The Sun.
London, England, 1855-11-29 00:00:00

DEPOSIT AND GENERAL LIFR INSURANCE COMPANY ♦,

ATBE, JUN.
This was an action brought by the above company to
recover of the defendant, a solicitor, carrying on business

• at Bristol, the sum of 2001., and interest- for desposit
call, and interest on 200 shares in the above company.
The defendant, amongst other pleas, pleaded fraud on

the part of the company.
Mr. Sergeant Shee and Mr. Barldely were for the
plaintiff, and Mr. M. Smith, Q.C., and Mr. Phipson for

the defendant.
Mr. Sergeant Shee, in stating the case to the jury,
sail this company was completely registered under the
provisions of the act, in 1852, and the action was
brought to recover 2001., with interest thereon, in re-
spect of shares in this company, applied for by the defen-
dant, and allotted to Lim by the company in April, 1854.
In consequence of that allotment the defendant became
liable for 10s. deposit on each share, but which had
never been paid. In July, 1854, he wrote to the secre-
tary of the company, stating it was inconvenient for him
then to take the shares, btu; he signed the deed of settle-
ment on the 9th of August. In November the direc-
tors made a call of 10s. per share on all shares issued,
but the defendant had refused to pay either the deposit
or call, and the present action was brought to recover
those amounts with interest thereon.
Evidence was then given of the registration of the
deed of settlement, and the defendant's name being re-
gistered on the 9th August, 1855.
Mr. Doyle, the secretary, ail Mr. Knox, the ac-
countant, produced the documentary evidence relative
to the application and allotment of the shares, and the
resolution of the directors ordering a call of 10s. per

share.
Mr. Smith said the defence to this action wa', that the
defendant, on agreeing to take these shares, was de-
ceived in the grossest manner respecting the actual state
of the company by the agents of the company and the
directors. The directors were desirous of obtaining an
office at Bristol, to establish an agency there, and the
defendant having chambers to let, situate in Bridge-
street, Mr. Thomas, the agent, applied to him for them,
and he became the landlord of the company at Bristol.
It would appear that the company was•projected in
1851 by a person named Howden, who was thrown out
of the concern, and in 1852 the certificate of complete
registration was obtained. Before that it was repre-
sented there were 5,034 shares subscribed; but, on inves-
tigation, it was found a great number of the persons
named as shareholders were insolvent, and others in-
fants, children of theoflicers of the company. The society
commenced business, and at the time when the defendant
was induced to take shares the company was in an in-
solvent state, the receipts of all kinds being insufficient
to meet the expenses. By the powers of the deed, the
original capital was to be 100,0001. in 20,000 shares of
51. each, with permission to increase the capital as re-
quired. Capital being required, the company, in order
to raise it, said it was necessary to create new capital,
in order to increase their loan business ; but so far from
that being the fact, the money was required to clear the
company from its difficulties ; and Mr. Thomas, the
Bristol agent, applied to the defendant to become a
shareholder, representing to him that the company was
a first-rate one, that the directors were men of wealth
and responsibility, and that the shares were all paid up
in full, and wished him to take 400 shares. Ho (the
learned counsel) should produce before them in evidence
the former manager (Mr. Bevan), now undergoing sen-
tence for embezzlement, who would prove that the
society, at this time, was in a bad state; notwithstand-
ing, he wrote to Mr. Thomas, desiring him to stick to
his friend and get him to take shares, because the com-
pany wanted money, and that if he got him to take
shares he would give him a check for 501., instead of
paying him 201. commission, which would be a very
pretty Christmas-box for him. He begged him not to
fail, and to stick to him. Ultimately the defendant ap-
plied for 200 shares, and after that Bevan went down
to Bristol, saw the defendant, and reiterated to the diter
fondant what Thomas had previously stated !h
reference to the flourishing state of the sociedty. The
report
learned gentleman then referred to a
Prinfteloo,ooo/.
issued by the company, stating the ca
to be fully paid up, and that the shares were
to a
most respectable persona.
He also drawn up in
harPeist3lwoere held by
report of a Committee of Directors, a to
the handwriting of Lord Drirltl7o
investigate into the affairs I _
o et the company arose
company, which
stated the existing difficulties
it
was a mistake in the
thathe
from three causes :--Firet,subscribed deposit to
first instance in t
been 20,000/. ; secondly,
10,0001., which ougibiTitting
insurance business, and that 1
that it was haveunfortanftatethotehere was no person in the di-
rectory experienced i
enditure had been larger in the I
consequently the
management of
rinsedtheexop,cern than it ought to have been.
with 2,300/. money out on loan,
If 10,0001. were
company, who owed their bankers
it would clear
hadtheether liabilities amounting to 12,0001.,
6,5001., and
and that each director should increase his stake 1,000
The report further alluded to the bankers re-
shares.
a material guarantee for the debt owing to them
re-
quiring,
ling up of the share list. The position of the
by the fi----v -•'but
directors was critical, b y proper management they
might be saved from gettting into a worse position.
After some further remarks on the financial state of the
company, he called
Mr. John Ayre, jun., who deposed that he took the
shares, and signed the deed, from the representations of
Mr. Bevan and Mr. Thomas of the flourishing state of
the society and the responsibility of the directors. When
he afterwards found from these persons the true nature
of the society, he repudiated his engagement. He never
had any scrip, nor received any profits. (Laughter.)
Mr. C. W. Bevan, the late manager, deponed that he
was at present undergoing a sentence of 18 months im-
prisonment, for embeizlement, at the prosecution of the_r
company. The letter referred to, written to Mr.
.1.4. r:
Thomas, was in his handwriting. What he toldn_ DI
Ayre, relative to the stability of the thedirectors_%edyof
flourishing state of the society, was untrue. M
all
thorn were not first-rate wen, nor had they paid uP