The Sun.
London, England, 1870-06-30 00:00:00

EDITION.

THE EUROPEAN ASSURANCE SOCIETY.
SHAREHOLDER'S PETITION FOR
WINDING UP.

In the Court of Vice-Chancellor James, yesterday, a
petition was presented by Mr. Crowe, a shareholder in
the European Assurance Society, for the compulsory
winding-up of the society, under the provisions of the
Companies' Act of 1862.
Mr. E. E. Kay, Q.C., and Mr. Napier Higgins
appeared for the petitioner; Mr. Fry, Q.C., and Mr. F.
C. J. Millar for the society ; and Mr. Roupell for
664 shareholders, representing £172,600, and 3,213 policy-
holders, representing policies to the amount of £928,711,
to oppose the application.
Mr. Kay opened the case by remarking that the peti-
tion was for the compulsory winding-up of a company
which was the subject of two similar petitions before the
court in October last. Before adverting to the merits of
the case, he desired to call attention to an attempt which
had already been made to prejudice the mind of the
court against the petition, and point out the considerable
disadvantage under which both he, as counsel,
end the petitioner were labouring in prosecuting the
inquiry. Immediately after the presentation of the peti-
tion steps were taken to secure evidence, which, in cases
o 4 that description, was that only which could be regarded
”c; valuable or reliable—the evidence of witnesses who
knew most about the affairs of the company,. but who,
from their intimate connection with the society, were
most reluctant to make any material disclosures. Until
the petition was presented no steps could be
taken to procure evidence of that kind, and
then the most expeditious mode of procedure
was to apply for the appointment of a special
examiner. That plan was adopted in this instance, and
the most valuable evidence which he possessed in support
of the petitioner had been secured in that way. The
examination, however, was not completed in sufficient
time, and it was a fact that at the moment he was without
a brief of the most important portion of the testimony,
and that the petitioner had been unable to make the cross
examinations he had intended to make by way of answer
to certain allegations which had been made.
The Vice-Chancellor : The petitioner ought to he
prepared with evidence before taking proceedings. The
petition was presented on the 6th June, and it is now the
29th, and under the circumstances ample time has elapsed
for conducting a special examination.
Mr. Kay urged that he was labouring under the greatest
possible disadvantage, and that the greatest expedition
has been used with the view of completing special exami-
nation. Enormous interests were involved, and it was im-
portant that every inquiry should be instituted in order
to ascertain whether it was just and equitable that the
society should be allowed to waste the assets of the share-
holders or be placed immediately in liquidation.
The Vice-Chancellor : I am sorry to be of personal in-
convenience to counsel, but must decide the hearing must
now
M go on.
r. Kay then stated that the company, as was the
Albert Life Assurance Company, was composed of a con-
glomeration of other companies, having no less than
thirty-three original organisations amalgamated with it.
There were 312,340 shares of £2los. each, and the society
had recently been registered under the Companies' Act of
1862. In the year 1868 the policies of the society
amounted to £8,700,000, besides which the society was
liable upon annuities amounting to between £16,000 and
£17,000 per annum, which liability was estimated to be
no less than £140,000, and was to be added to the
possible liability upon policies. At the present time the
shareholders altogether numbered 1,655, and it was esti-
mated thad the company had received from one source
and another since the commencement about £3,500,000.
The assets now existing and represented as being valuable
—how far they were valuable he would afterwards shew
—were £371,000. When the matter was before the court
on a former occasion the nature of the balance sheet pub-
lished for the year 1868 created some discussion. Since
that time the balance sheet of 1869 had been issued, and
that disclosed the state of affairs down to the termination
of the year.
The Vice-Chancellor, interrupting Mr. Kay, inquired
whether any attempt had been made to obtain the deci-
sion of the general body of the shareholders in the
matter.

Mr. Kay replied in the negative.
Mr. Fry said that one-half of the shareholders, in
fact, were desirous of proceeding with the business of the
company.
Mr. Kay observed that that must be the case, although
the society was alleged to be in a state of hopeless in-
solvency. But he would shew that the existing assets
were not by any means sufficient to meet the existing lia-
bilities, and it was not only just and equitable, but ex-
tremely desirable, that the society should be wound up.
The Vice-Chancellor : But I would prefer to ascertain
what the opinion of the general body of shareholders is
on the question, unless it could be proved that the
opinion is withheld by some fraudulent or unfair means.
Mr. Kay continued to say that the last-mentioned
balance-sheet was framed on a different principle to the
former. Since the presentation of the last petition the
directors had taken some steps to diminish the current
expenses of working the society. The constitution of the
board had also been altered, by calling upon a number of
directors to resign, and appointing others ; and in the
balance-sheet certain items which were objected to on a
former occasion, and held to be improperly included as
forming the assets of the company, had been omitted. They
were indebted on sundryitems £79,250185. 9d., whilst the life
claims which were admitted and were payable during•the
next three months amounted to £51,900. At the moment
the balance sheet was made out the actual liabilities were
£98,574. The policies were payable within three months
—therefore if that amount were multiplied by four the
probable claims for the year would be ascertained. On
the other side of the account the assets were indicated,
and the first sum was £33,000 in consols, which
he would satisfy the court was specifically
appropriated to meet Government and other guarantees,
and being so, must be devoted to that object before it was
available to meet any other liability. The same remark
applied in the case of the items of Indian Government
debentures, and the Melbourne Government debentures,
the latter being specially hypothecated to meet claims in
Australia. The remaining assets consisted of mort-
gages, life interests, and reversions, and some of those
were due from companies which were actually in
course of liquidation, and from which, therefore, very
little indeed would be realised. One of the companies
was that of the Albert Life Assurance, and the evidence
was that not much was to be expected from that source.
Another asset was in the shape of re-assurances, but the
larger part of those re-assurances were from the unfortu-
tunate Albert Office, and although they were inserted
for the full amount, it was obvious that scarcely anything
would be obtained, and on the whole he was justified in
saying that there was really nothing in the shape of
available assets upon which the directors could put their
hands to meet claims.

The Vice-Chancellor : Have any accruing claims not
been met ?

Mr. Millar : Not a single one.
Mr. Kay said he had contrary evidence as to that.
The testimony went to shew that the claims had been
mitigated to an extent which had occasioned a great deal
of scandal among the officers of the society themselves.
The claims had been mitigated because of the difficulty to
procure funds, and a large amount of uncalled capital
had been called upon, because even with the current in-
come, which ought to be sufficient, there was not
enough to meet the claims. A great number of the
items were purely fictitions, and ought not to be included
in the assets at all. The result of all this was that during
the last year and-a-half large calls had been made upon the
society to provide capital to meet their necessities. By
no means the whole of the amount which was called upon
had been paid, and the directors were so aware of the con-
sequences that would accrue from an attempt to enforce
payment, and of the utter hopelessness of it if any such
attempt were made, that no endeavours had been put for-
ward to compel payment.
The Vice-Chancellor: Is the petitioner one of those who
have not paid ?
Mr. Millar : There are two calls due from the peti-
tioner.
The Vice-Chancellor : Then I won't proceed with the
petition until he has paid his calls.
Mr. Fry : By postponing the petition, the court would,
I think, be inflicting great harm upon the society.
The Vice Chancellor : If the society wish it,l will go on
with the petition, but I object entirely to a man who does
not himself perform his duty, coming here seeking to
compel others to do their duty. It is a most monstrous
thing, and I never will give a winding-up order under such
circumstances.
Mr. Kay said the fact was that the petitioner sold his
shares before any call was made, but the company refused
to let him off. 'Under that state of things he had not paid
the calls ; and, moreover, as there was an enormous arrear
of calls allowed to be outstanding, he did not see any
reason why he should be made a scapegoat by the directors
who had neglected their duty.
Mr. Fry : Unless the court is prepared to dismiss the
petition, the society would prefer that it was not allowed
to stand over.
The Vice-Chancellor : It being admitted thad, dismiss
petition with costs.
It was intimated that an appeal from his Honour's de-
cision would be made immediately to the House of Lords.

The flags over the public buildings at Liverpool
were lowered half-mast on Friday, in token of respect to
the memory of the late Foreign Secretary.
A Vienna telegram of the Eastern Budget says
that the majority of the candidates who have been elected
for the Diets are strongly in favour of the maintenance of
the constitutional system, and inclined to adopt a conci-
liatory policy towards the nationalities.
The necessity for a new system of education was
strikingly illustrated in the course of a case heard in the
Salford Police Court the other day. It was found that
two girls, 13 and 14 years of age, who had been grossly
assaulted, could not be allowed to give evidence for the
prosecution, because they were utterly ignorant of the
meaning of right or wrong, did not know what lying was,
and did not know what would happen to them if they did
not speak the truth. Owing to this lamentable state of
things the -prisoner had to be discharged, as there was
not sufficient collateral evidence to warrant a convic-
tion.