enough to cover such a case as the one just referred to. sec. 37 of the English Bankruptcy Act, 1883.

And see

And see further and consider Parbury's case, 30 L. J. Ch. N. S. 513; 7 Jur N. S. 503; 4 L. T. N. S. 62; 3 De G. F. and J. 80, which is fully set out infra.

See on the whole subject Buckley 4th ed. 176–180.

In Lindley on Partnership, 4th ed., p. 1117, the effect of the following sections of the English Bankruptcy Act, 1869,-sec. 15, which describes what property of the bankrupt is divisible among his creditors; sec. 22 which relates to the possession, &c., of the bankrupt's property by the trustee; sec. 23 which relates to the disclaimer by the trustee of a bankrupt's property; and sec. 31 relating to the proof of debts—is thus given. 1. That shares do not vest in the trustee, so as to make him a shareholder in place of the bankrupt. Cf. Baba Saheb Damaskar's case, supra, sed quære, in India as to the effect of sec. 7 of the Indian Insolvent Act, as to which see per Turner, L. J. in Parbury's case, 3 De G. F. and J., p 91.

2. That the trustee can, without the concurrence of the bankrupt, sell and transfer or otherwise dispose of his shares for the benefit of his estate. Cf. ss. 21, 30 and 31 of the Indian Insolvent Act.

3. That this right can only be exercised by the trustee, subject to the same conditions as regards consents, payment of calls in arrear, and the like, as the bankrupt himself would have had to comply with if he

had been the transferor.

4. That if the shares cannot be disposed of beneficially for the estate, they may be disclaimed by the trustee, and so get rid of altogether.

5. That inasmuch as under s. 31 [of the English Bankruptcy Act] all calls due and to become due can be proved, the bankrupt when discharged will be free from liability in respect of the shares, whatever the trustee may do with them. Cf. however, Baba Saheb Damaskar's case, Punnett v. Vinayak Pandurang, Furdoonjee's case, and Mr. Buckley's opinion cited supra, and IN RE Mercantile Marine Association, 25 Ch. D. 415.

6. That practically even calls in arrear will not be proved if the Company has a lien on the shares, and they are worth more than the amount due in respect of them; for the Company will then retain the shares and realise them if not redeemed.

7. That practically calls in arrear will not be proved if the shares are transferred by the trustee; (but it is apprehended that future calls can be proved in this case. If they cannot, the bankrupt may still be liable in some cases as a past member, which evidently is not intended : note to p. 1118) for the Company will look to the transferee for all future calls.

8. That future calls will be proved if the trustee disclaims or does nothing; the amount of injury sustained by the disclaimer being estimated under s. 23 at the amount of the debt which, but for the disclaimer, would be provable under s. 31.

The effect of an order absolute for the discharge of an insolvent under the Indian Insolvent Act was fully considered in ex parte Parbury, 30 L. J. Ch. N. S. 513; 7 Jur. N. S. 503; 4 L. T. N. S. 62; 3 De G. F. and J. 80. The order of dates was as follows: 26th May 1849 windingup order of the Company: 4th June 1853 order nisi for the discharge of Parbury the insolvent, and a shareholder in the Company, notice whereof was given in the Presidency and London Gazettes; 1st July 1854, order absolute for Insolvent's discharge; 25th March 1868, Parbury's name was placed on the list of contributories and on the 9th February 1860 a call was made on him. The Company were not named in the insolvent's schedule as creditors. It was held (Knight Bruce, L. J. dub.) as to the effect of this omission) that by the order absolute for his discharge under the Indian insolvent Act, Parbury was discharged from all

Contribu

of death.

liability for the debts which the contributories were called upon to pay. The Company had ceased to exist before the insolvency, and no new debts could be incurred; and before the insolvency all the events for which the demand arose had happened, and all the facts necessary to ascertain the proportionate amount to be contributed by Parbury were extant and capable of proof. It was further held (Knight Bruce, L J. dub.); that the Indian Insolvent Act does not make the specification in the schedule of the debt or liability a condition precedent to a discharge for the debt or liability, nor is the discharge confined to debts in the schedule. Lastly, it was held that Parbury was not liable in respect of the costs of the winding-up, inasmuch as these expenses were only incidental to the debts to be paid, and did not fall upon one who was entirely discharged from these debts. As to the liability of contributories for the costs and expenses of windingup see sec. 61 supra (pp. 53, 54) and note thereto.

126. If any contributory dies either before or tories in case after he has been placed on the list of contributories hereinafter mentioned (i), his personal representatives, heirs and devisees shall be liable in 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 contributories accordingly (ii).

Petition of representatives.

Sec. 76 of the English Companies' Act (25 and 26 Vic., e. 89), 1862; and sec. 99 of the Indian Companies' Act X. of 1866, verbatim.

(i) Sec. 147 post.

(ii) Secs. 148, 154 post.

Cf. Act XIX. of 1857, sec. 64.

As to the exoneration and liability respectively in the hands of a legatee of stock specifically bequeathed see sec. 157 of the Indian Succession Act X. of 1865 and illustrations thereto; and the note thereto in Henderson, p. 187.

Per Earl Cairns, L. C. in Buchan's case, 4 Ap. Ch. 549, 538. An executor whose testator has held shares in a Joint Stock Company has generally one of two courses open to him. He may have the shares transferred into his own name, and become to all intents and purposes a partner in the Company. He may, on the other hand, not wish to have the shares transferred into his name, and he ought in that case 10 have a reasonable time allowed him to sell the shares, and to produce a purchaser who will take a transfer of them. Per Lord Selborne ibid. p. 595, the case of trustees who take a transfer in their names differs, in principle, from that of executors who merely intimate their title as executors to a Company, in order to claim and exercise the rights which belong to them as the legal representatives of their testator. Trustees have not, in any proper sense of the word, a representative character, but executors have Having representative rights it is impossible that they should not be entitled to produce the legal evidence of them to the Company, for the purpose of having their title in some way recorded and recognized, without making themselves personally liable."

In that case the executor had more than twenty years before the winding-up authorized the stock to be transferred into his name, and had ever since acted as a shareholder.

By sec. 154 post, if the representative contributory makes default in payment of any sum ordered to be paid by him, proceedings may be taken

for administering the movable and immovable property of the deceased contributory.

"Whether the shareholder die after the commencement of the winding"up, and either before or after he has been placed on the list of contri"butories, or whether he have died many years before the winding-up, “but his shares have not been either personally accepted," [see Buchan's “Case, ubi supra) or otherwise disposed of by his executors, the liability "of his estate is the same, and is that which would have been the "liability of the shareholder if living.

"Executors then should be careful before proceeding to distribute 'their testators' estate among the beneficiaries, to see that they have "provided for the contingent liability in respect of such shares as they "have not disposed of, for otherwise they may become personally liable." "Buckley, pp. 180, 181, 4th ed.

"Executors, when made contributories in respect of their testator's shares, are liable of course only in their representative character, and not personally, unless they have personally accepted the shares, or except so far as they have made themselves liable for a devastavit," ibid., p. 182.

of insolvency.

127. If any contributory becomes insolvent, Contribueither before or after he has been placed on the list tories in case of contributories, his assignees shall be deemed to represent such insolvent for all the purposes of the winding-up, and shall be deemed to be contributories accordingly, and may be called upon to admit to prove [? proof] against the estate of such insolvent, or otherwise to allow to be paid out of his assets in due course of law, any monies due from such insolvent in respect of his liability to contribute to the assets of the Company being wound up(i).

Sec. 77 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, substituting the words "insolvent" for "bankrupt" and "prove" for "proof" in that Act; and sec. 100 of the Indian Companies' Act X. of 1866, verbatim.

Cf. 12 and 13 Vic., c. 108, s. 14. The section in the English Act concludes thus: "and for the purposes of this section any person who may have taken the benefit of any act for the relief of insolvent debtors before the eleventh day of October one thousand eight hundred and sixty-one shall be deemed to have become bankrupt."

(i) See sec. 125 supra.

See the note to sec. 125 supra.

In IN RE West of England Bank ex parte Budden and Roberts, 12 Ch. D. 288, it was held that in the winding-up of a Company a shareholder who has become bankrupt cannot be placed on the list of present coutributories, neither can his trustee in bankruptcy, whether prior_or subsequent to the winding-up, be on the list if he has executed a disclaimer under sec. 23 of the English Bankruptcy Act, 1869; but the official liquidator of the Company was held entitled to prove in the bankruptev in respect of the injury sustained by reason of the effect of the 23rd see of that Act. See IN RE Cape Le Breton Co., 19 Ch. Div. 77. In the English Companies' Act, 1862, there follows a section 78, providing that if any female contributory marries either before or after she has been placed on the list of contributories her husband shall, during the continuance of the marriage, be liable to contribute to the assets of the Company the same sum as she would have been liable to

Circumstances under

contribute if she had not married, and he shall be deemed to be a contributory accordingly. (See IN RE West of England Bank, ex parte Hatcher, 12 Ch. D. 284, and Mr. Buckley's note 4th ed. 183. In India sec. 4 of the Indian Succession Act X. of 1865 effected a complete change in the status of married women domiciled in India (see the section Appendix post), consequently the Indian Companies' Act does not contain a section corresponding to see. 78 of the English Companies' Act. 1862. As to some of the effects of sec. 4 of the Succession Act, see Miller v. Administrator General of Bengal, I. L. R. 1 Calc. 412, and Proby v. Proby, I. L. R. 5 Calc. 357; 5 C. L. R. 1.

Winding-up by Court.

128. A Company under this Act may be wound which Com- up by the Court as hereinafter defined) under the pany may be following circumstances (that is to say) :wound up by (a) whenever the Company has passed a special resolution(ii) requiring the Company to be wound up by the Court;

Court.

(b) whenever the Company does not commence its business within a year from its incorporation, or suspends its business for the space of a whole year; (e) whenever the members are reduced in number to less than seven(iii);

(d) debts;

whenever the Company is unable to pay its

(e) whenever for any other reason of a like nature the Court is of opinion that it is just and equitable that the Company should be wound up.

Sec. 79 of the English Companies' Act (25 and 26 Vic., c. 89), 1862; and sec. 101 of the Indian Companies' Act X. of 1866, verbatim, save that in clause (e) the words "for any other reason of a like naturo" are inserted in this Act.

Cf. Act XIX. of 1857, s. 66.

(i) See sec. 130 post.

(ii) See sec. 77 supra.

(iii) See sec. 73 supra.

Unregistered Companies must consist of more than seven members, to be wound up under this Act, see sec. 213 post.

As to who may petition for the winding-up, see sec. 131 post. Sections 191-196 post provide for winding-up, subject to the supervision of the Court; and sections 173-190 for the voluntary winding-up of a Company.

So

By sec. 140 post the Court may, as to all matters relating to the winding-up, have regard to the wishes of creditors or contributories. also in the case of winding-up subject to the supervision of the Court, sec. 193 post.

As to the principles which govern the Court in making a winding-up order on a contributory's and a shareholder's petition respectively, see Buckley, 4th ed., pp. 181-189.

In IN RE Chapel House Colliery Co.. 24 Ch. Div. 259, it was decided that although as a general rule an unpaid creditor of a Company which cannot pay its debts is entitled to a winding-up order, that order will not be made when it is shown that the petitioning creditor cannot gain anything by a winding-up order, and, à fortiori, it will not be made under those circumstances if the other creditors oppose it. Per Bowen, L. J. (p. 269): The case may be decided on the simple principle that no one can be entitled to ask for a winding-up order when it is impossible that he should obtain anything by it." In the above case, the case of IN RE Uruguay Central Ry. Co., 11 Ch. D. 372, was approved. Sce Olathe Co. 27 Ch. D. 278. Sub-sec. (a). See IN RE Orrell Colliery, W. N. 1879, 106.

"Sub-sec. (b). In IN RE German Date Coffee Co., 20 Ch. Div. 189, Lindley, L. J., observes upon this sub-sec. : That, I understand, is to give the Company a reasonable time. Supposing that there was no proof that the Company had failed within a year, I should think that "the Company was entitled by statute to a year-the shareholders would "be entitled to it But when we have to deal with a case in which it is apparent within a year that the whole thing is abortive, that the Company cannot acquire that which it was intended to acquire, and cannot carry out the objects for which it was formed, the Act does not require us to wait a year, and the case is then brought fairly within the 5th sub-sec., ie, whenever the Court is of opinion that it is just and equitable,' that the Company should be wound up.”

46

66

See also RE Middlesbrough Assembly Rooms Co., 14 Ch. Div. 104. In that case a shareholder, in July 1879, presented a petition for winding-up the Company, on the ground that it had suspended business for more than a year. It appeared that the Company, which was formed for building and using and letting assembly rooms, had bought a site and begun the building by the end of 1875. Soon afterwards, owing to the depression of trade in the neighbourhood, the directors, with the sanction of the great body of shareholders, resolved to proceed no further till times improved. The sum which could still be raised for calls was sufficient to erect rooms, though smaller than those originally intended, but it did not appear that the Company could carry on the proposed business at a profit.

Shareholders to the amount of one-eighth in value supported the petition, but fully four-fifths in value of the shareholders opposed it. The Court of Appeal, reversing the decision of Bicon, V.C., refused to make a winding-up order. Per Cotton, L. J., p. 110: “A creditor who petitions for winding-up stands in a very different position from a shareholder. His only means of getting paid is by means of a winding-up order, and he therefore has a right to an order when the circumstances are such as give jurisdiction to make one. But a shareholder is in a very different position, and though the circumstances are such that the Court can make a winding up order, it has a discretion as to whether it will make one on his application. If the petitioner could satisfy the Court that the business of the Company had been suspende on account of inability to carry it on, or by reason of an intention to abandon the undertaking, the case would be very different.'

See also IN RE The Calcutta Jute Mills Co., I. L. R. 5 Calc., as to the granting of a winding-up order on a creditor's petition ex debito justitiæ. Sub-sec. (c). See Buckley, 4th ed., p. 190.

Sub-sec. (d). See sec. 129 as to when a Company is to be deemed unable to pay its debts.

Sub-sec. (e). This sub-section puts a legislative interpretation upon the cases which have been decided upon the same sub-section in England, see Shelford's Law of Joint Stock Companies, 2nd ed., p. 220; Buckley, 4th ed., p. 190, and the cases there cited; and per Baggailay, L. J., ÎN RE Diamond Fuel Co., 13 Ch. Div. 408.