order for inspection of the books; but where the debts are large, and the transactions of the company have been complicated, the Court will make an order for inspection without any special reason being given for it (a). An order for inspection will be made, notwithstanding a secrecy clause in the articles of association (b). As to discovery from the official liquidator, v. sect. 94. Where a company, in whose articles of association was contained a Voluntary clause providing that the books should, subject to reasonable re- winding-up. strictions, be open to the inspection of the shareholders during the hours of business, went into voluntary liquidation, it was held that the clause ceased then to be applicable (c). Where the articles of association provided that no shareholder should be at liberty to inspect the books, except such as should be produced at a general meeting, and the company went into voluntary liquidation with a view to re-construction with reduced capital, a shareholder who had accepted shares in the new company was held bound by the original contract, and not entitled to inspect the books of the winding-up company (4). 157. Any person to whom anything in action belonging to Power of the company is assigned in pursuance of this Act may bring assignee to sue. or defend any action or suit relating to such thing in action in his own name. 158. In the event of any company being wound up under this Act, all debts payable on a contingency, and all claims against the company, present or future, certain or contingent, ascertained or sounding only in damages, shall be admissible to proof (a) against the company, a just estimate being made, so far as is possible, of the value (8) of all such debts or claims as may be subject to any contingency or sound only in damages, or for some other reason do not bear a certain value. (a) Gen. Order, Nov. 1862, Rules 20-28. (B) Gen. Order, Nov. 1862, Rule 25. Debts of all descriptions to be proved. A trustee for a company in liquidation of shares in another company WHAT IS is entitled to prove for the amount of calls which have been made on ADMISSIBLE TO PROOF. him, and interest thereon, and also for any future calls and interest, he Trustee for the undertaking to pay over the dividends, when received, in discharge of company. the liability against which he is entitled to be indemnified (e). (a) Ex parte Buchanan, 15 W. R. 99; 15 L. T. (N.S.) 261. (b) Re Birmingham Banking Co., 36 L. J. (Ch.) 150. (c) In re Yorkshire Fibre Co., L. R. 9 Eq. 650. (d) Re Metropolitan and Provincial Bank, Ex parte Davis, 16 W. R. 668. Indemnity. Mutual insur ance society Unstamped policy. Damages. Servants and officers of the company; A trustee for a company of a lease is entitled to prove for the amount of rent actually paid by him since the commencement of the windingup, and for the consideration, being a fit and proper sum, which he may have to pay for the purpose of assigning the lease and putting an end to his liability (a). By deed of amalgamation of the A. and B. Companies, the B. Company covenanted to indemnify the A. Company against its liabilities: held, that the A. Company were entitled to prove in the winding-up of the B. Company as creditors for the amount of judgments recovered against the A. Company by its creditors, and costs; but that a simple contract creditor of the A. Company was not entitled to prove for his debt (b). Where a ship, insured in a mutual insurance society upon an unstamped policy, was lost, and it appeared from entries in the company's books that the money due upon the policy had been raised by order of the committee, but a winding-up order was made before the money was paid, proof was allowed in respect of the amount secured by the policy; for, although the policy, being unstamped, was, under 35 Geo. 3, c. 63, inadmissible in evidence, there was a sufficient admission of liability in the books of the company (c). A company having power to enter into a contract for the purchase of goods is bound by such contract, although the goods may not be intended to be used for the purposes of the company, and although that fact may be known to the person with whom the contract is entered into ; and if, through the winding-up of the company, the contract becomes incapable of being performed, the person with whom the contract was entered into may prove for damages for its non-performance (d). Servants of the company are not entitled to payment in full of any part of the wages or salary due to them at the date of winding up in priority to other creditors (e); except that by the Stannaries Act, 1869, (32 & 33 Vict. c. 19), s. 26: Wages of Miners, &c.] "On a company formed for, or engaged in, working a mine (including a company registered under any of the Joint Stock Companies Acts), being wound up in the Court of the Vice-Warden, or any other Court, or otherwise, the date of the winding-up order having been not earlier than two months after the passing of this Act (f); then and in every such case the amount (if any) due at the date of the windingup order to miners, artisans, and labourers employed, wholly or in part, in or about the mine, in respect of their wages or other earnings in relation to the mine, not exceeding three months' wages or earnings to each such person, shall be paid in priority to all other debts of the company. The winding-up order is notice of discharge to the servants (g); but if the business is continued after the winding-up, and the former ser (a) In re Southampton Imperial Hotel Co., Hunt's Claim, W. N. 1872, 53. (b) Re British Provident Life, &c., Co., Anglo-Australian Co.'s Case, 4 N. R. 48. (c) Martin's Claim, L. R. 14 Eq. 148; and see s. 200. (d) In re Contract Corporation, Ebbw Vale Co.'s Claim, L. R. 8 Eq. 14. (e) In re General Rolling Stock Co., Chapman's Case, L. R. 1 Eq. 346. (f) 24th of June, 1869. (y) Chapman's Case, L. R. 1 Eq. 346. vants are actually employed, the old contract between the company and the servants continues in force, and notice of discharge must be given pursuant thereto (a). compulsorily; Y. was, under articles of agreement, engaged as manager of a branch when company wound up bank for a term of five years, at a stipend of not less than £500 a year; and it was provided that he should have the right of occupying the bank premises as a dwelling-house free of rent and taxes. The company having been compulsorily wound up during the term, it was held that Y. was entitled to claim for the present value of an annuity of £500 for the remainder of the term, and a proper rent for the bank premises for the same time, a deduction to be made in consideration of his being at liberty to obtain a fresh appointment (b). The case last mentioned was followed in Ex parte Clark (c). By the articles of association of a company, L. was appointed manager, and it was provided that if he should at any time be deprived of or removed from his office for any other cause than gross misconduct, the directors should pay to him as compensation for loss of office a sum equal to three years' salary within one month from the time of his removal. He was held entitled to prove in the compulsory winding-up for the sum specified in the articles, without any such deduction as was made in Yelland's Case (v. supra) in consideration of his being at liberty to obtain a fresh appointment (d). But where one of the terms of the engagement of an officer of the company was, that "£5000 be paid him if the company discontinue to employ him," it was held that this must be a discontinuance when it was optional with the company either to continue or discontinue the employment; and that, therefore, his employment having been terminated by the compulsory winding-up of the company, his claim against the company could not be sustained (e). wound up voluntarily. A company covenanted that in case they should at any time there- when company after displace an agent of the company from his appointment they would do certain acts. The voluntary dissolution of the company and transfer of its business to another company, and the consequent determination of the agent's employment, was a displacement of him within the meaning of the covenant (ƒ). Where the directors of a company in course of formation appointed a broker on the terms that he should have £100 down and £400 more on the allotment of all the shares, and subsequently they, by their own act, abandoning the company and winding it up, made it impossible that the rest of the shares should be allotted, it was held that the broker was entitled to recover either as damages or for work done, and that the sum to which he was entitled was the £400, less an allowance for the chance of his not having been able to dispose of all the shares if the company had gone on (g). (a) In re English Joint Stock Bank, Ex parte Harding, L. R. 3 Eq. 341. (b) Yelland's Case, L. R. 4 Eq. 350. (c) L. R. 7 Eq. 550. (d) Ex parte Logan, L. R. 9 Eq. 149. (e) Tait's Case (Albert Arbitration), 16 Sol. J. 46. (f) Stirling v. Maitland, 5 N. R. 46. 5 N. R. 52. Share of plant in cost-book company. Contributory buying up debt of company. Policy-holder. Where a person entered into an agreement to act as agent for a company for five years, and to transact no business except for the company, in consideration of a fixed salary and a commission of 10 per cent. on all business transacted, and the company was wound up voluntarily during the term, he was not entitled to prove for the prospective value of the commission during the remainder of the term (a). So where L. agreed with an insurance company to act as their agent, for a fixed salary and a commission of 10 per cent. on the renewal premiums of all policies effected through him, and he was further, in case of his retirement from the agency, to receive a commission of 5 per cent. during his life on the renewal premiums of all policies effected through him and existing at the time of his retirement, it was held in the compulsory winding-up that the commission was dependent on the existence of premiums, and his claim against the company was therefore disallowed (b). By the articles of association of a company S. was appointed general manager, and it was therein stated that he had agreed to take a large number of shares in the company, and it was stipulated that in the event of his being dismissed from the service of the company he should be repaid any sum he might have paid on the shares. He paid £2000 in respect of the shares-and a resolution to wind up having been passed, he was appointed a liquidator and received £400 as remuneration. It was held that the resolution to wind up was tantamount to a notice of dismissal, and that he was entitled to prove for £2000, less the £400 paid to him as liquidator (c). In an unlimited company the articles of association provided that all contracts and obligations of the company should contain a limitation of the liability of the shareholders to the amount of their shares. B. acted as underwriter to a limited company, which became amalgamated with the unlimited company, and at an interview with the directors of the unlimited company he was told that he was to go on for them as he had been doing for the limited company. It was held that this agreement was not a contract or obligation within the articles, and that B.'s claim must be admitted against the general assets of the company (d). According to the custom of Cornwall, an adventurer in a cost-book mine, upon relinquishing his shares and discharging his proportion of the liabilities of the company at that date, is entitled to be paid his share of the then value of the stock and plant-such share is due to him immediately and payable within two years, and if the company be wound up before payment is made, he may prove for the amount (e). A contributory of the company, having bought up a debt of the company for a less sum than is actually due thereon, may prove for the full amount of the debt, and not merely for what he has paid for it (ƒ). A claim under a winding-up in respect of a policy of life assurance (a) Ex parte Maclure, L. R. 5 Ch. 737. (b) Lewine s Case (Albert Arbitration) 15 Sol. J. 828. (c) Shirreff's Case, W. N. 1872, 156; 27 L. T. 367. (d) Bache's Case, W. N. 1872, 187. (e) In re Prosper United Mining Co., Ex parte Palmer, L. R. 7 Ch. 286. (f) In re Humber Iron corks Co., L. R. 8 Eq. 122. is not affected by non-payment of the premiums after the commencement of the winding-up. The condition of the policy is that the holder shall pay the premium to the directors of the company within a limited time, and if, before the time for payment has arrived, or the days of grace have expired, the winding-up has destroyed the functions of the directors, the policy-holder cannot be affected by the non-payment (a). The date, however, at which the policy is to be estimated is, not the date of presentation of the winding-up petition, but the date of the winding-up order (b). Premiums, therefore, which fall due in the interval between the presentation of the petition and the order, must be paid before the policy is presented for valuation-for the policy must be valued as a current valid engagement. And the policy-holder will not be allowed to set off the amount of the valuation against the premiums (c). In estimating the amount for which the holders of current life policies Valuation of are entitled to prove in the liquidation of a life assurance office, it was policy; held by James, V.C., in Bell's Case (d) that the amount is the sum which would be required by a solvent assurance office, having the same rate of premiums and the same amount of proprietary capital as the company in liquidation, in order to grant to the policy-holder a policy of the same amount, under the same conditions, whether ordinary or special, at the same premium; or, in other words, the proof will be for the capitalized difference between the increased premium required by such a company, having regard to the state of health of the life insured, and the premium formerly paid to the company in liquidation. This case was, however, disapproved by Lord Cairns in Lancaster's Case (e); and his Lordship there held that the amount for which the policy-holder is to be admitted to prove is the difference between the present value of the reversion in the sum assured at the decease of the life and the present value of a life annuity of an amount equal to the pure premium without the loading. The time as from which the valuation is to be made is the date of the order to wind up-the tables to be employed, the Seventeen Offices' Experience Tables-and the rate of interest 4 per cent. Again, in a very recent case, Romilly, M.R., has held that in these cases the rule in Bell's Case, and not that in Lancaster's Case, is to be followed (ƒ). The claim on an annuity contract will be for the present value of of annuity. the annuity calculated according to the tables, where they can be ascer tained, of the company originally granting the annuity, and where those (a) Cook's Policy, L. R. 9 Eq. 703. (b) Lancaster's Case (Albert Arbitration), 16 Sol. J. 103; L. R. 14 Eq. 72, n; Blundell's Case (European Arbitration), Nov. 5, 1872; Holdich's Case, L. R. 14 Eq. 72, 80; but see Bell's Case, L. R. 9 Eq. 706, 720. (c) Blundell's Case, ubi supra. (e) In re Albert Life Assurance Co., (f) In re English Assurance Co., Holdich's Case, L. R. 14 Eq. 72. |