The Agricultural Cattle Insurance Company Brotherhood's Case
| Jurisdiction | England & Wales |
| Judgment Date | 31 July 1862 |
| Date | 31 July 1862 |
| Court | High Court of Chancery |
English Reports Citation: 45 E.R. 1304
BEFORE THE LORDS JUSTICES.
S. C. 31 Beav. 365; 31 L. J. Ch. 861; 8 Jur (N. S.), 926; 7 L. T. 142; 10 W. R. 852. See Stanhope's case, 1865, L. R. 1 Ch. 165; Stewart's case, 1866, L. R. 1 Ch. 513. Followed, Smallcombe's case, 1867, L. R. 3 Eq. 769. See Spackman v. Evans, 1868, L. R. 3 H. L. 197; Phosphate of Lime Company v. Green, 1871, L. R. 7 C. P. 63; Allen's case, 1873, L. R. 16 Eq. 455.
[566] In the Matter of the agricultural cattle insurance company. brotherhood's case. Before the Lords Justices. July 3, 12, 14, 31, 1862. [S. C. 31 Beav. 365 ; 31 L. J. Ch. 861 ; 8 Jur. (N. S.), 926 ; 7 L. T. 142 ; 10 W. E. 852. See Stanhope's case, 1865, L. E. 1 Ch. 165; Steivart's case, 1866, L. E. 1 Ch. 513. Followed, Smallcombe's case, 1867, L. E. 3 Eq. 769. See Spackmanv. Evans, 1868, L. K. 3 H. L. 197 ; Phosphate of Lime Company v. Green, 1871, L. R. 7 C. P. 63 ; Allen's case, 1873, L. E. 16 Eq. 455.] A shareholder had retired from a company in pursuance of an invalid arrangement for the forfeiture of shares, which had been proposed to the shareholders generally by circular. Twelve years afterwards the company was ordered to be wound up. The shareholder's name had never during the interval been upon the register, nor had any payment been marie to him in respect of the dividends which had been paid to continuing shareholders, and some of his shares had actually been allotted to other persons who were registered in respect of them and received the dividends. It did not appear that any debt existed at the date of the winding up order, which had been contracted before the shareholder's retirement. Held, that it was too late to question the regularity of the forfeiture, and that the retired shareholder was not a contributory. This was the appeal of the official manager of the above company from the decision of the Master of the Eolls, dated the 16th June 1862, that the name of the Eeapondent ought not to be inserted in the list of contributories. The company was completely registered in the year 1845, and the 182d section of its deed of settlement provided as follows :-" That it shall be lawful for the board of directors for the time being for and on behalf of the company, to sell, at such price or prices and upon such terms as they shall think proper, all or any of the shares which shall from time to time be forfeited to the board under the provisions of these presents contained to any person or persons who shall be approved of by the board as fit to become a shareholder or shareholders in respect thereof, and either with or without the divi-[567]-dends which may have been declared in respect of such shares in the interval between the forfeiture and the purchase and the sale thereof: provided always, that when any one or more share or shares shall have been forfeited for non-payment of any call, within the time hereinbefore limited for the payment thereof, the board of directors shall not sell nor direct to be sold any more of such shares than shall be sufficient, as near as may be, to pay the amount of the sum payable by the shareholder for the time being in respect of such shares and legal interest thereupon; and the expenses attending such sale and all shares which shall remain unsold shall again revert to and become the property of the person or persons to whom the same shall have belonged immediately upon such forfeiture as aforesaid in the same manner as if such call had been duly and regularly paid." The Respondent executed the deed in respect of 100 shares on the 25th 4DEQ.F.SJ.M8. IN BE AGEICULTUBAL CATTLE INSURANCE CO. 1305 October 1845, and in respect of 100 more on the 15th November following: he paid for them ,200 to the company. On the 1st February 1848 a call of 1 per share was made upon all the shareholders, payable by two instalments of 10s. each on the 1st March and the 1st May in the same year. On the 3d August 1848 a further call waa made of 1 per share, payable on the 3d September. These calls were paid by the Respondent. On November 2d, 1848, it was proposed at a special general meeting of the company that a call of 3 per share should be made, and that those of the shareholders who were desirous of retiring should pay part of such call, and that the shares held by them respectively should be declared forfeited for the non-payment of the residue of the call; and a resolution was passed that the meeting should be adjourned till the 13th November, and that in the meantime all legal proceedings against the shareholders on the part of the [568] company should be suspended, and that notice should be given to all the shareholders of the proposed resolution. The following circular-letter was thereupon sent to the shareholders by the secretary :- "Agricultural Cattle Insurance Company, November 4th, 1848.-Sir,-I am instructed by the directors of this company to inform you, that the enclosed propositions were made by a considerable body of shareholders at the special general meeting held yesterday, and request that you will sign the accompanying form, should you wish to retire from the company upon the proposed terms. The special general meeting has been adjourned to be held at the New Hall, Chippenham, on Monday the 13th instant, at twelve o'clock at noon precisely; and in case you should not attend or return the accompanying form duly signed on or before that date, you will be held as declining to concur in the propositions submitted to the meeting. " Terms proposed by shareholders who wish to withdraw from the above company :- " All calls to the present time to be paid up. " That a call of 3 per share be made on the capital stock of the company, and that the directors be empowered to forfeit shares of retiring shareholders on payment by them in proportion to the number of their shares as follows:-Holders of shares under 100 to pay 2, 10s...
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