The Sun.
London, England, 1857-05-15 00:00:00

balance-sheet and report of the profits and accumu-
lations of the joint stock or capital from the com-
mencement of the business, or the end of the period
included in the last preceding report. Then, as to
declaring dividends, articles 60 and 63 are to
the following eff :—That at the end of the
first six months of every year, and also at the
end of every second six in inns of every year, ex-
cept as thereinafter mentioned, the court of direc-
tors shall determine upon, app det, and declare such
dividend for t're period then elapsed, out of the
clear profit .of the company then actually accrued
and reduced into possession, es they should think
fit ; and if 'the court of d rectors shall think proper
they aro not to make any dividends of the profi s
durin,g the first year of business, and such profits
sh dl form part of the "surplus or reserved fund,"
and in each succeeding year the net prcifits, after
making deductii in and allowance forbad and doubt-
ful debts, shall, aft- r setting apart such proportion
of profits as the directors shall think requisite for
the surplus fund, be divided among the proprietors ;
but no proportion- of profits is to be set apart for
the surpins fund, if by reason thereof the dividend
will .be reduced below 4 per cent. ; and the sm.-
islos fund for the time being is to be added to the
capital, and nsver to be considered part of the
profits. By article 64 at every annual general
meeting the proprietors are to appoint two or thee
persons, not being directors, to be auditors for the
year ensuing, for the. purpose of examining and
auditing the accounts of the directors ; and the
auditors are to sign such accounts, if found to be
correct ; but if any errors or misstatements shall
appear upon the examination of such accounts the
auditors are authorised to call a special meeting of
the proprietors, and to report to the same meet-
ing the result of the examina ion, or to lay the same
before the next general meeting ; and the auditors
are empowered to require the production of the
books, vouchers, writings, and documents relating
to the said accounts, and to require the assistance
of the general and other managers, accountants,
dens, and officers of the company, or such of
them as they shall think proper in the investiga-
tion of such accounts. The 65th article pro-
vides for petitioning the Crown for leave t )
increase the capital of the company by supple-
mental charter, and that the holders of new
shares aro to be bouud by the terms of the deed,
and subject to the same liabilities as the original
shareholders, and that one-half of the amount of
such shares is to be paid up before issuing the certi-
ficate thereof, and that it shall not be lawful for
the company to repay the sum so paid up, or any
part thereof, without the consent of the Board of
Trade. And by articre 71, if at any time the court
of directors shall find that the losses of the com-
pany have exhausted all the " surplus or reserved
fund," and also one-fourth of the capital actually
paid up, they-shell as soon as possible call a special
meeting of the proprietors, and submit to such
meeting a full sta'ement of the affairs of the com-
pany; and if it shall appear at such meeting and be
declared by a resolution of the majority of the pro-
prietors present that the losses of the company
have exhausted the said fund, and also one-four h
of the paid-up capital, the chairman shall declare
the company dissolve", and the same shall he dis-
solved accordingly, except for the purpose of finally
closing and winding-up the affairs of the company.
Then, by the charter or letters patent incorporating
the company, it is declared that the several regula
tions contained in the deed of constitution, or in
any by law or supplemental deed to be made in
pursuance thsreiif, shall be the existing regulations
of the corporation, and it is thereby declared that,
the corporation shall not commence business until
it shall have been certified to the President of the
Board of Trade, by at least three of the directors
of the corporation, that all the shares have been
subscribed for and that the deed of constitution
has been executed personally or by power of attor-
ney by the holders of all of the shares in the busi-
ness, and that a sum of not less than one-half of
the amount of each share has been paid up in respect
Of each share as directed by the act of 50,0001. at
the least, being half of the capital of the said cor-
poration, is to be paid up within 12 calendar
months from the date of the charter. Now, no-
thing can be more clear and explicit than the pro-
visions in the charter as to the duties, of the di-
rectors and other officers of the company, and I
may hers remark that where a duty is thrown on
a body consisting of several persons each is in-
dividually liable for a breach of duty, as well
for acts of commission as of omission—that is, each
individual of the body who does not do what in
him lies to discharge his public duty contracts by
his negligence individual guilt (see " Rex v. Hol-
land,"
5, T. R., page 607), and where parties are
required by law to certify as to a 'Articular fact it
is nol necessary to show that they knew at the time
that the contents of the certificate were false. In
order to support an indictment for conspiracy to
obstruct the course of justice by producing a false
certificate, it was held sufficient that the person
certifying the facts as true agreed to do so without
knowing that it was true (see " Rex v. Maubly,"
6, T. R., 619). It is not necessary on the present
occasion to go in detail into the facts brought to
light during this most poinful inquiry, or to single
out any particular' persons as deliuquerits ; that
will be for elsewhere and hereafter ; but having
regard to the course pursued in the management of
the affairs of the Royal British Bank, in defiance
of the act of Parliament to regulate joint-stock
banks, and of the provisions in the charter, I think
that the directors and general managers of the bank
are open to some one or more of the following
'charges :-Ist, commencing business before all the
shares were subscrib d for, and at least half the
amount paid up, and repaying part of the'sum paid
up without leave of the Board of Trade, contrary
to the form of the st +tate (7th and Bth Vic., cap..
113, sec. 5), and the terms of the charter, page 53.
2d, making, declaring, and publishing false state-
ments and balance sheets of the assets and liabilities
of the bank, and of the amounts and nature of tiie '
capital and property and value thereof, and of the
profits and losses of the company, thereby conceal-
ing the actual state aid position of the affairs of
the corporation, and giving a semblance of solvency
where the reality had ceased to exot, and send-
ing false reports and balance-sheets and -profits
and loss accounts to the proprietors in violation
of the articles 30 and 45 of the deed of constitution
in the charter, as required by the statute 7th and
Bth Victoria, cap. 113, sec. 4. 3d, declaring divi-
dends when no profits bad been made, but on the
contrary, when the affairs of the corporation were
greatly embarrassed and large losses had been in-
curred, and. when, according to the terms of the
charter, not a single farthing ought to have been
allowed for dividend (acre articles 60 and 63 • and
see P. Lord Campbell, in " Barnes v. Pennell," 2
House of Lords Oases, pp. 509 and 524 5). 4tb,
conspiring to raise the price of the shares of the
company by illegal means and with a criminal
view. To give a fictitious price to the shares of a
company (which are a vendible commodity in the
menet) by means of fal e reports and publications,
or by declaring dividends when there are no profits
or by the company buying their own shares is a
fraud levelled against the public (see " Rex v. De
Beranger," 3 M. and S. 67 ; and see P. Lord
Campbell in " Barnes v. Pennell," 2 House of
Lords Cases, 524-5 ; and see proviso to article 3 in
the charter). sth, conspiring when in a state of
insolvency, and when the losses of the company
had exhausted the "surplus or reserve fund" and
one-fourth part of the paid-up capital—l say, when
in such a state, conspiring to obtain a supplemental
charter from the Crown by false representations
and by false reports and balance-sheets, and making
dividends when not justified in so doing, and there-
upon issuing new shares or obtaining deposits for
new shares at a premium, with intent to cheat the
public and in contempt of the prerogative of the
Crown. 6th, making such repeated gross misap-
plication of the funds of the bank by large loans to
some of the directors and other persons on terms
of the utmost risk, in total disregard of the discre-
tion vested in the directors by the charter, with
`consequent serious loss to the corporation ; em-
barking in a hazardous speculation by laying
out large sums of the bank money upon
an undertaking quite foreign to the business
of banking—l refer particularly to the Welsh
mines—and thereby also incurringheavy losses; not
exercising proper superintendence and control over
the general manager in conducting the business and
affairs of the company ; and though the directors
found that the losses of the company had exhausted
all the "surplus or reserved fund," and also ore,-
fourth of the capital actually paid up, failing to call
a special general meeting of the proprietors, and
to submi to the meeting a statement of the affairs
of the company, as directed by the 71st article of
the deed of constitution, all which several instances
of misconduct under the sixth head were in direct
violatimi of the' terms of the charter. (See articles
3, 33, 34, and 71.) I may here add that the peti-
tion to the Crown for the original charter con-
tained false representations as to the payment of
the deposit on shares. With respect to the andi-
ters of the company, it appears that they neglected
the duty which they owed to the proprietors of
Properly examining and auditing the accounts of
the'court of directors, for without examination of