Basil Scott, Kt., C.J.
1. The first plaintiff, through his three nominees, the 2nd, 3rd and 4th plaintiffs, was the owner of 161 shares-in the Indian Specie Bank. In the month of April 1913, upon instructions from the 1st plaintiff, the share certificates and blank transfers executed by the nominal registered holders-of the shares were handed to the Managing Director of the Specie Bank who undertook to sell the shares on commission. The Managing Director, in the month of May, paid in respect of the shares a sum of Rs. 10,500 which would be approximately the equivalent of the net sale-proceeds of the shares at Rs. 66 per share; and he represented that the shares had been sold at that figure. The Specie Bank went into liquidation in or about the month of December 1913. The 2nd, 3rd and 4th plaintiffs were thereafter placed upon list A of contributories in respect of the said shares standing in their name on behalf of the 1st plaintiff, on the ground that they remained registered share-holders. It is not disputed that the representation of the Managing Director of the Bank that the shares had been sold was false. In consequence of the shares not having been sold, the 1st plaintiff has been obliged to pay the amounts of the calls made in the liquidation aggregating in all Rs. 8,050 with interest up to payment amounting to Rs. 219 and these sums he seeks to recover from the Bank in liquidation on the ground that the Managing Director in the course of his employment by the defendant Bank was guilty of neglect and misconduct towards the plaintiffs in not selling the said shares and that the direct consequence of such neglect and misconduct has been that the 2nd, 3rd and 4th plaintiffs were placed upon list A instead of list B and that the 1st plaintiff has been obliged to pay the calls on the said shares as aforesaid; and that in any event the plaintiffs have been deprived of their rights to indemnity against a purchaser.
2. The suit was dismissed in the trial Court on the ground that the plaintiffs had received full consideration for the shares and that there was no loss to them in so remaining owners. The learned Judge remarked:
It would be a very strange contradiction if the plaintiffs having been placed upon the list of ccntributories in spite of certain facts (brought to the notice of the Court at the time of settling the list) and having paid the calls, should be entitled on the same facts to recover the amounts so paid to the liquidators in an action.
3. In our opinion the plaintiffs have no cause of action. According to the decision of the House of Lords in Honldsworth v. City of Glasgow Bank (1880), 5 App. Cas. 317 (an action based upon misrepresentation) a share-holder contracts to contribute a certain amount to be applied in payment of the debts and liabilities of the -Company and it is inconsistent with his position as a shareholder, where he remains as such, to claim back any of that money. He must not directly or indirectly receive back any part of it.
4. The same principle was applied in In re Addle-stone Linoleum Company (1887) 37 Ch.D. 191, where persons upon being registered as shareholders sought to recover as damages for breach of contract or otherwise in respect of the issue of fully paid up shares the amount which they had had to pay as contributories in the winding up upon shares which were not in fact fully paid up. Mr. Justice Kay, whose decision was affirmed in the Court of Appeal, observed:
Practically, what these applicants are seeking to recover by their proof is a dividend in respect of the 2 10 s. per share which they have been compelled to pay in the winding-up. But as share-holders they have contracted that they will pay this money and that it shall be first applied in payment of the creditors whose debts are not due to them as members of the Company-that is, they are practically admitting their liability to pay the 2 10 s. per share to such other creditors and yet seeking to get part of it back out of the pockets of those very creditors themselves. I confess it seems to me that the money so claimed is not only claimed in the character of members but that the claim is just as unreasonable as if it were a claim of dividends or profits and that, accordingly, it comes within the words ' or otherwise ', which I have read from Section 38.
5. Section 38 corresponds with Section 61 of the Indian Companies Act of 1882. Sub-section (17) of that section is as follows :
No sum due to any member of a Company, in his haracter of a member, byway of dividends, profits, or otherwise, shall be deemed to be a debt of the Company, payable to such member in a case of competition between himself and any other creditor not being a member of the Company; but any such sum may be taken into account, for the purposes of the final adjustment of the rights of the contributories amongst themselves.
6. In the case of the Specie Bank there is no probability that the assets will ever suffice to pay the claims of the creditoi-s in full and therefore, there is no chance of any final adjustment of the rights of contributories amongst themselves. It is improbable having regard to the decision of the Master of the Rolls in Burgess's case (1880) 15 Ch.D. 507 that even if there were surplus assets, the plaintiff would be entitled to recover in respect of his present claim.
7. We dismiss the appeal with costs.