Evans v Coventry
| Jurisdiction | England & Wales |
| Judgment Date | 21 December 1854 |
| Date | 21 December 1854 |
| Court | High Court of Chancery |
English Reports Citation: 43 E.R. 1125
BEFORE THE LORDS JUSTICES.
[911] evans v. coventry. Before the Lords Justices. Dec. 21, 1854. Where a portion of a trust fund has been lost, that is prinul facie a breach of trust, and a sufficient ground for the appointment of a receiver on an interlocutory application. Held, also, that objections to the bill on the ground of misjoinder, multifariousness or want of parties, were no answer to such an application. On a bill filed by a Plaintiff insured in a society (whose funds were liable to pay the insurance money) on behalf of himself and other persons so insured, charging a loss of the fund through the negligence of the directors, and on the answer and affidavits shewing that the secretary had absconded with part of the funds, and that some of the directors were in needy circumstances : Held, that the Plaintiff was entitled to the appointment of a receiver and to an injunction. This was an appeal from the decision of Vice-Chancellor Kindersley, refusing a motion of the Plaintiffs for an injunction and receiver. The case is reported in the 3d Volume of Mr. Drewry's Reports (page 75). For the purposes of the present report, the following statement will be found sufficient. The bill was filed by the Plaintiffs, on behalf of themselves and all other the members insured in certain societies called " The General Benefit Health and Life Assurance Society" and "The City of London Loan Society and Deposit Bank," except such of them as were Defendants, against the trustees, treasurer and manager of those societies. The bill stated, in substance, that the assurance society was established in 1820, for the purpose of insuring lives and granting weekly allowances during sickness; that it had a nominal capital of 50,000, in shares of 1 each. That the loan and deposit bank consisted of the same trustees, treasurer, manager, directors and officers, [912] as the insurance society, and was, in fact, a branch of it. That the funds of the societies were carried to the same account at the bankers, and invested in the names of the same trustees ; and that the accounts of the one could not be taken without those of the other. That one of the Plaintiffs effected an insurance for 4s. per week, and another Plaintiff' for 3s. per week, during sickness, and had paid the premiums regularly ; that another Plaintiff deposited with the loan society 2G, which was due to him, with interest. That others of the Plaintiffs had effected insurances on their lives in the assurance society, and had paid the premiums; that another Plaintiff was the personal representative of a deceased member, on whose death a sum of 25 became due on a policy effected by her. That, on application by him (the last-mentioned Plaintiff) to the directors for payment of the 25, an answer was sent, stating that the secretary had left the office in considerable embarrassment, and that an investigation was in progress, the result of which would be laid before the claimants, and their directions taken as to the best mode of winding up the society. That the office of the societies was closed, and the business of the societies had ceased to be carried on; and that the directors had refused to repay the Plaintiffs their deposits or insurance monies. 1126 EVANS V. COVENTRY 8 DE0. M. &0. 913. The bill prayed that an account might be taken of the funds and property belonging to the societies, and of the application thereof; that the Defendants might be declared personally liable for any loss which had accrued to the funds of the societies, or either of them, by reason of the default of the Defendants, or any of them, and particularly of the secretary; that, if the funds of the society then forthcoming, exclusively of what the Defendants were liable to pay on account of the default of the secretary, were insufficient to meet and satisfy the [913] claims on the societies, the Defendants might be declared liable to make good the same to the extent of 50,000, guaranteed by them by a prospectus mentioned in the bill; that the accounts of the societies might be investigated, and, if necessary, the affairs of them wound up; that, in the meantime, the conduct and management of the societies might be taken under the protection of the Court, and that a proper person might be appointed manager and receiver, to get in the outstanding assets; and that the Defendants might be restrained from parting with the funds in their possession or control, and from recovering any outstanding estate. By their answers, the Defendants stated that the loan society was established in 1838, and was carried on at the same office as the assurance society, but that the two were never amalgamated ; that they had the same directors and the same secretary ; that the secretary had falsified the accounts of both, and had absconded to Australia, having appropriated to his own use considerable sums belonging to both societies; that, upon a discovery of the defalcations, the office of the societies was closed for the purpose of investigation; that the monies of both societies had been paid by the secretary into the Bank of England, and had not been distinguished; that, under the circumstances aforesaid, the directors had refused to make payments in respect of the insurances. They objected that the interests of the proprietors of the insurance society were altogether distinct from those of members of the loan company; that the interests of the creditors by insurance were conflicting with those of the proprietors ; and that the the bill was multifarious. In support of the motion for a receiver, affidavits were filed, verifying the statements in the bill, and also an affidavit of the clerk to the Plaintiffs' solicitor, stating [914] that one of the directors of the societies, and of the Defendants, resided in a very small house, and appeared to be in needy circumstances; that another of them, who also appeared to be in needy circumstances, said, on being served with the notice of motion, that it was of no use suing him, as he was merely a furniture broker and had not 50 in the world; and further said, that another of the directors was only a warehouseman, and had little if any property, and that it would be of no use taking proceedings against any of them, adding also that the directors had proposed to sell out part of the stock belonging to the societies, for payment of the expenses of the suit, but that their solicitor had advised them not to do so. Another witness deposed to another director having stated that he was in needy circumstances. By the policies of the assurance company it was provided that the capital stock or funds of the company, for the time being, remaining unapplied and undisposed of, in pursuance of the trusts, powers and authorities contained in the deed of settlement of the company, should alone be answerable to the demands of the assured, or the heirs, executors, administrators or assigns of the assured, under the policies; and that the members of the company should not, nor should any of them, be answerable, directly or indirectly, further or otherwise than as to their respective shares in the sum of 50,000, constituting the original capital stock or funds of the company, set opposite to their respective signatures to the deed of settlement. The deed of settlement contained a similar provision. It also provided that the funds of the company should consist of the capital of 50,000, and of all sums to be received by the society for assurances; and that, at the [915] end of seven years from the date of the deed, and afterwards, at specified intervals, bonuses might be declared. The rules of the company provided that, on payment of the premiums, the assured, after receiving a "free receipt," would be considered a member of the society so long as he observed its rules. The motion for an injunction and receiver was, in the first instance, made before any answer was filed, and was ordered by the Vice-Chancellor to stand over till the 8DEO. M. fcO. W. EYANS V. COVENTRY 1127 Defendants had put in their answer. On it being then renewed, the Vice-Chancellor refused it on the grounds that, as the suit was constituted, he did not see how the Court could ever make a decree for the distribution of the funds;-that the suit was one by persona in the position of creditors of a joint stock company, and that the Plaintiff*, and some of those whom they took on themselves to represent, had directly conflicting interests; that there was no imputation of want of integrity on any of the Defendants except the secretary, nor any imputation of insolvency, except by shewing that they were persons of very limited circumstances (see 3 Drewry, p. 78 ti seq.). From this decision the Plaintiffs appealed. Mr. Anderson and Mr. G. W. Collins, in support of the appeal. Mr. Elderton and Mr. Selwyn, for different Respondents. The following cases were referred to, Sibson v. Edg-[$16]-worth (2 De G. & Sm. 73); King v. Malcott (9 Hare, 692); Hudson v. Maddism (12 Sim. 416); Maclaren v. Stainton (16 Beav. 279); Claitgh v. Ratdiffe (1 De G. & Sm. 164); Beaumont v. Meredith (3 Ves. & B. 180); Richardson v. Larpent (2 Y. & C. C. C. 507); Richardson v. Hastings (11 Beav. 17); Minn v. Slant (15 Beav. 49); Hallett v. Dawdall (16 Jur. 462); Underwood's cote (5 De G. M. & G. 677); Pearce v. Piper (17 Ves. 1); Clements v. Bowes (\ Drew. 684). Mr. Anderson, in reply. the lord justice knight bruce. The arguments which have been advanced in opposition to this motion might have had place or even weight if the application were of a different nature, or made at a different stage of the cause. But this is not the hearing of the cause; there is no plea; there is no demurrer. The application before the Court is simply an interlocutory application for an injunction, accompanied by the appointment of a receiver, without which the injunction (if otherwise proper) would be unsafe, and perhaps...
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Evans v Coventry
...made any representations that the whole of the shares had been taken or the whole capital paid up. The case will be found reported in 5 De G. M. & G. p. 911, on an application for an injunction and receiver. The cause was heard before Vice-Chancellor Kin-[840]-dersley, who delivered an elab......
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...v. The London Indisputable Life Policy Company (1 K. & J. 223); In re The Athenaeum Life Assurance Society (Johns. 633); Evans v. Coventry (3 Drew. 75; 5 De G. M. & G. 911, on motion for receiver; S. C. at hearing, 2 Jur. (N. S.) 557, V.-C. K.; 8 De G. M. & G. 835); In re The English and Ir......
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Aldebert v Kearns
...it was held that a policy-holder had no specific lieu on the funds of the company ? [Sir H. Cairns referred to Evans v. Coventry (5 De G. M. & G. 911).] [696] the solicitor-general. That was a case of a mutual assurance company ; a bill by some members on behalf of themselves and all other ......