Trust – Resignation by Trustee after Commencement of Liquidation Proceedings – Right to have Name Removed from Register.
The City of Glasgow Bank stopped payment on 2d October, and no business was transacted thereafter. On 5th October notice was given to shareholders that at a meeting to be held on the 22d a resolution would be brought forward to have the bank would up by reason of its insolvency. A trustee resigned his office by minute of resignation dated 16th October, and entered the resignation in the sederunt book of the trust. The minute was signed by all the other trustees and by the beneficiaries. A certified copy of it was delivered next day to the secretary of the bank, with a request to remove the party’s name from the register of members, or to make a note of the resignation upon the stock ledger, as was the bank’s custom in such cases. . The directors declined to do either.
In a petition brought for removal of the name from the bank’s register- held ( affirming the judgment of the Court of Session) that the directors of the bank were entitled to decline to make any change upon the register after the issue of the notice of 5th October.
Opinion per the Lord Chancellor (Cairns) that the power given to the directors of a joint-stock company to transfer shares was a power which was not intended to be in operation for the purpose of enabling individuals to escape from liability when the company has ceased to be a going concern, and when the general clauses of the deed of copartnership are no longer capable of being acted on.
Observed per Lord Penzance that the principle which obtains in all systems of bankruptcy – that the act of closing the trader’s doors and suspending his business is the dividing period of time after which the rights of creditors ought not to be compromised by any transaction of the bankrupts – is alike applicable to the case of a joint-stock company incorporated under the Companies Act.
Judges:
Lord Chancellor (Cairns), Lord Hatherley, Lord Penzance, Lord O’Hagan, Lord Selborne, Lord Blackburn, and Lord Gordon
Citations:
[1879] UKHL 503, 16 SLR 503
Links:
Jurisdiction:
Scotland
Banking
Updated: 04 July 2022; Ref: scu.637957
