Scottish Court of Session Decisions

The Caledonian Heritable Security Company (Limited) went into voluntary liquidation on 13th July 1880. The liquidation was placed under supervision of the Court on 11th December 1880. On 24th August 1880 the liquidator settled a list of contributories of present members (the A list), and on 14th September 1880 made a call of £3 per share, being the whole amount uncalled on the company's shares, payable on 6th October 1880, and proceeded to enforce the call and realise the estate of the company. He also ranked the creditors, and paid them two dividends, one of 6s. 8d. per pound on 11th November 1880, the other of 2s. per pound on 15th May 1881. He made up a report of his actings and dealings for the first year of the liquidation to 13th July 1881.

The report and relative accounts showed that the liabilities of the company as at 31st July 1881 amounted to £107,944, and the assets to £149,615, showing an apparent surplus of £41,671. But the liquidator explained that the principal asset was £135,784, the amount contained in heritable bonds held by the company, and that he was unable to make any estimate of the ultimate outcome from £71,604 of that amount; that he estimated as recoverable £16,247; and that the only amount he considered wholly good was £47,932—£135,784. These estimated recoveries proceeded on the footing of a reasonable time being allowed for realisation. The realisation of the apparent surplus disclosed upon the above estimates was thus postponed and contingent. Meantime the creditors had only received 8s. 8d. per pound upon their debts.

The liquidator thus finding it necessary, in order to provide funds for the payment of the company's debts and the other purposes specified in the Companies Act 1862, to call upon the past members of the company during the year prior to the liquidation (viz., 13th July 1878 to 13th July 1880), after intimation to the parties, prepared the B list of contributories, and submitted it to the Court for approval.

The Companies Act 1862, sec. 38, provides—“In the event of a company formed under this Act being wound up, every present and past member of such company shall be liable to contribute to the assets of the company to an amount sufficient for the payment of the debts and liabilities of the company, and the costs, charges, and expenses of the winding-up, and for the payment of such sums as may be required for the adjustment of the rights of the contributories amongst themselves, with the qualifications following (that is to say)—(1) No past member shall be liable to contribute to the assets of the company if he has ceased to be a member for a period of one year or upwards prior to the commencement of the winding-up. (2) No member shall be liable to contribute in respect of any debt or liability of the company contracted after the time at which he ceased to be a member. (3) No past member shall be liable to contribute to the assets

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of the company unless it appears to the Court that the existing members are unable to satisfy the contributions required to be made by them in pursuance of this Act. (4) In the case of a company limited by shares, no contribution shall be required from any member exceeding the amount, if any, unpaid on the shares in respect of which he is liable as a present or past member.”

The note set forth that all the past members entered on the B list had ceased to be members within one year prior to the commencement of the winding—up; that the amount of the liabilities of the company contracted prior to 13th July 1879, and still subsisting at 13th July 1880, was £136,398; that the total amount of the £3 call on the shares contained in the B list was upwards of £3500, but part of the said sum had been paid by the present holders, and the call would only be made in respect of the unpaid portion thereof; and that the liquidator had made careful inquiry into the pecuniary position of such of the present members as had paid no part, or only a part, of the call, and was satisfied that the present holders of the shares specified in the B list (fourteen in number) were unable to pay the said call in full. Six of them had, subject to the sanction of the Court, compromised with the liquidator on the footing of making a complete surrender.

The list was in the form of which the following is a specimen:—

First Part—Contributories in Their Own Right.

Col. I	Col. II.	Col. III.	Col. IV.	Col. V.	Col. VI.
Serial No.	Name.	Address.	Description.	No. of Shares.	Names and Addresses of present Holders of Shares mentionedin Col. V.
1	A. B.	Perth.	Merchant.	50	Y. Z., Shoemaker, Glasgow
2	C. D.	Glasgow.	Merchant.	70	Do.
3	E. F.	Glasgow.	Merchant.
4	G. H.	Glasgow.	Merchant.

A memorandum was prefixed, explaining that where the number of shares in col. 5 stood opposite a group of two or more contributories, such contributories were the successive holders of the shares, the first in order having acquired them from the second, and the second from the third, all within one year of the commencement of the liquidation—the first in order, or in other cases the single contributory, being the transferor to the present shareholder in the A list. To facilitate reference to the A list the names and addresses of such present shareholders are given in col. 6.

The prayer of the note was “to approve of the B list of past members in the schedule hereto, without prejudice to any proceedings that may be competently taken by any contributory in the said list to have his name removed or to have the said list varied or altered; and further, to approve of the liquidator making the said call of £3 per share on the contributories in the said B list.”

The Court, without intimation to or service upon the contributories, heard the application in Chambers, the liquidator being in attendance, and thereafter they were satisfied that the prayer of the note should be granted, but that it was still open to contributories by application to the Court to open up the question.

Authorities— Helbert v. Banner, L.R., 5 H. of L. 28; Kellock v. Guthoven, L.R., 8 Q.B. 458, 9 Q.B. 241; Bridger and Neill's cases, L.R., 4 Ch. 266; Nevill's case, L.R., 6 Ch. 43.