The Joint Stock Companies Winding-Up Act, 1848; and of The Joint Stock Companies Winding-Up Amendment Act, 1849; and The German Mining Company The Case of Samuel Ball, William Haigh, Francis Ramsbotham, William Rothert, William Wood-Roffe, and Emily Duncan Harvey. Exparte William Chippendale, Charles Chippendale, and Thomas Hughes. Before the Lords Justices
| Jurisdiction | England & Wales |
| Judgment Date | 23 June 1854 |
| Date | 23 June 1854 |
| Court | High Court of Chancery |
English Reports Citation: 43 E.R. 415
BEFORE THE LORDS JUSTICES.
S. C. 22 L. J. Ch. 926; 17 Jur. 745; 18 Jur. 710; 2 W. R. 543. See In re Cork and Youghal Railway Company, 1869, L. R. 4 Ch. 753. Distinguished, In re National Permanent Benefit Building Society, 1869, L. R. 5 Ch. 309. See Davis 's Case, 1871, L. R. 12 Eq. 521; Yorkshire Railway Wagon Company v. Maclure, 1881, 19 Ch. D. 487; Blackburn Building Society v. Cunliffe, Brooks, & Company, 1882, 22 Ch. D. 65 n.; In re Pumfrey, 1882, 22 Ch. D. 260; In re Norwich Equitable Fire Insurance Company, 1884-86, 54 L. J. Ch. 228; 53 L. T. 569; Exparte Watson, 1888, 21 Q. B. D. 303; In re Wrexham, &c., Railway [1899], 1 Ch. 449.
DBO.M.*G.19, EX PABTE CHIPPENDALE, BE GERMAN MINING CO. 415 tqzi: I òò Sts. [19] In the Matter of the joint stock companies winding-up act, 1848 ; and of the joint stock companies winding-up amendment act, 1849; and In the Matter of the german mining company. The Case of samuel ball, william haigh, francis ramsbotham, william rothert, william wood-roffe, and emily duncan harvey. Exparte william chippendale, charles chippendale, and thomas hughes. Before the Lords Justices. April 21, 22, May 5, 1853 ; May 11, 25, June 23, 1854. [S. C. 22 L. J. Ch. 926 ; 17 Jur. 745 ; 18 Jur. 710 ; 2 W. R. 543. See In re Cork and Youghal Railway Company, 1869, L. R. 4 Ch. 753. Distinguished, In re National Permanent Benefit Building Society, 1869, L. R. 5 Ch. 309. See Davis 's Case, 1871, L. R. 12 Eq. 521 ; Yorkshire Railway Wagon Company v. Maclure, 1881, 19 Ch. D. 487 ; Blackburn Building Society v. Cunliffe, Brooks, & Company, 1882, 22 Ch. D. 65 n. ; In re Pwmfrey, 1882, 22 Ch. D. 260 ; In re Norwich Equitable Fire Insurance Company, 1884-86, 54 L. J. Ch. 228; 53 L. T. 569; Exparte Watson, 1888, 21 Q. B. D. 303 ; In re Wrexham, &c., Railway [1899], 1 Ch. 449.] A joint stock company was formed in England for working mines in Germany, subject to the terms of a deed of settlement, which provided that the capital should be £50,000, and gave no powers to the directors to raise money except by the creation of new shares. That capital was paid up and proved insufficient for working the mines. The wages of the miners being in arrear, and other debts being duo, the managing directors obtained advances from some of the shareholders for the purpose of paying those debts and preventing the mines from being seized under the law of the country. The directors also borrowed other sums on their personal guarantee from the bankers of the company, not for payment of debts, but for carrying on the business of the company in its ordinary course, and they afterwards repaid the bankers these advances. The company was wound up under the Winding-up Acts. Held,- 1. That the advances made by the shareholders to pay debts of the company might be set off by them with interest against a call. 2. That although the advances made by the bankers did not constitute a debt due to them from the company, the directors having no power to borrow, the directors were entitled to be allowed the amounts repaid by them to the bankers, the directors being trustees, and in that character entitled to indemnity from their cestuis que trustent against expenses bond fide incurred. 3. That the distinction between advances by shareholders to pay necessary expenses and a loan contracted by them is a sound one. This was a motion on behalf of three contributories to the above company to discharge an order made by Master Tinney, allowing certain sums to the Re-[20]-spondents (who were also contributories) in their accounts, as a set-off against a call made under the Winding-up Acts. The German Mining Company was established for the purpose of working mines in Prussia and Bavaria, under a deed of settlement bearing date the 2d of May 1836. It had offices in London, and was completely registered under the Registration Acts. The deed provided that the capital of the company should consist of £50,000, divided into one hundred shares. The following were the material clauses of the deed of settlement. 4. That the affairs and business of the company shall be under the sole and entire control of the directors, of whom there shall not be less than five nor more than nine, and that three of them shall at all meetings of directors and for all purposes be competent to act, and that the directors shall appoint and remove all officers and servants of the company, and award to them such salaries, wages, or other compensation as they shall think fit ; and any director or directors shall be removeable by a majority of votes at a general meeting of the shareholders specially convened for the purpose, and all boards of directors shall be held in London and not elsewhere, unless under the authority of a board in London. 11. That the directors shall have power to make such calls upon the shareholders to the extent of £500 per share, as they shall think necessary, each call not exceed- 416 EX PAETE CHIPPENDALE, BE GEBMAN MINING CO. 4 DE 0. M. * 0. a. ing £50 per share, and one month's notice to be given of each call by notice in writing to the shareholders respectively, such notice to be sent by the general or [21] twopenny post, and addressed to the shareholders respectively according to their place of residence for the time being, appearing in the books of the company for registering the shares, and in the event of the non-payment of any one of such calls within thirty days after the expiration of such notice, the directors shall give to such shareholder or shareholders neglecting to pay such call a notice in writing, to be transmitted as aforesaid, that unless such call be paid to the bankers of the company within thirty days next after the date of such notice, that the share or shares in respect of which such default shall be made will be liable to forfeiture, and if at the expiration of such last-mentioned thirty days the call or calls shall not be paid, the directors shall have the power, though it shall not be compulsory upon them if they see reason to the contrary, to declare the share or shares in respect of which such default shall be made to be forfeited, and all dividends, profits, and advantages thereon to be for the benefit of the remaining shareholders, but without prejudice to the right of the directors to enforce such calls as they shall think fit. 12. That the directors shall provide and keep proper minute books and books of account for the manifesting the true state of the affairs and business of the company, which minute books and books of account shall be open to the inspection of any share holder at the office of the company during all the usual hours of business. 13. That a general meeting of the shareholders shall be held some time in the month of March 1837, and in the same month in every succeeding year, of which fourteen days' notice shall be given by letters addressed to the respective shareholders according to their respective residences for the time being, appearing in the [22] company's books, and transmitted by the general or twopenny post, and at such meet ing the accounts of the company up to the 31st day of December preceding, and a general report of the affairs thereof shall be made and reduced into writing and submitted to the shareholders, and that at such annual meeting any special business may be transacted if the same meeting be also convened as a special meeting in manner hereinafter provided. 14. That the directors may at any time call a special general meeting on giving seven days' notice by circular letter addressed and sent to the shareholders in manner aforesaid, in which circular it shall be stated that the object of the meeting may be known on inquiry at the office of the company, or the object of such meeting may if the directors shall think fit be stated in the circular by which such meeting shall be convened. 15. That any number of shareholders holding collectively not less than twenty shares, may at any time require the directors to call a special general meeting of the shareholders by giving notice in writing to the directors and signifying in such notice the object of such meeting, and if the directors shall neglect or refuse for seven days to call such meeting the requisitionists shall be at liberty to call the same by giving fourteen days' notice by circular addressed and sent as aforesaid, signifying therein the object of such meeting, or that it may be known on application at the office of the company. 16. That a majority of votes at any general or special general meeting, whether convened by the directors or by the shareholders, under the clause for that purpose hereinbefore contained, shall be binding and conclusive upon all the shareholders of the company in respect of [23] any matter or thing which shall be brought before such meeting notwithstanding the absence from such meeting or the non-acquieacence at such meeting or afterwards of any of such shareholders in the decision of such meeting provided that shareholders holding or representing not less than thirty shares; be present in person or by proxy at such meeting, and except in case a ballot shall be demanded and granted as hereinafter mentioned. 20. That the directors shall be and are hereby authorized to carry into effect the treaties of the said parties of the first part which are now pending or in contemplation for the acquisition of the several mines hereinbefore mentioned, and also t negotiate for and acquire such other mines as they shall think desirable for the interests of the company, and also to abandon...
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