bility after coming of age. (Re Central Bank & Hogg, 1890, Sec. 125. 19 O.R. 7.)

126. The liability of the bank, under any law, custom or Liability of bank. agreement to repay moneys deposited with it and interest, if any, and to pay dividends declared and payable on its capital stock, shall continue, notwithstanding any statute of limitations, or any enactment or law relating to prescription.

No prescrip

tion.

2. This section applies to money heretofore or hereafter de- Retrospective. dosited, and to dividends heretofore or hereafter declared. 53 V., c. 31, s. 90.

This section dates from 1890. It was proposed in that year to oblige banks to pay to the government for the public use of Canada any dividends and depositors' balances remaining unclaimed for a certain number of years, but the proposed amendment was modified so as to require only annual returns of such dividends and balances (sec. 114).

This section expressly excludes the operation of any statute of limitations or any contract or law relating to prescription in such a case.

Unclaimed dividends and depositors' balances being simply debts due by the bank, the provincial law of limitations would otherwise apply, although no bank would perhaps venture to plead the statute of limitations as a reason for non-payment.

As an incidental consequence of this section, a bank must preserve for an indefinite time the vouchers for payments made by it.

127. Any suspension. by the bank of payment of any of Suspension for 90 days its liabilities as they accrue, in specie or Dominion notes, shall, to constitute if it continues for ninety days consecutively, or at intervals insolvency. within twelve consecutive months, constitute the bank insolvent, and work a forfeiture of its charter or Act of incorporation, so far as regards all further banking operations.

remain in

2. The charter or Act of incorporation of the bank shall, in Charter to such case, remain in force only for the purpose of enabling the force only for directors, or other lawful authority, to make and enforce the winding up.

Sec. 127.

When company deemed insolvent.

calls mentioned in the next following section of this Act, and to wind up the business of the bank. 63 V., c. 31, s. 91.

The words "consecutively or at intervals within twelve consecutive months" were added in 1890. In other respects the section dates, substantially in its present form, from 1871.

After a suspension of payment for a less period than would constitute it insolvent under this section, a bank may resume business, but if it does so without the consent of the curator, its right to issue or re-issue notes is subject to the provisions of sec. 61. If the suspension continues for more than 90 days, either consecutively, or at intervals within 12 consecutive months, such suspension constitutes the bank insolvent and operates a forfeiture of its charter to the extent provided for by sec. 127.

This section is supplementary to the provisions of the Winding-up Act by sec. 3 of which a company is deemed insolvent,(a) if it is unable to pay its debts as they become due; (b) if it calls a meeting of its creditors for the purpose of compounding with them;

(c) if it exhibits a statement shewing its inability to meet its liabilities;

(d) if it has otherwise acknowledged its insolvency;

(e) if it assigns, removes or disposes of, or attempts or is about to assign, remove or dispose of, any of its property, with intent to defraud, defeat or delay its creditors, or any of them;

(f) if, with such intent, it has procured its money, goods, chattels, lands or property to be seized, levied on or taken, under or by any process or execution;

(g) if it has made any general conveyance or assignment of its property for the benefit of its creditors, or if, being unable to meet its liabilities in full, it makes any sale or conveyance of the whole or the main part of its stock in trade or assets, without the consent of its creditors, or without satisfying their claims; or,

(h) if it permits any execution issued against it, under which any of its goods, chattels, land or property are seized, levied upon or taken in execution, to remain unsatisfied till within four days of the time fixed by the sheriff or proper officer for the sale thereof, or for fifteen days after such seizure.

The same Act also provides that a company is deemed to be unable to pay its debts as they become due, whenever a creditor,

to whom the company is indebted in a sum exceeding two hun- Sec. 127. dred dollars then due has served on the company, in the manner When comin which process may legally be served on it in the place where pany deemed insolvent. service is made, a demand in writing, requiring the company to pay the sum so due, and the company has, for ninety days, in the case of a bank, and for sixty days in all other cases, next succeeding the service of the demand, neglected to pay such sum, or to secure or compound for the same to the satisfaction of the creditor. (Sec. 4.)

within 3

thereafter

make calls.

128. If any suspension of payment in full, in specie or If no proceedings Dominion notes, of all or any of the notes or other liabilities of the bank, continues for three months after the expiration months of the time which, under the last preceding section, would con- directors to stitute the bank insolvent, and if no proceedings are taken under any Act for the winding-up of the bank, the directors shall make calls on the shareholders thereof, to the amount they deem necessary to pay all the debts and liabilities of the bank, without waiting for the collection of any debts due to the bank or the sale of any of its assets or property.

2. Such calls shall be made at intervals of thirty days.

Intervals.

3. Such calls shall be made upon notice to be given at least Notice. thirty days prior to the day on which any such call shall be payable.

4. Any number of such calls may be made by one resolution. Number. 5. No such call shall exceed twenty per centum on each share. Amount. 6. Payment of such calls may be enforced in like manner Payment. as payment of calls on unpaid stock may be enforced.

7. The first of such calls may be made within ten days after First call. the expiration of the said three months.

8. In the event of proceedings being taken, under any Act, Procedure. for the winding-up of the bank in consequence of the insolvency of the bank, the said calls shall be made in the manner prescribed for the making of such calls in such Act.

9. Any failure on the part of any shareholder liable to any Forfeiture such call to pay the same when due, shall work a forfeiture by for non-pay

ment.

Sec. 128.

Proviso.

Proceedings after insolvency of bank.

such shareholder of all claim in or to any part of the assets of the bank: Provided that such call, and any further call thereafter, shall nevertheless be recoverable from him as if no such forfeiture had been incurred. 53 V., c. 31, ss. 92, 93 and 94.

This section is a consolidation of three separate sections of the Act of 1890, and was divided into its present sub-sections in 1906. In other respects the section dates from 1890. In the last mentioned year the law was amended in several particulars. Formerly the first calls on the double liability were to be made if the suspension of payment in full continued for six months, now they are to be made as above provided. The words "and any number of such calls may be made by one resolution" were added in 1890. Apart from these words it would be necessary to have separate meetings and resolutions at intervals of at least 30 days. (Robertson v. Banque d'Hochelaga, 1881, 4 L.N. 314.)

The principle that the double liability of shareholders should be enforced without waiting for the collection of debts or the sale of assets, was laid down by the Act of 1871. The provision giving effect to this principle is designed to ensure the prompt and effectual enforcement of such liability, and to guard against the recurrence of such cases as have been the cause of loss to creditors in the past. In the case of the Bank of Upper Canada, for instance, the entire assets of the bank were not realized for many years and, partly as a result of the delay, the double liability was in fact never enforced.

After a bank has been constituted insolvent under sec. 127, proceedings may be taken under the Winding-up Act. If no such proceedings are taken, and the suspension of payment in full of all or any of the notes or other liabilities continues for three months after the bank has become insolvent under that section, the directors are obliged under sec. 128 to make calls on the shareholders to the amount the directors deem necessary to pay all the debts and liabilities of the bank, without waiting for the collection of any debts due to it or the sale of any of its assets or property.

If a winding-up order is made, the Winding-up Act provides that "the company from the time of the making of the winding-up order, shall cease to carry on its business, except in so far as is, in the opinion of the liquidator, required for the

beneficial winding-up thereof; but the corporate state and all Sec. 128. the corporate powers of the company, notwithstanding it is otherwise provided by the Act, charter or instrument of incorporation, shall continue until the affairs of the company are wound up" (sec. 20). Cf. secs. 21 to 23.

The settlement of the list of contributories, the making of calls upon shareholders, etc., is provided for by secs. 48 et seq. of the Winding-up Act.

By that Act the winding-up is deemed to commence at the time of the service of the notice of presentation of the petition for winding-up (sec. 5). When a bank becomes insolvent a creditor for a sum not less than $1,000 may apply by petition to the court in the province where the head office or other chief place of business in Canada is situated. Before making the order the court shall direct a meeting of the shareholders and a meeting of the creditors of the bank to be summoned, held and conducted as the court directs, for the purpose of ascertaining their respective wishes as to the appointment of liquidators. (Sec. 151; and cf. secs. 12 to 17 of general application to companies.)

The appointment of a chairman and the voting at each meeting is provided for (secs. 152 to 155).

The chairman of each meeting shall report the result thereof Appointto the court, and, if a winding-up order is made, the court shall ment of appoint one or more liquidators not exceeding three to be select-liquidator. ed, in its discretion, after such hearing of the parties as it deems expedient, from among the persons nominated by the majorities and minorities of the shareholders and creditors at their respective meetings (sec. 156).

If no one is so nominated, the liquidator or liquidators shall be chosen by the court (sec. 157).

In the case of the Bank of Liverpool, the judge appointed liquidators from the nominees of the creditors, one of them being the defendant bank. Held, affirming the judgment of the court below (22 N.S.R. 97), that there is nothing in the Winding-up Act that requires both creditors and shareholders to be represented on the board of liquidators, that a bank may be appointed liquidator, and that, if any appeal lies from the decision of the judge in exercising his judgment as to the appointment, his discretion was wisely exercised in this case. (Forsythe v. Bank of Nova Scotia, 1890, 18 S.C.R. 707, S.C. Cas. 209.)