1932 (2) TMI 23

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...., the plaintiff company sued the City Bricks Company on the mortgage, and in July of that year, while the mortgage suit was still pending, the City Bricks Company decided to go into voluntary liquidation. A liquidator was appointed in November 1923, and was made a party to the mortgage suit in December, 1923. The mortgage suit was decreed in April, 1924, and in August of that year the entire mortgaged property, including the unpaid share capital, was purchased by the plaintiff company in execution of the mortgage decree. Meanwhile, on the 27th July, 1921, (that is to say, after the mortgage to the City Bricks Company, but before the institution of the mortgage suit), the directors of the City Bricks Company passed a resolution purporting to....

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....eir auction purchase acquired the right to enforce this liability. As regards limitation, it has been urged on behalf of the plaintiff company that it has not yet begun to run, or at most it has begun to run from the date of the plaintiff company's auction purchase. It is further contended that the article applicable is Article 120 and not Article 112, though it is really immaterial which article is applicable, the suits having been instituted within three years of the plaintiff company's auction purchase. The appeals first came up for hearing before Cuming, J., who sent the cases back to the lower Appellate Court for recording a clear and unmistakable finding as to whether any call had actually been made on the two defendants. The lower....

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....ing given to the shareholders concerned. On the company going into liquidation the power to make calls would ordinarily vest either in the court or the liquidator but in the exercise of this power the court or the liquidator, as the case might be, would have to be guided by the articles of association, subject, of course, to the provisions contained in Part V of the Companies Act. As far as I have been able to ascertain, the Act makes no provision for the exercise of the power to call up unpaid share capital otherwise than in accordance with the articles of association and the provisions contained in Part V. A mere demand by the plaintiff company after its auction purchase cannot, therefore, take the place of a formal call. The sharehold....

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.... the City Bricks Co., even after the company went into liquidation, and in putting the mortgaged property to sale in execution of the decree obtained in that suit, but they have in my opinion misconceived their remedy and have failed to take the proper steps for the realization of their dues, I am not prepared to express any definite opinion as to what the appropriate steps would have been; but I see no reason why the plaintiff company, in their capacity as auction purchasers of the unpaid share capital, should not have applied to the court either for authority to issue notices of call in the name of the company on such of the shareholders as had not already received any notice, or for a direction on the liquidator to issue the necessary no....