The bankrupt had been a member of the Bombay stock exchange. His share had been forfeit. The trustee claimed the share. The official assignee contended that his members card or the value thereof vested in him as the assignee in the insolvency, because among other reasons, ‘if the effect of the rules be that the proceeds of sale of the insolvent’s card do not enure for the benefit of the general body of his creditors the rules are contrary to the law of insolvency.’
Held: The nature of the constitution of the association as regulated by the deed of association and its rules in the case of a defaulting member who was expelled from the Association, no interest in his card was retained and there was nothing to pass to the assignee.
Lord Blanesburgh said: ‘It being agreed . . that the rules of this association are entirely innocent of any design to evade the law of insolvency, it may be that even these cases, although cases of a company and a partnership, are more favourable to the [association] than to the [official assignee] . . [T]he real answer to this contention of the [official assignee] [is] in the nature and character of the association as they have described it whereby in the case of a defaulting member who is expelled from the association no interest in his card remains in himself, and none can pass to his assignee, whether his expulsion does or does not take place before the commencement of his insolvency.’
Judges:
Lord Blanesburgh
Citations:
(1932) 48 TLR 443 PC
Jurisdiction:
England and Wales
Cited by:
Cited – Money Markets International Stockbrokers Ltd v London Stock Exchange Ltd and Another ChD 10-Jul-2001
MMI were members of the London Stock Exchange, and accordingly held one share in that non-profit making institution. The share was valueless. Anticipating losing their membership and so the share, and also the demutualisation, the share was to be . .
Cited – Belmont Park Investments Pty Ltd v BNY Corporate Trustee Services Ltd and Another SC 27-Jul-2011
Complex financial instruments insured the indebtedness of Lehman Brothers. On that company’s insolvency a claim was made. It was said that provisions in the documents offended the rule against the anti-deprivation rule. The courts below had upheld . .
Lists of cited by and citing cases may be incomplete.
Commonwealth, Insolvency, Company
Updated: 28 April 2022; Ref: scu.180973