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CASES IN CHANCERY,
TURNER v. HILL. 1840: 2d May. The owner of nearly one-half the shares in a valuable mine in Cornwall, (which
was divided into 1,624 shares) having become bankrupt, his assignee and the other shareholders agreed, without the consent of the creditors, to dispose of his shares amongst themselves and their friends; and, in order to effect that object, they arranged that the mine should be sold under a decree of the Vice-Warden of the Stannaries, in an amicable suit to be instituted by a creditor of the mine against the then shareholders; that the mine should be repurchased by the assignee at a certain sum, and that a new company should be formed, consisting of the old and new shareholders. The bankrupt's shares were disposed of accordingly, the assignee and the old shareholders agreed to take some of them, H. and T. to take another jointly; and certain other persons, the remainder. Afterwards it was agreed that the shares in the mine should be altered to 54 shares. The decree was then obtained, and the mine sold and repurchased as had been arranged. H. and T. then agreed to sever their share. The creditors having discovered the circumstances under which the bankrupt's shares had been disposed of, the assignee was removed, and the plaintiff appointed in his place. The plaintiff filed a bill against H. alone, alleging that II. and all the other shareholders had notice of the circumstances before mentioned, and praying that H. might transfer her share to him, and account for and pay to him the profits thereof, and that a receiver might be appointed of the profits of the mine. Held that "the profits of the mine," must be taken to mean the profits of the share sought to be recovered; and that none of the other shareholders were necessary parties to the bill.
The plaintiff was the surviving assignee of Thomas and John Gundry, bankrupts. The object of the bill was to recover a share in certain mines, in Cornwall, *formerly be. [*2] longing to the bankrupts, which had been purchased by VOL. XI.
1840,--Turner v. Hill.
Jane Penneck Hill, and bequeathed by her to the defendants; one of whom was her executrix.
At and before the bankruptcy of the Messrs. Gundry, the mines in question were divided into 1,624 shares; and those gentlemen were entitled, between them, to nearly one-half of the shares. John Gundry was also the purser of the mines; and he having become greatly embarrassed in his circumstances, and the other shareholders haying.discovered that he had falsely charged them, in his accouits, with sums, to a large amount, as paid by him for materials for the mines, they, a few months before his bankruptcy, dismissed him from his office, and appointed Richard Tyačke purser of the mines in his place. In January, 1820, thie, eommission issued, under which the Messrs. Gundry, who were co-partners as bankers, were declared bankrupts. At the time of their bankruptcy, the mines were very valuable.
II. M. Grylls, a gentleman of great influence in the neighbor. hood of the mines, became desirous of purchasing some of the bankrupts' shares; and the other shareholders were desirous that he should become a co-adventurer with them in the mines, and should purchase as many of the bankrupts' shares as he should think proper, and that the remainder should be disposed of amongst themselves and such other persons as they should approve of as co-adventurers with them. On the 5th of February, 1820, a meeting of the adventurers in the mines, at which Grylls and Tyacke were present, was held for the purpose of considering
how to effect the before-mentioned object; and it was then [*3] proposed *as the best mode of effecting it, that a new com
pany of adventurers should be formed, and that the bankrupts' shares should be disposed of; and that, for the purpose of securing from liability such persons as should take shares as new adventurers, the mines should be sold through the medium of a decree of the Vice. Warden of the Stannaries, and be repurchased by the old adventurers, and that the moneys to arise from the sale of John Gundry's shares, should be applied in discharge of the debt due from him to his late co-adventurers; and, thereupon, and in the presence of Grylls and Tyacke, the following resolutions were drawn up and signed by the adventurers pre
1840.—Turner v. Hill.
sent : "It is proposed, as the only measure which can prevent the mines from stopping, to offer at least one-half for sale, at the price of 5001. for each share: it is proposed, for the security of the new adventurers, that the mines, materials, halvans, &c., shall be sold by the decree of the Vice Warden, and entered on the 1st of this instant February, clear of debts and demands which may have been contracted before that day: that the sum which may be raised from John Gundry's late shares, be wholly appropriated to pay the amount due from the mines to the end of October last : that the present adventurers who shall continue their shares, do give an undertaking, to the Vice Warden, to pay their proportions of the deficiency which may remain due from John Gundry as late purser, after the proceeds of the said John Gundry's shares shall have been appropriated as above: that communications be made, respecting the purchase of the onehalf of the mines agreed to be offered for sale, to Mr. Grylls, and that he be requested to correspond with such persons as are willing to become purchasers thereof; and the adventurers now present, will endeavor *to dispose of some part thereof [*4] amongst their friends, and write to Mr. Grylls the result." In consequence of these resolutions, Grylls and the then adventurers, together with Tyacke, immediately took active steps to form the new company, and to get persons, whom they approved of, to purchase the shares which were to be disposed of as before mentioned: and some of the old adventurers and Grylls and his friends agreed to take some of those shares; and Jane P. Hill and Tyacke agreed to take another share jointly. The bill alleged that Jane P. Hill, at the time when she so agreed to become interested in the mines, was well acquainted with the several circumstances before mentioned under which the proposed new company was intended to be formed and the said shares therein disposed of; and well knew that the mines were very valuable, and that the proposed undertaking would be very profitable.
On the 16th of February, 1820, at which time all the shares in the new adventure had been disposed of, a meeting of the old and new adventures was held, at which it was resolved that the
1840.-Turner v. Hill.
principal creditors of the mine should immediately petition the Vice-Warden, for a decree to procure the payment of the sums due to them; that they should represent to him, at the same time, that there was a great number of other creditors, and request him to appoint a day for the proof of their respective claims before his secretary, with a view to a decree for the sale of the mines, materials and halvans, for the purpose of defraying the whole sum which might be due; and that, when that should be accomplished, the Vice-Warden should be petitioned for a decree to sell the mines, with everything which might be thereon, in one lot. On the 23d of the same month, Grylls and Charles
Read were chosen assignees of the bankrupts' estates, and [*5] *the usual assignment thereof was made to them: but
Read interfered very little in the affairs of the bankrupts, and acted entirely under the influence and direction of Grylls.
Grylls, in order to effect his intention of becoming possessed of part of the bankrupts' shares, and to facilitate the formation of the new company, determined, as soon as he was appointed assignee, absolutely to relinquish the bankrupts’ shares; in order that they might be more readily disposed of in the manner and for the purpose mentioned in the resolutions. Accordingly, he and Read, with the privity of and in concert with the old and new adventurers, but without the consent or concurrence of the creditors of the bankrupts, relinquished all the bankrupts' shares to the old adventurers, under the pretence that the debts due in respect to them, exceeded their value.
On the day on which Grylls and Read were appointed assignees, another meeting of the old and new adventurers was held; and they then agreed to take such shares in the new comcompany as were set opposite to their names respectively; and it was further agreed that immediate measures should be taken to induce the Vice-Warden of the Stannaries to grant a decree for the sale of the mines, in order to pay the debts due at the end of January then last; and other arrangements were made with a view to the formation of the new company.
On the 23d of March, 1820, a petition was presented to the Vice-Warden, in pursuance of the before mentioned resolutions,