Hardoon V Belilios [1901] AC 118

Case Review

Citation: Hardoon v Belilios [1901] AC 118

Issue: Whether the plaintiff who is the registered holder of some shares in a bank company which is being wound-up, is entitled to be indemnified by the defendant who is the beneficial owner of those shares, against calls made upon them in the winding-up of the company.

Whether there was a trust relation between the plaintiff and defendant.

Relevant facts: The plaintiff was registered as share holder of fifty shares in a bank company in 1891. He was issued a provisional certificate of ownership. He signed blank transfer of the shares which were held by his employers for sometime. They were responsible to pay the allotment money and the first call. The certificate and blank transfer document were handed to Coxon who acted for the Syndicate to speculate shares in another company. The defendant financed the syndicate. Coxon pledged the certificate and blank transfer with the defendant as security for his advances. The operation of the syndicate resulted in a loss and consequently the defendant became the owner of the shares. The plaintiff requested the defendant to transfer shares out of his name but the defendant declined. Calls had been made on the contributaries whom the plaintiff is one but the defendant refused to indemnify the plaintiff. The plaintiff was sued by the liquidator for the calls made on him inrespect of the shares, and judgment was given against him. He then made a claim against the defendant.

Action/Claim: The plaintiff sought relief to claim back the money from the defendant inorder to indemnify him for the trust liabilities.

Outcome: The court held that to establish the relationship of trustee and cestui que trust (beneficiary) is to prove that the