Sainton v Carron Company
| Jurisdiction | England & Wales |
| Judgment Date | 20 July 1857 |
| Date | 20 July 1857 |
| Court | High Court of Chancery |
English Reports Citation: 52 E.R. 58
ROLLS COURT.
S. C. 23 L. J. Ch. 299; 18 Jur. 137; 2 Eq. R. 466; 2 W. R. 176. See Yeatman v.Yeatman, 1877, 7 Ch. D. 215. For other proceedings, see 16 Beav. 279, and the references in the note 51 E. R. 786.
[146] stainton v. the carbon company and others. Nov. 11, 12, 1853 ; Jan. 17, 1854. [S. C. 23 L. J. Ch. 299; 18 Jur. 137; 2 Eq. R. 466; 2 W. R. 176. See Yeatman v. Yeatman, 1877, 7 Ch. D. 215. For other proceedings, see 16 Beav. 279, and the references in the note 51 E. R. 786.] The personal representatives are the proper parties to sue to recover the assets, and parties interested in the estate will not be allowed to sue for that purpose, unless it be satisfactorily shewn that assets exist which might be recovered, and which, but for such suit, would probably be lost to the estate. The rule as to joining the partner of the deceased with the personal representatives, in a suit for administration, without charging and proving collusion (if it can be supported in the absence of any additional special circumstances), does not apply to auch a partnership as a joint stock company. After a decree for administration, a legatee cannot sue the debtors to recover the assets, in the absence of any refusal or neglect of the personal representatives to do so. After a decree for administration, a residuary legatee filed a bill against the executors and a company, in which the testator was a large shareholder, and with which he had had extensive transactions, to recover the assets, relying on the fact that the executors were shareholders and officers of the company, and had interest which conflicted with their duty. A demurrer of the company was allowed, it not being shewn that the executors intended to neglect the performance of the duties of their office. If a testator, when he makes his will, is aware of the circumstances and position of his executors and trustees, the Court will not lightly interfere with their discretion ; and although the circumstance of an executor being an insolvent may be a reason for appointing a receiver, yet, if the testator was aware of his insolvency, the Court will not, on that ground alone, take the property out of his hands. This suit was instituted by two of the residuary legatees under the will of Henry Stainton, against the Carron Company, the legal personal representatives of the testator and other Defendants interested under the will (twenty-six in all), having for its object to take the accounts and settle the transactions and dealings between the testator and the company. The company demurred to the bill, and the question was, whether, upon the facts therein stated, the Plaintiffs were justified in suing instead of the executors. The facts as stated in the bill were as follows :- The testator, Henry Stainton, was the London agent of the Carron Company from the year 1808 down to the period of his death, on the 5th December 1851. By his will, dated the 12th of October 1846, he appointed the Defendant, Henry Tibbats Stainton, James Maclaren and Henry Dawson, and three other persons [147] named Joseph, William and Thomas Dawson, executors of his will. The first three proved the will in England on the 23d December 1851, and in Scotland on the 12th July 1852. The Carron Company was incorporated by charter about eighty years ago, and had since carried on and continued to carry on a very extensive and profitable business in the manufacture of iron from iron ore. The constitution of the company, which was regulated by charter, provided that the capital of the company should consist of 600 shares of 250 each. The testator, besides being the London agent of the company, was the owner of 101 shares in the capital of the company. On his death, a claim of great importance to the persons interested in his estate was raised by the Carron Company. From the year 1808 up to the month of June 1825, the testator was remunerated by a commis- 1SBEAV.H8. STAINTON V. THE CARRON COMPANY 59 sion of 5 per cent, on all ready-money sales and on cash collected by him on open account, with certain additional allowances. In the month of May 1826 a resolution was passed, at a meeting of the Carron Company, which was set forth in the bill, and which the Carron Company now alleged had the eft'ect of depriving the testator of all commission from thenceforward, and of giving him a salary of 2000 a year, by way of remuneration for his services, in lieu of the commission he formerly enjoyed, and which, at the same time, continued to him the advantage of the dwelling-house attached to the warehouse, free from rent and taxes, and with allowances for coals and candles attached to the house which he had previously enjoyed. On the part of the persons interested in the estate of the testator, it was alleged that this resolution applied to one year only, viz., from June 1825 to June 1826, that it was never renewed, and that subsequently to [148] June 1826, and to his death, the testator charged in his accounts (which were settled and allowed half-yearly), and was entitled and allowed to charge, commission, at 5 per cent, as theretofore. Assuming these calculations on both sides to be correct, the difference would be this :-If the testator was entitled to charge commission, he was, at his death, a creditor of the company in the sum of 4018. If he was entitled only to a salary of 2000 per annum in lieu of commission, he was, at his death, a debtor to the company in the sum of 69,617 at least. This was the amount claimed by the Carron Company, in addition to which they claim the sum of 38,873, or such other sum as might be found to be the legal interest due, on the sums due from him from time to time, as they became due till the 31st December 1851, and interest from thence on the amount then due till the time of payment. By the constitution and charter of the company, it was provided that in case any one of the co-partners of the company should become a debtor to the company, his share in the partnership should be subject to this debt, before his other creditors ; and that the company, or, if the company failed to do so, any one or more of the shareholders in the company, were entitled to forfeit or to cause to be forfeited to the company the shares held by the debtor ; that these shares were to be taken at the price of the last valuation thereof, or at the option of the party forfeiting, they were to be sold by public auction. When this was done, out of the amount of the valuation or the produce of the sale, the debt and the expenses of such sale or valuation were to be paid, and the balance, if any, was to be paid to the partner who owned such forfeited shares, or to his estates. The value of tbe 101 shares held by the testator [149] was stated to be above 80,000, which the company claimed, under this provision, a right to hold, as a security for the sums alleged to be due to them from his estate. These were the facts stated in the bill, which explained the nature of the question which had arisen between the Carron Company and the persons interested in the testator's estate. The bill then detailed the proceedings which had taken place with relation to this question, which it is material to notice before stating the particular facts on which the equity and the relief sought by this bill were rested. In the month of March 18o2 James Maelaren and Henry Dawson (two of the trustees and executors and two of the Defendants to this bill) filed a bill in this Court, Mar.laren v. Shdnton (1C Beav. 279), against the remaining executor, Henry Tibbats Stainton, who was the eldest son and heir of the testator, against the Plaintiff's and the other persons interested in the estate of the testator, praying the establishment of the will, the execution of the trusts of it, and the administration of the estate of the testator. On the 8th May 1852 a decree was made in that cause, which established the will against Henry Tibbats Stainton, directed the trusts of the will to be performed, and was, in all other respects, the usual administration decree. In October 1852 the Carron Company commenced an action, in the Court of Session in Scotland, against the three executors and trustees of the testator, for the purpose of compelling payment of the sum claimed to be due to the company, and in that action, letters of inhibition and arrestment were issued, at the instance of the Carron Company, and duly recorded in Edin-[150]-burgh. Immediately on this being done, the Plaintiff's in the suit of Madaren v. Staintim applied to this Court, by motion, notice of which had been duly served on the company, for an injunction to restrain these proceedings in Scotland. On the 15th November 1852 this Court granted an 60 STAINTON V. THE CARBON COMPANY 18 BEAV. 151. injunction for that purpose, which was duly issued and served. On the 4th December 1852 this Court refused an application of the Carron Company to discharge or vary such orders (16 Beav. 279), from both which orders an appeal was now pending to the House of Lords. In the month of April 1852 the Carron Company carried in before the Master a charge and claim for 69,617 principal, and for 38,623 for interest, against the estate of the testator; but they did so under protest, and without prejudice to their right to prosecute their appeal, and also their action in the Court of Session, in case the appeal should prove successful. Having so done, they declined to prosecute this claim pending the appeal, although required so to do by the Master, who thereupon disallowed the claim. The Carron Company applied to this Court for an order to permit the suspension of the prosecution of their claim, and to set apart a sufficient portion of the testator's estate to answer the claim if ultimately successful, which application was refused on the 29th of June last. The bill alleged that the Carron Company refused to transfer the shares or pay...
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