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

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PR 4U. 4P. STAMPED 5 L°.]
a

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 iu tlie last preceding report. Then, as to
declaring di,vd-•nds, articles 60 and 63 are to
the following effsc• :—That at the end of the
first six months of every year, and also at the
end of every second six menths of every year ex-
cept as thereinafter mentioned, the court of direc-
tors 'shall determine upon, appoint, and declare such
dividend for the period ,then elapsed, out of the
clear profit of the company then actually accrued
and reduce I into possession, as they should think
fit ; and if the court of &rectors shall think proper
they are not to make any dividends of the profits
during tha first year of business, and such profits
shill form part of the " surplus or reserved fund,"
and in e ach succeeding year the net profits, after
making deducti 'n and allowance for bad and doubt-
' ful debts, shill, aft-r setting apart such proportion
of profits as tne directors shall think requisite for
the surplus fund, be divided among the proprietors;
but no proportion of profits is ts be set apart for
the surplus fund, if by reason thereof the dividend
will be reduced below 4 per cent. ; and the sur-
plus fund for the time being is to be added to the
capital, . and never to be considered part of the
profits. . By .article 64 at every annual general
meeting i he proprietors are to appoint two or three
persona, 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 ts 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 examination, or to lay the sem
before the next general meeting ; and the auditors
ere empowered to require the production of the
books, voucher..-, writings, and documents re'ating
to the said acorn's s, and to require the assistance
of the general and other managers, accountants,
clerks, and officers of the company, or such of
them as they shall think proper in the -investigas
tion of such accounts.. The 65th article pro-
vides for petitioning the Crown for leave to
increase the capital of the company by supple-
mental charter, and that the holders of new
shares are to be bound 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 article 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 shall as soon as possible call a special
meeting.of tile proprietors, and submit to such
meeting a till statement of the affairs of the com-
pany; and if it shalt 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 chair Man shall declare
the company dissolved, and the same shall be 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 4
tions contained in the deed of constitution, or in
any by law or supplemental deed to be made iu
pursuance thsresf, 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 here 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
f r acts of commission as of omission—that is, each
individual of the body who does not do what in
him lie. 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 particular fact it
is not 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 tile 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
Slight during this most painful inquiry, or to single
out any particular persons as delinquents ; that
will be for elsewhere and hereafter ; but having
regard to the course pursued in the management of
khe 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 i-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 statute (7th and Bth Vie., cap.
113, sec. 5), and the terms of the charter, pag.a 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 the
capital and property and value thereof, and of the
profits and losses of the company, thereby conceal-
ing the actual state and position of the affairs of
the corporation, and giving a semblance of solvency
where the reality had ceased to exist, 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 ihe died 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 had teen 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 (see articles 60 and 63 ; and
see P. Lord Campbell, in "Barnes v. Pennell," 2
House of Lords Oases, pp. 509 and 524 5). 4th,
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
merset) by Weans 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 charier). 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,
d
making
dividends when not justified in eo doing,
there-
upon issuing new shares or obtainingdo: cheatplo the
public new shares at a premium, with intent to
public and in contempt of the prerogativer.s themisap-
plication
Crown. 6th, making such repeated go
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 o
fdoutshe sP eculation by laying
out large sums bank money upon
an undertaking quite foreign to the business
of banking—l, refer particularly to the Welsh
mines—and thereby also incurring heavy 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 one-
fourth of the capital actually paid up, failing to call
a special general meeting of the proprietors) and
. to submit 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
violation of the terms of the charter. (See articles
32 33, 34, and 71.) I may here add that the peti-
tion to the Crown for the original charter con-
tained fake representations' as to the payment of
the deposit .on shares. With respect to the audi-
tors 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 ourt of directors, for without examination of