was present; and I do not understand that to have been the case" (a). (a) See 1 Hall & T. 320; 1 Mac. & Gor. 225. 1849. In re SOUTH WALES HOLLWEY'S HOLLWEY'S CASE. Aug. 1st. dinary meet joint-stock Company, re THIS was a motion to remove from the list of contribu- At an extraortories without qualification, the name of Mr. Charles ing of an unHollwey, who had become a shareholder in the Company, incorporated and afterwards transferred his shares to Mr. Buckland, the director mentioned in the last case, under the following circumstances, as stated in the evidence in support of Mr. Hollwey's claim to be removed from the list. In February, 1841, Mr. Hollwey was prevailed upon by the secretary, Mr. Wm. Lowther, to become an allottee of twenty 201. shares in the Company, and paid the amount payable in respect of them. solutions were passed, purporting to em power the directors, on behalf of the Company, to buy up the shares of any wishing to shareholder retire, on the terms of the He also executed the deed of settlement, the material purchaseportions of which are stated in the last case. In February, 1842, a meeting of the directors and shareholders of the Company was held, at which it was resolved, in pursuance of the power and authority given by the deed, to issue new shares in the Company, to rate as 201. shares, but upon each of which shares only 15l. were to be paid, and Mr. Hollwey had allotted to him five of such new shares, and paid in respect thereof 751. Shortly after the issue of the last-mentioned shares, Mr. Hollwey, having ascertained the danger he might eventually be brought into by having become a member of the Company, determined to dispose of his shares, and applied money being paid in deben tures, and of a further ad vance of the being also made by the same amount vendor, on the same security. chase being ef On a pur fected on these terms by a director, from a shareholder who was not director was not purchasing on his own account:-Held, that the share aware that the holder was not affected with constructive notice to the contrary; and, on his deposing that he had no actual notice, and there being no conflicting testimony, the Court directed the Master to review the list in which the shareholder was included as a "contributory" without qualification. 1849. In re THE VALE OF NEATH AND SOUTH WALES BREWERY Co. HOLLWEY'S to the secretary to find a purchaser for them, so as to relieve Mr. Hollwey from his responsibility, in pursuance of the 44th clause of the deed of settlement. The secretary, on receiving this intimation, communicated it to some of the directors, who, to prevent the shares from going into the market just as the Company were about issuing new shares, offered to purchase the shares on behalf of the Company; but Mr. Hollwey being advised that the Company only had power to purchase shares out of the surplus fund of the Company, in pursuance of the 23rd clause of the deed of settlement, (but which surplus fund never existed), considered that a sale to the Company would not be valid, and that their liability would remain the same. He, consequently, declined to sell his shares to the Company or the directors, or any one of them, on behalf of the Company. Some time afterwards, the secretary informed Mr. Hollwey that Mr. William Henry Buckland, a director and trustee of the Company, would purchase the shares at par, provided Mr. Hollwey would lend the Company the amount of such purchase-money, and a further sum of 500l., to which Mr. Hollwey agreed; and a deed of transfer was prepared and executed by him, dated the 27th of June, 1842, by which the shares were assigned to Mr. W. H. Buckland, his executors, administrators, and assigns, absolutely. Mr. Hollwey thereupon received the Company's debentures for the amount of the loan. The evidence produced before the Master, on the part of the official manager, to prove Mr. Hollwey to be a "contributory," was the deed of settlement and the payment of dividends. The evidence in opposition was the evidence of Mr. Lowther, Mr. Hollwey's affidavit, which was to the above effect, and the certificates and deed of transfer. For the purpose of obtaining further evidence, to establish the liability of Mr. Hollwey to remain on the list without qualification, Mr. Hollwey was summoned before the Master, and examined vivâ voce by the counsel for the official manager. 1849. In re The following were the material portions of this exami- THE VALE OF Q. How long did you hold those twenty shares?-A. Why, not much longer. Q. How long? A. Till June, I believe. Q. Do you know Mr. Lowther, the secretary of the Company?-A. I do. Q. Did you make any application respecting parting with your shares?-A. My brother mentioned to him that we wished to dispose of our shares. Q. And did Mr. Lowther inform you the Company wanted to purchase?—A. He said, the Company offered to purchase; but we objected to it. Q. Why did you object?-A. Because they could not purchase, we considered, according to the deed. Q. Who put that into your head?-A. I saw the deed. Q. What did you see in the deed that made you think that?—A. Why, that they could only purchase out of the surplus capital, and they never had any. Q. That was your construction?-A. That was my construction. Q. Are you a lawyer?—A. No Q. Did you communicate that to your brother?-A. Yes. We talked of it, and objected to it on that ground; and the thing was dropped. Q. Who took it up again?—A. Mr. Lowther. Q. Do you remember the first time of seeing him?— A. Not the date. Q. What did Mr. Lowther tell you? Give us the substance of his communication.-A. That Mr. Buckland would purchase the shares. Q. Did you know Mr. Buckland?-A. I had seen him. Q. Had you known him long before?-A. I never knew him till after I had got acquainted with the Brewery. NEATH AND SOUTH WALES BREWERY CO. HOLLWEY'S 1849. In re THE VALE OF NEATH AND Q. What was Buckland-one of the directors?-A. I sup- pose Q. You knew Mr. Buckland to be a director of the Com SOUTH WALES pany?-A. I supposed he was. BREWERY CO. HOLLWEY'S CASE. Q. Had you heard of Buckland buying shares of any one else?-A. No. Q. Of no one?-A. No. Q. Were you not aware at that time that he had bought some shares of other persons?-A. No: I have no recollection of hearing anything of the kind. Q. Can you say you were not aware of it?-A. I was not. Q. You were not aware that Mr. Buckland was buying shares in other quarters ?-A. No. Q. Did you see Mr. Buckland?-A. I did not on that subject. Q. By whom was the negotiation conducted?-A. Mr. Lowther and my brother principally. I left it more to him; he had more to do with it than I had. Q. Did you ask Mr. Lowther why Mr. Buckland was buying the shares?—A. I do not know that I did; it is six or seven years ago. Q. Can you remember whether you did or not?-A. I cannot. Q. I will ask you a plain question, and I hope you will give me an answer as plain as the question is: Had you not reason to believe, Mr. Hollwey, that Mr. Buckland was buying the shares on behalf of the Company?-A. No: I had not. Q. Did you not believe it?-A. I did not. Q. Did you believe that Mr. Buckland was buying these shares for his own purposes?-A. I did; if I had thought otherwise I would never have sold them to him. I thought it was an honourable transaction, or I would not have done it. Mr. Bacon and Mr. G. L. Russell in support of the mo tion. Mr. Hollwey, in June, 1842, transferred his shares to Mr. Buckland in the ordinary and regular way; and there is nothing to shew that he had any notice of the transaction being other than a transfer to a purchaser; nor is there any evidence to the contrary in the stipulation attached to the contract respecting the loan to the Company. Such a stipulation might be easily accounted for by the fact of Mr. Buckland having a great personal interest in the Company. The Company was indebted to him in a considerable amount, and, consequently, any fund being brought into the concern, as stipulated on the sale of the shares, enabled him to draw on the Company. On the other hand, Mr. Hollwey expressly deposed, before the Master, when examined by the official manager in support of the case of the Company, that he had no suspicion of the transaction being different from what it appeared and purported to be; and his evidence is altogether uncontradicted. Under these circumstances, it must be held that Mr. Hollwey is not liable in respect of any losses since June, 1842. Mr. Russell and Mr. T. H. Terrell for the official manager. -Mr. Hollwey was, in June, 1842, a partner in the Company; and, if he chose to shut his eyes to what all the other shareholders were aware of, he cannot avoid being affected with constructive notice of the proceedings of the partnership to which he belonged. Those proceedings appeared upon the minute-books of the Company, to which he might have had access. If he would not resort to those sources of information, still he is in law considered to have done so, and to have been aware that Mr. Buckland was buying up shares on behalf of the Company, in pursuance of the resolution. It is very difficult to understand how he could have remained uninformed upon the subject without either a design to avoid information which might be 1849. In re THE VALE OF NEATH AND SOUTH WALES BREWERY Co. HOLLWEY'S CASE. |