James Haldane, of the firm of Messrs. Lindsay, Jamieson, and Haldane, chartered accountants, Edinburgh.
These gentlemen immediately addressed themselves to the "work of their office. The first necessary step was to settle the list of shareholders, which was accomplished by the 7th of the following month.
At the period of the stoppage, according to the original list as settled by the liquidators, there appear to have been 1,819 shareholders of all kinds. Of these, 1,093 held in their own right; 484 as trustees; 100 as joint holders, life-renters, etc.; 108 were representative of stock held by wives, etc.; while the remainder held in some other representative capacity.
It is not to be supposed that so large a body would quietly submit to have their names placed on the list of contributories without a struggle, and efforts were made by many to get rid of their responsibility. Petitions to the Court of Session were presented by 209 persons for rectification of the list of contributories which the liquidators were obliged to resist. In this they were successful in 139 cases, partly successful in 26 cases, and unsuccessful in 44 cases. These petitions were presented chiefly on the ground that the petitioners had been induced to purchase stock on the fraudulent representations of the bank; or that prior to the stoppage the stock held by them had been sold to the bank; or that they had disposed of their holdings before the 22nd of October, when the shareholders passed the formal resolution to go into liquidation, although they made no pretence that they had sold before the date of the actual stoppage on the 2nd of October.
In addition to those cases of petitions for rectification, the liquidators were parties to other 203 cases before the law courts. Eighty-four of these were actions against the liquidators, 68 of which they resisted successfully, and 8 unsuccessfully, and were partially successful with respect to the remainder. In 25 actions raised by the liquidators, they were successful in 12, unsuccessful in 1, and partially successful in 5, while the others are still pending. The remaining 94 cases to which the liquidators were parties consisted of applications to the Court for sanction of arrangements made by them with certain debtors, credi-tors, contributories, etc. Amongst these may be mentioned, by way of example, the compromises effected with the trustees of James Morton and Co., Matthew Buchanan and Co., Glen, "Walker and Co., Potter, Wilson and Co., J. Innes, Wright and Co., W. Nicol and Co., of Bombay, all large debtors to the bank, whereby their estates were made effectual for the benefit of the bank to the value of nearly a million pounds, and litigation was thus avoided. The liquidators also entered into an agreement with the trustee of Smith, Fleming, and Co.'s estate, whereby, by paying a dividend of 2s. Id. per £ on the claims (amounting to about £180,000) of all creditors other than the bank, they secured all the assets, which promise to turn out well.
Among the special actions to which the liquidators were parties may be mentioned that of " Murdoch's Trustees," which was taken as a test case to try the question of the individual liability of trustees; and that of the Caledonian Bank, for the winding-up of which the liquidators petitioned. "With regard to Murdoch's trustees, they determined, notwithstanding former clear decisions on the point, to try the question of the personal liability of trustees afresh. The result was that judgment was given by the first division of the Court of Session unanimously in favour of the liquidators on the 20th December, 1878, and the principle of the personal liability of trustees was thereby affirmed. Against this judgment Murdoch's trustees appealed to the House of Lords, who, on the 7th of April following, dismissed the appeal, and confirmed the judgment of the Court of Session.
The petition for the winding-up of the Caledonian Bank was presented by the liquidators in December, 1878, under these circumstances : the Caledonian Bank having taken £400 stock of the City of Glasgow Bank, as security for an advance, from one of its customers, and having registered the same in its own name, became thereby a shareholder of the City of Glasgow Bank, and responsible for its debts. This fact having become a matter of notoriety, the shareholders of the Caledonian Bank, fearful of the consequences, began to sell their shares, or transfer them into the names of men of straw. The liquidators of the Glasgow Bank thereupon took steps to stop this process by closing the register of the Inverness Bank, which was effected by the petition for the winding-up of the latter, which was the only means then possible for effecting that object. The Caledonian Bank then stopped payment, but subsequently so amended its constitution as to prevent any transfer of shares without the approval of the directors; and having thus effected the chief object of the petition of the liquidators of the Glasgow Bank, the petition was withdrawn on the 28th of June, 1879, and the Caledonian Bank forthwith resumed business.
The first duty of the liquidators, viz., the settlement of the list of shareholders, having been effected, their second step was the call upon these unfortunate individuals for £500 per every £100 of stock held. This call was made on the 13th November, and was payable in two equal instalments on the 23rd of the following month and the 24th of the following February. The object of the liquidators in allowing so long a time for the payment of the second instalment was to enable shareholders to realize their securities without unduly forcing them upon the markets, and so, to a great extent, sacrificing them.
The nominal amount of the first call was about £4,200.000, and by the end of the second official year of the liquidation-22nd October, 1880-it had realized £2,409,066.
The first call necessarily swept away many hundreds of the original shareholders, and made the obligations of the remainder all the more onerous.