Welsh Journals

The RUTHIN Illustrated Magazine. No. 26. Vol. HI. MARCH, 1881. TWO PENCE. EUTHIN AND CERRIG-Y-DRUIDION RAILWAY COMPANY v SHAREHOLDERS. y / The second edition of this cause eelebre was heard at i /the Ruthin County Court on the 14th ulto., before Horatio / Lloyd, Esq., and a Jury.of five gentlemen of the town and neighbourhood. Over 100 shareholders were summoned for refusing to pay calls on two sets of shares, issued in 1876 and 1879. Their grcund of defence was, that they took the shares on certain specific conditions, which had not been performed. Plaintiffs, on the other hand, denied conditions, and also pleaded a waiver of them, if any. One case was taken as a test, and we think we shall best enable our readers to gain a clear view of the various questions in difference if we simply give them a summary of the lucid summing up of the learned Judge. His Honour said, that the case they were trying was an important one, as over 100 cases depended upon it, and would be decided by it. He proposed to consider the matter on two different points: first, in regard to the shares allotted in November, 1876, and, secondly, as to those allotted in February, 1879. Generally in actions by a Company for calls, it was suffic¬ ient, in order to obtain a verdict, to show simply that defendant's name was on the register, that the call was duly made, and due notice thereof given. But shareholders were at liberty to show, in defence, that they had been led to take shares by misrepresentation, &c. They must, however, within a reasonable time have repudiated their contracts—and not continued to act as shareholders, and so have acted inconsistently. As to the first allotment of shares. The first thing to be attended to was defendant's application for shares on the 15th of August, 1876. The Act had received the Royal Assent a month before. The application defendant signed was for 5 shares, whereby he acknowledged having paid a deposit of 5s. per share, and promised to pay calls duly made. The first meeting was held in November following, when shares were allotted. The Register was sealed, and defendant became a share- ; holder. But defendant says, that the application he signed was not the sole ground on which he applied for shares. He says he saw a paper at Mr. Adams's office, which con¬ tained the conditions, that no shareholders were to be liable to pay anything until (1) the Directors had taken £25,000 worth of shares, until (2) a responsible Contractor was found, and (3) until the " first sod " had been cut; and defendant now alleges that only the last condition has been performed. Mr. Adams, however, was positive that that document (marked in the case " A ") never was in existence before July, 1877. But defendant again says, though the paper is dated 1877, yet the wording of it was framed before —that it had been previously thought of. Mr. Adams altogether denies such an assertion. His Honour would leave it to the Jury to decide the fact. They should, in considering the question, bear in mind, that Mr. Adams had books and records, in which entries of events had been made at the time they occurred; and there seemed to be no doubt as to the genuineness of such records. Defend¬ ant, on the other hand, could only say, that he knew he was in Mr. Adams's office—he was uncertain of the date- that be saw a paper, containing the words before mentioned; but he did not know who shewed it him, or what was said on the occasion, If the Jury found that the document 'A' did not exist before the allotment of shares in November, 1876, then they must not pay any attention to it in consid¬ ering the case. Nothing afterwards was done until ] 877. On the 26th of June in that year a meeting was held, at which defendant was present, and he was one of a Commit¬ tee there appointed to push the concern, and to get more shares taken, it being apparently in danger of falling to the ground, Mr. Adams was appointed to make fresh terms, and then it was, according to his evidence, that the document " A " was prepared. Mr. Adams's history appeared to the learned Judge to be a good history of the document; and he really did not see how its genuineness could have been better proved. As to the second allotment of shares in February, 1879. The document clearly was then existing. Defendant again signed an ordinary application for more shares. Still he savs he was again influenced by document "A." He did not, however, say he would rather have signed that than the ordinary form. He attended meetings, when matters in general were discussed ; he was on the canvassing committee, taking active part in the movement, and knew the history and proceedings of the project. Mr. Adams says, the document was drawn simply to induce people to subscribe; that it was given to the canvassing committee to distribute; it failed in its object, was with¬ drawn, and never afterwards thought of. The next step to consider was Jackson's offer to make the line for £20,000 cash. It then became necessary for the shareholders to raise that amount. At that time, why did not defendant at the meetings ask why the Directors had not paid the £25,000 ? Mr. Adams's explanation on that point was that defendant knew of the departure from the old con¬ ditions. Jackson's scheme fell through, and next came Fryer's offer to make the line for £13,000 cash. Why did not defendant at the meetings ask, as before, where was the Directors £25,000? As to the second condition in document " A "—the providing of a responsible contractor —Fryer, the contractor who took the work, was evidently not responsible, The same remarks, however, would apply to that part of the case as had been made concerning the Directors' shares. The next point to be considered by the Jury was the conduct of defendant since a departure from the old terms took place, and they must decide whether or not he continued to act as a shareholder after he knew that the Directors had not subscribed the £25,000, and that a responsible contractor had not been secured. Lastly, the Jury must decide whether defendant repudiated his shares within a reasonable time after he discovered that things were not going on all right, and whether he gave notice to the plaintiffs. No formal repudiation was made, or notice given, until his resistance to pay some previous calls, for which he was sued, and eventually paid. In conclusion, his Honour appealed to the Jury not to be led away by their filings into giving a verdict on the " popular side." They hid a solemn duty to perform, and he hoped they would do it honestly. The following questions were sub¬ mitted to them:—1, Did defendant apply for his first five shares in August, 1876, upon the faith of terms similar to those of the document (A) bearing date July, 1877? 2. Did defendant apply for his second five shares, in February, 1879, knowing that the conditions mentioned in the document dated July, 1877, were either withdrawn or no longer applicable ? 3, Did defendant, after he knew that the Company had not a responsible contractor, and that the Directors, had not subscribed for £25,000, act as a shareholder, attend meetings, &c? 4, Did defendant re¬ pudiate his shares withiu a reasonable time after he became aware that there had been a departure from the conditions of the document dated July, 1877, and did he give plaintiffs' notice of such repudiation ? His Honour said if the Jury would answer these questions, he would be able to give his judgment. The Jury retired, and in about half an hour returned into Court, stating there was no likelihood whatever of their agreeing upon any answer, and consequently they were discharged. The case, which lasted about 5 hours, was listened to throughout with much interest by » large number of auditors.