Oakes v Turquand; Peek v Turquand

THE first of these cases was an appeal against a decision of Vice-Chancellor Malins, by which the name of Mr. Oakes was kept on the register of members of the company called “Overend, Gurney, & Co., Limited,” and he had been held liable to answer any call that might be made upon him by the liquidators appointed to wind up the company.

The second was an appeal by Mr. Peek against a like decision, the only difference between the two cases themselves being, that Mr. Oakes was an original allottee of the shares in respect of which liability was fixed on him, while Mr. Peek had purchased his shares in the ordinary way.

Both the Appellants alleged, in substance, that the representations made by the directors of the company were false and fraudulent, and that in consequence of such false and fraudulent representations, and by means thereof, they had become the holders of the shares. They insisted, therefore, that they were, as a result of the imposition practised upon them, released from all liability to have their names kept on the list of members, and be made to contribute to the debts of the company. The company had begun business on the 1st of August, 1865, and stopped payment on the 10th of May, 1866. On the 11th of May Vice-Chancellor Kindersley made an order appointing, provisionally, Messrs. Turquand and Harding to be the official liquidators of the company. An extraordinary general meeting of the members of the company was called for the 11th of June, 1866, “to consider the position of the affairs of the company, and, if deemed expedient, to pass the following resolution:— ‘That the company cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same voluntarily.’” The meeting was held, and 363 shareholders, representing 30,193 shares, were present, and 623 shareholders, representing 26,312 shares, sent proxies. The resolution actually passed was this:— “That it has been proved to the satisfaction of this meeting that Overend, Gurney, & Co., Limited, cannot, by reason of its liabilities, continue its business, and that it is advisable to wind up the same voluntarily, under the supervision of the Court, and that William Turquand and Robert Palmer Harding, of &c., be and are hereby appointed liquidators.” Two shareholders (Mr. Henry Kingscote and Mr. Henry Grissell) and one depositor (Mr. Charles Oppenheim) were appointed a committee of supervision.

Petitions for winding up the company were presented, and were heard before Vice-Chancellor Kindersley on the 22nd of June, 1866, when the following order was made:— “That the voluntary winding up of the said Overend, Gurney, & Co., Limited, referred to in the affidavit of William Bois, filed on the 22nd of June, 1866, be continued, but subject to the supervision of this Court, and that William Turquand and Robert Palmer Harding be continued as liquidators, and that any of the proceedings under the said voluntary winding-up might be adopted, as the Judge should think fit.”

The liquidators put the names of Mr. Oakes and of Mr. Peek on the list of contributories; and on the 20th of August, 1866, made a call of 10 per cent. on the members of the company in respect of the unpaid portion of the shares. Notice of motion to remove the names of these Appellants from the list, and to stay, as against them, all proceedings on the call, having been given, the motion was heard before Vice-Chancellor Malins, who, on the 9th of February and the 7th of March, 1867, made orders dismissing the motion, and directing that Mr. Oakes and Mr. Peek should pay the costs of the liquidators, and that the costs of Mr. Oppenheim, the depositor, who represented the creditors, should come out of the assets of the company. This appeal was brought against these orders.

The facts of the case necessary to raise the question of general liability were those above indicated. They have been so fully and so recently published in these Reports^F1, and are so frequently mentioned by the noble and learned Lords in their judgments, that it has been deemed inexpedient to repeat them here. But a point was raised in this House as to the registration of the memorandum or articles of association, and as to that the facts were these:— The third article of the memorandum of association was in these terms: “The objects for which the company is established are — the receiving money on deposit, or by re-discount of bills, and the employment and investment of such money, and of the paid-up capital of the company in the discounting of bills, promissory notes, and other negotiable securities, and in making advances in loans, and investing in securities, and generally, the carrying on of the business of bill brokers and money dealers, as heretofore carried on by Messrs. Overend, Gurney, & Co., at No. 65, Lombard Street, in the city of London; and, with a view to the above objects, the acquisition of such business upon terms to be agreed by the directors, and the acquisition, whether by way of purchase or amalgamation, or otherwise, of such other business or businesses of a like character, and upon such terms, as the directors shall think expedient, and the doing of all such acts and things as may, in the opinion of the directors, be incidental or conducive to the attainment of the above objects.”

On the 13th of July, 1865, Mr. C. E. Jones, the attesting witness to the memorandum of association, took it for registration to the Registrar of Joint Stock Companies. The registrar refused to receive it...