一审判决和上诉判决： 1The first instance judges and the Court of Appeal favoured the liquidator in which both judgements found that the company was in fact acting abnormally and outside of its rights.
2The first instance judges stated that, while fraud was not established judging from the facts of the case, agency principles were however used to assert that the company was acting as an agent on behalf of Mr Salomon and he was in turn ordered to indemnify the company for the debts that was incurred while acting as his agent.
3The Court of Appeal rejected the agent argument and concluded one of its own, where it argued that the company was acting as a trustee of Mr Salomon who was then the beneficiary.
4 According to Lindley LJ, the company was ‘A trustee improperly brought into existence by him to enable him to do what the statute prohibits’.
5Lopes LJ further argued that the family members who subscribed to the company were ‘dummies’ and not bona fide members as the Companies Act 1862 required.
6This decision held that Mr Salomon, acting as the beneficiary must indemnify the company as his trustee.
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1The first instance judges and the Court of Appeal favoured the liquidator in which both judgements found that the company was in fact acting abnormally and outside of its rights.
2The first instance judges stated that, while fraud was not established judging from the facts of the case, agency principles were however used to assert that the company was acting as an agent on behalf of Mr Salomon and he was in turn ordered to indemnify the company for the debts that was incurred while acting as his agent.
3The Court of Appeal rejected the agent argument and concluded one of its own, where it argued that the company was acting as a trustee of Mr Salomon who was then the beneficiary.
4 According to Lindley LJ, the company was ‘A trustee improperly brought into existence by him to enable him to do what the statute prohibits’.
5Lopes LJ further argued that the family members who subscribed to the company were ‘dummies’ and not bona fide members as the Companies Act 1862 required.
6This decision held that Mr Salomon, acting as the beneficiary must indemnify the company as his trustee.