John Hutton Syme, - Appellant; Peter Brown, - Respondent
| Jurisdiction | Scotland |
| Judgment Date | 01 January 1835 |
| Date | 01 January 1835 |
| Court | Court of Session |
English Reports Citation: 6 E.R. 1492
FROM THE COURT OF SESSION.
Ill CLAEK & FINNELLY. SYME V. BROWN [1835] [412] APPEAL from the court of session. JOHN HUTTON SYME,-Appellant; PETER BROWN,-Respondent. B., a partner and acting director of a joint-stock company, procured for S., who was not a, partner, at his request, some shares in the company's, stock, and received from him the purchase-money. S. afterwards refused to accept the transfer of the shares, and to- pay the instalments that accrued due on them, alleging, as the grounds of his refusal, that he was induced to purchase the shares by B.'s false and fraudulent representations, and fraudulent concealment as to the credit and solvency of the company. Upon the trial of an issue directed to ascertain the truth or falsehood of these allegations, several partners in the company were admitted as witnesses for B., and the Court of Session, upon a bill of exceptions, held, that they were competent witnesses. The House of Lords affirmed that decision. The question in this appeal regards the admissibility of evidence. The Edinburgh, Glasgow, and Alloa, Glass Company was established as a joint-stock company in, 1825. The capital stock was declared by the deed of co-partnership, to be £60,000, divided into 3000 shares of £20 each, payable at suchi periods, a.nd by such instalments, as the committee of management for the time being should direct. It was also provided by the said deed, among other things, that at the yearly meetings of the proprietors, a committee of management, consisting of a chairman, deputy-chairman, and twelve directors, should be elected; [413] that the business of the company should be conducted by a manager, secretary, agents and clerks, and such other office bearers as might be found necessary under the appointment and superintendence of the committee of management; that the books of the company should be balanced in April, every year, and an abstract of the company's affairs should be annually made out, and should be open to the inspection of any of the partners for one month after said annual general meetings;, and no longer. The company purchased premises at Alloa, and erected buildings there for their manufactory. The first manager appointed for the company was a Mr. Marshall, who; entered on his duties; early in 1825, and ceased to hold the appointment in 1827. The Respondent was a partner and director of the concern from its commencement, and he was at one time proprietor of 140 shares. In the summer of 1827, being then appointed manager and acting director, he went to reside at Alloa to superintend the affairs of the company; and while he was there he was in the habit of frequent intercourse with the Appellant, who resided at Alloa, and had been a partner of the Stirling Banking Company, them under sequestration. The prospects of the Glass Company were often the subject of their conversation, and the result was, that the Respondent procured for the Appellant, by his desire, fifty shares in the company's stock, in May 1829, and fifty shares more in the June following, at £3 10s. per share, which was considerably below par. As the affaire of the Stirling Bank had not been settled, these shares, by arrangement between the parties, were to stand in the name of the Respondent, and the Appellant paid him the £350. In 1831 (see Robertson v. Alexander, 5 Wilson, and Shaw, p. 1), [414] when the affairs of the Stirling Banking Company were settled, and the partners in it discharged from the sequestration, the Respondent pressed to have the said shares formally transferred to the Appellant, but he refused to accept the same; the consequence was, that the Respondent had to pay up two calls .of £1 each share, amounting together to- £200; and a demand of other instalments, amounting to £300, was soon afterwards made on him in respect of those shares. In June 1832, the Respondent brought his action against the Appellant, stating, as above stated, among other things;, and concluding that " it ought to be found and declared by decree, etc., that the foresaid 100 shares; of the stock of the said company, were purchased for behoof of, and belong to, the defender (the Appellant), and the defender ought to' be decerned and ordained, at his own espense, to have the said shares regularly transferred from the pursuer to himself, according to the forms, and in 1492 SYME V. BROWN [1835] III CLARK & FINNELLY. terms of the contract and regulations of the said company; moreover, the said defender ought and should be decerned and ordained, by decree, etc., to make payment to the pursuer (Respondent), of the foresaid sum of £200 sterling, advanced and paid by him as aforesaid, and interest thereof, from the respective periods of advance above mentioned, and in time coming during the non-payment; and in the event of the pursuer being obliged to- advance the other foresaid sum of £300, or any part of it, or to make any further advances or payments on account of the f o-resaid shares, the defender ought and should be decerned and ordained, to pay the amount of the same to him, with interest thereof from the periods of advance till payment; as also, generally, to1 free and relieve the pursuer of all [415] calls or payments exigible, or to become exigible, by or to' the said company, on account of the said stock. The defence set up by the Appellant was, tha,t he was induced by the Respondent's false representations of the prospects of the Glass Company, to- enter into the transaction, and that being deceived by the Respondent's misrepresentation and concealment in that respect, he was not bound to1 take a transfer of the shares, or to be responsible for the calls made in respect of them. The court directed the following issues to be tried by a jury; first, whether, in May 1829, the defender (the Appellant) employed the pursuer (the Respondent) to procure fifty shares of the stock of the Edinburgh, Glasgow, and Alloa Glass Company, and, in the month of June 1829, fifty other shares of the said stock, for behoof of the defender; and whether the pursuer did accordingly procure said shares; and whether the defender wrongfully fails to take delivery of the said shares, or any of them, and to pay the calls effeiring thereto', and otherwise relieve him as libelled ? or, secondly, whether, by the false and fraudulent representations, or fraudulent Concealment of the pursuer, as to the credit and solvency of the said company, the defender was induced to purchase the said shares, or any of them ? These issues came on to be tried in July 1834, before the Lord President of the Second Division of the...
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