5,000l. bona fide on the faith of these debentures, and the debentures are ex facie regular. VAUGHAN WILLIAMS, J.: Where there is, as here, a private company, and all the shareholders are cognisant of the facts, the sale cannot be called a fraud, though it might be a fraud if there were an intention to allot further shares to future allottees. Therefore the liquidator cannot have rescission of the agreement for sale, nor is he entitled to treat the sale as a fraudulent conveyance within 13 Eliz. c. 5, as tending to defeat and delay creditors: for Salomon was at the date of the sale solvent. But this is, in my view, an action against an agent-the company-and if the agent had been an individual his trustee in bankruptcy would have had the right to call on Salomon as principal to indemnify his agent against debts, and the right of the liquidator of the company-the agent here-is precisely the same. That is not, however, the remedy which he has asked. The original case put has failed-there was no secret sale at an undervalue-but I will allow an amendment, so as to raise the point I have suggested. In the interim Broderip's claim was admitted by the liquidator and paid off. The counter-claim of the company, as amended, claimed as follows: 1. To have the said agreements of 20 July and 2 August, 1892, rescinded. 2. To have the said 10,000l. mortgage-debentures delivered up to be cancelled. 3. Judgment against the said Aron Salomon for the said sum of 29,2571. 18s. 1d., with the interest thereon at the rate of 4 per cent. per annum from the several dates when the instalments were paid. 4. A declaration that the company is entitled to a lien upon the said business and assets for payment of the said sum of 29,2577. 188. 1d. and interest. 5. In the alternative, a declaration that the company or the liquidator thereof is entitled to be indemnified by the said Aron Salomon against the said sum of 7,6791. (the liabilities of the business at the date of the sale), and a declaration that the said company is entitled to a lien for the said sum of 7,6791. upon all sums which would be payable to the said Aron Salomon out of the assets of the company in respect of the said debentures or otherwise, and that the said Aron Salomon is not entitled to make any claim against the assets of the company until the said sum of 7,6791. has been satisfied. 6. Judgment for 20,000l. and interest thereon at the rate of 4 per cent. per annum, as from the date when the said call was made. February 14. Farwell, Q.C., and Theobald: On the evidence this company was merely an alias for Salomon. The company is his trustee or agent, whom he is bound to indemnify. Muir Mackenzie: The issue of fraud, as to the company being dishonestly formed, designed that is to defeat and delay Salomon's creditors, has failed. The suggestion that Salomon traded on his own account under an alias is an issue of fraud. [VAUGHAN WILLIAMS, J.: Suppose instead of Salomon carrying on business in the name of the company, he carried on business under some name which was not his own, calling himself Goodfit & Co., or took the name of his foreman-cutter? All his intention was to limit his liability.] He was entitled to do that if he did it in the manner pointed out and sanctioned by the Companies Act. [VAUGHAN WILLIAMS, J.: If it were a matter of first impression, I should have been of opinion that the Companies Act, 1862, was never meant to be used for this purpose. The Act was only, I am of opinion, meant to be used where seven or more persons were really associated, and not by only one man getting six names and signing himself. But it is too late to take that view now.] Salomon's object was quite legitimate-to form a private company in this way, instead of taking his sons into partnership. The company was duly formed under the Companies Act; it carried on business as "limited." There was no concealment, everything was perfectly regular. The creditors knew they were dealing with a company. They knew, or might have known, that the assets were charged by the debentures. The relationship between Salomon and the company altogether excludes the doctrine of agency. A person who forms a company does so with the object of excluding from the transaction the question of principal and agent. VAUGHAN WILLIAMS, J.: I have expressed my views and I do not think it would serve any useful purpose to add to what I have already said. But there is one thing which I wish to refer to, and it is this. So long as the statement of claim stood in its original form, the Statute of Elizabeth could have no application, because the creditors, who were alleged to be defeated and delayed, were not stated in the pleadings to be the creditors of Mr. Aron Salomon; but the moment you amend the statement of claim and allege the identity of Mr. Salomon with the company, the whole situation is changed. The creditors of the company thereupon become the creditors of Mr. Salomon, the agent company has a lien on the assets, and Mr. Salomon is bound to indemnify it. The debentures given to Mr. Salomon were in this view given to him by his agent the company, the company's creditors were his creditors, and the necessary effect of Mr. Salomon as principal taking these debentures from his agent the company was that his creditors were defeated and delayed by the issue of these debentures. The action is dismissed, and there will be judgment for the liquidator upon the counterclaim. Solicitors: Rowcliffes, Rawle & Co., for Little & Mills, Stroud, for Broderip. Ralph Raphael, for Salomon. S. M. & J. B. Benson, for the Liquidator. M.-VOL. II. L HOLME v. DRACHENFELS BANKET GOLD MINING SYNDICATE. 1895, February 14. VAUGHAN WILLIAMS, J. Company-Debenture-Extent of Charge-" Property"- Uncalled CapitalArticles of Association. A debenture charging a company's "property," does not primâ facie include uncalled capital, but it may do so if the debenture is issued in pursuance of articles of association, treating uncalled capital as forming part of the property chargeable. THIS was an action by debenture-holders of the Drachenfels Banket Gold Mining Syndicate, Limited, brought by leave in the winding-up of the company, to realize their security. The action was defended by the liquidator. The company was formed in 1890 to acquire and work certain claims in South Africa, and the company's memorandum of association contained the following borrowing power :— "To borrow or raise money by the issue of or upon the bonds, debentures, mortgages, or other obligations or securities of the company, either redeemable or irredeemable, and payable to bearer or otherwise, or by any mortgage or charge on all or any part of the property of the company present or future, including uncalled capital or otherwise, in such manner as the company shall think fit for the purposes of the company.” By article 47 of the company's articles it was, so far as material, provided : "The board of directors may borrow or raise money on the security of the property of the company, including the unpaid capital for the time being of the company, or on debentures or otherwise, in such manner and on such terms as they may see fit." By a resolution of the board of directors, passed 10 May, 1892, it was resolved that 2,000l. in 10 per cent. debenture-stock be issued in such amount as deemed advisable, repayable at six months at 150l. for every 100l. subscribed. In pursuance of the said resolution the company created debentures to the nominal amount of 2,000l., and issued stock certificates to registered holders for the same in the following form: "Drachenfels Banket Gold Mining Syndicate, Limited. "This is to certify that is the registered holder pounds of the above-mentioned debenture-stock created by resolution of the board of directors in exercise of the powers conferred upon the board by the 47 article of association. The debentures constitute a first charge upon all the property of the syndicate, bear interest at 10 per cent. per annum, and are to be redeemed at a premium of 50 per cent. on or before 30 November, 1892." A part of the company's assets consisted of uncalled capital. C. Hyde, for the debenture-holders: The debentures here, which are somewhat irregular in form, constitute a charge on the uncalled capital. In Page v. International Agency Trust (1), the latest case on the subject, Mr. Justice KEKEWICH says: "I think the word 'property' alone ought to be held to include uncalled capital as the power to charge it exists." Hurrell, for the liquidator, referred to Bank of South Australia v. Abrahams (2); In re Colonial Trusts Corporation, Ex parte Bradshaw (3); and In re Pyle Works (4). VAUGHAN WILLIAMS, J.: I quite assent to the general proposition, that where the word "property" is used in debentures it will not prima facie cover uncalled capital. But what I have to determine here is, what the parties in this particular case meant. Article 47 says the directors may raise money on the security of the property, including the unpaid capital for the time being. The debentures in question are issued in pursuance of that power, and they state that (1) 3 R. 596; 62 L. J. Ch. 610; 68 L. T. 435. (2) L. R. 6 P. C. 562; 44 L. J. P. C. 76; 32 L. T. 277; 23 W. R. 668. (3) 15 Ch. D. 465. (4) 44 Ch. D. 489, 577; 59 L. J. Ch. 489; 62 L. T. 887; 38 W. R. 674, |