Imatges de pàgina

construction or the other, it seems to me much more consistent with the terms of the clause to say that this 2nd clause (singularly framed, undoubtedly as it is, but which I think is capable of explanation by reference to a former act) is merely a declaration that mining companies are to be within the operation of the act; and if that be the meaning, it is not material in what words that is expressed. The very words used are, “all associations or companies formed for the purposes of working mines shall be liable to the operation of this act." Now, as to the operation of the act, those who contend in favour of the large construction of this clause namely, that it must include all companies, would leave out the 1st clause altogether. Such construction would leave all the subsequent clauses to operate on the company in question, but it would exclude the first clause. The 1st clause is the most important part of the act, because it describes the companies on which the act is to operate. It enumerates some by description, and gives a general description of others. That being the subject matter on which the act is to operate, the other provisions are directory, and make certain arrangements for the purpose of carrying the object of the act into effect. It may be naturally said, it is singular that the 1st clause, professing to enumerate and describe the companies which are the subject of the act should by a second independent clause enumerate and describe other companies, and say all such companies shall be under the operation of the act. And if there be nothing in the prior acts to explain that, it would have been a difficult matter to speculate on what it was that gave rise to that mode of describing the companies that were to be operated on by the act. But by reference to the former act, 7 & 8 Vict. c. 110, which directed registration of the companies, the next chapter furnishing the means by which those companies were to be wound up, we find that the act excludes banking companies; and these, although they are not the subject-matter of the present act, are all material to be considered in putting a construction upon the terms in question. It excludes banking companies and benefit building societies, which are duly inrolled

under their own acts; and then, by a totally distinct and independent clause namely, the 63rd clause, it excludes from the operation of that act partnerships for working mines on the cost-book principle, and it excludes, generally, all joint-stock companies which have been formed before the 1st of November 1844. So that the act for the registration of these companies, by a distinct clause, from the position in which it stands in the act and from the description of companies to be operated on by the act, excludes mining companies of a particular description, that is, mining companies carried on under the cost-book principle; therefore such mining companies were not operated on by the act of the 7 & 8 Vict. c. 110, nor were banking companies.

There is another description of company on which it is not very easy to understand how these two acts were intended to operate-namely, benefit building societies generally, as distinguished from benefit building societies duly inrolled under their particular acts. Those are the subjects of exception in the 7 & 8 Vict. c. 110, and then comes this act, which proposes to make alterations in that respect, and to include and bring under the operation of this act certain companies which were excluded from the operation of the prior act of the 7 & 8 Vict. c. 110; and for that purpose and in the 1st clause, after providing that this act shall apply to all companies affected by prior acts, which would not include banking companies nor mining companies because they are expressly excepted, it says, “and to all banking companies which would have been within the provisions thereof, if they had not been specially excepted from the provisions of" the act of the 7 & 8 Vict. c. 110. So that with regard to banking companies which are excepted out of the first act, by a distinct exception among the enumeration of the companies to be affected by it, those it includes, by distinctly declaring that it shall apply to all banking companies which would have been within the prior act if they had not been specially excluded. That is the mode in which it gets rid of the exception as to banking companies. But the former act also excepted those benefit building societies which were not duly inrolled according to their particular acts; and why this act dealt with that description of company, together with a mining company in the 2nd section, does not very clearly appear. But the 2nd section does deal with that description of company, and inasmuch as the 7 & 8 Vict. c. 110. dealt with mining companies by a separate clause, it appears to have been thought more consistent with the former act, or safer, to deal also with those companies under a separate clause. And then we find, as the 63rd section of the first act deals with mining companies, the 2nd section of the winding-up act also deals with mining companies. This act therefore having by distinct enumeration in the 1st section, got rid of the exception as to banking companies, in the 2nd section declares that mining companies and this description of building societies shall also be within the operation of the act. It appears to me that this goes a great way to explain what otherwise would not be very explicable : why it was that a distinct clause, finding its position in the act as it does here, was introduced into the act, and goes a great way to shew that the act intended to deal with those mining companies as it had clearly intended to deal with the banking companies, namely, to remove, as far as regarded subsequently formed mining companies, the exception which had been introduced into the act of the 7 & 8 Vict. c. 110.

What would be the effect of the other construction ? It would be this, that having excluded all mining companies carried on under the cost-book principle from the operation of the first act, by this act it would include not only all companies, whether the shares were transferable or not, but every partnership where there was more than one partner engaged, and that whether it existed for a great number of years or was a new company. And this was necessarily the argument on that construction of the act: anything more preposterous than that could not be conceived. There is nothing to confine or to restrict the operation of the act if it applies to all mining companies. Suppose an old mining company carried on by two proprietors jointly, or any number of parties, whether on the cost-book principle or not, the shares

transferable or not transferable, it is made the test that this act was at once to operate on all such companies. That would be a total departure from all the scheme of this act and the former act, and would be putting this association on a footing which is totally inapplicable under this act to any other description of company. But if the words are such as are not capable of being dealt with in any other way, whatever error might have been committed, one would be bound to give effect to them ; but it is a construction that one would be very slow and very unwilling to put, although you might be compelled by the words to adopt that particular construction, but nobody can doubt that it would be acting contrary to the real intention of the act, although that intention may not have been sufficiently expressed. But then would that construction be consistent with the words used? Would that be putting the companies under the operation of the act? The operation of the act is to apply to companies of a certain description,-new companies, companies formed after the passing of the act, or other companies which are to be ascertained with reference to the acts recited. This is not within the acts recited, and is not a new company; therefore it would be a company excluded, or rather not included within the description of the 1st section, which declares what companies are within it. It would be a false construction to put on the 2nd clause, for the sole purpose of doing that which it is impossible to suppose the legislature intended, namely, of operating on all companies, without any restriction or discretion, whether they existed for any length of time, or were carried on upon one principle or another. It appears to me, that that is not only not the obvious intention of the legislature, but that it is much more consistent with the words used (though perhaps not so happily expressed as one could wish,) and with the principle and the obvious meaning of the act, to put the construction on it that the second clause merely meant to add to the description of the companies which were to be affected by the description and operation of the first clause. Upon the construction of the act, therefore, if it had stood there alone, I certainly should think much the safest construction would

be to come to the conclusion which I have and the company not paying it, after a now expressed.

certain length of time giving the company But I confess, that if this company had the opportunity of paying the judgment been within the provision of the act, I debt if they please; but if they do not pay could not have given effect to the order of that debt, so ascertained to be a lawful debt the Vice Chancellor as operating on this by the judgment, it is assumed they canact. The act goes on professing to deal not. That is assumed as a very fair test with companies unable to meet their pecu- under the circumstances to which the act niary engagements : not only have we that was intended to apply. But following as the title of the act, but it is obvious that, another provision is necessarily and from the whole structure of the act, and properly introduced. If a creditor thinks from the injuries intended to be remedied, proper to sue an individual shareholder that it was not intended to deal with com- and recover a judgment, or shall be in the panies that were solvent, and carrying on course of recovering his judgment against their business, that might be prosperous, that individual shareholder, the shareor, at least, could not come within the de holder being so called upon to pay or scription of companies “unable to meet their liable to pay more than he ought, is then pecuniary engagements." For carrying that authorized to apply to the company to provision into effect, the act furnishes the relieve him from this liability, and if the means in the event of the companies failing company do not, within a certain time, to answer the purpose for which they were relieve him from the liability, that is also created, to facilitate the recovery of debts considered as a test of the condition of the from such companies, to do justice between company, and of their being in a condition shareholders, some of whom might be called to require the winding up of their affairs, upon to pay the obligations of the company namely, that they are not in a position to beyond their share of the responsibilities. meet their pecuniary engagements. Now if The object of this act and of the former these circumstances occur where the tests act was to afford some test, by which it do not at all prove the point under investigashould be ascertained whether the com- tion,-if these facts occur, but afford no pany did or did not fall within the descrip- proof of the insolvency of the company, or tion of a company unable to meet their their being unable to meet their pecuniary pecuniary engagements,-in short, a sort of engagements, the act loses the test which act of bankruptcy of the company. The was intended to be applied, and then the former act dealt with it as an act of bank- question is, whether the Court, exercising ruptcy, called it an act of bankruptcy, and a discretion, for so ample a discretion is provided certain tests. The same identical given to the Court, would be right in extests that are applied to traders as evidence ercising its discretion and putting the act of their insolvency are applied to the com- in operation upon such a test, the circumpanies, and, in the event of the test being stances not coming up to that which is applied, and the company not being able required to be proved before the company to remove that test, this statute considers ought to be subjected to the operation of it as an act of bankruptcy in effect, and the act. therefore subjects the company to the oper- Now, then, what are the facts, and do ation of the provisions for winding up the they prove what the act intended should concern. But all those tests are simply be established before the discretion of the for the purpose of coming to a safer con- Court should be exercised for the purpose clusion as to whether they do or do not of bringing them within the operation of fall within the description of companies the act? Here is a quarrel between a whose affairs require winding up, and as shareholder and the company. The shareto whom therefore the policy of the act holder having bought certain shares and was intended to apply. Now, among others, having for some reason or other (whether the test is proposed, of a creditor of the com- good or bad is quite immaterial) declined pany havingajudgment against thecompany, to pay the future calls, the company says, demanding payment against the company, “You must pay those calls." He says,

“I will not pay those calls. I insist upon it, I have a right to retire from the company without any obligation to pay the calls that have been made." That is the contest between the company and the shareholder. Now the shareholder, taking the statement from his own affidavit, considers that the action brought by the creditor was not brought by the creditor bona fide, for his own purposes, to recover the debt which he claims against the company, but that he was set on by the company or the officer of the company, for the purpose of indirectly compelling this shareholder to pay his calls —that is to say, to create a claim by him against the company, which they might set off against the calls which they demanded from him; and according to his own representation, that was the reason why this action was brought against him. He takes the course which the act prescribes, of giying notice to the company. As a matter of course, if that was their purpose, and the shareholder is right in supposing that was the object of the action, they did not regard that notice, because they intended the creditor should get judgment recovered against the shareholder, and then to tell him “we will not reimburse you without deducting the amount of the calls, and so obtaining payment of the calls by deducting them from the debt to which we are liable." That was the course suggested. The terms of the act are complied with, because here is an action brought by a creditor of the company against a shareholder; there is notice given by the shareholder to the company; and so far in point of fact, the test arises which the act intended should be considered a fair criterion of the position of the company. That is not what the act intended : the act intended all this transaction as a test of insolvency, and a proof of incapacity to meet their engagements. The transaction here does not prove it at all; the whole machinery is adopted for a totally different purpose, and has no reference whatever to the capacity or incapacity of the company to pay their debts; and that I have, not from the statement of the company, but from the statement of the shareholder who represents that, making it a ground of complaint against the company, it is true; but by doing so he keeps them out

of the operation of the act which he has endeavoured to enforce.

Then, as to the discretion which the act gives the Court as to whether it will or will not put the act into operation against the company. The 12th section provides “ that on the hearing of any such petition, it shall be lawful for the Court, if it shall not think fit in the first instance to make an order absolute, to require any parties to shew cause, within such time as the Court shall think fit, why the company should not be dissolved and wound up." And then it provides, that it shall impose any terms it thinks just, or, if the Court thinks right, “ to refer it to the Master to make preliminary inquiries as to the necessity or expediency of the dissolution and winding up, or of the winding up of such company; and it shall be lawful for the Court, in case no sufficient cause be shewn, or in case the terms of any such conditional order be not fulfilled, or in case it shall appear from the Master's report, upon such reference as aforesaid, that the dissolution and winding up or the winding up of any such company under this act is necessary or expedient, to make such order absolute as hereafter mentioned," leaving it to the discretion of the Court either to act immediately, or to put the parties in a position to relieve themselves from it, by performing such terms as the Court might think right, or to refer it to the Master to inquire whether, under the circumstances, it is expedient and proper that the company should or should not be wound up. Now, as to the affairs of the company, it is not easy to come to any satisfactory conclusion, from what is stated by the purser of the company. There are things stated in the affidavit not satisfactory, and it does not appear very distinctly what the result of the figures stated in that affidavit would be, but I find no test of insolvency. If I believe the purser's affidavit there certainly is not only no insolvency, but there is a state of things promising success for the future. Their not having paid the dividend on the new adventure in the mine is no proof that the affairs of the company are not prosperous. We know that the first expenditure may be very large, and till that expenditure begins to produce its fruits, it can

hardly be expected that a dividend should if the construction of the act had been such be paid among the shareholders. But the as the petitioner contends for, he has not a affidavit states that the property has in case in point of circumstances entitling creased to more than the obligations they him to come to the Court, I think I am owe, and this affidavit would shew a flou- bound to dismiss the petition with costs. rishing condition. But what I am to look to is not whether this affidavit shews a flourishing condition of the affairs of the company, but whether there is any evidence V.C. 1

CHIPCHASE V. SIMPSON. before me of their being in such a state as, Jan. 19. S under the provisions of the act, to require a

Will-Bequest to a Woman for her "or" winding-up. I do not find that test which

her Children's Benefit-Absolute Gift. the act affords; it is inoperative under existing circumstances, and I do not find any A testator, by his will, gave 1,0001. to satisfactory conclusion that it is so from his sister for her or for her children's sole any other circumstances stated.

use and benefit for ever. By a codicil to Being of opinion that the second clause his will, he recited that he was desirous of has not the construction contended for, the making further bequests in relation to his other matter does not arise; but there being sister and her family; and then gave, amongst two grounds, either of which would be other benefits, a further sum of 1,0001. to sufficient foundation for the order I make, his trustees to pay the dividends to his I thought it right for the parties to be sister for life, and then for her children : aware that on both grounds I am of opinion -Held, that the 1,0001. bequeathed by the this is not a case in which it is right to will was given absolutely to the testator's make any order. And I cannot but think sister. it is an error to use this act for the purpose of settling controverted points between the George Best, by his will, dated the 6th shareholders and the company: it was not of March 1841, made various bequests and intended for that purpose at all. The legacies, and amongst others was the folorder uses it for that purpose, and decides lowing: “Thirdly, I give and bequeath that there is to be a set-off, and makes unto my sister Jane Chipchase 1,0001. arrangements to settle the disputes between British sterling currency, for her or her the shareholder and the company. There children's sole use, benefit and behoof for is no such object in the act; the object ever. I desire my executors to pay the was on behalf of all creditors and share. same to her as soon as practicable." On holders, if a case appeared which would the 27th of January 1842 the testator made make it expedient that the affairs of the a codicil to his will, and thereby confirmed company should be wound up, to make all the bequests contained in his will, and arrangements for that purpose. That was being desirous of making further bequests the object of the statute; and to apply the in relation to his sister J. Chipchase and machinery of this statute for the purpose her family, the testator directed his exeof settling disputes about calls or sharescutors to purchase a farm in America for or payments by the shareholders of the 6001., and to allow his brother-in-law, company, appears to be a matter totally John Chipchase, to occupy the same during and entirely collateral to the object of the his life, and after his decease to become act, foreign from the purposes of the act, solely the property of his sister and her and one therefore which the Court would children for ever; and in order to enable not use the machinery of the act for the the said John Chipchase to properly stock purpose of carrying into effect. I think, and manage the said farm, the testator gave therefore, the order of the Vice Chancellor and bequeathed to him the sum of 4001. must be discharged, and the petition before to be paid to him for his sole use and him dismissed.

benefit for ever, or in case of his death to The ground upon which I have decided be paid to his sister Jane, or in case of her this case is the construction of the statute; death then to be paid to her children, share but, at the same time, being of opinion that and share alike. The testator then con


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