The Companies Acts, 1862, 1862 and 1867, and John Daly & Company (Ltd)

• Jurisdiction: Ireland
• Judgment Date: 07 August 1886
• Date: 07 August 1886
• Court: Chancery Division (Ireland)

CHANCERY DIVISION.

IN THE MATTER OF THE COMPANIES ACTS, 1862, 1862 AND 1867, AND IN THE MATTER OF JOHN DALY & CO. (LIMITED.)

Re BoydUNK 15 L. R. Ir. 141.

Ex parte Griffith 23 Ch. Div. 69.

Ex parte Hill Ibid. 695.

Ex parte TempestELR L. R. 6 Ch. 70.

Gas Light Improvement Company v. TerrellELR L. R. 10 Eq. 168.

Poland v. GlynnENR 4 Bing. 22, note (a).

Wiltshire Iron CompanyELR L. R. 3 Ch. 443.

Barge's CaseELR L. R. 5 Eq. 420.

Bills v. SmithENR 6 B. & S. 314.

Mercer v. PetersonELRENR L. R. 2 Ex. 304; 3 Ex. 105.

Vacher v. CocksENR 1 B. & Ad. 145.

Ex parte Hodgkin; Re SoftleyELR L. R. 20 Eq. 746.

Re CrawfordELR L. R. 9 Ch. 752.

Gibbs and West's CaseELR L. R. 10 Eq. 312.

Ex parte BlackburnELR L. R. 12 Eq. 358.

Hunt v. MortimerENR 10 B. & C. 44.

Butcher v. SteadELR L. R. 7 H. L. 839.

Bills v. Smith 6 B. & Sm. 314.

Re BoydUNK 15 L. R. Ir. 542.

Toovey v. MilneENR 2 B. & Ald. 683.

Edwards v. GlynENR 2 E. & E. 29.

Butcher v. SteadELR L. R. 7 H. L. 845.

1862 sect. 153 — 1872 — Fraudulent preference.

Vor.. XIX.] CHANCERY DIVISION. MILLER, J . :- I am not disposed to extend the principle of those cases; and unless you can show me the case of a solicitor, I shall make the order asked for. Ilfr. Murray : There is no case in which a solicitor's earnings were the subject of adjudication, and after such an expression of opinion from the Court the official assignees will not press the matter. His LORDSHIP then made an order in the terms of the application. Solicitor for the bankrupt : Mr. G. C. Lett. Solicitor for the official assignees : Mr. John Murray. IN THE MArritu OF THE COMPANIES ACTS, 1862 AND 1867, AND IN THE MATTER OF JOHN DALY & CO. (LIMITED.) Companies Acts, 1862 sect. 153-Bankruptcy (Ireland) Act, 18;2-Fraudu lent preference. G., the auditor and accountant of a limited liability Company, at the presÂsing instance of its secretary, on the 9th February, advanced £1500 to the Company, to enable it to meet urgent liabilities, on the personal undertaking of the secretary that the sum advanced should be repaid on the 4th March folÂlowing, when it was expected that a meeting of the shareholders would have authorized additional capital to be raised by unissued debentures, which would enable the Company to pay G., and carry on its business. No security was asked for, or given, though G. was aware of the embarrassment of the ComÂpany. The shareholders, at their meeting on the 3rd March, refused to authoÂrize the further issue of debentures, and passed a resolution to wind up the Company, and a petition for a voluntary winding-up was presented on the 6th, and an order for winding-up was made on the 19th, March. On the 7th, 10th, and 13th March the secretary, with the sanction of the directors, repaid, out of the assets of the Company, the £1500, in three sums, which were entered in the cash-book, as payments on the 3rd March : Held, that the transaction was a fraudulent preference of G., under the Bankruptcy (Ireland) Aet, 1872, sect. 53 : and also void, under the Companies 84 LAW REPORTS (IRELAND). {L. R. L N. B. Act, 1862, sect. 153, as the payments to G. were made after the petition for 1886. winding-up had been presented; and, on the application of the official liquida In re tor, G. was ordered to repay the money. DALY & Co. CASE adjourned from Chambers, on an application by the official liquidator of the Company for an order that three several payments of £650, £500, and £350 respectively (making in all the sum of £1500), made by the said Company in the month of, March, 1885, to Robert Gardner, carrying on business at 40 and 41, Dame-street, in the city of Dublin, as a public accountant, who was then a creditor of the said. Company, and also auditor of the accounts thereof, be declared fraudulent as against the said official liquidator, and that the said Robert Gardner be ordered to pay the said sum of £1500 to the said official liquidator, upon the ground that the said payments were made with a view to giving the said Robert Gardner an undue and fraudulent preference over the other creditors of the said Company, and that the said official liquidator's costs of and incidental to this application, be paid by the said Robert Gardner. The liquidator subsequently served notice that he would also rely, at the hearing, upon the further ground that the payments to Mr. Gardner were void, under section 153 of the Companies Act, 1862, as having been made after the commencement of the winding-up. The circumstances upon which the application was grounded, the principal arguments in support of and against it, are sufficiently stated in the judgment of the Master of the Rolls. W . Kenny, Q.C., and Kr. Blood, for the official liquidator. [They cited. the Companies Act, 1862, as. 84, 133, 153 ; Re Boyd (1) ; Ex parte Griffith (2) ; Ex parte Hill (3) ; Ex parte TemÂpest (4) ; Gas Light Improvement Company v. Terrell (5) ; Poland V". Glynn (6) ; Buckley on Joint Stock Companies, pp. 309, 310 ; Be Wiltshire Iron Company (7); Barge's Case (8).] (1) 15 L. R. Ir. 141. (2) 23 Ch. Div. 69. (3) Aid. 695. (4) L. R. 6 Ch. 70. (5) L. R. 10 Eq. 168. (6) 4 Bing. 22, note (a). (7) L. R. 3 Ch. 443. (8) L. R. 5 Eq. 420. Vim. XIX.] CHANCERY DIVISION. Mr. Jellett, Q. C., Mr. Madden, Q.C., and Mr. O'Connor, for Mr. Gardner, relied on Bills v. Smith (1) ; Mercer v. Peterson (2) ; bather v. Cocks (3); Ex parte Hodgkin ; Re Softley (4) ; Re CrawÂford (5) ; Gibbs and West's Case (6). Mr. Blood replied, citing Ex parte Blackburn (7). THE MASTER OF THE ROLLS : John Daly & Co., Limited, was a Company registered under Ang. 7. the Companies Act, 1862, and carrying on the business of drapers, &c., in Cork, Limerick, and elsewhere in the south of Ireland. Mr. Gardner, who resided in Dublin, was its auditor. In February, 1885, the Company was in difficulties of the gravest nature, and Mr. Hayes, the secretary, came to Dublin, saw Mr. Gardner, and pressed him to lend money to the Company for preÂsent 'help ; and on the 9th February he advanced £1500, under circumstances stated by him in his affidavit and by Mr. Hayes in his oral examination in. Court. Mr. Gardner's account of the transaction is as follows : " 2. On the 7th February, 1885, I received from Edward Hayes, the secretary to said Company, a telegram, asking for an interview with me on the following Monday, in reply to which I made an appointment for the following Monday, February 9th, 1885. " 3. I was then aware that said Company was in difficulties, and that the said interview was sought for the purpose of a. conÂference with me as to the best means of relieving it from embarÂrassment, and I accordingly at once communicated with Mr. Thomas Revington, who is a debenture-holder in the Company in his own right, to the extent of £24,400, asking him to be present at said interview. " 4. On the 9th February, 1885, the said Edward Hayes, accompanied by the said Thomas Revington, waited on me at my " 5. 6 B. & S. 314. (5) L. R. 9 Ch. 752. " 6. L. R. 2 Ex. 304 ; 3 Ex. 105. (6) L. R. 10 Eq. 312. " 7. 1 B. & Ad. 145. (7) L. R. 12 Eq. 358. " 8. L. R. 20 Eq. 746. 86 LAW REPORTS (IRELAND) [L. R. I. M. office, and I then went over, with them, the accounts, as made up 1886. to the 31st January, 1885, from which it was evident that the In re liabilities accruing between that date and the 18th instant were DALY & CO. largely in excess of what the funds of the Company, then availÂable, could meet, and that, in the absence of temporary assistance from some quarter, pending an arrangement which would place the Company in possession of funds, it should stop payment, with great damage to its credit. The said Edward Hayes, in the preÂsence of the said Thomas Revington, then stated that there were debentures unissued. to the extent of £17,000, of which he could certainly get £10,000 taken up, which would be ample for the wants of the Company and the future working of its business, and, for that purpose, that he...