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or in respect of any debt contracted after he ceased to be a member; or unless the existing members are unable to satisfy the contributions required; or, in a limited company, beyond the amount unpaid on his shares; or, in the case of a company limited by guarantee, beyond the amount undertaken on his behalf in the memorandum. (Sec. 38; Guthrie's Bell's Prin. 403 R.)

1712. [Trustees, Executors, etc.-Trustees whose names are on the register, though entered as such, are personally liable. (Lumsden v. Buchanan, 1865, 3 M. H. L. 89, 4 Macq. 950; Muir, 1878, 5 R. 392, aff. H. L. ib. 21.) So also is a curator bonis. (Lumsden v. Peddie, 1866, 5 M. 34.) A trustee will be liable even if he have not himself signed the transfer, provided he have acquiesced in the purchase, or otherwise by his actings adopted it. (Cunninghame, 1879, 6 R. 679, aff. H. L. ib. 99; Smith, ib. 1017; Gordon, 7 R. 55.) Resignation by a trustee after the stoppage, but before the resolution to wind up, will not relieve him of liability. (Shaw, 6 R. 332.) If a trustee have resigned before the stoppage, the fact must be intimated to the company to exempt him from liability. (Tochetti, ib. 789.) The executors of a trustee who has predeceased the liquidation are not liable, at least primarily. (Oswald, ib. 461.) Whether they might be put on the second list was not decided. Where the name of a deceased trustee is allowed to remain on the register after his death, his executors are liable to be placed on the second list, though the company was aware of his death. (Law's Exs. ib. 830.)

1713. [An executor whose testator held shares in a jointstock company does not, by merely accepting office, incur liability as a contributor in respect of such shares. To do so he must voluntarily have the shares transferred into his own name, and he is to be allowed a reasonable time to decide whether he will do so or not. (Buchan, 1879, 6 R. H. L. 44.)

1714. [Trustees or executors whose names have not been entered in the register until after the declared insolvency of the

[company are not primarily liable; but the Court will order their names to be entered in the subsidiary list. (Macdonald, 6 R. 621; Myles, ib. 718; Stenhouse, 7 R. 102.) But where the person whose name was on the register at the time of the stoppage had sold his shares some time before, and the purchaser's name was entered after the stoppage, the Court refused to remove the latter's name, because the seller was entitled to have it substituted for his own. (Howe, 6 R. 1194.)

1715. [Wives and Husbands.-A wife who has purchased shares with money from which her husband's jus mariti and right of administration are excluded,-her name only being put on the register,-is liable to contribute to the extent of her separate estate; but her husband is not liable. (Biggart, 1879, 6 R. 470.) But in like case, where the husband's rights are not excluded, and though only the wife's name appears on the register, and she alone signs the dividend warrants and herself draws the dividends, the husband is liable. (Thomas, ib. 607.) This will be the case even where the entry in the register bears that the shares are exclusive of his rights, where it is shown that they were bought with the husband's money, or that his rights are not in reality excluded. (Steedman, 7 R. 111; Carmichael, ib. 118.) Where a wife, whose husband's rights are excluded in a marriage contract, though only in general terms, succeeds to shares of which she is registered as owner, her name only is to be put on the list of contributories. (M'Dougall, 6 R. 1089.)]

1716. Dissolution.-When the affairs of the company have been completely wound up, the Court shall make an order declaring the company dissolved from the date of the order.

1717. (2.) Voluntary Winding up.-A company may be wound up voluntarily, 1st, if the period fixed for its duration has expired, or on the occurrence of any event which it has been agreed should involve a dissolution of the company; 2nd, whenever the company has passed a special resolution to that effect;

3rd, whenever the company has passed an extraordinary resolution that they are satisfied that it cannot continue its business by reason of its liabilities, and that it is advisable to wind it up. The winding up commences at the date of the resolution authorizing it, after which business can only be carried on for the purpose of winding up. The company in general meeting appoints its own liquidators, who shall have the same powers as those appointed by the Court. Any creditor of the company may insist on the company's being wound up by the Court if they are of opinion that his rights are being prejudiced. (Secs. 129-146.) When a voluntary winding up has begun, the Court may direct that it shall continue subject to its supervision. (Secs. 147, 148.) In a voluntary winding up, the liquidators appointed by the company have the same powers as to settling the list of contributories as belong to the official liquidator in a winding up by the Court. (Sec. 133.)

CHAPTER X.

OF CAUTIONARY OBLIGATIONS.

1718. A cautionary obligation is a secondary engagement, by which he who enters into it binds himself, failing the principal obligant, to fulfil the primary obligation. (Stair, i. 17. 3; Ersk. iii. 3. 61; Bell's Com. i. 347; Bell's Prin. 245.)

1719. Previous to the passing of the Mercantile Law Amendment Act (19 and 20 Vict. c. 60), it was customary to distinguish between proper and improper cautionry. Cautionry proper was where the cautioner was bound avowedly as such; improper cautionry was where both cautioner and principal were bound as principals. According to the present law, cautionry proper can exist only as the result of positive stipu lation, under the proviso attached to the 8th section of the

statute above referred to, which enacts that "nothing herein contained shall prevent any cautioner from stipulating, in the instrument of caution, that the creditor shall be bound, before proceeding against him, to discuss and do diligence against the principal debtor."

1720. Cautionary obligations are generally undertaken from motives of friendship, and are consequently gratuitous; but it is not uncommon for them to be entered into in consideration of a premium paid. (Bell's Prin. 246. See King, 1711, M. 9461.)

1721. The existence of a consideration has always been optional in Scotland; and the rule of our law in this particular has been adopted into that of England by 19 and 20 Vict. c. 97, sec. 3. (Bell's Com., Shaw's edition, vol. i. p. 268, note.)

1722. Where a premium is stipulated, the contract becomes an insurance of solvency or honesty; and associations have been formed, both here and in England, for the purpose of undertaking as a speculation to guarantee the good conduct of parties employed as public or private officers. (See Guarantee Association.)

1723. The tendency of the decisions in the Courts, both here and in England, of recent years, has been to require greater strictness than formerly in the constitution of cautionary obligations; and latterly the Legislature itself has stepped in with the same object.

1724. By the Mercantile Law Amendment Act (1856) (19 and 20 Vict. c. 60, sec. 6), it is enacted that all cautionary obligations, and all representations and assurances, shall be in writing, and shall be subscribed by the person undertaking or making them, or by some person duly authorized by him, otherwise the same shall have no effect. [A signature on a bill of exchange proved by parole evidence to have been intended as a guarantee, is not a cautionary obligation in terms of that section. (Walker's Trs., 1880, 7 R. H. L. 85.) Nor can a written

[cautionary obligation be qualified by parole proof. (M'Phersons, 1881, 9 R. 306.)]

1725. A cautionary obligation may be dependent on a condition, in which case it is not effectual unless the condition be complied with. (Bell's Prin. 250; Culcreugh Cotton Co., Nov. 21, 1823, 2 S. 513; Blair, 1836, 14 S. 1069; Paterson, March 9, 1844, 6 D. 987.)

1726. The cautioner is in general entitled to plead every defence which was competent to the principal debtor; and the extinction of the principal obligation discharges the accessory one. (Ersk. iii. 3. 64; Bell's Prin. 251; Menzies, 211; Johnston, 1680, M. 2076; Nimmo, 1700, M. 2076; Innes, 1728, M. 2079; Halyburton, 1735, M. 2073.) Moreover, the discharge of one cautioner, consented to by the rest, is a discharge to all. (Mercantile Law Amendment Act, sec. 9.)

1727. Discussion.-Cautioners bound prior to the Mercantile Law Amendment Act, 21st July 1856, are entitled to insist that the creditor shall first call on the principal debtor, and, in law language, discuss him; and that, even in the case of his failing to satisfy the obligation in full, the creditor shall give him (the cautioner) the benefit of such portion of it as he did discharge. (Stair, i. 17. 4; Ersk. iii. 3. 61; Bell's Com. i. 347; Bell's Prin. 252.)

1728. Discussion imports not merely a demand for payment, but enforcement of it, to the full extent which the circumstances of the principal debtor admit of. (Brisbane, 1662, M. 3588.) Discussion will be held to have taken place if the principal debtor has left the country, leaving no effects behind him, or has become bankrupt. (Bell's Prin. 253; Elams, Dec. 7, 1757, M. 2110.)

1729. Cautioners bound subsequent to the date of the Mercantile Law Amendment Act have no right of discussion (sec. 8) unless expressly stipulated for.

1730. The cautioner is entitled to an assignation of the debt

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