Sibson v Edgworth
| Jurisdiction | England & Wales |
| Judgment Date | 01 January 1847 |
| Date | 01 January 1847 |
| Court | High Court of Chancery |
English Reports Citation: 64 E.R. 34
HIGH COURT OF CHANCERY
[73] sibson v. edgwobth. Jan. 25, May 29, 31, Dec. 16, 1847; Jan. 13, 24, Feb. 23, 1848. A subscriber to a projected railway company, by his bill filed on behalf of himself and all other shareholders except the Defendants, alleged that the promoters, who were Defendants, in conjunction with the provisional committee-men, also Defendants, issued a prospectus representing the capital as ,£450,000, in 22,500 shares, on the faith of which the Plaintiff and many others paid their deposits and signed the deed; that the provisional committee-men, however, never, as they ought, superintended the administration of the affairs of the company, but that, with their sanction, certain of their body acted as directors, and exercised the whole direction of the company, and that the other provisional committee-men sanctioned all their acts, without making any inquiry. The bill alleged various acts of misfeazance on the part of the directors, and, in particular, that they did not allot all the shares, although they had many more than sufficient applications for them; and the bill prayed for a dissolution, accounts, payment of the liabilities of the company, and-distribution of the surplus among the subscribers. Some of the provisional committee-men, who were alleged by the bill to have applied for shares, but never to have paid any deposit or accepted them,, demurred. Held, allowing the demurrer, that the above charges against them were not sufficiently distinct or certain to support the bill. A Defendant, who was stated in the bill to be a shareholder, declining to concur .with the Plaintiff, also demurred on the ground that the case stated by the bill entitled the shareholders to a return of the whole deposit, and that the Plaintiff could not represent absent shareholders for the purpose of seeking a less extensive-remedy. Demurrer overruled. One of the general body of shareholders, on whose behalf the Plaintiff sued, had commenced an action at law against one of the Defendants to the suit, which continued and was pending after the bill filed^ This Defendant pleaded the pendency of the action, and that the sum sought to be recovered therein was a part of the monies which were the subject of the relief sought by the bill, and that the Plaintiff in equity had not 'such a common interest with the Plaintiff at law as to entitle the former to sustain a bill on behalf of himself and the latter. Held, on appeal overruling the plea, that the pendency of the action did not constitute a defence to the bill, as it must be assumed that the Plaintiff at law repudiated the character-of shareholder. A subscriber to a projected railway company, who had executed the subscriptioni contract, filed a bill on behalf of himself and all the other shareholders, except the Defendants, alleging misfeazance on the part of the directors, and seeking a dissolution and a distribution of the funds, after discharging the liabilities of the company,. 2DEG.&SM.74. - SIBSON V. EDGWORTH 35 One of the Defendants pleaded that there were allottees who had not executed the deed. It appeared from the statements on the bill that the form of application for shares contained an undertaking to sign the contract when required. Plea overruled, without prejudice to same defence by answer. Observations on Apperley v. Page [1 Ph. 779]. The bill purported to be exhibited by one of the shareholders in " The Wrexham, Nantwich and Crewe Junction Railway Company," on behalf of himself and all other the shareholders in the company (other than and except the several Defendants thereto). It stated that, in the month of September 1845, ten individuals, who were made Defendants, promoted the formation of the above railway company, which they caused to be provisionally registered. That, on the 26th and 27th of September 1845, they caused to be publicly circulated two preliminary announcements of the company, and the objects thereof. That, in one of those preliminary announcements, the capital was stated [74] to be £450,000, in 22,500 shares of £20 each share, and the deposit payable thereon was stated to be the sum of £2, 2s. 6d. per share. That subsequently, and with the view of inducing other persons to purchase shares in the company, the above-mentioned ten Defendants, acting in conjunction with the other Defendants to the bill, whose names appeared in the prospectus thereinafter mentioned, and who had consented and agreed to become members of the provisional committee therein named, did, on or about the 3d of October 1845, cause to be prepared and printed a certain prospectus, which was afterwards amended, of the company, and caused the amended prospectus to be registered at the Registry Office, and circulated printed copies of the same very extensively in different parts of England and Wales. That the amended prospectus contained a full and true statement (among other things) of the members of the provisional committee, of the provisional directors and other officers of the company, and of their places of business and residence. The bill then purported to set out the prospectus verbatim ; and among the names of persons therein represented as provisional directors were those of Sir Ralph Pendlebury, John Thompson, Richard Thompson and Samuel Kenrick, who were Defendants. The Mayor of Macclesfield was also among the list by that description, and without any name being given. The bill went on to state that many persons and, amongst others, the Plaintiff, on the faith of the prospectus, applied for shares; and that the number of shares so applied for greatly exceeded in the whole the total number of shares into which the capital of the company was divided. That, at the times when the applications were respectively made in manner aforesaid, the above-mentioned members of the provisional committee were, by virtue of such [75] their appointment and character, charged with the government, direction and administration of the company, and were duly registered as such in manner aforesaid, as by the Act of Parliament was required; but that they altogether omitted and declined to take the applications into their own consideration, or to make any allotments of shares, or personally to superintend, and that in fact they never had personally superintended, such government, direction or administration; but that, on or about the 24th October 1845, the Defendants, Thomas Edgworth and George Lewis, with certain other members of the provisional committee, having shortly before, with the concurrence of the rest of the members, assumed or constituted themselves to be the directors or managing committee of the company, took upon themselves in that capacity to exercise, and had ever since continued to exercise, with the full consent and sanction of the rest of the Defendants, members of the said provisional committee, the whole government, direction and administration of the company; and that the rest of the provisional committee had always sanctioned, and still continued to sanction, every act of the alleged directors or managers, without making any inquiry whatever into the propriety of such acts, and notwithstanding the repeated complaints and remonstrances of the Plaintiff and the other shareholders in the company. That the other members so assuming to be or constituting themselves directors ò with the Defendants, Thomas Edgworth and George Lewis as aforesaid, were certain persons named in the bill, and including Charles Poyser, William Kenrick and Samuel 36 SIBSON V. EDGWORTH 2 DE G. & S&. 76. Kenrick, thereinafter named as Defendants hereunto, together with certain other members of the provisional committee whose names the Defendants had concealed and still concealed from the Plaintiff; and that the Plaintiff was wholly unable to discover any return to or registration at the Registry Office of the alleged [76] directors, or of the names or name of any of them having ever been made by any person whomsoever, on the behalf of the company or otherwise. That the alleged directors, and particularly the Defendants, Thomas Edgworth, G-eorge Lewis and Charles Poyser, acting in such capacity as last aforesaid, did, on or about the 24th October 1845, proceed in the name and on the behalf and with the sanction of the provisional committee to...
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