M. Macauliffe vs C. Wilson on 1 August, 1895

Allahabad High Court
M. Macauliffe vs C. Wilson on 1 August, 1895
Equivalent citations: (1896) ILR 18 All 56
Author: Knox
Bench: Knox, Aikman


Knox, J.

1. We were at the hearing for some time much impressed with Mr. Colvin’s argument that on the present case the appellant stood in a confidential relation to the respondent; that certain duties were imposed upon him by Act No. VI of 1882; that the appellant had a position which enabled him to acquire special knowledge to his own advantage, and that he was bound to protect the interest of the respondent. But while we were referred to cases which showed that a director did occupy a special position quoad the company and the shareholders [upon which see Gilbert’s case L.R. 5 Ch. 559, and Gower’s case L.R. 6 Eq. 77, no single case was produced before us in which it had ever been held that the director of a company occupied any such relation to each individual shareholder. And in any case the relationship between directors and shareholders in a company is that of agent to principal, not of trustee and cestui que trust. I hold that the appeal must prevail, and, setting aside the judgment and decree of the lower Court, would dismiss the respondent’s claim.

2. Under the circumstances of the case I would direct that each party pay his own costs.

Aikman, J.

3. Much argument was addressed to us with a view of showing that the defendant as director of the Bank stood in a fiduciary relation to the plaintiff, and that his mere silence as to tins state of the Bank was sufficient to render him liable in an action for deceit. As to this I think the conclusion arrived at by the learned Subordinate Judge is correct, and that the case he refers to, i.e., Gilbert’s case L.R. 5 Ch. 559, is an authority for the view which he took.

4. I would allow the appeal and dismiss the plaintiff’s suit. But in the exercise of the discretion which the Court has on the question of costs, I would not allow the appellant his costs here or in the Court below, as his conduct, though not such as to render him liable in an action for deceit, is certainly not free from blame.

5. The order of the Court is that the appeal be decreed and the plaintiff’s suit dismissed. The parties will pay their costs both here and below.

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