The Express.
London, England, 1857-11-21 00:00:00

LAW INTELLIGENCL

THIS DAY.

EQUITY COURT.
THE GREAT NORTHERN PRREERRNGE BEARS-

HOLDERS.-JUDOMENT.

(Before the Lad Chancellor end the Lords Judas.)

liiiKT V. TIIII GMAT NOWIIIIIIS NALLICIIT CONPAXT.

This was as appeal from VkoChatiesikt Weed. The
pLintiffs were the holders of redone amounts of the kw
dee:rip/an of preferecoe Mock lamed by the Great Melbas
Railway, and the defendants are the company, reporting
generally the intsrests of the ordinary shareholders. The
object of the snit was to obtain a declaration that the *Wide
and the other preference shareholders see entitled to be pad
full dividends from 30th June, 1836, before ray dividends
shall be paid to the calinery shareholders; and to restrain
the company by injunction from declaring or paying divi-
dends to the ordinary shareholders without roped to suck
right of the plaintiffs and other holders of preference
stock. The dispute has mien iv convoquence of
the frauds of Leopold Redpath, who had imposed forged
stock on the shareholders to an meant sorely equal
to the net revenvo of the company for the half-year ending
December 31, 1836, which wee earliest& to dividend, and
which amounted to 243,923 L dit Id. On the discovery of
the frauds, which rendered it trapciedble to distinguish valid
from spurious stock, the company were advised that they
could not legally pay any dividend, died they obtained an
act of parliament which made the societal* steak valid, and
. .

required the drones as apply the ibove-mentioned lore of
net revenue and any moneys to be received by
the company from Redpath's estate la paying the expenses
occasioned by his (mode, in parchuing from time to time
stook to the amount of thatlorgod, sad forthwith cancelling
the row, end as to any rurplus which might remain to
'poly the same ea far as it would extend in payments,
la coder, to the different classes of the preference share-
holders for the divides,* to which they would have been
entitled, if the said not terrine had bar apportioned r
dividend. The queen= then arose as to whether the pre-
ference shareholders were not entitkl to be paid their dirt-
dead without reference to the Melt ousted by the frauds of
itedpuh, which they cadendid wee only to be ooatidersd
r an ordinary lose to the company, sad one which could not
interfere with their tights to be paid eat of the revenue of
the company which arose ont of profits. The Vie: .Chaa-
oollor decided in favour of the preference eltereholders, and
the present appall was brought. The ors wee argue lat
great length darhig Let week, end judgment wee postponed
•atil this mousing,

The Lord Chancellor after stating the facts and the statutes
ender which the predirenos stork of the company ere con-
stituted sod ea the csintrucUon of which the question in-
volved turned, expressed his opinion that on the proper con-
struction it was intended by the legislature that the preference
shareholders should be paid in full, if poesible, onell occasions
el the declareike of dividends ; and if Ilse preemoneach of such
OCCINitaN Mt not enticient to pay those preference share
holders in fell, than that they were entitled to be paid their
arrears of dividend on subsequent occasions by the die idea
of prate baton coy payment to the ordinary shareholders.
Lakes that conanntion were put upon the act of
parliament the moult world be to glee the di-
rectors an interest in so dealing with their
right to apportion the amount applicable to dividend out et
ea to give an undue preponderance in favour of tie
' ordinary shareholders in contradistinction to the undoubted
sights of the preference shareholders which were a first
cheep on the profit.. He had, therefore, come to the con-
clusion that the decision of the "ice-Chancellor was cos rect,
and that if on the declaration of soy dividend the prodta wens
found imqifilcient to unduly the whole:of the claims of the pre-
[settee shareholders, they are entitled to be paid in full on
ell subsequent deelsratioos of dividends ;before the ordinary
shareholders receive anything. Even if that wee not so, the
right of the preference shareholders to main their dividends
from June to December, 1866, wee beyond doubt. The
apple' would therefore be dismiend with costs.
The Lords Justices concurred, end the appeal was dis-
missed with theta.