1843.-Marke v. Locko. If the 23rd Order does not apply, this suit must stand over for want of parties; not only Mattock and Bush have an interest in the suit, and a duty, as trustees, which they may or may not be willing to perform, but Mrs. Locke, and those claiming under her, say that they ought to be delivered from these questions by one suit, and that this suit, as at present constituted, will not deliver them from these questions, parties who may contest their claim not being here. If the order, therefore, does not apply, the cause must stand over, not only upon the ground of Lord Cottenham's decision, but upon general principles and authority, the frame of the bill, and the nature of the circumstances. But it is said that the 23rd Order applies. Now that order (whether it might or might not be usefully extended, I need not express, if I have formed any opinion) *is as [*506] follows: [His Honor here read the order, as far as the words "answer the bill."] I am of opinion, that these are words, not of direction, but of condition—and I think that they have been so construed by one of the Judges of this Court. If the condition is not fulfilled, the whole proceeding under the order is out of place, and Mrs. Locke may say that she is entitled to disregard it that it is not necessary to pay any attention to an irregular and unauthorized proceeding. Assume that no account, no payment, no conveyance is sought against the other defendants, can it be said that no direct relief is sought against them? The plaintiff seeks to be established in respect of his alleged customary heirship; if so, he has a right to a conveyance from Mattock and Bush. They are trustees for one or the other of the contending parties; each of them may institute a suit against Mattock and Bush,-Mrs. Locke must be a party to every one of the suits, and the question may be re-agitated in each. Upon the whole, I am of opinion, that if I were to overrule this objection, it would render the suit entirely useless to the plaintiff, and that the Lord Chancellor, or House of Lords, would most properly reverse the decision. 1843.-Richardson v. Larpent. [*507] *WILLIAM JOHN RICHARDSON and six others, on behalf of themselves and of all other the proprietors or shareholders and partners of and in the Company or partnership, called the British Iron Company, hereinafter mentioned, except such of the said proprietors or shareholders and partners as are hereinafter named as defendants hereto, Plaintiffs; and Sir GEORGE G. de H., LARPENT and others, (directors of the Company,) ROBERT SMALL and others, (trustees,) and ROBERT SMITH, (Secretary,) Defendants. 1843: July 25th. The directors of a joint-stock company, consisting of upwards of 500 members, made certain calls, which the majority of the shareholders paid, but which six of them, alleging that the calls were fraudulently made, refused to pay, and filed their bill on behalf of themselves, and all other the shareholders, except the defendants, against the directors, trustees, and secretary of the company, praying for an account of the debts and assets of the partnership, a receiver, an injunction to restrain the defendants and all officers and servants of the company from dealing with the partnership property, an account of the debts and liabilities of the company, and to have the property applied towards the payment of its debts and liabilities:-Held, that some at least of the absent shareholders, who had paid up the disputed calls, ought to be made parties to the suit.[1] Where a cause is set down for hearing, upon the defendant's objection for want of parties, under the 39th Order of August, 1841, the Court will assume, for the purpose of deciding that objection only, the defendant's answer to be true. THE bill stated, that in the month of April, 1825, certain persons, in number 571, entered into partnership together for the purpose of working iron-mines in Great Britain, and of manufacturing and selling the ores and metals to be obtained and raised from such mines, and that the terms of such partnership were contained in a certain indenture of settlement. The bill then set forth the indenture of settlement, which bore date the 28th of April, 1825, and which, amongst many other clauses, contained clauses to the effect that the parties thereto of the second part called proprietors and others who should thereafter [1] 1 Coll. 241; 5 Hare, 112; 4 D. & War. 270; 2 Coll. 633; 15 Sim. 460; 14 Sim. 66. 1843.-Richardson v. Larpent. become proprietors as therein mentioned, should form a partnership, to be called "The British Iron Company," for the term of sixty-one years, unless sooner dissolved by agreement; that the capital of the Company should consist of £2,000,000 divided in 20,000 shares of £100 each; that the *man- [*508] agement of the Company should be confided to sixteen directors, to be chosen from among the proprietors; and that it should be lawful for a special general meeting, called for the purpose, from time to time to amend, alter, or annul, either wholly, or in part, any of the clauses of the deed, or of the existing regulations. The bill then, after stating the appointment of the defendants as directors, trustees, and secretary, alleged that at a special general meeting of the proprietors, held on the 7th November, 1826, it was resolved, first, that the capital to be raised for the purposes of the Company should no longer consist of the sum of £2,000,000, divided into 20,000 shares of £100 each, but should be limited to the sum of £1,000,000, and should be considered as divided into 20,000 shares of £50 each; and secondly, that no proprietor should be liable to pay in the whole more than £50 in respect of any one share: that all the 20,000 shares of £50 each, were taken and subscribed for, and that, in the month of February, 1829 a call for the last instalment in respect of £50 on each share was made: that, at a meeting held on the 4th May, 1838, the directors procured some of the shareholders to pass resolutions, authorizing them to raise a loan of £300,000, and rescinding the two resolutions passed at the meeting of the proprietors on the 7th November, 1826: that on the 25th May, 1838, the directors, by fraud and misrepresentation, the nature of which was specially charged by the bill, procured some of the proprietors to confirm the resolutions of the 4th of the same month: that the plaintiffs and divers other partners and proprietors of the Company protested against the resolutions of the 4th and 25th May, and declared the same illegal and void: that, notwithstanding the £50 per share had already been called for, and, except as therein mentioned, paid up, the directors, on four several occasions mentioned in the bill, made four several calls of £5 each: that the defendants, and, through their 1843-Richardson v. Larpent. [*509] *misrepresentation, the other shareholders, except the plaintiffs, had paid up these calls, but that the plaintiffs had protested against and refused to pay them, and actions had accordingly been brought against them to recover the amount of the calls. The bill charged that the number of shareholders was so great, and their rights and liabilities so subject to change and fluctuation by death or otherwise, that it was not possible without the greatest inconvenience to make them parties to the suit; and that so to do, would render it impossible in fact to prosecute the suit to a hearing; and that the directors refused to allow the plaintiff's to inspect the books of the Company, or to discover to the plaintiffs who were the members of the Company. The bill further charged that all the shareholders had a common interest in having the property and effects and other assets belonging or due to the partnership duly got in or applied under the direction of the Court, in satisfaction of the debts due and owing from the partnership. The bill prayed, amongst other things, that it might be declared that the resolutions of the 4th and 25th May, 1838, were fraudulent and void; that the actions for the calls might be restrained by injunction; that the directors might be declared personally liable for all acts, dealings, and transactions made or done in consequence of their fraudulent misrepresentation, and might be decreed to make good all losses occasioned thereby; that an account might be taken of all the partnership property. and that such part of the partnership property as required to be sold, might be sold; for a receiver; for an injunction to restrain the defendants and all the officers and servants of the Company from in any manner dealing with the partnership property; for an account of the debts and liabilities of the Company; and to have the property of the Company properly applied towards payment and satisfaction of its several debts and liabilities. *The defendants, in a schedule to their answer, set out the names of all the present shareholders (upwards of 500 in number,) who had paid up the additional instalments called for on their respective shares; and by their answer they submitted, that these persons were necessary parties to the suit. [*510] 1843.-Richardson v. Larpent. They denied the various charges of fraud and misrepresentation contained in the bill. The cause was set down by the plaintiffs under the 39th Order of August, 1841, to be heard on the objection for want of parties only. Mr. Russell, Mr. Wigram, and Mr. Roundell Palmer, for the defendants.--For the purpose of sustaining the objection for want of parties under the 39th Order, the Court will assume the truth of the answer as to that particular point. Then these plaintiffs, not having a common interest with the absent defendants in the relief which they seek, cannot be permitted to sue on behalf of themselves and all other shareholders: Bainbridge v. Burton.(a) Some of the shareholders having paid, and others not having paid, the additional calls, it is impossible to say that the whole of the rights and interests of the Company are represented by one of these classes only, especially a class which is in the minority. How can a class of individuals so circumstanced and in a minority take the whole concern into their own hands, and enforce a general account and dissolution (for they virtually ask a dissolution) behind the backs of the majority? Longe v. Younge,(b) Walworth v. Holt,(c) Newton v. Lord Egmont,(d) Jones v. Garcia del Rio.(e) The cases in which parties have been allowed to sue on behalf of themselves and others are these: first, cases in which some have been allowed to sue on behalf of all having a manifestly common interest *against [*511] individuals for the purpose of enforcing a personal liability to the partnership, or of relieving the partnership from a liability to those individuals. Cockburn v. Thompson, (f) Hichens v. Congreve,(g) Walburn v. Ingilby,(h) Small v. Atwood,(i) Taylor v. Salmon,(k) Preston v. Grand Collier Dock Company.(1) Secondly, cases in which some have been allowed to sue on behalf of all the partners having a manifest common interest in the relief sought, against all having an opposite interest (a) 2 Beav. 539. (b) 2 Sim. 369. (e) Turn. & Russ. 297. (h) 1 M. & K. 61. (i) 1 You. 407. VOL II. (c) 4 Myl. & Cr. 619. (d) 5 Sim. 130. (g) 4 Russ. 562. (1) 11 Sim. 327. 60 |