J. Chester (J. P. Grain with him), for Wright : Wright was never an officer of the society: In re Great Western Forest of Dean Coal Consumers Company (Limited), Carter's case (2). Theobald (Farwell, Q.C., with him), for the liquidator : Wright is an "officer" of the society within section 10 of the Companies (Winding-up) Act, 1890 (1). This case is distinguishable from Carter's case (2). Wright has been guilty of a misfeasance and breach of trust within section 10. Chester, in reply. CAVE, J. In disposing of this case I will deal first with the appeal of Wright, and then with the cross-appeal. It is urged on behalf of Wright that he was never an officer of the society. The learned Commissioner has held that he was an officer after he was appointed manager. That seems to me correct and disposes of the appeal of Wright. The first point raised on the cross-appeal is that the Commissioner was wrong in holding that Wright was not an officer of the society before he was appointed manager. It is said that he became an officer when he was appointed solicitor on 6 March, 1876, at a salary of 1,650l. a year, for which he was to provide office and incidental expenses, and pay over to the society all the fees and costs received by him from clients of the society. Several cases have been referred to. The most material is Carter's case (2), where Mr. Justice PEARSON held that a solicitor was not an officer of the society. I agree with that decision. A man does not become an officer of the society merely because he is appointed solicitor, any more than a banker does, because he is appointed banker to the society, or a broker, because he is appointed broker, or an auditor, because he is appointed auditor. These persons cannot be said to be in the employment of the society so as to make them officers of the society; and Mr. Justice PEARSON points out that a solicitor who is independent of the society, and only acts for the society in legal business, cannot be said to be an officer of the society. Here, however, the solicitor agrees to forego his ordinary rights to take up other business, but agrees to do all the work of the society for a fixed salary, and to take no fees from the society, or if he does, to (2) 31 Ch. D. 496; 55 L. J. Ch. 494; 54 L. T. 531; 34 W. R. 516. pay them over to the society. That altogether alters his position. He is no longer independent and able to exercise his discretion. He undertakes to do all the work of the society for a fixed salary, and to forego all the ordinary rules with regard to payment as between solicitor and client. I think that the change is of so great a character that it constitutes Wright an officer of the society, and that he must be so regarded from the time he was appointed solicitor. The result will be that Wright's appeal will be dismissed, and the cross-appeal allowed. The case must go back to the Commissioner with our determination that Wright became an officer of the society when he was appointed solicitor on 6 March, 1876. COLLINS, J. I am of the same opinion, and as the case is one of great importance I will add a few words as to whether Wright was or was not an officer of the society. I think it is established that Wright was not merely solicitor to the society in the ordinary sense, but an "officer" of the society. I agree with what has fallen from Mr. Justice CAVE, that as a rule a solicitor is no more an officer of a society than is a banker. But here Wright's position was different. He was paid a fixed salary, and looking, as we are entitled to look, at the facts reported to us by the official receiver, it is clear Wright was acting in the capacity not only of a solicitor, but much more in the capacity he subsequently assumed, that of financial manager to the society. Moreover, the transactions here are much more akin to the duties of a financial manager than a solicitor. I have no hesitation in saying as a fact that Wright must be regarded as an "officer" of the society. Wright's appeal will therefore be dismissed and the cross-appeal allowed. Leave to appeal given. Solicitors: Bonner, Thompson, Burnie & Co., for Wright. S. M. IN RE BOWLING AND WELBY'S CONTRACT.* 1894, November 13; December 19. STIRLING, J. Company-Unregistered Society-Winding-up-Vesting Order-Sale by Liquidator —Jurisdiction to Wind up and make Vesting Order-Vendor and Purchaser Companies Act, 1862 (25 & 26 Vict. c. 89), s. 199. An order to wind up an unregistered society under section 199 of the Companies Act, 1862, and a vesting order in favour of the liquidator having been made, the liquidator contracted to sell part of the property of the society. It then appeared that at the date of the winding-up order there were not (exclusive of representatives of deceased and bankrupt members) more than seven members on the register of the company : Held, that the winding-up and vesting orders were made without jurisdiction, and that the liquidator could not make a good title. THIS was a summons taken out under the Vendor and Purchaser Act, 1874, by the vendor of certain real estate asking for a declaration that the purchaser's requisitions had been sufficiently answered. The vendor was the liquidator of the Leeds and Yorkshire Permanent Benefit Building Society. The society was incorporated under 6 & 7 Will. IV. c. 32, but was not registered under the Companies Acts. On 27 July, 1893, an order was made by the County Court Judge at Leeds for the compulsory winding-up of the society under the Companies Act, 1862 (1). By an order of the same County Court Judge, made on 13 November, 1893, the property of the society was vested in the liquidator. On 17 October in that year the contract for sale in question was entered into. It was objected by the purchaser that at the date of the winding up there were less than seven members; that, therefore, there was no jurisdiction to make either the winding-up or vesting order, and that the liquidator had no title. Since affirmed, W. N. 1895, 57. (1) Section 199 of the Companies Act, 1862, so far as material is as follows: "Subject as hereinafter mentioned, any partnership, association, or company, except railway companies incorporated by Act of Parliament, consisting of more than seven members, and not registered under this Act, and hereinafter included under the term unregistered company, may be wound up under this Act . . . ." Section 203 provides that either by the order to wind up an unregistered company or any subsequent order its property may be vested in the liquidator. The evidence showed that at the date of winding up there were fewer than seven members on the register, but that there were besides representatives of deceased and bankrupt members who, if they could be rightly considered members, would raise the number to more than seven. P. F. Wheeler, for the summons: There were at the date of the winding up of the society more than seven members if the representatives of deceased and bankrupt members be included in the list of members, as they ought to be. There was, therefore, jurisdiction to wind up the society under the Companies Acts, and the objection of the purchaser falls to the ground. [He referred to Doncaster Permanent Building Society (2), 6 & 7 Will. IV. c. 32, and In re Sheffield & South Yorks. Permanent Building Society (3).] [STIRLING, J.: By the Companies Acts other persons may be held to be members.] The number seven only applies to a registered company. [STIRLING, J.: The effect of section 199, is in case of less than seven members, to reduce it merely to a partnership. Your contention is that the number of members is the same as the contributories.] I would refer to section 4 of the Companies Act, 1862, which prohibits partnerships exceeding a certain number. If your Lordship be against me then I say that the list must be made out at the time of the winding-up order, and all whether present or past members are liable. But if it is confined to present members, the inclusion of executors of deceased members makes seven: Buchan's case (4). On these grounds there were more than seven members at the time of the winding up. I have, therefore, shown a good title. [STIRLING, J. You cannot succeed unless you show that both : (2) L. R. 3 Eq. 158; 15 L. T. 270; 15 W. R. 102. (3) 22 Q. B. D. 470; 58 L. J. Q. B. 265; 60 L. T. 186. (4) 4 App. Cas. 549. the legal and equitable titles are in you. If the vesting order was made without jurisdiction, the legal title is outstanding.] Dibdin, for the purchaser: Members, under section 199, means present members. If not so that section would be nugatory. The terms of section 200 exclude the idea that contributories are members. Signatories must sign the register. Is not the objec- [Stirling, J.: I cannot accept the statement that signatories must sign before a building society can be wound up. tion which has been raised a mere technicality? order is good.] As to legal personal representatives they cannot be put on unless they apply to be put: Lindley's Companies, 5th edit., 537, In re Cheshire Banking Co., Duff's Executors' case (5). Wheeler, in reply: Members and contributories are identical. That appears from section 38. [STIRLING, J.: Members is identical with shareholders, but hardly with contributories. It seems to me, that the difficulty could be got over if the outstanding legal estate could be conveyed.] December 19. Cur adv. vult. STIRLING, J: [after stating the facts, continued:] It is contended on behalf of the liquidator that the question as to the jurisdiction to make the winding-up order cannot now be raised because the order cannot now be appealed from, and the Court will not interfere by way of prohibition. It appears to me that that is so. And if the legal estate were conveyed to the purchaser, as I suggested at the hearing, he would get a good holding title. I have, however, been since informed that this object cannot be attained, and I am thus compelled to express my opinion on the objection. (5) 32 Ch. D. 301; 54 L. T. 558. |