1847. CRIDLAND v. DE MAULEY. secret influence of rival interests, been rejected by the committee, after a protracted parliamentary contest, without any sufficient or satisfactory reason being assigned, the directors, although their original opinion of the undertaking has, by the evidence adduced before Parliament, been fully confirmed, have, after mature deliberation, which has been influenced by the consideration of the pressure in all pecuniary affairs relating to railway undertakings, thought it prudent to exercise the powers vested in them by the deed of settlement by declaring the company dissolved. The only duty which now remains for the directors to perform is to return to the shareholders the amount of their deposits, after deducting therefrom the expenses incurred on their behalf, and to submit the annexed statement of account, by which it will be seen, that, after discharging all the liabilities of the partnership, there remains for distribution 10s. 6d. per share; and this result has been arrived at after a patient examination of the various claims against them, and at the same time preserving due regard to the protection of themselves and their shareholders individually from future liability." That, on the receipt of this circular, the plaintiffs for the first time discovered that the whole of the 25,000 shares had not been allotted and subscribed for, and that the deposits had only been paid on 16,555 of such shares, and that the defendants had diminished the amount of the capital of the company, and that some of the defendants had never executed the subscribers' agreement, or taken any share or shares in the company. That the plaintiffs would never have executed the subscribers' agreement if they had known that the defendants, or any of them, would not execute the same; and that by omitting or refusing to execute the subscribers' agreement, to which they had directed themselves to be made parties as aforesaid, the defendants committed a fraud on plaintiffs, and the other bonâ fide subscribers to the undertaking who were induced to execute the same. That the defendants were compelled to borrow a considerable sum, at interest, from the bankers of the company, in order to make up a sufficient sum to pay the parliamentary deposit required by the standing orders of the House of Commons. That, in attempting to diminish the capital of the company, the defendants committed a fraud upon the plaintiffs and the other persons who had subscribed their money to the undertaking on the faith that the capital of the company was to be £500,000 at the least. That, at the time of their taking such shares in the intended company, they were expressly assured that all the shares in the company were taken. That, shortly after the letters of allotment had been sent, the plaintiff Cridland called on the solicitor for the company and inquired why no more than fifteen shares were allotted to him, and was informed by the solicitor that all the shares had been disposed of except 300 or 400, which the directors meant themselves to take. That at that time the shares were at a premium of 15s. per share. That some of the defendants, the directors whom the bill mentioned, never took any shares. That the defendants allotted to some of themselves shares which they sold at a premium before all the other shares had been allotted, and kept shares back with a view to increase the premium; and that among the expenses for which the defendants took credit in their accounts was a sum of 3087. 14s. 3d. for commission on selling scrip, which the plaintiffs verily believed was a commission on selling and buying in the scrip to rig the market; and the bill charged that the defendants had no power to expend the sums or incur the liabilities set forth in their accounts. That the plaintiffs had declined accepting the sum of 10s. 6d. and signing the deed of release in the letter or circu 1847. CRIDLAND v. DE MAULEY. 1847. ช. DE MAULEY. lar of the 23rd day of June mentioned or alluded to. The bill CRIDLAND further charged, that the defendants never bonâ fide intended to carry into effect the proposed objects stated in the prospectus, and that they never made the proper and necessary inquiries to ascertain the truth of the statements and allegations therein contained. It also charged, that the defendants proposed and carried on the scheme quite regardless of the interests of the public or of the plaintiffs, and for the sole purpose of selling at a premium the shares they might allot to themselves and their friends; and that, under the circumstances therein mentioned, and from the defendants having had the sole control of the affairs of the company, and having all the books and papers relative to the same in their possession, and from many of the circumstances aforesaid being within the personal knowledge of the defendants and the other persons, the plaintiffs could not obtain such effectual relief in the matters aforesaid in a court of common law as in a court of equity. And the bill charged, that plaintiff's were totally ignorant of the names and addresses of such persons, if any such there were, as had taken shares, other than the parties to the suit. The prayer was, that the defendants might be ordered or decreed to pay to the plaintiffs the sum of £105, being the amount of the deposits so paid by plaintiffs in respect of the shares so allotted to them respectively in the proposed company or undertaking as aforesaid, together with interest thereon; and that the defendants might be ordered to pay to the plaintiffs the costs of the suit. Mr. Swanston and Mr. T. H. Terrell, in support of the demurrer. There is a misjoinder of plaintiffs, for the case stated is, that there were three distinct applications and three distinct allotments. There are, therefore, three distinct cases, each of which may admit of a different defence, and ought not to be joined in the same bill. The allega 1847. CRIDLAND v. tion in the bill, that the plaintiffs are jointly interested, can make no difference, for that is an inference of law, and the demurrer only admits the matters of fact pleaded. If they DE MAULEY. were in fact jointly interested, still, as it is not alleged that this fact was known to the defendants, it would not prevent the three cases from being perfectly distinct as regards the defence to them. From the allegation, that one of the plaintiffs paid all the deposits, it only follows that the others are not interested or are differently interested. The case falls within the principle of Jones v. Garcia del Rio (a). But the bill cannot be sustained on the substance of the case. A distinct case of fraud must be alleged against the defendants personally, to entitle the plaintiffs to relief on the ground of fraud, and no such case is made by the bill. The plaintiffs' remedy, if any, is at law, this case being in substance an action for money had and received. [The Vice-Chancellor referred to Colt v. Wollaston (b).] In that case the evidence shewed a case of clear fraud, and the judgment of the Court proceeds upon that ground. Here no facts are alleged amounting to a fraud, and a mere charge that conduct is fraudulent, which, upon the facts stated, does not appear so, will not protect a bill from demurrer. Moreover, the bill seeks accounts of the application of the money subscribed, and charges that the funds have been misapplied; all of which are immaterial if the plaintiffs repudiate the contract on the ground of fraud. Mr. Russell and Mr. R. W. E. Forster appeared for the plaintiffs, but were not called upon. The VICE-CHANCELLOR: It may be that the bill contains allegations and charges (a) Turn. 297. (b) 2 P. Wms. 154; and see Green v. Barrett, 1 Sim. 45; Sed don v. Connell, 10 Sim. 74; Har vey v. Collett, 15 Sim. 332. 1847. CRIDLAND v. which are, in some respects, not clear; which are, in some respects, not distinct; and which are, in some respects, appaDE MAULEY, rently contradictory. The question, however, is, whether, taking the whole together, and not treating the separate parts of the pleading with too much rigour, there is not to be collected a substantial allegation that money was obtained from the plaintiffs by misrepresentation and fraud. If it be assumed, as I am bound to assume, that the statements of the bill are true, they would, I think, entitle the plaintiffs to a decree. Nor does the objection as to misjoinder appear to me tenable. Upon the whole, there appears sufficient to sustain the bill; and I, therefore, overrule the demurrer, but without costs, and without prejudice to any question in the cause. An appeal from this decision was heard before the Lord Chancellor, March 11, 1848, when the Vice-Chancellor's judgment was affirmed. The LORD CHANCELLOR, after referring to the allegations in the bill, that the plaintiffs agreed among themselves to apply for allotments of shares, and that they would take the shares jointly, and that the party in whose name they might be taken should be considered as holding the shares for the whole, said, that upon those allegations repeated two or three times in the course of the bill, the plaintiffs were all interested in every share, and that was the mode in which their joint interest was created. How could it be said to be an improper joinder if every party was interested in every share, and had a valuable interest in every share, according to the allegation? The names as they stood merely shewed who were the trustees for the plaintiffs. It was quite a different thing from what it would be (and even then his Lordship did not see that the objection would hold) if the parties upon an allega |