Brinsmead Edward Thomas Articles

1896

"The LIST of APPLICATIONS for SHARES will OPEN this day, TUESDAY, the 28th JULY, 1896, and CLOSE tomorrow, WEDNESDAY, JULY 29th, for Town, and the Following Day for the Country.

A portion of the Capital has been reserved for the Musical Profession and Music Trades. All applications for the remaining Share, available will be carefully considered, and a strictly fair and proportionate Allotment made.

Thos. Edward BBRINSMEAD & Sons, LIMITED, PIANOFORTE MANUFACTURERS.
Incorporated under the Companies Acts, 1862 to 1890;
Whereby the Liability of the Shareholders is limited to the amount of their Shares. CAPITAL £100,000,

Divided into 18,000 Ordinary Shares of £5 each, and 2.000 Deferred Shares of £5 each.
The Ordinary Shareholders are entitled to a Preferential Dividend of 8 per cent. per annum on the amount for the time being paid up thereon, and, subject thereto, the profits in each year will be applied as to one-third to a Reserve Fund, one-third by way of additional dividend on the Ordinary Shares, and the remaining third by way of Dividend on the Deferred Shares. The Shares are payable as follows: 10s. per Share on Application; £2 10s. per Share on Allotment; and the balance in two instalments at one and two months after Allotment respectively, or the whole amount may be paid up in full on Allotment, the Shares ranking for dividend from date of payment.

DIRECTORS.
* Thomas Edward Brinsmead, Esq., The Pianoforte Works, Ferdinand Street, Camden Town, London, N.W.
* Edward George Stanley Brinsmead, Esq., Bartholomew Works, Kentish Town, London, N.W.
* Jacob Bradford, Esq., Mus.Doc, Oxon, Director of the Cambridge, Limited.
* E. H. Lomax, Esq., B.A., LL.B., Aylburton House, Richmond, Surrey,
* Edwin Ballantyne, Esq., F.S.I., Boscastle, West Hampstead, N.W.
* Sydney Walter Brinsmead, Esq., The Pianoforte Works, Ferdinand Street, Camden Town, London, N.W.

Will join the Board on completion of the purchase.

BANKERS. - Messrs. Brown, Janson and Co., 32, Abchurch Lane, London,
This Company has been formed for the purpose of acquiring, carrying on, and considerably extending the business of Pianoforte Manufacturers now carried on by Thomas Edward Brinsmead and Sons, at Ferdinand Street, Camden Town, and Bartholomew Works. Bartholomew Road, Kentish Town, London, N.W.

The business was established by Mr. Thomas Edward Brinsmead, who, for nearly thirty years, held an important position with Messrs. John Brinsmead and Sons, and who has since taken his two sons, Mr. Edward George Stanley Brinsmead and Mr. Sydney Walter Brinsmead, into partnership.

The business is solely conducted by these three gentlemen, and has so greatly increased that they find themselves unable to execute the large number of orders for their instruments at the Bartholomew Road factory, and have therefore acquired, on favourable terms, additional and larger premises in Ferdinand Street, Camden Town, N.W. (in the immediate vicinity of the principal pianoforte manufactories), which are being fitted up with first-class plant and machinery in a cordance with present-day requirements.

In order to carry out the necesary extension and thoroughly develop the business, it has been decided to convert the undertaking into a public Company, and to give the numerous customers and others an opportunity of participating in the profits.

The members of the firm are all practical men, each having been for many years engaged in the actual manufacture of pianos. Mr. Thomas Edward Brinsmead has for many years personally superintended the adjustment of the delicate parts of pianofortes, while Mr. Edward George Stanley Brismead has been mainly responsible for the extremely beautiful sounding-boards with which the firm's instruments are fitted. [...][...]" To-day, 01/08/1896, p. 1

"With an open this day (Tuesday) and close to-morrow (Wednesday)" subscription list, applications for shares (to be forwarded to the bankers, Messrs. Brown, Janson, and Co.) have been invited by the prospectus of THOMAS EDWARD BRINSMEAD AND SONS, LIMITED, of Camden Town and Kentish Town, pianoforte manufacturers; but although it is stated that "it is a well-known fact that very large profits are made by all well-known pianoforte manufacturers," the prospectus gives no information whatever as to what have been profits hitherto earned by Messrs. T. E. Brinsmead and Sons.

New premises acquired will, it is stated, be capable of turning out "a minimum of 50 pianofortes weekly,” and “on an output of only 50 pianos weekly, taking the profit at £7 each, which is below the average, a profit is shown of £18,200 per annum."

The price to be paid to Mr. Davis, an intermediary vendor, for the property, of which no valuations are given, is £76,650, and the capital is to be called £100,000, in Ordinary shares for £90,000, and Deferred shares for £10,000.

The vendor is 'so satisfied," &c., that he will lodge with trustees," on or before the completion of the purchase," a sufficient amount in cash to secure a dividend of not less than 8 per cent. per annum for "a minimum period" of three years. "Certain arrangements" which have been entered into with reference to the formation of this Company are not to be disclosed. It would have been particularly interesting to know who are parties to these arrangements. This affair is not the Brinsmead factory that is so well known." The Statist, 01/08/1896, p. 192

"A VERY curious company case is being investigated by Mr. G. S. Barnes, the Senior Official Receiver at the Bankruptcy Court.

It is that of Thomas Edward Brinsmead & Sons, Limited. This was a firm of pianoforte makers, whose chief stock-in-trade seems to have consisted of their similarity of name to the well-known and old-established firm of Brinsmead.

The business of Thomas Brinsmead and his sons was purchased from them for the small sum of £637 by a person named Davis. He then sold it to the company formed for the purchase for £76,000, nothing having happened to enhance its value between his purchase and the sale.

A prospectus was issued, and the public subscribed £58,000, the greater portion of which went into the pocket of "Mr. Davis." Now comes the mystery.

The company being wound up, and it being clear that a fraud had been committed, no trace can be found of the mysterious Mr. Davis, who has carried off nearly £50,000 for a concern for which he paid less than £700.

The Official Receiver declares his determination to spare no effort in order to solve the mystery. It is certainly one of those "stories of the City" which show how far we have advanced since the days of Hounslow Heath and the gallant Turpin." The Speaker, 26/12/1896, p. 679

1897

"THE WINDING UP petition which was presented in Re Thomas Edward Brinsmead & Sons (Limited) seems to have rested upon very special circumstances. The company was formed by members of the BRINSMEAD family, who were formerly in the employment of the well-known firm of JOHN BRINSMEAD & SONS, to carry on the trade of pianoforte making.

The vendors fixed the price of the goodwill of the business which they were selling to the company at £76,000, and the goodwill carried with it the exclusive right to use the name of T. E. BRINSMEAD & SONS.

But no sooner was the company started than it was attacked by the original firm of JOHN BRINSMEAD & SONS, and an injunction was granted by NORTH, J., and confirmed by the Court of Appeal, restraining the company from using the name of BRINSMEAD without adding an express statement that it had Towards the close of the year 1892 a strong demand was no connection with the original firm.

In these proceedings it was held that the design of the promoters of the company was to get as much as they could of JOHN BRINSMEAD & SONS' business by the use of the family name, and that the £76,000 charged for goodwill was really charged for the improper advantage it was hoped to obtain. Of the purchase price a considerable part seems to have actually passed into the hands of the vendors. Under these circumstances it was alleged that the company ought to be wound up under the "just and equitable" clause.

The company, it was said, was based on fraud, and by reason of the injunction the substratum of its business was gone. But the mere fact that there has been fraud in the formation of a company is not a sufficient ground for winding it up.

The shareholders may think it most for their interest to waive the fraud and carry on business on the best terms they can (Re Haven Gold Mining Co., 20 Ch. D. 151), and, although in the present case the company may have been greatly prejudiced by the injunction it appeared that it had by no means lost its business.

The substratum of the business was not gone in the same manner as in the cases in which upon this ground a winding-up order has been made-where, for instance, a title to the property sold to the company cannot be made out (Re Haven Gold Mining Co., supra), or a patent on which the business depends cannot be obtained (Re German Date Coffee Co., 20 Ch. D. 169).

But though the whole substratum of the business was not gone, VAUGHAN WILLIAMS, J., held that the disappearance of a substantial part of it gave him a discretion to make a winding-up order, and notwithstanding that a considerable business remained and that there were shareholders who desired to carry it on, he exercised his discretion in favour of a windingup.

In his decision he seems to have been largely influenced by the facilities which the winding-up procedure would afford for the recovery of any money which might have been improperly paid to the vendors." The Solicitors' Journal, 19/12/1896, p. 123

"IN RE THOMAS EDWARD BRINSMEAD & SONS, LTD. ·

1897, Feb. 11, 12, 20. LINDLEY, SMITH, AND RIGBY, L.JJ. Winding-up Order-Fraudulent Company-Similarity of name — InjunctionSubstratum of Company -" Just and Equitable"-Domestic Forum-Wishes of Shareholders.

Where a company had been fraudulently formed to acquire and carry on a small piano business with a view to passing off its pianos as those of an old established firm of similar name, and the old firm had obtained an injunction against the company restraining it from using its name so as to deceive the public, with the result that the company's business had, by the disclosure of the fraud, become worthless, the Court on a shareholders' petition made an order for winding up the company as "just and equitable" within s. 79 (5) of the Companies Act, 1862.

The wish of shareholders to have a voluntary winding-up is only a bar to the Court making a compulsory order on a shareholders' petition where the meeting in favour of the domestic forum really represents the genuine wishes of the shareholders, not where it is organised by the promoter of the company to defeat investigation by the Court.

PETITION by shareholders for the winding-up of the company on the ground that its substratum was gone.

The material clauses of the company's memorandum of association were the following:

"(A.) To acquire and take over as a going concern, and carry on the business of pianoforte manufacturers, now carried on by Thomas Edward Brinsmead, Edward George Stanley Brinsmead, and Sydney Walter Brinsmead, at Bartholomew Works, Bartholomew Road, Kentish Town, in the county of Middlesex, under the style or firm of 'Thomas Edward Brinsmead & Sons,' together with the whole of the real and personal property and assets of the proprietors of that business used in connection therewith, or belonging thereto, and with a view thereto to adopt and carry into effect (either with or without modifications) the agreement dated the 2nd July, 1896, and made between Joseph Henry Davies of the one part, and Stephenson Wilson of the other part.

"(B.) To carry on as a joint-stock company limited, the business referred to in the said agreement as the same has heretofore been carried on by the said T. E. Brinsmead, E. G. S. Brinsmead, and S. W. Brinsmead, and also the general business of manufacturers

of and dealers in pianofortes and other musical instruments, and cabinets, pianoforte frames . . . and processes in connection with the above mentioned business, as are customarily or usually carried on in connection therewith."

The agreement referred to in (A) was made between Davies as vendor, and Wilson as trustee for the company, for the sale to the company of the property for 76,650l., payable as to 10,000l. in deferred shares of the company, and as to 66,650l. in cash.

The following facts are chiefly taken from the judgment of Mr. Justice VAUGHAN WILLIAMS:

The main ground upon which it was said that it was "just and equitable" that the company should be wound up by the Court was, that the substratum of the business which the company was incorporated to carry on, had become impossible.

The petition contained, in addition, allegations going to show that the circumstances of the formation of the company required investigation, partly because it was suggested the company, whatever the scope of the memorandum of association, was in fact formed, so far as the intention of the promoters was concerned, for the purpose of fraudulently depriving the owners of the old-established business of John Brinsmead & Sons, of as much of their business as could be got away through the belief of customers that they were dealing, not with T. E. Brinsmead & Co., Ltd., but with the old firm of John Brinsmead & Sons; and partly because, it was alleged, the goodwill of the business purchased by the company, being of little or no value, was purchased by the company at a very large price (76,000l.), the shareholders being led to believe that they were purchasing the old-established business of John Brinsmead & Co., and that the price so paid, as to a very large extent (about 40,000l.) passed into the hands of vendors who were men without means, and it was sought to say that, even though the substratum of the business of the company, as defined by the memorandum of association, had not become strictly impossible, yet that the fact that there were these matters requiring investigation might itself make it just and equitable that the company should be ordered to be wound up compulsorily; and the more so because the Court of Appeal, affirming the judgment of Mr. Justice NORTH, had restrained the company-i.e., Thomas Edward Brinsmead & Sons, Ltd. - from using the name of Thomas Edward Brinsmead & Sons, Ltd., or the name of Brinsmead in connection with the manufacture or sale or hire of pianos, without adding thereto an express statement that the respondent company was distinct from, and had no connection with the old firm of John Brinsmead & Sons.

On that appeal, the history of the formation of the company was given by Lord Justice A. L. SMITH, who said :

"One has in this case to take a survey of one year and nine months, because nothing has to be counted except from October 24, 1894, to the date of July 28, 1896. What do we find? We find that for years and years, from the year 1834 I think, that is for years and years prior to October, 1894, John Brinsmead & Sons, or rather the Brinsmead family, now represented by John Brinsmead & Sons, have been carrying on and building up a trade in the manufacture and sale of pianofortes, which has become, I may say, universally notorious - I am speaking only from my own knowledge.

Brinsmead pianos are as well known, I suppose, to any one who knows anything, as any other article in trade which is wellknown to anybody. Prior to October, 1894, they had in their employment (that is the proper word to use for it, no matter what has been stated in the affidavits), a cousin, whose name was Thomas Edward Brinsmead, and who worked for them at the wage of 21. 16s. 6d. per week.

I emphasise that because many statements in the affidavits on the Thomas Edward Brinsmead side speak to the great capacity he has for making pianos. At any rate, he was a workman for his uncle at 2l. 16s. 6d. per week. Thomas Edward had a son named George, who was working for the uncle at 17. 12s. 6d. per week, and another son named Sidney, who was working at 11. 10s. 4d. per week. That delineates accurately the position of the three Brinsmeads when they parted company with the uncle in October, 1894. I know there is a conflict in the affidavits as to why they parted company with the uncle.

It is sufficient to say that they no longer continued to work for him. What do we then find? We at once find Mr. Thomas Edward Brinsmead with his two boys, in conjunction with a man called Wilcox, who was also a workman who had left the old firm, setting up business in the manufacture of pianofortes under the name of T. Brinsmead & Sons.

Now, I ask myself whether that was honest business to start with. Why did they take the name of T. Brinsmead & Sons ? It was not true. As to the elder Brinsmead, his name was Thomas Edward Brinsmead. The 'Sons' is true, but the firm who started making the pianos in a small pettifogging way at that time was not T. Brinsmead & Sons, but Thomas Edward Brinsmead, his two sons, and a man named Wilcox.

But for some reason or other—and, for myself, I have no difficulty in surmising the purpose-this Brinsmead starts in rivalry with his uncle, or the old firm, under the name of T. Brinsmead & Sons.

Well, I say he started in fraud. He took that name, I have not the slightest doubt in the world, for the purpose of filching from his uncle as much of the old trade as he could get by using that name, the name T. Brinsmead & Sons being as near to the old name, J. Brinsmead & Sons, as he could well go.

I am not now going to pursue it, but the result of that was litigation by the uncle to restrain him. The uncle was successful. He got, first of all, an injunction from Mr. Justice ROMER, which has been read by Lord Justice LINDLEY. That injunction, in part, at any rate, was evaded. There was a motion to commit. There were proceedings upon that, and we have heard what was the result of those proceedings.

Then, after those proceedings had been taken, Mr. Thomas Edward Brinsmead turns himself into a limited company with his sons, and that goes on for a little while. Then the company is voluntarily wound up, and at last (mind, I am only taking one year and nine months) Mr. Thomas Edward Brinsmead and the two sons (Wilcox appears to have dropped out) blossom out into a company issued to the public by the prospectus, and the picture which we have seen enclosed in the prospectus, and no less a sum than 76,000l. is sought to be obtained from the public.

For what? Using the name of Thomas Edward Brinsmead & Sons, Ltd. These are the facts occurring in this one year and nine months.

What is the 76,000l. got from the public for ? What is to induce the public to subscribe 76,000l.? To use the new firm's name? Were they to pay 76,000l. for the business of the father and the two sons and Mr. Wilcox, whose business was being dealt with, or were they to pay 76,000l. for the slice they could get out of the old business of John Brinsmead & Sons?

Well, the question has only to be put to be answered in one way. Now, then, John Brinsmead & Sons bring this action against the company, limited, this new company, the 76,000l. company, Thomas Edward Brinsmead & Sons, Ltd., to restrain them from using the name on the ground that the name, Thomas Edward Brinsmead & Sons, Ltd., is likely to deceive the public (I am not talking of shareholders; I have nothing to do with them; that will come out hereafter, I dare say), and is likely to induce the public to buy the new firm's pianos, thinking they are buying the pianos of the old firm of John Brinsmead & Sons."

The Lord Justice then dealt with the question whether the use of the name Thomas Edward Brinsmead and Sons, Ltd. was likely to deceive the public into thinking that they were really buying the old firm's pianos, and pointed out that, although there was no evidence of any customer being deceived, there was evidence that when the company was advertised as Thomas Edward Brinsmead & Sons, Ltd., people embarked their money in the company, believing it was the old well-known company which had been known for years and years as John Brinsmead & Sons; and the Lord Justice said that there was cogent evidence that Thomas Edward Brinsmead, Thomas Edward Brinsmead & Sons, and Thomas Edward Brinsmead & Sons, Ltd., had all done what they had done with the intention of getting as much of the old firm's trade into their own hands as they possibly could by using that name.

From the affidavits in the present petition, it appeared that the company was doing a considerable business since the granting of the injunction by Mr. Justice NORTH, and consistently with same. When the petition was first before the Court, Mr. Justice VAUGHAN WILLIAMS ordered that a meeting of the shareholders of the company should be held to ascertain their views; and a meeting having been held, the view of the majority of the shareholders present was that they wished the business continued, and that the company should not be compulsorily wound up; but several shareholders had brought actions to recover the sums paid by them for shares, on the ground that they were induced to take them by fraud.

Warmington, Q.C., and Lyttleton Chubb, for the petitioner. Swinfen Eady, Q.C., E. E. Fletcher, P. S. Stokes, and Ashton Cross, for shareholders in support of the petition.

[...][...][...][...][...][...]" Reports of Bankruptcy and Company Cases Decided in the High Court ..., 11/02/1897, p. 70-89

For references see page
alfabetic B

© Copyright all rights reserved