HL Deb 09 February 1865 vol 177 cc95-6
THE EARL OF BELMORE

called attention to a recent judgment in the Court of Chancery Appeal in Ireland, respecting the liability of shareholders in railways. He said it would not be necessary to mention the particulars of the case which was the subject of this judgment. The point to which he wished to direct attention was one which affected every railway company in Ireland. A local company, whose line it appeared had always been worked by a neighbouring company, having got into difficulties, was brought by the creditors last year into the Bankruptcy Court. Now, in England there was no question that a railway company could not be made bankrupt; and in the Report of a Select Committee, which sat last year, and of which his noble Friend below him (the Earl of Donoughmore) was Chairman, a recommendation was inserted that the law should be so altered as to allow the affairs of a railway company to be wound up in bankruptcy. The case having been heard in the Bankruptcy Court, the company was adjudicated bankrupt, and from this decision an appeal was brought into the Court of Appeal in Chancery. The Lord Chancellor of Ireland, in delivering judgment, confirming the decision of the Court below, said that Judge Berwick had held that a railway company was a commercial company for trading purposes under 20 amp; 21 Vict. c. 60, sees. 4 and 156, and he (the Lord Chancellor) continued— They were public carriers, and by the 99th section of the Bankrupt Act, carriers by name were expressly made subject to the bankrupt laws. It had been argued that no calls could be made beyond the amount of shares, &c. After some further observations, he went on to say— As to making calls beyond the specified amount of the shares, that question was not before the court; and if the Bankrupt Court decided that those who paid their shares in full should still be made contributors, and it came back to them on appeal, they would give the best decision they could on the subject. But it appeared to him as if legislation on that point inferred that no shareholder in a railway should be liable for a single shilling above the amount of his unpaid calls. However, the case was not before them, and it was not necessary he should give an opinion. Now it seemed to him (the Earl of Belmore) that this mere "inference of legislation" was very unsatisfactory to shareholders, and there should be no doubt on the subject. Many landowners and others had taken shares on the implied understanding with Parliament that they were not to be liable beyond the amount of those shares, and they were willing to risk the almost certainty of receiving no dividends for many years for the sake of improving the country, and it seemed very hard that they should suffer by a lapsus in legislation. Besides, this uncertainty tended to reduce the value of railway property; for, as was remarked to him by the person who brought this case to his notice, "how will you ever get another railway made, or get any person to take shares?" Shareholders were a very helpless body, and he had therefore thought it to be his duty to call attention to this matter in as few words as possible, and without saying anything that could effect one way or the other the particular case to which he had alluded.