Re Munster Bank, Ltd Dillon's Claim

• Jurisdiction: Ireland
• Judgment Date: 28 April 1886
• Date: 28 April 1886
• Court: Chancery Division (Ireland)

Appeal.

IN RE MUNSTER BANK, LIMITED

DILLON'S CLAIM.

Waterhouse v. Jamieson L. R. 2 Sc. App. 29.

Fleeming v. Howden L. R. 1 Sc. App. 372.

Minnitt v. Lord Talbot de MalahideUNK 1 L. R. Ir. 143.

Bristowe v. Whitmore 9 H. L. Cas. 391.

Dale v. MartinUNK 11 L. R. Ir. 371.

Dronfield Case 17 Ch. Div. 76.

Oakes v. TurquandELR L. R. 2 H. L. 325

Chapman and Barker's CaseELR L. R. 3 Eq. 361.

Cree v. SomervailELR 4 App. Cas. 648.

Chapman & Barker's CaseELR L. R. 3 Eq. 361.

Oakes v. TurquandELR L. R. 2 H. L. 325.

Company Winding-up Trustee for Company Contributory Indemnity.

You XVII.] . CHANCERY DIVISION. 341 IN RE MUNSTER BANK, LIMITED (1). (DILLON'S CLAIM.) Company-Winding-up-Trustee for Company-Contributory-Indemnity. Appeal. 1886 April 20, 28. D. and F. were joint managers of the M. Bank, and, while so acting, a number of stocks, shares, and other securities, and, amongst others, 40,006 Consols, and 60,000 New Three Per Cent. Stock, were transferred into their names, as trustees for the Bank. There was also assigned to them by certain customers of the Bank 801 shares in the Bank itself, as security for moneys due, or to become due, from them to the Bank; and these shares were, at the date of the liquidation, standing in the names of D. and F. During the years 1883 and 1884 the 40,000 Consols, and 60,000 New Three per Cent. Stock, were transferred to the Bank of Ireland, as security for advances to the M. Bank on an account entitled in the name of the Governor and Company of the Bank of Ireland, " in collateral account with D. and F., both of the M. Bank." The M. Bank stopped payment in July, 1885, and was being wound up. F. absconded, and on the 1st October, 1885, an order was made that the estate and interest of D. and F. in the 40,000 Consols and 60,000 New Three per Cent. Stock should vest in D. and the liquidators of the M. Bank. The Bank of Ireland having been paid off, the 40,000 Consols and 60,000 New Three per Cent. were, on the 5th October, 1885, transferred into the names of D. and the liquidators. The liquidators placed D. on the list of contribuÂÂtories in respect of the 801 shares, and made a call thereon ; and they also required D. to join with them in realizing the stock. D. claimed to be inÂÂdemnified against the calls out of these stocks. On a summons to decide on D.'s claim : Held, affirming the judgment of the Master of the Rolls, that, as against creditors, D. had no such right of indemnity. APPEAL by Michael Dillon from an order of the Master of the Rolls, made on the 10th March, 1886, declaring that the said Michael Dillon, one of the late joint managers of the Munster Bank, was bound to concur with the liquidators in the sale of two sums of 60,000 Government New Three per Cent. Stock, and (1) Before NAISH, C., FITZ GIBBON and BARRY, L.JJ. VOL. XVII. 2 G 342 LAW REPORTS (IRELAND). [L. R. T. Appeal. 40,000 Consols, standing in the joint names of the liquidators 1686. and Michael Dillon, for the benefit of the creditors of the Bank. In re M IINSTER BANK, LTD. The material facts are stated in the judgment of the Lord (DILLON'S Serjeant Campion and Hr. Piers White, Q. C., for the appelÂÂlant : Mr. Dillon being forced to pay calls on the shares which he holds only as being trustee for the Bank, is entitled to be indemnified out of the stock which he also holds as their trustee : Lewin on Trusts (8th Ed.), 642. The liquidators have no greater rights than the Company ; and the rights of creditors, when enforced by the liquidator, must be enforced by him in right of the Company : Waterhouse v. Jamieson (1) ; Fleming v. Hoyden (2). The ComÂÂpany are bound to recoup Mr. Dillon for the expenses incurred by him as their trustee : Minnitt v. Lord Talbot de Malahide (3) ; Bristow v. Whitmore (4) ; Dale v. Martin (5) ; Dronfield Case (6). Mr. Overend, Q. C., and Mr. Edward Carson, for the responÂÂdents, the liquidators : Even if the rights of creditors had not intervened, Mr. Dillon has no lien on these sums of stock; for when they were transferred to the Bank of Ireland Messrs. Dillon and Farquharson ceased to have any interest in the stock, as trustees or otherwise, and the order of the 1st October, 1885, after the Bank went into liquida-, tion, gave Mr. Dillon no right to assert a lien on these stocks. But the Bank is now being wound up. No such right of indemÂÂnity as Mr. Dillon claims can be asserted as against the creditors of the Company : The Companies Act, 1862, s. 38, sub-sect. 7; Oakes v. Turquand (7); Chapman and Barker's Case (8); Cree v. Somervail (9). (1) L. R. 2 Se. App. 29. (2) L. R. 1 Sc. App. 3724 (3) 1 L. It. Ir. 143. (4) 9 H. L. Cas. 391. (5) 11 L. It. Ir. 371. (6) 17 Ch. Div. 76. (7) L. It. 2 H. L4 323. (8) L. It. 3 Eq. 361. (9) 4 App. Cas. 648. Voi. XVII.] CHANCERY DIVISION. 343. .11fr. G. Fitzgerald,' for the petitioning creditor, Was not heard. _41118766:4 NAISH, C.:- This case was argued before us, before the Court rose for the' 1111JINI grTeE R BANK, L Easter holidays, and we have had an opportunity of considering in (DILLoN'sTD. the interval the several arguments addressed to us. The facts of CLAM.) the case are simple, and free from complication. Mr. Dillon the April 28. appellant and Mr. Farquharson were the joint managers of the Munster Bank. In consequence of their position as suoh, a number of securities were from time to time transferred into their names as trustees for the Bank. Some of the securities so transferred belonged to custom1rs of the...