on claims mentioned in
2nd schedule to C. C. C, not
fully adjudicated on.

Carry over proceeds of sale ....

Place on deposit


E. C.

&c.

"Account of dividends
on amount of claims
not yet adjudicated
on."


£ s. d.

7 10
&c.


£ s. d.
11,231



Mowatt V. Castle Steel, 8fc. Co., LimtcL, Chitty, J., 6th May, 1886.
B. 1398.
For forms of foreclosure orders, bco Part I., pp. 908 — 910.



DEBENTUKES AND DEBENTURE STOCK. 445

Upon the applicon by summons, dated, &c., of the pltff, and upon Form 497 a.
hearing the solors for the applicant and for the deft J. B. and for jjook debts
C. J. S. the off recr and liqr of the above-named coy, and upon read- taken in part
ing the judgment, &c., the chief clerk's certificate in this action dated, amount^due^
&c., and the afi'dt, &c. It is ordered that the book debts due to the
deft coy included in the Exhibit A. to the sd afltdt of, &c., be assigned
to the pltfl and the deft J. B., to be held by them in equal shares, and
to be accepted by them at the full amount stated in the sd exhibit, in
part payment (one-half to each), of the amount found due to them
resply by the sd chief clerk's certificate. Foioler v. BrocuVs, ^'c. Co.,
1891. r. 1833. Eeg. 8 August, 1893.

For foreclosure judgments, see Part I., pp. 908, 910; Sadler y. Worloj, (1894) 2
Ch. 170 ; Wehh v. N(itio)H(l Cycle Co., W. N. (ISSG) 97 ; Elias v. Continental Oxygen
Co., (1897) 1 Ch. 511.



446



WINDING-UP BY THE COURT. [ChAP. XXXIX.



CHAPTEE XXXIX.



CONTRIBUTORIES.



Meanino- of
"contribu-
tory."



Liability is a
specialty debt.



Proof in
bankiniptcy.

Mere debtor
not contribu-
tory.



Death of
contributory.



Bankruptcy.



Sect. 74 of 1862. — The term "contributory" shall mean every person liable to
contribute to the assets of a company under this Act, in the event of the same being
wound up : it shall also, in all proceedings for determining the persons who are to
be deemed contributories, and in all proceedings prior to the final determination of
such persons, include any person alleged to be a contributory. [And see sect. 196 (5),

[See, as to contributories, the note to sect. 38, p. 449.]

Sect. 75 of 1862. — The liabihty of any person to contribute to the assets of a com-
pany under this Act in the event of the same being wound up, shall be deemed to
create a debt (in England and Ireland of the nature of a specialty) accruing due
from such person at the time when his liability commenced, but payable at the time
or respective times when calls are made as hereinafter mentioned for enforcing such
liability ; and it shall be lawful in the case of the bankruptcy of any contributory
to prove against his estate the estimated value of his liability to future calls, as well
as calls already made.

A person who is merely a debtor to the company is not a contributory, although
in a sense he may be liable to contribute to the assets. Lee ^- Moor''s Case, 5 Eq. 368 ;
Re European Society, 8 C. Div. 679. So where shares are held by A. in trust for B.
the latter is not a contributory. King^s Case, 6 Ch. 196. And an equitable mort-
gagee of shares is not a contributory. SicheWs Case, 3 Ch. 119.

Sect. 76 of 1862. — If any contributory dies cither before or after he has been placed
on the list of contributories hereinafter mentioned, his jjersonal representatives, heirs,
and devisees shall be liable in a due course of administration to contribute to the
assets of the company in discharge of the liability of such deceased contributory,
and such personal representatives, heirs, and devisees shall be deemed to be con-
tributories accordingly.

Sect. 77 of 1862. — If any contributory becomes bankrupt, either before or after he
has been placed on the list of contributories, his assignees shall be deemed to repre-
sent such bankrupt for all the purposes of the winding-up, and shall be deemed to
be contributories accordingly, and may be called upon to admit to proof against the
estate of such bankrupt, or otherwise to allow to be paid out of his assets in due
course of law, any moneys due from such bankrupt in respect of his liability to con-
tribute to the assets of the company being wound up ; and for the purposes of this
section any person who may have taken tlie benefit of any Act for the rehef of
insolvent debtors before the eleventh day of October, one thousand eight hundred
and sixty-one, sliall be deemed to have become bankrupt.

Where the adjudication is more than a year before the commencement of the
winding-up, and the trustee disclaims, neither the bankrupt nor the trustee can be
placed on the list. Ex parte Buddcn and Roberts, 12 C. D. 288.



CONTRIBUTORIES.



447



Wlien the trustee disclaims shares, the liquidator may prove for damages. Re Disclaimer
mdlett, W. N. (1894) 156. o^ shares.

And so, too, where the adjudication and disclaimer are within the year, or after
the winding-up, but before any call. S. C. But in either case the official liquidator
may prove in the bankruptcy for the damage. See sect. 55 of the Bankruptcy Act,
1883.

The liability to future calls is provable in bankruptcy (see sect. 75, supra), and Proof for
accordingly, where a member becomes bankrupt, his discharge will release him from ^ "^^ ^'' ®"
that liability. Ee Mercantile Mutital Marine Association, 25 C. D. 415.

A trustee in bankruptcy of a contributory usually disclaims where there is a
liability to calls. Where he does not, his name should be placed on the list, for he
is to be "deemed a contributory." See Ex parte Satcher, 12 C. D. 284, as to the
eflPect of these words.

But where a contributory becomes bankrupt after his name has been settled on
the list, his name is not removed. Be Cape Breton, 19 C. Div. 77.

A bankrupt who after bankruptcy acts and is treated as a member, may bo liable.
Bastie's Case, 4 Ch. 274.

Sect. 78 of 1862. — If any female contributory marries, either before or after she Marriage of
has been placed on tlie list of contributories, her husband shall during the con- contributory,
tinuance of the marriage be liable to contribute to the assets of the company the
same sum as she wovild have been liable to contribute if she had not married, and
he shall be deemed to be a contributory accordingly.

Where shares stand in the name of a married woman her husband is, by sect. 78,
made a contributory, and he is liable as such, even though the shares are her
separate property. Ex parte Hatcher, 12 C. D. 284, ubi supra. But see Belcher'' s
Case, W. N. (1883) 94. Where, however, the shares have been placed in her name
since 1st January, 1883, it would seem that he is released from liability by sect. 7
of the Married Women's Property Act, 1882, which declares that "her separate
estate shall alone be liable."

Sect. 90 of 1862. — When an order has been made for winding-up a company Guarantee
limited by guarantee and having a capital divided into shares, any share capital company,
that may not have been called up shall be deemed to be assets of the company, and
to be a debt (in England and Ireland of the nature of a specialty) due to the com-
pany from each member to the extent of any sums that may be unpaid on any
shares held by him, and payable at such time as may be appointed by the Court.

Sect. 95 of 1862. — The [official] liquidator shall have power [with the sanction of Proof in
the Coui't] to do the foUowiug things : (5) To prove, rank, claim, and draw a dividend, bankruptcy,
in the matter of the banki-uptcy or insolvency or sequestration of any contributory,
for any balance against the estate of such contributory, and to take and receive
dividends in respect of such balance, in the matter of bankruptcy or insolvency, or
sequestration, as a separate debt due from such banki'upt or insolvent, and rateably
with the other separate creditors.



List of Contributories.

Sect. 98 of 1862. — As soon as may be after making an order for winding-up the List and
company, the Coui't shall settle a list of contributories, with power to rectify the rectification,
register of members in all cases where such rectification is required in pursuance of
this Act, and shall cause the assets of the company to be collected, and applied in
discharge of its liabilities.

As to rectification after winding-up, see Freservation Syndicate, (1895) 2 Ch. 768 ;
National Bank of Wales, (1897) 1 Ch. 298.



448



WINDING-UP BY THE COURT. [ChAP. XXXIX.



Contribu-
tories in their
own right
and others.



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