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COMPANY LAW. 
 
 TENTH EDITION. 
 
ELEVENTH EDITION. 1912 . 3 Parts . Cloth, £5. 
 
 PALMER’S COMPANY PRECEDENTS. 
 
 For Use in Relation to Companies. 
 
 Part I.— General Forms. Cloth, 40/- 
 
 Part II,— Winding-Up Forms and Practice. 
 
 Cloth, 34/- 
 
 Part III.— Debentures and Debenture Stock. 
 
 Cloth , 26/- 
 
 TWENTY- NINTH EDITION. 1915. Net , I / - 
 
 PALMER’S PRIVATE COMPANIES : 
 
 Their Formation and Advantages. 
 
 TWENTY-NINTH EDITION. 1915 . Cloth , Net , 2/6. 
 
 PALMER’S SHAREHOLDERS’, DIRECTORS’, AND 
 
 VOLUNTARY LIQUIDATORS’ LEGAL COMPANION. 
 
Company Law: 
 
 PRACTICAL HANDBOOK 
 
 FOR 
 
 Lawyers and Business Men. 
 
 CONTAINING THE 
 
 COMPANIES (CONSOLIDATION) ACT, 1908; COMPANIES ACT, 1913, 
 AND OTHER ACTS AND RULES. 
 
 BY 
 
 Sir FRANCIS BEAUFORT PALMER, 
 
 BENCHER OF THE INNER TEMPLE, 
 
 \ 
 
 Author of “ Company Precedents” §c. 
 
 TENTH EDITION. 
 
 BY 
 
 ALFRED F. TOPHAM, LL.M., 
 
 of Lincoln’s inn, barrister -at -law, 
 
 FORMERLY WHEWELL SCHOLAR AND CHANCELLOR’S MEDALLIST IN THE UNIVERSITY OF CAMBRIDGE. 
 
 LONDON : 
 
 STEVENS AND SONS, LIMITED, 
 
 119 & 120, CHANCERY LANE. 
 
 TORONTO : 
 
 CANADA LAW BOOK COMPANY, LIMITED. 
 1916. 
 
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 PREFACE 
 
 TO THE TENTH EDITION. 
 
 j 
 
 The editing of this Work has now passed for the first 
 time in its history into hands other than the Author’s. 
 
 All the Author’s arguments, expressions of opinion 
 and criticisms of decided cases have been retained 
 unaltered. The Editor’s views on some of the 
 subjects dealt with have been stated elsewhere, but 
 have not been put before the reader in this edition. 
 The additional matter consists mostly of short state- 
 ments of the effect of recent decisions, and, in the few 
 cases where the Editor has expressed an opinion or 
 attempted to lay down a general principle, the passage 
 in question is printed between square brackets. 
 
 Some re-arrangement and some substantial additions 
 have been made as to subjects which have developed 
 in importance during recent years, such as Re-organi- 
 zation of Capital (p. 100), Apportionment between 
 Capital and Income (p. 220), Receivers (p. 324), and 
 Set-off (p. 405). 
 
VI 
 
 PREFACE TO THE TENTH EDITION. 
 
 Emergency legislation, so far as it relates especially 
 to companies, has been dealt with shortly in the 
 Appendix (p. 633). 
 
 All references to the Act and to decided cases as 
 well as the Index, Table of Cases and cross references 
 have been revised and corrected throughout, and the 
 Editor hopes that errors and misprints have been 
 reduced to a minimum. 
 
 In this respect the Editor has received most valuable 
 assistance from his clerk, Mr. H. C. Mills. 
 
 A. F. TOPHAM. 
 
 5, New Square, Lincoln’s Inn, 
 February , 1916. 
 
AUTHOR’S PREFACE 
 
 TO THE NINTH EDITION. 
 
 — -♦ — 
 
 The fact that eight large editions of this Work have been sold 
 since its publication in 1898, that the Work is now in common 
 use in the United Kingdom and has followed the Author’s 
 larger work to Canada, Australia, New Zealand, India and 
 the United States, affords convincing evidence that it has been 
 found serviceable. 
 
 The object of the Work is to set forth the leading provisions 
 of the Companies (Consolidation) Act, 1908, which has now 
 taken the place of the Companies Acts, 1862 to 1907, and at 
 the same time to show, by reference to the principal decisions, 
 how the Acts have been interpreted by the Courts, and how the 
 provisions thereof have been supplemented by the application 
 of the general rules of law and equity. 
 
 The Acts alone, as pointed out in the Preface to the first 
 edition, afford a very inadequate view of the law regulating 
 companies incorporated thereunder ; but the Acts plus the 
 decisions constitute a great and, for the most part, admirable 
 system of Company Law built up with the assistance (at the 
 Bar and on the Bench), and illuminated by the genius, of a 
 host of great lawyers — a system which prevails not only in the 
 United Kingdom, where the paid-up capital of such companies 
 exceeds £ 2 , 000 , 000 , 000 , but, with more or less variation, in 
 most of our colonies and dependencies. 
 
 The Author has laboured to make the Work practically 
 useful not only to lawyers and to students of law, but generally 
 
Vlll PREFACE TO THE NINTH EDITION. 
 
 to business men ; for nowadays, looking to the vast number of 
 persons interested as directors, shareholders, officials, customers, 
 creditors and otherwise in companies, there are but few business 
 men who can safely avoid the task of acquiring some knowledge 
 of Company Law. 
 
 The Work in its inception was the outcome of the Author’s 
 series of lectures on Company Law delivered in 1897, at the 
 Inner Temple Hall, upon the request of the Council of Legal 
 Education. 
 
 The Author tenders his cordial thanks to his friend 
 Mr. Edward Manson, of the Chancery Bar, for his kind 
 assistance in preparing the Work for, and passing it through, 
 the press. 
 
 And he offers his sincere acknowledgments to the profession 
 and the public for the encouraging reception accorded to the 
 prior editions. 
 
 F. B. P. 
 
 May, 1911. 
 
( i* ) 
 
 CONTENTS. 
 
 CHAPTER PAGE 
 
 I. Preliminary - - - - - 1 
 
 II. Formation: General Sketch of^roceedings - - 21 
 
 III. Memorandum of Association - - - - 26 
 
 IV. Articles of Association - - - - 37 
 
 V. Certificate of Incorporation - - - - 51 
 
 VI. Corporate Existence and Powers - - - 55 
 
 VII. Capital - - - - - - -81 
 
 VIII. Membership - - - - - 101 
 
 IX. Register of Members - - - - - 124 
 
 X. Transfer and Transmission of Shares - - - 1 30 
 
 XI. Certificates of Shares - - - - - 142 
 
 XII. Calls - - - - - - - 146 
 
 XIII. Forfeiture - - - - - -151 
 
 XIV. Lien on Shares - - - - - - 154 
 
 XV. General Meetings - - - - -161 
 
 XVI. Directors - - - - - - -177 
 
 XVII. Dividends and Profits - - - - -216 
 
 XVIII. Accounts - - - - - - - 222 
 
 XIX. Audit ------- 225 
 
 XX. Notices - - - - - - - 232 
 
 XXI. Resolutions of General Meetings - 236 
 
 XXII. Majority Rights of Members - - - - 241 
 
 XXIII. Registered Office - 243 
 
 XXIV. Minutes - - - - - - 244 
 
 XXV. Name of Company - 248 
 
 XXVI. Contracts - - - - - - 253 
 
 XXVII. The Common Seal - 257 
 
 XXVIII. Secretary and other Officials - - - - 266 
 
X 
 
 CONTENTS 
 
 CHAPTEE PAGE 
 
 XXIX. Bills of Exchange and Promissory Notes - - 264 
 
 XXX. Conveyances, Assignments, Leases, Releases, 
 
 Deeds of Covenant, etc. - 267 
 
 XXXI. Borrowing Powers - - - - 269 
 
 XXXII. Debentures and Debenture Stock - 283 
 
 XXXIII. Promoters - - - - - - -331 
 
 XXXIY. Underwriting ------ 337 
 
 XXXV. Prospectuses - - - - - - 343 
 
 XXXVI. Statement in lieu of Prospectus - - - 363 
 
 XXXVII. Private Companies - - - - 366 • 
 
 XXXVIII. Companies Limited by Guarantee - - - 378 
 
 XXXIX. Unlimited Companies - - - 381 
 
 XL. Assurance Companies Act, 1909 - 382 
 
 XLI. Registration under Section 249 of existing 
 
 Companies - - - - - 385 
 
 XLII. Illegal Associations ----- 386 
 XLIII. Winding-Up - - - - - - 388 
 
 ,, Reconstruction and Amalgamation - - -423 
 
 „ Arrangements - - - - - 430 
 
 XLIV. Pensions and Gratuities - - - - 433 
 
 XLV. Powers of Attorney - - - - - 435 
 
 XLVI. Foreign Companies ----- 437 
 XLVII. Leading Cases - - - - - - 439 
 
 APPENDIX. 
 
 Table of Corresponding Sections ----- 447 
 Companies (Consolidation) Act, 1908 - - - - - 451 
 
 Companies Act, 1913 - - - - - - 550 
 
 Assurance Companies Act, 1909 - - - - - 552 
 
 Rules (Reduction of Capital) - - - - - 588 
 
 Rules (Winding-up) - - - - - - - 597 
 
 List of Forms - 630 
 
 Special Provisions relating to Companies during the War - 633 
 
( xi ) 
 
 TABLE OF CASES. 
 
 A. 
 
 Al— Afr page 
 
 Al Biscuit Co., W. N. (1899) 115 - - - - - 185 
 
 A Company, Re, (1894) 2 Ch. 349 ----- 397 
 
 A Company, Re, (1915) 1 Ch. 520 - - - - 393, 396 
 
 Aaron’s Reef v. Twiss, (1896) A. C. 273; 65 L. J. P. C. 54; 74 L. T. 
 
 794 - - - - - - - 153, 346, 356, 359 
 
 Abbot, Bristol United Breweries v., (1908) 1 Ch. 279 ; 77 L. J. Ch. 
 
 136; 98 L. T. 22 - - - - - - - 281 
 
 Abbot (J. W.) & Co., Re, (1913) W. N. 284 ; 30 T. L. R. 30 - 326 
 
 Abercorris Co., Levy v. (1888), 37 C. I). 264 ; 57 L. J. Ch. 202; 58 
 
 L. T. 218; 36 W. R. 411 ----- 283,318 
 
 Aberdeen, &c. Co. v. Blackie, 1 Macq. 401 - - - - 192 
 
 Abrahams & Sons, (1902) 1 Ch. 695; 86 L. T. 290 - 282 
 
 Abrahams, Rex v., (1904) 2 K. B. 859; 73 L. J. K. B. 972 ; 91 L. T. 
 
 493 (Div. Ct.) - - - - - - - 18 
 
 Abrath v. G. E. Rail. Co., 11 App. Cas. 247 - - - - 74 
 
 Aecles, Hodgson v., 51 W. R. 57 ; W. N. (1902) 164 - - 314 
 
 Acroyd, Inman v., 82 L. T. 621 ; (1901) 1 K. B. 613 - 187, 188 
 
 Adams v. Thrift, (1915) 2 Ch. 21 - - - - - 358 
 
 Adamson’s Case, 18 Eq. 670; 44 L. J. Ch. 125 ; 22 W. R. 820 - 194 
 
 Addinell’s Case, 1 Eq. 225; 35 L. J. Ch. 75; 13 L. T. 456; 14 
 W. R. 72 - - - - - - - - 104 
 
 Addis v. Gramophone Co., (1909) A. C. 488 - - - - 263 
 
 Addlestone Linoleum Co., In re (1887), 37 C. D. 191 ; 57 L. J. Ch. 
 
 249 ; 58 L. T. 428 ; 36 W. R. 227 - - - - - 120 
 
 Adler, De Waal v., 12 A. C. 141 - 135 
 
 Ador, Ex parte, (1891) 2 Q. B. 574; 61 L. J. Q. B. 15; 63 L. T. 485; 
 
 40 W. R. 71 - - - - - - - 412 
 
 Aerators, Limited v. Tollit, (1902) 2 Ch. 319; 71 L. J. Ch. 727 ; 86 
 L. T. 651 ; 50 W. R. 584 - - - - - - 27 
 
 African Association v. Allen, (1910) 1 K. B. 396 - 263 
 
 African, &c. Co., Boord v., (1898) 1 Ch. 596 ; 77 L. T. 553 ; 46 W. R. 
 
 150 125, 223 
 
 African, &c. Co., Dawson v., (1898) 1 Ch. 6; 67 L. J. Ch. 47 ; 77 
 L. T. 392 ; 46 W. R. 132 ; 14 T. L. R. 30 (C. A.) - - 189, 191 
 
Xll 
 
 TABLE OF CASES. 
 
 Afr— Ama page 
 
 African Tug Co., Towers v., (1904) 1 Ch. 558 ; 73 L. J. Ch. 395 ; 90 
 L. T. 298 ; 52 W. R. 532 ; 20 T. L. R. 292 (C. A.) - - 219 
 
 Agency Land and Finance Co. of Australia, Re, 20 T. L. R. 41 - 152, 313 
 Aggs v. Nicholson, 1 H. & N. 165 - - - - 199 
 
 Agra, &c. Bank, Re (1865), L. R. 2 Ch. 391 ; 36 L. J. Ch. 222 ; 16 
 L. T. 162 ; 15 W. R. 414 - - - - - 293, 301 
 
 Agriculturist Cattle Co., Re, 4 Ch. D. 34, n. - - - - 329 
 
 Aizlewood, Sheffield and South Yorkshire, &c. Society v., 44 C. D. 
 
 412 ; 59 L. J. Ch. 34 ; 62 L. T. 768 67, 204 
 
 Alabama, &c. Co., Re, (1891) 1 Ch. 213 (C. A.) ; 60 L. J. Ch. 221 ; 
 
 64 L. T. 127 ; 2 Meg. 377 - - - - - 430, 431 
 
 Albion Co. v. Martin, 1 C. D. 580; 45 L. J. Ch. 173; 33 L. T. 660; 
 
 24 W. R. 134 - - - - - - - 192 
 
 Albion Steel Co., Re, 7 C. D. 547 ; 47 L. J. Ch. 229 ; 38 L. T. 207 ; 
 
 26 W. R. 348 - - - - - - - 410 
 
 Albion Transvaal Gold Mines, Transvaal Exploring Co. v., (1899) 
 
 2 Ch. 370 ; 68 L. J. Ch. 670 ; 48 W. R. 108 - - 121, 122 
 
 Alderson v. Maddison, 5 Ex. Div. 293 ; 8 App. Cas. 467 ; 29 W. R. 
 
 105 ; 43 L. T. 249 ; 49 L. T. 303 ; 52 L. J. Q. B. 737 - - 355 
 
 Alexander v. Automatic Telephone Co., (1900) 2 Ch. 56, 63 ; 69 L. J. 
 
 Ch. 428; 48 W. R. 546; 82 L. T. 400 s-102, 146, 148, 149, 171, 206 
 
 Alexander, Marmor Ltd. v., (1908) S. C. 78 (Ct. of Sess.) - - 211 
 
 Alexander v. Simpson, 43 C. D. 139; 59 L. J. Ch. 137; 61 L. T. 
 
 708 ; 38 W. R. 161 ; 1 Meg. 457 - - - - 167, 168 
 
 Alexandra Palace Co., 21 0. D. 149 ; 51 L. J. Ch. 655 ; 46 L. T. 730 ; 
 
 30 W. R. 771 206, 211, 215, 221 
 
 Alexandria Water Co., Webb, Hale & Co. v., 21 T. L. R. 572 - - 141 
 
 Alfred Melson & Co., U906) 1 Ch. 841 393 
 
 Algeciras (Gibraltar) Rail. Co., Greenwood v., (1894) 2 Ch. 205 ; 63 
 L. J. Ch. 670 ; 71 L. T. 133 ; 1 Manson, 455 ; 7 R. 620 (C. A.) - 327 
 
 Allen, African Association v., (1910) 1 K. B. 396 - 263 
 
 Allen v. Gold Reefs of W. Africa, (1900) 1 Ch. 656 ; 69 L. J. Ch. 266 ; 
 
 48 W. R. 452 ; 82 L. T. 210 - 47, 49, 50, 91, 151, 154, 166, 171, 233 
 
 Allen v. Hyatt (1914), 30 T. L. R. 444 - - - - 180 
 
 Alliance Marine, Re, (1892) 1 Ch. 300; 61 L. J. Ch. 176; 65 L. T. 
 
 554 ; 40 W. R. 329 - - - - - - - 78 
 
 Allsopp & Sons, 51 W. R. 644 (C. A.) - - - - 96 
 
 Alma Spinning Co., Re, 16 C. D. 681 ; 53 L. J. Ch. 167 ; 43 L. T. 620 ; 
 
 29 W. R. 133 - - - - - - -182 
 
 Alperton Rubber Co., British Murac Rubber Svnd. v., (1915) W. N. 
 
 176; (1915) 2 Ch. 186 - - - - 43,50,181 
 
 Alpha Co., Ward v., (1903) 1 Ch. 203 ; 72 L. J. Ch. 91 ; 51 W. R. 201 - 330 
 Alston, Mozley v., 1 Ph. 790 - - - - - - 242 
 
 Amalgamated Properties of Rhodesia, Re, 30 T. L. R. 405 - - 403 
 
 Amalgamated Society of Carpenters, Russell v., (1910) 1 K. B. 506 - 9 
 
 Amalgamated Society of Railway Servants, Osborne v., W. N. (1908) 
 
 251 (C. A.) ; 77 L. J. Ch. 759 ; 24 T. L. R. 827 ; 25 T. L. R. 107 ; 
 
TABLE OF CASES. 
 
 X111 
 
 Ama — Ant page 
 
 Amalgamated Society of Railway Servants, Ta££ Vale Rail. Co. v ., 
 (1901) A. C. 426 ; 70 L. J. Q. B. 905 ; 50 W. R. 44 - - 9 
 
 Amalgamated Syndicates, (1897) 2 Ch. 600; 66 L. J. Ch. 783; 77 
 L. T. 431 ; 4 Manson, 308 - - - - - -71 
 
 Ambergate Rail. Co. v. Norcliffe, 6 Ex. 629 ; 20 L. J. Ex. 234 - 148 
 
 American Pastoral Co., Be, 62 L. T. 625 - - - - 96 
 
 Amor v. Fearon, 9 A. & E. 548 - 262 
 
 Amsterdamsch Trustees Kantoor, JDuder v., (1902) 2 Ch. 132 - 274 
 
 Anderson, Chida Mines Ltd. v., 22 T. L. R. 27 - 129, 131, 261 
 
 Anderson, Price v. , 15 Sim. 473 220 
 
 Anderson, Smith v., 15 C. D. 247, 273; 50 L. J. Ch. 39; 43 L. T. 
 
 329; 29 W. R. 21 ; 16 C. D. 275 - - - 180,386,387 
 
 Anderson’s Case, 17 Ch. D. 373 ; 50 L. J. Ch. 269 ; 43 L. T. 723 ; 29 
 W. R. 372 - - - - - - - 128, 354 
 
 Anderson’s Case (1877), 7 C. D. 79; 47 L. J. Ch. 273 ; 37 L. T. 560; 
 
 26 W. R. 442 - - - - - - - 31 
 
 Andrew Knowles & Sons, Ltd., (1912) W. N. 300 - - - 99 
 
 Andrews v. Brown and Gregory, (1904) 2 Ch. 448 ; 73 L. J. Ch. 
 
 770 (C. A.) - - - - - - - - 293 
 
 Andrews v. Gas Meter Co., (1897) 1 Ch. 361; 66 L. J. Ch. 246; 76 
 L. T. 132 ; 45 W. R. 321 - - - 48, 50, 83, 88, 90, 215, 439 
 
 Andrews v. Mockford, (1896) 1 Q. B. 372 - 357 
 
 Anglo-American Co., Viola v., (1912) 2 Ch. 305 - 326 
 
 Anglo-American Land Agency, Nelson v., (1897) 1 Ch. 130; 66 L. J. 
 
 Ch. 112 ; 75 L. T. 482; 45 W. R. 171 - - - -222 
 
 Anglo-American Telegraph Co., Simm v., 5 Q. B. D. 188; 49 L. J. 
 
 Q. B. 392 ; 42 L. T. 37 ; 28 W. R. 290 ; 44 J. P. 280 - 136, 144 
 
 Anglo-American Telegraph Co., Be, (1911) W. N. 248 - - 79 
 
 Anglo -Austrian Co., 35 S. J. 469 - 395 
 
 Anglo- Austrian Printing Union, (1895) 2 Ch. 891 - 421 
 
 Anglo -Colonial Syndicate, Limited, 65 L. T. 847 - - - 121 
 
 Anglo-Continental Corporation of Western Australia, In re, (1898) 
 
 1 Ch. 327 ; 67 L. J. Ch. 179; 78 L. T. 157 - - - 416 
 
 Anglo-Danubian Co., Be (1875), 20 Eq. 339; 44 L. J. Ch. 502; 33 
 L. T. 118; 23 W. R. 783 - - - - 190, 270, 317 
 
 Anglo-French Co-operative Society, 21 C. D. 492 ; 47 L. T. 638 ; 31 
 
 W. R. 177 - - - - - - - 206, 212 
 
 Anglo-French Exploration, (1902) 2 Ch. 845; 71 L. J. Ch. 800; 51 
 W. R. 8 - - - - - - - 97 
 
 Anglo-Italian Bank v. Davies, 9 C. D. 275; 27 W. R. 3; 39 L. T. 
 
 244 - - - - - - - - -411 
 
 Anglo-Italian Bank, Moor v., 10 C. D. 689 - - 273, 328, 392 
 
 Anglo-Italian Hemp Co., Lynde v., (1896) 1 Ch. 178 ; 65 L. J. Ch. 
 
 96 ; 73 L. T. 502 - - - - - - - 346 
 
 Anglo- Oriental Carpet Co., (1903) 1 Ch. 914; 72 L. J. Ch. 458; 88 
 L. T. 391 ; 51 W. R. 634 - - - - - - 282 
 
 Ansell, Boston Deep Sea Co. v., 39 C. D. 339 ; 59 L. T. 345 - 193, 206, 262 
 Anthony v. Seger, 1 Hagg. Cas. Con. 9 - - - - 172 
 
XIV 
 
 TABLE OF CASES. 
 
 Ant— Atk PAGE 
 
 Antrobus, Dawkins v., 17 C. D. 634 ; 29 W. R. 511 ; 44 L. T. 557 - 151 
 
 Appleton, French & Scrafton, Limited, (1905) 1 Ch. 749 ; 74 L. J. 
 
 Ch. 749 ; 93 L. T. 8 ; 53 W. R. 601 409 
 
 Appleyard v. New London and Suburban Co., (1908) 1 Ch. 621 ; 77 
 L. J. Ch. 358 ; 98 L. T. 663 - - - - - 280 
 
 Archer’s Case, (1892) 1 Ch. 322 ; 61 L. J. Ch. 129 ; 65 L. T. 800 ; 40 
 
 W. R. 212 - - - - - - 182, 184, 185, 206 
 
 Archibald D. Dawnay, Limited, W. N. (1900) 152 - 122 
 
 Argus Co., Re, 39 C. D. 571 ; 58 L. J. Ch. 166 ; 59 L. T. 689 ; 37 W. 
 
 R. 215 - - - - - - 43, 44, 49 
 
 Argyle, &c. Co., In re, 54 L. T. 237 - - - - - 102 
 
 Argylls, Ltd. v. Coxeter, (1913) 29 T. L. R. 355 - 409 
 
 Ariel Motors, Bissellv., 27 T. L. R. 14 - - - - 296 
 
 Arkwright v. Newbold, 17 C. D. 301 ; 50 L. J. Ch. 372 ; 44 L. T. 393 ; 
 
 29 W. R. 4 55 y - - - - - 355, 360 
 
 Armitage v. Garnet, (1893) 3 Ch. 337 - 220 
 
 Armorduct Co. v. General Incandescent Co., (1911) 2 K. B. 143 - 414, 421 
 
 Army and Navy Hotel, 31 C. D. 644 - 397 
 
 Army, &c. Society v. Craig, 8 T. L. R. 227 - 360 
 
 Arnaud, Reg. v., 9 Q. B. 806- - - - - - 56 
 
 Arnison v. Smith (prospectus), 40 Ch. D. 567; 41 Ch. D. 348; 61 
 L. T. 63 ; 37 W. R. 739 ; 1 Meg. 388 - - 353, 354, 355 
 
 Arnot v. United African Lands, W. N. (1901) 28; (1901) 1 Ch. 
 
 518- - - - - - - - 170,240 
 
 Arnot’s Case, 36 C. D. 702 ; 57 L. J. Ch. 195 ; 57 L. T. 353 - - 1 11 
 
 Arnott, Shaw v., 2 Stark. 256 _____ 262 
 
 Artisans’ Land and Mortgage Corporation, (1904) 1 Ch. 796 - 94, 220 
 
 Artistic Colour Co., Re, 14 C. D. 502 ; 49 L. J. Ch. 526 ; 42 L. T. 713 ; 
 
 23 W. R. 939 - - - - - - 413 
 
 Ashanti Development, Ltd., (1911) W. N. 144 - - - 100 
 
 Ashbury Railway Carriage and Iron Co. v. Riche (1874), L. R. 7 H. L. 
 
 671 ; 44 L. J. Ex. 185 ; 33 L. T. 451 - 3, 38, 50, 61, 63, 66, 69, 70, < 
 
 72, 73, 77, 167, 180, 439 
 
 Ashbury v. Watson, 30 C. D. 376 ; 54 L. J. Ch. 985 ; 33 W. R. 882 - 34, 
 
 38, 48, 81, 88, 90, 214, 439 
 
 Ashford, Landowners v., 16 0. D. 411 - - - - 319 
 
 Ashley v. Ashley, 4 C. D. 757 - - - - - 330 
 
 Ashley’s Case, 9 Eq. 269; 39 L. J. Ch. 354 ; 22 L. T. 83; 18 W. R. 
 
 395- - - - - - - - - 352 
 
 Ashurst v. Mason, 20 Eq. 225 ; 44 L. J. Ch. 337 ; 23 W. R. 506 - 212, 244 
 
 Ashworth, Dermatine Co. v., 21 T. L. R. 510 - 177, 199, 248, 266 
 
 Asphaltic Wood Co. (1878), 49 L. T. 159 - 315 
 
 Astley v. New Tivoli Co., (1899) 1 Ch. 151 ; 68 L. J. Ch. 90 ; 79 L. T. 
 
 541; 47 W. R. 326; 6 Manson, 64 - 189 
 
 Athenaeum, &c. Society v. Pooley (1858), 3 De G. & J. 294 - - 292 
 
 Atkin v. Wardle (1889), 61 L. T. 23; 58 L. J. Q. B. 377 - 248, 265 
 
 Atkinson v. Newcastle, &c. Waterworks Co., 2 Ex. D. 441 - - 351 
 
TABLE OF CASES. 
 
 XV 
 
 Atl— Bag pagk 
 
 Atlanta, &c. Co., Nell v. (1896), 11 T. L. R. 407 (C. A.) - - 185- 
 
 Att.-Gen. v. Davy, 2 Atk. 212 - - - - -241 
 
 Att.-Gen. v. G. E. Rail. Co., 5 App. Cas. 473; 49 L. J. Ch. 545; 42 
 L. T. 810 ; 28 W. R. 769 - - - - - - 63 
 
 Att.-Gen. v. Gt. Northern Rail. Co., 1 Dr. & Sm. 283 - - 68 
 
 Att.-Gen. v. Jameson, 2 Ir. R. 644 - - - - - 371 
 
 Att.-Gen., London County Council v., (1901) A. C. 26 ; 70 L. J. K. B. 
 
 77 ; 83 L. T. 605 ; 49 W. R. 686 - - - - - 63 
 
 Att.-Gen., London County Council v., (1902) A. C. 165 - - 68 
 
 Att.-Gen. v. Manchester Corporation, (1906) 1 Ch. 643; 75 L. J. Ch. 
 
 330 ; 54 W. R. 307 ; 22 T. L. R. 261 - - - - 68 
 
 Att.-Gen. v. New York Breweries Co., (1898) 1 Q,. B. 205 ; (1899) 
 
 A. C. 62 ; 67 L. J. Q. B. 86; 78 L. T. 61 ; 46 W. R. 193 - - 139 
 
 Att.-Gen. v. North Eastern Rail. Co., (1906) 2 Ch. 675 ; 76 L. J. Ch. 
 
 5; 95L. T. 512 - - - - - - 68 
 
 Att.-Gen. v. Smith, (1909) 2 Ch. 524 - - - - 55 
 
 Attwood v. Munnings, 7 B. & C. 278- - 436 
 
 Atwool v. Merryweather, 5 Eq. 464, n. - - - 50, 171 
 
 Auriferous Properties, Ltd. (No. 1), (1898) 1 Ch. 691 - - 410 
 
 Austin’s Case (1871), 24 L. T. 932 - - - - - 147 
 
 Australian Co. v. Mounsey, 4 K. & J. 733; 31 L. T. (O. S.) 246; 6 
 W. R. 734 - - - - - - - 190, 270 
 
 Australian Estates, &c. Co., (1910) 1 Ch. 414 - - 95, 99, 100 
 
 Australian Joint Stock Co., W. N. (1897) 48 - - - - 391 
 
 Australian Mutual, Campbell v., 99 L. T. 3 - - - 67, 71 
 
 Automatic, &c. Co., Everett v., (1892) 3 Ch. 506; 62 L. J. Ch. 241 ; 
 
 67 L. T. 349 - - - - - - - 159 
 
 Automatic Self-Cleaning Co. v. Cuninghame, (1906) 2 Ch. 34; 75 
 
 L. J. Ch. 437 ; 94 L. T. 651 (C. A.) - 190 
 
 Automatic Telephone Co., Alexander v ., (1900) 2 Ch. 56, 63; 69 L. J. 
 
 Ch. 428 ; 48 W. R. 546 ; 82 L. T. 400 - 102, 146, 148, 149, 171, 208 
 
 Avery v. Wood, (1891) 3 Ch. 115 - - - - - 18 
 
 Avill & Smart, Milward v., 4 Mans. 403 - 327 
 
 Ayre v. Skelsey’s Adamant Cement Co., 20 T. L. R. 587 - - 92 
 
 Ayres, Levi v., 3 A. C. 852 - - - - - 137, 140' 
 
 B. 
 
 Back, Cairney v., (1906) 2 K. B. 746; 75 L. J. K. B. 1014 ; 22 T. L. 
 
 R. 776 - - - - - - - 411 
 
 Baglan Hall Co., 5 Ch. 346 ; 39 L. J. Ch. 591 ; 23 L. T. 60; 18 W. R. 
 
 499- - - - - - - - 72,116,117 
 
 Bagnall v. Carlton, 6 Ch. D. 371 ; 47 L. J. Ch. 30 ; 37 L. T. 481 ; 26 
 W. R. 243 - - - - - - - 331, 332 
 
XVI 
 
 TABLE OF CASES. 
 
 Bag — Ban page 
 
 Bagot, &c. Co. v. Clipper Pneumatic, &c. Co., (1902) 1 Ch. 146; 71 
 L. J. Ch. 158 ; 85 L. T. 652 ; 50 W. E. 177 253 
 
 Bahia Co., Be, L. R. 3 Q. B. 584 ; 37 L. J. Q. B. 176 ; 18 L. T. 467 ; 
 
 16 W. E. 862 - - - - - 112, 128, 136, 143 
 
 Bahia and San Francisco Railway Co. (1868), L. E. 3 Q. B. 595 - 130, 439 
 Bailey v. Birkenhead Co., 12 Beay. 433; 19 L. J. Ch. 377 - - 147 
 
 Bailey v. Sweeting, 9 C. B. N. S. 843 - 256 
 
 Baillie v. Oriental Telephone Co., (1915) 1 Ch. 503 - 167, 175, 242 
 
 Baillie’s Case, International Society of Auctioneers, In re, (1898) 
 
 1 Ch. 110 ; 67 L. J. Ch. 81 ; 77 L. T. 523 ; 46 W. R. 187 - - 127 
 
 Baily v. British Equitable Assurance Co., (1906) A. C. 35; (1904) 
 
 1 Ch. 374 ; 73 L. J. Ch. 240 ; 90 L. T. 335 ; 52 W. E. 549 ; 20 
 T. L. R. 242 (C. A.) ; 75 L. J. Ch. 73 ; 94 L. T. 1 - 43, 49, 50, 440 
 
 Bainbridge v. Smith, 41 C. D. 462 ; 60 L. T. 879 ; 37 W. E. 594 - 40, 198 
 Baines, Omnium Electric Palaces v., (1914) 1 Ch. 332 - - 334 
 
 Baird’s Case, 5 Ch. 725 ; 23 L. T. 424; 18 W. R. 1094 - 2, 7, 116, 139 
 
 Baker, Glyn v., 13 East, 509 ------ 307 
 
 Balaghat Co., (1901) 2 K. B. 665; 17 T. L. E. 660; 70 L. J. K. B. 
 
 866 ; 85 L. T. 8 ; 49 W. E. 625 (C. A.) - - 125, 223 
 
 Balfour, Johns v., 5 T. L. E. 389; 1 Meg. 191 - - - 67 
 
 Balkis Co., 36 W. E. 392 ; 58 L. T. 300 ; W. N. (1888) 3 - - 134 
 
 Balkis, &c. Co., Bishop v., 25 Q. B. D. 512 ; 59 L. J. Q. B. 563 ; 63 
 L. T. 601 ; 39 W. E. 99 - 138, 139 
 
 Balkis Co., Tomkinson v.-, (1893) A. C. 396; 63 L. J. Q. B. 134; 69 
 L. T. 598 ; 42 W. E. 204 - - - - 136, 144, 440 
 
 Bamford, Be, (1910) 1 Ir. E. 390 - 396, 400 
 
 Bangor, &c. Co., Be, 20 Eq. 59 ; 32 L. T. 389 ; 23 W. E. 785 - 85 
 
 Banham, Eeddaway v., (1896) A. C. 199; 74 L. T. 289; 44 W. E. 
 
 638 -------- 249 
 
 Bank of Africa v. Salisbury Gold Mining Co., (1892) A. 0. 281 ; 61 
 L. J. P. C. 34; 66 L. T. 237 ; 41 W. E. 47 - - - 154 
 
 Bank of Australasia, Henderson v., 40 C. D. 170; (1890), 45 C. JD. 
 
 330; 59 L. J. Ch. 794 ; 63 L. T. 597 ; 2 Meg. 301 - 67, 167, 175, 176 
 
 Bank of Egypt, Ltd., Be, (1913) 1 Ir. E. 502 - - - - 149 
 
 Bank of England, Davis v., 2 Bing. 393 - - - 135, 440 
 
 Bank of England, Mayor of the Staple v., 21 Q. B. D. 160 - - 258 
 
 Bank of England, Oliver v., (1901) 1 Ch. 652 ; 70 L. J. Ch. 377 ; 84 
 L. T. 253; 49 W. E. 391 ; 65 J. P. 294 ; (1902) 1 Ch. 610 - 136, 190 
 
 Bank of England, Sloman v., 14 Sim. 475 - 136 
 
 Bank of England, Starkey v ., (1903) A. C. 114 ; 72 L. J. Ch. 402 ; 88 
 L. T. 244; 51 W. R. 513 - - - - - - 136 
 
 Bank of England v. Vagliano, (1891) A. C. 144; 60 L. J. Q. B. 145; 
 
 64 L. T. 353 ; 39 W. E. 657 - - - - - 17 
 
 Bank of Gibraltar, L. R. 1 Ch. 74 - - - - - 395 
 
 Bank of Ireland v. Evans’ Trustees, 5 H. L. C. 389 - - - 258 
 
 Bank of South Australia, (1895) 1 Ch. 578 ; 64 L. J. Ch. 397 ; 72 
 L. T. 273 ; 43 W. E. 359 - - - - - - 390 
 
TABLE OF CASES. 
 
 XVII 
 
 Ban — Bar page 
 
 Bank of Syria, (1900) 2 Ch. 272; 69 L. J. Ch. 412; 83 L. T. 165; 
 
 affirmed, 83 L. T. 547 ; 49 W. R. 100 (0. A.) - - 191, 195 
 
 Bank of Syria, Re, Owen and Ashworth’s claim, Whitworth’s claim, 
 
 (1901) 1 Ch. 115; 70 L. J. Ch. 82; 83 L. T. 547; 49 W. R. 100; 
 
 8 Manson, 105 (C. A.) - 182, 194 
 
 Bank of Wales, Croskey v., 4 Giff. 314 - 146 
 
 Bannatyne v. Direct Spanish Telegraph Co., 34 Ch. D. 287 ; 56 L. J. 
 
 Ch. 107; 58 L. T. 716; 35 W. R. 125 - - - - 95 
 
 Banner, Helbert v., L. R. 5 H. L. 28 - - - - 404 
 
 Barclay, Corporation of Sheffield v., (1903) 2 K. B. 580; 89 L. T. 
 
 227 ; 52 W. R. 54 ; reversed by House of Lords, 3rd July, 1905, 
 
 (1905) A. C. 392 ; 54 W. R. 49 ; 93 L. T. 83 ; 74 L. J. K. B. 747 - 
 
 136, 137 
 
 Bargate v. Shortridge, 5 H. L. C. 318 ; 24 L. J. Ch. 457 ; 3 W. R. 423 45 
 Baring Brothers, Venables v., (1892) 3 Ch. 527 ; 61 L. J. Ch. 602 ; 
 
 67 L. T. 110 ; 40 W. R. 699 - - - - 306, 307 
 
 Baring Gould v. Sharpington Co., (1899) 2 Ch. 80 ; 68 L. J. Ch. 429 ; 
 
 80 L. T. 739 ; 47 W. R. 564 - - - - 39, 424, 430 
 
 Barned’s Banking Co., Re, 3 Ch. 105 ; 37 L. J. Ch. 81 ; 17 L. T. 269 ; 
 
 14 W. R. 722; 16 W. R. 193 65, 113, 257, 422 
 
 Barnes, Ex parte, (1896) A. C. 146 ; 65 L. J. Ch. 394 ; 74 L. T. 153 ; 
 
 44 W. R. 433 - - - - - - 408, 439 
 
 Barnes, Gluckstein v., (1900) A. C. 240 ; 69 L. J. Ch. 385 ; 82 L. T. 
 
 393 ; 7 Manson, 321 (H. L.) 331, 332, 333, 334 
 
 Barnett, Brandao v., 12 Cl. & Fin. 787 - - - 303, 306 
 
 Barnett v. South London Tramways Co., 18 Q. B. D. 815 ; 56 L. J. 
 
 Q. B. 452 ; 57 L. T. 436 ; 35 W- R. 640 - - - 260, 261 
 
 Baroness Wenlock v. River Dee Co., 36 C. D. 685 ; 10 App. Cas. 350 
 
 3, 269, 428 
 
 Baroness Wenlock v. River Dee Co. (No. 2), 19 Q. B. D. 155 - 275 
 
 Barras, John Morley Building Co. v., (1891) 2 Ch. 386 ; 60 L. J. Ch. 
 
 496; 64 L. T. 856; 39 W. R. 619 - - - - -166 
 
 Barrett’s Case, 4 De G. J. & S. 416 ; 12 L. T. 193 ; 13 W. R. 559 - 103 
 
 Barron v. Potter, (1914) 1 Ch. 895 ----- 181 
 
 Barrow’s Case, 14 C. D. 432 ; 49 L, J. Ch. 253 ; 28 W. R. 341 ; 42 
 
 L. T. 12 - - - - - - 122, 261 
 
 Barrow Hematite Co., Bond v., (1902) 1 Ch. 353; 71 L. J. Ch. 246; 
 
 86 L. T. 10; 50 W. R. 295 - - - 213,218,219 
 
 Barrow Hematite Steel Co. (No. 1), In re, 39 Ch. D. 582; 58 L. J. 
 
 Ch. 148 ; 59 L. T. 500 ; 37 W. R. 249 - - 44, 49, 95 
 
 Barrow Hematite Steel Co. (No. 2), 83 L. T. 397 ; 69 L. J. Ch. 869 ; 
 
 (1900) 2 Ch. 846; (1901) 2 Ch. 746 - - - - 98 
 
 Barrow v. Paringa Mines, (1909) 2 Ch. 658 - 341 
 
 Bartlett v. Mayfair Property Co., W. N. (1897) 175 ; (1898) 2 Ch. 28 - 271 
 Barton, Gibson v., L. R. 10 Q. B. 329; 44 L. J. M. 0. 81 ; 32 L. T. 
 
 396 ; 33 W. R. 858 - - - - 123, 163, 245 
 
 Barton v. L. & N. W. Rail. Co., 24 Q. B. D. 77 ; 59 L. J. Q. B. 33 ; 
 
 62 L. T. 164 ; 38 W. R. 197 - - 112, 133, 136, 139 
 
XV111 
 
 TABLE OF CASES. 
 
 Bar — Ben page 
 
 Barton v. L. & N. W. Rail. Co., 38 Ch. D. 144 ; 57 L. J. Oh. 676 ; 
 
 59 L. T. 122; 36 W. R. 452 - - - - 136, 143 
 
 Barton v. North Stafford Rail. Co., 38 C. D. 458 ; 57 L. J. Ch. 800; 
 
 58 L. T. 549 ; 36 W. R. 754 _____ 139 
 
 Barton’s Trust, 5 Eq. 238 ------ 220 
 
 Barton-upon-Humber Water, 42 U. D. 585 - - - - 390 
 
 Barwick v. English Joint Stock Bank, L. R. 2 Ex. 259 ; 36 L. J. Ex. 
 
 147 - - - - - - - 74, 439 
 
 Bassford, Jackson v., (1906) 2 Ch. 467 ; 75 L. J. Ch. 697 ; 95 L. T. 
 
 292 -------- 415 
 
 Baster v. London and County Printing Works, (1899) 1 Q. B. 901 - 262 
 
 Bateman v. Mid-Wales Rail. Co. (1865), L. R. 1 C. P. 499 ; 35 L. J. 
 
 C. P. 205 ; 14 W. R. 672 - - - - - - 264 
 
 Bath Electric Tramways, Longman v ., (1905) 1 Ch. 646; 21 T. L. R. 
 
 373 ; 53 W r . R. 480 ------ 139 
 
 Bath v. Standard Land Co., (1910) 2 Ch. 408 ; reversed on appeal, 
 
 W. N. (1911) 101 - - - - - - - 194 
 
 Bath’s Case, 8 Ch. D. 334 ; 47 L. J. Ch. 601 ; 38 L. T. 267 ; 26 W. R. 
 
 441 ------- 64, 67 
 
 Batten v. Dartmouth Harbour Commissioners, 45 C. D. 612 - - 329 
 
 Baxter, Kelner v., L. R. 2 C. P. 174; 36 L. J. C. P. 94; 15 L. T. 
 
 313; 15 W. R. 278 - ----- 253,441 
 
 Bayer, West End Hotels Synd. v. (1912), 29 T. L. R. 92 - - 242 
 
 Beall, Quartz Hill Gold Mining Co. v., 20 C. D. 501 ; 51 L. J. Ch. 
 
 874 ; 46 L. T. 746 ; 30 W. R. 583 - - - - - 174 
 
 Beattie v. Ebury, 7 Ch. 777 ; 41 L. J. Ch. 777 ; 27 L. T. 398 ; 20 
 W. R. 994 - - - - - - - - 355 
 
 Beatty, North West Transportation Co. v., 12 A. C. 589; 50 L. J. 
 
 P. C. 102 ; 57 L. T. 426 ; 36 W. R. 647 - - - 57, 170 
 
 Beauchemin, Larocque v., (1897) A. C. 358 - - - - 122 
 
 Bechuanaland Exploration Co. v. London Trading Bank (12th July, 
 1898), (1898) 2 Q. B. 658 - - - *- 304, 306, 307 
 
 Becke, Cobb v. y 6 Q. B. 936 - - - - - - 197 
 
 Beckwith’s Case, In re New British Iron Co., (1898) 1 Ch. 324; 67 
 L. J. Ch. 164 ; 78 L. T. 155 - - - - 43, 185 
 
 Beer v. London and Paris Hotel Co., 20 Eq. 412 ; 32 L. T. 715 - 255 
 
 Beeton & Co., Ltd., Re , (1913) 2 Ch. 279 - - - - 411 
 
 Belilios, Hardoon v., (1901) A. C. 118 - - 135, 137, 211, 253 
 
 Bell v. Bell, 65 L. T. 245 ; 7 T. L. R. 689 - - - - 131 
 
 Bell, Gee v., 35 C. D. 160 - 327- 
 
 Bell, Hodgson v. y 24 Q. B. D. 528 - - - - - 18 
 
 Bellairs v. Tucker, 13 Q. B. D. 562 ----- 355 
 Bellamy, Perrins v., (1899) 1 Ch. 797 - - - - 207 
 
 Bellerby v. Rowland and Marwood’s S.S. Co., (1901) 2 Ch. 265; 17 
 T. L. R. 510; 70 L. J. Ch. 616; 84 L. T. 651 ; on app., (1902) 
 
 2 Ch. 14 - - - - - - - 93, 128 
 
 Benjamin Cope & Sons, (1914) 1 Ch. 800 - 290, 320 
 
TABLE OF CASES. 
 
 XIX 
 
 Ben— Bla pagk 
 
 Bennett, Cornwall Mining Co. v., 5 H. & N. 423 ; 29 L. J. Ex. 157 ; 
 
 6 Jur. N. S. 539 - - - - - - -147 
 
 Bennett Brothers, East v., (1911) 1 Ch. 163 - 169 
 
 Bennett v. Cooper (1845), 9 Beav. 252 - 308 
 
 Benson, Shaw v., 1 1 Q. B. D. 563 ----- 387 
 
 Bentham Mills Spinning Co., Re , 11 C. D. 900 ; 48 L. J. Ch. 671 ; 41 
 L. T. 11 ; 28 W. B. 26 - - - - - -140 
 
 Bentinck v. London Joint Stock Bank, (1893) 2 Ch. 120 ; 62 L. J. Ch. 
 
 458; 68 L. T. 315 ; 42 W. R. 140 - - - - - 307 
 
 Bentley & Co. (Henry), 69 L. T. 204 - - - 104, 335 
 
 Bentley’s Yorkshire Breweries, (1909) 2 Ch. 609 - - - 315 
 
 Bethell v. Trench Tubeless Co., (1900) 1 Ch. 408; 69 L. J. Ch. 213; 
 
 82 L. T. 247 ; 48 W. R. 310 (C. A.) 167, 419 
 
 Betts v. Macnaghten, (1910) 1 Ch. 430; 25 T. L. R. 552 - 167, 175, 244 
 Bevan v. Webb, (1901) 2 Ch. 59; 70 L. J. Ch. 59 ; 84 L. T. 609 ; 49 
 W. R. 548 (C. A.) - - - - - - - 125 
 
 Bevan, Burton v., (1908) 2 Ch. 240 ; 77 L. J. Ch. 591 - 60, 107, 108, 244 
 
 Bidwell Brothers, In re, (1893) 1 Ch. 603 ; 62 L. J. Ch. 549 ; 68 L. T. 
 
 342 ; 41 W. R. 363 - - - - - - 172 
 
 Biggerstaff v. Rowatt’s Wharf, (1896) 2 Ch. 93 ; 65 L. J. Ch. 536 ; 74 
 L. T. 473 ; 44 W. R. 536 - - - - - 45, 309 
 
 Biggs’ Case, 1 Eq. 309 ; 35 L. J. Ch. 216 ; 13 L. T. 627 - - 152 
 
 Binney v. Ince Hall Coal Co., 35 L. J. Ch. 363 - - 159, 291 
 
 Bird v. Bird’s Patent Sewage, L. R. 9 Ch. 358 ; 43 L. J. Ch. 399 ; 30 
 L. T. 281 - - - - - - - - 424 
 
 Bird, Lydney and Wigpool Co. v., 33 C. D. 85; 55 L. J. Ch. 875 ; 
 
 55 L. T. 358 ; 34 W. R. 749 67, 331, 332 
 
 Birkbeck Building Society, Re, (1913) 1 Ch. 400 - - - 67 
 
 Birkenhead Co., Bailey v ., 12 Beav. 433 ; 19 L. J. Ch. 377 - - 147 
 
 Birmingham Rail. Co., Reg. v., 3 Q. B. 223 - - - - 74 
 
 Birmingham Small Arms Co., Newton v., (1906) 2 Ch. 378 ; 75 L. J. 
 
 Ch. 378 ; 95 L. T. 135 ; 54 W. R. 621 - - - 231 
 
 Birmingham Tramways Co., Neale v., (1910) 2 Ch. 464 - - 93 
 
 Bisgood v. Henderson’s Transvaal Estates Co., (1908) 1 Ch. 743; 77 
 L. J. Ch. 486 ; 98 L. T. 809 (C. A.) - - 66, 427 et seq. 
 
 Bishop v. Balkis, &c. Co., 25 Q. B. D. 512 ; 59 L. J. Q. B. 563; 63 
 L. T. 601 ; 39 W. R. 99 - - - - - 138, 139 
 
 Bishop & Sons, Limited, Re, (1900) 2 Ch. 254 - 393, 398, 422 
 
 Bishop of Sodor and Man, Laughton v., 4 P. C. 495 - - - 174 
 
 Bissell v. Ariel Motors, 27 T. L. R. 14 - - - - 296 
 
 Black & Co.’s Case, L. R. 8 Ch. 262 ----- 410 
 Black and White Publishing Co., Fisher v., (1901) 1 Ch. 174; 70 
 
 L. J. Ch. 175; 84 L. T. 305; 49 W. R. 310 (C. A.) - - 215 
 
 Black, Chesterfield and Boythorpe Colliery v., 26 W. R. 207 - 193 
 
 Black v. Homersham, 4 Ex. D. 24 ; 48 L. J. Ex. 79 ; 39 L. T. 671 ; 
 
 27 W. R. 171 - - - - - - - 220 
 
 Blackburn v. Yigers, 12 A. C. 531 ----- 234 
 
 b 2 
 
XX 
 
 TABLE OF CASES. 
 
 Bla — Bou page 
 
 Blackburn & Co., (1899) 2 Ch. 725 ; 68 L. J. Ch. 764; 81 L. T. 520; 
 
 48 W. B. 186; 7 Manson, 47 415 
 
 Blackburn Building Society v. Cunliffe, Brooks, 22 Ch. D. 61 ; 9 App. 
 
 Cas. 857 ; 54 L. J. Ch. 376 ; 52 L. T. 225 ; 33 W. E. 309 - 275 
 
 Blackie, Aberdeen, &c. Co. v., 1 Macq. 401 - 192 
 
 Blackpool Motor Car Co., Be, (1901) 1 Ch. 77 ; 70 L. J. Ch. 61 ; 49 
 
 W. R. 124; 8 Manson, 193 _____ 415 
 
 Blair Open Hearth Furnace, 108 L. T. 665 ; (1914) 1 Ch. 390 - 181, 364 
 Blakeley Ordnance Co., In re (1868), L. R. 3 Ch. 154 ; 37 L. J. Ch. 
 
 418 ; 18 L. T. 132 ; 16 W. R, 533 - - - - 293, 298 
 
 Blaker v. Herts, &c. Waterworks Co. (1889), 41 Ch. D. 399 ; 58 L. J. 
 
 Ch. 497 ; 60 L. T. 776 ; 37 W. R. 601 - - - 296 
 
 Bloomenthal v. Ford, (1897) A. C. 156 ; 66 L. J. Ch. 253 ; 76 L. T. 
 
 205 ; 45 W. R. 449 - - - - - 75, 136, 144, 440 
 
 Blow, Hand v., (1901) 2 Ch. 721 ; 79 L. J. Ch. 687 ; 85 L. T. 156 ; 
 
 50 W. R. 5 - - - - - - - - 326 
 
 Bloxam, Ex parte, 33 Beav. 529a _____ 103 
 
 Blunt, Iron Ship, &c. Co. v., L. R. C. P. 484; 37 L. J. C. P. 273; 
 
 16 W. R. 868 ______ 147,189 
 
 Bodega Co., Ld., (1904) 1 Ch. 276 ; 73 L. J. Ch. 198 ; 89 L. T. 694 ; 
 
 52 W. R. 249 - - - - - - - 189 
 
 Bolivia (Republic of) Exploration Synd., Ltd., (1914) 1 Ch. 139 - 227 
 
 Bolognesi’s Case, L. R. 5 Ch. 567 - 399 
 
 Bomore Road (No. 9), (1906) 1 Ch. 359 ; 75 L. J. Ch. 157 ; 94 L. T. 
 
 403; 54 W. R. 312 - - - - - -418 
 
 Bond v. Barrow Hematite Co., (1902) 1 Ch. 353; 71 L. J. Ch. 246; 
 
 86 L. T. 10; 50 W. R. 295- - - - 213,218,219 
 
 Boord v. African, &c. Co., (1898) 1 Ch. 596 ; 77 L. T. 553 ; 46 W. R. 
 
 150 - - - - - - - - 125, 223 
 
 Booth v. New Afrikander Gold Mining, (1903) 1 Ch. 295; 87 L. T. 
 
 509 ; 51 W. R. 593 (C. A.) - - - - - 341, 342 
 
 Booth v. Walkden Spinning Co., (1909) 2 K. B. 368 - - - 432 
 
 Borax Co., Foster v., (1901) 1 Ch. 326; W. N. (1899) 34; 83 L. T. 
 
 638 ; 49 W. R. 212 - - - - 66, 309, 310, 325 
 
 Borland’s Trustee v. Steel Brothers & Co., (1901) 1 Ch. 279 - 131, 140, 
 
 155, 156, 158, 291, 375 
 
 Borough of Portsmouth Tramways, (1892) 2 Ch. 362 ; 61 L. J. Ch. 
 
 462; 66 L. T. 671 ; 40 W. R. 553 - - - 273, 328, 386 
 
 Bos, Princess of Reuss v. (1871), L. R. 5 H. L. 176 ; 40 L. J. Ch. 
 
 665; 24 L. T. 641 - - - - 35, 52, 53, 113, 382, 388 
 
 Bosanquet, &c. v. St. John del Rey (1897), 77 L. T. 207 - - 217 
 
 Boschoek Proprietary Co. v. Fuke, (1906) 1 Ch. 148; 75 L. J. Ch. 
 
 261 ; 94 L. T. 398 ; 54 W. R. 359 - - - 164, 184, 186 
 
 Boston Deep Sea Co. v. Ansell, 39 C. D. 339; 59 L. T. 345 -193,206,262 
 Bouch v* Sproule, 12 App. Cas. 385 ; 56 L. J. Ch. 1037 ; 57 L. T. 345 ; 
 
 36 W. R. 193 - - - - - - - 220 
 
 Boudard, Everard & Co. (1896), 74 L. T. 712; 65 L. J. Ch. 735; 45 
 
 W. R. 152 - - - - - - - - 345 
 
TABLE OF CASES. 
 
 XXI 
 
 Bou— Bri page 
 
 Boultbee, Cherry v., 4 My. & Or. 442 - 289 
 
 Boulter, Tibbatts v. (1895), 73 L. T. 534 - 353 
 
 Bowen v. Brecon Rail. Co.,L. R. 3 Eq. 541 - 319 
 
 Bowen v. Defries & Co., (1904) 1 Oh. 37 ; 73L.J.Ch. 1; 52W.R.253 - 282 
 Bower, Cargill v. (1878), 10 C. D. 502 ; 47 L. J. Ch. 649; 38 L. T. 
 
 779; 26 W. R. 716 - - - - - -200 
 
 Bower v. Foreign Gas Co., W. N. (1877) 222 - 320 
 
 Bowes v. Hope Mutual Life Insurance Society (1865), 11 H. L. C. 
 
 402 - - - - - - - - 393, 440 
 
 Bowes, Saunderson v., 14 East, 508 ----- 297 
 Boyd, British Asbestos Co. v., (1903) 2 Ch. 439 ; 73 L. J. Ch. 31 ; 
 
 88 L. T. 763; 51 W. R. 667 164, 182, 192 
 
 Boyle’s Case, 33 W. R. 40 ; 54 L. J. Ch. 550 ; 52 L. T. 501 - - 112 
 
 Boynton. Limited, In re , (1910) 1 Ch. 519 - 324 
 
 Boynton, Hoffman v ., (1910) 1 Ch. 519; 26 T. L. R. 294 - - 317 
 
 Boythorpe Colliery Co., James v. (1891), 2 Meg. C. R. 55 ; W. N. 
 
 (1890) 28 - - - - - - - - 320 
 
 Bradford Banking Co. v. Briggs (1886), 12 App. Cas. 29 ; 56 L. J. Ch. 
 
 364 ; 56 L. T. 62 ; 35 W. R. 521 - 39, 154, 155, 157, 158, 159, 160, 291, 440 
 Bradford Navigation Company, 10 Eq. 331 - 389 
 
 Bradford Tramways and Omnibus Co., 68 J. P. 362 - - - 410 
 
 Brailey v. Rhodesia Cons., (1910) 2 Ch. 95 - - - 424 
 
 Braine’s Tadcaster Breweries Co., Dawson v., (1907) 2 Ch. 359; 76 
 
 L. J. Ch. 588 ; 97 L. T. 83 - - - - - 315 
 
 Bramah v. Roberts, 3 Bing. N. C. 963 ; 1 Scott, 350 ; 3 D. P. C. 392- 264 
 Brandao v. Barnett, 12 Cl. & Fin. 787 - - - 303, 306 
 
 Braunstein and Marjolaine, Ltd., (1914) W. N. 335 ; 58 S. J. 755 - 325 
 
 Bray v. Ford, (1896) A. C. 44 ; 65 L. J. Q. B. 213 ; 73 L. T. 609 - 192, 
 
 193, 436 
 
 Bray, Shepheard v ., (1907) 2 Ch. 571 ; 76 L. J. Ch. 692 ; 24 T. L. R. 
 
 17 (C. A.) - - - - - - - - 358 
 
 Brazilian Rail. Co., Cleary v., (1915) W. N. 178 - - - 326 
 
 Brazilian Rubber Plantations, (1911) 1 Ch. 425; 27 T. L. R. 109 - 201, 
 
 204, 211 
 
 Brecon Rail. Co., Bowen v., L. R. 3 Eq. 541 - - - - 319 
 
 Brennan, Warner Engineering Co. v., 30 T. L. R. 191 - - 338 
 
 Brentford Tramways Co., 26 C. D. 527 - 389 
 
 Brett’s Case, 6 Ch. 800 ; 8 Ch. 800 - - - - - 404 
 
 Brett, Wilson v., 11 M. & W. 115 ----- 202 
 
 Brick and Stone Co., W. N. (1878) 140; 22 S. J. 625 - - 165 
 
 Bridger’s and Neill’s Cases (1869), 4 Ch. 266; 38 L. J. Ch. 201 ; 19 
 L. T. 624 ; 17 W. R. 216 - - - - - - 153 
 
 Bridger’s Case (1870), L. R. 5 Ch. 305; 39 L. J. Ch. 478; 22 L. T. 
 
 737 ; 18 W. R. 412 - - - - - - 113 
 
 Bridges, Fordyce v., 11 H. L. C. 4 - - - - 272 
 
 Bridgwater Navigation Co., Be (1889), 14 App. Cas. 525 ; 59 L. J. Ch. 
 
 122 ; 61 L. T. 621 ; 38 W. R. 401 ; 1 Meg. 372 - 85, 214, 416, 440 
 
XXII 
 
 TABLE OF CASES. 
 
 Bri — Bri page 
 
 Bridport Old Brewery Co., Re, L. R. 2 Ch. 194; 15 L. T. 643; 15 
 W. R. 291 - - - - - - - - 237 
 
 Briggs, Ex parte, 1 Eq. 483 ------ 352 
 
 Briggs, Bradford Banking Co. v. (1886), 12 A. C. 29; 56 L. J. Ch. 
 
 364 ; 56 L. T. 62 ; 35 W. R. 521 - 39, 154, 155, 157, 158, 159, 160, 
 
 291, 440 
 
 Briggs, Grundy v., (1910) 1 Ch. 444; W. N. (1910) 17 - 131, 139, 184 
 
 Briggs, Oriental Inland Steam Co. v. (1861), 31 L. J. Ch. 241 ; 2 J. 
 
 & H. 625 ; 4 De G. F. & J. 191 ; 10 W. R. 125 - - -115 
 
 Brighton Alhambra, Securities Investment Corporation v. (1893), 68 
 L. T. 249 ; 62 L. J. Ch. 566 ; W. N. (1893) 15 - - 327 
 
 Brighton Grand Concert Hall, Ltd., London and Counties Assets Co. 
 
 v., (1915) 2 K. B. 493 - - - - - - 189 
 
 Brigstocke, Dominion of Canada Syndicate v., (1911) 2 K. B. 648 
 
 342, 377 
 
 Brinsmead (T. E.) & Sons, (1897) 1 Ch. 45, 406; 76 L. T. 100; 66 L. J. 
 
 Ch. 290 - - - - - 391, 394, 398 
 
 Bristol United Breweries v. Abbot, (1908) 1 Ch. 279; 77 L. J. Ch. 
 
 136; 98 L. T. 22 - - - - - - - 281 
 
 Bristow v. Needham, 2 R. 629 - - - - - 326 
 
 British and American Shoe Co., Randall, Limited v., (1902) 2 Ch. 
 
 354 ; 74 L. J. Ch. 683 ; 87 L. T. 442 ; 50 W. R. 697 - 27 
 
 British Asbestos Co. v.Boyd, (1903) 2 Ch. 439; 73 L. J. Ch. 31 ; 88 
 L. T. 763 ; 51 W. R. 667 - - - - 164, 182, 192 
 
 British, &c. Association, Rogers & Co. v., 68 L. J. Q,. B. 14 ; 79 
 
 L. T. 494 - - - - - - - - 324 
 
 British Bank of S. A., Lubbock v ., (1892) 2 Ch. 198; 61 L. J. Ch. 
 
 498 ; 67 L. T. 74 ; 41 W. R. 103 - - - - - 217 
 
 British Building Stone Co., (1908) 2 Ch. 450; 77 L. J. Ch. 752; 99 
 L. T. 608 - - - - - - - - 424 
 
 British Burmah Lead Co., In re, 56 L. T. 815 ; W. N. (1887) 101 ; 
 
 4 T. L. R. 631 - - - - - - - 355 
 
 British Columbia Association, Hoare v., (1912) W. N. 235 ; 107 L. T. 
 
 602 -------- 281 
 
 British Columbian Exploitation Gold Estates, W. N. (1899) 32 - 129 
 
 British, &c. Corporation v. Couper, (1894) A. C. 399; 63 L. J. Ch. 
 
 425 ; 70 L. T. 882 ; 42 W. R. 652 - 48, 68, 83, 93, 95, 96, 97, 440 
 
 British Electromobile Co., Electromobile Co. v., 97 L. T. 196; 23 
 T. L. R. 192 - - - - - - 27, 249 
 
 British Equitable Assurance Co. v. Baily, (1906) A. C. 35; 75 L. J. 
 
 Ch. 73; 94 L. T. 1 (H. L. E.) - - - - 49, 440 
 
 British Equitable Bond, &c. Co., (1910) 1 Ch. 574 - 393 
 
 British India, &c. Co. v. Commissioners, 7 Q. B. D. 165 - 283, 288 
 
 British Murac Rubber Synd. v. The Alperton Rubber Co., (1915) 
 
 W. N. 176; (1915) 2 Ch. 186 43, 50, 181 
 
 British Mutual, &c., Southall v., 6 Ch. 614; 40 L. J. Ch. 698; 19 
 W. R. 865 - - - - - 168,194,381,418,425 
 
TABLE OF CASES. 
 
 XX11L 
 
 Bri — Bro page 
 
 British Mutual Bank v. Charnwood Forest Bail., 18 Q. B. D. 714; 
 
 35 W. E. 590 ; 55 L. J. Q. B. 399 ; 56 L. J. Q. B. 449 - - 261 
 
 British Nation, &c. Association, Ex parte, 8 Ch. D. 704 - 65, 68 
 
 British Power Traction Co., (1910) 2 Ch. 470; (1906) 1 Ch. 497; 75 
 
 L. J. Ch. 248 ; 94 L. T. 479 ; 54 W. R. 387 ; 22 T. L. B. 268 - 326, 327 
 British Seamless Paper Box (1881), 17 C. D. 467 ; 50 L. J. Ch. 497 ; 
 
 44 L. T. 498 ; 29 W. B. 690 - - - - 333, 367 
 
 British South Africa Co. v. De Beers, (1910) 2 Ch. 502 - - 274 
 
 British Sugar Refining Co., 3 K. & J. 408 - 167 
 
 British Tea Table Co., 101 L. T. 707 ----- 326 
 British Vacuum Cleaner Co. v. New Vacuum Cleaner Co., (1907) 2 
 
 Ch. 312 ; 76 L. J. Ch. 511 ; 97 L. T. 201 ; 23 T. L. B. 587 - 27, 249 
 
 Briton Medical Co., 37 W. B. 52 - - - - 123 
 
 Briton Medical Co. v. Jones, 61 L. T. 384 - 191 
 
 Broad, Driver v., (1893) 1 Q. B. 744; 63 L. J. Q. B. 12; 69 L. T. 
 
 169 - - - - - - - 316 
 
 Broad’s Patent Co., W. N. (1892) 5 - - - - - 397 
 
 Broad Street Co., W. N. (1887) 149 - - - - - 121 
 
 Broad’s Patents, &c. Co., Fowler v., (1893) 1 Ch. 724 ; 62 L. J. Ch. 
 
 373 ; 68 L. T. 576 ; 41 W. R. 247 - - - - - 273 
 
 Broadwood, Shipway v., (1899) 1 Q. B. 369 ; 68 L. J. Q. B. 360; 80 
 
 L. T. 11 (C. A.) - - - - - 193, 194 
 
 Brocklebank, Stocker v., 3 M. & G. 250 - 262 
 
 Broderip v. Salomon, (1895) 2 Ch. 323 ; 64 L. J. Ch. 689 ; 72 L. T. 
 
 755; 43 W. B. 612- - 55,371 
 
 Brookes v. Hansen, (1906) 2 Ch. 129; 75 L. J. Ch. 450; 94 L. T. 
 
 728; 54 W. B. 502 ; 22 T. L. B. 475 - - - - 351 
 
 Broome, Shepheard v., (1904) A. C. 342 ; 73 L. J. Ch. 608; 91 L. T. 
 
 178; 53 W. B. Ill ; 20 T. L. B. 540 (H. L.— E.) - - - 360 
 
 Broome v. Speak, (1903) 1 Ch. 586 ; 72 L. J. Ch. 251 ; 88 L. T. 580; 
 
 51 W. B. 258 (C. A.) - - - - - 359 
 
 Brougham, Sinclair v., (1914) A. C. 398 - 275 
 
 Broughton, Jennings v., 17 Beav. 234 ; 5 D. M. & G. 126 ; 22 L. J. 
 
 Ch. 585 ; 1 W. B. 441 - - - - - - 346 
 
 Brown, Joint Stock Discount Co. v., 3 Eq. 139 ; 8 Eq. 381 ; 20 L. T. 
 
 844 ; 17 W. B. 1037 - - 65, 68, 72, 179, 204, 209, 262, 407 
 
 Brown, Leroux v. (1852), 12 C.B. 801 - 256 
 
 Brown, Ortigosa v., 38 L. T. 145 ; 47 L. J. Ch. 168 - - - 134 
 
 Brown, Smith v., (1896) A. C. 614 ; 65 L. J. P. C. 89 ; 75 L. T. 213 ; 
 
 45 W. R. 132 - - - - - - - 121 
 
 Brown, Tyne Steamship Co. v., 75 L. T. 483 - 46, 192, 276 
 
 Brown and Gregory, Andrews v., (1904) 2 Ch. 448 ; 73 L. J. Ch. 770 
 
 (C. A.) - - - - - - - -293 
 
 Brown and Gregory, Ltd., Be, (1904) 1 Ch. 627 - 289 
 
 Brown’s Case, 9 Ch. 102 ; 43 L. J. Ch. 153 ; 29 L. T. 562 ; 22 W. R. 
 
 171 - - - - - - - - - 183 
 
 Browne v. La Trinidad, 37 C. D. 1 ; 57 L. J. Ch. 292 ; 58 L. T. 137 ; 
 
 36 W. B. 289 - - - 40, 42, 164, 176, 195, 198 
 
XXIV 
 
 TABLE OF CASES. 
 
 Bro— Bur page 
 
 Browne and Wingrove, Re, (1891) 2 Q. B. 574 (C. A.) ; 61 L. J. Q. B. 
 
 15; 65 L. T. 485; 40 W. R. 71 - - - - -329 
 
 Browning v. Great Central Mining Co., 5 H. & N. 856 - - 255 
 
 Brunswick Estate, Chapleo v., 6 Q. B. D. 715; 29 W. R. 529; 44 
 W. R. 449 ; 50 L. J. Q. B. 372 - - - 190, 276 
 
 Brunton v. Electrical Engineering Co., (1892) 1 Ch. 434 ; 61 L. J. Ch. 
 
 256 ; 65 L. T. 745 - - - - - 290, 312, 320 
 
 Brunton, English and Scotch, &c. Trust v., (1892) 2 Q. B. 700 
 (C. A.); 62 L. J. Q. B. 136; 69 L. T. 406; 41 W. R. 133 - 290, 312 
 
 Brussels Palace of Varieties v. Prockter, 10 T. L. R. 72 - - 339 
 
 Brutton v. Burney, W. N. (1901) 37 ; (1901) 1 Ch. 637 - - 120 
 
 Bryant v. La Banque du Peuple, (1893) A. C. 170 ; 62 L. J. P. C. 68 ; 
 
 68 L. T. 681 ; 41 W. R. 239 ; 57 J. P. 89 - - - 276, 436 
 
 Bryden, Sadgrove v., (1907) 1 Ch. 318; 76 L. J. Ch. 184; 96 L. T. 
 
 361 -------- 174 
 
 Bryon v. Metropolitan, &c. Co., 3 De G. & J. 123 - - 269, 270 
 
 Buchan’s Case, 4 App. Cas. 549 - - - - - 139 
 
 Buck v. Robson, L. R. 10 Eq. 629 ----- 405 
 
 Bucknall, Watts v., (1903) 1 Ch. 766; 72 L. J. Ch. 447; 88 L. T. 
 
 845 ------ 359, 360, 361 
 
 Buena Ventura, James v., (1896) 1 Ch. 456 - - - - 151 
 
 Building Societies Trust, Re, 44 C. D. 144 - 396 
 
 Bulawayo Market Co., (1907) 2 Ch. 458; 76 L. J. Ch. 673; 23 
 T. L. R. 714 - - - - - - - 177 
 
 Bulkeley, Knight v., 3 Jur. (N. S.) 817 ; 33 L. T. 7 ; Storey on 
 Agency, s. 475 ------- 174 
 
 Bull, Burt v., (1895) 1 Q. B. 276 ; 64 L. J. Q. B. 232 ; 71 L. T. 810; 
 
 43 W. R. 180 - - - - - - 326 
 
 Bull, Strapp v., (1895) 2 Ch. 1 ; 72 L. T. 514 (C. A.) - - 327 
 
 Buller, Exeter and Crediton Rail. Co. v., 5 Ry. Cas. 211 ; 11 Jur. 
 
 521 -------- 242 
 
 339 
 
 118 
 
 425 
 
 142 
 
 Bultfontein Sun Diamond Mine (1896), 12 T. L. R. 461 
 Bunn’s Case, 2 De G. F. & J. 275, 300 - 
 
 Burdett Coutts v. True Blue, (1899) 2 Ch. 616; 68 L. J. Ch. 692; 81 
 L. T. 29; 48 W. R. 1 ; 7 Manson, 85 (C. A.) - 
 
 Burdett v. Standard Exploration Co., 16T.L. R. 112 - 41, 
 
 Burgess’ Case, 15 C. D. 507 ; 49 L. J. Ch. 541 ; 43 L. T. 45 ; 28 
 
 W. R. 792 - - - - - - - - 353 
 
 Burkinshaw v. Nicolls (1878), 3 App. Cas. 1004 ; 48 L. J. Ch. 179 ; 39 
 L. T. 308; 26 W. R. 819 - - - - 75, 143, 144, 440 
 
 Burland v. Earle, (1902) A. C. 83; 85 L. T. (P. C.) 553; 71 L. J. 
 
 P. C. 1 ; 50 W. R. 241 - 40, 50, 57, 170, 171, 180, 185, 213, 242 
 
 Burn v. London and South Wales Coal Co., W. N. (1890) 209; 
 
 7 T. L. R. 118 - - - - - - - 223 
 
 Burnard, Hambro v., (1904) 2 K. B. 14 - - - - 436 
 
 Burnes v. Pennell (1849), 2 H. L. C. 497 ; 13 Jur. 897 - 7, 210, 215 
 
 Burney, Brutton v., W. N. (1901) 37; (1901) 1 Ch. 637 - - 120 
 
 Burnham, Russell v., (1909) 1 Ch. 127 - 107, 346 
 
TABLE OF CASES. 
 
 XXV 
 
 Bur— Cap page 
 
 Burrows v. Matabele Co., W. N. (1901) 68 ; (1901) 2 Ch. 23 - - 341 
 
 Burt v. Bull, (1895) 1 Q. B. 276 ; 64 L. J. Q. B. 232 ; 71 L. T. 810 ; 
 
 43 W. E. 180 - - - - - - - 326 
 
 B. U. R. T. Co., Ltd., Curtis v., 28 T. L. R. 585 - - 432 
 
 Burton v. Bevan, (1908) 2 Ch. 240; 77 L. J. Ch. 591 - 60, 107, 108, 244 
 Bury v. Famatina Development Co., (1910) A. C. 439 - 69, 317 
 
 Bush, Murray v., L. R. 6 H. L. 77 ; 42 L. J. Ch. 586 ; 29 L. T. 217 ; 
 
 22 W. R. 280 - - - - - - 192 
 
 Bute’s (Marquis of) Case, (1892) 2 Ch. 100 ; 61 L. J. Ch. 357 ; 66 L. T. 
 
 317 ; 40 W. R. 538 ; 13 E. R. 566 - - - - - 205 
 
 Butler v. Manchester Rail. Co., 21 Q. B. D. 207 - - - 74 
 
 Butler v. Northern Territories Mines of Australia, 96 L. T. 41 ; 23 
 T. L. R. 179 - - - - - - - 71 
 
 Byrne v. Leon Van Tienhoven, 5 C. P. D. 344 - 103 
 
 C. 
 
 Cachar Co., Re, L. R. 2 Ch. 417 - 352 
 
 Cackett v. Keswick, (1902) 2 Ch. 456 ; 71 L. J. Ch. 641; 87 L. T. 11; 
 
 51 W. R. 69 - - - - - 351, 359, 361 
 
 Cairney v. Back, (1906) 2 K. B. 746 ; 75 L. J. K. B. 1014 ; 22 T. L. R. 
 
 776 - - - - - - - - - 411 
 
 Calgary and Edmonton Land Co., (1906) 1 Ch. 141 ; 75 L. J. Ch. 138 ; 
 
 94 L. T. 132; 13 Manson, 55 - - - - - 99 
 
 Calthorpe, Nash v., W. N. (1905) 100 - 381 
 
 Cambrian Co., 23 W. R. 405; 31 L. T. 773; W. N. (1875) 6- 169, 239 
 
 Campbell v. Australian Mutual, 99 L. T. 3 - - - 67, 71 
 
 Campbell v. Maund, 5 Ad. & El. 865- - - - - 172 
 
 Campbell’s Case (1873), 9 Ch. 1 ; 43 L. J. Ch. 1 ; 29 L. T. 519 ; 22 
 W. R. 113 - - - - - 44, 86, 87, 89, 92, 168 
 
 Campbell’s Case (1876), 4 C. D. 470; 25 W. R. 299 ; 35 Ia T. 900 - 192, 317 
 Canada N. W. Co., W. N. (1885) 61 - - - - - 99 
 
 Canadian Agricultural Coal Co., Mortgage Insurance Co. v., (1901) 
 
 2 Ch. 377 ; 70 L. J. Ch. 684 ; 84 L. T. 861 ... 329 
 
 Canadian Produce Corporation, Finance and Issue v., (1905) 1 Ch. 
 
 37; 53 W. R. 170 - - - - - - - 108 
 
 Canning Jarrah Timber Co., (1900) 1 Ch. 708 ; 69 L. J. Ch. 416; 82 
 L. T. 409; 7 Manson, 439 (C. A.) - - - - -431 
 
 Cape Breton Co., In re, 29 C. D. 795 ; 54 L. J. Ch. 822 ; 53 L. T. 181 ; 
 
 33 W. R. 788 ; 12 App. Cas. 652 - - - 193, 206, 407 
 
 Capel v. Sims Composition Co., 36 W. R. 689 ; 58 L. T. 807 ; 57 L. J. 
 
 Ch. 713 - - - - - - - 354, 360 
 
 Capital and Counties Bank, Esberger & Son, Ltd. v., (1913) 2 Ch. 
 
 366 - - - - - - - 280 
 
XXVI 
 
 TABLE OF CASES. 
 
 Cap— Cen page 
 
 Capital Fire Insurance Association, Re (No. 2) (1883), 24 C. D. 408 ; 
 
 53 L. J. Ch. 71 ; 49 L. T. 697 ; 32 W. E. 260 - - 223, 322 
 
 Capper’s Case, 3 Ch. 458; 16 W. E. 1002 - - - 113, 115 
 
 Caratal (New) Mines, Re , (1902) 2 Ch. 498; 71 L. J. Ch. 883; 87 
 L. T. 437 ; 50 W. E. 572 - - - - - 170, 240 
 
 Carbolic Smoke Ball Co., Carlill v., (1893) 1 Q. B. 256 ; 62 L. J. Q. B. 
 
 257 ; 67 L. T. 837 ; 41 W. E. 210 - - - - 109, 301 
 
 Cardiff Workmen’s Cottage Co., (1906) 2 Ch. 627 ; 75 L. J. Ch. 769 ; 
 
 95 L. T. 669 ; 22 T. L. E. 799 282 
 
 Cargill v. Bower (1878), 10 C. D. 502; 47 L. J. Ch. 649; 38 L. T. 
 
 779; 26 W. E. 716- - - - - - -200 
 
 Caridad Copper Co. v. Swallow, (1902) 2 K. B. 44 ; 71 L. J. K. B. 
 
 601 ; 86 L. T. 699; 50 W. E. 565 - - - - - 188 
 
 Carlill v. Carbolic Smoke Ball Co., (1893) 1 Q. B. 256 ; 62 L. J. Q,. B. 
 
 257 ; 67 L. T. 837 ; 41 W. E. 210 - - - - 109, 301 
 
 Carling’s Case, 1 C. D. 115 ; 45 L. J. Ch. 5 ; 33 L. T. 645 ; 24 W. E. 
 
 165- - - - - - - - 405, 407 
 
 Carlton, Bagnall v., 6 C. D. 371 ; 47 L. J. Ch. 30; 37 L. T. 481 ; 26 
 W. E. 243 - - - - - - - 331, 332 
 
 Carlton Bank, Cornford v., (1899) 1 Q. B. 392 ; 68 L. J. Q. B. 196 ; 
 and affirmed, (1900) 1 Q. B. 22 ; 68 L. J. Q. B. 1020 ; 82 L. T. 415 
 (C. A.) - - - - - - - - 74 
 
 Carlton Co., Premier Industrial Bank v., (1909) 1 K. B. 106 - 45, 197 
 
 Carlyle Press, Strong v., (1893) 1 Ch. 268; 62 L. J. Ch. 541 ; 68 
 L. T. 396 ; 41 W. E. 404 - - - - - - 328 
 
 Carriage Co-operative Association, 27 C. D. 322 ; 53 L. J. Ch. 1154 ; 
 
 51 L. T. 286; 33 W. E. 411 - - - - 185, 206 
 
 Carrick v. Wigan Tramways Co., W. N. (1893) 98 - - - 329 
 
 Carshalton Park Estate, (1908) 2 Ch. 62; 77 L. J. Ch. 550; 99 L. T. 
 
 12 ; 24 T. L. E. 547 - - - - - - 325 
 
 Carter v. White, 25 Ch. D. 666 ----- 338 
 
 Cartmell’s Case, 9 Ch. 691 ; 43 L. J. Ch. 588 ; 31 L. T. 52 ; 22 W. E, 
 
 697 -------- 115, 255 
 
 Cash, Limited v. Cash, (1902) W. N. 32 - - - - 27 
 
 Castell & Brown, Ld., Re, (1898) 1 Ch. 315 ; 67 L. J. Ch. 169 ; 78 
 L. T. 109 ; 46 W. E. 248 - - 290, 309, 312, 320 
 
 Castle Steel, &c. Co., Mowatt v., 34 C. D. 58; 55 L. T. 645 - - 259 
 
 Oathcart, Re, 5 Ch. 703 - - - - - - 18 
 
 Cavanagh, Whitechurch (George) Ltd. v., (1902) A. C. 117 ; 85 L. T. 
 
 349 ; 50 W. E. 218 - - - - - 139, 261 
 
 Cave v. Cave, 15 C. D. 639 - - - - - - 234 
 
 Cawley & Co., In re, 42 C. D. 209 ; 58 L. J. Ch. 633 ; 61 L. T. 601 ; 
 
 37 W. E. 692; 1 Meg. 251 - - - - 130, 147, 247 
 
 Central De Kaap Gold Mines, 69 L. J. Ch. 18 ; 7 Manson, 82 - 187 
 
 Central Eailway of Venezuela v. Kisch, L. E. 2 H. L. 123 ; 36 L. J. 
 
 Ch. 849 ; 16 L. T. 500 ; 15 W. E. 821 - - 127, 345, 353 
 
TABLE OF CASES. 
 
 XXY11 
 
 Cen— Cit pagk 
 
 Central Rail. Co. of Venezuela, Scholey v., 9 Eq. 266, n. - - 652 
 
 Central Uruguay Railway, Etheridge v. } (1913) 1 Ch. 425 - - 430 
 
 Centrifugal Butter Co., Re, (1913) 1 Ch. 188 - 402 
 
 Chadwick, Smith v., 20 C. D. 27 ; 51 L. J. Ch. 597 ; 46 L. T. 702 ; 
 
 30 W. R. 661 ; 9 A. C. 187 ; 53 L. J. Ch. 873 ; 50 L. T. 697 ; 32 
 W. R. 687 ; 48 J. P. 644 - - - - 354, 355, 356 
 
 Chamberlain Wharf v . Smith, (1900) 2 Ch. 605; 69 L. J. Ch. 783; 
 
 83 L. T. 238 ; 49 W. R. 91 (C. A.) - - - - - 9 
 
 Chambers v. Manchester & Milford Railway, 5 B. & S. 588 - - 428 
 
 Chapel House Colliery Co., Re, 24 C. D. 259 ; 52 L. J. Ch. 934; 49 
 L. T. 575; 31 W. R. 933 - - - 328,393,398,399,414 
 
 Chapleo v. Brunswick Estate, 6 Q. B. D. 715; 29 W. R. 529; 44 
 W. R. 449; 50 L. J. Q. B. 372 - - - 190, 276 
 
 Chapman’s Case, 1 Eq. 346 ------ 263 
 
 Chapman & Barker’s Case, 3 Eq. 361 ; 15 L. T. 528 ; 15 W. R. 334 - 118 
 
 Chapman, Civil Service Society v., (1914) W. N. 369 - - 199 
 
 Chapman, Evans v., 86 L. T. 381 - - - - - 50 
 
 Chapman v. Smethurst, W. N. (1909) 65, reversing (1909) 1 K. B. 73 - 266 
 Charitable Corporation v. Sutton, 2 Atk. 400- - 178, 200, 205 
 
 Charlesworth v. Mills, (1892) A. C. 231 ; 25 Q. B. D. 425 - - 281 
 
 Charnwood Forest Rail.. British Mutual Bank v., 18 Q. B. D. 714 ; 
 
 35 W. R. 590 ; 55 L. J. Q. B. 399 ; 56 L. J. Q. B. 449 - - 261 
 
 Cherry v. Boultbee, 4 My. & Cr. 442 - 289 
 
 Chester & Co., 52 W. R. 189 - - - - - - 397 
 
 Chester, Reg. v., 1 Ad. & El. 342 - - - - -173 
 
 Chesterfield and Boythorpe Colliery v. Black, 26 W. R. 207 - - 193 
 
 Chestergate Hat Co., Johnston v., (1915) W. N. 277 - - 221 
 
 Chic, Limited, Robinson Printing Co. v., (1905) 2 Ch. 123; 74 L. J. 
 
 Ch. 399 ; 93 L. T. 262 ; 53 W. R, 681 - - - - 327 
 
 Chida Mines, Ltd. v. Anderson, 22 T. L. R. 27 - 129, 131, 261 
 
 Chillington Iron Co., 29 C. D. 159 ; 54 L. J. Ch. 624 ; 52 L. T. 504 ; 
 
 33 W. R. 442 - - - - - - - 172 
 
 China Steamship Co., In re, 7 Eq. 240; 38 L. J. Ch. 199 - - 316 
 
 Chinese Corporation, Spitzel v. (1900), 80 L. T. 347 ; 6 Manson, 355 - 112 
 Christineville Rubber Estates, (1911) W. N. 216 ; 81 L. J. Ch. 63 - 352 
 
 City and County Bank, L. R. 10 Ch. 471 - - - 396, 398 
 
 City and County, &c. Investment Co., Re, 13 C. D. 475; 42 L. T. 
 
 303 ; 28 W. R. 933 - - - - - - - 425 
 
 City and Suburban Permanent Building Society, Pepe v., (1893) 
 2Ch. 311 - - - - - - - - 49 
 
 City Bank, Ex 'parte, L. R. 3 Ch. 758 ; 18 L. T. 457 ; 16 W. R. 
 
 919 - - - - - - - - 269, 285 
 
 City of Chicago, &c. Co., Eichbaum v., (1891) 3 Ch. 459; 61 L. J. 
 
 Ch. 28 ; 65 L. T. 704 ; 40 W. R. 153 - - - - 94 
 
 City of Glasgow Bank, Houldsworth v., 5 A. C. 317 ; 42 L. T. 194 ; 
 
 28 W. R. 677 - - - - - - 74, 346 
 
 City of London, &c. Co., Skinner v., 14 Q. B. D. 882 ; 54 L. J. Q. B. 
 
 437 ; 53 L. T. 191 ; 33 W. R. 628 - 
 
 135 
 
XXV111 
 
 TABLE OF CASES. 
 
 Cit— Col PAGE 
 
 City Property, Ltd., Palace Billiard Rooms, Ltd. v., (1912) S. C. 5 - 99 
 
 City Rice Mills, Thorn v. (1889), 40 C. D. 357 ; 58 L. J. Oh. 297 ; 60 
 L. T. 359 ; 37 W. R. 398 - - - - - - 297 
 
 Civil, Naval & Military Outfitters, (1899) 1 Ch. 215 - 408 
 
 Civil Service Brewery Co., W. N. (1893) 5 ; 37 S. J. 194 - - 423 
 
 Civil Service Society v. Chapman, (1914) W. N. 369 - - - 199 
 
 Clandown Colliery Co., Re, (1915) 1 Ch. 369; W. N. 75 - 393, 398 
 
 Claridge, Seal v., 7 Q. B. D. 516 - - - - - 21 
 
 Clark, France v., 26 C. D. 263; 53 L. J. Ch. 585 ; 50 L. T. 1 ; 32 
 W. R. 466 - - - - - - - 134, 145 
 
 Clark, Saunderson & Co. v. (1912), 29 T. L. R. 579 - 281 
 
 Clark v. Imperial Gas, &c. Co., 4 B. & Ad. 315 - 258 
 
 Clarke v. Hart, 6 H. L. C. 633 - - - - - 151 
 
 Clarke, Huth v., 25 Q. B. D. 391 ; 63 L. T. 348 ; 59 L. J. M. C. 120 ; 
 
 59 W. R. 655 - - - - - - - 197 
 
 Clarke, London Founders’ Association v 20 Q,. B. D. 576; 57 L. J. 
 
 Q. B. 291 ; 59 L. T. 93 ; 36 W. R. 489 - - - 135 
 
 Clayton, Peat v., (1906) 1 Ch. 659 ; 75 L. J. Ch. 344; 94 L. T. 465 ; 
 
 54 W. R. 416 - - - - - - - 132 
 
 Clayton Engineering Co., W. N. (1904) 28 ; 90 L. T. 293 - 329, 330 
 
 Cleary v. Brazil Rail. Co., (1915) W. N. 178 - 326 
 
 Cleveland Co., Orton v., 3 H. & C. 868 ; 13 W. R. 869 ; 11 Jur. N. S. 
 
 531 -------- 185 
 
 Clews, Grindey r., (1898) 2 Ch. 593 ----- 207 
 
 Clifford (Lord de), Re, (1900) 2 Ch. 707; 69 L. J. Ch. 828 ; 83 L. T. 160 - 207 
 Clinch v. Financial Corporation, 5 Eq. 461 ; 4 Ch. 117 ; 18 L. T. 197 ; 
 
 37 L. J. Ch. 281 - - - - - - 167, 175 
 
 Clinton’s Case, (1908) 2 Ch. 515 - 60, 253 
 
 Clipper Pneumatic, &c. Co.., Bagot, &c. Co. v., (1902) 1 Ch. 146; 71 
 L. J. Ch. 158 ; 85 L. T. 652 ; 50 W. R. 177 253 
 
 Clyne Tin Plate Co. (1882), 47 L. T. 439 - - - - 322 
 
 Coal Consumers’ Association, Be, 4 C. D. 629 - - - 411 
 
 Coalport China Co., Be, (1895) 2 Ch. 404 ; 64 L. J. Ch. 710 ; 73 L. T. 
 
 46 ; 41 W. R. 38 - - - - - - - 131 
 
 Coasters, Ltd., W. N. (1910) 235 ; (1911) 1 Ch. 86 - 144, 203, 235 
 
 Coates v. L. & S. W. Rail. Co., 41 L. T. 553 ; 44 J. P. 154 - - 144 
 
 Coats (J. & P.), Ltd. v. Crossland, 20 T. L. R. 800 - 204, 206, 407 
 
 Cobb v. Becke, 6 Q. B. 936 - - - - - - 197 
 
 Coleman, Imperial Association v., 6 Ch- 558; 40 L. J. Ch. 262; 24 
 L. T. 290 ; on app., 6 H. L. 190 - - - 192, 193, 194 
 
 Coleridge, West Yorkshire Darracq Agency v., (1911) 2 K. B. 326 - 186 
 
 Coles, Foster v., 22 T. L. R. 555 - - - - - 84 
 
 Collen v. Wright (1857), 7 El. & Bl. 301 ; 8 El. & Bl. 647 - 190, 199 
 
 Collin v. Thompson’s Trustees, 4 Macq. 424, 432 - 200 
 
 Colman v. Eastern Counties Rail. Co., 10 Beav. 1 - - 5, 68 
 
 Colmer, Limited, Be James, (1897) 1 Ch. 524 - - - 50 
 
 Colonial Bank v. Whinney, 1 1 App. Cas. 426 ; 56 L. J. Ch. 43 ; 55 
 L. T. 362 ; 36 W. R. 705 ; 30 C. D. 261 - - - 19, HO 
 
TABLE OF CASES. 
 
 XXIX 
 
 Col — Coo PAGE 
 
 Colonial Bank, Williams v„ 38 C. D. 388 ; 57 L. J. Ch. 826; 59 L. T. 
 
 643 ; 36 W. R. 625 - - - - - - - 145 
 
 Colonial Gold Reef, Ltd., (1914) 1 Ch. 382 - - - - 173 
 
 Colonial Life Assurance Co. v. Home and Colonial Assurance Co., 33 
 
 Beav. 548; 12 W. R. 783; 10 L. T. 448; 33 L. J. Ch. 741 - 249 
 
 Colonial Mutual Soc., 21 C. D. 837 - - - - - 383 
 
 Colonial Trusts Corporation, In re, 15 C. D. 473 - 290, 309, 311, 329 
 
 Columbian Fire-Proofing Co., (1910) 2 Ch. 120 ; 79 L. J. Ch. 583 ; 102 
 
 L. T. 835; 1 Manson, 237 - - 310 
 
 Combined Incandescent Mantles Syndicate, Shewell >., 23 T. L. R. 
 
 481 -------- 341 
 
 Combined Weighing Machine Co., 43 C. D. 99 - - - 392 
 
 Commercial Bank of New Brunswick, Mackay v., L. R. 5 P. C. 394 ; 
 
 43 L. J. C. P. 31 ; 30 L. T. 180 ; 22 W. R. 473 - - - 74 
 
 Commissioners, British India, &c. Co. v., 7 Q,. B. D. 165 - 283, 288 
 
 Common Petroleum Co., (1895) 2 Ch. 759; 65 L. J. Ch. 76; 73 L. T. 
 
 338 - - - - - - - - 121, 122 
 
 Concessions Acquisition Syndicate, 68 L. J. Ch. 49; 79 L. T. 666; 
 
 5 Manson, 348; W. N. (1898) 162 - - - - - 123 
 
 Concessions Trust, Re, (1896) 2 Ch. 757 ; 65 L. J. Ch. 909 ; 75 L. T. 
 
 298 - - - - - - - - - 138 
 
 Connolly Bros., Ltd., (1912) 2 Ch. 25 - 312 
 
 Consett Iron Co., (1901) 1 Ch. 236 - - - - - 79 
 
 Consolidated Diesel Engine, (1915) 1 Ch. 192 - 403 
 
 Consolidated Exploration Co., (1899) 2 Ch. 599 - 400 
 
 Consolidated Goldfields v. Simmer and Jack East, (1913) W. N. 41 ; 
 
 108 L. T. 488 - - - - - - - 294 
 
 Consolidated Kent Collieries Corporation, Currie ?;., (1906) 1 K. B. 
 
 134 -------- 420 
 
 Consolidated Kent Collieries Corporation, Maynard v., (1903) 2 K. B. 
 
 121 ; 72 L. J. K. B. 681 ; 88 L. T. 676 ; 52 W. R. 117 (C. A.) - 135 
 
 Consolidated Nickel Mines, (1914) 1 Ch. 883 - - - - 188 
 
 Consolidated South Rand Mines, W. N. (1909) 66 - - 400 
 
 Consort Deep, &c. Co., Re, (1897) 1 Ch. 575 (C. A.); 66 L. J. Ch. 
 
 122 ; 76 L. T. 300 ; 45 W. R. 227 - - - - 128, 338 
 
 Consumers’ Gas Co. of Toronto, Johnston v., (1898) A. C. 447 ; 67 
 
 L. J. P. C. 33; 78 L. T. 270 (P. C.) - - - -351 
 
 Continental, &c. Co.,‘ Elias v., (1897) 1 Ch. 511; 66 L. J. Ch. 273; 
 
 76 L. T. 229; 45 W. R. 313 - - - - -328 
 
 Continental Tyre Co. v. Daimler Co., (1915) 1 K. B. 893 - 29, 243 
 
 Continental Union Gas Co. (1893), 7 T. L. R. 496 - - - 50 
 
 Contract Corporation, Re, L. R. 2 Ch. 95 - - - - 404 
 
 Conybeare, New Brunswick Co. v., 9 H. L. C. 711, 724 ; 31 L. J. Ch. 
 
 297 ; 6 L. T. 109 ; 10 W. R. 305 - - - - - 355 
 
 Cook v. Fowler (1874), L. R. 7 H. L. 27 - - - - 286 
 
 Cooke, Freeman v., 2 Ex. 654 - 143 
 
 Coolgardie Gold Mines, 76 L. T. 269; 14 T. L. R. 277 - 71, 121, 122 
 
 Cooper, Ex parte, L. R. 10 Ch. 510 - - - - - 415 
 
XXX 
 
 TABLE OF CASES. 
 
 Coo— Cov page 
 
 Cooper’s Case, (1908) 1 Ch. 141; 77 L. J. Ch. 36; 97 L. T. 757; 
 
 appeal from compromised, (1908) 1 Ch. 334 ; 77 L. J. Ch. 288 - 130 
 
 Cooper, Bennett v. (1845), 9 Beav. 252 - 308 
 
 Cooper v. Griffin, (1892) 1 Q. B. 740 ; 61 L. J. Q. B. 363 ; 66 L. T. 
 
 660 ; 40 W. R. 420 ------ 160, 184 
 
 Coote v. Jecks, 13 Eq. 597 ; 41 L. J. Ch. 599 - 274, 325 
 
 Copiapo Mining Co., In re , 6 Manson, 320 - - - - 79 
 
 Cork and Youghal Rail. Co., In re , L. R. 4 Ch. 748 ; 39 L. J. Ch. 277 ; 
 
 21 L. T. 735 - - - - - - - 275 
 
 Cork Co., Payne v., (1900) 1 Ch. 308 ; 69 L. J. Ch. 156; 82 L. T. 
 
 44 ; 48 W. R. 325 ; 7 Manson, 225 - - 39, 50, 424, 430 
 
 Cornbrook v. Law Debenture Corporation, (1904) 1 Ch. 103; 73 
 L. J. Ch. 121 ; 89 L. T. 680; 52 W. R. 242 281 
 
 Cornelius, Hermer v ., 5 C. B. N. S. 236 - 262 
 
 Cornell v. Hay, L. R. 8 C. P. 328 ; 42 L. J. C. P. 136 ; 28 L. T. 475 ; 
 
 21 W. R. 580 - - - - - - - 360 
 
 Cornford v., Carlton Bank, (1899) 1 Q. B. 392; 68 L. J. Q. B. 196; 
 and affirmed, (1900) 1 Q. B. 22 ; 68 L. J. Q. B. 1020; 82 L. T. 415 
 (C. A.) - - - - - - - 74 
 
 Cornwall Mining Co. v. Bennett, 5 H. & N. 423; 29 L. J. Ex. 157 ; 
 
 6 Jur. N. S. 539 ------- 147 
 
 Corporation of Liverpool, Scott v., 3 De G. & J. 360 - - 69 
 
 Corporation of Seaford, Crook v., 6 Ch. 551- - - -75 
 
 Corporation of Sheffield v. Barclay, (1903) 2 K. B. 580 ; 89 L. T. 227 ; 
 
 52 W. R. 54, reversed by House of Lords, 3rd July, 1905, (1905) 
 
 A. C. 392 - - - - - - - - 137 
 
 Cory, Dovey v„ (1901) A. C. 477 ; 70 L. J. Ch. 753 ; 85 L. T. 257 ; 
 
 50 W. R. 65 - - - 200, 202, 204, 217, 218, 227, 440 
 
 Costa Rica Co. v. Eorwood, (1900) 1 Ch. 756; on app., W. N. (1901) 
 
 44; (1901) 1 Ch. 746 192, 193, 194 
 
 Costello’s Case, 2 D. F. & J. 302 - 133 
 
 Cotterell v. Stratton (1872), L. R. 8 Ch. 302 - - - - 329 
 
 Cotton v. Imperial, &c. Co., (1892) 3 Ch. 454; 61 L. J. Ch. 684; 67 
 L. T. 342 - - - - - 66, 426, 427, 429, 430 
 
 County Life Assurance Co., In re , L. R. 5 Ch. 288 ; 18 W. R. 390 ; 22 
 L. T. 537 ; 39 L. J. Ch. 471 - - - - 45, 46, 258 
 
 County of Gloucester Bank v. Rudry, &c. Co., (1895) 1 Ch. 629; 64 
 L. J. Ch. 451 ; 72 L. T. 375 ; 43 W. R. 486 - 44,45,194,258,259 
 
 Couper, British, &c. Corporation v ., (1894) A. C. 399 ; 63 L. J. Ch. 
 
 425; 70 L. T. 882 ; 42 W. R. 652 - 48, 68, 83, 93. 95, 96, 97, 440 
 
 Courtown (Earl), Logan v. f 13 Beav. 22 ; 20 L. J. Ch. 347 - - 146 
 
 Coutts, Danby v., 29 C. D. 500 ----- 435 
 
 Coveney v. Persse, (1910) 1 Ir. R. 194 - 312 
 
 Coventry’s Case, In re Britannia Fire Association, (1891) 1 Ch. 202 
 (C. A.) ; 60 L. J. Ch. 186 ; 64 L. T. 185 ; 39 W. R. 328 - 104, 199 
 
 Coventry and Dixon’s Case, 14 C. D. 660 ; 42 L. T. 559 ; 28 W. R. 
 
 775- - - - - - - 184,191,192,204 
 
TABLE OE CASES. 
 
 XXXI 
 
 COW — Cul PAGE 
 
 Cowley v. Newmarket Local Board, (1892) A. C. 345 - - 351 
 
 Cox, Johnstone v. (1881), 19 C. D. 17 - - - - 329 
 
 Coxeter, Argylls Ltd. v. (1913), 29 T. L. R. 355 - 409 
 
 Cox-Moore v. Peruvian Corporation, (1908) 1 Ch. 604 ; 77 L. J. Ch. 
 
 387; 98 L. T. 611 - - - - - - - 321 
 
 Craig, Army, &c. Society v., 8 T. L. R. 227 - 360 
 
 Cranstown v. Johnston, 3 Ves. jun. 170 - 274 
 
 Crawley’s Case, 4 Ch. 322 - - - - 110, 112, 114, 352 
 
 Credit Assurance and Guarantee Corporation, (1902) 2 Ch. 601 ; 71 
 L. J. Ch. 775 ; 87 L. T. 216 ; 51 W. R. 20 (C. A.) - - 95, 96 
 
 Credit Foncier, Crouch v., L. R. 8 Q. B. 374 ; 42 L. J. Q. B. 183 ; 29 
 L. T. 259 ; 21 W. R. 946 - 293, 299, 300, 302, 304, 305, 306, 307 
 
 Cree, Somervail v., 4 A. C. 648 - - - - - 118 
 
 Creyke’s Case, L. R. 5 Ch. 63; 39 L. J. Ch. 124; 21 L. T. 572; 18 
 W. R. 22 - - - - - - - - 153 
 
 Crichton’s Case, (1901) 2 Ch. 184 ; 18 T. L. R. 556; 70 L. J. Ch. 639; 
 84 L. T. 864 ; 49 W. R. 556 ; and on app., (1902) 2 Ch. 86 ; 71 L. J. 
 
 Ch. 531 ; 86 L. T. 787 - -84,416,417 
 
 Crickmer’s Case, 10 Ch. 614 ; 46 L. J. Ch. 870 ; 24 W. R. 219 - 145 
 
 Crigglestone Coal Co., Be, (1906) 2 Ch. 327 ; 75 L. J. Ch. 662 ; 95 
 L. T. 510 - - - - - - - 393, 398 
 
 Croft v. Day, 7 Beav. 84 - - - - - 27, 249 
 
 Crompton & Co., Ltd., (1914) 1 Ch. 954 - 310 
 
 Cronck, Owen v., (1895) 1 Q. B. 265 ----- 326 
 Crook v. Corporation of Seaford, 6 Ch. 551- - - -75 
 
 Croskey v. Bank of Wales, 4 Giff. 314 - 146 
 
 Crossland, Coats (J. & P.) Ltd. v., 20 T. L. R. 800 - 204, 206, 407 
 
 Crossley (John) & Sons, W. N. (1892) 55 - - - 87 
 
 Crouch v. Credit Foncier, L. R. 8 Q. B. 374 ; 42 L. J. Q. B. 183; 29 
 L. T. 259 ; 21 W. R. 946 - 293, 299, 300, 302, 304, 305, 306, 307 
 
 Crown Bank, 44 C. D. 634 ; 59 L. J. Ch. 739 ; 62 L. T. 823 ; 38 
 
 W. R. 666 - - - - - - - -71 
 
 Crown Lease Proprietary Co., 14 T. L. R. 47 - - - 338 
 
 Crowther v. Thorley, 50 L. T. 43 - - - - _ 387 
 
 Croydon Tramways Co., Kaye v., (1898) 1 Ch. 358; 67 L. J. Ch. 222 ; 
 
 78 L. T. 239 ; 46 W. R. 405 - - - 166, 168, 193, 425 
 
 Croystill, Ernest v., 2 De G. F. & J. 175 - 180 
 
 Crum v. Oakbank Oil Co., 8 A. C. 65; 48 L. T. 537; L. R. 6 H. L. 
 
 375 - 41, 44, 168, 214, 441 
 
 Crumlin Viaduct Works Co. (1879), 11 C. D. 755; 48 L. J. Ch. 
 
 537 ; 27 W. R. 722 - - - - _ . .315 
 
 Crystal Palace Co., 130 L. T. N. 483 ----- 324 
 Crystal Reef Co., (1892) 1 Ch. 408 ----- 395 
 
 Cuff v. London and County Land Co., (1912) 1 Ch. 440 - - 231 
 
 Cullen, Ex parte, (1891) 2 Q. B. 151 ; 60 L. J. Q. B. 567 ; 64 L. T. 
 
 801 ; 39 W. R. 543 ; 8 M. B. R. 174 - - - - 173 
 
 Cullerne v. London, &c. Society, 25 Q. B. D. 485 ; 59 L. J. Q. B. 
 
 525 ; 63 L. T. 511 ; 39 W. R. 88 - - - 205, 208, 407 
 
XXX11 
 
 TABLE OF CASES. 
 
 Cum — Dav page 
 
 Cumberland Lead Co., Eales v., 6 H. & N. 481 - - - 189 1 
 
 Cunard Steamship Co. v. Hopwood, (1908) 2 Ch. 564 ; 77 L. J. Ch. 
 
 785 ; 99 L. T. 549 - ----- 279,281 
 
 Cundy v. Lindsay, 3 App. Cas. 459 - 104, 113 
 
 Cunliffe, Brooks & Co. v. Blackburn Benefit Society, 9 App. Cas. 
 
 865 ; 54 L. J. Ch. 376; 52 L. T. 225 ; 33 W. R. 309 - - 275 
 
 Ouninghame, Automatic Self-Cleaning Co. v., (1906) 2 Ch. 34; 75 
 
 L. J. Ch. 437 ; 94 L. T. 651 (C. A.) - 190 
 
 Cunningham, R. N., 36 C. D. 532; 57 L. J. Ch. 169; 58 L. T. 
 
 16 - - - - - - - - - 194 
 
 Currie v. Consolidated Kent Collieries Corporation, (1906) 1 K. B. 
 
 134 - - _ _ _ . _ _ _ 420 
 
 Curtis v. B. U. R. T. Co., Ltd., 28 T. L. R. 585 
 
 Cyclists’ Touring Co., (1907) 1 Ch. 269 
 
 Cyclists Touring Club v. Hopkinson, (1910) 1 Ch. 179 
 
 - 432 
 
 - 79 
 -67, 252, 434 
 
 Daimler Co., Continental Tyre Co. v., (1915) 1 K. B. 893 - 29, 243 
 
 Dale’s Case, 6 Q. B. D. 453 - - - - - - 18 
 
 Dale and Plant, In re (1889), 61 L. T. 206; 1 Meg. 338 ; 43 Ch. D. 
 
 255- 185, 253 
 
 Dalton Co. v. Dalton Timelock Co., 66 L. T. 704 - - 121, 122 
 
 Danby v. Coutts, 29 C. D. 500 ----- 435 , 
 
 Dandeson, Hague v., 2 Ex. 741 ; 17 L. J. Ex. 269 - 159 
 
 Dangerfield, Shackleford, Ford & Co. v ., L. R. 3 C. P. 407 ; 37 L. J. 
 
 0. P. 157 ; 18 L.T. 289; 16 W. R. 675 - - - - 250 
 
 Darlaston Steel Co., Slater v., W. N. (1877) 165 - - - 430 
 
 Darley, Smyth v., 2 H. L. C. 789 - 166, 232, 233 
 
 Dartmouth Harbour Commissioners, Batten v., 45 C. D. 612 - 329 
 
 Davey & Co. v. Williamson & Sons, (1898) 2 Q,. B. 194 ; 67 L. J. 
 
 Q. B. 699; 46 W. R. 571 309 
 
 David Lloyd & Co., Lloyd v., 6 C. D. 339 ; 37 L. T. 83 ; 25 W. R. 872 
 
 328, 414 
 
 David Payne & Co., Young v., (1904) 2 Ch. 609; 92 L. T. 777; 73 
 
 L. J. Ch. 849 ; 20 T. L. R. 590 (C. A.) 73, 235 
 
 Davies, Anglo-Italian Bank v., 9 C. D. 275 ; 27 W. R. 3 ; 39 L. T. 244 - 411 
 Davies v. Gas Light and Coke Co., (1909) 1 Ch. 248 - 125 
 
 Davis v. Bank of England, 2 Bing. 393 - - - 135, 440 
 
 Davis, Loring v., 32 C. D. 625 - 135,137 
 
 Davison v. Duncan, 7 E. & B. 229 ----- 174 
 
 Davison v. Gillies, 16 C. D. 347, n. ; 50 L. J. Ch. 192, n. ; 44 L. T. 
 
 92, n. - - - - - - - - 217 
 
 Davy, Att.-Gen. */., 2 Atk. 212 241 
 
TABLE OF CASES. 
 
 XXX111 
 
 Daw — Dey page 
 
 Dawes’ Case, 6 Eq. 232 ; 37 L. J. Ch. 901 ; 16 W. R. 995 - 116, 153 
 
 Dawes, Sharp v., 2 Q,. B. D. 26 - - - - 147, 169 
 
 Dawkins v. Antrobns, 17 C. D. 634; 29 W. R. 511 ; 44 L. T. 557 - 151 
 
 Dawson v. African, &c. Co., (1898) 1 Ch. 6 ; 67 L. J. Ch. 47 ; 77 L. T. 
 
 392 ; 46 W. R. 132 ; 14 T. L. R. 30 (C. A.) - - 189, 191 
 
 Dawson v. Braine’s Tadcaster Breweries Co., (1907) 2 Ch. 359; 76 
 
 L. J. Ch. 588 ; 97 L. T. 83 - 315 
 
 Dawson v. Isle, (1906) 1 Ch. 633; 75 L. J. Ch. 338; 95 L. T. 385; 
 
 54 W. R. 452 - - - - - - - 280 
 
 Dawson, Row v. (1749), 1 Yes. 331 ----- 308 
 
 Day, Re, 1 C. D. 699 - - - - - - - 387 
 
 Day, Croft v., 7 Beav. 84 - - - 27, 249 
 
 De Beers, British South Africa Co. v., (1910) 2 Ch. 502 - - 274 
 
 Debenture Holders of Anglo -Australian, &c. Co., Newton v ., (1895) 
 
 A. C. 244 ; 64 L. J. P. C. 57 ; 72 L. T. 305 ; 43 W. R. 401 - 271, 273 
 De Bouchont v. Goldsmid, 5 Yes. 213 - 436 
 
 Defries and Sons, (1909) 2 Ch. 423 - 287, 295 
 
 Defries & Co., Bowen v., (1904) 1 Ch. 37 ; 73 L. J. Ch. 1 ; 52 W. R. 
 
 253 - - - - - - - 282 
 
 De la Rue (Thomas) & Co., (1911) 2 Ch. 361 - - - - 96 
 
 Delta Syndicate, 30 C. D. 153 ; 54 L. J. Ch. 724 ; 53 L. T. 559; 33 
 W. R. 839 - - - - - - - - 122 
 
 De Mattos v. Gibson, 4 De G. & J. 276 - 156, 291 
 
 Demerara Rubber Co., Re, (1913) 1 Ch. 331 - - - - 424 
 
 Denham & Co., In re, 25 C. D. 752; 50 L. T. 523; 32 W. R. 
 
 487 - - - - - - 200, 203, 205, 206, 210 
 
 Dennison, Simpson v., 10 Hare, 51- - - - -66 
 
 Denton Colliery Co., 18 Eq. 16 121 
 
 Denton v. Macneil, 2 Eq. 352; 14 L. T. 721 ; 14 W. R. 813 - - 355 
 
 De Pass’s Case, 4 De G. & J. 544 - 130, 133 
 
 Derby Canal Co. v. Wilmot, 9 East, 359 - 259 
 
 Dermatine Co. v. Ashworth, 21 T. L. R. 510 - - 177, 199, 248, 266 
 
 De Rosaz’s Case, 21 L. T. 10 - - - - - - 109 
 
 Derry v. Peek, 14 App. Cas. 337 ; 58 L. J. Ch. 864 ; 61 L. T. 265 ; 
 
 38 W. R. 33 - - - - - 345, 359, 442 
 
 De Ruvigne’s Case, 5 C. D. 306 ; 46 L. J. Ch. 360 ; 36 L. T. 329 - 206 
 
 Descours, Parry & Co., W. N. (1909) 50 397 
 
 Devala Provident Gold Mining Co., In re, 22 Ch. D. 593 - - 355 
 
 Development Co. of Central and West Africa, (1902) 1 Ch. 547 ; 50 
 W. R. 456 ; 86 L. T. 323 - - - - - - 97 
 
 Devenish, Pulsford v., (1903) 2 Ch. 625 ; 73 L. J. Ch. 35; 52 W. R. 
 
 73 - - - - - - - 402, 409, 421 
 
 De Yerges v. Sandeman, Clark & Co., (1902) 1 Ch. 579 - - 145 
 
 De Waal v. Adler, 12 App. Cas. 141 - - - - 135 
 
 Dexine Patent Packing and Rubber Co., 88 L. T. 791 - - 91 
 
 Dexter, Hilder v., (1902) A. C. 474 ; 71 L. J. Ch. 781 ; 87 L. T. 311 ; 
 
 7 Com. Cas. 258 - - - - - 105, 335, 342 
 
 Deyes v. Wood, W. N. (1911) 51 ; (1911) 1 K. B. 806 - - 296 
 
 p. c 
 
XXXIV 
 
 TABLE OF CASES. 
 
 Dia — Dun page 
 
 Diamond Fuel Co., 13 C. D. 400 ----- 395 
 
 Dicido Pier Co., In re, (1891) 2 Ch. 354; 64 L. T. 695 ; 39 W. B. 
 
 486- - - - - - - - 95,97 
 
 Dickinson v. Yalpy, 10 B. & C. 128; 5 M. & B. 126 - 264 
 
 Dickon, Swaby v., 5 Sim. 629 - - - - - 326 
 
 Dickson, Holland v., 37 C. D. 669 ----- 223 
 
 Direct Spanish Cable Co., 34 C. D. 307 ; 56 L. J. Ch. 353 ; 55 L. T. 
 
 804 ; 35 W. E. 209 - - - - - - - 95 
 
 Direct Spanish Telegraph Co., Bannatyne v ., 31 C. D. 287 ; 56 L. J. 
 
 Ch. 107; 58 L. T. 716; 35 W. E. 125 - - - - 95 
 
 Discoverers Finance Corporation, Lindlar’s Case, (1910) ICh. 312 - 130 
 Discoverers Finance Corporation, Cooper’s Case, (1910) 1 Ch. 207 
 (C. A.) - - - - - - - 130 
 
 Dixon v. Kennaway & Co., (1900) 1 Ch. 833; 69 L. J. Ch. 501; 82 
 L. T. 527 ; 7 Manson, 446 - - - - - - 144 
 
 Dixon, Mangles v., 3 H. L. C. 702 - - - - 292 
 
 Dodd, Sovereign Life Assurance Co. v., (1892) 2 Q. B. 573 - - 405 
 
 Doecham Gloves, Ltd., Be, (1913) 1 Ch. 226 - 100 
 
 Doman’s Case, 3 C. D. 21 - - - - 43, 49 
 
 Dominion of Canada Freehold Estate Co., Be, 55 L. T. 347 - 321, 431 
 
 Dominion of Canada Syndicate v. Brigstocke, (1911) 2 K. B. 648 
 
 342, 377 
 
 Doncaster Building Society, 3 Eq. 158 - - - - 390 
 
 Dore Gallery Co., W. N. (1891) 98 ; 62 L. T. 758 ; 38 W. E. 491 - 395 
 
 Dover Coalfields Extension, Limited, Be, (1908) 1 Ch. 65 ; 77 L. J. 
 
 Ch. 94 ; 98 L. T. 31 (C. A.) ----- 185 
 
 Dovey v. Cory, (1901) A. C. 477; 70 L. J. Ch. 753; 85 L. T. 257; 
 
 50 W. E. 65 - - - 200, 202, 204, 217, 218, 227, 440 
 
 Downes v. Ship, L. E. 3 H. L. 343; 37 L. J. Ch. 642; 19 L. T. 741- 109 
 Downy, Limited (Archibald D.), W. N. (1900) 152 - - - 122 
 
 Dowson, Be, W. N. (1889) 222 - - - - - 123 
 
 Drew, National Exchange Bank v., 2 Macq. 124; 25 L. T. 223 - 346 
 
 Driffield Gas Light Co., In re, (1898) 1 Ch. 451 ; 78 L. T. 162 - 416 
 
 Drincqbier v. Wood, (1899) 1 Ch. 393; 68 L. J. Ch. 181; 79 L. T. 
 
 548; 47 W. E. 252; 6 Manson, 76 - 355, 358 
 
 Driver v. Broad, (1893) 1 Q. B. 744 ; 63 L. J. Q. B. 12 ; 69 L. T. 169 - 316 
 Drogheda Steam Packet Co., Be, (1903) 1 Ir. E. 512 - - - 220 
 
 Du Boulay v. Du Boulay, L. E. 2 P. C. 441 ; 17 W. E. 594 - - 249 
 
 Duck v. Tower Galvanizing Co., (1901) 2 K. B. 314 ; 70 L. J. K. B. 
 
 625 ; 84 L. T. 847 - - - - - - 45, 46, 309 
 
 Duckett v. Gover, 6 C. D. 82 ; 25 W. E. 544 ; 46 L. J. Ch. 407 - 242 
 
 Duder v. Amsterdamsch Trustees Kantoor, (1902) 2 Ch. 132 - 274 
 
 Duffin v. Mexican Gold Co., W. N. (1890) 116 - - -123 
 
 Duke of Manchester, Smith v., 24 C. D. 611 ; 53 L. J. Ch. 96; 49 
 
 L. T. 96; 32 W. E. 83 211 
 
 Duncan & Co., Be, (1905) 1 Ch. 307 ; 74 L. J. Ch. 188 ; 92 L. T. 
 
 108; 53 W. E. 299 409, 412 
 
TABLE OF CASES. 
 
 XXXV 
 
 Dun — Ebb page 
 
 Duncan, Davison v., 7 E. & B. 229 ----- 174 
 Dunderland Iron Co., (1909) 1 Ch. 446 - 323, 393 
 
 Dunlop v. Dunlop, 21 C. D. 583 ; 48 L. T. 89 ; 31 W. R. 211 - 151, 160 
 Dunlop v. Higgins, 1 H. L. C. 381 ; 12 Jur. 295 - - 103 
 
 Dunlop Truffault Cycle Co., Be, Shearman’s Case, 66 L. J. Ch. 25- 352 
 Dunn, Parker v., 8 Beav. 497 ----- 326 
 
 Dunstan v. Imperial, &c. Co., 3 Bar. & Ad. 125 - - - 1S5 
 
 Dunster’s Case, (1894) 3 Ch. 473; 63 L. J. Ch. 885; 71 L. T. 528 
 43 W. R. 164 - - - - - - - 102 
 
 Duranty’s Case (1858), 26 Beav. 268 ----•' 357 
 Dutton v. Marsh, L. R. 6 Q. B. 361 ----- 266 
 
 E. 
 
 Eade, Ireland v., 7 Beav. 55 - - - - - - 326 
 
 Eaglesfield v. Marquis of Londonderry, 4 0. D. 693; 25 W. R. 190; 
 
 35 L. T. 822 
 
 Eales v. Cumberland Lead Co., 6 H. & N. 481 
 Eales, Watson v., 23 Beav. 294 - 
 
 Earl of Chesterfield, Ford v., 21 Beav. 426 - - - 
 
 Earl of Jersey v. Guardians of Poor of Neath, 22 Q. B. D. 548 
 Earl of Perth, Lodwich v., 1 T. L. R. 76 
 Earl Stamford, Lowndes v., 18 Q. B. 425 - - - 
 
 Earle, Burland v., (1902) A. C. 83; 85 
 P. C. 1 ; 50 W. R. 241 - 40, 50, 57 
 
 Earle, Webb v., 20 Eq. 557 ; 44 L. J. Ch. 608 ; 
 
 East v. Bennett Brothers, (1911) 1 Ch. 163 - 
 
 East Anglian Rail. Co., Russell v., 3 M. & G. 125 
 East Higham Rail. Co. v. Eastern Counties Rail. Co., 11 C 
 East Holyford Rail. Co., Mahoney v. t L. R. 7 H. L. 869 
 
 L. T. 553; 71 L. J. 
 170, 171, 180, 185, 213, 
 24 W. R. 46 - 84, 
 
 353 
 189 
 151 
 329 
 
 71 
 
 354 
 187 
 
 242 
 
 214 
 
 169 
 
 67 
 
 East Lancashire Rail. Co., Vance v., 3 K. & J. 50 
 East Pant Mining Co. v. Merryweather, 2 H. & M. 254 ; 
 216 ; 10 Jur. N. S. 1231 - - - - 
 
 B. 775 - 5 
 
 - 44, 45, 46, 
 191, 197, 258 
 - 66 
 13 W. R. 
 
 - 171 
 
 Eastern and Australian Steamship Co., 68 L. T. 321 ; 41 W. R. 373 - 122 
 Eastern, &c. Co., Mutter v., 38 C. D. 92 - - - - 222 
 
 Eastern Counties Rail. Co., Colman v., 10 Beav. 1 - 5, 68 
 
 Eastern Counties Rail. Co., East Higham Rail. Co. v., 11 C. B. 775 - 5 
 
 Eastern Counties Rail. Co., Hawkes v., 5 H. L. C. 331 - 5, 73 
 
 Eastman Photographic Materials Co., Staples v., (1896) 2 Ch. 303; 
 
 65 L. J. Ch. 682 ; 74 L. T. 479 
 
 Ebbett’s Case, 5 Ch. 302 ; 39 L. J. Ch. 679 ; 22 L. T. 424; 18 W. R. 
 
 394 ------- 
 
 Ebbw Vale Co., In re (1877), 4 C. D. 827; 46 L. J. Ch. 241; 36 
 L. T. 308 - - - - - - - 95, 96, 
 
 c2 
 
 - 84 
 
 - 115 
 
 217 
 
XXX VI 
 
 TABLE OF CASES. 
 
 Ebe — Emm pagb 
 
 Ebenezer Timmins & Son, Limited, 50 W. E. 134; 18 T. L. E. 29 - 122 
 Eberle’s Hotel Co. v. Jonas, 18 Q. B. D. 459 - 410 
 
 Ebury, Beattie v., 7 Ch. 777 ; 41 L. J. Cb. 777; 27 L. T. 398; 20 
 W. E. 994 -------- 355 
 
 Eddystone Granite Quarries Co., Eollit v., (1892) 3 Ch. 75; 61 L. J. 
 
 Ch. 567 ; 40 W. E. 667 - - - - - - 321 
 
 Eddystone Marine Insurance Co., In re, (1893) 3 Ch. 9 ; 62 L. J. 
 
 Ch. 742 ; 69 L. T. 363 ; 41 W. E. 462 - - 68, 117 
 
 Edelstein v. Schuler & Co., 50 W. E. 498; 17 T. L. E. 597 ; (1902) 
 
 2 K. B. 144 - - - - - - 306 
 
 Eden v. Eidsdale, &c. Co., 23 Q. B. D. 368 ; 58 L. J. Q. B. 579 ; 61 
 L. T. 444; 38 W. E . 55 - - - - - - 193 
 
 Edgington v. Eitzmaurice, 29 C. D. 483 ; 55 L. J. Ch. 650 ; 53 L. T. 
 
 369; 33 W. E. 911 - - - - - - 230, 355 
 
 Edinburgh and District Aerated Water Manufacturers’ Defence 
 Association v. Jenkinson, 5 Ct. of Sess. Cas. 1159 - - 9 
 
 Edinburgh Northern Trams Co., Mann v., (1893) A. C. 69; 62 L. J. 
 
 P. C. 74 ; 68 L. T. 96 ; 57 J. P. 245 5, 332 
 
 Edmonds v. Foster, 45 L. J. M. C. 41 - - - - 123 
 
 Edwards v . Edwards, 2 C. D. 291 ; 24 W. E. 713; 34 L. T. 472 ; 45 
 L. J. Ch. 391 - - - - - - 325 
 
 Edwards v. Midland Eail. Co., 6 Q. B. D. 287 - - - 74 
 
 Edwards, Eamskill v., 31 C. D. 100 ; 55 L. J. Ch. 81 ; 53 L. T. 949 ; 
 
 34 W. E. 96 - - - - - - - 212 
 
 Edwards v. Standard Eolling Stock Syndicate, (1893) 1 Ch. 574 ; 62 
 L. J. Ch. 605; 68 L. T. 193, 633; 41 W. E. 343 - - - 325 
 
 Egmont (Lord), Ware v., 4 D. M. & G. 460 - 235 
 
 Ehrmann Bros., (1906) 2 Ch. 697 ; 75 L. J. Ch. 817 ; 22 T. L. E. 734 
 (C. A.), reversing Joyce, J., in 54 W. E. 555 - 282 
 
 Eichbaum v. City of Chicago, &c. Co., (1891) 3 Ch. 459 ; 61 L. J. Ch. 
 
 28; 65 L. T. 704; 40 W. E. 153 - - - - - 94 
 
 Electrical Engineering Co., Brunton v., (1892) 1 Ch. 434; 61 L. J. 
 
 Ch. 256 ; 65 L. T. 745 - - - 290, 312, 320 
 
 Electromobile Co. v. British Electromobile Co., 97 L. T. 196; 23 
 T. L. E. 192 - - - - - - 27, 249 
 
 Eley v. Positive, &c. Co., 1 Ex. Div. 88 ; 45 L. J. Ex. 451 ; 34 L. T. 
 
 190 ; 26 W. E. 338 - - - - - 40, 42, 262 
 
 Elias v. Continental, &c. Co., (1897) 1 Ch. 511 ; 66 L. J. Ch. 273; 76 
 L. T. 229; 45 W. E. 313 - - - - - -328 
 
 Elkington’s Case, L. E. 2 Ch. 511 ; 36 L. J. Ch. 593; 16 L= T. 301 ; 
 
 15 W. E. 665 113 
 
 Elmore’s German Metal Co., 85 L. T. 767 (C. A.) - - - 321 
 
 Emma Co. v. Lewis, 4 C. P. D. 396 ; 40 L. T. 168 ; 48 L. J. C. P. 
 
 257 ; 27 W. E. 836 - - - - - - - 331 
 
 Emma Silver Mining Co. v. Grant, 11 C. D. 918 (secret profit); 17 
 C. D. 122 (bankruptcy) ----- 332, 336 
 
 Emma Silver Mining Co. Re, (production of books), L. E. 10 Ch. 194 - 398 
 
TABLE OF CASES. 
 
 XXXV11 
 
 Emm— Eva page 
 
 Emmerson’s Case (1866), L. R. 1 Ch. 433; L. R. (1866) 2 Eq. 236 - 137, 409 
 Empire Co. (1890), 44 C. D. 402; 59 L. J. Ch. 345; 62 L. T. 493; 
 
 38 W. R. 747; 2 Meg. 191 - - - - - - 431 
 
 Empire Trust, In re , 64 L. T. 221 - 78, 270 
 
 Empress Engineering Co., Be (1878), 16 C. D. 125 ; 43 L. T. 742 ; 
 
 29 W. R. 342 - - - - - 253, 323 
 
 Engel v. South Metropolitan Co., (1892) 1 Ch. 442 ; 61 L. J. Ch. 369 ; 
 
 66 L. T. 155 ; 40 W. R. 282 - - - - - 322 
 
 Englefield Colliery Co., 8 C. D. 388 ; 38 L. T. 112 - 206, 212, 335 
 
 English and Colonial Produce Co., (1906) 2 Ch. 435 ; 75 L. J. Ch. 831 ; 
 
 95 L. T. 580; 22 T. L. R. 669 (C. A.) - - - 253,335 
 
 English and Colonial Produce Co., Sutton v., (1902) 2 Ch. 502 ; 71 
 L. J. Ch. 685 ; 87 L. T. 438 ; 50 W. R. 571 - 131, 134, 140, 184 
 
 English and Scotch, &c. Trust v. Brunton, (1892)2 Q. B. 700 (C. A.); 
 
 62 L. J. Q. B. 136; 69 L. T. 406; 41 W. R. 133 - - 290,312 
 
 English Joint Stock Bank, Barwick v., L. R. 2 Ex. 259 ; 36 L. J. 
 
 Ex. 147 - - - - - - 74, 439 
 
 Enthoven, Kellock v., L. R. 9 Q. B. 241 ; 43 L. J. Q. B. 90; 22 
 W. R. 322 - - - - - - - 137 
 
 Erlanger v. New Sombrero, 3 App. Cas. 1218 ; 48 L. J. Ch. 73; 39 
 L. T. 269; 27 W. R. 65 - - - 75, 332, 333, 334, 441 
 
 Ernest v. Croystill, 2 De G. F. & J. 175 - 180 
 
 Ernest v. Loma Co., (1897) 1 Ch. 1 ; 66 L. J. Ch. 17 ; 75 L. T. 317; 
 
 45 W. R. 86 - - - - - 172, 174, 239 
 
 Ernest v. Nicholls (1857), 6 H. L. C. 401 ; 3 Jur. N. S. 919 - 44, 56, 
 
 65, 68, 425, 441 
 
 Esberger & Son, Ltd. v. Capital and Counties Bank, (1913) 2 Ch. 
 
 366 -------- 280 
 
 Esdaile, Reg. v. (1858), 1 F. & E. 213 - 210, 215 
 
 Esparto Trading Co., Be , 12 C. D. 191; 48 L. J. Ch. 573; 28 W. R. 
 
 146- - - - - - - - 102,151 
 
 Espuela Land and Cattle Co., 48 W. R. 684; (1909) 2 Ch. 187 85, 168 
 
 Estates Investment Co., Ross v., 3 Ch. 682; 37 L. J. Ch. 873; 19 
 L. T. 61 ; 16 W. R. 1151 - 346, 353, 354 
 
 Etheridge v. Central Uruguay Railway, (1913) 1 Ch. 425 - - 430 
 
 Euphrates and Tigris Steam Navigation Co., (1904) 1 Ch. 360; 73 
 L. J. Ch. 175; 90 L. T. 56- - - - - - 80 
 
 Eupion Fuel and Gas Co., Be, W. N. (1875) 10 210 
 
 European Banking Co., 2 Eq. 521 - - - - 399 
 
 European Central Railway, Be (1876), 4 C. D. 33; 46 L. J. Ch. 57 ; 
 
 35 L. T. 583 ; 25 W. R. 92 - - - - 286, 329 
 
 European Central Rail. Co., Heymann v., 7 Eq. 154 - - - 346 
 
 Evan Jones, Powell v., (1905) 1 K. B. 11 - - - 436 
 
 Evans’ Case (1867), L. R. 2 Ch. 420; 36 L. J. Ch. 501; 16 L. T. 
 
 252 ; 15 W. R. 543 - - - - - - - 102 
 
 Evans, Ex parte, 11 C. D. 691 ; 13 C. D. 252 - 325 
 
 Evans v. Chapman, 86 L. T. 381 - - - - - 50 
 
XXXV111 
 
 TABLE OF CASES. 
 
 Eva— Far page 
 
 Evans, Jones v., (1913) 1 Ch. 23 220 
 
 Evans v. Eival Granite Quarries, (1910) 2 K. B. 979 - - 310 
 
 Evans, Re , W. N. (1892) 126 397, 398 
 
 Evans, Spackman v., L. R. 3 H. L. 171 ; 37 L. J. Ch. 752 ; 19 L. T. 
 
 151 ------ 149, 151, 227 
 
 Evans’ Trustees, Bank of Ireland v., 5 H. L. C. 389 - 258 
 
 Everett v. Automatic, &c. Co., (1892) 3 Ch. 506; 62 L. J. Ch. 241 ; 
 
 67 L. T. 349 - - - - - - - 159 
 
 Evershed, Wallace v., (1899) 1 Ch. 891 - - - - 328 
 
 Exchange Bank v. Reg., 11 App. Cas. 157 - 410 
 
 Exchange Drapery Co., In re, 38 C. D. 171 ; 57 L. J. Ch. 914 ; 58 
 L. T. 544 ; 36 W. R. 444 - - - - - - 150 
 
 Exchange Trust, Limited, Larkworthy’s Case, (1903) 1 Ch. 711 ; 72 
 L. J. Ch. 387 ; 88 L. T. 56 - - - - - - 152 
 
 Exeter and Crediton Rail. Co. v. Buller, 5 Ry. Cas. 211 ; 11 Jur. 527 - 242 
 Exhall Coal Co., Wyley v., 33 Beav. 538 - - - - 414 
 
 Exploring Land and Minerals Co. v. Kolchmann, 94 L. T. 234 - 200, 205 
 Explosives Co., Moore v., 56 L. J. Q. B. 235 - 355 
 
 Explosives Co., Reid v. (1887), 56 L. J. Q. B. 388 ; 19 Q. B. D. 264 ; 
 
 57 L. T. 439 ; 35 W. R. 509 263, 327 
 
 F. 
 
 Faber, Nelson & Co. v., (1903) 2 K. B. 367 ; 72 L. J. K. B. 771 ; 89 
 L. T. 21 - - - - - - 309, 310 
 
 Fairbairn, &c. Co., Re, (1893) 3 Ch. 450 ; 63 L. J. Ch. 8 ; 69 L. T. 
 
 415; 42 W. R. 155- - 148,152 
 
 Fairlie, Freeman v., 3 Nev. 40 _____ 222 
 
 Famatina Co. v. Bury, (1910) A. C. 439 - - 69, 317 
 
 Famatina Development Corporation, (1914) 2 Ch. 271 - - 211 
 
 Family Endowment Society, 5 Ch. 118 - - - - 384 
 
 Fareham Brick Co., Totterdell v., L. R. 1 C. P. 674; 14 W. R. 919 ; 
 
 35 L. J. C. P. 278 ; 12 Jur. N. S. 901 - - - 197 
 
 Farmer, London and Northern S. S. Co. v., (1914) W. N. 200; 111 
 
 L. T. 204 - - - - - - - - 150 
 
 Farmer v. Goy & Co., (1900) 2 Ch. 149; 69 L. J. Ch. 481 ; 83 L. T. 
 
 309 ; 48 W. R. 425 - - - - - - 292, 293 
 
 Farmers’ United, Limited, (1900) 2 Ch. 442; 69 L. J. Ch. 684; 83 
 L. T. 406 - 123 
 
 Farnham United Breweries, Northern Assurance, Ltd. v., (1912) 
 
 2 Ch. 125 - - - 321 
 
 Farnol, Eades, Irvine & Co., Re, (1915) 1 Ch. 22 - - - 325 
 
 Farrar v. Farrars, 40 C. D. 395 — 409 ; 58 L. J. Ch. 185 ; 60 L. T. 
 
 121 ; 37 W. R. 196 
 
 57 
 
TABLE OF CASES. 
 
 XXXIX 
 
 Fau— For page 
 
 Faure Electric Accumulator Co. v. Phillipart, 58 L. T. R. 52 5 - 147, 
 
 148, 151, 153, 192, 195 
 
 Faure Electric Co., 40 C. D. 141 ; 58 L. J. Ch. 48; 59 L. T. 918; 37 
 W. R. 116; 1 Meg. 99 179, 204, 340 
 
 Fearon, Amor v., 9 A. & E. 548 ----- 262 
 
 Feilden, Westmoreland Slate Co. v., (1891) 3 Ch. 15 - - - 405 
 
 Fenwick, Stobart & Co., (1902) 1 Ch. 507 ; 86 L. T. 193 - 235, 260 
 
 Ferguson v. Wilson, 2 Ch. 77 - - - 115, 177, 178, 179, 199 
 
 Fernandez’s Executors, 5 Ch. 314 - - - - -139 
 
 Fernie, Hallows v ., 3 Ch. 467 ; 36 L. J. Ch. 267 ; 18 L. T. 340; 16 
 W. R. 873 - - - - - - - - 355 
 
 Fewings, Ex porte (1884), 25 C. D. 338 ; 53 L. J. Ch. 545 ; 20 L. T. 
 
 109 ; 32 W. R. 352 - - - - - - - 286 
 
 Finance and Issue v. Canadian Produce Corporation, (1905) 1 Ch. 37 ; 
 
 53 W. R. 170 - - - - - - - 108 
 
 Financial Corporation, Re, 28 W. R. 760 - - - - 211 
 
 Financial Corporation, Clinch v., 5 Eq. 461 ; 4 Ch. 117 ; 18 L. T. 
 
 197 ; 37 L. J. Ch. 281 167, 175 
 
 Findlay v. Waddell (1910), S. C. 670, Ct. of Sess. - - 227, 420 
 
 Firbank’s Executors v. Humphrys, 18 Q. B. D. 54 ; 56 L. J. Q. B. 
 
 57; 56 L. T. 36; 35 W. R. 92 - - - 145,190,276 
 
 Fisher v. Black and White Publishing Co., (1901) 1 Ch. 174 ; 70 L. J. 
 
 Ch. 175 ; 84 L. T. 305 ; 49 W. R. 310 (C. A.) - - 215 
 
 Fisher’s Case (1885), 31 C. D. 120 ; 55 L. J. Ch. 497, 597; 53 L. T. 
 
 832 ; 34 W. R. 49, 335 - - - - - - 113 
 
 Fitzgerald v. Persse, (1908) 1 Ir. R. 279 - - - - 319 
 
 Fitzmaurice, Edgington v., 29 C. D. 459 ; 55 L. J. Ch. 650 ; 53 L. T. 
 
 369; 33 W. R. 911 ----- 230, ,355 
 
 Fleetwood and District Syndicate, (1915) 1 Ch. 486 - 402 
 
 Fleetwood Estate Co., W.N. (1897) 20 - - - - 78 
 
 Flitcroft’s Case, 21 Ch. Div. 535 ; 52 L. J. Ch. 217 ; 48 L. T. 86; 31 
 W. R. 174 - - - 55, 56, 179, 206, 207, 215, 219, 221, 407 
 
 Floating Dock of St. Thomas, (1891) 1 Ch. 691 - - - 96 
 
 Florence Land Co., 10 C. D. 530 ; 48 L. J. Ch. 137 ; 39 L. T. 589; 27 
 W. R. 236 - - - - - - 290, 309, 310, 311 
 
 Florence Land Co., Norton v. (1877), 7 C. D. 332 ; 38 L. T. 377 ; 26 
 W. R. 123 - - - - - - - - 285 
 
 Follit v. Eddystone Granite Quarries Co., (1892) 3 Ch. 75; 61 L. J. 
 
 Ch. 567 ; 40 W. R. 667 - - - - - - 321 
 
 Forbes’ Case, 8 Ch. 775 - - - - - - 189 
 
 Ford, Bloomenthal v., (1897) A. C. 156; 66 L. J. Oh. 253; 76 L. T. 
 
 205 ; 45 W. R. 449 - - - - 75, 136, 144, 440 
 
 Ford, Bray v., (1896) A. C. 44; 65 L. J. Q. B. 213 ; 73 L. T. 609 - 
 
 192, 193, 436 
 
 Ford v. Earl of Chesterfield, 21 Beay. 426 - 329 
 
 Fordyce v. Bridges, 1 H. L. C. 4 - - - - 272, n. 
 
 Foreign and Colonial Trust, Re, (1891) 2 Ch. 395; 65 L. T. 78; 39 
 W. R. 699 - 
 
 78 
 
xl 
 
 TABLE OF CASES. 
 
 For-Ful page 
 
 Foreign Gas Co., Bower v., W. N. (1877) 222 - 320 
 
 Fore Street, &c. Co., 59 L. T. 214; 1 Meg. 67 - - - 94 
 
 Forest of Dean, &c. Co., 10 C. D. 450; 40 L. T. 287; 27 W. R. 
 
 594 - - - - - - - 179, 201, 204, 205 
 
 Forrest v. Manchester Rail. Co., 30 Beav. 40 - - - - 67 
 
 Forwood, Costa Rica Co. v., (1900) 1 Ch. 756 ; on app., W. N. (1901) 
 
 44; (1901) 1 Ch. 746 192, 193, 194 
 
 Forwood, Rhodes v., 1 A. C. 256 ----- 263 
 
 Foss v. Harbottle, 2 Hare, 461 - 40, 176, 191, 441 
 
 Foster, Edmonds v ., 45 L. J. M. C. 41 - - - - 123 
 
 Foster, Pearce v., 17 Q. B. D. 5 36; 55 L. J. Q. B. 306; 54 L. T. 664 262 
 
 Foster v. Borax Co., (1901) 1 Ch. 326 ; W. N. (1899) 34 ; 83 L. T. 638 ; 
 
 49 W. R. 212 - - - - - 66, 309, 310, 325 
 
 Foster v. Coles, 22 T. L. R. 555 - - - - - 84 
 
 Foster v. New Trinidad Co., (1901) 1 Ch. 208 ; 70 L. J. Ch. 123 ; 49 
 W. R. 119; 8 Manson, 47 - - - - - 215, 217 
 
 Fothergill, Hardy v. (1888), 13 A. C. 351 ; 58 L. J. Q. B. 44 ; 59 L. T. 
 
 273 ; 37 W. R. 177 410, 441 
 
 Foucar & Co., Re, (1913) W. N. 83 - - - - - 100 
 
 Foweraker, Simultaneous Colour Printing Synd. v., (1901) 1 K. B. 
 
 771 ; 70 L. J. K. B. 453; 8 Manson, 307 - - 309, 318 
 
 Fowler v. Broads Patents, &c. Co., (1893) 1 Ch. 724; 62 L. J. Ch. 
 
 373 ; 68 L. T. 576 ; 41 W. R. 247 - - - - - 273 
 
 Fowler, Cook v. (1874), L. R. 7 H. L. 27 - - - - 286 
 
 Fox, Ex parte, L. R. 6 Ch. 176 _____ 424 
 
 France v . Clark, 26 C. D. 263; 53 L. J. Ch. 585; 50 L. T. 1 ; 32 
 W. R. 466 - - - - - - - 134, 145 
 
 Francke, Re, 57 L. J. Ch. 437 _____ 327 
 
 Francklyn, Halifax Sugar Co. v., 59 L. J. Ch. 591 ; 62 L. T. 56; 
 
 2 Meg. 129 - - - - - - - 195, 233 
 
 Frankenburg v. Great Horseless Carriage, (1900) 1 Q. B. 504; 69 
 L. J. Q. B. 147 ; 81 L. T. 684 - - - - - 358 
 
 Fraser, Henthorn v., (1892) 2 Ch. 27 ; 61 L. J. Ch. 373; 66 L. T. 439 ; 
 
 40 W. R, 433 - - - - - - 103, 109 
 
 Freehold Land Co., Kent v., 3 Ch. 493 - - - - 353 
 
 Freeman v. Cooke, 2 Ex. 654 - - - - - -143 
 
 Freeman v. Fairlie, 3 Nev. 40 - 222 
 
 Frost (S.) & Co., (1898) 2 Ch. 556; (1899) 2 Ch. 207 - - 121 
 
 Fruit and Vegetable Association v. Kekewich, (1912) 2 Ch. 52 - 165 
 
 Fuke, Boschoek Proprietary Co. v., (1906) 1 Ch. 148; 75 L. J. Ch. 
 
 261 ; 94 L. T. 398 ; 54 W. R. 359 - - - 164, 184, 186 
 
 Fuller v. Glyn, Mills, Currie & Co., (1914) 2 K. B. 168 - - 145 
 
TABLE OF CASES. xli 
 
 G. 
 
 Gab — Gen page 
 
 Gaboriau, Rex v., 11 East, 77 _____ 176 
 
 Gadd v. Houghton, 1 Ex. D. 357 - - - - 199, 255 
 
 Gallagher, Slater and Mason’s Case, 46 L. T. 54; 30 W. R. 378 - 415 
 
 Gallard, Ex parte , (1896) 1 Q. B. 68 ; 65 L. J. Q. B. 199 ; 73 L. T. 
 
 457 ; 44 W. R. 121 ; 2 Manson, 515 (C. A.) - - - 403 
 
 Galloway v. Halle Concerts Soc., (1915) 2 Ch. 233 - - 148, 149 
 
 Galloway v. Schill & Co., (1912) 2 K. B. 354- - 123 
 
 Gallsworthy v. Selby Dam Commissioners, (1892) 1 Q. B. 348 ; 61 
 L. J. Q. B. 372; 66 L. T. 17 ; 8 T. L. R. 60 - - - 75 
 
 Gandy v. Gandy (1885), 30 C. D. 57 ; 54 L. J. Ch. 1154; 53 L. T. 
 
 306; 33 W. R. 803 - - - - - - - 323 
 
 Garden Gully, &c. Co. v. McLister, 1 App. Cas. 39 ; 33 L. T. 408 ; 24 
 W. R. 744 - - - - - - 147, 151, 152 
 
 Gardiner, Macdougall v. (1875), L. R. 10 Ch. 606; 1 C. D. 13; 45 
 L. J. Ch. 27; 24 W. R. 118 - - 40, 50, 164, 165, 176, 242 
 
 Gardner v. Iredale, (1912) 1 Ch. 700 - - - 117, 163, 368 
 
 Gardner v. London, Chatham and Dover Railway, 2 Ch. 201 - 283 
 
 Garnet, Armitage v. % (1893) 3 Ch. 337 - 220 
 
 Garrard v. Hardey, 5 Man. & Gr. 471 - - - 6 
 
 Gartside v. Silkstone, &c. Co. (1882), 21 C. D. 762; 51 L. J. Ch. 
 
 828 ; 47 L. T. 76 ; 31 W. R. 36 - - - - - 320 
 
 Gas Light and Coke Co., Davies v., (1909) 1 Ch. 248 - - 125 
 
 Gas Meter Co., Andrews v., (1897) 1 Ch. 361 ; 66 L. J. Ch. 246; 76 
 L. T. 132; 45 W. R. 321 - - - 48,50,83,88,90,215,439 
 
 Gaskell, Gosling v., (1897) A. C. 575 - - - 296, 326, 328 
 
 Gee v. Bell, 35 C. D. 160 - - - - - 327 
 
 Geisse v. Taylor, (1905) 2 K. B. 658 ; 74 L. J. K. B. 912 ; 93 L. T. 
 
 534 (Div. Ct.) - - - - - - - 319 
 
 Geldert, Municipality of Picton v., (1893) A. C. 524 - 351 
 
 General Accident Co., (1904) 1 Ch. 147 ; 73 L. J. Ch. 84 ; 89 L. T. 
 
 699 ; 52 W. R. 332 - - - - - - - 418 
 
 General Auction, &c. Co. v. Smith, (1891) 3 Ch. 432 ; 60 L. J. Ch. 
 
 723 ; 65 L. T. 188 ; 40 W. R. 106 - - - - 68, 269 
 
 General, &c. Co., Grill v ., L. R. 1 C. P. 603; affd., L. R. 3 0. P. 
 
 476 ; 35 L. J. C. P. 324 - - - - - - 202 
 
 General Commercial Trust, Yerner v., (1894) 2 Ch. 239 ; 63 L. J. Ch. 
 
 456; 70 L. T. 516 ----- 216,217,218 
 
 General Exchange Bank, Ex parte Lewis (1871), L. R. 6 Ch. 818 ; 40 
 L. J. Ch. 429 ; 24 L. T. 787 ; 19 W. R. 791 - 159 
 
 General Finance Co., National Trustee Co. of Australasia v., (1905) 
 
 A. C. 373 - - - - - - - - 207 
 
 General Incandescent Co., Armorduct Co. v., (1911) 2 K. B. 143 
 
 414, 421 
 
 General Industrial Development Syndicate, Limited, W. N. (1907) 23 - 100 
 General Motor Cab Co., 56 S. J. 573 ; (1913) 1 Ch. 377 - 294, 431 
 
xlii 
 
 TABLE OF CASES. 
 
 Gen — Gol page 
 
 General Phosphate Corporation, W. N. (1893) 142 - 393 
 
 General Rolling Stock Co., Re, 20 W. R. 762 ; L. R. 7 Ch. 646 409, 402 
 
 General Service Co., Re, (1891) 1 Ch. 496; 60 L. J. Ch. 586; 64 
 L. T. 272 - - - - - - - - 413 
 
 General South American Co., Re, 2 C. D. 337 ; 34 L. T. 706; 24 
 W. R. 891 - - - - - - - 277, 310 
 
 George Newman & Co., (1895) 1 Ch. 674; 64 L. J. Ch. 407 ; 72L.T.697; 
 
 43 W. R. 483 - - - - 56, 186, 206, 367, 371 
 
 George Whitechurch & Co., (1902) A. C. 117; 85 L. T. 349; 50 
 W. R. 218— H. L. (E.) ----- 139, 261 
 
 German Date Co., Re, 20 C. D. 169 ; 51 L. J. Ch. 564 ; 46 L. T. 327 ; 
 
 30 W. R. 717 - - - - - 71, 391, 394 
 
 German Mining Co., Re, 4 De G. M. & G. 19 ; 23 L. T. (O. S.) 200; 
 
 2 W. R. 543 - - - - - - 211, 275 
 
 Gerson v. Simpson, (1903) 2 K. B. 197 ; 72 L. J. K. B. 603 ; 89 L. T. 
 
 117 ; 51 W. R. 610 - - - - - - - 358 
 
 Gibb, Mersey Dock Trustees v., L. R. 1 H. L. 93 - - - 74 
 
 Gibb, Overend, Gurney & Co. v., L. R. 5 H. L. 480 ; 42 L. J. Ch. 67 
 
 201, 202, 204 
 
 Gibson, De Mattos v., 4 De G. & J. 276 - 156, 291 
 
 Gibson v. Barton, L. R. 10 Q. B. 329; 44 L. J. M. C. 81 ; 32 L. T. 
 
 396 ; 23 W. R. 858 123, 163, 245 
 
 Gibson v. Holland, L. R. 1 C. P. 1 - - - - - 256 
 
 Gilbert’s Case, 5 Ch. 559 ; 39 L. J. Ch. 837 ; 23 L. T. 341 ; 18 W. R. 
 
 938- - - - - - 130,146,148,188,190 
 
 Gill’s Case, 12 C. D. 755 ------ 405 
 
 Gillies, Davison v., 16 C. D. 347 n. ; 50 L. J. Ch. 192 n. ; 44 L. T. 92 n. 217 
 Gilpin, McCollin v., 5 Q. B. D. 390 - 177, 199 
 
 Glamorgan Iron & Coal Co., Marshall v., 7 Eq. 129 ; 38 L. Ch. J. 69 ; 
 
 19 L. T. 632 ; 17 W. R. 435 - - - - - - 44 
 
 Glasdir Copper Mines, English Electro-Metallurgical Co. v. Glasdir 
 Copper Mines, (1904) 1 C. D. 819 ; 73 L. J. Ch. 461 ; 90 L. T. 412 - 327 
 Glasdir Copper Mines, Re, W. N. (1905) 57 ; (1906) 1 Ch. 365 - 327 
 
 Glasgow and Transvaal Options, Sleigh v., G. F. 420 (Ct. of Sess.) - 341 
 Glasier v. Rolls (1889), 42 C. D. 436 ; 58 L. J. Ch. 820; 62 L. T. 133 ; 
 
 38 W. R. 113; 1 Meg. 196, 418 - - - - - 333 
 
 Glen, Hong Kong & China Co. v., (1914) 1 Ch. 527 - - - 117 
 
 Globe Trust, Re, (1915) W. N. 221 - - - - - 393 
 
 Glory Paper Mills, (1894) 3 Ch. 473 ----- 184 
 
 Glossop v. Glossop, (1907) 2 Ch. 370 ; 76 L. J. Ch. 610; 97 L. T. 372 - 188 
 Glover and Giles (1881), 18 C. D. 180 - - - - 54 
 
 Gluckstein v. Barnes, (1900) A. C. 240 ; 69 L. J. Ch. 385 ; 82 L. T. 
 
 393; 7 Manson, 321 (H. L.) 331, 332, 333, 334 
 
 Glyn v. Baker, 13 East, 509 ------ 307 
 
 Glyn, Mills, Currie & Co., Fuller v., (1914) 2 K. B. 168 - - 145 
 
 Gold Co., Re, 11 C. D. 719 ; 48 L. J. Ch. 281 ; 40 L. T. 5 ; 27 W. R. 
 
 341 - - - - - - - 170, 239, 393 
 
TABLE OF OASES. 
 
 xliii 
 
 Gol — Gra pagh 
 
 Gold Exploration Syndicate, Grant v., (1900) 1 Q,. B. 233 ; 69 L. J. 
 
 Q. B. 150; 82 L. T. 5; 48 W. R. 2S0 (0. A.) - ■■ -193 
 
 Gold Hill Mines, Re, 23 C. D. 210 ; 49 L. T. 66 ; 31 W. R. 853 - 391, 397 
 
 Gold Reefs of W. Africa, Allen v., (1900) 1 Oh. 656 ; 69 L. J. Oh. 266 ; 
 
 48 W. R. 452 ; 82 L. T. 210 - 47, 49, 50, 91, 151, 154, 166, 171, 233 
 
 Goldsborough Co., North Australian Co. v., 61 L. T. 717 - - 390 
 
 Goldsmid, De Bouchont v ., 5 Yes. 213 - 436 
 
 Goldsmith, Turner v., (1891) 1 Q. B. 544 - 263 
 
 Goodchap v. Roberts (1880), 14 C. D. 49 - - - - 286 
 
 Goodfellow v. Nelson Line, Ltd., (1912) 2 Ch. 234 - 321 
 
 Goodwin, Ferraira & Co., Ladenberg v., (1912) 3 K. B. 275 - - 281 
 
 Goodwin v. Robarts, 10 Ex. 337 ; 44 L. J. Ex. 157 ; on app., 1 App. 
 
 Cas. 476 ; 45 L. J. Ex. 748 ; 35 L. T. 179 ; 24 W. R. 987 - 302, 304, 
 
 305, 307 
 
 Gordillo v. Weguelin, 5 C. D. 303 - 286 
 
 Gorringe v. Irwell, &c. Works (1886), 34 C. D. 128; 53 L. J. Ch. 85; 
 
 55 L. T. 572 ; 35 W. R. 86 - - - - - 315, 399 
 
 Gorrissen’s Case, L. R. 8 Ch. 507 ; 42 L. J. Ch. 864; 28 L. T. 611 ; 
 
 21 W. R. 536 - - - - - - - 339 
 
 Gosling v. Gaskell, (1897) A. C. 575 - 296, 326, 328 
 
 Cover’s Case, 1 C. D. 182 ; 45 L. J. Ch. 83 ; 33 L. T. 619 ; 24 W. R. 
 
 125 - - - - - - - 356, 359, 361 
 
 Gover, Duckett v., 6 C. D. 82 ; 25 W. R. 544 ; 46 L. J. Ch. 407 - 242 
 
 Government Stock, &c. Co. v. Manila Rail. Co., (1897) A. C. 81 ; 66 
 
 L. J. Ch. 102 ; 75 L. T. 553; 45 W. R. 353 - - 309, 310 
 
 Government Stock Investment Co., (1892) 1 Ch. 597 ; 61 L. J. Ch. 
 
 381 ; 66 L. T. 608 ; 40 W. R. 387 - - - - - 78 
 
 Goy & Co., Farmer v., (1900) 2 Ch. 149 ; 69 L. J. Ch. 481 ; 83 L. T. 
 
 309 ; 48 W. R. 425 - - - - - 292, 293 
 
 Graham, Reg. v., 9 W. R. 738 _____ 173 
 
 Graham v. Yan Diemen’s Land Co., 26 L. J. Ex. 73 - - 151, 166 
 
 Grain’s Case, 1 C. D. 307 ; 45 L. J. Ch. 321 ; 33 L. T. 766 - - 7 
 
 Gramophone and Typewriter, (1908) 2 K. B. 89 ; 77 L. J. K. B. 39 ; 
 
 24 T. L. R. 480 (C. A.) - - - - - -190 
 
 Gramophone Co., Addis v., (1909) A. C. 488 - 263 
 
 Grant, Emma Silver Mining Co. v., 11 C. D. 918 (secret profit) ; 17 
 
 C. D. 122 (bankruptcy) ----- 332, 336 
 
 Grant, Household Fire Insurance Co. v., 4 Ex. D. 216 ; 48 L. J. Ex. 
 
 577 ; 41 L. T. 298 ; 27 W- R. 858 - - - - - 109 
 
 Grant, Moxham v., (1900) 1 Q. B. D. 88 ; 69 L. J. Q. B. 97 ; 7 Manson, 
 
 65 (C. A.) ------ 180,211,407 
 
 Grant, Twycross v., 2 C. P. D. 469 ; 46 L. J. C. P. 636; 36 L. T. 812 ; 
 
 25 W. R. 701 - - - - - 331, 360, 443 
 
 Grant v. Gold Exploration Syndicate, (1900) 1 Q. B. 233; 69 L. J. 
 
 Q. B. 150; 82 L. T. 5; 48 W. R. 280 (0. A.) - - -193 
 
 Grant v. United Switchback Co., 40 C. D. 135 ; 58 L. J. Ch. 211 ; 
 
 60 L. T. 525; 37 W. R. 312 - - 66, 75, 167, 168, 178, 186, 
 
 193, 241, 253 
 
xliv 
 
 TABLE OF CASES. 
 
 Gra— Gre page 
 
 Grave, Nant-y-glo, &c. Co. v., 12 C. D. 738 - 209 
 
 Gray v. Lewis, L. E. 8 Ch. 1035; 43 L. J. Ch. 281 ; 29 L. T. 12 ; 
 
 21 W. E. 923 - - - - - - - 50 
 
 Gray v. Pearson, 6 H. L. C. 106 - - - 69, 273 
 
 Gray v. Stone & Eunnell, 69 L. T. 282; W. N. (1893) 133; 3 E. 
 
 692 - - - - - - - - - 160 
 
 Great Britain Mutual, Be, 16 C. D. 246 ; 19 C. D. 39; 20 C. D. 35 - 390 
 Great Central Mining Co., Browning v., 5 H. & N. 856 - - 255 
 
 Great Cobar, Ltd., Be, (1915) 1 Ch. 682 - - - 326 
 
 Great Eastern Eail. Co., Abrath v., 11 App. Cas. 247 - - 74 
 
 Great Eastern Eail. Co., Att.-Gen. v., 5 A. C. 473 ; 49 L. J. Ch. 545 ; 
 
 42 L. T. 810; 28 W. E. 769 - - - - - 63 
 
 Great Eastern Eail. Co. v. Turner, 8 Ch. 149 ; 42 L. J. Ch. 83 ; 27 
 
 L. T. 697 ; 21 W. E. 163 - - - - - 55, 179, 180 
 
 Great Eingall Consolidated, Euben v., (1906) A. C. 439 - 46, 136, 
 
 143, 258, 261, 443 
 
 Great Horseless Carriage, Frankenburg v., (1900) 1 Q. B. 504 ; 69 
 L. J. Q. B. 147 ; 81 L. T. 684 - - - - - 358 
 
 Great Northern Co., Henry v ., 1 De G. & J. 606 ; 27 L. J. Ch. 1 ; 30 
 L. T. O. S. 141 ; 3 Jur. N. S. 1133 - - - - 84 
 
 Great Northern Eail. Co., Att.-Gen. v., 1 Dr. & Sm. 283 - - 68 
 
 Great Northern Eail. Co., Thairwall v., (1910) 2 K. B. 509 - - 221 
 
 Great Northern Salt Co., 44 C. D. 472; 59 L. J. Ch. 288 ; 62 L. T. 
 
 231; 2 Meg. 46 ----- 181,244,245 
 
 Great Western (Forest of Dean) Consumers’ Co., 21 C. D. 769 ; 51 
 L. J. Ch. 743; 46 L. T. 875; 30 W. E. 885 - - 407, 414 
 
 Great Western Eail. Co., Hoole 3 Ch. 262; 17 L. T. 453; 16 
 W. E. 260 - - - - - - - - 220 
 
 Great Western Eail. Co., Eanger v., 5 H. L. C. 86 - - - 74 
 
 Greaves v. Tofield, 14 C. D. 571 - - - - - 18 
 
 Green, Pearse v., 1 J. & W. 135 - 222 
 
 Green, Whaley Bridge Co. v., 5 Q. B. D. 109 ; 49 L. J. Q. B. 326 ; 
 
 28 W. E. 351 ; 41 L. T. 674 193, 331, 332 
 
 Green’s Case, 19 W. E. 1057 - - - - - - 133 
 
 Green v. Wright, 1 C. P. D. 592 ----- 262 
 
 Greene, Eobb v., (1895) 2 Q. B. 315 - - - - - 263 
 
 Greenwell v. Porter, (1902) 1 Ch. 530; 71 L. J. Ch. 243 ; 86 L. T. 220- 170 
 Greenwich Ferry, Lathom v., 72 L. T. 790 - 327 
 
 Greenwood, Be, (1900) 2 Q. B. 306 - - - - - 393 
 
 Greenwood v. Algebras (Gibraltar) Eail. Co., (1894) 2 Ch. 205 ; 63 
 L. J. Ch. 670 ; 71 L. T. 133 ; 1 Manson, 455 ; 7 E. 620 (C. A.) - 327 
 
 Greenwood v. Humber & Co., W. N. (1898) 162; 6 Manson, 42 - 358 
 
 Greenwood v. Leather Shod Wheel Co., (1900) 1 Ch. 421 ; 69 L. J. Ch. 
 
 131 ; 81 L. T. 595 ; 7 Manson, 210 (C. A.) - - 346, 351, 354, 361 
 
 Greenwood’s Case, 3 De G. M. & G. 459 - - - 8 
 
 Grenier, Prefontaine v., (1907) A. C. 101 ; 95 L. T. 623 - - 200 
 
 Gresham Life, L. E. 8 Ch. 449 - 190, 198 
 
TABLE OF CASES. 
 
 xlv 
 
 Gre — Ham page 
 
 Greymouth Point Elizabeth Rail. Co., Re, Yuill v. Same, (1904) 1 Oh. 
 
 32 ; 73 L. J. Ch. 92 - - - - - 189, 195 
 
 Griffin, Cooper v., (1892) 1 Q. B. 740; 61 L. J. Q. B. 363; 66 L. T. 
 
 660 ; 40 W. R. 420 - - - - - 160, 184 
 
 Griffith v. Paget (1877), 5 C. D. 894; 6 C. D. 515; 46 L. J. Ch. 493 ; 
 
 25 W. R. 523, 821 ; 37 L. T. 141 - - - 44, 90, 425, 441 
 
 Grill v. General, &c. Co., L. R. 1 C. P. 603; affd., L. R. 3 C. P. 476; 
 
 35 L. J. C. P. 324 - - - - - - - 202 
 
 Grimwade v. Mutual Society, 52 L. T. 409 - 204 
 
 Grindey, Re, Clews v. Grindey, (1898) 2 Ch. 593 - 207 
 
 Grissell’s Case, In re Overend & Gurney, (1865) L. R. 1 Ch. 528; 35 
 
 L. J. Ch. 752 - - - - - 405, 441 
 
 Grosvenor, Studdert v., 33 C. D. 528 ; 34 W. R. 754; 55 L. T. 171 ; 
 
 53 L. J. Ch. 689 - - - - - - 173, 442 
 
 Grundy v. Briggs, (1910) 1 Ch. 444; W. N. (1910) 17 131, 139, 184 
 
 Guardians of Poor of Neath, Earl of Jersey v., 22 Q. B. D. 548 - 71 
 
 Guinness v. Land Corporation of Ireland, 22 C. D. 349 ; 52 L. J. Ch. 
 
 117; 47 L. T. 517; 31 W. R. 341 - 31,38,83 
 
 Gunn’s Case, L. R. 3 Ch. 40; 38 L. T. 139 - - - - 109 
 
 Gurney, Peek v., L. R. 6 H. L. 377 ; 43 L. J. Ch. 19; 22 W. R. 29 - 
 
 345, 357, 359 
 
 Gurney, Queen v., Finlayson, 254 - - - - -210 
 
 Gutta Percha Corporation, Re, (1900) 2 Ch. 665 - 393 
 
 Guy v. Waterlow Bros., 25 T. L. R. 515 - 132, 145 
 
 H. 
 
 Hadleigh Castle Gold Mines, (1900) 2 Ch. 419; 69 L. J. Ch. 631 ; 
 
 83 L. T. 400 - - - - - 59, 170, 239 
 
 Hafna Mining Co., 84 L. T. N. S. 403 - - - - 421 
 
 Hague v. Dandeson, 2 Ex. 741 ; 17 L. J. Ex. 269 - - - 159 
 
 Haley, Lee v., L. R. 5 Ch. 155 ; 39 L. J. Ch. 284; 22 L. T. 251 ; 18 
 W. R. 242 -------- 249 
 
 Halifax Sugar Co. v. Francklyn, 59 L. J. Ch. 591 ; 62 L. T. 563 ; 
 
 2 Meg. 129 - - - - - - - 195, 233 
 
 Hall & Co., In re, 37 Ch. D. 712 ; 57 L. J. Ch. 288 ; 58 L. T. 156 - 
 
 145, 235 
 
 Hall & Co. (W. J.), (1909) 1 Ch. 521 - - - - - 84 
 
 Halle Concerts Society, Galloway v., (1915) 2 Ch. 233 - 148, 149 
 
 Hallett, Re, W. N. (1894) 156 _____ 140 
 
 Hallows v. Fernie, 3 Ch. 467 ; 36 L. J. Ch. 267 ; 18 L. T. 340 ; 16 
 W. R. 873 - - _ - - _ _ _ 355 
 
 Hambro v. Burnand, (1904) 2 K. B. 14 - - _ - 436 
 
 Hamilton’s Case (Lord Claude), L. R. 8 Ch. 548; 42 L. J. Ch. 
 
 465 ; 28 L. T. 652 ; 21 W. R. 518 - - - - 163 
 
xlvi 
 
 TABLE OF CASES. 
 
 Ham — Har paoe 
 
 Hamilton’s Windsor Ironworks, Re, 12 C. D. 712; 39 L. T. 658; 
 
 27 W. R. 827 - - - - - - 309 
 
 Hamlyn v. Wood, (1891) 2 Q. B. 488- - 263 
 
 Hammond, Jennings v. (1882), 9 Q,. B. I). 229; 31 W. E. 40; 51 
 L. J. Q. B. 493 - - - - - - 387 
 
 Hampshire Land Co., (1896) 2 Ch. 743; 65 L. J. Ch. 860 ; 75 L. T. 
 
 181 ; 45 W. E. 136 - - - - 166, 235, 317, 318 
 
 Hampson, Imperial Hydropathic Co. v., 23 C. D. 1 ; 49 L. T. 147 ; 
 
 31 W. E. 330 - - - - - 40, 198 
 
 Hampson v. Price’s Patent Candle Co., 24 W. E. 754; 34 L. T. 
 
 711 ; 45 L. J. Ch. 437 67, 190, 241, 433 
 
 Hand v. Blow, (1901) 2 Ch. 721 ; 79 L. J. Ch. 687 ; 85 L. T. 156; 50 
 W. E. 5 - - - - - - - 326 
 
 Hannan’s Empress, &c. Co., (1896) 2 Ch. 643 ; 65 L. J. Ch. 902 ; 75 
 L. T. 45 - - - - - - 103, 338 
 
 Hansen, Brookes v., (1906) 2 Ch. 129; 75 L. J. Ch. 450; 94 L. T. 
 
 728 ; 54 W. E. 502 ; 22 T. L. E. 475 - - - 351 
 
 Harben v. Phillips, 23 C. D. 14 ; 48 L. T. 334, 741 ; 31 W. E. 173 - 40, 
 
 164, 173, 198, 242 
 
 Harbottle, Eoss v., 2 Hare, 461 - - 40, 176, 191, 441 
 
 Hardey, Garrard y., 5 Man. & Gr. 471 - - - 6 
 
 Hardman, Whitwood Chemical Co. v., (1891) 2 Ch. 416 - - 262 
 
 Hardoon v. Belilios, (1901) A. C. 118 - - 135, 137, 211, 253 
 
 Hardy v. Eothergill (1888), 13 App. Cas. 351 ; 58 L. J. Q. B. 44 ; 59 
 L. T. 273 ; 37 W. E. 177 - - - - - 410, 441 
 
 Hardy v. Metropolitan Land Co., L. E. 7 Ch. 427 - 407 
 
 Hargreaves, Ltd. (Joseph), (1900) 1 Ch. 347 - - - - 399 
 
 Hargrove, Ex parte, L. E. 10 Ch. 542 - 387 
 
 Harmer, Steel v., 14 M. & W. 831 ----- 264 
 
 Harper’s Ticket Issuing Machine, Ltd., (1912) W. N. 263 ; 29 T. L. E. 
 
 63 - - - - - - - - - 189 
 
 Harrington v. Victoria Dock Co., 3 Q,. B. D. 549 - - - 193 
 
 Harris, Mason v., 11 0. D. 97 ; 48 L. J. Ch. 589 ; 40 L. T. 644 ; 27 
 W. E. 699 - - - - - - - 50, 171 
 
 Harris’s Calculating Machine Co., (1914) 1 Ch. 920 - - - 275 
 
 Harris’ Case, 7 Ch. 587; 41 L. J. Ch. 621 ; 26 L. T. 781; 20 W. E. 
 
 690- - - - - - - - - 109 
 
 Harrison, Ex parte, 69 L. T. 204 ----- 339 
 
 Harrison, Ex parte, 26 C. D. 522 ----- 140 
 
 Harrison v. Heathorn, 6 Man. & Gr. 81 - - - - 6 
 
 Harrison v. Mexican Eail. Co., 19 Eq. 358 ; 44 L. J. Ch. 403 ; 32 
 L. T. 82 ; 23 W. E. 403 - - - - - 47, 82 
 
 Harrogate Estates, Limited, (1903) 1 Ch. 498; 72 L. J. Ch. 313; 88 
 L. T. 82 ; 51 W. E. 334 - - - - - 280, 281 
 
 Hart, Clarke v., 6 H. L. C. 633 _____ 151 
 
 Hart, Ireland v., (1902) 1 Ch. 522; 86 L. T. 385 - - 131, 135 
 
 Hart, Eolland v. , 6 Ch. 681; 40 L. J. Ch. 701; 25 L. T. 191; 19 
 W. E. 962 (C. A.) - - 234 
 
TABLE OF CASES. 
 
 xlvii 
 
 Har — Hen page 
 
 Hartley’s Case, 10 Ch. 157 ; 44 L. J. Oh. 240 ; 32 L. T. 106 ; 23 W. R. 
 
 203 - - - - - - - 121,122,441 
 
 Hathorn, Salisbury Gold Mining Co. v., (1897) A. C. 268 - 169, 176 
 
 Hauxwell, Ex parte, 23 C. D. 627 ----- 318 
 
 Havana Exploration Co., Re, (1915) W. N. 266 - 411 
 
 Haven Gold Co., Re, 20 C. D. 151 ; 51 L. J. Ch. 242; 46 L. T. 322; 
 
 30 W. R. 389 - - - - - 71, 391, 394, 398 
 
 Hawkes Ackerman v. Lockhart, (1898) 2 Ch. 1 ; 67 L. J. Ch. 284; 
 
 78 L. T. 336; 46 W. R. 445 (C. A.) - - - -223 
 
 Hawkes v. Eastern Counties Rail. Co., 5 H. L. C. 331 - 5, 73 
 
 Hay, Cornell v., L.lR. 8 C. P. 328; 42 L. J. C. P. 136; 28 L. T. 
 
 475 ; 21 W. R. 580 - - - - - - - 360 
 
 Hay’s Case, 10 Ch. 604 ; 44 L. J. Ch. 721 ; 33 L. T. 466 - 185, 407 
 
 Haycraft Gold Reduction Co., (1900) 2 Ch. 230 - 164, 194, 393, 419 
 
 Haycraft, Herbert Gold Co. v., 0. A. 28 March, 1901 - - 132 
 
 Heathorn, Harrison v., 6 Man. & Gr. 81 - - - - 6 
 
 Hebb’s Case, 4 Eq. 9; 36 L. J. Ch. 748; 16 L. T. 308; 15 W. R. 
 
 754 - - - - - - - - 103,115 
 
 Heiron, Metropolitan Bank v., 5 Ex. D. 319 ; 43 L. T. 676 ; 29 W. R. 
 
 370 -------- 335 
 
 Helbert v. Banner, L. R. 5 H. L. 28 - - - - 404 
 
 Helby’s Case, 2 Eq. 175 ; 14 L. T. 47 ; 14 W. R. 417 - - 217 
 
 Helms, Hubbock v., 56 L. T. 232 ; 56 L. J. Ch. 536 ; 35 W. R. 574 - 
 
 309, 325 
 
 Hemans v. Hotchkiss Co., (1899) 1 Ch. 115; 68 L. J. Ch. 99; 79 
 L. T. 681 ; 47 W. R. 276; 6 Manson, 52 - - - - 169 
 
 Hemp Cordage, &c. Co., (1896) 2 Ch. (C. A.) 121 ; 65 L. J. Ch. 591; 
 
 74 L. T. 627 ; 44 W. R. 630 338 
 
 Henderson v. Bank of Australasia, 40 C. D. 170; (1890), 45 C. D. 330 ; 
 
 59 L. J. Ch. 794 ; 63 L. T. 597 ; 2 Meg. 301 - 67, 167, 175, 176 
 
 Henderson v. Lacon, 5 Eq. 249 ; 17 L. T. 527 ; 16 W. R. 328 - 345, 346, 353 
 Henderson, Tiessen v., (1899) 1 Ch. 861 ; 68 L. J. Ch. 353 ; 80 L. T. 
 
 483 ; 47 W. R. 459 ; 6 Manson, 340 - 168, 425 
 
 Henderson’s Nigel, Ltd., (1911) W. N. 159 - - - - 418 
 
 Henderson’s Transvaal Estates Co., Bisgood v., (1908) 1 Ch. 743; 77 
 L. J. Ch. 486 ; 98 L. T. 809 (C. A.) - - 66, 427 et seq. 
 
 Henderson’s Transvaal Estates Co., Thomson v., (1908) 1 Ch. 765; 
 
 77 L. J. Ch. 501 ; 98 L. T. 815 ; 15 Mans. 220 ; 24 T. L. R. 539 - 
 
 167, 419 
 
 Hendricks v. Montague, 17 C. D. 638; 50 L. J. Ch. 456; 44 L. T. 
 
 879; 30 W. R. 160 - - 27,249 
 
 Henry Bentley & Co., 69 L. T. 204 - 104, 339 
 
 Henry Lister & Co., Ltd., (1892) 2 Ch. 417 - 401 
 
 Henry Lister, Lister v., 41 W. R. 330 ; 62 L. J. Ch. 568 ; 68 L. T. 
 
 826 -------- 320 
 
 Henry Pound, Son and Hutchings (1882), 42 Ch. D. 402 (C. A.) ; 
 
 58 L. J. Ch. 792 ; 62 L. T. 137 ; 38 W. R. 18 ; 1 Meg. 363 - 296 
 
xlviii 
 
 TABLE OF CASES. 
 
 Hen— Hod page 
 
 Henry v. The Great Northern Co., 1 De G. & J. 606 ; 27 L. J. Ch. 1 ; 
 
 30 L. T. (0. S.) 141 ; 3 Jur. N. S. 1133 - - - - 84 
 
 Henthorn v. Fraser, (1892) 2 Ch. 27 ; 61 L. J. Ch. 373 ; 66 L. T. 439 ; 
 
 40 W. E. 433 - - - - - - 103, 109 
 
 Herbert Gold Co. v. Haycraft, C. A. 28 March, 1901 - 132 
 
 Heritage’s Case, 9 Eq. 5 ; 39 L. J. Ch. 238 ; 22 L. T. 479 ; 18 W. E. ' 
 270 - - - - - - - - 115, 116 
 
 Hermer v. Cornelius, 5 C. B. N. S. 236 - 262 
 
 Herts, Hooper v., (1906) 1 Ch. 549 ; 75 L. J. Ch. 253; 94 L. T. 324; 
 
 54 W. E. 350 (C. A.) - - - - - - 134 
 
 Herts, &c. Waterworks Co., Blaker v. (1889), 41 C. D. 399 ; 58 L. J. 
 
 Ch. 497 ; 60 L. T. 776; 37 W. E. 601 - - - - 296 
 
 Herts and Essex Waterworks, W. N. (1909) 48 - 282 
 
 Heslop v. Paraguay Central, 54 S. J. 234 - 286, 319 
 
 Hester & Co., Re, 44 L. J. Ch. 757 - - - - - 424 
 
 Heward v. Wheatley, 3 De G. M. & G. 628 ; 22 L. J. Ch. 435 ; 21 L. T. 
 
 (O. S.) 121; 1 W. E. 216 - - - - - -116 
 
 Heydon’s Case, 3 Co. Eep. 7- - - - - -273 
 
 Heymann v. European Central Eail. Co., 7 Eq. 154 - 346 
 
 Hibblewhite v. McMorine, 6 M. & W. 200 - 134, 316 
 
 Hickman v. Kent or Eomney Marsh Association, (1915) 1 Ch. 881 40, 41 
 Hicks v. May, 13 C. D. 236 ------ 412 
 
 Hicks v. Powell, L. E. 4 Ch. 741 - 274 
 
 Higg’s Case, 2 H. & M. 657 ; 12 L. T. 669 ; 13 W. E. 937 - - 424 
 
 Higgins, Dunlop v., 1 H. L. C. 381 ; 12 Jur. 295 - - - 103 
 
 Higgins, North Sydney Investment Co. v., (1899) A. C. 263 - 122, 253 
 
 Higginson, Re, (1899) 1 Q. B. 329; 68 L. J. Q. B. 198; 79 L. T. 
 
 673 ; 47 W. E. 285 ; 5 Manson, 289 418 
 
 Higgs v. Northern Assam Tea Co. (1869), 4 Ex. 387 ; 38 L. J. Ex. 
 
 233; 21 L. T. 336; 17 W. E. 1125 293 
 
 Hilder v. Dexter, (1902) A. C. 474 ; 71 L. J. Ch. 781 ; 87 L. T. 311 ; 
 
 7 Com. Cas. 258 - - - - - 105, 335, 342 
 
 Hill v. Manchester, &c., Co. 5 B. & Ad. 866 - 258 
 
 Hilo Manufacturing Co. v. Williamson (1912), 28 T. L. E. 164 - 352 
 
 Himalaya Tea Co., Mair v ., 1 Eq. 411 - - - - 262 
 
 Hindley’s Case, (1896) 2 Ch. 121; 65 L. J. Ch. 591; 74 L. T. 627; 
 
 44 W. E. 630 - - - - - - - 103 
 
 Hiram Maxim Lamp Co., Re, (1903) 1 Ch. 70; 72 L. J. Ch. 18 ; 87 
 L. T. 729 ; 51 W. E. 74 - - - - - 149, 405 
 
 Hitchens, Malam v., (1894) 3 Ch. 578 ; 63 L. J. Ch. 797 ; 71 L. T. 
 
 655 - 220 
 
 Hoare & Co., Re, (1904) 2 Ch. 208 ; 73 L. J. Ch. 601 ; 91 L. T. 115; 
 
 53 W. E. 51 (C. A.) ----- 95, 98, 219 
 
 Hoare & Co., W. N. (1910) 87 - - - - - 95 
 
 Hoare v. British Columbia Association, (1912) W. N. 235 ; 107 L. T. 
 
 602 - 281 
 Hodgson v. Accles, 51 W. E. 57 ; W. N. (1902) 164 - - - 314 
 
 Hodgson v. Bell, 24 Q. B. D. 528 18 
 
TABLE OP CASES. 
 
 xlix 
 
 Hod— Hor 
 
 PAGE 
 
 Hodson v. Tea Co. (1880), 14 Ch. D. 859 ; 49 L. J. Ch. 234 ; 28 W. R. 
 
 458 - - - - - - - - 294, 324 
 
 Hoffman v. Boynton, (1910) 1 Ch. 519; 26 T. L. B. 294 - - 317 
 
 Holborn District Board of Works, Saunders v ., (1895) 1 Q. B. 64; 
 
 64 L. J. Q. B. 101; 71 L. T. 519; 43 W. R. 26 - - - 351 
 
 Holland, Gibson v., L. R. 1 C. P. 1 - - - - - 256 
 
 Holland, Ideal Bedding Co. v., (1907) 2 Ch. 157 ; 76 L. J. Ch. 441 ; 
 
 96 L. T. 774 ; 23 T. L. R. 467 - - - - - 160 
 
 Holland, Shaw v ., (1900) 2 Ch. 305 ----- 105 
 Holland v. Dickson, 37 C. D. 669 ----- 223 
 
 Holroyd v. Marshall (1862), 10 H. L. C. 191 - - - - 308 
 
 Holthausen, Ex parte, L. R. 9 Ch. 722 - 274 
 
 Homan, Ex parte, re Broadbent, 12 Eq. 598 - - - - 318 
 
 Home Assurance Association, Richards v., L. R. 6 C. P. 591 - 110 
 
 Home and Colonial Assurance Co., Colonial Life Assurance Co. v., 
 
 33 Beav. 548 ; 12 W. R. 783 ; 10 L. T. 448 ; 33 L. J. Ch. 741 - 249 
 
 Home and Foreign Investment Co., Re, (1912) 1 Ch. 72 - - 89 
 
 Homer District Gold Mines, In re, 39 C. D. 546; 58 L. J. Ch. 134 ; 
 
 60 L. T. 97 - - - - - - - 104, 128 
 
 Homersham, Black v., 4 Ex. D. 24 ; 48 L. J. Ex. 79 ; 39 L. T. 671 ; 
 
 27 W. R. 171 - - - - - - - 220 
 
 Hong Kong and China Co. v. Glen, (1914) 1 Ch. 527 - - 117 
 
 Hoole v. Great Western Rail. Co., 3 Ch. 262 ; 17 L. T. 453 ; 16 W. R. 
 
 260- - - - - - - - - 220 
 
 Hoole v. Speak, (1904) 2 Ch. 732; 73 L. J. Ch. 719; 91 L. T. 183; 
 
 20 T. L. R. 649 - - - - - - - 360 
 
 Hooley, Re, (1899) 2 Q. B. 579 - - - - - 140 
 
 Hooper v. Herts, (1906) 1 Ch. 549 ; 75 L. J. Ch. 253 ; 94 L. T. 324 ; 
 
 54 W. R. 350 (C. A.) - - - - - - 134 
 
 Hooper v. Kerr, Stuart & Co., 17 T. L. R. 162; 45 S. J. 139; 83 
 L. T. 729 - - - - - - - 164, 195 
 
 Hooper’s Telegraph Co., Menier v., 9 Ch. 350; 43 L. J. Ch. 330; 30 
 L. T. 209 ; 22 W. R. 396 - 50, 91 171, 242 
 
 Hope v. International Co., 4 C. D. 327 ; 46 L. J. Ch. 200; 35 L. T. 
 
 924 ; 25 W. R. 203 - ----- 94,153 
 
 Hope Mutual Life Insurance Society, Bowes v. (1865), 1 1 H. L. C. 
 
 402 ------- 393, 440 
 
 Hopkins’ Trusts, 18 Eq. 696 ------ 220 
 
 Hopkins, Williams v., 18 C. D. 370 ----- 412 
 
 Hopkinson, Cyclists Touring Club v., (1910) 1 Ch. 179 - 67, 252, 434 
 
 Hopkinson v. Rolt, 9 H. L. C. 514 ; 34 L. J. Ch. 468 ; 5 L. T. 90 ; 9 
 W. R. 900 - - - - - - - 157, 158 
 
 Hopwood, Cunard Steamship Co. v., (1908) 2 Ch. 564; 77 L. J. Ch. 
 
 785 ; 99 L. T. 549 ------ 279,281 
 
 Horbury Bridge Co. Re, 11 C. D. 109 ; 48 L. J. Ch. 341 40 L. T. 
 
 353 ; 27 W. R. 433 - - 172,176,239 
 
 Horne (W. C.) and Sons, Ltd., Re, (1906) 1 Ch. 271 - - - 330 
 
 P. 
 
 d 
 
1 
 
 TABLE OF CASES. 
 
 Hor- Hyd PAGE 
 
 Horner & Co., 5 Manson, 355 _____ 423 
 
 Horton, Wright v. (1887), 12 A. C. 371 ; 56 L. J. Ch. 873; 56 L. T. 
 
 782 ; 36 W. R. 17; 52 J. P. 179 - 273,277 
 
 Hotchkiss Co. , Hemans v., (1889) 1 Ch. 115 ; 68 L. J. Ch. 99 ; 79 L. T. 
 
 681 ; 47 W. R. 276 ; 6 Manson, 52 - - - - 169 
 
 Houghton, Gadd v., 1 Ex. D. 357 - 199, 255 
 
 Houldsworth v. City of Glasgow Bank, 5 App. Cas. 317 ; 42 L. T. 
 
 194 ; 28 W. R. 677 - - - - - - 74, 346 
 
 Houldsworth v. Yorkshire Woolcombers, (1904) A. C. 355 ; 73 L. J. 
 
 Ch. 739; 91 L. T. 602 ; 53 W. R. 113 - - 281, 310 
 
 Household Fire Insurance Co. v. Grant, 4 Ex. D. 216 ; 48 Li J. Ex. 
 
 577; 41 L. T. 298; 27 W. R. 858 - - - - - 109 
 
 Howard v. Patent Ivory Co., 38 Ch. D. 156; 57 L. J. Ch. 878; 58 
 L. T. 395 ; 36 W. R. 801 - - - 46, 253, 256, 271, 276 
 
 Howard v. Sadler, (1893) 1 Q. B. 1; 68 L. T. 120; 41 W. R. 126 - 160, 184 
 
 Howbeach Coal Co. v. Teague, 5 H. & N. 151 - - 147, 192 
 
 Howden v. Yorkshire Miners’ Association, (1903) 1 K. B. 308 ; 72 
 L. J. K. B. 176 ; 88 L. T. 134 (C. A.) ; affirmed by House of Lords 
 (14th April, 1905), 21 T. L. R. 431 - - - - 9 
 
 Hoylake Rail. Co., 9 Ch. 257 - - - - - -132 
 
 Hoyle v. Hoyle, (1893) 1 Ch. 84 256 
 
 Hubbard, Ex parte (1886), 17 Q. B. D. 690 - - - - 281 
 
 Hubbard v. Hubbard, 68 L. J. Ch. 54; 79 L. T. 665; 5 Manson, 
 
 360- - - - - - - - - 319 
 
 Hubbuck v. Helms, 56 L. T. 232 ; 56 L. J. Ch. 536 ; 35 W. R. 574 - 
 
 309, 325 
 
 Hudson, Thompson v. (1869), L. R. 4 H. L. 1 - - - 294 
 
 Hudson, York, &c. Rail. Co. v. (1853), 16 Beav. 485 - 178 
 
 Hughes’ Case, 13 Eq. 623 - - - - - - 412 
 
 Humber & Co., Greenwood v., W. N. (1898) 162 ; 6 Manson, 42 - 358 
 
 Humber Ironworks Co., L. R. 2 Eq. 15; 35 Beav. 346 - - 399 
 
 Humber Ironworks Co. v. Warrant Finance Co., L. R. 4 Ch. 647 - 412 
 
 Hume v. Record Reign Jubilee Syndicate, 80 L. T. 404 - - 387 
 
 Humphrys, Firbank’s Executors v., 18 Q. B. D. 54; 56 L. J. Q,. B. 
 
 57 ; 56 L. T. 36 ; 35 W. R. 92 - - - 145, 190, 276 
 
 Hunt’s Claim, W. N. (1872) 53 - - - - - 211 
 
 Hurd, Redgrave v., 20 C. D. 1 ; 51 L. J. Ch. 113 ; 45 L. T. 485 ; 30 
 W. R. 251 - - - - - - - - 356 
 
 Huth v. Clarke, 25 Q. B. D. 391 ; 63 L. T. 348; 59 L. J. M. C. 120; 
 
 59 W. R. 655 - 197 
 
 Hutton v. Scarborough Cliff, &c. Co., 2 Dr. & Sm. 514, 521 ; 13 L. T. 
 
 87 ; 13 W. R. 1059 ; on app., 34 L. J. Oh. 643 ; 11 Jur. N. S. 551 ; 
 
 4 De G. J. & S. 672 - - - 47, 48, 50, 82, 83, 439 
 
 Hutton v. West Cork Rail. Co., 23 Ch. D. 672 ; 52 L. J. Ch. 689 ; 31 
 W. R. 827 - - - - - - 67, 185, 433, 434 
 
 Hyam’s Case, 1 D. F. & J. 75 - - - - 133 
 
 Hyatt, Allen v. (1914), 30 T. L. R. 444 - - - - 180 
 
 Hyde v. New Asbestos Co., 8 T. L. R. 121 - - - 354 
 
 Hydraulic Power Co., Be, (1914) 2 Ch. 187 - - - - 99 
 
TABLE OF CASES. 
 
 li 
 
 I. 
 
 Ibo -Ire page 
 
 Ibo Investment Trust, Ltd., (1903) 2 Ch. 373 ; (1904) 1 Ch. 26 - 400 
 
 Ideal Bedding Co. v. Holland, (1907) 2 Ch. 157; 76 L. J. Ch. 441 ; 
 
 96 L. T. 774; 23 T. L. R. 467 - - - - 160 
 
 Ilfracombe Building Society, (1901) 1 Ch. 102; 70 L. J. Ch. 66; 84 
 L. T. 146 - - - - - - - 387, 390 
 
 Imperial Association v. Coleman, 6 Ch. 558 ; 40 L. J. Ch. 262 ; 24 L. T. 
 
 290; onapp., 6 H. L. 190 - 192, 193, 194 
 
 Imperial, &c. Co., Cotton v., (1892) 3 Ch. 454; 61 L. J. Ch. 684; 67 
 
 L. T. 342 - 
 
 Imperial, &c. Co., Dunstan v., 3 Bar. & Ad. 125 
 Imperial Gas, &c. Co., Clark v., 4 B. & Ad. 315 
 Imperial Bank of China, L. B. 1 Ch. 339 
 Imperial Hydropathic Co. v. Hampson, 23 Ch. D. 
 
 66, 426, 427, 429, 430 
 
 - 185 
 
 [- - - 258 
 
 - 395 
 
 1 ; 49 L. T. 147 ; 
 
 31 W. R. 330 - - - - - - 40, 198 
 
 Imperial Land Co. of Marseilles, L. R. 10 Eq. 298 - 407 
 
 Ince Hall Coal Co., Binney v., 35 L. J. Ch. 363 - - 159, 291 
 
 Inchiquin’s (Lord) Case, (1891) 3 Ch. 28; 60 L. J. Ch. 556; 64 L. T. 
 
 841; 39 W. R. 610- - - - - - -183 
 
 Ind Coope & Co., (1911) 2 Ch. 223 - - - - - 311 
 
 Ind Coope & Co., Normandy v ., (1908) 1 Ch. 84 ; 77 L. .7. Ch. 82 ; 97 
 L. T. 872 ; 15 Mans. 65; 24 T. L. R. 57 - 50, 168, 185, 188, 242 
 
 Inderwick v. Snell, 2 M. & G. 216 - - - - -198 
 
 Indian Mechanical, &c. Co., (1891) 3 Ch. 538; 61 L. J. Ch. 33; 40 
 W. R. 184 - - - - - - - - 78 
 
 Indian Zoedone Co., 26 Ch. D. 70 ; 53 L. J. Ch. 468; 50 L. T. 547 ; 
 
 32 W. R. 481 - - - - - - 169, 245 
 
 Indiarubber Co., Panama and South Pacific Co. v., L. R. 10 Ch. 515 - 194 
 Ingilby, Walburn v., 1 M. & K. 61 - - - - - 6 
 
 Inman v. Acroyd, 82 L. T. 621 ; (1901) 1 K. B. 613 - - 187, 188 
 
 Innes & Co., Be, (1903) 2 Ch. 254; 72 L. J. Ch. 643; 89 L. T. 142; 
 
 51 W. R. 514 (C. A.) - - - - - 117, 405 
 
 International Cable Co., Be, 66 L. T. 254; W. N. (1892) 34 - 43, 188 
 
 International Co., Hope v., 4 C. D. 327 ; 46 L. J. Ch. 200; 35 L. T. 
 
 924 ; 25 W. R. 203 - - - - - - 94, 153 
 
 International, &c. Co., Page v., 68 L. T. 433; 62 L. J. Ch. 610 - 271 
 
 International Co. of Mexico, Mercantile Co. v., (1893) 1 Ch. 484 n. ; 
 
 68 L. T. 603 n. - - - - - - -321 
 
 International Life Assurance Society, 10 Eq. 312 - - - 207 
 
 International Pulp Co., Be, 3 Ch. D. 594 ; 45 L. J. Ch. 446; 35 L. T. 
 
 229 ; 24 W. R. 535 413 
 
 International Society of Auctioneers, In re, Baillie’s Case, (1898) 1 Ch. 
 
 110; 67 L. J. Ch. 81; 77 L. T. 523; 46 W. R. 187 - - 113 
 
 Iredale, Gardner v., (1912) 1 Ch. 700 - 117, 163, 368 
 
 Ireland v. Eade, 7 Beav. 55 - - - - - - 326 
 
 Ireland v. Hart, (1902) 1 Ch. 522; 86 L. T. 385 - - 131, 135 
 
 cl 2 
 
Hi 
 
 TABLE OF OASES. 
 
 Iri — Jeg page 
 
 Irish Mercantile Loan Society, (1907) 1 Ir. E. 98 - - - 390 
 
 Iron Ship, &c. Co. v. Blunt, L. E. 3 C. P. 484; 37 L. J. C. P. 273 ; 
 
 16 W. E. 868 - - - - - - 147, 189 
 
 Irvine v. Union Bank of Australia, 2 App. Cas. 366 ; 46 L. J. P. C. 
 
 87; 37 L. T. 176; 25 W. E. 682 - - - 46, 271, 275, 276 
 
 Irving and Fullarton Building Society, Smiths’ Trustees v., 6 F. 99 
 (Ct. of Sess.) - - - - - - 390 
 
 Irwell, &c. Works, Gorringe v. (1886), 34 C. D. 128 ; 53 L. J. Ch. 
 
 85; 55 L. T. 572 ; 35 W. E. 86 - - - - 315, 399 
 
 Isaac’s Case, (1892) 2 Ch. 158 ; 61 L. J. Ch. 481 ; 66 L. T. 593 ; 40 
 W. E. 518 - - - - - - -43,184,186 
 
 Isle, Dawson v., (1906) 1 Ch. 633 ; 75 L. J. Ch. 338 ; 95 L. T. 385 ; 54 
 W. E. 452 - - - - - - - - 280 
 
 Isle of Wight Eail. Co. v. Tahourdin, 25 C. D. 320 - - - 165 
 
 Islington Electric Supply Co., 93 L. T. 31 ; W. N. (1892) 81 - 80, 97 
 
 Izard, Ex parte (1883), 23 Ch. D. 75 - - - - - 327 
 
 J. 
 
 Jackson v. Bassford, (1906) 2 Ch. 467 ; 75 L. J. Ch. 697; 95 L. T. 
 
 292- - - - - - - - - 415 
 
 Jackson v. Eainford, (1896) 2 Ch. 340; 65 L. J. Ch. 757 ; 44 W. E. 
 
 554 - - - - - - - - - 271 
 
 Jackson v. Turquand, L. E. 4 H. L. 305 ; 39 L. J. Ch. 11 - 104, 355 
 
 Jackson & Co., (1899) 1 Ch. 348; 68 L. J. Ch. 190; 79 L. T. 662; 
 
 6 Manson, 125 _____ 121, 122, 123, 282 
 
 Jacobs v. Morris, (1902) 1 Ch. 816 ----- 436 
 
 Jaegen, &c. Co. v. Yallen, 77 L. T. E. 180 - 234 
 
 James v. Boythorpe Colliery Co. (1891), 2 Meg. C. E. 55; W. N. 
 
 (1890) 28 - - - - - - - - 320 
 
 James v. Buena Ventura, (1896) 1 Ch. 456 - 151 
 
 James v. May, L. E, 6 H. L. 328 ; 42 L. J. Ch. 586 ; 29 L. T. 216 - 211 
 
 James v. Eockwood Colliery Co., 106 L. T. 128 - - - 189 
 
 James Colmer, Limited, Re, (1897) 1 Ch. 524 - - - 50 
 
 James Keith and Blackman Co. (No. 1), Eainford v., (1905) 1 Ch. 
 
 296- - - - - - - - - 145 
 
 James Keith and Blackman (No. 2), Eainford v., (1905) 2 Ch. 147 ; 
 
 74 L. J. Ch. 531 ; 92 L. T. 786 (C. A.) - - - 67 
 
 James Nelson & Sons Ltd., Nelson v., (1914) 2 K. B. 770 - - 43 
 
 Jameson, Att.-Gen. v., 2 Ir. E. 644 ----- 371 
 Jarvis Conklin Mortgage, 11 T. L. E. 373 - 390 
 
 Jarvis (F. W.) & Co., (1899) 1 Ch. 193; 68 L. J. Ch. 145; L 79 L. T. 
 
 427 -------- 122 
 
 Jecks, Coote v., 13 Eq. 597 ; 41 L. J. Ch. 599 - - 274, 325 
 
 Jegon, Ex parte, 12 C. D. 503 ----- 219 
 
TABLE OF CASES. 
 
 liii 
 
 Jen— Jub page 
 
 Jenkinson, Edinburgh and District Aerated Water Manufacturers 
 Defence Association v., 5 Ct. of Sess. Cas. 1159 - 9 
 
 Jenner’s Case, 7 C. D. 132 ; 47 L. J. Ch. 201 ; 37 L. T. 349 ; 26 W. It. 
 
 291 - - - - - - - - 184, 191 
 
 Jennings v. Broughton, 17 Beay. 234; 5 D. M. & G. 126; 22 L. J. 
 
 Ch. 585 ; 1 W. It. 441 - - - - - - 346 
 
 Jennings v. Hammond (1882), 9 Q. B. D. 229; 31 W. R. 40; 51 L. J. 
 
 Q. B. 493 - - - - - - - - 387 
 
 Jewish Colonial Trust (Jeudische Coloniajbank), Limited, (1908) 2 
 Ch. 287; 77 L. J. Ch. 629; 99 L. T. 243 - - - - 78 
 
 Johannesburg Hotel Co., (1891) 1 Ch. 119 ; 60 L. J. Ch. 391 ; 64 L. T. 
 
 61 ; 39 W, R. 260; 2 Meg. 409 - - - - - 122 
 
 John Brown, Ltd., Re, (1914) W. N. 434 - - - - 79 
 
 John Morley Building Co. v. Barras, (1891) 2 Ch. 386; 60 L. J. 
 
 Ch. 496; 64 L. T. 856; 39 W. R. 619 - - - 166 
 
 John Rowell & Sons Ltd., Rowell v ., (1912) 2 Ch. 609 - - 94 
 
 Johns v. Balfour, 5 T. L. R. 389 ; 1 Meg. 191 - - - 67 
 
 Johnson & Co., 50 W. R. 482 ; (1902) 2 Ch. 101 - - - 282 
 
 Johnson v. Lyttle’s Iron Agency (1877), 5 C. D. 687 ; 46 L. J. Ch. 
 
 786 ; 36 L. T. 528 ; 25 W. R. 548 - - 41, 147, 151, 152, 245 
 
 Johnson v. Russian Spratts, (1898) 2 Ch. 149 - 287 
 
 Johnston, Cranstown v., 3 Yes. Jun. 170 - 274 
 
 Johnston Foreign Patents, (1904) 2 Ch. 234 - - - - 276 
 
 Johnston v. Chestergate Hat Co., (1915) W. N. 277 - 221 
 
 Johnston v. Consumers Gas Co. of Toronto, (1898) A. C. 447; 67 
 
 L. J. P. C. 33; 78 L. T. 270 (P. C.) - - - - 351 
 
 Johnstone v. Cox (1881), 19 Ch. D. 17 - - - - 329 
 
 Joint Stock Discount Co. v. Brown, 3 Eq. 139 ; 8 Eq. 381 ; 20 L. T. 
 
 844; 17 W. R. 1037 - - 65,68,72,179,204,209,262,407 
 
 Joint Stock Trust, Re (1912), 56 S. J. 272 - 207 
 
 Jonas, Eberle’s Hotel Co. v., 18 Q. B. D. 459 - - - 410 
 
 Jones, Briton Medical Co. v., 61 L. T. 384 - 191 
 
 Jones v. Evans, (1913) 1 Ch. 23 220 
 
 Jones v. North Vancouver Land Co., (1910) A. C. 317 - - 152 
 
 Jones v. Pacaya Rubber Co., W. N. (1910) 257 ; (1911) 1 K. B. 455 - 
 
 149, 151, 152 
 
 Jones v. Scottish Accident Co., 17 Q. B. D. 421 - - - 29 
 
 Jones v. Smith, 1 Ha. 43 ----- - 235 
 
 Jones v. Victoria Graving Dock (1877), 2 Q. B. D. 314 ; 46 L. J. Q. B. 
 
 219 ; 36 L. T. 144 ; 25 W. R. 348 - - - - 245, 256 
 
 Jonmenjoy v. Watson, 9 A. C. 561 - - - - - 436 
 
 Joplin Brewery Co., Re, (1902) 1 Ch. 79 ; 50 W. R. 75 ; 71 L. J. Ch. 
 
 21 - - - - - - - - - 282 
 Joseph Hargreaves, Limited, (1900) 1 Oh. 347 - 407 
 
 Joshua Stubbs, Limited, (1891) 1 Ch. 475; 60 L. J. Ch. 190; 64 
 L. T. 306; 39 W. R. 617 (C. A.) - - - - - 328 
 
 Jubilee Sites Syndicate, Re, (1899) 2 Ch. 204 - 395 
 
liv 
 
 TABLE OF CASES. 
 
 K. 
 
 Kar — Kir page 
 
 Karberg’s Case, (1892) 3 Ch. 1 ; 61 L. J. Ch. 741 ; 66 L. T. 700-342, 346 
 Kasintoe Rubber Estates, Llewellyn v., (1914) 2 Ch. 670 - - 424 
 
 Kaslo-Slocan Co., W. N. (1910) 13 - - - - - 395 
 
 Kaye v. Croydon Tramways Co., (1898) 1 Ch. 358 ; 67 L. J. Ch. 222 ; 
 
 78 L. T. 239; 46 W. R. 405 ... 166, 168, 193, 425 
 
 Kekewich, Fruit and Vegetable Association v ., (1912) 2 Ch. 52 - 165 
 
 Kelk, London Financial Association v., 26 C. D. 107 ; 53 L. J. Ch. 
 
 1025 ; 50 L. T. 492 - - - - - 204, 209 
 
 Kelland, Wilson v., (1910) 2 Ch. 306 ----- 312 
 Kellock v. Enthoven, L. R. 9 Q. B. 241 ; 43 L. J. Q. B. 90; 22 W. R. 
 
 322- - - - - - - - - 137 
 
 Kellock’ s Case (1867), L. R. 3 Ch. 769; 16 W. R, 919 - 329 
 
 Kelner v. Baxter, L. R. 2 C. P. 174 ; 36 L. J. C. P.94; 15 L. T. 313 ; 
 
 15 W. R. 278 - - - - - 253, 441 
 
 Kennaway & Co., Dixon v., (1900) 1 Ch. 833; 69 L. J. Ch. 501 ; 82 
 L. T. 527 ; 7 Manson, 446 - 144 
 
 Kent’s Case, 39 C. D. 266 ; 57 L. J. Ch. 977 ; 36 W. R. 818; 59 L. T. 
 
 449; 19 Meg. 69 - - - - - - -415 
 
 Kent Coalfields Syndicate, (1898) 1 Q. B. 754 ; 46 W. R. 453 ; 67 
 L. J. Ch. 500; 78 L. T. 443 - - - - 125, 223 
 
 Kent Collieries, 23 T. L. R. 559 (C. A.) - - - - 321 
 
 Kent County Gas Co., 95 L. T. 756 - - - - - 354 
 
 Kent County Gas Co., (1913) 1 Ch. 92 336 
 
 Kent Outcrop Coal Co., Be, (1912) W. N. 26 - - - 163 
 
 Kent or Romney Marsh Association, Hickman v., (1915) 1 Ch. 881 - 
 
 40, 41 
 
 Kent v. Freehold Land Co., 3 Ch. 493 - 353 
 
 Kepitigalla Rubber Estates v. National Bank of India, 25 T. L. R. 402 - 261 
 Kerr, Stuart & Co., Hooper v., 17 T. L. R. 162; 45 S. J. 139; 83 
 L. T. 729 - - - - - - - 164, 195 
 
 Kershaw, In re, Whittaker v. Kershaw, 45 Ch. D. 320 ; 60 L. J. Ch. 
 
 9 ; 63 L. T. 203 ; 39 W. R. 23 - - - - - 146 
 
 Keswick, Cackett v., (1902) 2 Ch. 456; 71 L. J. Ch. 641; 87 L. T. 
 
 11 ; 51 W. R. 69 - - - - - 351, 359, 361 
 
 Kettle’s Ca3e, 9 Eq. 306 ------ 384 
 
 Key & Son, Limited, (1902) 1 Ch. 467 ; 71 L. J. Ch. 254; 50 W. R. 
 
 234; 86 L. T. 374 - ----- 124,140 
 
 Kharaskhoma Syndicate, (1897) 2 Ch. 451 ; 66 L. J. Ch. 675; 77 L. T. 
 
 82 - - - - - - - - - 121 
 
 Kingsbury Collieries, (1907) 2 Ch. 259; 76 L. J. Ch. 469; 96 L. T. 
 
 829 - - - - - - - - 66, 67 
 
 Kingston Cotton Co. (No. 2), (1896) 2 Ch. 284 ; 65 L. J. Ch. 673 ; 74 
 L. T. 568 - - - - - - 225, 226, 227, 407 
 
 Kirby, Wright v ., 23 Beav. 863 ----- 329 
 
TABLE OF CASES. 
 
 lv 
 
 Kis— Lan page 
 
 Kisch, Central Railway of Venezuela v., L. R. 2 H. L. 123 ; 36 L. J. 
 
 Ch. 849 ; 16 L. T. 500 ; 15 W. R. 821 - - 127, 345, 353 
 
 Knight, Re (1867), L. R. 2 Ch. 321 ; 36 L. J. Ch. 317 ; 15 L. T. 546 ; 
 
 15 W. R. 294 - - - - - - - 245 
 
 Knight v. Bulkeley, 3 Jur. (N. S.) 817; 33 L. T. 7; Storey on 
 Agency, s. 475 - - - - - - -174 
 
 Knowles v. Scott, (1891) 1 Ch. 717 - - - - - 421 
 
 Koffyfontein Mines, Ltd. (directors’ resignation), Mosely v., (1910) 
 
 2 Ch. 382 - - - - - - - - 188 
 
 Koffyfontein Mines, Ltd. (increase of capital), Mosely v., (1911) 1 Ch. 
 
 73; (1911) A. C. 409 - - - - - - 87 
 
 Koffyfontein Mines, Ltd. (shares for bonus certificates), Mosely v., 
 (1904) 2 Ch. 108 ; 73 L. J. Ch. 569 ; 91 L. T. 266 ; 53 W. R. 140 
 (C. A.) - - - - - - 68, 317 
 
 Kolchmann, Exploring Land and Minerals Co. v., 94 L. T. 234 - 200, 205 
 Krasnapolsky Co., Re, (1892) 3 Ch. 174 - - - - 398 
 
 Kuala Pahi Estate v. Mowbray, (1914) W. N. 321 - 322 
 
 L. 
 
 La Banque du Peuple, Bryant v., (1893) A. C. 170; 62 L. J. P. C. 
 
 68 ; 68 L. T. 681 ; 41 W. R. 239 ; 57 J. P. 89 - - 276, 436 
 
 La Compagnie de Mayville v. Whitley, (1896) 1 Ch. 788 ; 65 L. J. Ch. 
 
 729 ; 74 L. T. 441 ; 44 W. R. 568 - - - - - 195 
 
 La Trinidad, Browne v., 37 C. D. 1 ; 57 L. J. Ch. 292 ; 58 L. T. 137 ; 
 
 36 W. R. 289 - - - 40, 42, 164, 176, 195, 198 
 
 Lacon, Henderson v., 5 Eq. 249 ; 17 L. T. 527 ; 16 W. R. 328 - 345, 
 
 346, 353 
 
 Ladenberg & Co. v. Goodwin Ferreira & Co., (1912) 3 K. B. 275 - 281 
 
 Ladies’ Dress Association v. Pulbrook, (1900) 2 Q. B. 376, 381 ; 69 
 L. J. Q. B. 705 ; 49 W. R. 6; 7 Manson, 465 (C. A.) - 52, 99, 153, 405 
 Lagunas Nitrate Co. v. Lagunas Nitrate Syndicate, (1899) 2 Ch. 392 ; 
 
 68 L. J. Ch. 699; 81 L. T. 334; 48 W. R. 74 - 74, 201, 202, 331, 333, 
 
 334, 354 
 
 Laing, Salomans v., 12 Beav. 339 - - - - 5 
 
 Lake George Mines, Limited, (1904) 1 Ch. 803 - 401 
 
 Lamb v. Sambas Rubber, (1908) 1 Ch. 845; 77 L. J. Ch. 386; 98 
 L. T. 633 - - - - - - 149, 151, 353 
 
 Lambeth, Reg. v., 8 Ad. & El. 356 - - - - -173 
 
 Lancaster Banking Co., W. N. (1897) 3; 75 L. T. 647 - - 80 
 
 Lancaster Canal, Parnaby v., 11 Ad. & El. 223 - - - 74 
 
 Land Co., Thames Plate Glass Co. v. (1870), 11 Eq. 248; 24 L. T. 
 
 227 ; 19 W. R. 303 ; 6 Ch. 643 ; 25 L. T. 236 ; 19 W. R. 764 - 414 
 
 Land, &c. Co., White v., W. N. (1883) 174 - 234 
 
 Land Corporation of Ireland, Guinness v., 22 C. D. 349 ; 52 L. J. Ch. 
 
 117 ; 47 L. T. 517; 31 W. R. 341 - - - - 31,38,63 
 
 Land Credit Co., 4 Ch. 460; 20 L. T. 641 ; 17 W. R. 689 - 45, 195, 255 
 
1 vi 
 
 TABLE OP CASES. 
 
 Lan- Leg page 
 
 Land Credit Company of Ireland v. Lord Fermoy (1870), L. E. 5 Ch. 
 
 763; 23 L. T. 439; 18 W. E. 1089 - - - - 200 
 
 Land Mortgage Bank of Florida, In re, (1898) 1 Ch. 444; 67 L. J. 
 
 Ch. 183; 78 L. T. 156; 46 W. E. 333 - - - 417 
 
 Land Securities Co., Somerset v., W. N. (1897) 29 - - - 223 
 
 Landowners v. Ashford, 16 C. D. 411 - - - - 319 
 
 Lands Allotment Co., Re, (1894) 1 Ch. 616; 63 L. J. Ch. 291 ; 70 L. T. 
 
 286; 42 W. E. 404- - -65,179,244 
 
 Lane’s Case, 1 D. J. & S. 509 _____ 245 
 
 (1913) 2 Ch. 
 280, 384, 
 73 L. J. 
 
 Langham Skating Eink, 5 C. D. 683 ; 46 L. J. Ch. 345 ; 36 L. T. 
 
 605 - - - - - - - - 394, 
 
 Langlaagte Proprietary Co. (1912), 28 T. L. E. 529 - - - 
 
 Larocque v. Beauchemin, (1897) A. C. 358 - 
 
 Lathom v. Greenwich Ferry, 72L.T.790 
 
 Laughton v, Bishop of Sodor and Man, 4 P. C. 495 - - - 
 
 Law Car and General Insurance Co., W. N. (1911) 91 
 103; (1912) 1 Ch. 405 - 
 
 Law Debenture Corporation, Cornbrook v., (1904) 1 Ch. 103 
 Ch. 121 ; 89 L. T. 680 ; 52 W. E. 242 
 Law Guarantee Society, 25 T. L. E. 565 
 Law Guarantee and Trust Society, Re, (1915) 1 Ch. 340; 
 
 830 - 
 
 Law Guarantee and Trust Society, Smith v., (1904) 2 Ch 
 L. J. Ch. 733; 91 L. T. 545; 20 T. L. E. 789 (C. A.) 
 
 Law Union, &c. Co., Macdonald v. (1873), L. E. 9 Q. B. D. 328; 22 
 W. E. 530 ; 30 L. T. 545 ; 43 L. J. Q. B. 131 - - - 156 
 
 Lawe’s Case, 1 De G. M. & G. 421 ; 21 L. J. Ch. 688 - - 166 
 
 Lawrence v. Wynn, 5 M. & W. 355 - - - - - 148 
 
 Lawrence’s Case (1867), L. E. 2 Ch. 412 ; 36 L. J. Ch. 490 ; 16 L. T. 
 
 222 _______ 109, 126 
 
 Lawton, Park v.> (1911) 1 K. B. 588 - - - - 123, 163 
 
 Laxon & Co., Re (No. 2), (1892) 3 Ch. 555; 61 L. J. Ch. 667 ; 67 L. T. 
 
 85; 40 W. E. 621 - - - - - - 35,52,53 
 
 Leather Shod Wheel Co., Greenwood v., (1900) 1 Ch. 421 ; 69 L. J. 
 
 Ch. 131 ; 81 L. T. 595 ; 7 Manson, 210 (C. A.) - 346, 351, 354, 361 
 
 Lee v. Haley, L. E. 5 Ch. 155 ; 39 L. J. Ch. 284 ; 22 L. T. 251 ; 18 
 W. E. 242 - - - - - - - - 249 
 
 414 
 54 
 122 
 327 
 174 
 
 405 
 
 - 281 
 - 404 
 108 L. T. 
 
 330, 413 
 569; 73 
 
 315, 329 
 
 Lee v. Neuchatel Co., 41 C. D. 1 ; 58 L. J. Ch. 408 ; 61 L. T. 11 ; 37 
 W. E. 321 - - - - - 215, 216, 217, 218, 219 
 
 Lee v. Eoundwood Colliery Co., (1897) 1 Ch. 373 ; 66 L. J. Ch. 186; 
 
 75 L. T. 641 ; 45 W. E. 324 (C. A.) - - - - 325 
 
 Leeds and Hanley Co., (1902) 2 Ch. 809; 72 L. J. Ch. 1 ; 87 L. T. 
 
 488 ; 51 W. E. 5 (C. A.) ; (1904) 2 Ch. 45 - - 193, 331, 334, 410 
 
 Leeds Banking Co., Re, 3 Eq. 781 ; 36 L. J. Ch. 90; 15 L. T. 266 ; 
 
 15 W. E. 146 ; 2 Dr. & Sm. 415 - 104,113 
 
 Leeds Estate, &c. Co. v. Shepherd, 36 C. D. 787 ; 57 L. J. Ch. 46 ; 57 
 L. T. 684 ; 36 W. E. 322 - - 179, 186, 197, 204, 215, 226, 227 
 
 Lees Brook Spinning Co., Re, (1906) 2 Ch. 394; 75 L. J. Ch. 565; 
 
 95 L. T. 54 ; 54 W. E. 563 - - 94,100 
 
 Leggott v. Western, 12 Q. B. D. 287 ----- 160 
 
TABLE OF CASES. lvii 
 
 Lei— Lly PAGE 
 
 Leicester Club Co., Cannon’s Case, .‘30 C. D. 629 ; 55 L. J. Ch. 206 ; 
 
 34 W. R. 14 - - - - - - - 185 
 
 Leifchild’s Case, 1 Eq. 231- - - - - -67 
 
 Leinster Contract Corporation, Re, (1903) 1 Ir. R. 517 - - 410 
 
 Le Phenix, In re, 58 L. T. 512 - - - - - 383 
 
 Le Roi Mining Co., McMillan v., (1906) 1 Ch. 331 ; 75 L. J. Ch. 174 ; 
 
 94 L. T. 160; 54 W. R. 281 - - - - -173 
 
 Leon Yan Tienhoven, Byrne v., 5 C. P. D. 344 - - - 103 
 
 Leroux v. Brown (1852), 12 C. B. 801 - 256 
 
 Letheby and Christopher, Limited, Jones’s Case, (1904) 1 Ch. 815 ; 73 
 L. J. Ch. 509; 90 L. T. 774; 52 W. R. 460 133 
 
 Lever, Mayor of Salford v., (1891) 1 Q,. B. 168; 60 L. J. Q. B. 39; 
 
 63 L. T. 658 ; 39 W. R. 85 - - - - - - 193 
 
 Levi v. Ayers, 3 App. Cas. 852 - - - - 137, 140 
 
 Levita’s Case, L. R. 3 Ch. 36 ; 17 L. T. 337 ; 16 W. R. 95 - - 103 
 
 Levita’s (G. H.) Case, L. R. 5 Ch. 489 104, 109 
 
 Levy v. Abercorris Co. (1888), 37 Ch. D. 264; 57 L. J. Ch. 202; 58 
 L. T. 218; 36 W. R. 411 - - - - - 283, 318 
 
 Levy v. Walker, 10 C. Div. 436 ; 7 Beav. 84 - 250 
 
 Lewis, Ex parte, 6 Ch. 818 ; 40 L. J. Ch. 429 ; 24 L. T. 787 ; 19 
 W. R. 791 - - - - - - - 154, 159 
 
 Lewis, Emma Co. v., 4 C. P. D. 396; 40 L. T. 168; 48 L. J. C. P. 
 
 257 ; 27 W. R. 836 - - - - - - - 331 
 
 Lewis, Gray v., L. R. 8 Ch. 1035 ; 43 L. J. Ch. 281 ; 29 L. T. 12 ; 
 
 21 W. R. 923 - - - - - - - 50 
 
 Lewis, Parker v., 8 Ch. 1035 ; 21 W. R. 928 ; 29 L. T. 199 - - 193 
 
 Lewis’s (Harvey) Case, 26 L. T. 673 ----- 185 
 Leyton and Walthamstow Cycle Co., 50 W. R. 93 - - 400 
 
 Liberator Building Society, 71 L. T. 406 - - - - 407 
 
 Liberian Government Concessions, Re, 9 T. L. R. 136 - - 354 
 
 Lichtenstein, Re, 23 T. L. R. 424 - 393, 422 
 
 Life and Health Assurance Association, W. N. (1910)45 - - 383 
 
 Lincoln, White v. (1803), 8 Yes. 363 ----- 222 
 Lindlar’s Case, (1910) 1 Ch. 312 - - - 123, 130, 133 
 
 Lindner & Co., Re, (1911) W. N. 66 - - - - - 99 
 
 Lindsay, Cundy v., 3 A. C. 459 - 104, 113 
 
 Lindus v. Melrose, 3 H. & N. 177 ----- 177 
 
 Lister v. Henry Lister, 41 W. R. 330 ; 62 L. J. Ch. 568 ; 68 L. T. 
 
 826 - - - - - - - - - 320 
 
 Liverpool Household Stores Association, In re (1890), 59 L. J. Ch. 
 
 624 - - - - - - - 197, 204, 245, 407 
 
 Liverpool Household Stores v. Smith (1887), 37 C. D. 170 ; 57 L. J. 
 
 Ch. 85 ; 57 L. T. 770; 58 L. T. 204 ; 36 W. R. 485 - - 174 
 
 Liverpool Service Association, Re, L. R. 9 Ch. 511 - - - 399 
 
 Liverpool Waterworks Co., Sparks v., 13 Yes. 428 - - - 152 
 
 Llewellyn v. Kasintoe Rubber Estates, (1914) 2 Ch. 670 - - 424 
 
 Lloyd v. David Lloyd & Co., 6 C. D. 339 ; 37 L. T. 83 ; 25 W. R. 872 - 
 
 328, 414 
 95, 97 
 
 Llynvi Co., 26 W. R. 55 
 
TABLE OF CASES. 
 
 lviii 
 
 Loc — Lon page 
 
 Loch, Waller?;., 7 Q. B. D. 619 _____ 174 
 
 Lock v. Queensland Mortgage Co., (1896) A. C. 461 ; 65 L. J. Ch. 
 
 798 ; 75 L. T. 3 ; 45 W. R. 65 - - - 64, 150 
 
 Locke & Smith, Ltd., Re, (1914) 1 Ch. 687 - 314 
 
 Lockhart, Hawkes Ackerman v., (1898) 2 Ch. 1 ; 67 L. J. Ch. 284; 
 
 78 L. T. 336 ; 46 W. R. 445 (C. A.) - 223 
 
 Lodwich v. Earl of Perth, 1 T. L. R. 76 - - - - 354 
 
 Logan v. Courtown (Earl), 13 Beay. 22; 20 L. J. Ch. 347 - - 146 
 
 Loma Co., Ernest v., (1897) 1 Ch. 1 ; 66 L. J. Ch. 17 ; 75 L. T. 317 ; 
 
 45 W. R. 86 - - - - - 172, 174, 239 
 
 London and Colonial Ein. Corp., 77 L. T. 146 ; 13 T. L. R. 576 (C. A.) 
 
 105, 192 
 
 London and Counties Assets Co. v. Brighton Grand Concert Hall, Ltd., 
 (1915) 2 K. B. 493 - - - 189 
 
 London and County Banking Co., Picker v. (1887), 18 Q. B. D. 515 - 
 
 303, 306 
 
 London and County Coal Co., 3 Eq. 355 - 391 
 
 London and County Land Co., Cuff v., (1912) 1 Ch. 440 - - 231 
 
 London and County Printing Works, Baster v. (1899), 1 Q. B. 901 - 262 
 
 London and General Bank, In re (No. 1), (1895) 2 Ch. 166 ; 63 L. J. 
 
 Ch. 853; 43 W. R. 481 ; 72 L. T. 611 - - 206, 227, 407 
 
 London and General Bank (No. 2), (1895) 2 Ch. 673; 64 L. J. Ch. 
 
 866 ; 73 L. T. 304 ; 44 W. R. 80 - - - 206, 225, 230 
 
 London and Globe Finance Co., Re, (1903) 1 Ch. 728; 72 L. J. Ch. 
 
 368 ; 88 L. T. 194; 51 W. R. 651 ; 50 W. R. 253 - 210, 409, 416 
 
 London and Mercantile Discount Co., L. R. 1 Eq. 277 - - 395 
 
 London and New York Co., (1895) 2 Ch. 860- - - - 96 
 
 L. & N. W. Rail. Co., Barton v., 24 Q. B. D. 77 ; 59 L. J. Q. B. 33; 
 
 62 L. T. 164; 38 W. R. 197 - - - 112,133,136,139 
 
 L. & N. W. Rail. Co., Barton v., 38 C. D. 144; 57 L. J. Ch. 676 ; 59 
 
 L. T. 122 ; 36 W. R. 452 - 136,143 
 
 L. & N. W. Rail. Co., Peel v. y (1907) 1 Ch. 5; 76 L. J. Ch. 152 ; 95 
 L. T. 897 - - - - - - - 67, 173, 442 
 
 London and Northern Assets Corporation (No. 1), Wall v., 14 T. L. R. 
 
 496; (1898) 2 Ch. 469 169, 170, 175, 239 
 
 London and Northern Assets Corporation (No. 2), Wall?;., (1899) 1 Ch. 
 
 550 - - - - - - - - - 171 
 
 London and Northern Bank, Re, Ex parte Archer, 85 L. T. 698 ; 50 
 W. R. 262 (C. A.) - - - - - - - 408 
 
 London and Northern Bank, Ex parte Jones, (1900) 1 Ch. 220; 66 
 L. J. Ch. 24; 81 L. T. 512 ; 7 Manson, 60 - 109 
 
 London and Northern Bank, Haddock’s Case, W. N. (1902) 84 ; (1902) 
 
 2 Ch. 73 - - - - - - - 360, 408 
 
 London and Northern S. S. Co. v. Farmer, (1914) W. N. 200 ; 111 L. T. 
 
 204- - - - - - - - - 150 
 
 London and Paris Hotel Co., Beer v., 20 Eq. 412 ; 32 L. T. 715 - 255 
 
 London and Provincial Bank, Powell v., (1893) 2 Ch. 555 ; 62 L. J. 
 
 Ch. 795; 69 L. T. 421 ; 41 W. R. 545 - - - 131,134 
 
TABLE OF CASES. 
 
 IX 
 
 Lon — Lon page 
 
 London and Provincial Co., Re, 5 C. D. 525; 46 L. J. Ch. 842; 36 
 
 L. T. 545 - - - - - - - - 102 
 
 London and Provincial Law Assurance Society v. London and 
 
 Provincial Joint Stock Life Assurance Co., 17 L. J. Ch. 37 - 249 
 
 London and Provincial Pure Ice, W. N. (1904) 136 - 397 
 
 London, &c. Society, Cullerne v., 25 Q. B. D. 485 ; 59 L. J. Q. B. 
 
 525 ; 63 L. T. 511 ; 39 W. R. 88 - - - 205, 208, 407 
 
 London and South Wales Coal Co., Burn v., W. N. (1890) 209; 7 T. 
 
 L. R. 118 - - - - - - - - 223 
 
 London and S. W. Canal Co., (1911) 1 Ch. 346; (1911) W. N. 29 - 
 
 185, 206 
 
 London and S. W. Rail. Co., Coates v., 41 L. T. 553 ; 44 J. P. 154 - 144 
 London and Southern, &c. Co., 31 C. D. 223 ; 55 L. J. Ch. 224; 54 
 
 L. T. 44 ; 34 W. R. 163 - - - - - -181 
 
 London and Staffordshire Bank, 24 C. D. 149 - - - 354 
 
 London and Staffordshire Fire Co., Re, 24 C. D. 149 ; 53 L. J. Ch. 
 
 78 ; 48 L. T. 955 ; 31 W. R. 781 - - - - - 352 
 
 London Assurance Corporation v. London and Westminster Ass. 
 
 Corp., 9 Jur. N. S. 843 - - - - - 249 
 
 London, Birmingham and Manchester Insurance Co., Molineaux v., 
 
 (1902) 2 K. B. 589; 71 L. J. K. B. 848; 87 L. T. 324; 51 W. R. 
 
 36 (C. A.) - - - - - - - 184, 189 
 
 London, Bombay and Mediterranean Bank, McEwen v., 15 W. R. 248- 414 
 London Celluloid Co., 39 Ch. D. 190; 57 L. J. Ch. 843; 59 L. T. 
 
 109 ; 36 W. R. 673 ; 1 Meg. 45 - - - - - 119 
 
 London Celluloid, Willmott v., 34 C. D. 147 ; 52 L. T. 642; W. N. 
 
 (1885) 29 - - - 415 
 
 London, Chatham and Dover Railway, Gardner v., 2 Ch. 201 - 283 
 
 London County Council v. Att.-Gen., (1901) A. C. 26; 70 L. J. K. B. 
 
 77 ; 83 L. T. 605 ; 49 W. R. 686 - - - - - 63 
 
 London County Council v. Att.-Gen., (1902) A. C. 165 - - 68 
 
 London Financial Association v. Kelk, 26 C. D. 107 ; 53 L. J. Ch. 
 
 1025 ; 50 L. T. 492 - - - - - 204, 209 
 
 London Fish Market Co., 27 S. J. 600 - 398 
 
 London Founders’ Association v. Clarke, 20 Q. B. D. 576; 57 L. J. 
 
 Q. B. 291 ; 59 L. T. 93 ; 36 W. R. 489 - - - - 135 
 
 London Freehold Land Co. v. Suffield, (1897) 2 Ch. 608 ; 66 L. J. Ch. 
 
 790; 77 L. T. 445; 46 W. R. 102 - 258,259 
 
 London Indiarubber Co., 5 Eq. 519 ; 37 L. J. Ch. 235 ; 17 L. T. 530 ; 
 
 14 W. R. 594 ; 16 W. R. 334 - - - - 85, 396, 416 
 
 London Joint Stock Bank, Bentinck v., (1893) 2 Ch. 120; 62 L. J. 
 
 Ch. 458 ; 68 L. T. 315 ; 42 W. R. 140 - - - - 307 
 
 London Joint Stock Bank, Sheffield v., 13 A. C. 333; 57 L. J. Ch. 
 
 986 ; 58 L. T. 535 ; 37 W. R. 33 - - - - 145, 436 
 
 London Joint Stock Bank v. Simmons, (1892) A. C. 201 ; 61 L. J. 
 
 Ch. 723; 66 L. T. 625; 41 W. R. 108 - - - 145, 306 
 
 London Marine Association, Re, 8 Eq. 176 ; 20 L. T. 943 ; 17 W. R. 
 
 784- - - - - - - - - 387 
 
 London Music Hall, Limited, Underwood v., (1901) 2 Ch. 309 - 82, 88, 90 
 London Pressed Hinge Co., 53 W. R. 407 ; 92 L. T. 409 ; 21 T. L. R. 
 
 322 - - - - - - - - - 309 
 
lx 
 
 TABLE OF CASES. 
 
 Lon — Lyt page 
 
 London Steamboat Co., 31 W. E. 781 ; W. N. (1883) 123 - - 99 
 
 London Trading Bank, Bechuanaland Exploration Co., (1898) 2 Q. B. 
 
 658 - - - - - - - 304, 306, 307 
 
 London Tramways Co., Eapier v. y 69 L. T. 361 - - - 74 
 
 London Tramways Co., Walker v. (1879), 12 C. D. 705 ; 49 L. J. Ch. 
 
 23 ; 28 W. E. 163 - - - - - - 47, 443 
 
 London United Breweries, (1907) 2 Ch. 511 ; 76 L. J. Ch. 612 ; 97 
 
 L. T. 541 327 
 
 Longman v. Bath Electric Tramways, (1905) 1 Ch. 646; 21 T. L. E. 
 
 373 ; 53 W. E. 480 - - - - - - - 139 
 
 Lonsdale Yale Ironstone Co., 16 W. E. 601 - 422 
 
 Lorant, Scadding v., 3 H. L. C. 418 ----- 176 
 Lord Baltimore, Penn v., 1 Yes. sen. 444; Wh. & Tu. L. Gas. 7th ed. 
 
 755 ________ 274 
 
 Lord Clanmorris, Thomson v., (1900) 1 Ch. 718; 69 L. J. Ch. 337 ; 
 
 82 L. T. 277 ; 48 W. E. 488 (C. A.) - 358 
 
 Lord Fermoy, Land Credit Company of Ireland v. (1870), L. E. 5 Ch. 
 
 763 ; 23 L. T. 439 ; 18 W. E. 1089 - - - - 200 
 
 Lord Westbury, Torbock v., (1902) 2 Ch. 871 ; 71 L. J. Ch. 845 ; 87 
 L. T. 165 ; 51 W. E. 133 - - - - - 166, 239 
 
 Loring v. Davis, 32 C. D. 625 - - - - 135, 137 
 
 Louisiana, &c. Mortgage Co., (1909) 2 Ch. 552 - - 95, 96 
 
 Louth, &c. Co., Sharpley v., 2 C. D. 663; 46 L. J. Ch. 259; 35 L. T. 
 
 71 - - - 352 
 
 Lowndes v. Earl Stamford, 18 Q. B. 425 - - - 187 
 
 Lubbock v. British Bank of S. A., (1892) 2 Ch. 198; 61 L. J. Ch. 
 
 498; 67 L. T. 74; 41 W. E. 103 - - - - - 217 
 
 Luce, Neath Building Society v., 43 C. D. 158; 61 L. T. 611; 38 
 
 W. E. 122 - - - 275 
 
 Lucky Guss, Limited, 79 L. T. 722 - - - 122, 123 
 
 Lumley v. Wagner, 1 D. M. & G. 604 - 262 
 
 Lumsden’s Case, 4 Ch. 31 ; 19 L. T. 437 ; 17 W. E. 65 - - 115 
 
 Lush & Co., (1913) W. N. 39; 108 L. T. 450 - 282 
 
 Lushington, Pender v., 6 C. D. 70 ; 46 L. J. Ch. 317 - 40, 170, 171, 173 
 Lydney and Wigpool Co. v. Bird, 33 Ch. D. 85 ; 55 L. J. Ch. 875 ; 55 
 L. T. 358 ; 34 W. E. 749 - - - - 67, 331, 332 
 
 Lynde v. Anglo-Italian Hemp Co., (1896) 1 Ch. 178; 65 L. J. Ch. 
 
 96 ; 73 L. T. 502 - - - - - - - 346 
 
 Lyon’s Case, 35 Beav. 646 ------ 355 
 
 Lyster’s Case (1867), 4 Eq. 233 ; 36 L. J. Ch. 616 ; 16 L. T. 824; 15 
 W. E. 1007 196, 197 
 
 Lyttle’s Iron Agency, Johnson v. (1877), 5 C. D. 687 ; 46 L. J. Oh. 
 
 786; 36 L. T. 528; 25 W. E. 548 - - 41, 147, .151, 152, 245 
 
TABLE OF CASES. 
 
 XI 
 
 M. 
 
 McC Mai page 
 
 McCollin v. Gilpin, 5 Q. B. D. 390 - - - - 177, 199 
 
 McConnell v. Wright, (1903) 1 Ch. 546 ; 72 L. J. Ch. 347; 88 L. T. 
 
 431 ; 51 W. R. 661 (C. A.) - - - - - - 358 
 
 McConnell’s Case, (1901) 1 Ch. 728; 70 L. J. Ch. 251; 84 L. T. 
 
 557 - - - - - - - 186, 187, 189 
 
 Macdonald v. Law Union, &c. Co. (1873), L. R. 9 Q. B. 328 ; 22 W. R. 
 
 530 ; 30 L. T. 545; 43 L. J. Q. B. 131 - - - 156 
 
 Macdougall v. Gardiner (1875), L. R. 10 Ch. 606; 1 Ch. D. 13; 45 
 
 L. J. Ch. 27 ; 24 W. R. 118 - - 40, 50, 164, 165, 176, 242 
 
 McEwen v. London, Bombay and Mediterranean Bank, 15 W. R. 
 
 248 -------- 414 
 
 Macfarlane’s Claim, 17 C. D. 337 ; 50 L. J. Ch. 273 ; 44 L. T. 299 - 410 
 Mack’s Case, W. N. (1900) 114 189 
 
 Mackay, Ex parte, 8 Ch. 643 _____ 318 
 
 Mackay v. Commercial Bank of New Brunswick, L. R. 5 P. C. 394 ; 
 
 43 L. J. C. P. 31 ; 30 L. T. 180 ; 22 W. R. 473 - - - 74 
 
 McKay’s Case, 2 Ch. D. 1 - - - - - - 261 
 
 McKenna, Parker v., 10 Ch. 118 ; 44 L. J. Ch. 425; 31 L. T. 739 ; 
 
 23 W. R. 271 _ _ _ _ 192,193,206,436,442 
 
 McKeown v. Boudard, Everard & Co. (1896), 74 L. T. 712 ; 65 L. J. 
 
 Ch. 735 ; 45 W. R. 152 - - - - - 345 
 
 Mackley’s Case, 1 Ch. D. 247 ; 45 L. J. Ch. 158 ; 33 L. T. 460 ; 24 
 
 W. R, 92 - - - - - - - - 102 
 
 Macleay v. Tait, (1906) A. C. 24 - - - 351, 360, 361 
 
 McLister, Garden Gully, &c. Co. v., 1 A. C. 39 ; 33 L. T. 408 ; 24 W. R. 
 
 744 ______ 147, 151, 152 
 
 McMahon, Re, Fuller v. McMahon, (1900) 1 Ch. 173; 69 L. J. Ch. 
 
 142; 81 L. T. 715; 7 Manson, 38 - - - - - 148 
 
 McMahon v. North Kent Iron Works, (1891) 2 Ch. 148 ; 60 L. J. Ch. 
 
 372 ; 64 L. T. 317 ; 39 W. R. 349 - - - - - 324 
 
 McMillan v. Le Roi Mining Co., (1906) 1 Ch. 331 ; 75 L. J. Ch. 174; 
 
 94 L. T. 160 ; 54 W. R. 281 - - - - -173 
 
 McMorine, Hibble white v., 6 M. & W. 200 - - - 134, 316 
 
 McMullen v. “Sir Alfred Hickman” Steamship Co., Limited, 71 
 
 L. J. Ch. 755 174 
 
 Macnaghten, Betts v., (1910) 1 Ch. 430 ; 25 T. L. R. 552 - 167, 175, 244 
 Macnamara, Wilmer v., (1895) 2 Ch. 245 ; 64 L. J. Ch. 516 ; 72 L. T. 
 
 552 ; 43 W. R. 519 ______ 216 
 
 Macneil, Denton v., 2 Eq. 352 ; 14 L. T. 721 ; 14 W. R. 813 - 355 
 
 Maddison, Alderson v., 5 Ex. Div. 293 ; 8 A. C. 467 ; 29 W. R. 105; 
 
 43 L. T. 249 ; 49 L. T. 303 ; 52 L. J. Q. B. 737 - - - 355 
 
 Mahoney v. East Holyford Rail. Co., L. R. 7 H. L. 869 - 44, 45, 46, 191, 
 
 197, 258 
 
 Main Colliery Co., Powell v., (1900) A. C. 366; 69 L. J. Q,. B. 758; 
 
 83 L. T. 85 ; 49 W. R. 49 (H. L.) - - - - - 272 
 
 Mair v. Himalaya Tea Co., 1 Eq. 411 - - - - 262 
 
 Mair v. Rio Grande Rubber Estates, (1913) A. C. 853 - - 355 
 
lxii 
 
 TABLE OF CASES. 
 
 Mai — Mar page 
 
 Maison Louis Pinet, Ltd., Pinet & Co. v., (1898) 1 Ch. 179 - - 27 
 
 Malam v. Hitchens, (1894) 3 Ch. 578; 63 L. J. Ch. 797 ; 71 L. T. 
 
 655 --------- 220 
 
 Malleson v. National Insurance Co., (1894) 1 Ch. 200 ; 63 L. J. Ch. 
 
 286 ; 70 L. T. 157 ; 42 W. R. 249 - - - - - 47 
 
 Manchester and London Life Assurance Association, 9 Eq. 643 - 384 
 
 Manchester, &c. Co., Hill v., 5 B. & Ad. 866 - 258 
 
 Manchester and Milford Rail. Co., 14 C. D. 645; 49 L. J. Ch. 365; 
 
 42 L. T. 714 - - - - - - - 326 
 
 Manchester and Milford Railway, Chambers v., 5 B. & S. 588 - 428 
 
 Manchester Brewery, North Cheshire and Manchester Brewery v., 
 
 (1899) A. C. 83 ; 68 L. J. Ch. 74 ; 79 L. T. 645, H. L. (E.) - 27, 249 
 Manchester Corporation, Att.-Gen. v ., (1906) 1 Ch. 643 ; 75 L. J. Ch. 
 
 330 ; 54 W. R. 307 ; 22 T. L. R. 261 - - - 68 
 
 Manchester Rail. Co., Butler v., 21 Q. B. H. 207 - - - 74 
 
 Manchester Rail. Co., Forrest v., 30 Beav. 40 - - - 67 
 
 Manchester Rail. Co., North Central Waggon Co. v., 13 A. C. 554 - 281 
 Mangles v. Dixon, 3 H. L. C. 702 ----- 292 
 
 Manila Rail. Co., Government Stock, &c. Co. v ., (1897) A. C. 81 ; 86 
 
 L. J. Ch. 102; 75 L. T. 553; 45 W. R. 353 - - 309, 310 
 
 Mann v. Edinburgh Northern Trams Co., (1893) A. C. 69; 62 L. J. 
 
 P. C. 74 ; 68 L. T. 96 ; 57 J. P. 245 5, 332 
 
 Margrett, Ramsay v ., (1894) 2 Q. B. 18 - - - - 281 
 
 Marine Investment Co., Re, 17 L. T. 535 - 414 
 
 Marine Mansions Co. (1867), 4 Eq. 601 ; 37 L. J. Ch. 113 - 273, 315 
 
 Marino’s Case, 2 Ch. 596 - - - - - -133 
 
 Mariquita, &c. Co., Reg. v., 1 E. & E. 289 - 222 
 
 Markham and Darter’s Case, (1899) 1 Ch. 414; (1899) 2 Ch. 480; 68 
 
 L. J. Ch. 215 ; 80 L. T. 282 ; 47 W. R. 509 ; 6 Manson, 84 - 121, 144 
 
 Marks v. Samuel, (1904) 2 K. B. 287 ; 73 L. J. K. B. 587 ; 90 L. T. 
 
 590 ; 53 W. R. 88 (C. A.) - - - - - - 174 
 
 Marmor, Limited v. Alexander, (1908) S. C. 78 (Ct. of Sess.) - 211 
 
 Marquis of Londonderry, Eaglesfield v., 4 C. D. 693 ; 25 W. R. 190 ; 
 
 35 L. T. 822 - - - - - - - 358 
 
 Marquis of Northampton, Salt v., (1892) A. C. 1 ; 61 L. J. Ch. 49; 
 
 65 L. T. 765 ; 40 W. R. 529 - - - - - 160 
 
 Marrs v. Thompson, 17 T. L. R. 365 (C. A.) - - - - 387 
 
 Marseilles, &c. Rail. Co., Re, 7 Ch. 161 ; 41 L. J. Ch. 345 ; 25 L. T. 
 
 858 ; 20 W. R. 254 - - - - - - 73, 235 
 
 Marsh, Dutton v., L. R. 6 Q. B. 361 - 266 
 
 Marshall v. Glamorgan Iron and Coal Co., 7 Eq. 129 ; 38 L. J. Ch. 
 
 69; 19 L. T. 632; 17 W. R. 435 - - - - - 44 
 
 Marshall, Holroyd v. (1862), 10 H. L. C. 191 - 308 
 
 Marshall, Shipley v., 14 C. B. N. S. 566 - - - - 280 
 
 Marshall, Turquand v., 4 Ch. 376; 38 L. J. Ch. 639 ; 20 L. T. 765 ; 
 
 17 W. R. 935 - - - - - 201, 204 
 
 Marshall’s Valve Gear Co. v. Manning, Wardle & Co., (1909) 1 Ch. 
 
 267 - - 190, 242 
 
TABLE OF CASES. 
 
 Ixi ii 
 
 Mar— Men page 
 
 Martin, Albion Co. v., 1 0. D. 580 ; 45 L. J. Ch. 173 ; 33 L. T. 060 ; 
 
 24 W. R. 134 - - - - - - - 192 
 
 Martyn ; Penrose v. (1858), E. B. & E. 490 - 266 
 
 Marzetti’s Case, 28 W. R. 541 ; 42 L. T. 206 ; W. N. (1880) 50 - 201, 204, 
 
 206, 335 
 
 Maskelyne British Typewriter Co., (1898) 1 Ch. 133 ; 67 L. J. Ch. 
 
 125 ; 77 L. T. 579 ; 46 W. R. 194 - - - - - 296 
 
 Mason, Ashurst v., 20 Eq. 225 ; 44 L. J. Ch. 337 ; 23 W. R. 506 
 
 212, 244 
 
 Mason v. Harris, 11 Ch. D. 97 ; 48 L. J. Ch. 589; 40 L. T. 644 ; 27 
 W. R. 699 - - - - - - - 50, 171 
 
 Mason’s Case, In re Liverpool Insurance Co., 30 W. R. 378 ; 46 L. T. 
 
 54; W. N. (1882) 18 - - - - - - 150 
 
 Masonic and General Life Assurance Co., 32 C. D. 373 - - 392 
 
 Masonic and General Life, &c. Co., Re Sharpe, (1892) 1 Ch. 154 ; 61 
 L. J. Ch. 193; 65 L. T. 806; 40 W. R. 241 - - 179, 390 
 
 Matabele Co., Burrows v., W. N. (1901) 68 ; (1901) 2 Ch. 23 - 341 
 
 Maude’s Case, 6 Ch. 51 ; 40 L. J. Ch. 21 ; 23 L. T. 749 ; 19 W. R. 
 
 113- - - - - - - - 150,416 
 
 Maudsley v. Maudsley, Sons and Field, (1900) 1 Ch. 602; 69 L. J. 
 
 Ch. 347 ; 82 L. T. 378; 48 W. R. 568 - - - - 274 
 
 Maund, Campbell v., 5 Ad. & El. 865 - - - - 172 
 
 Maund v. Monmouthshire Canal Co., 4 M. & G. 452 - - - 74 
 
 May, Hicks v., 13 C. D. 236 ------ 412 
 
 May, James v ., L. R. 6 H. L. 328 ; 42 L. J. Ch. 586 ; 29 L. T. 216 - 211 
 Mayfair Property Co., Bartlett v., W. N. (1897) 175 ; (1898) 2 Ch. 28 - 271 
 May hew, Schweitzer v., 31 Beav. 37 - - - - - 328 
 
 Maynard v. Consolidated Kent Collieries Corporation, Limited, (1903) 
 
 2 K. B. 121; 72 L. J. K. B. 681; 88 L. T. 676; 52 W. R. 117 
 (0. A.) - - - - - - - - 135 
 
 Mayor of Salford v. Lever, (1891) 1 Q,. B. 168 ; 60 L. J. Q. B. 39 ; 
 
 63 L. T. 658 ; 39 W. R. 85 - - - - - - 193 
 
 Mayor of the Staple v. Bank of England, 21 Q. B. D. 160 - - 258 
 
 Mayor of Wigan, Reg. v., 14 Q. B. D. 908 - 188 
 
 May’s Metal Separating Syndicate, W. N. (1898) 159; 68 L. J. Ch. 
 
 46 ; 79 L. T. 63 ; 5 Mans. 342 - 121,123 
 
 Mears v. Western of Canada, (1905) 2 Ch. 353; 74 L. J. Ch. 581; 
 
 93 L. T. 150 - - - - - - - 107 
 
 Measures Brothers, Ltd. v. Measures, (1910) 2 Ch. 248; 26 T. L. 
 
 R. 251 (1910) - - - - - - - 263 
 
 Medical Battery Co., Re, (1894) 1 Ch. 444 - 398, 422 
 
 Melbourne Brewery Co., Re, (1901) 1 Ch. 453 ; 49 W. R. 250 - 328, 392 
 Melhado v. Port Alegre Co., L. R. 9 C. P. 503; 43 L. J. C. P. 253; 
 
 31 L. T. 57 ; 23 W. R. 57 - - - - - - 41 
 
 Melrose, Lindus v., 3 H. & N. 177 - - - - - 177 
 
 Melson & Co., (1906) 1 Ch. 841 ; 75 L. J. Ch. 509 ; 94 L. T. 641 ; 54 
 W. R. 468 - - - - - - - 393, 398 
 
 Mendel, Odessa Tramways Co. v. (1878), 8 C. D. 235 ; 26 W. R. 887 ; 
 
 38 L. T. 731 ; 47 L. J. Ch. 505 - - - - 115, 147 
 
 Menell et Cie., Re, (1915) 1 Ch. 759 ----- 219 
 
lxiv 
 
 TABLE OF CASES. 
 
 Men— Min 
 
 PAGE 
 
 Menier v. Hooper’s Telegraph Co., 9 Ch. 350; 43 L. J. Ch. 330; 30 
 L. T. 209; 22 W. R. 396 - - - - 50, 91, 171, 242 
 
 Mercantile Bank of Australia, (1892) 2 Ch. 204 - - 390, 438 
 
 Mercantile Co. v. International Co. of Mexico, (1893) 1 Ch. 484, n. ; 
 
 68 L. T. 603, n. - - - - - - 321 
 
 Mercantile, &c. Co. v. River Plate, &c. Co., (1892) 2 Ch. 303- - 274 
 
 Mercantile Trust Co. v. River Plate Co., (1894) 1 Ch. 578; 63 L. J. 
 
 Ch. 366 ; 70 L. T. 131 ; 42 W. R. 365 - - - 321 
 
 Merchants’ Fire Office, (1899) 1 Ch. 432 - 408 
 
 Merry weather, Atwool v ., 5 Eq. 464, n. - - - 50, 171 
 
 Merry weather, East Pant Mining Co. v. y 2 H. & M. 254 ; 13 W. R. 
 
 216; 10 Jur. N. S. 1231 - - - - - -171 
 
 Merry weather v. Moore, (1892) 2 Ch. 518 - - - - 263 
 
 Mersey Dock Case, 11 H. L. C. 443 - - - - - 18 
 
 Mersey Dock Trustees v. Gibb, L. R. 1 H. L. 93 - - - 74 
 
 Mersey Steel Co. v. Naylor, 9 App. Cas. 434 - - - - 410 
 
 Metal Constituents Co., (1902) 1 Ch. 707 ; 50 W. R. 492 - 36, 102 
 
 Metcalf’s Case, 13 C. D. 169; 49 L. J. Ch. 347; 42 L. T. 178; 28 
 W. R. 435 - - - - - - - - 206 
 
 Metropolitan, &c. Co., Bryon v., 3 De G. & J. 123 - - 269, 270 
 
 Metropolitan, &c. Co., Touche v. y 6 Ch. 671 - - - - 334 
 
 Metropolitan Amalgamated Estates, Ltd., Re, (1912) 2 Ch. 497 - 326 
 
 Metropolitan Bank v. Heiron, 5 Ex. Div. 319 ; 43 L. T. 676 ; 29 
 W. R. 370 - - - - - - - - 335 
 
 Metropolitan Bank Co., Rumball v. (1877), 2 Q,. B. D. 194; 46 L. J. 
 
 Q. B. 346; 36 L. T. 240; 25 W. R. 366 - - 304, 305, 307 
 
 Metropolitan Coal Consumers’ Association v. Scrimgeour, (1895) 2 
 Q. B. 604 ; 65 L. J. Q. B. 22 ; 73 L. T. 137 ; 44 W. R. 35 - 67, 340, 342 
 Metropolitan Land Co., Hardy v., L. R. 7 Ch. 427 - 407 
 
 Mexican Gold Co., Duffin v., W. N. (1890) 116 - 123 
 
 Mexican Rail. Co.. Harrison v., 19 Eq. 358; 44 L. J. Ch. 403; 32 
 L. T. 82 ; 23 W. R. 403 - - - - - 47, 82 
 
 Mid-Kent Fruit Factory, (1896) 1 Ch. 567 - - - - 410 
 
 Midland Counties District Bank, (1905) 1 Ch. 357 ; 92 L. T. 360 - 263 
 
 Midland Express, Ltd., (1914) 1 Ch. 41 289 
 
 Midland Rail. Co., Edwards v., 6 Q. B. D. 287 - - - 74 
 
 Midland Rail Co., Taylor v., 8 W. R. 401 - - - - 159 
 
 Mid-Wales Rail. Co., Bateman v. (1865), L. R. 1 C. P. 499; 35 L. J. 
 
 C. P. 205 ; 14 W. R. 672 - - - - - - 264 
 
 Migotti’s Case, 4 Eq. 238 ; 36 L. J. Ch. 531 ; 16L.T. 271; 15 W. R. 731- 102 
 Milan Tramways Co., Re (1884), 25 Ch. D. 587 ; 53 L. J. Ch. 1008 ; 
 
 50 L. T. 545 ; 32 W. R. 601 - - - - - 329 
 
 Miles v. New Zealand Estate Co. (1886), 32 C. D. 266; 55 L. J. Ch. 
 
 801 ; 54 L. T. 582; 34 W. R. 669 - - - - 155, 158 
 
 Mills, Charlesworth v., (1892) A. 0. 231 ; 25 Q. B. D. 425 - - 281 
 
 Milward v. Avill & Smart, 4 Mans. 403 - 327 
 
 Mil ward v. Thatcher, 2 T. R. 81 - - - - -189 
 
 MineraCo., Re (1876), W. N. 234 - - - - - 397 
 
TABLE OF CASES. 
 
 lxv 
 
 Min — Mou page 
 
 Mining Shares Co., (1893) 2 Ch. 660 ; 62 L. J. Ch. 434 ; 68 L. T. 578 ; 
 
 41 W. R. 376 - - - - - - - 80 
 
 Mitcalfe, Sullivan v., 5 C. P. D. 465 ; 49 L. J. C. P. 815 ; 44 L. T. 8 ; 
 
 29 W. R. 181 - - - - - - - 359 
 
 Mitchell, Norman v., 19 Beav. 278; 5 De G. M. & G. 648 ; 2 W. R. 
 
 247, 685 - - - - - - - - 146 
 
 Mockford, Andrews v., (1896) 1 Q. B. 372 - - - 357 
 
 Molineaux v. London, Birmingham and Manchester Insurance Co., 
 (1902) 2 K. B. 589 ; 71 L. J. K. B. 848; 87 L. T. 324; 51 W. R. 
 
 36 (C. A.) - - - - - - - 184, 189 
 
 Monmouthshire Canal Co., Maund v., 4 M. & G. 452 - - 74 
 
 Monolithic Co., (1915) 1 Ch. 643 - - - 280, 282 
 
 Montague, Hendricks v., 17 C. D. 638 ; 50 L. J. Ch. 456 ; 44 L. T. 
 
 879 ; 30 W. R. 160 - - - - - 27, 249 
 
 Montaignac v. Shitta, 15 A. C. 357 ----- 436 
 
 Montefiore, Ramsgate Hotel v., L. R. 1 Ex. 109 ; 35 L. J. Ex. 90 - 112 
 
 Montgomery Moore Ship Collision Doors Syndicate, W. N. (1903) 121 ; 
 
 72 L. J. Ch. 624 ; 89 L. T. 126 - - - - 392 
 
 Montgomeryshire Brewery Co., Robinson v ., (1896) 2 Ch. 841 ; 65 
 L. J. Ch. 915 ; 3 Manson, 279 - - - - - 75 
 
 Montreal Lithographing Co. v. Sabiston, (1899) A. C. 610 ; 68 L. J. 
 
 C. P. 121 ; 81 L. T. 135 (H. L.) - - - - - 27 
 
 Moor v. Anglo-Italian Bank, 10 C. D. 689 - - 273, 328, 392 
 
 Moore v. Explosives Co., 56 L. J. Q. B. 235 - - - - 355 
 
 Moore, Merryweather v., (1892) 2 Ch. 518 - - - - 263 
 
 Moore v. N. W. Bank, (1891) 2 Ch. 599; 60 L. J. Ch. 627 ; 64 L. T. 
 
 456.; 40 W. R. 93 - - - - - -132 
 
 Morrell v. Oxford Portland Cement Co., 26 T. L. R. 682 - - 185 
 
 Morris, Jacobs v., (1902) 1 Ch. 816 ----- 436 
 
 Morrison (G. H.) & Co., Ltd. (1912), 106 L. T. 731 - - - 411 
 
 Morrison, New Zealand Loan and Mercantile Agency Co. v., (1898) 
 
 A. C. 349 (P. C.) ; 67 L. J. P. C. 10 ; 77 L. T. 603 ; 46 W. R. 239 - 432 
 Morrison v. Skerne Ironworks Co., 60 L. T. 588 - 325 
 
 Morrison v. Trustees’ Executors Co. (1899), 68 L. J. Ch. 11 ; 79 L. T. 
 
 605 - - - - - - - - - 152 
 
 Morris’s Case, L. R. 7 Ch. 200 ; L. R. 8 Ch. 810 - 404 
 
 Mortgage Insurance Co. v. Canadian Agricultural Coal Co., (1901) 
 
 2 Ch. 377 ; 70 L. J. Ch. 684 ; 84 L. T. 861 - - - - 329 
 
 Morton, Queen v., L. R. 2 C. C. R. 22 - - - 145, 259 
 
 Mosely v. Koffyfontein Mines, Limited (shares for bonus certificates), 
 (1904) 2 Ch. 108; 73 L. J. Ch. 569; 91 L. T. 266; 53 W. R. 140 
 (C. A.) - - - - - - 68, 317 
 
 Mosely v. Koffyfontein Mines, Limited (director’s resignation), (1910) 
 
 2 Ch. 382 - - - - - - - - 188 
 
 Mosely v. Koffyfontein Mines, Limited (increase of capital), (1911) 
 ICh. 73; (1911)A. C. 409- - - - - - 87 
 
 Moss Steamship Co. v. Whinney, (1912) A. C. 254 - 326 
 
 Mounsey, Australian Co. v., 4 K. & J. 733; 31 L. T. (O. S.) 246; 
 
 6 W. R. 734 - - - - - - 190, 270 
 
 P. 
 
 e 
 
lxvi 
 
 TABLE OF CASES. 
 
 Mou- Nat TAGE 
 
 Mount Morgan West Gold Mine Co., In re, 56 L. T. 622 - 353, 354, 356 
 Mowatt v. Castle Steel, &c. Co., 34 C. D. 58 ; 55 L. T. 645 - - 259 
 
 Mowbray, Kuala Pahi Estate v., (1914) W. N. 321 - 322 
 
 Moxham v. Grant, (1900) 1 Q. B. 88; 69 L. J. Q. B. 97 ; 7 Manson, 
 
 65 (C. A.) ------ 180,211,407 
 
 Moxbay, Tulk v. (1848), 2 Ch. 774 ----- 156 
 
 Mozley v. Alston, 1 Ph. 790 - - - - - - 242 
 
 Muggeridge, Be, L. R. 10 Eq. 443 ----- 405 
 
 Muggeridge, New Brunswick Co. v., 1 Dr. & Sm. 363; 30 L. J. Ch. 
 
 242 ; 3 L. T. 651 ; 9 W. R. 193 - - - - 115, 345 
 
 Municipal Freehold Land Co. v. Pollington (1890), 63 L. T. 238 ; 59 
 L. J. Ch. 734 ; 2 Meg. 307 - - - - - 188, 262 
 
 Municipality of Picton v. Geldert, (1893) A. C. 524 - - - 351 
 
 Munnings, Attwood v., 7 B. & C. 278 - 436 
 
 Munster and Leinster Bank, In re, (1907) Ir. R. 237 - - - 80 
 
 Munt v. Shrewsbury Rail. Co., 13 Beav. 1 - - 66, 68 
 
 Murray v. Bush, L. R. 6 H. L. 77 ; 42 L. J. Ch. 586; 29 L. T. 217 ; 
 
 22 W. R. 280 - - - - - - - 192 
 
 Murray, Wills v., 4 Ex. 843; 19 L. J. Ex. 209 - - 167, 176 
 
 Mutoscope and Biograph Syndicate, Be, (1899) 1 Ch. 896 ; 68 L. J. Ch. 
 
 417; 81 L. T. 22; 47 W. R. 520 - - - - - 416 
 
 Mutter v. Eastern, &c. Co., 38 C. D. 92 - - - 222 
 
 Mutual Society, Grim wade v., 52 L. T. 409 - - - - 204 
 
 Mutual Society, Wallingford v. (1879), 5 A. C. 685; 50 L. J. Q. B. 
 
 49 ; 43 L. T. 258 ; 29 W. R. 81 - - - - - 294 
 
 Mysore Gold Co., 42 C. D. 535 ----- 424 
 
 Mysore Reefs Kangundy Mining Co., Stephens v., 71 L. J. Ch. 295 ; 
 
 86 L. T. 221 ; (1902) 1 Ch. 745 - - - - - 71 
 
 N. 
 
 Nant-y-glo, &c. Co. v. Grave, 12 C. D. 738 - - - - 209 
 
 Nash v. Calthorpe, W. N. (1905) 100 ----- 361 
 Nassau Steam Co. v. Tyler (1894), 70 L. T. 376 - 266 
 
 Natal Investment Co., In re (1868), L. R. 3 Ch. 355 - 293, 298, 299, 300 
 Natal Land Co. v. Pauline Colliery Syndicate, (1904) A. C. 120 - 253 
 
 National Bank of China, Poole v., (1907) A. C. 229 ; 76 L. J. Ch. 458 ; 
 
 99 L. T. 889, H. L. (E.) 95, 97, 98, 440 
 
 National Bank of India, Kepitigalla Rubber Estates v., 25 T. L. R. 
 
 402 -------- 261 
 
 National Bank of Wales, Be, (1897) 1 Ch. 298 (C. A.); (1899) 2 Ch. 
 
 629, 672 ----- 137, 202, 217, 244 
 
 National Boiler Co., (1892) 1 Ch. 306 ; 61 L. J. Ch. 501 ; 65 L. T. 849 - 78 
 
 National Co. for Distribution of Electricity, (1902) 2 Ch. 34, 357 ; 87 
 L. T. 6 - - - - - - 394, 422 
 
TABLE OF CASES. 
 
 lxvii 
 
 Nat — New page 
 
 National Debenture Corporation, Re, (1891) 2 Ch. 505; 60 L. J. Ch. 
 
 533 ; 64 L. T. 512 ; 30 W. R. 707 - - - - - 52 
 
 National Dwellings Co., 78 L. T. 144 - - - 91, 96 
 
 National Dwellings Co. v. Sykes, (1894) 3 Ch. 159 ; 63 L. J. Ch. 906; 
 
 42 W. R. 696 - - - - - - 170, 176 
 
 National Exchange Bank v. Drew, 2 Macq. 124 ; 25 L. T. 223 - 346 
 
 National Funds Assurance Co., 10 C. D. 118, 126; 48 L. J. Ch. 163; 
 
 39 L. T. 420 ; 27 W. R. 320 206, 211, 215, 407 
 
 National Insurance Co., Malleson v., (1894) 1 Ch. 200; 63 L. J. Ch. 
 
 286 ; 70 L. T. 157 ; 42 W. R. 249 - - - - - 47 
 
 National Investment Corporation, (1901) 1 Ch. 950 - 411 
 
 National Motor Mail Coach Co., Re, (1908) 2 Ch. 228 ; 77 L. J. Ch. 
 
 796 ; 99 L. T. 334 - - - - - 107, 108, 353 
 
 National Motor Mail Coach Co., (1908) 2 Ch. 515 - 335 
 
 National Provincial Insurance, 56 S. J. 290 - - - - 414 
 
 National Stores, (1899) 2 Ch. 773 - - - - 48 
 
 National Telephone Co., (1914) 1 Ch. 755 84, 85 
 
 National Trustee Co. of Australasia v. General Finance Co., (1905) 
 
 A. C. 373 - - - - - - - - 207 
 
 Naval and Military Co-operative Society, Young v., (1905) 1 K. B. 
 
 687 ; W. N. (1905) 41 ; 92 L. T. 458 ; 53 W. R. 447 - 188, 211 
 
 Naylor, Mersey Steel Co. v., 9 A. C. 434 - 410 
 
 Neale v. Birmingham Tramways Co., (1910) 2 Ch. 464 - - 93 
 
 Neath Building Society v. Luce, 43 C. D. 158 ; 61 L. T. 611 ; 38 
 
 W. R. 122 - - - - - - - - 275 
 
 Neath District, &c. Co., Pegge v., (1898) 1 Ch. 183 ; 67 L. J. Ch. 17 ; 
 
 77 L. T. 550; 46 W. R. 243 - - - - - 318 
 
 Neath Harbour Works, Re, 35 W. R. 827 ; 56 L. T. 727 ; W. N. 
 
 (1887) 87, 121 - - - - - - 207, 399 
 
 - 326 
 
 - 185 
 
 Needham, Bristow v., 2 R. 629 - 
 
 Nell v. Atlanta, &c. Co. (1896), 11 T. L. R. 407 (C. A.) 
 
 Nelson v. Anglo-American Land Agency, (1897) 1 Ch. 130 ; 66 L. J, 
 Ch. 112 ; 75 L. T. 482 ; 45 W. R. 171 
 Nelson v. James Nelson & Sons, Ltd., (1914) 2 K. B. 770 
 Nelson, Ex parte, 14 C. D. 45 
 
 Nelson & Co. v. Faber, (1903) 2 K. B. 367 ; 72 L. J. K. B. 771 ; 89 
 
 222 
 
 43 
 
 411 
 
 L. T. 21 - - - - - - 309, 310 
 
 Nelson, Ogdens v., (1905) A. C. 109 ----- 263 
 Nelson, Osgood v., L. R. 5 H. L. 636 - 198 
 
 Nelson Line, Ltd., Goodfellow v., (1912) 2 Ch. 234 - 321 
 
 Netter, Sangster v., 9 T. L. R. 441 - - - - - 339 
 
 Neuchatel Co., Lee v., 41 C. D. 1 ; 58 L. J. Ch. 408 ; 61 L. T. 11 ; 
 
 37 W. R. 321 - - - - 215, 216, 217, 218, 219 
 
 New Afrikander Gold Mining, Booth v., (1903) 1 Ch. 295 ; 87 L. T. 
 
 509; 51 W. R. 593 (C. A.) ----- 341, 342 
 
 New Asbestos Co., Hyde v., 8 T. L. R. 121 - - - - 354 
 
 New Balkis Eersteling, Randt Gold Mining Co. v., (1903) 1 K. B. 461 
 (C. A.) ; (1904) A. C. 165 ; 72 L. J. K. B. 143 ; 88 L. T. 189 ; 51 
 W. R. 391 (C. A.) 
 
 132 
 
lxviii 
 
 TABLE OF CASES. 
 
 New — New page 
 
 New Balkis Eersteling v. Randt Gold Mining Co., (1904) A. C. 163 ; 
 
 73 L. J. K. B. 384 ; 90 L. T. 494 ; 52 W. R. 561 ; 20 T. L. R. 396 
 (H. L. E.); (1904) 2 Ch. 468 - 152,153 
 
 New Beeston Cycle Co., Salton v., (1899) 1 Ch. 775; 68 L. J. Ch. 
 
 370; 80 L. T. 521 ; 47 W. R. 462 - - 187, 188 
 
 New Belgium Co., Transvaal Land Co. v., (1914) 2 Ch. 488 - - 193 
 
 Newbold, Arkwright v., 17 C. D. 301 ; 50 L. J. 372; 44 L. T. 393 ; 
 
 29 W. R. 455 - - - - - - 355, 360 
 
 New Brunswick Co. v. Conybeare, 9 H. L. C. 711, 724 ; 31 L. J. Ch. 
 
 297 ; 6 L. T. 109 ; 10 W. R. 305 - - - - - 355 
 
 New Brunswick Co. v. Muggeridge, 1 Dr. & Sm. 363 ; 30 L. J. Ch. 
 
 242 ; 3 L. T. 651 ; 9 W. R. 193 - - - - 115, 345 
 
 Newcastle Co., W. N. (1888) 246 ----- 397 
 
 Newcastle, &c. Waterworks Co., Atkinson v., 2 Ex. Div. 441 - 351 
 
 New Chili, &c. Co., In re, 45 C. D. 598; 60 L. J. Ch. 90; 63 L. T. 
 
 344; 39 W. R. 59; 2 Meg. 355 - 152, 153 
 
 New Clydach Co., 6 Eq. 514 - 289 
 
 New de Kaap, (1908) 1 Ch. 589 ; 77 L. J. Ch. 374 ; 98 L. T. 665 ; 15 
 Mans. 149 - - - - - - - - 420 
 
 Newdigate Colliery, Re, (1912) 1 Ch. 468 - - - - 326 
 
 New Durham Salt Co., In re (1891), 2 Meg. C. R. 360; (1891), 7 
 T. L. R. 13, 18 - - - - - 287, 318 
 
 New Eberhardt Co., In re (1889), 43 C. D. 118, 129 ; 59 L. J. Ch. 73 ; 
 
 62 L. T. 301 ; 38 W. R. 97 ; 1 Meg. 441 - - - - 121 
 
 Newhaven Local Board v. Newhaven School Board, 30 0. D. 363 - 191 
 
 New London and Brazilian Bank and Brocklebank (1882), 21 C. D. 
 
 302 ; 51 L. J. Ch. 711 ; 47 L. T. 3 ; 30 W. R. 737 - 154, 155, 158, 
 
 159, 291 
 
 New London and Suburban Co., Appleyard v., (1908) 1 Ch. 621 : 77 
 L. J. Ch. 358 ; 98 L. T. 663 - - - - 280 
 
 Newman (George) & Co., (1895) 1 Ch. 674; 64 L. J. Ch. 407; 72 
 L. T. 697; 43 W. R. 483 - 1 - - 56, 186, 206, 377 
 
 Newmarket Local Board, Cowley v., (1892) A. C. 345 - - 351 
 
 New Mashonaland Co., (1892) 3 Ch. 577 ; 61 L. J. Ch. 617 ; 67 L. T. 
 
 90; 41 W. R. 75 - - - - - - - 204 
 
 New Oriental Bank Corporation, (1892*) 3 Ch. 563 - 398 
 
 New Par Consols, (1898) 1 Q. B. 673 - - - - 394 
 
 New Sombrero Co. v. Erlanger, 3 App. Cas. 1218 - - -441 
 
 Newspaper Proprietary Syndicate, (1900) 2 Ch. 349 ; 69 L. J. Ch. 
 
 578; 83 L. T. 341 - - - - - - - 411 
 
 New Tivoli Co., Astley v., (1899) 1 Ch. 151; 68 L. J. Ch. 90; 79 
 L. T. 541 ; 47 W. R. 326 ; 6 Manson, 64 - - - - 189 
 
 Newton, Re, (1896) 2 Q. B. 403; 65 L. J. Q. B. 686; 75 L. T. 144; 
 
 45 W. R. 63 - - - - - - - 401 
 
 Newton v. Birmingham Small Arms Co., (1906) 2 Ch. 378; 75 
 L. J. Ch. 378; 95 L. T. 135; 54 W. R. 621 - - - 231 
 
 Newton v. The Debenture Holders of Anglo-Australian, &c. Co., 
 (1895) A. C. 244 ; 64 L. J. P. C. 57 ; 72 L. T. 305 ; 43 W. R. 401 - 
 
 271, 273 
 
 New Transvaal Co., -Se, (1896)2 Ch. 750; 65 L. J. Ch.868; 75L.T.272- 416 
 
TABLE OF CASES. 
 
 lxix 
 
 New — Nor page 
 
 New Trinidad Co., Foster v„ (1901) 1 Ch. 208; 70 L. J. Ch. 123; 49 
 W. B. 119; 8 Manson, 47 - - - - - 215, 217 
 
 New Vacuum Cleaner Co., British Vacuum Cleaner Co. v., (1907) 
 
 2 Ch. 312; 76 L. J. Ch. 511 ; 97 L. T. 201 ; 23 T. L. B. 587 - 27, 249 
 New Weighing Machine Co., W. N. (1896)48 - 397 
 
 New Westminster Brewery, (1911) W. N. 247 - - - 79 
 
 Now York Breweries Co., Att.-Gen. v., (1898) 1 O. B. 205 ; (1899) 
 
 A. C. 62 ; 67 L. J. Q. B. 86 ; 78 L. T. 61 ; 46 W. B. 193 - - 139 
 
 New York Exchange Co., Re, 39 C. D. 415; 58 L. J. Ch. Ill; 58 
 L. T. 915 ; 60 L. T. 66 - - - - - - 421 
 
 New York Taxicab Co., (1913) 1 Ch. 1 321, 325 
 
 New Zealand, &c. Co. v. Peacock, (1894) 1 Q,. B. 622, 632 ; 63 L. J. 
 
 Q. B. 227; 70 L. T. 110 - - - - 66, 148, 427, 429, 
 
 New Zealand Estate Co., Miles v. (1886), 32 C. D. 266; 55 L. J. Ch. 
 
 801 ; 54 L. T. 582; 54 W. B. 669 - 155, 158 
 
 New Zealand Joint Stock, &c. Corporation, 23 T. L. B. 238 - 402, 421 
 
 New Zealand Kapanga Co., 18 Eq. 17, n. ; 42 L. J. Ch. 781 ; 21 
 W. B. 782 - - - - - - - 121, 128 
 
 New Zealand Loan and Mercantile Agency Co. v. Morrison, (1898) 
 
 A. C. 349 (P. C.) ; 67 L. J. P. C. 10 ; 77 L. T. 603 ; 46 W. B. 239 432 
 
 New Zealand Midland Bailway, Re, Smith v. Lubbock, (1901) 2 Ch. 
 
 357 ; 70 L. J. Ch. 684 ; 84 L. T. 861 - - - 329 
 
 Nicholls, Ernest v. (1857), 6 H. L. C. 401 ; 3 Jur. N. S. 919 - 44, 56, 
 
 65, 68, 425, 441 
 
 Nicholson, Aggs v., 1 H. & N. 165 ----- 199 
 
 Nicol’s Case (misrepresentation), 3DeG. & J. 387 ; 28 L. J. Ch. 257 ; 
 
 33 L. T. (O. S.) 14 ; 7 W. B. 217 ; 29 C. D. 429 - - 355, 357 
 
 Nicol’s Case (membership), 29 C. D. 421 ; 52 L. T. 933 - - 74, 
 
 102, 103, 111, 116 
 
 Nicolls, Burkinshaw v. (1878), 3 A. C. 1004; 48 L. J. Ch. 179; 39 
 L. T. 308 ; 26 W. B. 819 - - - - 75, 143, 144, 440 
 
 Noakes v. Noakes, (1907) 1 Ch. 64 ; 76 L. J. Ch. 151 ; 95 L. T. 606 ; 
 
 23 T. L. B. 16 - - - - - - - 315 
 
 Norcliffe, Ambergate Bail. Co. v., 6 Ex. 629; 20 L. J. Ex. 234 - 148 
 
 Norman v. Mitchell, 19 Beav. 278 ; 5 De G. M. & G. 648 ; 2 W. B. 
 
 247, 685 - - - - - - - - 146 
 
 Normandy v. Ind Coope & Co., (1908) 1 Ch. 84 ; 77 L. J. Ch. 82 ; 97 
 L. T. 872; 15 Mans. 65; 24 T. L. B. 57 - 50, 168, 185, 188, 242 
 
 North Australian Co. v. Goldsborough Co., 61 L. T. 717 - - 390 
 
 North Australian Territory Co., 45 Ch. D. 87 - - - 408 
 
 North Brazilian Sugar, 37 C. D. 83 ; 56 L. T. 229 - 223 
 
 North Central Waggon Co. v. Manchester Bail. Co., 13 App. Cas. 
 
 554 - - - - - - - - - 281 
 
 North Charterland Co. (1896), 13 T. L. B. 80 - - - 338 
 
 North Cheshire and Manchester Brewery v. Manchester Brewery, 
 (1899) A. C. 83; 68 L. J. Ch. 74; 79 L. T. 645— H. L. (E.) - 27, 249 
 North Eastern Insurance Co., (1915) W. N. 210 - - 402,403 
 
 North Eastern Bail. Co., Att.-Gen. v., (1906) 2 Ch. 675; 76 L. J. Ch. 
 
 5 ; 95 L. T. 512 
 
 68 
 
lxx 
 
 TABLE OF CASES. 
 
 Nor — Ode page 
 
 North Kent Iron Works, McMahon v., (1891) 2 Ch. 148 ; 60 L. J. 
 
 Ch. 372 ; 64 L. T. 317 ; 39 W. R. 349 - 324 
 
 North Stafford Rail. Co., Barton v., 38 C. D. 458 ; 57 L. J. Ch. 800; 
 
 58 L. T. 549; 36 W. R. 754 - - - - - 130 
 
 North Vancouver Land Co., Jones v., (1910) A. C. 317 - - 152 
 
 Northern Assam Tea Co., In re (1870), 10 Eq. 458 - 293 
 
 Northern Assam Tea Co., Higgs v. (1869), 4 Ex. 387 ; 38 L. J. Ex. 
 
 233; 21 L. T. 336 ; 17 W. R. 1125 - 293 
 
 Northern Assurance, Ltd. v. Farnham United Breweries, (1912) 2 Ch. 
 
 125 - - - - - - - - - 321 
 
 Northern Counties Bank, Be, 31 W. R. 546 - - 210 
 
 Northern Territories Mines of Australia, Butler v., 96 L. T. 41 ; 23 
 T. L. R. 179 - - - - - - - 71 
 
 North of England Steamship Co., (1905) 1 Ch. 609, reversed by C. A., 
 in W. N. (1905) 77 ; 21 T. L. R. 481 ; 53 W. R. 499 ; (1905) 2 Ch. 
 
 15 - - - - - - - 168, 238 
 
 North of England Iron Steamship Insce. Co., (1900) 1 Ch. 481 ; 69 
 L. J. Ch. 211 ; 82 L. T. 598 ; 48 W. R. 604 73 
 
 North Sydney Investment Co. v. Higgins, (1899) A. C. 263 - 122, 253 
 
 Northumberland Banking Co., Be, 2 De G. & J. 357- - - 53 
 
 Northumberland Building Society, Rosenberg v., 22 Q. B. D. 373 - 
 
 18, 49 
 
 Northumberland, &c. Co., Be, 33 C. D. 16 ; 38 L. T. 377 ; 26 W. R. 
 
 123- - - - - - - - - 253 
 
 N. W. Bank, Moore v., (1891) 2 Ch. 599 ; 60 L. J. Ch. 627 ; 64 L. T. 
 
 456; 40 W. R. 93 - - - - - - - 132 
 
 North-West Transportation Co. v. Beatty, 12 App. Cas. 589 ; 50 L. J. 
 
 P. C. 102 ; 57 L. T. 426 ; 36 W. R. 647 - - - 57, 170 
 
 Norton v. Florence Land Co. (1877), 7 Ch. D. 332; 38 L. T. 377 ; 26 
 W. R. 123 - - - - - - - - 285 
 
 Norton v. Yates, (1905) W. N. 175 - - - - - 310 
 
 Norwich Yarn Co., Be, 22 Beav. 143 ----- 211 
 
 O. 
 
 Oak Pitts Colliery Co., Be, 21 C. D. 322 ; 51 L. J. Ch. 768 ; 47 L. T. 
 
 7 ; 30 W. R. 759 - - - - - - 410, 413 
 
 Oakbank Oil Co. v. Crum (1883), 8 App. Cas. 65; 48 L. T. 537; 
 
 (1867), L. R. 6 H. L. 375 - - - 41, 44, 168, 214, 441 
 
 Oakes v. Turquand, L. R. 2 H. L. 325 ; 36 L. J. Ch. 949 ; 16 L. T. 
 
 808 - - - - - 7, 52, 56, 126, 353, 409, 442 
 
 Oceana Development Co., (1912) W. N. 121, 138 - - - 99 
 
 Odessa Tramways Co. v. Mendel (1878), 8 Ch. D. 235 ; 26 W. R. 887 ; 
 
 38 L. T. 731 ; 47 L. J. Ch. 505 - 115,147 
 
 Odessa Waterworks Co., Be, W. N. (1897) 166 - - - 410 
 
 Odessa, Wood v ., 42 C. D. 636 ; 58 L. J. Ch. 628 ; 37 W. R. 733 ; 
 
 1 Meg. 265 ----- 40, 41, 220 
 
TABLE OF CASES. 
 
 ltfxi 
 
 Offi — Owe PAGE 
 
 Official Receiver, Tailby v., 13 A. C. 523; 58 L. J. Q. B. 75; 60 
 L. T. 162; 27 W. R. 513 - 280,308,318 
 
 Ogdens v. Nelson, (1905) A. 0. 109 - - - - - 263 
 
 O’Hagan, Viditz v., (1899) 2 Ch. 569 - - - - 113 
 
 Olathe Silver Co., Be (1884), 27 Ch. D. 278 ; 33 W. R. 12 - 328, 392 
 
 Oliver v. Bank of England, (1901) 1 Ch. 652; 70 L. J. Ch. 377 ; 84 
 L. T. 253 ; 49 W. R. 391 ; 65 J. P. 294 ; (1902) 1 Ch. 610 - 136, 190 
 
 Oliver, Pittard v., 39 W. R. 311 ; (1891) 1 Q. B. 474 
 Olympia, Limited, (1898) 2 Ch. 181; 78 L. T. 159: 
 236 - 
 
 Omnium Electric Palaces v. Baines. (1914) 1 Ch. 332 
 One and All Sickness Association, 25 T. L. R. 674 - 
 
 Onward Building Society, In re , (1891) 2 Q. B. 463; 
 
 752; 65 L. T. 516; 40 W. R. 26 - 
 
 Ooregum Co. v. Roper, (1892) A. C. 125; 61 L. J. Ch. 
 427 ; 41 W. R. 90 - - - - 29, 69, 
 
 - 174 
 
 14 T. L. R. 
 
 331, 333 
 
 - 334 
 
 - 387 
 
 60 L. J. Q. B. 
 
 - 137 
 
 337 ; 66 L. T. 
 
 116, 117, 340, 442 
 
 Opera, Be (No. 3), (1891) 3 Ch. 260, 
 L. T. 371 ; 39 W. R. 705 - 
 
 C. A. ; 60 L. J. Ch. 839 
 
 65 
 
 309, 315 
 
 Oppenheimer, Be , (1907) 1 Ch. 399; 76 L. J. Ch. 287 ; 96 L. T. 631 - 220 
 Oregon Mortgage Co. (1910), S. C. 964, Ct. of Sess. ; Mews, 56 - 92 
 
 Oriental Bank Corporation, 28 C. D. 634 ; 54 L. J. Ch. 481 - 390, 399, 410 
 Oriental Inland Steam Co. v. Briggs (1861), 31 L. J. Ch. 241 ; 2 J. & 
 
 H. 625 ; 4 De G. F. & J. 191 ; 10 W. R. 125 
 Oriental Telephone Co., Baillie v ., (1915) 1 Ch. 503 - 167, 175, 
 
 Orleans Motor Co., (1911) 2 Ch. 41 - 
 
 Ormerod’s Case, (1894) 2 Ch. 474; 63 L. J. Ch. 578 ; 70 L. T. 795 ; 
 
 42 W. R. 701 ; W. N. (1890) 217 - - - 115, 327, 
 
 Ortigosa v. Brown, 38 L. T. 145 ; 47 L. J. Ch. 168- 
 Orton v. Cleveland Co., 3 H. & C. 868; 13 W. R. 869 ; 11 Jur. N. S. 
 
 531 - 
 
 Osborne v. Amalgamated Society of Railway Servants, W. N. (1908) 
 
 251 (C. A.) ; 77 L. J. Ch. 759 ; 24 T. L. R. 827 ; 25 T. L. R. 107 - 
 Osborne v. Same, W. N. (1911) 59 (C. A.) - 
 
 Osgood v. Nelson, L. R. 5 H. L. 636 - 
 
 Osmondthorpe Hall Society, (1913) W. N. 243; 58 S. J. 13 - 
 Otto Electrical Manufacturing Co., Jenkin’s Claim, 75 L. J. Ch. 682 ; 
 
 (1906) 2 Ch. 390 ; 95 L. T. 141 ; 54 W. R. 601 - - 60, 
 
 Ottoman, Re, W. N. (1867) 164 
 Ottos Kopje Diamond Mines, (1893) 1 Ch. 618; 62 L. J. Ch. 166; 68 
 L. T. 138 ; 41 W. R. 258; Seton, 1918 - - 135, 143 
 
 Outlay Assurance Society, In re, 34 Ch. D. 479 ; 56 L. J. Ch. 448 ; 
 
 56 L. T. 477 ; 35 W. R. 343 
 
 Overend, Gurney & Co. v. Gibb, L. R. 5 H. L. 480 ; 42 L. J. Ch. 
 
 67 - - - - - - - 201, 202, 
 Owen & Ashworth’s Claim, (1900) 2 Ch. 272; (1901) 1 Ch. 115; 83 
 L. T. 547 ; 49 W. R. 100 (C. A.) - - - - 44, 104 
 
 115 
 
 242 
 
 310 
 
 339 
 
 134 
 
 185 
 
 9 
 
 9 
 
 198 
 
 390 
 
 254 
 
 408 
 
 - 54 
 
 204 
 
lxxii 
 
 TABLE OF CASES. 
 
 Owe — Pas page 
 
 Owen v. Cronck, (1895) 1 Q. B. 265 ----- 326 
 Oxenford, Sheppard v., 1 K. & J. 491 - - - - 6 
 
 Oxford Benefit, &c. Society, 35 C. D. 502 ; 56 L. J. Ch. 98 ; 55 L. T. 
 
 598; 35 W. R. 116 - - - - - 179, 186, 215, 217 
 
 Oxford Portland Cement Co., Morrell v., 26 T. L. R. 682 - - 185 
 
 P. 
 
 Pacaya Rubber Co., Be, (1913) 1 Ch. 218; (1914) 1 Ch. 542 - 355, 414 
 
 Pacaya Rubber Co., Jones v., W. N. (1910) 257 ; (1911) 1 K. B. 455 - 
 
 149, 151, 152 
 
 Pacific Coast Syndicate, Be, (1913) 2 Ch. 26 - - - - 414 
 
 Padstow Association, Be (1882), 20 C. D. 137 ; 51 L. J. Ch. 344; 45 
 L. T. 774 ; 30 W. R. 326 - - - - - - 387 
 
 Page v. International, &c. Co., 68 L. T. 433; 62 L. J. Ch. 610 - 271 
 
 Paget, Griffith v. (1877), 5 C. D. 894 ; 6 C. D. 515 ; 46 L. J. Ch. 493 ; 
 
 25 W. R. 523, 821 ; 37 L. L. T. 141 - - 44, 90, 425, 441 
 
 Palace Billiard Rooms, Ltd. v. City Property, Ltd., (1912) S. C. 5 - 99 
 Palace Hotel, Ltd., Be, (1912) 2 Ch. 438 - 100 
 
 Palace Restaurants, Ltd., Be, (1914) 1 Ch. 492 - 413 
 
 Palmer’s Decoration and Furnishing Co., (1904) 2 Ch. 743; 73 
 L. J. Ch. 828 ; 53 W. R. 142 - - - - - 293 
 
 Panama, &c. Co., Be (1870), L. R. 5 Ch. 318 ; 39 L. J. Ch. 482; 22 
 L. T. 424; 18 W. R. 441 - - - - 308, 309, 311, 442 
 
 Panama and South Pacific Co. v. Indiarubber Co., L. R. 10 Ch. 515 - 194 
 Panhard Levassor Co., Societe Panhard v., (1901) 2 Ch. 513 - 27 
 
 Pappa, Ural Gold Fields v., 15 T. L. R. 330 - - - 131 
 
 Paraguay Central, Heslop v ., 54 S. J. 234 - 286, 319 
 
 Parbury’s Case, (1896) 1 Ch. 100; 65 L. J. Ch. 104; 73 L. T. 506; 
 
 44 W. R. 107 - - - - - - - 145 
 
 Paringa Mines, Barrow v., (1909) 2 Ch. 658 - - - - 341 
 
 Paringa Mines, Smith v., (1906) 2 Ch. 193; 75 L. J. Ch. 702 ; 94 
 
 L. T. 571 - - - - - - - - 176 
 
 Paris Skating Rink Co., 5 Ch. D. 959 - 392 
 
 Park v. Lawton, (1911) 1 K. B. 588 - - - - 123, 163 
 
 Park v. Royalties Syndicate, Ltd., (1912) 1 K. B. 330 - - 369 
 
 Parker, Ex parte, 2 Ch. 685 ; 15 W. R. 1217 - - - -128 
 
 Parker v. Dunn, 8 Beav. 497 ------ 326 
 
 Parker v. Lewis, 8 Ch. 1035 ; 21 W. R. 928 ; 29 L. T. 199 - - 193 
 
 Parker v. McKenna, 10 Ch. 118; 44 L. J. Ch. 425; 31 L. T. 739; 
 
 23 W. R. 271 - - - - 192, 193, 206, 436, 442 
 
 Parnaby v. Lancaster Canal, 11 Ad. & El. 223 - - - 74 
 
 Parrott, Be, 63 L. T. 777 ------ 401 
 
 Parsons v. Surgey, 4 Fost. & Fin. N. P. Cas. 247 - - - 174 
 
 Partridge v. Rhodesia Goldfields, (1910) 1 Ch. 239 - 316 
 
 Passburg Grains, Stirling v., 8 T. L. R. 71 - - - - 354 
 
TABLE OF CASES. 
 
 lxxiii 
 
 Pat— Pen page 
 
 Patent File Co., Re, 6 Ch. 83; 40 L. J. Ch. 190 ; 19 W. R. 193 - 66, 
 
 190, 270 
 
 Patent Invert Sugar Co., 31 C. D. 166 ; 55 L. J. Ch. 924; 53 L. T. 
 
 698, 737 ; 34 W. E. 169 - - - - - 90, 92 
 
 Patent Ivory Co., Howard v., 38 C. D. 156; 57 L. J. Ch. 878 ; 58 
 L. T. 395 ; 36 W. E. 801 - - - 46, 253, 256, 271, 276 
 
 Patent Lionite Co., Thomas v., 17 C. D. 257 - - - - 411 
 
 Pathe Freres, Ex parte, (1914) 2 K. B. 299 - 338 
 
 Pauline Colliery Syndicate, Natal Land Co. v., (1904) A. C. 120 - 253 
 
 Payne v. The Cork Co., (1900) 1 Ch. 308 ; 69 L. J. Ch. 156 ; 82 L. T. 
 
 44 ; 48 W. E. 325 ; 7 Manson, 225 - - 39, 50, 424, 430 
 
 Peacock, New Zealand, &c. Co. v., (1894) 1 Q. B. 622, 632; 63 L. J. 
 
 Q. B. 227 ; 70 L. T. 110 - - - - 66, 148, 427, 429 
 
 Pearce v. Foster, 17 Q. B. D. 536 ; 55 L. J. Q. B. 306 ; 54 L. T. 664 - 262 
 Pearks v. Richardson, (1902) 1 K. B. 91 ; 71 L. J. K. B. 18 ; 85 L. T. 
 
 616 ; 50 W. E. 286 - - - - - - - 234 
 
 Pearse v. Green, 1 J. & W. 135 - - - - 222 
 
 Pearson, Gray v., 6 H. L. C. 106 - - - - 69, 273 
 
 Pearson’s Case, 5 C. D. 336; 46 L. J. Ch. 339; 25 W. E. 618 - 185, 
 
 206, 407 
 
 Peat v. Clayton, (1906) 1 Ch. 659 ; 75 L. J. Ch. 344 ; 94 L. T. 465 ; 
 
 54 W. E. 416 - - - - - - - 132 
 
 Peckham Trams, 57 L. J. Ch. 462 ----- 399 
 
 Pedlar v. Road Block, (1905) 2 Ch. 427; 22 T. L. R. (1906) 179; 
 
 74 L. J. Ch. 753 ; 54 W. E. 44 - - - - 71 
 
 Peek v. Derry, 37 Ch. D. 541 ; 57 L. J. Ch. 347 ; 59 L. T. 78 ; 36 
 W. E. 899 ; on app., 14 App. Cas. 337 ; 58 L. J. Ch. 864 ; 61 L. T. 
 
 265 ; 38 W. E. 33 ; 1 Meg. 292 - - 357, 358, 442 
 
 Peek v. Gurney, L. E. 6 H. L. 377 ; 43 L. J. Ch. 19 ; 22 W. E. 
 
 29 - - - - - - - 345, 357, 359 
 
 Peel’s Case, 2 Ch. 674 ; 36 L. J. Ch. 757 ; 16 L. T. 780; 15 W. E. 
 
 1100 - - - - - - 35, 51, 52, 352, 442 
 
 Peel v. L. & N. W. Rail. Co. (No. 1), (1907) 1 Ch. 5; 76 L. J. Ch. 
 
 152 ; 95 L. T. 897 - - - - - 67, 173, 442 
 
 Pegge v. Neath District, &c. Co., (1898) 1 Ch. 183; 67 L. J. Ch. 17 ; 
 
 77 L. T. 550 ; 46 W. R. 243 - - - - - 318 
 
 Pell’s Case, 5 Ch. 11 ; 39 L. J. Ch. 120; 21 L. T. 412 ; 18 W. E. 31 - 
 
 117,442 
 
 Pellatt’s Case, L. E. 2 Ch. 527 ; 36 L. J. Ch. 613 ; 16 L. T. 442 ; 15 
 W. E. 726 - - - - - - - 109,117 
 
 Pelly’s Case, 21 C. Div. 492 ; 47 L. T. 638; 31 W. R. 177 - - 179 
 
 Penarth Pontoon Co., Re, (1911) W. N. 240 - 168, 238 
 
 Pender v. Lushington, 6 C. D. 70 ; 46 L. J. Ch. 317 - 40, 170, 171, 173 
 
 Penn v. Lord Baltimore, 1 Yes. sen. 444 ; Wh. & Tu. L. Cas. 7 ed. 755 - 274 
 Pennell, Burnes v. (1849), 2 H. L. C. 497 ; 13 Jur. 897 - 7, 210, 215 
 
 Penney, Ex parte, 8 Ch. 446; 42 L. J. Ch. 183; 28 L. T. 150; 21 
 W. E. 186 - - - - - - - - 131 
 
 Penrose v. Martyn (1858), E. B. & E. 490 - 266 
 
 Pen-y-Van Colliery Co., 6 C. D. 477 - 392 
 
lxxiv 
 
 TABLE OF CASES. 
 
 Pep— Foo page 
 
 Pepe v. City and Suburban Permanent Building Society, (1893) 2 Ch. 
 
 311 - - - - - - - - 49 
 
 Percival v. Wright, (1902) 2 Ch. 421 ; 71 L. J. Ch. 846 ; 51 W. R. 31- 105, 
 
 180, 190 
 
 226; 38 W. R. 710; 
 
 Q. B. 
 
 Perkins, Be, 24 Q. B. D. 613 ; 59 L. J. 
 
 2 Meg. 197 - - - - - - - - 156 
 
 Perrins v. Bellamy, (1899) 1 Ch. 797 - - - - - 207 
 
 Perry’s Case, 34 L. T. 716 - - - - - 205 
 
 Persse, Coveney v. (1910), Ir. R. 194 - - - - 312 
 
 Persse, Fitzgerald v. (1908), 1 Ir. R. 279 - - - - 319 
 
 Perth Electric Tramways, (1906) 2 Ch. 216; 75 L. J. Ch. 534; 94 
 L. T. 815; 54 W. R. 535 ----- 288,319 
 
 Peruvian Amazon Co., 29 T. L. R. 384 - 391 
 
 Peruvian Corporation, Cox-Moore v., (1908) 1 Ch. 604; 77 L. J. Ch. 
 
 387 ; 98 L. T. 611 - 
 
 Peruvian Guano Co., (1894) 3 Ch. 690; 71 L. T. 611 
 Peruvian Rail. Co., Be (1866), L. R. 2 Ch. 617 ; 16 
 W. R. 1002 ----- 
 
 Peruvian Rail. Co., (1915) 2 Ch. 144 
 Pethick, Dix & Co., Be, (1914) W. N. 403 
 Peveril Mines, Be, (1898) 1 Ch. 122 ; 67 L. J. Ch. 77 ; 77 L. T. 505 ; 
 
 46 W. R. 198 - - - - - 38, 50, 392, 430 
 
 Phillipart, Faure Electric Accumulator Co. v., 58 L. T. R. 525 - 147, 
 
 148, 151, 153, 192, 195 
 
 Phillips, Harben v., 23 C. D. 14 ; 48 L. T. 334, 741 ; 31 W. R. 173 - 40, 
 
 164, 173, 198, 242 
 
 Phoenix Bessemer Co., Be, 44 L. J. Ch. 683; 32 L. T. 854 - - 271 
 
 Piccadilly Hotel, Ltd., Be, (1911) 2 Ch. 534 - - - - 314 
 
 Pickard v. Sears, 6 Ad. & El. 469 ----- 143 
 
 Pickburn, Popham v., 7 H. & N. 891 - - - - 174 
 
 Picker v. London and County Banking Co. (1887), 18 Q. B. 
 
 - 321 
 43 W. R. 170-186 
 L. T. 644; 15 
 
 - 65, 72, 264 
 289, 406 
 
 - 411 
 
 I). 515 - 
 303, 
 
 306 
 
 256 
 
 220 
 
 27 
 
 Picksley, Reuss v., L. R. 1 Ex. 342 - - - - - 
 
 Piercy, Re, (1907) 1 Ch. 289; 76 L. J. Ch. 116; 95 L. T. 868 - 94 
 
 Pinet & Co., F. v. Maison Louis Pinet, Limited, (1898) 1 Ch. 179 
 Pinkett v. Wright, 2 Ha. 120 ; 12 Cl. & Fin. 764 ; 12 L. J. Ch. 119 
 6 Jur. 1102 ------- 
 
 Pirie v. Stewart, 6 F. 847 (Ct. Sess.) - 
 Pittard v. Oliver, 39 W. R. 311 ; (1891) 1 Q. B. 474 - 
 Pollard, Ex parte, 4 Deac. & Chit. 27 - - - 274, 325 
 
 Pollington, Municipal Freehold Land Co. v. (1890), 63 L. T. 238 ; 59 
 L. J. Ch. 734 ; 2 Meg. 307 - 188, 262 
 
 Poole, Jackson and White’s Case (1878), 9 Ch. D. 322; 48 L. J. Ch. 
 
 48 ; 35 L. T. 659 ; 26 W. R. 823 150 
 
 Poole v. National Bank of China, (1907) A. C. 229 ; 76 L. J. Ch. 458 ; 
 
 96 L. T. 889, H. L. E. - - - 95, 97, 98, 440 
 
 Poole Firebrick Co., L. R. 17 Eq. 268 420 
 
 Pooley, Athenaeum, &c. Society v. (1858), 3 De G. & J. 294 - - 292 
 
 154 
 
 394 
 
 174 
 
TABLE OF CASES. 
 
 lxxv 
 
 Pop— Pri page 
 
 Popham v. Pickburn, 7 H. & N. 891 - - - - - 174 
 
 Popple v. Sylvester (1883), 22 C. D. 98 ; 52 L. J. Ch. 54; 47 L. T. 
 
 329; 31 W. R. 116- ----- 287,329 
 
 Popular Life Assurance Co., W. N. (1908) 222 - - - 383 
 
 Porto Alegre Co., Melhado v., L. R. 9 C. P. 503 ; 43 L. J. C. P. 253 ; 
 
 31 L. T. 57 ; 23 W. R. 57 - - - - - - 41 
 
 Port Darwin Co., Swabey v ., 1 Meg. 385 - - 43, 186, 187 
 
 Port Phillip Co., Postlethwaite v., 43 C. D. 452; 59 L. J. Ch. 201 ; 
 
 62 L. T. 60; 38 W. R. 246 ; 2 Meg. 10 - - - -425 
 
 Port Philip, &c. Co., Shaw v., 13 Q. B. D. 103 ; 53 L. J. Q. B. 369 ; 
 
 50 L. T. 685 ; 32 W. R. 771 - - - - -136 
 
 Porter, Greenwell v., (1902) 1 Ch. 530; 71 L. J. Ch. 243; 86 L. T. 
 
 220 -------- 176 
 
 Portsmouth (Borough of) Tramways, (1892) 2 Ch. 362 ; 61 L. J. Ch. 
 
 462 ; 66 L. T. 671 ; 40 W. R. 553 - - - - 328, 392 
 
 Portuguese Consolidated, &c. Mines, 42 C. D. 160 ; 45 C. D. 26 ; 58 
 L. J. Ch. 813 , 62 L. T. 88 ; 1 Meg. 246 - - - 105,128 
 
 Portuguese Copper Co., 45 C. D. 26 - - - - - 195 
 
 Positive, &c. Co., Eley v., 1 Ex. Div. 88 ; 45 L. J. Ex. 451 ; 34 L. T. 
 
 190 ; 26 W. R. 338 - - - - - 40, 42, 262 
 
 Postage Stamp, &c. Co., (1892) 3 Ch. 566; 61 L. J. Ch. 597 ; 67 L. T. 
 
 88 ; 41 W. R. 28 - - - - - - - 206 
 
 Postlethwaite v. Port Phillip Co., 43 C. D. 452 ; 59 L. J. Ch. 201 ; 62 
 L. T. 60 ; 38 W. R. 246 ; 2 Meg. 10 425 
 
 Potter, Barron v., (1914) 1 Ch. 895 ----- 181 
 
 Potter, Wigfield v. (1881), 45 L. T. 612 - 387 
 
 Pound (Henry), Son and Hutchings, 42 C. D. 402 (C. A.) - - 295 
 
 Powell, Hicks v., L. R. 4 Ch. 741 - - - - 274 
 
 Powell v. Evan Jones, (1905) IK. B. 11 - - - - 436 
 
 Powell v. London and Provincial Bank, (1893) 2 Ch. 555 ; 62 L. J. 
 
 Ch. 795; 69 L. T. 421 ; 41 W. R. 545 - - - 131, 134 
 
 Powell v. Main Colliery Co., (1900) A. C. 366 ; 69 L. J. Q. B. 758 ; 83 
 L. T. 85 ; 49 W. R. 49 (H. L.) - - - - - 272 
 
 Powell & Sons, W., W. N. (1892) 94 - - - - - 392 
 
 Prefontaine v. Grenier, (1907) A. C. 101 ; 95 L. T. 623 - - 200 
 
 Premier Industrial Bank v. Carlton Co., (1909) 1 K. B. 106 - 45, 197 
 
 Premier Oil Co., Robson v., (1915) 2 Ch. 124 - 171 
 
 Premier Underwriting Association (No. 1), Re , (1913) 2 Ch. 29 - 380 
 
 Premier Underwriting Association (No. 2), Re, (1913) 2 Ch. 81 - 380 
 
 Preservation Syndicate, (1895) 2 Ch. 768; 64 L. J. Ch. 723; 73 
 L. T. 393 - - - - - - - - 121 
 
 Price v. Anderson, 15 Sim. 473 - - - - - 220 
 
 Price’s Patent Candle Co., Hampson v., 24 W. R. 754 ; 34 L. T. 711 ; 
 
 45 L. J. Ch. 437 - - - - - 67, 190, 241, 433 
 
 Princess of Reuss v. Bos (1871), L. R. 5 H. L. 176 ; 40 L. J. Ch. 665 ; 
 
 24 L. T. 641 - - - - - 35, 52, 53, 113, 388 
 
 Printing and Numerical Regist. Co., Re, 8 C. D. 535 ; 47 L. J. Ch. 
 
 580; 38 L. T. 676 ; 26 W. R. 627 - - - 410,411 
 
lxxvi 
 
 TABLE OF CASES. 
 
 Pri— Q,ui page 
 
 Pritchard’s Case (1873), L. R. 8 Ch. 956 ; 42 L. J. Ch. 768 ; 29 L. T. . 
 
 363 - - - - - - - 43, 121 
 
 Pritchard, Offor & Co., W. N. (1893) 153 - 423 
 
 Prockter, Brussels Palace of Varieties v., 10 T. L. R. 72 - - 339 
 
 Professional Benefit Building Society, Re, 6 Ch. 862 - - 395, 398 
 
 Propert, Weeks v. (1873), L. R. 8 C. P. 427 ; 42 L. J. C. P. 129 ; 21 
 W. R. 676 - - - - - - - 190, 276 
 
 Property Insurance Co., Re, (1914) 1 Ch. 775 - 408 
 
 Pugh and Sharman’s Case, 13 Eq. 566 ; 41 L. J. Ch. 580 ; 26 L. T. 
 
 274 - - - - - - - - 104, 113 
 
 Pulbrook, Ladies’ Dress Association v., (1900) 2 Q. B. 376, 381 ; 69 
 L. J. Q. B. 705 ; 49 W. R. 6 ; 7 Manson, 465 (C. A.) - 52, 99, 153, 405 
 Pulbrook v. Richmond Co., 9 C. D. 610 ; 48 L. J. Ch. 65 ; 27 W. R. 
 
 377 ------ 40, 184, 198 
 
 Pulsford v. Devenish, (1903) 2 Ch. 625; 73 L. J. Oh. 35; 52 
 W. R. 73 - - - - - - 402, 409, 421 
 
 Pulsford v. Richards, 17 Beav. 97 - - - - 346 
 
 Punt v. Symons & Co., (1903) 2 Ch. 506 ; 72 L. J. Ch. 768 ; 89 L. T. 
 
 525 ; 52 W. R. 41 - - - - - - 43, 47, 190 
 
 Pyle Works, Re (No. 1), 44 Ch. D. 534 ; 59 L. J. Ch. 489; 62 L. T. 
 
 887 ; 38 W. R. 674 ; 2 Meg. 83 - - - 150, 271 
 
 Pyle Works, Re (No. 2), (1891) 1 Ch. 173 ; 60 L. J. Ch. 114 • 63 L. T. 
 
 628; 39 W. R. 235; 2 Meg. 327 - - - 190, 211, 244 
 
 Q. 
 
 Quartermaine’s Claim, (1892) 1 Ch. 639; 61 L. J. Ch. 273; 66 L. T. 
 
 19 ; 40 W. R. 298 - - - - - - - 329 
 
 Quartz Hill Gold Mining Co. v. Beall, 20 C. D. 501 ; 51 L. J. Oh. 
 
 874 ; 46 L. T. 746 ; 30 W. R. 583 - - - - - 174 
 
 Queen v. Gurney, Finlayson, 254 - - - - -210 
 
 Queen v. Morton, L. R. 2 C. C. R. 22 - - - 145, 259 
 
 Queen, Shropshire Union Co. v., L. R. 7 H. L. 496 ; 45 L. J. Q. B. 
 
 31 ; 32 L. T. 283; 23 W. R. 709 - - - - 131, 143 
 
 Queen v. Sir Charles Reed, 5 Q. B. D. 483 - 269 
 
 Queen’s Building Society, 6 Ch. 815- - - - - 390 
 
 Queensland Land and Coal Co., Re, (1894) 3 Ch. 181 ; 63 L. J. Ch. 
 
 810; 71 L. T. 115; 42 W. R. 600 - - - - 256, 318 
 
 Queensland Mercantile Agency, 58 L. T. 878 - - - 390 
 
 Queensland Mortgage Co., Lock v., (1896) A. C. 461 ; 65 L. J. Ch. 
 
 798 ; 75 L. T. 3; 45 W. R. 65 - - - - 64, 150 
 
 Quin & Axtens v. Salmon, (1909) A. C. 442 - - 171, 190, 242 
 
TABLE OF CASES. 
 
 lxxvii 
 
 E. 
 
 Rad— Reg page 
 
 Radford and Bright, Limited (No. 1), Re, (1901) 1 Ch. 272 ; 70 L. J. 
 
 Ch. 78; 84 L. T. 150; 49 W. R. 270 - - - 403 
 
 Radford and Bright (No. 2), Re, (1901) 1 Ch. 735 ; 70 L. J. Ch. 352- 403 
 Railway and Electric Co., 38 C. D. 597 - 263 
 
 Railway Sleepers Co. (1885), 29 C. D. 204 ; 54 L. J. Ch. 720; 52 L. T. 
 
 731 ; 33 W. R. 595 - - - - - - - 238 
 
 Railway Time Tables, &c. Co., Re, 42 C. D. 98; 58 L. J. Ch. 504; 61 
 
 L. T. 94 ; 37 W. R. 531 ; 1 Meg. 208 114, 127 
 
 Railway Time Tables, &c. Co., 68 L. T. 649 - - - - 69 
 
 Rainford, Jackson v., (1896) 2 Ch. 340 ; 65 L. J. Ch. 757 ; 44 W. R. 
 
 554 - - - - - - - - 271 
 
 Rainford v. James Keith and Blackman Co. (No. 1), (1905) 1 Ch. 296 - 145 
 Rainford v. James Keith and Blackman Co. (No. 2), (1905) 2 Ch. 147 ; 
 
 74 L. J. Ch. 531 ; 92 L. T. 786 (C. A.) - - - 67 
 
 Ramel Syndicate, Ltd., (1911) 1 Ch. 749 - - - - 417 
 
 Ramsay v. Margrett, (1894) 2 Q. B. 18 - - - - 281 
 
 Ramsgate Hotel v. Montefiore, L. R. 1 Ex. 109 ; 35 L. J. Ex. 90 - 112 
 
 Ramskill v. Edwards, 31 C. D. 100 ; 55 L. J. Ch. 81 ; 53 L. T. 949; 
 
 34 W. R. 96 - - - - - - - 212 
 
 Ranee’s Case, L. R. 6 Ch. 104 ; 40 L. J. Ch. 277 ; 23 L. T. 828 ; 19 
 W. R. 291 - - - - - - - 206, 
 
 Randall, Limited v. British and American Shoe Co., (1902) 2 Ch. 
 
 354; 71 L. J. Ch. 683; 87 L. T. 442 ; 50 W. R. 697 
 Randt Gold Mining Co., (1904) 2 Ch. 468; 73 L. J. Ch. 598; 91 
 L. T. 174; 53 W. R. 90; 20 T. L. R. 619 - - - 152, 
 
 Randt Gold Mining Co. v. New Balkis Eersteling, (1903) 1 K. B. 461 
 (C. A.); (1904) A. C. 165; 72 L. J. K. B. 143; 88 L. T. 189; 51 
 W. R. 391 (C. A.) - 
 
 Randt Gold Mining Co. v. Wainwright, (1901) 1 Ch. 184 - 132, 
 
 Ranger v. G. W. Rail. Co., 5 H. L. C. 86 
 Rapid Road Transit Co., (1909) 1 Ch. 96 - 
 
 Rapier v. London Tramways Co., 69 L. T. 361 
 Rawlins v. Wickham, 3 De G. & J. 304 - 
 
 Record Reign Jubilee Syndicate, Hume v., 80 L. T. 404 
 Reddaway v. Banham, (1896) A. C. 199 ; 74 L. T. 289 ; 44 W. R. 638 - 
 Redgrave v. Hurd, 20 C. D. 1 ; 51 L. J. Ch. 113; 45 L. T. 485; 30 
 W. R. 251 - 
 
 Red Rock Mining Co. (1889), 61 L. T. 785 - 
 
 Reese River, &c. v. Smith (register prima facie evidence), L. R. 4 
 H. L. 64 ; 39 L. J. Ch. 849 - -125, 127, 129, 352, 353, 
 
 Reese River Silver Mining Co., In re (reports in prospectus, creditors’ 
 remedies), L. R. 2 Ch. 604; 36 L. J. Ch. 618; 16 L. T. 549; 15 
 W. R. 882 - - - - - - 355, 409, 
 
 Reeves & Son, (1899) 1 Ch. 184 - 122, 
 
 Regent’s Canal, W. N. (1867) 79 - 
 
 217 
 
 27 
 
 153 
 
 132 
 
 152 
 
 74 
 
 223 
 
 74 
 
 355 
 387 
 240 
 
 356 
 391 
 
 354 
 
 442 
 
 123 
 
 197 
 
lxxviii 
 
 TABLE OF CASES. 
 
 Reg — Ric page 
 
 Regent’s Canal Ironworks Co., Re (1876), 3 C. D. 43 ; 45 L. J. Ch. 
 
 620; 35 L. T. 288 ; 24 W. R. 687 - - - - 317, 319 
 
 Regent’s Canal Ironworks Co., Ex parte Grissell, (1876) 3 C. D. 411 
 
 327, 421 
 
 Reg. v. Arnaud, 9 Q. B. 806 - - - - - - 56 
 
 Reg. v. Birmingham Rail. Co., 3 Q. B. 223 - - - - 74 
 
 Reg. v. Chester, 1 Ad. & El. 342 - - - - -173 
 
 Reg. v. Esdaile (1858), 1 F. & E. 213 - 210, 215 
 
 Reg., Exchange Bank v., 11 A. C. 157 - 410 
 
 Reg. v. Graham, 9 W. R. 738 - - - - - 173 
 
 Reg. v. Lambeth, 8 Ad. & El. 356 - - - - - 173 
 
 Reg. v. Mariquita, &c. Co., 1 E. & E. 289 - 222 
 
 Reg. v. Mayor of Wigan, 14 Q. B. D. 908 - - - - 188 
 
 Reg. v. Saddlers, 10 H. L. C. 404 - - - - - 189 
 
 Reg. v. St. Pancras, 11 Ad. & El. 15 - - - - - 173 
 
 Reg. v. Tidy, 2 Q,. B. 179 ------ 263 
 
 Reg. v. Tyler & Co., (1891) 2 Q. B. 588 ; 61 L. J. M. C. 38 ; 65 L. T. 
 
 662; 56 J. P. 118 ----- -74,123,210 
 
 Reg. v. Webb, 14 East, 406 - - - - - - 6 
 
 Reg. v. Wimbledon, 8 Q. B. D. 459; 51 L. J. Q. B. 219; 46 L. T. 
 
 47; 30W. R. 400 ------ 172,173 
 
 Registrar of Companies, Rex v., (1912) 3 K. B. 23 - - 27, 250 
 
 Reid & Sons, (1900) 2 Q. B. 634 ; 69 L. J. Q. B. 736; 83 L. T. 196; 
 
 49 W. R. 15 - - - - - - - 400 
 
 Reid v. Explosives Co. (1887), 56 L. J. Q. B. 388 ; 19 Q. B. D. 264 ; 
 
 57 L. T. 439 ; 35 W. R. 509 - - - - 263, 327 
 
 Reidpath’s Case, 11 Eq. 86- - - - - -110 
 
 Reliance Taxi-Cab, Re (1912), 28 T. L. R. 529 - - - 408 
 
 Remmett, Walker v., 15 L. J. Ch. 8, 174 - - - - 340 
 
 Repertoire Opera Co., Re, 2 Manson, 314 - - - 207 
 
 Reuss v. Picksley, L. R. 1 Ex. 342 ----- 256 
 
 Reuss (Princess of) v. Bos, 5 H. L. 176 - - 35, 52, 53, 113, 382 
 
 Reversionary Interest Society, (1892) 1 Ch. 615; 61 L. J. Ch. 379; 
 
 66 L. T. 460; 40 W. R. 389 - - - - 78, 270 
 
 Rex v. Abrahams, (1904) 2 K. B. 859 ; 73 L. J. K. B. 972 ; 91 L. T. 
 
 493 (Div. Ct.) - - - - - - -18 
 
 Rex v. Gaboriau, 11 East, 77 - - - - - - 176 
 
 Rex v. Registrar of Companies, (1912) 3 K. B. 23 - - 27, 250 
 
 Rex v. Webb, 14 East, 406 - - - - - - 6 
 
 Rex v. Wilts and Berks Canal Co. , 3 Ad. & El. 477 ; 8 Ad. & El. 901 - 1 25 
 
 Rhodes v. Forwood, 1 App. Cas. 256 ----- 263 
 Rhodesia Cons., Brailey v., (1910) 2 Ch. 95 - - - - 424 
 
 Rhodesia Goldfields, (1910) 1 Ch. 239 - 293, 329 
 
 Rhodesia Goldfields, Partridge v., (1910) 1 Ch. 239 - 316 
 
 Rica Gold Co., Re, 11 C. D. 36 ; 40 L. T. 531 ; 27 W. R. 715 - 394 
 
 Richard Mills & Co., Ltd., Smith v. The Co., (1905) W. N. 36 - 418 
 
 Richards v. Home Assurance Association, L. R. 6 C. P. 591 - 110 
 
TABLE OF CASES. 
 
 lxxix 
 
 Ric— Roc page 
 
 Richards, Pulsford v., 17 Beav. 97 - - - - 340 
 
 Richards, Southampton Dock Co. v., 1 Man. & G. 448; 2 Rail. Oas. 
 
 215; 1 Scott, N. R. 219 ----- 244,247 
 
 Richardson, Pearks v ., (1902) 1 K. B. 91 ; 71 L. J. K. B. 18; 85 
 L. T. 616; 50 W. R. 286 - - - - - - 234 
 
 Richardson’s Case, 19 Eq. 588 ; 44 L. J. Ch. 252 ; 32 L. T. 18 ; 23 
 
 W. R. 683 - - - - - - - - 104 
 
 Riche v. Ashbury Rail. Co., L. R. 9 Ex. 224 ; L. R. 7 H. L. 653 - 3, 69, 70 
 Riche, Ashbury Railway Carriage Co. v. (1874), L. R. 7 II. L. 671 ; 
 
 44 L. J. Ex. 185 ; 33 L. T. 451 - 38, 50, 61, 63, 66, 72, 73, 77, 
 
 167, 180, 439 
 
 Richmond Co., Pulbrook v., 9 C. D. 610 ; 48 L. J. Ch. 65 ; 27 W. R. 
 
 377 ------ 40, 184, 198 
 
 Richmond’s Case, 4 K. & J. 325 ----- 190 
 
 Ricketts v. Ricketts, W. N. (1891) 29 - - - - 160 
 
 Ridsdale, &c. Co., Eden v., 23 Q. B. D. 368 ; 58 L. J. Q. B. 579; 61 
 L. T. 444 ; 38 W. R. 55 - - - - - -193 
 
 Rimington’s Case, 2 Ch. 714 - - - - - - 89 
 
 Rio Grande Rubber Estates, Mair v., (1913) A. C. 853 - - 355 
 
 Ritso’s Case (1877), 4 C. D. 782 - - - - - 103 
 
 Rival Granite Quarries, Evans v., (1910) 2 K. B. 979 - - 310 
 
 River Dee Co. (No. 1), Baroness Wenlock v., 36 C. D. 685 ; 10 A. C. 
 
 354 ; 54 L. J. Q. B. 577 ; 53 L. T. 62 ; 49 J. P. 773 - 3, 269, 428 
 
 River Dee Co. (No. 2), Baroness Wenlock v. , 19 Q. B. D. 155; 56 
 L. J. Q. B. 589; 57 L. T. 320; 35 W. R. 822 - - - 275 
 
 River Plate Co., Mercantile Trust Co. v., (1892) 2 Ch. 303 ; (1894) 
 
 1 Ch. 578 ; 63 L. J. Ch. 366 ; 70 L. T. 131 ; 42 W. R. 365 - 274, 321 
 Road Block, Pedlar v., (1905) 2 Ch. 427; 22 T. L. R. 179; 74 L. J. 
 
 Ch. 753 ; 54 W. R. 44 - - - - - - 71 
 
 Robb v. Greene, (1895) 2 Q. B. 315 ----- 263 
 
 Robarts, Goodwin v., 10 Ex. 337 ; 44 L. J. Ex. 157 ; on app., 1 A. C. 
 
 476 ; 45 L. J. Ex. 748 ; 35 L. T. 179 ; 24 W. R. 987 - 302, 304, 305, 307 
 Robert Stephenson & Co., Ltd., 107 L. T. 33 - - - 312 
 
 Roberts v. Security Co., (1897) 1 Q. B. Ill ; 66 L. J. Q. B. 119; 75 
 L. T. 531 ; 45 W. R. 214 - - - - - - 259 
 
 Roberts, Bramah v., 3 Bing. N. C. 963 ; 1 Scott, 350 ; 3 D. P. C. 392 - 264 
 Roberts, Goodchap v. (1880), 14 C. D. 49 - - - 286 
 
 Robertson, South-Western Loan and Discount Co. v., 8 Q. B. D. 17 - 160 
 
 Robertson and Woodcock, Ltd., Ying v., 56 S. J. 412 - - 242 
 
 Robinson’s Case, 4 Ch. 330 ; 20 L. T. 96 ; 17 W. R. 454 - - 109 
 
 Robinson v. Montgomeryshire Brewery Co., (1896) 2 Ch. 841 ; 65 
 L. J. Ch. 915; 3 Manson, 279 - - - - - 75 
 
 Robinson Printing Co. v. Chic, Limited, (1905) 2 Ch. 123 ; 74 L. J. 
 
 Ch. 399 ; 93 L. T. 262 ; 53 W. R. 681 - - - - 327 
 
 Robson, Buck v ., L. R, 10 Eq. 629 ----- 405 
 
 Robson v. Premier Oil Co., (1915) 2 Ch. 124 - 171 
 
 Robson v. Smith, (1895) 2 Ch. 118 ; 64 L. J. Ch. 457 ; 72 L. T. 559 ; 
 
 43 W. R. 632 - - - - - 283, 312, 315 
 
 Rockwood Colliery Co., James v., 106 L. T. 128 - - - 189 
 
lxxx 
 
 TABLE OF CASES. 
 
 Hog— Rub PAGET 
 
 Bogers’ Case, Harrison’s Case (1868), L. E. 3 Ch. 633; 18 L. T. 
 
 779; 16 W. E. 881 ; 25 L. T. 406 - - - - 112,133 
 
 Eogers & Co. v. British, &c. Association, 68 L. J. Q. B. 14 ; 79 L. T. 
 
 494- - - - - - - - - 324 
 
 Eolland v. Hart, 6 Ch. 681 ; 40 L. J. Ch. 701 ; 25 L. T. 191 ; 19 
 
 W. E. 962 (C. A.) - - - - - - - 234 
 
 Eolls, Glasier v. (1889), 42 C. D. 436; 58 L. J. Ch. 820; 62 L. T. 
 
 133 ; 38 W. E. 113 ; 1 Meg. 196, 418 - - - 33a 
 
 Eolt, Hopkinson v., 9 H. L. C. 514 ; 34 L. J. Ch. 468 ; 5 L. T. 90 ; 
 
 9 W. E. 900 - - - - - - 157, 158- 
 
 Eomford Canal Co., 24 C. D. 85 ; 52 L. J. Ch. 729 ; 49 L. T. 118 - 169 
 
 Eoots v. Williamson, 38 C. D. 485 ; 57 L. J. Ch. 995 ; 58 L. T. 802 ; 
 
 36 W. E. 758 - - - - - - - 131 
 
 Eoper, Ooregnm Co. v., (1892) A. C. 125; 61 L. J. Ch. 337; 66 
 
 L. T. 427 ; 41 W. E. 90 - - - 29, 69, 116, 117, 340, 442 
 
 Eosenberg v. Northumberland Building Society, 22 Q. B. D. 373 - 18, 49 
 Eoss v. Estates Investment Co., 3 Ch. 682; 37 L. J. Ch. 873; 19 
 
 L. T. 61 ; 16 W. E. 1151 - 346, 353, 354 
 
 Eotherham Alum, &c. Co., 25 C. D. 103 ; 53 L. J. Ch. 290 ; 50 L. T. 
 
 219 ; 32 W. E. 131 41, 245, 253, 262, 335 
 
 Eoundwood Colliery Co., Be, (1897) 1 Ch. 373 - 310 
 
 Eoundwood Colliery Co., Lee v., (1897) 1 Ch. 373 ; 66 L. J. Ch. 186 ; 
 
 75 L. T. 641 ; 45 W. E. 324 (C. A.) 325 
 
 Eoussell v. Burnham, (1909) 1 Ch. 127 - 107, 346- 
 
 Eoutledge & Sons (George), (1904) 2 Ch. 474; 73 L. J. Ch. 843; 
 
 91 L. T. 288 ; 53 W. E. 44 - - - - 288, 319 
 
 Bow v. Dawson (1749), 1 Yes. 331 ----- 308 
 
 Eowatt’s Wharf, Biggerstaff v., (1896) 2 Ch. 93 ; 65 L. J. Ch. 536 ; 
 
 74 L. T. 473; 44 W. E. 536 - - - - 45, 309 
 
 Eowell v. John Eowell & Sons, Ltd., (1912) 2 Ch. 609 - - 94 
 
 Eowland’s Case, 42 L. T. 785 ; W. N. (1880) 80 144 
 
 Eowland and Marwood’s S. S. Co., Bellerby v., (1901) 2 Ch. 265 ; 17 
 
 T. L. E. 510; 70 L. J. Ch. 616 ; 84 L. T. 651 ; on appeal, (1902) 
 
 2 Ch. 14 - - - - - - 93, 128 
 
 Eowles, Eyall v. (1748), 1 Yes. 348 - - - - - 292: 
 
 Eoxburghe Press, (1899) 1 Ch. 210; 68 L. J. Ch. Ill; 80 L. T. 280; 
 
 47 W. E. 281 - - - - - - 123 
 
 Eoyal Aquarium Society, Stroud v., 89 L. T. 243 ; (1903) W. N. 146 - 175, 
 
 185, 434 
 
 Eoyal British Bank v. Turquand, 6 E. & B. 327 ; 24 L. J. Q. B. 327 ; 
 
 1 Jur. N. S. 1086 - - 44, 104, 192, 195, 253, 258, 275, 276, 448 
 
 Eoyal Exchange Shipping Co., Ward v., 58 L. T. 174; 6 Asp. M. C. 
 
 239 - -- -- -- - 312 
 
 Eoyal Insurance Co., Taunton v., 2 H. & M. 135 ; 33 L. J. Ch. 406 ; 
 
 10 L. T. 156; 12 W. E. 549 - - - - - 72 
 
 Eoyalties Syndicate, Ltd., Park v., (1912) 1 K. B. 330 - - 369 1 
 
 Boyce, Ltd., Shaw v., (1910) W. N. 251 ; (1911) 1 Ch. 138 - - 321 
 
 Eubber and Produce Investment Trust, (1915) 1 Ch. 382 - - 408 
 
 Buben v. Great Fingall Consolidated, (1906) A. C. 439 - 46, 136, 
 
 143, 258, 261, 448 
 
TABLE OF CASES. 
 
 lxxxi 
 
 Rud — Sal page 
 
 Rudry, &c. Co., County of Gloucester Bank v., (1895) 1 Ch. 629; 64 
 L. J. Ch. 451 ; 72 L. T. 375 ; 43 W. R. 486 - 44, 45, 194, 258, 259 
 
 Ruffle, Ex parte, L. R. 8 Ch. 1001 ----- 401 
 
 Rugeley Gas Co., W. N. (1899) 127 - - - - - 80 
 
 Rumball v. Metropolitan Bank. Co. (1877), 2 Q. B. D. 194 ; 46 L. J. 
 
 Q. B. 346; 36 L. T. 240; 25 W. R. 366 - - 304, 305, 307 
 
 Russell, Cordner & Co., (1891) 3 Ch. 171 ; 60 L. J. Ch. 805 ; 65 L. T. 
 
 740 ; 39 W. R. 635 - - - - - - - 421 
 
 Russell Hunting Record Co., Re, (1910) 2 Ch. 78 - 399, 415 
 
 Russell v. Amalgamated Society of Carpenters, (1910) 1 K. B. 506 - 9 
 
 Russell v. East Anglian Rail. Co., 3 M. & G. 125 - - - 67 
 
 Russell v. Wakefield Waterworks, 20 Eq. 474 ; 44 L. J. Ch. 496 ; 32 
 L. T. 685; 23 W. R. 887 - - - - - - 180 
 
 Russian Petroleum Co., (1907) 2 Ch. 540 ; 77 L. J. Ch. 21 ; 97 L. T. 
 
 564 ; 23 T. L. R. 746 (C. A.) - - - 288, 319 
 
 Russian Spratts, Limited, In re, 67 L. J. Ch. 381 ; 78 L. T. 480 ; 46 
 W. R. 514 - - - - - - - 146, 271 
 
 Russian Spratts, Johnson v., (1898) 2 Ch. 149 - - - 287 
 
 Ryall v. Rowles (1748), 1 Yes. 348 ----- 292 
 
 S. 
 
 Sabiston, Montreal Lithographing Co. v., (1899) A. C. 610 ; 68 L. J. 
 
 C. P. 121 ; 81 L. T. 135 (H. L.) - - - - - 27 
 
 Sadgrove v. Bryden, (1907) 1 Ch. 318; 76 L. J. Ch. 184; 96 L. T. 
 
 361 - - - - - - - - - 174 
 
 Saddlers, Reg. v., 10 H. L. C. 404 - - - - - 189 
 
 Sadler v. Worley, (1894) 2 Ch. 170 ; 70 L. T. 494 ; 42 W. R. 476 - 328 
 
 Sadler, Howard v., (1893) 1 Q. B. 1 ; 68 L. T. 120 ; 41 W. R. 126 - 
 
 160, 184 
 
 Safety Explosives, Limited, Re, (1904) 1 Ch. 226; 73 L. J. Ch. 184; 
 
 90 L. T. 331 ; 52 W. R. 470 (C. A.) - - - 411,412 
 
 Saffery, Welton v., (1897) A. C. 299; 66 L. J. Ch. 362; 76 L. T. 
 
 505 ; 45 W. R. 508 - - 38, 39, 40, 69, 123, 416, 429, 443 
 
 Sailing Ship Kentmere, W. N. (1897) 58 - - 165, 198, 391 
 
 St. Hilda’s Incorporated College, Cheltenham, (1901) 1 Ch. 556; 70 
 L. J. Ch. 266 ; 49 W. R. 279 - - - - 80, 252 
 
 St. John del Rey, Bosanquet, &c. v. (1897), 77 L. T. 207 - - 217 
 
 St. Neot’s Water (No. 2), 22 T. L. R. 478 - 390 
 
 St. Pancras, Reg. v., 11 Ad. & El. 15 - - - -173 
 
 Sale, Re, (1913) 2 Ch. 697 - - - - - - 220 
 
 Sale Hotel and Botanical Gardens Co., In re, Hesketh’s Case, 78 L. T. 
 
 368 - - - - - - - - 331, 334 
 
 Salisbury Gold Mining Co., Bank of Africa v., (1892) A. C. 281 ; 61 
 L. J. P. C. 34 ; 66 L. T. 237 ; 41 W. R. 47 - - - 154 
 
 P. 
 
 / 
 
lxxxii 
 
 TABLE OF CASES. 
 
 Sal— Sco page 
 
 Salisbury Gold Mining Co. v. Hathorn, (1897) A. C. 268 - 169, 176 
 
 Salisbury- Jones’s Case, (1894) 3 Ch. 356; 64 L. J. Ch. 27 ; 71 L. T. 
 
 284 - - - - - - - 43, 115, 184 
 
 Salmon v. Quin & Axtens, (1909) A. C. 442 - - 171, 190, 242 
 
 Salomans v. Laing, 12 Beav. 339 - - - - - 5 
 
 Salomon, Broderip v., (1895) 2 Ch. 323 ; 64 L. J. Ch. 689 ; 72 L. T. 
 
 755; 43 W. R. 612 _____ 5 5, 371 
 
 Salomon v. Salomon & Co., (1897) A. C. 22; 66 L. J. Ch. 35; 75 
 L. T. 426 ; 45 W. R. 193 - 52, 53, 55, 56, 57, 163, 272, 273, 333, 
 
 367, 371, 429, 443 
 
 Salt v. Marquis of Northampton, (1892) A. C. 1 ; 61 L. J. Ch. 49 ; 65 
 L. T. 765 ; 40 W. R. 529 - - - - - 160 
 
 Salton v. New Beeston Cycle Co. (No. 1), (1899) 1 Ch. 775 ; 68 L. J. 
 
 Ch. 370; 80 L. T. 521 ; 47 W. R. 462 - - - 187,188 
 
 Sambas Rubber, Lamb v., (1908) 1 Ch. 845; 77 L. J. Ch. 386; 98 
 L. T. 633 - - - - - - 149, 151, 353 
 
 Samuel, Marks v., (1904) 2 K. B. 287 ; 73 L. J. K. B. 587 ; 90 L. T. 
 
 590 ; 53 W. R. 88 (C. A.) - - - - - - 174 
 
 Sandeman, Clark & Co., De Verges v., (1902) 1 Ch. 579 - - 145 
 
 Sanders, Be, 13 Q. B. D. 476 _____ 405 
 
 Sandwell Park Colliery Co., (1914) 1 Ch. 589 - - - 431 
 
 Sangster v. Netter, 9 T. L. R. 441 ----- 339 
 
 Sanitary Burial Association, (1900) 2 Ch. 289 - 423 
 
 Sanitary Carbon Co., W. N. (1877) 223 169 
 
 Saragossa and Mediterranean Rail. Co., (1904) A. C. 159 ; 73 L. J. 
 
 Ch. 568 ; 52 W. R. 609 ; 20 T. L. R. 354 (H. L.— E.) - - 330 
 
 Sargent, Ex parte, 17 Eq. 273; 43 L. J. Ch. 425 ; 22 W. R. 815 - 134 
 
 Saunders & Co., Be, (1908) 1 Ch. 415; 77 L. J. Ch. 289 ; 98 L. T. 
 
 533 ; 15 Mans. 142 ; 24 T. L. R. 263 - - - - 139 
 
 Saunders v. Holborn District Board of Works, (1895) 1 Q. B. 64 ; 64 
 L. J. Q. B. 101 ; 71 L. T. 519 ; 43 W. R. 26 - - - 351 
 
 Saunderson v. Bowes, 14 East, 508 ----- 297 
 
 Saunderson & Co. v. Clark (1912), 29 T. L. R. 579 - - - 281 
 
 Scadding v. Lorant, 3 H. L. C. 418 ----- 176 
 Scarborough Cliff, &c. Co., Hutton v., 2 Dr. & Sm. 514, 521 ; 13 
 L. T. 87 ; 13 W. R. 1059 ; on app., 34 L. J. Ch. 643 ; 11 Jur. N. S. 
 
 551 ; 4 De G. J. & S. 672 - - - 47, 48, 50, 82, 83, 439 
 
 Schill, Galloway v., (1912) 2 K. B. 354 - 123 
 
 Scholey v. Central Rail. Co. of Venezuela, 9 Eq. 266, n. - - 352 
 
 Schonberg, Transport v., 21 T. L. R. 305 - - - - 192 
 
 Schuler & Co., Edelstein v., 50 W. R. 498 ; 17 T. L. R. 597 ; (1902) 
 
 2 K. B. 144 - - - - - - - 306 
 
 Schweitzer v. Mayhew, 31 Beav. 37 - - - - - 328 
 
 Schweppes, Ltd., Lire, (1914) 1 Ch. 322 - 100 
 
 Scott v. Corporation of Liverpool, 3 De G. & J. 360 - - - 69 
 
 Scott, Knowles v., (1891) 1 Ch. 717 - - - - -421 
 
 Scottish Accident Co., Jones v., 17 Q. B. D. 421 - - - 29 
 
 Scottish Economic Life Assurance Co., Ex parte, 45 C. D. 220; 38 
 W. R. 684 ; 60 L. J. Ch. 14,- 62 L. T. 926 - 383 
 
TABLE OF CASES. 
 
 lxxxiii 
 
 Sco-She i’aqe 
 
 Scottish National Insurance Co., Scottish Union and National In- 
 surance Co. v., (1909) S. C. 318 (Ct. of Sess.) - - - 27 
 
 Scottish Petroleum Co., 23 C. D. 413; 49 L. T. 348; 31 W. R. 846 - 103, 
 
 127, 182, 195, 352, 354 
 
 Scottish Union and National Insurance Co. v. Scottish National 
 Insurance Co., (1909) S. C. 318 (Ct. of Sess.) - - - 27 
 
 Scrimgeour, Metropolitan Coal Consumers’ Association v., (1895) 
 
 2 Q. B. 604 ; 65 L. J. Q. B. 22 ; 73 L. T. 137 ; 44 W. R. 35 
 
 67, 340, 342 
 
 Seal v. Claridge, 7 Q. B. D. 516 - - - - - 21 
 
 Sears, Pickard v., 6 Ad. & El. 469 ----- 143 
 
 Second East Dulwich 745th Starr-Bowkett Building Society, 68 L. J. 
 
 Ch. 196 - - - - - - 207 
 
 Securities Investment Corporation v. Brighton Alhambra, (1893) 68 
 L. T. 249 ; 62 L. J. Ch. 566 ; W. N. (1893) 15 - - 327 
 
 Security Co., Roberts v., (1897) 1 Q,. B. Ill ; 66 L. J. Q. B. 119; 75 
 L. T. 531 ; 45 W. R. 214 - - - - - - 259 
 
 Seger, Anthony u., 1 Hagg. Cas. Con. 9 - - - - 172 
 
 Selby Dam Commissioners, Gallsworthy v., (1892) 1 Q. B. 348 ; 61 
 L. J. Q. B. 372 ; 66 L. T. 17 ; 8 T. L. R. 60 - - - 75 
 
 Severn Rail. Co., In re, (1896) 1 Ch. 559; 65 L. J. Ch. 400; 74 L. T. 
 
 219; 44 W. R. 347 - ----- 219,220 
 
 Sewell’s Case, L. R. 3 Ch. 131, 640; 18 L. T. 2 ; 16 W. R. 381 - 44, 
 
 89, 126 
 
 Shackleford, Ford & Co. v. Dangerfield, L. R. 3 C. P. 407 ; 37 L. J. 
 
 C. P. 157; 18 L. T. 289; 16 W. R. 675 - - - ’-250 
 
 Sharpe, Re, (1892) 1 Ch. 154; 61 L. J. Ch. 193; 65 L. T. 806; 40 
 W. R. 241 - - - - - - 206, 215, 407 
 
 Sharp v. Dawes, 2 Q. B. D. 26 - - - - 147, 169 
 
 Sharpington Co., Baring Gould v., (1899) 2 Ch. 80 ; 68 L. J. Ch. 429 ; 
 
 80 L. T. 739 ; 47 W. R. 564 - 39, 424, 430 
 
 Sharpley v. Louth, &c. Co., 2 C. D. 663 ; 46 L. J. Ch. 259 ; 35 L. T. 71 - 352 
 Shaw, Ex parte, 2 Q. B. D. 463; 46 L. J. Q. B. 394; 36 L. T. 573; 
 
 25 W. R. 569 - - - - - - - 128 
 
 Shaw’s Case, 34 L. T. 715 - - - - - - 112 
 
 Shaw v. Arnott, 2 Stark. 256 ------ 262 
 
 Shaw v. Benson, 11 Q. B. D. 563 ----- 387 
 
 Shaw v. Holland, (1900) 2 Ch. 305 ----- 105 
 
 Shaw v. Royce, Limited, (1910) W. N. 251 ; (1911) 1 Ch. 138 - 321 
 
 Shaw v. Tati Concessions, (1913) 1 Ch. 292 - - - - 174 
 
 Shaw v. The Port Philip, &c. Co., 13 Q. B. D. 103 ; 53 L. J. Q. B. 
 
 369; 50 L. T. 685; 32 W. R. 771 - - - - - 136 
 
 Shaws, Bryant & Co., W. N. (1901) 124 - 188 
 
 Sheffield and South Yorkshire, &c. Society v. Aizlewood, 44 C. D. 
 
 412 ; 59 L. J. Ch. 34 ; 62 L. T. 768 - 67, 204 
 
 Sheffield (Corporation of) v. Barclay, (1903) 2 K. B. 580 (C. A.) ; 
 
 H. L. (1905) A. C. 392; 74 L. J. K. B. 747; 93 L. T. 83; 54 
 
 W. R. 49 - - - - _ _ _ _ 136 
 
 f 2 
 
lxxxiv 
 
 TABLE OF CASES. 
 
 She — Sim page 
 
 Sheffield, &c. Society, Re, 22 Q. B. D. 470; 58 L. J. Q. B. 265; 60 
 
 L. T. 186; 53 J. P. 375 - - - - - - 55 
 
 Sheffield v. London Joint Stock Bank, 13 App. Cas. 333 ; 57 L. J. Ch. 
 
 986 ; 58 L. T. 735 ; 37 W. E. 33 - - - - 145, 436 
 
 Shepheard v. Bray, (1907) 2 Ch. 571 ; 76 L. J. Ch. 692 ; 24 T. L. E. 
 
 17 (C. A.) - - - - - - - 358 
 
 Shepheard v. Broome, (1904) A. C. 342 ; 73 L. J. Ch. 608 ; 91 L. T. 
 
 178 ; 53 W. E. Ill ; 20 T. L. E. 540 (H. L.— E.) - - -360 
 
 Shepherd, Leeds Estate, &c. Co. v., 36 C. D. 787 ; 57 L. J. Ch. 46; 
 
 57 L. T. 684 ; 36 W. E. 322 - 179, 186, 197, 204, 215, 226, 227 
 
 Shewell v. Combined Incandescent Mantles Syndicate, 23 T. L. E. 
 
 482 -------- 341 
 
 Sheriff of Warwickshire, Taunton v., (1895) 2 Ch. 319; 64 L. J. Ch. 
 
 497; 72 L. T. 712 - - - - - - 309,315 
 
 Sheppard v. Oxenford, IK. & J. 491 - - - - - 6 
 
 Ship, Downes v., L. E. 3 H. L. 343 ; 37 L. J. Ch. 642 ; 19 L. T. 741 - 109 
 Shipley v. Marshall, 14 C. B. N. S. 566 - - - - 280 
 
 Shipway v. Broadwood, (1899) 1 Q. B. 369; 68 L. J. Q. B. 360; 80 
 
 L. T. 11 (C. A.) - - - - - - 193, 194 
 
 Shitta, Montaignac v., 15 A. C. 357 ----- 436 
 Shortridge, Bargate v ., 5 H. L. C. 318; 24 L. J. Ch. 457 ; 3 W. E. 
 
 423 -------- 45 
 
 Shrewsbury Eail. Co., Munt v., 13 Beav. 1 - - - 66, 68 
 
 Shropshire Union Co. v. The Queen, L. E. 7 H. L. 496 ; 45 L. J. Q. B. 
 
 31 ; 32 L. T. 283 ; 23 W. E. 709 - - - - 131, 143 
 
 Siddall, Re, 29 C. D. 1 ; 54 L. J. Ch. 682; 52 L. T. 114; 33 W. E. 
 
 500- - - - - - - - - 387 
 
 Silberhiitte Supply Co., (1910) W. N. 81 - - - 399 
 
 Silkstone, &c. Co., Gartside v. (1882), 21 C. D. 762 ; 51 L. J. Ch. 
 
 828 ; 47 L. T. 76 ; 31 W. E. 36 - - - - - 320 
 
 Silkstone Coal Co., Wheatleys. (1885), 29 C. D. 715; 54 L. J. Ch. 
 
 778 ; 52 L. T. 798 ; 33 W. E. 797 - 309, 311 
 
 Simm v. Anglo-American Telegraph Co., 5 Q. B. D. 188 ; 49 L. J. 
 
 Q. B. 392 ; 42 L. T. 37 ; 28 W. E. 290 ; 44 J. P. 280 - 136, 144 
 
 Simmer and Jack East, Consolidated Goldfields v., (1913) W. N. 41 ; 
 
 108 L. T. 488 - - - - - - - 294 
 
 Simmons, London Joint Stock Bank v ., (1892) A. C. 201 ; 61 L. J. 
 
 Ch. 723 ; 66 L. T. 625 ; 41 W. E. 108 - - - 145, 306 
 
 Simpson, Alexander v., 43 C. D. 139; 59 L. J. Ch. 137; 61 L. T. 
 
 708 ; 38 W. E. 161 ; 1 Meg. 457 - - - - 167, 168 
 
 Simpson, Gerson v., (1903) 2 K. B. 197 ; 72 L. J. K. B. 603; 89 
 
 L. T. 117; 51 W. E. 610 - - - - - -358 
 
 Simpson v. Dennison, 10 Hare, 51- - - - -66 
 
 Simpson v. Westminster Palace Hotel Co., 8 H. L. C. 712; 6 Jur. 
 
 N. S. 985 60, 66, 67, 69 
 
 Sims Composition Co., Capel v., 36 W. E. 689 ; 58 L. T. 807 ; 57 
 
 L. J. Ch. 713 - - - - - 354,360 
 
TABLE OF CASES. 
 
 lxxxv 
 
 Sim — Smi page 
 
 Simultaneous Colour Printing Synd. v. Foweraker, (1901) 1 K. B. 
 
 771 ; 70 L. J. K. B. 453 ; 8 Manson, 307 - - - 309, 318 
 
 Sinclair v. Brougham, (1914) A. C. 398 - - - - 275 
 
 “Sir Alfred Hickman” Steamship Co., Ltd., McMullen v., 71 L. J. 
 
 Ch. 755 - - - - - - - - 174 
 
 Sir Charles Reed, Queen v., 5 Q. B. 1). 483 - 269 
 
 Sissons v. S., 54 S. J. 802 - - - - - -189 
 
 Skelsey’s Adamant Cement Co., Ayr'e v., 20 T. L. R. 587 - - 92 
 
 Skelton’s Case, 68 L. T. 210 ; 9 T. L. R. 213 - 352 
 
 Skerne Ironworks Co., Morrison v., 60 L. T. 588 - 325 
 
 Skinner v. City of London, &c. Co., 14 Q. B. D. 882 ; 54 L. J. Q. B. 
 
 437 ; 53 L. T. 191 ; 33 W. R. 628 - - - - - 135 
 
 Slater v. Darlaston Steel Co., W. N. (1877) 165 - 430 
 
 Slater, Stubbs v., (1910) 1 Ch. 632 - - - - - 134 
 
 Sleigh v. Glasgow and Transvaal Options, G. F. 420, Ct. of Sess. - 341 
 Slogger Automatic Co., Re, (1915) 1 Ch. 478 - 325 
 
 Sloman v. Bank of England, 14 Sim. 475 - - - - 136 
 
 Sly, Pink & Co., (1911) 2 Ch. 430 - - - - - 182 
 
 Small v. Smith, 10 App. Cas. 131 ----- 319 
 
 Smedley and Fletcher, Ex p arte, W. N. (1867) 259 - - - 110 
 
 Smeed, Dean & Co., Thames Conservators v., (1897) 2 Q. B. 346 - 18 
 
 Smelting Corporation, Re, (1915) 1 Ch. 472 - - - - 289 
 
 Smethurst, Chapman v., W. N. (1909) 65; reversing (1909) 1 K. B. 
 
 73 - - - - - - - - - 266 
 
 Smith’s Case, 2 Ch. 604; 36 L. J. Ch. 618; 16 L. T. 549; 15 W. R. 
 
 882- - - - - - - - - 352 
 
 Smith & Co., Re, (1901) 1 Ir. R. 73 - - - - - 329 
 
 Smith v. Anderson, 15 C. D. 247, 273 ; 50 L. J. Ch. 39 ; 43 L. T. 
 
 329 ; 29 W. R. 21 ; 16 C. D. 275 - - - 180, 386, 387 
 
 Smith, Arnison v., 40 C. D. 567; 41 C. D. 348; 61 L. T. 63; 37 
 
 W. R. 739 ; 1 Meg. 388 - - - - 353, 354, 355 
 
 Smith, Att.-Gen. v., (1909) 2 Ch. 524 - - - - 55 
 
 Smith, Bainbridge v., 41 C. D. 262 ; 60 L. T. 879 ; 37 W. R. 594 
 
 40, 198 
 
 Smith v. Brown, (1896) A. C. 614 ; 65 L. J. P. C. 89; 75 L. T. 213; 
 
 45 W. R. 132 - - - - - - - 121 
 
 Smith v. Chadwick, 20 C. D. 27 ; 51 L. J. Ch. 597 ; 46 L. T. 702 ; 
 
 30 W. R. 661 ; 9 App. Cas. 187 ; 53 L. J. Ch. 873; 50 L. T. 697 ; 
 
 32 W. R. 687 ; 48 J. P. 644 - 354, 355, 356 
 
 Smith, Chamberlain Wharf v., (1900) 2 Ch. 605; 69 L. J. Ch. 783; 
 
 83 L. T. 238; 49 W. R. 91 (C. A.) - * - - - - 9 
 
 Smith v. Darley, 2 H. L. C. 789 - - - - - 233 
 
 Smith v. Duke of Manchester, 24 C. D. 611 ; 53 L. J. Ch. 96 ; 49 L. T. 
 
 96; 32 W. R. 83 - - - - - - - 211 
 
 Smith, General Auction, &c. Co. v., (1891) 3 Ch. 432; 60 L. J. Ch. 
 
 723 ; 65 L. T. 188 ; 40 W. R. 106 - - - - 68, 269 
 
 Smith, Jones v., 1 Ha. 43 - - - - - - 235 
 
lxxxvi 
 
 TABLE OF CASES. 
 
 Smi — Sou page 
 
 Smith v. Law Guarantee and Trust Society, (1904) 2 Ch. 569; 73 
 L. J. Ch. 733 ; 91 L. T. 545 ; 20 T. L. R. 789 (C. A.) - 315, 329 
 
 Smith, Liverpool Household Stores v. (1887), 37 C. D. 170; 57 L. J. 
 
 Ch. 85 ; 57 L. T. 770 ; 58 L. T. 204 ; 36 W. R, 485 - - 174 
 
 Smith v. Paringa Mines, (1906) 2 Ch. 193; 75 L. J. Ch. 702; 94 
 L. T. 571 - - - - - - - - 176 
 
 Smith, Reese River, &c. v. (register prima facie evidence), L. R. 4 
 H. L. 64 ; 39 L. J. Ch. 849 - 125, 127, 129, 352, 353, 354 
 
 Smith, Richard Mills & Co., Limited v., (1905) W. N. 36 - - 418 
 
 Smith, Robson v., (1895) 2 Ch. 118 ; 64 L. J. Ch. 457 ; 72 L. T. 559 ; 
 
 43 W. R, 632 283, 312, 315 
 
 Smith, Small v., 10 A. C. 131 _____ 319 
 
 Smith, Sweny v. (1867), 7 Eq. 324 ; 38 L. J. Ch. 446 - - 152 
 
 Smith v. Thompson, Smith, Re, 71 L. J. Ch. 411 - - 207 
 
 Smith’s Trustees v. Irving and Eullarton Building Society, 6 F. 99 
 (Ct. of Sess.) 390 
 
 Smyth v. Darley, 2 H. L. C. 789 - 166, 232, 233 
 
 Sneath v. Valley Gold Co., (1893) 1 Ch. 477; 68 L. T. 602; 9T. L. R. 
 
 137- - - - - - - - - 321 
 
 Snell, Inderwick v., 2 M. & G. 216 - - - - 198 
 
 Sneyd, Re (1884), 25 C. D. 338 ; 53 L. J. Ch. 545 ; 20 L. T. 109 ; 32 
 W. R. 352 - - - - - - - - 329 
 
 Societe Generate v. Walker, 11 App. Cas. 20; 55 L. J. Ch. 169; 54 
 L. T. 389; 34 W. R. 662 - - 131, 135, 142, 145, 155, 291 
 
 Societe Generale, Werderman v. (1881), 19 C. D. 246 ; 45 L. T. 514 ; 
 
 30 W. R. 33 - - - - - - - 291 
 
 Societe Panhard v. Panhard Levassor Co., (1901) 2 Ch. 513 - - 27 
 
 Somerset v. Land Securities Co., W. N. (1897) 29 - - 223 
 
 Somervail v. Cree, 4 App. Cas. 648 - - - - - 118 
 
 Sorsbie v. Tea Corporation, (1904) 1 Ch. 12 ; 73 L. J. Ch. 57 ; 89 L. T. 
 
 516; 52 W. R. 177; 20 T. L. R. 57 (C. A.) - - -432 
 
 South African Syndicate, Young v., (1896) 2 Ch. 268; 65 L. J. Ch. 
 
 638; 74 L. T. 527 ; 44 W. R. 509 - - - 167, 170, 240 
 
 South African Territories, Limited v. Wallington, (1897) 1 Q. B. 692 
 (C. A.); (1898) A. C. 309 ----- 322,339 
 
 South African Trust Co., In re, Ex parte Hirsch (1896), 74 L. T. 769- 335 
 South Durham Brewery Co., Re, 31 C. D. 261 ; 55 L. J. Ch. 179 ; 53 
 L. T. 928; 34 W. R. 126 - - - - - - 82 
 
 S. E. R., Tomkinson v., 35 C. D. 675; 56 L. J. Ch. 932; 56 L. T. 
 
 812; 35 W. R. 788- _____ 68,434 
 
 S. E. Rail. Co., Whitfield p., E. B. & E. 122 - - - - 74 
 
 South Essex Estuary Co. (1870), 11 Eq. 157 - 293 
 
 South of England Natural Gas Co., (1911) 1 Ch. 573 ; (1911) W. N. 
 
 80 - - - - - - - 342, 351, 356 
 
 South of Ireland Co. v. Waddell, L. R. 4 C. P. 617 - 254 
 
 South London Fish Market, 39 C. D. 324 - 390 
 
 South London Tramways Co., Barnett v., 18 Q. B. D. 815 ; 56 L. J. 
 
 Q. B. 452; 57 L. T. 436; 35 W. R. 640 - - - 260, 261 
 
TABLE OF CASES. 
 
 lxxxvii 
 
 Sou — Sta page 
 
 South Metropolitan Co., Engel v., (1892) 1 Ch. 442 ; 61 L. J. Ch. 369 ; 
 
 66 L. T. loo ; 40 W. R. 282 - - - - - 322 
 
 South Wales Atlantic, &c. Co., Re (1875), 2 C. D. 763; 46 L. J. Ch. 
 
 177; 35 L. T. 294 - - 386 
 
 South-Western Loan and Discount Co. v. Robertson, 8 Q. B. D. 17 - 160 
 South-Western of Venezuela Rail. Co., Re , (1902) 1 Ch. 701 ; 71 
 L. J. Ch. 407 ; 86 L. T. 321 ; 50 W. R. 300 327 
 
 Southall v. British Mutual, &c., 6 Ch. 614; 40 L. J. Ch. 698; 19 
 W. R. 865 - - - - - 168, 194, 381, 418, 425 
 
 Southampton Dock Co. v. Richards, 1 Man. & G. 448 ; 2 Rail. Cas. 
 
 215; 1 Scott, N. R. 219 ----- 244,247 
 
 Southsea Garage, Limited, 55 S. J. 314 - - - - 389 
 
 Sovereign Life Assurance Co., 42 C. D. 540 ; 58 L. J. Ch. 811 ; 61 
 L. T. 45 ; 38 W. R. 58 - - - - - - 384 
 
 Sovereign Life Assurance Co. v. Dodd, (1892) 2 Q. B. 573 - - 405 
 
 Spackman v. Evans, L. R. 3 H. L. 171 ; 37 L. J. Ch. 752 ; 19 L. T. 
 
 151 - - - - - - - 149, 151, 227 
 
 Spanish Prospecting Co., (1911) 1 Ch. 92; 103 L. T. 609; (1910) 
 
 W. N. 241 - - - - - - - 217, 221 
 
 Spargo’s Case, 8 Ch. 407 ; 42 L. J. Ch. 488 ; 28 L. T. 153 ; 21 W. R. 
 
 306- - - - - 122,443 
 
 Sparks v. Liverpool Waterworks Co., 13 Ves. 428 - 152 
 
 Speak, Broome v., (1903) 1 Ch. 586 ; 72 L. J. Ch. 251 ; 88 L. T. 580 ; 
 
 51 W. R. 258 (C. A.) - - - - - - 359 
 
 Speak, Hoole v., (1904) 2 Ch. 732 ; 73 L. J. Ch. 719 ; 91 L. T. 183; 
 
 20 T. L. R. 649 - - - - - - 360 
 
 Spencer’s Case, 6 Ch. 362 ------ 384 
 
 Spiers & Pond, W. N. (1895) 135 - - - - - 78 
 
 Spiral Globe Co., Re, (1902) 1 Ch. 396 ; 85 L. T. 778 ; 50 W. R. 
 
 187 - - - - - - - - - 282 
 
 Spiral Globe Co., Watson & Co. v., (1902) 2 Ch. 209; 71 L. J. Ch. 
 
 538 ; 86 L. T. 499 - - - - - - - 280 
 
 Spitzel v. Chinese Corporation (1900), 80 L. T. 347; 6 Manson, 355 - 
 
 112, 127 
 
 Spottiswoode, Dixon and Hunting, Limited, (1912) 1 Ch. 410 - 418 
 
 Sproule, Bouch v., 12 A. C. 385; 56 L. J. Ch. 1037; 57 L. T. 345; 
 
 36 W. R. 193 - - - - - - - 220 
 
 Stacey (F.) & Co. v. Wallis, 106 L. T. 541 - - - - 199 
 
 Staffordshire Gas Co., 66 L. T. 414 - - - - - 192 
 
 Standard Bank of South Africa v. Standard Bank, 25 L. T. R. 420 - 27 
 
 Standard Exploration Co., Burdett v., 16 T. L. R. 112 - - 41, 142 
 
 Standard Land Co., Bath v., (1910) 2 Ch. 408 ; reversed on appeal, 
 
 W. N. (1911) 101 - - - - - - -194 
 
 Standard Manufacturing Co., (1891) 1 Ch. 627 ; 60 L. J. Ch. 292 ; 64 
 L. T. 487 ; 39 W. R. 369 ; 2 Meg. 418 - - 309, 315, 443 
 
 Standard Rolling Stock Syndicate, Edwards v., (1893) 1 Ch. 574; 62 
 L. J. Ch. 605; 68 L. T. 193, 633 ; 41 W. R. 343 - - - 325 
 
 Standard Rotary Machine Co., 95 L. T. 829 - - - - 312 
 
XXXV111 
 
 TABLE OF CASES. 
 
 Sta — Stu PAGE 
 
 Stanhope’s Case, L. R. 1 Ch. 161 ; 35 L. J. Ch. 296; 14 L. T. 468 ; 
 
 14 W. R. 266 - - - - - - - 116 
 
 Stanhope Silkstone Collieries Co., Re, 11 C. D. 160 - - - 411 
 
 Stanley’s Case, 4 De G. J. & S. 407 ; 33 L. J. Ch. 535 ; 10 L. T. 674 ; 
 
 12 W. R. 894 - - - - - - - 270 
 
 Staples v. Eastman Photographic Materials Co., (1896) 2 Ch. 303 ; 65 
 
 L. J. Ch. 682 ; 74 L. T. 479 - - - - - 84 
 
 Star Steam Laundry, (1913) W. N. 39 ; 108 L. T. 367 - - 189 
 
 Starkey v. Bank of England, (1903) A. C. 114; 72 L. J. Ch. 402; 
 
 88 L. T. 244 ; 51 W. R. 513 - - - - - 136 
 
 State of Wyoming Syndicate, Re, (1901) 2 Ch. 431 ; 17 T. L. R. 631 ; 
 
 70 L. J. Ch. 727 ; 84 L. T. 868 ; 49 W. R. 650 - 164, 195, 419 
 
 S.S. Titian, 36 W. R. 347 - - - - - 421 
 
 Steel v. Harmer, 14 M. & W. 831 - - - - - 264 
 
 Steel Brothers & Co., Borland’s Trustee v., (1901) 1 Ch. 279 - 131, 140, 
 
 155, 156, 158, 291, 375 
 
 Stenotyper, Limited, Re, (1901) 1 Ch. 250; 70 L. J. Ch. 94; 84 L. T. 
 
 149 ; 8 Manson, 203 ------ 415 
 
 Stephens v. Mysore Reefs Kangundy Mining Co.. 71 L. J. Ch. 295; 
 
 86 L. T. 221 ; (1902) 1 Ch. 745 - - - 71 
 
 Stevenson v. Wilson, (1907) S. C., Ct. of Sess. 445 - 135 
 
 Stewart Carburettor, Re, (1912) W. N. 100; 28 T. L. R. 335 - 100 
 
 Stewart, Pirie v., 6 F. 847 (Ct. Sess.) - 394 
 
 Stewart’s Case, 1 Ch. 574; 35 L. J. Ch. 738; 14 L. T. 817 - - 128 
 
 Stirling v. Passburg Grains, 8 T. L. R. 71 - - - 354 
 
 Stocken’s Case, 3 Ch. 415 ; 37 L. J. Ch. 230 ; 17 L. T. 554 ; 16 W. R. 
 
 322 - - - - - - - - 148, 153 
 
 Stocker v. Brocklebank, 3 M. & G. 250 - 262 
 
 Stockton Malleable Iron Co., 2 C. D. 101 ; 45 L. J. Ch. 168 - - 130 
 
 Stone & Funnell, Gray v., 69 L. T. 282; W. N. (1893) 133; 3 R. 
 
 692- - - - - - - - - 160 
 
 Strand Hotel Co., Re, W. N. (1868) 2 - 414 
 
 Strand Music Hall, Re, 3 De G. J. & S. 147 ; 14 W. R. 6 - 287, 317, 318 
 Strand Wood Co., (1904) 2 Ch. 1 ; 73 L. J. Ch. 550; 90 L. T. 800; 53 
 W. R. 69 - - - - - - - - 407 
 
 Stranton Iron Co., In re, 16 Eq. 559; 43 L. J. Ch. 215 - 128, 171 
 
 Strapp v. Bull, (1895) 2 Ch. 1 ; 72 L. T. 514 (C. A.) - - - 327 
 
 Stratton, Cotterell v. (1872), L. R. 8 Ch. 302 - 329 
 
 Streatham Estates Co., (1897) 1 Ch. 15; 66 L. J. Ch. 57 ; 75 L. T. 
 
 574; 45 W. R. 105 271 
 
 Stringer’s Case, L. R. 4 Ch. 475 ; 38 L. J. Ch. 698 ; 20 L. T. 591 ; 17 
 W. R. 694 - - - - - - - 206, 217 
 
 Strong v. Carlyle Press, (1893) 1 Ch. 268 ; 62 L. J. Ch. 541 ; 68 L. T. 
 
 396; 41 W. R. 404 - - - - - - - 328 
 
 Stroud v. Royal Aquarium Society, 89 L. T. 243 ; (1903) W. N. 146 - 
 
 175, 185, 434 
 
 Stubbs v. Slater, (1910) 1 Ch. 632 - - - - - 134 
 
 Studdert v. Grosvenor, 33 C. D. 528; 34 W. R. 754; 55 L. T. 171 ; 
 
 53 L. J. Ch. 689 - - - - - - 173, 442 
 
TABLE OF CASES. 
 
 XXXIX 
 
 Sub— Tal page 
 
 Suburban Hotel Co., Re (1867), L. E. 2 Ch. App. 737 ; 36 L. J. Ch. 710; 
 
 17 L. T. 22; 15 W. R. 1096 .... 394, 414 
 
 Suffield, London Freehold Land Co. v., (1897) 2 Ch. 608; 66 L. J. 
 
 Ch. 790 ; 77 L. T. 445 ; 46 W. E. 102 - - 258, 259 
 
 Sullivan v. Mitcalfe, 5 C. P. D. 465; 49 L. J. C. P. 815; 44 L. T. 8 ; 
 
 29 W. E. 181 - - - - - - - 359 
 
 Sumatra Tobacco Co., W. N. (1898) 80 - - - - 99 
 
 Surgey, Parsons v., 4 Fost. & Fin. N. P. Cas. 247 - - - 174 
 
 Sussex Brick Co., (1904) 1 Ch. 598; 78 L. J. Ch. 308; 90 L. T. 426; 
 
 52 W. E. 371 - - - - - - 128, 137 
 
 Sutton, Charitable Corporation v., 2 Atk. 400 - 178, 200, 205 
 
 Sutton v. English and Colonial Produce Co., (1902) 2 Ch. 502; 71 
 
 L. J. Ch. 685 ; 87 L. T. 438 ; 50 W. R. 571 - 131, 134, 140, 184 
 
 Sutton’s Hospital Case, 10 Eep. 30 b - - - - 3, 257 
 
 Swabey v. Port Darwin Co., 1 Meg. 385 - - - 43, 186, 187 
 
 Swaby v. Dickon, 5 Sim. 629 ------ 326 
 
 Swallow, Caridad Copper Co. v., (1902) 2 K. B. 44 ; 71 L. J. K. B. 
 
 601 ; 86 L. T. 699 ; 50 W. E. 565 - - - - - 188 
 
 Sweeting, Bailey v., 9 C. B. N. S. 843 - 256 
 
 Sweny v. Smith (1867), 7 Eq. 324; 38 L. J. Ch. 446 - - - 152 
 
 Sykes’s Case, 13 Eq. 255; 41 L. J. Ch. 251 ; 26 L. T. 92 - 150 
 
 Sykes, National Dwellings Co. v., (1894) 3 Ch. 159; 63 L. J. Ch. 
 
 906 ; 42 W. E. 696 ----- 170,176 
 
 Sylvester, Popple v. (1883), 22 C. D. 98 ; 52 L. J. Ch. 54 ; 47 L. T. 
 
 329; 31 W. R. 116 - 287,329 
 
 Symington v. Symington’s Quarries, Limited, 8 F. 121 (Ct. of Sess.)- 394 
 Symons’ Case, 5 Ch. 298 ; 39 L. J. Ch. 461 ; 22 L. T. 217 ; 18 W. R. 
 
 366- - - - - - - - - 115 
 
 Symons & Co., Punt v ., (1903) 2 Ch. 506; 72 L. J. Ch. 768; 89 L. T. 
 
 525 ; 52 W. E. 41 - - - - - - 43,47,190 
 
 Syria Ottoman Rail. Co., 20 T. L. E. 217 - 390 
 
 T. 
 
 Taft Yale Rail. Co. v. Amalgamated Society of Railway Servants, 
 (1901) A. C. 426 ; 70 L. J. Q. B. 905 ; 50 W. E. 44 - - 9 
 
 Tahiti Cotton Co., 17 Eq. 273; 43 L. J. Ch. 425; 22 W. R. 815 - 145 
 
 Tahourdin, Isle of Wight Rail. Co. v., 25 C. D. 320 - - - 165 
 
 Tailby v. Official Receiver, 13 App. Cas. 523 ; 58 L. J. Q. B. 75 ; 60 
 L. T. 162; 37 W. R. 513 - - - - 280, 308, 318 
 
 Tait v. MacLeay, (1904) 2 Ch. 631 ; 74 L. J. Ch. 43; 91 L. T. 474 ; 
 
 20 T. L. R. 710 (C. A.) ; (1906) A. C. 24 - - 351,360,361 
 
 Taite’s Case, 3 Eq. 795 ; 36 L. J. Ch. 475 ; 16 L. T. 343 ; 15 W. R. 
 
 891 - - - - - - - - - 352 
 
 Talbott, Re (1888), 39 C. D. 567; 58 L. J. Ch. 70; 60 L. T. 45; 37 
 W. R. 233 - - - - - - - - 329 
 
xc 
 
 TABLE OF CASES. 
 
 Tas — Tho page 
 
 Tasker & Sons (W.), (1905) 1 Ch. 283 ; 53 W. R. 247 ; 92 L. T. 17 - 
 
 288, 319 
 
 Tati Concessions, Shaw v., (1913) 1 Ch. 292 - - - - 174 
 
 Taunton, Delmard, Lane & Co., Re, (1893) 2 Ch. 175 - 293, 316, 329 
 
 Taunton v. Royal Insurance Co., 2 H. & M. 135 ; 33 L. J. Ch. 406 ; 
 
 10 L. T. 156 ; 12 W. E. 549 - - - - - 72 
 
 Taunton v. Sheriff of Warwickshire, (1895) 2 Ch. 319; 64 L. J. Ch. 
 
 497 ; 72 L. T. 712 - - - - - - 309, 315 
 
 Taurine Co., 25 C. D. 118 ; 53 L. J. Ch. 271 ; 49 L. T. 514 ; 32 W. R, 
 
 129- - - - - - - - - 197 
 
 Taylor, Geisse v., (1905) 2 K. B. 658 ; 74 L. J. K. B. 912; 93 L. T. 
 
 534 (Div. Ct.) - - - - - - - 319 
 
 Taylor, Phillips and Rickard’s Case, (1897) 1 Ch. 298; 66 L. J. Oh. 
 
 222; 76 L. T. 1 ; 45 W. R. 401 - - - 129, 420 
 
 Taylor v. Midland Rail. Co., 8 W. R. 401 - - - - 159 
 
 Taylor’s Agreement Trusts, (1904) 2 Ch. 737 ; 73 L. J. Ch. 557 ; 52 
 W. R. 602 - - - - - - - - 418 
 
 Tea Co., Hodson v. (1890), 14 C. D. 859 ; 49 L. J. Ch. 234 ; 28 W. R. 
 
 458 294, 324 
 
 Tea Corporation, Sorsbie v., (1904) 1 Ch. 12; 73 L. J. Ch. 57 ; 89 
 
 L. T. 516; 52 W. R. 177; 20 T. L. R. 57 (C. A.) - - - 432 
 
 Teague, Howbeach Coal Co. v., 5 H. & N. 151 , - - 147, 192 
 
 Tean Friendly Society (1914), 58 S. J. 234 - 390 
 
 Teasdale’s Case, 9 Ch. 54 ; 43 L. J. Ch. 578 ; 29 L. T. 707 ; 22 W. R. 
 
 286 - - - - - - - - - 94 
 
 Teede & Bishop, Limited, W. N. (1901) 52 ; 84 L. T. 561; 70 L. J. Ch. 
 
 409; 8 Mans. 217 ------ 167, 175 
 
 Tees Bottle Co., 33 L. T. 834 ; 38 L. T. 147 - - - - 134 
 
 Telescriptor Syndicate, Re, (1903) 2 Ch. 174; 72 L. J. Ch. 480; 88 
 
 L. T. 389 ; 51 W. R. 409 - - - - - - 417 
 
 Thairwall v. Great Northern Rail. Co., (1910) 2 K. B. 509 - - 221 
 
 Thames Conservators v. Smeed, Dean & Co., (1897) 2 Q. B. 346 - 18 
 
 Thames Ironworks, 28 T. L. R. 273 ; (1912) W. N. 66 - - 326 
 
 Thames Plate Glass Co. v. Land Co. (1870), 11 Eq. 248 ; 24 L. T. 227 ; 
 
 19 W. R. 303 ; 6 Ch. 643 ; 25 L. T. 236 ; 19 W. R. 764 - - 414 
 
 Thatcher, Milward v., 2 T. R. 81 - - - - - 189 
 
 Theatrical Trust, Re, (1895) 1 Ch. 771 ; 64 L. J. Ch. 488; 72 L. T. 
 
 461; 43 W. R. 553- - 117,414 
 
 Thomas De la Rue & Co., Ltd., (1911) 2 Ch. 361 - - - 96 
 
 Thomas Wolfe & Son, Ltd., (1912) W. N. 286 - - - 99 
 
 Thomas v. Patent Lionite Co., 17 C. D. 257 - - - - 411 
 
 Thomas v. United Butter Cos., (1909) 2 Ch. 484 - 13, 19, 424, 438 
 
 Thomas, .Be (1884), 14 Q. B. D. 379 ; 54 L. J. Q. B. 336 ; 51 L. T. 602 ; 
 
 33 W. R. 583 387 
 
 Thompson v. Hudson (1869), L. R. 4 H. L. 1 - - - 294 
 
 Thompson, Marrs v., 17 T. L. R. 365 (C. A.) - - - 387 
 
 Thompson’s Trustees, Collin v., 4 Macq. 424, 432 - 200 
 
 Thomson’s Case (1865), 4 De G. J. & S. 749 ; 34 L. J. Ch. 525 ; 12 L. T. 
 
 717; 13 W. R. 958 - - - - - - - 113 
 
TABLE OF CASES. 
 
 XC1 
 
 Tho— Tra paqm 
 
 Thomson v. Henderson’s Transvaal Estates Co., (1908) 1 Ch. 765; 77 
 L. J. Ch. 501 ; 98 L. T. 815 ; 15 Mans. 220 ; 24 T. L. R. 539 - 167, 419 
 Thomson v. Lord Clanmorris, (1900) 1 Ch. 718; 69 L. J. Ch. 337; 
 
 82 L. T. 277 ; 48 W. R. 488 (C. A.) - 358 
 
 Thorley, Crowther v., 50 L. T. 43 - - - - 387 
 
 Thorn v. City Rice Mills (1889), 40 C. D. 357 ; 58 L. J. Ch. 297 ; 60 
 L. T. 359 ; 37 W. R. 398 - - - - - - 297 
 
 Thorne (H. E.) & Son, Ltd., (1914) 2 Ch. 438 - - 405, 406 
 
 Thorpe, Yenner’s Electrical Appliances v., (1915) W. N. 307 - 413 
 
 Thrift, Adams v., (1915) 2 Ch. 21 - - - - - 358 
 
 Thurso New Gas Co., Be, 42 C. D. 486 ; 61 L. T. 351 ; 38 W. R. 156 ; 
 
 1 Meg. 330- ------- 414 
 
 Tibbatts v. Boulter (1895), 73 L. T. 534 - - - - 353 
 
 Tidy, Reg. v., 2 Q. B. 179 ------ 263 
 
 Tiessen v. Henderson, (1899) 1 Ch. 861 ; 68 L. J. Ch. 353; 80 L. T. 
 
 483 ; 47 W. R. 459 ; 6 Manson, 340 - 168, 425 
 
 Tillott, (1892) 1 Ch. 86 ; 61 L. J. Ch. 38 ; 65 L. T. 781 ; 40 W. R. 204 - 222 
 Tilson v. Warwick Gas Co., 4 B. & C. 962 - - - - 41 
 
 Tilt Cove Copper Co., Be, (1913) 2 Ch. 588 - 325 
 
 “Titian ” (S.S.), 36 W. R. 347 421 
 
 Tofield, Greaves v., 14 C. D. 571 - - - - 18 
 
 Tollit, Aerators Ltd. v., (1902) 2 Ch. 319 ; 71 L. J. Ch. 727 ; 86 L. T. 
 
 651 ; 50 W. R. 584 - - - - - - 27 
 
 Tom Tit Cycle Co. (Fisher’s Case), 15 T. L. R. 132 ; W. N. (1899) 35 - 121, 
 
 122, 123 
 
 Tomkinson v. Balkis Co., (1893) A. C. 396; 63 L. J. Q. B. 134; 69 
 L. T. 598; 42 W. R. 204 - - - - 136, 144, 440 
 
 Tomkinson v. S. E. R., 35 C. D. 675; 56 L. J. Ch. 932; 56 L. T. 
 
 812; 35 W, R. 788- ----- 68,434 
 
 Tomlin’s Case, In re Brinsmead & Sons, (1898) 1 Ch. 104 ; 67 
 L. J. Ch. 11 ; 77 L. T. 521; 46 W. R. 171- - - -353 
 
 Torbock v. Lord Westbury, (1902) 2 Ch. 871 ; 71 L. J. Ch. 845; 87 
 L. T. 165; 51 W. R. 133 ----- 166,239 
 
 Tothill’s Case, L. R. 1 Ch. 85 - - - - - 244 
 
 Totterdell v. Fareham Brick Co., L. R. 1 C. P. 674; 14 W. R. 919 ; 
 
 35 L. J. C. P. 278; 12 Jur. N. S. 901 - - - - 197 
 
 Touche v. Metropolitan, &c. Co., 6 Ch. 671 - - - - 334 
 
 Tower Galvanizing Co., Duck v., (1901) 2 K. B. 314; 70 L. J. K. B. 
 
 625 ; 84 L. T. 847 - - - - - - 45, 46, 309 
 
 Towers v. African Tug Co., (1904) 1 Ch. 558 ; 73 L. J. Ch. 395; 90 
 L. T. 298 ; 52 W. R. 532 ; 20 T. L. R. 292 (C. A.) - - 219 
 
 Townshend v. Windham (1750), 2 Yes. 1 - - - - 308 
 
 Trade Auxiliary Co. v. Yickers, 16 Eq. 298; 21 W. R. 336 - - 166 
 
 Transport v. Schonberg, 21 T. L. R. 305 - 192 
 
 Transvaal Exploring Co. v. Albion Transvaal Gold Mines, (1899) 
 
 2 Ch. 370; 68 L. J. Ch. 670 ; 48 W. R. 108 - - 121, 122 
 
 Transvaal Land Co. v. New Belgium Co., (1914) 2 Ch. 488 - - 193 
 
XC11 
 
 TABLE OF CASES. 
 
 Tre — TJni page 
 
 Trench Tubeless Tyre Co., Bethell v., (1900) 1 Ch. 408; 69 L. J. 
 
 Ch. 213 ; 82 L. T. 247 ; 48 W. E. 310 (C. A.) - 167, 175, 419 
 
 Trevor v. Whitworth (1887), 12 App. Cas. 409; 57 L. J. Ch. 28; 57 
 L. T. 457 ; 36 W. E. 145 - 38, 66, 68, 92, 93, 94, 116, 128, 215, 
 
 377, 443 
 
 True Blue, Burdett Coutts v ., (1899) 2 Ch. 616 ; 68 L. J. Ch. 692 ; 81 
 L. T. 29; 48 W. E. 1 ; 7 Manson, 85 (C. A.) - 425 
 
 Truman’s Case, (1894) 3 Ch. 272 ; 63 L. J. Ch. 635 ; 71 L. T. 328 ; 43 
 W. E. 73 - - - - - - 103,115,234 
 
 Truman, Hanbury & Co., (1910) 2 Ch. 498 - 100 
 
 Trustees’ Executors Co., Morrison v. (1899), 68 L. J. Ch. 11 ; 79 L. T. 
 
 605 - - - - - - - - -152 
 
 Tucker, Bellairs v., 13 Q. B. D. 562 - 
 Tulk v. Moxhay (1848), 2 Ph. 774 
 Tunnel Mining Co. (Pool’s Case), 35 C. D. 579 
 Turner, Re, Barker v. Ivimey, (1897) 1 Ch. 536 
 Turner v. Goldsmith, (1891) 1 Q. B. 544 
 Turner, Great Eastern Eail. Co. v., 8 Ch. 149 : 
 
 L. T. 697 ; 21 W. E. 163 - 
 Turquand, Jackson v., L. E. 4 H. L. 305 ; 39 L. J. Ch. 11 - 
 Turquand v. Marshall, 4 Ch. 376 ; 38 L. J. Ch. 639 ; 20 L. T. 
 
 17 W. E. 935 
 
 42 L. J. Ch. 83 
 - 55, 
 
 - 355 
 
 - 156 
 
 - 121 
 
 - 207 
 
 - 263 
 ; 27 
 
 179, 180 
 104, 355 
 765 ; 
 
 201, 204 
 
 Turquand, Oakes v., L. E. 2 H. L. 325 ; 36 L. J. Ch. 949; 16 L. T. 
 
 808 7, 52, 56, 126, 353, 409, 442 
 
 Turquand, Eoyal British Bank v., 6 E. & B. 327 ; 24 L. J. Q. B. 327 ; 
 
 1 Jur. N. S. 1086 - - 44, 104, 192, 195, 253, 258, 275, 276, 443 
 
 Tussaud v. Tussaud, 44 C. D. 678 - - - - - 27 
 
 Tuticorin Cotton Press Co. (1894), 43 W. E. 190 ; 71 L. T. 723 - 140 
 
 Tweddle & Co., (1910) 2 K. B. 697 - - - - - 409 
 
 Twigg, Wesbury v., (1892) 1 Q. B. 77 - - - - 421 
 
 Twiss, Aaron’s Eeef v., (1896) A. C. 273 ; 65 L. J. P. C. 54 ; 74 L. T. 
 
 794 - - - - - - - 153, 346, 356, 359 
 
 Twycross v. Grant, 2 C P. D. 469; 46 L. J. C. P. 636; 36 L. T. 812; 
 
 25 W. E. 701 - - - - - 331, 360, 443 
 
 Tyler, Nassau Steam Co. v. (1894), 70 L. T. 376 - 266 
 
 Tyler & Co., Eeg. v., (1891) 2 Q. B. 588 ; 61 L. J. M. C. 38 ; 65 L. T. 
 
 662; 56 J. P. 118 - - - - -74,123,210 
 
 Tyne Mutual v. Brown, 74 L. T. 283- - - - 46, 276 
 
 Tyne Steamship Co. v. Brown, 75 L. T. 483 - 192 
 
 U. 
 
 Underwood v. London Music Hall, Limited, (1901) 2 Ch. 309 - 82, 88, 90 
 Union Bank of Australia, Irvine v., 2 A. C. 366; 46 L. J. P. C. 87 ; 
 
 37 L. T. 176; 25 W. E. 682 - - - 46, 271, 275, 276 
 
 Union Bank of Kingston-upon-Hull, 13 C. D. 808 - 424 
 
TABLE OF CASES. 
 
 XClll 
 
 Uni— Vid page 
 
 Union Bank of Manchester, 12 Eq. 354 - - - - 19 
 
 Union Hill Silver Co., 22 L. T. 400 - - - - - 232 
 
 United African Lands, Arnot v., W. N. (1901) 28; (1901) 2 Ch. 518 - 170, 240 
 United Club, 60 L. T. 665 - - - - - - 392 
 
 United Lankat Plantations, Will v.\ (1914) A. C. 11 - - 84, 85, 443 
 
 United Provident Assurance Co., (1910) 2 Ch. 477 - 432 
 
 United Rubber Cos., Thomas v., (1909) 2 Ch. 484 - 13, 19, 424, 438 
 
 United Service Co., L. R. 6 Ch. 212- - - - -75 
 
 United Switchback Co., Grant v., 40 C. D. 135 ; 58 L. J. Oh. 211 ; 60 
 
 L. T. 525; 37 W. R. 312 - 66, 75, 167, 168, 178, 186, 193, 241, 253 
 Universal, &c. Co., Wallace v., (1894) 2 Ch. 547; 63 L. J. Ch. 598; 
 
 70 L. T. 852 (C. A.) 294, 324 
 
 Ural Gold Fields v. Pappa, 15 T. L. R. 330 - - - - 131 
 
 Uruguay Central Rail. Co., Re (1879), 11 C. D. 372; 48 L. J. Ch. 
 
 540 ; 27 W. R. 571 - - - - - - 328, 393 
 
 Y. 
 
 Yagliano Anthracite Co., (1910) W. N. 187 - 124 
 
 Yagliano, Bank of England v., (1891) A. C. 144 ; 60 L. J. Q. B. 145 ; 
 
 64 L. T. 353; 39 W. R. 657 - - - - - 17 
 
 Valentine Meat Juice Co. v. Yalentine Extract Co., 83 L. T. 259 - 27 
 
 Yallen, Jaegen, &c. Co. v., 77 T. L. R. 180 - 234 
 
 Yalletort Sanitary Steam Laundry, (1903) 2 Ch. 654; 72 L. J. Ch. 
 
 674 ; 39 L. T. 60 - - - - - - - 320 
 
 Yalley Gold Co., Sneath v., (1893) 1 Ch. 477 ; 68 L. T. 602 ; 9 T. L. 
 
 R. 137 - - - - - - - - 321 
 
 Yalpy, Dickinson v-, 10 B. & C. 128 ; 5 M. & R. 126 - - 264 
 
 Yan Diemen’s Land Co., Graham v ., 26 L. J. Ex. 73 - 151, 166 
 
 Yance v. East Lancashire Rail. Co., 3 K. & J. 50 - - - 66 
 
 Yarieties, Re, (1893) 2 Ch. 235 ; 68 L. T. 214 ; 41 W. R. 296 - 395, 422 
 
 Yenables v. Baring Brothers, (1892) 3 Ch. 527 ; 61 L. J. Ch. 602 ; 67 
 
 L. T. 110; 40 W. R. 699 ----- 306,307 
 
 Yenner’s Electrical Appliances v. Thorpe, (1915) W. N. 307 - 413 
 
 Yerner v. General Commercial Trust, (1894) 2 Ch. 239 ; 63 L. J. Ch. 
 
 456; 70 L. T. 516 ----- 216,217,218 
 
 Yickers, Trade Auxiliary Co. v., 16 Eq. 298 ; 21 W. R. 336 - - 166 
 
 Victoria Brick Works, W. N. (1898) 162; 5 Mans. 350 - - 123 
 
 Victoria Dock Co., Harrington v., 3 Q. B. D. 549 - - - 193 
 
 Victoria Graving Dock, Jones v. (1877), 2 Q. B. D. 314; 46 L. J. 
 
 Q. B. 219; 36 L. T. 144; 25 W. R. 348 - - - 245, 256 
 
 Victoria (Malaya) Rubber Estates, (1914) W. N. 307 - - - 99 
 
 Victoria Society, Knottingley, (1913) 1 Ch. 167 - - - 390 
 
 Victoria Steamboats Co., (1897) 1 Ch. 158 ; 66 L. J. Ch. 21 ; 75 L. T. 
 
 374; 45 W. R. 135 ----- 324,325 
 
 Yiditz v. O’Hagan, (1899) 2 Ch. 569 - - - - - 113 
 
xciv 
 
 TABLE OF CASES. 
 
 Vig— Wal page 
 
 Vigers, Blackburn v., 12 A. C. 531 ----- 234 
 
 Vine and General Rubber Trust, 108 L. T. 709 - - - 100 
 
 Ying v. Robertson and Woodcock, Limited, 56 S. J. 412 - - 242 
 
 Viola v. Anglo-American Co., (1912) 2 Oh. 305 - - - 326 
 
 Violet Consolidated Gold Mining Co., 68 L. J. Ch. 535 ; W. N. (1899) 
 
 66 ; 80 L. T. 684 - - - - - - - 137' 
 
 Vivian & Co., (1900) 2 Ch. 654 ; 69 L. J. Ch. 659 ; 82 L. T. 674 - 66 
 
 Vivian & Co., 54 L. T. 384 - - - - - 95, 97 
 
 Vron Colliery Co., Re, i>0 C. D. 442 ; 51 L. J. Ch. 389 ; 30 W. R. 411 ; 
 
 W. N. (1886) 32 ----- 392, 413 
 
 Vulcan Iron Works Co., W. N. (1885) 120 - - - - 144 
 
 W. 
 
 Waddell, Findlay v., (1910) S. C. 670, Ct. of Sess. - - 227, 420 
 
 Waddell, South of Ireland Co. v., L. R. 4 C. P. 617 - - - 254 
 
 Wagner, Lumley v., 1 D. M. & G. 604 _ 262 
 
 Wainwright’s Case, 62 L. T. 30; 63 L. T. 429; 59 L. J. Ch. 281 ; 
 
 1 Meg. 463 - - - - - - - - 354 
 
 Wain wright, Randt Gold Mining Co. v., (1901) 1 Ch. 184 - 132, 152 
 
 Wakefield Rolling Stock Co., (1892) 3 Ch. 165 ; 61 L. J. Ch. 670; 67 
 L. T. 83; 40 W. R. 700 - - - - 150, 417, 420 
 
 Wakefield Waterworks, Russell v., 20 Eq. 474 ; 44 L. J. Ch. 496; 32 
 L. T. 685 ; 23 W. R. 887 - - - - - - 180 
 
 Wala Wynaad, 21 C. D. 849 ------ 394 
 
 Walburn v. Ingilby, 1 M. & K. 61 - - - - - 6 
 
 Walkden Spinning Co., Booth v., (1909) 2 K. B. 368 - - 432 
 
 Walker v. Elmore’s German Metal Co., 85 L. T. 767 - - - 321 
 
 Walker, Levy v., 10 C. D. 436; 7 Beav. 84 - - - - 250 
 
 Walker v. London Tramways Co. (1879), 12 C. D. 705 ; 49 L. J. Ch. 
 
 23 ; 28 W. R. 163 - - - - - - 47, 443 
 
 Walker v. Remmett, 15 L. J. Ch. 8, 174 - 340 
 
 Walker & Smith, Limited, Re, 72 L. J. Ch. 572; 88 L. T. 792 ; 51 
 W. R. 491 - - - - - - - - 99 
 
 Walker, Societe Generale v., 11 A. C. 20 ; 55 L. J. Ch. 169 ; 54 L. T. 
 
 389; 34 W. R. 662 - - - -131, 135, 142, 145, 155, 291 
 
 Walker Steam Trawl Fishing Co. (1908), S. C. 123, Ct. of Sess. - 98 
 Wall v. London & Northern Assets Corporation (No. 1), 14 T. L. R. 
 
 496; (1898) 2 Ch. 469 - - - - 169, 170, 175, 239 
 
 Wall v. London & Northern Assets Corporation (No. 2), (1899) 1 
 Ch. 550 - -- -- -- - 171 
 
 Wallace’s Case, W. N. (1900) 171 ; (1900) 2 Ch. 671 ; 69 L. J. Ch. 
 
 777 ; 83 L. T. 403 - - - - - - 103, 109 
 
 Wallace v. Evershed, (1899) 1 Ch. 891 328 
 
TABLE OF CASES. 
 
 XCV 
 
 Wal Weg page 
 
 Wallace v. Universal, &c. Co., (1894) 2 Ch. 547 ; 63 L. J. Ch. 598 , 70 
 L. T. 852 (C. A.) - - - - - - 294, 324 
 
 Wallcourt’s (Lord) Case, W. N. (1899) 258 ; 7 Manson, 235 - - 151 
 
 Waller v. Loch, 7 Q. B. D. 619 - - - - - 174 
 
 Wallingford v. Mutual Society (1879), 5 App. Cas. 685 ; 50 L. J. 
 
 Q. B. 49 ; 43 L. T. 258 ; 29 W. R. 81 - - - 294 
 
 Wallington, South African Territories, Ltd. v., (1897) 1 Q. B. 692 
 (C. A.); (1898) A. C. 309 ----- 322,339 
 
 Wallis’ Case, L. R. 4 Ch. 325, n. 109, 110 
 
 Wallis, Stacey (F.) & Co. v., 106 L. T. 541 - 199 
 
 Walters v. Woodbridge, 7 C. D. 504 - - - - - 211 
 
 Wandsworth Gaslight Co. v. Wright, 22 L. T. 404 - - 169, 172 
 
 Ward v. Alpha Co., (1903) 1 Ch. 203; 72 L. J. Ch. 91; 51 W. R. 
 
 201 - - - - - - - - - 330 
 
 Ward v. Royal Exchange Shipping Co., 58 L. T. 174; 6 Asp. M. C. 
 
 239- - - - - - - - - 312 
 
 Wardle, Atkin v. (1889), 61 L. T. 23; 58 L. J. Q. B. 377 - 248, 265 
 
 Ware v. Lord Egmont, 4 D. M. & G. 460 - 235 
 
 Warner Engineering Co. v. Brennan, 30 T. L. R. 191 - - 338 
 
 Warner International Co., Ltd., (1914) W. N. 61 ; 110 L. T. 456 - 338 
 
 Warrant Finance Co., Humber Ironworks Co. v., L. R. 4 Ch. 647 - 
 
 409, 412 
 
 Warwick Gas Co., Tilson v., 4 B. & C. 962 - - - - 41 
 
 Washington Diamond Co., (1893) 3 Ch. 95 ; 62 L. J. Ch. 895 ; 69 L. T. 
 
 27 ; 41 W. R. 681 - - - - - - - 150 
 
 Waterlow Bros., Guy v., 25 T. L. R. 515 - 132, 145 
 
 Waterproof Materials Co., W. N. (1893) 18; 37 S. J. 231 - - 423 
 
 Watson, Ashbury v., 30 C. D. 376 ; 54 L. J. Ch. 985 ; 33 W. R. 882 - 34, 
 
 38, 48, 81, 88, 90, 214, 439 
 Watson, Jonmenjoy v., 9 A. C. 561 ----- 436 
 
 Watson & Co. v. Spiral Globe Co., (1902) 2 Ch. 209; 71 L. J. Ch. 
 
 538 ; 86 L. T. 499 - - - - - - - 280 
 
 Watson v. Eales, 23 Beav. 294 - - - - -151 
 
 Watson (Robert) & Co., (1899) 2 Ch. 509 - 121 
 
 Watts v. Bucknall, (1903) 1 Ch. 766; 72 L. J. Ch. 447; 88 L. T. 
 
 845 ______ 359, 360, 361 
 
 Wear Engine Works Co., Be, L. R. 10 Ch. 188; 44 L. J. Ch. 256; 32 
 L. T. 314; 23 W. R. 735 - - - - - - 396 
 
 Webb, Bevan v., (1901) 2 Ch. 59; 70 L. J. Ch. 59; 84 L. T. 609; 
 
 49 W. R. 548 (C. A.) - - - - - - 125 
 
 Webb, Hale & Co. v. Alexandria Water Co., 21 T. L. R. 572 - 141 
 
 Webb v. Earle, 20 Eq. 557 ; 44 L. J. Ch. 608 ; 24 W. R. 46 - 84, 214 
 
 Webb, Reg. v., 14 East, 406 - - - - - - 6 
 
 Webb v. Whiffin, L. R. 5 H. L. 718 ----- 404 
 
 Wedgwood Coal Co., Be, 6 C. D. 627 ; 37 L. T. 309 - - - 431 
 
 Weeks v. Propert (1873), L. R. 8 C. P. 427; 42 L. J. C. P. 129 ; 21 
 W. R. 676 - - - - - - - 190, 276 
 
 Weguelin, Gordillo v., 5 C. D. 303 ----- 286 
 
XCV1 
 
 TABLE OF CASES. 
 
 Wei— Whe page 
 
 Weikersheim’s Case, 8 Ch. 831 ; 28 L. T. E. 653 - 124 
 
 Welsbach Incandescent Gas Co., (1904) 1 Ch. 87 ; 73 L. J. Ch. 104 ; 
 
 89 L. T. 645 ; 52 W. E. 327 - - 34, 82, 88, 90, 96, 219 
 
 Welsh Flannel and Tweed Co., 20 Eq. 367 ; 23 W. E. 558 ; 32 L. T. 
 
 361 ; 44 L. J. Ch. 391 - - - - - 148 
 
 Welton v. Saffery, (1897) A. C. 299 ; 66 L. J. Ch. 362 ; 76 L. T. 505 ; 
 
 45 W. E, 508 38, 39, 40, 69, 123, 416, 429, 443 
 
 Wenborn & Co., (1905) 1 Ch. 413 _____ 414 
 
 Wenlock (Baroness) v. Eiver Dee Co. (No. 1), 36 C. D. 685; 10 App. 
 
 Cas. 354 ; 54 L. J. Q. B. 577 ; 53 L. T. 62 ; 49 J. P. 773 - - 269 
 
 Wenlock (Baroness) v. Eiver Dee Co. (No. 2), 19 Q. B. D. 155; 56 
 L. J. Q. B. 589; 57 L. T. 320 ; 35 W. E. 822 - 275 
 
 Werderman v. Societe Generale (1881), 19 C. D. 246 ; 45 L. T. 514 ; 
 
 30 W. E. 33 - - - - - - - 291 
 
 West Coast Goldfields, 21 T. L. E. 375 ; (1906) 1 Ch. 1 - 149, 417 
 
 West Cork Eail. Co., Hutton v., 23 C. D. 672 ; 52 L. J. Ch. 68$ ; 31 
 W. E. 827 - - - - - - 67, 185, 433, 434 
 
 West Devon Mine, Re, W. N. (1884) 139 - - - - 393 
 
 West End Hotels Syndicate v. Bayer (1912), 29 T. L. E. 92 - - 242 
 
 West Hartlepool Co., Re, L. E. 10 Ch. 618; 44 L. J. Ch. 668; 33 
 L. T. 149; 23 W. E. 938 - - - - - 393, 414 
 
 West Hartlepool Eail. Co., Wilson v., 2 D. J. & S. 492 - 75, 256 
 
 West India, &c. Steamship Co., 9 Ch. 11, n. - - - - 90* 
 
 West of England Bank, In re, Ex parte Budden & Eoberts (1879), 12 
 C. D. 288 ; 48 L. J. Ch. 764 ; 41 L. T. 179 ; 27 W. E. 906 - 140 
 
 West Yorkshire Darracq Agency, W. N. (1908) 236 _ - _ 107 
 
 West Yorkshire Darracq Agency v. Coleridge, (1911) 2 K. B. 326 - 186 
 
 Westbury v. Twigg, (1892) 1 Q. B. 77 - - - - 421 
 
 Western Brazilian Telegraph Co. v. Bibby, 42 L. T. 821 - - 414 
 
 Western Counties Steam Bakeries, (1897) 1 Ch. 617 ; 66 L. J. Ch. 
 
 354; 76 L. T. 239; 45 W. E. 418 - - - 227, 407 
 
 Western, Leggott v ., 12 Q,. B. D. 287 - - - - 160 
 
 Western of Canada, Re (1873), 17 Eq. 1 ; 43 L. J. Ch. 184 - 273, 328, 
 
 393, 398, 414, 440 
 
 Western of Canada, Mears v., (1905) 2 Ch. 353; 74 L. J. Ch. 581 ; 
 
 93 L. T. 150 - - - - - - - 107 
 
 Westminster Palace Hotel Co.. Simpson v., 8 H. L. C. 712 ; 6 Jur. 
 
 N. S. 985 - - - - - - 60, 66, 67, 60 
 
 Westmoreland Slate Co. v. Feilden, (1891) 3 Ch. 15 - - - 405- 
 
 Weston’s Case, 4 Ch. 20; 38 L. J. Ch. 49; 19 L. T. 337; 17 W. E. 
 
 62 - - - - - - 130, 133, 443 
 
 Wey and Arun Canal, 4 Eq. 197 - - - - 380 
 
 Whaley Bridge Co. v. Green, 5 Q. B. D. 109 ; 49 L. J. Q. B. 326 ; 28 
 W. E. 351 ; 41 L. T. 674 - 193,331,332 
 
 Wheatcroft’s Case, 29 L. T. 324 ; 42 L. J. Ch. 853 - 112, 129, 261 
 
 Wheatley, Heward v. f 3 De G. M. & G. 628 ; 22 L. J. Ch. 435 ; 21 
 L. T. (O. S.) 121 ; 1 W. E. 216 116 
 
TABLE OF CASES. 
 
 XCV11 
 
 54 L. J. 
 
 55 L. T. 
 19, 
 
 Wha-Wil 
 
 Wheatley v. Silkstone Coal Co. (1885), 29 C. D. 715 
 778 ; 52 L. T. 798 ; 33 W. R. 797 - 
 Whiffin, Webb v., L. R. 5 H. L. 718 
 Whinney, Ex parte, 13 Q. B. D. 478 - 
 
 Whinney, Colonial Bank v., 11 A. C. 426; 56 L. J Ch 43 
 362 ; 36 W. R. 705 ; 30 C. D. 261 - 
 Whinney, Moss Steamship Co. v., (1912) A. C. 254 - 
 White, Carter v., 25 C. D. 666 _ 
 
 White v. Land, &c. Co., W. N. (1883) 174 - - _ ] 
 
 White v. Lincoln (1803), 8 Yes. 363 - 
 
 White’s Case, 12 C. D. 517 ; 48 L. J. Ch. 821 ; 41 L. T 333 • 27 
 W. R. 895 - 
 
 ^M^^o'w ^R e< 2*]L8 ^ Ltd ’ V ' Cavanagh ’ ( 1902 ) A - 0. 117 ; 85 L. 
 
 Whitefriars Financial Co., (1899) 1 Ch. 189 - 
 
 Whitehall Court, Re (1887), 56 L. T. R. 280 ; 3 T. L. R. 400 
 
 W ^ ehead * Brothers, (1900) 1 Ch. 804; 69 L. J. Ch. 607 ; 82 L. T 
 670; 48 W. R. 585- _ 
 
 Whitfield v. S. E. Rail. Co., E. B. & E. 122 - 
 
 5 ar ^ ers > Re ’ 32 C. D. 337 ; 49 L. J. Ch. 340 ; 42 L. T. 11 • 
 ■60 YY . ±v. 241 - qJ 
 
 Whitley, La Compagnie de Mayyille v., (1896) 1 Ch. 788 • 65 L J 
 Ch. 729 ; 74 L. T. 441 ; 44 W. R. 568 - - ’ ^ 
 
 ^w'r 45 ■ D ' 320 ; 60 L - J - Gh * 9 i 63 L - T. 203 ; 
 
 Whitwood Chemical Co. v. Hardman, (1891) 2 Ch. 416 
 Whitworth Jrevor t>. (1887), 12 A. C. 409 ; 57 L. J. Ch. 28 ; 57 L. T~ 
 45/ ; 36 W. R. 145 - 38, 66, 68, 92, 93, 94, 116, 128, 215, 377 
 
 Wickham, Rawlins v., 3 De G. & J. 304 - _ _ 
 
 Wickham, Xenos v., L. R. 2 H. L. 310 - _ _ " 
 
 Wigan Tramways Co., Carrick v., W. N. (1893) 98 - 
 Wigfield v. Potter (1881), 45 L. T. 612 
 Wilcox & Co., W. N. (1903) 64 
 Wilkinson Sword Co., Ltd., (1913) W. N. 27 ; 29 T 
 
 PACK 
 
 Ch. 
 
 309, 311 
 
 - 404 
 
 - 405 
 
 140 
 
 326 
 
 338 
 
 234 
 
 222 
 
 122 
 
 139, 261 
 122, 123 
 - 186 
 
 122 
 
 74 
 
 , 110 
 
 195 
 
 146 
 
 262 
 
 443 
 
 355 
 
 258 
 
 329 
 387 
 
 330 
 
 L. R. 242 
 
 117, 119 
 - 84, 85, 443 
 65 
 
 Will v. United Lankat Plantations, (1914) A. C. 1 1 - 
 William Thomas & Co., Re, (1915) 1 Ch. 325 
 
 W 643 a %Vw 0 E n 625 Bank ’ 38 D ‘ 388 : 57 L ' J ' Ch ' 826 ; 59 L ' T ' 
 Williams v. Hopkins, 18 C. D. 370 - 
 
 Williamson, Hilo Manufacturing Co. v. (1912), 28 T. L. R. 164 
 Williamson, Boots v., 38 C. D. 485 ; 57 L. J. Ch. 995 ; 58 L. T. 802 • 
 36 W. R. 758 _ 
 
 W ™B m 6°99- & 46 ' w’b^Y & C °' (1898) 2 Q ’ R 194 ’ 67 L ' J - 
 
 ■ Cj0ndou Celluloid, 34 C. D. 147 ; 52 L. T. 642 ; W. N. 
 (lo85) 29 — — _ 
 
 Willows, York Tramways Co. v. (1882), 8 Q. B. D. 685 • 51 L J 
 Q- B. 257 ; 46 L. T. 296 ; 30 W. B. 624 - . ’ . ’ 10s 
 
 P. 
 
 145 
 
 412 
 
 352 
 
 - 131 
 
 309 
 
 415 
 
 192 
 
XCV111 
 
 TABLE OF CASES. 
 
 Wil— Wri PAGE 
 
 Wills v. Murray, 4 Ex. 843; 19 L. J. Ex. 209 - - 167, 176 
 
 Wilmer v. Macnamara, (1895) 2 Ch. 245 ; 64 L. J. Ch. 516 ; 72 L. T. 
 
 552 ; 43 W. E. 519 - - - - ■ - - 216 
 
 Wilmot, Derby Canal Co. v., 9 East, 359 - 259 
 
 Wilson, Ex parte, 8 Ch. 45 ; 42 L. J. Ch. 81 ; 27 L. T. 597 ; 21 W. E. 46 - 206 
 Wilson v. Brett, 11 M. & W. 115 - - - - - 202 
 
 Wilson, Ferguson v., 2 Ch. 77 115, 177, 178, 179, 199 
 
 Wilson v. Kelland, (1910) 2 Ch. 306 - - - - - 312 
 
 Wilson, Stevenson v., (1907) S. C., Ct. of Sess. 445 - - - 135 
 
 Wilson v. West Hartlepool Eail. Co., 2D. J. & S. 492 - 75, 256 
 
 Wilts and Berks Canal Co., Eex v., 3 Ad. &E1. 477 ; 8 Ad. & El. 901 - 125 
 
 Wiltshire Iron Co., Re, L. E. 3 Ch. 443 - 207, 399 
 
 Wimbledon, Eeg. v., 8 Q. B. D. 459; 51 L. J. Q. B. 219; 46 L. T. 
 
 47; 30 W. E. 400 ------ 172,173 
 
 Wimbledon Olympia, Ltd., (1910) 1 Ch. 630 - 356 
 
 Wincham Shipbuilding and Boiler Co., In re (Hallmark’s Case), 
 
 9 C. D. 329 ; 26 W. E. 823 ; 38 L. T. 659 - - - - 203 
 
 Windham, Townshend v. (1750), 2 Yes. 1 - - - - 308 
 
 Winskill, Woods v., (1913) 2 Ch. 303 - - - - 327 
 
 Winterbottom, Re, 18 Q. B. D. 446 ; 56 L. J. Q. B. 238; 56 L. T. 168 - 149 
 Withernsea Brick Works, Re, 16 C. D. 337 ; 50 L. J. Ch. 185 ; 43 
 L. T. 713; 29 W. E. 178 - - - - - -412 
 
 Wood, Avery v., (1891) 3 Ch. 115 - - - - - 18 
 
 Wood, Deyes v., (1911) W. N. 51 ; (1911) 1 K. B. 806 - . - 296 
 
 Wood, Drincqbier v. , (1899) 1 Ch. 393; 68 L. J. Ch. 181 ; 79 L. T. 
 
 548; 47 W. E. 252; 6 Manson, 76 - 355, 358 
 
 Wood, Hamlyn v., (1891) 2 Q. B. 488 - - - - 263 
 
 Wood v. Odessa, 42 C. D. 636; 58 L. J. Ch. 628; 37 W. E. 733; 
 
 1 Meg. 265 ------ 40, 41, 220 
 
 Woodbridge, Walters v., 7 C. D. 504 - - - - 211 
 
 Wood’s Case, 3 De G. & J. 85; 15 Eq. 236; 42 L. J. Ch. 403; 21 
 W. E. 645 - - - - - - - - 112 
 
 Wood’s (A. M.) Ships Woodite Protection Co., In re, 2 Meg. C. E. 
 
 164; 62 L. T. 760; 6 T. L. E. 30 - - - - -150 
 
 Woods v. Winskill, (1913) 2 Ch. 303 ----- 327 
 
 Worley, Sadler v., (1894) 2 Ch. 170 ; 70 L. T. 494 ; 42 W. E. 476 - 328 
 Worth, Ex parte (1859), 4 Drew. 529- - 357 
 
 Wragg, Limited, Re, (1897) 1 Ch. 796; 66 L. J. Ch. 419; 76 L. T. 
 
 397 ; 45 W. E. 557- - - - - - - 117 
 
 Wrexham, Mold and Connah’s Quay Eail. Co., (1899) 1 Ch. 440 - 275 
 
 Wright’s Case, L. E. 7 Ch. 55 ; 41 L. J. Ch. 1 ; 25 L. T. 471 ; 20 
 W. E. 45 ; 12 Eq. 331 ; 24 L. T. 899 ; 19 W. E. 947 - 166, 175, 353, 355 
 Wright, Collen v. y 7 El. & Bl. 301 ; 8 El. & Bl. 647 - - 190, 199 
 
 Wright, Green v., 1 C. P. D. 592 ----- 262 
 
 Wright v. Horton (1887), 12 App. Cas. 371; 56 L. J. Ch. 873; 56 
 L. T. 782; 36 W. E. 17; 52 J. P. 179 ... 273,277 
 
 Wright v. Kirby, 23 Beav. 863 ----- 329 
 
TABLE OF CASES. 
 
 XC1X 
 
 Wri Yui page 
 
 Wright, McConnell v., (1903) 1 Ch. 546; 72 L. J. Ch. 347 ; 88 L. T. 
 
 431 ; 51 W. E. 661 (C. A.) - - - _ 358 
 
 Wright, Percival v., (1902) 2 Ch. 421 ; 71 L. J. Ch. 846 ; 51 W. K. 31 - 105, 
 
 180, 190 
 
 Wright, Pinkett v., 2 Ha. 120 ; .12 Cl. & Fin. 764 ; 12 L. J. Ch. 1 19 • 
 
 6 Jur. 1102 - - - _ . - - 154 
 
 Wright, Wandsworth Gaslight Co. v., 22 L. T. 404 - - 169, 172 
 
 Wyley v. Exhall Coal Co., 33 Beay. 538 - - - - 4\ 4 
 
 Wynn, Lawrence v., 5 M. & W. 355 ----- 143 
 
 X. 
 
 Xenos v. Wickham, L. E. 2 H. L. 310 
 
 - 258 
 
 Y. 
 
 77 L. J. Ch. 43 
 
 Yates, Norton v., (1905) W. N. 175 - 
 Yeoland Consols, 58 L. T. 922 ; 4 T. L. E. 364 
 Yolland, Husson & Birkett, (1908) 1 Ch. 152 
 L. T. 824 ; 14 Mans. 346 - 
 
 York Tramways Co. v. Willows (1882), 8 Q. B. D. 685 
 257 ; 46 L. T. 296 ; 30 W. E. 624 - 
 York, &c. Eail. Co. v. Hudson (1853), 16 Beav. 485 - 
 Yorkshire Co., 9 Eq. 650; 18 W. E. 541 
 
 Yorkshire Miners’ Association, Howden v ., (1903) 1 K. B. 308 • 72 
 
 /i\ru ^ 134 ; (C. A.) affirmed by House of Lords 
 
 (14th April, 1905), 21 T. L. E. 431 - 
 
 Yorkshire Woolcombers’ Association, Houldsworth v. Same Co. 
 (1904) A. C. 355; 73 L. J. Ch. 739 ; 91 L. T. 602; 53 W. E. 113 - 
 
 281, 309, 
 
 Young v. David Payne & Co., (1904) 2 Ch. 609; 92 L. T. 777 • 
 
 - 310 
 
 - 115 
 97 
 
 - 279 
 
 51 L. J. Q. B. 
 
 105, 192 
 
 - 178 
 
 - 223 
 
 310 
 
 73 L. J. Ch. 849 ; 20 T. L 
 
 E. 590 (C. A.) - 
 
 Young v. Naval and Military Co-operative Society, (1905) 1 K. B. 687 • 
 W. N. (1905) 41 ; 92 L. T. 458 ; 53 W. E. 447 - - 188 
 
 Young v. South African Syndicate, (1896) 2 Ch. 268 ; 65 L. J. Ch. 
 
 638; /4 L. T. 527 ; 44 W. E. 509 - 170 
 
 Ystalyfera Gas Co., W. N. (1887) 30 ; 3 T. L. E. 321 
 
 Yuill, Greymouth Point Elizabeth Eail. Co. v ., (1904) 1 Ch. 32; 73 
 L. J. Ch. 92 ’igg 
 
 73, 235 
 
 211 
 
 240 
 
 128 
 
 195 
 
COMPANY LAW 
 
 CHAPTER I. 
 
 PRELIMINARY. 
 
 The following pages treat almost exclusively of companies incorporated 
 under the Companies Act, 1862 — the Magna Charta of co-operative 
 enterprise — or under the Companies (Consolidation) Act, 1908* ( infra , 
 p. 13), which has taken the place of the Act of 1862 ; but it is 
 necessary to bear in mind that such companies, though incomparably 
 the most numerous and important, form only one of several classes 
 of associations known to the law. Of these associations outside the 
 Companies (Consolidation) Act, 1908, the principal are — (1) ordinary 
 partnerships ; (2) companies incorporated by royal charter ; (3) com- 
 panies incorporated by special Act of Parliament ; (4) unincorporated 
 companies; (5) companies under the Act of 1844; (6) building 
 societies ; (7) industrial and provident societies ; (8) friendly societies ; 
 (9) trade unions; and (1(P limited partnerships. It is desirable, 
 therefore, before dealing at large with companies under the Act of 
 1908, to say a few words as to each of the other kinds of companies or 
 associations above referred to ; for it is by comparing and contrasting 
 the principal features of these other forms of co-operative effort with 
 those of companies under the Act of 1908, that the special characteristics 
 of the latter can be best brought into clear relief. To begin with — 
 
 (1.) Ordinary Partnerships. 
 
 In these associations the tirm is not a person in law, distinct from 
 the partners who compose the firm. The partners are themselves 
 the firm. They are the joint owners of the partnership property ; 
 
 * This Act is referred to in these pages as “the Act,” or “ the Act of 1908,” or 
 “ the Consolidation Act of 1908.” 
 
 \ p - 
 
 The principal 
 kinds of 
 associations 
 known to 
 the law. 
 
 Partnerships. 
 
 1 
 
2 
 
 PRELIMINARY. 
 
 Chartered 
 
 companies. 
 
 
 their shares in the partnership are not transferable, and each of the 
 partners is an agent of the partnership to make contracts, undertake 
 obligations and dispose of partnership property in the ordinary course 
 of the partnership business. Upon all contracts and obligations so 
 incurred the liability of the partners is unlimited. As between them- 
 selves, the partners may make what private arrangements they please ; 
 but “as between the partners and the outside world, whatever may be 
 the partners’ private arrangements between themselves, each partner 
 is the unlimited agent of every other in every matter connected with 
 the partnership business, or which he represents as partnership 
 business, and not being in its nature beyond the scope of the partner- 
 ship. A partner who may not have a farthing of capital left may 
 take moneys or assets of the partnership to the value of millions, may 
 bind the partnership by contracts to any amount, may give the 
 partnership acceptances for any amount, and may even, as has been 
 shown in many painful instances in this Court, involve his innocent 
 partners in unlimited amounts for fraud which he has craftily con- 
 cealed from them ” : per Lord Justice James, Baird's case , 5 Ch. 725. 
 This very serious liability as regards an ordinary partnership strikingly 
 differentiates such an association from a statutory partnership, like 
 a limited company. Partnership law is now to a large extent codified 
 in the Partnership Act, 1890. As to “limited partnerships,” see 
 infra, p. 10. 
 
 (2.) Companies incorporated by Royal Charter. 
 
 A charter of incorporation can only be granted by the Crown, for 
 the constitution of corporations is one of the prerogatives vested in 
 the Crown by the common law. This power is now supplemented by 
 7 Will. 4, c. 73. Instances in which the Crown has exercised the 
 power are : The Russia Company, incorporated by Queen Elizabeth, 
 1555; The Senegal Adventurers, incorporated by the same Queen, 
 1588 ; The Levant Company, incorporated by the same Queen, 1592; 
 The East India Company, incorporated by the same Queen, 31st 
 December, 1600 ; The Hudson’s Bay Company, 1670 ; The Bank 
 of England, incorporated in 1674; The South Sea Company, incor- 
 porated 1711; The London Assurance Corporation, 1720; Penin- 
 sular and Oriental Steam Navigation Company, 1840; The British 
 North Borneo Company, 1881 ; The British South Africa Company, 
 1889. 
 
 A charter of incorporation usually runs as follows : — 
 
 “ George the Fifth, by the Grace of God of the 
 United Kingdom of Great Britain and Ireland and of the British 
 
3 
 
 COMPANIES INCORPORATED BY ROYAL CHARTER. 
 
 Ch. I. 
 
 Dominions beyond the Seas King, Defender of the Faith, 
 to all to whom these presents shall come, greeting [ then follow 
 recitals of the circumstances ] : Now therefore know ye that we 
 of our special grace, &c., by these presents, for us, our heirs 
 and successors, grant and ordain that A., B. and 0., and all 
 such other persons and bodies politic and corporate as have 
 become, or from time to time hereafter may become, members 
 of the said undertaking or company, and shall hold one or 
 more shares therein, shall be a body politic and corporate in 
 deed and in law by the name of the A. B. C. Company for 
 carrying into effect the purposes hereinafter mentioned,” &c. 
 
 It is, or was, a peculiarity of a chartered corporation that its members 
 were originally under no liability for the debts of the corporation, the 
 Crown having no power in incorporating to attach liability to the 
 individual members of the corporation. This anomaly was, however, 
 removed by the statute above mentioned, 7 Will. 4, c. 73, under which 
 a considerable number of banks and other concerns have from time 
 to time been incorporated with a liability attached to the shares in 
 the capital, and sometimes with an additional liability of the like 
 or double the amount in the event of a winding-up. There still, Fundamental 
 however, subsists a difference of a fundamental character between difference 
 a chartered company and a company formed under a special Act or chartered 
 registered under the Companies Acts, and it is this : at common law a c0 ™ p ^ ie ® 
 corporation created by the king’s charter has power, as was deter- 
 mined in the Sutton's Hospital case (TO Hep. 13), to deal with its 
 property, to bind itself by contracts, and to do all such acts as an 
 ordinary person can do, and so complete is this corporate autonomy 
 that it is unaffected even by a direction contained in the creating 
 charter in limita^n^f-TTLa_corporate powers. For the common law 
 has always held that such a direction of the Crown — though it may give 
 the Crown a right to annul the charter if the direction is disregarded — 
 cannot derogate from that plenary capacity with which the common 
 law endows the company, even though the limitation is an essential 
 part of the so-called bargain between the Crown and the corporation. 
 
 See judgment of Bowen, L. J., in Baroness Wenlock v. River Dee Co ., 
 
 36 0. D. 685, and of Blackburn, J., in Riche v. Ashbury Rail . Co.. 
 
 L. K. 9 Ex. p. 224. This feature — the unrestricted corporate capacity 
 of the chartered company — is in marked contrast to the strict delimita- 
 tion by the legislature and the Courts of the statutory or registered 
 company to its defined objects. 
 
 The power to incorporate by charter has always been sparingly 
 exercised by the Crown, and the delay and expense in the proceedings 
 
 1 ( 2 ) 
 
4 
 
 PRELIMINARY. 
 
 I 
 
 for obtaining a charter — concurring with the reluctance of the Crown 
 to grant — has, for many years past, made a charter a very exceptional 
 mode of incorporation. 
 
 (3.) Companies incorporated by special Act of 
 Parliament. 
 
 Special Act 
 companies. 
 
 Special 
 peculiarity 
 of them — 
 compulsory 
 powers. 
 
 The formation of companies by private or special Act of Parliament 
 grew out of the canal-construction movement, a movement which fol- 
 lowed closely on Brindley’s success in the construction of the Bridge- 
 water Canal under the Acts obtained in 1759 and 1760 by the Duke of 
 Bridgewater. 
 
 It was very soon discovered that the best organization for the con- 
 struction of these large undertakings was a company incorporated by 
 special Act of Parliament. One of the earliest of these Acts was the 
 Trent Navigation Act, 1766 (6 Geo. 3, c. 196). A considerable number 
 of canal companies were so constituted, but it was not until the great 
 movement set in for the construction of railways — inaugurated by the 
 Stockton and Darlington Act of 1821 — that companies constituted 
 under special Acts began to multiply. Since then, great numbers of 
 companies have been so constituted, and in particular in relation to 
 railway, dock, water-works, gasworks, and tramway undertakings. In 
 the case of most of these companies, the scheme of constitution and 
 management is the same or similar, and, therefore, to avoid repetition and 
 save expense, the legislature has embodied in certain Acts a code of 
 general regulations or statutory provisions applicable to such companies 
 and incorporated by reference into the special Act creating the com- 
 pany. Among such general Acts embodying typical provisions are 
 The Companies Clauses Consolidation Act, 1845 (8 Viet. c. 16); The 
 Pailways Clauses Act, 1845 (8 Viet. c. 20) ; The Lands Clauses Consoli- 
 dation Act, 1845 (8 Viet. c. 18) ; The GasWorks Clauses Act (10 & 11 
 Viet. c. 15) ; The Waterworks Clauses Act (10 & 11 Viet. c. 17) ; The 
 Harbours and Docks and Piers Act (10 & 11 Viet. c. 27) ; The Electric 
 Lighting (Clauses) Act, 1899, and various other Acts amending and 
 extending the above. 
 
 A special peculiarity of these statutory undertakings, and one 
 which distinguishes them from ordinary trading companies regis- 
 tered under the Companies (Consolidation) Act, 1908, is that they 
 are, in many cases, invested with compulsory powers: for instance, 
 to take land or to commit what, but for these parliamentary powers, 
 would amount to nuisances ; otherwise their constitution is closely 
 analogous ; the liability of the members, for example, is limited 
 to the amount ox their shares, and the company in each case incor- 
 
COMPANIES CONSTITUTED BY CONTRACT. 
 
 Ch. I. 
 
 5 
 
 porated is restricted, as regards its powers, to the purposes of 
 its creation and the terms of its parliamentary mandate. See 
 Colman v. Eastern Counties Rail. Co 10 Beav. 1 ; Salomons v. 
 Laing, 12 Beav. 339 ; East Higham Rail. Co. v. Eastern Counties Rail. 
 Co ., 11C. B. 775 ; Hawkes v. Eastern Counties Rail. Co ., 5 H. L. C. 331. 
 In the case last mentioned, Lord Cranworth, after reviewing the 
 authorities, said: “It must, therefore, be now evident, as a well- 
 settled doctrine, that a company incorporated by Act of Parliament 
 for a special purpose cannot devote any part of its funds to objects 
 unauthorized by the terms of its incorporation, however desirable such 
 application may be.” See also Mann v. Edinburgh Northern Tram- 
 ways Co., (1893) A. C. 69. 
 
 (4.) Unincorporated Companies constituted by 
 Contract. 
 
 These companies made their appearance first in the seventeenth Common law 
 century. It was a time when men of business were beginning to com P am es. 
 recognize the advantages derivable from co-operation in commercial 
 enterprise, the advantages which it offered, that is to say, on the one 
 hand, for raising funds for the purposes of large and more or less 
 speculative undertakings by means of contributions from a number of 
 small capitalists ready and willing to co-operate, and, on the other hand, 
 of minimising the risk by spreading the liability. The difficulty was 
 how to secure these advantages. A charter was too costly, and a special 
 Act of Parliament was impracticable. Business men had to devise 
 for themselves a new form of partnership which should possess the 
 advantages as nearly as might be of a chartered corporation, and in 
 particular should have shares of fixed amount freely transferable by 
 the holders. The outcome of these commercial needs was the unincor- 
 porated company, the lineal ancestor of the ordinary company under 
 Companies Act, 1862, and its amending Acts, now reproduced and 
 consolidated in the Act of 1908. 
 
 The law at first frowned on these new associations. It questioned 
 their validity. It insisted on treating them as ordinary partnerships, 
 and by this and other rules which it applied to them seriously checked 
 and crippled their development. They continued, however, to be 
 formed, and gradually the number increased until the fraudulent 
 promoter appeared on the scene. 
 
 To such an extent did this person take advantage of the opportunity 
 by floating all sorts of fraudulent and objectionable concerns that the 
 legislature had, in 1719, to intervene and pass the Bubble Act with a 
 view to putting down fraudulent companies. Unfortunately the Act 
 
6 
 
 PRELIMINARY. 
 
 was expressed in such ambiguous terms as to raise doubts whether it 
 was not intended to stop generally the formation of companies with 
 transferable shares, good and bad alike. The leading case — a very 
 instructive one — on this Act is R. v. Webb , 14 East, 406. The difficulty 
 was solved, however, in 1825 by the repeal of the Bubble Act, and 
 thenceforth, for a time, the formation of companies was left to the 
 common law, subject to the doubts which existed as to whether, under 
 the common law, they were legal or not, doubts which were subse- 
 quently settled in favour of their legality. See Walburn v. Ingilby , 
 1 M. & K. 61, decided by Lord Brougham; Garrard v. Hardey , 5 
 Man. & Grr. 471 ; Harrisonv. Heathorn , 6 Man. & Grr. 81 ; and Sheppard 
 v. Oxenford, 1 K. & J. 491. 
 
 Left to the freedom of the common law, the tide of company enter- 
 prise rose, and, as it did so, the policy of the legislature changed. In 
 lieu of the policy of repression the legislature, in 1 844, recognizing the 
 advantages of the joint stock company principle, and the desirability 
 of facilitating the association of persons in commercial undertakings, 
 provided means for regulating them by passing, in 1 844, the Act 7 & 8 
 Yict. c. 110. This Act, with certain exceptions, required all companies 
 subsequently formed to be registered under it. The formation of 
 unregistered companies was thus, to a great extent, stopped, and 
 though the Act was repealed in 1862, except as to then existing 
 companies, the Act of 1862, as appears below, continued to prohibit 
 the formation of unregistered companies for gain where the members 
 exceeded twenty, or in the case of banking companies, ten. The Act 
 of 1908 does the same. 
 
 Unincorpo- 
 rated com- 
 pany to be 
 differentiated 
 from ordinary 
 partnership. 
 
 An unincorporated company has always been regarded by the law 
 as a partnership with special features ; one of these special features 
 was the transferability of its shares. To secure the continuity of 
 the concern, notwithstanding the death or bankruptcy of members, 
 was another ; and the vesting of the management in a select body 
 of directors, to the exclusion of the members generally, was a third. 
 
 Deed of Such companies were usually established by deed of settlement 
 
 settlement. expressed to be made between the various shareholders and a trustee 
 or trustees with whom the shareholders covenanted to observe the 
 provisions of the deed. The deed commonly declared that the several 
 persons for the time being holding shares in the capital of the com- 
 pany should constitute and be a company with a specified name, and 
 with a specified capital, and subject to specified regulations (set out in 
 the deed) until dissolved in a specified manner. And the deed usually 
 also made the shares transferable. 
 
 What the founders of these associations aimed at was, in fact, to make 
 them as nearly as possible a corporation with continuous existence, and 
 
COMPANIES INCORPORATED UNDER 7 & 8 VICT. C. 110. Ch. I. 
 
 7 
 
 with transmissible and transferable stock, but without any individual 
 right in any associate to bind the other associated members or to deal 
 with the assets of the association. In many cases they obtained a private 
 Act of Parliament enabling them to sue and be sued in the name of 
 some specified officer. See further as to unincorporated companies, 
 Baird’s case , 5 Oh. 725 ; Grain’s case , 1 C. D. 307, 315 ; Burnes v. 
 Pennell , 2 H. L. C. 897 ; Lindley on Companies. 
 
 Such associations being in contemplation of law nothing but great 
 partnerships with some special features, the members have always 
 been held liable for the debts and liabilities to the full extent of their 
 means. 
 
 (6.) Companies incorporated under 7 & 8 Viet. c. 110 
 
 [1844]. 
 
 The above Act was the first general registration Act in regard to 
 companies. Lord Cranworth has, in Oakes v. Turquand , L. R. 2 H. L. 
 at p. 358, pointed out some of the circumstances which made the inter- 
 vention of the legislature necessary. 
 
 “ When it became the habit and interest,” said that learned 
 Judge, “of persons engaged in commerce to unite in great numbers 
 for carrying on any particular trade, it soon became evident 
 that the ordinary provisions of the laws of this country were ill 
 adapted to the business of such bodies. It is a general principle of 
 mercantile law, that when two or more persons are associated in 
 partnership for carrying on a trade, every partner can bind his co- 
 partners in all contracts made in the ordinary course of the business. 
 But where a hundred persons or upwards are engaged in any particular 
 trade to be managed by directors acting for the whole body, that 
 principle plainly became very inconvenient in its application. So, 
 again, it was a principle of our Courts that in any proceeding by or 
 against a partnership, all the partners must, either as plaintiffs or 
 defendants, be made parties to the proceeding. But when numerous 
 members of a partnership, to the extent of many hundreds of persons, 
 were concerned as partners, this rule would, if adhered to, have made 
 litigation practically impossible, and would often have amounted to a 
 denial of justice.” 
 
 The Act was of a somewhat anomalous character. It incorporated 
 the companies registered under it, and thus endowed them with 
 faculties, privileges and powers denied to an unincorporated company. 
 In particular it facilitated legal proceedings and the holding of pro- 
 perty, but it still withheld from them one of the most important 
 incidents of an incorporated company — the immunity of the members 
 
 Companies 
 under the 
 Act of 1844. 
 
Building 
 
 societies. 
 
 Industrial 
 
 societies. 
 
 Friendly- 
 
 societies. 
 
 PRELIMINARY. 
 
 from direct liability. Indeed, it expressly imposed on the members 
 liability for the debts of the company just as if they were partners. 
 
 Notwithstanding this provision, an effort was in some cases made 
 to obtain limited liability for a company registered under the Act. 
 The Act provided that the deed of settlement should be filed with the 
 Registrar of Joint Stock Companies and be open for public inspection, 
 and it was thought that the insertion in the deed of settlement so filed 
 of a clause limiting the liability of the members to the amount of their 
 shares would or might be effective. Clauses to that effect were 
 inserted in some cases, but it was ultimately held by the Court that 
 this attempt to limit was, as regards outsiders, ineffectual. See 
 Greenwood* s case , 3 De Gr. M. & GK 459 ; and see further as to such 
 companies, Lindley on Companies. 
 
 (6.) Building Societies 
 
 under the Building Societies Act, 1874 (37 & 38 Yict. c. 412), and the 
 Building Societies Act, 1894 (57 & 58 Yict. c. 47). 
 
 The liability of the members of these societies is limited. The 
 societies are by the Act of 1874 incorporated. They are not companies, 
 but they bear a great resemblance to companies. See further Wurtz- 
 burg on Building Societies. 
 
 (7.) Industrial and Provident Societies 
 
 under the Industrial and Provident Societies Act, 1893 (56 & 57 Yict. 
 c. 39); amended 1895 (58 & 59 Yict. c. 30). 
 
 The Act incorporates such societies (sect. 21), and limits the liability 
 of the members. It also confers special rights and privileges. 
 These societies are not companies, though, like building societies, they 
 bear a considerable resemblance to them. They are intended for 
 small capitalists, and accordingly the interest of a member is not to 
 exceed 200/. (Sect. 4.) See Powke, Industrial and Provident Societies. 
 
 (8.) Friendly Societies 
 
 under the Friendly Societies Act, 1896 (59 & 60 Yict. c. 25) ; amended 
 Societies’ Borrowing Powers Act, 1898 (61 & 62 Yict. c. 15); re- 
 amended Friendly Societies Act, 1908 (8 Edw. 7, c. 32). 
 
 These societies are not incorporated, but they are, by the Act, 
 invested with various privileges, and the liability of the members is 
 limited. A friendly society can convert itself into a company, and a 
 
TRADE UNIONS. 
 
 Ch. I. 
 
 9 
 
 company can convert itself into a friendly society. (Sect. 71 of the Act 
 of 1896.) See Fuller, Friendly Societies. 
 
 (9.) Trade Unions. 
 
 These associations, which at common law were illegal as in supposed Trade unions, 
 restraint of trade, were legalised to some extent by the Trade Union 
 Acts, 1871 and 1876 (34 & 35 Viet. c. 31, and 39 & 40 Viet. c. 22). 
 
 “ Parliament has legalised trade unions whether registered or not. If 
 registered, they enjoy certain advantages.” Per Lord Macnaghten in 
 Taff Vale Rail. Co. v. Amalgamated Society of Railway Servants , (1901) 
 
 A. C. 426 : in which case it was decided that trade unions could be sued 
 for wrongs committed by their agents. The Act of 1871, however, in 
 legalising trade unions, contains an important qualification, for it 
 expressly provides that it is not to enable the Court to entertain any 
 legal proceedings for directly or indirectly enforcing or recovering 
 damages for the breach of a large class of agreements, including 
 almost all the material rules of these societies. For example, if it be 
 desired to compel a member of the union to abstain from work during 
 a strike, or to insist on standard wages or hours, or to pay his sub- 
 scriptions or fines, or if a member desires to compel the union to give 
 him the benefits in the way of sick pay and otherwise stipulated for, 
 the Court will not assist. 
 
 The Companies Acts, 1862 and 1867, are not to apply to any trade 
 union, and registration of a trade union under them is void. See 
 Trade Union Act, 1871, s. 5. By sect. 293 of the Act of 1908, 
 the reference in that section to the Acts of 1862 and 1867 is to be read 
 as a reference to the Companies Act, 1908. See, further, Company 
 Precedents, Part I., p. 113; Chamberlain Wharf (1900) 2 Ch. 605; 
 
 Edinburgh and District Aerated - Water Manufacturers ’ Defence Associa- 
 tion y. Jenkinson , 5 Ct. of Sess. Cas. 1159; and Hoivden v. Yorkshire 
 Miners' Association , (1903) 1 K. B. 308 ; Taff Vale Rail. Co. v. Amal- 
 gamated Society of Railway Servants, (1901) A. C. 426 ; Osborne v. 
 
 Amalgamated Society of Railway Servants , (1910) A. C. 87 ; 27 T. L. B. 
 
 115; Russell v. Amalgamated Society of Carpenters , (1910) 1 K. B. 
 
 506. 
 
 By the Trade Disputes Act, 1906 (6 Edw. 7, c. 47), s. 4 (1), “ No 
 Court” is now “to entertain any action against a trade union .... 
 in respect of any tortious act alleged to have been committed by or on 
 behalf of the trade union.” 
 
10 
 
 PRELIMINARY. 
 
 Limited 
 
 partnerships. 
 
 Companies 
 under the 
 Act of 1862. 
 
 (10.) Limited Partnerships. 
 
 Limited partnerships are associations established under the Limited 
 Partnerships Act, 1907 (7 Edw. 7, c. 24). The name is somewhat of a 
 misnomer, for in such an association there must be one or more 
 partners with unlimited liability. Those partners are called ‘ ‘ general 
 partners ” ; the other partners are called “ limited partners,” the latter 
 contributing to the partnership assets a specified amount in money or 
 money’s worth, and enjoying immunity from liability beyond the 
 amount so contributed. But it is an essential condition of this 
 immunity (sect. 6) that a limited partner shall not take part in the 
 management of the business, and he is to have no power to bind the 
 firm. He may inspect the books and may advise, that is, consult with 
 the other partners as to the state and prospects of the business, but 
 he must not go beyond this. If he does, though it be in ignorance 
 of the law, or inadvertently, or at the urgent request of the general 
 partners, he forfeits his immunity from liability, and is plunged into 
 the unknown depths of unlimited liability. 
 
 These limited partnerships are an importation from abroad. On the 
 Continent something of the kind has been for upwards of half a 
 century permitted in several countries, but the scheme offers little 
 attraction to those who have, as in England, the alternative of forming 
 or joining a private company, with all the advantages and immunities 
 conferred by the law on such companies. The Act in effect merely 
 limits the liability of a sleeping partner provided he strictly complies 
 with the statutory requirements. If A. wants to join a partnership, 
 and while limiting his liability wants to look after his money by taking 
 part in the conduct of the business, the Act of 1907 affords him no 
 facilities and no protection. If he wants to join a limited partnership 
 he must make up his mind to leave the whole of the management of 
 the business in the hands of the general partners ; to intervene means 
 for him to risk incurring liability for all the debts and obligations of 
 the firm. The Act is full of pitfalls for the unwary. The Act has 
 been in force for more than seven years, and instead of a rush to take 
 advantage of its provisions, there has been great reluctance and 
 hesitation ; the rush has been to form private companies. 
 
 The provisions of the Bankruptcy Act, 1914, now apply to limited 
 partnerships. (Sect. 127.) 
 
 The Companies Acts, 1862 to 1913. 
 
 The main object of the Act of 1862 (a masterpiece of legislation) 
 was to throw open to all the coveted privilege of carrying on business 
 with limited liability. The principle of the Act was to allow the 
 
THE COMPANIES ACTS, 1862 TO 1913. 
 
 Ch. I. 
 
 11 
 
 greatest freedom both in the formation and working of a limited 
 liability company, and at the same time to ensure that those who dealt 
 with such concerns should be informed that the liability of the members 
 was limited. Abandoning the old cumbersome system introduced by the 
 Act of 1844 of provisional and complete registration, the Act made the 
 formation of a company a perfectly simple and inexpensive process — all 
 that it required for the formation of a company was seven signatures 
 to a written or printed document called a memorandum of association. 
 
 This, on payment of a small fee, was to be registered and a certificate 
 of incorporation to be given, and thereupon the company was at 
 liberty at once to commence business. It was not bound before 
 starting business to have any capital paid up or subscribed beyond 
 the seven shares to be taken by the signatories of the memorandum ; 
 it might start on its commercial career without any further subscription,' 
 might at once enter into contracts, borrow money if it could, and carry 
 on business. And the great boon of limited liability was secured by 
 the insertion in the memorandum, as part of the name of the company, 
 of the magic word “ Limited,” together with a clause stating that the 
 liability of the members was to be limited. 
 
 The Act of 1862 was amended and extended by the following 
 Acts : — 
 
 1. The Companies Seals Act, 1864 (27 Yict. c. 19). The subse- 
 
 This Act empowered companies in certain cases to have 9 uent Acts, 
 official seals for use abroad. 
 
 2. The Companies Act, 1867 (30 & 31 Yict. c. 131). 
 
 This Act provided for reduction of capital, issue of 
 share-warrants to bearer, sub-division of shares and other 
 matters. 
 
 3. The Joint Stock Companies Arrangement Act, 1870 (33 & 34 
 
 Yict. c. 104). 
 
 This Act extended the powers of the Court in winding- 
 up as to compromises and arrangements with creditors. 
 
 4. The Companies Act, 1877 (40 & 41 Yict. c. 26). 
 
 This Act provided further for reduction of capital. 
 
 5. The Companies Act, 1879 (42 & 43 Yict. c. 76). 
 
 This Act provided for re-registration with limited 
 liability of unlimited companies, and also for the creation 
 of reserve capital. 
 
 6. The Companies Act, 1880 (43 Yict. c. 19). 
 
 This Act provided for payment off of profits in reduction 
 of capital, and empowered the Registrar to strike names of 
 defunct companies off the register. 
 
12 
 
 PRELIMINARY. 
 
 7. The Companies Colonial Registers Act, 1883 (46 & 47 Yict. 
 
 c. 30). 
 
 This Act provided for colonial registers in certain cases. 
 
 8. The Companies Act, 1886 (49 Yict. c. 23). 
 
 This Act amended the Act of 1862, as to winding-up in 
 Scotland in certain respects. 
 
 9. The Preferential Payments in Bankruptcy Act, 1888 (51 & 52 
 
 Yict. c. 62), though not one of the Companies Acts, never- 
 theless affects the winding-up thereof. See also the Act of 
 1897, infra. 
 
 10. The Companies Memorandum of Association Act, 1890 (53 & 54 
 
 Yict. c. 62). 
 
 This Act provided for the extension of objects, &c. 
 
 11. The Companies Winding-up Act, 1890 (53 & 54 Yict. c. 63;, 
 
 largely modified provisions of the principal Act in regard to 
 winding-up. 
 
 12. The Directors’ Liability Act, 1890 (53 & 54 Yict. c. 64). 
 
 This Act modified the liabilities of directors in regard to 
 prospectuses, &c. 
 
 13. The Companies Winding-up Act, 1893 (56 & 57 Yict. c. 58), 
 
 modifying the Bankruptcy Act, 1883, in relation to 
 winding-up. 
 
 14. The Preferential Payments in Bankruptcy Amendment Act, 
 
 1897 (60 Yict. c. 19). 
 
 15. The Companies Act, 1898 (61 & 62 Yict. c. 26), modifying s. 25 
 
 of the Companies Act, 1867. 
 
 16. The Companies Act, 1900 (63 & 64 Yict. c. 48), extensively 
 
 amending the Companies Acts, 1862 and 1867. 
 
 17. The Companies Act, 1907 (7 Edw. 7, c. 50), amending the above 
 
 Acts in a number of important particulars. 
 
 18. The Companies Act, 1908, enabling certain foreign and colonial 
 
 companies to hold land and other property. 
 
 The existence of these eighteen Acts with their many provisions, 
 original, supplementary, amending, re-amending, substitutionary and 
 repealing, rendered it a difficult task even for the trained lawyer 
 familiar with the Acts and decisions to know how the law stood, much 
 more for the business man, and long before 1908 there was a growing 
 consensus of opinion that the law needed simplifying, and that the 
 living provisions of the law ought to be brought together in an 
 orderly form under one comprehensive enactment, so that he who ran 
 might read one Act in place of the mosaic of many separate Acts. 
 This has now been accomplished by the Companies (Consolidation) 
 Act, 1908 (7 Edw. 7, c. 69), and it marks a new and important starting 
 
THE COMPANIES (CONSOLIDATION) ACT, 1908. Ch. I. 
 
 13 
 
 point in the history of our company law. This Act has been amended 
 by the Companies Act, 1913, with reference to private companies. 
 
 The Act of 1908 itself is little more than a consolidation of the 
 existing law as already expressed in the Acts of 1862 to 1908. The 
 alterations are few and trifling, but some of them change the law con- 
 siderably. See Thomas v. United Butter Co ., (1909) 2 Ch. 484. The 
 drafting is in the main clear, but (alas!) practically no attempt has 
 been made to embody in the Act the relevant decisions of the Courts — 
 decisions which throw so great a flood of light on the operation and 
 meaning of the repealed Acts, and of the new Act. See p. 17, infra. 
 
 The Companies (Consolidation) Act, 1908, is divided into ten 
 parts : — 
 
 Part I. Constitution and Incorporation. 
 
 Part II. Distribution and Reduction of Capital. 
 
 Part III. Management and Administration. 
 
 Part IV. Winding-up and Dissolution. 
 
 Part Y. Registration Office and Fees. 
 
 Part VI. Application of Act to Companies formed and registered 
 under former Acts. 
 
 Part VII. Companies authorized to register under the Act. 
 
 Part VIII. Winding-up of unregistered Companies. 
 
 Part IX. Companies established outside the United Kingdom. 
 
 Part X. Supplemental. 
 
 And there are six Schedules : — 
 
 Schedule I. Tables A., B. and C. 
 
 Schedule II. Statement in lieu of Prospectus. 
 
 Schedule III. Forms of Memorandum and Articles and Annual 
 Summary. 
 
 Schedule IV. Provisions as to Scotch Orders. 
 
 Schedule Y. Applicability of sect. 281. 
 
 Schedule VI. Repeals. 
 
 The Act was to come into operation on the 1st April, 1909. See 
 sect. 296. It maybe cited as “The Companies (Consolidation) Act, 
 1908” (see sect. 295), or, with the Act of 1913, as “The Companies 
 Acts, 1908 and 1913.” 
 
 One key to the understanding of the Act is to be found in the 
 interpretation section (sect. 285), attaching to certain words used in the 
 Act special significations, “ unless the context otherwise requires.” 
 A brief comment on some of these definitions may not be out of place. 
 The section commences thus : — 
 
 285. — (1) In this Act, unless the context otherwise requires , the 
 
 The interpre- 
 tation of the 
 Act. 
 
14 
 
 PRELIMINARY. 
 
 “ Articles.” 
 
 following expressions have the meanings hereby assigned to them, 
 that is to say : — 
 
 “ Existing company” means a company formed and registered 
 under the Joint Stock Companies Acts [ i.e ., of 1856, 1857, 
 &c.], or under the Companies Act, 1862 ; 
 
 “ Company ” means a company formed and registered under this 
 Act or an existing company ; 
 
 It follows, then, that the various sections of the Act dealing with a 
 “company” apply prima facie not only to companies formed under 
 the Companies (Consolidation) Act, 1908 — i.e., on or after April 1st, 
 1909 — but also to companies formed under the Act of 1862, at any 
 time before April 1st, 1909. 
 
 This at a stroke brings within the operation of the Act the 50,000 
 or more companies registered under the Companies Acts, 1862 to 1908, 
 and now carrying on business in the United Kingdom and all parts of 
 the world. Henceforth they are to be governed by the provisions of 
 the Act of 1908. But as regards existing companies, the application 
 is subject to the words “unless the context otherwise requires,” and 
 further to the provisions of Part VI. and sect. 286 of the Act (see 
 Appendix, infra, pp. 512, 522). Moreover, by sect. 247 of the Act its 
 provisions are made applicable in like manner to companies registered, 
 but not formed, under the Joint Stock Companies Acts (as defined in 
 sect. 285) or under the Act of 1862. 
 
 Another important expression defined in s. 285 is the following : — 
 
 “Articles” means the articles of association of a company, as 
 originally framed or as altered by special resolution, includ- 
 ing, so far as they apply to the company, the regulations 
 contained (as the case may be) in Table B. in the Schedule 
 annexed to the Joint Stock Companies Act, 1856, or in 
 Table A. in the First Schedule annexed to the Companies 
 Act, 1862, or in that Table as altered in pursuance of 
 section seventy-one of that Act, or in Table A. in the 
 First Schedule to this Act ; 
 
 This expression — “ articles ” — now takes the place of the expression 
 “regulations,” so frequently used in the Companies Acts, 1862 to 
 1907. See, for example, sects. 12 and 50 of the Act of 1862 ; sects. 9 
 and 21 of the Act of 1867 ; sects. 3 and 13 of the Act of 1900. 
 
 We thus get rid of what has been for many years past a trouble- 
 some ambiguity — the use sometimes of “articles,” sometimes of 
 “regulations.” In the present edition the author has uniformly 
 adopted the expression “articles” as being in conformity with the 
 language of the new Act, and also in harmony with legal and com- 
 mercial usage. 
 
15 
 
 THE COMPANIES (CONSOLIDATION) ACT, 1908. Ch. I. 
 
 By defining “ articles ” as above the Consolidation Act also gets rid 
 of the clumsy circumlocution so often appearing in the text of the 
 Acts, e.g ., in sect. 12 of the Act of 1862, “ if authorized so to do by its 
 regulations as originally framed or as altered by special resolution,” 
 and substitutes the simple expression ‘‘if authorized by its articles.” 
 
 See, e.g., sect. 41 (1908). 
 
 The following are some further defined expressions : — 
 
 “Memorandum” means the memorandum of association of a 
 company, as originally framed or as altered in pursuance of 
 the provisions of this Act ; 
 
 “Document” includes summons, notice, order, and other legal 
 process, and registers ; 
 
 “ Share” means share in the share capital of the company, and 
 includes stock except where a distinction between stock and 
 shares is expressed or implied ; 
 
 “Debenture” includes debenture stock ; 
 
 “ Books and papers ” and “books or papers” include accounts, 
 deeds, writings, and documents ; 
 
 “Director” includes any person occupying the position of director 
 by whatever name called ; 
 
 “Prospectus” means any prospectus, notice, circular, advertise- 
 ment, or other invitation, inviting the public to subscribe 
 for or purchase any shares or debentures of a company. 
 
 Besides the above, “Private company” is defined in sect. 121. 
 
 The repeals are dealt with in sect. 286, which runs thus : — 
 
 286. — (1) The Acts mentioned in the first part of the Sixth Repeals. 
 Schedule to this Act are hereby repealed to the extent specified in the 
 third column of that part : 
 
 Provided that the repeal shall not affect — 
 
 (a) The incorporation of any company registered under any 
 
 enactment hereby repealed ; nor 
 
 (b) Table B. in the Schedule annexed to the Joint Stock Com- 
 
 panies Act, 1856, or any part thereof, so far as the same 
 applies to any company existing at the commencement of 
 this Act ; nor 
 
 (c) Table A. in the First Schedule annexed to the Companies Act, 
 
 1862, or any part thereof (either as originally contained in 
 that Schedule or as altered in pursuance of section seventy- 
 one of that Act) so far as the same applies to any company 
 existing at the commencement of this Act ; nor 
 
16 
 
 PRELIMINARY. 
 
 Pending- 
 
 liquidation 
 
 (d) The continuance in force of the enactments set out in the 
 second part of the Sixth Schedule to this Act, being the 
 enactments continued in force by section two hundred and 
 five of the Companies Act, 1862. 
 
 (2) The mention of particular matters in this section or in any other 
 section of this Act shall not prejudice the general application of 
 section thirty-eight of the Interpretation Act, 1889, with regard to 
 the effect of repeals. 
 
 This must be read with sect. 38 of the Interpretation Act, 1889 
 (52 & 53 Yict. c. 63), which runs as follows : — 
 
 38. — (1) Where this Act or any Act passed after the commencement 
 of this Act repeals and re-enacts, with or without modification, any 
 provisions of a former Act, references in any other Act to the pro- 
 visions so repealed, shall, unless the contrary intention appears, be 
 construed as references to the provisions so re-enacted. 
 
 (2) Where this Act or any Act passed after the commencement of 
 this Act repeals any other enactment, then, unless the contrary inten- 
 tion appears, the repeal shall not — 
 
 (a) revive anything not in force or existing at the time at which the 
 
 repeal takes effect ; or, 
 
 (b) affect the previous operation of any enactment so repealed or 
 
 anything duly done or suffered under any enactment so 
 repealed ; or 
 
 (c) affect any right, privilege, obligation, or liability acquired, 
 
 accrued, or incurred under any enactment so repealed ; or 
 
 (d) affect any penalty, forfeiture, or punishment incurred in respect 
 
 of any offence committed against any enactment so repealed ; 
 or 
 
 (e) affect any investigation, legal proceeding, or remedy in respect 
 
 of any such right, privilege, obligation, liability, penalty, 
 forfeiture, or punishment as aforesaid ; 
 
 and any such investigation, legal proceeding, or remedy may be 
 instituted, continued, or enforced, and any such penalty, forfeiture, 
 or punishment may be imposed, as if the repealing Act had not been 
 passed. 
 
 Windings-up commenced before the Consolidation Act of 1908 are 
 excepted by sect. 287 : — 
 
 287. The provisions of this Act with respect to winding up shall not 
 apply to any company of which the winding up has commenced before 
 the commencement of this Act, but every such company shall be wound 
 up in the same manner and with the same incidents as if this Act had 
 
17 
 
 THE COMPANIES (CONSOLIDATION) ACT, 1908. Ch. I. 
 
 not passed, and for the purposes of the winding up the Act or Acts 
 under which the winding up commenced shall be deemed to remain in 
 full force. 
 
 The operation of deeds, &c. prior to the Act is not to be affected. 
 
 288. Every conveyance, mortgage, or other deed, made before the 
 commencement of this Act in pursuance of any enactment hereby 
 repealed shall be of the same force as if the Act had not passed, and 
 for the purpose of that deed the repealed enactment shall be deemed 
 to remain in full force. 
 
 References in documents to the repealed Acts are transferred to the 
 Consolidation Act. • 
 
 291. Where any enactment repealed by this Act is mentioned or 
 referred to in any document, that document shall be read as if the 
 corresponding provision (if any) of this Act were therein mentioned or 
 referred to and substituted for the repealed enactment. 
 
 How far the decisions on the Companies Acts, 1862 
 to 1907, may be resorted to for the purpose of 
 interpreting the Companies (Consolidation) Act, 
 1908. 
 
 The Act of 1908 being a consolidation Act, it is apprehended that 
 the rule laid down by Lord Herschell in Bank of England v. Vagliano , 
 (1891) A. C. 144, is in point. His Lordship in that case, speaking 
 with reference to the Bills of Exchange Act, 1882 (which consolidated 
 the law relating to bills of exchange), said: — “I think the proper 
 course is, in the first instance, to examine the language of the statute, 
 and to ask, what is its natural meaning uninfluenced by any con- 
 siderations derived from the previous state of the law, and not to start 
 with inquiring how the law previously stood, and then assuming that 
 it was probably intended to leave it unaltered to see if the vords of 
 the enactment will bear an interpretation in conformity with this view. 
 
 “ If a statute intended to embody in a code a particular branch of 
 the law is to be treated in this fashion, it appears to me that its utility 
 will be almost entirely destroyed, and the very object with which it 
 was enacted will be frustrated. The purpose of such a statute surely 
 was that on any points specifically dealt with by it, the law should be 
 ascertained by interpreting the language used instead of, as before, 
 by roaming over a vast number of authorities in order to discover 
 what the law was — extracting it by a minute critical examination of the 
 prior decisions, dependent upon a knowledge of the exact effect even 
 of an obsolete proceeding such as a demurrer to evidence. I am, of 
 course, far from asserting that resort may never be had to the previous 
 p. 2 
 
 Decisions on 
 the repealed 
 Acts. 
 
18 
 
 PRELIMINARY. 
 
 state of the law for the purpose of aiding in the construction of the 
 provisions of the code. If, for example, a provision be of doubtful 
 import such resort would be perfectly legitimate. Or again, if in a 
 code of the law of negotiable instruments words be found which had 
 previously acquired a technical meaning, or been used in a sense other 
 than their ordinary one, in relation to such instruments, the same inter- 
 pretation might well be put upon them in the code. I take these as 
 examples merely ; they, of course, do not exhaust the category. 
 What, however, I am venturing to insist upon is, that the first step 
 taken should be to interpret the language of the statute, and that an 
 appeal to earlier decisions can only be justified on some special 
 ground.” 
 
 Nor is the principle thus laid down confined to a codifying Act, it 
 extends also to a consolidating and amending Act. ‘‘The same 
 principle applies to such an Act as that which is now before us, but in 
 a ess stringent degree. In this Act, clauses of the repealed Acts are 
 found repeated, but often in altered form, and with amendments 
 whereby the sense may be to a great measure changed. Speaking 
 generally, I think that the enactments must be dealt with as they 
 now stand, and that a minute critical examination of the repealed 
 clauses ought not to be entered upon for the purpose of interpretation 
 except upon special grounds.” Per Chitty, L. J., in Thames Conser- 
 vators v. Smeed , Dean Sf Ca., (1897) 2 Q. B. 346 (C. A.). 
 
 Applying this principle to the Consolidation Act of 1908, which has to 
 a very great extent adopted the wording of the Acts of 1862 to 1907, it 
 is obvious that there is and must be ample scope for reference to the 
 decisions on those Acts, and the right thus to refer is well settled. 
 
 Thus in a Mersey Dock case, 11 H. L. C. 443, Blackburn, J., in 
 delivering the opinion of the majority of the judges, said : “ Where 
 an Act of Parliament has received a judicial construction putting a 
 certain meaning on its words, and the legislature in a subsequent Act 
 in pari materia uses the same words, there is a presumption that the 
 legislature uses these words intending to express the meaning which 
 it knew has been put upon the same words before ; and unless there 
 is something to rebut that presumption, the Act should be so con- 
 strued, even if the words were such that they might originally have 
 been construed otherwise.” 
 
 The reports are full of cases in which this rule has been recognised 
 and acted on : Re Cathcart , 5 Ch. 703 ; see Avery v. Wood , (1891) 3 Ch. 
 115; Greaves v. Tojield, 14 C. D. 571 ; Dale's case , 6 Q. B. D. 453; 
 Rosenberg v. Northumberland Building Society, 22 Q. B. I ). 373 ; 
 Hodgson v. Bell, 24 Q,. B. D. 528 ; Rex v. Abrahams, (1904) 2 K. B. 859. 
 
 Hence it may be taken that in re-enacting the provisions of the 
 Companies Acts, 1862 to 1907, the legislature has not disturbed the 
 
THE COMPANIES ACTS, 1862 TO 1908. 
 
 Ch. I. 
 
 19 
 
 decided cases, and that those decided cases are still to he treated as 
 relevant and available for the interpretation of the new Act, in so far 
 as any questions as to its meaning may arise in the future. It by no 
 means follows, however, that the new Act is to be taken to adopt and 
 affirm a construction erroneously placed on the former Acts. Colonial 
 Ban7cv. Whinney (1885), 30 0. D. 261, furnishes a good illustration. 
 There the question arose whether shares in a company were or were 
 not choses in action within sect. 44 of the Bankruptcy Act, 1883 
 (dealing with reputed ownership). It appeared that in 1871 Vice- 
 Chancellor Bacon, in Union Bank of Manchester , 12 Eq. 354, had 
 decided that under a similar provision in a corresponding portion of the 
 Bankruptcy Act, 1869, shares were not included as choses in action; 
 and this decision was relied on by Cotton and Bindley, L. JJ., the latter 
 saying that “the decision of the Vice-Chancellor has never been 
 appealed from or judicially disturbed. After it had thus stood for 
 years the present Act of 1883 was passed. I do not think we ought 
 to suppose the draughtsmen of that Act to have been unaware of the 
 construction which had been put by the Court upon the Act of 1869, 
 and it appears to me that it would be a very strange thing for us to 
 say that the language used, in the Act of 1883, ought to be construed 
 differently from the judicial construction which had been put on the 
 same language in the Act of 1869.” But on appeal to the House of 
 Lords (1886), 11 A. C. 426, this decision was overruled, and it was 
 held that, notwithstanding the erroneous decision of the Vice-Chan- 
 cellor, shares icere choses in action within the meaning of sect. 44 of 
 the Bankruptcy Act of 1883. Moreover the application of a decision 
 may be excluded by a change in the language of the new Act : 
 Thomas v. United Butter Co., (1909) 2 Ch. 484. 
 
 Here, then, in the Companies (Consolidation) Act, 1908, we find 
 gathered together and set in order the results of more than fifty years 
 of company legislation, and we may venture to assert that the pro- 
 visions of the Act, interpreted and supplemented by the many important 
 decisions of the Courts on the Companies Acts, 1862 to 1907, and 
 supplemented also by the Acts relating to insurance companies referred 
 to in Chap. XLI. of this work, form together a comprehensive, and in 
 most respects, admirable system of law for regulating the constitution, 
 management, and winding-up of companies throughout the United 
 Kingdom — a system which contrasts very favourably with the com- 
 plicated formalities and the hard-and-fast regulations and restrictions 
 imposed by not a few foreign systems of law in regard to companies 
 and co-operative enterprises. Unlike these systems, the policy of our 
 law has been to accord the utmost liberty in regard to the formation, 
 the carrying on, and the dissolution of companies ; and although this 
 freedom has at times been abused by unscrupulous persons for their 
 
 2 ( 2 ) 
 
20 
 
 PRELIMINARY. 
 
 own ends, necessitating the intervention of the legislature, such abuses 
 are but an insignificant item in comparison with the vast volume of 
 honestly formed and honestly managed companies ; * while there can 
 be no doubt that the facilities afforded by these Acts have largely 
 stimulated and developed British trade and co-operative enterprise in 
 all parts of the world. 
 
 * Tiie share capital of companies now on tne register under the Companies Acts 
 amounts, according to the latest official return, to more than two thousand five 
 hundred millions, while the total share capital of companies registered since 1862. 
 exceeds seven thousand eight hundred millions. 
 
Ch. II. 
 
 21 
 
 CHAPTER II. 
 
 FORMATION OF A COMPANY LIMITED BY SHARES ALLOTMENT 
 
 AND COMMENCEMENT OF BUSINESS GENERAL SKETCH OF 
 
 PROCEEDINGS. 
 
 The mode of forming a company limited by shares is extremely 
 simple : — 
 
 Preliminaries. 
 
 The first step is to prepare the Memorandum of Association (see First steps, 
 sect. 3 of the Act of 1908) and the Articles of Association (if there 
 are to be any). See sect. 10. 
 
 The Memorandum of Association. 
 
 This is a document of extreme importance in relation to the proposed The memo- 
 company, and it will be fully dealt with later on (Chapter III., p. 26). randum - 
 It is required to state (among other things) (1) the name of the com- 
 ply y (2) what part of the United Kingdom the registered office is 
 to be situate in ; (3) the objects of the company ; (4) that the 
 liability of the members is limited ; and (5) the capital of the com- 
 pany. See the specimen form set out in the Third Schedule to the 
 Act, infra , Appendix. 
 
 This document has to be subscribed by seven persons at least, or, in 
 the case of a private company, by two persons at least. Each subscriber 
 must write opposite to his or her name the number of shares — it must 
 not be less than one — he or she takes, and each signature must be 
 attested by a witness. (Sects. 3, 6.) 
 
 The memorandum may be wholly in writing, or it may be printed 
 (save as regards the signatures), or it may be partly printed and 
 partly in writing. 
 
 The signature of a subscriber cannot be attested by himself or by 
 another subscriber. “ The word implies the presence of some person 
 who stands by, but is not a party to the transaction.” Per Lord 
 Selborne, Seal v. Claridge, 7 Q. B. D. 516. 
 
 The Articles of Association. 
 
 These contain the regulations for the management of the affairs of The articles, 
 the company and the conduct of its business. (Sect. 10.) In the case 
 
22 
 
 REGISTRATION. 
 
 Registration. 
 
 Fees. 
 
 of a company limited by shares there is no obligation to register 
 articles of association, but if it is registered without articles the 
 regulations in Table A. in the First Schedule to the Act are to be 
 deemed to be the articles of the company. 
 
 There is a third alternative, and that is to have a short set of 
 articles of association, supplementing or modifying Table A., but 
 otherwise leaving Table A. to operate. In such a case Table A., plus 
 the supplementary or modifying provisions, will constitute the regula- 
 tions of the company. 
 
 As a general rule, it is desirable for a company to have special 
 articles of association, but there are a considerable number of cases 
 in which Table A., in its new form, with any necessary modifications 
 and additions as above, may work well enough. 
 
 The articles of association (if there are to be any) must be printed 
 (sect. 12), and must be signed by the subscribers of the memorandum, 
 and the subscribers’ signatures must be attested as required by sect. 12(d) 
 of the Act. See Articles of Association, Chap. IV., p. 37. 
 
 Memorandum and articles must each bear a 10.s. deed stamp, and a 
 5s. registration stamp. 
 
 Registration. 
 
 In order to effect registration of the company, the documents, pre- 
 pared as above described, must be taken to the Registrar of Joint 
 Stock Companies (sect. 15), with a statutory declaration by a solicitor 
 . of the High Court engaged in the formation of the company, or by a 
 person named in the articles of association as a director or secretary 
 of the company, of compliance with the requirements of the Act as to 
 registration (sect. 17), and also (except in the case of a private 
 company) with certain other documents below mentioned. 
 
 The above documents each require a 5s. registration stamp, and the 
 Registrar, on payment of the requisite registration fee and stamp duties, 
 registers and retains the documents, and issues a certificate of incorpo- 
 ration. Sect. 16; see Chap. V., p. 51. 
 
 As to the further declaration or licence required during the war, see 
 Appendix, p. 632. 
 
 Fees on Registration. 
 
 The fees on registration are proportioned to the amount of the 
 capital. See Table B. in the First Schedule to the Act, and the note 
 appended thereto in regard to the capital duty of 5s. per cent, imposed 
 by the Stamp Act, 1891, and the Finance Act, 1899. 
 
ALLOTMENT OF SHARES, ETC. 
 
 Ch. II. 
 
 23 
 
 Form of Certificate of Incorporation. 
 
 The certificate of incorporation is in the terms following : — Certificate. 
 
 I hereby certify that the Company, Limited, is this 
 
 day incorporated under the Companies (Consolidation) Act, 
 
 1908, and that the company is limited. 
 
 Given under my hand this day of . 
 
 [> Signature ] Registrar of Joint Stock Companies. 
 
 With the issue of the certificate of incorporation (see Chap. V., 
 infra, p. 51), the company comes into existence as a body corporate. 
 
 See Chap. VI., infra , p. 55. 
 
 Allotment of Shares and Commencement of Business 
 and exercise of Borrowing Powers. 
 
 The following is a summary of the position : — 
 
 Class 1 ( Private Companies). 
 
 In the case of private companies as defined in sect. 121 of the Private 
 Act (Chap. XXXVII., infra), the company can go to allotment com P anie s* 
 immediately after the certificate of incorporation is obtained, and can 
 commence business and exercise its borrowing powers forthwith, a 
 private company being exempt from all restrictions as to allotment 
 and commencement of business. 
 
 Class 2 ( Companies issuing Prospectus inviting Public to subscribe 
 
 for Shares). 
 
 In the case of companies in relation to whose formation a prospectus Share 
 inviting the public to subscribe for shares is issued — prospectus 
 
 (a) The prospectus must contain the disclosure required by sect. 8 1 , compan e 
 
 and must provide for payment of at least five per cent, applica- 
 tion money on the shares offered (sect. 85), and must be dated 
 and signed by every director or proposed director named in 
 it, or by his agent duly authorized in writing, and must be 
 filed with the registrar before its issue. (Sect. 80.) 
 
 (b) If anyone is to be named in the articles or prospectus as a 
 
 director or proposed director, he must by himself or his agent 
 duly authorized in writing sign and file with the registrar a 
 consent in writing to act as such director, and if the articles 
 provide for a share qualification, must either subscribe the 
 memorandum of association for his qualification or sign 
 
24 
 
 ALLOTMENT OF SHARES, ETC. 
 
 Other 
 
 companies. 
 
 and file a contract to take and pay for such qualification. 
 (Sect. 72.) 
 
 (c) It must be seen that the articles fix the minimum subscription 
 
 upon which the directors may proceed to allotment, unless 
 the parties are content that the whole amount of the share 
 capital for which the public are invited to subscribe shall be 
 treated as the minimum subscription. (Sect. 85.) 
 
 (d) On the application to register there must be delivered to the 
 
 registrar a list of the persons who have consented to be 
 directors. (Sect. 72 (2).) 
 
 (e) Before going to allotment, care must be taken that, as required 
 
 by sect. 85, the minimum subscription has been subscribed, 
 and the sum payable on application has been paid to and 
 received by the company. 
 
 (f) It must be seen also that every director of the company has 
 
 paid to the company on each of the shares taken, or contracted 
 to be taken, by him, and for which he is liable to pay in cash, 
 a proportion equal to the proportion payable on application 
 and allotment on the shares offered for public subscription. 
 (Sect. 87 (1) (b).) 
 
 (g) There must be filed with the registrar a statutory (sect. 87 (1) (c) ) 
 
 declaration by the secretary, or one of the directors, in the 
 prescribed form. (Company Precedents, Part I., Form 227, 
 11th ed., p. 605.) 
 
 And thereupon the registrar will certify that the company is entitled 
 to commence business. (Sect. 87 (2).) 
 
 Class 3 ( Companies not issuing Prospectus inviting Public to subscribe 
 
 for Shares ). 
 
 In the case of companies which do not fall within Classes 1 and 2 : — 
 
 (a) A statement in lieu of prospectus (sect. 82) must be filed with 
 
 the registrar, and the statement must be in the prescribed 
 form : see infra , Appendix, Act of 1908, Second Schedule. 
 
 (b) If anyone is named in the articles or in the statement in lieu of 
 
 prospectus as a director, or proposed director, he must by 
 himself, or by his agent duly authorized in writing, sign and 
 file with the registrar a consent in writing to act as such 
 director, and if the articles provide for a share qualification, 
 must either subscribe the memorandum of association for 
 his qualification, or sign and file a contract to take and pay 
 for such qualification. (Sect. 72.) 
 
 (c) It must be seen that the memorandum or articles fix, and that 
 
 the statement in lieu of prospectus states, the minimum sub- 
 
ALLOTMENT OF SHARES, ETC. 
 
 Ch. II. 
 
 scription (if any) upon which the directors may proceed to 
 allotment, unless the parties are content that the whole 
 amount of the share capital, other than that issued or 
 agreed to be issued as fully or partly paid up otherwise than 
 in cash, shall be treated as the minimum, and it must be 
 seen that the minimum has been subscribed. (Sects. 82 and 
 85 (7).') 
 
 {d) On the application to register there must be delivered to the 
 registrar a list of persons who have consented to be directors. 
 (Sect. 72 (2).) 
 
 •(e) It must be seen that every director of the company has paid to 
 the company on each of the shares taken, or contracted to be 
 taken, by him and for which he is liable to pay in cash, a 
 proportion equal to the proportion payable on application 
 and allotment on the shares payable in cash. (Sect. 87 (1) (b).) 
 
 (f) There must be filed with the registrar a statutory declaration 
 (sect. 87 (1) (c)) by the secretary or one of the directors in 
 the prescribed form. (See Company Precedents, Part I., 
 Form 227, 1 1th ed., p. 605.) 
 
 And thereupon the registrar will certify that the company is entitled 
 to commence business. (Sect. 87 (2).) 
 
 As regards companies in Class 3, the statement in lieu of pro- 
 spectus must be filed, and all the above requirements must be complied 
 with, even though the company on its formation issues, or proposes 
 forthwith to issue, a prospectus inviting the public to subscribe for 
 debentures or debenture stock. 
 
26 
 
 Form of 
 memorandum. 
 
 Name of 
 company. 
 
 CHAPTEE III. 
 
 MEMORANDUM OF ASSOCIATION. 
 
 The specimen form of memorandum of association for a company- 
 limited by shares is set forth [infra, Appendix) in the Third Schedule 
 to the Act of 1908 (Form A.). This form follows, it will be observed, 
 the requirements of sect. 3 of the Act, and states : — 
 
 (1) The name of the company. See Name of Company, infra , 
 Chapter XXV. 
 
 (2) In what part of the United Kingdom the registered office is to 
 be situate. See infra, Chapter XXIII. 
 
 (3) The objects of the company. See infra, pp. 29 and 60. 
 
 (4) That the liability of the members is limited. See infra, p. 32. 
 
 (5) The capital of the company and the shares into which such 
 capital is divided. See infra, p. 32. 
 
 It is for the subscribers to the memorandum of association to frame 
 and fill up the memorandum as they choose ; for the Act in sect. 2 
 expressly provides that any seven or more persons (or in the case of a 
 private company two persons) associated together for any lawful 
 purpose may, by subscribing their names to a memorandum of asso- 
 ciation and otherwise complying with the requirements of the Act in 
 respect of registration, form an incorporated company with or without 
 limited liability. 
 
 1. Name. 
 
 In the selection of a name for a company the greatest freedom of 
 choice is allowed, but the following points must be borne in mind : — 
 
 1. The last word of the name must be the word “Limited.” As to 
 
 dispensing with this word in the case of certain companies, see 
 infra, p. 455. As to the penalty for improper use of the word 
 “Limited,” see sect. 282. 
 
 2. The word “ Eoyal ” or “ Imperial” must not be used as part of 
 
 the name without the consent of the Home Office. 
 
 3. A name must not be selected too closely resembling the name 
 
 used by any other concern, whether registered or not, carrying 
 on a business similar to that proposed to be carried on by the com- 
 pany. For the protection of registered companies, the Registrar, 
 
NAME. 
 
 Ch. III. 
 
 27 
 
 in such cases, is, by sect. 8, empowered to refuse registration, 
 and the Court will not, in case of refusal, interfere with his 
 discretion. Rex v. Registrar of Companies , (1912) 3 K. B. 23. 
 
 This section provides that “ a company may not be registered under 
 a name identical with that by which a company in existence is already 
 registered, or so nearly resembling the same as to be calculated to 
 deceive, except ” as therein named ; and, in the case of an unregistered 
 company, or firm, it is wise in the promoters to observe the same rule. 
 In neither case is registration any efficient protection against an action 
 for an injunction at the suit of anyone prejudiced by the adoption of 
 the name. The principle on which the Court interferes in such cases 
 is, that one person is not to be permitted to represent the business 
 which is carried on by another as carried on by him. Croft v. Bay , 
 7 Beav. 84; Hendricks v. Montague , 17 C. D. 638; Tussaud v. Tussaud , 
 44 C. D. 678 ; North Cheshire and Manchester Brewery v. Manchester 
 Brewery , (1899) A. C. 83 ; F. Pinet Co. v. Maison Louis Pinet, 
 Limited , (1898) 1 Ch. 179 ; and Montreal Lithographing Co. v. 
 Sabiston, (1899) A. C. 610; Societe Panhard v. Fanhard Levassor Co., 
 (1901) 2 Ch. 513; Aerators , Limited v. Tollit, (1902) 2 Ch. 319; 
 British Vacuum Cleaner Co. v. New Vacuum Cleaner Co., (1907) 2 Ch. 
 312 ; Electromobile Co. v. British Electromobile Co., 97 L. T. 196 ; 
 Cash, Limited v. Cash, (1902) W. N. 32 ; Valentine Meat Juice Co. v. 
 Valentine Extract Co., 83 L. T. 259 ; Scottish Union and National 
 Lnsurance Co. v. Scottish National Insurance Co., (1909) S. C. 318, 
 Ct. of Sess. ; Standard Bank of South Africa v. Standard Bank, 25 
 T. L. B. 420. 
 
 The inadvertent omission by a limited company to publish its 
 corporate name will not disentitle it to have the use of its trade name 
 protected by injunction. Randall , Limited v. British and American 
 Shoe Co., (1902) 2 Ch. 354. 
 
 The prohibition against similarity of name does not apply where 
 an existing company is in course of being dissolved and testifies its 
 consent to the satisfaction of the Registrar. See sect. 8(1) of Act of 1908. 
 
 The following are some examples of the various kinds of names that 
 may be adopted : — 
 
 The Wenlock Ironworks, Limited. 
 
 The York Supply Association, Limited. 
 
 The Patent Pencil Company, Limited. 
 
 The Birmingham Advance Corporation, Limited. 
 
 The Malaga Syndicate, Limited. 
 
 The London and South Coast Bank, Limited. 
 
 The Gordon Trust, Limited. 
 
 The Tenby Club, Limited. 
 
 The Incorporated Institute of Barge Owners, Limited. 
 
28 
 
 MEMORANDUM OF ASSOCIATION. 
 
 The Suburban News, Limited. 
 
 La Trinidad, Limited. 
 
 The J. K. Syndicate, Limited. 
 
 Bass, Ratcliff, and Gretton, Limited. 
 
 Sir Joseph Causton, Limited. 
 
 Sir W. G. Armstrong & Co., Limited. 
 
 George Newnes, Limited. 
 
 Peter Robinson, Limited. 
 
 The last few names are specimens of names adopted on conversion of 
 going business concerns into companies, it being very common in such 
 cases to adopt the old name with merely the addition of the word 
 “ limited.” 
 
 There is great inconvenience in having too long a name, and it is 
 highly desirable, therefore, where practicable, to confine the name to 
 three or four words. As to change of name, see infra , p. 250. 
 
 2. Registered Office. 
 
 Registered Every memorandum of association is required to state whether the 
 
 office ‘ registered office will be situate in England, or in Scotland, or in 
 
 Ireland. If the registered office is to be in Wales, the proper state- 
 ment in the memorandum is, that it is to be situate in England ; 
 England, for this purpose, including Wales. 20 Geo. 2, c. 42, s. 3. 
 The statement as to the situation of the registered office is material, for 
 various reasons, and, in particular, because on the situation of the 
 registered office depends the place where the company is to be 
 registered. Thus, if the registered office is to be in England, the 
 company must be registered in London, unless the memorandum states 
 that the object is to work mines in the counties of Devon or Cornwall. 
 In that case it must be registered at Truro. If the registered office is 
 to be in Scotland, or in Ireland, the company must be registered in 
 Edinburgh or Dublin, as the case may be. The London office for 
 registration is at Somerset House. 
 
 Writs and notices are to be served at the registered office of the 
 company. See Chap. XXIII., “ Registered Office.” 
 
 The principal obj ect of requiring a company to have a registered 
 office is to provide some definite place at which notices and other 
 documents may be served on it. Accordingly by sect. 62 of the 
 Act, it is enacted that “ Every company shall have a registered office 
 to which all communications and notices may be addressed,” By 
 sect. 116, a document may be served on a company by leaving it or 
 sending it by post to the registered office of the company. 
 “Document” here includes summons, notice, order, or other legal 
 process, and registers ; and under sebt. 26 of the Interpretation Act, 
 
THE OBJECTS CLAUSE. 
 
 Ch. Ill 
 
 29 
 
 1889, tlie service [by post] shall be deemed to be effected by 
 properly addressing, prepaying, and posting a letter containing the 
 document, and, unless the contrary is proved, to havejbeen effected at 
 the time at which the letter would be delivered in the ordinary course 
 of post. Sect. 62 (2) of the Act provides for notices^to the registrar 
 of the situation of the registered office, and of any change therein. 
 
 The situation of the registered office also fixes the domicile ( Jones v. 
 
 Scottish Accident Co., 17 Q. B. D. 421) and nationality ( Continental 
 Tyre Co. v. Daimler Co., (1915) 1 K. B. 893) of the company. 
 
 See further as to the registered office, Chap. XXIII., infra, and 
 sects. 61 and 117. 
 
 3. The Objects Clause. 
 
 Every memorandum of association — this is the third requirement — Objects, 
 must state the objects of the proposed company. clause. 
 
 The statement of the objects is not a mere record of what is con- 
 templated by the subscribers, without operative effect. On thn 
 contrary, the statement has a twofold operation — 
 
 (1) It affirmatively determines what shall be the powers of the 
 
 company; for the stated objects confer on the company all 
 powers reasonably requisite to the attainment thereof ; 
 
 (2) It limits and restricts the powers of the company to those 
 
 thus conferred, save so far as other powers are given by 
 statute. 
 
 Hence, as it rests with the subscribers to declare the objects, it 
 follows that the subscribers are by the Act furnished with the means, 
 not merely to bring into existence a statutory corporation, but to 
 endow that body with such powers (not illegal) as they, in their 
 absolute discretion, think fit. This is their statutory right, and its 
 importance cannot be exaggerated. 
 
 As regards legality, the subscribers may be associated together for 
 any lawful purpose (sect. 2), and accordingly the following rules are 
 applicable : — 
 
 (a) The objects must not include anything in contravention of 
 
 the Act. For example, a limited company cannot legally 
 issue shares at a discount, and accordingly, to make the 
 issuing of its shares at a discount one of the objects of 
 such a company is not allowable. Ooregum Co. v. Roper , 
 
 (1892) A. 0. 125. Again, it is not a lawful object to 
 provide for a limited company dealing in its own shares, 
 for that is in contravention of the Act. 
 
 (b) The objects stated must not include anything in contravention 
 
 of the general law. For example, it is not a legal object 
 “to keep a gambling house in the United Kingdom, ” or 
 “to establish and work lotteries in England,” or “to work 
 
30 
 
 MEMORANDUM OF ASSOCIATION. 
 
 The 
 
 subscribers’ 
 
 discretion. 
 
 and develop inventions for importing tobacco into the 
 United Kingdom free of duty,” or “to work a scheme for 
 debasing the coinage,” or to promote the commission of 
 burglaries — for all these obj ects are contrary to the general 
 law. 
 
 (c) The objects must not include any which would render the 
 company a trade union, for to register a trade union under 
 the Companies Act, 1908, is illegal. See Trade Union 
 Acts, 1871 and 1876, and sect. 294 of the Act of 1908. 
 
 Subject to these restrictions the subscribers of a company’s memo- 
 randum of association have complete freedom to frame the objects as 
 they choose. It is for them to say whether the objects shall be wide 
 or narrow, cautious or speculative, wise or ridiculous, reasonable or 
 unreasonable, congruous or incongruous, diffuse and rambling, or 
 concise and elliptical — whether they shall be concurrent, or indepen- 
 dent, or substitutional, or contingent, or in the alternative. 
 
 No doubt some persons have argued that what the legislature 
 really intended was that the principal objects should be specified 
 — not the powers by which those objects are proposed to be attained — 
 and proceeding from this premiss maintain that once a main or 
 primary “ object” is specified it is improper to set out in the memo- 
 randum further objects which merely confer “powers.” But there 
 is nothing in the Act to give colour to this contention or to show 
 an intention to discriminate between main objects and objects merely 
 conferring powers. Every object stated, whether main or auxiliary, 
 in effect endows the company with a power or powers. To exclude 
 objects conferring powers is to nullify the Act. 
 
 Besides these critics there is another class who complain of what 
 may be called the multifariousness of the contents of a memorandum 
 of association. The objects clause, according to their view, ought to 
 specify the leading objects, be they one or many ; and that is enough ! 
 To go on and specify as an object anything which is implied or may 
 possibly be implied as incidental, on a reasonable construction of the 
 leading object or objects, is irregular and improper. There ought to 
 be no overloading, overlapping, repetition or surplusage. But here 
 again the answer is that it is a matter for the subscribers’ discretion. 
 They have a statutory right to state the objects as they choose, 
 [f they deem it desirable to set out the objects in greater detail than 
 some experts or pedants consider necessary, there is nothing in the Act 
 to prevent them, and there is much to be said from the commonsense 
 point of view in favour of the practice. Take, for instance, borrowing 
 powers of a company. It is unnecessary, any critic might say, to 
 include a borrowing power in the objects of a trading company, for 
 such a power is, according to the decisions, implied ; and so it is to the 
 trained lawyer familiar with the authorities ; but the persons to whom 
 
THE OBJECTS CLAUSE. 
 
 Ch. III. 
 
 31 
 
 a memorandum of association is addressed are in the main men of 
 business, not lawyers, and for these it is expedient that the powers of 
 the company should be made manifest by adequate objects, and should 
 not be left as far as possible to inference or implication. This principle 
 has been extensively and almost universally acted on during the last 
 thirty years, and has been sanctioned by the practice and example of 
 the greatest masters of company law, including Lord Macnaghten, 
 Lord Davey, and the Lords Justices Chi tty, Rigby, and Far well, 
 when at the Bar. In the result cases of ultra vires with reference to a 
 company’s objects have bean almost banished from the Courts. 
 
 It is a curious fact that the advocates of this retrograde policy 
 of extreme conciseness and reliance on implication are quite ready to 
 elaborate the position by inserting express and detailed supplementary 
 powers in the articles, and to assume that the general words in the 
 memorandum will be interpreted so as to include by implication the 
 additional powers set out in the articles. And, no doubt, there are 
 some dicta to the effect that this is allowable ; but these dicta must be 
 acted on with great caution. Thus, Jessel, M. R., in Anderson' s case , 
 7 C. D. 75, said: “Where there are two contemporaneous docu- 
 
 ments executed and assented to by the same persons at the same 
 time .... it appears to me that the ordinary rule applies, according 
 to which contemporaneous documents are to be read together, so that 
 if there is any ambiguity in one it may be explained by the other.” 
 But these words must be read as qualified by the words which had 
 just gone before : “I am not now speaking,” said the learned judge, 
 “ of those portions of the memorandum of association which the Act 
 of Parliament requires to be stated in the memorandum.” And this 
 distinction was further emphasised by Bowen, L. J., in Guinness v. 
 Land Corporation of Ireland, 22 0. D. 377, where he pointed out that 
 ■“ the memorandum contains the fundamental condition upon which 
 alone the company is allowed to be incorporated ; they are conditions 
 introduced for the benefit of the creditors and the outside public, as 
 well as shareholders. The articles are the internal regulations of the 
 company. How can it be said that in all cases the fundamental 
 conditions of the charter of incorporation and the internal regulations 
 of the company are to be construed together ? ... . In any case it 
 is, as it seems to me, certain that for anything which the Act of 
 Parliament says shall be in the memorandum, you must look to the 
 memorandum alone. If the legislature has said one instrument is to 
 be dominant you cannot turn to another instrument and read it, nor 
 modify the provision of the dominant instrument.” 
 
 To sum up, experience shows that it is better in stating the objects to 
 be explicit, and thus to preclude as far as practicable the doubts and 
 difficulties which inevitably arise on the construction of a very concise 
 statement of objects. Hence the somewhat elaborate statements of 
 
32 
 
 MEMORANDUM OF ASSOCIATION. 
 
 Limitation 
 of liability. 
 
 ‘ ‘ Capital ’ ’ 
 clause. 
 
 objects now so commonly found. These clauses may, and undoubtedly 
 do in some cases, err by excess of detail; but over-elaboration is 
 better than over-conciseness. Nothing is more annoying to those who 
 have to manage a company than to find that the powers of the com- 
 pany are fettered or questioned, and its business impeded or prejudiced 
 simply because the draftsman of the memorandum of association has 
 framed it without sufficient foresight or judgment, and has, contrary 
 to the fact, assumed that the ordinary business man is familiar with 
 the legal and somewhat conflicting decisions as to the powers which 
 may be implied by a concise specification of objects. 
 
 The objects clause, then, must be drawn in clear and well-con- 
 sidered terms, and must on no account omit any of the clauses which 
 experience has shown are or may be required for the working of the- 
 business. 
 
 As to the powers conferred by the stated objects, see infra , p. 60. 
 
 As to the construction of objects, see infra, p. 69. 
 
 As to the effect of general words, see infra, p. 72. 
 
 As to the importance of making the objects wide enough, see infra r 
 p. 64. 
 
 As to the doctrine of ultra vires, see infra , p. 62. 
 
 Limitation of Liability. 
 
 The fourth clause of the memorandum states that the liability of 
 the members is limited. This clause is to be read in conjunction with 
 sect. 123 of the Act of 1908, which provides that in winding up, in 
 the case of a company limited by shares, no contribution shall be 
 required from any member exceeding the amount (if any) unpaid on 
 the shares in respect of which he is liable as a present or past member. 
 See Appendix. 
 
 Capital Clause. 
 
 This clause must state the amount of the nominal capital, the number 
 of shares into which it is divided, and the amount of each share. 
 
 What is to be the amount of the capital is a matter left to the 
 discretion of the promoters. It can be as small or as large as they 
 choose. The capital of the average company is 5,000 /.,* or 10,000/., 
 or 50,000/., or 100,000/. Sometimes it is larger, sometimes less. 
 Companies have been registered with a capital of 7/. or less, and 
 others — numerous now — with a capital of 5,000,000/. and upwards. 
 
 * By far the larger number of companies now registered are companies with a. 
 capital of between 1,000?. and 5,000/. See Board of Trade Report. 
 
CAPITAL CLAUSE. 
 
 Ch. III. 
 
 33 
 
 The material consideration in fixing the amount of capital is, What 
 funds will the company want, and how much in the shape of paid-up 
 shares are the vendors, if any, to get ? Suppose the company is to 
 be formed to acquire a going concern, and that the price to be 
 paid therefor is 50,000/. in paid-up shares, and 50,000/. in cash, and 
 that the company besides will want a working capital of 20,000/. 
 This makes a total of 120,000/. Then, in addition to this, it may 
 be desirable to have some shares in reserve, which can be issued as 
 and when the company wants further capital, so that, in such case, the 
 capital may properly be fixed at, say, 130,000/., or 150,000/. Or to take 
 another case : the purchase consideration may be 300,000/., to be paid, 
 as to 200,000/., in cash, and as to 100,000/. in paid-up ordinary shares, 
 and the company may determine to raise the cash part of the considera- 
 tion by the issue of 100,000/. of debentures and 100,000/. of preference 
 shares. In such a case the capital will be, say, 200,000/., or, with an 
 addition for working capital, 250,000/. In a case where the company 
 is not proposing to buy any existing concern or property, but to start 
 a fresh business, the question will simply be, What sum will it cost 
 to start the new concern and to provide sufficient working capital ? and 
 the nominal capital will be fixed accordingly. 
 
 As regards the amount of the shares, this is again for the promoters 
 to determine. 1/. shares are very common. So are 51. shares and 
 10/. shares. Occasionally the shares are fixed as low as Is. each, or 5s. 
 each, and everyone is familiar with the 2s. shares of the Incandescent 
 Gas Light Company, Limited, which went up in the market to 70/. or 
 80/. each. Shares have been fixed as high as 1,000/., or even 5,000/. 
 each. When the original capital is divided into several classes of 
 shares, the amount of the different classes often varies. Some may 
 be 10/. each, some 5/. each; some 1/. each and others Is. each. All 
 these are matters which have to be thought out, with reference to 
 the special requirements of the company, by those who are interested 
 in its formation and fortunes. 
 
 It is not unusual to divide the shares in the original capital into two 
 or more classes, e.g., preference shares and ordinary shares, or prefer- 
 ence shares and A. ordinary shares and B. ordinary shares, or ordinary 
 shares and deferred shares, or preference shares, ordinary shares, and 
 founders’ shares ; and various special rights, privileges, and conditions 
 are attached to such shares. As regards preference shares and 
 founders’ shares, it is very common to declare these rights, privileges, 
 and conditions by express provision in the memorandum of association, 
 for by so doing, extra protection is secured to the holders of such 
 shares against any alteration of their status. See further as to classes 
 of share capital, p. 87. It is not, however, essential in a memorandum 
 of association to specify the rights attached to each class, or, indeed, to 
 
 p. 3 
 
 Amount of 
 shares. 
 
 Classes of 
 shares. 
 
34 
 
 MEMORANDUM OF ASSOCIATION. 
 
 Conditions 
 and provi- 
 sions gene- 
 
 disclose the fact that it is intended to divide the capital into different 
 classes of shares, for all this can be done — and more properly done — 
 by the articles of association of the company. Thus the memorandum 
 may state that the capital is 100,000/. in 1/. shares, and the articles 
 may state that of the shares in the capital 50,000 shall be preference, 
 with specified rights attached, and 50,000 shall be ordinary shares. 
 
 Other Provisions. 
 
 These are the five leading provisions or conditions in the memo- 
 randum of association of a company limited by shares, and they are the 
 
 rally in ^ only provisions which the Act of Parliament requires to be stated 
 of association, therein, but occasionally additional provisions are inserted, clauses, 
 for example, defining the rights attached, as above mentioned, to 
 
 
 different classes of shares, rights as regards dividend, voting, and 
 participation in assets on a winding-up, and various other matters. 
 There is nothing illegal in the insertion in the memorandum of such 
 additional provisions, but it must be borne in mind that, if inserted 
 without qualification, they become conditions of the company’s con- 
 stitution within the meaning of sect. 7 of the Act of 1908, substituted 
 for sect. 12 of the Act of 1862, and the rule is that such a condition 
 cannot be altered, and that nothing can be done in contravention 
 thereof — a conclusion of law which may prove embarrassing to the 
 company. See Ashbury v. Watson, 30 0. D. 376. 
 
 If, however, the memorandum qualifies the provisions, e.g ., by 
 giving power to alter th«m, that power may be exercised. Welsbach 
 Incandescent Gas Co., (1904) 1 Ch. 87. But it is open to argument 
 that sect. 45 impliedly nullifies, as to companies formed after 1st April, 
 1909, a power to alter the memorandum as to reorganisation of 
 capital by consolidation or subdivision of classes of shares. (See 
 further, p. 100, infra.) 
 
 Association 
 
 clause. 
 
 Association Clause. 
 
 The memorandum of association of a company limited by shares 
 concludes with what is commonly referred to as the association clause 
 (see Third Schedule to the Act, Appendix, infra), whereby the sub- 
 scribers declare that they desire to be formed into a company, and 
 agree to take shares, and the clause is followed by a tabular form in 
 which the names, addresses, and descriptions of the subscribers, and 
 the number of shares taken by each, appear. 
 
 Subscription 
 of memo- 
 randum. 
 
 Subscription of Memorandum. 
 
 This is provided for by sect. 6. Auyone may be a subscriber. A 
 married woman may be a subscriber : so may a bankrupt, an alien 
 
SUBSCRIPTION OF MEMORANDUM. 
 
 Ch. III. 
 
 35 
 
 ( Princess of Rcuss v. Bos (1871), L. R. 5 H. L. 176), or an infant 
 (Be Laxon 8f Co. (No. 2) (1893), (1892) 3 Ch. 555), but there is some 
 doubt as to this last point. An incorporated company with the 
 requisite power may be a subscriber, and several persons may jointly 
 be subscribers ; but a firm is not a person, and the individual partners 
 must subscribe. 
 
 A subscriber usually subscribes the memorandum with his own 
 hand ; but he can subscribe by the hand of an agent duly authorized 
 by him (Re Whitley Partners , 32 Ch. D. 337), and the Registrar does 
 not call for evidence of authority if seven subscribe with their own 
 hands. The number of subscribers must be at least seven, except in 
 the case of a “ private” company, but there may be as many more as 
 the promoters think fit. 
 
 In the case of a “ private company” — as defined by sect. 121 — two 
 subscribers are enough. (Sect. 2.) 
 
 Each subscriber must write opposite to his or her name the number 
 of shares he or she takes, and must take one share at least. 
 
 Usually the subscribers each subscribe for one share ; but sometimes 
 they subscribe for a larger number. As to the liability to pay up the 
 shares subscribed for, see pp. 116 — 118. 
 
 If the articles require a qualification, the directors (except in the 
 case of a private company, sect. 72 (3) ) must sign the memorandum 
 for their qualification, unless they sign and file with the Registrar a 
 contract in writing to take the shares from the company and pay for 
 them. (Sect. 72.) 
 
 In subscribing the memorandum of association care must be taken 
 to write clearly. The signature should set out the full name of 
 the subscriber, and should be followed by the subscriber’s address, 
 clearly written, and sufficiently explicit, and also by words denoting 
 his occupation, or, if he has none, stating the fact. Thus the term 
 “broker” should be qualified by stating what sort of broker. “Clerk” 
 also should be qualified ; but it is not necessary to state to whom the 
 subscriber is clerk. It is sufficient to say, for example, “clerk to a 
 public company.” 
 
 Attention to such details as these is necessary, otherwise when the 
 document comes before the Registrar of Companies he may refer 
 it back, on the ground that he cannot read the signatures, or that 
 some of the requisite particulars are not clearly expressed. It is 
 his duty to see that the requirements of the Act of Parliament are 
 complied with, and that the documents are in order. Peel's case , 2 
 Ch. 682. 
 
 As regards the witnesses to the signatures of the subscribers, one Witnesses, 
 witness for all the signatures will suffice, and, in that case, the words 
 •“ Witness to the above signatures” will be used; but sometimes the 
 
 3 ( 2 ) 
 
36 
 
 MEMORANDUM OF ASSOCIATION. 
 
 same witness cannot attest all the signatures, and in that case the* 
 attestation clause must be altered. It may run thus : — 
 
 Witness to the above signatures other than that of A. B., 
 
 , or, 
 
 Witness to the signatures of the above A., B. and C., 
 
 Witness to the signatures of the above D., E., F. and GK, 
 
 The witness or witnesses must in each case give his or their address.. 
 This also should be clearly written and sufficiently explicit for identifi- 
 cation. One of the subscribers cannot witness and attest the signature 
 of another of the subscribers. 
 
 A subscriber to the memorandum cannot, after the registration of 
 the company, repudiate his subscription on the ground that he was. 
 induced to sign by misrepresentation. Metal Constituents , Limited 9 , 
 Lord Lurgan's case , (1902) 1 Ch. 707. 
 
Ch. IV. 
 
 37 
 
 CHAPTER IV. 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 As already mentioned, the memorandum of association, when taken When articles 
 in for registration, may (and in some cases must (see Appendix)) be 1 * e( l u ir e d* 
 accompanied by articles of association (sect. 10 of the Act) containing 
 regulations for the management of the affairs of the company. 
 
 Form and Subscription. 
 
 The articles are to be expressed in separate paragraphs numbered Form and 
 arithmetically, and they may adopt any of the provisions contained in subscription. 
 Table A. See Appendix. If no articles are so registered, the articles Table A * 
 contained in Table A., so far as the same are applicable, are to apply 
 to the company. (Sect. 11.) 
 
 In most cases a full set of articles is taken in for registration. In a 
 good many cases a short set of articles only is registered making a few 
 alterations in Table A., and supplementing it to some extent, and in a 
 considerable number of cases Table A. is left to operate without 
 alteration. 
 
 The articles, if any, must be printed, must bear the same stamp as Printing, 
 a deed (10s.), and must be signed by the subscribers to the memorandum 
 of association. Each subscriber must sign in the presence of a witness, 
 who must attest the signature. (Sect. 12.) See Appendix (First 
 Schedule to Act of 1908). As in the case of the memorandum, the 
 signature may be under the signatory’s own hand or that of his duly 
 authorized agent : p. 35. One of the subscribers cannot attest the 
 signature of another. 
 
 Copies. 
 
 Each member of the company is entitled to a copy of the memorandum 
 and articles (sect. 18) on payment of a shilling. 
 
 Where articles have been registered a copy of every special resolu- 
 tion for the time being in force is to be annexed to or embodied in 
 every copy of the articles of association that may be issued after the 
 passing of such special resolution ; and where no articles have been 
 registered a copy of any such special resolution is to be forwarded in 
 
38 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 print to any member requesting the same on payment of Is. or such 
 less sum as the company may direct. (Sect. 70.) There is a penalty 
 for default. 
 
 Articles. 
 
 Meaning in the Act of 1908 of the term “ Articles.” 
 
 The expression “Articles” is frequently used in the Act of 1908, 
 and in sect. 285 thereof it is specially defined. See supra , p. 14. 
 
 The expression “Articles” thus takes the place of the expression 
 “ the regulations ” heretofore commonly used in a similar sense in the 
 Companies Acts, 1862 to 1907. See, for example, sects. 12 and 50 of 
 the Act of 1862 ; sects. 9 and 21 of the Act of 1867 ; sects. 3 and 13 of 
 the Act of 1900. 
 
 The memo- 
 randum the 
 dominant 
 instrument. 
 
 Relation of the Articles to the Memorandum. 
 
 The articles of a company are subordinate to and controlled by 
 the memorandum of association, which is the dominant instrument. 
 The memorandum contains the conditions upon which alone the com- 
 pany is granted incorporation — conditions which are fundamental, 
 and with a few exceptions unalterable. The articles are the internal 
 regulations of the company, and over these the members have full 
 control, and may alter them from time to time as they think fit by 
 pursuing the course pointed out in sects. 13 and 69 of the Act ; subject 
 only to this, that they keep within the limits marked out by the 
 memorandum of association and the Acts. 
 
 Ultra vires 
 provisions. 
 
 “ The memorandum is, as it were, the area beyond which the action 
 of the company cannot go ; inside that area the shareholders may make 
 such regulations for their own government as they think fit.” Per 
 Lord Cairns, L. C., Ashbury Rail. Co. v. Riche , L. P. 7 H. L. 670. 
 
 Hence, any articles that go beyond the company’s sphere of action 
 will be inoperative, and anything done under the authority of such 
 articles void and incapable of ratification. 
 
 If, for instance, the articles purport to confer on the company a 
 power to buy its own shares ( Trevor v. Whitworth , 12 App. Cas. 409), 
 or to pay dividends out of capital ( Guinness v. Land Corporation oj 
 Ireland , 22 0. D. 349), or to extend the objects by special resolution 
 {Ashbury v. Riche , supra), or to issue shares at a discount ( Welton v. 
 Saffery , (1897) A. C. 299), or prohibit the members from exercising 
 the statutory right of applying for a winding-up order ( Re Peveril 
 Mines , (1898) 1 Ch. 122), or provide for the application of the profits 
 in a manner which is inconsistent with some provision in the memo- 
 randum of association ( Ashbury v. Watson, 30 C. D. 376), or purport 
 to deprive shareholders who dissent from a scheme of reconstruction 
 
MEMBERS BOUND TO THE COMPANY. 
 
 Ch. IV. 
 
 39 
 
 under sect. 192 of the Act of 1908 (substituted for sect. 161 of the Act 
 of 1862) of their statutory right to be paid out in cash ( Baring Gould 
 v. Sharpington Co., (1899) 2 Ch. 80; Payne v. Cork Co., (1900) 1 Ch. 
 
 308), they are to that extent invalid and ineffectual. 
 
 But though the articles cannot alter or control the memorandum, 
 yet, if there he an ambiguity in the memorandum, the articles regis- 
 tered at the same time may, it has been said, be used to explain it, 
 provided it is not in the objects. See supra, p. 31. 
 
 Binding Force of Articles. 
 
 Sect. 14 of the Act (substituted for sect. 16 of the Act of 1862) Binding 
 enacts that “the memorandum and articles of association shall, when clau8es - 
 registered, bind the company and the members thereof to the same 
 extent as if they respectively had been signed and sealed by each 
 member, and contained a covenant on the part of each member, his 
 heirs, executors, and administrators, to observe all the provisions of the 
 memorandum and of the articles, subject to the provisions of this Act.” 
 
 And, under sect. 11, Table A., so far as applicable, and, under sect. 13, 
 any new regulations adopted by the company are made binding in 
 like manner as if they had been inserted in the original articles. 
 
 Thus, whatever the articles may be, they are binding m the 
 manner, and to the extent, mentioned in sect. 14 of the Act. With 
 regard to that section, it is to be noted that it does not make them abso- 
 lutely binding on the company and the members thereof, but binding 
 as ife ach member had covenanted to conform to such regulations. 
 
 The Members bound to the Company by implied 
 
 Covenant. 
 
 The above section (14) does not say with whom the implied covenant Members’ 
 by the members is to be taken to be made, but it is sufficiently imphed cove- 
 obvious that it is with the company, and, therefore, that the members company, 
 are all bound to the company. See Bradford Bank v. Briggs, 12 App. 
 
 Cas. 29. In that case the articles gave the company a lien on the 
 shares of a member, and it was held that Briggs, the plaintiff 
 in the action, being a member, was to be treated as having 
 covenanted with the company to give it such lien. Lord Black- 
 burn said (p. 33): “His property in the shares was, by virtue of 
 sect. 16 of the Act (the corresponding section of the old Act), bound 
 to the company as much as if he had executed a covenant to the 
 company in the same terms as Article 103.” So, again, in Welton v. 
 
 Saffery, (1897) A. C. 315, Lord Herschell said : “ It is quite true that 
 the articles constitute a contract between each member and the 
 company .” And in Imperial Hydropathic , fyc. Co. v. Hampson, 23 
 
40 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 C. D. 1, Bowen, L. J., said: “We are discussing the rights of 
 
 directors of a statutory corporation created by the Act of 1862, and in 
 such a case we must consider what are the rights of the directors and 
 shareholders, for the articles of association by sect. 16 are to bind all 
 the company and all the shareholders as much as if they had put 
 their seals to them.” That this is the true construction follows from 
 the many decisions in which it has been held that the company is 
 entitled to sue its members for the enforcement, and to restrain the 
 breach by them of its articles, and to treat as irregular anything 
 which is done in contravention thereof. Macdougall v. Gardiner , 1 
 C. D. 13; Pender v. Lushington , 6 C. D. 70; Imperial Hydropathic Co. 
 v. Hampson , 23 0. D. 1 ; Harben v. Phillips , ibid. 15. 
 
 "Whether 
 implied 
 covenant 
 inter se. 
 
 How far binding* between Members. 
 
 In Eley v. Positive , (See. Co., 1 Ex. Div. 88, where the articles pro- 
 vided that the plaintiff should be solicitor to the company, Lord Cairns 
 said: “ They (the articles) are an agreement inter socios, and in that 
 view, when the introductory words are applied to Article 118, it 
 becomes a covenant between the parties that they will employ the 
 plaintiff.” See also Browne v. La Trinidad , 37 C. D. 1. So in Imperial 
 Hydropathic Co. v. Hampson, 23 C. I). 1, Cotton, L. J., said that the 
 articles* “ under the Act are a contract between the shareholders to 
 comply with the regulations in them.” And Stirling, J., in Wood v. 
 Odessa Waterworks Co., 42 C. D. 636, said: “The articles of associa- 
 tion constitute a contract not merely between the shareholders and the 
 company, but between each individual shareholder and every other.” 
 See also Pulbrook v. Richmond, Sfc. Co., 9 C. D. 610 ; and Bainbridge v. 
 Smith, 41 C. D. 475, in which it was held that a director being a 
 member was entitled to an injunction against his co-directors restrain- 
 ing them from improperly excluding him from board meetings. 
 Nevertheless there is some reason to doubt whether this is really the 
 effect of the articles, and Lord Herschell in Welton v. Saffery, (1897) 
 A. C. at p. 315, stated the position in language somewhat different, 
 but .substantially to the same effect. “It is quite true,” he said, 
 “that the articles constitute a contract between each member and the 
 company, and that there is no contract in terms between the individual 
 members of the company ; but the articles do none the less, in my opinion, 
 regulate their rights inter se .” And this accords with the well-established 
 principle that it is for the company, save in exceptional cases, to sue for 
 a breach of the articles. Macdougall v . Gardiner, 1 C. I). 13 ; Foss v. 
 Hurbtittle, 2 Hare, 461; Burland v. Earle, (1902) A. C. 83. And as to 
 enforcing provisions in the articles for referring disputes to arbitra- 
 tion, see Hickman v. Kent or Romney Marsh Association, (1915) 1 Oh. 
 881. 
 
HOW FAR BINDING ON COMPANY. 
 
 Ch. IV. 
 
 41 
 
 How far binding on the Company. 
 
 First, in relation to an outsider, do the articles bind the company? Whether 
 The answer clearly is no. A provision in the articles in favour of 
 an outsider, e.g., with a promoter, that the preliminary expenses shall i n whose 
 be paid by the company, gives to the promoter no right of action fav0U1 ’- 
 against the company. Re Rotherham Chemical Co., 25 C. D. 103 ; Melhado 
 v. Porto Alegre Co., L. R. 9 C. P. 503. In this respect the articles 
 of a company differ from an Act of Parliament. Such a provision 
 in an Act of Parliament imposes on the company a statutory duty 
 towards the promoter, and confers on the promoter a corresponding 
 right of action. Tilson v. Warwick Gas Co., 4 B. & C. 962. 
 
 Secondly, in relation to members. Here the answer is yes. The 
 articles do bind the company. The section (14) says so: “The .... 
 articles shall bind the company and the members thereof to the same 
 extent as if, &c.,” and these words must have effect given to them. It 
 may possibly be urged that they are qualified, and that the company 
 is only bound “as if the members had covenanted,” not as if the 
 members and the compayiy had covenanted, and, therefore, that the 
 company is not bound. But such a construction stultifies the section, 
 and, in effect, strikes out of it the words, that “the articles shall 
 bind the company ,” and in corroboration of this view, there are 
 numerous decisions showing that the company is bound. Thus, in 
 Johnson v. Ly tile's Iron Agency (1877), 5 0. D. 687, an irregular 
 forfeiture of shares was impeached by a member, and set aside by the 
 Court of Appeal on the ground, as James, L. J., said, that the notice 
 prior to forfeiture ‘ 1 did not comply strictly with the provisions of the 
 contract between the company and the shareholders which is contained 
 in the regulations.” So in Crum v. Oakbank Co., 8 A. C. 65, it was 
 held that the plaintiff, a member, was entitled, as against the com- 
 pany, to insist on the observance of the articles as to dividends so 
 long as they stood unaltered. So also in Wood v. Odessa Waterworks 
 Co., 42 C. D. 636, Stirling, J., granted an injunction, at the instance 
 of a member, to restrain the defendant company from contravening the 
 articles. Furthermore, in Burdett v. Standard Exploration Co. (1900), 
 
 16 T. L. R. 112, Cozens-Hardy, J., held that a member was entitled 
 to enforce compliance by the company with a clause in the articles 
 giving him. a right to a share certificate. And see Hickman v. Kent 
 or Romney Marsh Association , (1915) 1 Ch. at p. 897. 
 
 These decisions, however, all deal with cases in which members 
 claimed and sought to enforce or protect rights given them as 
 members of the company. Where rights are by the articles given 
 to members not as such, but in some other capacity ( e.g ., as directors, 
 policy-holders, or otherwise), a member claiming to enforce the 
 
42 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 Cases where 
 company 
 not bound 
 by articles. 
 
 same cannot, it seems, sue on the articles — treating them as a 
 contract by the company with him — he must make out a contract 
 outside the articles. 
 
 Thus, in Eley v. Positive , Sfc. Co., 1 Ex. D. 88, the articles contained a 
 clause providing that A. should be employed for life as solicitor for the 
 company, and should not be removed except for misconduct ; he took 
 office and was so employed for some time, and, whilst so employed, he 
 became a shareholder ; later on the company discontinued his employ- 
 ment ; he, still being a shareholder, sued for breach of contract, and it 
 was held that no action lay. The matter was disposed of rather sum- 
 marily in the Court of Appeal ; Lord Cairns, L. C., delivered the 
 judgment of the Court, and refused the plaintiff relief principally upon 
 the ground that the articles “are an agreement inter socios, and, in that 
 view, if the introductory words are applied to Article 118, it becomes a 
 covenant between the parties to it that they will employ the plaintiff. 
 Now, so far as the plaintiff is concerned, this is res inter alios acta ; 
 the plaintiff is no party to it [ although he ivas a member ]. This article 
 is either a stipulation which is binding on the members, or else 
 a mandate to the directors ; in either case it is a matter between 
 the directors and shareholders, and not between them and the 
 plaintiff.” 
 
 This case was followed in Browne v. La Trinidad , 37 C. D. 1 , where the 
 articles contained a provision that a contract with the plaintiff, made 
 before incorporation, should be adopted by the company, and that it 
 was thereby confirmed, and that the provisions thereof, so far as ap- 
 plicable to the company, should be construed as part of the regulations. 
 Yet it was held that the plaintiff, though a member of the company, 
 had no cause of action against the company on this clause. Lindley, 
 L. J., said: “That, having regard to the construction put upon sect. 16 
 [of 1862] in Eley v. Positive , Sfc. Co., and subsequent cases [ none to be 
 found~\, it must be taken as settled that the contract upon which he 
 (the plaintiff) relies, is not a contract upon which he can maintain any 
 action, either on the common law side or the equity side ” ; adding, 
 “there might have been some difficulty in arriving at that conclusion 
 if it had not been for the authorities, because it happens that this 
 gentleman has had shares allotted to him and is therefore a member.” 
 
 It is not easy to reconcile the rule laid down in these decisions with 
 sect. 16 of the Act of 1862 (now supplanted by sect. 14 of the Act of 
 1908), which expressly provides that the regulations “ shall bind the 
 company and the members thereof,” but they must be taken to have 
 settled the law in this respect. 
 
 It has been suggested that the meaning of the enactment {supra, 
 p. 41) is that the implied covenant is only to bind the members to 
 observe such of the provisions of the articles as concern their rights, 
 
CONSTRUCTIVE NOTICE OF REGULATIONS. Ch. IV. 
 
 43 
 
 privileges, powers and obligations as members. But the section does 
 not contain any such qualification : the implied covenant is to observe 
 “ all the provisions ... of the articles.” 
 
 Finding a difficulty in applying the above rule consistently with 
 justice the Courts have in some cases acted on the footing that a clause 
 in the articles, not dealing with the rights of a member as such, 
 but apparently intended to operate as a contract with him, is to be 
 regarded as the basis of a contract, i.e., as indicating the terms on 
 which the company proposes to contract with him, and that if the 
 parties enter into the relations contemplated by the clause, they are to 
 be treated as having made a contract in the terms of the clause and are 
 bound accordingly. This is illustrated by Swabey v. Port Darwin 
 Gold Co. (1889), 1 Meg. 385. In that case the articles provided for 
 the payment to each director by way of remuneration of a specified 
 sum per annum. By a special resolution, in July, the company reduced 
 this as from the end of the preceding year. The plaintiff thereupon 
 resigned, and sued the company for three months’ remuneration for 
 services prior to the date of his resignation ; and the Court held that 
 he was entitled to recover on the footing of an implied contract in the 
 terms of the clause. “ The articles,” said Lord Esher, “ do not them- 
 selves form the contract, but from them you get the terms upon which 
 the director is serving.” And this proposition was adopted by 
 Stirling, J., in Re International Cable Co ., 66 L. T. 254 ; and by 
 Wright, J.,* in Ex parte Beckwith, (1898) 1 Ch. 324. Moreover, the 
 principle involved is not confined to members, it extends also to out- 
 siders, e.g ., to persons who take office as directors. Isaacs' case, (1892) 
 2 Ch. 158 ; Salisbury Jones' case , (1894) 3 Ch. 356. And see 
 Pritchard' s case , 8 Ch. 956. The question whether an implied con- 
 tract so entered into is capable of being varied by the company against 
 the will of the other party has not been finally decided. According to 
 Swabey v. Port Darwin Gold Co., supra , it would seem that the 
 contract, at any rate where it relates to service, can be varied by the 
 company as to the future, and this accords with the views expressed 
 in Doman's case, 3 C. D. 21, and in Argus Life Assurance Co., 39 
 C. D. 571. But the contrary was decided in case of an express 
 contract for service in Nelson v. James Nelson Sf Sons, Ltd., (1914) 
 2 K. B. 770 ; and see Punt v. Symons, (1903) 2 Ch. 506 ; Baily v. 
 British Equitable Assurance Co., (1904) 1 Ch. 374 (reversed by the 
 House of Lords, (1906) A. C. 35, on the ground that there was in 
 fact no contract) ; and British Murac Syndicate, Ltd. v. The Alberton 
 Rubber Co., (1915) W. N. 176. 
 
44 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 Notice of 
 regulations. 
 
 Consequences. 
 
 Constructive Notice of Memorandum and Articles. 
 
 Under the Companies Acts the memorandum and articles of 
 association or regulations of a company are registered in a public 
 office and are open for public inspection on payment of a small fee. 
 (Sect. 243, which takes the place of sect. 174 of the Act of 1862.) 
 They are public documents ; and accordingly it is well settled that 
 anyone, whether a shareholder or an outsider, who has dealings with 
 a registered company, must be taken to have notice of the memorandum 
 and articles or other regulations which form the constitution of the 
 company. This principle was fully recognized in regard to registered 
 companies prior to the Act of 1862 {Ernest v. Nicholls, 6 H. L. 0. 401), 
 and was adopted in regard to the companies under the Act of 1862. 
 See Sewell’s case, L. R. 3 Ch. 131 ; Campbell’s case, L. R. 9 Ch. 1, 
 “ Every joint stock company,” said Lord Hatherley in Mahoney v. East 
 Holyford Mining Co., L. R. 7 H. L. 869, “has its memorandum and 
 articles of association . . . open to all who are minded to have any 
 dealings whatsoever with the company, and those who so deal with 
 them must be affected with notice of all that is contained in those two 
 documents.” And what is more, they must be taken not only to have 
 read those documents, but to have understood them according to their 
 proper meaning. Per Jessel, M. R., Griffith v. Paget, 6 C. D. 517 ; 
 Oakbank Oil Co. v. Crum, 8 App. Cas. 71. See also Marshall v. 
 Glamorgan Iron and Coal Co., 7 Eq. 137 ; Barrow Hematite Co., 39 
 0. D. 582 ; Argus Life Co., 39 0. D. 571 ; County of Gloster Bank v. 
 Rudry, Sfc. Co., (1895) 1 Ch. 629 ; Owen and Ashworth’s Claim , (1901) 
 1 Ch. 115. 
 
 This rule of constructive notice entails important consequences, for 
 inasmuch as every one dealing with a company is to be deemed to have 
 notice of its memorandum and articles, it follows that he is fixed with 
 notice of the extent not only of the company’s powers, but of the 
 directors’ powers and of any limitations and restrictions thereon 
 imposed by the articles or other regulations. 
 
 Thus if the articles provide that a bill of exchange to be effective 
 must be signed by two directors, an outsider or anyone dealing with 
 the company must see that it is so signed, otherwise he cannot claim 
 under it. So, too, if the articles provide that the seal of the 
 company is to be affixed in the presence of two directors, who are to 
 sign their names, a person dealing with the company must see that 
 this is done. This is a sufficiently onerous obligation to impose on 
 those who deal with a registered company, but the incidence of the 
 obligation is to some extent lightened by what is known as the 
 
CONSTRUCTIVE NOTICE OF REGULATIONS. Ch. IV. 
 
 45 
 
 Rule in Royal British Bank v. Turquand (6 E. & B. 327). 
 
 This rule is that where a company is regulated by an Act of Parlia- Presumption 
 ruent, general or special, or by a deed of settlement or memorandum of re & ulari ty. 
 and articles registered in some public office, persons dealing with the 
 company are bound to read the Act and registered documents, and to 
 see that the proposed dealing is not inconsistent therewith ; but they 
 are not bound to do more ; they need not inquire into the regularity of 
 the internal proceedings — what Lord Hatherley called u the indoor 
 management.” They are entitled to assume that all is being done regu- 
 larly. See also Mahoney v. East Holyford Rail. Co., L. R. 7 H. L. 869 ; 
 
 Bar gate v. Shortridge, 5 H. L. C. 318 ; In re Land Credit Co. of Ireland, 
 
 L. P. 4 Ch. 469 ; In re County Assurance Co., L. P. 5 Ch. 288 ; Duck v. 
 
 Toiler Galvanizing Co., (1901) 2 K. B. 314. Premier Industrial Bank 
 v. Carlton Co., (1909) 1 K. B. 106, is not easily reconcileable with 
 the rule. 
 
 This rule is based on the principle of convenience, for business could 
 not be carried on if a person dealing with the apparent agents of a 
 company was compelled to call for evidence that all internal regulations 
 had been duly observed. Thus where the articles give power to 
 borrow with the sanction of a general meeting, a lender need not 
 inquire whether such sanction has in fact been obtained. Royal 
 British Bank v. Turquand, ubi supra. He may assume that it has, and 
 if he is acting bond fide he will, even though the sanction has not been 
 obtained, stand in as good a position as if it had been obtained. 
 
 So if there is a managing director, and authority in the articles 
 for the directors to delegate their powers to him, a person dealing 
 with him may assume that he has power to do what he purports to do, 
 provided that it is within the company’s objects. All he has to do is 
 to see that the managing director might have power to do what ho 
 purports to do. That is enough for a person dealing with him bond 
 fide. Bigger staff v. Rowatls Wharf, (1896) 2 Ch. 93. 
 
 So, too, in the case of a mortgagee taking a mortgage from a 
 company which, as far as he can tell, has been duly executed. 
 
 County of Gloster Bank v. Rudry, &fc. Co., (1895) 1 Ch. 633. In that 
 case a person dealing with a company in due course obtained from 
 the company a mortgage under seal signed by two directors and the 
 secretary. The articles contained no special provision as to the execu- 
 tion of such a document, but they provided that the directors should 
 have power to fix a quorum, and that power they had exercised 
 by fixing three as the quorum. In fact, the mortgage had been sealed 
 at an irregular meeting, and no quorum was present. It was held, 
 notwithstanding, that the mortgage was good, for the mortgagee had 
 no means of knowing of this internal irregularity in the management. 
 
46 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 Notice of 
 irregularity. 
 
 So, too, in a similar case, debentures issued under the seal of the 
 company were held to be valid though there had been no meetings 
 or resolutions of the company or the board. Duck v. Tower Galvaniz- 
 ing ('o., (1901) 2 K. B. 314. 
 
 On the same principle, a person dealing with a company is entitled 
 to assume that the directors who carry on its business are directors 
 de jure. It matters not to him that they have not been duly appointed — 
 that is part of the indoor management. Mahoney v. East Holy ford Co., 
 L. R. 7 H. L. 869; Re County Life , 5 Ch. 288. 
 
 But a person dealing with a company who has notice of the irregu- 
 larity cannot claim the benefit of this rule. Thus where directors had 
 only power to borrow in excess of 1,000/. with the assent of a general 
 meeting, and without obtaining such assent had issued debentures for 
 2,500/. to themselves in respect of money lent, it was held, that as 
 they must be taken to have known that the internal regulations had 
 not been complied with, the debentures could only stand good for 
 1,000/. Howard v. Patent Ivory Co., 38 Ch. D. 156. And see Tyne 
 Mutual v. Brown , 74 L. T. 283. Nor does the rule apply, it seems, 
 where requisite signatures are forged. Ruben v. Finyall Consolidated, 
 (1906) A. C. 439. A person dealing with a company must take the 
 articles to be such as appear at the office of the Registrar of Joint Stock 
 Companies to be in force. If the directors propose to do something 
 in excess of their powers thereunder, he is not entitled to assume that 
 their powers have been extended by a special resolution {infra). Irvine 
 v. Union Bank of Australia, 2 App. Cas. 366. 
 
 Clauses in 
 articles. 
 
 Subject-Matter of Articles. 
 
 The matters with which a company’s articles usually deal are — 
 
 (I) the exclusion, or partial exclusion, of Table A. ; (2) the adoption of 
 a preliminary agreement, if any ; (3) the allotment of shares by the 
 directors ; (4) calls and forfeiture for non-payment of calls ; (5) transfer 
 and transmission of shares; (6) increase of capital; (7) reduction 
 of capital ; ^8) borrowing ; (9) general meetings ; (10) directors ; 
 
 (II) dividends and reserve fund ; (12) accounts and audit ; (13) notices; 
 (14) special provisions for winding-up. These various matters will be 
 found dealt with under their respective headings. 
 
 Alteration. 
 
 Alteration of Articles. 
 
 Sect. 13 of the Act gives to a company under the Act power by 
 special resolution, but “subject to the provisions of the Act and to 
 the conditions contained in the memorandum of association,” to alter 
 
ALTERATION OF ARTICLES. 
 
 Ch. IV. 
 
 47 
 
 or add to its articles, and it expressly provides that ‘ ‘ any alteration 
 or addition so made shall be as valid as if originally contained in the 
 articles , and be subject in like manner to alteration by special reso- 
 lution.” Nothing could be wider than the terms of this section. It 
 does not say that the articles for the management or administration of 
 the business may be altered, or that the articles, other than those 
 which form part of the constitution of the company, may be altered ; 
 there is no limitation, except that the power is to be subject to the 
 Act and the memorandum. All or any of the articles (supra, p. 14) 
 may therefore be altered, and a company cannot by a clause 
 in its articles exempt any article from liability to alteration under 
 the section. Walker v. London Tramways Co. (1879), 12 Ch. D. 705; 
 Malleson v. National Insurance Co ., (1894) 1 Ch. 200. And this 
 applies not only as between the company itself and its shareholders 
 (Allen v. Gold Reefs of West Africa , (1900) 1 Ch. 656), but as between 
 the company and an outsider. Punt v. Symons Sf Co., (1903) 2 Ch. 506. 
 
 Sect. 13 of the Act of 1908 is substituted for sect. 50 of the Act of 
 1862, which was to the same effect. 
 
 At an early period, however, in the history of the Act of 1862, a 
 construction was placed by Kindersley, V.-C., on the corresponding 
 section in the Companies Act, 1856, which for many years had the 
 effect of fettering to a large extent the freedom of companies under 
 the Act of 1862. The case was Hutton v. Scarborough Cliff, Sfc. Co., 2 
 Dr. & Sm. 521 (No. 2). The company there was desirous of issuing some 
 of the shares in the original capital as preference shares, but there 
 being no power in its memorandum or articles to do so, the Court held 
 (4 De Gr. J. & S. 672) that it could not be done, and the Vice-Chan- 
 cellor had expressed a doubt whether it could be done by altering the 
 articles. It was then proposed to alter the articles of association so as 
 to enable new shares to be created and issued with a preference 
 attached to them ; but Kindersley, V.-C., held that this again could 
 not be done, as it amounted to an alteration of the constitution of the 
 company, and was, therefore, ultra vires and invalid. 
 
 The learned judge in effect decided that the different articles 
 were to be discriminated, and that there must be excepted from 
 alterability such portions of them as in the opinion of the Court 
 were part of the company’s constitution, and that it was only 
 the articles as to the management and administration of the 
 company which could be altered. Obviously this was unduly 
 narrowing down the words of the section ; nevertheless there was 
 no appeal, and the decision, though it did not escape criticism (see 
 Harrison v. Mexican Rail. Co., 19 Eq. 358), was for years recognized 
 as authoritative. 
 
 Hutton v. 
 Scarborough 
 Cliff Hotel. 
 
 Principle of 
 decision. 
 
48 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 Dissent from 
 the decision. 
 
 Andrews v. 
 Gas Meter Co. 
 
 Hutton v. 
 Scarborough 
 Co. (No. 2) 
 overruled. 
 
 Results. 
 
 Retrospective 
 
 alterations 
 
 allowable. 
 
 At last, however, in British , Sfc. Corporation v. Couper , (1894) A. 0. 
 399, Lord Macnaghten had occasion in the House of Lords to refer to 
 this case, and said : “ It seems to me that the decision was not founded 
 upon a sound view of the Companies Act, 1862, and I respectfully 
 dissent from it.” 
 
 The way was thus prepared for the final demolition of the doctrine 
 by the Court of Appeal in Andrews v. Gas Meter Co., (1897) 1 Ch. 
 361 (C. A.). In that case the original articles contained no power 
 to issue preference shares, but the company, by special resolution, 
 had altered its articles so as to take power, and had issued preference 
 shares accordingly. The Court overruled Hutton v. Scarborough 
 Cliff Hotel Co. (No. 2), ubi supra , and held the alteration effective. 
 The principle on which the case was decided was that although by 
 sect. 8 of the Act [of 1862] a company’s memorandum is to state the 
 amount of the original capital and the number of shares into which it 
 is to be divided, yet that this does not extend to the rights of the 
 shareholders in respect of their shares, and the terms on which 
 additional capital may be raised. These are matters which may be 
 regulated by the articles of association — indeed are more properly 
 so regulated than by the memorandum, and are therefore matters 
 which, unless dealt with in the memorandum, as in Ashbury v. Watson 
 (30 C. D. 376), may be determined by the company from time to time 
 by special resolution pursuant to sect. 50 of the same Act. “ We are 
 of opinion,” said Lindley, L. J., delivering the judgment of the Court, 
 “that the second decision in Hutton v. Scarborough Cliff Hotel Co. 
 [ supra~\ was wrong and ought not to be followed, and that the 
 decision appealed from must be reversed, and the resolutions thereby 
 declared to be ultra vires must be declared intra vires and valid. If, 
 by declining to follow the second decision in the case referred to, 
 we were disturbing titles or embarrassing trade or commerce, wo 
 should treat it as one of those decisions which, though wrong, it would 
 be mischievous to overrule. But such is not the case, and it io 
 desirable from all points of view to remove from companies a fetter 
 which ought never to have been imposed upon them.” 
 
 This decision has been very welcome, not merely because it removes a 
 fetter on the issue of preference shares, but also because it disposes of 
 the notion that the power to alter the articles given by the Act is not 
 to have the full effect which the legislature contemplated. 
 
 In a subsequent case it was argued that the power to alter the 
 articles conferred by sect. 50 of the Act of 1862 (now replaced 
 by sect. 13 of the Act of 1908) did not justify a retrospective 
 alteration, e.g ., the insertion of a lien clause [infra, p. 154) intended 
 to give the company a lien on the shares of members for debts 
 incurred before as well as after the insertion of the clause. The 
 
ALTERATION OF ARTICLES. 
 
 Ch. IV. 
 
 49 
 
 argument if successful would have created the utmost confusion, 
 and would to a great extent have deprived the members of that full 
 control over the articles with which the section was intended to invest 
 them. But it did not prevail, the Court of Appeal holding that the 
 power of altering the articles was not thus to be limited, and that the 
 introduction of a lien clause was valid and effective, though in some 
 senses it operated retrospectively. 
 
 “ The power,” said Lindley, M. R., in that case, “ thus conferred on 
 corporations to alter the regulations is limited only by the provisions 
 contained in the statute and the conditions contained in the company’s 
 memorandum of association. It must be exercised for the benefit of the 
 company as a whole [ sed qu.~\, and it must not be exceeded. These condi- 
 tions are always implied and are seldom if ever expressed. But if they 
 are complied with, I can discover no ground for judicially putting any 
 other restrictions on the power conferred by the section than those 
 contained in it.” Allen v. Gold Reefs of West Africa , (1900) 1 Ch. 656. 
 
 The foregoing decisions are in accordance with the principles of 
 construction applied by the late Lord Justice Chitty in Pepe v. City 
 and Suburban Permanent Building Society , (1893) 2 Ch. 311. In that 
 case the plaintiff, a holder of fully paid-up shares, had under the rules 
 given notice of withdrawal ; afterwards, and before repayment, the 
 society altered the rules by giving the directors power to pay off in 
 priority members holding less than 50 1. in the society. It was held 
 that the alteration was valid though in some sense it took away the 
 vested right of the plaintiff. 
 
 “It was,” said Chitty, J., in that case, “part of the plaintiff’s 
 contract with the society that the rules might be altered, and the power 
 of altering them was wisely framed so as to require not a bare majority 
 but three-fourths of the members to bring about the alteration. . . . 
 The plaintiff’s counsel says rightly that when the plaintiff gave notice 
 of withdrawal he had a vested right to be paid according to the then 
 existing rule, but this does not settle the question, because there 
 existed also against him the power of altering the rule, so that the 
 question assumes this form, that he had a vested right liable to be 
 divested by any later rule they passed. It may be wondered that the 
 society should have such a power, but it may be greatly to the benefit 
 of all concerned to make alterations. And I say also that members 
 place reliance on the sense of justice of the three-fourths majority 
 required to effect the alteration.” 
 
 See also British Equitable Assurance Co. v. Baily, (1906) A. 0. 
 35; Rosenberg v. Northumberland Building Socy., 22 Q,. B. 373; 
 Re Barrow Hematite Co ., 39 C. D. 582 ; Doman's case , 3 C. D. 21 ; 
 Re Argus Co., 39 C. D. 571. In the case last mentioned it was considered 
 that a power in the deed of settlement of a company (not under the 
 
 4 
 
 P. 
 
50 
 
 ARTICLES OF ASSOCIATION OR REGULATIONS. 
 
 Limits to 
 alteration. 
 
 Act of 1862) to alter such deed of settlement was to have full effect, 
 and included even power to insert, by alteration, a clause providing 
 for the sale of the whole undertaking. Re James Colmer, Ltd., 
 (1897) 1 Ch. 524, shows the far-reaching operation of the decision 
 in Andrews v. Gas Meter Co., supra. In Continental Union Gas Co. 
 (1893), 7 T. L. R. 496, it had been held in effect that voting rights 
 were matter of the company’s constitution and unalterable ; but in 
 Re James Colmer , Ltd., Romer, J., held that Hutton v. Scarborough 
 Cliff Co., ubi supra, having been overruled, there was no objection 
 to an alteration of voting rights. 
 
 Nevertheless, a limit must be placed on the general words contained 
 in sect. 1 3 ; and the limit is this, that the section cannot be used to 
 oppress or defraud a minority of shareholders, or so as to violate any 
 statutory provision or principle of law. Peveril Gold Mines, (1898) 
 1 Ch. 122; Payne v. Cork Co., (1900) 1 Ch. 308. The power, in 
 other words, like other powers, must be exercised fairly and 
 according to law. And it is clear from the authorities that any 
 abuse of the statutory power will be restrained. A majority, 
 for instance, will not be permitted by the Court, under colour of 
 the section, to commit a fraud on the minority. Menier v. Hooper's 
 Telegraph Co., L. R. 9 Ch. 350. And see Gray v. Lewis, L. R. 8 Ch. 
 1051; Atwool v. Merryweather, 5 Eq. 464, n. ; Mason v. Harris, 11 
 Ch. D. 97; and Macdougall v. Gardiner, 1 Ch. D. 13; Bur land v. 
 Earle , (1902) A. C. 83; Normandy v. Ind, Coope Sf Co., (1908) 1 Ch. 
 84. And a company will not be allowed to alter its articles in breach 
 of contract with an outsider. Allen v. Gold Reefs, (1900) 1 Ch. at 
 p. 673 ; Baily v. British Equitable, (1904) 1 Ch. 374 ; British Murac 
 Syndicate v. Alberton Rubber Co., (1915) 2 Ch. 186. But short of 
 fraud or oppression, breach of contract, or want of good faith, or con- 
 travention of the statutes on the part of the majority, the statutory 
 power of alteration is subject to no restriction. As Lord Cairns. L. C., 
 said in Ashbury v. Riche , L. R. 7 H. L. 653, 671, “The memorandum 
 is, as it were, the area beyond which the action of the company cannot 
 go ; inside that area the shareholders may make such regulations for 
 their own government as they think fit.” 
 
 Rectification. 
 
 Rectification by Court. 
 
 The Court has no jurisdiction to rectify the articles of association on 
 the ground of mistake, for they have statutory operatiou. Evans v. 
 Chapman , 86 L. T. 381. 
 
Ch. V. 
 
 51 
 
 CHAPTER Y. 
 
 THE CERTIFICATE OF INCORPORATION. 
 
 “ When once,” said Lord Cairns, in Peel's case (1867), 2 Ch. 674, 
 “ the memorandum is registered and the company is held out to the 
 world as a company undertaking business, willing to receive share- 
 holders and ready to contract engagements, then it would be of the 
 most disastrous consequences, if, after all that has been done, any 
 person was allowed to go back and enter into an examination (it might 
 be years after the company had commenced trade) of the circumstances 
 attending the original registration and the regularity of the execution 
 of the document.” Were such a thing permissible, a company’s 
 foundation would be built not on a rock but on sand. The 
 legislature was fully alive to the importance of this, of making the 
 certificate of incorporation — the company’s statutory charter — un- 
 impeachable, and in sect. 1 8 of the Companies Act, 1862, it provided that 
 “ the certificate of incorporation of any company given by the registrar 
 shall be conclusive evidence that all the requisitions of this Act in 
 respect of registration have been complied with.” In relation to this 
 enactment it was long since held that the words “the requisitions of 
 this Act in respect of registration” meant “the requisitions and 
 conditions precedent and incidental to registration,” and, accordingly, 
 that once the certificate of incorporation was given, the company 
 named therein as incorporated was to be taken to be duly and effectu- 
 ally incorporated, and all reference to prior matters was precluded. 
 
 Thus, in Peel's case (1867), 2 Ch. 674, the memorandum of associa- 
 tion had, after signature and before registration, been altered without 
 the privity of the signatories so materially that, in the words of Lord 
 Cairns, “ the alteration entirely neutralised and annihilated the 
 original execution and registration of the document.” The company 
 was, however, registered, and the registrar gave his certificate of 
 incorporation ; subsequently the question arose whether this certificate 
 was conclusive, seeing that according to sect. 6 of the Act the memo- 
 randum before registration has to be subscribed “ by seven or more 
 persons associated for any lawful purpose,” whereas here the signature 
 had been entirely annihilated. Nevertheless, it was held that the 
 
 4 ( 2 ) 
 
52 
 
 CERTIFICATE OF INCORPORATION. 
 
 registrar’s certificate of incorporation was conclusive. “ The certificate 
 of incorporation,” said Lord Cairns, “ is not merely a prima facie 
 answer, but a conclusive answer to such objections, .... when once 
 the certificate of incorporation is given nothing is to be inquired inte 
 as to the regularity of the prior proceedings.” 
 
 And shortly afterwards, Lord Chelmsford, L. C., dealing with the 
 same point in Oakes v. Turquand , L. R. 2 H. L. 325, said : “ I think 
 that the certificate prevents all recurrence to prior matters essential to 
 registration, amongst which is the subscription of a memorandum of 
 association by seven persons, and that it is conclusive that all previous 
 requisitions have been complied with.” 
 
 See also Salomon v. Salomon Sf Co., (1897) A. C. 22. The Court of 
 Appeal there, whilst holding that the defendant company had been 
 formed “ for an illegitimate purpose,” and “for objects not authorized 
 by the Act,” nevertheless held the certificate of incorporation conclusive, 
 although, as we have seen, sect. 6 of the Act of 1862 required that the 
 subscribers should be persons associated together for some “ lawful 
 purpose,” following the view taken by the House of Lords in Princess 
 of ReussY. Bos , L. R. 5 H. L. 193. But no legislation, were it framed, as 
 Lord Herschell said, by a “ committee of archangels,” can escape mis- 
 interpretation ; and in Re A ational Debenture Corporation , (1891) 2 Ch. 
 505, a learned judge refused to treat a certificate of incorporation as 
 conclusive where he found as a fact that the memorandum of association 
 had been subscribed by six persons only instead of seven, thus in effect 
 treating the words “conclusive evidence” as meaning “ prima facie 
 evidence,” although the legislature had significantly used the words 
 “conclusive evidence ” in contradistinction to the words “ prima facie 
 evidence” used by it in sects. 31 and 37 of the same Act. This 
 decision was reversed on appeal on the ground that the evidence 
 did not establish the fact so found. Unfortunately, however, the 
 judges of the Court of Appeal let fall some dicta to the effect that if 
 the judge below had been right as to the facts, his decision would have 
 been correct in point of law. The Court, however, had no power to 
 overrule PeeVs case , and of course these mere dicta could in no way 
 derogate from the authority of the decision in that case. Referring 
 to these dicta , Vaughan Williams, J., in Laxon Sf Co. (2), (1892) 
 3 Ch. 555, said that he did not understand how they could be reconciled 
 with the decision and words of the judgment of Lord Cairns in PeeVs 
 case , ubi supra; and it is to be noted that the Court of Appeal in 
 Salomon v. Salomon Sf Co., as appears above, followed PeeVs case. 
 Further, in Ladies' Dress Association v. Pulbrook, (1900) 2 Q. B. 376, 
 381, where these dicta were relied on, Romer, L. J., whilst holding 
 them not applicable, significantly added that “if it were not so, it 
 might be necessary for us to consider whether these dicta could be 
 
CERTIFICATE OF INCORPORATION. 
 
 Ch. V. 
 
 53 
 
 justified.” The existence of these dicta , however, ill-founded as they 
 were, cast a shadow of uncertainty on the conclusiveness of the certi- 
 ficate. It was also doubtful, from the remarks of Turner, L. J., in Re 
 Northumberland Banking Co., 2 De GL & J. 357, whether the certificate 
 was conclusive, if the company was one not authorized to be registered 
 under the Act. To get rid of these doubts sect. 1 (1) of the Companies 
 Act, 1900, was passed, and it dealt with both points, expressly pro- 
 viding that “ a certificate of incorporation given by the registrar in 
 respect of any association shall be conclusive evidence that all the 
 requisitions of the Companies Acts in respect of registration and 
 matters precedent and incidental thereto have been complied with, and 
 that the association is a company authorized to be registered and duly 
 registered under the Companies Acts.” This section made it clear 
 beyond all cavil that the certificate of incorporation is conclusive, 
 even as Lord Cairns decided in 1867. 
 
 It is now repealed, but is re-enacted in sect. 17 of the Act of 1908. 
 
 Looking to the above decisions and to the words of sect. 17, it is clear 
 that there is no longer any possible ground for questioning the con- 
 clusiveness of certificates of incorporation. Thus, even if the seven 
 signatories to a memorandum were all written by one person, or were 
 all forged, the certificate would be conclusive that the company was 
 duly incorporated. So, too, if the signatories were all infants, the 
 certificate would still be conclusive, whether the remarkable decision 
 in Laxon Sf Co. (2), (1892) 3 Ch. 555, that an infant is a “person” 
 within sect. 6, can or cannot be supported. 
 
 As a safeguard, however, and to secure care in the preparation of 
 documents and in the matters preliminary to registration, the legis- 
 lature has taken the precaution to provide in sect. 17 (2) of the 
 Act of 1908, that a statutory declaration by a solicitor of the High 
 Court, and in Scotland by an enrolled law agent, engaged in the 
 formation of the company, or by a person named in the articles of 
 association as a director or secretary of the company, of compliance 
 with all or any of the said requirements shall be produced to the 
 registrar, and the registrar may accept this declaration as sufficient 
 evidence of compliance. 
 
 The practice now is to require the production of such a statutory 
 declaration upon all applications to register under Part I. of the Act. 
 
 The further question whether a company, once incorporated by As to im- 
 
 registration under the Act of 1862, could by scire facias or otherwise P 630 ^ 11 ? 
 
 ° J J incorporation 
 
 be removed from the register and disincorporated, was touched on b jsci.fa. 
 but not dealt with by the Lord Chancellor in Salomon v. Salomon 
 <$f*Co., (1897) A. C. 22; the point had, however, been previously 
 adjudicated on by the House of Lords in Princess of Reuss v. Bos 
 (1871), L. R. 5 H. L. 176. In that case the question arose as to the 
 
54 
 
 CERTIFICATE OF INCORPORATION. 
 
 regularity of the constitution of a company — “ The General Company 
 for the Promotion of Land Credit, Limd.” All the subscribers to the 
 memorandum of this company were foreigners, and there was no 
 intention to carry on business in England. Neither of these circum- 
 stances affected its validity, but the articles of association contained 
 provisions contrary to the Companies Act, and Lord Hatherley, L. C., 
 said: “All we have to ask ourselves is this, my lords. Has this 
 company come into existence ? Has it been born ? . . . The question 
 is therefore simply whether it has been created. If created, there is 
 no power given in this Act of Parliament, nor in any other Act of 
 Parliament that I am aware of, by which, through any result of a 
 formal application, like an application for scire facias to repeal a 
 charter, the company can be got rid of, unless by winding up ” ; and 
 Lord Cairns said : “ My lords, it might have been a very wise pro- 
 vision of the legislature to say that in a case of this kind — a case 
 where there was an abuse of the Act of Parliament going on ; a case 
 where, if it had been a matter of a royal grant, there would have been 
 what is termed a forfeiture of the franchise by reason of non-user or 
 mis-user : it might have been a very wise thing for the legislature to 
 say that in a case of that kind there should be some peremptory 
 mode of reducing or getting rid of the incorporation and putting an 
 end to a state of things which was an abuse of, or a fraud upon, the Act 
 of Parliament, and which ought not to be allowed to continue. 
 However, the legislature has not thought fit to provide any means in 
 the nature of a process of reduction, in the ordinary sense of the term, 
 for getting rid of an incorporation in any such circumstances.” 
 
 See, also, what was said by Fry, J., in Glover v. Giles (1881), 18 
 Ch. D. 180. 
 
 It is clear from these judicial observations that there was not, under 
 the Companies Acts as the law then stood, any jurisdiction to annul 
 a certificate of incorporation, and the Act of 1908 has introduced no 
 change in this respect. 
 
 The Pegistrar of Companies has, however, jurisdiction under sect. 
 242 of the Act of 1908 to strike the names of companies believed to be 
 defunct off the register, subject to the observance of certain for- 
 malities. If companies so struck off are still carrying on business 
 the Court has power to reinstate them on the register. See In re 
 Outlay Assurance Society , 34 Ch. D. 479 ; Re Langlaagte Proprietary 
 Co. (1912), 28 T. L. P. 529 ; and Company Precedents, Part I., p. 1337. 
 Sect. 242 of the Act takes the place of sect. 7 of the Companies Act, 
 1880, and sect. 26 of the Companies Act, 1900. 
 
Ch. VI. 
 
 55 
 
 CHAPTER VI. 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Company a Legal Persona. 
 
 Upon the issue of the certificate of incorporation, a company regis- Company a 
 tered under the Act of 1908 becomes a body corporate, or in other person, 
 words, a corporation. (Sect. 16.) A corporation, it must be re- 
 membered, is not, like a partnership or a family, a mere collection or 
 aggregation of individual units. It is, in contemplation of law, a person 
 distinct from the members or shareholders who are interested in it — a 
 metaphysical entity — a convenient fiction of law, but with no physical 
 existence. As Lord Selborne said (6r. E. Rail. Co. v. Turner , 8 Ch. 
 
 152) : “ The company is a mere abstraction of law.” “A corporation,” 
 said Cotton, L. J., “is not a mere aggregate of the shareholders.” 
 
 Flitcroft's case , 21 C. L>. 535. “A corporation is a legal persona just 
 as much as an individual.” Per Cave, J., in Re Sheffield, Sfc. Society , 
 
 22 Q. B. D. 476 ; Att.-Gen. v. Smith , (1909) 2 Ch. 524, in which it was 
 held that a company was a person within the Dentists Act, 1878. “ The 
 
 company is at law a different person altogether from the subscribers to 
 the memorandum of association.” Per Lord Macnaghten, Salomon v. 
 
 Salomon Co., (1897) A. C. 22. 
 
 These several statements of the law are cited here because they 
 emphasize the all-important distinction between the company as a 
 body corporate, and the members or shareholders of that body. 
 
 This distinction lies at the root of many of the most perplexing Importance of 
 questions that beset company law. It is a fundamental or cardinal the P rmci P le - 
 distinction — a distinction which must be firmly grasped. Broderip v. 
 
 Salomo?i, (1895) 2 Ch. 323 (C. A.) (reversed by the House of Lords on 
 appeal), is a melancholy instance of the legal quagmire into which the 
 neglect of this principle may conduct even the most learned judges. 
 
 The principle is thrown into very clear relief by contrasting a 
 partnership with an incorporated company. 
 
 Company and Ordinary Partnership distinguished. 
 
 1 . In the case of a partnership the property of the firm belongs to the Companies 
 
 individual members. They are collectively entitled to it, whereas, in ships Stin- 
 
 the case of a company, it belongs to the company, and not to the guished and 
 
 contrasted. 
 
y. 
 
 56 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Re-affirma- 
 tion of the 
 principle. 
 
 Salomon v. 
 Salomon in 
 the House of 
 Lords. 
 
 members. Re George Newman 8f Co. y (1895) 1 Ch. 685 ; Reg. 
 Arnaad , 9 Q. B. 806. 
 
 2. Creditors of a firm are creditors of tbe members of the firm, 
 and on obtaining judgment against the firm can levy execution 
 on the property of the partners in the firm ; whereas, in the case 
 of a company the creditor has no debtor but that abstraction the 
 corporation. Per Cotton, L. J., Flitcr.oft’s case , 21 C. D. 533. The 
 direct remedy of the creditor is solely against the incorporated 
 company (per Lord Cranworth, Oakes v. Turquand , L. R. 2 H. L. 
 357), and judgment against the company gives no right to levy 
 execution against the members. 
 
 3. A member of a firm can dispose of property and incur liabilities, 
 within the scope of the business, to any extent ; whereas a member of 
 a company, as such, has no such power. 
 
 4. In the case of a partnership, restrictions on a member’s authority 
 contained in the partnership contract are of no avail as against out- 
 siders ; whereas, in the case of a company such restrictions are effective, 
 because the public are bound to acquaint themselves with them. 
 Ernest v. Nicholls , 6 H. L. C. 419. 
 
 5. A partner cannot contract with the firm, whereas a member of the 
 company can contract with the company ; for the company is in law a 
 distinct person. 
 
 Elementary as this principle — of the independent corporate existence 
 of a company — may seem to be, it has still — after all the many 
 years’ working of the Companies Acts — been so much misunderstood, 
 and has had to be so elaborately explained and emphasized by the 
 House of Lords in the case of Salomon v. Salomon , (1897) A. C. 22 — 
 above referred to — that it may be well to pause in order to examine 
 briefly that decision. The case was this : One Salomon, a leather 
 merchant, was the owner of a profitable business, and in order to 
 obtain the advantages of limited liability, he being perfectly solvent at 
 the time, determined to convert the business into a private company, 
 see Chapter XXXVI., infra. Of the shares in the capital he himself 
 took 20,000, and his wife and sons and daughter took each, one. No 
 other shares were issued. Salomon received also mortgage debentures 
 to the amount of 10, 000 A in part payment by the company for the 
 business. 
 
 It was the validity of these debentures which was questioned in the 
 action on the ground that the company was a “ one man company ” 
 and a sham, and so Yaughan Williams, J., held, being of opinion that 
 Salomon & Co. was a mere alias for Salomon, and, therefore, that 
 Salomon was bound to pay the unsecured creditors of the company 
 out of his own pocket notwithstanding that his shares had all been 
 fully paid up. 
 
COMPANY AND PARTNERSHIP DISTINGUISHED. Ch. VI. 
 
 57 
 
 This decision the Court of Appeal affirmed but on a somewhat 
 different ground, viz. that the whole scheme was a fraud on the 
 policy of the Act, and that it was never intended by the legislature 
 that a company should consist of one substantial person and six mere 
 dummies devoid of any real interest. There must, the Court was of 
 opinion, be seven bond fide traders associated. This decision caused 
 great anxiety in the commercial world, as well it might, but it was 
 unanimously reversed by the House of Lords, Salomon v. Salomon & Co., 
 
 (1897) A. C. p. 22, on the ground that the only mode of ascertaining 
 the intent and meaning of the Act was to examine its provisions and 
 find what regulations it had imposed as a condition of trading with 
 limited liability, and that the Act said not a syllable as to the seven 
 members being beneficially or substantially interested. 
 
 “ The statute,” said Lord Chancellor Halsbury, “ enacts nothing as to Judgments 
 the extent or degree of interest which may be held by each of the seven, ^rds on Uxe 
 or as to the proportion of interest, or influence, possessed by one or case, 
 the majority of the shareholders over the others.” And Lord Herschell 
 added, “It was said that in the present case, the six shareholders, 
 other than the appellant, were mere dummies, his nominees, and held 
 shares in trust for him. I will assume this was so. In my opinion it 
 makes no difference.” Lord Macnaghten also said : “ There is nothing 
 in the Act requiring that the subscribers to the memorandum should 
 be independent or unconnected, or that they or any of them should 
 take a substantial interest in the undertaking, or that they should 
 have a mind and will of their own, as one of the learned judges 
 seemed to think, or that there should be anything like a balance of 
 power in the constitution of the company.” A serious danger was 
 thus averted and the cardinal principle of corporation law — the 
 independence of the company as a legal persona — was fully vindicated. 
 
 Farrar v. Farrars , Limited , 40 C. D. 395 — 409, affords another illus- Further cases, 
 tration of the rule of independent corporate existence. In that case 
 Lindley, L. J., said : “A sale by a person to a corporation of which he 
 is a member is not, either in form or in substance, a sale by a person 
 to himself. To hold that it is, would be to ignore the principle which 
 lies at the root of the legal idea of a body corporate, and that idea 
 is that the corporate body is distinct from the persons composing it. 
 
 A sale by a member of a corporation to the corporation is in every 
 sense a sale, valid in equity as well as at law.” 
 
 So again in North West Transportation , Sfc. Co. v. Beatty , 12 A. 0. 
 
 589, it was held that a sale of property of the company to one of its 
 members which had been sanctioned by a general meeting, could not 
 be invalidated on the ground that it was carried by the votes of 
 the purchaser. And see Burland v. Earle , (1902) A. C. 83. 
 
58 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Seven mem- 
 bers required. 
 
 Penalty, 
 
 unlimited 
 
 liability. 
 
 What busi- 
 ness may be 
 commenced. 
 
 Restrictions 
 on commence- 
 ment of busi- 
 ness. 
 
 Number of Members necessary to preserve Limited 
 
 Liability. 
 
 It may be convenient here to refer to sect. 115 of the Act of 1908, 
 which provides, “If at any time the number of members of a company 
 is reduced in the case of a private company below two, or in the case 
 of any other company below seven, and it carries on business for more 
 than six months whilst the number is so reduced, every person who is 
 a member of such company during the time that it so carries on business 
 after those six months, and is cognisant of the fact that it is so carrying 
 on business with fewer than two or seven members as the case may be, 
 shall be severally liable for the payment of the whole debts of the 
 company contracted during that time and may be sued for the same 
 without the joinder in the action of any other member.” 
 
 This section is a reproduction, with some necessary variations as to 
 private companies, of sect. 48 of the Companies Act, 1862. 
 
 Having regard to this section, the members of a limited company 
 other than a private company must be careful to keep the number of 
 members up to seven. This is not a difficult thing, even where the 
 number of members is small, for (as appears above, p. 57) a few 
 shares can be transferred to clerks or nominees of the principal share- 
 holders. All that is required is, that there should be seven, or in the 
 case of a private company two, members on the register. 
 
 Commencement of Business. 
 
 Under the Companies Act, 1862, a company was entitled to commence 
 business immediately upon its incorporation : it was, in the words of 
 sect. 18 of that Act, “ capable forthwith of exercising all the functions 
 of an incorporated company.” And this plenary capacity of starting 
 business at once is still permitted to private companies. See sect. 16 
 of the Act of 1908. But as regards other companies, sect. 87 of the 
 Act of 1908 restricts their power to commence business unless and 
 until certain conditions have been complied with. 
 
 The section embodying the restrictions is in the terms following : — 
 
 87. — (1.) A company shall not commence any business or exercise 
 any borrowing powers unless — 
 
 (a) shares held subject to the payment of the whole amount thereof 
 in cash have been allotted to an amount not less in the whole 
 than the minimum [see infra , p. 105] subscription; and 
 
 (b) every director of the company has paid to the company on each 
 of the shares taken or contracted to be taken by him, and for 
 which he is liable to pay in cash, a proportion equal to the 
 proportion payable on application and allotment on the shares 
 
COMMENCEMENT OF BUSINESS. 
 
 Ch. VI. 
 
 59 
 
 offered for public subscription, or in the case of a company 
 which does not issue a prospectus inviting the public to 
 subscribe for its shares on the shares payable in cash ; and 
 
 (c) there has been filed with the registrar of companies a statutory 
 
 declaration by the secretary or one of the directors, in the 
 prescribed form, that the aforesaid conditions have been 
 complied with ; and 
 
 (d) in the case of a company which does not issue a prospectus 
 inviting the public to subscribe for its shares, there has been 
 filed with the registrar of companies a statement in lieu of 
 prospectus. 
 
 (2.) The registrar of companies shall, on the filing of this statutory 
 declaration, certify that the company is entitled to commence business, 
 and that certificate shall be conclusive evidence that the company is 
 so entitled. 
 
 Provided that in the case of a company which does not issue a pro- 
 spectus inviting the public to subscribe for its shares the registrar 
 shall not give such a certificate unless a statement in lieu of a pro- 
 spectus has been filed with him. 
 
 (3.) Any contract made by a company before the date at which it is 
 entitled to commence business shall be provisional only, and shall not 
 be binding on the company until that date, and on that date it shall 
 become binding. 
 
 (4.) Nothing in this section shall prevent the simultaneous offer for 
 subscription of any shares and debentures or the receipt of any money 
 payable on application for debentures. 
 
 (5.) If any company commences business or exercises borrowing 
 powers in contravention of this section, every person who is responsible 
 for the contravention shall, without prejudice to any other liability, be 
 liable to a fine not exceeding fifty pounds for every day during which 
 the contravention continues. 
 
 (6.) Nothing in this section shall apply to a private company or to 
 a company registered before the 1st day of January, 1901, or to a 
 company registered before the 1st day of July, 1908, which does not 
 issue a prospectus inviting the public to subscribe for its shares. 
 
 The duty of the registrar in granting the certificate is purely 
 ministerial. As to the meaning of “ conclusive,” see p. 52 ; and 
 Hadleiyh Castle Gold Mines , (1900) 2 Ch. 419, infra , p. 239. 
 
 The word “provisional” means that the contracts made by a com- 
 pany before the date at which it is entitled to commence business are 
 to be treated as if they contained a provision that they shall not be 
 binding on the company unless and until the company becomes entitled 
 to commence business. Hence, if the company never becomes entitled 
 to commence business a contract entered into by it never becomes 
 
 Contracts 
 
 before 
 
 certificate. 
 
60 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 binding on it, and no one can sue in respect of such contract. In re 
 Otto Electrical Manufacturing Co., Jenkins' Claim, (1906) 2 Ch. 390; 
 Clinton's case, (1908) 2 Ch. 515. 
 
 “Every person responsible for the contravention” would include 
 directors, managers, and other executive officers, possibly the secretary, 
 having regard to sub-sect. 1 (c). Conf. Burton v. Sevan, (1908) 
 2 Ch. 240. 
 
 What is the minimum subscription depends on the provisions of 
 sect. 85 of the Companies Act, 1908. See infra, p. 105. 
 
 As to pre-incorporation contracts and contracts generally by a com- 
 pany, see Contracts, Chap. XXVI., infra. 
 
 Powers of Registered Company. 
 
 A company under the Act of 1908 has the following powers : — 
 
 (1) Power to do whatever it is necessary to do with a view to the 
 
 attainment of the objects (see supra, p. 29) stated in its 
 memorandum, and also whatever may fairly be regarded 
 as incidental to and consequential on the stated objects. 
 
 (2) Power to do whatever else is legally authorized by the other 
 
 clauses of its memorandum. 
 
 (3) Power to do such other things as it is allowed to do by the 
 
 Act of 1908 or by any other statute. 
 
 That the powers of a registered company were dependent on and 
 governed by its stated objects was recognized in an early case decided 
 on the Joint Stock Companies Act, 1856, the immediate forerunner of 
 the Companies Act, 1862. The Act of 1856 contained provisions as 
 to formation almost identical with those subsequently adopted in the 
 Act of 1862. In particular the Act required that the memorandum 
 should state the objects of the proposed company, and it prohibited 
 any alteration of the conditions contained in the memorandum of 
 association. It was in relation to a company formed under this Act 
 that Simpson v. Westminster Palace Hotel, 8 H. L. C. 712, was decided 
 in 1860. In that case the memorandum stated that “the objects for 
 which the company is established are the purchase of leasehold lands 
 in the City of Westminster, the erection, furnishing and maintenance of 
 an hotel thereon, and the carrying on the usual business of an hotel 
 and tavern therein, and the doing all such things as are incidental or 
 otherwise conducive to the attainment of these objects.” The direc- 
 tors, whilst the hotel was in course of being built, agreed to let off for 
 a stipulated period — a few years — a large portion of the building to 
 the head of a Government Department for the business of his office, 
 and evidence was given that such a letting was calculated to be pro- 
 ductive of advantage to the company in its intended business. The 
 case went to the House of Lords, and it was decided that the letting 
 
POWERS OF REGISTERED COMPANY. 
 
 Ch. VI. 
 
 61 
 
 was not ultra vires, on the ground that it was temporary and preli- 
 minary, and conducive to the ultimate object of the whole being 
 devoted to the proper purpose of the hotel. The Lord Chancellor 
 (Lord Campbell), in his opinion, said: “ The funds of a joint stock 
 company established for one undertaking cannot be applied to another. 
 If an attempt to do so is made the act is ultra vires, and although 
 sanctioned by all the directors and by a large majority of the share- 
 holders, any single shareholder has a right to resist it, and a Court of 
 Equity will interpose on his behalf by injunction. A railway com- 
 pany cannot apply its funds to make a line of railway different from 
 that described in the Act by which the company was constituted. A 
 company established for granting fire and life insurances cannot engage 
 in marine insurance. A company established to make a railway and 
 exercise the trade of carriers upon the line from one town in England 
 to another cannot add to it the trade of a steam-packet company ; and 
 no company can ever abandon the business for which it was established 
 
 and undertake another I agree that the case depends upon the 
 
 fair construction of the third clause of the Memorandum of Association. 
 There is a difficulty in saying that the letting of so large a portion of 
 the hotel to the India Board for so long a time is carrying on the usual 
 business of an hotel or tavern therein ; but I conceive that it is in the 
 words of the third clause, ‘ doing a thing otherwise conducive to the 
 attainment of’ the described objects of the undertaking. An hotel 
 to be used as such still remains in the hands of the company. This 
 hotel is larger than any other hotel in England, and in this portion of 
 the building the usual business of an hotel and tavern is to be carried 
 
 on I rely much upon the consideration that the arrangement 
 
 is temporary and preliminary, and conducive to the ultimate object of 
 the whole building being devoted to the proper business of the hotel,” 
 and the other learned lords concurred. 
 
 After the Act of 1862 came into operation this decision was treated 
 as applicable to companies registered under that Act, and as importing 
 that a company so registered was, as regards its powers, substantially 
 in the same position as a railway, water, gas or other company incor- 
 porated for specified purposes or objects, and was not endowed with the 
 general powers of a common law corporation [supra, p. 3). Whether 
 this was the true position of such a company was not, however, finally 
 settled until 1875, when the celebrated case of Ashbury Railway 
 Carriage and Iron Co. v. Riche, L. B-. 7 H. L. 653, was decided by the 
 House of Lords. In that case the objects of the company were “to 
 make and sell, or lend on hire, railway carriages and waggons and all 
 kinds of railway plant, and to carry on the business of mechanical 
 engineers and general contractors ; to purchase, lease, work and sell 
 mines, minerals, lands and buildings ; to purchase and sell, as. 
 
62 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 House of 
 
 Lords’ 
 
 decision. 
 
 G-rounds for 
 decision. 
 
 merchants, timber, coal, metals and other materials ; to buy and sell 
 any such materials on commission or as agents ; to acquire, purchase, 
 hire, construct or erect works or buildings for the purposes of the 
 company ; and to do all such other things as are necessary, contingent, 
 incidental or conducive to all or any of such objects.” 
 
 The company with this memorandum defining its objects had 
 entered into a contract with the plaintiff in relation to the con- 
 struction of a railway in Belgium, and the question raised in 
 the action was, whether that contract was valid. The Exchequer 
 Chamber, affirming the decision of the Court of Exchequer, held 
 that the contract was ultra vires , but in the Exchequer Chamber, 
 L. R. 9 Ex. 249, the judges were evenly divided in opinion. 
 
 Blackburn, J., in his judgment, in which Brett and Grove, JJ., also 
 concurred, was of opinion that the company, being incorporated, was 
 like a chartered or common law corporation endowed with full powers, 
 that, although the Act might have expressly or impliedly cut down 
 these powers it had not in fact done so, and that in the circumstances 
 the contract was only ultra vires the directors, not ultra vires the 
 company, and capable, therefore, of being ratified by the shareholders. 
 
 On appeal, the House of Lords held that the contract was ultra vires the 
 company and therefore altogether void, and that the views put forward 
 by Blackburn, J., and those who concurred with him, were erroneous. 
 
 The view of their Lordships was that a company under the Act of 
 1862 was not to be regarded as a common law corporation endowed 
 with full powers, but as a statutory corporation endowed with limited 
 powers only. Lord Chancellor Cairns, after premising (p. 669) that 
 the subscribers “are to state the objects for which the proposed 
 company is to be established, and that the" existence, the coming into 
 existence of the company, is to be an existence and to be a coming into 
 existence for those objects, and for those objects only,” and after 
 referring to the words at the end of sect. 12, to the effect that “no 
 altera' ion shall be made by any company in the conditions contained 
 in its memorandum of association,” proceeded as follows : — 
 
 “ Now, my Lords, if that is so — if that is the condition upon which 
 the corporation is established — if that is the purpose for which the 
 corporation is established — it is a mode of incorporation which con- 
 tains in it both that which is affirmative and that which is negative. 
 It states affirmatively the ambit and extent of vitality and power 
 which by law are given to the corporation, and it states, if it is 
 necessary so to state, negatively that nothing shall be done beyond 
 that ambit, and that no attempt shall be made to use the corporate 
 life for any other purpose than that whi< h is so specified.” 
 
 “ A statutory corporation,” said Lord Selborne in the same case, 
 “ created by Act of Parliament for a particular purpose, is limited as 
 
POWERS OF REGISTERED COMPANY. 
 
 Ch. VI. 
 
 63 
 
 to all its powers by the purposes of its incorporation, as defined in 
 that Act. The present and all other companies, incorporated by virtue 
 of the Companies Act, 1862, appear to me to be statutory corporations 
 within this principle. The memorandum of association is, under the 
 Act, their fundamental and, except in certain specified particulars, 
 their unalterable law; and they are incorporated only for the objects 
 and purposes expressed in that memorandum. .... I am unable to 
 see any distinction for this purpose between statutory corporations 
 under the Railway Acts and statutory corporations under the Com- 
 panies Act, 1862 I think that contracts for objects and 
 
 purposes foreign to, or inconsistent with, the memorandum of associa- 
 tion are ultra vires of the corporation itself. And it seems to me far 
 more accurate to say that the inability of such companies to make such 
 contracts rests on an original limitation and circumscription of their 
 powers by the law and for the purposes of their incorporation, than 
 that it depends upon some express or implied prohibition making acts 
 unlawful which otherwise they would have had a legal capacity to 
 do.” And all the learned lords were of opinion that, if it were neces- 
 sary to find words of prohibition, the words at the conclusion of sect. 12, 
 to the effect that, “ save as aforesaid, no alteration shall be made in the 
 conditions contained in the memorandum of association,” were suffi- 
 cient, and that in thus prohibiting any alteration of the conditions in 
 the memorandum the Act, in effect, prohibited the doing of anything 
 beyond the objects expressed. They further held, as a corollary from 
 the above, that the contract, being ultra vires , and therefore void in 
 its inception, was incapable of ratification even by the unanimous 
 consent of all the shareholders. 
 
 In a subsequent case ( Att.-Gen . v. Great Eastern Rail. Co., 5 
 App. Cas. 473), the principle laid down in Ashbury v. Riche was 
 again recognized in the House of Lords, but it was in some degree 
 qualified by the rule laid down by Lord Selborne, L. 0., and the 
 other Law Lords, to the effect that the principle was one to be 
 reasonably, and not unreasonably, understood and applied, and that 
 whatever may fairly be regarded as incidental or consequential upon 
 those things which the legislature had authorized (that is, those things 
 specified in the memorandum as objects) ought not, unless expressly 
 prohi fated, to be held by judicial construction to be ultra vires. 
 
 Lastly, in London County Council v. Att.-Gen., (1902) A. C. 165, 
 Lord Halsbury, L. C., referring to Ashbury Railway Carriage Co. v. 
 Riche ami Att.-Gen. v. G. E. Rail. Co., said, “I think now it cannot 
 be doubted that those two cases do constitute the law upon the 
 subject. It is impossible to go behind those two cases. They are 
 now part of the law of this country and we must acquiesce in them 
 whether we like them or not.” 
 
64 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 What powers 
 implied. 
 
 Munition 
 
 work. 
 
 Necessity of 
 amplifying 
 objects 
 clause. 
 
 Specimen 
 clauses: why 
 inserted. 
 
 To apply and illustrate these principles : — 
 
 If a company is formed, for example, “ to buy, sell and deal in 
 coal,” it may, for the purpose of carrying out its objects , not only buy, 
 sell and deal in coal, but may — (1) purchase or take on lease stores ; 
 (2) open shops and agencies; (3) buy and hire trucks, carts, horses; 
 (4) employ labour ; (5) draw and accept bills of exchange ; (6) borrow 
 and give security; (7) incur debts; (8) make contracts for purchase 
 or supply; (9) have a banking account; (10) bring actions and take 
 proceedings; (11) compromise actions and disputes {Bath's case , 
 8 Ch. D. 334); (12) employ agents; (13) pay bonuses and pensions 
 to employes : for these things are fairly incidental to and consequential 
 on the object to “ buy, sell, and deal in coal.” As to pensions and 
 gratuities, see Chap. XLIY., post. 
 
 Such a company may also pay all “ expenses incurred in getting up 
 and registering the company,” and it may pay dividends out of profits, 
 and may provide for payment, even out of capital, of interest on 
 capital paid up in advance of calls, for clauses 17 and 72 of Table A. 
 (substituted for clauses 7 and 55 of the original Table A.) treat such 
 outgoings and expenses as properly dealt with by the articles, and 
 what Table A. authorizes is not to be treated as ultra vires. Lock v. 
 Queensland Mortgage Co ., (1896) A. C. 461. 
 
 By sect. 16 of the Munitions of War Act, 1915, any company has 
 power, notwithstanding anything contained in its memorandum of 
 association, to carry on munition work during the present war. 
 
 Wide as the powers thus vested are, experience has shown that 
 they are not wide enough to cover many of the transactions which 
 are found necessary or convenient in the course of a company’s 
 business, irrespective of the fact already alluded to, that an over- 
 concise statement of objects leaves, in the opinion of business men,, 
 too much to implication of law, thereby necessitating constant resort 
 to legal advice, and also hampering business by the doubts it induces 
 amongst outsiders as to the company’s capacity to engage in a given 
 transaction. See further, supra , p. 30. 
 
 Hence the objects clause of by far the greater number of existing 
 companies is expressed in considerable detail (see p. 31), and specifies, 
 in most cases at any rate, some objects which might be — to a lawyer 
 — implied. 
 
 The following are the clauses most commonly found in memoranda 
 of association : — 
 
 1. A clause authorizing the company to carry on the particular 
 business which it is proposed to carry on, and also to carry on various 
 other businesses which it may probably or possibly be desirable to 
 carry on in conjunction therewith or in lieu thereof. 
 
 The object of this is to avoid the necessity for going to the Court 
 
POWERS OF REGISTERED COMPANY. 
 
 Ch. VI. 
 
 65 
 
 (under sect. 9 of the Act of 1908 (embodying the Companies Memo- 
 randum of Association Act, 1890)) to extend the objects, and also to 
 give the company full freedom for developing its business. 
 
 2. A clause empowering the company to acquire any other business 
 similar to its own, for it is extremely difficult to i triply such a power 
 from the memorandum. Ernest v. Nicholls , 6 H. L. C. 401. 
 
 3 . A clause empowering the company to enter into any agreement 
 for sharing profits, joint adventure, reciprocal concession, or other 
 arrangement of a like nature with other persons or companies 
 carrying on any similar business; for very clear powers are necessary 
 to justifv such transactions. Ex parte British Nation, Sfc. Association , 
 8 Ch. D. 704. 
 
 4. A clause empowering the company to take shares in other 
 companies having similar objects, &c. Such a power is commonly 
 wanted, and not easily implied ( Earned' s Banking Co., 3 Ch. 105 ; 
 Lands Allotment Co., (1894) 1 Ch. 630), but may be implied, r.g , from 
 a clause allowing amalgamation. Re William Thomas Sf Co., (1915) 
 1 Ch. 325. 
 
 5. A clause empowering the company to promote other companies for 
 any purpose calculated to benefit the company. This power, though 
 often required, cannot be implied. Joint Stock Discount Co. v. Broun, 
 8 Eq. 381. 
 
 6. A power generally to acquire property and rights which the 
 company may think necessary or convenient for the purpose of its 
 business. In dealing with outsiders, it is found useful to have an 
 express power like this, and so preclude any question of capacity. 
 
 7. A power to lend money and guarantee the performance of 
 contracts by customers and others. These loan and guarantee trans- 
 actions are constantly called for in business, and yet the power is one 
 not easily implied. 
 
 8. A power to borrow or raise money by the issue of debentures, 
 debenture stock, or otherwise ; for, although a trading company has 
 an implied power to borrow and to give security to a reasonable amount 
 {infra. Chapter XXXI.), it is found in practice highly desirable to 
 ha e an explicit power in the memorandum. Some doubt, too, exists 
 whether debenture stock of a permanent character can be raised without 
 express power. See now, however, sect. 103 of the Act (1908). 
 
 9. A power to draw, make, accept, indorse, discount, and issue 
 promissory notes, bills of exchange, debentures, and other negotiable 
 or transferable instruments. This is very desirable ; for, although 
 a trading company has implied power to make and accept promissory 
 notes and bills of exchange for the purpose of its business (see In re 
 Peruvian Rails. Co., L. R. 2 Ch. 623), the fact that various kinds 
 of companies have been held not to possess any such implied power 
 
 p. 5 
 
66 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Powers of 
 company as 1 
 expenditure. 
 
 clouds the implication with a most inconvenient uncertainty. See 
 Company Precedents, Part I., p. 474. 
 
 10. A power to sell and dispose of the undertaking of the company 
 for shares, debentures, or securities of any other company having 
 objects altogether, or in part, similar to those of this company. This 
 is effective. See Cotton v. Imperial , Sfc. Co ., (1892) 3 Ch. 454 ; Grant 
 v. United Switchback Co., 40 C. D. 135, in which a sale of the under- 
 taking or any part was one of the objects. New Zealand, &c. Co. v. 
 Peacock, (1894) 1 Q. B. 622, in which it was distinctly held by the Court 
 of Appeal that a sale under the power in the memorandum was valid. 
 So too in Foster v. Borax Co., (1901) 1 Ch. 326; and Vivian Sf Co., 
 (1900) 2 Ch. 654. Lindley on Companies, 6th ed., 256. In the 
 absence of an express power like this, a company cannot sell or 
 dispose of its whole business ( Simpson v. Westminster Palace Hotel 
 Co., 8 H. L. C. 712). According, however, to Bisgood v. Henderson' s 
 Transvaal Estates, (1908) 1 Ch. 743, the power to sell for shares 
 cannot be exercised if winding-up and distribution among the share- 
 holders of the proceeds of sale is in contemplation; but this view is 
 commonly considered erroneous. See further infra, p. 427. 
 
 11. A power to apply for an Act of Parliament for any purpose 
 which may seem expedient. Without such an express power a company 
 cannot apply its funds in promoting a Bill to effect any modification 
 in its constitution. Munt v. Shrewsbury, Sfc. Pail. Co., 13 Beav. 1 ; 
 Simpson v. Dennison, 10 Hare, 51 ; Vance Y.East Lancashire Pail. Co., 
 3 K. & J. 50. 
 
 12. A power to sell, improve, manage, develop, exchange, lease, 
 mortgage, dispose of, turn to account, or otherwise deal with, all or 
 any part of the property and rights of the company. Although a 
 trading company has an implied power to deal with its property for 
 the purpose of its business (see In re Patent File Co., L. P. 6 Ch. 83), 
 it is in practice found highly desirable to have express and explicit 
 powers on such matters, and so preclude all question and doubt. See 
 Kingsbury Collieries, (1907) 2 Ch. 259. 
 
 Intra Vires and Ultra Vires Proceedings. 
 
 It is a corollary from the rule in Ashbury v. Riche, ubi supra — 
 that a company’s objects circumscribe its powers — that the funds 
 of a company under the Act can only be applied in carrying 
 out its authorized objects. “ It cannot be questioned,” said Lord 
 Herschell in Trevor v. Whitworth, 12 App. Cas. 414, “since the case 
 of Ashbury v. Piche, that a company cannot employ its funds for the 
 purposes of any transactions which do not come within the objects 
 specified in the memorandum. The capital may, no doubt, be 
 diminished by expenditure upon, and reasonably incidental to, the 
 
INTRA VIRES AND ULTRA VIRES PROCEEDINGS. Ch. VI. 
 
 67 
 
 objects specified. A part of it may be lost in carrying on tbe business 
 operations authorized. Of this all persons trusting the company are 
 aware and take the risk. But I think that they have a right to rely 
 on the capital remaining undiminished by any expenditure outside 
 those limits.” 
 
 The following are some of the cases in which the expenditure of the 
 company’s funds, or the employment of its property, has been held 
 a legitimate expenditure or employment on the objects of the company 
 and therefore intra vires, though not expressly provided for : a company, 
 formed to work a patent, expending its funds in purchasing such patent 
 {Leif child' s case , 1 Eq. 231) ; a company, formed to work mines of which it 
 had acquired a lease, spending money in buying the freehold, including 
 surface ( Johns v. Balfour , 5 T. L. B,. 389) ; a company, being second 
 mortgagee of land in England, paying off the first mortgages in order to 
 prevent foreclosure {Re Sheffield, Sfc. Society v. Aisleivood, 44 C. D. 412); 
 a company, bound to supply boats for a ferry, employing the boats, when 
 not wanted for the ferry, in excursions {Forrest v. Manchester Rail. Co., 
 30 Beav. 40) ; a hotel company letting off temporarily part of its premises 
 not wanted for the purposes of its business {Simpson v. Westminster 
 Palace Hotel Co., 8 H. L. 0. 712) ; a colliery company selling land 
 from time to time when the sale is reasonably necessary {Kingsbury 
 Collieries , (1907) 2 Ch. 259); a company incurring debts for the 
 purpose of its business {Russell v. East Anglian Rail. Co., 3 M. & G. 
 125) ; a company formed to acquire and work a mine, paying fees to a 
 mining expert for a report of the mine to its solicitors and brokers, 
 and for advertisements and printing ( Lydney , Sfc. Co. v. Bird, 33 Ch. 
 D. 85); a company paying its workmen a gratuity {Hampson v. 
 Price's Patent Candle Co., 24 W. R. 754), or granting a pension to 
 an ex-officer or his widow {Henderson v. Bank of Australasia , 
 40 C. D. 170; Hutton v. West Cork Ry. Co., 23 C. D. 672; Cyclists 
 Touring Club v. Hupkinson, (1910) 1 Ch. 179, but the pensioner cannot 
 prove for the pension if the company is wound up, Re Birkbeck 
 Building Society, (1913) 1 Ch. 400), or compromising a bond fide 
 ■dispute {Bath's case, 8C D. 334), or selling its undertaking for shares, 
 where authorized by its memorandum to do so (see supra , p. 66), or paying 
 to a broker a reasonable brokerage for issue of its capital {Metropolitan 
 Coal, Sfc. Co. v. Scrimgeour , (1895; 2 Q. B. 604), or incurring expenses 
 on printing, stamping and sending out proxy papers and circulars to 
 secure the defeat of a resolution which the directors consider adverse 
 to the company’s interest {Peel v. L. N. W. Rail. Co., (1907) 
 1 Ch. 5 ; Campbell v. Australian Mutual, 99 L. T. 3), or, with wide 
 powers of lending, lending money to a servant of the company 
 l Rainford v. James Keith and Blackman Co., (1905) 2 Ch. 147). 
 
 All these have been held intra vires. So it is intra vires for a 
 
 5 ( 2 ) 
 
 Examples of 
 intra vires 
 acts. 
 
CORPORATE EXISTENCE AND POWERS. 
 
 68 
 
 Examples of 
 ultra vires 
 acts. 
 
 trading company to borrow, raise money and give security on its 
 property. General Auction Co., (1891) 3 Ch. 436. 
 
 The following, on the other hand, are a few cases in which trans- 
 actions not expressly authorized have been held ultra vires. 
 
 The application by a company of its funds towards promoting a 
 Bill in Parliament to obtain powers for improving the navigation of 
 a river was held ultra vires, though the prosperity of the company 
 depended materially on the navigation of the river being improved. 
 Munt v. Shreivsbury Rail. Co., 13 Beav. 1. See also Aft.- Gen. v. 
 Manchester Corporation, (1906) 1 Ch. 643, as to acting as carriers in 
 relation to tramways, and Att.-Gen. v. North Eastern Rail. Co., (1906) 
 2 Ch. 675. 
 
 So a railway company (in the absence of a power for the purpose in 
 its constitution) was held incompetent to secure the capital and 
 guarantee the profits of another company about to run steamboats in 
 connection with the line, however beneficial it might be to the railway 
 company. Column v. E. C. Rail. Co., 10 Beav. 1. So, again, where 
 a railway company proposed to subscribe to the Imperial Institute, this 
 was held ultra vires. Tomkinson v. S. E. R., 35 C. D. 675. It is primd 
 facie ultra vires for a railway company to take to working coal mines 
 and dealing in coal for profit. Att.-Gen. v. Great Northern Rail. Co., 1 
 Dr. & Sin. 283. It is ultra vires for a corporation like the London County 
 Council to run omnibuses. L. C. C. v. Att.-Gen., (1902) A. C. 165. 
 
 It is likewise ultra vires for a company, without special power in its 
 constitution, to take over the undertaking of another company ( Ernest 
 v. Nicholls, 6 H. L C. 401), or to enter into a partnership or amalgama- 
 tion arrangement ( British Nation Life, 8 C. D. 704), or to promote 
 another company. Thus, where a company was formed to carry on 
 business as a bill broker and scrivener and to make advances and 
 procure loans and invest in securities, it was held that subscribing for 
 shares in a new company, in order to assist in floating it, was not a 
 bona fide investment, and therefore ultra vires. Joint Stock Discount 
 Co. v. Brown, 8 Eq. 381. It is also ultra vires for a company to pay 
 dividends out of capital. It is now well settled that a company 
 cannot apply its funds in purchasing its own shares ( Trevor v. Whit- 
 uorth, 12 App. Cas. 409); and the same case shows that even an 
 express authority in the memorandum is unavailing to authorize it, 
 the reason being that such a purchase operates as a reduction of 
 capital and can only be effected with the sanction of the Court. 
 British, &cc. Co. v. Couper, (1894) A. C. 339. Fur the same reason it 
 is ultra vires for a company under the Companies Acts to make a 
 present of bonus shares ( Re Eddy stone Co., (1893) 3 Ch. 9), or to 
 issue its shares at a discount, that is to say, on the footing that the 
 holders shall have paid-up shares on payment of less than the nominal 
 
CONSTRUCTION OR INTERPRETATION OF OBJECTS. Ch. VI. 
 
 69 
 
 value of such, shares. Ooregum Co. v. Roper , (1892) A. C. 125 ; 
 
 Welton v. Saffery , (1897) A. C. 299. 
 
 And where a company issues debentures with bonus certificates for 
 payment of an additional sum out of profits it cannot afterward-*, by 
 arrangement, issue paid-up shares in satisfaction of the certificates, 
 feee Bury v. Famatina Development Co., (1910) A. C. 489; Railway 
 Time Tables Co., 68 L. T. 649 ; and Moseley v. KoffyJ'ontein Mines , 
 
 Limited, (1904) 2 Ch. 108. 
 
 Construction or Interpretation of Objects. 
 
 Whether any given transaction is or is not within the powers of a Construction, 
 company is a question of law depending on the construction to be 
 placed on the objects clause of the memorandum of association. “ I 
 agree,” said Lord Chancellor Campbell in Simpson v. Westminster 
 Palace Hotel Co., 8 H. L. C. 7 12, one of the earliest cases in tho House 
 of Lords on the powers of a registered company, “that the case 
 depends upon the fair construction of the third clause of the memo- 
 randum of association.” And so in Riche v. Ashbury Railway Carriage 
 Co., L. R. 7 H. L. 653, the whole case turned, us appears from the 
 opinions of the Lords, on the construction to be placed on the objects 
 clause of the memorandum of association. The transaction in question 
 was held ultra vires because it was not covered by the objects clause. 
 
 Accordingly, if a question arises as to whether a transaction is or is 
 not within the powers of a company to be inferred from its objects, 
 one must scrutinize the objects clause and ascertain its meaning, 
 and in doing this the rules which are to be applied to its inter- 
 pretation or construction must be borne in mind. To construe a 
 document is, as Lord Chelmsford said in Scott v. Corporation of 
 Liverpool , 3 De G. & J. 360, nothing more than this : to arrive at 
 the meaning of the parties to the instrument. For this purpose 
 there are certain well-recognized rules which apply to a memo- 
 randum and articles of association, just as much as to any other 
 document. Thus (i) the whole document must be read and considered. 
 
 (ii) The expressed intention is to have effect; we are not to speculate 
 as to what the parties intended, but to ascertain it from the words 
 used, for the expressed meaning is to be taken to indicate the intention. 
 
 (iii) The “golden rule” must be observed, namely, that the gram- 
 matical and ordinary sense of the words is to be adhered to ; unless 
 that would lead to absurdity, or some repugnance or inconsistency 
 with the rest of the instrument, in which case the grammatical and 
 ordinary sense of the words may be modified so as to avoid that 
 absurdity, repugnance or inconsistency, but no further. Gray v. 
 
 Pearson, 6 H. L. C. 106. Where the language is clear and unam- 
 biguous it must have effect, even though in the result it may operate 
 in a capricious and unreasonable manner ; if it is ambiguous the more 
 
70 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 reasonable construction should be adopted, (iv) Popular words are 
 to be taken prima facie to be used in their popular sense, and technical 
 words in their technical sense ; but in each case the prima facie sense 
 may be displaced or qualified by the context, (v) The words used 
 must be read with reference to the subject-matter, secundum subjectam 
 materiam ; the memorandum must be liberally interpreted, ut res may is 
 valeat quam pereat (vi) The ejusdem generis rule, the rule noscitur a 
 sociis , and the maxim expressio unius est exclusio alterius are also, at 
 times, applicable. The case of Riche v. Ashbury Railway Carriage 
 Co ., L. P. 7 H. L. 653 (further referred to supra , p. 61), affords a 
 good instance of the application of the noscitur a sociis construction. 
 In that case it was held, that the words “ general contractors” inserted 
 in one of the clauses were to be taken to refer to the preceding words 
 of the same clause exclusively, and to be restricted accordingly. 
 
 “ The purposes,” said Lord Cairns, L. C., in that case, “ for which 
 a company, established under the Act of 1862, is formed, are always 
 to be looked for in the memorandum of association of the company. 
 According to that memorandum the Ashbury Railway Carriage and 
 Iron Company, Limited, is formed for these objects : ‘ to make and 
 sell, or lend on hire, railway carriages and waggons, and all kinds of 
 railway plant, fittings, machinery, and rolling stock ; to carry on the 
 business of mechanical engineers and general contractors ; to purchase, 
 lease, work and sell mines, minerals, land and buildings ; to purchase 
 and sell, as merchants, timber, coal, metals or other materials, and to 
 buy and sell such materials on commission, or as agents.’ Part of the 
 argument at your Lordships’ Bar was as to the meaning of two of the 
 words used in this part of the memorandum — the words ‘ general 
 contractors.’ My Lords, as it appears to me, upon all ordinary prin- 
 ciples of construction those words must be referred to the part of the 
 sentence which immediately precedes them. The sentence which I 
 have read is divided into four classes of works. First, ‘ to make and 
 sell, or lend on hire, railway carriages and waggons, and all kinds of 
 railway plant, fittings, machinery, and rolling stock.’ That is an 
 object sui generis , and complete in the specification which I have read. 
 The second is, ‘ to carry on the business of mechanical engineers and 
 general contractors.’ That, again, is the specification of an object 
 complete in itself ; and according to the principles of construction, the 
 term ‘ general contractors ’ would be referred to that which goes imme- 
 diately before, and would indicate the making generally of contracts 
 connected with the business of mechanical engineers — such contracts 
 as mechanical engineers are in the habit of making, and are in their 
 business required, or find it convenient to make for the purpose of 
 carrying on their business. The third is, ‘ to purchase, lease, work 
 and sell mines, minerals, land and buildings.’ That is an object 
 pointing to the working and the acquiring of mineral property, 
 
CONSTRUCTION OR INTERPRETATION OF OBJECTS. Ch. VI. 
 
 71 
 
 and the generality of the last two words, ‘ land and buildings,’ 
 is limited by the purpose for which land and buildings are to 
 be acquired, namely, the leasing, working and selling, mines and 
 minerals. The fourth head is, ‘to purchase and sell, as merchants, 
 timber, coal, metals or other materials, and to buy and sell any such 
 materials on commission or as agents.’ That requires no commentary. 
 My Lords, if the term ‘ general contractors ’ were not to be interpreted 
 as I have suggested, the consequence would be that it would stand 
 absolutely without any limit of any kind. It would authorize the 
 making, therefore, of contracts of any and every description ; and the 
 memorandum, in place of specifying a particular kind of business, 
 would virtually point to the carrying on of business of any kind 
 whatever, and would therefore be altogether unmeaning.” Such words 
 as “in or out of the colony ” ( Campbell v. Australian Mutual , Sfc. Society, 
 99 L. T. 3), or “in Mysore and elsewhere ” ( Pedlar v. Road Block Gold 
 Mines , (1905) 2 Ch. at p. 435), have been held not to be restricted by 
 the context, but to be world-wide. 
 
 These well-settled rules of construction have since been supplemented 
 and to some extent modified by a new rule of construction first suggested 
 in Haven Gold Mining Co., 20 C. D. 151, and in German Date Co., 20 
 C. D. 169, and subsequently recognized in Crown Bank, 44 C. D. 634 ; 
 Amalgamated Syndicate, (1897) 2 Ch. 600 ; Coolgardie Gold Mines, 
 76 L. T. 269. 
 
 According to these authorities, where the objects of a company are 
 expressed in a series of paragraphs, the true rule of construction is to 
 seek for the paragraph (commonly the first) which appears to embody 
 the main or dominant object of the company, and all the other para- 
 graphs, however generally expressed, are to be treated as merely 
 ancillary to this main object, and as limited and controlled thereby. 
 
 Assuming that this rule of construction is to be treated as estab- 
 lished, it is, of course, to be borne in mind that, like every other rule 
 of construction, it may be excluded or modified by the contents of the 
 document to be construed, for every rule of construction contains by 
 implication the saving clause “ unless a contrary intention appear by 
 the document.”* Accordingly this “primary object” rule must be 
 applied with caution ; it has only a prima facie application, and it 
 must be seen that there is nothing in the document to exclude or 
 modify it. Pedlar v. Road Block, (1905) 2 Ch. 427 ; 22 T. L. E-. (1906) 
 179; and Butler v. Northern Territories Mines of Australia, 96 L. T. 
 41. Sometimes for this purpose the memorandum declares the 
 intention to be that the objects specified in each paragraph of the 
 clause, or in each of three or four specified paragraphs, shall, except 
 
 * See per Bowen, L. J., in Earl of Jersey v. Guardians of Poor of Neath, 22 Q. B. 
 D. 548. 
 
72 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 General 
 words : 
 thereof. 
 
 where otherwise expressed in such paragraph, be in no wise limited 
 or restricted by reference to or inference from the terms ol any other 
 paragraph or the name of the company. These words are obviously 
 intended to exclude or modify the rule, and the Court is bound to 
 give effect to the intention thus indicated.* 
 
 There are otlmr modes of excluding the rule occasionally adopted. 
 For example, the paragraphs stating the several leading objects of the 
 company sometimes commence with the words ‘‘ as an independent 
 object.” In other cases, the first few paragraphs are expressed in 
 vtry wide general terms, and any special object is made subordinate 
 thereto and is sometimes expressed to be “ without prejudice to the 
 generality of the preceding objects.” See further, as to interpretation, 
 Company Precedents, Part 1 , Chap. VII. 
 
 General Concluding Words. 
 
 The objects clause commonly concludes with the words: “ To do all 
 effect gU( .] 1 0 ther things as are incidental or conducive to the attainment of 
 the above objects or any of them ” : sometimes the words are even 
 wider, e.y ., “ all such other things as the company may think 
 expedient.” The latter words were used in Peruvian Rail. Co. v. 
 Thames Co ., L. R. 2 Cti. 617, and were relied on by Lord Cairns as 
 enlarging the company’s powers, but it seems very doubtful whether 
 they can really add anything to what the law already implies as 
 incidental to the specifically enumerated objects. See Boylan Hall Co ., 
 5 Cli. 356 ; Simpson v. Westminster Palace Hotel Co., 8 H. L. C. 712; 
 Taunton v. Royal Insur. Co , 2 H. & M. 135. 
 
 The operation of such gr-n« ral words should, it seems, be considered 
 to be limited to such things as are naturally conducive to the objects 
 specified, i.e ., doing something bond Jide connected with the objects to 
 be attained and in the ordinary course of business adapted to their 
 attainment. Joint Stock Discount Co. v. Brown , 3 Lq. at p. 150; 
 8 Eq. 381 ; Ashbury v. Riche , L R. 7 H. L. 653 (where the words were 
 “necessary, contingent, incidental, or conducive ”) ; 20 L- T. 361. 
 
 Indefinite objects. 
 
 Sometimes it is contended that when the objects are widely stated 
 there is no sufficient “ statement ” of the objects within the require- 
 
 * Yet, strange to say, in Stephens v. Mysore Reefs Kangwndy M<n ny Co., (19 2) 
 1 Ch. 745. a learned judge disregarded the operation of such words, on the 
 ground that inasmuch as when applied to one particular paragraph they would be 
 nousense, they could not be held to apply to the other twenty-thiee paragraphs. 
 Such a reading offends against the settled prim iples of construction, and cannot, 
 it is apprehended, be maintained. [Possibly the only true limitation of the con- 
 tention in the text is to be found in the dictum of V\ ariington, J., in Pedlar v. Road 
 Block Mines, (190 ) 2 Ch. s39 : “ It is not right to accept a construction which 
 would virtually enable a company to Carry on any business or undertaking of any 
 kind whatever.” — Ed.~\ 
 
company’s responsibility for acts of its agents. Ch. VI. 
 
 ments of the Act, but any objection of the kind is precluded by the 
 certificate of incorporation, which the Act makes conclusive evidence 
 of compliance with the preliminary conditions, one of which is a state- 
 ment of the objects. However, where the objects are ambiguous, that 
 construction should be preferred which brings them within reasonable 
 limits ; but if there is no ambiguity there is no room for restrictive 
 construction. 
 
 Alteration of other Conditions in the Memorandum. 
 
 In Ashbury v. Riche, L. R. 7 H. L. 653, the House of Lords was dealing Rule of ultra 
 primarily with the objects of a company, but the rule there established not 
 
 applies equally to the other conditions contained in the memorandum objects only, 
 of association. Thus the name of the company (clause 1 of the memo- 
 randum) cannot be changed except as provided by sect. 8 of the Act 
 (1908); the situation of the registered office (clause 2 of the memo- 
 randum) can only be altered by special Act of Parliament (but see 
 infra, p. 243) ; and the capital of the company (clause 5 of the 
 memorandum) can only be altered in the manner specified in the Act 
 of 1908, sects. 41 and 46, and, where sect. 45 applies, can only be 
 reorganised in the manner required by that section. 
 
 Protection of Outsiders dealing bona fide. 
 
 These powers and disabilities of a company, as matters of public How rule 
 
 record, everyone is presumed to know, but an outsider dealing affects 
 
 . . 1 . ’ u , outsiders, 
 
 with a registered company m regard to a matter apparently 
 
 within the powers of the company ( e.g ., selling to it property 
 or lending it money) is only bound to look to the memorandum 
 and articles of the company, and if the transaction appears to be 
 within the powers of the company, he may safely proceed ; he is not 
 bound to ascertain that the property or advance is really required for 
 the purposes of the company. If he does not know of any intention to 
 misapply the funds of the company or the money advanced, but acts 
 bond fide in the matter, he is not prejudiced by any such misapplica- 
 tion ( Hatches v. Eastern Counties Rail. Co., 5 H. L. C. 331 ; Re 
 Marseilles , 8fc. Rail. Co., 7 Ch. 161 ; Young v. David Payne Sf Co., 
 
 (1904) 2 Ch. 609) ; nor is he concerned as to any irregularities of 
 internal management. See supra, pp. 44, 45. 
 
 Company’s Responsibility for Acts of its Agents. 
 
 An ingenious perversion of the doctrine of ultra vires has sometimes Acts of agents 
 
 led to its being contended that, inasmuch as the funds of a company company : 
 i i • „ . . r f fraud, torts, 
 
 can be applied only to the promotion of its objects, they cannot be & c . 
 
 applied in making good damage caused by the fraud, or negligence, or 
 
 misconduct of its agents and servants. 
 
74 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Company, 
 when liable. 
 
 Other cases 
 of liability. 
 
 This is a fallacy. There is nothing in the rule of ultra vires which 
 in any way protects a company acting within its legitimate sphere from 
 liability, to the extent of its assets, for the consequences of the acts of 
 its agents, done by them on behalf of the company and in the course of 
 the company’s business. This liability is derived from the ordinary law 
 of principal and agent, and it makes no difference whether the agent’s 
 wrongful act or default takes the form of malice, negligence, nuisance, 
 or fraud. “The objects of the company,” as Lord Cranworth said, in 
 Ranger v. G. W. Rail. Co., 5 H. L. C. 86, “ can only be accomplished 
 by the agency of individuals, and there can be no doubt that, if the 
 agents employed conduct themselves fraudulently, so that if they had 
 been acting for private employers the persons for whom they were 
 acting would have been affected by their fraud, the same principles 
 must prevail when the principal under whom the agent acts is a cor- 
 poration.” See also Barwick v. English Joint Stock Banking Co., L. R. 
 2 Ex. 259 ; and Houlclsworth v. City of Glasgow Bank , 5 App. Cas. 326, 
 where Lord Selborne, referring to the observations of Willes, J., in 
 delivering the judgment of the Exchequer Chamber, in Barwick v. 
 English Joint Stock Banking Co., supra, said : “ The principle on which 
 the company is held liable in such cases has already received full 
 recognition from the House of Lords. It is a principle not of the law 
 of torts, or of fraud or deceit, but of the law of agency, equally 
 applicable whether the agency is for a corporation in a matter within 
 the scope of the corporate powers, or for an individual, and the 
 decisions in all these cases proceed not on the ground of any imputa- 
 tion of vicarious fraud to the principal, but because — as was well put 
 by Mr. Justice Willes in Barwick' s case, L. R. 2 Ex. 259 — ‘With 
 respect to the question whether a principal is answerable for the act of 
 his agent in the course of his master’s business, no sensible distinction 
 can be drawn between the case of fraud and the case of any other 
 wrong.’ ” 
 
 Hence, a corporation may be held liable for negligence ( Mersey 
 Bock Trustees v. Gibb, L. R. 1 H. L. 93 ; Parnaby v. Lancaster Canal , 
 11 Ad. & El. 223; Lagunas Nitrate Co. v. Lagunas Syndicate , (1899) 
 2 Ch. 392, 423"); for trespass ( Maund v. Monmouthshire Canal, 4 M. 
 & Gr. 452); for malicious prosecution ( Abrath v. G. E. Rail. Co., 11 
 App. Cas. 247 ; Edwards v. Midland Rail. Co., 6 Q. B. D. 287 ; 
 Cornford v. Carlton Bank, (1899) 1 Q. B. 392); for libel ( Whit- 
 field v. S. E. Rail. Co., E. B. & E. 122); for assault and battery 
 ( Butler v. Manchester Rail. Co., 21 Q,. B. D. 207); for nuisance ( Rapier 
 v. London Tramways Co., 69 L. T. 361); for fraud {Barwick v. English 
 Joint Stock Bank, L. R. 2 Ex. 259 ; Houldsworth v. City of Glasgow 
 Bank, 5 App. Cas. 317 ; Mackay v. Commercial Bank of New Brunswick, 
 L. R. 5 P. C. 394). It may be indicted or fined for breach of duty 
 imposed by the law. Reg. v. Birmingham Rail. Co., 3 Q. B. 223 ; Reg . 
 
STATUTORY DUTIES. 
 
 Ch. VI. 
 
 v. Tyler Sf Co., (1891) 2 Q. B.588. It may be estopped by the acts of 
 its agents. Burkinshaw v. Nicolls, 3 App. Cas. 1004 ; Bloomenthal v. 
 Ford, (1897) A. 0. 156 ; Rohinson v. Montgomeryshire Brewery Co., 
 (1896) 2 Ch. 841. See Chap. XXY. And finally, it may be 
 held guilty of laches, and bound by acquiescence. Erlanger v. New 
 Sombrero Co., 3 App. Cas. 1218 ; NicoVs case, 29 C. D. 429. For 
 although it may not have eyes and see what is going on, it has agents 
 who can see. Crook v. Corporation of Seaford, 6 Ch. 551. 
 
 The extent of the company’s liability is not limited because its 
 constitution limits the amount of its expenditure. Gallsworthy v. 
 Selby Dam Commissioners, (1892) 1 Q. B. 348 ; United Service Co., 
 L. B. 6 Ch. 212. 
 
 A company can ratify an act which has been done on its behalf 
 without authority, provided the act is not ultra vires. Grant v. 
 Switchback Co., 40 C. D. 135 ; Wilson v. West Hartlepool Co., 2 De Gr. 
 J. & S. 475. 
 
 Statutory Powers independent of Memorandum. 
 
 Besides the powers given to a company by its memorandum of 
 association, it has numerous other supplemental powers expressly 
 given to it by the Companies Act, 1908. Of these the following may 
 be mentioned : — 
 
 1 . Power by sect. 8 to change its name in manner specified. 
 
 2. Power by sect. 13 to alter its articles. See p. 46. 
 
 3. Power by sect. 16 to have a common seal, and see sect. 79 as to 
 official seals for foreign purposes. 
 
 4. Power by sect. 16 to hold lands notwithstanding Mortmain Acts. 
 
 5. Power by sect. 25 to keep a register of members which, 
 by sect. 33, is madejtmmd facie evidence. 
 
 6. Power by sect. 35 to keep a colonial register. See further, 
 p. 129. 
 
 7. Power by sect. 37 to issue share warrants to bearer. 
 
 8. Power by sect. 41 to increase its capital, consolidate its shares, 
 convert shares into stock, and to re-convert stock into shares. 
 
 9. Power by sect. 41 to sub-divide its shares. 
 
 10. Power by sect. 45 to reorganise capital. 
 
 11. Power by sect. 46 to reduce its capital in various ways. 
 
 12. Power by sect. 59 to make part of its uncalled capital incapable 
 of being called up, except in a winding-up. 
 
 13. Power by sect. 76 to contract without seal. See infra, p. 254. 
 
 14. Power by sect. 78 to appoint an attorney to execute deeds, &c. 
 abroad. 
 
 15. Power by sect. 89 to pay, in certain cases, commissions for taking 
 up, underwriting, or placing shares. 
 
 Statutory 
 powers in- 
 dependent of 
 memorandum. 
 
76 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Statutory 
 
 duties. 
 
 Statutory Duties. 
 
 Together with these powers the Act imposes on a company a number 
 of duties and obligations of which the following may be men- 
 tioned. The company must : — 
 
 1. Supply to members on demand printed copies of its memorandum 
 and articles, and of any special resolutions. (Sects. 18 and 70 
 of Act of 1908.) 
 
 2. Keep a register of members at its office (sect. 25) to be open 
 for inspection. (Sect. 30.) 
 
 3. Make annual returns of its members, assets and liabilities, &c. 
 to the Registrar. (Sect. 26.) 
 
 4. Give to the R gistrar notices of increase of capital and consoli- 
 dation of shares, &c. (Sects. 42, 43, and 44.) 
 
 5. Have a registered office (sect. 62), and notify to Registrar situa- 
 tion and change of situation. (Sect. 62.) 
 
 6. Put up the name of the company outside its office and place of 
 business, and insert it in all its business publications, &c. 
 (Sect. 63.) 
 
 7. Hold one general meeting every year within fifteen months of 
 the lust. (Sect. 64.) 
 
 8. If registered after 31st of December, 1900, hold the statutory 
 meeting not less than one month after and not more than three 
 months after it becomes entitled to commence business. (Sect. 65.) 
 
 9. Register special and extraordinary resolutions. (Sect. 70.) 
 
 10. Keep at its registered office a register of its directors or 
 managers, and send a copy to Registrar and notify changes. 
 (See sect. 75.) 
 
 11. File its prospectus (if any) with the Registrar, or statement in 
 lieu thereof. (Sects. 80, 82.) 
 
 12. In issuing a prospectus, comply with sect. 81. 
 
 13. Where sects. 85 and 87 apply, refrain from allotting shares or 
 commencing business until the requirements of those sections 
 have been satisfied. 
 
 14. Make returns of allotments to the Registrar within one month. 
 (Sect. 88.) 
 
 15. File contracts and mate returns where shares are allotted for a 
 consideration other than cash. (Sect. 88.) 
 
 16. State in every balance sheet the amount paid by way of under- 
 writing commission until written off. (Sect. 90.) 
 
 17. Have certificates of shares ready for delivery within two months. 
 (Sect. 92.) 
 
 18. Register with the Registrar of Joint Stock Companies all mort- 
 gages and charges to which sect. 93 applies. 
 
ALTERATION OF OBJECTS. 
 
 Ch. VI. 
 
 71 
 
 19. Keep a register of mortgages and charges open for inspection 
 by shareholders, creditors, and the public. (Sects. 100, 101.) 
 
 ‘20. Comply with sects. 112 and 113 as to audit. 
 
 21. Keep up the number of the members to seven, or in the case of 
 a private company to two. See sect. 115, supra , p. 58. 
 
 Alteration of Objects. 
 
 In keeping a company strictly to the objects defined in its memo- Extension, 
 randum of association the Legislature intended to protect, not only ^ en allow * 
 investors and shareholders, but also the outside public, and more 
 particularly creditors. Per Lord Cairns, Ashbury v. Riche , L. R. 
 
 7 H. L. 667. And in this, it was pursuing a just and beneficial 
 policy. But there was a sensible inconvenience attaching to the 
 unalterability of a company’s memorandum in respect of the objects 
 specified in it. Not, indeed, that the memorandum was ever, strictly 
 speaking, unalterable. It was always possible to alter the objects by 
 special Act of Parliament, and in many cases this was done ; but 
 obtaining a private Act was an expensive and dilatory process. The 
 only other alternative was to reconstruct — a course, again, involving 
 inconvenience and dislocation. This hindrance to the legitimate 
 expansion of a company’s business the Legislature recognized, and in 
 the Companies Memorandum of Association Act, 1890, the provisions The Act of - 
 of which are now embodied in sect. 9 of the Act of 1908, it administered 1890 * 
 a qualified relief, subject to certain simple and easy conditions. This 
 Act provided that a company registered under the Companies Act, 
 
 1862, might by special resolution alter its memorandum with respect 
 to its objects, and empowered the Court to confirm the alteration 
 where it appeared that the alteration was required to enable the 
 company — 
 
 (a) To carry on its business more economically or more efficiently ; or 
 
 (b) To attain its main purpose by new and improved means ; or 
 
 (c) To enlarge or change the local area of its operations ; or 
 
 (d) To carry on some business or businesses which, under existing 
 circumstances, may conveniently or advantageously be combined 
 with the business of the company ; or 
 
 (e) To restrict or abandon any of the objects specified in the memo- 
 
 randum of association or deed of settlement. 
 
 The Act contained various provisions designed for the protection of 
 creditors, including debenture holders, and also of shareholders whose 
 rights may be affected by the proposed alteration. The legislative 
 facilities thus offered to companies for enlarging the scope of their 
 business objects have been largely made use of. 
 
78 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 Instances of 
 companies 
 availing 1 
 themselves o 
 .the Act. 
 
 Thus a considerable number of companies have obtained power to 
 raise money by debentures and perpetual debenture stock. Reversionary 
 Interest Society , (1892) 1 Ch. 615; Law Reversionary Interest Society , 
 May, 1893 ; P. Phipps 8f Co., July, 1897 ; Union Rolling Stock Co., 
 January, 1894 ; In Re Empire Trust , 64 L. T. B,. 221. 
 
 The area of a company’s operations has been enlarged in several 
 cases. Indian Mechanical , Sfc. Co., (1891) 3 Ch. 538; London Joint 
 Stock Bank , November, 1892; R. Bell Sf Co.; Crompton Sf Sons. 
 
 Several banks have largely extended their objects. London and 
 Midland Banking Co., 1891 ; London Joint Stock Bank , November, 
 1892; York City and County Banking Co., 1894; Liverpool and District 
 Banking Co., 1896 ; London and Westminster Bank, 1897. 
 
 Other companies have been enabled to acquire other business 
 concerns of a like nature ( London Joint Stock Bank, November, 1892 ; 
 Norwich Union, 1893; Leicestershire Banking Co., June, 1895), or 
 enter into arrangements for joint working. Tower Company, Limited. 
 
 Investment companies have been allowed to enlarge the scope of 
 their investments {Re Foreign and Colonial Government Trust, (1891) 
 2 Ch. 395; Government Stock Co., (1892) 1 Ch. 597); insurance 
 companies to extend their objects so as to take in cognate businesses 
 {Re Alliance Marine, (1892) 1 Ch.300: National Boiler, (1892) 1 Ch.306); 
 guarantee companies to extend their business to indemnity, burglary, 
 &c. Law Guarantee , 1895 ; British Empire Co., 1897 ; Equity and Law 
 Life, 1897 ; North of England Association, (1900) 1 Ch. 481. In some 
 cases objects have been so extended as to allow the promotion of 
 foreign companies and holding shares in them. Ocean Accident Co., 
 July, 1893 ; Crompton Sons. An unlimited company having neither 
 shares nor capital has been allowed to alter its memorandum. North 
 of England Steamship Insurance Co., In re, (1900) 1 Ch. 481. These 
 are only a few instances out of many alterations sanctioned by the 
 Court under the Act. 
 
 The Court rarely refuses to confirm a resolution for alteration of 
 objects. If the alterations of the objects sanctioned are such as render 
 the name of the company misleading, the Court is in the habit of re- 
 quiring the company’s name to be changed so as to express the altera- 
 tion in its aims or sphere of operations. Foreign and Colonial Government 
 Trust Co., supra; Government Stock Investment Co., (1892) 1 Ch. 597 ; 
 Indian Mechanical , <$fc. Co., supra ; Alliance Insurance, (1892) l Ch. 300 ; 
 National Boiler Insurance Co., (1892) 1 Ch. 306. The Court may also 
 add words to the resolution so as to limit the extended objects. 
 Spiers <$f Pond, W. N. (1895) 135 ; Fleetwood Estate Co., W. N. (1897) 
 20. But in In re Jewish Colonial Trust {Juedische Coloniajbank), 
 (1908) 2 Ch. 287, the Court refused to sanction an alteration involving 
 the abandonment of objects of the company of a fundamental character. 
 
PETITION TO OBTAIN SANCTION OF COURT. Ch. VI. 
 
 79 
 
 and confining them (from a world-wide) to a limited local area. 
 
 And in Re Cyclists Touring Co ., (1907) 1 Ch. 269, the Court refused 
 to sanction an alteration extending the objects of a company formed 
 to cater for, protect and assist cyclists so as to include the catering for 
 and assistance of motorists, the latter being one of the dangers against 
 which cyclists needed protection. In other cases the power which the Adoption of 
 Act contains (sect. 1(1), now sect. 264 of 1908), enabling a company ^ e ™arScles m 
 regulated by deed of settlement to adopt a memorandum and articles, by companies 
 has been exercised. The following are a few instances within the ^ 
 
 writer’s own experience : Birmingham and Midland Bank ; Law Union settlement. 
 and Crown Insurance Co. ; Equity and Law Life Assurance Society ; 
 
 Manchester and District Banking Co.; London and Westminster Bank. 
 
 In Consett Iron Co., (1901) 1 Ch. 236, a learned judge ex- 
 pressed doubts whether the Court has jurisdiction under the Act to 
 sanction an alteration which amounts to a re-writing of the objects 
 in modern form, and accordingly in that case the old objects were 
 left, whilst five times as much matter (in the shape of new objects in 
 modern form) was added. Apparently, therefore, the doubt is confined 
 to the question whether the Court has jurisdiction to sanction an 
 alteration which introduces a series of new objects in modern form 
 instead of the old objects. This question has been answered again and 
 again in the affirmative by the High Court. Thus, Henn Collins, J., 
 in 1891, in the Birmingham and Midland Bank , Limited ; Kekewich, J., 
 in 1893, in the Law Union and Crown Insurance Co., Limited ; 
 
 North, J., in 1894, in the York City and County Bank, Limited ; 
 
 North, J., in 1895, in Leicestershire Banking Co., Limited ; Chitty, 
 
 J., in 1896, in Equity and Law Life Assurance Society; Vaughan 
 Williams, J., in 1896, in the Union Steamship Co., Limited; North, J., 
 in 1897, in the London and Westminster Bank, Limited , and in 
 Wakefield and Barnsley Union Bank, Limited ; Stirling, J., in 1897, in 
 British Plate Glass Co., Limited ; Byrne, J., in 1899, in Halifax Joint 
 Stock Bank, Limited; Farwell, J., in 1901, in Halifax Commercial 
 Banking Co., Limited; and Kekewich, J., in 1901, in Carlisle and 
 Cumberland Banking Co., Limited , sanctioned an alteration which sub- 
 stituted a complete new set of objects in modern form for the old concise 
 and imperfect objects. See also New Westminster Brewery , (1911) 
 
 W. N. 2-47, and Re Anglo-American Telegraph Co., (1911) W. N. 248. 
 
 And it is to be noted that the Act empowers the company by special 
 resolution to “ alter ” its objects and not merely to “ extend ” or “ add 
 to” them. 
 
 Where the company proposed to adopt new powers of unlimited 
 extent the alteration was only permitted subject to modification. Re 
 John Brown, Ltd., (1914) W. N. 434. 
 
 The Act applies to a company formed under the Companies Act, 
 
80 
 
 CORPORATE EXISTENCE AND POWERS. 
 
 How to obtain 
 sanction of 
 Court. 
 
 1856. Copiapo Mining Co., In re, 6 Manson, 320; and see Re Euphrates 
 and Tigris Steam Navigation Co., (1904) 1 Ch. 360. And see sect. 246 
 of the Act of 1908. 
 
 Where a company formed not for purposes of gain, without the 
 word “limited,” desires to alter its objects, it must first submit the 
 proposed alteration to the Board of Trade. St. Hilda's Incorporated 
 College , Cheltenham , (1901) 1 Ch. 556. 
 
 Petition to obtain Sanction of Court. 
 
 The procedure to obtain the sanction of the Court is quite simple. 
 A petition is presented, and, upon summons in chambers, directions 
 are given as to advertising the petition and as to notice to debenture 
 holders (if any) ( Munster and Leinster Bank, In re, (1907) 1 Ir. R. 
 237, M. RA ; and in the course of a short time, generally about a 
 fortnight, the petition comes on again, and the order, if the Court 
 approves, is made. A copy of this order is filed with the Registrar, 
 who gives a certificate, and the transaction is then complete. 
 
 The jurisdiction under the Act is still vested in the judges of the 
 Chancery Division ( Islington Electric Supply Co., 93 L. T. N. 31), but 
 this includes the judge to whom winding-up is assigned. Mining 
 Shares Co., (1893) 2 Ch. 660. As to transfer to the County Court, see 
 Rugeley Gas Co., W. N. (1899) 127. In the case of a company which 
 has been allowed to dispense with the word “limited,” the approval of 
 the Board of Trade should be obtained to the proposed changes.. 
 St. Hilda’s Incorporated College, Cheltenham , (1901) 1 Ch. 556. 
 
 Advertisement of the order will not as a rule be required. Lancaster 
 Banking Co., W. N. (1897) 3. For the Act contains no enactment, 
 corresponding to sect. 51 (3) as regards reduction. 
 
Ch. VII. 
 
 81 
 
 CHAPTER VII. 
 
 CAPITAL. 
 
 Every company limited by shares has a capital. This capital — as 
 one of the essential features in the company’s constitution — is to be 
 mentioned in the memorandum of association, and the capital so 
 mentioned is to be “divided into shares of a certain fixed amount.” 
 (Sect. 8 (1908).) What the amount shall be, and into what shares it 
 shall be divided is left to the subscribers to the memorandum of 
 association to determine; but, when determined, it constitutes one of 
 the fundamental conditions of the company’s constitution (see sect. 7 
 of the Act of 1862), and, accordingly, can only be altered in the 
 manner provided for in the Act. See sects. 41, 45 and 46. 
 
 The capital is usually fixed at some round figure, proportioned to 
 the requirements of the company in the early stages of its existence, 
 e. g., 1,000/., or 20,000/., or 50,000/., or 100,000/., or 500,000/., or 
 1,000,000/. Thus, suppose the company to be formed to acquire a 
 property for 100,000/., to be satisfied as to 50,000/. by paid-up shares, 
 and as to the balance by cash, and that it will want 50,000/. for working 
 capital: the initial capital will, in such cases, be fixed at — say 150,000/. 
 
 As to the amount of the shares, it is usually fixed at 1/., or 51., or 
 10/. Sometimes the amount is less — 10s., 5s., 2s. 6d., or even as low 
 as Is. 
 
 Preference and other special Classes of Shares. 
 
 Not unfrequently, the capital is, by the memorandum and articles of 
 association, divided not only into shares of different amounts, but into 
 different classes of shares with different rights attached to them, e.g ., into 
 preference and ordinary shares or preference, ordinary, and founders’ 
 shares. When this is the case, it is not uncommon to define in the 
 memorandum some of the rights attached to the different classes of 
 shares respectively, or to some one class of them. 
 
 The object of so defining the rights of shareholders in the memo- 
 randum is to fortify the position of the class, for rights once uncon- 
 ditionally attached by the memorandum to a particular class of shares 
 cannot be altered or infringed. Ashbury v. Watson , 30 C. D. 376. 
 That case decided that the specification in the memorandum of the 
 rights attached to a class of shares, is to be regarded, primd facie , 
 as one of the “ conditions” referred to in sect. 12 of the Act of 1862 
 p. 6 
 
 Capital and 
 division into 
 shares of fixed 
 amounts. 
 
 Definition 
 of rights in 
 memorandum. 
 
82 
 
 CAPITAL. 
 
 General 
 clause in me- 
 morandum as 
 to division in 
 classes. 
 
 Memorandum 
 silent, but 
 power in ori- 
 gin al articles. 
 
 Where memo- 
 randum and 
 articles are 
 both silent as 
 to classes of 
 shares. 
 
 Views 
 
 formerly 
 
 prevailing. 
 
 andyn’sect. 7 of the Act of 1908, and, therefore, made unalterable. 
 But if , the rights are only conditionally attached by the memorandum 
 of association, e.g., if though specified therein they are accompanied 
 by a clause in the memorandum providing for alteration, such a speci- 
 fication does not take effect as an unalterable condition : the power 
 to alter contained in the same document is effective. Welsbach Incan- 
 descent Gas Light Co., (1904) 1 Ch. 87 ; and see Underwood v. London 
 Music Hall , Ltd ., (1901) 2 Ch. 309. 
 
 In many — perhaps it would be correct to say in most — cases the 
 form of the clause in the memorandum is to the effect that “the 
 shares in the capital for the time being, whether original or increased, 
 may be divided into several classes with any preferential, special, 
 qualified, or deferred rights, privileges, or conditions attached thereto,” 
 and, in such case, the power to attach preferential rights is clear. 
 
 In other cases, now less common than formerly, the memorandum 
 is wholly silent as to the issue of special classes of shares ; but even in 
 such cases it was long since held that the articles, as originally framed 
 and registered, could effectually divide, or give power to divide, the 
 capital into different classes of shares with preferential and other 
 rights attached. Harrison v. Mexican Rail. Co ., 19 Eq. 358; Re South 
 Durham Brewery Co., 31 C. D. 261. This conclusion was not arrived 
 at without difficulty, for the decisions in Hutton v. Scarborough Cliff. Sfc. 
 Co. ( (1865), 4 De G. J. & S. 672; and (No. 2)2 Dr. & Sm. 521, supra , 
 p. 47), both appeared to point to the conclusion that, where the 
 memorandum of association was silent as to any distinctions between 
 shareholders, there was an implied condition of equality, and, if so, it 
 was not easy to see how (looking to sect. 12 of the Act of 1862 
 (sect. 7 of 1908) ) the articles could modify this condition. However, 
 Jessel, M. R., in Harrison v. Mexican Rail. Co. (19 Eq. 358), held 
 that the articles could for this purpose explain, though they could 
 not contradict, the memorandum, and, although Kay, J., subsequently 
 decided the contrary in Re South Durham Brewery Co. [supra), that 
 decision was reversed on appeal. 
 
 It is, however, not uncommon to find that neither the memorandum 
 nor the articles, as originally framed, give power to issue preference 
 or other special classes of shares. In this case, memorandum and 
 articles being both silent, the following questions sometimes arise : — 
 (1) Can the company issue part of the shares in its original capital 
 with preferential or special rights attached? (2) Can the company 
 issue new shares created upon an increase of capital with preferential 
 or special rights attached ? 
 
 At one time it was generally considered that both these questions 
 must be answered in the negative. 
 
 As to the first question, it was decided by Lord Westbury, L. C., 
 that when both the memorandum and articles were silent as to pre- 
 
PREFERENCE AND OTHER SPECIAL SHARES. Ch. VII. 
 
 83 
 
 ference shares, a company could not issue shares in its original capital 
 as preference shares, at any rate, without altering its articles ; and, 
 further, his Lordship expressed doubt whether even by altering its 
 articles, the power could be obtained ( Hutton v. Scarborough Cliff, Sfc. 
 
 Co., 4 De G. J. & $. 672) ; and the decision of Kindersley, V.-C., in 
 Hutton v. Scarborough Cliff, Sec. Co. (No. 2), 2 Dr. & Sm. 520, 521, went 
 far to confirm this doubt. And as to the second question, it was 
 expressly answered in the negative by the decision of Kindersley, V.-C., 
 in the case last mentioned. 
 
 But this decision has now, as appears above (p. 48), been over- The law as 
 ruled by the Court of Appeal in Andrews v. Gas Meter Co., (1897) uow settled. 
 1 Ch. 361, and, accordingly, the correct answer to the second question 
 is “ yes, by altering its articles so as to take the requisite power.” 
 
 Moreover, the grounds given by the Court of Appeal for this deci- 
 sion go far to show that the same answer should be given to the first 
 question ; for it is now abundantly clear that silence in the memo- 
 randum does not amount to an implied condition of equality as between 
 the shares in the capital. 
 
 Cotton, L. J., in Guinness v. Land Corporation of Ireland , 22 C. D. 
 
 349, 377, said : “In reality it is not by implication from the construc- 
 tion of the memorandum that the equality of the shareholders as 
 regards dividend arises, but by the implication which the law raises as 
 between partners, unless their contract has provided to the contrary.” 
 
 And in a later case ( British Co. v. Couper, (1894) A. C. 399), Lord 
 Macnaghten said: “I agree that the equality of shareholders as 
 regards dividend is not an implied condition of the memorandum ; but 
 I doubt whether it is necessary to have recourse to the doctrine of 
 partnership. It seems to me that if the sum of the interests of persons 
 concerned in a joint venture is divided into shares of equal amount 
 distinguished by numbers for the purpose of identification, but with 
 no other distinction between them, expressed or implied, it follows as 
 a self-evident proposition that the interests of the shareholders in 
 respect of their shares, as regards dividends and everything else, must 
 be equal.” 
 
 And, lastly, Andreivs v. Gas Meter Co., supra, was decided in the 
 . Court of Appeal on grounds which are inconsistent with the proposition 
 that silence gives rise to an implied condition of equality in the 
 memorandum. 
 
 There being, then, no implied and therefore unalterable condition of 
 equality in the memorandum, it follows that an alteration of the 
 articles can give the requisite power to issue part of the original 
 shares as preference shares. This conclusion is not at variance with 
 the decision in Hutton v. Scarborough Cliff Co. (4 De G. J. & S., No. 1, 
 supra), for in that case the company wa3 seeking to issue preference 
 
 6 ( 2 ) 
 
84 
 
 CAPITAL. 
 
 Cumulative 
 and non- 
 cumulative 
 dividends. 
 
 shares, although neither its memorandum nor its articles gave power 
 to issue the same, and although its regulations expressly, in effect, 
 provided that all dividends were to be paid pari passu. It is only 
 contrary to the doubt expressed by Lord Westbury — a doubt which 
 was nothing more than a dictum. As to altering the rights attached 
 to classes of shares, see infra, p. 90. 
 
 Cumulative Dividends. 
 
 In defining the rights of holders of preference shares in regard to- 
 dividends, it is necessary to determine whether a dividend payable ta 
 them is to be cumulative ( i.e ., whether, where the profits of any year 
 are insufficient to pay the preference dividend, the deficiency is to bo 
 made good out of the profits of subsequent years), or is to be non- 
 cumulative (i.e., payable as regards each year out of the profits of that 
 year only). 
 
 Prima facie where the clause defining the preferential rights declares 
 that the preference shares are to be entitled to a preferential dividend 
 at a specified rate per cent., the dividend is cumulative. See Henry v. 
 The Great Northern Co., 1 De Gr. & J. 606 ; Webb v. Earle , 20 Eq. 
 557 ; Foster v. Coles, 22 T. L. B. 555 ; but for clearness the word 
 “ cumulative ” is sometimes inserted in the definition of rights,. 
 e.g., a fixed cumulative preferential dividend, &c. This prevents 
 any mistake. 
 
 If the dividend is to be non-cumulative, the clause must be carefully 
 framed accordingly, e.g., it should say that “the preference shares are 
 to confer the right to receive out of the profits of each year a prefer- 
 ential dividend for such year ” at the specified rate per cent. ; or the 
 definition may declare that the profits of each year available for 
 dividend are to be applied first to the payment of a dividend for such 
 year on the preference shares at the specified rate, and that the 
 surplus shall be applicable to dividend on the other shares. All that 
 is necessary is that it should appear with sufficient clearness that the 
 preferential dividend for each year is to come only out of the profits of 
 that particular year. If this intention is plain, the Court will give 
 effect to it even though imperfectly expressed. Staples v. Eastman 
 Photographic Materials Co., (1896) 2 Ch. 303. In addition to a fixed 
 preferential dividend, preference shares are sometimes given the right 
 to participate in surplus profits. But they have no such right unless, 
 it is expressly given to them by the articles. Will v. United Lankat 
 Plantations, (1914) A. C. 11 ; National Telephone Co., (1914) 1 Ch. 755* 
 
 As to payment of arrears of preference dividend in the winding-up, 
 see Crichton' s Oil Co., (1901) 2 Ch. 184 ; W. J. Hall & Co., (1909) 1 
 Ch. 521 ; Company Precedents, 10th ed., Part I., p. 817. 
 
 These are only some of the special rights and privileges, attached tcv 
 preference shares. 
 
founders’ or deferred shares. Ch. VII. 
 
 Preference as to Capital. 
 
 The right of a preference shareholder is prima facie confined to a preference 
 preferential dividend. Apart from special provisions in the articles, capital, 
 he is not entitled to have his capital on a winding-up paid off in 
 priority to the other shareholders ( London India Rubber Co ., 5 Eq. 
 
 519) ; but he is entitled, after repayment of all the paid up capital, to 
 participate in the surplus assets of the shareholders in proportion to 
 the nominal amount of the shares. Re Bridgwater Navigation Co ., 
 
 14 A. C. 525. 
 
 Preferential rights as to capital may be and often are attached. 
 
 Then the clause runs that the preference shareholders are to be entitled 
 not only to a preferential dividend but to priority as regards capital in 
 the winding-up. If so, the capital paid up on the preference shares in 
 accordance with the clause must, in a winding-up, be paid off out of 
 the surplus assets before the ordinary shareholder can get anything. 
 
 Re Bangor, Sfc. Co., 20 Eq. 59. But the holders of preference shares 
 are not then entitled to participate in any surplus capital. Re National 
 Telephone Co., (1914) 1 Ch. 755 (not following Espuela Land Co., 
 
 (1909) 2 Ch. 187, having regard to the decision of the House of Lords 
 in Will v. United Lankat , (1914) A. C. 11). 
 
 These are the general rules. But the rights of shareholders inter se 
 must of course depend on the true construction of the documents. 
 
 See infra, p. 416. 
 
 Founders’ or Deferred Shares. 
 
 Besides preference and ordinary shares it is not at all uncommon, Founders’ 
 though it is less common than it was, to issue what are called founders’ gh ar e S ^ rre 
 or deferred shares. These shares are usually mentioned in the 
 memorandum of association as part of the capital, e.g ., capital 100,000/., 
 in 100,000 shares of \l. each, whereof 100 shall be founders’ shares. 
 
 When this is the case, the memorandum generally defines the rights 
 attaching to such founders’ shares, e.g., that they shall confer on the 
 holders the right to 10 per cent, of the surplus profits of the company for 
 each year, which remain after paying a cumulative dividend at the 
 rate of 10 per cent, on the capital paid up on all the other shares for the 
 time being issued. This is one very common clause, but the rights 
 attached to founders’ shares vary considerably. Sometimes there are 
 10,000 or more of Is. each, and sometimes it is provided that each 
 shall confer the same right as regards dividend, voting and in a 
 winding up as if it were a fully paid-up ordinary share of 10/. (or 1/.). 
 
 Founders’ shares are mostly subscribed for by the vendors and pro- 
 moters, but they are also sometimes used by way of bonus to attract 
 subscribers for the ordinary or other shares.* 
 
 * Founders’ shares offered as a bonus must not of course be issued without con- 
 sideration or at a discount. 
 
86 
 
 CAPITAL. 
 
 Increase of 
 oapital. 
 
 A prospectus must, under sect. 81, state the number of founders’ 
 or management or deferred shares, if any, and their rights and 
 interests in the property and profits and their voting rights, unless 
 sub- sect. 7 applies. 
 
 Increase of Capital.* 
 
 To increase the capital of a company limited by shares is to alter 
 one of the conditions of its memorandum, but sect 41 of the Act of 
 1908 (which takes the place of sect. 12 of the Act of 1862) empowers 
 a company limited by shares, “if so authorized by its articles,” to 
 alter the conditions of its memorandum so as “to increase its share 
 capital by the issue of new shares of such amount as it thinks 
 expedient.” It is to be noted that the authority to increase may be 
 unlimited and/or limited, and can be exercised from time to time (see 
 sect. 32 of the Interpretation Act, 1889), but the Act does not say how 
 the company may exercise the authority. It is not required that the 
 increase shall be by special resolution, or extraordinary resolution, or 
 by ordinary resolution. It follows that the power can be exercised on 
 the company’s behalf in the manner indicated in its articles, and whether 
 “by special resolution,” or “ by extraordinary resolution,” or “by reso- 
 lution of a general meeting,” or “by resolution of the directors,” or 
 “ by the managing director,” or “by the directors with the sanction of 
 a special resolution” (Table A. of 1862), or “with the sanction of 
 an extraordinary resolution” (Table A. of 1908), or otherwise. See 
 Campbell' s case , 9 Ch. 1. 
 
 In this respect the authority to increase is like the authority to 
 convert shares into stock, or to consolidate shares (sect. 41), or the 
 power to issue share warrants to bearer (sect. 37), or the power 
 to adopt an official seal (sect. 79), or the power to pay interest 
 during construction (sect 91). In all these cases the company can, 
 “if so authorized by its articles,” do the thing authorized in the 
 manner authorized, and whether by special resolution, resolution of 
 the directors or otherwise, and accordingly where the articles provide 
 merely that “ the company may increase its capital,” without saying 
 how, and contain the general clause (Table A., 71) enabling the 
 directors to act generally on the company’s behalf, the directors can 
 exercise the power of increase. Campbell's case, supra. 
 
 The authority to increase is to be contrasted with the authority to 
 reduce (sect. 46), and to sub-divide (sect. 41 (d) ), which authorities can 
 only be exercised by special resolution , and if the articles do not 
 contain the requisite authority they must be amended by special 
 resolution, and then the power has to be exercised by subsequent 
 special resolution. 
 
 * As to control of new issues by the Treasury during the War, see Appendix, 
 p. 632. 
 
INCREASE OF CAPITAL. 
 
 Ch. VII. 
 
 87 
 
 But two successive special resolutions can be passed in three 
 meetings. John Crossley Sf Sons (1892), W. N. 55. 
 
 Where the articles do not contain the requisite authority to increase 
 they should be amended by special resolution inserting the requisite 
 authority. But a short cut may be taken, for in such case if the 
 company passes a special resolution authorizing the creation and issue 
 of the desired new shares, that will in effect not only give the authority 
 to increase required by sect. 41, but uno jlatu enable the directors to 
 exercise that authority. It was so held by a full Court of Appeal in 
 Campbell's case , L. B. 9 Ch. 1 at p. 21 (Lord Selborne, L. C., and James 
 and Mellish, L. JJ.), differing in opinion from the Exchequer Chamber. 
 
 Where the articles of association enabled (clause 53) the company 
 in general meeting to increase its capital, and by special resolution 
 the words “by resolution of the directors” were substituted for the 
 words “ in general meeting,” but the articles also contained a clause 
 headed “ Preference Shares,” authorizing the issue of new shares with 
 preferential or special rights, and generally on such terms as the com- 
 pany by resolution of a general meeting should declare, it was held 
 that notwithstanding the alteration of clause 53, and that the new 
 shares were issued as ordinary shares, clause 59 in effect precluded 
 the directors from issuing the same without the sanction of a general 
 meeting. Mosely v. Kojfyfontein Co ., (1911) A. C. 409. One would 
 have thought that the object of clause 59 was to provide that no shares 
 should be issued with any preferential or special rights without the 
 sanction of the company in general meeting, and not to control or 
 limit the directors’ power to issue new as ordinary shares, especially 
 looking to the alteration made in clause 53, and to the fact that 
 sect. 41 of the* Act authorizes the company “ to increase its capital by 
 the issue of new shares,” so that really, as pointed out by Lord 
 Selborne in Campbell' s case , supra , there is no increase of capital until 
 the new shares are issued. The decision is commonly thought to have 
 defeated the manifest intention.* 
 
 What Classes of New Shares may be created. 
 
 Before answering this question it is necessary to make sure that Shares should 
 there is nothing in the memorandum to restrict or limit the company’s ^dimry 36 
 choice, e.g. s that the memorandum does not provide that no preference of what class, 
 shares shall be issued, or that specified first preferential rights shall 
 be irrevocably (p. 81, supra) attached to a particular class of shares 
 in the original capital, or that shares created upon an increase of 
 
 * This criticism was directed to the dechion of the Court of Appeal ((1911) 
 1 Ch. 73). The House of Lords has subsequently affirmed the decision. 
 
CAPITAL. 
 
 capital shall be deferred shares or ordinary shares only. Any such 
 condition or provision, if contained in the company’s memorandum 
 and unqualified, must in nowise be contravened ( Ashbury v. Watson , 
 30 C. D. 376 ; Re Welsbach Incandescent Gas Light Co ., (1904) 
 
 1 Ch. 87), but, subject as aforesaid, it is now settled, by the decision 
 in Andrews v. Gas Meter Co., (1897) 1 Ch. 361, that it is open to the 
 company, when the memorandum of association contains nothing to 
 the contrary, to create and issue new shares with preferential or other 
 special rights attached. 
 
 Thus, where the memorandum of association of a company contained 
 a statement that the original preference shares therein mentioned 
 should confer a right to a fixed cumulative preferential dividend, but 
 also contained a power for the company to issue new shares on such 
 special conditions as to priority or postponement, either for dividends 
 or repayment of principal, as the company might determine, the 
 company was held to have power to issue new preference shares to 
 rank pari passu with the original preference shares. Underwood v. 
 London Music Hall , Limited , (1901) 2 Ch. 309 ; Welsbach Incandescent 
 Gas Light Co ., (1904) 1 Ch. 87. 
 
 The principle of the decision in Andrews v. Gas Meter Co., supra , 
 appears to be that “ the rights of the shareholders in respect of their 
 shares and the terms on which additional capital may be raised are 
 matters to be regulated by the articles of association rather than by 
 the memorandum, and are therefore matters which, unless provided 
 for by the memorandum, as in Ashbury v. Watson , supra , may be 
 determined by the company from time to time by special resolution 
 pursuant to sect. 50 of the Act” (see sect. 13 of Act of 1908); and 
 there is nothing inequitable in this readjustment of rights or interests, 
 for the shareholders must be taken to have assented to it when they 
 joined the company. 
 
 Assuming, then, that there is nothing in the memorandum to the con- 
 trary, the question as to what class of shares shall, upon a creation of 
 fresh capital, be selected for increase, will turn on the special needs 
 and circumstances of the company and on the condition of the market. 
 According to the circumstances they will be pre-preference shares, 
 preference shares, second preference shares, ordinary shares, or 
 deferred shares. 
 
 As to the various rights commonly attached to preference shares, see 
 supra, p. 84. 
 
 Notice of 
 increase to 
 registrar. 
 
 Notice of Increase to Registrar. 
 
 Where the capital is increased, notice thereof must be given to the 
 Registrar within fifteen days from the date after the passing, or, in the 
 case of a special resolution, of the confirmation of the resolution autho- 
 rizing the increase ; in default the company and every director and 
 
STOCK. 
 
 Ch. VII. 
 
 89 
 
 manager will be liable to a penalty of hi. per day. See sect. 44. 
 
 Upon an increase of capital, duty has to be paid as provided for in 
 Table B in the First Schedule to the Act of 1908, and also (5s. per 100/.) 
 as provided for by sect. 7 of the Finance Act, 1899, and by sect. 5 of 
 the Bevenue Act, 1903. 
 
 Consolidation of Shares. 
 
 Sect. 41 of the Act of 1908 also gives power to consolidate shares. Consolidation 
 This power can, like the power to increase the capital, be made exer- 8 l iare8 * 
 cisable by ordinary, extraordinary, special, or other resolution of a 
 general meeting, or by the directors. See supra , p. 86. And even 
 where there is no power in the articles, it appears, on the principles 
 of CampbelVs case , 9 Ch. 1, that the power may be exercised by a 
 special resolution without first altering the articles. It is not very 
 common to consolidate shares. It is more common to sub-divide them 
 under the power contained in the same section. The tendency of 
 modern business is to reduce, not increase, the denomination of shares. 
 
 Stock. 
 
 The conversion of paid-up shares into stock, also authorized by Conversion 
 sect. 41 of the Act of 1908, may be effected either by special resolution or °f shares into 
 otherwise in such manner as the regulations provide. Such a conversion 
 can only be made where the shares are paid-up shares. Notice of con- 
 version must, as in the case of an increase of capital, be given to the 
 registrar. (Sect. 42.) A considerable number of companies have availed 
 themselves of this power, and have converted their shares into stock. 
 
 One of the conveniences of stock, besides its divisibility, is that it be- 
 comes no longer necessary in a transfer to specify all the numbers of 
 the various shares comprised in the transfer. A transfer is merely of so 
 much stock. Under sect. 41 stock can be re-converted into shares in 
 the manner provided by the articles. Stock cannot be issued direct by 
 the company ; but, if it is so issued, this irregularity can be waived. 
 
 Where, however, a company purported to issue bonus stock and partly 
 paid stock, these two issues were held to be entirely void, the holders 
 had no rights, and calls could not be made on them. Be Home and 
 Foreign Investment Co., (1912) 1 Ch. 72. 
 
 Sub-division of Shares. 
 
 Sub-division of shares is provided for in sect. 41 of the Act Sub-division 
 of 1908, which takes the place of sect. 21 of the Act of 1867. of shares. 
 Prior to this enactment it was ultra vires to sub-divide shares. 
 
 Riming ton's case , 2 Ch. 714 ; see also Sewell's case, 3 Ch. 131. A power 
 to sub-divide must be contained in the articles and must be 
 
90 
 
 CAPITAL. 
 
 Alteration of 
 rights of 
 special classes 
 of share- 
 holders. 
 
 exercised by a special resolution. Hence, unlike increase of 
 capital (see CamphelV s case , p. 87, supra), if there be no power 
 in the regulations, two successive special resolutions must be passed 
 (1) altering the articles by inserting the power, and (2) exercising 
 the power by effecting the sub-division. See West India , Sfc. Steam- 
 ship Co., 9 Ch. 11 ; and Patent Invert Sugar Co., 31 0. D. 166. Notice 
 of a special resolution to sub-divide shares must be given to the 
 registrar. (Sect. 42.) The articles sometimes contain power on 
 sub-division to attach a preference to some of the shares resulting 
 from the sub-division as against the other shares ; and, having regard 
 to the decision in Andrews v. Gas Meter Co., (1897) 1 Ch. 361, it 
 would seem that such a power can be inserted in the articles, 
 even though not appearing in the articles as originally framed. 
 
 Alterations of Preferential and Special Rights. 
 
 Where preferential or other special rights are by the memorandum 
 of association unconditionally attached to a class of shares, such rights 
 can only be altered by virtue of some power reserved in that memo- 
 randum ( Ashbury v. Watson, 31 C. D. 371 ; Underwood v. London 
 Music Hall, Limited, supra; Re Welsbach Incandescent Gas Light Co., 
 (1904) 1 Ch. 87), or by virtue of a scheme sanctioned by the Court 
 under sect. 120 of the Act, or under sect. 45 of the Act. See p. 100, post. 
 
 If the rights are attached by the articles only, the position is 
 altogether different, and there is greater scope for alteration. This is 
 a matter of great importance, for after issuing preference shares it is 
 not uncommon to find it desirable to alter the rights attached thereto, 
 e.g., by sanctioning the creation of pre-preference shares, or of further 
 preference shares ranking pari passu with the original issue, or by 
 reducing the rate of the preferential dividend. 
 
 It was formerly considered that such alterations could only be 
 made where the articles in force when the shares were issued 
 gave the requisite power. Thus in Harper v. Paget, where prefer- 
 ence shares had been issued and it was proposed to issue further 
 preference shares ranking pari passu with them, Jessel, M. B., 
 granted an injunction to restrain such issue. This case is mentioned 
 in Griffith v. Paget, 5 C. D. 895. And see the Order, Company Prece- 
 dents, Part I. 1408. But having regard to Andrews v. Gas Meter Co., 
 (1897) 1 Ch. 361, it seems doubtful whether this view can be sup- 
 ported. There is, of course, no question that a clause in the articles, 
 in force at the time when the shares were being issued, authorizing 
 a modification of the rights attached thereto, e.g., with the sanction 
 of a three-fourths majority in value of the holders of the shares of the 
 class, is effective ; but the question is whether such a clause cannot, 
 under sect. 13 of the Act of 1908, which takes the place of sect. 50 
 of the Act of 1862, be introduced into the articles so as to 
 
REDUCTION OF CAPITAL. 
 
 Ch. VII. 
 
 91 
 
 have full effect ; and, looking to the decision above referred to, it 
 would seem that this question should be answered in the affirmative : 
 the concluding words of sect. 13 of the Act point clearly to the con- 
 clusion that such a clause, if inserted, would be as valid as if contained 
 in the articles of association as originally registered. See National 
 Dwellings Co., 78 L. T. 144, North, J. 
 
 Whether a company, which has issued preference shares with rights 
 only attached by the articles, can, without inserting any such 
 clause in its articles, alter by special resolution the rights so 
 attached is a still more difficult question ; thus, if the company has 
 issued 10,000 preference shares and 100,000 ordinary shares, would a 
 special resolution reducing the dividend on the preference shares and 
 carried by the votes of the holders of the ordinary shares be effective ? 
 Probably such interference with the rights of a class by a majority 
 proposing to benefit themselves at the expense of the class so dealt 
 with would be restrained as unfair and oppressive, and an abuse of 
 the power to alter articles. See M enter v. Hooper's Telegraph Co., 9 
 Oh. 350 ; and see, per Homer, L. J., Allen v. Gold Reefs of West 
 A frica , (1900) 1 Ch. 656. 
 
 Reduction of Capital. 
 
 The Companies Act, 1862, made no provision for reduction of 
 capital. The theory of that Act was that the limited capital, the 
 creditors’ only fund, was not to be capable of reduction otherwise 
 than in the prosecution of the company’s objects; but the working 
 of the Act showed that there were many cases where capital could 
 be reduced without any injustice to creditors, and where commercial 
 convenience required that it should be reduced. In these cases 
 the Companies Acts of 1867 and 1877 relaxed the severity of the 
 rule against reduction, but they by no means abolished it. On the 
 contrary the legislature has, throughout these Acts, in granting a 
 qualified right of reduction to companies, studiously safeguarded the 
 rights of creditors by stringent conditions and every precaution in its 
 power. The Act of 1908, sects. 46 — 56, re-enacts the provision for 
 reduction. 
 
 Power to Reduce. 
 
 In order to effect a reduction of capital, the articles of the com- 
 pany must contain power to reduce. See sect. 46. Power in the 
 memorandum is not effective. Re Dexine Patent Packing and Rubber 
 Co., 88 L. T. 791. 
 
 If there is no such empowering clause in the articles, they must 
 be altered by special resolution, and subsequently a further special 
 resolution must be passed to reduce the capital in the manner proposed. 
 
 Reduction of 
 capital. 
 
 Power to 
 reduce. 
 
92 
 
 CAPITAL. 
 
 Modes of 
 reduction. 
 
 See Patent Invert Sugar Co., 31 C. D. 166 ; Oregon Mortgage Co. 
 (1910), S. C. 964, Court of Session, and p. 90, supra. The statutory 
 power cannot be fettered. Ay re v. Skelsey's Adamant Cement Co., 
 20 T. L. R. 587. The resolution for reduction must state with suffi- 
 cient clearness what is to be done in the way of reduction. It need 
 not purport in terms to alter the memorandum of association ( Camp- 
 bell's case , 9 Ch. 1), but it must show what is proposed to be done, 
 e.g., “that the present capital of 10,000/., divided into 1,000 shares of 
 10/. each, be reduced to 5,000/., divided into 1,000 shares of 51. each, 
 and that such reduction be effected by cancelling the present liability 
 of 51. per share, and reducing the nominal amount of each share to 
 51.,” or, “that the capital of the company be reduced from 10,000/., 
 divided into 1,000 shares of 10/. each, to 5,000/., divided into 1,000 
 shares of 51. each, and that such reduction be effected by cancelling 
 paid-up capital which has been lost or is unrepresented by available 
 
 assets to the extent of /., and by reducing the amount of the 
 
 shares from 10/. to 51.," or, “ that capital of the company be paid off to 
 the extent of 5/. per share, upon the footing that the same may be 
 called up again as and when required in accordance with the regu- 
 lations of the company.” 
 
 Modes of Reduction. 
 
 There are several modes of reducing capital. Some of these can be 
 carried out without the sanction of the Court ; for others the sanction 
 of the Court is required. 
 
 The general rule or principle of the Act is, that the capital of a 
 company is not to be reduced without the sanction of the Court in any 
 case where the rights of creditors are affected, and for this reason : 
 The creditors of a company are invited to deal with the company on 
 the footing of its registered capital being a reality, of the registered 
 shareholders being liable for the unpaid portions of their shares, and 
 of the company having received the paid-up capital which appears in its 
 register and in the returns to the Registrar of Joint Stock Companies, 
 and if this liability to pay up were released or the paid-up capital 
 returned to shareholders, or the creditors’ security in any other manner 
 given away or tampered with, it would seriously alter their position. 
 Trevor v. Whitworth, 12 App. Cas. 409. The company’s capital is 
 embarked in its business and it must run the risks of that business. 
 It may be diminished. It may be lost. Of that persons dealing with 
 the company are aware and take the chance, but they have a right to 
 rely, and were intended by the legislature to have a right to rely, 
 on the capital remaining undiminished by any expenditure outside 
 those limits, or by any return of any part of it to the shareholders. 
 Per Lord Herschell, Trevor v. Whitworth, Sfc., supra. 
 
MODES OF REDUCTION. 
 
 Ch. VII. 
 
 93 
 
 It will be convenient to deal with reduction under two heads, viz. : — 
 
 1. Reduction not requiring sanction of Court. 
 
 2. Reduction requiring sanction of Court. 
 
 1 . Reduction of capital without the sanction of the Court is allowable 
 in the following cases : — 
 
 (a) A company may forfeit shares for non-payment of calls or 
 instalments pursuant to its articles. Such a proceeding 
 amounts, if there be any liability on the shares, to a reduction 
 of capital, but the Act clearly contemplates such a reduction as 
 an allowable proceeding. See Articles 24 to 30 of Table A. 
 
 (b) A company may pay off paid-up capital out of accumulated 
 profits. This is expressly sanctioned by sect. 40, e.g., where 
 the company has a reserve of undistributed profits and it desires 
 to pay off, say, the sum of 51 . per share, on the footing that it 
 should be capable of being called up again. Neale v. 
 Birmingham Tramways Co., (1910) 2 Ch. 464. 
 
 (c) A company may, by special resolution under sect. 41 (e) of the Act 
 
 of 1908, without asking for or obtaining the sanction of the Court, 
 cancel shares which have not been taken or agreed to be taken 
 (this is not reduction, sect. 41 (4)), but where it is desired to 
 cancel shares which have been taken or agreed to be taken the 
 sanction of the Court must be obtained. 
 
 (d) A company may in certain cases accept a surrender of shares, 
 
 e.g., as a short cut to forfeiture, but no company may take back 
 shares which are effectually repudiated on the ground of mis- 
 representation ; and it seems doubtful whether the power to 
 accept surrenders can safely be exercised unless it is sanc- 
 tioned by the Court, or unless the company is in a position 
 to forfeit the shares and bond fide arranges a surrender as a 
 short cut to the same end. The validity of each case of 
 surrender of shares must be decided upon its own merits. See 
 what Lord Herschell said in Trevor v. Whitworth, 12 App. Cas. 
 418. “ A surrender of shares in consideration of a payment in 
 
 money or money’s worth by the company is a purchase by it 
 of its own shares and is ultra vires.” Per Lord Macnaghten, 
 Trevor v. Whitworth, supra; and see British , Sfc. Co., (1894) 
 A. C. 399 ; and Bellerby v. Rowland and Marwood’’ s S.S. Co., 
 (1902) 2 Ch. 14. 
 
 In the case last mentioned a surrender of partly paid shares, though 
 made in good faith, was held to be invalid. “ Every surrender of 
 shares,” said Cozens-Hardy, L. J., in that case, “whether fully paid 
 up or not, involves a reduction of capital which is unlawful, except 
 
 Where sanc- 
 tion of Court 
 not required. 
 
H4 
 
 CAPITAL. 
 
 where sanctioned by the Court under the Companies Acts of 1867 and 
 1877. Forfeiture is a statutory exception and is the only exception.” 
 
 It has indeed been held that a surrender of shares in exchange for 
 other shares may in some cases be effected without the sanction of the 
 Court (see Eichbaum v. City of Chicago , Sfc. Co., (1891) 3 Ch. 450), 
 but in coming to this decision, Stirling, J., relied on Teasdales case , 
 9 Ch. 54, the authority of which had been severely shaken by Trevor 
 v. Whitworth , 12 App. Cas. 409. Moreover, Lord Justice Eigby, when 
 at the bar, advised (see Company Precedents, Part I. 751), notwith- 
 standing Eichbaum v. City of Chicago, Sfc. Co., supra, that a general 
 scheme for exchange of shares was invalid as involving a trafficking by 
 the company in its own shares (see Hope v. International Co., 4 C. 1). 
 327), and that the shares issued by the company in exchange could not, 
 for such a consideration, be regarded as effectually paid up or partly 
 paid up, for the company gets no additional assets by the transaction, 
 seeing that the amount paid up on the share surrendered in exchange 
 already belongs to the company absolutely. And, lastly, on the 
 appeal in Bellerby v. Rowland and Marwood' s S.S. Co., supra , Stirling, 
 L. J., expressed an opinion that in deciding Eichbaum v. City of 
 Chicago , Sfc. Co., he should not have followed Teasdale's case. Notwith- 
 standing these considerations such an exchange was held by Warring- 
 ton, J., not to involve a reduction of capital. Seo Rowell v. John 
 Rowell Sf Sons, Ltd., (1912) 2 Ch. 609. 
 
 Where sanc- 
 tion of Court 
 .required. 
 
 2. Eeduction requiring the sanction of the Court. The following are 
 some of the modes of reduction which require the sanction of the Court : — 
 
 (a) Eeducing the liability of shareholders in respect of uncalled or 
 unpaid capital, e.g ., where the shares are 10/. each with 51. 
 paid up, reducing them to 51. fully paid-up shares, and thus 
 relieving the shareholders from liability of the uncalled shares. 
 This is the kind of reduction more especially contemplated by 
 the Act of 1867, and is provided for in sect. 46 (1) (a) of the Act 
 of 1908. 
 
 (b) Paying off or returning paid-up capital not wanted for the 
 purposes of the company, e.g., where the shares are 10/. fully 
 paid up, reducing them to 51., and paying back 51. per share. 
 Sect. 46 of the Act expressly provides that this kind of reduc- 
 tion is to be allowable. Lees Brook Spinning Co., In re, (1906) 
 2 Ch. 394; Artizans ’ Land and Mortgage Corp., In re, (1904) 1 
 Ch. 796; Piercy, In re, (1907) 1 Ch. 289. 
 
 (c) Paying off paid-up capital on the footing that it may be called up 
 
 again. Thus, if the shares are 10/. fully paid up, paying off 21. 
 per share on the footing that when desired the company may 
 call it up again. Fore Street , Sfc. Co., 59 L. T. 214. 
 
MODES OF REDUCTION. 
 
 Ch. VII. 
 
 95 
 
 (d) Cancelling shares which have been surrendered, or the holders of 
 which consent to cancellation. Llynvi Co., 26 W. R. 55 ; Vivian 
 Sr Co ., 54 L. T. 384 ; Poole v. National Bank of China , (1907) 
 A. C. 228. 
 
 (e) Paying off and cancelling preference shares, in pursuance of a 
 
 contract in the memorandum and articles binding on both 
 preference and ordinary shareholders, by applying for the 
 purpose a portion of the profits of the company. See In re 
 Dicido Pier Co., (1891) 2 Ch. 354. 
 
 (f) Lost Capital. Cancelling capital which has been lost or is un- 
 
 represented by available assets. This is one of the commonest 
 modes of reduction. A company, whose capital amounts to 
 100,000/. in 10/. shares, has lost, say, 50,000/. by some business 
 disaster. Nothing, as Sir George Jessel said, can be more 
 beneficial to the company than to admit the loss, and to write 
 it off {In re Ebbiv Vale Co. (1877), 4 C. D. 827), e.g., to reduce 
 its 10/. shares to 51., and thus place itself in a position to 
 resume payment of dividends. 
 
 The provisions empowering a company to cancel “any lost 
 capital, or any capital unrepresented by available assets,” are 
 alternative provisions, and the latter is not explanatory of the 
 former. Hoare Sf Co., Ltd., In re, (1904) 2 Ch. 208. 
 
 (g) Any other kind of reduction (except those mentioned on p. 93, 
 supra), sect. 46. British and American Co. v. Couper , (1894) 
 A. C. 399; Poole v. National Bank of China, (1907) A. C. 229 ; 
 Louisiana, Sfc. Co., (1909) 2 Ch. 552. 
 
 In connection with reductions it sometimes becomes necessary to 
 cancel wholly or in part arrears of preference dividend. This requires 
 an arrangement under sect. 120 {Australian Estates and Mortgage Co., 
 (1910) 1 Ch. 414; Hoare Sf Co., (1910) W. N. 87), unless the 
 memorandum or articles vest the requisite power in a class meeting. 
 ( Hoare Sf Co., (1904) 2 Ch. 208.) 
 
 All round Reduction. 
 
 Primd fade a reduction of capital should be an all round one ; that 
 is to say, where capital is to be paid off or to be cancelled as lost or 
 unrepresented by available assets, or where the liability for uncalled 
 capital is to be reduced, the same percentage should be paid off or 
 cancelled or reduced in respect of each share ; and this pari passu mode 
 of reduction is the proper mode where there are several classes of 
 shares, e.g., ordinary and preference shares {Bannatyne v. Direct 
 Spanish Telegraph Co., 34 C. D. 287 ; Direct Spanish Cable Co., 34 
 C. D. 307 ; Barrow Hematite Steel Co., 39 C. D. 582 ; Credit Assur- 
 ance and Guarantee Corporation , (1902) 2 Ch. 601), unless such pre- 
 
 All round 
 reduction. 
 
96 
 
 CAPITAL, 
 
 ference shares have priority as regards capital in winding-up (Re 
 American Pastoral Co ., 62 L. T. 625), in which case the loss should 
 be thrown first on the ordinary shares. And see Floating Dock of St. 
 Thomas , (1891) 1 Ch. 691 ; London and New York Co., (1895) 2 Ch. 
 860. But it is open to a company to pass a special resolution reducing 
 the capital otherwise than in accordance with the legal rights of the 
 shareholders, e.g., by paying off wholly or in part some of the share- 
 holders, although all are entitled to rank pari passu ; or by cancelling 
 part of the capital paid up on one class, although both classes rank 
 evenly as regards capital. And it is now settled that the Court has 
 jurisdiction to confirm any kind of reduction, notwithstanding that it 
 involves a departure from the legal rights of the classes. British and 
 American Corporation v. Couper, (1894) A. C. 399; Credit Assurance 
 and Guarantee Corporation , (1902) 2 Ch. 601 ; Allsopp and Sons, 51 
 W. B. 644; Welsbach Incandescent Gas Light Co., (1904) 1 Ch. 87; 
 National Dwellings Society, In re, 78 L. T. 144 ; Louisiana and Southern 
 States Real Estates Co., (1909) 2 Ch. 552; Thomas de la Rue & Co., 
 (1911) 2 Ch. 361. For the power to confirm a reduction conferred by 
 the Acts of 1862 and 1877 (now represented by sect. 46 of the Act of 
 1908) is perfectly general. 
 
 “ It will,” said Lord Herschell, L. C., in British and American 
 Corporation v. Couper , supra , “ be observed that neither of these 
 statutes [1867 and 1877, for which sects. 46 — 56 are now substituted} 
 prescribes the mode in which the reduction of capital is to be 
 effected, nor is there any limitation of the power of the Court to 
 confirm the reduction, except that it must first be satisfied that the 
 creditors entitled to object to the reduction have either consented or 
 been paid or secured ... If, then, the scheme which the Court is asked 
 to confirm be in fact one for the reduction of capital, I am, with all 
 deference, at a loss to understand how the Court in confirming it could 
 be acting ultra vires , seeing that, as I have pointed out, the statute has. 
 not prescribed the manner in which the reduction is to be carried out. 
 Nor has it prohibited any method of effecting that object ... I think 
 it was the policy of the legislature to entrust the prescribed majority 
 of the shareholders with the decision whether there should be a, 
 reduction of capital, and if so, how it should be carried into effect. 
 The interests of the dissenting minority of the shareholders (if there be 
 such) are properly safeguarded by this : that the decision of the 
 majority can only prevail if it be confirmed by the Court.” And Lord 
 Macnaghten, in the same case, referring to the power given by the Act 
 of 1867, said, “The power is general .... the Companies Act, 1877, 
 was passed merely in order to remove certain doubts created by the 
 decision of Sir George Jessel in the Ebbw Vale case, 4 C. D. 827, which 
 was, I believe, a surprise to the profession at the time, and which is, I 
 believe, generally thought to have been incorrect but there is. 
 
ALL ROUND REDUCTION. 
 
 Ch. VII 
 
 not a word in the Act of 1877, from beginning to end, tonding to narrow 
 the scope of the Act of 1867. The generality of the power conferred 
 by that Act is left wholly untouched.” There can be no mistake here 
 as to the principle on which the House of Lords proceeded. 
 
 Yet, strange to say, in Anglo-French Exploration, (1902) 2 Ch. 845, 
 Buckley, J., treated this principle as unsound, and held that inasmuch 
 as the Act of 1877 gave specific power to cancel capital lost or un- 
 represented by available assets, it impliedly denied jurisdiction to 
 sanction the cancellation of capital not lost or unrepresented by avail- 
 able assets, e.g., to sanction a cancellation of paid-up shares which the 
 holder was willing to have cancelled for the company’s benefit. This, 
 as pointed out in the fifth edition of this work, was inconsistent alike 
 with the principle laid down in the House of Lords as above stated, 
 and with a series of cases in which the Court has from time to time 
 exercised the very power thus supposed to be denied to it. See 
 Llynvi Co., 26 W. B. 55 ; Re Vivian Sf Co., 54 L. T. 384 ; Islington 
 Electric Co., W. N. (1892) 81 ; Re Dicido Pier Co., (1891) 2 Ch. 354. 
 
 However, in a recent case in the House of Lords, Poole v. National 
 ' Bank of China, (1907) A. C. 229, that House dissented from the views 
 so expressed by Buckley, J., and re-affirmed the principle laid down 
 in British and American Corporation v. Couper, supra. 
 
 “The decision,” said Lord Macnaghten, “ of Buckley, J., in Anglo- 
 French, &c. goes even further. His language, if correctly reported, 
 seems to imply that because the Act of 1877 specifies certain cases 
 and declares that the power conferred by the Act of 1867 includes 
 those specified, it is to be inferred that in all other eases the jurisdic- 
 tion of the Court is excluded. If that is the meaning of what the 
 learned judge said, with all respect I am unable to agree with his 
 view. The condition that gives jurisdiction is not proof of loss of 
 capital or proof that capital is unrepresented by available assets, or 
 that capital is in excess of the wants of the company. The jurisdiction 
 arises whenever the company seeking reduction has duly passed a 
 special resolution to that effect. In the present case the creditors are 
 not concerned at all. The reduction does not involve the diminution 
 of any liability in respect of unpaid capital or the payment to any 
 shareholder of any paid-up capital.” 
 
 The Court will not sanction the cancellation of a class of shares on 
 the footing that in lieu thereof the company is to issue to the holders 
 a much larger amount of paid-up shares of another class. Development 
 Co. of Central Africa, (1902) 1 Ch. 547. 
 
 If the company reducing its capital has a reserve fund, there is no 
 obligation to apply in the first instance the whole of such reserve fund 
 to replace the capital account ; and if the reserve fund has been 
 employed in the business and is therefore mixed up with the general 
 
 7 
 
 p. 
 
98 
 
 CAPITAL. 
 
 assets, a loss falls on the reserve and on the paid-up capital rateably 
 (Re Hoare Sf Co., (1904) 2 Ch. 208 ; Poole v. National Bank of China , 
 (1907) A. 0. 229), unless the company chooses to throw on reserve a 
 larger proportion than its rateable proportion. 
 
 In the case last mentioned, Lord Macnaghten said : “ The Court of 
 Appeal was not quite satisfied about the propriety of retaining in 
 hand any part of the reserve fund, but the proposal was allowed to 
 pass on the company giving an undertaking which is embodied in the 
 order that no part of the sum retained out of the profit reserve fund 
 should be applied otherwise than for capital purposes. As the 
 company offered this undertaking I do not propose to your lordships 
 that it should be omitted, but I do not quite understand what the 
 undertaking means or how long it is intended to last. But I must 
 say, speaking for myself, that I do not think that this addition to the 
 order ought to be treated as a precedent in any other case.” 
 
 The Court will not, under guise of a reduction of capital, sanction 
 a resolution which effects a “conversion” and “ re- allocation ” as 
 distinguished from a reduction of capital. Walker Steam Trawl Fishing 
 Co. (1908), S. C. 123, Ct. of Sess. 
 
 Proceeding's 
 for sanction 
 of Court. 
 
 Proceedings to obtain Sanction of Court. 
 
 As to the mode of procedure where the sanction of the Court is 
 required, the first step is to pass the requisite special resolution 
 reducing the capital. The next is to apply to the Court to confirm 
 the resolution. This application is made by petition. The petition 
 states the incorporation and nature of the company, its subsequent 
 history, the passing of the special resolution for reduction, and 
 the facts requisite to show that it is a proper case for reduction, 
 and prays for a confirmation order. See Company Precedents, 
 Part I., p. 1268. Where the reduction does not involve either 
 the diminution of liability or the payment off of any paid-up 
 capital (A. cases) the procedure is short and simple. A summons in 
 chambers is taken out, and on it directions are given fixing a day for 
 hearing the petition and ordering meanwhile advertisements to be 
 inserted in the Gazette and other newspapers. The petition then 
 comes on — usually in about a fortnight — and the order can be at once 
 made without setting in motion any of the complicated machinery 
 provided by the legislature where the rights of creditors are involved. 
 But the Court requires in these cases very clear proof that the capital 
 alleged to have been lost has in fact been lost. Re Barrow Hematite 
 Steel Co., (1900) 2 Ch. 846 ; on appeal, (1901) 2 Ch. 746. In cases (B.) 
 which do involve a diminution of liability or a return of paid-up 
 capital, the procedure is much more elaborate. It is provided for 
 
PROCEEDINGS TO OBTAIN SANCTION OF COURT. Ch. VII. 
 
 in detail in the Rules of the Supreme Court as to reduction of 
 capital, 1908. See infra , Appendix; Company Precedents, Part I., 
 p. 1287 et seq. 
 
 An inquiry has to be made as to the debts and liabilities, advertise- 
 ments have to be issued, the consent of creditors has to be obtained. 
 Such as do not consent must be paid off, or provision be made for 
 paying their debts into Court. As to obtaining consent of bearer 
 debenture holder by extraordinary resolution under a majority clause 
 in the trust deed, see Re Hydraulic Power Co., (1914) 2 Ch. 187 ; and 
 us to satisfying landlord’s claim to future rent, see Palace Billiard 
 Rooms, Ltd. v. City Property, Ltd., Court of Sess. (1912), S. C. 5. 
 Ultimately, at the end of six or eight months, the petition comes on and 
 an order may or may not be made. If made, the order must be adver- 
 tised. The London Steamboat Co., 31 W. R. 781 ; Canada N. W. Co., 
 W. N. (1885) 61. In either case, (A.) or(B.), the words “ and Reduced” 
 have to be added to the company’s name and used for a longer or 
 ? shorter period. In (A.) cases these words need not be used until the 
 presentation of the petition, and the Court has power in such cases to 
 dispense with them altogether ; but it rarely, if ever, does so now. In 
 case (B.) the words have to be used as from the passing of the special 
 resolution until such time as the Court shall fix for discontinuing. 
 In both cases the Court generally requires the use of the words to be 
 continued for a month from the order confirming the reduction. For 
 cases as to dispensing with further use of the words “ and reduced,” 
 see Sumatra Tobacco Co. (1898), W. N. 80; Re Australian Estates , 
 (1910) 1 Ch. 414; Re Lindner Sf Co., (1911) W. N. 66; Andrew 
 Knowles Sf Sons, Ltd., (1912) W. N. 300 (use of words on the com- 
 pany’s seal dispensed with). In making the order the Court approves 
 .a minute expressing the new condition of the capital, as to the form of 
 which see Company Precedents, Part I. p. 1297 ; and Oceana Develop- 
 ment Co., (1912) W. N. 121, 138; Thomas Wolfe Sf Son, Ltd., (1912) 
 W. N. 286; Re Victoria ( Malaya ) Rubber Estates, (1914) W. N. 307 ; 
 .and this minute, together with a copy of the order, has to be filed with 
 the Registrar, who gives a certificate, which completes the reduction. 
 
 This certificate is conclusive of the reduction, even though it is shown 
 afterwards that the company had not by its articles any power to 
 reduce {Re Walker and Smith , Limited, 72 L. J. Ch. 572), or that the 
 special resolution for reduction was invalid. Ladies' Dress Association 
 v. Pulbrook, (1900) 2 Q. B. 376. 
 
 In Calgary and Edmonton Land Co., (1906) 1 Ch. 141, it was held 
 by Buckley, J. (in total disregard of the express provisions of the 
 Companies Act, 1867), that where capital was to be paid off it ought 
 to be paid off after the presentation of the petition, but before the order 
 confirming the reduction. This was clearly erroneous. See Com- 
 
 7 ( 2 ) 
 
100 
 
 CAPITAL. 
 
 pany Precedents, Part I., p. 1305; and Eady, J., in Lees Brook 
 Spinning Co ., (1906) 2 Ch. 394 ; . Warrington, J., in Estate and 
 Finance Co.; and Parker, J., in General Industries Development 
 Syndicate , Limited (1907), W. N. 23, declined to follow tlie decision. 
 
 Occasionally the Court directs publication of the reasons for reduc- 
 tion. Truman , Hanbury Sc Co ., (1910) 2 Ch. 498 ; Form 624, Company 
 Precedents, Part I., p. 1284. 
 
 Re-Organization of Capital. 
 
 Re-organization which involves no alteration of the memorandum of 
 association may be effected by the appropriate resolutions without the 
 sanction of the Court. Re Australian Estates Co ., (1910) 1 Ch. 414. 
 
 Where the re-organization tnvolves an alteration of the memorandum 
 of association and also either consolidation of shares of different classes 
 or division of shares into shares of different classes, the provisions of 
 sect. 45 of the Act must be complied with, which involve a special 
 resolution confirmed by the Court and a resolution passed by a majority 
 in number of the shareholders of each class holding at least three- 
 quarters of the issued share capital of such class, and confirmed as a 
 special resolution. 
 
 For a case of sub -division under this section, see Re Vine and 
 General Rubber Trust , 108 L. T. 709. Meetings must be called for 
 this purpose, at which proxies will be allowed. Re Foucar & Co., 
 (1913) W. N. 83. 
 
 Where an alteration of the memorandum is necessary, not involving 
 consolidation or division of classes of shares, sect. 45 does not apply. 
 Re Schweppes , Ltd., (1914) 1 Ch. 322, following Re Palace Hotel, Ltd., 
 (1912) 2 Ch. 438, and overruling Re Doecham Gloves, Ltd., (1913) 
 1 Ch. 226. [It is not quite clear how far the memorandum can then 
 be altered by a scheme of arrangement under sect. 120 (see Palace 
 Hotel , Ltd., (1912) 2 Ch. at p. 442), since sect. 7 only authorizes 
 alterations of the memorandum in cases for which express provision is 
 made in the Act. But see Re J. A. Nordberg, Ltd., (1915) 2 Ch. 439 ; 
 where, however, this point was not raised.] 
 
 Rights accorded to preference shareholders do not necessarily inter- 
 fere with the ordinary shareholders so as to require a meeting of the 
 latter under the section. Re Stewart Carburettor , (1912) W. N. 100 ; 
 28 T. L. R. 335. 
 
 The proceedings are by petition similar in form to a petition for 
 reduction of capital. The petition need not be advertised. Ashanti 
 Development, Ltd., (1911) W. N. 144. 
 
Ch. VIII. 
 
 10 ] 
 
 CHAPTER VIII. 
 
 MEMBERSHIP. 
 
 Every company under the Act of 1908 is composed of members, Members. 
 
 though in contemplation of law it is an entity distinct from such 
 
 constituent members. In the case of a company limited by shares, 
 
 the terms “ member ” and “shareholder ” are synonymous. A member Shareholders. 
 
 is a shareholder, and a shareholder is a member. We have now to 
 
 consider what it is which constitutes membership. It is a point of the 
 
 first importance in the law of companies, and to answer it we must turn 
 
 to sect. 24, which takes the place of sect. 23 of the Act of 1862 ; that 
 
 section provides as follows : — 
 
 “24. — (1) The subscribers of the memorandum of a company Who are 
 under this Act shall be deemed to have agreed to become members of members * 
 the company, and on its registration shall be entered as members in 
 its register of members ; (2) every other person who agrees to become 
 a member of a company, and whose name is entered on its register of 
 members, shall be a member of the company.” 
 
 This section, it will be observed, deals with two classes : — 
 
 (1) Those persons who have subscribed the company’s memorandum Subscribers, 
 of association. 
 
 (2) Those persons who have agreed to be members, and whose Others, 
 names are entered in the register. 
 
 These and these only can strictly be called members in the sense 
 of having acquired the full status of membership. NicoVs case (1884), 
 
 29 C. D. 421. 
 
 A person may, therefore, become a member or shareholder in any of 
 the following ways : — 
 
 (1) By subscribing the memorandum of association before its regis- 
 tration. 
 
 (2) By agreeing with the company to take a share or shares, and 
 being placed on the register of members. 
 
 (3) By taking a transfer of a share or shares, and being placed on 
 the register of members. 
 
102 
 
 MEMBERSHIP. 
 
 Subscribers to 
 memorandum. 
 
 (4) By registration on succession to a deceased or bankrupt member. 
 
 (5) By allowing bis name to be on tbe register of members or 
 otherwise holding himself out or allowing himself to be held 
 out as a member. See infra , p. 126. 
 
 Premising thus much, let us proceed to analyse a little more closely 
 the conditions creating the status of membership ; and first of persons 
 subscribing the memorandum. 
 
 Subscribers to the Memorandum. 
 
 Every such subscriber becomes a member ipso facto on the in- 
 corporation of the company, and liable as the holder of whatever 
 number of shares he has subscribed for. The 23rd section of the Act 
 of 1862 (for which sect. 24 of the Act of 1908 is substituted), as Bowen, 
 L. J., pointed out (Nicol's case , 29 C. D. 447), defines the status of a 
 subscriber of the memorandum of association in a different way to the 
 position of other persons who agree to become members. “It is 
 plain, ” said Lord Cairns in Evans' case (1867), L. R. 2 Ch. 420, “ that 
 the original subscribers are by the Act of Parliament deemed to have 
 taken the shares set opposite their names — the object being that the 
 public might rest with confidence on the subscribers of the memoran- 
 dum becoming members of the company.” And see Migotti's case , 4 Eq. 
 238. In the case of the subscribers of the memorandum, therefore, no 
 allotment is necessary ( Re London and Provincial Co ., 5 C. D. 525) ; 
 no entry on the register of members is necessary. Nicol's case , 
 supra; Alexander v. Automatic Co., (1900) 2 Ch. 63. The sub- 
 scriber is bound to take the shares from the company, and to pay for 
 them on call duly made like any other shareholder. Alexander v. 
 Automatic Co., supra. He cannot in satisfaction of this obligation 
 take a transfer of fully paid shares from another member ; the only 
 way he can possibly escape liability is by showing that all the shares 
 have been allotted to others. Macldey's case, 1 C. D. 247 ; Evans' 
 case , supra. See also Re Esparto Trading Co., 12 C. D. 191, where a 
 subscriber who had not been placed on the register was nevertheless 
 held liable for the shares he had subscribed for after a lapse of nine 
 years. In In re Argyle, fyc. Co., 54 L. T. 237, liability was enforced 
 after a lapse of four years. 
 
 But where the subscriber showed that his subscription was intended 
 to be on behalf of his firm, and the shares were allotted to the firm, it 
 was held that he had discharged his obligation. Punster's case, (1894) 
 3 Ch. 473. 
 
 As to the subscriber’s liability to pay, see infra, p. 116. 
 
 A subscriber cannot repudiate on the ground of misrepresentation. 
 Metal Constituents Co., (1902) 1 Ch. 707. 
 
APPLICATION FOR SHARES. 
 
 Ch. VIII. 
 
 10*3 
 
 Other Members. 
 
 To come next to the second class of persons dealt with by sect. 24 (2) other 
 — every other person who agrees to become a member, and whose mem l> erH * 
 name is entered in its (the company’s) register of members. 
 
 Here the section contemplates two things: — (1) an agreement; 
 
 (2) entry on the register. An agreement alone does not create the 
 status of membership. It is a condition precedent to acquiring such 
 status of membership that the shareholder’s name should be entered 
 on the register. Per Pry, L. J., NicoVs case , 29 C. H. 421 ; see 
 further, infra, p. 111. 
 
 The Agreement to take Shares. 
 
 There is no difference, as Chitty, J., said in NicoVs case, 29 C. D. 421, Agreement to 
 between a contract to take shares and any other contract. A formal take . s hares. 
 agreement is not necessary. If, in substance, an agreement is made, 
 the form is not material. Ritso's case (1877), 4 C. D. 782. To 
 constitute a binding contract to take shares in a company, when such 
 contract is constituted, as it usually is, by application and allotment, 
 there must be an application by the intending shareholder, an allot- 
 ment by the directors of the company of the shares applied for, and 
 a communication by the directors to the applicant of the fact of 
 such allotment having been made. In re Scottish Petroleum Co., 
 
 23 C. D. 430. 
 
 Application for Shares. 
 
 An application for shares is usually made in writing signed by the Application 
 applicant, but an application by word of mouth is effective. Ex parte 01 s aie9 ‘ 
 Bloxam, 33 Beav. 529 a ; Levita's case, L. B. 3 Ch. 36. An application 
 is an offer by the applicant and, like any other offer, it may be with- 
 drawn at any time before acceptance is notified to the applicant, or, 
 if the acceptance is by post, at any time before the letter of acceptance 
 is posted (Hebb's case, 4 Eq. 9 ; Dunlop v. Higgins, 1 H. L. C. 381 ; 
 
 Henthorn v. Fraser, (1892) 2 Ch. 27 ; Wallace's case , (1900) 2 Ch. 671), 
 and such withdrawal may be by word of mouth. Truman's case, 
 
 (1894) 3 Ch. 272. Withdrawal by post is not effective unless it 
 reaches the company before notice of allotment is posted. Byrne v. 
 
 Van Tienhoven , 5 C. P. D. 344. 
 
 The general rule qui facit per alium facit per se applies to a contract Application 
 to take shares, and, accordingly, A. can authorize B. to apply for ^ a ® ent ’ 
 shares on A.’s behalf, and, if shares are allotted to A., he becomes a 
 member. Barrett's case , 4 De Gf. J. & S. 416 ; Hannan's Empress, Sfc. 
 
 Co., (1896) 2 Ch. 643; Hindleg's case, (1896) 2 Ch. 121. Nor is it 
 
104 
 
 MEMBERSHIP. 
 
 Allotment of 
 shares. 
 
 essential that the agent should have actual authority : it is sufficient 
 if he is held out as having authority. Thus, where A. gives B. an 
 open letter authorizing him to apply, and gives him private instructions 
 limiting the authority. Here, if B. applies showing his authority 
 but concealing the private instructions, A. is bound, though the 
 application is in contravention of the private instructions. Henry 
 Bentley Sf Co ., 69 L. T. 204. 
 
 If A. applies for shares in a fictitious name and is allotted some, he 
 will be held liable as a member in respect thereof, and his real name 
 maybe entered on the register. Pugh and Sharman's case , 13 Eq. 566. 
 Where an application is sent in the name of another not sui juris ( e.g ., an 
 infant son), it has been held that the case is the same as if the applica- 
 tion were sent in in a false or fictitious name. The transaction is fabula 
 acta , and the applicant himself may be put on the list of contri- 
 butories ( Pugh and Sharman's case , 13 Eq. 566 ; Richardson' s case , 
 19 Eq. 588 ; G. H. Levita's case, L. R. 5 Oh. 489) ; but there must, to 
 constitute liability in such a case, be a contract, and there can be no 
 contract where there is no intention of contracting, as the Court of 
 Appeal pointed out. Cundy v. Lindsay , 3 App. Cas. 459. This was 
 the case in Coventry' s case , Britannia Fire Association, (1891) 1 Ch. 
 202 (0. A.). 
 
 Allotment. 
 
 Acceptance of an application for shares is ordinarily evidenced by 
 what is termed allotment. Allotment means the appropriation to an 
 applicant by a resolution of the directors of a certain number of shares 
 in response to an application. Shares so allotted are not, in general, 
 specific shares identified by number ; the numbering is left till 
 later. To be effective an acceptance of an application for shares 
 must be unconditional. If it introduces a new term {e.g., says that 
 the shares must be paid up at once under penalty of forfeiture), it is 
 not an effective acceptance, and is to be regarded as a new offer made 
 by the company which will not result in a contract unless accepted by 
 the applicant. Leeds Banking Co., 2 Dr. & Sm. 415 ; Addinell's case, 
 1 Eq. 225 ; Jackson v. Turquand, L. R. 4 H. L. 305. 
 
 So, too, a resolution for allotment to a person who has not applied, 
 though communicated to the allottee, is in point of law merely an 
 offer by the company. 
 
 To constitute a valid allotment there must, as a general rule, be a 
 duly constituted board of directors. In re Homer District Gold Mines , 
 39 C. D. 546. But the rule in Royal British Bank v. Turquand , supra , 
 p. 45, may sometimes render an allotment by an irregular board 
 effective. And see Owen and Ashworth' s Claim, (1900) 2 Ch. 272. And 
 an allotment by a board irregularly constituted may be subsequently 
 
WHEN FIRST PUBLIC ALLOTMENT MAY BE MADE. Ch. VIII. 
 
 105 
 
 ratified by a regular board. Portuguese Consolidated Coffee , 42 C. I). 
 
 160. A director who has joined in an allotment to himself will be 
 estopped from alleging the invalidity of the allotment. York Tram- 
 ways Co. v. Willows (1882), 8 Q. B. D. 685. 
 
 The duty of the directors as to allotment is clear. They are bound to 
 act in good faith in the best interests of the company. London and 
 Colonial Finance Co., 13 T. L. B. 576 (C. A.); Shawv. Holland , (1900) 
 
 2 Ch. 305; Percival v. Wright , (1902) 2 Ch. 421. But it is generally 
 considered that they may property offer the shares to the existing 
 shareholders at par or over, even though the shares stand at a higher 
 price in the market : there is no duty to the company to hold out for 
 the highest price. Hilder v. Dexter , (1902) A. C. 474. 
 
 When first public Allotment may be made. 
 
 Prior to the Companies Act, 1900, directors had an absolute discre- Restrictions* 
 tion as to when they should proceed to allotment ; but the many 
 mischiefs which arose from companies going to allotment on a wholly public, 
 inadequate subscription and merely for the purpose of paying 
 preliminary expenses, led the legislature to interfere, and sect. 4 of 
 the Act of 1900 and sect. 1 of the Act of 1907 imposed restrictions 
 which, in substance, are re-enacted in sect. 85 of the Act of 1908. 
 
 This section runs thus : — 
 
 85. — (1) No allotment shall be made of any share capital of a 
 company offered to the public for subscription, unless the following 
 conditions have been complied with, namely : — 
 
 (a) the amount (if any) fixed by the memorandum or articles and 
 
 named in the prospectus as the minimum subscription upon 
 which the directors may proceed to allotment ; or 
 
 (b) if no amount is so fixed and named, then the whole amount 
 
 of the share capital so offered for subscription, 
 has been subscribed, and the sum payable on application for the 
 amount so fixed and named, or for the whole amount offered for 
 subscription, has been paid to and received by the company. 
 
 (2) The amount so fixed and named and the whole amount aforesaid 
 shall be reckoned exclusively of any amount payable otherwise than in 
 cash, and is in this Act referred to as the minimum subscription. 
 
 (3) The amount payable on application on each share shall not be 
 less than five per cent, of the nominal amount of the share. 
 
 (4) If the conditions aforesaid have not been complied with on the 
 expiration of forty days after the first issue of the prospectus, all 
 money received from applicants for shares shall be forthwith repaid 
 to them without interest, and, if any such money is not so repaid 
 within forty-eight days after the issue of the prospectus, the directors 
 of the company shall be jointly and severalty liable to repay that 
 
10(5 
 
 MEMBERSHIP. 
 
 money with interest at the rate of five per centum per annum from 
 the expiration of the forty-eighth day : 
 
 Provided that a director shall not be liable if he proves that the loss 
 of the money was not due to any misconduct or negligence on his part. 
 
 (5) Any condition requiring or binding any applicant for shares to 
 waive compliance with any requirement of this section shall be void. 
 
 (6) This section, except sub- section (3) thereof, shall not apply to 
 any allotment of shares subsequent to the first allotment of shares 
 offered to the public for subscription. 
 
 (7) In the case of the first allotment of share capital payable in 
 cash of a company which does not issue any invitation to the public 
 to subscribe for its shares, no allotment shall be made unless the 
 minimum subscription (that is to say) : — 
 
 (a) the amount (if any) fixed by the memorandum or articles and 
 
 named in the statement in lieu of prospectus as the minimum 
 subscription upon which the directors may proceed to allot- 
 ment; or 
 
 (b) if no amount is so fixed and named, then the whole amount of 
 
 the share capital other than that issued or agreed to be 
 issued as fully or partly paid up otherwise than in cash, 
 has been subscribed and an amount not less than five per cent, of the 
 nominal amount of each share payable in cash has been paid to and 
 received by the company. 
 
 This sub -section shall not apply to a private company or to a 
 company which has allotted any shares or debentures before the first 
 day of July nineteen hundred and eight. 
 
 With regard to the application of the above section — 
 
 (1.) As to companies which invite the public to subscribe for 
 shares, sub-sects. (1) to (6) inclusive apply, and the 
 minimum subscription should be stated in the articles and 
 in the prospectus. 
 
 (2.) As to companies which on their formation do not invite the 
 public to subscribe, and have, therefore, to file a statement 
 in lieu of prospectus (under sect. 82), sub-sects. (1) to 
 (6) do not apply unless and until these companies invite 
 the public to subscribe, but sub-sect. (7) applies unless the 
 company has allotted any shares or debentures or deben- 
 ture stock before 1st July, 1908. A minimum subscription 
 clause should therefore be inserted in the articles and in 
 the statement in lieu of prospectus. 
 
 (3.) As to private companies sub-sect. (7) does not apply at all, 
 but sub-sects. (1) to (6) inclusive will apply if the company 
 in contravention of its articles offers any of its shares to 
 the public for subscription. 
 
WHEN FIRST PUBLIC ALLOTMENT MAY BE MADE. Ch. VIII. 
 
 ] 
 
 The following points have to be borne in mind : — 
 
 (1.) As to the minimum subscription. The amount may be 
 stated as so many shares, or so many pounds, or as a 
 specified percentage of what is offered for subscription. 
 
 West Yorkshire Darracq Agency , W. N. (1908) 236. The 
 statement must be express. Roussell v. Burnham , (1909) 
 
 1 Ch. 127. 
 
 (2.) The prospectus in (4) means the prospectus on which the 
 applicant subscribed. Roussell v. Burnham , ubi sup. 
 
 (3.) The words at close of sub-sect. (1) of sect. 85, “ has been paid 
 to and received by the company,” mean what they say, 
 and are not satisfied by the giving of a cheque until the 
 cheque is honoured. Mearsv. Western of Canada, (1905) 
 
 2 Ch. 353 ; National Motor, Sfc. Co., (1908) 2 Ch. 228 ; 
 
 Burton v. i Sevan, (1908) 2 Ch. 240. 
 
 (4.) As to the meaning of “ the public,” see p. 341. 
 
 Sect. 82, referred to in par. (7) of sect. 85, above mentioned, runs 
 thus : — 
 
 82. — (1) A company which does not issue a prospectus on or 
 with reference to its formation, shall not allot any of its shares 
 or debentures unless before the first allotment of either shares or 
 debentures there has been filed with the registrar of companies a 
 statement in lieu of prospectus signed by every person who is named 
 therein as a director or a proposed director of the company or by his 
 agent authorized in writing, in the form and containing the particulars 
 set out in the Second Schedule to this Act. 
 
 (2.) This section shall not apply to a private company or to a company 
 which has allotted any shares or debentures before the 1st July, 1908. 
 
 The above sects. 85 and 82 should be read in conjunction with 
 sect. 86 of the Act, which provides as follows : — 
 
 (1.) An allotment made by a company to an applicant in contra- Effect of 
 vention of the provisions of the last foregoing section («.<?., 85), shall irregular 
 be voidable at the instance of the applicant within one month after 
 the holding of the statutory meeting {infra, p. 161) of the company and 
 not later, and shall be so voidable notwithstanding that the company 
 is in course of being wound up. 
 
 (2.) If any director of a company knowingly contravenes or permits 
 or authorizes the contravention of any of the provisions of the last 
 foregoing section with respect to allotment he shall be liable to com- 
 pensate the company and the allottee respectively for any loss, 
 damages, or costs which the company or the allottee may have sus- 
 tained or incurred thereby : Provided that proceedings to recover such 
 loss, damage, or costs shall not be commenced after the expiration of 
 two years from the date of allotment. 
 
108 
 
 MEMBERSHIP. 
 
 An allotment made by directors before the minimum subscription is 
 obtained is, as sect. 86 provides, voidable, not void, and the allottee is 
 entitled to rescind the contract at any time within one month of the 
 date of the statutory meeting. If the company is one to which the 
 statutory meeting section (65) does not apply (i.e., is a company formed 
 before 1st January, 1901), there is no time limit on the shareholder’s 
 right to rescind short of his affirming the contract. Finance and Issue 
 Co. v. Canadian Produce Co ., (1905) 1 Ch. 37. 
 
 It is not necessary that the rescinding shareholder should take 
 actual legal proceedings to avoid the contract within the month. 
 Notice of avoidance followed by prompt legal proceedings, though 
 after the month, is sufficient. In re National Motor , Sfc. Co., (1908) 
 2 Ch. 228. 
 
 After allotment is once made, though irregularly, it is only voidable 
 at the option of the shareholder. The company cannot insist on pay- 
 ing back the application moneys, for the shareholder may prefer to 
 keep the shares. Burton v. Bevan, (1908) 2 Ch. 240. But he may 
 still bring his action against the directors who have “knowingly con- 
 travened ” the section to compel them to make good the loss occasioned 
 to him by the irregular allotment. Ib. 
 
 “Knowingly contravening” the section means contravening it with 
 knowledge of the facts upon which the contravention depends. It is 
 immaterial whether the directors had knowledge of the law or not. A 
 director merely hearing the minutes of a preceding meeting, at which 
 the resolution for the irregular allotment has been passed, read, and 
 voting for their confirmation, will not fix him with knowledge so as to 
 make him liable under this section. Burton v. Bevan , (1908) 2 Ch. 
 240. The Court, it seems, has no jurisdiction to restrain directors by 
 injunction from going to allotment in contravention of sect. 85, and it 
 is said the proper remedy is by action against the directors for breach 
 of their statutory duty. Finance and Issue v. Canadian Produce 
 Corporation , (1905) 1 Ch. 37. This seems to be a lame conclusion. 
 
 It will be observed that sect. 85 of the Act only applies to a 
 company’s first allotment of shares offered to the public for subscrip- 
 tion : once the company has allotted shares offered for public sub- 
 scription, it will not, if it makes a further issue, have again to comply 
 with the section : nor does the section touch or affect in any way 
 (except by sub-sect. (7) ) an allotment of shares not offered for public 
 subscription, e.g., offered to a limited circle of friends or relations. 
 
 The comment which suggests itself on this legislation is that there 
 is nothing to prevent promoters putting the “ minimum subscription ” 
 at a merely nominal figure, e.g., seven 1/. shares. 
 
NOTICE OF ALLOTMENT. 
 
 Ch. VIII. 
 
 ] 09 
 
 Notice of Allotment. 
 
 ‘‘I think,” said Lord Cairns in Pellatt's case, L. R. 2 Ch. 527, Notice of 
 “ that where an individual applies for shares in a company, there being ' l,,otm( * nt 
 no obligation to let him have any, there must be a response by the 
 company, otherwise there is no contract ” ; and this statement of the 
 law has always been accepted. The communication of the acceptance 
 need not necessarily be in writing, but it must be communicated in 
 some way, whether by writing or verbally, or by conduct. Gunn's case , 
 
 L. R. 3 Ch. 40. Prima facie notice of allotment must be given to the 
 applicant or to his agent duly authorized to receive notice of allotment 
 (. Levita's case, 5 Ch. 489 ; De Rosaz's case , 21 L. T. 10) ; for an agent to 
 apply for shares has no implied authority to receive notice of allotment. 
 Robinson's case, 4 Ch. 330 ; Wallis' case, L. R. 4 Ch. 325, n. 
 
 If, however, A., in applying, says, Give notice of allotment to B., and 
 notice is so given, that is sufficient (De Rosaz's case (1889), 21 L. T. 10), 
 and so, too, an applicant may waive notice of allotment. Carlill v. 
 
 Carbolic, Sfc. Co., (1893) 1 Q. B. 256. 
 
 There are other cases also in which notice of allotment is not 
 necessary to complete the contract, e.g., where, by virtue of some 
 agreement upon reconstruction or amalgamation, the company is under 
 an obligation to allot the shares, and a person, entitled to an allotment 
 in response to a circular calling on him to come in, claims allotment of 
 his shares. In such case notice of allotment may not be necessary 
 (Gunn's case , L. R. 8 Ch. 40), unless, indeed, the circular shows that 
 the offer is intended to invite application, not acceptance (Wallace's 
 case, W. N. (1900) 171 ; (1900) 2 Ch. 671). However, in any case in 
 which the company, by letter or otherwise, in effect offers a specified 
 number of shares to a person and he writes back accepting them, no 
 further notice of allotment is necessary. 
 
 Allotment and notice after incorporation, in response to an applica- 
 tion before incorporation, is sufficient to constitute a complete contract 
 (Downes v. Ship, L. R. 3 H. L. 343 ; Lawrence' s case, 2 Ch. 412), for 
 in such a case the application operates as a continuing offer and 
 matures, on acceptance by the company after incorporation, into a 
 contract. 
 
 As a general rule, notice of allotment may be given by post (House- By post., 
 hold Fire Insurance Co. v. Grant, 4 Ex. D. 216 ; Henthorn v. Fraser , 
 
 (1892) 2 Ch. 27), and in such case the contract is complete when the 
 letter is posted, even though it is never received. Harris' case, 7 Ch. 
 
 587. But handing to a town postman in the street who is clearing 
 a pillar-box is not enough. London and Northern Bank , Ex parte Jones, 
 
 (1900) 1 Ch. 220. 
 
 If notice of allotment is disputed the onus is on the company to prove Proof of 
 
 notice. 
 
110 
 
 MEMBERSHIP. 
 
 the notice ( Reidpath's case, 11 Eq. 86) ; but this onus it may discharge 
 by proving acts on the part of the alleged member, going to show that 
 he was aware of the allotment and assented to it ( Crawley's case (1869), 
 4 Ch. 322), for formal notice is not necessary. Richards v. Home 
 Assurance Association, L. B. 6 0. P. 591. Notice of allotment, if 
 brought home to the allottee, not from the company but aliunde, will 
 bind him ( Wallis' case, L. P. 4 Ch. 325, n.), e.g ., if the allottee is 
 present at a board meeting at which the allotment is resolved on. 
 Ex parte Smedley and Fletcher , W. N. (1867) 259. 
 
 In Crawley's case, supra, C. had applied for shares that were not 
 allotted to him for fourteen months, and accordingly he might have 
 refused the allotment on the ground that it was not made within a 
 reasonable time. No notice of the allotment was given to him, but 
 some months afterwards, he, at the request of B., signed a blank 
 transfer of the shares, and that was held sufficient to show that he must 
 have known of, and assented to, the allotment. “ I think after that 
 act,” said Selwyn, L. J., p. 328, “he cannot be heard to say that he 
 did not know of the allotment, or that it had not been communicated 
 to him.” 
 
 A letter of allotment and letter of renunciation or any other docu- 
 ment having the effect of a letter of allotment of any company had, by 
 the Stamp Act, 1891, to be stamped with a penny stamp under a 
 penalty on any person executing, granting, issuing or delivering it 
 out, of 2 01. Sect. 79 and Schedule I. But by sect. 9 of the Finance 
 Act, 1899 (62 & 63 Viet. c. 9), a duty of 6d. is substituted for the 
 lctf. duty when the nominal amount which is allotted or to which the 
 letter of allotment relates is not less than 51., and a separate duty is 
 charged in respect of letters of allotment and renunciation although 
 entered in the same document. An unstamped letter of allotment, 
 if posted or delivered, is still an effective acceptance of the applica- 
 tion. Re Whitley Partners , 32 C. D. 337. 
 
 Entry on Register. 
 
 Where membership is constituted otherwise than by subscribing the 
 memorandum of association, entry in the register of members is, by 
 sect. 24, made a condition precedent to membership. The complete 
 .membership. s t a t us 0 f membership in such case is not acquired unless and until it 
 can be predicated of the person that he is, within the words of the 
 section, one “who agrees to become a member of a company, and 
 whose name is entered in its register of members.” 
 
 In this respect there is an essential difference between the 
 requisites of membership as regards persons who subscribe the 
 memorandum, and those who otherwise agree to become members. 
 
 Entry on 
 register 
 necessary 
 to complete 
 
ENTRY ON REGISTER. 
 
 Ch. VIII. 
 
 Ill 
 
 The former, as we have seen (p. 102), become ipso facto , on the 
 registration of the company, members irrespective of entry in the 
 register of members ; but the latter do not become members until 
 agreement, plus entry in the register. This distinction is recognized 
 in NicoVs case, 29 C. D. 421. In that case A. had agreed to take 
 shares, and shares had been allotted to him ; but his name had not 
 been entered in the register. After some years, the agreement for 
 membership not having been acted on, a winding-up order was made, 
 and it was sought to place A. on the list of contributories, on the 
 ground that he was a member. The learned judges were all of 
 opinion that he had never become a member, that he had only agreed 
 to be a member. 
 
 Cotton, L. J., said that the question was, whether, under the circum- 
 stances, A. had become an actual member or had only agreed to 
 become a member, and stated that ‘ ‘ there was in this case no actual 
 membership, although it would have been possible, if proper proceed- 
 ings had been taken, to render the membership complete”; and 
 Bowen, L. J., said : “ It appears to me that A. never acquired the 
 status of a member of the company. I think that he remained with 
 contractual obligations to the company, which the company had for a 
 time a right to enforce against him. . . . According to the twenty- 
 
 third section of the Act (1862) I think he had not become a corporate 
 member ” ; and Fry, L. J., said that the section “ makes the placing 
 of the name of a shareholder on the register a condition precedent to 
 membership.” 
 
 The result, therefore, in the case of an agreement to take shares not 
 perfected by entry on the register, is that there is an agreement which 
 the Court may or may not think ought to be specifically enforced, but 
 there is no membership. 
 
 So, too, if B. takes a transfer of shares from A., and the company 
 rightly or wrongly refuses to register such transfer, B. is not a member, 
 although either A. or B. can enforce registration of the transfer under 
 sect. 32 of the Act (1908). 
 
 Nor is the rule, that entry in the register is necessary to establish 
 the status of membership, in any way at variance with the rule as to 
 settling the list of contributories in winding-up, namely, that a person 
 who has agreed to become a member, and whose name is not, but ought 
 to be, on the register, is to be included in such list, for in a winding-up 
 the Court has full power to rectify the register of members (sects. 32 
 and 163 of the Act) ; but even in contributory cases the Court will not 
 exercise this power unless the agreement relied on is one which, at the 
 commencement of the winding-up, the company was entitled to have 
 specifically enforced. Arnofs case , 36 C. D. 707. 
 
 The above cases must also be distinguished from those in which a 
 
 Agreement 
 without regis- 
 tration not 
 sufficient. 
 
 Wrongful 
 
112 
 
 MEMBERSHIP. 
 
 removal from 
 register. 
 
 Registration 
 subject to a 
 condition. 
 
 Delay in 
 allotment. 
 
 Conditional 
 
 applications. 
 
 person who has acquired the full status of membership is afterwards 
 wrongfully removed from the register, as, for example, in consequence 
 of a forged transfer having been proved. In such a case the person 
 remains a member ; he has acquired the full status, and the wrongful 
 removal of his name does not affect his membership. Barton v. 
 L. Sf N. W. Rail. Co., 24 Q. B. D. 77; Re Bahia Co., L. R. 3iX B. 
 595. 
 
 Moreover, it has been held that where shares are allotted subject to 
 a condition, and the name of the allottee is entered in the register with 
 words expressly referring to the condition, he has not obtained the 
 complete status of a member. Spitzel v. Chinese Corporation (1900), 
 80 L. T. 347. 
 
 Mere entry of a person’s name on the register cannot make him a 
 member if there is no contract. 
 
 i 
 
 Delay in Allotment. 
 
 It is an implied term in an application for shares that the offer 
 must be accepted within a reasonable time, and, if it is not, the 
 applicant is entitled to repudiate the allotment. See Crawley's case, 
 L. R. 4 Ch. 323, supra, and Ramsgate Hotel v. Montejiore , L. R. 1 Ex. 
 109. What is a reasonable time must depend on circumstances; but 
 an allottee who receives notice of allotment, after a reasonable time 
 has expired, must exercise his right of repudiation promptly. If he 
 does not he will be bound ; a fortiori if creditors’ rights have inter- 
 vened by a winding-up. Boyle's case, 33 W. R. 450 ; Crawley's case, 
 supra. 
 
 Conditional Applications. 
 
 Sometimes an application for shares is made subject to a condition 
 precedent, e.g ., A. writes to a hotel company saying, If you will give me 
 an order for furniture, I will take up fifty shares in your capital, which 
 please allot. In such case an allotment disregarding the condition 
 may be repudiated by the allottee ; for where there is a conditional 
 application for shares and an unconditional allotment there is no 
 contract constituted. The parties are not ad idem. Rogers' case, 
 Harrison' s case (1868), L. R. 3 Ch. 633 ; Wood's case, 3 De G. & J. 85 ; 
 Shaw's case , 34 L. T. 715 ; Wood's case, 15 Eq. 236. The condition 
 need not be contained in the letter of application. It is sufficient if 
 the letter containing the condition reach the directors before allotment. 
 Rogers' case , Harrison's case, supra. But in such cases if, after notice 
 of allotment before the condition is complied with, the allottee abstains 
 from repudiating, he will be taken to have waived the condition and 
 be bound. Wheatcroft' s case , 29 L. T. 324. 
 
EXAMPLES OF CONTRACTS TO TAKE SHARES. Ch. VIII. 
 
 113 
 
 A distinction of a very material kind exists between an application 
 with a condition precedent annexed, and an application with a collateral 
 agreement or a condition subsequent. In the latter case the applicant 
 on allotment becomes a shareholder in presenti absolutely, with only 
 a right to enforce (if valid) the collateral agreement or condition 
 subsequent against the company. Elkington’ s case (1867), L. B. 2 
 Ch. 511; Fisher’s case and Sherington’s case (1885), 31 C. D. 120; 
 
 Bridger’s case (1870), L. B. 5 Ch. 305 ; and Thomson’s case (1865), 
 
 4 D. J. & S. 749, are good illustrations of the distinction. 
 
 Mistake as to Company. 
 
 Where a person applies for and takes an allotment of shares in Mistake as to 
 Company A. believing it to be Company B., he may in some cases be company, 
 entitled to repudiate membership if he acts promptly on discovering 
 his mistake. International Society of Auctioneers and Valuers , Baillie’s 
 case, (1898) 1 Ch. 110; Cundy v. Lindsay , 3 App. Cas. 459, 465. 
 
 Who may take Shares. 
 
 As to the subscribers of the memorandum, see supra , p. 102. may 
 
 As to other persons, it is well settled that any person not under take shares, 
 disability may become a member ; a married woman may take shares 
 {Re Leeds Banking Co., 3 Eq. 781 ; Married Women’s Property Act, 
 
 1893, s. 1); a foreigner may take shares {Princess of Reuss v. Bos, 
 
 L. R. 5 H. L. 193 ; but dividends due to enemy shareholders must 
 be paid to the Public Trustee : see Trading with the Enemy Amend- 
 ment Act, 1914, s. 2, and (as to notice) s. 3 (2)); a company having 
 power to take shares may become a member {Re Burned’ s Banking Co., 
 
 3 Ch. 112) ; and even an infant may become a member, subject, how- 
 ever, to the right to repudiate the shares when he attains majority. 
 
 Capper’s case, 3 Ch. 458 ; Pugh and Sharman’s case, 13 Eq. 566. Till 
 disaffirmed the infant’s contract is valid. Viditz v. O’ Hagan, (1899) 
 
 2 Ch. 569. 
 
 Typical Examples of Contracts to take Shares. 
 
 (a) A. applies to the company for an allotment of a specified number Examples of 
 of shares, and agrees to accept the same or any less number that may contracts to 
 
 tskfi sli^rGS 
 
 be allotted to him. In response to this application, the directors 
 resolve that a specified number of shares be allotted to him, and 
 notice of such allotment is given to him. This constitutes the agree- 
 ment, and his name should at once be entered on the register. 
 
 (b) The company allots or offers to A. a specified number of shares, 
 and A . notifies to the company his acceptance of the shares so offered. 
 
 The agreement is complete, and A. should be entered in the register. 
 
 (c) A. authorizes some agent to apply for shares on his behalf, and 
 such agent applies accordingly. The shares are allotted to A., and 
 
 8 
 
 p. 
 
il4 
 
 MEMBERSHIP. 
 
 notice is given to him as above, and he is duly registered. He is a 
 member. 
 
 (d) B. without authority applies for shares on behalf of A., and the 
 directors allot shares to A., and register him. Subsequently A. ratifies 
 B.’s act, e.g., either expressly, or by doing something (e.g., signing a 
 transfer, or taking a dividend) which shows that he assents to the 
 allotment. A. is a member. 
 
 (e) A. being the holder of shares, transfers them by an instrument 
 complying with the regulations of the company to B. ; B. takes the 
 transfer to the company, and the company passes it and places B. on 
 the register. In this case, B. becomes a member in respect of the 
 shares comprised in the transfer, and his name should be entered in 
 the register in the place of A.’s. 
 
 (f) A. accepts office as a director of the company. The regulations 
 of the company state that the qualification of a director is so many 
 shares, and that unless he acquires such qualification within (say) a 
 month after the incorporation of the company, he is to be deemed to 
 have agreed to take the shares from the company, and is to be 
 registered accordingly. A. does not take up the shares within the 
 month, and shortly afterwards he is, by the officers of the company, 
 placed on the register as the holder of such shares. He thereby 
 becomes a member in respect of such shares. By accepting the office 
 he is regarded as in effect agreeing to comply with the regulations, 
 and by placing him on the register the company accepts his offer ; and 
 see pp. 184, 185, infra. 
 
 (g) A. accepts office as a director. The articles state that the 
 qualification of a director is the holding of so many shares. A. does 
 not acquire his qualification within a reasonable time, and he is, at the 
 expiration of that time, placed on the register of members in respect 
 of his qualification. He is estopped from denying that he is a member 
 in respect of the shares thus registered in his name, and should, there- 
 fore, be treated as a member. 
 
 (h) A., who has not applied for shares, is informed that he has been 
 registered as a holder of a specified number of shares in a company. 
 He signs a proxy paper in respect of such shares, or otherwise, 
 in effect, acts as the owner of such shares. He is estopped from 
 denying that he is the holder of such shares. Crawley's case , 4 Ch. 
 323. 
 
 (i) A. applies for shares on the footing that he is not to be liable 
 thereon for the full amount, and the company allots shares which 
 involve the full liability. A. nevertheless exercises acts of ownership, 
 e.g., by selling some and obtaining proxies. A. is bound. He Railway 
 Time Tables , Sfc. Co., 42 C. D. 98. “If she assented to have these 
 shares in her name, that is all that is required to make her liable as a 
 member,” said Cotton, L. J., and Bowen, L. J., added: “From such 
 
SPECIFIC PERFORMANCE. 
 
 Ch. VIII. 
 
 115 
 
 assent to be on the register, and from such dealing with the shares 
 which took place after she was on the register, there can be but one 
 inference which the Court ought to draw, namely, that she agreed to 
 be a member of the company, and her name being on the register, her 
 liability to the company is complete.” 
 
 The cases under the last two heads come to this : that a person is to 
 be regarded as a member if his name is on the register of members 
 with his consent, or if he is estopped from denying that he is registered 
 without consent. He may not have applied. The shares may have 
 been placed there without his consent and contrary to his wishes, but 
 if he assents to his name being on the register, he is to be considered 
 a member of the company. 
 
 Mere entry of a person’s name on the company’s register, however, 
 without agreement or assent, is not enough. Thus, if a director 
 resigns before the time for taking up his qualification shares has 
 expired, and the company has, notwithstanding, entered his name on 
 the register, without his assent, as the holder of the qualification 
 shares, he may compel the company to take his name off the register. 
 Salisbuty-J ones' s case, (1894) 3 Ch. 356. So, too, if a man’s name is 
 put on the register upon the application of some person professing 
 to act as his agent, but without any authority in fact, the company can 
 be compelled to take the name off. OrmerocVs case , (1894) 2 Ch. 475. 
 Or, again, where a man applies for shares, but withdraws his applica- 
 tion before acceptance. If, nevertheless, the company allots and puts 
 his name on the register, he may have it taken off. Hebb's case , 
 4 Eq. 9 ; Truman's case, (1894) 3 Ch. 272. 
 
 A person improperly registered as a transferee of a share is not 
 bound, and may have his name taken off the register. Heritage' s case, 
 9 Eq. 5 ; Cartmell's case, 9 Ch. 691. 
 
 As to rescinding the agreement, see infra, p. 128. 
 
 The above are all cases of persons sui juris. In the case of persons 
 not sui juris, such as infants or lunatics, a contract to take shares is 
 voidable [Lumsden' s case, 4 Ch. 34 ; Ebbett's case, 5 Ch. 302 ; Capper's 
 case , 3 Ch. 458 ; Yeoland Consols, 58 L. T. 922 ; Symons' case, 5 Ch. 298), 
 but valid till disaffirmed. 
 
 Specific Performance. 
 
 The Court has jurisdiction to specifically enforce a contract by a Specific per - 
 person to take, or by a company to allot, shares [New Brunswich Co. 
 
 formance of 
 contract to 
 
 Muggeridge , 1 Dr. & Sm. 363 ; Oriental Inland Steam Co. v. Briggs take shares. 
 (1861), 31 L. J. Ch. 241 ; Odessa Tramways Co. v. Mendel (1878), 
 
 8 Ch. D. 235) ; but the matter is one of judicial discretion, and if 
 before action brought all the shares have been allotted to other 
 persons, the only remedy of a plaintiff claiming an allotment is an 
 
 8 ( 2 ) 
 
116 
 
 MEMBERSHIP. 
 
 Cesser of 
 membership. 
 
 Liability on 
 shares. 
 
 action for damages for breach of contract. Ferguson v. Wilson (1866), 
 2 Ch. 77. A company may, by delay, disentitle itself to enforce an 
 agreement. NicoVs case , 29 C. D. 421. 
 
 Cesser of Membership. 
 
 A person may cease to be a member of a company — 
 
 (1.) By transferring bis shares to another person. In such case, 
 the transferor ceases to be a member so soon as the transferee is 
 registered, but not before. After registration the transferor is 
 still liable to be placed on the B. list of contributories as a past 
 member, if the company is wound up within a year. Stanhope's 
 case , L. R. 1 Ch. 161 ; Heritage's case , 9 Eq. 5. 
 
 (2.) By his shares being forfeited. Dawes' case, 6 Eq. 232. 
 
 (3.) By his shares being sold by the company under some provision 
 in its articles (e. g., for enforcing a lien), and by the purchaser 
 being registered as holder in his place. 
 
 (4.) By death: but in such a case the deceased member’s estato 
 remains liable until the registration of some person entitled 
 under a transfer from his executors or administrators. Heward 
 v. Wheatley , 3 De G. M. & G. 628 ; Baird's case , 5 Ch. 725. 
 
 (5.) By a valid surrender. Trevor v. Whitworth , 12 App. Cas. 409. 
 
 (6.) By the trustee in bankruptcy of an insolvent member disclaiming 
 his shares. See Bankruptcy Act, 1914, s. 54. 
 
 (7.) By rescission of the contract of membership on the ground of 
 misrepresentation (p. 128) or mistake (p. 113). This, however, 
 does not apply to shares subscribed for in the memorandum of 
 association. 
 
 Liability to pay for Shares. 
 
 The terms of the Act of 1908, and in particular the provisions of 
 sects. 14 and 123, leave no doubt, in the case of a company limited by 
 shares, about the obligation of shareholders to pay to the company the full 
 amount of their shares. The words of the section limiting the liability 
 of members to “ the amount unpaid on their shares,” can only mean,, 
 as Lord Macnaghten pointed out in the Ooregum case , (1892) A. C. 145, 
 that the liability of the member continues so long as anything remains 
 unpaid on his shares. Nothing but payment, and payment in full, 
 can put an end to the liability. “All the legislation,” said his 
 lordship, “proceeds on the footing of recognizing and maintaining 
 the liability of the individual member to the company until the 
 prescribed limits are reached.” The liability under the Act of 1862 
 was to pay in money or (with the company’s consent) money’s worth. 
 Baglan Hall Co., 5 Ch. 346. But by sect. 25 of the Companies Act, 
 1867, the legislature restricted the power to pay otherwise than in 
 cash by providing that any shares should be deemed to have been 
 
LIABILITY TO PAY FOR SHARES. 
 
 Ch. VIII. 
 
 11 
 
 issued and to be held subject to the payment of the whole amount 
 thereof in cash unless the same should have been otherwise determined 
 by a contract duly made in writing and filed with the Registrar of 
 Joint Stock Companies at or before the issue of such shares. Whilst 
 this section was in force it followed that once a share was issued 
 it had to be paid up in full in cash unless a sufficient contract pro- 
 viding for some other mode of payment was duly filed before such 
 issue. See, further, infra , p. 119. The cash payment section was 
 repealed by the Companies Act, 1900, as from 31st December, 1900, 
 and the Act of 1908 leaves that repeal untouched. Hence shares, 
 whether subscribed for in the memorandum or otherwise taken, 
 may now be paid up in money or (with the consent of the company) 
 in money’s worth, e.g., by making over to the company property or 
 rendering to it services. Baglan Hall Co., 5 Ch. 346 ; see also Wilkinson 
 Sicord Co., Ltd., (1913) W. N. 27 ; 29 T. L. R. 242 (where a contract 
 was allowed to be filed twenty -four years after the formation of the 
 company in respect of shares for which the memorandum had been sub- 
 scribed). And it is well settled that if a valid contract be made for the 
 acceptance by the company of specified property or services of substantial 
 value in payment or part payment of shares the Court will not, whilst the 
 contract stands, inquire into the value of the consideration even at the 
 instance of the liquidator ( PelVs case , 5 Ch. 1 1 ; Re Baglan Hall Co., 
 5 Ch. 346); the attempt in Re Wragg, Limited, (1897) 1 Ch. 796, 
 to upset this well-established rule signally failed. See also Re 
 Theatrical Trust, (1895) 1 Ch. 771 ; Re Innes Sf Co., (1903) 2 Ch. 254 ; 
 and, as to future services, Pellatt's case, L. R. 2 Ch. 527, and Gardner 
 v. Iredale , (1912) 1 Ch. 700. 
 
 The result of these decisions is that a company may and sometimes 
 does issue paid-up shares at a discount, by taking as the cash equiva- 
 lent of payment property worth in the market much less than the 
 nominal amount of such shares, and the transaction, though an abuse 
 of the Acts, cannot practically be upset, but except in this way it is 
 not permissible or practicable to issue shares on a cash basis at a 
 discount or by way of bonus. Ooregum Gold Mining Co. v. Roper, 
 (1892) A. C. 125; Eddystone Marine Insurance Co., (1893) 3 Ch. 9. 
 
 Where, however, the contract is fraudulent or shows on the face 
 of it that the consideration given to the company is illusory, or is 
 clearly not equivalent to the nominal value of the shares, the shares 
 cannot to this extent be treated as fully paid. Re Wragg, Ltd., ubi 
 sup., at p. 836; Hong Kong Sf China Co. v. Glen, (1914), 1 Ch. 527 
 (an agreement to allot as fully paid a certain proportion of all future 
 increases of capital). 
 
 Under sect. 89 of the Companies Act, 1908, a commission may be 
 paid for subscribing the shares, and thus in effect the rule that 
 shares may not be issued at a discount is still further relaxed : that is, 
 
118 
 
 MEMBERSHIP. 
 
 Who is liable. 
 
 tlie financial result to tlie company is the same as if the shares were 
 issued at a discount ; hut as a matter of form the transaction is correct : 
 the shares are fully paid up by the subscriber, and the commission 
 is paid him by the company out of its funds as part of its business 
 expenditure. 
 
 Who is Liable. 
 
 The registered holder of a share is the person liable in respect 
 of anything unpaid on the share, and it makes no difference whether 
 he is the beneficial owner of the share or a mere trustee, nor, in the 
 latter case, whether the company is or is not cognisant of the trust. 
 Chapman and Barker's case , 3 Eq. 361. The cestui que trust cannot 
 be made liable either as shareholder or as a contributory ( Bunn's case , 
 2 De G. F. & J. 275, 300 ; Somervail v. Cree , 4 App. Cas. 648), for there 
 is no privity of contract between him and the company. 
 
 The liability of the registered holder to pay arises in most cases 
 from the operation of sect. 14 (2) of the Act (replacing sect. 16 of the 
 Act of 1862), which expressly provides that “all money payable by 
 any member to the company in pursuance of the conditions and 
 regulations of the company under the memorandum or articles, 
 shall be a debt due from him to the company ” ; and the articles 
 generally provide that calls and instalments made payable by the 
 terms of issue shall be paid when due by the holder to the com- 
 pany. See “Calls,” p. 146. Sometimes, however, the articles are 
 defective in this respect, and in such cases it is necessary to resort to 
 the contract under which the shares were issued, and to rely on the 
 promise therein to pay the whole or part by specified instalments. 
 In a winding-up the liability to pay whatever may be called for 
 arises under sect. 123 of the Act (rejdacing sect. 38 of the Act of 
 1862). Where the holder dies, his estate remains liable in respect of 
 his share until some other person is registered as the holder thereof. 
 When the holder transfers and the transferee is registered, the trans- 
 feree becomes liable to pay all moneys subsequently becoming payable 
 in respect of the share. See infra, p. 130. But though a person has 
 by transfer, forfeiture, or surrender, ceased to be a member, he still 
 remains secondarily liable in the event of a winding-up commencing 
 within one year after he ceased to be a member. Sect. 123 of the 
 Act. 
 
 Returns as to Allotments and Filing Contracts with 
 
 Registrar. 
 
 The cash payment section of the Act of 1867 was repealed because 
 it was found to operate very harshly at times on persons who had given 
 full consideration for their shares and were not aware of the non- 
 compliance with the section ; but the policy of the law which dictated 
 
DECISIONS ON SECT. 25 OF COMPANIES ACT, 1867. Ch. VIII 
 
 119 
 
 the section remains the same, that is to say, that persons dealing with 
 the company, and shareholders of the company also, are entitled to 
 know the nature of the quid pro quo for which shares have been issued 
 as fully paid by the directors of the company. In repealing sect. 25 
 the legislature has therefore, in pursuance of this policy, made 
 provision by sect. 88 (which takes the place of sect. 7 of the Act of 
 1900), for the company promptly filing with the registrar particulars 
 of all allotments from time to time made. The substituted section runs 
 as follows : — 
 
 88. — (1.) Whenever a company limited by shares makes any allot- Return as to 
 ment of its shares, the company shall within one month thereafter file allotments, 
 with the Registrar of Companies — 
 
 (a) a return of the allotments stating the number and nominal 
 amount of the shares comprised in the allotment, the names, 
 addresses, and descriptions of the allottees, and the amount (if 
 any) paid or due and payable on each share ; and 
 
 (b) in the case of shares allotted as fully or partly paid up other- 
 wise than in cash, a contract in writing constituting the title 
 of the allottee to the allotment, together with any contract of 
 sale, or for services or other consideration in respect of which 
 that allotment was made, such contracts being duly stamped, 
 and a return stating the number and nominal amount of shares 
 so allotted, the extent to which they are to be treated as paid 
 up, and the consideration for which they have been allotted. 
 
 The section also provides for filing particulars as to oral contracts 
 and imposes penalties for default, and gives the Court power to extend 
 the time for filing in certain cases, a remedy first given by the Act of 
 1898. Re Wilkinson Sivord Co., (1913) W. N. 27 ; 29 T. L. R. 242. 
 
 Neglect to file the required contract or particulars will not, as under 
 sect. 25 of the Act of 1867, below referred to, render the shares liable 
 to payment in cash, but will expose the directors and other officials of 
 the company to heavy penalties. 
 
 Annual return under sect. 26, see p. 123. 
 
 Decisions on Sect. 25 (now repealed) of the Companies 
 
 Act, 1867. 
 
 Sect. 25 of the Companies Act, 1867, ran as follows: — “Every Filing of 
 
 share in any company shall be deemed and taken to have been issued cont racts 
 
 J L . under sect. 2 
 
 and to be held subject to the payment of the whole amount thereof in 0 f Act 1867. 
 
 cash, unless the same shall have been otherwise determined by a 
 
 contract duly made in writing and filed with the Registrar of Joint 
 
 Stock Companies at or before the issue of such shares.” 
 
 The result was that, to use Bow 7 en, L. J.’s language in London, 
 
 Celluloid Co., 39 C. D. 204, “ there is a statutory liability to pay the 
 whole amount in cash , which can only be avoided under the statute in 
 
MEMBERSHIP. 
 
 one way, namely, by a registered contract.” A registered contract 
 under sect. 25 did not, however, it must be remembered, exempt the 
 shares from being paid up in full ; the section only regulated the mode 
 of payment. Per Lindley, L. J., In re Addlestone Linoleum Co. (1887), 
 37 C. D. 205. It did not affect the quantum or the adequacy of the 
 consideration. That was regulated by the Act of 1862, read in the 
 light of the decisions cited on p. 117. 
 
 Sect. 25 was, as above mentioned, repealed by sect. 33 of the Act of 
 1900 ; but it is still desirable to refer to some of the leading decisions 
 on the repealed section, having regard to the peculiar language used 
 by the repealing section. It runs as follows : — 
 
 33. — (1.) Section 25 of the Companies Act, 1867, and the other 
 enactments mentioned in the schedule to this Act to the 
 extent specified in the third column of that schedule are 
 hereby repealed . 
 
 (2.) No proceedings under section 25 of the Companies Act, 
 1867, shall be commenced after the commencement of this 
 Act. 
 
 This provision — “ that no proceeding under sect. 25 shall be com- 
 menced after the commencement of this Act ” — may not, as Rigby, L. J., 
 pointed out in Brutton v. Burney, Limited , (1901) 1 Ch. 637, cover the 
 entire case. “Suppose,” said the Lord Justice, “that a brewery 
 company were to be wound up and there were surplus assets of which 
 the appellants desired to obtain their share : though no proceedings 
 could be taken against them under sect. 25, is it clear that they could 
 obtain their share of the assets in the winding-up ? I think it is not 
 an unreasonable contention (whether it be well founded or not it is 
 not necessary now to decide) that in the absence of a contract filed 
 under sect. 25 they would not be able to obtain their shares of the 
 assets in the winding-up. It might be years before such a question 
 arose, and meanwhile the shareholders would be placed in a difficult 
 position and the value of their shares might be seriously imperilled.” 
 From this position they would be rescued if they could obtain either 
 before or in the winding-up relief by being allowed to file a proper 
 contract or memorandum nunc pro tunc. Hence the Court in the case 
 cited refused to treat the Companies Act of 1898 (which gave power to 
 grant relief) as functus officio, and its powers have been invoked in at 
 least one recent case: see Wilkinson Sword Co., (1913) W. N. 27. 
 
 Apart from the Act of 1898, in cases where owing to inadvertence 
 a contract or sufficient contract was not filed at or before the issue of 
 the shares, and the holders of the shares were thus left exposed to the 
 danger of having to pay them over again, the Court had power, at the 
 instance of the allottee, if he came promptly on discovering the mistake, 
 to rectify the register under sect. 35 of the Act of 1862 by striking his 
 
DECISIONS ON SECT, 25 OP COMPANIES ACT, 1807 . Ch, VIII. 
 
 121 
 
 name off to the intent that after the contract has been tiled he might 
 obtain a re-allotment. New Zealand Kapanga Co., 18 Eq. 17 (n.) ; Denton 
 Colliery Co., 18 Eq. 16. But evidence was always required that the 
 allottees were ignorant of the omission to file, and very commonly 
 evidence also of the solvency of the company. There was full evidence 
 of solvency in the cases last mentioned. See also Broad Street Co., 
 W. N. (1887) 149, and Preservation Syndicate, (1895) 2 Ch. 768, 
 where relief was given after the commencement of a winding-up, the 
 notice of motion having been served before the winding-up. 
 
 This general power was, however, found inadequate to meet the 
 requirements of the situation, and it was supplemented by the 
 Companies Act, 1898. 
 
 The commonest cases for relief under the Companies Act, 1898, 
 have been as follows : — 
 
 (a) Where no contract in writing at all was filed “at or before the 
 
 issue” of the shares. See Jackson 8f Co., (1899) 1 Ch. 348. 
 For the precise meaning to be attached to the words “at 
 or before,” see Tunnel Mining Co., Pool's case, 35 C. D. 579, 
 and Anglo- Colonial Syndicate, Limited, 65 L. T. 847. 
 
 (b) Where a contract was filed at or before the issue, but it was 
 
 insufficient — 
 
 (i) Because it was not made between the proper parties. 
 
 See Dalton v. Dalton Time Lock , 66 L. T. 704 ; 
 Hartley's case, 10 Ch. 157 ; Smith v. Brown , (1896) 
 A. C. 614 ; Pritchard' s case, 8 Ch. 960 ; Common 
 Petroleum Co., (1895) 1 Ch. 759 ; Transvaal Explor- 
 ing Co. v. Albion Transvaal Gold Mines, (1899) 
 2 Ch. 370. 
 
 (ii) Because it was not signed by both parties. New 
 
 Eberhardt Co., 43 C. D. 118. 
 
 (iii) Because it did not specify or correctly specify the 
 
 consideration or the general nature of the considera- 
 tion. Kharaskhoma, (1897) 2 Ch. 451 ; Robert 
 Watson 6f Co., (1899) 2 Ch. 509; S. Frost Sf Co., 
 (1898) 2 Ch. 556; (1899) 2 Ch. 207; Markham and 
 Darter's case, (1899) 2 Ch. 480; Tom Tit Cycle Co., 
 Fisher's case, 15 T. L. R. 132; W. N. (1899) 35; 
 May's Metal Separating Syndicate, W. N. (1898) 
 159; Jackson Co., (1899) 1 Ch. 348. 
 
 (iv) Because it did not state the number of shares to be 
 
 allotted under it or gave merely an option to take 
 shares instead of cash. Jackson Sf Co., supra ; 
 Cool gar die Mines , 14 T. L. R. 277 ; Transvaal 
 Exploring Co. v. Albion Transvaal Gold Mines } 
 
122 
 
 MEMBERSHIP. 
 
 (1899) 2 Ch. 370; Delta Syndicate, 30 C. D. 153; 
 Common Petroleum Enyine Co., (1895) 2 Ch. 759. 
 
 (y) Because the shares were subscribed in the memorandum 
 and the only contract filed, was filed some time 
 afterwards. F. IV. Jarvis Sf Co., (1899) 1 Ch. 193; 
 Dalton Time Lock Co. v. Dalton, 66 L. T. 704 (C. A.) ; 
 Archibald D. Dawnay, Limited, W. N. (1900) 152, 
 and Ebenezer Timmins Sf Son, Limited, 50 W. B. 
 134; and see Hartley's case , 10 Ch. 157, and White- 
 head Sf Brothers, (1900) 1 Ch. 804. 
 
 (vi) Where the shares though treated in the books as 
 paid up in cash were, in fact, issued and credited 
 for a consideration other than cash. 
 
 Meaning of 
 ‘ ‘ cash ’ ’ in 
 sect. 25. 
 
 The section used the term “ cash.” This did not mean exclusively 
 current coin. If the company owed to A. 100/., presently payable, and 
 A. owed the company 100/., also presently payable in respect of his 
 shares, and it was agreed between the parties that the one sum should 
 be set off against the other, that amounted to payment in cash within 
 the section. It was not necessary to go through the idle form of the 
 company handing the 100/. over and the allottee handing it back again. 
 Spargo's case, 8 Ch. 407 ; White's case , 12 C. D. 517. Some doubts 
 were thrown on these cases by Lord Halsbury’s observations in 
 Johannesburg Hotel Co., (1891) 1 Ch. at p. 129 (C. A.); but the Privy 
 Council has recently expressed a very clear opinion that Spargo's case 
 was rightly decided. Larocque v. Beauchemin, (1897) A. C. 358 ; North 
 Sydney Investment Co. v. Higgins, (1899) A. C. 263. See also Barrow's 
 case, 14 C. D. 432 ; Coolgar die Mines, 14 T. L. R. 278 ; Jackson Sf Co., 
 (1899) 1 Ch. 348 ; Transvaal Exploring Co. v. Albion Transvaal Gold 
 Mines, (1899) 2 Ch. 370, and Eastern and Australian Steamship Co., 
 68 L. T. 321. 
 
 As to cases where the company is estopped by certificate from 
 alleging that shares have not been fully paid, see p. 144. 
 
 As to the construction of particular words in the Act of 1898, the 
 following cases may be usefully referred to : — 
 
 “Credited as fully or partly paid for a consideration other than 
 cash.” This means in consideration of property or services or other 
 benefits which the company agrees to take in payment instead of cash. 
 Tom Tit Cycle Co., Fisher's case , 15 T. L. P. 132; W. N. (1899) 35. 
 
 “ The company or any person interested in such shares or any of 
 them may apply.” See Whitefriars Financial Co., (1899) 1 Ch. 189. 
 
 “The Court” means the Court having jurisdiction under sect. 35 of 
 the Act of 1862. Lucky Guss, Limited , 79 L. T. 722 ; Reeves Sf Son, 
 (1899) 1 Ch. 184. And now under sect. 32 of the Act of 1908. 
 
DECISIONS ON SECT. 25 OF COMPANIES ACT, 1867. Ch. VIII. 
 
 123 
 
 “Accidental or due to inadvertence.” Lucky Guss, supra; Jack- 
 3071 Sf Co., (1899) 1 Oh. 348 ; Tom Tit Cycle Co., 15 T. L. B. 132 ; 
 
 W. N. (1899) 35; Company Precedents, Part I., p. 1422. 
 
 “ Or that for any reason it is just and equitable to grant relief.” 
 Roxburghe Press, (1899) 1 Ch. 210. 
 
 “Either before or after an order has been made or an effective 
 resolution has been passed.” Welton v. Saffery, (1897) A. C. 299. 
 
 “On such terms and conditions.” See May's Metal Co., W. N. 
 
 (1898) 159; Tom Tit Cycle Co., W. N. (1899) 35; Parmer's Limited, 
 
 (1900) 2 Ch. 442. 
 
 “ Is satisfied that the filing of the requisite contract would cause 
 delay or inconvenience or is impracticable.” See Jackson Sf Co., (1899) 
 
 1 Ch. 348 ; Reeves Sf Son, (1899) 1 Ch. 192. 
 
 The application in the Chancery Division is commonly made by 
 motion, but may properly be by summons adjourned into Court 
 (Duffiii v. Mexican Gold Co., W. N. (1890) 116 ; Whitefriars Financial 
 Co., (1899) 1 Ch. 184; Re Dowson , W. N. (1889) 222); in the 
 winding-up Court it should be in Court. Concessions Acquisitions 
 Syndicate, 68 L. J. Ch. 49. 
 
 The application must be supported by affidavit. The affidavit 
 must not barely state that the omission to file was accidental or due to 
 inadvertence, but must set out the circumstances. Victoria Brick 
 Works, W. N. (1898) 162; see, further, Company Precedents, 10th ed., 
 
 Part I., pp. 1422—1444. 
 
 Annual Summary of Capital and List of Members. 
 
 By sect. 26 of the Act of 1908, every company having a share Annual 
 capital must every year file a list of members and summary of shares suramar 7- 
 issued, &c. See Appendix, p. 456. “ Year” in the section no doubt 
 
 means the year commencing 1st January and ending 31st December. 
 
 Gibson v. Barton, L. P. 10 Q. B. 329. A director not taking care that 
 the return is made affords prima facie evidence of default. Gibson v. 
 
 Barton, supra ; Edmonds v. Foster, 45 L. J. M. C. 41. And a director 
 cannot excuse himself by showing that by his own default the meeting 
 was not in fact called. Though the meeting is not held, the return 
 should be made. Park v. Lawton, (1911)1 K. B. 588. An offence under 
 sect. 26 is a criminal offence. Reg. v. Tyler, (1891) 2 Q,. B. 588. 
 Proceedings to enforce the penalty are taken before a magistrate under 
 the Summary Jurisdiction Acts 11 & 12 Viet. c. 43; 42 & 43 Viet, 
 c. 49 ; and 47 & 48 Viet. c. 43. The magistrate may inquire into the 
 sufficiency or accuracy of the return. Briton Medical, 37 W. B. 52. 
 
 As to what is a sufficient return, Galloway v. Schill Sf Co., (1912) 
 
 2 K. B. 354. The complaint must be brought within six months. 
 
 Edmonds v. Foster, supra. 
 
124 
 
 Register of 
 members. 
 
 Contents. 
 
 Inspection. 
 
 CHAPTER IX. 
 
 REGISTER OF MEMBERS. 
 
 Every company under the Act is to keep in one or more books a 
 register of its members. See sect. 25 of the Act. 
 
 Contents. 
 
 This register must contain : — 
 
 (i) The names and addresses and occupations (if any) of the members 
 
 of the company, and in the case of a company having a share 
 capital a statement of the shares held by each member, dis- 
 tinguishing each share by its number (sect. 22) and the amount 
 paid or agreed to be considered as paid on the shares of each 
 member. 
 
 (ii) The date at which each person was entered in the register as 
 ■ a member. 
 
 (iii) The date at which any person ceased to be a member. 
 
 In default the company and its directors are liable to heavy penalties — 
 51. for every day the default continues. 
 
 In Vagliano Anthracite Co., (1910) W. N. 187, it was held that a 
 firm was not a “person,” and therefore ought not to be registered, 
 but the section uses the term “member,” not “person”; and in 
 Weikersheim' s Case, 8 Ch. 831 ; 28 L. T. R. 653, the Court of Appeal 
 held that a firm could be registered. 
 
 Notice of any change of address is to be entered on the register. 
 No notice of any trust is to be entered on the register. Sect. 27. 
 
 As to share warrants, see sect. 37. 
 
 In In re Key Sf Son, (1902) 1 Ch. 467, the Court refused to allow a 
 memorandum of lien to be entered on the register by the company. 
 
 Inspection. 
 
 The register of members commencing from the date of the regis- 
 tration of the company is, by sect. 30, to be kept at the registered office 
 of the company (sect. 62, p. 243), and by sect. 30 such register is to be 
 open for inspection by members gratis, and for inspection by any other 
 person on payment of one shilling or such less sum as the company 
 may prescribe for each inspection. 
 
 A right is also given to require a copy of such register or any part 
 thereof, and a penalty is imposed for refusal of inspection, and in 
 
PUBLICITY OF REGISTER. 
 
 Ch. IX. 
 
 125 
 
 addition to this penalty, a judge sitting in chambers may by order 
 compel an immediate inspection of the register, and disobedience of 
 that order being a contempt of Court may be punished by imprisonment. 
 
 The right to inspection does not in this case carry with it the right 
 to take copies, such right being excluded by the section entitling the 
 person inspecting to require a copy on certain terms. Balaghat Co ., 
 
 (1901) 2 K. B. 665, overruling Boord v. African, Sfc. Co., (1898) 
 
 1 Ch. 596. Sixpence a folio of 100 words must therefore be paid. 
 
 The right terminates on a winding-up. Be Kent Coalfields Syndi- 
 cate, (1898) 1 Q. B. 754. 
 
 [Refusal in this section means a distinct and definite refusal. Rex v. 
 
 Wilts and Berks Canal Co., 3 Ad. & El. 477. See, too, 8 Ad. & El. 901. 
 
 A creditor or member may inspect by his solicitor or agent. Bevan 
 v. Webb, (1901) 2 Ch. 59, 75. 
 
 The Court will compel production, irrespective of motive. Davies v. 
 
 Gas Light & Coke Co., (1909) 1 Ch. 248. 
 
 Closing of Register. 
 
 The company is empowered to close the register by advertisement, Closing of 
 but not for more than thirty days in each year. See sect. 31. register. 
 
 Register Prima facie Evidence. 
 
 The register of members is to be prima facie evidence of any matters 
 by the Act directed or authorized to be inserted therein. Sect. 33 of the 
 Act. Hence it is not conclusive. Reese River, See. Co. v. Smith, L. R. 
 
 4 H. L. 80. 
 
 Publicity of Register. 
 
 It is important to note the fact that the register of members is, by the Publicity oP 
 Act, open to the public. In this respect the Act of 1862 differed from register, 
 the Act of 1844. Supra, p. 7. By sect. 50 of the Act of 1844 every 
 shareholder was to have liberty to search the register at all reasonable 
 times, but nobody was to be at liberty to search it who was not a 
 shareholder. 
 
 The Companies Act, 1862, retained the obligation as to keeping a 
 register ; but the Act introduced an important change in providing 
 (sect. 32 of 1862) that the register should be open to the inspection not 
 only of shareholders, but, on payment of one shilling, of all other per- 
 sons. This would, of course, include creditors and persons dealing or about 
 to deal with the company, and the change indicates unmistakeably an 
 intention on the part of the legislature that the creditors and persons 
 who contemplate dealing in some way with the company ought to 
 have the means by inspecting the register of satisfying themselves 
 
126 
 
 REGISTER OF MEMBERS. 
 
 Object of 
 publicity. 
 
 Doctrine of 
 bolding out. 
 
 to what extent they may safely trust the company. Sect. 30 of the 
 Act of 1908 is to the same effect. 
 
 While the liability of shareholders remained unlimited “ such a 
 power of inspection was not necessary, or, certainly, not at all so 
 necessary. . . . But when the legislature enabled shareholders to 
 limit their liability not merely to the amount of their shares, but to so 
 much of that amount as remained unpaid, it is obvious that no 
 creditor could safely trust the company without ascertaining first who 
 the shareholders might be, and, secondly, to what extent they would 
 be liable. This is obviously the reason why the new statute opened the 
 register to the inspection of all the world. . . . The legislature took care 
 to provide the register as the means of enabling persons dealing with the 
 company to know to whom and to what they might trust. It intended 
 to put the persons whose names are on it in the same position towards 
 creditors (subject, of course, to the statutable restrictions) as persons 
 engaged in an ordinary partnership, or persons trading formerly under 
 the Act of 1844.” Per Lord Cranworth, Oakes v. Turquand , L. R. 2 
 H. L. 366. In the same case his Lordship also said : “ It is a fallacy 
 to hold that the liability of the partners in these companies must rest 
 entirely on the same principle of contract which was the foundation of 
 the liability of the partners of any unincorporated companies prior to 
 the institution of this class of associations. The question is not 
 whether there was any privity of contract between the appellant and 
 creditors of the company, but it is whether, under the constitution of 
 these newly created societies, there is a statutory liability imposed on 
 persons in the position of the appellant. Secondly, it is an error 
 to hold that creditors are not supposed to trust to the respon- 
 sibility of the shareholders. The careful regulations as to the 
 register of shareholders and the publicity to be given to them form a 
 sufficient answer to that argument. Indeed, it is plain from the reason 
 of the thing, that no credit would otherwise be given to the abstraction 
 of a company.” 
 
 On the same principle in Sewell's case , L. R. 3 Ch. 138, where a 
 registered shareholder wished to disclaim the ownership of certain 
 shares, Lord Cairns, while assuming in the shareholder’s favour that 
 he might have had a right to disclaim, was of opinion that “not 
 having done so, and being aware that he was held out to the public as 
 the holder of the shares, it is too late for him, months or even years 
 afterwards, to enter into that question.” “It is impossible,” the same 
 learned judge remarked on another occasion, “to disembarrass these 
 cases of the effect which a man’s name being on the register has in 
 inducing other persons to alter their position.” Lawrence' s case (1867), 
 L. R. 2 Ch. 417. 
 
 The result of this doctrine of holding out is that if a person’s name 
 
RECTIFICATION OF REGISTER. 
 
 Ch. IX. 
 
 127 
 
 is on the register with his consent, and he claims a right to have it 
 removed on some ground or other, he must exercise the right promptly, 
 otherwise he forfeits it. See Scottish Petroleum Co ., 23 C. D. 434, in 
 which Baggallay, L. J., said : “The delay of a fortnight in repudiating Delay, 
 the shares makes it in my mind doubtful whether the repudiation in 
 the case of a going concern would have been in time. No doubt 
 where investigation is necessary some time must be allowed, as in 
 the Central Railway Company of Venezuela , L. R. 2 H. L. 99 ; but 
 where, as in the present case, the shareholder is at once fully informed 
 of the circumstances, he ought to lose no time in repudiating.” Even 
 where a name is, pursuant to a void contract, placed on the register, 
 delay after knowledge may be fatal. Railway Time Tables Co., 42 C. D. 
 
 107 ; supra , p. 114. 
 
 Nevertheless the reliance to be placed on the register is qualified to Register not 
 this extent that anyone dealing with the company must be taken to conc lusive. 
 know — 
 
 (1) That shares may be transferred in accordance with the 
 articles, and thus an insolvent shareholder may be substituted 
 for a solvent one. 
 
 (2) That a member who has been induced to take shares by mis- 
 representations or mistake, even though on the register for 
 years, may, while the company is a going concern, repudiate 
 his shares and get off the register. See p. 352. 
 
 (3) That there may be persons on the register placed there without 
 their consent who may subsequently enforce the removal of their 
 names. See further, Reese River Co. v. Smith , L. R. 4 H. L. 
 
 80 ; and Baillid s case , (1898) 1 Ch. 110, in which a person 
 on the register escaped on the ground that he had made a 
 mistake as to the company. 
 
 (4) That a person whose name has been improperly entered on the 
 
 register under an allotment in contravention of sect. 85 of 
 the Act of 1908, may claim under sect. 86 to be removed. 
 
 (5) Where the entry on the register is there stated to be subject to 
 some condition membership is not complete. Spitzel v. Chinese 
 Corporation , 80 L. T. 347. 
 
 Rectification of Register. 
 
 It is a corollary from the principle that the register of members is Rectification 
 to be the creditors’ guarantee, showing them to whom and to what of re £ lster * 
 they have to trust, that the register should be properly kept and that 
 the names appearing therein should be the names of the persons 
 really for the time being liable to the creditors. That this may be 
 
128 
 
 REGISTER OF MEMBERS. 
 
 Instances. 
 
 the case the legislature in sect. 32 of the Act of 1908 (replacing 
 sect. 35 of the Act of 1862) provides a summary mode of rectifying 
 the register from time to time by application to the Court in two classes 
 of cases : — 
 
 (1) Where the name of any person is without sufficient cause 
 entered in or omitted from the register of members. 
 
 (2) Where default is made or unnecessary delay takes place in 
 entering on the register the fact of any person having ceased to 
 be a member. 
 
 This jurisdiction is exerciseable after as well as before winding- 
 up ( Sussex Brick Co ., In re, (1904) 1 Ch. 598), and is frequently 
 exercised. The following are a few illustrative cases in which 
 orders have been made : where the applicant was induced to take 
 shares by misrepresentation {Stewart's case , 1 Ch. 574 ; Anderson' s case, 
 17 C. D. 373); where the company improperly neglected to register 
 a transfer ( Stranton Iron Co., 16 Eq. 559); where shares had been 
 issued to the applicant as paid up without filing a contract in com- 
 pliance with sect. 25 of the Companies Act, 1867 ( New Zealand Kapanga 
 Co., 18 Eq. 17); where shares were improperly forfeited ( Ystalyfera 
 Gas Co., W. N. (1887) 30) ; where the company, acting on a forged 
 transfer, had removed the name of the applicant, the real owner {Bahia, 
 Sfc. Co., L. R. 3 Q. B. 584) ; where there was a dispute between the 
 vendor and purchaser of shares {Ex parte Shaw, 2 Q. B. D. 463) ; 
 where shares had been irregularly allotted to applicant {Portuguese 
 Consolidated , 8fc. Mines, 42 C. D. 160 ; Homer District Gold Mines, 39 
 C. D. 546) ; where the signatory of an underwriting letter not con- 
 stituting a contract had been placed on the register ( Consort , fyc. Co., 
 (1897) 1 Ch. 575) ; where a shareholder, who had made an ultra vires 
 surrender of his shares to the company, claimed to have his name re- 
 instated. Bellerby v. Rowland and Marwood' s Steamship Co., (1902) 
 2 Ch. 14 (C. A.). 
 
 The Court has rarely declined, as between a member and the com- 
 pany, to exercise its jurisdiction under the section {Ex parte Parker, 
 2 Ch. 685) ; but the Court had and has a discretion, although the 
 words “if satisfied of the justice of the case,” in sect. 35 of the Act 
 of 1862 are not used in sect. 32 of the new Act. See, per Lord 
 Macnaghten, Trevor v. Whitworth , 12 App. Cas. at p. 440, as to the 
 materiality of these words. Where justice requires it, the order to 
 rectify will be made nunc pro tunc. Sussex Brick Co., (1904) 1 Ch. 598. 
 An application under sect. 32 should be by motion intituled in the Com- 
 panies (Consolidation) Act, 1908, and in the matter of the particular 
 company. If there is no winding-up pending, the application should 
 be made to one of the ordinary judges of the Chancery Division (if it 
 is made in that Division), and not to the winding-up judge. British 
 
RECTIFICATION OF REGISTER. 
 
 Ch. IX. 
 
 129 
 
 Columbian Exploitation Gold Estates , W. N. (1899) 32. For forms of 
 notice of motion, and orders to rectify, see Company Precedents, 
 
 Part I., 11th ed., pp. 1392 et seq. There is jurisdiction to rectify the 
 register not only upon motion under sect. 32, but in an action against 
 the company. Reese River Co. v. Smith , L. E. 4 H. L. 80. 
 
 In a voluntary winding-up the liquidator may alter the register on 
 sanctioning transfers of shares made after the commencement of the 
 winding-up. Companies Act, 1908, ss. 163, 186 (iv) ; Taylor , Phillips 
 and Rickard’s case , (1897) 1 Ch. 298. 
 
 Under a winding-up by the Court, the liquidator can now only 
 rectify the register with the special leave of the Court. (Sect. 173.) 
 
 A secretary, as such, has no power to alter the register. Wheat- 
 .< croft's case , 29 L. T. 326 ; Chida Mines , Limited v. Anderson , 22 
 T. L. E. 27. 
 
 Colonial Registers. 
 
 A company is by sect. 34 given power in the circumstances specified Colonial 
 therein, to “ cause to be kept in any colony in which it transacts re & lster8 ' 
 business, a branch register or registers of the members resident in such 
 colony.” Such a register may be rectified by any competent Court in 
 the colony. See the section in the Appendix. 
 
 9 
 
130 
 
 Transfer of 
 shares, 
 
 Act permits, 
 subject to 
 company’s 
 articles. 
 
 Restrictions 
 by articles. 
 
 CHAPTER X. 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 “ When joint stock companies were established the great object,” 
 said Lord Blackburn, “ was that the shares should be capable of being 
 easily transferred.” Re Bahia and San Francisco Rail . Co ., L. R. 
 
 3 Q. B. 595. In pursuance of this object, sect. 22 of the Act provides 
 that shares in a company under the Act shall be capable of being 
 transferred in manner provided by the articles of the company ; and it 
 is well settled that, unless the articles otherwise provide, the share- 
 holder has a free right to transfer to whom he will. Weston's case, 
 
 4 Oh. 20. 
 
 It is not (as that case decided) necessary to seek in the articles for a 
 power to transfer, for the Act gives that. It is only necessary to look 
 to the articles to ascertain the mode of transfer and the restrictions 
 upon it. See Gilbert's case , 5 Ch. 565. 
 
 So absolute, prima facie , is the right, that a transfer by a shareholder, 
 if out and out, is valid, though made to a pauper and with the avowed 
 object of escaping liability. De Pass's case , 4 De Gh & J. 544 ; 
 Discoverers Finance Corporation , Lindlar's case , (1910) 1 Oh. 312 ; 
 affirming Neville, J., (1910) 1 Ch. 207, and overruling Cooper's case , 
 (1908) 1 Oh. 141. Hence the importance, in the interests of the 
 company, of inserting some qualification of the right in the articles. 
 
 There is nothing to limit the restrictions which a company’s articles 
 may place on the right of transfer. In re Cawley Sf Co ., 42 0. D. 209, 
 231 ; Stockton Malleable Iron Co., 2 0. D. 101. The articles may give 
 the directors power to refuse to register a transfer in any specified 
 cases ; for instance, where calls are in arrear, or where the company 
 has a lien on the shares — and some such provisions are usually 
 inserted. Thus, Table A. in clause 20 provides that the directors may 
 decline to register any transfer of shares to a person of whom they 
 do not approve, and may also decline to register any transfer of shares 
 on which the company has a lien. But the articles in many cases go 
 far beyond this. They prohibit, for example, the transfer of a share 
 to any person who is not a member of a specified class, or they provide, 
 as they often do in private companies, that before transferring to an 
 
TRANSFER OF SHARES. 
 
 Ch. X. 
 
 131 
 
 outsider the intending transferor must first offer the shares to the other 
 members, and give them a right of pre-emption. And there is nothing 
 in such provisions, though permanent, to contravene the rule against 
 perpetuities. Borland’s Trustee v. Steel Brothers Sf Co ., (1901) 1 Ch. 279. 
 
 Where a discretion as to registering transfers is by the articles Where 
 given to the directors, the Court will not control the exercise of such airectorTa^to 
 discretion, unless it is proved that the directors are not exercising it registration of 
 bona fide (Ex parte Penney , 8 Ch. 452; Re Coalport China Co ., (1895) transfers. 
 
 2 Ch. 404), or are acting, in other words, oppressively, capriciously, or 
 corruptly, or in some way maid jide. Bell v. Bell, 65 L. T. 245. Nor 
 will the Court draw unfavourable inferences against directors because 
 they do not give their reasons for refusing to pass a particular transfer, 
 for they are under no obligation to disclose their reasons either in 
 Court or out of Court ; it is enough that they have in fact considered 
 the transfer, and that in exercise of the discretion given to them by the 
 articles they have not passed it. See the above cases. But if the 
 directors choose to give their reasons, the Court will then consider 
 whether they are legitimate or not. Bell v. Bell, ubi supra. 
 
 In the absence of a wider power to refuse to register or transfer, 
 the directors cannot refuse on the ground that the title will on the 
 registration vest in the trustee in bankruptcy of the transferee. Sutton 
 v. English and Colonial Produce Co., (1902) 2 Ch. 502. 
 
 Whatever the articles as to transfer may be, a shareholder desiring 
 to transfer must conform to them. If he does not, the company is 
 entitled to refuse to register the transfer, and the Court declines in 
 such a case to interfere. 
 
 On the other hand, registration by the secretary without the 
 authority of the directors can be repudiated by them. Chida Mines v. 
 
 Anderson, 22 T. L. R. 27. 
 
 One of several transferors revoking his signature on mere suspicion 
 of a breach of trust does not justify an absolute refusal to register. 
 
 Grundy v. Briggs, (1910) 1 Ch. 444. 
 
 A transfer is incomplete until registered. Societe Generate v. Walker, Registration 
 1 1 App. Cas. 28 ; Shropshire Union Co. v. The Queen, L. R. 7 H. L. to 
 
 496 ; Roots v. Williamson, 38 C. D. 485 ; Powell v. London and Pro- transfer. 
 vincial Bank, (1893) 2 Ch. 555. Pending registration, the transferee 
 has only an equitable right to the shares transferred to him. He 
 does not become the legal owner until his name is entered on the 
 register in respect of the shares transferred to him. Before that he 
 cannot be sued for calls. Ural Gold Fields v. Pappa, 15 T. L. R. 330. 
 
 But delay in registration involves danger to him, for some prior equity 
 may come to light, as in Ireland v. Hart, (1902) 1 Ch. 522, where a 
 husband had mortgaged shares of which he was trustee for his 
 wife ; or a second transfer may be passed and registered, and 
 
 9 (2) 
 
132 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 Priorities. 
 
 Liability of 
 transferor 
 until regis- 
 tration. 
 
 thus the prior transfer may be defeated. And see Peat v. Clayton , 
 (1906) 1 Ch. 659. “The rule on this point is that, as between two 
 persons claiming title to shares in a company which are registered 
 in the name of the third party, priority of title [i.e., equitable 
 title] prevails, unless the claimant, second in point of time, can show 
 that, as between himself and the company, before the company received 
 notice of the claim of the first claimant, he (the second claimant) has 
 acquired the full status of a shareholder, or, at any rate, that all 
 formalities have been complied with, and that nothing more than some 
 purely ministerial act remains to be done by the company, which, as 
 between the company and the second claimant, the company could 
 not have refused to do forthwith, so that, as between himself and the 
 company, he may be said to have acquired, in the words of Lord 
 Selborne, ‘ a present, absolute, unconditional right to have the transfer 
 registered ’ before the company was informed of the existence of a 
 better title.” Per Bonier, J., Moore v. A 7 . W. Bank , (1891) 2 Ch. 599 ; 
 Guy v. Waterloiv Bros., 25 T. L. B. 515. 
 
 Delay in registration prejudices the transferor also as well as the 
 transferee, for in the case of shares which are only in part paid up, 
 the transferor, whilst the transfer is unregistered, continues liable to 
 the company to pay all calls in respect of the shares comprised therein 
 that may be made by the company. Hence the transferor is given by 
 law a right to enforce registration of the transfer. See sect. 28. 
 
 It is not clear that the registration of the transfer divests the 
 liability of the transferor for calls in arrear {Hoy lake Rail. Co., 
 9 Ch. 257) ; but where the transfer is in the usual form it seems 
 that the company may sue the transferee for the calls in arrear 
 {Herbert Gold , Limited v. Haycraft (C. A.), 27 March, 1901), and 
 it is clear that the transferee takes the shares on the footing 
 that the call has not been paid, and cannot vote in respect thereof 
 if the articles provide that no member shall be entitled to vote 
 at all if any calls or other sums of money shall be due and 
 payable to the company in respect of the shares of such members. 
 Randt Gold Mininy Co v. Wainwriyht , (1901) 1 Ch. 184. In a 
 winding-up he can certainly be called on to pay up whatever is then 
 unpaid on his shares (sect. 123 of the Companies Act, 1908), and it 
 would seem that, even while the company is a going concern, it could 
 make a fresh call on him for the amount of the old unpaid call, and 
 that he would be liable to pay such call. Randt Gold Mininy Co. v. 
 New Balkis Eersteling , (1903) 1 K. B. 461 (C. A.) ; affirmed (1904) 
 A. C. 165. 
 
 Where the articles contain a clause empowering the directors to 
 reject a transferee whom they do not approve, and a holder of partly 
 paid-up shares has actively or passively induced the directors to pass 
 
FORM AND EXECUTION OF TRANSFER. 
 
 Ch. X. 
 
 and register a transfer, even though it be an out-and-out transfer 
 which but for his conduct they would have refused to register, the 
 company on discovering the facts may repudiate the registration. 
 De Pass's case, 4 De Gr. & J. 544 ; Lindlar's case , (1910) 1 Ch. 312. 
 
 But where the articles contain no clause authorizing the directors to 
 reject a transferee, a shareholder may at the last moment before 
 liquidation, and for the express purpose of escaping liability, transfer 
 his partly-paid shares to a transferee even though he be a pauper, and 
 may compel the directors to register that transfer, provided that it be 
 an out-and-out transfer, reserving to the transferor no beneficial right 
 to the shares, direct or indirect. Whether the transfer is of that 
 character is a question of fact. Hyam's case, 1 D. F. & J. 75 ; 
 Costello's case, 2 D. F. & J. 302 ; Lindlar's case, (1910) 1 Ch. 312. 
 
 Where the directors have a discretion as to registering transfers 
 and the consideration is misstated, the company, on discovering the 
 facts, may repudiate the transfer and restore the transferor’s name to 
 the register. Green's case, 19 W. F. 1057 ; sub nom. Rogers' case, 
 25 L. T. 406. Compare Weston' s case, 4 Ch. 20, 27, where there was 
 no misrepresentation. 
 
 Form and Execution of Transfer. 
 
 The form of transfer provided by a company’s regulations is usually 
 in close accord with the form given in clause 19 of Table A. The 
 directors may refuse to register if the prescribed form is not sub- 
 stantially followed, but they may waive any irregularity, e.g., non- 
 signature by the transferee. Marino's case, 2 Ch. 596. And they 
 must not be too technical. Thus, where the articles required a 
 
 transfer to be “in the usual common form,” according to which 
 the address of the transferor and the distinctive number of the shares 
 should appear, and the transfer tendered omitted these particulars, 
 but was accompanied by the transferor’s share certificate giving the 
 omitted particulars, it was held that the transfer should be registered. 
 Re Letheby & Christopher, Limited , Jones's case , (1904) 1 Ch. 815. 
 Where there are joint holders, a transfer, to be effective, must be 
 executed by all. If the signature of anyone be forged, the transfer 
 will be void. Barton v. L. 8f N. W. Rail. Co., 24 Q. B. D. 77. 
 Unless otherwise provided by the regulations, a transfer may be 
 merely signed by the parties to it, but sometimes the regulations 
 provide that a transfer is to be by deed ; this, however, causes incon- 
 venience without any corresponding advantage, for it interferes with 
 the ordinary practice as to blank transfers. 
 
 According to that practice, upon a sale or mortgage of shares, the 
 transferor very commonly signs and hands over what is called a blank 
 
 Form and 
 execution 
 transfer. 
 
 Blank 
 
 transfers. 
 
134 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 When to be 
 executed 
 under hand 
 or seal. 
 
 Practice 
 
 transfer ( i.e ., a transfer signed by the transferor, but with a blank for 
 the name of the transferee), the intention being that the purchaser 
 or mortgagee shall be at liberty later on to fill up the blank and 
 perfect his security by getting himself registered. If, however, the 
 regulations require the transfer to be by deed, the transferee cannot 
 effectively fill up the blank and deliver the deed unless authorized so 
 to do by power of attorney under seal ; whereas, if the transfer may be 
 under hand merely, the authority to fill up the blank may be oral and 
 may be implied from the nature of the transaction. See Hibblewhite 
 v. McMorine , 6 M. & W. 200 ; Powell v. London and Provincial Bank , 
 (1893) 2 Ch. 555; France v. Clark , 26 0. D. 257; Fx parte Sargent , 
 17 Eq. 273 ; Tees Bottle Co., 33 L. T. 834. 
 
 A person taking a blank transfer and certificate by way of security 
 is an equitable mortgagee, not a pledgee, and can sell after reasonable 
 notice. Stubbs v. Slater, (1910) 1 Ch. 632. 
 
 Where a shareholder executes blank transfers to enable another to 
 deal with the shares, he is bound not to do anything to prevent 
 registration of the transfer ; and if he improperly intervenes, he is 
 liable in damages. Hooper v. Herts, (1906) 1 Ch. 549. 
 
 As to the measure of damages in such a case, see ib. 
 
 Where the regulations require a transfer to be under hand, the fact 
 that it is under seal does not make it the less effective. Ortigosa v. 
 Brown, 38 L. T. 145. 
 
 If a deed is requisite, it must be duly signed, sealed, and delivered. 
 Powell v. London and Provincial Bank, (1893) 2 Ch. 555. A printed 
 circle with the words “place for seal,” is not equivalent to a seal. 
 Balkis Co., 36 W. R. 392. 
 
 Transfers by infants can only be made in pursuance of an order of 
 some Court of competent jurisdiction, e.g., the Chancery Division, and 
 by the person named in the order. 
 
 Shares held by a lunatic member or by joint holders, one of whom 
 is a lunatic, can only be transferred pursuant to an order in lunacy 
 and by the person named in the order. Lunacy Act, 1890, ss. 133, 
 136—139. 
 
 Married women can transfer without the concurrence of their 
 husbands. Married Women’s Property Act, 1882, s. 9. 
 
 A member can transfer his shares by attorney, but the power of 
 attorney must be left with the transfer, and should either be retained 
 by the company or should be filed pursuant to the Conveyancing Act, 
 1881, s. 48. It should be duly authenticated, and unless it is 
 irrevocable under sect. 8 or 9 of the Conveyancing Act, 1882, evidence 
 should be adduced that at the time the transfer was signed the 
 appointor was alive. 
 
 The instrument of transfer, when executed by the transferor, is 
 
FORM AND EXECUTION OF TRANSFER. 
 
 Ch. X. 
 
 handed to the transferee or his broker, together with the certificates observed on 
 of title, and is then executed by the transferee and deposited with the transfer - 
 company for registration. 
 
 A seller of shares is bound, if the contract fixes no date, to deliver Delivery of 
 
 certificates 
 
 the certificates within a reasonable time, and the reasonableness of 
 the time cannot depend upon circumstances which are unknown to the 
 buyer and are not disclosed to him by the seller. De Waal v. Adler , 
 
 12 App. Cas. 141. 
 
 An agreement for the sale of a share does not impliedly bind Vendor not 
 the vendor to procure the registration of the transfer. His duty is p r0C ure 
 performed when he hands over to the transferee a duly executed registration, 
 transfer, together with the certificate or its equivalent. Skinner v. 
 
 City of London, Sfc. Co., 14 Q. B. D. 882; London Founders' Association 
 v. Clarke, 20 Q,. B. D. 576. But until the registration of the transfer 
 the transferor is a trustee of the shares for the transferee. See Loring 
 v. Davis, 32 C. D. 625; Hardoon v. Belilios , (1901) A. C. 118; 
 
 Stevenson v. Wilson, (1907) S. C., Ct. of Sess. 445. 
 
 If the buyer wishes to protect himself he must buy ‘ ‘ with registra- 
 tion guaranteed.” 
 
 A company is not bound to register a transfer at once. It may Investigation 
 inquire, e.g., as to the authenticity of the transfer. Societe Generale v. ^eforeregis- 
 Walker, 11 App. Cas. 41 ; Ireland v. Hart, (1902) 1 Ch. 522; Ottos tration. 
 Kopje Diamond Mines , (1893) 1 Ch. 618. And where a transfer 
 purports to be executed or signed by the agent of the transferor, the 
 directors are entitled to call for evidence of authority. 
 
 A transfer of shares must be duly stamped. If gratuitous or for a Stamp, 
 nominal consideration, e.g., 5s., it must bear a 10s. stamp; but if on 
 a sale it must bear an ad valorem stamp at the rate of 10s. per cent, 
 on the price. See Stamp Act, 1891. The directors cannot safely 
 register a transfer not duly stamped, for the transfer in such a case 
 not being available as evidence for any purpose in a Court of justice 
 (Stamp Act, 1891, s. 14 (a)), the directors could not use it to justify 
 altering the register. Maynard v. Consolidated Kent Collieries Cor- 
 poration, Limited, (1903) 2 K. B. 121. It makes no difference that 
 the stamp is sufficient on the face consideration, if the directors know 
 that such consideration is less than the real consideration. Ib. 
 
 Forged Transfers. 
 
 Sometimes a forged transfer is presented for registration. If the Forged 
 company acts thereon it may incur serious liability, for the re- tran8 ^ ei 
 gistration of the transfer does not defeat the title of the true 
 owner, and he has a right to require the company to restore his 
 name to the register. Davis v. Bank of England, 2 Bing. 393 ; 
 
186 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 Sloman v. Bank of England , 14 Sim. 475 ; Barton v. L. Sf N. W. Rail. 
 f/o., 38 Ch. D. 149. Re Bahia , Sfc. Co ., L. R. 3 Q. B. 595, is an 
 illustrative case. There the company, acting on a forged transfer, 
 registered the transferee and gave him a certificate of title ; he then 
 sold the shares, and the purchaser, when the shares were claimed by 
 the real owner, was held entitled to damages as against the company. 
 In order to minimise the danger incident to the registration of transfers, 
 it is usual for the company, upon the deposit with it of a transfer, to 
 write to the transferor a letter informing him of the deposit of the 
 transfer, and stating that it will be registered unless, by return of 
 post, he objects. This course of procedure practically operates as a 
 safeguard, but, in adopting it, a company does not relieve itself of 
 its obligation to ascertain the authenticity of the deposited transfer. 
 The transferor may not receive the notice, and, even if he does receive 
 it, he is not bound to reply; by not replying, he does not estop himself 
 from asserting his rights at some subsequent period. Barton v. L. Sf 
 N. W. Rail. Co. (1889), 24 Q. B. D. 77. Where the company registers 
 a forged transfer it may, primd facie, on discovering the forgery, 
 remove the name of the transferee from the register ; it is not 
 estopped by the registration. Simm v. Anglo-American , Sfc. Co., 
 5 Q,. B. D. 214. But, if it has issued to the transferee a certificate 
 of title, and he or a bond fide buyer from him has acted thereon, the 
 company may be liable in damages. See p. 143, infra ; Re Bahia, Sfc. 
 Co., L. R. 3 Q. B. 595 ; Tomkinson v. Balkis Co., (1893) A. 0. 396 ; 
 Bloomenthal v. Ford, (1897) App. Cas. 156. Where, however, the 
 certificate has been issued and sealed by the secretary fraudulently, 
 without the authority of the directors and for his own purposes, it has 
 been held that the company is not estopped. Ruben v. Great Fingall 
 Consolidated, (1906) A. C. 439, overruling Shaw v. Port Philip , 13 
 Q. B. D. 103. 
 
 A person claiming under a forged transfer who sends in and procures 
 registration of such transfer and the issue of a fresh certificate is 
 bound, though acting in good faith, to indemnify the company. 
 Sheffield, Corporation of v. Barclay , H. L., (1905) A. 0. 392, reversing 
 C. A., (1903) 2 K. B. 580. And on the same principle where a stock- 
 broker, acting innocently under a forged power of attorney from one 
 of two trustees of stock, had induced the Bank of England to transfer 
 the stock, he was held liable to indemnify the Bank as having impliedly 
 warranted his authority to the Bank. Starkey v. Bank of England , 
 (1903) A. C. 114 ; Oliver v. Bank of England, (1902) 1 Ch. 610. 
 
 Tra^ 6 ? A t ® ven where there is no such right of action, companies can, in some 
 
 1891 and 1892.’ cases, pay compensation under the Acts known as the Forged Transfer 
 Acts, 1891 and 1892. These Acts, however, do not give any right to 
 compensation ; they merely give the company power to pay. 
 
TRANSFERS DURING WINDING-UP. 
 
 Ch. X. 
 
 137 
 
 Indemnity. 
 
 Upon a sale of shares there is an implied contract on the part of the Indemnity of 
 buyer to indemnify the seller from any calls or liability which may 
 arise in respect of the shares subsequently to the transfer. Kellock v. 
 
 Enthoven, L. E. 9 Q,. B. 241 ; Loring v. Davis, 32 C. D. 625 ; Levi v. 
 
 Ayres, 3 App. Cas. 852; Hardoon v. Belilios, (1901) A. 0. 118. 
 
 Transfers during Winding-up. 
 
 These, where the winding-up is compulsory or under supervision, Transfers 
 are avoided by sect. 205 of the Companies Act unless sanctioned by during wind- 
 the Court, and the Court will not, if a transfer is incomplete by reason 1D ° u ^‘ 
 of want of registration at the commencement of the winding-up, put 
 the buyer on the register. Emmerson’s case (1866), L. E. 1 Ch. 433; 
 and see In re Onward Building Society, (1891) 2 Q. B. 463. 
 
 A voluntary liquidator has power under sect. 205, to register a 
 transfer after winding-up ( Re National Bank, of Wales , (1897) 1 Ch. 
 
 (C. A.) 298), and the transfer, if registered, has full effect. The 
 transferee in such a case ought to be placed on the A list of con- 
 tributories, the transferor on the B list. A transferee under a transfer 
 executed before a confirmatory resolution for winding-up is not 
 entitled to insist on the registration of such transfers merely because 
 an action has been brought to declare the resolution invalid and an 
 interlocutory order made to restrain the company acting on it. Violet 
 Consolidated Gold Mining Co., 68 L. J. Ch. 535. 
 
 It is doubtful whether a voluntary liquidator can rectify nunc pro 
 tunc, although the Court can. Sussex Brick Co., (1904) 1 Ch. 598, 
 supra, p. 128. 
 
 Transferor a Past Member. 
 
 Where there is a liability in respect of uncalled capital on the shares Liability of 
 transferred, the transferor, upon registration of the transfer, is freed transferoi^as 
 from this liability, subject to this qualification, that if a winding-up P tl!5tmemjei 
 takes place within one year he may be placed on the B list of con- 
 tributories as a past member if the A list proves inadequate. See 
 sect. 123 of the Act. 
 
 Certification of Transfers. 
 
 When the holder of shares executes a transfer thereof, it is Certificates, 
 for the transferee, as the party mainly concerned, to get the transfer when 
 registered, and in order to do this he must be prepared to hand reqmred ' 
 
1 38 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 Practice as to. 
 
 Effect. 
 
 Stock 
 
 Exchange 
 
 sanctions. 
 
 Certification 
 of outsider. 
 
 Estoppel by 
 certification. 
 
 over, or to procure someone else to hand over, to the company 
 the transferor’s certificate of title to such shares. If the certificate 
 comprises the shares transferred and no more, it can of course 
 be handed over with the transfer to the transferee, and can then 
 be delivered by him to the company ; but very commonly the 
 certificate includes other shares, for example, the certificate may 
 certify that A. is the holder of 100 shares; if he transfers only 50, 
 he retains 50, and, therefore, does not want to hand over his certificate 
 to the purchaser. And again, if, having 100 shares, he sells 50 to B. 
 and 50 to 0. he cannot hand over the certificate to both. In such 
 cases the transferor usually lodges his certificate with the company, 
 and then at his request, or at the request of his broker, the secretary 
 “certifies” the transfers (before they are handed over to the trans- 
 ferees), by stamping in the margin the form of certification and 
 signing the same. The following forms are used : — “ Certificate lodged : 
 
 for the Company, Limited, Secretary,” or “Certificate for 
 
 shares [has been lodged] at the company’s office. Date. 
 
 Secretary.” 
 
 The certification is regarded as a representation by the secretary, 
 on behalf of the company, that the transferor has produced such 
 documents as on the face of them show a prima facie title in the 
 transferor to make the transfer, i.e., a certificate of title that the 
 transferor is the registered holder of the shares comprised in the 
 transfer, or else a certificate that some other person is the registered 
 holder, together with proper transfers from that person to the transferor. 
 In giving such “certifications” the secretary is not supposed to do 
 more than look at the documents produced ; if they appear to be in 
 order he certifies, if they are not he refuses to certify ; but he is not 
 bound to inquire whether the documents produced to him are genuine 
 or not, or whether the various transfers are valid or invalid in point 
 of law. “ He does not warrant the title of the transferor, nor the 
 validity, in point of law, of the various documents which together 
 (purport to) establish his title.” Per Lindley, L. J., Bishop v. Balkis 
 Consolidated Co., 25 Q,. B. D. 512. 
 
 A transfer certified as above is, by the rules of the London Stock 
 Exchange, accepted as good delivery of the shares to a purchaser 
 without delivery of the certificate. But irrespective of these rules, 
 by the general practice a transferee requires the share certificate or a 
 certified transfer in order to comply with the articles of the company, 
 which usually provide for the production of the certificate before a 
 transfer will be registered. 
 
 Sometimes an official of the London Stock Exchange certifies. 
 
 It was held in one case (Re Concessions Trust, (1896) 2 Ch. 757), 
 that where an instrument, purporting to transfer fully paid up shares, 
 
TRANSMISSION OF SHARES. 
 
 Ch. X. 
 
 139 
 
 is certified by the secretary as above, the company is, by the certifica- 
 tion, estopped from saying that they are not paid up. But it has now 
 been decided by the House of Lords that there is no estoppel where 
 the secretary certifies in cases in which he is not authorized to certify. 
 George Whitechurch Sf Co., (1902) A. C. 117. 
 
 Certification of transfers given to the secretary is an ordinary busi- 
 ness transaction within the power of a company. Bishop v. Balkis, Sfc. 
 Co., 25 Q. B. D. 520. 
 
 If the company, after certifying, returns the certificate by mistake 
 to the transferor, and the transferor pledges it in fraud of the trans- 
 feree, this, it seems, gives the pledgee no ground of action against the 
 company. Longman v. Bath Electric Tramways , (1905) 1 Ch. 646. 
 
 Transmission of Shares. 
 
 Where a member of a company dies, his shares, as personal estate, 
 vest in his executors or administrators, and the estate is liable ( Baircl’s 
 case, 5 Ch. 725) ; but the executors or administrators do not ipso facto 
 become members of the company, nor is the company entitled, without 
 their consent, to register them as members. Such registration (as 
 members) may involve them in a personal liability, and to justify 
 it there must be some distinct and intelligent request on their 
 part. Buchan's case, 4 App. Cas. 588. W 7 here registered as members, 
 there should be a clean registration, without any reference to their 
 representative capacity. They may choose the order in which their 
 names are to stand. Re Saunders Sf Co., (1908) 1 Ch. 415. Sect. 29 
 of the Act enables the personal representative of a deceased member, 
 without himself becoming a member, to transfer the shares of the 
 deceased, and the provision is commonly repeated in the regulations. 
 See Clauses 21, 22 and 23 of Table A. This power is frequently exer- 
 cised when the shares are not fully paid up. The transfer is subject 
 to the regulations. 
 
 One of two executors registered as shareholders cannot transfer : 
 all must concur. Barton v. North Staffordshire Rail. Co., 38 C. D. 
 458 ; Barton v. L. Sf N. W. Rail. Co., 24 Q. B. Div. 77. 
 
 A transfer by executors to one of themselves should be treated as 
 prima facie regular. Grundy v. Briggs, (1910) 1 Ch. 444. 
 
 If a shareholder is domiciled abroad the company may not recognize 
 his executors or administrator till probate or letters of administration 
 are obtained in England. Fernandez ’ Executor, 5 Ch. 314; A.-G. v. 
 New York Breweries, (1898) 1 Q-. B. 205; affirmed, (1899) A. C. 62. 
 As to colonial probate, see Colonial Probate Act, 1892 (55 Yict. c. 6). 
 
 The trustee of a bankrupt member generally has a right under the 
 regulations to be registered as a member in respect of the bankrupt’s 
 
 Power of 
 company. 
 
 Transmission 
 of shares. 
 
 Trustee in 
 bankruptcy. 
 
140 
 
 TRANSFER AND TRANSMISSION OF SHARES. 
 
 Share 
 
 warrants to 
 bearer. 
 
 shares. See Clause 22 of Table A., and Re Bentham Mills Spinning Co., 
 11 C. D. 900, and W. Key Sf Son, Limited , (1902) 1 Ch. 467. In the 
 latter case there was a lien clause, and the company claimed to enter the 
 trustee’s name with a memorandum stating the lien, and to indorse a 
 similar memorandum, but the Court disallowed the entry and held the 
 trustee entitled to a “clean” certificate. The equitable title vests in 
 the trustee, and he has also, under sect. 48 (3) of the Bankruptcy Act, 
 1914, a statutory power to transfer the shares subject to the same 
 conditions as the bankrupt is subject to. If the shares are onerous, 
 the trustee may by writing, within three months of his appointment, 
 disclaim the shares, leaving the company to prove for the injury 
 caused by the disclaimer. Bankruptcy Act, 1914, s. 54; In re West 
 of England Bank, Ex parte Budden and Roberts (1879), 12 C. D. 288 ; 
 Levi v. Ayers, 3 App. Cas. 845. 
 
 As to the measure of damages in such a case, see Re Hallett, W. N. 
 (1894) 156 ; Re Hooley , (1899) 2 Q. B. 579. 
 
 On the bankruptcy of a trustee of shares, the shares, being choses in 
 action, will not pass to his trustee in bankruptcy under the order and 
 disposition clause. Colonial Bank v. Whinney, 1 1 App. Cas. 426. 
 
 A company cannot refuse to register a transfer of shares to a bank- 
 rupt director on the ground that if registered the shares will pass to 
 the trustee in bankruptcy. Sutton v. English and Colonial Produce Co., 
 (1902) 2 Ch. 502. 
 
 A provision in articles for the compulsory transfer of shares of a 
 bankrupt shareholder at a prearranged valuation is no fraud on the 
 bankruptcy law. Borland’s Trustee v. Steel Brothers , (1901) 1 Ch. 279. 
 
 As to a Scotch sequestrator’s right to prove against the estate of 
 a deceased shareholder, see Tuticorin Co., 43 W. It. 190. 
 
 A clause, entitling a company to refuse to register any transfer 
 made by a member who is indebted to it, has no application to a 
 person claiming by transmission, such as a trustee in bankruptcy or an 
 executor {Re Bentham Mills Spinning Co., 11 C. D. 900; see, however, 
 Ex parte Harrison , 26 C. D. 522) ; but this oversight is usually 
 corrected in properly-framed regulations. 
 
 Share Warrants to Bearer. 
 
 The Act of 1862 made no provision for the creation of shares to bearer. 
 Shares of this description were first introduced by the Companies Act, 
 1867, and the provisions there relating to them are re-enacted in sects. 
 37 and 38 of the Act of 1908. Under sect. 37, a company is empowered, 
 if authorized by its articles so to do, to issue, with respect to any 
 share which is fully paid up, or with respect to stock, a warrant under 
 the common seal stating that the bearer of the warrant is entitled to 
 
SHARE WARRANTS TO BEARER. 
 
 Ch. X. 
 
 141 
 
 the share or shares or stock therein specified. The section also 
 empowers the company to provide, by coupons or otherwise, for the 
 payment of future dividends. Sect. 37 further enacts that a share 
 warraut shall entitle the bearer of such warrant to the shares or stock 
 specified in it, and such shares or stock may be transferred by delivery 
 of the share warrant. A considerable number of companies have 
 taken advantage of these provisions as contained in the Act of 1867. 
 Share warrants to bearer are always treated as negotiable instruments. 
 Whether they are so or not under the Act is not quite clear, but there 
 is a valid mercantile custom to treat them as negotiable which is as 
 effective. Webb , Hale Sf Co. v. Alexandria Water Co. (1905), 21 
 T. L. R. 572. See infra , p. 306. One circumstance which operates as 
 a check on or discourages the issue of share warrants is the heavy 
 stamp duty payable on the issue of them under the Stamp Act, 1891, 
 viz., three times the amount of duty payable on transfer, that is to 
 say, 30s. per cent. When a share warrant is issued, the name of the 
 prior holder of the share is to be struck out of the register of members. 
 See sect. 37 (5). Hence, whilst the share warrant is outstanding there 
 will be no registered holder. The Act provides in sect. 26 as to the 
 particulars to be contained in the annual summary where share 
 warrants have been issued, and sect. 38 provides penalties for forgery 
 and personation. 
 
 Holding a share warrant will not qualify a director where a share 
 qualification is required. 
 
 The holder of a share warrant may be deprived of the right of 
 voting, but this is seldom done, though the right to vote is usually 
 qualified by providing for the deposit beforehand of the warrant. 
 
142 
 
 Certificates 
 of title to 
 shares. 
 
 Convenience 
 
 of. 
 
 CHAPTER XL 
 
 CERTIFICATES OF SHARES. 
 
 Nature and Form of. 
 
 Section 23 of the Act provides that a certificate under the common 
 seal of a company specifying any shares or stock held by any member 
 of the company, shall be primd facie evidence of the title of the 
 member to the shares or stock, and the articles of the company usually 
 contain express provision as to the issue of such certificates. More- 
 over, sect. 92 of the Act makes provision for the prompt issue of 
 certificates. The document issued is commonly in these terms : — 
 
 11 The Company , Limited . 
 
 “ This is to certify that A. B. is the registered holder of shares 
 
 of £ each, numbered to inclusive, in the above-named 
 
 company, and that the sum of £ has been paid up on each of the 
 
 said shares. Given under the common seal of the said company this 
 day of .” 
 
 The articles of a company usually give the members the right 
 to a certificate (see Table A, Clause (6) ), and this right can be enforced 
 by action against the company. Burdett v. Standard Exploration Co ., 
 16 T. L. R. 112. 
 
 A share certificate is meant to facilitate dealings by shareholders 
 with their shares in the market by enabling them, on any such dealing, 
 whether it is one of sale, mortgage or pledge, to show on the spot a 
 good primd facie marketable title to the shares. “The certificates in 
 companies of this kind,” said Lord Selborne, in Societe Generate de 
 Paris v. Walker , 11 App. Cas. 20, 29, “are the proper, and indeed the 
 only, documentary evidence of title in the possession of a shareholder.” 
 
 A share certificate is a declaration to all the world that the person 
 in whose name the certificate is made out, an4 to whom it is given, is 
 a shareholder in the company, and it is given by the company with the 
 intention that it should be so used by the person to whom it is given, 
 and acted upon in the sale and transfer of shares. Per Cockburn, C. J.,. 
 
ESTOPPEL AS TO TITLE TO SHARES. 
 
 Ch. XI. 
 
 143 
 
 in Re Bahia, 8pc. Rail. Co., L. R. 3 Q. B. 595. And see per Lord 
 Cairns, L. C., in Shropshire Union, Sfc. Co. v. The Queen , L. R. 7 II. L. 
 at p. 509, and Burkinshaw v. Nicolls, 3 App. Cas. 1004, at p. 1017. 
 
 Being thus addressed to the world, and all persons being invited 
 
 to rely upon it, the directors of a company are bound to use the 
 
 utmost care in issuing certificates ; for the general rule is that a May raise an 
 
 person making a representation of fact with the intention that it esto PP el 
 
 shall be acted on, is estopped from denying its truth as against any 
 
 person acting on it bona. fide. Pickard v. Sears, 6 Ad. & El. 469 ; 
 
 Freeman v. Cooke, 2 Ex. 654. Hence if, by inadvertence or neg- 
 ligence, an incorrect certificate is issued, the company may incur 
 serious liabilities in respect thereof. But the case is different where 
 the secretary of a company, for his private ends, has fraudulently 
 affixed the seal of the company to a certificate and forged the names 
 of two of the directors. A certificate so issued raises no estoppel 
 against the company in favour even of a mortgagee without notice. 
 
 Ruben v. Great Fingall Consolidated Co., (1906) A. C. 439. The 
 cases on estoppel by certificate fall into two classes — representations 
 by a company raising an estoppel as to title, and representations 
 raising an estoppel as to payments on shares. The principle in both 
 is the same. 
 
 Estoppel as to Title to Shares. 
 
 Thus, in Re Bahia and San Francisco Co., L. R. 3 Q. B. 593, the Estoppel of 
 company, acting upon a forged transfer, purporting to be a transfer by 
 A., a shareholder, to B., issued to B. a certificate representing him to certificate, 
 be the owner of the shares. C., in reliance on this certificate and in issued - 
 good faith, purchased and paid for the shares specified in it, and was 
 duly registered as owner thereof. The forgery was subsequently 
 discovered, and the company was compelled to restore the name of A. 
 to the register in respect of the shares in question : his title, of 
 course, no forgery could displace ( Barton v. L. <$f JV. W. Rail. Co., 
 
 38 C. D. 144); but the company was also held liable, in an action by 
 0., to pay him damages for wrongfully removing his name ; for though 
 the shares were not really his, the company was estopped, by its 
 conduct, from setting up this defence. 
 
 In Ottos Kopje Diamond Mines, (1893) 1 Oh. 618, A. bought shares 
 on the faith of a certificate representing B. as the holder, and took a 
 transfer from B. accordingly. The company had, in fact, issued the 
 certificate to B. in pursuance of a forged transfer, and refused to 
 register the transfer to A. The Court held that A. was, under the 
 circumstances, entitled to damages, and that the measure of such 
 damages was the value of the shares at the time of the refusal to 
 
144 
 
 CERTIFICATES OF SHARES. 
 
 Estoppel of 
 •company by 
 certificate as 
 to payment 
 ■on shares. 
 
 register. The aggrieved party must, however, in such cases show that 
 he acted on the certificate, for if he merely relies on a forged transfer 
 and is registered and receives a certificate of title, the company is not 
 estopped as against him ( Simm v. Anglo-American Telegraph Co ., 
 5 Q. B. Div. 188; Coates v. L. Sf S. IV. Hail. Co ., 41 L. T. 553; 
 Vulcan Ironworks Co., W. N. (1885) 120); but if he acts on the certificate 
 the case is different. Thus, where A. was registered as the holder of 
 shares under a forged transfer, and received a certificate of title 
 thereto and bond fide acted upon it by selling the shares, the company 
 was held estopped from denying his title to the shares, and such title 
 being displaced by that of the true owner, he was held entitled to 
 damages from the company. Tomkmson v. Bdlkis Co., (1893) A. C. 
 396. So, also, if he is put to rest until it is too late to get redress 
 against the real wrongdoer there is an estoppel. Dixon v. Kennaway 
 Sr Co., (1900) 1 Ch. 833. 
 
 Estoppel as to Payment on Shares. 
 
 The only difference in this case is that the representation made by 
 the company is oue as to payment and not title, but the company 
 is equally bound to pay damages if its representation is acted on in 
 good faith. Thus, if a company issues a certificate describing a share 
 as fully paid up, when in fact it is not fully paid up, a purchaser 
 of the share, who acts on the faith of the certificate, is entitled 
 to hold the share as paid. Burkinshaw v. Nicolls , 3 App. Oas. 1004. 
 See also Rowland's case , W. N. (1880) 80; and Markham and Darter's 
 case , (1899) 1 Ch. 414. Bloomenthal v. Ford, (1897) A. C. 162, 
 affords a good illustration. There A. lent the company 1,000/. 
 on the terms that he was to have fully paid-up shares as security, 
 and the company issued to him a certificate stating that he was the 
 registered holder of 10,000 fully paid-up shares. The shares were, 
 in truth, not paid up, but of this fact the lender had no knowledge, 
 and it was held, in a winding-up, that the company was estopped 
 from saying that the shares were not paid up, and that A., who 
 honestly believed the representation made in the certificate to be true, 
 was not bound to make any inquiry, or to ascertain how it was that 
 the company was in a position thus to register him as the holder of 
 paid-up shares for which he had not in fact paid. The company, in 
 such a case, has no right to say : “I told you so-and-so, but you ought 
 not to have believed me. You were too great a fool. I had the 
 right to mislead you because you were too great a fool.” Per Lord 
 Halsbury, L. C. The estoppel will arise in favour of a firm, though 
 one of the directors signing the certificate is a member of the firm. 
 Coasters, Limited, 103 L. T. 622 ; (1911) 1 Ch. 86. See, also, 
 
NOTE AT FOOT. 
 
 Ch. XI. 
 
 145 
 
 Parburfs case , (1896) 1 Oh. 100, in which the company was held 
 estopped as against an original allottee who had acted on the company’s 
 certificate. 
 
 A transferee with knowledge or notice that the representation is not 
 correct cannot, however, invoke the doctrine of estoppel in his favour 
 ( Crickmer's case, L. E. 10 Oh. 614), but the onus of proving notice 
 rests on the person setting up the case of notice. In re Hall Sf Co., 
 
 37 0. D. 712. 
 
 Directors who issue certificates for shares or stock which do not exist 
 may be held personally liable in damages upon an implied warranty of 
 authority. Firbank v. Humphreys, 18 Q. B. D. 54. 
 
 A certificate that a person is the holder of shares or stock does No stamp 
 not require any stamp. It is not a deed. Queen v. Morton, L. E. re 9 uir ed. 
 
 2 0. C. E. 22. 
 
 But a scrip certificate or other document entitling any person to 
 become the proprietor of any share of any company or proposed 
 company requires a penny stamp. Stamp Act, 1891, s. 79. 
 
 As to estoppel by “certification,” see supra, pp. 138, 139. 
 
 Deposit by Way of Equitable Mortgage. 
 
 A valid equitable mortgage of shares or stock may be effected by Equitable 
 depositing the certificate relating thereto. Tahiti Cotton Co., 17 Eq. ^ 
 
 273; Williams v. Colonial Bank, 38 0. D. 395; France v. Clark, 26 certificates. 
 0. D. 263 ; London Joint Stock Bank v. Simmons , (1892) A. 0. 201 ; and 
 Sheffield v. London Joint Stock Bank, 13 App. Cas. 333 ; De Verges v. 
 
 Sandeman, Clark Sf Co., (1902) 1 Ch. 579. If a purchaser of shares 
 leaves them in the hands of a broker, together with blank transfers, 
 and the broker deposits the certificates by way of charge, the pur- 
 chaser may be estopped from disputing the validity of the charge. 
 
 Fuller v. Glyn, Mills , Currie Sf Co., (1914) 2 K. B. 168. 
 
 Renewing Lost Certificates. 
 
 The articles very commonly contain provision for the issue of a Bost certifi- 
 fresh certificate in the place of any certificate which has been lost cates * 
 or defaced. See Clause 7 of Table A., infra, Appendix. 
 
 Note at Foot. 
 
 The certificate very commonly bears at the foot thereof a note to the Note, 
 effect that before any transfer is registered the certificate must be 
 produced. This note, it seems, is only a warning to the shareholder 
 to take care of the certificate. It is not addressed to outsiders, and 
 therefore does not create a contract or estoppel against the company 
 on which they can rely. Rainford v. James Keith and Blackman Co., 
 
 (1905) 1 Ch. 296 ; Guy v. Waterlow Bros., 25 T. L. E. 515. See dicta 
 to the contrary in Societe Generate v. Walker , 1 1 App. Cas. 20. 
 
 P. 10 
 
14b 
 
 Calls on 
 shares. 
 
 CHAPTER XII. 
 
 CALLS. 
 
 A member is under a liability to pay up in accordance with the 
 articles the amount for the time being unpaid on his shares. If his 
 shares have been issued as paid up or partly paid up, whether for 
 cash or otherwise, or if he or some prior holder has paid them up 
 wholly or in part, he may be wholly or pro tanto exempt from calls ; 
 but prima facie his liability is to pay the full amount in money or, if 
 so agreed, in money’s worth. Under sect. 25 of the Companies Act, 
 1867, he had to pay in cash unless a contract otherwise providing was 
 filed with the registrar, but this section has been repealed. See supra , 
 p. 119. 
 
 The nature of this liability is defined by sect. 14 of the Act. 
 See supra , p. 116. A shareholder is bound, indeed, to pay the full 
 amount unpaid on his shares, but he is not bound (unless, indeed, the 
 terms of issue so provide) to pay up at once. He is only bound to 
 pay in accordance with the articles , e.g., by instalments, according to 
 the terms of issue, or in response to calls. In re Kershaw , Whittaker 
 v. Kershaw , 45 C. D. 320 ; Re Russian Spratts , Limited , 78 L. T. 480 ; 
 Alexander v. Automatic Telephone Co ., (1900) 2 Ch. 56. When the 
 liability to pay has thus matured into a debt, this indebtedness on the 
 shareholder’s part to the company is by the section “to be in the 
 nature of a specialty debt.” An instalment payable by the terms of 
 issue is not a call. Croskey v. Bank of Wales , 4 Gift. 314 ; Alexander 
 v. Automatic Telephone Co., (1900) 2 Ch. 56. 
 
 Call-making Power a Trust. 
 
 The power to make calls is a power in the nature of a trust, and it 
 must be exercised for the general benefit of the company. Gilbert’s 
 case, 5 Ch. 559 ; Alexander v. Automatic Telephone Co., (1900) 2 Ch. 
 56. If it is being exercised maid fide, e.y., for the directors’ own ends 
 or other indirect purpose, this is an abuse of the power, and an 
 injunction may be obtained restraining the call. See p. 149, post. 
 Norman v. Mitchell, 19 Beav. 278; Logan v. Courtown , 13 Beav. 22; 
 
MAKING OF CALLS. 
 
 Ch. XII. 
 
 147 
 
 Bailey v. Birkenhead Co., 12 Beav. 433. But the Court does not readily 
 accede to such an application. The onus of proving mala Jides in such 
 a case is on the shareholder. Odessa Tramways Co. v. Mendel , 8 C. 
 Div. 245. In the absence of proof of mala jides, it is a well-established 
 principle that the Court will not interfere with the discretion of the 
 directors in making a call. Ibid. 
 
 Making of Calls. 
 
 A call is made by the directors or other the executive of the company 
 pursuant to the provisions of the company’s articles. These generally 
 provide (see Table A., Arts. 12 — 17) that the directors may from time 
 to time make such calls as they think fit upon the members in respect 
 of all moneys unpaid on the shares held by them and not by the condi- 
 tions of allotment thereof made payable at fixed times, and that each 
 member shall pay the amount of every call so made on him to the 
 persons and at the times and places fixed by the directors. Usually 
 the notice of a call is 14 or 21 days. The terms thus defined by the 
 articles are the terms on which, and on which only, the shareholder 
 has agreed to pay, and in making a call care must, therefore, be 
 taken that the directors making it are (i) duly appointed ( Howbeach 
 Coal Co. v. Teague , 5 H. & N. 151) ; and (ii) duly qualified ( Iron Ship 
 Co. v. Blunt , L. B. 3 C. P. 484 ; Sharp v. Dawes , 2 Q. B. I). 26) ; 
 (iii) that the meeting of the directors has been duly convened ( Garden 
 Gully United Quartz Mining Co. v. McLister, 1 App. Cas. 46 ; Faure 
 Electric Accumulator Co. v. Phillipart, 58 L. T. R. 525) ; (iv) that the 
 proper quorum is present {Austin’s case (1871), 24 L. T. 932); and 
 (v) that the resolution making the call is duly passed and specifies the 
 amount of the call, the time and place — for these are of its essence — 
 and to whom the call is to be paid. See Re Cawley 8f Co., 42 C. D. 
 209 ; conf. Johnson v. Lyttle’s Iron Agency, 5 0. D. 687. A proper 
 entry must also be made in the minutes. Cornwall Mining Co. v. 
 Bennett , 5 H. & N. 423. Unless these matters are attended to the 
 call may be invalid, and when the company comes to sue for the 
 amount or seeks to enforce payment by forfeiture it may be em- 
 barrassed by finding that all the proceedings are vitiated by an initial 
 irregularity. See, however, as to such irregularities, p. 192. 
 
 Sometimes the articles limit the amount of a call — provide, for 
 example, that the amount shall not exceed one-fourth of the nominal 
 amount of the share, and sometimes that a specified interval must elapse 
 between the times fixed for payment of two successive calls. Any 
 conditions of this kind must be kept in mind in making a call. 
 
 Calls should be made pari passu unless the articles otherwise 
 
 10(2) 
 
148 
 
 CALLS. 
 
 Interest on 
 
 Calls where 
 
 member 
 
 deceased. 
 
 provide, and directors can only justify a call made on certain selected 
 members only (if at all) on very special grounds. Galloway v. Halle 
 Concerts Society , (1915) 2 Ch. 233. If the directors omit to make calls 
 on their own shares they may be held guilty of misfeasance. 
 Alexander v. Automatic Telephone Co ., (1900) 2 Ch. 56. 
 
 It may sometimes be proper for directors to make a call in order to 
 restrain threatened transfers ( Gilbert's case , 5 Ch. 559) : and where a 
 company is about to sell its undertaking, there is no objection to a call 
 being made with a view to increasing the saleable assets by the 
 amount thereof. New Zealand Co. v. Peacock , (1894) 1 Q. B. 622. 
 
 A call may be made payable in instalments without any express 
 authority in the articles. Ambergate Rail. Co. v. Norcliffe, 6 Ex. 629 ; 
 Lawrence v. Wynn, 5 M. & W. 355. 
 
 Directors may make calls after a voluntary winding-up has com- 
 menced with the sanction of a general meeting or of the liquidators. 
 Fairbairn Engineering Co., Ladd's case, (1893) 3 Ch. 450. 
 
 Interest. 
 
 The articles usually contain also a provision to the effect that if 
 any call is not paid at the time fixed, the holder for the time being of 
 the share is to be liable to pay interest at a specified rate, sometimes 
 10 per cent. See Table A., Art. 14. Such a clause is binding and 
 will be given effect to. It does not, however, apply in the case of 
 calls made by the liquidators of a company. Welsh Flannel and 
 Tweed Co., 20 Eq. 367. As to liability to pay interest on calls after 
 forfeiture of the shares, see Stocked s case, L. E. 3 Ch. 412 ; Faure 
 Electric Accumulator Co. v. Phillipart, 58 L. T. E. 525. 
 
 Deceased Member. 
 
 Although the articles generally provide that calls are to be 
 made on the “members,” a deceased member, whilst his name 
 remains on the register, is to be treated as a continuing member so 
 far as may be necessary to make his estate liable. New Zealand, Sfc. 
 Co. v. Peacock , (1894) 1 Q. B. 622. 
 
 In the administration of the insolvent estate of a deceased person 
 the amount due for calls which may be made in respect of shares in a 
 company held by him should be estimated and proved for, as well 
 when the company is a going concern as when it is being wound up. 
 Re McMahon , Fuller v. McMahon, (1900) 1 Ch. 173. 
 
PAYMENT IN ADVANCE OF CALLS. 
 
 Ch. XII. 
 
 149 
 
 Bankrupt Member. 
 
 If a shareholder becomes bankrupt and the company proves in the 
 bankruptcy for the uncalled liability on the shares and receives a 
 dividend, this does not make the bankrupt a holder of fully-paid 
 shares so as to entitle him to participate in surplus assets of the com- 
 pany. Proof is not equivalent to payment. Re West Coast Goldfields , 
 (1906) 1 Ch. 1 . 
 
 Enforcing Payment. 
 
 The duty of the directors of a company when a call is made is to Enforcement 
 compel every shareholder to pay to the company the amount due from of payment, 
 him in respect of such call, and they are guilty of a breach of their 
 duty if they do not take all reasonable means for enforcing payment. 
 
 Spackman v. Evans , L. P. 3 H. L. 186. 
 
 It is a breach of trust for them to favour any director in such a 
 matter. Alexander v. Automatic Telephone Co ., (1900) 2 Ch. 56. 
 
 It is now common to sue for a call on a writ specially indorsed 
 under Ord. III. r. 6 of Supreme Court Pules. After judgment has 
 been obtained against the defaulting shareholder, the company can, if 
 needs be, proceed against him in bankruptcy. Re Winterbottom, 18 
 Q. B. D. 446. See also as to forfeiture, Chapter XIII. Whilst the 
 company is a going concern the shareholder can plead a set-off. 
 
 Re Hiram Maxim Co., (1903) 1 Ch. 70. As to the method of enforcing 
 calls due to an English company from contributories in Ireland, see 
 Re Bank of Egypt, Ltd., (1913) 1 I. P. 502. 
 
 Injunction to Restrain Enforcement of Call. 
 
 If a call is improperly made, the shareholder can obtain an injunc- 
 tion to restrain the directors from enforcing the call by forfeiture 
 pending the trial of the question ; but usually only on the terms that 
 the amount of the call should be paid into Court. Lamb v. Sambas 
 Rubber Co,, (1908) 1 Ch. 845 ; and see Jones v. Pacaya Rubber Co., 
 
 (1911) 1 K. B. 455. 
 
 An injunction to restrain the enforcement of a call by action at law 
 cannot now be granted. Judicature Act, 1873, s. 24 (5) ; and see 
 Galloway v. Halle Concerts Society , (1915) 2 Ch. 233. 
 
 Payment in Advance of Calls. 
 
 The articles of a company usually contain a clause similar to Payment in 
 
 Clause 17 of Table A., empowering the directors to receive from any advance of 
 
 J calls. 
 
150 
 
 CALLS. 
 
 member money in advance of calls, on the footing that interest is to be 
 paid tbereon whilst in advance. This is an extremely important power 
 and one which is frequently exercised. It is in the nature of a trust 
 to be faithfully exercised for the benefit of the company, and accord- 
 ingly the directors should only receive money in advance when, in 
 their judgment, the same can be advantageously used for the pur- 
 poses of the company, and the rate of interest should not be excessive. 
 Poole , Jackson, and White's case (1878), 9 C. D. 322 ; In re Pyle 
 Works, 44 C. D. 586. Hence, where directors under a power of this 
 kind paid up in advance their own shares, and the same day appro- 
 priated the amount in payment of their fees, the company being 
 insolvent, it was held, that the transaction, not being bond fide, was 
 ineffectual, and that the directors remained liable on their shares. 
 Sykes's case, 13 Eq. 255. See, however, Mason's case, In re Liverpool 
 Insurance Co., 30 W. R. 378 ; In re A. M. Woods, Ship v. Woodite 
 Protection Co., 2 Meg. C. R. 164 ; also Washington Diamond Co., 
 (1893) 3 Ch. 95. It has now been settled by the House of Lords 
 that where money is paid up in advance under such a clause on the 
 footing that it is to carry interest, such interest is to be paid whether 
 there are or are not profits for the payment thereof. If there are no 
 profits, or the profits are insufficient, then the company must pay 
 out of capital, and there is nothing ultra vires in this. Lock v. 
 Queensland Co., (1896) A. C. 461, 467. Where capital has been paid up 
 in advance it ranks for repayment in a winding-up primd fiacie before 
 capital not paid up in advance. Maude's case, 6 Oh. 51 ; Wakefield, 
 fyc. Co., (1892) 3 Ch. 165 ; In re Exchange Drapery Co., 38 C. D. 
 171. The company is not entitled to repay the amount advanced at 
 any time against the wish of the shareholder. London and Northern 
 S.S. Co. v. Farmer , (1914) W. N. 200 ; 111 L. T. 204. 
 
Ch. XIII. 
 
 151 
 
 CHAPTER XIII. 
 
 FORFEITURE. 
 
 The articles of a company generally contain provisions for the 
 forfeiture of shares for non-payment of calls or instalments. See 
 Table A., Arts. 24 — 30 : sometimes for non-payment of debts also. 
 See Dunlop v. Dunlop , 21 Ch. D. 583, and the footnote on p. 160, post. 
 Such a power to forfeit is not inherent in a company. Clarke v. Hart , 
 6 H. L. C. 633. It only exists where it is given by the articles or 
 introduced into them, as it may be, by special resolution. Dawkins v. 
 Antrobus, 17 C. D. 634; Allen v. Gold Reefs of West Africa , (1900) 
 1 Ch. 656. When given, it is like other powers of directors, fiduciary 
 — to be exercised, that is, for the benefit of the company. 
 
 A collusive forfeiture made for the purpose of enabling a member 
 favoured by the directors to escape from his liabilities is an abuse of the 
 power and a fraud on the other shareholders. Re Esparto Trading Co., 
 12 C. D. 191 ; Spackman v. Evans, L. R. 3 H. L. 186 ; Lord Wallcourt' s 
 case , W. N. (1899) 258. Forfeiture is treated very strictly by the Courts, 
 and directors seeking to enforce it must exactly pursue the course of 
 procedure marked out by the articles. Clarke v. Hart, supra. A 
 slight irregularity is as fatal as the greatest. Garden Mining, Sfc. Co. 
 v. McLister, 1 App. Cas. 39 ; Johnson v. Lyttle 1 s Iron Agency, 5 C. D. 
 687. Thus if the call, in respect of which the forfeiture is made, 
 was not validly made ( Garden Gully United Quartz Mining Co. v. 
 McLister, supra), or if the notice on which the forfeiture is founded 
 is inaccurate in requiring payment of interest from a wrong date, e.g ., 
 the date of the call instead of the date appointed for payment, the 
 forfeiture may be held invalid. Johnson v. Lyttle' s Iron Agency Co., 
 supra ; Watson v. Eales, 23 Beav. 294 ; Faure Electric Accumulator Co. 
 v. Phillipart, 58 L. T. 525. Even where a shareholder is seeking to 
 rescind his contract the Court can restrain a forfeiture. Lamb v. 
 Sambas Rubber, (1908) 1 Ch. 845; Jones v. Pacaya Rubber Co., (1911) 
 1 K. B. 455. 
 
 Where a shareholder is bankrupt the notice of forfeiture may still 
 be given to him. Graham v. Van Dieman’s Land Co., 26 L. J. Ex. 
 73 ; but it is well to give notice to the trustee also. So where the 
 shareholder is dead the notice may be sent to his registered address. 
 Allen v. Gold Reefs of West Africa, (1900) 1 Ch. 656 at p. 670. [Note 
 that in this case the notice in fact reached the executors ; but the 
 statement of the law at p. 670 is probably sufficient to override the 
 doubt expressed in James v. Buena Ventura, (1896) 1 Ch. at p. 465.] 
 
 Forfeiture of 
 shares for 
 non-payment 
 of calls. 
 
 Collusion. 
 
 Irregular. 
 
152 
 
 FORFEITURE. 
 
 Forfeiture 
 after wind- 
 ing-up. 
 
 Sale of 
 shares. 
 
 Power to 
 annul. 
 
 Relief 
 
 against. 
 
 The exercise of a power of forfeiture is a question of expediency as 
 to which the directors must exercise their discretion. Bigg's case , 
 1 Eq. 309. On forfeiture the shares become the property of the 
 company and may be sold by it. See Table A., Clause 27. 
 
 Directors do not lose the power of forfeiture because the company 
 charges all its uncalled capital in favour of trustees for debenture 
 holders. Re Agency Land and Finance Co. of Australia , 20 T. L. R. 41 . 
 
 In a voluntary winding-up the directors can, with the sanction 
 of the liquidator, exercise the power of forfeiture. See sect. 185 (iii) 
 of the Act of 1908, and Re Fairbairn, Sfc. Co., (1893) 3 Ch. 450. 
 
 The articles generally give power to the directors to sell forfeited 
 shares. In such a case the directors can sell at a discount, that is for 
 less than the amount paid up prior to the forfeiture. Morrison v. 
 Trustees' Executors Co. (1899), 68 L. J. Ch. 11 ; 79 L. T. 605 (C. A.). 
 [But semble the transferee will remain liable to pay any amount remain- 
 ing unpaid on the shares at the time of sale. S. C. And see New 
 Balkis v. Randt Gold Mining Co., (1904) A. C. 165, and p. 153, post^\ 
 In such a case the transferee will be a holder of shares in respect of 
 which money is due, and may therefore by a clause in the regulations 
 be debarred from voting. Randt Gold Mining Co. v. Wainwright , (1901) 
 1 Ch. 184. He should be credited with any subsequent payments made 
 by the ex-owner. Randt Gold Mining Co., (1904) 2 Ch. 468. 
 
 The articles very commonly give power to the directors so long as 
 they have not sold the forfeited shares to annul the forfeiture on such 
 terms as they think proper. This power cannot be exercised without 
 the consent of the late holder. Exchange Trust, Limited, Larkworthy' s 
 case, (1903) 1 Ch. 711. 
 
 Relief against Forfeiture. 
 
 Where a forfeiture has been duly and bond fide effected, equity will not 
 relieve against it. Sparks v. Liverpool Waterworks Co., 13 Yes. 428. 
 A shareholder who desires to challenge a forfeiture as invalid may 
 bring an action to set it aside ( Sweny v. Smith (1867), 7 Eq. 324 ; 
 Johnson v. Ly tile's, fyc. Co., supra; Re New Chili, Sfc. Co., 45 C. D. 
 598) ; and may obtain an injunction to restrain the forfeiture pending 
 the trial, usually on the terms of payment of the amount called up into 
 Court ; see Jones v. Pacaya Rubber Co., (1911) 1 K. B. 455 (where the 
 forfeiture was restrained pending the trial of an action claiming rescis- 
 sion of the contract to take the shares) ; and mere laches will not dis- 
 entitle a legal owner of shares to such relief if the forfeiture is invalid 
 (i Garden Gully , Sfc. Co. v. McLister, 1 App. Cas. 39) ; but it is different 
 where years have elapsed and the shareholder claiming relief was 
 himself party as director to the forfeiture. Jones v. North Vancouver 
 Land Co., (1910) A. C. 317. 
 
LIABILITY AFTER FORFEITURE. 
 
 Ch. XIII. 
 
 153 
 
 A shareholder whose shares have been irregularly forfeited (e.g., 
 without proper notice) can sue the company or, in a winding-up, prove 
 for damages against the company. In re New Chili , 8fc. Co., 45 C. D. 
 598. 
 
 A clause in a company’s articles forfeiting the shares of any share- 
 holder who should commence or threaten an action against the 
 company or the directors on payment to the shareholder of the full 
 market value of his shares is invalid, as an infringement of a share- 
 holder’s legal rights. Hope v. International Financial Society (1876), 
 4 C. D. 327. 
 
 Liability after Forfeiture. 
 
 Forfeiture of shares prevents prima facie any action by the company 
 for past calls ( Stocken's case, 3 Ch. 415), and when a person has been 
 induced by misrepresentation to become a member, forfeiture places 
 him in a position, if sued by the company, to set up the misrepresenta- 
 tion by way of defence, even in a winding-up. Aaron's Reefy. Twiss, 
 (1897) A. C. 273. But the articles commonly provide that where 
 a share has been forfeited the member shall be liable for payment of 
 the call with interest, and this creates a new obligation ( Stocken's 
 case, supra ) which can be enforced by action at law, but not by placing 
 the holder on the list of contributories. Ladies' Dress Association v. 
 Pulbrook , (1900) 2 Q. B. 376. 
 
 A call may be “ owing” within the meaning of such a clause, 
 though it has not become payable when the forfeiture takes place. 
 Faure v. Phillipart, 58 L. T. 525. 
 
 The forfeiture of a share does not relieve the forfeiting member 
 from liability in respect thereof if the company should be wound up 
 within a year after the forfeiture : he will still be liable as a past 
 member to the extent specified in sect. 123 of the Act. Creyke's 
 case , L. B. 5 Ch. 63. So a shareholder who has transferred his shares 
 within a year of a winding-up is liable as a past member, though the 
 shares have been forfeited in the hands of a transferee. Bridgets and 
 Neill' s cases (1869), L. It. 4 Ch. 266. 
 
 A liquidator has no power to cancel a forfeiture of shares duly 
 made by the directors before the commencement of the winding-up. 
 Dawes' case, 6 Eq. 232. 
 
 When shares forfeited for non-payment of calls are sold, the pur- 
 chaser is liable to a fresh call in respect of the capital comprised in 
 such prior calls ( New Balkis Eersteling v. Randt Gold Mining Co., 
 (1904) A. C. 163), for the company cannot sell free from that liability. 
 But subsequent payments by the former holder, on account of the 
 prior calls, should be credited to the purchaser in due course. Randt 
 Gold Mining Co., (1904) 2 Ch. 468. 
 
 Damages for 
 
 irregular 
 
 forfeiture. 
 
 Liability 
 
 after. 
 
154 
 
 The lien 
 clause : its 
 operation. 
 
 As to subse- 
 quent mort- 
 gage or 
 purchase. 
 
 Exemption 
 
 clause. 
 
 CHAPTEE XIY. 
 
 LIEN ON SHARES. 
 
 How created. 
 
 A company has, prima facie , no lien on the share of a member ( Pinkett 
 y. Wright , 2 Ha. 120 ; 12 01. & Fin. 764) ; but the articles may, and 
 usually do, provide that the company shall have a paramount lien on the 
 shares of each member for his debts and liabilities to the company, 
 whether matured or not. See Company Precedents, llthed.,PartI.p. 662, 
 and Table A., cl. 9. And such a provision is effective. New London , Sfc. 
 Co. v. Brocklebank (1882), 21 C. D. 302; Bradford Bank v. Briggs (1886), 
 12 App. Oas. 29. The lien thus created takes effect as an equitable 
 charge [Ex parte Lewis (1871), 6 Ch. 818) created in favour of the 
 company by covenant of the shareholder, the covenant being implied 
 by virtue of sect. 14 of the Act. See Bradford Bank v. Briggs , 
 supra ; and also p. 39, supra. Alien clause may be adopted by special 
 resolution. Allen v. Gold Reefs of West Africa , (1900) 1 Ch. 656. 
 
 A right of lien may be discharged by a clear arrangement between 
 the shareholder and the company. Bank of Africa v. Salisbury Gold 
 Mining Co ., (1892) A. C. 281. 
 
 Validity of Lien against Third Persons. 
 
 A lien clause in the articles not infrequently gives rise to 
 questions of priority between the company asserting the lien and 
 persons claiming under the shareholder. For example, the company 
 may receive notice that the shareholder has mortgaged or sold the 
 shares, and the question then arises whether, if the shareholder 
 subsequently becomes indebted to the company, the company’s lien 
 will rank in priority to the mortgagee or purchaser. 
 
 The answer to the question generally turns on the presence or 
 absence in the articles of a clause (below referred to as an exemp- 
 tion clause) relieving the company from the obligation to take notice 
 of equities in relation to its shares. It will be convenient to consider, 
 in the first place, cases 
 
WHERE THERE IS AN EXEMPTION CLAUSE. Ch. XIV. 
 
 155 
 
 Where there is an Exemption Clause. 
 
 See, for examples, p. 158. 
 
 In New London and Brazilian Bank v. Brocklebank (1882), 21 C. D. 
 302, there was a paramount lien clause and also an exemption clause. 
 The shares were acquired with trust money. One of the holders 
 became indebted to the bank, and upon the bank seeking to enforce 
 its charge the prior equity of the beneficiaries was set up, with the 
 result that the Court of Appeal (Jessel, M. R., and Lindley and 
 Holker, L. JJ.) held that the bank had a lien on the shares which 
 must prevail over the title of the beneficiaries. Jessel, M. R., con- 
 sidered that, as the lien was given by the articles, it took effect from 
 the time the member was admitted, and further, that the beneficiaries 
 were not entitled to repudiate the lien and exemption clauses, and 
 Lindley, L. J., said that he failed to see upon what ground the 
 equitable owner could claim title to the shares and yet “repudiate 
 the terms upon which the trustees have acquired the shares.” 
 
 In the last edition of Lindley on Company Law, p. 637, this case is 
 referred to as an authority for the proposition that — 
 
 “In the case of companies which are exempted from the duty of 
 taking notice of trusts, the lien is available against a shareholder who 
 is merely a trustee for others for debts due from him personally.” 
 
 And the decision was recognized as a binding authority by Far- 
 well, J., in the recent case of Boidand’s Trustees v. Steel Brothers Sf 
 Co., (1901) 1 Ch. 289. 
 
 Again, in Miles v. New Zealand, Alford, Sfc. Co. (1886), 32 C. D. 266, 
 there being a lien clause and an exemption clause, it was held by the 
 Court of Appeal that the company was not bound to take notice of 
 a mortgage, and was entitled to rank before the second mortgagee 
 in respect of a claim arising after notice to the company of such 
 mortgage. 
 
 And in Societe Generate v. Walker (1886), 11 App. Cas. 20, where 
 there was an exemption clause, Lord Selborne said that he thought 
 “upon the true and proper construction of the Companies Act, 1862, 
 and of the articles of this company , there was no obligation upon this 
 company to accept or to preserve any record of notices of equitable 
 interests or trusts if actually given or tendered to them, and that any 
 such notice if given would be absolutely inoperative.” 
 
 This passage was thought by Lord Halsbury, L. C., in Bradford 
 Banking Co. v. Briggs (see infra), to go too far ; but, apparently, atten- 
 tion was not called to the fact that, in the case last mentioned, there 
 was no exemption clause, whereas, in the case Lord Selborne was 
 dealing with, there was a very full exemption clause. 
 
 New London , 
 §c. Bank v. 
 Brocklebank. 
 
LIEN ON SHARES. 
 
 The principle of these decisions appears to be that a shareholder can- 
 not both approbate and reprobate, and that those who claim under 
 him cannot repudiate either the lien clause or the exemption clause, 
 any more than those claiming under a lease or a policy can repudiate 
 the conditions thereof. Qui sentit commndum , sentire debet et onus l. See 
 Macdonald v. Law Union, Sfc. Co. (1873), L. R. 9 Q. B. 328, and Bor- 
 land's Trustee v. Steel Brothers Sf Co., (1901) 1 Ch. 279 (Farwell, J.). 
 It is the same principle as that a person who takes property with 
 notice of an equity attached thereto is bound thereby. See Tulk v. 
 Moxhay (1848), 2 Ph. 774. “If,” said Lord Chancellor Cottenham in 
 
 that case, “ an equity is attached to the property by the owner, no one 
 purchasing with notice of that equity can stand in a different situation 
 from the party from whom he purchased.” Tulk v. Moxhay was a 
 case as to user of land, but there is no difference in principle whether 
 the subject-matter is land or a chattel, e.g ., a ship. See De Mattos 
 v. Gibson (1858), 4 De G. & J. 276, in which Knight-Bruce and 
 Turner, L. JJ., both considered that, when there was a contract between 
 A. and B. as to the employment of a chattel the Court of Chancery 
 had power to restrain C., claiming through B. with notice, from doing 
 anything in contravention of the contract. “A system of law,” said 
 Knight-Bruce, L. J., “in which such a power does not exist must 
 surely be very defective. I repeat that in my opinion the power does 
 exist here.” 
 
 The importance of thus relieving the company from an obliga- 
 tion to recognize equities is well pointed out by Lord Coleridge, C. J., 
 sitting in the Court of Appeal in Re Perkins, 24 Q. B. D. 613. “It 
 looks to regis- seems to me,” he said, “ extremely important not to throw any doubt 
 tered holder. on the principle that companies have nothing whatever to do with the 
 relations between trustees and their cestuis que trust in respect of the 
 shares of the company. If a trustee is on the company’s register as a 
 holder of shares, the relations which he may have with some other 
 person in respect of the shares are matters with which the com- 
 pany have nothing whatever to do. They can only look to the 
 man whose name is upon the register. It seems to me that if we 
 were to throw any doubt upon that rule, we should make the carrying 
 on of their business by joint stock companies extremely difficult, and 
 might involve those companies in very serious questions, and the 
 ultimate result would be anything but beneficial to the holders of 
 shares in such companies themselves.” Lord Esher and Fry, L. J., 
 concurred. It is for these dicta that the case is cited. The actual 
 point decided was a somewhat different one, viz., that as the company 
 were not bound to recognize trusts, they had no lien upon the shares 
 for a debt due to them by the cestui que trust of the shareholder. 
 
 156 
 
 Principle of 
 decision. 
 
 Object of 
 sect. 27 of 
 the Act. 
 
 Company 
 
WHERE NO EXEMPTION CLAUSE. 
 
 Ch. XIV. 
 
 157 
 
 Where no Exemption Clause. 
 
 On the other hand, cases sometimes occur where there is a lien Where no 
 clause hut no clause exempting the company from taking notice of ^ e ^g tl0n 
 trusts and equities. In such cases the company has to rely exclusively 
 on sect. 27 of the Act, which provides that ‘‘No notice of any trust, 
 expressed, implied or constructive, shall be entered on the register or 
 be receivable by the registrar in the case of companies under this Act 
 and registered in England or Ireland.” 
 
 This section is very wide in its terms ; but it has been held by the 
 House of Lords, on the corresponding section in the Act of 1862, 
 that notice of an equitable mortgage created by the shareholders, 
 is not notice of a “ trust ” within the meaning of the sections. 
 
 Bradford Banking Co. v. Briggs (1887), 12 App. Cas. 29. In that 
 case the articles contained a clause giving the company a first and 
 permanent lien, and there was no exemption clause. The company 
 received notice of a mortgage by the shareholder, and afterwards it 
 advanced money to the shareholder and claimed priority for its 
 advance, contending ( 1 ) that on the true construction of the lien clause 
 (103) in its articles (which gave the company a first and permanent 
 lien) the shareholder had agreed that the company should have a lien 
 ranking in priority to all other charges with or without notice, and 
 that the second mortgagee with notice of this bargain could not 
 establish any claim in violation of it ; and (2) that the company was, 
 under sect. 30 of the Act of 1862 (now sect. 27), entitled to disregard 
 the notice as notice of a trust, and, on that ground, entitled to priority. 
 
 It was held that the principle of Hopkinson v. Rolt , 9 H. L. C. 514, 
 applied, and there being nothing in the articles to the contrary, the 
 company was not entitled to disregard notice of the mortgage and 
 insist upon priority for its subsequent advances. 
 
 As to the first of these contentions, the House of Lords was of 
 opinion that it was inconsistent with the real meaning of the clause. 
 
 “I cannot agree,” said Lord Blackburn, “that such is the true con- 
 struction of Art. 103.” And Lord Fitzgerald observed that “the 
 principle of Hopkinson v. Rolt governs the present case unless there is 
 something in Art. 103 which prevents its application. The articles 
 provide for the transfer of shares; . . . but there is no limit to the 
 right of the shareholder to pledge, or raise money on, his shares 
 unless it is to be found in Art. 103,” and he considered that “full 
 effect may be given to its terms, and yet the lien conferred by it be 
 limited as to liabilities of the shareholder contracted up to the time at 
 which the company shall have had notice that he has ceased to be the 
 beneficial holder of the shares.” 
 
158 
 
 LIEN ON SHARES. 
 
 As to the second contention, the House of Lords held that notice of the 
 mortgage was not notice of a trust within the meaning of the section. 
 
 It is material to note that this case was decided on the construction 
 of the articles and of sect. 30 of the Act of 1862. It did not decide 
 that there was any inexorable rule of equity making it impossible, by 
 the articles, to exclude the application of the rule in Hopkmson v. 
 Bolt , supra. On the contrary, as appears above, the provisions of the 
 articles were carefully considered, and it was held that they did not 
 import any intention to exclude the rule, for they in no way attempted 
 to relieve the company from noticing equities. And as regards sect. 30 
 of the Act of 1862 (now sect. 27 of 1908), the case merely decided that 
 notice of a mortgage was not notice of a trust. Bradford Banking Co. 
 v. Briggs therefore in no way derogates from the authority of New 
 London and Brazilian Bank v. Brocklebank , 21 C. D. 302, supra , p. 155. 
 See also the judgment of Farwell, J., in Borland \ Trustee v. Steel 
 Brothers Sf Co., (1901) 1 Ch. 288. 
 
 Exemption Clauses. 
 
 The terms of exemption clauses vary considerably. In New London 
 and Brazilian Bank v. Brocklebank , 21 C. D. 302, supra , p. 155, the 
 clause ran — 
 
 “The company shall not be bound by or recognize any agreement 
 to transfer or charge any share, or any equitable, contingent, future or 
 partial interest, or other right in, to, or in respect of such share, 
 except an absolute right thereto in the person from time to time regis- 
 tered as the holder thereof.” 
 
 The clause in Societe Generale v. Walker , supra , p. 155, ran thus — 
 
 “The company shall not be bound by or recognize any equitable, 
 contingent, future, or partial interest in any share or any other right 
 in respect of a share except absolute right thereto in the person from 
 time to time registered as the holder thereof, and except also as 
 regards any parent, guardian, committee, husband, executor, or 
 administrator or trustee in bankruptcy his right under these presents 
 to become a member in respect of or to transfer a share.” 
 
 In Miles v. New Zealand , Sfc. Co., supra, p. 155, the clause was in 
 these terms — 
 
 “The company shall not be bound to recognize any contingent, 
 future, partial or equitable interest in the nature of a trust, or other- 
 wise in any share or any other right in respect of any share except an 
 absolute right thereto in the person from time to time registered as the 
 holder thereof.” 
 
 Another provision very commonly found in articles is that “[Save 
 as herein otherwise provided] the company shall be entitled to treat 
 
HOW LIEN ENFORCED : SALE. 
 
 Ch. XIV. 
 
 159 
 
 the registered holder of any share as the absolute owner thereof, 
 and, accordingly, shall not [except as ordered by a Court of competent 
 jurisdiction or as by statute required] be bound to recognize any 
 equitable or other claim to, or interest in, such shares on the part of 
 any other person.” Such a clause is framed with a view to enabling 
 the company, whether in relation to a lien clause or otherwise, to deal 
 with the registered holder of a share as the absolute owner, and to 
 relieve the company altogether from any obligation to take notice of 
 any claims or assertions of equitable interests that may come to it. 
 
 How far such a clause operates has not yet been fully determined. 
 It is, however, clear that, even without the words in brackets, it does 
 not prevent a person equitably interested in shares from procuring 
 the intervention of the Court to protect his rights. Binney v. Ince 
 Hall Coal Co ., 35 L. J. Ch. 363 ; Taylor v. Midland Rail. Co ., 8 W. B. 
 401. In this respect it goes no further than sect. 27 of the Act. See 
 Bradford Banking Co. v. Briggs , 12 A. C. 29, supra , p. 157 ; and 
 •Company Precedents, Part I. p. 650. 
 
 How Lien enforced. — Sale. 
 
 The articles generally give power to the company to enforce a lien 
 by sale after default (see Table A., Art. 10), and, if needs be, to 
 transfer the shares into the purchasers’ names. This is right ; for, in 
 the absence of some such provision, it may be necessary to apply to 
 the Court. New London , Sfc. Bank v. Brocklebank, 21 Ch. D. 302, 
 supra, p. 155. On the other hand, the charge which a lien creates 
 being a mortgage within the meaning of sect. 2, sub-sect. (vi) of the 
 Conveyancing Act, 1881, the shareholder or his transferee is entitled, by 
 sect. 15, sub-sect, (i) of that Act, to require the company, on payment 
 of the sum due, to assign the debt and their lien on the shares to his 
 nominee. Everett v. Automatic , Src. Co., (1892) 3 Ch. 506 : but see 
 Re Magneta Time Co., (1915) W. N. 318, as to the necessity of con- 
 currence of a subsequent incumbrancer. 
 
 This being so, it may be that the power of sale given by sect. 19 of 
 the same Act to mortgagees is applicable. Sect. 19, no doubt, only 
 gives the power to a mortgagee to sell where the mortgage is “by 
 deed,” but under sect. 14 of the Act of 1908, the lien clause binds 
 the shareholder as if it were his deed of covenant with the company. 
 Bradford Bank v. Briggs, supra. 
 
 The clause conferring a lien extends not only to the shares, but to 
 the dividends thereon {Re General Exchange Bank (1871), L. E. 6 Ch. 
 818 ; Hague v. Dandeson, 2 Ex. 741), and also to any assets which, in 
 a winding-up, may come to the shareholders in respect thereof. Ex 
 parte Lewis, 6 Ch. 818. 
 
 Such a clause 
 does not 
 exclude the 
 Court. 
 
 Enforcing- 
 
 lien. 
 
160 
 
 LIEN ON SHARES. 
 
 Forfeiture 
 
 clause. 
 
 Simple 
 forfeiture 
 clause with- 
 out lien. 
 
 Charging 
 
 orders. 
 
 When the holder of shares subject to a lien by the company sells 
 some of them the purchaser is entitled to marshal as against an 
 execution creditor of the vendor, and to throw the lien in the first 
 instance upon the shares remaining unsold. Gray v. Stone Sf Funnell , 
 69 L. T. 282 ; W. N. (1893) 133. 
 
 Forfeiture. 
 
 Occasionally the articles provide that a lien may be enforced by 
 forfeiture, but such a provision is not effective ; for the lien is an 
 equitable mortgage, and a clause for forfeiture in a mortgage is, in 
 equity, inoperative. The rule is that, “once a mortgage always a 
 mortgage ” {Salt v. Marquis of Northampton , (1892) A. 0. 1), and any 
 attempt to clog the equity of redemption is futile. 
 
 Sometimes it is thought better to avoid any question as to the operation 
 of the lien clause by striking it out altogether, and adopting in lieu 
 thereof a forfeiture clause for non-payment of any debt. Such a clause 
 is sometimes used {Dunlop v. Dunlop , 21 0. D. 583), and is effective (a). 
 It practically overrides Bradford Banking Co. v. Briggs , supra , p. 157. 
 
 Charging Orders. 
 
 As to obtaining charging orders on shares, see 1 & 2 Yict. c. 110, 
 s. 14 ; 3 & 4 Yict. c. 82, s. 1 ; B. S. C., Ord. XLYI. r. 1 ; and Company 
 Precedents, Pt. II. pp. 557, 650. A charging order cannot be made upon 
 the shares of a judgment debtor if he is a trustee of the shares. 
 Cooper v. Griffin , (1892) 1 Q. B. 740; Howard v. Sadler , (1893) 1 Q. B. 1 ; 
 South Western Loan and Discount Co. v. Robertson , 8 Q. B. D. 17. 
 See also Ideal Bedding Co. v. Holland , (1907) 2 Ch. 157. A charging 
 order must be enforced in a separate action commenced by writ or 
 originating summons. Company Precedents, Part II. p. 650. See 
 Leggott v. Western, 12 Q. B. D. 287 ; Ricketts v. Ricketts , W. N. (1891), 
 29 ; E. S. C., Ord. LY. r. 5a. 
 
 [(«) The validity of the clause was not questioned in Dunlop v. Dunlop , and the dicta 
 of the House of Lords in the subsequent case of Trevor v. Whitworth , 12 A. C. at 
 p. 417, and of the Court of Appeal in Bellerby v. Rowland $ Marwood , (1902) 2 Ch. 
 at p. 32, may raise a doubt whether forfeiture is permissible for purposes other than 
 those specified in Clause 26 of Table A. — Ed.] 
 
Ch. XV. 
 
 161 
 
 CHAPTER XV. 
 
 GENERAL MEETINGS. 
 
 The Statutory Meeting*. 
 
 taken the place of sect. 12 of the Companies Act, 1900), runs as 0 f company? 
 follows : — 
 
 (1.) Every company limited by shares and registered on or after the 
 1st day of January, 1901, shall, within a period of not less than one 
 month nor more than three months from the date at which the com- 
 pany is entitled [see p. 28] to commence business, hold a general 
 meeting of the members of the company, which shall be called the . 
 statutory meeting. 
 
 (2.) The directors shall, at least seven days before the day on which 
 the meeting is held, forward to every member of the company a report 
 (in this Act called “the statutory report”) to every member and to 
 every other person entitled under this Act to receive it. 
 
 (3.) The statutory report shall be certified by not less than two 
 directors of the company, or, where there are less than two directors, 
 by the sole director and manager, and shall state — 
 
 (a) the total number of shares allotted, distinguishing shares allotted 
 
 as fully or partly paid up otherwise than in cash, and stating 
 in the case of shares partly paid up the extent to which they 
 are so paid up, and in either case the consideration for which 
 they have been allotted ; 
 
 (b) the total amount of cash received by the company in respect of 
 
 such shares, distinguished as aforesaid ; 
 
 (c) an abstract of the receipts of the company on account of its 
 
 capital, whether from shares or debentures, and of the pay- 
 ments made thereout up to a date within seven days of the 
 date of the report, exhibiting under distinctive headings the 
 receipts of the company from shares and debentures and 
 other sources, the payments made thereout, and particulars 
 concerning the balance remaining in hand, and an account 
 or estimate of the preliminary expenses of the company ; 
 
 11 
 
 P. 
 
162 
 
 GENERAL MEETINGS. 
 
 (d) the names, addresses, and descriptions of the directors, auditors 
 
 (if any), managers (if any), and secretary of the company ; and 
 
 (e) the particulars of any contract, the modification of which is to be 
 
 submitted to the meeting for its approval, together with the 
 particulars of the modification or proposed modification. 
 
 (4.) The statutory report shall, so far as it relates to the shares 
 allotted by the company, and to the cash received in respect of such 
 shares, and to the receipts and payments of the company on capital 
 account, be certified as correct by the auditors, if any, of the company. 
 
 (5.) The directors shall cause a copy of the statutory report, certified 
 as by this section required, to be filed with the registrar of com- 
 panies forthwith after the sending thereof to the members of the 
 company. 
 
 (6.) The directors shall cause a list showing the names, descriptions, 
 and addresses of the members of the company, and the number of 
 shares held by them respectively, to be produced at the commence- 
 ment of the meeting, and to remain open and accessible to any member 
 of the company during the continuance of the meeting. 
 
 (7.) The members of the company present at the meeting shall be 
 at liberty to discuss any matter relating to the formation of the com- 
 pany, or arising out of the statutory report, whether previous notice 
 has been given or not, but no resolution of which notice has not been 
 given in accordance with the articles may be passed. 
 
 (8.) The meeting may adjourn from time to time, and at any 
 adjourned meeting any resolution of which notice has been given in 
 accordance with the articles, either before or subsequently to the 
 former meeting, may be passed, and the adjourned meeting shall 
 have the same powers as an original meeting. 
 
 (9.) If a petition is presented to the Court in manner provided for 
 in Part IV. of this Act for winding up the company on the ground of 
 default in filing the statutory report, or in holding the statutory 
 meeting, the Court may, instead of directing the company to be 
 wound up, give directions for the report to be filed or a meeting to 
 be held, or make such other order as may be just. 
 
 (10.) The provisions of this section as to forwarding and filing the 
 statutory report shall not apply in the case of a private company. 
 
 The obvious purpose of the statutory meeting with its preliminary 
 report is to put the shareholders of the company as early as possible 
 in possession of all the important facts relating to the new company — 
 what shares have been taken up, what moneys received, what con- 
 tracts entered into, what sums spent on preliminary expenses, &c. 
 Furnished with these particulars, the shareholders are to have an 
 opportunity of meeting and discussing the whole situation — the 
 
ORDINARY AND EXTRAORDINARY GENERAL MEETINGS. Ch. XV. 1 
 
 management, methods and prospects of the company. If the share- 
 holders fail to do so, they have only themselves to blame. 
 
 As regards the details of the section, it is to be noted that it is only Notes on the 
 applicable in the case of a company limited by shares. Hence the sectl0U - 
 •section does not apply to unlimited companies, or to companies limited 
 by guarantee (even where these companies have a capital divided 
 into shares), and it applies only in part to private companies. And see 
 sub-sect. (10); Gardner v. Iredale, (1912) 1 Ch. 700. 
 
 The words “ entitled to commence business ” at the commencement 
 ■of the section refer, in the case of a company which on its formation 
 invites the public to subscribe for shares, to sect. 87. {Supra, p. 57.) 
 
 In the case of a private company the words refer to the date of 
 incorporation. Such a company is entitled to commence business 
 immediately on its incorporation, for sect. 10 of the Act declares that 
 it shall “be capable forthwith of exercising all the powers of an 
 incorporated company” ; and, as Lord Macnaghten said in Salomon's 
 ■case, (1897) A. C. 22, “The company attains maturity on its birth. 
 
 There is no period of minority, no interval of incapacity.” 
 
 The notices convening the statutory meeting should state that it is 
 to be the statutory meeting. Gardner v. Iredale , (1912) 1 Ch. 700. 
 
 For a case where the company was wound up for default in com- 
 pliance with this section, see Re Kent Outcrop Coal Co., (1912) 
 
 W. N. 26. 
 
 Ordinary and Extraordinary General Meetings. 
 
 A general meeting of the shareholders of a company is, by sect. 64, Annual 
 to be held once at least in every calendar year, and not more than meetln §'- 
 fifteen months after the holding of the last preceding general meeting, 
 and there are penalties for default ; moreover, the Court, in case of 
 default, can order the meeting to be convened. The calendar year 
 commences 1st January {Gibson v. Barton , L. B. 10 Q,. B. 329; Park 
 v. Lawton , (1911) 1 K. B. 588). Sect. 26 implies that an ordinary 
 meeting is to be held every year. The statutory meeting is not an 
 ■ordinary meeting. Hence both should be held, though the holding of 
 an extraordinary meeting would no doubt be a sufficient compliance 
 with sect. 64. Lord Claude Hamilton' s case, L. B. 8 Ch. 548. 
 
 The articles usually distinguish between ordinary meetings and Ordinary and 
 
 ■extraordinary meetings. See Clause 47 of Table A. The term “ordinary extraordm ary 
 . -I, J meetings, 
 
 meeting is generally confined to the annual meeting which, by the 
 
 articles, is usually to be held at some specified period of the year. 
 
 The article for this purpose commonly provides that the directors 
 
 are to hold one meeting every year at a specified date, and that they 
 
 may call other meetings whenever they choose ; and further, that they 
 
 •shall call an extraordinary meeting whenever they are required so to 
 
 11 ( 2 ) 
 
164 
 
 GENERAL MEETINGS. 
 
 do by a requisition signed by a specified proportion of the members* 
 Macdougall v. Gardiner (1875), L. R. 10 Oh. 606 ; see Clause 48 of 
 Table A. Sect. 66 of the Act of 1908 (re-enacting provisions first 
 introduced by sect. 13 of 1900) provides that the directors must call 
 an extraordinary meeting on the requisition of the holders of not less 
 than one -tenth of the issued share capital of the company upon which 
 all calls and other sums then due have been paid, and that if the 
 directors do not, pursuant to any such requisition, convene a general 
 meeting within twenty-one days the requisitionists, or a majority of 
 them in value, may themselves convene such a meeting. See sect. 66 
 below. 
 
 Who may Convene. 
 
 The articles, as above stated, generally provide that the directors 
 may, and that they shall, upon a specified requisition by members, 
 convene a general meeting. This means prima facie that the directors 
 may by resolution passed at a duly convened and constituted meeting 
 of the board order the meeting to be convened. Hay craft Gold 
 Reduction Co., (1900) 2 Ch. 230 ; Harbenv. Phillips, 23 C. D. 14. But 
 if the articles so provide, a resolution in writing signed by the 
 directors without meeting is as effective as a resolution passed at a 
 board meeting. Notice of a general meeting given by the secretary 
 without the sanction of the directors or other proper authority is 
 invalid. Ibid.; and Re State of Wyoming Syndicate, (1901) 2 Ch. 431. 
 But such a notice may be ratified by the directors before the meeting. 
 Hooper v. Kerr Stuart <$f Co., 83 L. T. 729, infra , p. 195. 
 
 Moreover, a resolution passed by a meeting which has the appear- 
 ance of being regularly convened, will not be invalidated because some 
 of the acting directors who joined in convening the meeting were not 
 duly appointed. Browne v. La Trinidad, 37 C. D. 1 ; British Asbestos 
 Co. v. Boyd, (1903) 2 Ch. 439. See also Boschoek Proprietary Co. v. 
 Fuke, (1906) 1 Ch. 148, where the object was to confirm past pro- 
 ceedings. 
 
 Directors in calling meetings, as in other matters, must consider tho 
 general interests of the company. 
 
 Extraordi- As regards a meeting on requisition the articles commonly contain 
 nSino- neral independent provisions on the subject. Where this is so the share- 
 holders can proceed either under the articles or under sect. 66, as may 
 seem the more convenient, but subject to this qualification, that the 
 articles cannot abridge the statutory right. Usually it is found better 
 to proceed under the section. 
 
 The section above referred to (which takes the place of sect. 13 of 
 the Act of 1900) runs thus : — 
 
 66. — (1.) Notwithstanding anything in the articles of a company, 
 the directors of a company shall, on the requisition of the holders of 
 
NOTICE. 
 
 Ch. XV. 
 
 not less than one -tenth of the issued share capital of the company upon 
 which all calls or other sums then due have been paid, forthwith pro- 
 ceed to convene an extraordinary general meeting of the company. 
 
 (2.) The requisition must state the objects of the meeting, and must 
 be signed by the requisitionists and deposited at the office of the com- 
 pany, and may consist of several documents in like form each signed 
 by one or more requisitionists. 
 
 (3.) If the directors of the company do not proceed to cause a meet- 
 ing to be held within twenty-one days from the date of the requisition 
 being so deposited, the requisitionists, or a majority of them in value, 
 may themselves convene the meeting, but any meeting so convened 
 shall not be held after three months from the date of such deposit. 
 
 (4.) If at any such meeting a resolution requiring confirmation at 
 another meeting is passed, the directors shall forthwith convene a 
 further extraordinary general meeting for the purpose of considering 
 the resolution and, if thought fit, of confirming it as a special resolu- 
 tion ; and, if the directors do not convene the meeting within seven 
 days from the date of the passing of the first resolution, the requisi- 
 tionists, or a majority of them in value, may themselves convene the 
 meeting. 
 
 (5.) Any meeting convened under this section by the requisitionists 
 shall be convened in the same manner, as nearly as possible, as that in 
 which meetings are to be convened by directors.” 
 
 (Clause 1.) The holder of fully paid shares can take part in a requi- 
 sition in respect of those shares, notwithstanding that calls remain 
 unpaid on other shares held by him. Fruit and Vegetable Association 
 v. Kekewich , (1912) 2 Ch. 52. 
 
 (Clause 2.) Documents may be “in like form,” notwithstanding 
 slight differences of language. Fruit and Vegetable Association v. 
 Kekewich , ubi sup. 
 
 The mere fact that some of the resolutions referred to in the 
 requisition could not be put to the meeting does not relieve the 
 directors from an obligation to call the meeting. Isle of Wight Rail. 
 Co. v. Tahourdin , 25 C. D. 320. 
 
 The Court would not under the old law compel directors to convene 
 a general meeting pursuant to a requisition where the articles enabled 
 the requisitionists themselves to call the meeting ( Macdougall v. 
 Gardiner , 10 Ch. 606), and the same rule will probably be adopted 
 under the Act. The shareholders have the remedy in their own hands. 
 But there might be special circumstances where the Court would 
 interfere, e.g., where there was a deadlock ( Brick and Stone Co., W. N. 
 (1878) 140 ; Sailing Ship “ Kentmere ” Co., W. N. (1897) 58), or where 
 there was no board, or such disputes between the governing body 
 as to prevent the affairs of the company being properly carried on. 
 
166 
 
 GENERAL MEETINGS. 
 
 Omission to 
 give notice 
 to any 
 particular 
 members. 
 
 Notices as per 
 regulations. 
 
 Contents 
 of notice. 
 
 Special or 
 
 ordinary 
 
 business. 
 
 Trade Auxiliary Co. v. Vickers , 16 Eq. 298. In such a case the Court 
 would meet the situation by an injunction or appointment of a receiver. 
 
 In an urgent case a mandatory injunction has been granted directing 
 the directors to call a meeting “forthwith” under sect. 66 (1). 
 Rutherford v. Farmery (1915, R. No. 1524), Astbury, J., 12 Nov. 1915. 
 
 Notice. 
 
 Unless the articles otherwise provide, every member is entitled 
 to notice of a general meeting — usually a seven days’ notice — and 
 the omission to give due notice, therefore, invalidates the meeting* 
 {Smyth v. Barley , 2 H. L. C. 789); but a clause in the articles 
 commonly relaxes this rule as regards an accidental omission or non- 
 receipt. See Clause 49 of Table A. ; and as to members who are 
 abroad, see infra , p. 232. Unless the articles otherwise provide, 
 the executors or administrators of a deceased member, until registered 
 as members, are not entitled to notice. Allen v. Gold Reefs of West 
 Africa , (1900) 1 Oh. 656. To convene a meeting of the subscribers 
 of the memorandum a reasonable notice is sufficient. Two days was 
 held sufficient in John Morley Building Co. v. Barras , (1891) 2 Ch. 
 386. Sunday is not a dies non , apart from express provision. Child v. 
 Edwards , (1909) 2 K. B. 753. The notice of meeting must be given in 
 accordance with the articles ; these usually require the notice to specify 
 the date, place, and hour of meeting, and in case of special business, 
 the general nature thereof. Where the articles are thus framed, it is 
 necessary to define what is special business, and this is usually done by 
 saying that at an ordinary meeting, the consideration of the accounts and 
 reports, the election of directors and other officers in the place of those 
 retiring by rotation, and the declaration of a dividend shall be 
 considered ordinary business ; but that any other business transacted 
 at an ordinary meeting, and all business transacted at an extra- 
 ordinary meeting shall be considered special business. See Clause 50 
 of Table A. An ordinary meeting may deal with special business if 
 the notice specifies it. Graham v. Van Diemen's Land Co ., 26 
 L. J. Ex. 73. The notice convening a meeting at which any special 
 business is to be transacted must state the nature thereof, otherwise 
 the meeting will have been irregularly convened and cannot deal with 
 the matter. Lawe's case , 1 De G. M. & G. 421 ; Hampshire Co ., (1896) 
 2 Ch. 743 ; Kaye v. Croydon Tramways Co ., (1898) 1 Ch. 358 (C. A.). 
 
 But a resolution need not be in the identical terms of the resolution 
 specified in the notice of meeting, if, as passed, it is in substance covered 
 by the notice. Torhock v. Lord Westhury , (1902) 2 Ch. 871. 
 
 If a member is known to be dead, it is enough to send a notice to 
 his registered address. Allen v. Gold Reefs of West Africa, (1900) 
 1 Ch. 656. 
 
NOTICE. 
 
 Ch. XV. 
 
 167 
 
 Notices are not construed with excessive strictness. Wright' s case, 
 12 Eq. 545; Grant v. United Switchback, 40 C. D. 137; Henderson v. 
 Bank of Australia, 45 C. D. 330. Substantial compliance with the 
 articles is sufficient. In re British Sugar liefining Co., 3 K. & J. 
 408 ; Young v. South African Syndicate, (1896) 2 Ch. 268. Notices are 
 to be construed as a business man would construe them, and to be 
 understood in the ordinary sense (Alexander y. Simpson, 43 C. D. 139); 
 but it is not enough, in a notice of an extraordinary meeting, merely 
 to say “ special business.” Wills v. Murray , 4 Ex. 869. Nor is it 
 enough to state that remuneration is to be allowed to the directors, 
 without stating the amount, if the amount is large. Baillie v. Oriental 
 Telephone Co., (1915) 1 Ch. 503. 
 
 Nor will a notice pointing to a particular course of action justify 
 the adoption of only a part thereof, for how is it possible for the 
 Court to know how many shareholders abstained from attending the 
 meeting, being satisfied that the arrangement as it was proposed was 
 advantageous to them, and being quite content to exercise no voice 
 about it? Per Page- Wood, V.-C., Clinch v. Financial Corporation , 5 
 Eq. 461. Thus, where a meeting was convened to consider resolutions 
 for reconstruction and for winding-up as incidental thereto, and at the 
 meeting a naked resolution for winding-up was passed, it was held to 
 be invalid as not in accordance with the notice. Re Teede Sf Bishop, 
 70 L. J. Ch. 409 ; W. N. (1901) 52 ; 84 L. T. 561. The authority of 
 the case is, however, shaken by the recent decisions in Thomson v. 
 Henderson' s Transvaal Estates Co., (1908) 1 Ch. 765, in which it was 
 held that where the notice specified several resolutions, some ultra 
 vires and some intra vires, and all were passed, the latter were effective, 
 although the other resolutions were void. And see per Lord Selborne, 
 Ashbury v. Riche, L. P. 7 H. L. 693. 
 
 But if the articles or the Act give a general power to deal with 
 certain business at a general meeting without notice of such business, 
 the fact that the notice convening the meeting specifies a particular 
 resolution for dealing with such business does not limit the powers 
 of the meeting. Bethell v. Trench Tubeless Co., (1900) 1 Ch. 408. 
 In that case it was held that at a meeting to confirm a special 
 resolution for winding-up voluntarily the company, having without 
 notice a general power under the Act to appoint a liquidator, might 
 appoint B. though the notice stated that A. would be proposed. So, 
 if the notice convening an ordinary meeting states that A. and B. will be 
 proposed as directors, this does not prevent the appointment of C. and I), 
 if by the regulations the appointment of directors is part of the business 
 of the meeting and requires no special notice ; and see Betts Sf Co. v. 
 Macnaghten, (1910) 1 Ch. 430, and post, p. 175. 
 
 Where a contract is to be submitted to a meeting for confirmation, 
 
 Terms of 
 notices not 
 strictly 
 construed. 
 
168 
 
 GENERAL MEETINGS. 
 
 Notice of 
 meeting to 
 be held on 
 contingency- 
 only. 
 
 Form of 
 notice in 
 case of 
 special 
 resolution. 
 
 Quorum of 
 
 general 
 
 meeting. 
 
 and directors of the company are interested therein, it has been held 
 iliat the notice convening the meeting should give particulars as to 
 that interest. Kayev. Croydon Tramways Co., (1898) 1 Ch. 358 (C. A.) ; 
 Tiessenv. Henderson , (1899) 1 Ch. 861 ; Normandy v. Ind , Coope & Co., 
 (1908) 1 Ch. 84. See contra , Southall v. British Mutual , 6 Ch. 614 
 (C. A.), and Grant v. United Switchback Co., 40 C. D. 135 (C. A.). 
 
 On the other hand, where a meeting is convened to pass a special 
 resolution adopting a new set of articles in lieu of the existing articles, 
 it has been generally assumed that if the notice stated the terms of 
 the proposed resolution that was a sufficient compliance with sect. 51 of 
 the Act of 1862 (for which sect. 69 of the Act of 1908 is substituted), 
 without the notice specifying the details of alteration involved. 
 The Court has repeatedly acted on this assumption, and the most 
 eminent counsel have advised that it was correct. 
 
 Nor is it easy to see why the words of the section should, in such 
 case, be supplemented by the Court. However, a learned judge (now 
 dead), in Normandy v. Ind, Coope Sf Co., (1908) 1 Ch. 84, considered 
 that such a notice was insufficient, and that the notice ought to specify 
 the material alterations proposed. It was not, however, really 
 necessary to decide the point. See, too, Grant v. United Switchback 
 Rail. Co., 40 C. D. 135 ; Southall v. British Mutual , 6 Ch. 614. 
 
 A notice that a meeting will be held in a certain contingency is not 
 a good notice {Alexander v. Simpson, 43 C. D. 139), . unless the articles 
 sanction such a form of notice. Re North of England Steamship Co., 
 (1905) 2 Ch. 15. (Company Precedents, Pt. I. p. 696.) But even 
 without special authority in the articles, it is possible to convene the two 
 meetings for passing and confirming a special resolution if care is taken 
 that the notice convenes both meetings unconditionally. Espuela Land 
 and Cattle Co., 48 W. P. 684 (Byrne, J.). In construing a notice, 
 the rule is that the shareholders, to whom it is addressed, are to be 
 presumed to know the Acts of Parliament, and also the terms of the 
 memorandum and articles ; and they must therefore read the notice in 
 the light of these documents. Campbells case, 9 Ch. 22 ; Oakbank Oil 
 Co. v. Crum, 8 App. Cas. 70. A notice convening a meeting to pass a 
 special resolution need not state that the resolution will be proposed 
 “as an extraordinary resolution,” notwithstanding the wording of 
 sect. 69 of the Act. Re Penarth Pontoon Co., (1911) W. N. 240. 
 
 Quorum. 
 
 In order to constitute a general meeting a quorum of members must 
 be present. If there be no provision as to a quorum in the articles, 
 two members are requisite for a quorum. This is the common law 
 rule. One member cannot for the purposes of an Act constitute a 
 meeting, though for the purposes of a contract it may be possible. 
 
CHAIRMAN VOTES. 
 
 Ch. XV. 
 
 169 
 
 East v. Bennett Brothers , (1911) 1 Ch. 163; Sharp v. Daives, 2 Q. B. D. 
 ■26 ; In re Sanitary Carbon Co., W. N. (1877) 223. But a single person 
 may constitute a “meeting” where that word has a special signification 
 given it by the articles. East v. Bennett Brothers, (1911) 1 Ch. 163. 
 
 The regulations very commonly make three a quorum, as in 
 Clause 51 of Table A., hut sometimes a scale is established for deter- 
 mining a quorum. 
 
 Where articles provide for a quorum “present in person or by 
 proxy,” proxies can be counted. Sometimes there is a different 
 quorum fixed for general meetings of shareholders and for meetings 
 of particular classes of shareholders. See Hemans v. Hotchkiss Co., 
 (1899) 1 Ch. 115; Company Precedents, Part I. p. 685. 
 
 If no quorum be present, then there is no meeting and the proceed- 
 ings are invalid. Cambrian, Sfc. Co., 31 L. T. 773 ; Romford Canal 
 Co., 24 C. H. 85. Sometimes the articles provide that for some 
 particular class of business a smaller quorum shall be sufficient. 
 Occasionally it is provided that if a quorum is not present the meeting 
 is to stand adjourned, say, for a week, and that at the adjourned 
 meeting those who are present shall be a quorum. This also is 
 effective. See Table A., Art. 52. 
 
 Chairman. 
 
 The articles generally provide for the directors electing a chairman 
 of their meetings (conf. Table A., Art. 90) ; and the chairman so 
 chosen is, as a rule, by the articles, to be entitled to preside at a 
 general meeting (see Table A., Art. 53) ; or in his absence some other 
 director. If no director is willing to act as chairman, then some 
 person selected by the meeting is to act. In the absence of any such 
 provisions the meeting will itself choose its own chairman from 
 amongst the members present. The duty of the chairman is to 
 keep order and see that the business is properly conducted. Indian 
 Zoedone Co., 26 C. D. 70. His decisions on points of order and upon 
 any incidental questions that arise are to be taken prima facie to be 
 correct. S.C.; and see Wandsworth Gaslight Co. v. Wright, 22 L. T. 
 404. If the articles so provide, the chairman’s decision as to the 
 validity of a vote is conclusive. Wall v. London and Northern Assets 
 Corporation (No. 1), (1898) 2 Ch. 469. He may also, by the vote of 
 a majority, stop a discussion on a resolution after it has been 
 reasonably debated. Ib. 
 
 Where the articles say that he “ may” adjourn, as in Clause 55 of 
 Table A., he has a discretion, and may decline to adjourn. Salisbury 
 Gold Mining Co. v. Hathorn, (1897) A. C. 268. But if he departs 
 from his dut} r , e.g ., by prematurely closing the meeting and purporting 
 to adjourn it, his acts become irregular, and it is open to the meeting 
 
 Chairman of 
 
 general 
 
 meeting. 
 
170 
 
 GENERAL MEETINGS. 
 
 Votes at 
 
 general 
 
 meeting. 
 
 to select another chairman and proceed with the business. National 
 Dwellings Co. v. Sykes , (1894) 3 Ch. 159. See further, p. 175. 
 
 In the case of a special or extraordinary resolution, where no poll 
 is duly demanded, the declaration by a chairman that a resolution 
 has been carried, is, by sect. 69 of the Companies Act, 1908, made 
 11 conclusive evidence of the fact, without proof of the number or 
 proportion of votes.” It is now settled that “ conclusive ” in this 
 section means what it says, conclusive and not primd facie evidence. 
 See Re Gold Co., 11 C. D. 719; Hadleigh Castle Gold Co., (1900) 
 2 Ch. 419 ; Arnot v. United African Lands, W. N. (1901) 28, C. A., 
 overruling Young v. South African Syndicate, (1896) 2 Ch. 268. 
 
 But a chairman’s declaration is not, it seems, conclusive where the 
 declaration that the resolution is passed shows on the face of it that it 
 was not passed by the requisite majority. Re Caratal {New) Mines, 
 Limited , (1902) 2 Ch. 498, and see pp. 51, 239. 
 
 The articles (see Table A., Art. 56) commonly contain similar 
 provisions making the chairman’s declaration conclusive as to the 
 passing or not passing of a resolution by a specified majority, and 
 should be construed accordingly. 
 
 Votes. 
 
 The articles generally determine how many votes a member is to 
 have. Very commonly they provide that a member shall have one 
 vote for every share held by him. See Clause 60 of Table A. Some- 
 times they provide that the voting shall be in accordance with a scale. 
 Sometimes one class of shares is given no votes or only a qualified 
 right of voting. In the absence of any regulations as to votes, each 
 member has one vote only, whether on a show of hands or at a poll. 
 (Sect. 67.) The register is the only evidence of a member’s right to 
 vote at a general meeting. Pender v. Lushington, 6 C. D. 70. If the 
 articles so provide, the chairman’s decision as to the validity of a 
 vote is, in the absence of fraud, conclusive. Wall v. London and 
 Northern Assets Corporation, (1898) 2 Ch. 469. A shareholder’s vote 
 is a right of property which he may use as he pleases. The propriety 
 or impropriety of his motive is immaterial ( Pender v. Lushington, 
 6 C. D. 70); he is entirely free to exercise his own judgment as 
 to how he shall vote ( North-West Transportation Co. v. Beatty, 12 
 App. Cas. 589 ; Burland v. Earle , (1902) A. C. 83), and may, at any 
 rate in some cases, bind himself by contract to vote, or riot to vote, in 
 a particular way ( Greenwell v. Porter, (1902) 1 Ch. 530), and the 
 Court has no power to go behind the vote and to invalidate it on the 
 ground that the shareholder had a personal interest in the subject- 
 matter different from, or opposed to, that of the company, and did 
 not exercise his voting power for the best interests of the company.. 
 
SHOW OF HANDS POLL. 
 
 Ch. XV. 
 
 171 
 
 See East Pant Mining Co. v. Merry iveather, 2 H. & M. 254. Burland 
 v. Earle {supra). But a majority of the members will not be allowed 
 by vote to commit a fraud on the minority, e.g., by sanctioning a sale 
 to themselves of the property of the company at an undervalue. 
 
 Menier v. Hooper's Telegraph Co ., 9 Ch. 350; Burland v. Earle {supra ) ; 
 and see Ativoolv. Merryweather , 5 Eq. 464, n. ; Mason v. Harris , 1 1 C. 
 
 Div. 97 ; Alexander v. Automatic Telephone Co., (1900) 2 Ch. 56 ; Allen 
 v. Reefs of West Africa, (1900) 1 Ch. 656. 
 
 There is nothing to prevent a shareholder transferring some of his 
 shares to nominees to increase, where there is a scale, his voting 
 power. In re Stranton Iron Co., 16 Eq. 559; Pender v. Lushington , 
 
 6 C. D. 70. An alien enemy cannot vote. Robson v. Premier Oil Co., 
 
 (1915) 2 Ch. 124. 
 
 A provision in a company’s articles that no objection shall be taken 
 to any vote except at the meeting at which it is tendered, or any 
 adjournment thereof, is binding, and votes not then disallowed cannot 
 afterwards be challenged ( Wall v. London and Northern Assets Cor- 
 poration (No. 2), (1899) 1 Ch. 550), but such a provision is unusual. 
 
 By the Collecting Societies and Industrial Assurance Companies 
 Act, 1896, restrictions are placed on the voting by “collectors” who 
 are members of an industrial assurance company. 
 
 Where the shareholder is a company, that company is by sect. 68 
 authorized to vote by its repres entative. 
 
 Resolutions. 
 
 Questions for submission to a general meeting are generally expressed Resolutions, 
 in the form of resolutions. A resolution, according to the ordinary 
 practice of companies, may be proposed by the chairman or by some 
 other member, and, in either case, is put by the chairman to the 
 meeting, whereupon it is open to discussion ; when the discussion has 
 closed, the chairman puts the resolution formally to the vote by stating 
 what the resolution is, and that it has been proposed by A. and 
 seconded by B., and he then calls for a show of hands : “those who 
 are in favour of the resolution, hold up one hand ; those who are 
 against the resolution, hold up one hand” — and having counted the 
 number pro and con., he then states the result, e.g ., “the resolution is 
 carried,” or “the resolution is lost.” Thereupon a poll can be demanded 
 unless the regulations otherwise provide. 
 
 The articles usually give the chairman, where the votes are equal, 
 a casting vote, both on a show of hands and at a poll (see Table A., 
 
 Art. 58) ; but in the absence of such provision he has no casting vote. 
 
 A resolution inconsistent with the articles is invalid, unless confirmed 
 as a special resolution. Quin and Axtens v. Salmon, (1909) A. C. 442. 
 
172 
 
 GENERAL MEETINGS. 
 
 Show of 
 hands. 
 
 Poll. 
 
 Show of Hands. 
 
 Unless the articles otherwise provide, questions arising at a 
 general meeting are to be decided, in the first instance, by a show 
 of hands. This is the common law rule which, unless excluded, 
 applies automatically. Horbury, fyc. Co., 11 C. D. 109. In taking 
 a vote by show of hands, the duty of the chairman, unless the articles 
 otherwise provide, is to count the hands held up and to declare the 
 result accordingly, without regard to the number of votes that a 
 member holding up the hand possesses ; and without regard to the 
 fact that some members hold proxies for some other members. Ernest 
 v. Loma Co., (1897) 1 Ch. 1; overruling In re Bidwell Brothers , (1893) 
 1 Ch. 603. 
 
 Where the number of votes on a show of hands is equal, the 
 chairman has no casting vote by common right. 
 
 Poll. 
 
 A vote by show of hands is a rough and ready way of taking the 
 sense of a meeting ; but it is often a v^ry inadequate means for 
 arriving at the wishes of the whole constituency of the company. To 
 ascertain these, the articles usually provide for the taking of a 
 poll. The right to demand a poll is a common law right, and, 
 according to the common law, any one member may demand a 
 poll. This rule can only be excluded by express provision. 
 Rey. v. Wimbledon , 8 Q. B. D. 459. It may be qualified by the 
 articles, and is to some extent qualified as to special and extra- 
 ordinary resolutions by sect. 69 of the Act. See p. 237, infra. 
 Usually the articles contain a provision as to how many members 
 may demand a poll. When a poll is duly demanded, it is the 
 chairman’s duty to grant it, and to fix the time and place for 
 taking it ; for if a poll is duly demanded, the show of hands is 
 nullified. Anthony v. Seger , 1 Hagg. Cas. Con. 9, at p. 13. If, by the 
 regulations, the poll is to be taken “in such manner as the chairman 
 may direct,” a poll may betaken then and there. Chillington Iron Co., 
 29 C. D. 159. As to the manner of taking a poll, it is usual to 
 require every person who desires to vote to sign a paper headed, as 
 the case may be, “For” or “Against” the motion. The votes of 
 each member are then inserted, and, these having been added up, the 
 chairman declares the result. A meeting or the chairman has power to 
 appoint scrutineers to examine and count the votes at a poll and to 
 report the result to the chairman ( Wandsworth Co. v. Wright , 22 L. T. 
 404), and this is often done. A member may vote at a poll, though not 
 present when the poll was demanded. Campbell v. Maund , 5 Ad. & El. 
 865. If a poll is duly demanded, it must be taken, and in such case the 
 
PROXIES. 
 
 Ch. XV. 
 
 173 
 
 meeting subsists in contemplation of law until the poll has been 
 taken; and this is so, even though the chairman refuses to grant 
 the poll, and there is no express adjournment of the meeting. 
 
 Regina v. Wimbledon , 8 Q. B. D. 459. If a poll is not completed 
 on the day on which it is commenced, it must be continued sub- 
 sequently, for the chairman is not entitled to close the poll whilst 
 voters are coming in. Reg. v. St. Pancras, 11 Ad. & E. 15; Reg. v. 
 
 Graham , 9 W. R. 738. To shut out and exclude a voter may 
 invalidate a poll. Reg. v. Lambeth , 8 Ad. & El. 356. Upon taking a 
 poll, the right to vote and the number of shares is to be determined, 
 if any question arises, by a reference to the register of members. 
 
 Pender v. Lushington, 6 0. D. 70. To appoint a subsequent day for 
 the taking of the poll is not an adjournment, although the meeting 
 subsists till the poll is taken (Reg. v. Chester , 1 Ad. & El. 342) ; but 
 it is not uncommon to adjourn to hear the result. 
 
 At a poll there is no power, in the absence of express provision in 
 the articles, to take it by voting papers. McMillan v. Le Roi Mining 
 Co ., (1906) 1 Oh. 331. 
 
 Proxies. 
 
 Prima facie , there is no right to vote by proxy, for the common Proxies, 
 law does not recognize any such mode of voting ; but the articles 
 generally confer such a right, for it is extremely inconvenient that 
 a member, especially when residing at a distance, should be obliged 
 personally to attend every meeting. 
 
 The directors, acting in good faith in the interests of the company, 
 may do what they consider requisite to get the members to vole 
 against or in favour of a particular resolution, e.g., they may at the 
 expense of the company send out stamped proxy forms. Peel x. 
 
 L. Sf N. W. Rail. Co ., (1907) 1 Ch. 5, overruling Studdert v. Grosvenor , 
 
 33 C. D. 528. 
 
 The articles generally fix the required form of proxy. It 
 commonly runs : — “ I, A. B., appoint C. D. to be my proxy to vote 
 on my behalf at the general meeting of the company to be held on 
 the day of See Table A., Clause 67. 
 
 The articles also as a rule require the instrument of proxy to be- 
 signed by the appointor, or, in the case of a corporation, to be under 
 its seal. In such a case a foreign or colonial corporation which has 
 no seal, can nevertheless appoint proxies. Colonial Gold Reefs, Ltd 
 (1914) 1 Ch. 382. Sometimes it is provided that the instrument must 
 be signed in the presence of a witness. In such case, signature in the 
 presence of a witness is necessary. Harben v. Phillips, 23 C. D. 32. 
 
 A proxy cannot attest his own appointment. Ex parte Cullen , (1891 
 2 Q. B. 151. A proxy paper for a single meeting only requires a 
 
174 
 
 GENERAL MEETINGS. 
 
 Defamatory 
 speeches at 
 general 
 meetings. 
 
 penny stamp. If for several meetings, it requires a 10s. stamp. 
 Sect. 80, Stamp Act, 1891. To cancel an adhesive stamp the signatory 
 should place his initials and the date on it or otherwise mark it so 
 as to be incapable of subsequent use. McMullen ( Sir Alfred Hickman) 
 Steamship , Ltd ., 71 L. J. Ch. 755. 
 
 A proxy paper signed in blank and handed over to some one 
 with authority to fill up the blank, is effective if the blank has been 
 properly filled up when the proxy paper is deposited or used. Sadgrove 
 v. Bryden, (1907) 1 Ch. 318 ; Ernest v. Loma Co., (1897) 1 Ch. 1. 
 The articles very commonly require instruments of proxy to be deposited 
 with the company a certain number of hours before the meeting. See 
 Clause 66 of Table A. If so, further proxies cannot be deposited 
 after the date of the meeting for the purpose of a poll taken sub- 
 sequently. Shcuv v. Tati Concessions , (1913) 1 Ch. 292. 
 
 If the shareholder himself after appointing a proxy attends the 
 meeting, his being there does not, it seems, avoid the instrument of 
 proxy ; but if he votes before his proxy has voted for him, he impliedly 
 revokes the proxy. Knight v. Bulkeley , 5 Jur. (N. S.) 817 ; 33 L. T. 
 7 ; Story on Agency, s. 475. 
 
 As to a corporation representative, see s. 68, infra , p. 467. 
 
 Speeches— Defamation. 
 
 A speech by a shareholder at a meeting defamatory of the directors, 
 but on a matter affecting the interests of the shareholders, is privileged 
 ( Parsons v. Surgey, 4 Fost. & Fin. N. Pi Cas. 247); but the privilege 
 is gone if the public or the press are present at the meeting at the 
 express invitation of the shareholder publishing the defamatory matter. 
 Ibid. As to where reporters are present uninvited, see Pittard v. Oliver, 
 (1891) 1 Q. B. 474 ; and Marks v. Samuel, (1904) 2 K. B. 287, C. A. 
 If the directors of a company invite a newspaper to a private meeting, 
 query, whether the company can sue the newspaper for publishing, in 
 a report of that meeting, a true statement of what was said by a 
 shareholder, because that statement is defamatory. Liverpool House- 
 hold Stores v. Smith (1887), 37 C. D. 170. A report to the public 
 press of the proceedings of a general meeting, if containing libellous 
 matter, is not privileged. Popham v. Pickburn , 7 H. & N. 891 ; 
 Davison v. Duncan, 7 E. & B. 229. But a report sent to the members 
 is prima facie privileged. Laughton v. Bishop of Sodor ^ Man , 4 P. C. 
 495 ; Waller v. Loch, 7 Q. B. D. 619. And see Quartz Hill Gold 
 Mining Co. v. Beall, 20 C. D. 508. 
 
AMENDMENTS. 
 
 Ch. XV. 
 
 175 
 
 Amendments. 
 
 Where a resolution is proposed there is a primd facie right to Amendments 
 propose any relevant amendment coming within the scope of the resolutions, 
 notice. Thus, if the notice is “to increase the capital of the company,” 
 and a resolution is proposed accordingly to increase it to 10,000/., an 
 amendment can be proposed to increase to 20,000/. or to 50,000/., but 
 an amendment to alter the articles or remove the directors would be 
 irregular, and the chairman should not allow such an amendment 
 to be put to the meeting, for it does not come within the scope 
 of the notice. So, too, if the notice is “to increase the capital 
 by 20,000/.,” or “to increase the directors’ remuneration by 100/.,” 
 an amendment to increase the capital to 50,000/., or the remuneration 
 by 500/., would be irregular ; for it is not fair to call the members 
 together for an apparently limited and small object, and then to spring 
 on them a much larger proposal. Those who are absent may have 
 stayed away because they are content with what is proposed in the 
 notice, and those who are present by proxy, are presumed to have 
 given the proxy on the basis of the notice. See Teede Sp Bishop , 
 
 Limited , W. N. (1901) 52, and Clinch v. Financial Corporation , 5 Eq. 
 
 461 ; Wall v. London and Northern Assets Corporation (No. 1), (1898) 
 
 2 Ch. 469, 484 ; Stroud v. Royal Aquarium Society , 89 L. T. 243. 
 
 Similarly, if the notice of meeting is to ratify a particular agree- 
 ment, it would seem permissible to ratify the agreement subject 
 to modifications or conditions, provided they do not make the 
 agreement more onerous as regards the company. Wright 1 s case , 
 
 12 Eq. 335, n., 341, n. Where the notice is in general terms, e.g., “ to 
 increase the capital” or “to increase the directors’ remuneration” 
 
 (cf. Baillie v. Oriental Telephone Co ., (1915) 1 Ch. 503), there is a wide 
 scope for amendment. Where the notice stated that the business was 
 to pass with such amendments as should be determined, a resolution 
 re-electing three directors, it was held that an amendment to elect 
 two extra directors was competent. Betts v. Macnaghten , 25 T. L. R. 
 
 552. See also Henderson v. Bank of Australasia, 45 Ch. D. 330. 
 
 So, too, a notice of meeting to confirm a resolution to wind up and 
 to appoint a particular person liquidator is effective to confirm the 
 resolution, though a person other than the person named is appointed 
 liquidator ; for as soon as a resolution for the voluntary winding-up of 
 a company has been passed, a liquidator can be appointed without any 
 previous notice. Re Trench Tubeless Tyre Co., (1900) 1 Ch. 408. 
 
 If a chairman refuses to allow a proper amendment to a proposed 
 resolution to be put, even under a mistaken idea that the amendment 
 is ultra vires , the resolution may be irregular. The mover of the 
 amendment not challenging the chairman’s ruling is not a waiver of 
 
176 
 
 GENERAL MEETINGS. 
 
 Adjournment 
 of general 
 meeting. 
 
 Rule in Foss 
 v. Harbottle. 
 
 his right to impeach the resolution. Henderson v. Bank of Australasia 
 (1890), 45 C. D. 330. Unless the regulations otherwise provide, an 
 amendment at a meeting need not be seconded if it is put and voted 
 on. In re Horbury Bridge Co., 11 Ch. D. 118. 
 
 Adjournment. 
 
 The articles commonly confer on the chairman power, with the- 
 consent of the meeting, to adjourn. This gives the chairman a 
 discretion. The meeting may resolve to adjourn, but it is for the 
 chairman to determine whether he will exercise the power vested in 
 him. Salisbury Gold Mining Co. v. Hathorn , (1897) A. C. 268. The 
 articles often provide for a poll being taken — on the spot — on the- 
 question of adjournment. If the chairman improperly adjourns or stops- 
 the meeting, the meeting can choose another chairman and go on with the 
 business. National Dwellings Society v. Sykes, (1894) 3 Ch. 159. On 
 the other hand, if the meeting is duly adjourned or dissolved, members- 
 who remain behind cannot continue the business. Rex v. Gaboriau, 
 11 East, 77. As regards notice, an adjourned meeting is regarded 
 in law as a continuance of the ordinary meeting ( Scadding v. Lorant , 3- 
 H. L. C. 418) ; and accordingly a fresh notice thereof need not be given. 
 Wills v. Murray , 4 Ex. 843. Directors, in the absence of express pro- 
 visions in the articles, have no power to postpone a meeting which has 
 been duly convened. Smith v. Paringa Mines , (1906) 2 Ch. 193. 
 
 Irregularities, &c. 
 
 The rule in Foss v. Harbottle , 2 Ha. 461 {infra, p. 242), is- 
 applicable to general meetings, and accordingly the Court declines to 
 interfere, at the instance of a minority, in respect of domestic irregu- 
 larities {Macdougall v. Gardiner , 1 C. D. 13) ; the principle being that 
 it is within the power of the persons who have committed the- 
 irregularity at once to set the matter right by calling a fresh meeting- 
 and dealing with the matter with all due formalities. Browne v. La 
 Trinidad, 37 C. D. 1. 
 
Ch. XVI. 
 
 177 
 
 CHAPTER XVI. 
 
 DIRECTORS. 
 
 A company cannot act in its own person, for it has no person. Per 
 Lord Cairns, Ferguson v. Wilson , L. R. 2 Ch. 89. Accordingly it must 
 act by agents, and usually these persons, by whom it acts, by whom 
 the business of the company is carried on or superintended, are termed 
 directors. The Act, however, as we have seen, leaves the members 
 entirely free to determine how and by whom the business shall be 
 managed, and accordingly, in some cases, the regulations provide that 
 instead of directors there shall be a “council” or a “ managing com- 
 mittee,” or that the business shall be carried on by “ managers.” In 
 other cases, especially in private companies, it is not uncommon to 
 provide that the business shall be managed by “ governing directors” 
 or by “permanent directors,” or by a sole “governing director.” In 
 all these matters the articles can be framed as may seem expedient, 
 but whatever the title chosen for the governing body, and whatever 
 the scope of their duties, the rules which apply to directors apply also 
 to members of a council or committee, who, in substance, stand in the 
 position of directors. The definition of “director” in sect. 285 of the 
 Companies Act, 1908, “includes any person occupying the position of 
 director by whatever name called.” A limited company may be a 
 director or the sole director of another company if it has the requisite 
 power. Bulawayo Market Co., (1907) 2 Ch. 458. See Company 
 Precedents, Part I., p. 734. 
 
 Directors, Agents of Company. 
 
 Directors, whether they are called “ directors ” or a “council ” ora 
 “ managing committee,” are, in the eye of the law, agents of the 
 company for which they act, and the general principles of the law of 
 principal and agent regulate in most respects the relationship of the 
 company and its directors. Hence (1) where directors make a contract 
 in the name of or purporting to bind the company, it is the company — 
 the principal — which is liable on it, not the directors ; they are not 
 personally liable unless it appears that they undertook personal 
 liability ( Lindus v. Melrose, 3 H. & N. 177 ; Me Collin v. Gilpin, 5 
 Q. B. D. 390), e.g., by contracting in their own names or by contracting 
 for the company without using the word “limited” as part of the 
 name. See sect. 63 (3) of the Act. Dermatine Co. v. Ashworth, 
 21 T. L. R. 510. As to their liability for damages where they 
 contract for the company without authority, see p. 190, infra. 
 
 p. 12 
 
 Company 
 only acts by 
 agents. 
 
 Their acts 
 generally 
 bind company 
 only, and not 
 themselves, 
 except in 
 certain cases. 
 Law of 
 principal and 
 agent obtains. 
 
178 
 
 DIRECTORS. 
 
 Cases 
 
 establishing 
 position of 
 directors as 
 agents. 
 
 (2) Where directors contract in their own names but really on 
 behalf of the company, the other party to the contract can, gene- 
 rally, on discovering that the company is the real principal, sue 
 the company on the contract. See Pollock on Contracts, 7th ed., 
 p. 102. (3) Where directors enter into a contract which is within 
 
 the power of the company but is beyond the powers of the directors, 
 the company, like any other principal, can ratify the contract. Grant 
 v. United, Switchback Rail. Co ., 40 C. D. 135. 
 
 That directors are agents is established by a long series of decisions. 
 It will be sufficient to refer to one of these, Ferguson v. Wilson, 2 Ch. 
 77, in which it was held by Turner and Cairns, L. JJ., that directors 
 were not liable in respect of a contract of the company on the ground 
 that they were agents. “What,” said Cairns, L. J., in that case, “ is 
 the position of the directors of a public company ? They are merely 
 agents of the company. The company itself cannot act in its own 
 person, for it has no person, it can only act through directors, and the 
 case is, as regards those directors, merely the ordinary case of principal 
 and agent, for wherever an agent is liable those directors would be 
 liable. Where the liability would attach to the principal, and the 
 principal only, the liability is the liability of the company. This being 
 a contract alleged to be made by the company, I own that I have not 
 been able to see how it can be maintained that an agent can be brought 
 before this Court, or into any other Court, upon a proceeding which 
 simply alleges that his principal has violated a contract that he has 
 entered into. In that state of things, not the agent but the prin- 
 cipal would be the person liable.” See further, infra, p. 199, as 
 to contracts by directors. 
 
 Directors 
 how far 
 
 trustees ? 
 
 Directors Trustees, in what sense. 
 
 Directors are not only agents but they are in some sense and to some 
 extent trustees or in the position of trustees. No doubt their position 
 differs considerably from that of the trustees of a marriage settlement 
 or will, and it is well settled that the strict rules applicable to such 
 trustees do not apply in all respects to directors. Their conduct is to 
 be measured with reference to the character of the undertaking whicli 
 they are appointed to manage and conduct. 
 
 Nevertheless it is impossible now to dispute the proposition that 
 they are in some sense trustees, that proposition having been estab- 
 lished by a long series of cases. 
 
 Thus in Charitable Corporation v. Sutton (1742), 2 Atk. 400, Lord 
 Hardwicke, L. C.. held that committeemen or directors of a chartered 
 corporation who had misapplied its funds and committed breaches of 
 its bye-laws, were liable as trustees for “ breach of trust.” So, in 
 York, Sfc. Rail. Co.v. Hudson (1853), 16 Beav. 485, directors who had 
 
DIRECTORS TRUSTEES, IN WHAT SENSE. Ch. XVI. 
 
 179 
 
 improperly dealt with funds of the company were held liable as 
 trustees . Romilly, M R., there said, “ the directors are persons selected 
 to manage the affairs of the company for the benefit of the share- 
 holders. It is an office of trust which, if they undertake, it is their 
 duty to perform fully and entirely.” 
 
 So, in Feryuson v. Wilson (1866), 2 Ch. 90, Lord Cairns, whilst 
 holding directors to be mere agents and, therefore, not liable on a 
 contract made on behalf of the company, said that “the case was to 
 be distinguished from proceedings by shareholders against directors 
 treating the directors as trustees — which in point of law they are — 
 and seeking redress against them for a breach of trust. That kind of 
 case is exactly the converse of the present. Here the shareholders 
 who file the bill, in point of fact allege that the company has done no 
 wrong whatever, that it is the executive which has committed the 
 wrong and they — the shareholders — file the bill to protect, as it were, 
 the company from the unlawful acts of the directors. There, the 
 directors, being in the position of trustees , are, of course, liable in this 
 Court.” 
 
 This two-fold character of directors is, perhaps, best expressed in 
 Lord Selborne’s words in G. E. Rail. Co. v. Turner (1872), 8 Ch. 149, 
 where he said (p. 152) : “ The directors are the mere trustees or 
 
 agents of the company — trustees of the company’s money and property; 
 agents m the transactions which they enter into on behalf of the com- 
 pany.” And this is the way in which it is put by Sir George Jessel in 
 the case of Forest of Dean. Sfc. Co. (1879), 10C. D.450: “Directors,” said 
 that learned judge, “are called trustees. They are no doubt trustees 
 of assets which have come into their hands, or which are under their 
 control.” 
 
 So in Joint Stock Discount Co. v. Brown, 8 Eq. 381, where 
 directors had misapplied funds of the company, it was declared that 
 they had “ committed a breach of trust and were jointly and separately 
 liable” accordingly. See also Flitcroft's case, 21 C. D. 519; Felly's 
 case , ibicl. 492; F'aure Electric Co., 40 C. D. 150; Oxford Benefit, Sfc. 
 Society, 35 C. D. 502 ; Leeds Estate, Sfc. Co. v. Shepherd, 36 C. D. 787 ; 
 and Masonic and General Life, Sfc. Co. v. Sharpe, (1892) 1 Ch. 154: in all 
 which cases directors were held liable as trustees. It was as being 
 trustees that directors were held, before the Trustee Act, 1 888, disentitled 
 to claim the benefit of the Statutes of Limitation (see Flitcroft's case , 
 supra) ; and it is as trustees that they have since that Act been held 
 entitled to the benefit of the qualified provisions for limitation of 
 actions contained in sect. 8 of the Act of 1888. This was decided in 
 Re Lands Allotment Co., (1894) 1 Ch. 616, where Lindley, L. J., said : 
 “Although directors are not, properly speaking, trustees, yet they 
 have always been considered and treated as trustees of money which 
 
 U ( 2 , 
 
180 
 
 DIRECTORS. 
 
 First 
 
 directors. 
 
 comes to their hands, or which is actually under their control, and 
 ever since joint stock companies were invented directors have been 
 held liable to make good moneys which they have misapplied, upon 
 the same footing as if they were trustees ” ; and the learned judge 
 proceeded to point out that, in accordance with the established rules, 
 directors are considered express trustees of money which they have 
 control of; and Kay, L. J., in the same case, added : “ When they” — 
 directors, that is — “ get assets of the company under their control or 
 into their hands and deal with them in a way which is beyond the 
 powers of the company, they are liable for a breach of trust ” ; and he 
 held, therefore, that they were trustees within sect. 8 of the Trustee 
 Act, 1888. 
 
 James, L. J., it is true, in Smith v. Anderson , 15 C. D. 275, defined 
 the status of a director in language differentiating it from that of trustee, 
 but this dictum cannot outweigh the authorities above referred to. 
 
 Perhaps the best — or the least controversial — way of putting it is to 
 say that they occupy a fiduciary position. 
 
 But this fiduciary position does not extend to directors as share- 
 holders in their individual capacity ; there is nothing, for instance, to 
 prevent directors purchasing on their own account shares in the com- 
 pany from the executors of a deceased shareholder. Percivalv. Wright y 
 (1902) 2 Ch. 421 ; conf. Burland v. Earle , (1902) A. C. 83 ; but if they 
 take an unfair advantage of their position, they may be made to 
 account for the resulting profit. Allen v. Hyatt (1914), 30 T. L. R. 444. 
 
 As throwing some light on the process of reasoning by which 
 directors are regarded as trustees, it is to be borne in mind that the 
 funds of a company are by statute made applicable only to specific pur- 
 poses, and are in that way impressed with the qualities of a trust fund. 
 See Ernest v. Cray still (1860), 2 D. F. & J. 175, per Knight-Bruee 
 and Turner, L. JJ. ; and Great Eastern Rail. Co. v. Turner , 8 Ch. 149, 
 per Lord Selborne ; and Ashbury v. Riche, L. P. 7 H. L. 689, per 
 Lord Hatherley; and Russell v. Wakefield Waterworks , 20 Eq. 474, 
 per Jessel, M. B. Moxham v. Grant , (1900) 1 Q. B. 88. Thus they 
 may be followed into the hands of any alienee who takes with notice 
 of their ultra vires application. 
 
 As to the relief of directors for breach of trust where they have 
 acted honestly and reasonably, see sect. 279 of the Act of 1908, infra,. 
 p. 520. 
 
 Appointment of Directors. 
 
 First directors are usually named in the articles of association, if 
 there are any, but not uncommonly the articles, instead of naming 
 them, contain a power for the subscribers, or the majority of them, 
 by writing, to appoint them, as in Table A., clause 68. Where 
 directors are to be named in the articles, sect. 72 of the Companies 
 
PROVISIONS OF ACT OF 1908. 
 
 Ch. XVI. 
 
 181 
 
 Act, 1908, as to filing consents and contracts for share qualifications 
 (see infra ), must be borne in mind. If there are no articles, or there 
 is no such provision, then clause 68 of Table A. prescribes that it 
 shall rest with the majority of the subscribers of the memorandum 
 to appoint in writing. In such case the signatures of a majority to 
 the appointment will be sufficient. Where the power is given to the 
 subscribers and nothing is said about the majority, the subscribers 
 should all sign the appointment ( Great Northern Salt Co ., 44 C. D. 
 
 472), or a meeting of the subscribers may be called, and a resolution 
 passed thereat, which is another way of effecting the appointment; 
 and in that case, if a majority be present, they are competent to 
 appoint. London and Southern , 8fc. Co., 31 C. D. 223. If there are 
 no directors and no provision in the regulations for the appointment 
 of the first directors, and Table A. is excluded, they can be appointed 
 under sect. 67 of the Act, by which five members may convene a meeting 
 to appoint directors. The articles may give power to a vendor or other 
 outsider to appoint one or more directors. If so, the company cannot 
 alter its articles so as to destroy this power, but the Court will not 
 grant an injunction to enforce the appointment of any particular director 
 who is objectionable to the company on personal grounds. British 
 Murac Syndicate, Ltd. v. The Alberton Rubber Co., (1915) 2 Ch. 186. 
 
 Where the articles delegate the power of appointing additional 
 directors to the board, a general meeting has no power to do so. 
 
 Blair Open Hearth Furnace , 108 L. T. 665. 
 
 But if the directors cannot agree, the company retains power to 
 appoint new directors. Barron v. Potter , (1914) 1 Ch. 895. 
 
 Provisions of Act as to naming Directors in Articles. 
 
 Sect. 72 of the Companies (Consolidation) Act, 1908, provides as Restrictions 
 
 follows : — on appoint- 
 
 ment of 
 
 72. — (1.) A person shall not be capable of being appointed director director, 
 of a company by the articles, . . . unless, before the registration 
 
 of the articles, ... he has by himself or by his agent authorized 
 in writing — 
 
 (i) signed and filed with the registrar a consent in writing to act as 
 
 such director ; and 
 
 (ii) either signed the memorandum of association for a number of 
 
 shares not less than his qualification (if any), or signed and 
 filed with the registrar a contract in writing to take from the 
 company and pay for his qualification shares (if any). 
 
 (2.) On the application for registration of the memorandum and 
 articles of association of a company, the applicant shall deliver to the 
 registrar a list of the persons who have consented to be directors of 
 the company, and if this list contains the name of any person who has 
 
182 
 
 DIRECTORS. 
 
 Maximum 
 and minimum 
 number of 
 directors. 
 
 Qualification. 
 
 not so consented the applicant shall he liable to a fine not exceeding 
 fifty pounds. 
 
 (3.) This section shall not apply to a private company 
 
 The word “articles” in this section refers to the articles in force, 
 whether in their original form or as altered by special resolution. 
 See sect. 285. Where an agent signs the consent he must produce 
 his authority. 
 
 An intended director who subscribes the memorandum for his 
 qualification becomes bound on incorporation to take the shares even 
 though the company never commences business. 
 
 As to what is a private company, see sect. 121. 
 
 Maximum and Minimum Number. 
 
 The regulations usually fix what is to be the maximum and minimum 
 number of the directors. As a general rule, a large board is not 
 desirable, for it weakens the sense of individual responsibility. 
 Where a minimum number is fixed, and the number of the 
 directors falls below the minimum number, the remaining directors 
 prima facie cannot act ( Alma Spinning Co., 16 C. D. 681), unless the 
 articles contain the ordinary provision enabling the directors to act 
 notwithstanding vacancies. This provision does not make their acts 
 valid if the minimum number never was appointed. Sly, Spink & Co ., 
 (1911) 2 Ch. 430 ; Scottish Petroleum Co., 23 0. D. 431 ; Re Bank of 
 Syria, Owen and Ashworth' s claim, Whitworth' s claim , (1901) 1 Oh. 115. 
 Nevertheless, their acts may be valid in favour of a person who has no 
 notice of the irregularity. British Asbestos Co., (1903) 2 Oh. 439. 
 
 Qualification. 
 
 The general law requires no share qualification for a director, and 
 Table A., Art. 70, only requires a nominal qualification — the holding of 
 at least one share in the company. But the articles of a company very 
 commonly contain a provision that “the qualification of a director 
 shall be the holding of [a specified number of] shares in the company” ; 
 it being thought desirable in most companies to require a qualification, as 
 giving a director a personal interest in the undertaking. Archer '* case, 
 (1892) 1 Oh. 322. The amount is commonly fixed at 100/. or 200/., but 
 sometimesat 1,000/. or 5,000/., and occasionally — in thecase of important 
 private companies — at 10,000/. or 50,000/. There is, however, in the case 
 of an ordinary company, no particular advantage in requiring a large 
 qualification ; on the contrary, it is detrimental as restricting the class 
 of persons eligible for office, and possibly depriving the company of 
 the services of an eminently suitable director, simply because he has 
 not got sufficient funds to take up his qualification. Many questions 
 have arisen in regard to qualification clauses, and more particularly as 
 to the liability of a director to take up his qualification shares. Where 
 
QUALIFICATION. 
 
 Ch. XVI. 
 
 m 
 
 the clause is framed in the terms above mentioned, it has long since 
 been settled that it does not compel the director to take shares from 
 the company. The meaning of such a clause is, that the director is 
 under an obligation to acquire the requisite qualification in some way 
 or other, whether from the company, or by transfer from a friend, or by 
 purchase in the market ; but that he is to have a reasonable time — now 
 two months (sect. 73, below) — within which to do so. Brown's case , 
 
 9 Ch. 102. After the two months have expired he is disqualified from 
 acting as a director, but the mere acting as a director does not import 
 any agreement to take the shares from the company. Brown's case, supra. 
 Nevertheless, if in such circumstances he is put on the register by 
 the officers of the company after the time limited for qualifying has 
 expired, he cannot repudiate the shares ; he is estopped by his conduct. 
 
 Brown's case, supra; Lord Inchiquin's case, (1891) 3 Ch. 28. The 
 law has now, however, been supplemented by sect. 7 3 of the Act of 
 1908, which takes the place of sect. 3 of the Act of 1900. The section 
 runs as follows : — 
 
 73. — (1.) Without prejudice to the restrictions imposed by the last Sect. 73. 
 foregoing section (see p. 181), it shall be the duty of every director 
 who is by the regulations of the company required to hold a specified 
 share qualification, and who is not already qualified, to obtain his 
 qualification within two months after his appointment, or such shorter 
 time as may be fixed by the regulations of the company. 
 
 (2.) The office of director of a company shall be vacated, if the 
 director does not within two months from the date of his appointment, 
 or within such shorter time as may be fixed by the regulations of the 
 company, obtain his qualification, or if after the expiration of such 
 period or shorter time he ceases at any time to hold his qualification : 
 and a person vacating office under this section shall be incapable of 
 being re-appointed director of the company until he has obtained his 
 qualification. 
 
 (3.) If after the expiration of the said period or shorter time any 
 unqualified person acts as director of the company, he shall be liable 
 to a fine not exceeding five pounds for every day between the expiration 
 of the said period or shorter time and the last day on which it is proved 
 that he acted as a director. 
 
 This section, it will be observed, leaves it still optional with a 
 company to have a qualification clause or not. It is comprehensive 
 in so far as it applies to companies formed before the Companies Act, 
 
 1908, as well as after, but it creates a duty only, not a contract. 
 
 Sub-sect. 3 will, however, go far to discourage unqualified persons 
 from acting as directors, for it imposes a definite liability to pay a 
 fine of five pounds per diem by way of punishment. Prior to the 
 enactment a company could only recover compensation if it could 
 prove damage. Coventry's case, 14 C. D. 660. 
 
184 
 
 DIRECTORS. 
 
 Present of 
 qualification 
 
 A joint holding may qualify a director. Glory Paper Mills , (1894) 
 3 Ch. 473 ; Grundy v. Briggs, (1910) 1 Ch. 444. 
 
 f A well known and commonly adopted form of qualification clause 
 now is, that if the director does not qualify within, say, one month “ he 
 is to he deemed to have agreed to take the shares from the company.” 
 This clause was an effective one ; and if, after the month was up, the 
 director was still in office, and did not hold the requisite qualification, 
 the contract was complete, and the company or its liquidator might 
 place his name on the register for the qualification shares. Isaacs' case, 
 (1892) 2 Ch. 158. If, however, the director resigned within the month, 
 he escaped even under such a clause. Salisbury Jones' case , (1894) 
 3 Ch. 356. And as under sect. 73 (2) of the Act, a director vacates 
 office at the expiration of the time limited, it is doubtful whether Isaacs' 
 case , supra , now operates. See Company Precedents, Part I., p. 722. 
 
 A special resolution raising the share qualification, e.g., from 50 to 
 250 shares, does not make the directors “cease” to hold their quali- 
 fication, or necessarily vacate their offices under such a clause as 
 sect. 73 (2). Molineaux v. London , Birmingham and Manchester 
 Insurance Co., (1902) 2 K. B. 589. 
 
 Occasionally a clause says that no person shall be eligible as a 
 director unless he holds a specified qualification. This makes the 
 possession of the qualification a condition precedent to election, and 
 if the person elected does not possess the qualification he does not 
 become a director de jure. Jenner's case , 7 C. I). 132. At times the 
 form runs that a director’s qualification shall be the holding of so 
 many shares “in his own right.” To the unsophisticated layman 
 these words might seem to mean, holding beneficially and not as a 
 mere trustee for some third party ; but it has been decided that this is 
 not so, and that if the director holds the shares as trustee, he is none 
 the less duly qualified ( Pulbrook v. Richmond Mining Co., 9 0. D. 
 610; Cooper v. Grijfin, (1892) 1 Q. B. 740 ; Hoivard v. Sadler, (1893) 
 1 Q. B. 1) — a construction which goes far to defeat the object of the 
 clause, that the director shall have a substantial stake in the company. 
 See Archer's case, (1892) 1 Ch. 322. However, though the first of 
 these cases was decided thirty years ago, the Court has in several 
 recent cases sought to restrict its application. Thus it has been held 
 that if a person is entered on the register as holding shares as 
 liquidator of some other company, he does not hold “ in his own right.” 
 Boschoek Proprietary Co. v. Fuke, (1906) 1 Ch. 148 ; see, too, Sutton v. 
 English and Colonial Produce Co., (1902) 2 Ch. 502. According to 
 that case, if the beneficiary, where a share is held in trust, gives notice 
 to the company claiming the shares, the qualification of the registered 
 holder is gone — i.e., the company must take notice of the trust. 
 
 It has too often happened in the history of companies that a director 
 has accepted a present of his qualification from a promoter or vendor, 
 
REMUNERATION . 
 
 Ch, XVI. 
 
 185 
 
 being assured that it is quite the usual thing. Such a transaction shares from 
 constitutes a gross breach of trust on the part of the director. It ye^or^&c. 
 amounts to accepting a retaining fee from the promoter or vendor ; 
 the director is liable to account to the company for any damages 
 sustained by such breach of trust [Hay's case , 10 Ch. 604 ; Pearson's 
 case , 5 C. D. 336; London Sf a S'. W. Canal Co ., (1911) 1 Ch. 346, and 
 there is no right of set-off. In re Carriage Supply Association (1884), 
 
 27 C. D. 322. The same principle applies if he takes up and pays for 
 his qualification, receiving at the same time an indemnity from the pro- 
 moter (in such case the indemnity is a thing of value, and the director 
 must account to the company for it : Archer's case , (1892) 1 Ch. 322) ; 
 or if he holds his shares as a bare trustee for the promoters. The 
 damages in that case may be the highest value of the shares. Re 
 London and South Western Canal , (1911) 1 Ch. 346. [ Sed quaere 
 
 whether this decision is sound in principle.] 
 
 The mere fact that the director of a company holds his qualification 
 shares as trustee for another company does not render him liable to 
 account to that company for the director’s fees which he earns. Re 
 Dover Coalfields Extension , Limited , (1908) 1 Ch. 65. 
 
 Remuneration. 
 
 Primd facie , directors of a company are not entitled to remuneration. Remunera- 
 Dunstan v. Imperial , Sfc. Co ., 3 Bar. & Ad. 125; Hutton v. West Cork tion. 
 
 Rail. Co ., 23 Ch. D. 672; Stroud v. Royal Aquarium Society , 89 L. T. 
 
 243. But the articles usually provide expressly for payment of 
 remuneration. Table A. (cl. 69) so provides. And where this is the 
 case the provision operates as an authority to the directors to pay such 
 remuneration out of the funds of the company ; and there is no rule 
 to the effect that the remuneration can only be paid out of profits. 
 
 Harvey Lewis's case, 26 L. T. 673. Where a decision of the Board as 
 to mode of division is required, there is no right of action till resolution 
 passed. Morrell v. Oxford Portland Cement Co., 26 T. L. B. 682. 
 
 The amount of remuneration to be paid to directors is a matter of 
 internal management. Burland v. Earle , (1902) A. C. 83; Normandy 
 v. Ind, Coope Sf Co., (1908) 1 Ch. 84. 
 
 A director can sue for remuneration agreed to be paid him 
 by the company (Orton v. Cleveland Co., 3 H. & C. 868; Nell v. 
 
 Atlanta Co., 11 T. L. B. 407, C. A.), and prove in the winding- 
 up like an ordinary creditor. Beckwith's case, (1898) 1 Ch. 324 ; 
 
 A 1 Biscuit Co., W. N. (1899) 115; Dale Sf Plant, 43 Ch. D. 255. 
 
 Leicester Club Co., Cannon's case, 30 C. D. 629 — which was a de- 
 cision to the contrary — cannot be relied on. Whether the articles 
 do or do not constitute a contract for this purpose between the 
 company and the directors (see supra, p. 39), they operate, it has 
 
186 
 
 DIRECTORS. 
 
 been held, as an offer accepted by the director, and thus give the terms 
 on which the director is serving the company. Swabey v. Port Darwin 
 Gold Mining Co., 1 Meg. 385 ; Isaacs' case , (1892) 2 Ch. 158 ; Peruvian 
 Co., (1894) 3 Ch. 690. But it is open to directors by a resolution to 
 renounce the right to future remuneration under such implied con- 
 tracts. McConnell's case , Re London and Northern Bank , (1901) 1 Ch. 
 728. An agreement by all the directors with the company to renounce 
 the right to remuneration is binding on each director. West Yorkshire 
 Darracq v. Coleridge , (1911) 2 K. B. 326. To take remuneration 
 in excess of what is payable under the regulations is a misfeasance ; 
 and directors who are parties to such payments are jointly and severally 
 liable to make good the amount. George Newman , (1895) 1 Ch. 674 5 
 Oxford , Sfc. Society , 35 C. D. 502 ; Leeds Estate Co. v. Shepherd (1887), 
 36 C. D. 809; Re Whitehall Court (1887), 56 L. T. B,. 280. But it 
 seems competent to the company in general meeting to ratify excess 
 remuneration in accordance with the principle recognized in Grant v. 
 United Switchback , 40 C. D. 135, C. A. Directors must not pay the 
 income tax on their remuneration out of the company’s funds. Bos- 
 choek Proprietary Co. v. Fuke , (1906) 1 Ch. 148. 
 
 Where, under the articles, a director is to be paid so much per 
 annum, and he vacates office before the end of a current year, the 
 question whether he can maintain a claim for an apportioned part of 
 the remuneration for that year, has given rise to considerable differ- 
 ence of opinion. In Swabey v. Port Darwin Gold Mining Co., Limited 
 (1889), 1 Meg. 385, the question was considered by the Court of 
 Appeal — Lord Halsbury, L. C., Lord Esher, M. B., and Lindley, L. J. 
 There the clause in the articles provided that “ the directors shall each 
 receive by way of remuneration out of the funds of the company in 
 each year the sum of 200/., and the chairman in addition 100/. per 
 annum.” A director resigned in the course of a current year, and he 
 was held entitled to an apportioned part of the remuneration for that 
 year. In that case Lord Halsbury, L. C., said: “As to the point of 
 the service being determined in the middle and not at the end of the 
 year disentitling the plaintiff to anything because the service was for 
 a year, the judgment of Stephen, J., was right. But upon the articles 
 there were two cases in which the service could be brought to an 
 earlier termination than the year, namely, if the directors give a 
 month’s notice of resignation the resignation must be accepted by the 
 company; but if this were done, then both the parties contemplated an 
 earlier determination of the service than a full year. On the other 
 hand, the company could, if it thought fit, by special resolution deter- 
 mine the service between it and its servants. There was therefore a 
 reciprocal right to put an end to the' service at an earlier period than 
 the end of the year. It follows from that, as a necessary consequence, 
 that both parties must have contemplated that, as this was a service for 
 
REMUNERATION. 
 
 Ch. XVI. 
 
 187 
 
 hire and reward, a proportionate part of the remuneration agreed upon 
 should be paid if the service was determined at an earlier period than 
 the full year.” On the other hand, in Salton v. New Beeston Cycle Co.., 
 (1899) 1 Ch. 775, Cozens-Hardy, J\, held that where the article pro- 
 vided that “the directors shall be entitled to receive by way of 
 remuneration in each year 5,0001 .,” a director who vacated office in a 
 current year was not entitled to any apportionment : and this was 
 followed by Wright, J., in McConnelV s case , (1901) l Ch. 728, where 
 
 the words were “ each director shall be paid the sum of 300/. 
 
 per annum”; and by Bruce, J., in Inman v. Acroyd and Best , 82 
 L. T. 621; affirmed, (1901) K. B. 613, where the words were “the 
 sum of 300/. per annum per director.” See also Central de Kapp 
 Gold Mines, 69 L. J. Ch. 18. But in nearly all these cases the 
 Court proceeded on the erroneous assumjition that in Swabey v. 
 Port Darwin Gold Mining Co., Limited, the Court of Appeal was 
 dealing with a case in which the articles provided that the remune- 
 ration to be paid to the directors should be at the rate of 200/. per 
 annum as stated in the head-note to that case. Thus, in Inman v. 
 Ackroyd and Best, supra, Bruce, J., distinguished Swabey v. Port 
 Darwin Gold Mining Co., on the ground that “in that case the 
 remuneration stipulated to be paid to the directors was to be at the rate 
 of 200/. per annum, and I think there that the observations of the 
 Lord Chancellor with respect to the reciprocal rights of the parties 
 must be read in connection with and in regard to the particular form 
 of the stipulation in that case.” But on this point the head-note in 
 Swabey v. Port Darwin Gold Mining Co. is incorrect. The remunera- 
 tion clause did hot contain the words “at the rate.” The terms of 
 the clause taken from the articles registered at Somerset House are 
 set forth above (p. 187), and the above decisions, grounded on this 
 inaccuracy, require therefore reconsideration, as noted in the appeal 
 in Inman v. Ackroyd, (1901) 1 K. B. 618. 
 
 Furthermore, it is not easy to see why the Apportionment Act, 1870 
 (33 & 34 Yict. c. 35), does not apply. That Act expressly provides 
 that all rents, annuities (including salaries and pensions), and other 
 periodical payments in the nature of income shall be apportionable, and 
 provides for the recovery in due course of an apportioned part of an 
 annuity determined by death or otherwise. In Salton v. New Beeston 
 Cycle Co., supra, it was argued that the Act applied, and on the other 
 hand the case of Lowndes v. Earl Stamford (1852), 18 Q,. B. 425 
 (decided on the Apportionment Act, 1834, which was very differently 
 expressed), was apparently relied on ; but in his judgment, Cozens- 
 Hardy, J., made no reference to the Apportionment Act. However, in 
 Inman v. Ackroyd and Best, supra, Bruce, J., considered that the 
 Apportionment Act, 1870, must have been taken into consideration by 
 Cozens-Hardy, J., and Wright, J., and held to be inapplicable. 
 
188 
 
 DIRECTORS. 
 
 Resignation. 
 
 Disqualify - 
 cation. 
 
 Where the company went into liquidation a few days before the 
 expiration of a year, and the director’s work for the year was com- 
 pleted, he was held entitled to remuneration for the year. Shaws , 
 Bryant Sf Co., W. N. (1901) 124. If the remuneration is to be paid 
 “ at such time as the directors determine,” a director has no right 
 until such determination. Caridad Copper Co. v. Swallow , (1902) 
 2 K. B. 44 (C. A.) ; Inman v. Ackroyd , supra . A director may in some 
 cases be entitled to remuneration although not qualified. Salton v. 
 New Beeston Cycle Co., supra ; International Cable Co., 66 L. T. 253. 
 A salaried director is not, in the absence of a clear provision to the 
 contrary, entitled to his travelling expenses in attending board 
 meetings. They are covered, primd facie, by his remuneration. 
 Young v. Naval and Military Co-operative Society, (1905) 1 K. B. 687. 
 
 Where the articles fix the remuneration of directors, and provide 
 that the company may, by resolution in general meeting, grant to the 
 directors any additional remuneration, it has been held to be ultra 
 vires for the directors to grant a retiring pension to a managing 
 director. Normandy v. Ind, Coope Sf Co., (1908) 1 Ch. 84. Sed qucere ; 
 and see Cyclists' Touring Clubv. Hopkinson, (1910) 1 Ch. 179. Remu- 
 neration ceases as from the time when any director ought to have 
 vacated office under the provisions of the articles. Consolidated Nickel 
 Mines, (1914) 1 Ch. 883. 
 
 Resignation. 
 
 Primd facie, a director, like any other agent, can at any time resign 
 his office, and usually the regulations make express provision accord- 
 ingly. It seems enough if he gives notice to the company in the 
 manner provided by sect. 116 of the Act of 1908. See, however, 
 Municipal Freehold Land Co. v. Polling ton , 63 L. T. 238. That he 
 must give notice to the company in general meeting appears to be 
 unsound. And there is nothing to prevent a director from parting 
 with his qualification shares, and so vacating office by disqualification. 
 Gilbert's case, 5 Ch. 565. A resignation once made is irrevocable. 
 Reg. v. Mayor of Wigan , 14 Q. B. D. 908; Glossop v. Glossop, (1907) 
 2 Ch. 370. 
 
 Where a director who was both a permanent and an ordinary one 
 resigned, it was held that the resignation applied to both offices. 
 Moseley v. Koffyfontein, (1910) 2 Ch. 382. 
 
 Disqualification. 
 
 The regulations commonly provide for special cases in which a 
 director is to vacate office by reason of disqualification, e.g., if he 
 accepts any other office under the company, becomes bankrupt, or 
 lunatic, or ceases to hold his qualification shares, or absents himself 
 or is absent from meetings of the directors for a lengthened period. 
 See Company Precedents, Part I., p. 730, and Table A., cl. 77. 
 
POWERS OF DIRECTORS. 
 
 Ch. XVI. 
 
 1M 
 
 In such a case the director, upon the event happening, vacates his 
 office automatically. Bodega Co., Limited , (1904) 1 Ch. 276. 
 
 Even apart from such provision, it is well settled that the acceptance 
 by a director of an incompatible office vacates his directorship. 
 
 See Milward v. Thatcher , 2 T. E. 81 ; Bales v. Cumberland Lead Co ., 
 
 6 H. & N. 481 ; Iron Ship Co. v. Blunt , L. E. 3 C. P. 484. The 
 trusteeship of a debenture holders’ trust deed, if paid, is a “ place 
 of profit” disqualifying within the meaning of such a regulation. 
 
 Astley v. New Tivoli Co., ( 1 899 J 1 Ch. 151. An “office under the 
 company ” may, but will not usually, include the appointment of one 
 of the directors to be solicitor of the company. Harper's Ticket 
 Issuing Machine , Ltd., (1912) W. N. 263 ; 29 T. L. E. 63. 
 
 “Becomes bankrupt ” means becomes such after election. It does 
 not preclude the election as a director of a person who at the time is 
 an undischarged bankrupt. Dawson v. African Co., (1898) l Ch. 6. 
 
 “Becomes insolvent.” Reg. v. Saddlers Co., 10 H. L. C. 404; 
 
 Sissons v. S., 54 S. J. 802 ; Mans. 48 ; James v. Rockwood Colliery Co ., 
 
 106 L. T. 128 ; London Sf Counties Assets Co. v. Brighton Grand Concert 
 Hall , Ltd., (1915) 2 K. B. 493. 
 
 “ Cease to hold ” : a director does not “ cease to hold ” shares where 
 he has never acquired them. Forbes' case, 8 Ch. 775. Nor does he 
 “cease to hold” by the qualification being raised from, e.g., 50 
 to 250 shares. Molineaux v. London , Birmingham and Manchester 
 Insurance Co., (1902) 2 K. B. 589. 
 
 “Absenting himself” means being absent voluntarily ( Mack's case , 
 
 W. N. (1900) 114), but a director may be treated as absenting himself 
 if ill-health obliges him to go abroad. McConnell' s case , Re London 
 and Northern Bank. (1901) 1 Ch. 728. As to the meaning of 
 “ concerned in any contract with the company,” Star Steam Laundry , 
 
 (1913) W. N. 39 ; 108 L. T. 367. 
 
 Unless otherwise provided, a director is not entitled to join in 
 forming a quorum for the consideration of matters with regard to 
 which he is not entitled to vote. Re Greymouth Point Elizabeth Rail, 
 and Coal Co., (1904) 1 Ch. 32. 
 
 As to acts done by disqualified directors, see infra , p. 191. 
 
 Powers of Directors. 
 
 The articles generally give to the directors a number of specific Powers of 
 
 powers scattered up and down the various clauses, but, in addition directors 
 , . n . under the 
 
 to these specific powers, there is almost always inserted a general articles. 
 
 clause on the lines of Clause 71 of Table A., providing that the 
 
 directors may exercise all the powers of the company not by the 
 
 articles or by statute required to be exercised by the company 
 
 in general meeting. Such a general vesting of powers in the 
 
 directors is valid and effective, and all that has to be done, in 
 
190 
 
 DIRECTORS. 
 
 Acts of 
 directors in 
 excess of 
 .authority. 
 
 considering whether any particular transaction is within the powers 
 conferred by such a clause on the directors, is to search the articles 
 and the Acts to see whether there is any express provision requiring, 
 for that transaction, the authority of the company in general meeting, 
 and, if there is no such provision, the directors must be treated as com- 
 petent to carry out the transaction. “The articles,” said Mellish, L. J., 
 in In re Patent File Co ., L. R. 6 Ch. 83, at p. 88, “ give to the directors 
 the whole powers of the company, subject to the provisions [of the 
 articles and] of the Companies Act, 1862, and I cannot find anything 
 either in the Act or in the articles to prohibit their making a mort- 
 gage by deposit.” So, in In re Anglo- Danubian Co., 20 Eq. 339, where 
 it was a question of directors’ power to issue debentures at a discount, 
 Jessel, M. R., said: “Looking to the 66th clause, I cannot have any 
 possible doubt. The directors can do anything the company can do.” 
 See, also, Australian Co. v. Mounsey , 4 K. & J. 733; Pyle Works , 
 No. 2, (1891) 1 Ch. 173; Hampson v. Price’s Patent Candle Co., 45 
 L. J. Ch. 437. 
 
 In exercising these powers, whether general or special, directors 
 must always bear in mind that they are trustees for the company, and 
 must exercise the powers for the benefit of the company, and for that 
 alone. Richmond’s case, 4 K. & J. 325 ; Gilbert’s case, 5 Ch. 559 ; Re 
 Gresham Life Assurance Society , Ex parte Penney , L.R. 8Ch. 449; Puntv. 
 Symons Sf Co., (1903) 2 Ch. 506 ; Percivalv. Wright, (1902) 2 Ch. 421. 
 
 Where directors have a discretion and are bond fide acting in the 
 exercise of it, it is not the habit of the Court to interfere with them. 
 Gresham Life , L. R. 8 Ch. 449. 
 
 Where the articles vest the general powers of the company in the 
 directors, “ subject to such regulations not being inconsistent with the 
 aforesaid regulations,” as may be prescribed by the company in 
 general meeting, the company in general meeting cannot override the 
 directors’ powers by prescribing a regulation or passing a resolution 
 inconsistent with the articles. Automatic Self-Cleaning Co. v. Cunning- 
 hame, (1906) 2 Ch. 34: Gramophone and Typewriter, (1908) 2 K. B. 
 89; Salmon v. Quin & Axtens, (1909) A. C. 442. See, however, 
 Marshall’s Valve Gear Co. v. Manning , Warclle Sf Co., (1909) 1 Ch. 267. 
 
 Acts in Excess of Authority. 
 
 Directors who act in excess of their authority — e.g ., borrow beyond 
 the limit of their borrowing powers — are, in some cases, held liable to 
 those with whom they deal, on the footing that they are to be taken 
 to warrant their authority. Collen v. Wright (1857), 8 El. & Bl. 647 ; 
 Weeks v. Propert, L. R. 8 C. P. 427 ; Chapleo v. Brunswick Estate , 
 6 Q. B. D. 715; Firbank’s Executors v. Humphry s, 18 Q. B. D. 54; 
 Oliver v. Bank of England, (1902) 1 Ch. 610, furnish examples of this 
 doctrine. 
 
DEFECTIVE APPOINTMENTS. 
 
 Ch. XVI. 
 
 19 L 
 
 Defective Appointments and Acting after 
 Disqualification. 
 
 A person who has not been duly appointed is not a director ( Jenner's 
 case , 7 Ch. D. 132); and his purporting to act as such does not give the 
 company any right of action against him unless it can show damage. 
 Coventry's case , 14 Ch. D. 660. But the company may bring an 
 action to restrain a de facto director from acting as director or repre- 
 senting himself as such. This right, however, is confined to the 
 company ; an individ *al member has no right to bring such an action 
 where a director is improperly disqualified or appointed. For the 
 matter is one for the company to determine, that is, for the majority, 
 and if the majority choose not to interfere, the individual member 
 must conform to the will of the majority. See rule in Foss v. Harbottle, 
 p. 242. 
 
 As regards persons dealing with the company — outsiders, that is — 
 the concluding paragraph of sect. 7 1 of the Act to some extent prevents 
 the inconvenience which may arise from directors being irregularly 
 appointed, for it provides that “ until the contrary is proved, every 
 general meeting of the company or meeting of directors or managers 
 in respect of the proceedings whereof minutes have been so made shall 
 be deemed to have been duly held and convened and all proceedings 
 had thereat to have been duly held, and all appointments of directors, 
 managers or liquidators shall be deemed to be valid.” And sect. 74 
 provides that the acts of a director or manager shall be valid, notwith- 
 standing any defect that may afterwards bn discovered in his appoint- 
 ment or qualification ; but these provisions are obviously inadequate, 
 and it is therefore usual to insert in the articles a clause supple- 
 menting them. See, for example, Clause 94 of Table A. It is 
 to be observed that there is a distinction between the words of 
 sect. 71 and the words of the clause, for the words of the section are 
 qualified by tho introduction of the words “ until the contrary is 
 proved.” The provisions above referred to are effective not only as 
 regards members, but as regards outsiders, for, as we have seen {supra, 
 p. 44), outsiders, even more than members, are entitled to presume 
 that the proceedings of the company have been conducted with due 
 regularity. Mahoney v. East Holyford Co., L. R. 7 H. L. 8tt7, is an 
 instance. There de facto directors had not been duly appointed, but 
 the company was held bound by their acts as against an outsider, 
 and Lord Cairns relied, amongst other things, on a clause in the 
 regulations similar to Clause 94 of Table A. The protection enures 
 for the benefit of a director who has taken over the rights of the 
 outsider. See Re Bank of Syria, (1900) 2 Ch. 272. See, also, Neic- 
 haven v. Newhaven , 30 C. D. 363; Briton Medical Co. v. Jones, 61 
 L. T. 384; Dawson v. African, Sfc. Co., (1898) 1 Ch. 6; Howbeach 
 
 Acts where 
 not duly ap- 
 pointed a 
 director. 
 
192 
 
 DIRECTORS. 
 
 Coal Co. v. Teague , 5 H. & N. 151 ; and British Asbestos Co. v. Boyd , 
 (1903) 2 Ch. 439. In Dawson v. African, $'c. Co. it was held that a 
 call made by directors, who had not been duly appointed or were dis- 
 qualified, was valid ; and in the British Asbestos Co. the combined 
 effect of an article analogous to Clause 94 of Table A. and of sect. 67 
 of the Act of 1862 (for which sect. 74 is now substituted), was held 
 to validate the acts of a person who had vacated his directorship by 
 becoming secretary, but had gone on innocently acting as director. 
 And see Transport v. Schonberg , 21 Times L. R. 305. 
 
 A director who takes part in irregular proceedings may be estopped 
 from setting up the irregularity. Faure v. Phillipart , 58 L. T. 527 ; 
 York Tramways v. Willows , 8 Q. B. D. 685. 
 
 The clause will not, however, protect a person who knows of the 
 invalidity of the appointment ( Staffordshire Gas Co., 66 L. T. 414; 
 Tyne Steamship Co. v. Brown, 75 L. T. 483); a director, for instance, 
 making a maid fide transfer of his shares, accepted collusively by the 
 other directors. Murray v. Bush, L. R. 6 H. L. 77 ; see further, as to 
 the protection afforded to outsiders by the rule in Royal British Bank 
 v. Turquand, supra, p. 44. 
 
 A de facto director is as much in a fiduciary position as a de jure 
 director, and liable accordingly. Coventry's case, 14 C. D. 670. 
 
 Contracts by Directors with Company : Bribes. 
 
 Contracts by 
 company 
 with directors 
 or in which 
 they are 
 interested. 
 
 Unless the articles confer on a director express powers of contracting 
 with the company, a director’s powers of so contracting are extremely 
 limited. He may take up shares in the company, he may subscribe 
 for debentures in the ordinary course of business ( Campbell's case, 
 4 C. D. 470 ; and see London and Colonial Fin. Corp 77 L. T. 146, 
 C. A.) ; but otherwise he is, like a trustee, disqualified from con- 
 tracting with the company ( Albion Co. v. Martin, 1 C. D. 580), and 
 for a good reason. The company is entitled to the collective wisdom 
 of its directors, and if all or any of such directors are interested in a 
 contract, the company loses the benefit of its directors’ unbiassed 
 judgment ( Imperial Association v. Coleman, 6 Ch. 558 ; and see Costa 
 Rica Rail. Co. v. Forwood, (1900) 1 Ch. 756; affirmed, (1901) 1 Ch. 
 746) ; for on any such contract being entered into, a conflict of interest 
 and duty must or may arise, and in this conflict the interests of those 
 whom the director is bound to protect run a great risk of being 
 sacrificed. So strictly is this principle adhered to, that no question ie 
 allowed to be raised as to the fairness or unfairness of the contract in 
 question. Aberdeen , Sfc. Co. v. Blackie, 1 Macq. 401 ; Parker v. McKenna, 
 10 Ch. 118; Bray v. Ford, (1896) A. C. 50. If, for example, the 
 directors (there being no relaxation of the rule in the articles) a^ree 
 to sell to one of themselves part of the property of the company, 
 
CONTRACTS BY DIRECTORS WITH COMPANY : BRIBES. Ch. XVI. 
 
 193 
 
 the company is entitled to have the sale set aside, or, at its option, to 
 sue the directors for breach of duty. So, too, if a director, concealing 
 his interest, sells, through a third party, his property to the company, 
 the company is entitled to reject the property and claim repayment 
 of the purchase-money ( In re Cape Breton Co., 29 Ch. D. 795 ; 
 Chesterfield and Boythorpe Colliery v. Black , 26 W. R. 207), or to 
 retain the property and claim damages for any loss sustained by the 
 non-disclosure. Leeds and Hanley Co., (1902) 2 Ch. 809. And the 
 same rule applies to contracts with any company in which a director 
 holds shares. And if that company has notice of the facts, the contract 
 may be set aside. Transvaal Land Co. v. New Belgium Co., (1914) 
 
 2 Ch. 488. But this right the shareholders may waive to any extent 
 by provisions in the articles as below mentioned, and even in the 
 absence of such a provision they can, by resolution of a general 
 meeting, duly convened, confirm a contract in which the directors or 
 some of them are interested. Grant v. United Switchback Co., 40 C. D. 
 
 135 ; Kaye v. Croydon Tramways Co., (1898) 1 Ch. 358 ; Imperial 
 Association v. Coleman , L. R. 6 H. L. 190 ; Costa Rica Rail. Co. v. 
 
 Forwood, (1901) 1 Ch. 746 (C. A.). 
 
 Directors, as we have seen, are agents of the company, and it is a Secret 
 well-settled rule that an agent cannot, without the knowledge and benefits of 
 consent of his principal, be allowed to make any profit out of the 
 matter of his agency beyond his proper remuneration. “No man,” 
 said Lord Cairns, L. C., “ can in this Court, acting as agent, be allowed 
 to put himself in a position in which his interest and duty will conflict.” 
 
 Parker v. McKenna, 10 Ch. 118 ; see also Bray v. Ford , (1896) A. C. 50. 
 
 And this rule applies with peculiar stringency to the directors of a 
 joint stock company. Hence any secret benefit obtained by a director 
 by reason of his position, or in the course of the company’s business, 
 whether it takes the form of a commission, or of qualification shares, 
 or a sum of cash, is regarded as a bribe, and the director is account- 
 able to the company for the amount (see Eden v. Ridsdale, Sfc. Co., 
 
 23 Q> B. D. 368 ; Boston Co. v. Ansell, 39 C. D. 339 ; Parker v. Lewis , 
 
 8 Ch. 1035) ; and if the bribe has not been paid, the company can sue 
 the briber for the excess of price caused by the bribe. Mayor of 
 Salford v. Lever, (1891) 1 Q. B. 168; Whaley Bridge Co. v. Green, 
 
 5 Q. B. D. 109; Grant v. Gold Exploration Syndicate, (1900) 1 Q,. B. 
 
 233. Where a director has been promised a present of this kind, he 
 cannot enforce payment. The consideration is corrupt, and the law 
 will render no assistance to him. Harrington v. Victoria Dock Co., 3 
 Q. B. D. 549 ; Shipway v. Broadwood, (1899) 1 Q. B. 369. 
 
 In the alternative the company may, if it chooses, rescind the 
 contract ; for where one party to a contract bribes or has any under- 
 hand dealing with the agent of the other party, the latter on discovery 
 
 13 
 
 p. 
 
94 
 
 DIRECTORS. 
 
 Relaxation 
 of the above 
 rules. 
 
 may repudiate the contract. Panama and Pacific Co. v. Indiarubber 
 Co ., L. R. 10 Ch. 515 ; Shipway v. Broadwood , (1899) 1 Q. B. 369. 
 And see the Prevention of Corruption Act, 1906 (6 Edw. 7, c. 34). 
 
 So, too, a company acting as manager must rest satisfied with the 
 agreed remuneration, and cannot charge extra for services rendered by 
 its employees. Bath v. Standard Land Co., (1910) 2 Ch. 408. 
 
 These are the rules primd facie applicable to such transactions, but a 
 company is at liberty to waive the benefit of such rules, and to allow a 
 director to make a contract, or to be interested in a contract, with the 
 company, and the articles very commonly make provision accord- 
 ingly. The usual form which such a provision takes, is that a director 
 may make contracts, or be interested in contracts, with the company ; 
 but he is to disclose the nature of his interest to the board, and is not 
 to vote in regard to the matter. Experience has shown that, as a 
 general rule, such provisions are desirable ; for it often happens that 
 a company may be largely benefited by being able to deal with one of 
 its own directors. All that is required is that the other directors 
 should have such knowledge as will enable them to scrutinize the 
 terms of the contract with more than usual care. Imperial Association 
 v. Coleman, 6 H. L. 190 ; Southall v. British Mutual , Sfc., 6 Ch. 619 ; 
 Adamson's case, 18 Eq. 670; Costa Pica Co. v. Forwood, (1900) 1 Ch. 756. 
 
 Proceedings 
 of directors. 
 
 Proceedings of Directors. 
 
 The directors of a company must, as a general rule, act at board 
 meetings unless the regulations otherwise provide. Haycraft Gold 
 Co., (1900) 2 Ch. 230. Nevertheless, it does not follow that a transac- 
 tion can be invalidated as against an outsider who has dealt with the 
 company bond fide merely because the directors acted without meeting. 
 County of Gloucester Bank v. Rudry , Sfc. Co., (1895) 1 Ch. 629; Re 
 Bank of Syria , Owen Sf Ashworth's claim, (1901) 1 Ch. 115. And 
 the articles not uncommonly negative the rule, and expressly declare 
 that a resolution in writing signed by all the directors shall be as 
 effective as if passed at a board meeting, and there are cases in 
 which this is found extremely convenient. Primd facie one director 
 alone has no power to act on behalf of the company. R. N. Cunningham , 
 58 L. T. 16 ; Bindley, 156. He is only one of a body of directors in 
 whom collectively the management is vested. 
 
 The articles usually provide that the directors may conduct their 
 proceedings as they think fit. Sometimes proxies are allowed. 
 
 Notices of 
 
 directors’ 
 
 meetings. 
 
 Notice of Board Meeting. 
 
 Primd facie due notice must be given convening a meeting of 
 directors, and in default the meeting is irregular ( Harben v. Phillips, 
 23 C. D. 34) ; but this is not always necessary, for by the articles, 
 
QUORUM OF DIRECTORS. 
 
 Ch. XVI. 
 
 195 
 
 or by the determination of the directors, meetings may be held at 
 fixed times, and it may be arranged that in such cases no notice need 
 be given. Where notice has to be given, it must be given a reasonable 
 time before the meeting. Browne v. La Trinidad , 37 C. D. 1. Other- 
 wise it will be invalid, unless, indeed, all the directors are present 
 at the meeting. The notice need not specify, unless the articles 
 otherwise provide, the nature of the business to be transacted. La 
 Compagnie de Mayville v. Whitley , (1896) 1 Ch. 788. As regards 
 directors abroad, the regulations commonly provide that no notice 
 need be given, and even in the absence of such a provision it appears 
 that notice need not be given to a director abroad, unless, indeed, 
 he is within easy reach. Halifax Sugar Co. v. Francklyn , 59 L. J. 
 
 Ch. 593. Sometimes by an accidental omission to give due notice to Omission of 
 some one director, or by reason of there not being a quorum present, ant 
 
 a meeting of directors is rendered irregular, but the directors never- 
 theless transact business on behalf of the company, e.g., allot shares, 
 make contracts, &c. In such a case, the rule in Royal British Bank Outsiders uu- 
 v. Turquand (see p. 44, supra ) applies, and outsiders will not, as a 
 general rule, be prejudiced by such irregularities. They are not con- larity of 
 cerned to see to the internal regularity of the company’s proceedings — proceedings, 
 its “ indoor management” as Lord Hatherley termed it — and are en- 
 titled to assume that everything has been properly done. Where there 
 has been any such irregularity, a subsequent regularly constituted 
 board meeting can always ratify and confirm what was done by the Ratification, 
 irregular board, and it will then be valid ab initio. Portuguese Copper 
 Co., 45 C. D. 26 ; Land Credit Co., 4 Ch. 473 ; Hooper v. Kerr Stuart 
 .Sf Co., 83 L. T. 729 ; 45 S. J. 139 (22 Dec., 1900). And see State of 
 Wyoming Syndicate , (1901) 2 Ch. 431, 437. 
 
 Quorum of Directors. 
 
 The articles generally fix, or enable the directors to fix, the quorum Quorum of 
 for a board meeting, that is to say, what number of directors must be < l ircctori? - 
 present to enable them to act as a board, and exercise the powers 
 vested in the directors collectively. Prima facie, a power to fix a 
 quorum cannot be exercised by less than a majority of the directors 
 at a board meeting. A director must not be counted in a quorum for 
 the consideration of matters on which he is not entitled to vote. Re 
 Greymouth Point Elizabeth Rail. Co.; Yuill v. Same, (1904) 1 Ch. 32. 
 
 If the requisite quorum is not present the meeting is irregular and 
 cannot transact business : so too if the number of directors of the 
 company is less in the whole than the required minimum board, no 
 effective board meeting can be held ( Faure Electric, Sfc. Co. v. Phillipart 
 (1888), 58 L. T. R. 525), unless the articles give power to act 
 notwithstanding vacancies. Scottish Petroleum, 23 C. D. 411 ; Bank 
 
 V6 ( 2 ) 
 
196 
 
 DIRECTORS. 
 
 Resolutions 
 of directors. 
 
 Examples. 
 
 of Syria, (1900) 2 Ch. 272. If no quorum has been fixed the number 
 who usually act will do. Lyster's case (1867), 4 Eq. 233. It must be 
 borne in mind that a provision for a quorum does not dispense with 
 the due convening of a meeting. The directors must all be summoned. 
 If they have been, or such of them as can be reached by notice, and 
 if all the directors or a quorum be present, the meeting can proceed to 
 business. 
 
 The quorum clause in Table A. is 88. 
 
 Minutes. 
 
 It is the duty of directors to keep proper minutes of their proceed- 
 ings. See infra , p. 244. 
 
 Resolutions of Directors. 
 
 The directors exercise their powers by resolutions passed at board 
 meetings. Thus a call is made by passing a resolution — 
 
 “That a call of 1. per share be, and the same is hereby, 
 
 made on the members of the company, such call to be payable 
 to, &c., on, &c., at, &c.” 
 
 The following are other examples : — 
 
 “ That the shares numbered, &c., of A. B. be, and the same 
 are hereby forfeited.” 
 
 “ That Messrs. and be and they are hereby 
 
 appointed a committee with power to arrange with Mr. 
 
 the terms on which he shall supply, &c., and make a contract 
 with him accordingly for a period not exceeding twelve calendar 
 months.” 
 
 “ That the sum of 1. be raised for the purposes of the 
 
 company by the issue of mortgage debentures to that amount, 
 and that the solicitor be requested to furnish a draft debenture 
 for the approval of the board.” 
 
 “ That the seal of the company be affixed to a contract, &c.” 
 
 “ That Mr. ’s offer to supply the company with be 
 
 and the same is hereby accepted, and that the secretary do give 
 
 Mr. notice of this resolution.” 
 
 “That an offer be made to Mr. on behalf of the 
 
 company to, &c.” 
 
 It is not, however, essential to the validity of a directors’ resolution 
 that the determination should be embodied in a formal resolution, and 
 the minutes in recording it often, in fact, enter only the substance, e.g ., 
 “ a contract with A. B. for the supply of, was submitted and 
 approved.” 
 
 In order to carry a resolution in regard to external matters into- 
 effect, it is sometimes necessary to do some further act in the name of 
 the company, e.g., where a resolution has been passed to borrow 
 
DELEGATION COMMITTEES. 
 
 Ch. XVI. 
 
 197 
 
 money it will be necessary to apply to some person or persons to lend 
 the same, or to issue a prospectus, and when a lender has been found 
 and the security agreed on, the directors will pass a resolution 
 approving thereof and directing the seal to be affixed and the contract 
 to be signed by two directors on behalf of the company. Hence, a 
 matter may come before the board several times before it is completed. 
 So, too, a mechanical act may be necessary, e.g., to sign or seal a 
 document, &c. 
 
 Delegation. 
 
 The maxim “ delegatus non potest delegare ” applies to directors, and 
 they cannot, therefore, prima facie delegate their powers ( Cobb v. Becke , 
 6 Q. B. 936) ; but this rule may be controlled by an express or implied 
 authority to delegate, and usually the articles expressly provide that 
 the directors may appoint servants and agents and determine their 
 duties and powers, and further that the directors may delegate to 
 any one or more of themselves any of their powers. Conf. Table A. 
 cl. 91. A delegation thus authorized is good. In re Taurine Co., 
 25 Oh. D. 118 ; Leeds Estate Co. v. Shepherd , 36 Ch. D. 787. 
 
 Delegation may also be presumed. See Totterdell v. Fareham 
 Brick Co., L. B. 1 0. P. 674; Regent's Canal , W. N. (1867) 79; 
 Lyster's case , 4 Eq. 238 ; Mahoney v. East Holyford Co., L. P. 7 
 H. L. 869. See, however, Premier Industrial Bank v. Carlton Manu- 
 facturing Co., (1909) 1 K. B. 106, and note, supra , p. 45. 
 
 Delegation does not prevent the directors from still acting in regard 
 to the matter delegated. Huth v. Clarke, 25 Q. B. D. 391. 
 
 If directors delegate their powers to a committee without fixing a 
 quorum, whatever the committee does must, unless the articles other- 
 wise provide, be done in the presence of all its members. In re 
 Liverpool Household Stores Association (1890), 59 L. J. Ch. 624. 
 
 Committees. 
 
 The delegation to a committee is usually effected by resolution 
 passed at a meeting of the board, e.g . — 
 
 “ That Messrs. and be, and they are hereby 
 
 appointed, a committee, with power on behalf of the company 
 to, &c.” 
 
 “ That Mr. be and he is hereby appointed a committee 
 
 for the purpose of, &c. ; and that the following powers and 
 authorities be delegated to him, (1) power to, &c. ; (2) power 
 to, &c.” 
 
 “ That Messrs. and be, and they are hereby 
 
 appointed, a committee for the purpose of settling with 
 
 Mr. the terms of an agreement for, &c., anc(. that they 
 
 be authorized to execute on behalf of the company an agree- 
 ment in writing embodying such terms.’ ’ 
 
 Delegation 
 by directors. 
 
 Committees 
 of directors. 
 
198 DIRECTORS. 
 
 Rotation of 
 retirement 
 of directors. 
 
 Rotation. 
 
 The articles of a company usually provide that a proportion 
 of the directors, usually one-third, shall retire by rotation year 
 by year, but in the case of private companies these provisions 
 
 
 are often omitted or considerably qualified. See clauses 78 — 86 of 
 Table A. 
 
 Removal of 
 directors. 
 
 Removal. 
 
 The articles generally contain power to remove a director, but 
 unless they do so a director cannot, it has been held, be removed 
 without first altering the articles by special resolution so as to 
 take the requisite power. Imperial Hydropathic Co. v. Hampson , 23 
 C. D. 1 ; Browne v. La Trinidad , 37 Ch. D. 1. But removal is one 
 thing and specific performance another, and the Court, it is now well 
 settled, will not enforce specifically a contract of service either at the 
 instance of employer or employed. Hence, if a director refuses to act 
 the Court will not force him to act, and if, on the other hand, a 
 company, by resolution of a general meeting, refuses to employ a 
 director, the Court will not force it to do so. Harben v. Phillips , 23 
 C. D. 14 ; Bainbridge v. Smith, 41 C. D. 462. It is a different thing, 
 however, when a board of directors excludes one of their body from 
 acting. The Court does not regard such exclusion as the act of the 
 company (even though the directors have, under the articles, the 
 general powers of the company), and it will accordingly, on the appli- 
 cation of the, aggrieved director, grant an injunction restraining the 
 other directors from excluding him from office. Pulbrookv. Richmond, 
 Sfc. Co., 9 C. D. 610. It will not, however, restrain the company, and 
 if, after the grant of the injunction, the shareholders, by a resolution 
 in general meeting, declare that they do not wish the particular director 
 to act any longer, the Court will discharge the injunction and decline 
 to assist him any further, at least, by injunction. Bainbridge v. Smith , 
 41 C. D. 475. For any other redress he may claim he must proceed 
 by action for damages. 
 
 Where the power to remove is only for reasonable cause, it is for 
 the meeting to decide what is reasonable cause, and the Court will not 
 interfere with their decision. Inderwick v. Snell, 2 M. & Gr. 216 ; and 
 see Gresham Life , 8 Ch. 449 ; Osgood v. Nelson, L. R. 5 H. L. 636. 
 If, owing to the irremovability of a director, there is a deadlock, a 
 winding-up order may be obtained. Sailing Ship Kentmere , W. N. 
 (1897) 58. 
 
 Table A. gives a power to remove — Art. 86. 
 
LIABILITIES OF DIRECTORS. 
 
 Ch. XVI. 
 
 199 
 
 Liabilities of Directors. 
 
 As to Contracts. 
 
 Directors being agents (see above, p. 177), are not liable on contracts 
 purporting to bind their company. If, having authority, they make a 
 contract professedly for the company, then the company, their principal, 
 and the company only, is liable on it ; if they have not authority to 
 make the contract, still they are not personally liable on the contract 
 (. Ferguson v. Wilson , L. R. 2 Ch. 77), although they may be liable to an 
 action for damages for breach of implied warranty of authority. Collen 
 v. Wright . 7 E. & B. 301 ; 8 E. & B. 647 ; Coventry's case , (1891) 1 
 Ch. 202. The general rule is thus stated by Lord Cairns in Ferguson 
 v. Wilson , supra : “ Whenever an agent is liable, those directors would 
 be liable. Where the liability would attach to the principal and the 
 principal only, the liability is the liability of the company.” 
 
 Thus, if the directors order goods for, or on behalf of, their company, 
 or if they enter into an agreement for, or on behalf or on account of, 
 the company, the company is liable and not the directors, whether the 
 contract be in writing or verbal. 
 
 But the directors of a company may, of course, if they choose, 
 contract, so as to bind themselves personally : whether they have done 
 so depends on the terms of the contract. If, for example, they contract 
 in their own names, without disclosing that they are acting for the com- 
 pany, they are, without doubt, personally liable ; or, if they contract, 
 disclosing the fact that they are directors, but without using words 
 sufficient to bind the company, e.g., the word “ Limited,” they are 
 personally liable on the contract. The test of liability is, does it 
 appear from the terms of the contract that the directors were contracting 
 on behalf of the company? If it does, they are protected. “Ltd.” 
 maybe used as an abbreviation for “limited.” F. Stacey & Co. v. 
 Wallis , 106 L. T. 541. See also sect. 63 (3) of the Act, and Civil 
 Service Society v. Chapman , (1914) W. N. 369. 
 
 Thus, if the directors contract in their own name, but expressly on 
 behalf of the company or for the company, that is sufficient, and it 
 matters not whether the words appear in the description of the parties, 
 or in the body of the contract, or are added by way of qualification 
 to the signature. Gadd v. Houghton , 1 Ex. D. 357. On the other 
 hand, if the directors contract without purporting to bind the company, 
 
 e.g., where they say: “We, the directors of the Company, 
 
 Limited, hereby agree,” &c., the contract does not purport to bind 
 the company, and the directors are therefore liable. Aggs v. 
 Nicholson , 1 H. & N. 165 ; McCollin v. Gilpin , 5 Q,. B. D. 390; and 
 see Dermatine Co. v. Ashworth , 21 T. L. R. 510. 
 
 Contracts 
 by directors 
 for company. 
 
 Directors 
 may bind 
 themselves 
 personally. 
 
200 
 
 DIRECTORS. 
 
 Frauds and 
 torts of 
 directors. 
 
 Negligence 
 of directors. 
 
 As to Frauds and other Torts. 
 
 Any director who is a party to a fraud, such as the issuing of a 
 fraudulent prospectus, or to the commission of any tort, is personally 
 liable. This is on the principle that whoever commits a wrong is 
 liable for it himself, and none the less so that he was acting as an 
 agent or servant on behalf, and for the benefit, of another ; for the 
 contract of agency or service cannot impose any obligation on the 
 agent or servant to commit, or assist in the committing of, fraud or 
 any other wrong. Collin v. Thompson' s Trustees , 4 Macq. 424, 432. 
 The company may also be liable ( supra , pp. 73 — 75), but that does not 
 exonerate the director, nor ought it in reason to do so, for though the 
 company is an artificial person in law, it is in fact the directors who set 
 the company in motion. So, too, if, by the order of the directors, 
 a trespass is committed, a patent infringed, or other wrongful act 
 committed, the directors who are parties to it are personally liable. 
 If more than one person is concerned in the commission of a wrong, 
 the person wronged has his remedy against all, or any one or more 
 of them, at his choice ; for every wrongdoer is liable for the whole 
 damage, and it does not matter whether they acted as between 
 themselves as equals, or one of them as agent or servant of another. 
 Pollock on Torts, 7th ed., p. 190. 
 
 But a director is not to be held responsible for the fraud of his 
 co-directors, unless he has expressly or impliedly authorized it. Cargill 
 v. Bower (1878), 10 Ch. D. 502. “A director,” as Lord Hatherley 
 said, “ cannot be held liable for being defrauded. To do so would 
 make his position intolerable.” Land Credit Company of Ireland v. 
 Lord Fermoy (1870), L. P. 5 Ch. 772; In re Charles Denham Sf Co., 
 25 Ch. D. 752 ; Dovey v. Cory, (1901) A. C. 477 ; Prefontaine v. 
 Grenier , (1907) A. C. 101. 
 
 As to the measure of damages where a director had by fraudulent 
 misrepresentations induced his co-directors to advance him moneys of 
 the company on an insufficient security, see Exploring Land and 
 Minerals Co. v. Kolchmann , 94 L. T. 234. 
 
 Again, if a director neglects to comply with the requirements of 
 the Act of 1908, he is, or may be, liable in damages personally. 
 See, further, infra, p. 357. 
 
 Negligence. 
 
 “By accepting a trust of this sort {i.e., the management of a 
 company’s affairs), a person,” says Lord Hardwicke, “is bound to 
 exercise it with fidelity and reasonable diligence” ( Charitable Cor- 
 poration v. Sutton, 2 Atk. 405) ; and Jessel, M. B., in another case, 
 said : “ Directors are bound to use fair and reasonable diligence in 
 
NEGLIGENCE. 
 
 Ch. XVI. 
 
 201 
 
 the discharge of their duties, and to act honestly ; but they are not 
 bound to do more.” Forest of Dean, Sfc. Co., 10 C. D. 452. 
 
 “ If the directors act within their powers and with such care as is 
 reasonably to be expected from them, having regard to their know- 
 ledge and experience, and if they act honestly for the benefit of the 
 company which they represent, they discharge both their legal and 
 equitable duty to the company, and will not be liable for mistakes or 
 errors of judgment.” Lagunas Nitrate Co.v. Lagunas Nitrate Syndicate, 
 (1899) 2 Ch. 392. And see Brazilian Rubber Plantations, 27 T. L. B. 109. 
 
 Thus, in Turquand v. Marshall (1869), 4 Ch. 376, it was sought to 
 make directors liable on the ground, amongst other things, that they 
 had made an improvident loan to one of themselves ; but relief was 
 refused, and Lord Hatherley, L. C., said: “ They were intrusted with 
 full powers of lending money, and it was part of the business of the 
 concern to trust people with money, and their trust to an undue extent 
 was not a matter with which they could be fixed, unless there was 
 something more alleged, as, for instance, that it was done fraudulently 
 and improperly, and not merely by a default of judgment. Whatever 
 may have been the amount lent to anybody, however ridiculous and 
 absurd their conduct might seem, it was the misfortune of the company 
 that they chose such unwise directors ; but so long as they kept within 
 the powers of their deed, the Court could not interfere with the dis- 
 cretion exercised by them.” To do so would seriously cripple directors 
 in the exercise of that free judgment on which the company’s welfare 
 so much depends ; but there is nothing in these words to import that 
 directors may not be liable for negligence, as distinguished from want 
 of judgment, as Lord Hatherley subsequently explained in Over end, 
 Gurney Sf Co. v. Gibb, L. B. 5 H. L. 480. 
 
 “I should like,” said his Lordship there, “to say one word as 
 
 regards the case of Turquand v. Marshall I certainly 
 
 never intended to lay down the strong position that a person, 
 acting for another as his agent, is not bound to use all the ordi- 
 nary prudence that can be properly and legitimately expected from 
 any person in the conduct of the affairs of the world, viz., the same 
 amount of prudence which in the same circumstances he would 
 exercise on his own behalf.” 
 
 Beferring to this topic, Lord Lindley, in his work on Companies, 
 remarks that although, speaking generally, directors have a wide 
 discretion, and, in the absence of proof of mala fdes, it may be difficult 
 to establish a case of culpable or wilful default, yet, if such a 
 case be proved, and loss by the company attributable thereto be 
 also proved, the directors would be liable to make good such loss. 
 The negligence for which a director will be held liable must, however, 
 be such as would make him liable in an action. Marzetti’s case, 28 
 W. B. 541. 
 
202 
 
 DIRECTORS. 
 
 What has helped not a little to perplex the law on this point is the 
 notion which has long been floating about in the minds of even 
 eminent lawyers — that directors are not liable for mere negligence, but 
 only for gross negligence, and the case of Overend , Gurney v. Gibb , 
 L. P. 5 H. L. 480, is sometimes referred to as an authority for the 
 proposition — though not very happily, inasmuch as in that case 
 negligence was not alleged. It was in that very case, too, that Lord 
 Hatherley used the words above cited without any dissent on the 
 part of the other learned lords. 
 
 Directors’ imprudence may, it is true, be so gross, so palpable, as to 
 justify the inference that they were not acting bond Jide in the exercise 
 of the discretion committed to them ; but mala jides or fraud of this 
 kind is quite distinct from negligence, with reference to which the 
 word “gross” does not seem to mean anything at all. “Gross 
 negligence,” remarked Polfe, B., in Wilson v. Brett , 11 M. & W. 115, 
 “ is the same thing as ‘ negligence ’ with the addition of a vituperative 
 epithet,” and this epigram was cited with approval by Willes, J., in 
 Grill v. General , Sfc. Co., L. P. 1 0. P. 603, affirmed L. P. 3 C. P. 476. 
 Erie, C. J., referring to this expression, 35 L. J. C. P. 324, said : 
 “ I advisedly abstained from using a word to which I can attach no 
 definite meaning ; and no one, as far as I know, ever was able to 
 do so.” 
 
 On the other hand, Pomer, J., in giving evidence before the House 
 of Lords Select Committee in 1897 on the then pending Companies 
 Bill, said: — “As I understand the law, a director is only liable for 
 what is called ‘ gross negligence ’ .... he is not held liable for 
 ordinary mere negligence if it is of a simple character.” But when 
 asked by the Lord Chancellor, “ Do you, as a lawyer, say there is 
 any difference between gross negligence and negligence? ” the answer 
 of the learned judge was, “It is very difficult to say as a lawyer.” 
 At all events, in Lagunas Nitrate Co. v. Lagunas Syndicate , (1899) 
 2 Ch. 392, and in National Bank of Wales , (1899) 2 Ch. 672, Pomer, J., 
 and Lindley, L. J., maintained the utility of the phrase “ gross negli- 
 gence.” “ Their negligence,” said Lindley, M. P., in the last-men- 
 tioned case, speaking of directors, “ must be not the omission to take 
 all possible care, it must be much more blameable than that ; it must 
 be in a business sense culpable or gross. I do not know how better 
 to describe it.” Unfortunately these expressions do not remove the 
 obscurity of the word “ gross.” 
 
 The truth is that negligence is a purely relative term : it is the 
 absence of due care or diligence, and what is due care or diligence 
 must in every community be judged by the actual state of the society, 
 the habits of business, the general usages of life and the changes as 
 well as the institutions peculiar to the age. Story on Bailments, § 14. 
 
 In a recent case fDovey v. Cory , (1901) A. C. 477) a bank had 
 
NEGLIGENCE. 
 
 Ch. XVI. 
 
 20 
 
 sustained heavy losses by the issue of fraudulent balance sheets and 
 the improper advance of money to customers of the bank. The 
 frauds were the work of the manager and the chairman, and the 
 question arose whether a co-director, though, in fact, innocent 
 of any complicity, was liable to the company for negligence in 
 not having discovered the frauds. The House of Lords in the 
 result entirely exonerated him from liability. “It is obvious,” said 
 Halsbury, L. C., in giving judgment, “ that if there is such a duty (of 
 detecting frauds) it must render anything like an intelligent devolution 
 of labour impossible. Was Cory to turn himself into an auditor, a 
 managing director, a chairman, and find out whether auditors, 
 managing directors, and chairmen were all alike deceiving him ? That 
 the letters of the auditors were kept from him is clear. That he was 
 assured that provision had been made for bad debts and that he 
 believed such assurances is involved in the admission that he was 
 guilty of no moral fraud : so that it comes to this — that he ought to 
 have discovered a network of conspiracy and fraud by which he was 
 surrounded, and found out that his own brother and the managing 
 director . . . were inducing him to make representations as to the 
 prospects of the concern and the dividends properly payable which 
 have turned out to be improper and false. I cannot think it can be 
 expected of a director that he should be watching either the inferior 
 officers of the bank or verifying the calculations of the auditor him- 
 self. The business of life could not go on if people could not trust 
 those who are put in a position of trust for the express purpose of 
 attending to details of management”: and Lord Davey added, “I 
 think the respondent Cory was bound to give his attention to and 
 exercise, his judgment as a man of business on the matters which were 
 brought before the board at the meetings which he attended, and it is 
 not proved that he did not do so. But I think he was entitled to rely 
 upon the judgment, information, and advice of the chairman and 
 general manager, as to whose integrity, skill, and competence he had 
 no reason for suspicion. I agree with wdiat was said by Sir George 
 Jessel in In re Wincham Shipbuilding and Boiler Co., Hallmark’s case , 
 9 C. 1). 329, and by Mr. Justice Chitty, in In re Denham Sf Co., 
 that directors are not bound to examine entries in the company’s 
 books. It was the duty of the general manager and (possibly) the 
 chairman to go carefully through the returns from the branches and 
 to bring before the board any matter requiring consideration, but the 
 respondent was not, in my opinion, guilty of negligence in not 
 examining them for himself, notwithstanding that they were laid on the 
 table of the board for reference.” 
 
 A director is not necessarily affected with constructive notice, in the 
 absence of actual knowledge of the facts which appear in the books 
 of the company. Coasters Limited , 103 L. T. 622. 
 
204 
 
 DIRECTORS. 
 
 In determining whether a director has been guilty of negligence, 
 the Court will, as Dovey v. Cory , supra , and other cases show, take 
 into account the character of the business, the number of the directors, 
 the provisions of the articles, the ordinary course of management and 
 practice of directors, the extent of their knowledge and experience, and, 
 in a word, all the special circumstances of the particular case. 
 
 Given a case of duty not performed, the burden of proving that 
 the non-performance is equivalent to negligence rests on those 
 who allege such negligence (. In re Liverpool Household Stores (1890), 
 59 L. J. Ch. 618), for directors have a large discretion, and while 
 acting honestly within it cannot he charged with misfeasance. 
 Thus directors will not be held liable for misfeasance because, 
 in the exercise of their discretion, they allow calls to remain un- 
 paid ( In re Liverpool Household Stores , supra), or because they rely 
 on subordinates doing their duty ( Dovey v. Cory , supra), or do 
 not sue for a debt of the company. In re Forest of Dean Coal 
 Mining Co. (1878), 10 Ch. D. 450. It may in some cases be the 
 best policy for the company not to press for payment. Even if it is 
 not, mere errors of judgment and imprudence on the part of directors 
 do not constitute either negligence or misfeasance. Marzettfs case, 28 
 W. R. 541. As Lord Justice Cotton said : “ Trustees are liable, what- 
 ever trouble they take, if the fund in their care goes not according to 
 the trust. Opinions of counsel, bona Jides, or care, do not protect them. 
 Directors are confidential agents with the liabilities of trustees ; but 
 they have a large discretion, and if they act bond Jide they are relieved, 
 and are not liable for want of judgment or error if they make a 
 payment which is not, in fact, for the purposes of the company.” See, 
 also, Re Faure Accumulator Co., 40 C. D. 150 ; Sheffield and South 
 Yorkshire, Sfc. Society v. Aizlewood , 44 C. D. 412; and as to im- 
 prudence, Turquand v. Marshall, 4 Ch. 376; Overend, Gurney v. Gibb, 
 L. R. 5 H. L. 480 ; London Financial Association v. Kelk, 26 C. D. 107 ; 
 Grimwade v. Mutual Society, 52 L. T. 409. See Brazilian Rubber Planta- 
 tions and Estates, (1911) 1 Ch. 425, as to indemnity provisions in the 
 articles. 
 
 But it is one thing to make a payment injudiciously, and another 
 to make it without inquiry. Thus, if a director signs cheques for the 
 company he is bound to inform himself of the purposes for which the 
 cheques are being given. He cannot be allowed to say that the 
 signing was a ministerial act — a mere matter of form. If he neglects 
 inquiry, trusting to his co-directors, he does so at his own risk. 
 Joint Stock Discount Co. v. Brown (1869), 8 Eq. 381. And see Coats 
 v. Crossland, 20 T. L. R. 800. 
 
 And if directors do not really exercise their judgment they may be 
 liable. New Mashonaland Co., (1892) 3 Ch. 577 ; Re Leeds Co., 36 
 C. D. 787. 
 
MISFEASANCE AND BREACH OF TRUST. Ch. XVI. 
 
 205 
 
 Negligence by Non-Attendance at Board Meetings. 
 
 If directors are guilty of gross non-attendance and leave the manage- 
 ment to others, they may be guilty, by this means, of the breaches of 
 trust which are committed by others. Per Lord Hardwicke, Charit- 
 able Corporation v. Sutton , 2 Atk. 405. But it is not necessary for a 
 director to attend every board meeting unless the articles otherwise 
 provide. This was laid down long since in Perry's case, 34 L. T. 716, 
 in which Bacon, V.-C., said, that a director “ is not bound to attend 
 every meeting of the directors. It is not part of the duty of a director 
 to take part in every transaction which is considered at a board 
 meeting.” And Jessel, M. R., recognized this qualification in In re 
 Forest of Bean Co., 10 Ch. D. 452. “ They [directors] are bound, 
 
 no doubt,” said the learned judge, “to use all reasonable diligence, 
 having regard to their position, though probably an ordinary director, 
 who only attends at the board occasionally, cannot be expected to 
 devote as much time and attention to the business as the sole managing 
 partner of an ordinary partnership ; but they are bound to use fair and 
 reasonable diligence in the management of their company’s affairs, 
 and to act honestly.” 
 
 In the case of Re Denham Sf Co., 25 C. D. 752, a director who for 
 four years had attended no board meetings was held not to be 
 personally answerable for fraudulent reports and balance-sheets 
 issued and passed by his co-directors, or for dividends paid by them. 
 But there the articles were in special terms. In Marquis of Bute's case , 
 (1892) 2 Ch. 100, non-attendance by a trustee of a savings bank for 
 a long period was excused, but here there were fifty trustees. In that 
 case Stirling, J., said: “Neglect or omission to attend meetings is 
 not, in my opinion, the same thing as neglect or omission of a duty 
 which ought to be performed at those meetings.” See also Exploring 
 Land and Minerals Co., 94 L. T. 234. 
 
 Misfeasance and Breach of Trust. 
 
 Besides negligence, directors, as agents and trustees, may be held 
 liable for various other kinds of misconduct and delinquency. These 
 are generally grouped together under the head of what is known 
 as “ misfeasance,” or breach of trust, the term “breach of trust ” being 
 generally confined to some misapplication of the funds of the company 
 (see supra, pp. 179, 180), and the term “ misfeasance” to other breaches 
 of duty which do not involve such misapplication. For instance, 
 to apply the funds of the company to ultra vires purposes ( Cullerne 
 v. London Society , 25 Q. B. D. 485), or to pay dividends out of 
 capital (21 Ch. D. 519), is a breach of trust; see supra, pp. 179, 
 180; to allot shares knowingly to an infant ( Re Wilson, 8 Ch. 
 
 Negligence 
 of directors 
 by non- 
 attendance 
 to affairs. 
 
 Misfeasance 
 and breach 
 of trust. 
 
206 
 
 DIRECTORS. 
 
 Examples of 
 misfeasance 
 and breach 
 of trust. 
 
 45), or to take a bribe ( Pearson's case, 5 Ch. D. 336) ; to give a 
 creditor a fraudulent preference, or to commit a breach of the 
 articles resulting in loss to the company — these are acts of mis- 
 feasance. 
 
 The following are some cases in which directors have been 
 charged with or made liable for misfeasance or breach of trust : — 
 Stringer's case, L. R. 4 Ch. 475 (claim against directors to 
 repay dividend declared and paid under delusive balance-sheet) ; 
 Ranee's case, L. R. 6 Ch. 104 (director ordered to repay bonus im- 
 properly paid to him); National Funds Assurance Co., 10 C. D. 118; 
 Alexandra Palace Co., 21 Ch. D. 149 ; Flitcroft's case, 21 Ch. D. 519; 
 Denham Co., 25 C. D. 752; Re Sharpe, (1892) 1 Ch. 154; London 
 
 General Bank (2), (1895) 2 Ch. 673 (directors ordered to repay divi- 
 dends improperly paid to shareholders out of capital) ; De Ruvigne's 
 case, 5 Ch. D. 306 ; Pearson's case, 5 Ch. D. 336 ; Metcalf ' s case, 13 C. 
 D. 169 ; Carriage Co-operative Association, 27 C. D. 322 (orders against 
 directors who had improperly obtained their qualification shares from 
 promoters or vendors) ; Archer's case, (1892) 1 Ch. 332 (order to compel 
 director who had obtained from promoter a secret advantage — an 
 indemnity against loss on his qualification — to account to company) ; 
 London and S. W. Canal, (1911) 1 Ch. 346 (order against director who 
 held his qualification shares as trustee for and at will of promoter) ; 
 Postage Stamp, Sfc. Co., (1892) 3 Ch. 566 (directors ordered to account 
 for gift of shares by vendor) ; Englefield Co., 8 C. D. 388 (directors 
 ordered to make good sum paid to promoter for preliminary expenses, 
 out of which directors’ qualification provided) ; Marzetti's case, 28 W. R. 
 541 (director ordered to repay sums nominally paid for preliminary ex- 
 penses, but really for rigging the market) ; Geo. Newman Sf Co., (1895) 
 1 Ch. 674 (director held liable for present made to himself without the 
 sanction of the company’s articles); Parker v. McKenna, 10 Ch. 118 
 (directors held liable for illegitimate profits made by dealings with 
 the company’s shares) ; Boston Deep Sea Co. v. Ansell , 39 Ch. D. 339 
 (managing director held liable for secret commission) ; In re Cape 
 Breton Co., 29 Ch. D. 795, and 12 App. Cas. 652 (director selling his own 
 property to the company without disclosure): “The misfeasance in 
 such a case is not selling, but in not disclosing,” per Lord Herschell ; 
 Alexander v. Automatic Telephone Co., (1900) 2 Ch. 56 (directors held 
 liable for not making calls on themselves). 
 
 Directors who purposely abstain from making inquiries, in pursuance 
 of an understanding between them to that effect, into the price paid 
 to each other for properties sold to the company, are guilty of a gross 
 dereliction of duty. Coats v. Crossland , 20 T. L. R. 800. 
 
 In cases of misfeasance or breach of trust the delinquent director has 
 no right of set-off. In re Anglo-French Co-operative Society, 21 C. D. 
 492 ; In re Carriage Supply Association , 27 C. D. 322 ; Flitcroft' s case ? 
 
DISPOSITIONS PENDING WINDING-UP. Ch. XVI. 
 
 207 
 
 21 C. D. 519. And lie cannot rely on a release in general terms. Re 
 Joint Stock Trust (1912), 56 S. J. 272. 
 
 Statutory Relief of Directors. 
 
 By sect. 279 of the Companies Act, 1908 (which takes the place 
 of sect. 32 of the Act of 1907), special provision is now made for the 
 relief of directors. Thus — 
 
 “279. If in any proceeding against a director, or person occupying 
 the position of director, of a company for negligence or breach of 
 trust it appears to the Court hearing the case that the director or 
 person is or may be liable in respect of the negligence or breach of 
 trust, but has acted honestly and reasonably, and ought fairly to be 
 excused for the negligence or breach of trust, that Court may relieve 
 him, either wholly or partly, from his liability on such terms as the 
 Court may think proper.” 
 
 National Trustee Co. of Australasia v. General Finance Co., (1905) 
 A. C. 373, points to the conclusion that it is not enough to prove that 
 the trustee (remunerated) acted reasonably and honestly. It must, in 
 addition, be proved that he ought fairly to be excused. See also 
 In re Smith , Smith v. Thompson, 71 L. J. Ch. 411 ; Re Turner , Barker 
 v. Ivimey , (1897) 1 Ch. 536; Re Second East Dulwich l^bth Starr- 
 Bowkett Building Society , 68 L. J. Ch. 196; Re Grindey , Clews v. 
 Grindey , (1898) 2 Ch. 593; Perrins v. Bellamy, (1899) 1 Ch. 797 ; and 
 Re Lord de Clifford , (1900) 2 Ch. 707. 
 
 Dispositions pending Winding-up. 
 
 Directors who dispose of the company’s property pending a wind- 
 ing-up petition are prima facie liable, on a winding-up, for all such 
 moneys not expended by them in the ordinary course of business 
 (Companies Act, 1908, s. 205; Re Neath Harbour Works, 35 W. R. 827); 
 but where such payments are honestly made and in the ordinary 
 course of business, it is usual for the Court to allow them, as where a 
 charge on calls is given to prevent the ruin of an insurance company 
 (. International Life Assurance Society, L. R. 10 Eq. 312), or a contract 
 for sale of goods is completed by sale and delivery. Wiltshire Iron Co., 
 L. R. 3 Ch. 443. In sanctioning dispositions the Court is guided by 
 the same principles as those applied by the Court in bankruptcy to 
 “ protected transactions.” Re Repertoire Opera Co., 2 Manson, 314. 
 Directors should, however, be on their guard what they do after 
 petition presented. Ibid. 
 
 The acceptance of a bill of exchange in the ordinary course of 
 business by a director after commencement of a voluntary winding-up 
 is not capable of being sanctioned under the section, the directors 
 bein gfuncti officio. (Sect. 186 (iii).) 
 
 Statutory 
 relief of 
 directors . 
 
 D isposition 
 of property 
 by directors 
 pending 
 winding- up 
 petition. 
 
208 
 
 DIRECTORS. 
 
 Penalties. 
 
 penalties^ ^he * m P oses a nur aber of penalties for breach of its provisions. 
 
 The most important of these are the following : — 
 
 Alteration of Memorandum. — Sect. 9. Default in relation to altera- 
 tion of objects. 
 
 Copies of Memorandum and Articles. — Sect. 18. Default in supplying 
 copies of memorandum or articles. 
 
 Register of Members. — Sect. 25. Default in keeping register of 
 members. 
 
 Annual Returns. — Sect. 26. Default in making annual returns. 
 
 Inspection of Register. — Sect. 30. Default as to allowing inspection 
 of register. 
 
 Sub-division of Shares. — Sect. 41 . Default as to sub-division of shares. 
 
 Increase of Capital . — Sect. 44. Default as to giving notice of increase 
 of capital. 
 
 Name of Company. — Sect. 63. Default as to publishing name. 
 
 General Meeting. — Sect. 64. Default in convening annual general 
 meeting. 
 
 Special Resolutions. — Sect. 70. Default in registration of copies of 
 special and extraordinary resolutions. 
 
 Register of Directors. — Sect. 75. Default as to register of directors. 
 
 Commencing Business. — Sect. 87. For commencing business pre- 
 maturely. 
 
 Allotments of Shares. — Sect. 88. Default in returning allotments. 
 
 Share Certificates. — Sect. 92. Default as to issuing certificates. 
 
 Appointment of Receiver. — Sect. 94. Default as to registering appoint- 
 ment of receiver. 
 
 Accounts, filing. — Sect. 95. Default in filing accounts of receiver. 
 
 Return of Mortgages. — Sect. 99. Default in return as to mortgages. 
 
 Registration of Mortgages and Charges. — Sect. 100. Default in 
 registering mortgages or charges. 
 
 Inspection of Mortgage Register. — Sect. 101. Default in allowing 
 inspection. 
 
 Balance Sheet. — Sect. 113 (4). For issuing unsigned or without 
 report attached. 
 
 False Returns. — Sect. 281. For false returns and statements. 
 
 As to the prosecution in respect of offences made punishable by fine, 
 see sects. 276 and 277. 
 
 Application of Funds ultra vires the Company. 
 
 Ultra vires If directors apply funds of the company to purposes which are ultra 
 
 of funds* 011 v * res com P an 3 r > they are liable to replace them, however honestly 
 they may have acted. Cullerne v. London, Sfc. Society, 25 Q,. B. D. 485. 
 “If,” said Lord Justice Lindley in that case, “a director, acting 
 ultra vires, that is, not only beyond his own power, but also beyond 
 any power the company can confer on him, parts with money of the 
 
CRIMINAL LIABILITY FOR FRAUD. 
 
 Ch. XVI. 
 
 209 
 
 company, I fail to see on what principle the fact that he acted bond jide 
 and with the approval of the majority of the shareholders can avail 
 him as a defence to an action by the company to compel him to replace 
 the money.” This is a hard saying in cases where directors have 
 honestly misinterpreted their powers under an ambiguous memorandum 
 ( London Financial Association v. Kelk , 26 Ch. D. 107) ; but it is the 
 inexorable logic of the law. Such a case would be an eminently 
 proper one for relief under sect. 279 of the Act of 1908. 
 
 Remedies against Directors. 
 
 The civil remedy of a company against a delinquent director, whether 
 for negligence, fraud, misfeasance, or breach of trust, is, whilst the 
 company is a going concern, by action. Joint Stock Bank v. Brown , 
 8 Eq. 381 ; Nant-y-glo, Sfc. Co. v. Grave , 12 C. D. 738. If the company 
 is being wound up the remedy is, except where the parties are not 
 amenable to the winding-up jurisdiction, under sect. 215 of the Act, 
 commonly known as “misfeasance section,” which gives power to the 
 Court, in a summary way, to order any director or officer of the 
 company who has been guilty of misfeasance to replace the moneys 
 misapplied or to pay compensation. 
 
 An application under the section may be made by either the official 
 receiver or the liquidator or a creditor or contributory. 
 
 Criminal Liability for Fraud. 
 
 By the Larceny Act, 1861 , s. 84 : 
 
 “ Whosoever being a manager, director or public officer of any body 
 corporate or public company shall make, circulate or publish or concur 
 in making, circulating or publishing any written statement or account 
 which he shall know to be false in any material particular with intent 
 to deceive or defraud any member, shareholder or creditor of such 
 body corporate or public company, or with intent to induce any person 
 to become a shareholder or partner therein, or to intrust or advance 
 any property to such body corporate or public company, or to enter 
 into any security for the benefit thereof, shall be guilty of a misde- 
 meanour, and being convicted thereof shall be liable at the discretion 
 of the Court to any of the punishments which the Court may award 
 as hereinbefore last mentioned.” 
 
 The punishments “hereinbefore last mentioned” were “To be 
 kept in penal servitude for any term not exceeding seven years and 
 not less than three years, or to be imprisoned for any term not exceed- 
 
 14 
 
 p. 
 
210 
 
 DIRECTORS. 
 
 Criminal 
 liability of 
 directors 
 for fraud. 
 
 ing two years with or without hard labour and with or without solitary 
 confinement.” 
 
 A prospectus is a “written statement ” within this section. It was 
 under this Act that the directors of Overend, Grurney & Co. were 
 prosecuted. See the admirable summing-up of Cockburn, C. J., in this 
 case ( Queen v. Gurney, reported Finlayson, p. 254, extract of which is 
 given in Company Precedents, Part I., p. 233) ; and there have been 
 various other cases from time to time in which directors have been pro- 
 secuted and convicted. By sect. 217 of the Act of 1908 the Court may 
 direct the liquidator of a company in winding-up by the Court to 
 institute a prosecution against the directors, managers or officers, or 
 members, for criminal offences committed by them, and a similar 
 power of prosecuting is given to the liquidator in a voluntary winding- 
 up, with the sanction of the Court. (Sect. 217 (2).) The difficulty of 
 working these sections lies in the fact that the costs of the proceedings 
 come out of the assets, in other words, out of the pockets of creditors 
 or shareholders, who are naturally indisposed to have public justice 
 vindicated at their expense. The question was very carefully considered 
 by Buckley, J., in Re London and Globe Finance Corp., (1903) 1 Ch. 
 728, and the test he there adopted was what would a good citizen feel 
 to be his duty in the matter — if to prosecute, then a prosecution ought 
 to be directed by the Court, even against the wishes of the personas 
 entitled to the assets. Other cases are Re Charles Denham Sf Co., 32 
 W. P. 921; Re Eupion Fuel and Gas Co., W. N. (1875) 10; and 
 Re Northern Counties Bank, 31 W. P. 546. 
 
 Directors who pay dividends out of capital are not only civilly liable 
 but may be liable in some cases for conspiracy. Burnes v. Pennell, 
 2 H. L. C. 487 ; R. v. Esdaile, 1 F. & F. 213. 
 
 The Act of 1908 also contains a penal section (sect. 281), where 
 “ any person in any return, report, certificate, balance sheet or other 
 document required by or for the purposes of any of the provisions of 
 this Act specified in the Fifth Schedule hereto, wilfully makes a state- 
 ment false in any material particular knowing it to be false ” — a provi- 
 sion designed to fortify the working of the Act ; and offences against 
 several of the sections are criminal. Reg. v. Tyler, (1891) 2 Q. B. 
 588. 
 
 Further, by sect. 216 of the Act (1908), “If any director, officer, 
 or contributory of any company being wound up destroys, mutilates, 
 alters, or falsifies any books, papers, or securities, or makes or is privy 
 to the making of any false or fraudulent entry in any register, book 
 of account, or document belonging to the company, with intent to 
 defraud or deceive any person,” he is to be guilty of a misdemeanour, 
 and liable to two years’ imprisonment with or without hard labour. 
 
INDEMNITY — CONTRIBUTION. 
 
 Ch. XVI. 
 
 211 
 
 Indemnity. 
 
 Directors, as agents, are by law entitled to indemnity in respect of Indemnity to 
 all liabilities properly incurred by them in the management of the directors, 
 company’s business. Re German Mining Co ., 4 De G. M. & G. 19 ; 
 
 Re Norwich Yarn Co ., 22 Beav. 143 ; James v. May, L. R. 6 H. L. 
 
 328 ; Walters v. Woodbridge , 7 0. D. 504 ; Re Financial Corporation , 
 
 28 W. R. 760 ; Hunt's Claim , W. N. (1872) 53; Hardoon v. Belilios, 
 
 (1901) A. 0. 118 ; Seton, 7th ed. 1131. This extends to costs incurred 
 by a director in defending a libel action in connection with a report 
 made by him for the company ( Re Famatina Development Corporation , 
 
 (1914) 2 Ch. 271) ; and no express provision for that purpose is neces- 
 sary ; but the articles commonly contain express provision on the 
 subject, and where this is the case a L right of indemnity may be and 
 often is given more extensive than that implied by law. See Re Pyle 
 Works (2), (1891) 1 Ch. 184. The right does not, of course, extend to 
 indemnity for wrongful or ultra vires acts of the agent. Smith v. Duke 
 of Manchester , 24 Ch. D. 611 ; and other cases. 
 
 As to the right of indemnity where a person’s name has been 
 inserted in a prospectus without his consent, see sect. 84 (3) of the 
 Act of 1908. 
 
 Directors who pay a dividend representing that it is paid out of 
 profits cannot claim indemnity, but where directors pay a dividend to 
 members who know that it is paid out of capital, they may have a 
 right of indemnity as against such members. Moxham v. Grant , 
 
 (1900) 1 Q. B. 88 ; yet the directors will primarily be ordered to make 
 good the amount to the company. Re Alexandra Palace Co ., 21 C. D. 
 
 149 ; National Funds , 10 C. D. 118. 
 
 Directors are not entitled, unless the articles so provide, to be 
 paid by the company their travelling expenses in attending board 
 meetings. Young v. Naval and Military , Sfc. Society , (1905) 1 K. B. 
 
 687. Such expenses are not expenses incurred in the execution of 
 their office within an indemnity clause. Marmor , Limited v. Alexander 
 (1908), S. C. 78, Ct. of Sess. ; Brazilian Rubber , 27 T. L. R. 109. 
 
 Contribution. 
 
 Where directors incur liability, e.g ., by engaging in some ultra vires Contribution 
 
 transaction, they are all liable to contribute to meet the consequent directors 
 . . . A inter se as to 
 
 liability ; that is to say, ii one is sued for and has to pay the damages, moneys paid 
 
 he is entitled to call on the others, who are equally blameable, to l° r liability. 
 
 14 ( 2 ) 
 
212 
 
 DIRECTORS. 
 
 contribute rateably to discharge the amount, for all directors who 
 join in a misapplication of the company’s property are jointly and 
 severally liable. Ashurst v. Mason , 20 Eq. 225 ; Ramskill v. Edwards , 
 31 C. D. 100; In re Englefield Colliery Co., 8 Ch. D. 388; In re 
 Anglo-French Society , 21 Ch. D. 501 ; and see Buies of Supreme 
 Court, Ord. XVI. r. 55 ; and Ann. P. 1916, pp. 285, 299. See also the 
 right of contribution under sect. 84 (4) of the Act of 1908, in relation 
 to prospectus liabilities. 
 
Ch. XVII. 
 
 21 
 
 CHAPTER XVII. 
 
 DIVIDENDS AND PROFITS. 
 
 Dividend paying incident to Trading. 
 
 The Act of 1908, except in Table A., where applicable, does not contain No statutory 
 
 t. . provisions 
 
 any express provisions as to the payment oi dividends, and although except in 
 
 the powers of a company are limited by its objects, the Act evidently Table A. as 
 
 treats the power to pay dividends as an object of every company so dividends. 
 
 obvious, so inherent, as not to need mention in the memorandum, but 
 
 properly left to be dealt with and defined by the articles (Table A. 
 
 Clause 95, and Companies Act, 1908, s. 39 (3)) ; and this is consonant 
 
 with common sense, for the main object of the Act was, and is, to 
 
 enable people to trade with limited liability, and the chief incentive 
 
 to all such trading would be gone if the members of the company 
 
 could not appropriate to themselves the profits derived from such 
 
 trading. 
 
 But there is no principle which compels a company while a going 
 concern to divide the whole of its profits among the shareholders. 
 
 How the company shall deal with such profits is a matter of manage- 
 ment and internal economy. The company may form a reserve fund, 
 and the reserve fund may, subject to the control of a general meeting, 
 be invested in such securities as the directors may select, the matter 
 being one of internal management. Burland v. Earle , (1902) A. 0. 
 
 83 ; Bond v. Barrow Hcematite Co., (1902) 1 Ch. 353. 
 
 Table A. — which is to apply to all companies limited by shares, 
 unless excluded — provides, by Art. 95, for the payment of dividends 
 out of profits. Where Table A. does not apply, the articles generally 
 contain specific provisions as to the payment of dividends. 
 
 Power to declare Dividends. 
 
 In framing these provisions the usual plan is to provide that “the Powers in 
 company in general meeting,” or “ the directors with the sanction of a 
 general meeting,” may declare a dividend. Occasionally, however, 
 the power to declare dividends is vested in the directors alone, and in 
 many cases they are given the power to pay interim dividends. 
 
 Proportion in which Dividends payable. 
 
 One of the most important points which the articles have to In wlia t 
 determine in reference to dividends is in what proportion the dividends dividends 18 
 are to be made payable as between the members. The provision as payable, 
 to this, contained in Table A. (of 1862), was that the dividend is to be 
 paid “to the members in proportion to their shares.” This means 
 in proportion to the nominal amount of the capital held by them 
 respectively. And the result of such a provision is to give the same 
 
214 
 
 DIVIDENDS AND PROFITS. 
 
 Dividends on 
 preference or 
 other special 
 shares. 
 
 dividend per share to shares of the same amount, even where more 
 is paid up on some than on others. Oakbank Oil Co. v. Crum , 8 App. 
 Cas. 65. 
 
 Some persons consider this principle of distribution inequitable, and 
 not without reason, and it is consequently very common, in the articles, 
 to provide that the dividend shall be distributed among the members 
 “according to the capital paid on the shares.” Table A. (of 1908) 
 so provides in Clause 98. This gives a rateable dividend on the paid 
 up capital; but this again fails to satisfy ideal justice, because it does 
 not take account of the outstanding liability on the shares. Thus, if 
 there are 10,000 fully paid up shares of 1 1. each, and 10,000 1/. shares 
 on which only 5s. per share has been called and paid up, here the 
 holders of the part-paid shares undoubtedly confer a substantial 
 benefit on the company by enabling it to trade on the credit of the 
 uncalled capital represented by their names. And yet for this they 
 get no corresponding advantage. They take only the same dividend 
 as if their shares were 5s. shares. 
 
 To meet this unfairness it is sometimes provided that the profits 
 shall be applied, first in paying a dividend at the rate of — say — 5 per 
 cent, per annum on the paid up capital, and that the surplus shall be 
 divided among the members in proportion to their shares. This 
 seems, in a great measure, to do justice all round. 
 
 If the articles do not specify in what proportion dividends are 
 to be paid, they must be paid in proportion to the nominal amount of 
 the shares, for members are prima facie entitled to participate in the 
 profits of a company in proportion to their respective interests therein, 
 and the nominal amount of capital held by each is the measure of such 
 interest. Bridgwater Co., 14 App. Cas. 525 ; Oakbank Oil Co. v. Crum , 
 supra. 
 
 When the articles expressly or impliedly provide for payment 
 of dividends in proportion to the shares, the question sometimes arises 
 whether, by altering the articles, provision can be effectively made 
 for paying dividend in proportion to the capital paid up. Sect. 39 of 
 the Act authorizes such payment, and the decision in Andrews v. Gas 
 Meter Co., (1897) 1 Ch. 361, makes it clear that such an alteration 
 can be made. 
 
 Dividends on Preference or other Special Shares. 
 
 The dividend on preference shares depends on the terms of issue. 
 Such terms may be found in the memorandum ( Ashbury v. Watson, 
 30 Ch. D. 376), or in the articles of association, or in the resolution 
 creating the shares, or in some prospectus or other document offering 
 them for subscription. Webb v. Earle, 20 Eq. 557. 
 
 The dividend on preference shares is usually at a fixed rate, e.g., 5 per 
 cent, per annum on the capital paid up thereon. In some cases, as 
 
PAYMENT OUT OF PROFITS. 
 
 Ch. XVII. 
 
 215 
 
 appears above (p. 84), it is cumulative ; in other cases it is non-cumu- 
 lative. 
 
 Preference shares sometimes confer a right to participate also in 
 surplus profits. 
 
 Besides preference shares there may be other classes of shares with 
 special dividend rights attached thereto. 
 
 In declaring a dividend, the rights of all these different classes 
 must be observed. Any infringement, or attempted infringement of 
 their respective rights will give, to the members who are prejudiced, 
 the right to apply for an injunction or other relief. 
 
 Payment out of Profits. 
 
 In declaring dividends certain important points have to be borne in 
 mind, viz. : — 
 
 1 . Dividends are only to be paid out of profits, not out of capital. 
 
 In re Oxford Benefit Building Society , 35 Oh. D. 502 ; In re 
 National Funds Assurance Co ., 10 Ch. D. 126; FlitcrofI s case , 
 21 Ch. D. 519; Alexandra Palace Co., 21 Ch. D. 149; Leeds 
 Estate v. Shepherd, 36 Ch. D. 787 ; Re Sharpe, (1892) 1 Ch. 154. 
 Except as permitted under sects. 89 or 91 of the Act. Foster v. 
 New Trinidad Lake Asphalt Co., (1901) 1 Ch. 208; Fisher v. 
 Black and White Publishing Co., (1901) 1 Ch. 174. 
 
 2. Payment out of capital is ultra vires, for it amounts to a reduction 
 
 of the paid-up capital, and no such reduction is allowable. 
 
 3. Even if such payment is expressly authorized by the memo- 
 
 randum of association, or by the articles of association, or by 
 special resolution, it is, except as aforesaid, equally ultra vires, 
 for these documents cannot repeal the Act. Trevor v. Whit- 
 worth, 12 App. Cas. 409. 
 
 4. Much less can the sanction of a general meeting justify it. Flit- 
 
 croft' 1 s case, 21 C. D. 519. 
 
 5. Directors who are parties to the payment of a dividend out of 
 
 capital, except as aforesaid, ar prima facie jointly and severally 
 liable to repay the amount. Flitcroft’s case, supra. 
 
 6. Directors who are parties to the payment of a fictitious dividend 
 
 in order to raise the price of the company’s shares, may be 
 criminally liable for a conspiracy. See per Lord Campbell, L. C., 
 Burns v. Pennell (1849), 2 H. L. C. 525, and Regina v. Esdaile 
 (1858), 1 E. & F. 213. 
 
 The fundamental rule prohibiting payment of dividend out of 
 capital as not only contrary to the Act, but commercially unsound, 
 seemed at one time in no small danger of being relaxed or altogether 
 explained away by certain startling decisions of the Court of Appeal, 
 as formerly constituted, of which the following are the most im- 
 portant : — Lee v. Neuchatel Co., 41 C. D. 1 ; Verner v. General 
 
 Points to be 
 observed in 
 declaring 1 
 dividends. 
 
 Profits, not 
 capital, 
 available . 
 
 Ultra vires if 
 
 payment out 
 of capital. 
 Even if 
 authorized by 
 memorandum 
 or articles. 
 
 Or by general 
 meeting. 
 
 Civil liability 
 of directors. 
 
 Criminal 
 liability of 
 directors as to 
 payment out 
 of capital. 
 
 Modem 
 decided cases 
 militating 
 against above 
 rule. 
 
216 
 
 DIVIDENDS AND PROFITS. 
 
 Some conclu- 
 sions from 
 such cases. 
 
 The regula- 
 tions are to 
 be followed 
 (subject to 
 next para- 
 graph). 
 
 Capital only- 
 means amount 
 paid on shares 
 and assets 
 acquired 
 therefrom. 
 
 Net income 
 of wasting 
 property is 
 divisible as 
 profits. 
 
 Express 
 power in 
 articles to 
 apply such 
 net income is 
 equivalent to 
 sanction of 
 Court to re- 
 duce capital. 
 
 Loss, &c. of 
 “ fixed capi- 
 tal” need not 
 be made good 
 out of income. 
 
 Otherwise as 
 to ‘ ‘ circula- 
 ting capital.” 
 
 Realised 
 
 Commercial Trust, (1894) 2 Ch. 268 ; Wilmer v. Macnamara, (1895) 
 2 Ch. 245 ; below referred to as the Lee v. Neuchatel series of 
 decisions. 
 
 Some of the remarkable conclusions to which these decisions, or 
 the principles on which they were decided, pointed may be stated as 
 follows: — 
 
 Dividend pre-supposes profit of some kind; but it is for the 
 company to determine, by its articles or by resolution, 
 what sort of profits are available for dividends, and if they do 
 so the Court will not, subject to what follows, interfere, how- 
 ever illusory or unsound the principle adopted for arriving at 
 profits may be. 
 
 2. In determining what sort of profit is to be divisible, the company 
 
 must conform to the rule that dividends must not be paid out 
 of capital or out of borrowed money; but “ capital ” in this 
 proposition means the capital paid up on the shares, and the 
 capital assets acquired therewith. 
 
 3. To divide the net income arising from a company’s property is 
 
 not to be regarded as in any sense a return of capital, even 
 when the income arises from a wasting property acquired by an 
 expenditure of capital, for instance, from a lease of ten acres of 
 coal, one acre of which is worked out each year. 
 
 4. Therefore, though an express power in the memorandum to 
 
 return capital to shareholders can only be exercised with the 
 sanction of the Court, a power in the articles to apply the 
 proceeds arising from a wasting property in paying dividends, 
 is free from objection, although the result is the same. Lee v. 
 Neuchatel Co ., 41 C. D. 1. 
 
 5. Loss or depreciation of “ fixed ” capital does not affect the profits 
 
 available for dividend, or render it necessary to make good the 
 same out of income. “ Fixed capital ” here is used in the sense 
 in which the economists use the expression, and is not confined 
 to property physically fixed. Thus, the ships of a shipping 
 company and the rolling stock of a railway company are fixed 
 capital. See Company Precedents, Pt. I. p. 884 et seq. ; 
 Verner v. General Commercial Co., (1894) 2 Ch. 268. 
 
 C. But in ascertaining profit for a particular period, loss or deprecia- 
 tion of “ circulating ” capital must be taken into account. 
 Circulating capital means here capital which performs its whole 
 office in the production in which it is engaged by a single use, 
 e.g., the goods which the merchant has for sale, he sells out 
 and out and gets the money in exchange ; the goods which 
 the tradesman uses up in doing repairs for a customer; the horses 
 of a horse-dealer. Company Precedents, Pt. I. p. 884 et seq. 
 
 7. Accretions to capital, when realised , may be brought into the 
 
PAYMENT OUT OF PROFITS. 
 
 Ch. XVII. 
 
 217 
 
 profit and loss account and dealt with accordingly. Lubbock v. 
 British Bank of S. A ., (1892) 2 Ch. 198 ; Foster v. New 
 Trinidad Co ., (1901) 1 Ch. 208. And see Spanish Prospecting 
 Co ., (1911) 1 Ch. 92, where the meaning of the term “profits” 
 is discussed. 
 
 8. A legal mode of ascertaining the profits of a particular period, if 
 
 the articles so provide, is to take an account of the ordinary 
 outgoings, and in so far as the receipts exceed the outgoings, 
 and the loss of circulating capital during such period, the same 
 may be treated as profit without making good previous losses 
 even of circulating capital. Bosanquet v. St. John del Rey ( 1897), 
 77 L. T. 207 ; National Bank of Wales , (1899) 2 Ch. 629. 
 
 9. A balance sheet need not disclose the true position of the com- 
 
 pany. It deals, as regards the assets, not with existing facts 
 but with past history. It shows what the particular assets cost, 
 not what they are worth. Thus, if a company buys a property 
 for 10,000/. and the value has fallen to 1,000/., it will still 
 be properly entered in the balance sheet as property that cost 
 10,000/., and it may remain at that figure even though each 
 year, by consumption, user, wear and tear, or otherwise, it 
 depreciates more and more. 
 
 The extraordinary laxity in regard to the ascertainment of profits 
 which some of these decisions countenanced, and apparently legalised, 
 went far to render the salutary rule, that dividends must not be paid 
 out of capital, illusory. The earlier cases pointed to the conclusion, 
 that a dividend can only be paid out of profits ascertained by a proper 
 profit and loss account and balance-sheet, as commercial men generally 
 ascertain profits, throughout the world. Helby's case , 2 Eq. 175 ; 
 Stringer' s case , 4 Ch. 475 ; Ranee's case , L. It. 6 Ch. 104 ; Ebbw Vale 
 Co., 4 C. D. 827 ; Davison v. Gillies , 16 C. D. 347 ; Oxford Building 
 Society , 35 C. D. 502. This was the view of Jessel, M. It., as appears 
 from the decision in Ebbw Vale Co., supra. And see per Stirling, J., 
 Verner v. General Commercial , Sfc. Co., (1894) 2 Ch. 268, and per 
 Kay, L. J., in the same case, at p. 268, and per Chitty, J., in 
 Lubbock v. British Bank of S. A., (1892) 2 Ch. 198. And the Act of 
 1877 was undoubtedly passed with a view to enabling a company 
 which had lost capital to write it off, and thereby place it in a position 
 to resume payment of dividend. But these views were in effect dis- 
 regarded, if not treated as unsound, in the Lee v. Neuchatel series of 
 decisions. 
 
 The criticisms of the Law Lords in Dovey v. Cory, (1901) A. C. 477, 
 upon the Lee v. Neuchatel series of decisions, and the judicial dicta 
 therein, have, however, severely shaken their authority as expositions 
 of the law, and gone far to restore the authority of the earlier line of 
 decisions. 
 
 accretionH of 
 capital are 
 divisible as 
 profits. 
 
 Legal mode of 
 ascertaining 
 profits if 
 articles 
 admit. 
 
 Observations 
 on the above 
 decided cases. 
 
 Doubts as to 
 the Lee v. 
 Neuchatel 
 series. 
 
218 
 
 DIVIDENDS AND PROFITS. 
 
 Bond v. 
 Barrow 
 Haematite Co. 
 
 In Dovey v. Cory , supra, it was sought to make a director responsible 
 in respect of dividends paid out of capital. The Court of Appeal had 
 decided in his favour on two grounds : (1) that he had been deceived 
 by those whom he was entitled to trust, and (2) that the dividends were 
 not in fact paid out of capital ; and in regard to the second ground of 
 decision the Court reiterated the propositions laid down in the Lee v. 
 Neuchatel series of decisions and acted thereon. But the House of 
 Lords, during the argument before it, showed a marked disinclination 
 to agree to those propositions, and ultimately, whilst affirming the 
 decision on the first ground, declined in the most significant manner to 
 express any opinion on the propositions thus laid down in the Court 
 of Appeal ; and more than one of the learned Lords dissented from or 
 stated that he was not to be taken to assent to all those propositions. 
 Had the propositions thus referred to been free from objection, the 
 House would in the usual way have adopted them and treated them 
 as a further ground for the decision ; but a reservation of opinion so 
 pointed and unusual in regard thereto is pregnant with meaning and 
 necessarily casts a shadow of doubt on the propositions laid down 
 in the Lee v. Neuchatel series of decisions. 
 
 At all events, a salutary caution has been administered to those who 
 desire to act on that series of decisions, and further developments may 
 be anticipated. 
 
 Following on the decision of the House of Lords above referred to 
 came the case of Bond v. Barrow Haematite Co., (1902) 1 Ch. 353, 
 Farwell, L. J. (then J.). That was a case of a steel manufacturing company 
 which for the purpose of making steel had bought collieries and mines 
 and erected blast furnaces and cottages. By the surrender of the leases 
 and otherwise a loss had been incurred, and it was contended for the 
 plaintiff that, notwithstanding this loss, the company could apply its 
 current income in paying dividends. But the learned judge held that 
 the mines, blast furnaces and cottages were in the circumstances to be 
 regarded as u circulating capital,” and that, as this at any rate must be 
 made good before dividends could be paid, the company was not in a 
 position to pay dividends. In referring to Verner v. General and 
 Commercial Investment Trust, (1894) 2 Ch. 239, and to the propositions 
 laid down therein by Lindley, L. J., that fixed capital may be sunk 
 and lost and yet that the excess of current receipts over current pay- 
 ments may be divided, but that floating or circulating capital must be 
 kept up, he said: “I do not understand his Lordship to belaying 
 down a general and universal rule that in every company fixed capital 
 may be sunk and lost, but that there are companies in which that may 
 be the case. All the authorities, however, agree, I think, that 
 circulating capital must be kept up.” And referring to the decision 
 in Lee v. Neuchatel Co., supra , which was cited as an authority for the 
 proposition that no company owning wasting property need ever 
 
PAYMENT OUT OF PROFITS. 
 
 Ch. XVII. 
 
 219 
 
 create a depreciation fund, his Lordship said: “In my opinion that is 
 not the true result of the decision; the company’s assets were larger 
 than at its formation, and the Court decided nothing more than 
 the particular proposition that some companies with wasting assets 
 need have no depreciation fund. Lor instance, I cannot think that it 
 would be right for the defendant company to purchase out of capital 
 the last two or three years of a valuable patent and distribute the 
 whole of the receipts in respect thereof as profits without replacing 
 capital expended in the purchase.” 
 
 Meanwhile, in practice [notwithstanding the Lee v. Neuchatel series 
 of decisions], companies, as a general rule, ascertain their profit on 
 sound business principles, and, acting under the advice of competent 
 auditors, decline to avail themselves of the power, which the principles 
 laid down in the discredited decisions would allow, to inflate profits at 
 the expense of capital. 
 
 Generally, where capital has been lost or is unrepresented by avail- 
 able assets, companies take steps to reduce their capital, and the 
 Court never insists that reduction is needless, having regard to the 
 Lee v. Neuchatel series of decisions. See Welsbach Incandescent Co ., 
 (1904) 1 Ch. 87; Hoare Sf Co ., (1904) 2 Ch. 208. 
 
 Shareholders who have, with full knowledge of the facts, received 
 dividends paid out of capital cannot keep such dividends, and at the 
 same time take proceedings against the directors to compel them to 
 replace the amount of the dividend. Such a course would obviously 
 be most inequitable. Towers v. African Tug Co ., (1904) 1 Ch. 558. 
 
 But where dividends are paid on the representation of the directors 
 that they are being paid out of profits, the shareholders are not 
 accountable or precluded from suing. Filter of Is case , 21 C. D. 519. 
 
 An arrangement between a vendor and the company to guarantee 
 certain dividends for a specified period may be valid if it involves 
 merely the personal liability of the vendor. Ex parte Jegon , 12 Ch. D. 
 503. But such an arrangement is void as against the creditors of the 
 company if the dividends thus become payable directly or indirectly out 
 of the purchase price. Re Menell et Cie., (1915) 1 Ch. 759. 
 
 Declaration of Dividends. 
 
 The articles commonly provide for the directors, with the sanction 
 of a general meeting, declaring dividend; but sometimes, as in Table A., 
 the clause runs that ‘ ‘ the company in general meeting may declare 
 dividends.” See clause 95. 
 
 Where a dividend is declared and becomes payable it is a debt, and 
 each shareholder is entitled to sue the company for his proportion. 
 Re Severn Rail. Co ., (1896) 1 Ch. 559 ; Bindley, Com., 5th ed. 35, 437. 
 
 Until declaration the shareholders’ right to sue does not arise. Bond 
 v. Barrow Hcematite Steel Co ., (1902) 1 Ch. 353. 
 
 In practice 
 profits are 
 usually ascer- 
 tained on 
 strict business 
 principles, 
 and above 
 cases not 
 taken advan- 
 tage of. 
 
 Guaranteed 
 
 Dividends. 
 
 Dividend 
 when declared 
 is a debt 
 due from 
 company. 
 
220 
 
 DIVIDENDS AND PROFITS. 
 
 Limitation of 
 time for suing 
 company. 
 
 Declared 
 but unpaid 
 dividend 
 passing on 
 transfer. 
 
 Apportion- 
 ment of 
 dividends 
 between 
 tenant for 
 life and re- 
 mainderman. 
 
 Dividends are 
 prim a facie 
 payable in 
 cash only. 
 
 If the shareholder omits to sue for more than six years, his claim 
 may be barred ( In re Severn Rail . Co., (1896) 1 Ch. 564), unless the 
 effect of the articles is to constitute the right to the dividends a 
 specialty debt, when the shareholder has twenty years to recover. 
 Re Drogheda Steam Packet Co ., (1903) 1 Ir. R. 512. And see 
 Artizans ' Land and Mortgage Corp., (1904) 1 Ch. 796. These decisions 
 proceed on the footing that the dividends were specialty debts, 
 because the certificates of title were under seal ; but quaere whether 
 this is sound. Sometimes the articles of association (see clause 76 of 
 the old Table A.) fix a shorter period, and provide for forfeiture if not 
 claimed within that period ; but the London Stock Exchange Committee 
 objects to such a clause, and the clause does not appear in Table A. of 
 1908. 
 
 A transfer of shares, after dividend declared, does not, as against 
 the company, carry the dividend even where the transferee has 
 expressly bought cum div. ; but, as between a buyer and seller of 
 shares, the buyer is entitled to all dividends declared after the date of 
 the contract for sale, unless otherwise arranged. Black v. Homersham, 
 4 Ex. D. 24. 
 
 [As between tenant for life and remainderman, dividends, whenever 
 declared, are apportionable under the Apportionment Act, 1870 (33 & 
 34 Yict. c. 35). Re Oppenheimer , (1907) 1 Ch. 399. 
 
 When a company declares a bonus or special dividend, the question 
 whether it is to be treated as capital or income depends on the manner 
 in which the company has elected to treat it. Some or all has been 
 held to be dividend in Price v. Anderson , 15 Sim. 473 ; Hopkins' Irusts, 
 18 Eq. 696; and Re Piercy , (1907) 1 Ch. 289 ; and even though paid 
 in shares, in Malam v. Hitchens , (1894) 3 Ch, 578, where the tenant 
 for life was held entitled to the value of the dividend applied in 
 acquiring the shares, the rest of the value of the shares being treated 
 as capital. 
 
 Bonus shares have been treated as capital in Barton's Trusts, 5 Eq. 
 238 ; Bouch v. Sproule, 12 A. C. 385 ; Jones v. Evans , (1913) 1 Ch. 23. 
 
 If no dividend is declared by the company in respect of the period 
 of the life of the tenant for life, nothing will be payable to him, even 
 though the company has earned profits during that period. Re 
 Armitage, (1893) 3 Ch. 337 ; Re Sale , (1913) 2 Ch. 697.] 
 
 In the absence of express authority in the articles, the company 
 must pay dividends in cash. It may not pay them by the distribution 
 of, for example, shares in another company, or debentures. Hoole v. 
 Great Western Rail. Co., 3 Ch. 262 ; Wood v. Odessa, Sfc. Co., 42 C. D. 
 645. But it is very common, now, for the regulations to contain a 
 clause authorizing the company to pay dividends in specie, i.e ., by the 
 distribution of specific assets. See Company Precedents, Parti, p. 767. 
 
DIVIDENDS DURING CONSTRUCTION. Ch. XVII. 
 
 221 
 
 Sending a dividend warrant by post will discharge the company if 
 payment by post is authorized. Thairlwall v. Great Northern Railway , 
 
 (1910) 2 K. B. 509. 
 
 As to income tax on profits and dividends, see cases in Company 
 Precedents, Part I. 11th ed. p. 97. 
 
 As to dividends due to enemy shareholders, see p. 113, ante. 
 
 Capitalising Profits. 
 
 Cases often occur in which it is desired to capitalise undivided Capitalising 
 profits. If the issued shares are only part paid up, this can be done P roftts- 
 by declaring a bonus out of such profits and making a call payable at 
 the same date. But more commonly what is desired is to issue paid- 
 up bonus shares to the members and at the same time to carry from 
 reserve to capital account a corresponding amount. Such a transaction 
 cannot be carried out exactly on these lines, for paid-up shares cannot 
 be issued unless they are paid up by some one other than the company. 
 
 Now, the reserve fund belongs to the company, and to issue shares on 
 the footing that the company is to pay them up out of the reserve fund 
 is irregular, for the payment is by the company. To do what is 
 desired, it is therefore necessary to declare a bonus or dividend payable 
 out of reserve (free of income tax), so that each member may have an 
 individual right, and this can then be satisfied by the issue of paid-up 
 shares. And see, further, Company Precedents, Part I. 11th ed. p. 1062. 
 
 Dividends during Construction. 
 
 It was long since settled that a company could not pay dividends 
 out of capital, and that the payment of interest out of capital during 
 the construction of a company’s works was within this principle. 
 
 To do such a thing, whether directly or indirectly, was ultra vires. 
 
 See Alexandra Palace Co ., 21 C. D. 159, and Flitcroft's case, supra , 
 p. 220. This rule occasioned great inconvenience ; and at last, so far 
 as regards Indian companies, the rule was relaxed by the Indian 
 Railways Act, 1894. Thirteen years later — in 1907 — the Legislature, 
 in sect. 9 of the Companies Act, 1907, for which sect. 91 of the Act of 
 1908 has now been substituted, made the same concession in favour 
 of companies under the Companies Acts. 
 
 The power, it will be observed, is carefully hedged round with 
 conditions designed to prevent any abuse. 
 
 Agreements for Remuneration by Share of Profits. 
 
 Similar rules apply for the ascertainment of profits for this purpose 
 as for the purpose of dividend. Re Spanish Prospecting Co., (1911) 
 
 1 Ch. 92. Income tax should not be deducted for the pnrpose of 
 ascertaining the amount of the profits for this purpose. Johnston v. 
 
 Chestergate Hat Co., (1915) 2 Ch. 338. 
 
222 
 
 Directors’ 
 duty to keep 
 accounts. 
 
 Provisions in 
 articles. 
 
 CHAPTER XVIII. 
 
 ACCOUNTS. 
 
 Duty of Directors to keep. 
 
 Directors are agents, and also in some sense trustees for the company. 
 Supra, p. 178. This being so, they are under the clearest obligation 
 to keep proper accounts of their receipts and payments, dealings and 
 transactions on behalf of the company. It is one of the first duties of 
 an agent, as Lord Eldon pointed out in White v. Lincoln (1803), 
 8 Ves. 363, to keep a clear account, and to communicate the contents of 
 it to his principal. And see Freeman v. Fairlie , 3 Nev. 40 ; Pearse 
 v. Green , 1 J. & W. 135, 140; and, as to a cestui que trust's right to 
 information, Re Tillott , (1892) 1 Ch. 86. 
 
 Provisions of Articles. 
 
 The articles usually provide for the keeping of proper books of 
 account in relation to the affairs of the company (cf. Table A., 
 Arts. 103 — 108), and it is the duty of the directors to see that these 
 books are kept ; if they omit to do so, they commit a breach of 
 duty, and are liable to the company in damages. The articles also 
 usually provide that no member is to have a right of inspecting any 
 account, or book, or document, of the company ‘‘except as conferred 
 by statute, or authorized by the directors or by a resolution of the 
 company in general meeting.” A provision of this kind will not 
 disentitle a shareholder to inspect the register of members, or the 
 register of mortgages ; for a member has a statutory right to inspect 
 these under sects. 30, 100, 101 and 102 of the Act ; but subject to these 
 qualifications the provision is effective. See supra , p. 39. Occasionally 
 the articles give a wider right of inspection ; but even where they 
 provide that the books, wherein proceedings of the company are 
 recorded, may be inspected, a member has no right to inspect the 
 minute book of the proceedings of directors. Req. v. Marquitta , <0rc. 
 Co., 1 E. & E. 289. 
 
 The right of inspection includes a right to make extracts ( Mutter 
 v. Eastern, fyc. Co., 38 C. D. 92; Nelson v. Anglo-American Land 
 Agency, (1897) 1 Ch. 130); and it is not necessary for the share- 
 
RIGHTS OF INSPECTION. 
 
 Ch. XVIII. 
 
 223 
 
 holder seeking inspection to assign a reason ( Holland v. Dickson , 37 
 C. D. 669) ; but the right to take extracts is impliedly negatived 
 where the Acts give a right to have copies on payment ( Balaghat 
 Mining Co ., (1901) 2 K. B, 665, C. A., overruling Boord v. African 
 Consolidated Co., (1898) 1 Ch. 596). If need be the shareholder can 
 obtain an injunction to enforce his rights. 
 
 A director is entitled virtute officii to inspect. Burn v. London and 
 South Wales Coal Co., W. N. (1890) 209. 
 
 A right of inspection given by the articles ceases on a voluntary 
 winding-up. Yorkshire Co., 9 Eq. 650 ; 18 W. R. 541, approved by 
 Court of Appeal in Kent Coalfields Syndicate , (1898) 1 Q,. B. 754. 
 
 On a winding-up, compulsory or under supervision, the power of the 
 Court to order inspection of the register of members (sect. 30), or of 
 the register of mortgages and charges (sect. 101), comes to an end 
 {Kent Coalfields Syndicate , supra ; Somerset v. I^and Securities Co., 
 W. N. (1897) 29) ; but the Court is invested by sect. 221 with a 
 discretionary power to permit inspection by creditors or contributories. 
 See North Brazilian Sugar , 37 C. D. 83. 
 
 The articles generally provide that at the ordinary meeting in 
 each year a profit and loss account for the past year, and a balance 
 sheet, shall be submitted ; and in the case of a public company, they 
 generally go on to provide that copies of the account and balance sheet 
 shall be sent to the members beforehand. In private companies it is 
 commonly provided that the documents are not to be printed or 
 circulated. 
 
 The books of account are usually to be kept at the registered office 
 of the company. This has the advantage of protecting them against 
 a lien. Capital Fire Association , 24 0. D. 408 ; as to which see 
 Hawkes Ackerman v. Lockhart, (1898)2 Ch. 1. In Rapid Road Transit 
 Co., (1909) 1 Ch. 96, a solicitor’s lien was preserved in a winding-up. 
 
 Statutory Rights of Inspection to Holders of Preference 
 Shares and Debentures. 
 
 Sect. 114 of the Act of 1908 confers new rights in this respect. 
 The section runs thus : — 
 
 114. — (1) Holders of preference shares and debentures of a 
 company shall have the same right to receive and inspect the balance 
 sheets of the company and the reports of the auditors and other reports 
 as is possessed by the holders of ordinary shares in the company. 
 
 (2) This section shall not apply to a private company, nor to a 
 company registered before the first day of July nineteen hundred and 
 eight. 
 
 This is a statutory recognition of what was becoming a common and 
 very proper practice with companies. 
 
224 
 
 ACCOUNTS. 
 
 Fraudulent Accounts. 
 
 Under 25 & 26 Viet. c. 96, s. 84, directors keeping fraudulent 
 accounts or publishing fraudulent statements incur criminal liability. 
 As to falsification of books and papers in winding-up, see sect. 216 
 ' of the Act. 
 
 As to false returns, &c. under the Act of 1908, see sect. 281 of that 
 Act. 
 
 Inspectors. 
 
 Under sects. 109, 110, provision is made for the appointment of 
 inspectors by the Board of Trade or by a company to investigate the 
 affairs of the company. 
 
 This is a power which has been very rarely used. 
 
Ch. XIX. 
 
 225 
 
 CHAPTER XIX. 
 
 AUDIT. 
 
 The articles of a company usually provide for the appointment of 
 auditors and a periodical audit of the accounts. But this matter is 
 one of so much importance, both to the public and to shareholders, 
 that it has been deemed advisable by the legislature no longer to 
 leave it to a voluntary arrangement between the shareholders but to 
 regulate the matter by statute, thus acting on the principle adopted 
 nearly thirty years ago in the case of banking companies’ accounts. 
 See special provisions by the Companies Act, 1879. The regulations 
 dealing with this matter are now contained in sects. 112 and 113 of 
 the Act of 1908, and are very commonly incorporated by references in 
 the articles. 
 
 Duties of Auditors. 
 
 An auditor who accepts office pursuant to the articles of a 
 company is bound to conform to the terms of such articles. 
 “Auditors,” said Lindley, L. J., in Kingston Cotton Co. (No. 2), 
 (1896) 2 Ch. 284 (C. A.), “ are, in my opinion, bound to see what 
 exceptional duties, if any, are cast upon them by the articles of the 
 company whose accounts they are called upon to audit. Ignorance 
 of the articles and of exceptional duties imposed by them would not 
 afford any legal justification for not observing them.” 
 
 An auditor is also bound to make himself acquainted with his duties 
 under the Companies Acts. Republic of Bolivia Exploration Syndicate , 
 (1914) 1 Ch. 139. 
 
 In another leading case on the subject, In re London and General 
 Bank , (1895) 2 Ch. 673, the same learned judge made some important 
 observations on the general duties of auditors. “It is no part of an 
 auditor’s duty,” he said, “to give advice either to directors or share- 
 holders as to what they ought to do. 
 
 “An auditor has nothing to do with the prudence or imprudence of 
 making loans with or without security. It is nothing to him whether 
 the business of a company is being conducted prudently or impru- 
 dently, profitably or unprofitably. It is nothing to him whether 
 dividends are properly or improperly declared, provided he discharges 
 his own duty to the shareholders. His business is to ascertain and 
 state the true financial position of the company at the time of the 
 audit, and his duty is confined to that. But then comes the question : 
 How is he to ascertain that position ? The answer is : By examining 
 
 p. 15 
 
 Audit. 
 
226 
 
 AUDIT. 
 
 the books of the company. But he does not discharge his duty by 
 doing this without inquiry and without taking any trouble to see that 
 the books themselves show the company’s true position. He must 
 take reasonable care to ascertain that they do so. Unless he does 
 this, his audit would be worse than idle farce. Assuming the books 
 to be so kept as to show the true position of a company, the auditor 
 has to frame a balance sheet showing that position according to the 
 books, and to certify that the balance sheet presented is correct in 
 that sense. But his first duty is to examine the books not merely 
 for the purpose of ascertaining what they do show, but also for the 
 purpose of satisfying himself that they show the true financial position 
 of the company. This is quite in accordance with the decision of 
 Stirling, J., in Leeds Estate Building and Investment Co. v. Shepherd 
 (36 Ch. D. 787). An auditor, however, is not bound to do more than 
 exercise reasonable care and skill in making inquiries and investiga- 
 tions. He is not an insurer ; he does not guarantee that the books 
 do correctly show the true position of the company’s affairs ; he does 
 not even guarantee that his balance sheet is accurate according to the 
 books of the company. If he did, he would be responsible for an 
 error on his part, even if he were himself deceived without any want 
 of reasonable care on his part — say, by the fraudulent concealment 
 of a book from him. His obligation is not so onerous as this. Such 
 I take to be the duty of the auditor : he must be honest — i.e., he must 
 not certify what he does not believe to be true, and he must take 
 reasonable care and skill before he believes that what he certifies is 
 true. What is reasonable care in any particular case must depend 
 upon the circumstances of that case. Where there is nothing to 
 excite suspicion, very little inquiry will be reasonably sufficient, and, 
 in practice, I believe, business men select a few cases at haphazard, 
 see that they are right, and assume that others like them are correct 
 also. Where suspicion is aroused, more care is obviously necessary ; 
 but, still, an auditor is not bound to exercise more than reasonable 
 care and skill even in a case of suspicion, and he is perfectly justified 
 in acting on the opinion of an expert where special knowledge is 
 required. But an auditor is not bound to be suspicious as distin- 
 guished from reasonably careful.” And Lopes, L. J., in In re Kingston 
 Cotton Mills Co. (No. 2), supra , p. 225, added : “Auditors must not be 
 made liable for not tracking out ingenious and carefully laid schemes 
 of fraud when there is nothing to arouse their suspicion, and when 
 those frauds are perpetrated by tried servants of the company and are 
 undetected for years by the directors. So to hold, would make the 
 position of an auditor intolerable.” In accordance with these 
 principles, it was held in the above case, that auditors who* without 
 any ground for suspicion, had accepted and acted on the certificate 
 
THE CONSOLIDATION ACT OF 1908. Ch. XIX. 
 
 227 
 
 of the manager of the company as to the amount and value of the 
 company’s stock, such manager having been long in the service 
 of the company, and being a man of high character and unques- 
 tioned competence and trusted by everyone who knew him, was not 
 under any liability, though the valuation proved to have been false to 
 the knowledge of the manager. “ The question,” said Lindley, L. J., 
 p.287, “ is whether, no suspicion of anything wrong being enter- 
 tained, there was a want of reasonable care on the part of the auditors 
 in relying on the returns made by a competent and trusted expert 
 relating to matter on which information from such a person was 
 essential. I cannot think there was. The manager had no apparent 
 conflict between his interest and his duty. His position was not 
 similar to that of a cashier who has to account for the cash which he 
 receives, and whose own account of his receipts and payments could 
 not reasonably be taken by an auditor without further inquiry.” 
 
 Though the auditors are agents of the company, constructive 
 notice of facts coming to their knowledge is not imputed to the share- 
 holders. Spaceman v. Evans , L. R. 3 H. L. 171. 
 
 An auditor who commits a breach of his duty may be sued by the 
 company in an action (Leeds Estate , Sfc. Co. v. Shepherd , 36 Oh. D. 787), 
 or may be proceeded against in a winding-up for misfeasance under 
 sect. 215 of the Act, replacing sect. 10 of the Winding-up Act, 1890. 
 In re London and General Bank, (1895) 2 Ch. 673 (0. A.); Kingston 
 Cotton Mills Co. (No. 2), (1896) 2 Ch. 279 (C. A.). But to be open 
 to attack under the section an auditor must be an officer of the 
 company. An auditor who is merely called in to audit the accounts 
 pro hac vice is not an officer. Western Counties Steam Bakeries , 
 (1897) 1 Ch. 617 (0. A.). An auditor may set up the Statute of 
 Limitations. Leeds Estate Building Co. v. Shepherd, supra. 
 
 Directors are entitled to presume that auditors, like other officials of 
 the company, are doing their duty, and are not bound to supervise or 
 test the auditor’s work. Dovey v. Cory, (1901) A. C. 477. 
 
 An auditor will be ordered to deliver up books and papers to the 
 liquidator without prejudice to his — the auditor’s — lien. Findlay v. 
 Waddell (1910), S. C. 670, Ct. of Sess. 
 
 The Consolidation Act of 1908. 
 
 The provisions of the Companies (Consolidation) Act, 1908, as to 
 the audit of companies’ accounts are as follows : — 
 
 112. — (1) Every company shall at each annual general meeting 
 appoint an auditor or auditors to hold office until the next annual 
 general meeting. 
 
 15 (2) 
 
228 
 
 AUDIT. 
 
 (2) If an appointment of auditors is not made at an annual general 
 meeting, the Board of Trade may, on the application of any member 
 of the company, appoint an auditor of the company for the current 
 year, and fix the remuneration to be paid to him by the company for 
 his services. 
 
 (3) A director or officer of the company shall not be capable of 
 being appointed auditor of the company. 
 
 (4) A person, other than a retiring auditor, shall not be capable of 
 being appointed auditor at an annual general meeting unless notice of 
 an intention to nominate that person to the office of auditor has been 
 given by a shareholder to the company not less than fourteen days 
 before the annual general meeting, and the company shall send a 
 copy of any such notice to the retiring auditor, and shall give notice 
 thereof to the shareholders, either by advertisement or in any other 
 mode allowed by the articles, not less than seven days before the 
 annual general meeting : 
 
 Provided that if, after notice of the intention to nominate an auditor 
 has been so given, an annual general meeting is called for a date 
 fourteen days or less after the notice has been given, the notice, though 
 not given within the time required by this provision, shall be deemed 
 to have been properly given for the purposes thereof, and the notice 
 to be sent or given by the company may, instead of being sent or 
 given within the time required by this provision, be sent or given at 
 the same time as the notice of the annual general meeting. 
 
 (5) The first -auditors of the company may be appointed by the- 
 directors before the statutory meeting, and if so appointed shall hold 
 office until the first annual general meeting, unless previously removed 
 by a resolution of the shareholders in general meeting, in which case 
 the shareholders at that meeting may appoint auditors. 
 
 (6) The directors may fill any casual vacancy in the office of auditor, 
 but while any such vacancy continues the surviving or continuing 
 auditor or auditors, if any, may act. 
 
 (7) The remuneration of the auditors of a company shall be fixed 
 by the company in general meeting, except that the remuneration of 
 any auditors appointed before the statutory meeting, or to fill any 
 casual vacancy, may be fixed by the directors. 
 
 113. — (1) Every auditor of a company shall have a right of access 
 at all times to the books and accounts and vouchers of the company, 
 and shall be entitled to require from the directors and officers of the 
 company such information and explanation as may be necessary for the 
 performance of the duties of the auditors. 
 
 '(2) The auditors shall make a report to the shareholders on the 
 accounts examined by them, and on every balance sheet laid before 
 
THE CONSOLIDATION ACT OF 1908 . Ch. XIX. 
 
 229 
 
 the company in general meeting during their tenure of office, and the 
 report shall state — 
 
 (a) whether or not they have obtained all the information and 
 
 explanations they have required ; and 
 
 (b) whether, in their opinion, the balance sheet referred to in the 
 
 report is properly drawn up so as to exhibit a true and 
 correct view of the state of the company’s affairs according 
 to the best of their information and the explanations given 
 to them, and as shown by the books of the company. 
 
 (3) The balance sheet shall be signed on behalf of the board by 
 two of the directors of the company or, if there is only one director, 
 by that director, and the auditors’ report shall be attached to the 
 balance sheet, or there shall be inserted at the foot of the balance 
 sheet a reference to the report, and the report shall be read before 
 the company in general meeting, and shall be open to inspection by 
 any shareholder. 
 
 Any shareholder shall be entitled to be furnished with a copy of the 
 balance sheet and auditors’ report at a charge not exceeding sixpence 
 for every hundred words. 
 
 (4) If any copy of a balance sheet which has not been signed 
 as required by this section is issued, circulated, or published, or if 
 any copy of a balance sheet is issued, circulated, or published with- 
 out either having a copy of the auditors’ report attached thereto 
 or containing such reference to that report as is required by this 
 section, the company, and every director, manager, secretary, or 
 other officer of the company who is knowingly a party to the 
 default, shall on conviction be liable to a fine not exceeding fifty 
 pounds. 
 
 (5) In the case of a banking company registered after the fifteenth 
 day of August eighteen hundred and seventy- nine — 
 
 (a) if the company has branch banks beyond the limits of Europe, 
 
 it shall be sufficient if the auditor is allowed access to such 
 copies of and extracts from the books and accounts of any 
 such branch as have been transmitted to the head office of 
 the company in the United Kingdom ; and 
 
 (b) the balance sheet must be signed by the secretary or manager 
 
 (if any), and where there are more than three directors 
 of the company by at least three of those directors, and 
 where there are not more than three directors by all the 
 directors, 
 
 Referring to para, (b) of sub-sect. (2) of the above section, it is to 
 be noted that the auditors’ report is to state whether, in their opinion, 
 the balance sheet is properly drawn up so as to exhibit a true and 
 correct view, &c. In forming their opinion, the auditors must exercise 
 
230 
 
 AUDIT. 
 
 How far 
 auditor bound 
 by the books. 
 
 Auditor’s 
 right to 
 inspect books. 
 
 their own judgment, and if they do in fact entertain the opinion they 
 express, they will, in reporting it, have performed their statutory 
 duty. In forming their opinion they may take into account the 
 advice of lawyers and other experts, but auditors cannot shelter them- 
 selves under an expert’s opinion. They cannot successfully plead that 
 in reporting they expressed the opinion of some expert — not their own 
 opinion. And it is to be borne in mind that whether an auditor did 
 in fact entertain the opinion he reported or concurred in reporting is 
 a question of fact. Edgington v. Fitzmaurice , 29 C. D. 483. Hence, 
 if an auditor is sued for reporting untruly, in breach of his statutory 
 duty, or prosecuted for a false statement (sect. 281), it will be for the 
 tribunal, whether judge or jury, that tries the question to determine 
 the fact. 
 
 The words “books and accounts and vouchers,” it is apprehended, 
 mean all the books, not merely the books of account of the company. 
 Hence they include the minute book and letter books. And see the 
 interpretation section, sect. 285. 
 
 Where the auditor’s requirements are not complied with, the auditor 
 should specify in his certificate in what respects they have not been 
 complied with ; and if there is no balance sheet on which to indorse the 
 certificate, then the auditor should so specify in his report. But if the 
 specification of the instances of non-compliance be lengthy, there 
 seems no objection to the certificate stating that all the requirements 
 have not been complied with, without specification of details, provided 
 that it refers to the report for the details. 
 
 If the statutory meeting referred to in sect. 112(5) means the meeting 
 referred to in sect. 65, as it is submitted it does, it should be observed 
 that that section only applies in the cases of companies limited by 
 shares, and registered after the 31st of December, 1900. Except, 
 therefore, in the case of such a company, the articles ought to 
 expressly authorize the directors to fix the remuneration of the first 
 auditors. 
 
 With reference to the words in sect. 113 (2) (b), “ as shown by the 
 books of the company,” it is generally considered that these words do 
 not impliedly exempt the auditor from travelling outside the books. 
 With reference to the same words in the Companies Act, 1879, 
 Lindley, L. J., said that the auditor must take reasonable care to 
 ascertain that the books themselves show the company’s true position. 
 London General Bank , (1895) 2 Ch. 683. 
 
 That this is the meaning is emphasized by the preceding words in 
 sect. 113 (2) (b), “ according to the best of their information and the 
 explanations given them.” 
 
 The auditor’s right of access to the books of the company can be 
 enforced in a proper case by mandatory injunction ; but not where 
 
SECRET RESERVES. 
 
 Ch. XIX. 
 
 litigation is pending between the company and the auditors, and the 
 company may desire to appoint other auditors. Cuff v. London and 
 County Land Co., (1912) 1 Ch. 440. 
 
 Secret Reserves. 
 
 Companies occasionally desire to have secret reserves of undivided 
 profits so as to conceal the large amount made in prosperous years and 
 to furnish the directors with a special fund with which to mask losses, 
 to augment the divisible profits' in lean years, or provide for unexpected 
 contingencies. Not a few successful companies create what is, in sub- 
 stance, equivalent to such a reserve by writing down excessively the 
 value of some of their assets, but there are also a few cases where the 
 articles expressly provide for a secret reserve and authorize the 
 directors, in addition to the ordinary disclosed reserve, to establish a 
 secret reserve and carry thereto so much of the annual profits as they 
 think fit, and to apply such reserve as they deem expedient in the 
 interests of the company without bringing it into the annual accounts' 
 and balance sheet. When such an authority is acted on and a secret 
 reserve fund created, but not disclosed in the company’s balance sheet, 
 the question arises whether an auditor, provided he refers to the 
 reserve fund as an “ undisclosed, asset,” is justified under the provi- 
 sions of sect. 113 of the Act in reporting that “in his opinion the 
 balance sheet is properly drawn so as to exhibit a true and correct 
 view of the company’s affairs.” According to dicta in Newton v. 
 Birmingham Small Arms Co., (1906) 2 Ch. 378, he may be so justified 
 on the ground that the purpose of a balance sheet is primarily to show 
 that the financial position of the company is at least as good as there 
 stated, not to show that it is not or may not be better. But is this 
 view reconcileable with the wards of sect. 113, supra, p. 229? Can 
 “true and correct view” be construed to mean “a view not less 
 favourable than the true and correct view ” ? No doubt if the auditor 
 reports in accordance with his “opinion” he will have discharged his 
 duty, but whether the auditor did in fact honestly entertain the 
 opinion stated is a question of fact (see supra, p. 230), and herein 
 lies the danger. 
 
 Section 281 must be borne in mind, for it makes it a misdemeanour to 
 make a statement false in any material particular, knowing it to be 
 false, in any report . . . balance sheet , or other document required 
 for the provisions of the Act relating to ... “ the appointment, and 
 remuneration, and powers and duties of auditors.” 
 
CHAPTER XX. 
 
 NOTICES. 
 
 A company in the course of its business has frequent occasion to give 
 notice to its members (e.y., of calls, forfeiture, general meetings, &c., 
 see supra , p. 166), and it would be impossible in most cases to give a 
 personal notice. The articles therefore almost always provide in more 
 or less detail for a more practical mode of serving such notices. They 
 commonly provide that a notice may be given either personally or by 
 post, and that in the latter case the notice is to be deemed to be 
 served either “ when it is posted,” or “on the day following that on 
 which it is posted.” This is found more satisfactory than to provide (as 
 in Table A., clause 97, of 1862) that the notice shall be deemed to be 
 served when the letter containing the same would be delivered in the 
 ordinary course of post ; for it relieves the company from considering 
 how many hours or days it will take for a letter, in the ordinary course 
 of post, to reach the most distant of its members. Some articles, and 
 Table A. of 1908, provide that “ unless the contrary is proved , service is 
 to be treated as effected at the time when the letter would be delivered 
 in the ordinary course of post,” but this form is not to be recommended ; 
 the presence of the words in italics may lead to disputes and doubts, 
 and be productive of great inconvenience. 
 
 Shareholders resident Abroad. 
 
 Table A. (of 1 862) made no special provision as to a shareholder 
 who was abroad. If, then, it became necessary to serve a shareholder 
 resident, say, in the South Sea Islands, it might, according to the 
 words of that Table, be requisite to give several months’ notice of a 
 general meeting. This, of course, would be intolerable, and might 
 paralyse the company’s proceedings, but it was long since held in 
 Union Hill Silver Co., 22 L. T. 400, that it was not necessary in such 
 circumstances to serve notice on shareholders resident outside the 
 United Kingdom. This rule, being entirely consistent with common 
 sense and common convenience, has been acted on ever since. It 
 accords, too, with the view taken by the House of Lords in Smith v. 
 
AUTHENTICATION. 
 
 Ch. XX. 
 
 233 
 
 Darley , 2 H. L. 0. 789 ; see also Halifax Sugar Co., 62 L. T. 564. 
 However, for many years past it lias been usual (see first edition of 
 Company Precedents, published in 1877) to make special provision as 
 to service on members resident abroad, e.g ., by providing in the 
 articles that a member so resident may notify to the company an 
 address in England at which notices for him may be served, and 
 Table A. (of 1908) contains a provision (clause 110) to that effect, 
 but qualified by an extremely inconvenient clause (111), under which 
 notice to a member who has no registered address or address for 
 service in the United Kingdom must be given by advertisement. 
 There is no need for any such provision where a notice is to be deemed 
 to be served when it is posted, or on the day following, for such a 
 provision applies to all members, and a member resident abroad must 
 take his chance of getting the notice in time. 
 
 Notices to Executors of Deceased Members. 
 
 When notice of a general meeting is to be given to “ the members,” 
 it is not necessary to give it to the executors of a deceased member, 
 unless they too are members. Allen v. Gold Reefs of West Africa, 
 (1900) 1 Ch. 656. 
 
 But the articles may provide for notice to the executor or adminis- 
 trator of a deceased member, and if they do, it must be given. 
 Clauses 113, 114 of Table A. (of 1908) so provide, but the provision is 
 open to objection. 
 
 Framing and Construing Notices. 
 
 See supra , pp. 166, 167. 
 
 Authentication. 
 
 A document or proceeding, including a notice, requiring authentica- 
 tion by a company, may be signed by any director, secretary, or other 
 authorized officer of the company, and it need not be under the com- 
 pany’s common seal, and may be in writing or in print, or partly in 
 writing and partly in print. See sect. 117. And it is to be borne in 
 mind that the expression “ in writing ” in an Act “ shall, unless the 
 contrary intention appears, be construed as including reference to 
 printing, lithography, photography, and other modes of representing 
 or reproducing words in a visible form.” (Sect. 20 of the Interpreta- 
 tion Act, 1889.) 
 
234 
 
 NOTICES. 
 
 Notices to the Company. 
 
 The Act, in sect. 116, provides that “a document may he served on a 
 company by leaving it at or sending it by post to the registered office 
 of the company,” and under sect. 285 the term “ document” includes 
 summons, notice, order, and other legal process, and registers. 
 
 It was held long since that the words “other documents” in the 
 Act of 1862 included a writ of summons. White v. Land, Sfc. Co., 
 W. N. (1883) 174. See also Pearks v. Richardson, (1902) 1 K. B. 91, 
 in which it was held that service of a summons for an offence punish- 
 able summarily must be at the registered office. 
 
 Sect. 116 of the Act above referred to must be read in conjunction 
 with sect. 26 of the Interpretation Act, 1889, which runs thus : — 
 
 26. Where an Act passed after the commencement of this Act 
 authorizes or requires any document to be served by post, whether the 
 expression “serve,” or the expression “give” or “send,” or any 
 other expression is used, then, unless the contrary intention appears, 
 the service shall be deemed to be effected by properly addressing, 
 prepaying, and posting a letter containing the document, and, unless 
 the contrary is proved, to have been effected at the time at which the 
 letter would be delivered in the ordinary course of post. 
 
 Verbal Notice. 
 
 Verbal notice. A verbal notice to a company is effective. Such a notice should be 
 given to the secretary at the office or, in his absence, to a clerk. 
 Truman's case, ' 1894) 3 Ch. 272. Notice to a managing director, in 
 that character, on a matter affecting the business of the company 
 under his management, is notice to the company. Jaeqen , See. Co. v. 
 Vallen , 77 L. T. R. 180. 
 
 Constructive Notice. 
 
 A company is subject to the rules in regard to constructive notice ; 
 that is, notice which, though not actual notice, is in a Court of law or 
 equity imputed to a person. Hence, notice to the company’s agent in 
 any particular matter is notice to the company ( Rolland v. Hart, 6 Ch. 
 681 ; Blackburn v. Vigers, 12 App. Cas. 531, 543), unless the agent is 
 acting in fraud of his principal (Care v. Cave, 15 C. D. 639), for in 
 such a case the presumption, of course, is that he will not disclose his 
 own fraud. So notice may be imputed where the company has know- 
 ledge of a fact which in common prudence should have led to further 
 
CONSTRUCTIVE NOTICE. 
 
 Ch. XX. 
 
 235 
 
 inquiry. Jones v. Smith, 1 Ha. 43 ; Ware v. Lord Eymont, 4 D. M. & 
 Gk 460; A. W. Hall 8f Co., 37 C. D. 712. See further, Company 
 Precedents, Part III., p. 158, and sect. 3 of the Conveyancing Act, 
 1882. 
 
 Knowledge of a fact by a single director is not necessarily notice to 
 the company. Hampshire Land Co., (1896) 2 Ch. 743; Marseilles, Sfc. 
 Co., L. R. 7 Ch. 161 ; Young v. David Payne 8f Co., (1904) 2 Ch. 
 609 ; and a company is not to be taken to have notice of all its 
 secretary knows, e.g., of matter communicated to him as secretary of 
 another company, for he is under no duty to pass the knowledge on. 
 Fenwick, Stobart <8f Co., (1902) 1 Ch. 507. 
 
 A director is not necessarily affected with constructive notice in the 
 absence of actual knowledge of the facts which appear in the books 
 of the company. Coasters Limited, (1911) 1 Ch. 86. 
 
CHAPTEE XXI. 
 
 RESOLUTIONS OF GENERAL MEETINGS. 
 
 There are various kinds of resolutions submitted to general meetings. 
 Of these the most common are : — 
 
 1 . Ordinary resolutions. 
 
 2. Extraordinary resolutions. 
 
 3. Special resolutions. 
 
 And to these may be added, 
 
 4. Eesolutions requiring under the company’s regulations a specified 
 majority. 
 
 1. Ordinary Resolution. 
 
 An ordinary resolution is one which merely requires upon a show 
 of hands a simple majority of the voters present, or, if a poll be duly 
 demanded, a simple majority of the votes given thereat, whether in 
 person or by proxy, where proxies are allowable. See, further, 
 Company Precedents, Part I., p. 1100 et seq. 
 
 2. Extraordinary Resolution. 
 
 An extraordinary resolution is defined by sect. 69 (1) of the Act 
 thus : — 
 
 69. — (1) A resolution shall be an extraordinary resolution when it 
 has been passed by a majority of not less than three fourths of such 
 members entitled to vote as are present in person or by proxy (where 
 proxies are allowed) at a general meeting of which notice specifying 
 the intention to propose the resolution as an extraordinary resolution 
 has been duly given. 
 
 To pass an extraordinary resolution requires, therefore, only one 
 meeting, but the notice convening the meeting must specify the 
 intention to propose the resolution “as an extraordinary resolution,” 
 e.q., that the meeting “is convened to consider and, if thought fit, 
 pass an extraordinary resolution that, etc.” The words “ as an extra- 
 ordinary resolution ” are new ; they were not contained in sect. 129 of 
 
SPECIAL RESOLUTIONS. 
 
 Ch. XXI. 
 
 tlie Act of 1862, which defined “ extraordinary resolution ” ; but it lias 
 been usual to use the words, and it was, under the Act of 1862, 
 necessary to use them, or their equivalent, in the notice. See 
 Bridport Co ., L. R. 2 Ch. 194; and Company Precedents, Part IE., 
 p. 834. See also sub-sects. (4) and (5) of sect. 69, infra. 
 
 3. Special Resolutions. 
 
 Nature of. 
 
 What is a special resolution is defined in sect. 69 (2) of the Act 
 thus : — 
 
 (2) A resolution shall be a special resolution when it has been — 
 
 (a) passed in manner required for the passing of an extraordinary 
 
 resolution ; and 
 
 (b) confirmed by a majority of such members entitled to vote as 
 
 are present in person or by proxy (where proxies are 
 allowed) at a subsequent general meeting, of which notice 
 has been duly given, and held after an interval of not less 
 than fourteen days, nor more than one month, from the 
 date of the first meeting. 
 
 (3) At any meeting at which an extraordinary resolution is sub- 
 mitted to be passed or a special resolution is submitted to be passed 
 or confirmed, a declaration of the chairman that the resolution is 
 carried shall, unless a poll is demanded, be conclusive evidence of the 
 fact without proof of the number or proportion of the votes recorded 
 in favour of or against the resolution. 
 
 (4) At any meeting at which an extraordinary resolution is sub- 
 mitted to be passed or a special resolution is submitted to be passed 
 or confirmed a poll may be demanded, if demanded by three persons 
 for the time being entitled according to the articles to vote, unless the 
 articles of the company require a demand by such number of such 
 persons, not in any case exceeding five, as may be specified in the 
 articles. 
 
 (5) When a poll is demanded in accordance with this section, in 
 computing the majority on the poll reference shall be had to the 
 number of votes to which each member is entitled by the articles of 
 the company. 
 
 (6) For the purposes of this section notice of a meeting shall be 
 deemed to be duly given and the meeting to be duly held when the 
 notice is given and the meeting held in manner provided by the 
 articles. 
 
 A special resolution is a most useful part of the mechanism of a 
 company. It is by and through the instrumentality of such a 
 
 Nature 
 special 
 resolution 
 
238 
 
 RESOLUTIONS OF GENERAL MEETINGS. 
 
 Acts for 
 
 which 
 
 requisite. 
 
 Proceedings. 
 
 “ special resolution ” that many of the most important things which 
 a company is, by the Companies Acts, empowered to do are 
 ordained to be done. In defining the requisite steps for such a 
 resolution, the aim of the legislature seems to have been to secure 
 that every important change shall be only made after due delibera- 
 tion, and with the sanction, active or passive, express or tacit, of the 
 great body of the shareholders of the company. 
 
 Acts for which requisite . 
 
 The following are some of the various things that a company may 
 do by special resolution : — 
 
 (1) Change the name of the company, subject to sanction of Board 
 of Trade. Sect. 8. 
 
 (2) Alter its objects, subject to sanction of Court. Sect. 9. 
 
 (3) Increase, or take power to increase, its capital where there is no 
 power in the regulations. Sect. 41. 
 
 (4) Subdivide its shares into shares of smaller amounts. Sect. 41. 
 
 (5) Reorganise its capital. Sect. 45. 
 
 (6) Reduce its capital. Sect. 46. 
 
 (7) Convert any portion of its capital, uncalled, into reserve capital. 
 Sect. 59. 
 
 (8) Alter its articles. Sect. 13. 
 
 Proceedings by. 
 
 The following points should be noted in regard to a special 
 resolution : — 
 
 (a) It requires two meetings at an interval of not less than fourteen 
 clear days ( Railway Sleepers Co. (1885), 29 Ch. D. 204), and 
 not more than one calendar month. 
 
 (b) Each meeting must be duly convened in accordance with the 
 articles of the company. If none, then as per Table A. If 
 the articles so provide, the two meetings may be convened by 
 the same notice. North of England Steamship Co ., (1905) 
 2 Ch. 15 (C. A.) ; supra, p. 168. 
 
 (c) It was at one time considered doubtful, by reason of the wording 
 
 of sect. 69, whether the notice of the first meeting should not 
 state the intention to propose the resolution “as an extra- 
 ordinary resolution,” and the intention to sqbmit it for con- 
 firmation as a special resolution to a further meeting. It has 
 now, however, been decided that these words are not necessary. 
 Re Penarth Pontoon Co., (1911) W. N. 240. The notice of 
 the second meeting must specify the intention to submit the 
 resolution for confirmation. See further as to notices, supra , 
 p. 232. 
 
SPECIAL RESOLUTIONS. 
 
 Ch. XXI. 
 
 239 
 
 (d) The meetings must be duly constituted, that is to say, a quorum 
 must be present. 
 
 (e) The resolution must be passed at the first meeting by a three- 
 fourths majority of the members present in person or by proxy. 
 
 (f) At the second meeting it must be confirmed by at least a 
 
 simple majority of the members present in person or by proxy. 
 
 (g) At the first meeting, amendments within the notice may be 
 made, but the resolution confirmed at the second meeting must 
 be in the same form as that passed at the first meeting. 
 Torbock v. Lord Westbury , (1902) 2 Ch. 871. 
 
 (h) At either meeting a poll may be demanded by such number of 
 members not exceeding five as the articles fix, or in default by 
 any three members. 
 
 (i) At each meeting, unless a poll is duly demanded, a declaration 
 
 of the chairman that the resolution has been carried is to be 
 conclusive evidence of the fact, without proof of the number 
 or proportion of the votes recorded in favour of or against 
 the same. 
 
 (j) Upon a show of hands, hands only can be counted, not proxies. 
 
 (k) At a poll the number of votes which each voter is by the 
 articles entitled to is to be taken into account, and votes by 
 proxy are (if the articles permit) to be allowed. The proxy 
 votes for his principal. 
 
 It is important to note that a quorum is essential ( Cambrian Co., 23 
 "W. R. 405) ; that voting is, in the first instance, by a show of hands 
 (. Re Horbury Bridge Co., 11 C. D. 109) ; that proxies are only to be 
 counted on a poll ( Ernest v. Loma Co., (1897) 1 Ch. 1); that at the 
 second meeting no amendment can be put. Wall v. London and 
 Northern Assets Corporation , (1898) 2 Ch. 469. 
 
 Declaration of Chairman — Conclusiveness . 
 
 The section, it will be observed, says that the declaration of the 
 chairman (if no poll be demanded) is to be “conclusive”; and, in 
 pursuance of this provision, the Court of Appeal, in Re Gold Co. 
 (1879), 11 Ch. D. 719, held a declaration by a chairman conclusive, 
 although out of seventeen present only eleven voted for and two 
 against, and four abstained from voting. The word “conclusive” 
 seems clear enough, and it is made still clearer when contrasted 
 with the words used in sects. 23 and 33, where the legislature has 
 made certain things primd facie evidence only. This decision was 
 followed by Cozens-Hardy, J., in Hadleigh Castle Gold Mines , (1900) 
 2 Ch. 419. And the Court of Appeal subsequently approved the case 
 
 Chairman’s 
 
 declaration. 
 
240 
 
 RESOLUTIONS OF GENERAL MEETINGS. 
 
 last mentioned and overruled Young v. South African, Sfc. Syndicate , 
 (1896) 2 Ch. 268, in which Kekewich, J., had decided that “conclusive” 
 meant “ prima facie” See Arnot v. United African Lands , (1901) 
 1 Ch. 518. 
 
 But a chairman’s declaration will not be conclusive where in making 
 it he states the figures for and against, and those figures show that he 
 erroneously declares that the resolution has been duly passed. lie 
 Caratal [New) Mines , Limited , (1902) 2 Ch. 498. 
 
 4. Resolution requiring* Special Majority. 
 
 Occasionally the regulations provide that something may be done by 
 or with the sanction of a resolution passed by a majority of a special 
 character — for instance, a majority of the members present in person 
 or by proxy and entitled to three-fourths of the votes to which all the- 
 members are collectively entitled. 
 
 Notice to Registrar of Special and Extraordinary 
 Resolutions. 
 
 A copy of every special and extraordinary resolution has to be- 
 printed and forwarded to the Registrar, and a copy is to be annexed 
 to or embodied in the articles, and there are penalties for default. 
 See sect. 70 of the Act. 
 
Ch. XXII. 
 
 241 
 
 CHAPTER XXII. 
 
 MAJORITY RIGHTS OF MEMBERS. 
 
 It is a cardinal rule of corporation law that primd facie a majority of 
 its members is entitled to exercise the powers of the corporation, and 
 generally to control its operations. 
 
 Where no special provision is made by the constitution of a corpora- 
 tion, the whole are bound by the acts not only of the major part but 
 of the major part of those who are present at a regular corporate 
 meeting, whether the number present be a majority of the whole or 
 not. Bacon, Abridgment, II. 269. 
 
 “ It cannot be disputed,” said Lord Hardwicke in Att.-Gen. v. Davy , 
 2 Atk. 212, “that whenever a certain number of persons are incor- 
 porated, a major part of them may do any corporate act, or if all be 
 summoned and part appear, a major part of those that appear may do 
 a corporate act though nothing be mentioned in the charter of the 
 major part.” 
 
 This rule is equally applicable to a company under the Act of 1908, 
 save so far as its constitution or articles, or the Act itself, exclude or 
 modify the rule. 
 
 The Act does, however, modify the primary rule in certain cases. 
 It requires, for instance, for the passing of a special resolution 
 (sect. 69 (2)), or of an extraordinary resolution (sect. 69 (1)), a 
 majority of three-fourths of those present at the meeting in person or 
 by proxy, and, accordingly, where the Act, or the memorandum or 
 the articles, require a special or an extraordinary resolution, a three- 
 fourths majority is necessary ; a bare majority is insufficient. Again, 
 where the articles vest in the directors certain specific powers, e g., 
 to make calls, forfeit shares, &c., the power, being delegated, resides 
 with the directors exclusively, and a majority of the members cannot 
 exercise the power, though it may sanction and approve of the 
 exercise by the directors of such powers on any specific occasion. 
 Hampson v. Price's Patent Candle Co., 24 W. R. 754. Besides such 
 cases of exclusive powers it often happens that the articles, whilst in- 
 vesting the directors with general powers, do not give them all the powers 
 of the company ; or it may be that, though they have all the powers of 
 the company, they are, nevertheless, unable to exercise them in regard 
 to some particular transaction by reason of their being themselves 
 personally interested in such transaction. Where this is the case, the 
 matter can be submitted to a general meeting, and the resolution of 
 the meeting will sanction or not, as the case may be, what the directors 
 have done or propose to do. Grant v. United Switchback Rail. Co. 
 (1889), 40 Ch. D. 135. 
 
 Majority 
 rights of 
 members. 
 
 P. 
 
 16 
 
242 
 
 MAJORITY RIGHTS OF MEMBERS. 
 
 Rule in Foss 
 v. Harbottle. 
 
 The principle that the majority of members is entitled to control 
 the company is the basis upon which rests the well-known 
 
 Rule in Foss v. Harbottle (2 Ha. 461). 
 
 In that case two members of an incorporated company took legal pro- 
 ceedings against the directors and others to compel them to make 
 good losses sustained by the company by reason of the fraudulent acts 
 of such directors, and the Court held that as the acts were capable of 
 confirmation by the majority of the members the Court would not 
 interfere ; that is to say, it was left to the majority to complain or to 
 condone as they might think best. See also Mozley v. Alston , 1 Ph. 
 790 ; and McDougall v. Gardiner, 1 Ch. D. 13, where a single share- 
 holder complained of breach of the articles, and it was held that the 
 litigation ought to be in the name of the company, for that it was for 
 the majority to say whether they wished to complain or not. “ In my 
 opinion,” said Mellish, L. J., “in that case, if the thing complained 
 of is a thing which, in substance, the majority of the company are 
 entitled to do, or if something has been done irregularly that the 
 majority of the company are entitled to do regularly, or if something 
 has been done illegally which a majority of the company are entitled 
 to do legally, there can be no use in having litigation about it. The 
 ultimate end, no doubt, is, that a meeting has to be called, and then 
 ultimately the majority gets its wishes.” See also Harben v. Phillips , 
 23 C. D. 14 ; Duckett v. Gover, 6 C. D. 82 (as to farther proceedings, 
 25 W. P. 554) ; Exeter and Crediton Rail. Co. v. Puller, 5 Py. Cas. 211 ; 
 Normandy v. Ind, Coope Sf Co., (1908) 1 Ch. 84 ; Ving v. Robertson Sf 
 Woodcock, Ltd., 56 S. J. 412 (as to directors voting in their own 
 interests). But this supremacy of the majority must be received with 
 the following qualifications — (1) that no majority of shareholders can 
 sanction that which is ultra vires the company (supra, p. 63 ; Burland 
 v. Earle, (1902) A. C. 83); (2) that a majority is not entitled to 
 commit a fraud on the minority ( Menier v. Hooper's Telegraph Works, 
 9 Ch. 350 ; Burland v. Earle, supra) ; (3) that a minority can prevent 
 the company from acting on a special resolution obtained by a trick 
 ( Baillie v. Oriental Telephone Co., (1915) 1 Ch.. 503); (4) that an ordi- 
 nary resolution inconsistent with the articles is not effectual. Quin 
 .tic Axtens v. Salmon, (1909) A. C. 443. [In these four cases 
 the minority can commence proceedings in the name of the company ^ 
 In other cases, if the minority purport to do so, the action may be 
 stayed and the name of the company struck out, and the solicitor may 
 be ordered to pay the costs personally. Marshall's Valve Gear Co. v. 
 Manning, (1909) 1 Ch. 267 ; West End Hotels Syndicate v. Bayer 
 (1912), 29 T. L. P. 92.1 See further Company Precedents, Pt. I., 
 
 1 1th ed., p. 1357. 
 
Ch. XXIII. 
 
 24 
 
 CHAPTER XXIII. 
 
 REGISTERED OFFICE. 
 
 Every company under the Act of 1908 is bound (see sect. 62 of the Act 
 of 1908) to have a registered office to which all communications and 
 notices may be addressed. If a company carries on business without 
 having such an office it incurs a penalty. The situation of the regis- 
 tered office fixes the domicile of the company. A company registered 
 in England is not an “ alien enemy,” though all its members are alien 
 enemies. Continental Tyre Co. v. Daimler Co ., (1915) 1 K. B. 893. The 
 company’s memorandum of association states, as we have seen, in what 
 part of the United Kingdom the office of the proposed company is to be 
 situate. This, once declared, becomes an unalterable condition of the 
 company’s constitution, which nothing short of an Act of Parliament 
 can change. But though confined to that part of the United Kingdom — 
 England, Scotland, or Ireland — which it has chosen by its memoran- 
 dum, the company may, subject to that limitation, fix its office anywhere 
 it likes within the chosen area, and change it from time to time provided 
 it gives notice of each change to the registrar. See sect. 62 of the Act. 
 The company is to paint or affix, and is to keep painted or affixed, 
 its name on the outside of every office or place in which the business 
 is carried on, in a conspicuous position in letters easily legible. See 
 sect. 62 ; and under that section there is a penalty for default. 
 
 There are various provisions of the Act in relation to the registered 
 office ; thus sect. 30 of the Act provides that the register of members 
 is to be kept at the registered office, and the right of inspection is to 
 be exercised there. Again, under sects. 100, 101, 102, the register of 
 mortgages and copies of registered documents are to be kept at the 
 registered office, and the right of inspection is to be exercised there. 
 So, too, by sect. 108, which provides for the publication, in case of 
 banking and insurance companies and of certain other concerns, of 
 a balance sheet, it is provided that a copy of such statement shall 
 be put up in a conspicuous place in the registered office of the 
 company, and in every branch office or place where the business of 
 the company is carried on ; and sect. 116 provides for the service of 
 any notice, summons, order, and other document on the company 
 at the registered office. See further, supra , p. 234. Where in an 
 action or other legal proceeding it appears that the writ, petition, or 
 other document cannot be served by reason of there being no 
 registered office, the Court will make an order for substituted service. 
 
 16 ( 2 ) 
 
 Registered 
 
 office. 
 
244 
 
 CHAPTER XXIV. 
 
 MINUTES. 
 
 Minutes. 
 
 Not the only- 
 evidence. 
 
 As to putting 
 minutes in 
 
 evidence. 
 
 Section 7 1 of the Act provides that minutes are to be made and kept 
 of all proceedings of general meetings and of directors or managers, 
 and makes such minutes, if signed by the chairman of the meeting 
 at which the proceedings were held, or by the chairman of the next 
 succeeding meeting, evidence of the proceedings, i.e., primd facie evi- 
 dence of the matters therein stated. The section, moreover, provides 
 that until the contrary is proved, every general meeting of the com- 
 pany or meeting of directors or managers in respect of the proceedings 
 whereof minutes have been so made shall be deemed to have been duly 
 held and convened, and all proceedings had thereat to have been duly 
 had. The protection as well as convenience afforded to a company by 
 these privileges is very great, and the utmost care should be used to 
 keep the minutes in correct form and make them complete. 
 
 There is no rule, however, which makes minutes the only admissible 
 evidence, and a bargain or transaction may, therefore, be made out 
 and established as against the company though not recorded in the 
 minute book: Re Pyle Works (No. 2), (1891) 1 Oh. 184, where a 
 contract to give security by way of indemnity to directors was made 
 out though not entered. So a person may be proved to be a member 
 although no allotment is entered in the minutes. Re Great Northern 
 Salt Co. (1890), 44 C. D. 483. The Court, notwithstanding the minutes 
 are made conclusive by the articles, may look and consider the regularity 
 of the notice. Betts Co. v. Macnaghten, (1910) 1 Ch. 430. 
 
 Minutes being only primd facie evidence, they may be contradicted 
 by other evidence. Tothill's case , L. R. 1 Oh. 85. But if signed by 
 the chairman they are to be taken primd facie to be correct. Re Indian 
 Zoedone Co. (1884), 26 0. D. 70; and see Southampton Bock Co. v. 
 Richards , 1 Man. & Gr. 448. 
 
 Where a notice is taken as read it must be treated as part of the- 
 res gestae. Betts & Co. v. Macnaghten , (1910) 1 Ch. 430. 
 
 A director who is present at a meeting at which the minutes of 
 proceedings at a prior board are read and confirmed as correct is not 
 thereby made responsible for what was done at such prior board. 
 Lands Allotment Co., (1894) 1 Ch. 616 ; National Bank of Wales , 
 (1899) 2 Ch. 629; Burton v. Bevan, (1908) 2 Ch. 240. See, however,. 
 Ashurst v. Mason , 20 Eq. 225. 
 
FORM OF MINUTES — ORDINARY GENERAL MEETING. Ch. XXIV. 
 
 245 
 
 Omnia rite acta prsesumuntur. 
 
 Entries in the company’s books, which would be irregular unless 
 based on resolutions of the board, afford, on the above principle, primd 
 facie evidence of the resolutions, even though no minute thereof is 
 forthcoming. Re Knight (1867), L. R. 2 Ch. 321 ; Great Northern Salt 
 Co ., 41 C. D. 483 ; and see Lane's case , 1 D. J. & S. 509. 
 
 Thus, a letter written by the secretary of the company will be 
 assumed primd facie to have been written with the authority of the 
 directors although no minute appears to that effect. Johnson v. Ly tile's 
 Iron Agency (1877), 5 Ch. D. 687, p. 691. The absence, however, of 
 any minute of an alleged transaction is material when the party who 
 alleges the transaction was a director. Re Rotherham Co. (1884), 25 
 C. D. 109. “Directors,” said Kekewich, J., “ought to place on 
 record, either in formal minutes or otherwise, the purport and effect of 
 their deliberations and conclusions ; and if they do this insufficiently or 
 inaccurately they cannot reasonably complain of inferences different 
 from those which they allege to be right.” Re Liverpool Household 
 Stores , 59 L. J. Ch. 616. 
 
 Statute of Frauds. 
 
 The chairman’s signature of the minutes stating the terms of a 
 contract may be sufficient to satisfy the Statute of Frauds. Jones v. 
 Victoria Graving Dock Cq. } 2 Q. B. D. 314 ; and see Gibson v. Barton , 
 L. R. 10 Q. B. 332, for an instance in which the minute book was 
 put in evidence. 
 
 Form of Minutes— Ordinary General Meeting. 
 
 The following will give some idea of the mode in which minutes 
 are entered : — 
 
 The Fourth Ordinary Meeting of the Company, Limited, 
 
 held the day of [at the registered office of the 
 
 Company] at o’clock. 
 
 Mr. in the chair. 
 
 The Notice convening the Meeting was read by the Secretary. 
 
 The Minutes of the General Meeting of the Company held 
 the — th ultimo were read by the Secretary, and signed by 
 the Chairman. 
 
 It was resolved unanimously that the Report of the Direc- 
 tors, and the Accounts annexed thereto, be taken as read. 
 
 Upon the motion of the Chairman, seconded by Mr. , 
 
 it was resolved unanimously [or as the case may be] — 
 
 That the Report of the Directors, and the Accounts 
 annexed thereto, be, and the same are hereby, 
 adopted. 
 
 As to Statute 
 of Frauds. 
 
 Specimen of 
 minutes of 
 ordinary 
 meeting. 
 
246 
 
 MINUTES. 
 
 Upon, &c., it was resolved that a dividend, &c. 
 
 Upon the motion, &c., it was resolved that Mr. be, 
 
 and he is hereby, elected a director in the place of Mr. . 
 
 Upon, &c. [vote of thanks]. 
 
 A. B., Chairman. 
 
 If an amendment be moved, the minutes will run thus : — 
 
 It was moved by the Chairman, and seconded by Mr. , 
 
 That, &c. 
 
 An amendment was thereupon moved by Mr. , and 
 
 seconded by Mr. [here set it out], e.g . — 
 
 “ That the Report be received, but not adopted ; and 
 that a committee of five shareholders be appointed, 
 with power to add to their number, to inquire into 
 the formation and past management of the Company, 
 and with power to call for books and documents, 
 and to obtain such legal and professional assistance 
 as may be necessary, such committee to report to a 
 meeting to be called for day the — th of . ,r 
 
 The amendment was put to the Meeting and negatived. 
 The original question was then put to the Meeting and 
 declared by the Chairman to be carried. 
 
 Specimen of 
 minutes of 
 extraordinary 
 meeting-. 
 
 Form of Minutes— Extraordinary Meeting. 
 
 Extraordinary General Meeting of the Company, Limited, 
 
 held the — th day of , at, &c. 
 
 Mr. in the Chair. 
 
 The Notice convening the Meeting was read by the Secretary. 
 The Minutes of, &c. 
 
 Upon the motion of the Chairman, seconded by Mr. , 
 
 It was resolved unanimously that the capital of the 
 
 Company be increased to £ by the creation of 
 
 new shares of £ each. 
 
 A resolution moved by Mr. , and seconded by Mr. , 
 
 That, &c., was negatived. 
 
 Mr. moved — 
 
 That, &c. 
 
 Mr. seconded this motion. 
 
 A show of hands having been called for, the Chairman 
 
 declared [that hands were held up in favour of, and 
 
 against the resolution, and] that the motion was [con- 
 sequently] carried [or lost, as the case may be]. 
 
 A poll was then demanded and taken, the numbers being 
 as follow : — For the motion, 128 votes ; against the motion, 72. 
 
MODE OF TAKING MINUTES. 
 
 Ch. XXIV. 
 
 247 
 
 [The minutes may distinguish the number of personal votes, 
 and of votes by proxy. The scrutineer’s report (if any') will 
 be entered.] 
 
 The Chairman then declared that the resolution was carried. 
 
 Form of Minutes— Board Meeting. 
 
 The minutes of a meeting of the directors will be as follows : — 
 
 At a Meeting of the Directors held the — th day of at, &c. 
 
 Present, Mr. , Chairman of the Board ; Mr. , 
 
 and Mr. . 
 
 The Minutes of the Meeting of the — th were read and 
 signed. 
 
 Upon the motion, &c., it was resolved, &c. 
 
 The proposed contract with A. B. for the purchase of, &c. 
 was read, and it was resolved that the same be sealed, and 
 the same was sealed accordingly. 
 
 The Secretary was directed to, &c. 
 
 A letter from, &c., addressed to the Secretary, having been 
 read, and the Board being of opinion, &c., the Secretary was 
 directed to reply, &c., and the manager was desired to, &c. 
 
 Mode of taking Minutes. 
 
 The usual plan adopted is for the secretary to make notes at each 
 meeting of what passes, and subsequently to enter the particulars in 
 the proper minute book ready for reading and signature by the chair- 
 man after they have been read and confirmed at the next succeeding 
 meeting. See sect. 71 (2). 
 
 Sometimes, e.g ., in the case of legal proceedings, it may be requisite 
 to put the minute book in evidence, but the minutes of the last meeting 
 have not been signed. In such case the chairman can sign, for though 
 it is usual for him to sign at the next succeeding meeting ( Southampton 
 Dock Co. v. Richards , 1 Man. & G. 448 J, he is not bound to wait. 
 Minutes once made and signed ought never to be altered by striking 
 out or adding anything. Re Cawley Sf Co ., 42 Ch. D. 226. 
 
 As to the conclusive effect of the chairman’s declaration in case of 
 a special resolution, see supra , p. 239. 
 
 Specimen 
 minutes of 
 board 
 meeting 1 . 
 
 Mode of tak- 
 ing minutes 
 generally. 
 
 Signing of 
 minutes as 
 regards 
 evidence. 
 
248 
 
 Company’s 
 name to be 
 affixed outside 
 office, and 
 on notices, 
 advertise- 
 ments, &c. 
 
 Object of the 
 legislature. 
 
 CHAPTER XXV. 
 
 NAME OF COMPANY. 
 
 The memorandum of association of every company under the Act must, 
 as we have seen, state, amongst other things, the proposed name of the 
 company, with “Limited” as part of it in cases where the company 
 is limited, and the certificate of incorporation when given will then 
 incorporate the company by such name. To this name the company 
 must closely adhere. The name must he painted up or affixed to the 
 outside of every office or place in which the business of the companj r is 
 carried on in a conspicuous position in letters easily legible. Sect. 63. 
 The name must also be mentioned (at the risk of heavy penalties for 
 neglect to the company and the directors, sect. 63) in legible charac- 
 ters in all notices, advertisements, and other official publications of 
 the company, in all bills of exchange, promissory notes, indorsements, 
 cheques, and orders for money or goods, purporting to be signed by or 
 on behalf of the company, and in all bills, parcels, invoices, receipts, 
 and letters of credit of the company. Sect. 63. 
 
 Why this solicitude on the part of the legislature as to publication of 
 a company’s name ? The answer is, that the legislature, whilst allowing 
 limited liability, desired by this means to make the company itself 
 continually bring to the notice of those who dealt or might deal with 
 it the fact that it was “limited.” This policy it has fortified by 
 pecuniary penalties ; but it is not this only which makes neglect 
 dangerous to directors. Sect. 63 provides that if any director, manager, 
 or officer of a limited company, or any person on its behalf, signs or 
 authorizes to be signed on behalf of the company any bill of exchange, 
 promissory note, endorsement, cheque, order for money or goods, &c., 
 wherein the name of the company is not mentioned in manner 
 specified, he shall be personally liable to the holder of any such 
 bill of exchange, &c., for the amount thereof unless the same is duly 
 paid by the company. See Atkin Sf Co. v. War die Sf Others, 61 L. T. 
 23, in which the South Shields Salt Water Baths Co., Limited , was 
 misdescribed in a bill as the Salt Water Baths Co., Limited , and it 
 was held that the directors were personally liable on the bill. See 
 also Dermatine Co. v. Ashworth , 21 Times L. R. 510. 
 
SIMILARITY OF NAMES. 
 
 Ch. XXV. 
 
 249 
 
 Similarity of Names. 
 
 In choosing a name for a company, promoters must use care to 
 avoid adopting a name which is too like that of another company, for 
 the Act (by sect. 8) provides that no company is to be registered 
 under a name identical with that by which a company in existence is 
 already registered, or so nearly resembling the same as to be calculated 
 to deceive, except in a case where the company in existence is in 
 oourse of being dissolved, and signifies its consent in such manner as 
 the Registrar requires. In view of this provision the Registrar is 
 very particular as to names in registering companies, and it not unfre- 
 quently happens that, when the memorandum of association is taken in 
 for registration, it is found that the name selected has already been 
 adopted by some other company, or that it too nearly resembles the 
 name of some other company already on the register. Hence delay 
 and vexation. Even if the Registrar passes a name, this will not pre- 
 vent the proprietors of any concern, whether registered or not, if 
 prej udiced by the registration, from taking legal proceedings. 
 
 The principle on which the Court interferes in such cases (see supra, 
 p. 27) is, not that there is a property in the name ( Du Boulay v. Du 
 Boujay , L. R. 2 P. C. 441), but that one person is not to be permitted 
 to represent himself as carrying on the business which is carried on 
 by another. The leading cases on this point, illustrating the principles 
 on which the Court acts, are Croft v. Day , 7 Beav. 84 ; Lee v. Haley , 
 L. R. 5 Ch. 155. See further cases, supra, p. 27. And as prevention 
 is always better than cure, not only may a registered company be 
 restrained from carrying on business as above, but promoters may be 
 restrained from registering a company with a name calculated to 
 deceive. See Hendricks v. Montagu , 17 C. D. 638, where the registra- 
 tion of a company as the Universe Life Assurance Association, Limited, 
 was restrained, at the instance of an unregistered company known as 
 the Universal Life Assurance Society. 
 
 In cases like these, where the name adopted is merely descriptive of 
 the character of the defendant’s business, the Court has sometimes 
 great difficulty in interfering. London and Provincial Law Assurance 
 Society v. London and Provincial Joint Stock Life Assurance Co., 17 
 L. J. Ch. 37 ; Colonial Life Assurance Co. v. Home and Colonial 
 Assurance Co., Limited , 33 Beav. 548 ; London Assurance Corporation 
 v. London and Westminster Assurance Corporation, Limited, 9 Jur. 
 N. S. 843. But see now Reddaway v. Banliam, (1896) A. C. 199 ; and 
 British Vacuum Cleaner Co. v. New Vacuum Cleaner Co., (1907) 2 Ch. 
 312; Electromobile Co. v. British Electromobile Co., 98 L. T. 258; and 
 North Cheshire and Manchester Brewery Co. v. Manchester Brewery Co., 
 (1899) A. C. 83. If the Registrar exercises his discretion in the 
 
 Must not take 
 another com- 
 pany’s name. 
 
 Exception 
 to rule. 
 
 Principle on 
 which Court 
 acts. 
 
250 
 
 NAME OF COMPANY. 
 
 How company 
 may change 
 its name. 
 
 Omission of 
 “limited” in 
 name of com- 
 pany where to 
 be formed for 
 promoting 
 commerce, 
 arts, &c., with- 
 out intention 
 of paying 
 dividends. 
 
 Licence of 
 Board of 
 Trade. 
 
 matter, a mandamus will not lie against him. Rex v. Registrar of 
 Companies , (1912) 3 K. B. 23. 
 
 A company purchasing the goodwill of an existing business purchases 
 the right to the name under which it is carried on as part of the 
 goodwill. Levy v. Walker , 7 Beav. 84. 
 
 If by inadvertence a company is registered with a name identical or 
 closely resembling that of another company, sect. 8 (2) enables the first- 
 mentioned company, with the sanction of the Registrar, to change its 
 name. 
 
 Change of Name. 
 
 A company may by special resolution change its name, but only 
 with the consent of the Board of Trade. Sect. 8 (3) of the Act. The 
 proper course in such cases is to ascertain from the Registrar that 
 there is no objection to the proposed name, apply to the Comptroller 
 of Companies, Board of Trade, Whitehall Avenue, S.W., stating the 
 circumstances which have rendered the change desirable, and request- 
 ing him to obtain the sanction of the Board to the proposed change. 
 In due course this will be brought before the Board, and, if the requisite 
 consent is obtained, notice will be given to the applicant, and the 
 company will pass a special resolution carrying out the alteration. 
 Thereupon the Registrar will, issue a new certificate, as provided 
 in the section, and the change of name will be completely effected. 
 See Shackleford , Ford Sf Co. v. Dangerfeld, L. R. 3 C. P. 407. 
 
 Companies to promote Art, Commerce, &c. : Word 
 “IJimited ,, dispensed with. 
 
 Where an association is about to be formed for promoting commerce, 
 art, science, religion, charity, or any other useful object, and the 
 founders are willing to form it on the footing that its profits or income 
 shall be applied in promoting its objects only, and that no dividend 
 shall be paid to its members, the Board of Trade may grant a licence 
 authorizing registration of the association with limited liability, but 
 without the addition of the word “ limited” to its name. See sect. 20 
 of the Act of 1908. Many associations have been registered under 
 this section. At first the applications came almost exclusively from 
 Law Societies, Chambers of Commerce, and Trade Protection Societies, 
 but the advantages offered by the section are now better appreciated, 
 and associations of all kinds apply. Examples are given below. 
 
 An association desirous of being incorporated with limited liability 
 but without the word “ limited ” as part of its name, and of obtaining 
 for that purpose a licence from the Board of Trade pursuant to sect. 19 
 of the Act, should, according to the rules now in force, make a written 
 application to the Board for a licence, and with such application 
 should transmit for the Board’s consideration a draft in duplicate of 
 the proposed memorandum and articles of association. A cheque for 
 
COMPANIES TO PROMOTE ART, COMMERCE, ETC. Ch. XXV. 
 
 251 
 
 five guineas must also be sent to cover counsel’s fee for perusal of the 
 draft documents. See further Company Precedents, Part I., pp. 498, 
 
 499. 
 
 The advantages of incorporation for such associations is great. Advantages 
 The association gains in stability, public estimation, and credit. It ot ‘ 8 uch c< ^ n * 
 becomes a body corporate with perpetual succession, just as if it were the members, 
 incorporated by Poyal Charter or special Act of Parliament. It can 
 adopt in lieu of “ company ” a more suitable name, such as chamber, 
 club, college, guild, association. It can have a common seal; it can 
 hold property* in its own name without the intervention of trustees ; 
 it can contract and take and defend legal proceedings in its own 
 name ; its affairs can be conducted much more efficiently, and — finally 
 — its officers and members are freed from personal liability. 
 
 Associations obtaining the licence register, in almost all cases, as 
 companies limited by guarantee. See infra, Appendix. The guarantee 
 varies from Is. to 10/. Generally, membership is constituted by 
 election or by application in writing accepted by the governing body. 
 
 Sometimes ( e.g ., in charitable associations) a candidate for election 
 must make a donation. The governing body is not infrequently 
 called the committee or the council. When, as is often the case, the 
 association is formed to absorb and continue some existing association 
 of the same name, the members of this all join the registered associa- 
 tion, and the property, if any, is transferred to it, and the incorporated 
 association thus silently takes the place of its predecessor. See further 
 as to the formation of such companies, Company Precedents, Part I., 
 pp. 498, 499, where the clauses which the Board of Trade require to 
 be inserted in the memorandum will be found. 
 
 The following are some examples of companies which have been so Examples 
 registered : — 
 
 Benevolent. Colleges. 
 
 Birmingham Hospital Saturday Fund. Cheltenham Ladies’ College. 
 
 Clergy Pensions Institution. University College, Bristol. 
 
 of existing 
 companies of 
 the kind. 
 
 Chambers of Commerce. 
 London Chamber of Commerce. 
 Associated Chambers of Commerce. 
 
 Exchanges. 
 
 Birmingham Exchange. 
 Manchester Coal Exchange. 
 
 Clubs. 
 
 Huddersfield Carlton Club. 
 Manningham Football Club. 
 Newcastle Junior Liberal Club. 
 St. Pancras Reform Club. 
 Smithfield Club. 
 
 Hospitals. 
 
 Dalrymple Home for Inebriates. 
 
 Home Hospitals Association for Paying 
 Patients. 
 
 Law Societies. 
 
 {A great many.) 
 
 * By sect. 19 of the Act a company “ formed for the purpose of promoting art, 
 science, religion, charity or other like object not involving the acquisition of gain 
 by the company or the individual members thereof, ’ ’ is not to hold more than two 
 acres of land, but by licence of the Board of Trade it may hold more. 
 
252 
 
 NAME OF COMPANY. 
 
 Miscellaneous. 
 
 Religious. 
 
 Incorporated Council of Law Reporting-. 
 Meteorological Council. 
 
 Palestine Exploration Fund. 
 
 Royal School of Art Needlework. 
 
 Church Army. 
 
 Mission to Deep Sea Fishermen. 
 
 Scientific. 
 
 Birmingham Medical Institute. 
 British Dental Association. 
 
 College of Organists. 
 
 Incorporated Society of Musicians. 
 Institution of Mechanical Engineers. 
 
 Professional. 
 
 Philological Society. 
 
 Philosophical Society of Glasgow. 
 Physical Society of London. 
 
 Schools. 
 
 Clifton High School for Girls. 
 Glasgow School of Art. 
 
 Under sect. 20 (4) of the Act the Board of Trade has power to revoke 
 its licence after due notice, and thenceforth the word “ limited ” must 
 be used. 
 
 A company thus registered without the word “ limited ” can alter its 
 objects with the sanction of the Court (see sect. 9 of the Act, and supra , 
 pp. 77 — 80), but it maybe requisite to obtain the consent of the Board 
 of Trade. St. Hilda's College, (1901) 1 Ch. 556. Primd facie , a company 
 thus registered can pay a pension to an outgoing secretary. Cyclists 
 Touring Club v. Hopkinson , (1910) 1 Ch. 179. 
 
 When use of Word “Limited” prohibited. 
 
 Sect. 282 of the Act provides that if any person or persons trade or 
 carry on business under any name or title of which the word “Limited” 
 is the last word, that person or persons shall, unless duly incorporated 
 with limited liability, be liable to a fine not exceeding 51. for every 
 day upon which that name or title has been used. 
 
Ch. XXVI. 
 
 253 
 
 CHAPTER XXVI. 
 
 CONTRACTS. 
 
 In regard to contracts by companies, three leading rules must be borne 
 in mind : — 
 
 1 . A contract ultra vires the company is wholly void and cannot be 
 
 enforced or ratified. See supra , pp. 60 — 63. 
 
 2. A contract, not ultra vires the company, but ultra vires the 
 
 directors, may be ratified by the shareholders ( Grant v. United 
 Switchback Co ., 40 C. D. 135), and without such ratification 
 may, under certain circumstances, be binding on the company 
 by virtue of the Rule of estoppel recognized in Royal British 
 Bank v. Turquand. Supra , p. 44. 
 
 3. A contract made before the incorporation of a company by some 
 
 person professing to act on its behalf cannot be ratified by the 
 company after its incorporation. Kelner v. Baxter , L. R. 2 
 C. P. 174 ; Empress Engineering Co ., 16 0. Di 125 ; Natal Land 
 Co. v. Pauline Colliery Syndicate, (1904) A. C. 120; North 
 Sydney Investment Co. v. Higgins , (1899) A. 0. 263; Bagot 
 Pneumatic Tyre Co. v. Clipper Pneumatic Tyre Co., (1902) 
 1 Oh. 146. 
 
 But there is nothing to prevent the company, when incorporated, from 
 entering into a new contract to carry into effect the terms of the pre- 
 incorporation contract. Howard v. Patent Ivory Co., 38 C. D. 158 ; 
 In re Dale and Plant { 1889), 61 L. T. 206 ; Natal Land Co. v. Pauline 
 Colliery Syndicate, supra. Sometimes the contract is made before 
 incorporation with some person purporting to act as trustee for the 
 company. In this case also it is usual to make a fresh contract after 
 incorporation. Mere acting on the old contract does not make it 
 binding on the company ( Re Northumberland Hotel Co., 33 C. D. 16\ 
 though it may give the trustee the right to indemnity. Ilardoon v. 
 Belilios, (1901) A. C. 118. Merely taking the benefit of a pre-incor- 
 poration contract does not bind the company to fulfil the obligation k 
 of that contract. Re Northumberland Hotel Co., supra; Rotherham 
 Alum, Sfc. Co., 25 C. D. 103; Clinton's Claim, (1908) 2 Ch. 515, over- 
 ruling English and Colonial Produce Co., (1906) 2 Ch. 435. 
 
 Three parti- 
 cular rules as 
 to contracts. 
 
 1. Contract 
 ultra vires 
 
 company. 
 
 2. Contract 
 ultra vires 
 directors but 
 not company. 
 
 3. Contracts 
 made for com- 
 pany before 
 incorpora- 
 tion. 
 
254 
 
 CONTRACTS. 
 
 On these general rules the legislature has now engrafted a fourth, 
 viz. : — 
 
 4. That a company cannot make a binding contract until it is 
 entitled to commence business. See supra , p. 58. 
 
 This provision is contained in sect. 87 (3) of the Act of 1908, replac- 
 ing sect. 6 (3) of the Companies Act, 1900, and runs as follows : — 
 
 (3) “ Any contract made by a company before the date at which it is 
 entitled to commence business shall be provisional only, and shall not 
 be binding on the company until that date, and on that date it shall 
 become binding.” 
 
 ‘ ‘ Provisional ” here means that the contract is to be read as if it 
 contained a provision that it shall not be binding on the company 
 unless and until the company becomes entitled to commence business. 
 Re Otto Electrical Manufacturing Co., Jenkin’s case, (1906) 2 Ch. 390. 
 
 Companies registered prior to January 1, 1901, and companies 
 registered before 1st July, 1908, which do not invite the public to 
 subscribe their shares, and private companies, are exempt from this 
 provision. (Sect. 87 (6).) 
 
 The words of sect. 87 (3) are very wide and appear to include all 
 contracts, including contracts of membership. 
 
 The words “ shall be binding ” do not give any statutory sanction to 
 the contract, but mean that the contract is no longer provisional but 
 complete : but it is only good for what it may be worth, e.g., it may 
 still be liable to be avoided for fraud, misrepresentation, &c. 
 
 As to the conditions with which a company must comply to entitle it 
 to commence business, see p. 58. 
 
 Form of Contracts. 
 
 Contracts by, 
 or by agents 
 of, company. 
 
 According to the old common law rule a contract to bind a corpora- 
 tion had to be under its common seal. Modern decisions have relaxed 
 this rule to some extent (see South of Ireland Co. v. Waddell, L. R. 4 
 C. P. 617) ; but the exigencies of business rendered a further relaxation 
 of the rule desirable, and this was done by sect. 37 of the Companies 
 Act, 1867, which is re-enacted in sect. 76 of the Act of 1908. The result 
 of the enactment contained in that section is that a company can, as a 
 general rule, contract without seal. It is sufficient if the contract is made 
 by some person acting under the express or implied authority of the 
 company ; nor need the contract, as a general rule, be in writing even ; 
 it is sufficient if it is made by word of mouth, provided that the person 
 who makes it has authority to make it on the company’s behalf. 
 Who is a person acting on the implied authority of the company, 
 must depend on the articles of the company. Usually the directors 
 have express authority to act on the company’s behalf, and they can, 
 
SIGNED CONTRACTS. 
 
 Ch. XXVI. 
 
 therefore, on the company’s behalf, make contracts. So, too, if they 
 appoint a manager or other official, he may be given authority by 
 some resolution of the board, or by an instrument under the company’s 
 seal. See Beer v. London and Paris Hotel Co., 20 Eq. 412; Bryon v. 
 
 Great Central Mining Co., 5 H. & N. 856 ; Land Credit Co., 4 Ch. 460. 
 
 But the mere appointment of a manager by directors, under a power 
 for that purpose, will only operate as a delegation to such manager of 
 the ordinary commercial business of the company. CartmelVs case, 
 
 L. B. 9 Ch. 696. 
 
 In contracts by a company acting by its agents, the better form is 
 for the company to be made a party by its corporate name, the contract 
 being signed by the agents on behalf of the company. No personal 
 liability under the contract can attach to the agents where they sign 
 “on behalf ” of the company. Gadd v. Houghton , 1 Ex. D. 357, and 
 see p. 199. 
 
 Contracts under Seal. 
 
 As to the form which a contract to be sealed on behalf of a company Contracts 
 should take, such a contract will be expressed thus : An agreement under seal. 
 
 made this of between The Company, Limited, of the one 
 
 part, and A. B., of the other part, and it will provide that “ the said 
 company shall [do so-and-so] and that the said A. B. shall [do so-and- 
 so] ” and will conclude, As witness the common seal of the company 
 and the hand [and seal] of the said A. B., the day and year first 
 above written. 
 
 Signed Contracts. 
 
 As to the form which a contract to be signed on behalf of a company Contracts, 
 
 should take, the company by its corporate name should be made a ’ v y here 1 to 
 
 i t signed only, 
 
 party to it thus: “ between the Company, Limited, of the one 
 
 part, and A. B. of the other part,” or it may be “ between N. of 
 
 on behalf of the Company, Limited, of the one part, and A. B. of 
 
 of the other part.” 
 
 In any case care must be taken to show on the face of the contract that 
 the person who signs it is acting for, or on account or on behalf of, the 
 company, by inserting words to that effect in the description of the 
 parties, or in the body of the agreement, or in connection with the 
 signature. Any of these places will do. See Gadd v. Houghton , 1 
 Ex. Div. 357. If the words “for the company” are written or 
 printed immediately above or below or opposite the signature, that is 
 sufficient. 
 
 Presumption of Regularity. 
 
 Contracts where presumed to be intra vires of the company {supra, 
 p. 73), and where presumed to be intra vires of the directors (p. 44). 
 
256 
 
 CONTRACTS. 
 
 Oral 
 
 contracts. 
 
 Oral Contracts. 
 
 Where it is desired to make an oral agreement the person who is to* 
 make it on behalf of the company must have an express or implied 
 authority, and then a contract made by word of mouth between him 
 and the other party will bind the company, subject, of course, to the 
 provisions of the Statute of Frauds and the Sale of Goods Act, 1893, 
 which require that certain agreements shall be in writing signed by 
 the party to be charged. Sect. 4 of the former Act is, in this connec- 
 tion, the most material section. It deals with various agreements, 
 and, in particular, guarantees, contracts for sale of lands or any 
 interest in or concerning the same, and agreements not to be 
 performed within the space of a year from the making thereof. 
 In such cases no action is to be brought unless the agreement on 
 which such action shall be brought or some memorandum or note 
 thereof shall be in writing and signed by the party to be charged 
 therewith, or some other person thereunto authorized. It may be 
 noted, however, that “the statute in this part of it does not say that 
 unless these requisitions are complied with such agreement shall be 
 void, but merely that no action shall be brought upon it.” Per Jervis, 
 C. J., Leroux v. Brown (1852), 12 C. B. 801 ; Hoyle v. Hoyle , (1893) 1 
 Ch. 84. Accordingly, an agreement in relation to such matters is not 
 void because it is not in writing, and it can be enforced against the 
 company if, by any means, an admission of the terms of the agreement 
 signed by some duly authorized agent of the company can be produced 
 in evidence. Thus, a proposal in writing accepted orally is a sufficient 
 memorandum as against the proposer ( Reuss v. Picksley, L. R. 1 Ex. 
 342) ; so a letter from the company to its own solicitor mentioning 
 the terms of the contract made is sufficient (see Gibson v. Holland , 
 L. R. 1 0. P. 1) ; or a letter to an agent of the person sought to be 
 charged. Bailey v. Sweeting , 9 C. B. N. S. 843. A record of the 
 terms of the contract in the minutes signed by the chairman may 
 also suffice (see Jones v. Victoria Graving Dock (1877), 2 Q. B. I). 
 314; Queensland , Sfc. Co., (1894) 3 Ch. 181), or part performance 
 unequivocally referable to the contract. Wilson v. West Hartlepool 
 Bail. Co., 2 D. J. & S. 492 ; Howard v. Patent Ivory Co. (1888), 38 
 Ch. D. 163. “The Court,” as Bowen, L. J., said ( Hoyle v. Hoyle , 
 (1893) 1 Ch. 99), “is not in quest of the intention of the parties, but 
 only of evidence under the hand of one of the parties to the contract 
 that he has entered into it.” 
 
 As to disclosure of contracts in a prospectus, see infra, Chapter 
 XXXV. 
 
 As to filing particulars of an oral contract for the issue of paid-up 
 or partly paid-up shares for a consideration other than cash, seo 
 sect. 88 of the Act, and supra, p. 119. 
 
Ch. XXVII. 
 
 257 
 
 CHAPTER XXVII. 
 
 THE COMMON SEAL. 
 
 To have a common seal is incidental to a corporation ( Sutton's Hospital 
 case , 10 Rep. 30 b) ; but sect. 16 of the Act of 1908 expressly declares 
 that a company incorporated under that Act is to have a seal, and, by 
 sect. 63 of the same Act, the company is required to have its name 
 “ engraven in legible characters on its seal.” 
 
 The right to use the seal of the company for the purposes of its 
 business is usually vested in the directors. Occasionally the power is 
 vested in them by express words, but, more usually, their power 
 arises from the terms of a general clause enabling them to exercise all 
 the powers of the company (see, for example, Clause 71 of Table A.). 
 It has been laid down that the executive of the company is, prima 
 facie, entitled to use the common seal. Barned's Banking Co., 3 Ch. 
 105. 
 
 As to contracts under seal, sect. 76 of the Act enables a company, 
 as a general rule, to contract without seal ; it need only contract under 
 seal where a private person would have to do so, e.g ., in the case of a 
 covenant or of a bond. 
 
 As to conveyances, demises, surrenders, certificates, &c., the section 
 above referred to does not touch these instruments, and the ordinary 
 rule prevails, namely, that where in the case of an individual a seal is 
 requisite, it is requisite in the case of a company. 
 
 Thus, to convey freehold property, and to assign or surrender 
 leasehold property, or to give a power of attorney, a seal is requisite. 
 And a seal is requisite for some instruments in order to obtain certain 
 statutory advantages, e.g., in the case of a certificate of title to shares 
 (sect. 23 of the Act) ; in the case of a share warrant (sect. 37 of the 
 Act) ; and see the Conveyancing Acts, 1881 and 1882, for various cases 
 in which statutory incidents are annexed to deeds. 
 
 Where the articles contain special provisions as to the affixing of 
 the seal, e.g., that the instrument must also be signed by two directors, 
 those who deal with the company are bound to see that the deed on 
 the face of it accords with the articles. See supra, p. 44. 
 
 But if the instrument is on the face of it regular, they have a right 
 p. 17 
 
 The right to a 
 common seal. 
 
 Who can use. 
 
 Contracts not 
 under seal. 
 
 Conveyances, 
 
 &c. 
 
 Regulations 
 as to use of 
 seal. 
 
 Presumption 
 of validity. 
 
258 
 
 THE COMMON SEAL. 
 
 Delivery of 
 deed : not 
 required from 
 a corporation. 
 
 to presume that the seal so affixed has been duly affixed, that the 
 directors were duly appointed and their signatures duly made ( County 
 Life Assurance Co ., L. R. 5 Ch. 288; Mahoney v. East Holyford Mining 
 Co., L. R. 7 H. L. 869); and the burden of proving the contrary rests 
 with those who allege it. Clark v. Imperial Gas, fyc. Co., 4 B. & Ad. 
 315; Hill v. Manchester, Sfc. Co., 5 B. & Ad. 866. 
 
 This is a corollary from the rule in Royal British Bank v. Turquand, 
 supra, p. 44. See County of Gloucester Bank v. Rudry, Sfc. Co., (1895) 
 
 1 Ch. 629. In the latter case the seal had been irregularly affixed to 
 an instrument, but the company was held bound by it, for the instru- 
 ment appeared to be in accordance with the articles, and the 
 irregularity was only in regard to the “indoor” management, with 
 which an outsider cannot be acquainted. On the other hand, it has 
 been held in a later case, distinguishing County of Gloucester Bank v. 
 Rudry, &c. Co., that if the seal is affixed fraudulently by the secretary 
 for his own private ends, the company is not estopped ( Ruben v. Great 
 Finyall Co., (1906) A. C. 439). Where the presumption does not apply, 
 as in the case of a non-trading corporation, an instrument to which 
 the seal has been irregularly affixed is inoperative. Bank of Ireland 
 v. Evans' Trustees, 5 H. L. C. 389 ; Mayor of the Staple v. Bank of 
 England , 21 Q,. B. D. 160 ; and see London Freehold Land Co. v. 
 Su field, (1897) 2 Ch. 608. 
 
 A deed to be effective must be sealed and delivered ; but, in the case 
 of a corporation, the affixing of the seal imports delivery. “ Le fait 
 d’un corporation ne besoign ascun delivery mes l’apposition del 
 common seale done perfection al ces sans ascun deliverie.” Rol. Abr. 
 23 (1), 50 ; and see Comyns’ Digest, Fact A (3), that “a common seal 
 fixed to the deed of a corporation is tantamount to a delivery.” 
 Cruise’s Digest, 4th ed., 28, is to the same effect. Accordingly, whilst 
 in the case of a private individual it is usual to add ' an attestation 
 clause to the effect that the instrument was “ signed, sealed, and 
 delivered" in the presence of the witness, in the case of a company 
 the clause merely states that “ the common seal was affixed hereto 
 in the presence of — — and .” 
 
 Primd facie, therefore, if the common seal is duly affixed to a deed 
 it becomes operative ( London Freehold , fyc. Co. v. Sujjield, (1897) 
 
 2 Ch. 608), and it rests with those who allege the contrary to establish 
 the fact. 
 
 Nevertheless a corporation can execute a deed in escrow, i.e ., can 
 seal it subject to a condition suspending its efficacy. 
 
 As Lord Cranworth said in Xenos v. Wickham, L. R. 2 H. L. 310 : 
 “ The efficacy of a deed depends on its being sealed and delivered by 
 the maker of it, not on his ceasing to retain possession. This, as a 
 general proposition of law, cannot be controverted. It is not affected 
 
THE COMMON SEAL. 
 
 Ch. XXVII. 
 
 259 
 
 by the circumstance that the maker may so deliver it as to suspend or 
 qualify its binding effect. He may declare that it shall have no effect 
 until a certain time has arrived, or until some condition has been 
 performed ; but when the time has arrived, or the condition has been 
 performed, the delivery becomes absolute, and the maker of the deed 
 is absolutely bound by it, whether he has parted with the possession 
 or not. Until the specified time has arrived, or the condition has been 
 
 performed, the instrument is not a deed. It is a mere escrow 
 
 I know of nothing intermediate between a deed and an escrow.” 
 
 Whether a document sealed by a company was or was not intended 
 to operate as a complete and operative instrument, or as an escrow, 
 depends on the intention of the parties as expressed or implied. See 
 Derby Canal Co. v. Wilmot, 9 East, 359, 360, where the company’s seal 
 was affixed to a conveyance ; but the clerk was directed to retain it 
 until certain accounts were adjusted. Lord Ellenborough, C. J., and 
 the rest of the Court, held that, “in order to give the instrument 
 effect, the affixing of the seal must be done with intent to pass the 
 estate. Otherwise it operates no more than a feoffment would do 
 without delivery of possession, whereas here, though the seal was 
 directed to be and was affixed to the instrument for form, yet it was 
 with a reservation of any present effect to pass the title out of the 
 company, as they do not choose to deliver over the possession of the 
 conveyance till the accounts were settled between them and the 
 purchaser.” See, too, Mowatt v. Castle Steel, Sfc. Co., 34 C. D. 58, in 
 which the Court found as a fact that debentures to bearer sealed by 
 the company had not in fact been delivered, and held them void in 
 consequence. It is quite consistent with this, however, that the 
 company may be estopped from setting up non-delivery where an 
 instrument under the seal is taken in good faith. County of Gloucester 
 Bank v. Rudry, (1895) 1 Ch. 629. And see Roberts v. Security Co., 
 
 (1897) 1 Q. B. Ill, and London Freehold , Sfc. Co. v. Sujfield , supra , 
 that the onus of proving that a deed duly sealed was only executed in 
 escrow rests with those who so assert. 
 
 A document to which the seal is affixed is not necessarily a deed ; Whether 
 
 thus a certificate of title to shares is not a deed ( The Queen v. Morton, sealed d ° cu ; 
 
 v ment a deed. 
 
 L. R. 2 C. C. R. 22) ; but it would seem that every contract under the 
 seal is a deed, save only that, by the Bills of Exchange Act, 1882, 
 s. 91, a corporation is empowered to seal, instead of signing, accept- 
 ances, indorsements and the like. 
 
 Besides its common seal, a company may, under sect. 79 of the Foreign Seals 
 Act, obtain power to have an official seal for use abroad ; and, under Act - 
 sect. 78 of the Act, it can authorize any person, as the attorney 
 of the company, to execute, under his seal, deeds outside the United 
 Kingdom. 
 
 17(2) 
 
260 
 
 Appointment. 
 
 Duties. 
 
 Powers. 
 
 CHAPTER XXVIII. 
 
 SECRETARY AND OTHER OFFICIALS. 
 
 Appointment and Remuneration of Secretary. 
 
 Almost every going company has its secretary. The articles sometimes 
 contain a clause declaring who shall be the first secretary. In any 
 case a resolution is usually passed appointing a secretary and stating 
 his remuneration, and if the terms of appointment are special the 
 agreement in regard thereto is generally put in writing. 
 
 A secretary is generally remunerated by a fixed salary. 
 
 Duties. 
 
 The duties of the secretary vary with the size and nature of the 
 company and the terms of the arrangement made with him. But in 
 the ordinary course he is present at all meetings of the company, and 
 of the directors, and makes proper minutes of proceedings thereat ; 
 issues, under the direction of the board, all necessary notices to 
 members and others ; conducts all correspondence with shareholders 
 in regard to calls, transfers, forfeiture and otherwise, and keeps the 
 books of the company, or such of them as relate to the internal 
 business of the company, e.g ., the register of members, the share 
 ledger, the transfer book, the register of mortgages, certifies 
 transfers, &c., &c. He also makes all necessary returns to the Registrar 
 of Joint Stock Companies. 
 
 Where the same person is secretary to two companies, A. and B.,. 
 knowledge acquired elsewhere by him as secretary of A. Company is 
 not to be treated as knowledge by him as secretary of B. Company, 
 unless there is a duty to communicate the knowledge. Re Fenwick, 
 Stobart Co., Deep Sea Fishery Co.'s Claim , (1902) 1 Ch. 507, and see 
 p. 234. " 
 
 Powers. 
 
 A secretary, as such, has no authority to bind the company by 
 contract or to make representations as to the company’s affairs ta 
 induce people to take shares so as to bind the company (. Barnett v. 
 
LIABILITY. 
 
 Ch. XXVIII. 
 
 261 
 
 South London Tramways Co., 18 Q. B. D. 815) ; or to register a transfer 
 until passed by the directors ( Chida Mines , Limited v. Anderson, 22 
 Times L. R. 27); be can “certify” a transfer, but if be does so 
 fraudulently tbe company will not be liable. George Whitechurch, 
 
 Limited v. Cavanagh , (1902) A. 0. 117. Tbe secretary of tbe company 
 there, in pursuance of a fraudulent scheme to benefit himself and an 
 accomplice, certified that share certificates bad been produced to him 
 on a transfer when in fact they had not, and the House of Lords 
 decided that the secretary’s representation did not operate as an 
 estoppel against the company ; nor will the company be liable if the 
 secretary forges the directors’ signatures to a share certificate, and 
 fraudulently affixes the company’s seal thereto. And even where a 
 secretary is held out as a person to answer certain inquiries the com- 
 pany, on the same principle, incurs no liability for untrue answers if 
 made by the secretary for his own private ends. British Mutual Bank 
 v. Charnwood Forest Rail., 18 Q,. B. D. 714. 
 
 In a subsequent case of Ruben v. Great Fingall Consolidated, (1906) 
 
 A. C. 439, the House of Lords held the same principle to be applicable 
 to a share certificate to which the secretary had fraudulently, for his 
 private ends, affixed the seal of the company and forged the names 
 of the directors. 
 
 See also as to cheques with forged signatures of directors, 
 Kepitigalla Rubber Estates v. National Bank of India , 25 T. L. R. 402. 
 
 A secretary, as such, has no power to convene a general meeting 
 (see p. 164), or to strike a name off the register of members ( Wheat- 
 croft’s case, 29 L. T. 326), or to pass and register a transfer not 
 approved by the directors. Chida Mines v. Anderson , 22 T. L. R. 27. 
 
 In that case the secretary registered the transferee, and afterwards 
 the directors refused to pass the transfer. 
 
 Liability. 
 
 A company’s secretary is liable to heavy punishment for falsifying Liability, 
 any books or documents of the company. Sect. 216 of the Act. 
 
 And he may incur liability and penalties under the Act in the 
 following cases amongst others: Sect. 17 (2) (statutory declaration to 
 obtain certificate of incorporation) ; sect. 87 (1) (c) (statutory declara- 
 tion for company commencing business) ; sect. 26 (4) (signing the 
 annual list of members and summary) ; and sect. 88 (3) (return of 
 allotments). See also as to enemy shareholders, Appendix, p. 631. 
 
 He is also liable for misfeasance if he receives an improper 
 commission. Barrow’s case , 28 W. R. 341 ; McKay’s case, 2 Ch. I). 1. 
 
 But a secretary is in a very different position to directors, and is not 
 to be fixed personally with liability for a misapplication of the com- 
 
262 
 
 SECRETARY AND OTHER OFFICIALS. 
 
 Appointment 
 of officers 
 and agents. 
 
 Specific 
 
 performance. 
 
 Dismissal. 
 
 pany’s funds, though he may have known all about it. Joint Stock 
 Discount Co. v Brown (1869), 8 Eq. 396. 
 
 A secretary sued for negligence may set up the Statute of Limitations 
 Municipal Freehold Land Co. v. Pollington (1890), 63 L. T. 243. 
 
 A secretary who acts fraudulently or conspires with others is liable 
 to prosecution. 
 
 Appointment of Officers and Agents generally. 
 
 An appointment of an officer or agent by a company is commonly 
 made by instrument in writing pursuant to sect. 76 of the Act of 1908, 
 and this course is a better one than placing reliance for the purpose, 
 as is sometimes done, on the articles of association, for an appointment 
 made by the articles is not, it seems, a contract in writing by the 
 company at all, though it may be held to evidence the terms on which 
 the company has agreed to employ the officer or agent. Eley v. 
 Positive Government , Sfc. Co., 1 Ex. D. 88 ; Rotherham Co., 25 C. D. 
 103; and see supra , pp. 41, 42. Moreover, special stipulations are 
 usually required on such appointment, and they cannot be so conve- 
 niently inserted in the articles as in a formal agreement for employment. 
 
 It is a cardinal doctrine of equity that specific performance 
 of a contract for personal service will not be ordered. Stocker 
 v. Brocklehank , 3 M. & O. 250; Mair v. Himalaya Tea Co., 1 Eq. 411. 
 Service under coercion can never be satisfactory. But where there is 
 a negative stipulation that an employee will not engage elsewhere, 
 the Court will grant an injunction to restrain a breach thereof. Lum- 
 ley v. Wagner, 1 D. M. & Gr. 604. To found this remedy by injunc- 
 tion, however, the company must put in the contract a clear negative 
 covenant, or words amounting thereto. Whitwood Chemical Co. v. 
 Hardman, (1891) 2 Ch. 416. 
 
 In the absence of express provision — that is, unless he has con- 
 sented to forego it — an employee is entitled to reasonable notice of 
 dismissal, or to compensation in lieu thereof ( Green v. Wright, 
 1 C. P. D. 592) ; but there are certain things — going to the root of 
 the contract — for which an employee may be dismissed summarily and 
 without notice ; for instance, wilful disobedience to any lawful order 
 of the company ( Shaw v. Arnott , 2 Stark. 256 ; Amor v. Fearon, 
 9 A. & E. 548), misconduct ( Pearce v. Foster , 17 Q. B. D. 536 ; Boston 
 Deep Sea v. Ansell , 39 C. D. 339), incompetence or permanent disabi- 
 lity ( Hermer v. Cornelius , 5 C. B. (N. S.) 236), speculating on the 
 Stock Exchange ( Pearce v. Foster, 17 Q. B. D. 536), or even an act 
 of forgetfulness by an employee, if it has, or is calculated to have, 
 serious results, may justify dismissal without notice. Raster v. London 
 and County Printing Works, (1899) 1 Q. B. 901. 
 
APPOINTMENT OF OFFICERS GENERALLY. Ch. XXVIII. 
 
 263 
 
 An order for winding-up is equivalent to dismissal ( Chapman' s case , 
 
 1 Eq. 346), and so is the appointment by the Court of a receiver and 
 manager in a debenture action ( Reid v. Explosives , 19 Q,. B. D. 264); 
 and it has long been considered that a resolution for voluntary 
 winding-up operated in like manner. See, however, Midland Counties 
 District Bank , (1905) 1 Ch. 357, adversely commented on in Company 
 Precedents, Part I., p. 444. 
 
 Where power is reserved to the company at its absolute discretion to 
 determine the engagement at an earlier date than that fixed, proper 
 notice of the company’s intention to terminate must be given. African 
 Association and Allen , (1910) 1 K. B. 396. An officer who accepts an 
 incompatible office, by doing so primd facie vacates his original office. 
 
 Reg. v. Tidy , 2 Q. B. 179. 
 
 Where an appointment is made for a fixed period, there may be an WindiDg--up. 
 implied term on the company’s part that it will not discontinue its 
 business so as to disable itself from continuing the employment. 
 
 Ogdens v. Nelson , (1905) A. C. 109 ; and compare with this Rhodes v. 
 
 Forivood , 1 App. Cas. 256 ; Railway and Electric Co., 38 C. D. 597 ; 
 
 Hamlyn v. Wood , (1891) 2 Q. B. 488; Turner v. Goldsmith , (1891) 
 
 1 Q,. B. 544 ; Chapman's case (1866), 1 Eq. 346. 
 
 At all events, if a company by winding up disables itself from 
 carrying out its bargain to continue an employee in its employment, it 
 cannot hold him to his share of the bargain not to compete in business 
 with the company. Measures Bros., Limited v. Measures, (1910) 2 Ch. 
 
 248, C. A. 
 
 An employee or ex-employee may generally be restrained by Trade secrets, 
 injunction from revealing trade secrets. Merry weather v. Moore, 
 
 (1892) 2 Ch. 518; Robb v. Green, (1895) 2 Q. B. 315. 
 
 Where a servant is wrongfully dismissed from his employment, the 
 damages for dismissal cannot include compensation for the manner of 
 the dismissal. So a majority of the Law Lords held in Addis v. 
 
 Gramophone Co., (1909) A. C. 488. 
 
264 
 
 Express and 
 
 implied 
 
 powers. 
 
 How bills 
 accepted, &c. 
 
 CHAPTEE XXIX. 
 
 HILLS OF EXCHANGE AND PROMISSORY NOTES. 
 
 Company’s Power to Issue. 
 
 Whether a company can make, accept, indorse, or issue bills of 
 exchange, promissory notes, and other negotiable instruments depends 
 on its obj ects ; it cannot issue such instruments unless it has an express 
 or implied power given to it by its memorandum. In the case of a 
 trading company there is an implied power to accept and issue bills 
 and notes as there is to borrow — business convenience requires it — 
 and there are other commercial concerns which may also have an 
 implied power. See Re Peruvian Rail. Co. (1866), L. E. 2 Ch. 623. 
 But usually the memorandum of association contains express power. 
 The following are cases in which it has been held that companies had 
 no such implied power, and illustrate the inconvenience of relying on 
 an implied power: — Bramah v. Roberts , 3 Bing. N. C. 963 (a gas 
 company) ; Dickinson v. Valpy , 10 B. & C. 128 (a mining company); 
 Steel v. Harmer , 14 M. & W. 831 (a cemetery company) ; Bateman v. 
 Mid-Wales Rail. Co. (1865), L. E. 1 C. P. 499 (a railway company). 
 
 Acceptance by Director in Name of Company. 
 
 Sect. 77 of the Act enacts that a bill of exchange or promissory 
 note shall be deemed to have been made, accepted, or endorsed on 
 behalf of a company if made, accepted, or endorsed in the name or 
 by or on behalf or on account of the company, by any person acting 
 under its authority. 
 
 Thus, in order to accept a bill, all that is necessary is to authorize 
 one of the directors, or the secretary, or someone else, to sign the 
 acceptance on behalf of the company and then let the acceptance be in 
 these terms : — 
 
 For the 
 
 Accepted. 
 
 Company, Limited, and by its authority ; 
 
 payable at, &c. 
 
 Countersigned : N. Secretary. 
 
 Directors. 
 
ACCEPTANCE BY DIRECTOR IN NAME OF COMPANY. Ch. XXIX. 
 
 265 
 
 A bill may be : — 
 
 £. s. d. London, 1st March, 1878. 
 
 Three months after date, pay to , or order, one hundred 
 
 pounds, value received. 
 
 For the Company, Limited. 
 
 To Mr. 
 
 A. 
 
 B. 
 
 Directors . 
 
 A bill drawn on a company ought to be addressed to the company 
 
 thus : “To the Company, Limited,” not “ To the Directors of the 
 
 Company, Limited.” 
 
 A promissory note may be : — 
 
 Three months after date, The Company, Limited, 
 
 promises to pay to , or order, the sum of , value 
 
 received. 
 
 For, &c. [as above]. 
 
 An indorsement may be : — 
 
 Pay to , or order. 
 
 For, &c. [as above]. 
 
 A cheque can be signed in the same way. 
 
 A bill, note, cheque, or indorsement may be accepted, drawn, or 
 made on behalf of a company, by any person who has the necessary 
 authority. 
 
 Under sect. 91 of the Bills of Exchange Act, 1882, it is provided : 
 “ That in the case of a corporation where a bill, note, cheque, indorse- 
 ment, &c., is required to be signed, it is sufficient if the document be 
 sealed with the corporate seal.” Accordingly, if preferred, an accept- 
 ance can be in this form : — 
 
 Accepted. 
 
 Payable at the Bank, Limited. 
 
 As witness the common seal of the Company, Limited. 
 
 A promissory note runs in this form : — 
 
 The Company, Limited, hereby promises to pay to 
 
 of on the day of next, the sum of 
 
 £ . ' 
 
 As witness the common seal of the said company this 
 
 day of . 
 
 In relation to bills of exchange and promissory notes the provisions 
 of sect. 63 of the Act must be borne in mind, and accordingly the true 
 name of the company must appear, and particularly the word “ limited” 
 must not be omitted. Any breach of this enactment involves heavy 
 penalties, and, what is more, may impose personal liability on the 
 directors. See the concluding words of the section. Atkin v. War die 
 
 Acceptances 
 under seal. 
 
 Danger of 
 omitting the 
 word 
 
 “ limited,” 
 or not stating 
 the name 
 correctly. 
 
266 
 
 BILLS OF EXCHANGE AND PROMISSORY NOTES. 
 
 “For ” the 
 company. 
 
 (1889), 61 L. T. 23, is an instance in which, directors were held per- 
 sonally liable on a hill which did not state the name of a company 
 correctly; and see Penrose v. Martyr (1858), E. B. & E. 490, in which 
 a bill addressed to a company omitted the word “limited” in describ- 
 ing it. It was accepted by “ J. M., Secretary to the company,” and it 
 was held that he was personally liable. See also Nassau Steam Press 
 y. Tyler , 70 L. T. 376, where the directors described the company by 
 a wrong name and were held personally liable. But where a pro- 
 missory note was framed thus, “I, , promise to pay, &c. to A. B. C., 
 
 Limited,” and was signed “A. B., Managing Director,” it was held 
 that A. B. was not personally liable. Chapman v. Smethurst , (1909) 
 1 K. B. 927, C. A., reversing (1909) 1 K. B. 73. And directors were 
 held not personally liable where, owing to the length of the rubber 
 stamp employed, the word “limited” overlapped the paper and did 
 not appear. Dermatine Co. v. Ashworth , 21 Times L. B. 510. 
 
 As to the importance of using the words “ for” or “on account of ” 
 the company, see supra , pp. 254, 255, and sect. 26 of the Bills of 
 Exchange Act, 1882. A note in the form “ We, the directors of the A. 
 Company, Limited, promise to pay,” &c., signed by the chairman and 
 three other directors, with the seal of the company in the corner, was 
 held to bind the directors personally. Button v. Marsh , L. B. 6 Q. B. 
 361. 
 
Ch. XXX. 
 
 267 
 
 CHAPTER XXX. 
 
 CONVEYANCES, ASSIGNMENTS, LEASES, RELEASES, DEEDS OF 
 COVENANT, ETC. 
 
 When the directors, in pursuance of an agreement for sale or other- 
 wise, desire to convey or assign property of the company to a purchaser 
 or some other person, and also when they desire to grant a lease of, or 
 to mortgage, the company’s property, the company must be made a 
 party to the deed by its corporate name, — not the directors, — and the 
 company, not the directors, must thereby grant, or assign, or demise, 
 as the case may be, and enter into such covenants as may be necessary. 
 Thus, a conveyance of land will be to the effect following : — 
 
 This Indenture made the day of between The 
 
 Company, Limited, of the one part, and A. B., of, &c., 
 
 of the other part. WTiereas, &c. 
 
 Now This Indenture Witnesseth that in pursuance of the 
 said agreement, and in consideration of, &c., The said com- 
 pany, as beneficial owner, hereby grants unto the said A. B., 
 all and singular [description of the landP\ : To hold the same 
 unto and to the use of the said A. B. in fee simple. And the 
 said company hereby covenants with the said A. B. that, &c. 
 
 As witness the common seal of the said company and 
 the hand and seal of the said A. B. the day and year first 
 above written. 
 
 In like manner where the directors have agreed to purchase or take 
 on lease property, e.y., land, buildings, letters patent, concessions, &c., 
 on behalf of the company, the property will be conveyed, assigned, or 
 demised respectively to the company, not the directors, unless in some 
 special case it is desired to vest the property in the directors as trustees 
 for the company. Accordingly, the company will be party to the deed, 
 and the conveyance, assignment, or lease will be expressed to be made 
 “to the said company and its assigns,” and the covenants will be 
 “ with the said company and its assigns.” 
 
 Some persons in deeds use the expression 1 1 the said company, its 
 successors and assigns”; but the word “successors” is unnecessary 
 
 Conveyances, 
 &c. by- 
 company. 
 
 Conveyances, 
 &c. to 
 company. 
 
268 
 
 Notice. 
 
 Writ. 
 
 Petition. 
 
 CONVEYANCES, ASSIGNMENTS, LEASES, ETC. 
 
 (Go. Litt. 94 b), and, accordingly, may be, and generally is, omitted 
 with advantage. 
 
 The above rules apply not only to conveyances, &c., but to releases 
 and other deeds. Such instruments should all be made in the name of 
 the company. 
 
 So, too, a notice by the company, e.y., to dismiss an officer, will be 
 given in the name of the company. 
 
 The Company, Limited, hereby give you notice, &c. 
 
 In witness whereof the company hath caused two of its 
 
 directors to affix their signatures hereto this day of . 
 
 For the company, 
 
 A. 
 
 B. 
 
 Directors. 
 
 Again, in a writ of summons the company is named, as the party 
 suing or being sued, thus : — 
 
 The Company, Limited, Plaintiffs. 
 
 against 
 
 A. B. and C. D., Defendants. 
 
 So a petition by a company runs thus : — 
 
 In his Majesty’s High Court of Justice. 
 
 The humble petition of the Company, Limited, showeth 
 
 as follows, &c. 
 
Ch. XXXI. 
 
 269 
 
 CHAPTER XXXI. 
 
 BORROWING POWERS. 
 
 Most companies, like individuals, require to borrow from time to Where power 
 time for the exigencies of their business. To entitle a company to exists* 1 ^ 
 borrow it must have power to borrow given to it by its constitution. 
 
 Whether a company under the Act has or has not such a power will 
 depend on the objects specified in its memorandum of association. If 
 these objects comprise, as they usually do, an express power to borrow, 
 there is of course no question ; but it is not necessary to find an express 
 power. It is sufficient if there is an implied power. An implied power 
 arises whenever the objects are such that a power to borrow may fairly 
 be regarded as incidental to the company’s objects. This is the case 
 with a trading company. It has — it must have — as incidental to 
 carrying on its business, an implied power to borrow ( Bryon v. Metro- 
 politan, Sfc. Co., 3 De Gh & J. 123; Ex parte City Bank, L. R. 3 Ch. 
 
 758; General Auction , Sfc. Co. v. Smith, (1891) 3 Ch. 432); but in 
 regard to non- trading companies, there must be something in the 
 memorandum or articles to show expressly or inferentially that the 
 company is to have power to borrow ; for a company, as we have seen 
 already (p. 60), under the Act, is a statutory corporation with limited 
 powers. In the case of The Queen v. Sir Charles Reed , 5 Q,. B. D. 483, 
 
 Cotton, L. J., observed : “It was said that every corporation, unless re- 
 stricted by its act of incorporation, has the same power as an individual to 
 enter into contracts, including that of borrowing money. In our opinion 
 this contention .... cannot be maintained. The power of a corporation 
 established for certain specific purposes must depend upon what those 
 purposes are, and except so far as it has express power given to it, it will 
 have such powers only as are necessary for the purpose of enabling it in 
 a reasonable and proper way to discharge the duties, or fulfil the pur- 
 poses for which it was constituted A trading corporation stands, 
 
 as regards an implied power of borrowing, in a very different position.” 
 
 See also Baroness Wenlock v. River Dee, 10 App. Cas. 359. If a com- How power 
 pany has no power by its constitution to borrow, it can now remedy ^j^ined 
 the defect by applying to the Court under sect. 9 of the Companies 
 (Consolidation) Act, 1908, to sanction its taking such a power, or 
 
270 
 
 BORROWING POWERS. 
 
 How borrow- 
 ing powers 
 limited. 
 
 Bound by 
 regulations. 
 
 Power to 
 arive security. 
 
 Uncalled 
 capital, 
 mortgage of. 
 
 extending it if its existing power is unduly limited. In re Reversionary 
 Society , (1892) 1 Ch. 615 ; In re Empire Trust, 64 L. T. 221 ; see also 
 P. Phipps ’ Northampton and Toivcester Breweries , 1897 ; Midland- 
 Educational Co., 30 April, 1892 ; Union Rolling Stock Co., January, 
 1894. 
 
 Limit of Borrowing* Powers. 
 
 Sometimes, though, rarely, the memorandum of association limits 
 the borrowing powers to a specific sum, or to a sum not exceeding the 
 paid-up capital ; but in ninety-nine cases out of a hundred there is no 
 limit in the memorandum, and there is nothing whatever in the Act 
 itself to limit borrowing powers. If, therefore, the company has 
 express or implied power to borrow, it may from time to time 
 borrow as much as it wants, subject to any restrictions in its 
 articles. 
 
 Usually the articles authorize the directors to exercise the com- 
 pany’s borrowing powers. This authority may be given in two ways : 
 either generally by a clause empowering the directors to exercise all 
 such powers as may be exercised by the company, and are not by the 
 articles or by statute expressly directed or required to be exercised or 
 done by the company in general meeting (see Clause 71 of Table A.), 
 or by a special clause empowering the directors to borrow or raise 
 money ; but it is not uncommon to provide that the directors shall not 
 borrow more than a specified sum without the sanction of a general 
 meeting. In considering the powers of the directors to borrow, it is 
 not, therefore, necessary to find an express power to borrow ; it is 
 sufficient if the company has power, and the articles contain a clause 
 like Clause 71 of Table A., vesting in the directors the general powers 
 of the company. See Patent File Co., L. R. 6 Ch. 83 ; and Anglo- 
 Danubian Co., 20 Eq. 339, supra. 
 
 Security. 
 
 Where a company has power to borrow, it has, as incidental thereto, 
 power to secure the repayment of borrowed money by mortgage or 
 charge of all or any of its property, real or personal, present or future. 
 Australian , Sfc. Co. v. Mounsey, 4 K. & J. 733 ; Bryon v. Metropolitan, 
 Sfc. Co., supra ; Patent File Co., L. R. 6 Ch. 83. 
 
 Power to Mortgage uncalled Capital. 
 
 At one time it was thought that this did not include a right to 
 mortgage or charge uncalled capital ( Stanley's case, 4 D. J. & S. 407) ; 
 but in 1875, Jessel, M. R., decided that a mortgage of uncalled capital 
 
MORTGAGING UNCALLED CAPITAL. Ch. XXXI. 
 
 271 
 
 was allowable where the company’s articles of association gave the 
 power, and there was nothing in the memorandum of association to 
 the contrary ( Re Phoenix Bessemer Co., 44 L. J. Ch. 683 ; 32 L. T. 
 854) ; and accordingly, in the first edition of the author’s work on 
 Company Precedents, published in 1877, and in all subsequent editions, 
 the author, after referring to this decision, gave forms of debentures 
 charging the company’s undertaking and its uncalled capital for the 
 time being. Doubts having been raised as to the validity of such 
 a mortgage, the matter was considered in the Court of Appeal in Be 
 Pyle Works, 44 Ch. D. 534, and it was held that Re Phoenix Bessemer 
 Co. was well decided. Subsequently the same question came before 
 the Judicial Committee of the Privy Council, and it was again held 
 that if there is power in the memorandum, or power in the articles 
 and nothing in the memorandum to the contrary, uncalled capital can 
 be effectually charged. Newton v. The Debenture Holders of Anglo- 
 Australian, 8fc. Co., (1895) A. C. 244. But “if the memorandum, 
 when authorizing certain charges, has omitted to authorize a charge on 
 uncalled capital, the omission may imply a prohibition.” Per Lord 
 Macnaghten, S. C., p. 249. 
 
 And it is not essential that such a power to mortgage uncalled 
 capital or future calls should be given in terms by the articles ; some- 
 thing less may be sufficient ; thus a power in the memorandum to 
 mortgage the property and rights of the company is sufficient. Howard 
 v. Patent Ivory Co., 38 Ch. D. 156. So, too, a power to mortgage the 
 company’s “assets” appears to be sufficient ( Page v. International , Sfc. 
 Co., 68 Law Times, 435); or to raise money “in various modes,” or 
 “ in such other manner as the company may determine” ( Jackson v. 
 Rainford, (1896) 2 Ch. 340); or to raise money on “any security of 
 the company.” Newton v. Debenture Holders of Anglo- Australian, Sfc. 
 Co., supra. But a power to borrow on Ike property of the company 
 will not authorize a charge on the company’s uncalled capital, for 
 uncalled capital is only “property” potentially, that is to say, when 
 called up ( Irvine v. Union Bank of Australia, 2 App. Cas. 366) ; and 
 even the words “property both present and future” are insufficient. 
 Streatham Estates Co., (1897) 1 Ch. 15 ; In re Russian Spratts, Limited , 
 78 L. T. 480. 
 
 Can capital which, under sect. 58 or 59 of the Act of 1908 (sub- 
 stituted for sect. 5 of the Act of 1879), is “ not capable of being called 
 up except in the event and for the purposes of the company being- 
 wound up,” be charged by the company under a power in its 
 memorandum or articles to charge its uncalled capital ? 
 
 The Court of Appeal has answered this question in the negative. 
 Bartlett v. Mayfair Property Co., (1898) 2 Ch. 28. Bindley, L. J., 
 in his judgment in that case, said it was plain that sect. 5 of the 
 
 Validity 
 
 established. 
 
 What words 
 sufficient to 
 allow. 
 
 Such power 
 may also be 
 implied in 
 the memo- 
 randum . 
 
 As to mort- 
 gaging 
 reserve 
 capital. 
 
272 
 
 BORROWING POWERS. 
 
 Act (of 1879, now sect. 59) was framed, inter alia , “to preserve for 
 the general creditors of the company” the reserve capital, and the 
 learned judge considered that any mortgage of such reserve capital 
 would defeat this obj ect, and that to apply any part of the reserve 
 capital to paying off such a mortgage ‘ ‘ is not to apply the reserve 
 capital for the purposes of the company being wound up within the 
 true meaning of that expression as used in sect. 5, but to prevent 
 such application.” 
 
 But do the words of the Act justify the conclusion thus arrived at, 
 for it is only from the words it has used that the intention of Parlia- 
 ment can be gathered. “ I can only find the true intent and meaning 
 of the Act from the Act itself.” Per Lord Halsbury, L. C., Salomon 
 v. Salomon Sf Co ., (1897) A. C. 22,* infra , Chapter XXXVI. Now, 
 looking to the words of the Act, it is to be observed that, whilst the 
 company is prohibited from calling up the reserved capital, there are 
 no words prohibiting a mortgage or charge thereof. 
 
 If it had been intended by the legislature to prohibit any mortgage 
 or charge, it would have been easy to say so ; but the Act observes a 
 significant silence. Why, then, depart from the well-settled rule of 
 construction ( Powell v. Main Colliery Co., (1900) A. C. 366), by 
 reading into the enactment words not contained in it, and thus deprive 
 a company of the power of utilizing its reserve capital in times of 
 special pressure ? Take, for instance, the case of a bank with reserve 
 capital, and suppose some sudden financial pressure caused by a money 
 crisis or panic. Is the bank deprived by the Act of the power to 
 obtain temporarily, on the security of its reserve capital, funds suffi- 
 cient to enable it to tide over the crisis, or must it succumb simply 
 because, with ample resources, it cannot at the critical moment make 
 use of them ? Such a conclusion would be most unfortunate. 
 
 Lindley, L. J., bases his judgment to a great extent on the fact that 
 reserve capital, created upon the re-registration under the Act of an 
 unlimited company, represents a liability which, before such re-regis- 
 tration, could not have been mortgaged, and from this he infers that, 
 in the absence of express authority in the Act to mortgage, it cannot 
 have been intended to remove this disability ; but surely the answer 
 is that the Act renders the reserve capital part of the capital of the 
 company, though it is to remain uncalled ; that uncalled capital is 
 prima facie capable of being mortgaged ; that this had been decided 
 
 * “We must construe the statute by what appears to have been the intention of 
 the legislature. But we must ascertain that intention from the words of the 
 statute, and not from any general inferences to be drawn from the nature of the 
 objects dealt with by the statute.” Per Lord Brougham, L. C., Fordyce v. Bridges ,. 
 1 H. L. C. 4. 
 
PROPERTY SITUATE ABROAD. 
 
 Ch. XXXI. 
 
 2 
 
 (see supra, p. 271) in 1875; that the legislature must be taken to 
 have known the law, and to have intended the logical consequences of 
 its enactment, save so far as a contrary intention is expressed ; and 
 that it must be taken, therefore, to have known that the reserve 
 capital would primd facie be capable of being mortgaged, and yet it 
 only thought fit to provide that it should not be called up. The 
 learned judge referred to Hey don's case, 3 Co. 7 ; but the cardinal rule 
 of interpretation laid down in that case is that the Court is to consider 
 what remedy Parliament has appointed, and the decisions in Salomon 
 v. Salomon Sf Co., (1897) A. C. 22, and Wright v. Horton, 12 App. Cas. 
 371, show clearly that it is not for the Court to supplement the 
 remedy so appointed. 
 
 As to the argument that the payment of secured creditors is not one 
 of “the purposes of the winding-up,” this, it is submitted, is 
 unsound. The payment off of secured creditors was clearly one of the 
 purposes of a winding-up under the Act of 1862, and is not less clearly 
 one of the purposes of a winding-up under the Act of 1908. A secured 
 creditor can petition for a winding-up ( Western of Canada Co., 17 
 Eq. 1 ; Moor v. Anglo- Italian Bank, 10 C. D. 689 ; Borough of Ports- 
 mouth Tramways, (1892) 2 Ch. 362), and can apply in a winding-up 
 to have his security realized ( Marine Mansions Co., 4 Eq. 601 ; Fowler 
 v. Broads Patent, Sfc. Co., (1893) 1 Ch. 724), and he can prove in a 
 winding-up, although, if the company be insolvent, he must, if he 
 proves, either value his security or give it up. Lastly, there are the 
 remarks of Lord Macnaghten in Newton v. Anglo- Australian, fyc. Co., 
 (1895) A. C. 244, at p. 250. The decision in that case supports the 
 view that to prohibit the calling up of capital does not impliedly 
 prohibit a mortgage thereof. No doubt what the Court had to 
 construe in the case last mentioned were articles of association, not 
 an Act of Parliament ; but the same principles of interpretation apply 
 to both. Gray v. Pearson, 6 H. L. C. 106. Upon the whole it is 
 submitted that there is nothing in the Act of 1879 sufficient to show 
 that it was intended to negative the company’s power to mortgage or 
 charge the reserve capital. 
 
 Property situate Abroad. 
 
 When the company desirous of borrowing holds property abroad, as 
 is very commonly the case, it may have to consider how such property 
 can best be made available as security. The leading principle to be 
 borne in mind with regard to this is that immoveable property is 
 governed by the lex loci rei sites, and therefore to perfect the title of the 
 mortgagee or chargee upon property situate abroad the local law must 
 be complied with. Unless it is, the title of the mortgagee or chargee 
 may be intercepted by a local mortgage charge, lien, or execution. It 
 would be impossible here to detail the various peculiar conditions of the 
 
 P. 18 
 
274 
 
 BORROWING POWERS. 
 
 Mortgage 
 
 foreign 
 
 property. 
 
 How money 
 raised. 
 
 lex loci in different countries : sometimes the local law does not permit 
 land to be vested in aliens, or in a foreign corporation ; sometimes it 
 does not recognize trusts or a floating charge ; sometimes it does not 
 allow concessions to be charged or chattels to be mortgaged unless 
 possession is at once taken by the mortgagee. In cases like these the 
 company should perfect as far as possible the security it offers according 
 to the requirements of the local law. If it is unable to do this it may 
 yet through its articles give constructive notice to all persons dealing 
 with it of the charge, and so disentitle them to ignore it. Even without 
 complying with the formalities required by the local law in relation to 
 mortgages or transfers, it is still competent to a company to create an 
 effective charge on property belonging to it in a foreign country ; for 
 the Court, sitting in Chancery in virtue of its jurisdiction in personam , 
 enforces equities in regard to foreign land where the mortgagor 
 company is within the jurisdiction ( Penn v. Lord Baltimore , 1 Yes. Sen. 
 444 ; W. & T. L. C., 7th ed., 755 ; Cranstown v. Johnston , 3 Yes. 170 ; 
 Mercantile, Sfc. Co. v. River Plate, Sfc. Co., (1892) 2 Ch. 303 ; Westlake, 
 I. L. (1912), p. 230 ; Duder v. Amsterdamsch Trustees Kantoor, 
 (1902) 2 Ch. 132; British South Africa Co. v. De Beers, (1910) 1 Ch. 
 354 ; (1910) 2 Ch. 502) ; and in determining whether there is an 
 equity the Court regards English, not foreign, law, and if according to 
 English law there is an equity, e.g., if for valuable consideration a 
 company agrees to give a charge on foreign property, the Court will 
 enforce it, although the equity may be one not recognized by the lex 
 loci rei sitae {Ex parte Pollard , 4 Deac. 27 ; Coote v. Jecks, 13 Eq. 597 ; 
 Hicks v. Powell , L. B. 4 Ch. 741 ; Ex parte Holthausen, L. B. 9 Ch. 
 722) ; but — and this is the danger of the situation — it will only enforce 
 it subject to any rights which may in the meanwhile have been 
 rightfully acquired under the local law of the foreign country. This is 
 illustrated in Maudsley v. Maudsley, Sons and Field, (1900) 1 Ch. 602. 
 There the debenture holders of an English company had a floating 
 charge on its assets which included a French debt due to the company. 
 A creditor of the company in France attached this debt by legal process 
 in France, and the Court in England held that the title of the French 
 creditor must prevail against a receiver for the debenture holders 
 subsequently appointed. See further Company Precedents, Part III., 
 pp. 74 et seq. 
 
 Mode of Borrowing. 
 
 A company which has power to borrow may borrow in such manner 
 as it thinks fit. It can therefore raise money on a legal mortgage of 
 any specific portions of its property, or by equitable mortgage, e.g., 
 deposit of title deeds, or by a floating charge on the whole undertaking 
 of the company (see further, infra, pp. 308 et seq.), or by bonds, or by 
 promissory notes, or by debentures or debenture stock. See as to 
 these, infra, p. 283 et seq. Overdrawing the company’s banking 
 
ULTRA VIRES BORROWING. 
 
 Ch. XXXI. 
 
 275 
 
 account is borrowing. Cunliffe , Brooks 8f Co. v. Blackburn Benefit 
 Society , 9 App. Cas. 865. 
 
 Ultra vires Borrowing. 
 
 Where a company has no borrowing power or where the memo- 
 randum of association fixes a limit to the borrowing powers of the 
 company — a very rare thing — any borrowing in the one case and any 
 borrowing in excess of such limit in the other case is ultra vires the 
 company, and securities given for the same are inoperative. In such 
 cases the contract is not merely voidable, it is absolutely void and 
 incapable of ratification, even if every member of the company 
 purports to ratify the same ; nor can the company make good an 
 ultra vires borrowing by obtaining enlarged powers of borrowing 
 under sect. 9 of the Act. 
 
 So, too, if the company has unlimited powers of borrowing, but the 
 directors, having only limited powers, exceed them. In such a case the 
 borrowing, being ultra vires the directors, is irregular and the securities 
 are inoperative, unless the company is estopped from alleging their 
 invalidity under the rule in Royal British Bank v. Turquand , p. 44 ; 
 or unless the shareholders elect, as they may do, to ratify the 
 directors’ act. Irvine v. Union Bank of Australia , 2 App. Cas. 366. 
 
 Where there is an ultra vires borrowing, the lender has no right of 
 action in respect of the loan against the company itself, but he has 
 certain rights in respect of the moneys received by the company under 
 the transaction. He has, that is to say, if he intervenes before the 
 money has been spent, a right to follow his money and to obtain 
 an injunction restraining the company from parting with it. And 
 even if the company has spent it he may be entitled, if it has 
 been applied in paying off just debts owing to creditors of the 
 company, to stand in the place of and to be subrogated to the rights 
 of such creditors as simple contract creditors ( Blackburn Building 
 Society v. Cunliffe Brooks, 22 Ch. D. 61 ; 9 App. Cas. 857 ; In re 
 Cork and Youghal Rail. Co., L. R. 4 Ch. 748 ; In re German Mininy 
 Co., 4 D. M. & Gr. 56; Baroness Wenlock v River Dee (No. 2), 19 
 Q,. B. D. 155 ; Neath Building Society v. Luce, 43 C. D. 158 ; Re Harris 
 Calculating Machine Co., (1914) 1 Ch. 920; and Sinclair v. Brougham , 
 (1914) A. C 398) ; but not to any securities for their debts held by such 
 creditors. Re Wrexham, Mold and Connah's Quay Rail. Co., (1899) 
 1 Ch. 440 (C. A.). As to the rights of a depositor in a bank, where the 
 whole banking business was ultra vires , as against the shareholders 
 see Sinclair v. Brougham (Birkbeck Building Society ), (1914) A. C. 398, 
 where it was held that the surplus assets after payment of valid debts 
 must be distributed pari passu among the depositors and the share- 
 holders in proportion to the amounts paid or subscribed by them. 
 
 18 ( 2 ) 
 
 Borrowing 
 ultra vires the 
 company. 
 
 Ultra vires 
 the directors. 
 
 Ultra vires 
 
 borrowing 
 rights of 
 lenders. 
 
 Subrogations. 
 
276 
 
 BORROWING POWERS. 
 
 Personal 
 liability of 
 directors. 
 
 Constructive 
 
 notice. 
 
 Sect. 100. 
 
 Where several companies — each of which had power to borrow but 
 no power to borrow jointly — borrowed jointly on debentures, each 
 company was held chargeable for what it received. Johnston Foreign 
 Patents, (1904) 2 Ch. 234. 
 
 Nor is this all. The lender of ultra vires borrowed money has in 
 some cases a right against the directors of the borrowing company 
 personally for breach by them of their implied warranty of authority 
 ( Firbank v. Humphreys , 18 Q. B. D. 54 ; Weeks v. Propert (1873), 
 L. R. 8 C. P. 427 ; Chapleo v. Brunswick, Sfc. Society, 6 Q,. B. D. 696) 
 and it makes no difference as to the liability of the directors in such a 
 case that they did not know that they were exceeding their powers. 
 W eeks v. Propert, supra. 
 
 Constructive Notice of Borrowing* Limit. 
 
 As to how far a person lending to a company is bound to see that 
 the internal regulations as to borrowing have been observed, see 
 Royal British Bank v. Turquand , 5 El. & Bl. 248 ; 6 El. & Bl. 327 ; 
 Chapleo v. Brunswick Building Society, 6 Q,. B. D. 715 ; Howard v. 
 Patent Ivory Co. (1888), 38 C. D. 156; Irvine v. Union Bank of 
 Australia, 2 App. Cas. 366 ; and Bryant v. La Banquedu Peuple, (1893) 
 A. C. 170, and supra , p. 44. 
 
 But the benefit of the rule is reserved for persons dealing with a 
 company in honest ignorance of the irregularity. A lender with 
 notice of the irregularity cannot claim the protection of the rule. 
 Thus where directors had only power to borrow in excess of 1,000/. 
 with the assent of a general meeting, and without having obtained 
 such assent had issued debentures for 2,500/. to themselves in respect 
 of money lent to the company, it was held that, as they must be taken 
 to have known that the internal regulations had not been complied 
 with, the debentures could only stand good for 1,000/. Howard Patent 
 Ivory Co., 38 C. D. 156; Tyne Mutual v. Brown, 74 L. T. 283. And 
 the mere fact that the directors propose to do something in excess of 
 their powers under the articles will not entitle a person dealing with 
 them to assume that their powers have been extended by a special 
 resolution, for such a resolution requires registration, fie must take the 
 articles to be such as appear at the office of the Registrar of Companies 
 to be in force. Irvine v. Union Bank of Australia , 2 App. Cas. 366. 
 
 Registration of Mortgages and Charges. 
 
 This is dealt with by two sections, sect. 100 and sect. 93. 
 
 Registration under Sect. 100. 
 
 Substituted for sect. 43 of the Act of 1862. 
 
 This section requires every limited company to keep a register 
 of all mortgages and charges specifically affecting property of the 
 company, and enter in it a short description of the property mortgaged 
 
REGISTRATION UNDER SECT. 93. Ch. XXXI. 
 
 277 
 
 or charged, the amount of the mortgage or charge, and the names of 
 the persons entitled to it. 
 
 Non -registration under this section does not affect the validity of the 
 charge, even though the person entitled to it is a debenture holder. The 
 sole penalty is the statutory fine of 50/., and that only when the 
 omission to register is wilful. Re General South American Co ., 2 C. D. 
 337 ; Wright v. Horton (1887), 12 App. Cas. 371. 
 
 The defect of sect. 43 was that under it inspection of the register 
 was only given to any “ creditor or member of the company,” not to a 
 person who might contemplate dealing with the company and would 
 naturally wish to know the financial position of the company. But 
 sect. 101 of the Act of 1908 now opens the register to the public on 
 payment of a fee not exceeding Is., and the section below mentioned 
 ensures a still greater measure of disclosure. 
 
 Registration under Sect. 93 of the Companies Act, 1908. 
 
 Sect. 93 of the Act (which takes the place of sect. 14 of the Act of 
 1900 and sect. 10 of the Act of 1907) provides for the registration in 
 a public register at Somerset House of a company’s mortgages and 
 charges, and avoids, as against creditors and liquidators, mortgages 
 and charges not duly registered within twenty-one days after their 
 creation. The section runs as follows : — 
 
 93. — (1) Every mortgage or charge created after the first day of 
 July nineteen hundred and eight by a company registered in England 
 or Ireland and being either — 
 
 (a) a mortgage or charge for the purpose of securing any issue of 
 
 debentures [or debenture stock] ; or 
 
 (b) a mortgage or charge on uncalled share capital of the company ; or 
 
 (c) a mortgage or charge created or evidenced by an instrument 
 
 which, if executed by an individual, would require registra- 
 tion as a bill of sale ; or 
 
 (d) a mortgage or charge on any land, wherever situate, or any 
 
 interest therein ; or 
 
 (e) a mortgage or charge on any book debts of the company ; or 
 
 (f) a floating charge on the undertaking or property of the 
 
 company, 
 
 shall, so far as any security on the company’s property or undertaking 
 is thereby conferred, be void against the liquidator and any creditor of 
 the company, unless the prescribed particulars of the mortgage or 
 charge, together with the instrument (if any) by which the mortgage 
 or charge is created or evidenced, are delivered to or received by the 
 registrar of companies for registration in manner required by this Act 
 within twenty-one days after the date of its creation, but without 
 prejudice to any contract or obligation for repayment of the money 
 thereby secured, and when a mortgage or charge becomes void under 
 
278 
 
 BORROWING POWERS. 
 
 this section the money secured thereby shall immediately become 
 payable : 
 
 Provided that — 
 
 (i) in the case of a mortgage or charge created out of the United 
 
 Kingdom comprising solely property situate outside the 
 United Kingdom, the delivery to and the receipt by the 
 registrar of a copy of the instrument by which the 
 mortgage or charge is created or evidenced, verified in 
 the prescribed manner, shall have the same effect for the 
 purposes of this section as the delivery and receipt of the 
 instrument itself, and twenty-one days after the date on 
 which the instrument or copy could, in due course of post, 
 and if despatched with due diligence, have been received 
 in the United Kingdom, shall be substituted for twenty- 
 one days after the date of the creation of the mortgage or 
 charge, as the time within which the particulars and instru- 
 ment or copy are to be delivered to the registrar ; and 
 
 (ii) where the mortgage or charge is created in the United 
 
 Kingdom but comprises property outside the United 
 Kingdom, the instrument creating or purporting to create 
 the mortgage or charge may be sent for registration not- 
 withstanding that further proceedings may be necessary to 
 make the mortgage or charge valid or effectual according 
 to the law of the country in which the property is situate ; 
 and 
 
 (iii) where a negotiable instrument has been given to secure the 
 
 payment of any book debts of a company, the deposit of 
 the instrument for the purpose of securing an advance to 
 the company shall not for the purposes of this section be 
 treated as a mortgage or charge on those book debts ; and 
 
 (iv) the holding of debentures entitling the holder to a charge on 
 
 land shall not for the purposes of this section be deemed 
 to be an interest in land. 
 
 (2) The registrar shall keep, with respect to each company, a 
 register in the prescribed form of all the mortgages and charges 
 created by the company after the first day of July nineteen hundred 
 and eight and requiring registration under this section, and shall, on 
 payment of the prescribed fee, enter in the register, with respect to 
 every such mortgage or charge, the date of creation, the amount 
 secured by it, short particulars of the property mortgaged or charged, 
 and the names of the mortgagees or persons entitled to the charge. 
 
 (3) Where a series of debentures containing, or giving by reference 
 to any other instrument, any charge to the benefit of which the 
 debenture holders of that series are entitled pari passu is created by a 
 company, it shall be sufiicient if there are delivered to or received by 
 
REGISTRATION UNDER SECT. 93. Ch. XXXI. 
 
 279 
 
 the registrar within twenty-one days after the execution of the deed 
 containing the charge or, if there is no such deed, after the execution 
 of any debentures of the series the following particulars : — 
 
 (a) the total amount secured by the whole series ; and 
 
 (b) the dates of the resolutions authorizing the issue of the series 
 
 and the date of the covering deed, if any, by which the 
 security is created or defined ; and 
 
 (c) a general description of the property charged ; and 
 
 (d) the names of the trustees, if any, for the debenture holders ; 
 together with the deed containing the charge, or, if there is no such 
 deed, one of the debentures of the series, and the registrar shall, on 
 payment of the prescribed fee, enter those particulars in the register : 
 
 Provided that, where more than one issue is made of debentures in 
 the series, there shall be sent to the registrar for entry in the register 
 particulars of the date and amount of each issue, but an omission to 
 do this shall not affect the validity of the debentures issued. 
 
 (4) Where any commission, allowance, or discount has been paid or 
 made either directly or indirectly by the company to any person in 
 consideration of his subscribing or agreeing to subscribe, whether 
 absolutely or conditionally, for any debentures of the company, or 
 procuring or agreeing to procure subscriptions, whether absolute or 
 conditional, for any such debentures, the particulars required to be 
 sent for registration under this section shall include particulars as to 
 the amount or rate per cent, of the commission, discount, or allowance 
 so paid or made, but an omission to do this shall not affect the validity 
 of the debentures issued : 
 
 Provided that the deposit of any debentures as security for any debt 
 of the company shall not for the purposes of this provision be treated 
 as the issue of the debentures at a discount. 
 
 (5) The registrar shall give a certificate under his hand of the 
 registration of any mortgage or charge registered in pursuance of this 
 section, stating the amount thereby secured, and the certificate shall 
 be conclusive evidence that the requirements of this section as to 
 registration have been complied with. 
 
 (6) The company shall cause a copy of every certificate of regis- 
 tration given under this section to be endorsed on every debenture or 
 certificate of debenture stock which is issued by the company, and the 
 payment of which is secured by the mortgage or charge so registered : 
 
 (See Yolland, Husson and Birkelt , (1908) 1 Ch. 152, and Cunard 
 Steamship Co ., (1908) 2 Ch. 564.) 
 
 Provided that nothing in this sub-section shall be construed as 
 requiring a company to cause a certificate of registration of any 
 mortgage or charge so given to be endorsed on any debenture or 
 certificate of debenture stock which has been issued by the company 
 before the mortgage or charge was created. 
 
BORROWING POWERS. 
 
 28U 
 
 (7) It shall be the duty of the company to send to the registrar for 
 registration the particulars of every mortgage or charge created by 
 the company and of the issues of debentures of a series, requiring 
 registration under this section, but registration of any such mortgage 
 or charge may be effected on the application of any person interested 
 therein. 
 
 Where the registration is effected on the application of some person 
 other than the company, that person shall be entitled to recover from 
 the company the amount of any fees properly paid by him to the 
 registrar on the registration. 
 
 (8) The register kept in pursuance of this section shall be open to 
 inspection by any person on payment of the prescribed fee, not 
 exceeding one shilling for each inspection. 
 
 (9) Every company shall cause a copy of every instrument creating 
 ai^ mortgage or charge requiring registration under this section to 
 be kept at the registered office of the company : Provided that, in the 
 case of a series of uniform debentures, a copy of one such debenture 
 shall be sufficient. 
 
 With reference to this section the following observations occur — 
 
 (1) A mortgage or charge is “created ” when the deed or agree- 
 
 ment is executed or entered into, even though the advance 
 is made subsequently. Watson & Co. v. Spiral Globe Co , 
 (1902) 2 Ch. 209; Re Harrogate Estates , Ltd., (^1903) 1 Ch. 
 498; Appleyard v. New London and Suburban Co., (1908) 
 1 Ch. 621 ; Esberger & Son, Ltd. v. Capital and Counties 
 Bank, (1913) 2 Ch. 366. 
 
 (2) Paragraphs (d) and (e) of sub-sect. (1) are new: they were 
 
 first introduced in sect. 10 of the Act of 1907. 
 
 (3) The word “charge” includes an equitable charge whether 
 
 created or evidenced by deed or instrument in writing or 
 created by oral communication, express or implied, e.g ., by 
 deposit of title deeds or by an agreement to deposit. 
 
 (4) The mortgage or charge is void as against the liquidator and 
 
 creditors only. It is good as against the company, and the 
 company may give a subsequent valid mortgage to secure 
 the same debt. But if a subsequent creditor, even with 
 notice of the first charge, takes a registered charge before 
 the first charge is registered, he obtains priority. Re 
 Monolithic Co., (1915) 1 Ch. 643. 
 
 (5) “Book debts” are debts entered, or commonly entered, in 
 
 books. See Shipley v. Marshall, 14 C. B. N. S. 566; 
 Tailby v. Official Receiver, 13 App. Cas. 523; Dawson v. 
 Isle, (1906) 1 Ch. 633; Law Car, fyc. Corporation, W. N. 
 (1911) 91. Any assignment of a book debt is within the 
 section if it is intended to be a security for a debt. Saunder - 
 
REGISTRATION UNDER SECT. 93. Ch, XXXI. 
 
 281 
 
 son & Co. v. Clark (1912), 29 T. L. H. 579; and see Laden- 
 burg & Co. v. Goodwin , Ferreira & Co., (1912) 3 K. B. 275. 
 
 (6) As to sub-sect. (3), this provides for an alternative mode of 
 
 registration ( Harrogate Estates Co., (1903) 1 Oh. 498), and 
 it is applicable both to debentures and debenture stock. 
 Cunard Steamship Co. v. Hop wood, (1908) 2 Ch. 564. 
 
 (7) A mortgage of substituted property made pursuant to the pro- 
 
 visions of an unregistered trust deed requires registration 
 ( Cornbrookv . Law Debenture Corporation, (1904) 1 Oh. 103), 
 unless the company is not a party ( Bristol United Breweries 
 v. Abbott, (1908) 1 Ch. 279), pr unless the debentures or 
 debenture stock have been registered under sub-sect. (3). 
 See Cunard Steamship Co. v. Hopivood, (1908) 2 Ch. 564. 
 As to a separate charge on profits, securing a bonus to 
 debenture holders, see Hoare v. British Columbia Associa- 
 tion, (1912) W. N. 235 ; 107 L. T. 602. 
 
 The section only applies to the specified classes of mortgages and 
 charges. A simple mortgage or charge not for the purpose of securing 
 an issue of debentures or debenture stock, and not within paragraphs (b), 
 (c), (d) or (e) of sub-sect. 1, is not within the section: e.g., a mortgage 
 or charge on a concession, patent, or copyright, or a mortgage by 
 deposit of dock warrants, bills of exchange, or other mercantile 
 documents. 
 
 As to what is a bill of sale, see s. 4 of the Bills of Sale Act, 1878. 
 A pledge of goods accompanied by delivery of possession to the 
 pledgee is not a bill of sale ( Ex parte Hubbard, (1896) 17 Q. B. D. 
 690), nor is an oral agreement giving security followed by possession 
 ( Charlesworth v. Mills, (1892) A. C. 231 ; Ramsay v. Margrett, (1894) 
 2 Q. B. 18); no? prim, a facie are inventories of goods with receipt 
 attached ( Ramsay v. Margrett, supra) ; nor sale and hiring agreements. 
 North Central Waggon Co. v. Manchester Rail. Co., 13 App. Cas. 554. 
 See further Company Precedents, Part I., pp. 616 et seq. 
 
 As to paragraph (f), “floating charge,” see infra, pp. 308 et seq. 
 
 If the security is under the section avoided, the obligation of the 
 company to repay the money lent remains as an unsecured liability, and 
 matures at once. See sect. 93 (1). 
 
 The section does not apply to a charge given for the purpose of 
 obtaining any loan guaranted by the Government in pursuance of any 
 war obligation. 5 Geo. V. c. 11. 
 
 By sect. 96 of the Act provision is made for rectification of the 
 register by a Judge of the High Court on being satisfied that the 
 omission to register a mortgage or charge within the time required by 
 the Act, or that the omission or misstatement of any particular with 
 respect to such mortgage or charge “ was accidental or due to inad- 
 
282 
 
 BORROWING POWERS. 
 
 vertence or to some other sufficient cause, or is not of a nature to 
 prejudice the position of creditors or shareholders of the company, 
 or that, on other grounds, it is just and equitable to grant relief,” 
 may extend the time for registration on such terms and conditions as 
 seem to the judge just and expedient. The words here, “accidental 
 or due to inadvertence,” have a very wide meaning. Re Jackson 8f 
 Co ., (1899) 1 Ch. 348. In exercising this discretionary power of 
 granting relief on terms, it has become the practice to insert in the 
 order the following words : — “This order to be without prejudice to 
 the rights of parties acquired prior to the time when such debentures 
 shall be actually registered.” Re Joplin Brewery Co ., (1902) 1 Ch. 
 79; Re Spiral Globe Co., (1902) 1 Ch. 396; Re Abrahams Sf Sons, 
 (1902) 1 Ch. 695 ; Ehrmann Bros., (1906) 2 Ch. 697 ; Cardiff Work- 
 men’s Cottage Co., (1906) 2 Ch. 627. 
 
 The words probably go further than they should. The proviso, as 
 the Court of Appeal explained in Re Ehrmann Bros., Ltd. {supra), is 
 merely designed to protect rights acquired against the property of the 
 company in the interval between the expiration of the twenty-one 
 days for registering and the extended time allowed by the order. It 
 does not protect the existing unsecured creditors who have not obtained 
 any security or charge upon the property subject to the debentures. See 
 I. C. Johnson &f Co., (1902) 2 Ch. 101 (C. A.), and pp. 199—201 of 
 Part III. of Company Precedents. It does protect a secured creditor 
 whose security is registered between the expiration of the twenty-one 
 days and the extended time allowed by the order, even though he has 
 notice of the prior unregistered charge. Re Monolithic Co., (1915) 
 1 Ch. 643. Where an order extending the time is made, and these 
 words appear in it, and before actual registration a winding-up com- 
 mences, the mortgage or charge, if subsequently registered, is not 
 effective as against the general body of the creditors. So held by 
 Buckley, J., in Anglo- Continental Carpet Co., (1903) 1 Ch. 914. 
 
 An order for extension will not be made after a winding-up com- 
 mences. Re Abrahams & Sons, supra. 
 
 Sometimes, in cases where an extension of time is not obtainable, 
 the company, in lieu thereof, may call in and cancel the debentures 
 and issue new debentures, to be registered in due course. Bowen v. 
 Defries Co., (1904) 1 Ch. 37. 
 
 Sect. 97 provides for entering satisfaction, sect. 98 for an index to 
 the register, and sect. 99 for penalties for default in complying with 
 the Act as to registration. 
 
 The Court has power to extend the time even where the default was 
 made before 1st January, 1909. Sect. 38 of the Interpretation Act, 
 1889; Herts and Essex Waterworks Co., (1909) W. N. 48 ; Re Lush & 
 Co., (1913) W. N. 39 ; 108 L. T. 450. 
 
Ch. XXXII. 
 
 283 
 
 CHAPTER XXXII. 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Meaning* of “Debenture.” 
 
 The term debenture is not a technical term. “ I cannot find,” said What is a 
 Chitty, J., in Levy v. Abercorris Co. (1888), 37 Ch. D. 264, “any debentures 
 precise legal definition of the term. It is not either in law or com- 
 merce a strictly technical term, or what is called a term of art.” It is, 
 however, a word which has been in use for many centuries, and is 
 mentioned in the Parliament Rolls as early as the time of Henry Y., 
 
 1414. The term is used also in the Paston Letters, 1455, and in 12 & 
 
 13 Edward IV., 1472, provision was made in regard to debentures 
 under the seal of the staple of Calais. From thenceforth, the term 
 appears from time to time in the statutes. It is a very wide term, 
 but it is now generally used to signify a security for money, called 
 on the face of it a debenture, and providing for the payment of 
 a specified sum — say 100/. — at a fixed date, with interest meantime 
 half-yearly. It usually gives a charge by way of security, and in 
 most cases is expressed to be one of a series of like debentures. 
 
 But the term, as used in common parlance, is of an extremely elastic 
 character : for (a) it is sometimes used, both by lawyers and com- 
 mercial men, to describe an instrument which is not called, on the face 
 of it, a debenture, e.y., a railway mortgage or bond. See Gardner v. 
 
 London , Chatham and Dover Rail ., 2 Ch. 201. (b) It is used of an 
 
 instrument which is not one of a series. Levy v. Abercorris Co. } supra. 
 
 “ You may have a single debenture issued to one man.” Robson v. 
 
 Smith , (1895) 2 Ch. 118. (c) It is not confined to instruments issued 
 
 by companies; clubs sometimes issue debentures, and, occasionally, 
 individuals, e.y., the Tichborne Bonds, (d) It is not the less a deben- 
 ture because it is not under seal. British India , <8fc. Co. v. Commis- 
 sioners , 7 Q. B. D. 165, in which case a debenture was merely signed by 
 two directors, (e) Or because it does not provide for payment at any 
 fixed date, but only in the event of winding-up, or in some contin- 
 gency. (f ) Or because there is no personal liability on the company to 
 pay, but the security is to be as against the property of the company 
 only. (g) Or because it does not contain any charge. The term 
 
284 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 debenture is used in several Acts of Parliament in addition to the 
 Companies Acts, e.g ., the Stamp Acts, 1870 and 1891, and the Bills of 
 Sale Act, 1882. 
 
 What is 
 debenture 
 stock F 
 
 Distinguished from “ Debenture Stock.” 
 
 Debenture stock is a much more modern term than debenture. In 
 substance the holders of debenture stock and the holders of deben- 
 tures generally stand very much in the same position. The term 
 debenture stock, in common parlance, is used to describe a debt owing 
 by the company, payable at a fixed date, or in the event of winding-up, 
 or some other contingency, and in the meantime carrying interest at a 
 specified rate, and secured usually by a trust deed on the property of 
 the company. The debt is generally made payable to trustees, and 
 the beneficial interest thereof is represented by certificates held by 
 the debenture stock holders. Sect. 92 makes provision for the prompt 
 issue of the certificates. The difference between debentures and 
 debenture stock — apart from the fractional sub-divisibility of the 
 latter — is, that “a debenture” is the description of an instrument, 
 whereas “ debenture stock ” is the description of a debt or sum 
 secured by an instrument. It is, to use Lord Lindley’s words, 
 “borrowed capital consolidated into one mass for the sake of 
 convenience.” 
 
 Classes of 
 debentures. 
 
 Classes of Debentures. 
 
 The principal kinds of debentures are the following : — 
 
 I. Debentures payable to registered holder. 
 
 II. Debentures payable to bearer simply. 
 
 III. Debentures payable to registered holder, but with interest 
 coupons payable to bearer. 
 
 IV. Debentures payable to bearer, but with power for bearer to have 
 them placed on a register and to have them at any time with- 
 drawn therefrom. 
 
 In each case the debentures are usually secured by some mortgage 
 or charge on property of the company, whether by trust deed, or in 
 the debentures themselves, or in both ways. 
 
 A debenture, though one document, consists usually of two parts, 
 (1) the body of the instrument containing the bond or covenant and 
 charge, and (2) the indorsed conditions. 
 
DEBENTURES TO REGISTERED HOLDER. Ch. XXXII. 
 
 285 
 
 Class I. — Debentures to Registered Holder. 
 
 The object of this form of debenture is to meet the requirements of 
 the money market, and to facilitate and simplify dealings. It may be 
 convenient to go through the various provisions of the usual forms, 
 and explain briefly their object and operation. 
 
 The Company , Limited. 
 
 Issue of 100,000/. of debentures of 100/. each , carrying interest 
 at 4 per cent, per annum. 
 
 No. . Debenture. 100/. 
 
 1. The Company , Limited ( hereinafter called “ the 
 
 company”), will, on the day of , or on such earlier day 
 
 as the principal moneys hereby secured become payable in accord- 
 ance with the conditions indorsed hereon , pay to A. B. of 
 
 or other the registered holder for the time being hereof, the sum 
 Of 1 100]/. 
 
 The registered debenture has many advantages : — 
 
 1. The title of the debenture holder is recorded in the books of the 
 company, and is consequently not exposed to the risks of loss or 
 damage incident to a debenture to bearer passing from hand to hand. 
 
 2. The registered holder is the only person recognized by the 
 company as entitled to the debentures. This simplifies dealings with 
 the security. 
 
 3. The company having the names and addresses of the registered 
 holders can more easily communicate with them where it wishes to do 
 so for purposes of redemption, compromise, or reconstruction. 
 
 4. The registered debenture is a species of security well understood 
 on Stock Exchanges and favoured by investors. 
 
 It will be observed that clause 1 does not express the consideration. 
 In the case of a deed there is no need to do so ; but if the instrument 
 be under hand only, then the consideration should be stated, and 
 even in the case of a debenture by deed, there is, perhaps, some 
 advantage in showing, on the face of it, that it was, in fact, issued 
 for valuable consideration. In such a case, where it is desired to be 
 more explicit, the clause can begin with the words “ For valuable 
 consideration already received,” or, if desired, 4 ‘In consideration of 
 the sum of £ already received.’’ 
 
 The clause uses the term “will pay.” This is a perfectly simple, 
 intelligible and effective expression, and it is more suitable for an 
 ordinary business document than the expression “covenants.” But 
 there is no magic in the term, and occasionally the words “undertakes,” 
 “promises,” “covenants,” or “binds itself,” are substituted. See 
 Ex parte City Bank (1867), L. R. 3 Ch. 758 ; Norton v. Florence Land 
 Co. (1877), 7 Ch. D. 332. 
 
 I. Deben- 
 tures to 
 registered 
 holder. 
 
 Form of. 
 
 Payment of 
 principal. 
 
 Consideration. 
 
 “ Will pay.’* 
 
286 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Time for 
 payment. 
 
 Why pay- 
 ment to 
 registered 
 holder ? 
 
 A debenture usually fixes a date for payment as above, e.g., at the 
 end of five, ten, twenty, or thirty years ; but sometimes it is framed as 
 a perpetual debenture, and in that case the clause runs “ will, as and 
 when the principal moneys hereby secured become payable in accord- 
 ance, &c.,” the intention being that the principal shall only become 
 payable in the events specified in the conditions 8 and 9, infra , 
 pp. 293, 294. 
 
 Occasionally, where there is a temporary loan on debentures, they 
 are made payable on demand, and then the clause runs 1 1 will, on 
 demand in writing,” or will, at the expiration of seven days after 
 demand in writing, &c.” Such debentures are often issued to a 
 company’s bankers as security for an overdraft. 
 
 The object of making the debenture payable to the registered holder 
 is to simplify the title, and enable the company to look to some specified 
 person as the holder to whom it can make payments, and whose receipt 
 will be a sufficient discharge to the company. 
 
 In the absence of provisions as to register and ancillary clauses, the 
 company would have to take notice of any number of assignments, 
 charges, and claims that might be brought to its notice. 
 
 Payment of 
 interest. 
 
 Currency of 
 interest. 
 
 How judg- 
 ment affects 
 interest. 
 
 2 . The company will , during the continuance of this security , 
 
 pay to such registered holder interest thereon at the rate of 
 
 per cent, per annum by half-yearly payments on the day 
 
 of and day of in each year, the first of such 
 
 half-yearly payments to be made on the day of next. 
 
 A debenture almost always provides for payment of interest as in 
 clause 2; but sometimes the interest is made payable quarterly. Very 
 commonly the expression used is “ will in the meantime pay,” but 
 there is some ambiguity in this expression. It may mean “ until the 
 date fixed for payment” or “ until the date of actual payment.” The 
 latter construction would seem to accord best with the intention ; and, 
 as the words are ambiguous, should be preferred. Should, however, the 
 former construction prevail, subsequent interest would only be recoverable 
 byway of damages. Goodchap v. Roberts (1880), 14 Ch. D. 49 ; Cooky. 
 Fowler (1874), L. R. 7 H. L. 27 ; Gordillo v. Weguelin, 5 C. D. 303. 
 
 Moreover, if the holder should obtain judgment on the debenture, 
 the interest would thenceforth cease to be payable under the debenture, 
 for the contract would merge in the judgment, which carries interest 
 at 4 percent, only. Re European , Sfc. Co. (1876), 4 Ch. D. 33; Ex parte 
 Fewings (1884), 25 Ch. D. 338. By using, however, the words “during 
 the continuance of this security ” both these difficulties are avoided. 
 Sometimes interest is made payable only out of profits. See Company 
 Precedents, Part III., p. 309. Fleslop v. Paraguay Central , 54 S. J. 234. 
 
DEBENTURES TO REGISTERED HOLDER. Ch. XXXII. 
 
 287 
 
 See Popple v. Sylvester (1883), 22 C. D. 98, and the observations 
 thereon in the last-mentioned case. 
 
 As to payment by uncashed cheque, see Defries Sf Sons, (1909) 2 
 Ch. 423. 
 
 3. The company hereby charges with such payments its under- 
 taking, and all its property, present and future [ including its 
 uncalled capital ]. 
 
 A mortgage debenture generally contains a charge as in clause 3. 
 Sometimes the charge, however, is effected by a trust deed (see 
 pp. 313, 314) ; but even where there is a trust deed, a general charge 
 as above is very commonly inserted in the debenture. The word 
 “charge” creates a good equitable mortgage ; but equity is not 
 particular as to the terms used, and the word “ bind ” or “ mortgage ” 
 is equally effective. So, too, if it is stated that the property shall 
 stand as a security, or shall be a security for payment, &c., that is 
 sufficient. All that equity requires is a sufficient indication of the 
 intention to charge. In re Strand Music Hall Co., 3 D. J. & S. 147 ; 
 In re New Durham Salt Co. (1891), 2 Meg. C. B. 360. 
 
 As to the operation of a charge on the “undertaking,” see infra, 
 p. 308 et seq. A general charge as given in clause 3 is, by the Courts, 
 treated as a floating security, as to which see infra, pp. 308 et seq. 
 
 Sometimes, instead of a charge in general words as above, the 
 debenture charges some specific property, e.g., the company’s brewery 
 
 at or the company’s patents, &c. Or the charge may be on some 
 
 portion only of the property, e.g., the book debts, present and future, 
 of the company. 
 
 As to the words “ including the uncalled capital.” These words are 
 very commonly inserted where the company has power to mortgage its 
 uncalled capital. See supra, p. 270. The words “property, both 
 present and future,” do not cover the uncalled capital. Johnson v. 
 Russian Spratts, (1898) 2 Ch. 149. 
 
 The inclusion of uncalled capital adds additional security, and. at 
 the same time, does not prevent the company from calling up and dealing 
 with its capital as and when required. 
 
 4. This debenture is issued subject to, and with the benefit of, 
 the conditions indorsed hereon, ivhich are to be deemed part of it. 
 
 The effect of these words in clause 4 is to import the indorsed con- 
 ditions into the contract, and make them part of it. The rule “ verba 
 relata inesse videntur ” applies. See Broom’s Legal Maxims. 
 
 Sometimes the above clause is omitted and the conditions are set 
 out on the face of the debenture. This is an alteration merely in form, 
 not in substance. As to the conditions themselves, see infra , p. 288. 
 
 Charge. 
 
 Charge in 
 trust deed. 
 
 Floating 
 
 security. 
 
 Charge on 
 
 specific 
 
 property. 
 
 Uncalled 
 
 capital. 
 
 Reference to 
 
 indorsed 
 
 conditions. 
 
 Are part of 
 debenture. 
 
288 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Sealing. 
 
 Not always 
 necessary. 
 
 “ Pari pas^u 
 
 clause. 
 
 Given under the common seal of the company this day 
 
 of . 
 
 The common seal of the above-named 
 
 company was affixed hereto in the (l.s.) 
 
 presence of . 
 
 A debenture is almost always under seal, but it need not be so ; it 
 may be under hand, and occasionally is. See British India, Sfc. Co. v. 
 Commissioners , 7 Q. B. D. 165, where the debentures were merely 
 signed by two directors on behalf of the company. 
 
 If the articles contain any special provisions as to affixing the 
 seal, they must, of course, be observed. See supra, p. 257. 
 
 Indorsed Conditions. 
 
 On the back a series of conditions are indorsed as follows : — 
 
 The conditions within referred to. 
 
 1. This debenture is one of a series of 1,000 debentures , each 
 for securing the principal sum of 100£. issued, or about to be 
 issued , by the company. The debentures of the said series are 
 all to rank pari passu in point of charge ivithout any preference 
 or priority one over another , and such charge, save as regards 
 the hereditaments comprised in the indenture below mentioned, 
 is to be a floatmg security [ but so that the company is not to be 
 at liberty to create any mortgage or charge on its freehold and 
 leasehold land in priority to the said debentures ]. 
 
 Where the debenture is one of a series, the first condition usually 
 gives particulars as to the series, as above. 
 
 Condition 1 used commonly to be framed as above, but it proved ta 
 be open to this objection, that after paying off a debenture of the 
 series the company could not issue in its place another debenture t<v 
 rank pari passu with the others of the same class, although the total 
 amount outstanding was kept within the limit. Geo. Routledge Sf Sons, 
 (1904) 2 Ch. 474; W. Tasker Sf Sons, (1905) 1 Ch. 283 ; Perth Electric- 
 Tramways , (1906) 2 Ch. 216 ; Russian Petroleum Co., (1907) 2 Ch. 540. 
 To a great extent this difficulty has been removed by sect. 104 of the 
 Act of 1908, but it is still desirable to supplement the section by the 
 condition. Accordingly the condition should run thus : “ This is one 
 of a series of debentures of the company for securing principal sums 
 
 not exceeding in the aggregate at anyone time 1. The debentures 
 
 of the said series (whether original or not) are all to rank pari passu f 
 &c. Thus framed the company can pay off a debenture, and later on 
 issue a new one in its place, although it has not 11 purported ” to keep 
 
INDORSED CONDITIONS. 
 
 Ch. XXXII. 
 
 289 
 
 the debenture paid off alive, whereas under the section the company 
 must, in order to be able to re-issue, “ purport ” to keep alive. See 
 further as to priorities, infra, p. 319. 
 
 The condition, however, is not in all respects as efficacious as the 
 section, for the condition only operates as between the company and 
 the holders of debentures of the series, whereas the section operates 
 as between the company and the holders of the debentures of the 
 series and the subsequent incumbrancers . Thus, if the company pays off 
 a debenture without purporting to keep it alive, and afterwards, under 
 the condition, issues a debenture as one of the series, that debenture 
 will not obtain priority over the then subsequent incumbrancers. 
 
 The object of the above pari passu provision is to place all the Why express 
 debentures on the same level as to security ; so that, if the security is provision?^ 
 to be enforced, whatever is realized from it shall be divided amongst 
 them rateably, in proportion to the amounts paid up by each deben- 
 ture ( Re Smelting Corporation , (1915) 1 Ch. 472) ; and if more interest 
 is in arrear on some of the debentures than on others, in proportion to 
 the total amount due to each debenture holder for capital and interest. 
 
 Midland Express , Ltd., (1914) 1 Ch. 41. But for some such provision 
 the debentures would rank in point of security according to their dates 
 of issue ; and, accordingly, the first issued would rank as a first charge, 
 and the next issued as a second charge, and so on. New Clydach , Sfc. 
 
 Co., 6 Eq. 514. This would be entirely destructive of the marketable 
 character of the security. Where there is a pari passu clause, 
 a debenture holder, who seeks to enforce the security, must sue on 
 behalf of himself and the other debenture holders. The presence 
 of a pari passu clause does not, however, prevent a debenture holder, 
 whose debt is due, from getting judgment and obtaining payment 
 from the company if he can, and so, too, if, without judgment, 
 he can obtain payment from the company, he cannot be called on to 
 hand back what he has received for the benefit of the other debenture 
 holders. 
 
 [Where a holder of debentures of a series, containing a pari passu Effect as to 
 clause, owes money to the company, he cannot, on a distribution of the set off - 
 proceeds of sale of the company’s assets, set off his debt against the 
 amount due to him cm his debentures. The principle to be applied is 
 that where a person entitled to participate in a fund (viz., the proceeds 
 of sale) is also bound to make a contribution (viz., his debt) in aid of 
 that fund, he cannot be allowed to participate unless and until he has 
 fulfilled his duty to contribute. Cherry v. Boultbee, 4 My. & Cr. 442 ; 
 
 Re Broivn Sf Gregory, Ltd., (1904) 1 Ch. 627 ; and cf. Peruvian Rail. 
 
 Co., (1915) 2 Ch. 144.] 
 
 “ Such charge is to be a floating security.” See further as to this, Floating- 
 infra, p. 308. It is, and has been for many years, usual to state c ^ ar §“ e - 
 
 19 
 
 p. 
 
290 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Effect of, 
 as to later 
 specific 
 charges. 
 
 Later legal 
 mortgage. 
 
 expressly that the charge is a “ floating security,” although the pre- 
 sence of the word “ undertaking ” in the debentures imports this. 
 And even where the word “ undertaking ” is not used, the fact that 
 the charge is a general charge on all the property of the company as a 
 going concern is regarded by the Court as a sufficient indication of 
 intention that the charge is to he a floating security merely ; for, 
 otherwise, the business of the company would be paralysed. Re 
 Florence Land Co. (1878), 10 Ch. D. 530 ; Re Colonial Trusts (1880), 
 15 Ch. D. 473. 
 
 In the above form the floating character of the charge is largely 
 qualified ; for one of the most important features of such a charge is 
 that it leaves the company at liberty to create specific mortgages or 
 charges ranking in priority thereto. The condition, as above framed, 
 restricts this power. Occasionally the prohibition is not confined to 
 the freehold and leasehold land, but is general. Such a general pro- 
 hibition, however, is often found extremely inconvenient. 
 
 The prohibition, though good, is not absolutely protective ; for, if 
 the company disregarding it creates a legal mortgage or charge on 
 the property in favour of a person who takes for value without notice 
 of the character of the debenture holders’ charge, such person, in 
 accordance with the ordinary rules, obtains priority by virtue of the 
 legal estate. See English and Scottish , Sfc. Trust v. Brunton, (1892) 
 2 Q. B. (C. A.) 700. And it has been held that an equitable mortgagee 
 who obtains the title deeds and takes without notice of the debentures 
 obtains priority. Re Castell Brown , Limited , (1898) 1 Ch. 315. See 
 also, as to a solicitor’s lien, Brunton v. Electrical Engineering Co ., (1892) 
 1 Ch. 434. Where the clause expressly allows the company to mort- 
 gage its property, this does not authorise the company to create a 
 further floating charge pari passu with the existing charge. Re Ben- 
 iamin Cope <$f Sons, (1914) 1 Ch. 800. 
 
 Register to 
 be kept. 
 
 2. A register of the debentures will be kept at the company's 
 registered office wherein there will be entered the names, addresses 
 and descriptions of the registered holders and particulars of the 
 debentures held by them respectively, and such register will at 
 all reasonable times during business hours be open to the inspec- 
 tion of the registered holder hereof, and his legal personal repre- 
 sentatives and any person authorized in writing by him or them. 
 
 Shows title The provision as to keeping a register is to simplify the title, and 
 afford both to the company and the debenture holder, and those who 
 may deal with the latter, a simple mode of ascertaining who is for the 
 time being the proprietor of the debenture. Coupled with the next 
 condition it has greatly facilitated dealings with debentures. 
 
INDORSED CONDITIONS. 
 
 Ch. XXXII. 
 
 291 
 
 3. \_Save as in these conditions provided^ the registered riolder , 
 or his legal personal representatives , will be regarded as exclu- 
 sively entitled to the benefit of this debenture , and all persons 
 may act accordingly ; and the company shall not be bound to enter 
 in the register notice of any trust , or, save as herein provided , 
 and except as by some Court of competent jurisdiction ordered, 
 to recognize any trust or equity affecting the title to the debentures 
 
 ' or the moneys thereby secured. 
 
 The object of condition 3 is to fortify the title of the registered holder 
 by making the company agree to recognize him exclusively. There is 
 nothing illegal in such a provision ; the latter part of the condition is 
 intended to relieve the company, as far as is practicable, from the 
 obligation to take notice of trusts or equities. Such a provision 
 cannot, of course, relieve the company from its duty to recognize an 
 order of the Court ( Binney v. Ince Hall , Sfc. Co., 35 L. J. Ch. 363) ; 
 but where there is snch a conditiou, it is apprehended that a mere notice 
 of an equity may be disregarded ; for one who claims under a debenture 
 must be bound by the terms of the contract, and cannot be allowed 
 both to approbate and reprobate. See Societe Generate v. Walker , 
 11 App. Cas. 20; New London and Brazilian Bank v. Brocklebank 
 (1882), 21 Ch. D. 302; De Mattos v. Gibson, 4 De GK & J. 276; 
 Werderman v. Societe Generate d' Electricite (1881), 19 Ch. D. 246; 
 Borland's Trustee v. Steel Brothers 8f Co., (1901) 1 Ch. 279; and supra, 
 p. 156. In Bradford Banking Co. v. Briggs, 12 App. Cas. 29, there 
 was no clause excluding the recognition of equities. 
 
 4. Every transfer of this debenture must be in writing under 
 the hand of the registered holder or his legal personal repre- 
 sentatives. The transfer must be delivered at the registered 
 office of the company with a fee of 2s. §d., and such evidence oj 
 title or identity as the company may reasonably require, and 
 thereupon [if this debenture remains registered in the name 
 of the transferor the transferee will be recognized as having 
 become entitled to the benefit of this debenture free from any 
 equities, set-off or cross-claims which , but for this provision, 
 the company would be entitled to set up against the transferor 
 or transferee, and~\ the transfer will be registered and a note 
 of such registration will be indorsed hereon. The company 
 shall be entitled to retain the transfer. 
 
 The principal object of this clause also is to simplify the title to the 
 debenture by providing for the delivery of every instrument of 
 transfer to the company, so that if any question as to the title arises 
 the company will have the requisite documents in its possession. In 
 
 19 ( 2 ) 
 
 Registered 
 holder only 
 recognized. 
 
 How such 
 
 clause 
 
 operates. 
 
 Transfer. 
 
 Working of 
 clause. 
 
292 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Joint holders. 
 
 Closing of 
 register 
 
 Object of. 
 
 Exclusion of 
 equities. 
 
 Law as to 
 equities. 
 
 the absence of some such provision, the company would only receive 
 a notice of the transfer which might or might not be authentic. In 
 practice the condition is found extremely useful. The clause says 
 nothing about a debenture holder’s trustee in bankruptcy. He has 
 power to transfer under sect. 48 of the Bankruptcy Act, 1914. 
 
 A company is bound to exercise considerable care in regard to the 
 registration of transfers, for if it registers a forged transfer it may 
 incur serious responsibility. See supra , p. 143. The company (even in 
 liquidation) is bound by the conditions. Farmer v. Goy Sf Co., (1900) 
 2 Ch. 149. (Cozens-Hardy, J.) 
 
 5. In the case of joint registered holders , the principal moneys 
 and interest hereby secured shall be deemed to be owing to them 
 on a joint account. 
 
 Condition 5 is commonly inserted, but having regard to sect. 61 of 
 the Conveyancing Act, 1881, it is probably needless. 
 
 6. No transfer shall be registered during the seven days 
 immediately preceding the day by this debenture fixed for pay- 
 ment of interest. 
 
 Condition 6 is inserted in order to prevent the great inconvenience 
 that may arise if transfers come in just when the half-year’s interest is 
 being calculated. Most companies like to send out the interest on the 
 day it becomes due, and it is practically impossible to do this if a 
 number of transfers come in during the calculations. 
 
 7. The principal moneys and interest hereby secured will be 
 paid \_and such moneys are to be transferable free from andf\ 
 without regard to any equities between the company and the 
 original or any intermediate holder hereof \ or any set-off or 
 cross-claims , and the receipt of the registered holder for such 
 principal moneys and interest shall be a good discharge to the 
 company for the same. 
 
 Condition 7 is one of the most important conditions in the debenture. 
 Prima facie a debenture, being a chose in action, is only assignable 
 subject to all equities between the company and the original subscribers. 
 Mangles v. Dixon , 3 H. L. C. 702; Ryall v. Rowles (1748), 1 Yes. 348; 
 Judicature Act, 1873, sect. 25 (6). Thus, in Athenaeum , Sfc. Soc. v. 
 Pooley (1858), 3 De Gr. & J. 294, debentures had been issued to A. as 
 part of the consideration for property sold by him to the company. 
 The price was excessive, and A. had bribed the company’s manager 
 who arranged the sale. A. afterwards transferred the debentures to B., 
 who sold in the market to C., who bought without any notice of the 
 
INDORSED CONDITIONS. 
 
 Ch. XXXII. 
 
 293 
 
 circumstances relating to their issue. C. subsequently sought to enforce 
 them as against the company. Held, that though 0. was a purchaser 
 bond Jicle without notice, yet being only a purchaser of a chose in action 
 he could stand in no better position than A., and therefore that his claim 
 
 failed. “ Mr. appears to have bought these debentures innocently, 
 
 but very imprudently, in the belief, probably, that they were good 
 securities, and without notice of anything to the contrary. Unfortunately, 
 however, he bought what the English law calls a chose in action, and 
 it is too clearly settled to admit of question or argument that a person 
 buying a chose in action, which can only be put in suit in the name of 
 the original holder, cannot in general stand in a better position than 
 the original holder.” Per Knight Bruce, L. J., at p. 298. 
 
 But this “is a rule which must yield when it appears from the 
 nature or terms of the contract that it ” — the chose in action — “ must 
 have been intended to have been assignable free from and unaffected 
 by such equities” (per Lord Cairns, L. J., Re Agra , Sfc. Bank (1865), 
 
 L. P. 2 Ch. 397) ; and it is now a matter of course to insert such a 
 provision in a debenture unless the circumstances are very special ; for 
 investors long since discovered the extreme inconvenience of dealing 
 with a security which was liable to be defeated or depreciated by the 
 unexpected intervention of some latent equity being sprung upon them. 
 
 The efficacy of the condition is exemplified by the decision of 
 Cozens-Hardy, J., in Farmer v. Goy § Co ., (1900) 2 Ch. 149, which 
 may be contrasted with Re Taunton , Delmard Sf Co., (1893) 2 Ch. 175, 
 and Rhodesia Goldjields, Ltd., (1910) 1 Ch. 239. 
 
 In the absence of the bracketed words in this condition and in 
 condition 3 the company can set up equities against an unregistered 
 transferee of the debenture. Palmer' s Decoration and Furnishing Co., 
 
 (1904) 2 Ch. 743; Andrews v. Brown and Gregory, (1904) 2 Ch. 448. 
 
 The bracketed words go far to nullify this power. 
 
 The latter part of the condition is useful as fortifying the position of 
 the registered holder, and relieving the company from going into the 
 question of title. Such a stipulation is in point of law free from 
 objection. See also as to excluding equities, Crouch v. Credit Fonder, 
 
 L. P. 8 Q,. B. 385 ; Re Natal Investment Co., 3 Ch. 355 ; also In re 
 Blakely Ordnance Co. (1867), L. P. 3 Ch. 154; Higgs v. Northern 
 Assam Tea Co. (1869), 4 Ex. 387 ; In re Northern Assam Tea Co. 
 
 (1870), 10 Eq. 458; In re South Essex Estuary Co. (1870), 11 Eq. 157. 
 
 8. The company may at any time give notice in writing to the Notice by 
 registered holder hereof, his executors or administrators, of its 
 intention to pay off this debenture, and, upon the expiration vf 
 six calendar months from such notice being given , the principal 
 moneys hereby secured shall become payable. 
 
294 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Immediate 
 payment 
 where default 
 as to interest 
 or winding- 
 up. 
 
 Repayment 
 if default in 
 interest. 
 
 Repayment 
 on winding- 
 up. 
 
 Warrant for 
 interest. 
 
 This is a condition commonly inserted. Sometimes the words3“after 
 
 the day of next” are inserted before the words “give notice,” 
 
 so that the holder may have, at any rate, a term of five, or ten, or 
 sometimes twenty years’ quiet enjoyment of the security ; but in large 
 numbers of cases the clause is left as it stands above. 
 
 As to the mode of giving notice, see infra, p. 297. 
 
 9. The 'principal moneys hereby secured shall immediately 
 become payable : — 
 
 (a) If the company makes default for a period of six calendar 
 months in the payment of any interest hereby secured , and 
 the registered holder hereof , before such interest is paid , by 
 notice in writing to the company , calls in such principal 
 moneys ; or 
 
 (b) If an order is made or an effective resolution is passed for 
 the winding-up of the company . 
 
 It is now usual to provide as above. As to paragraph (a), it is more 
 satisfactory to the investor to know that if his interest gets largely into 
 arrear he can call up his principal, as in the case of an ordinary mort- 
 gage, and such a provision is valid. It is not regarded as a penalty 
 against which equity can relieve. Thompson v. Hudson (1869), L. E-. 
 4 H. L. 1 ; Wallingford v. Mutual Society (1879), 5 App. Cas. 685. 
 
 As to paragraph (b), it was long since settled that where a winding-up 
 ensues, the debenture holder is entitled to enforce his charge and 
 obtain immediate payment, even though his debenture has not 
 matured. Hodson v. Tea Co. (1880), 14 Ch. D. 859 ; Wallace v. 
 Universal , 8fc. Co ., (1894) 2 Oh. 547 (C. A.). Accordingly, the clause 
 does not prejudice the position of the company, while, at the same 
 time, it serves to make clear the position of the debenture holder — a 
 position which otherwise would have to be ascertained from a study 
 of the authorities. A clause such as 9 above enables the company to 
 insist on paying off debenture holders in the event of the winding-up 
 of the company. Consolidated Goldfelds v. Simmer and Jack East , 
 (1913) W. N. 41 ; 108 L. T. 488. On the happening of any other 
 event in clause 9 the company cannot pay off a debenture holder and 
 require him to release his security without satisfying him that all the 
 debenture® are paid off. Re General Motor Cab Co., 56 S. J. 573, as 
 explained in Consolidated Goldfields v. Simmer and Jack Egst (above). 
 
 10. In respect of each half-year' s interest on this debenture a 
 warrant on the company's bankers payable to the order of the 
 registered holder hereof ‘ or, in the case of joint holders , to the 
 order of that one whose name stands first in the register as one 
 
INDORSED CONDITIONS. 
 
 Ch. XXXII. 
 
 295 
 
 of such joint holders, will be sent by post to the registered 
 address of such registered holder, and the company shall not be 
 responsible for any loss in transmission. The payment of the 
 warrant , if purporting to be duly indorsed , shall be a good 
 discharge to the company. 
 
 Until payment of the warrant, 
 Sf Son, (1909) 2 Ch. 423. 
 
 the debt is not satisfied. Re Defries 
 
 10a. At any time after the principal moneys hereby secured Power to 
 
 become payable, or after the security constituted by the indenture 
 
 r 7 J J receiver. 
 
 below mentioned becomes enforceable, the registered holder of 
 this debenture may from time to time, with the consent in 
 writing of the holders of the majority in value of the outstanding 
 debentures of the same series, appoint by writing any person or 
 persons approved by the trustees of the said indenture to be a 
 receiver or receivers of the property charged by the debentures 
 {and not comprised in such indenture ), and may with the like 
 consent remove any such receiver, and every such appointment 
 or removal shall be as effective as if all the holders of debentures 
 of the same issue had concurred therein, and a receiver so 
 appointed shall have power (1) to take possession of, collect and 
 get in the property charged by the debentures, and for that 
 purpose to take all proceedings in the name of the company or 
 otherwise as may seem expedient ; (2) to carry on or concur in 
 carrying on the business of the company, and for that purpose 
 to raise money on the premises charged in priority to the deben- 
 tures or otherwise ; (3) to sell or concur in selling any of the 
 property charged by the debentures after giving to the company 
 at least seven days' notice of his intention to sell , and to carry 
 any such sale into effect by conveying in the name and on behalf 
 of the company or otherwise ; (4) to make any arrangement or 
 compromise which he or they shall think expedient in the interest 
 of the debenture holders, and all moneys received by such receiver 
 or receivers shall, after providing for the matters specified in 
 the first three paragraphs of clause 8 of sect. 24 of the Convey- 
 ancing Act, 1881, or such of them as may seem proper and for 
 the purposes aforesaid, be applied in or towards satisfaction pari 
 passu of the debentures, and the foregoing provisions in this 
 condition shall take effect as and by way of variation and exten- 
 sion of the provisions of sects. 19 and 24 of the said Act, which 
 provisions so varied and extended shall be regarded as incorpo- 
 rated herein. 
 
296 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Receiver 
 
 clause. 
 
 Trust deed 
 referred to 
 
 Such a provision as above is effective. Henry Pound , Son and 
 Hutchings (1882), 42 Oh. D. 402 (C. A.). The power may be vested 
 in a third party, but in such case is in the nature of a trust. Maskelyne 
 British Typewriter , (1898) 1 Ch. 133. In the absence of such a clause, 
 the provisions of the Conveyancing Act, 1881, as to the appointment 
 of receivers, do not apply, at any rate to a debenture which is one of 
 a series, charging the undertaking of the company. See Blaker v. 
 Herts , Sfc. Waterworks Co. (1889), 41 Oh. D. 399. [One of the most 
 important objects usually intended to be obtained by the incorporation 
 of these provisions is to make the receiver the agent of the company, 
 so that the debenture holders shall not be liable for his default. But 
 in Deyes v. Wood , (1911) 1 K. B. 806, the receiver was held to be the 
 agent of the debenture holders in spite of a clause similar to clause 10a 
 above. This case may be capable of explanation on the ground that 
 the numbers of the sections to be incorporated were omitted by mistake ; 
 but the j udgments were not apparently based on this omission, and throw 
 doubt on the effectiveness of the clause. In future the clause should 
 expressly provide (if so desired) that the receiver shall be the agent of 
 the company. See also Bissell v. Ariel Motors , 27 T. L. R. 73. 
 
 Where there is such an express provision the receiver ceases to be 
 the agent of the company after the commencement of a winding-up ; 
 but he does not thereupon become the agent of the debenture holder. 
 Gosling v. Gaskell, (1897) A. C. 595.] 
 
 An important advantage gained by the insertion of such a clause is 
 as to the appointment of a receiver in winding-up. See In re Henry 
 Pound , Son and Hutchings , supra. 
 
 11. The holders of the debentures of this issue are and 
 will be entitled pari passu to the benefit of and subject to the 
 
 provisions contained in , an indenture dated the day of , 
 
 and made between the company of the one part and and 
 
 of the other part , whereby certain property was vested in 
 
 trustees for securing the payment of the principal moneys and 
 interest payable in respect of the said debentures. 
 
 Where there is not to be any trust deed, the above clause is, of 
 course, omitted. 
 
 The insertion of words as above imports into the debenture the 
 provisions of the trust deed, and renders the security subject to the 
 obligations of such trust deed, and entitled to the benefit of it. See 
 p. 313, infra. 
 
 As to the advantages of a trust deed, see Company Precedents, 
 Pt. III. p. 93. 
 
DEBENTURES TO BEARER. 
 
 Ch. XXXII. 
 
 29 
 
 12. The principal moneys and interest hereby secured will be Place of 
 
 paid at the Bank , Limited , No. — , Street , London , P a 7 ment - 
 
 or Mo registered office of the company. 
 
 It is usual to insert a clause as above. In the absence of some such 
 provision, the ordinary rule prevails, and the company is bound to 
 search out its creditor and pay him. Where a clause is framed in the 
 alternative as above, it rests with the debenture holder to elect at 
 which place payment shall be made, and he must communicate his 
 election to the company. Saunderson v. Bowes , 14 East, 508 ; Thorn 
 v. City Rice Mills (1889), 40 Ch. D. 357. 
 
 13. A notice may be served by the company upon the holder of Service of 
 this debenture by sending it through the post in a prepaid letter on 
 
 addressed to such person at his registered address. Any notice 
 served by post shall be deemed to have been served at the expira- 
 tion of twenty-four hours after it is posted , and in proving such 
 service it shall be sufficient to prove that the letter containing 
 the notice was properly addressed and put into the post office. 
 
 It is a matter of great convenience to the company to have some 
 special mode like this of serving notice provided by the debenture. In 
 the absence of such a provision, it is for the company, if it desires to 
 give notice, e.g., for the purpose of redemption, to find out the address 
 of the debenture holder, and to take care that notice is effectually 
 served on him. The above clauses relieve the company from this 
 difficulty, or, at any rate, simplify the position very much. 
 
 Class II.— Debentures to Bearer. 
 
 In framing a debenture to bearer the object is to endow it with II. Deben- 
 the characteristics of a negotiable instrument, and in particular 
 (a) to make it transferable by delivery ; (b) to make it transferable 
 free from equities ; (c) to render the delivery of the debenture and 
 any interest coupon a good discharge to the company; (d) to enable 
 the bearer to sue the company in his own name, if necessary ; and 
 (e) to insure a good title to any person who acquires the debenture 
 bond fide for valuable consideration, notwithstanding any defect in the 
 title of the person from whom he acquires it. 
 
 The following are the clauses usually inserted. As to the negotia- 
 bility of such instruments, see infra, p. 302. 
 
298 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Form of. 
 
 Debenture to Bearer. 
 
 The Company , Limited. 
 
 Issue of debentures of £ each carrying interest at 
 
 the rate of per cent, per annum. 
 
 No. . Debenture. £ . 
 
 Payment of 
 principal. 
 
 1. The Company , Limited {hereinafter called “ the com- 
 
 pany ”), will , on the day of , or on such earlier day 
 
 as the principal moneys hereby secured shall become payable in 
 accordance with the conditions indorsed hereon, pay to the 
 Bearer of this debenture on presentation of the debenture the 
 sum of £ . 
 
 Negotiability. In making the instrument payable to bearer the object is to make 
 
 
 the security negotiable by the law merchant (see p. 302, infra), or, 
 if not, then as far as practicable by contract, or estoppel. There 
 is no objection in point of law to making the instrument payable to 
 bearer without the production of any assignment. Per Holt, L. J., 
 In re Blakely Ordnance Co. (1868), L. R. 3 Ch. 159 ; In re Natal Invest- 
 ment Co. (1868), L. P. 3 Ch. 355. 
 
 Payment of 
 interest. 
 
 2. The company will , during the continuance of the security , 
 
 pay interest thereon at the rate of per cent, per annum , by 
 
 equal half-yearly payments on every day of and 
 
 day of in accordance with the coupons annexed hereto. 
 
 Coupons. 
 
 In the case of a debenture to bearer it is necessary to provide for 
 payment of interest in accordance with coupons annexed, for otherwise 
 it would be necessary to insist on production of the debenture for pay- 
 ment of interest, and make some indorsement thereon of the payment. 
 Where the payment is not to be made till a distant date, or the deben- 
 ture is what is known as a perpetual one, it is usual in the first instance 
 to issue with the debenture only a limited number of coupons providing 
 for the payment of interest, say, for 10 or 20 years. In such case 
 provision is made for the issue of further coupons when the original 
 coupons are exhausted. 
 
 Charge. 
 
 3. The company hereby charges [as above , p. 287]. 
 
 As to the validity of a general charge as above, see p. 308. This 
 clause is usually framed on the same lines as clause 3 in Form, 
 supra, p. 291. 
 
INDORSED CONDITIONS. 
 
 Ch. XXXII. 
 
 299 
 
 4. This debenture is issued subject to, and with the benefit 
 of, the conditions indorsed hereon, which are to be deemed part 
 ofi it. 
 
 See supra, p. 287. 
 
 Given under the common seal ofi the company this day 
 
 of . 
 
 The form of coupon is as follows : — 
 
 The Company, Limited. 
 
 Debenture No. . Interest Coupon No. . 
 
 For pounds. Half-year' s interest due on the day 
 
 ofi and payable at the Bank or at the registered office 
 
 of the company ( less income tax). 1. 
 
 Secretary. 
 
 Indorsed Conditions. 
 
 The conditions within referred to : — 
 
 1. This debenture is one of a series of, 8fc. [as above, p. 288]. 
 
 2. Annexed to this debenture are coupons, each providing 
 
 for the payment ofi a half-year' s interest. Such interest will 
 be payable only on presentation and delivery of the coupon 
 referring thereto. 
 
 There is no doubt as to the validity of such a stipulation as that in 
 condition 2. Crouch v. Credit Fonder of England (1873), L. B. 8 
 Q. B. 389 ; Re Natal Investment Co. (1868), L. B. 3 Ch. 355. 
 
 3. The principal moneys and interest hereby secured will be 
 paid without regard to any equities between the company and 
 the original or any intermediate holder hereof. 
 
 As debentures to bearer are now negotiable by the law merchant, 
 condition 3 is implied and might be omitted. See infra, pp. 302 et seq. 
 
 4. If the principal moneys hereby secured shall become payable 
 
 before the day of the person presenting this debenture 
 
 for payment must surrender therewith the coupons representing 
 subsequent interest, the company nevertheless paying the interest 
 for the fraction of the current half-year. 
 
 Reference to 
 
 indorsed 
 
 conditions. 
 
 Form of 
 coupon. 
 
 Pari passu 
 clause. 
 
 Coupons.’ 
 
 Exclusion of 
 equities. 
 
 Surrender of 
 outstanding 
 coupons on 
 redemption 
 of debentures. 
 
300 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Delivery of 
 coupon good 
 discharge. 
 
 Notice by 
 advertise- 
 ment to 
 pay off. 
 
 Immediate 
 payment on 
 default as to 
 interest or 
 winding-up 
 
 Debenture to 
 be treated as 
 negotiable. 
 
 The provisions of condition 4 probably only express what would 
 otherwise be implied, but the condition is inserted in order to make the 
 contract perfectly clear. It is obvious that a company could not allow 
 future coupons to remain outstanding on the ground that they were 
 to be treated as waste-paper. If presented, as they might be, and 
 refused payment, it would damage the credit of the company. 
 
 5. The delivery to the company of this debenture and of each 
 of the said coupons shall be a good discharge for the principal 
 moneys and interest therein respectively specified , and the com- 
 pany shall not be bound to inquire into the title of the respective 
 bearers of such instruments or to take notice of any trust affecting 
 such moneys or be affected by express notice of the right , title, 
 or claim of any other person to such moneys or instruments. 
 
 Condition 5 is — or was — beneficial both to the company and the 
 debenture holders. It simplified and protected the position of both. 
 That it is effective is unquestionable. Crouch v. Credit Fonder 
 (1873), L. R. 8 Q,. B. 385 ; Re Natal Investment Co. (1868), L. R. 3 Ch. 
 355. Now, however, that the negotiability of debentures to bearer is 
 established {infra, p. 302) the condition might safely be dispensed with. 
 
 6. The company may at any time after the day of 
 
 give notice by advertisement in the “ Times ” and one other 
 London daily newspaper of its intention to pay off this deben- 
 ture , and upon the expiration of six calendar months from such 
 notice being given , the principal moneys hereby secured shall 
 become payable. 
 
 See supra , pp. 293, 294. 
 
 7. The principal moneys hereby secured shall immediately 
 become payable — 
 
 (a) If the company makes default , Sfc. [as at p. 294, substituting 
 
 “bearer” for “holder”] ; or 
 
 (b) If an order is made or an effective resolution is passed for 
 the winding-up of the company. 
 
 [8. This debenture is to be treated as negotiable , and all 
 persons are invited by the company and the owner for the time 
 being hereof to act accordingly .] 
 
 The object of condition 8 was to fortify the title of the debenture 
 holder for the time being by enabling him, if necessary, to establish 
 direct privity of contract with the company, and to endow the instru- 
 ment with the most important characteristic of a negotiable instru- 
 ment, namely, that a person who acquires the instrument for value 
 
NEGOTIABILITY OF BEARER DEBENTURES. Ch. XXXII. 
 
 30 J 
 
 obtains a good title notwithstanding any defect of title in the person 
 from whom he takes it. The words of invitation are in the nature of 
 an offer held out to all the world, requesting them to act thereon ; and 
 it seems probable that any person who does act on that invitation by 
 altering his position is entitled as against the company to rely on his 
 having so acted as an acceptance of the offer, and as therefore con- 
 stituting a direct contract by him with the company. See Agra and 
 Masterman' s Bank (1867), L. R. 2 Ch. 397 ; and Carlill v. Carbolic 
 Smoke Ball Co., (1893) 1 Q. B. 256. But here again the negotiability 
 of debentures to bearer now established {infra, p. 302), makes the 
 condition superfluous. 
 
 9. The principal moneys and interest hereby secured will be Place of 
 
 paid at the Bank , Limited , No. — , — Street, London , P a y ment - 
 
 or at the registered office of the company. 
 
 10. \_Reference to trust deed, if any ; as at p. 296, supra .] 
 
 1 1 . [ Provision that notice may be given by advertisement, and 
 deemed to be served on the day following that on which it is 
 advertised. ] 
 
 Trust deed 
 referred to. 
 
 Notice by 
 advertise- 
 ment. 
 
 Class III.— Debentures to Registered Holder with 
 Coupons to Bearer. 
 
 These are framed on the basis of the registered debenture above set Form of. 
 forth (pp. 285 — 296), but condition 2 (p. 298) of the bearer debenture 
 is substituted for clause 10 at p. 294, and the conditions are modified so 
 as to provide for interest coupons. 
 
 Class IV.— Debenture to Bearer capable of being 
 
 registered. 
 
 This form of security may be said to combine the advantages of the 
 registered debenture and the debenture to bearer. Those investors 
 who prefer a debenture to bearer get it, and those who — like trustees — 
 wish to avoid the risk incidental to the possession of an instrument to 
 bearer can safeguard themselves by registering. The drawback is 
 the stamp duty. As debentures to bearer they are charged with a 
 stamp duty of 10s. per cent, on issue. 
 
 The form adopted for this convertible debenture usually provides Form of. 
 for payment “to the bearer, or, when registered, to the registered 
 holder of the debenture,” and the conditions empower the bearer at 
 any time to take it in to be registered in his name, and provide that 
 thenceforth, whilst registered, the registered holder is to be regarded 
 
302 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Negotiability 
 by law 
 merchant. 
 
 Views of 
 Blackburn , J 
 
 Contrary 
 view of 
 Exchequer 
 Chamber and 
 House of 
 Lords. 
 
 as the owner, and shall alone be entitled to give receipts for the 
 principal moneys, and to transfer ; and a further provision enables the 
 registered holder at any time to have the registration cancelled and 
 the instrument liberated and made again “ to bearer.” 
 
 Negotiability of Bearer Debentures or Instruments 
 by Mercantile Custom. 
 
 From being ordinary choses in action debentures to bearer have 
 now, after a somewhat prolonged controversy, been admitted into the 
 select circle of negotiable instruments by virtue of the general custom 
 of merchants. 
 
 It is a well-established common law rule that when a general 
 custom is proved to exist as a fact, it is adopted by the common law 
 and becomes part of it. The negotiability of bills of exchange, of 
 bank notes, of cheques, of circular notes, of exchequer bills, and 
 of foreign bonds to bearer, has been established in this way ; but 
 until recently there was no judicial decision recognizing a similar 
 negotiability in the case of debentures to bearer. The contrary was 
 indeed held in Crouch v. Credit Fonder (1873), L. B. 8 Q. B. 374. 
 In that case the debenture in question had been stolen, and the plaintiff 
 derived title from the thief ; he was therefore not entitled to recover 
 unless the debenture was negotiable. It was tacitly admitted at the 
 trial that such instruments were treated as negotiable, and it was proved 
 that the plaintiff gave value for the debenture without notice, and the 
 jury found a verdict in his favour. This verdict the Court, Blackburn, 
 Bramwell, Quain, and Archbold, JJ., set aside and entered a verdict 
 for the defendants on the ground, amongst others, that as the deben- 
 ture was an English instrument made in England, it could not be 
 rendered negotiable by custom; “for as the instruments themselves,” 
 said the Court, “ are of recent introduction, it can be no part of the 
 law merchant, that is to say, of the ancient law merchant which forms 
 part of the law, and of which the law takes notice.” Per Black- 
 burn, J., who delivered the judgment of the Court. 
 
 This view of the law was manifestly unsound, and it was not long 
 (1875) before it was emphatically disclaimed in the Exchequer Chamber 
 ( Goodwin v. Robarts , 10 Ex. 337), the Court consisting of Cock- 
 burn, C. J., Mellor, Lush, Brett, and Lindley, JJ. In that case, the 
 instrument under consideration was scrip to bearer for a foreign 
 government bond. It was proved that it was by custom treated as 
 negotiable, but it was argued, on the authority of the last-mentioned 
 case, that, as the custom was modern, it could not have effect. The 
 Court, however, held that the custom, though modern, was effective, 
 and the scrip negotiable ; and the following luminous passage from 
 
NEGOTIABILITY OF BEARER DEBENTURES. Ch. XXXII. 
 
 the judgment delivered by Cockburn, C. J., deals with, and effectually 
 disposes of, the line of argument above referred to. ‘‘Having,” 
 said the Chief Justice, “ given the fullest consideration to this argu- 
 ment, we are of opinion that it cannot prevail. It is founded on the 
 view that the law merchant thus referred to, is fixed and stereotyped 
 and incapable of being expanded and enlarged, so as to meet the 
 wants and requirements of trade in the varying circumstances of 
 commerce. It is true that the law merchant is sometimes spoken of 
 as a fixed body of law forming part of the common law and, as it were, 
 coeval with it. But, as a matter of legal history, this view is altogether 
 incorrect. The law merchant thus spoken of with reference to bills of 
 exchange and other negotiable securities, though forming part of the 
 lex mercatoria, is of comparatively recent origin. It is neither more 
 nor less than the usages of merchants and traders in the different 
 departments of trade, ratified by the decisions of courts of law, which, 
 upon such usages being proved before them, have adopted them as 
 settled law with a view to the interests of trade and the public con- 
 venience, the Court proceeding herein on the well-known principle of 
 law that, with reference to transactions in the different departments 
 of trade, courts of law, in giving effect to the contracts and dealings 
 of the parties, will assume that the latter have dealt with one another 
 on the footing of any custom or usage prevailing generally in the 
 particular department. By this process, what before was usage only, 
 unsanctioned by legal decision, has become engrafted upon or incor- 
 porated into the common law, and may thus be said to form part of 
 it.” “ When a general usage has been judicially ascertained and 
 established,” says Lord Campbell, in Brandao v. Barnett , 12 Cl. & 
 
 Fin. 787, “it becomes a part of the law merchant which courts of 
 justice are bound to know and recognize.” 
 
 This decision was affirmed by the House of Lords (1 App. Cas. 476), 
 partly on the ground that negotiability was established, and partly on 
 the ground of estoppel. 
 
 The principles laid down by Cockburn, C. J., are so obviously sound 
 that they have never since been questioned. No doubt the instrument 
 with which the learned judge was dealing was not an English instru- 
 ment. It was issued and stood in the place of a foreign bond, but 
 it would be strange logic if the law merchant were competent from 
 time to time to add foreign instruments to the list of negotiable 
 instruments, and yet not competent to add to the list English instru- 
 ments made in England, especially as the negotiability of foreign 
 instruments depends entirely on the mercantile custom here , not on 
 any foreign law or custom. Picker v. London and County Banking Co. 
 (1887), 18 Q. B. D. 515. Upon what ground is such an irrational Power 
 distinction to be supported, and the growth of the law merchant to be 
 
304 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 ments to list suddenly arrested ? and why should it be held that the law mer- 
 of negotiable , . . • . .. ... 
 
 instruments, chant, which tor centuries past has been competent to render .English 
 
 instruments, bills of exchange, bank notes, cheques, exchequer 
 
 bills, &c. negotiable, is no longer operative? As Cockburn, C. J., 
 
 said in the case referred to : “ Why is it to be said that a new usage, 
 
 which has sprung up under altered circumstances, is to be less 
 
 admissible than the usages of past times ? Why is the door to be 
 
 now shut to the admission and adoption of usage on a matter 
 
 altogether of cognate character, as though the law had been finally 
 
 stereotyped and settled by some positive and peremptory enactment ?” 
 
 There has been no such enactment, and there is no answer to this 
 
 question ; and this being the case, there can, it is submitted, be no doubt 
 
 that the law T merchant, as part of the common law, is at liberty now, no 
 
 less than in the past, to enrich itself by impressing with the qualities 
 
 of negotiability, where the convenience of commerce requires it, not 
 
 only foreign instruments but also English instruments. The decision 
 
 in Rumball v. Metropolitan Bank (1876), 2 Q. B. D. 194, is a clear 
 
 authority that the list of English negotiable instruments is not closed. 
 
 Nevertheless it was not until August, 1898, that the High Court had 
 
 an opportunity of reconsidering the question whether debentures to 
 
 bearer of English companies are or are not negotiable by the law 
 
 merchant. 
 
 The question arose in Bechuanaland Exploration Co. v. London Trading 
 Bank , (1898) 2 Q. B. 658 ; the instruments in that case being deben- 
 tures to bearer issued by an English company — the Beira Junction 
 Bailway Company — in England. The debentures in question had 
 
 been fraudulently taken from the plaintiff company and pledged with 
 the defendant bank, which took them for value, in good faith, without 
 notice. Evidence was given that by the custom of merchants in 
 England, similar debentures to bearer were, and for some twenty years 
 and upwards had been, dealt with as negotiable instruments ; and it 
 was held on this evidence by Kennedy, J., that the custom was effica- 
 cious ; that the debentures, notwithstanding their being modern 
 English instruments, were negotiable and, accordingly, that the 
 plaintiff’s claim failed. 
 
 “It appears to me,” said the learned judge, “that upon the vital 
 question of the effect of modern mercantile usage, such as I think has 
 been sufficiently proved in the present case, it is impossible to treat 
 the reasoning of the Court of Queen’s Bench in Crouch v. Credit Fon- 
 der of England , L. B. 8 Q. B. 374, and the reasoning of the Exchequer 
 Chamber in Goodwin v. Robarts, L. B. 10 Ex. 337 ; 1 App. Cas. 476, 
 as capable of reconciliation. I read the judgment of the Exchequer 
 Chamber in the later case as plainly disapproving of the reasoning of 
 the judgment in the earlier case. It cannot, I think, be maintained 
 
NEGOTIABILITY OF BEARER DEBENTURES. Ch. XXXII. 
 
 305 
 
 that the judgment in Goodwin v. Iiobarts upon the effect of modern 
 mercantile usage was unnecessary to the decision, nor, I think, can it 
 he maintained that the two judgments are capable of reconciliation on 
 the ground that the instrument in question in the earlier case was an 
 English instrument, and the instrument in question in the later case 
 was, though issued by a London agent, to all intents and purposes the 
 scrip of a foreign government. In the first place, not only is there no 
 hint in the judgment of the Exchequer Chamber, so far as it deals 
 with the effect of modern mercantile usage, of an intention to confine 
 it to the case of the scrip issued by a foreign government, or to exclude 
 from the operative effect of modern mercantile usage an English 
 instrument, but the Court of Exchequer Chamber prefaces this portion 
 of the judgment by saying: ‘We think it unnecessary to enter upon 
 the question whether the contract thus entered into is to be considered 
 as a Russian or an English contract.’ In the second place, it seems 
 to me impossible to suppose that if Crouch v. Credit Fonder of Eng- 
 land was thought by the Exchequer Chamber to be still outstanding 
 and capable of support on so clear and definite a ground as this would 
 be, their judgment would (as the only ground of support for the deci- 
 sion in that case) have expressly stated that it might well be supported 
 on the ground that in that case there was substantially no proof what- 
 ever of general usage. . . . Lastly, in the case of Rumball v. Metro- 
 politan Rank, a Divisional Court of the Queen’s Bench Division in the 
 year 1877, treated Goodwin v. Robarts as decisive of an action in which 
 a similar question arose upon an English instrument. The Court, it 
 may be noted, consisted of Cockburn, C. J., and Mellor, J., the former 
 being the judge who had delivered the judgment of the Exchequer 
 Chamber in Goodivin v. Robarts, and the other one of the judges who 
 took part in the decision of that case. It is impossible to suppose that 
 they were not fully aware of all that could possibly be held to distin- 
 guish, if anything could, the two decisions, and Crouch v. Credit Fon- 
 der of England was cited to them in argument. But in their considered 
 judgment they held the matter of the effect of usage in conferring 
 negotiability upon an English instrument, although not negotiable by 
 statute or by the ancient law merchant, as settled by the judgment 
 of the Exchequer Chamber in Goodwin v. Robarts. It appears to me 
 that, having regard to the decisions of the Exchequer Chamber in 
 Goodwin v. Robarts and of the Queen’s Bench Division in Rumball v. 
 Metropolitan Bank, if I have come, as I have, to the conclusion that 
 there has been a sufficient proof of a mercantile usage to treat the 
 debentures in question in this case as negotiable, I cannot refuse to 
 follow these decisions, and these decisions .... appear to me prac- 
 tically to overrule the decision in Crouch v. Credit Fonder of England, 
 and to govern this case.” 
 
 p. 
 
 20 
 
DEBENTURES AND DEBENTURE STOCK. 
 
 306 
 
 Thus, at last, was the sterilizing and retrograde doctrine laid down 
 in Crouch v. Credit Fonder disposed of, and the negotiability by the 
 law merchant of debentures to bearer recognized and finally estab- 
 lished. In a recent case, Edelstein v. Schuler Sf Co ., (1902) 
 2 K. B. 144, Bigham, J., in following the decision in Bechuanaland 
 Exploration Co. v. London Trading Bank , supra , said : “ In my opinion 
 the time has passed when the negotiability of bearer bonds, whether 
 Government bonds or trading bonds, foreign or English, can be called 
 in question in our Courts. The existence of the usage has been proved 
 so often, and its convenience is so obvious, that it must be taken now to 
 be part of the law.” 
 
 This satisfactory termination of a long-standing controversy renders 
 the draftsman’s task in framing a debenture to bearer a comparatively 
 simple one. All that is necessary is to make the instrument in terms 
 payable to bearer, and to take care that no condition or stipulation appears 
 which is repugnant to or inconsistent with the nature of a negotiable 
 instrument. See, further, Company Precedents, Part III., p. 31 et seq. 
 
 Proof of Negotiability. 
 
 Having regard to the decisions in Bechuanaland Exploration Co. v. 
 London Trading Bank and in Edelstein v. Schuler Sf Co., supra , the 
 High Court, it is presumed, will now take judicial notice of the negoti- 
 ability of debentures to bearer, for “ when a general usage has been 
 judicially ascertained and established it becomes part of the law mer- 
 chant which Courts of justice are bound to know and recognize, and 
 justice could not be administered if evidence were required to be given 
 toties quoties to support such usages, and issue might be joined upon 
 them in each particular case.” Per Lord Campbell in Brandao v. 
 Barnett , 12 Cl. & Fin. 787. However, it may be well to bear in mind 
 Proof of that in order to prove negotiability it is only necessary to prove that 
 negotiability. the instrument is in form negotiable, e.g., payable to bearer, and that 
 it is in fact by general custom treated as negotiable. See London 
 Joint Stock Bank v. Simmons , (1892) A. C. 201 ; Venables v. Baring 
 Brothers , (1892) 3 Ch. 527 ; and Picker v. London and County Banking 
 Co. (1887), 18 Q. B. D. 515. Nor does the Court require the custom 
 to be proved by a cloud of witnesses. Thus, in the first of the above- 
 mentioned cases, the instruments in question — Argentine Cedulas — 
 were to bearer, and their negotiability was established by the 
 evidence of a bank manager. Lord Watson said (p. 212): “Each 
 bond, according to its tenor, appears to me to represent that the 
 document will pass from hand to hand, and that any bond fide holder 
 will be entitled to claim fulfilment of its terms. . . . Then there is 
 
PROOF OF NEGOTIABILITY. 
 
 Ch. XXXII. 
 
 30 
 
 direct testimony to the effect that, on the London Stock Exchange, 
 the bonds do pass from hand to hand by delivery only, and are treated 
 as negotiable securities, and no attempt was made to shake that testi- 
 mony either by cross-examination or by adducing evidence to the 
 contrary.” And Lord Macnaghten said (p. 224) : “ The Cedulas in 
 question are foreign bonds, with coupons attached, payable to bearer. 
 Admittedly, they pass from hand to hand on the Stock Exchange, and, 
 according to the evidence of the bank manager, who was not cross- 
 examined on the point, they are dealt with as negotiable instruments. 
 
 1 do not see on what ground they are to be denied the quality of 
 complete negotiability.” 
 
 So, in Venables v. Baring Brothers Sf Co ., (1892) 3 Ch. 527, 539, 
 American railway bonds to bearer were held to be negotiable, on the 
 evidence of business men that such bonds were here always treated 
 as negotiable. “ The only question,” said Kekewich, J., I have to 
 consider is, whether they — the railway bonds in question — are nego- 
 tiable according to the law merchant as part of the common law of 
 England. On this point I have had the evidence of several gentlemen 
 competent to speak, and they say that they have no doubt about the 
 matter at all.” See also Bentinck v. London Joint Stock Bank , (1893) 
 
 2 Ch. 120. It is not necessary to show a custom in relation to the 
 securities of the particular company. It is sufficient that instruments 
 of a like character issued by other companies are treated as negotiable. 
 See Venables v. Baring Brothers Sf Co., supra. Nor, again, is it neces- 
 sary to show that the instrument fulfils the conditions of a promissory 
 note. Rumball v. Metropolitan Bank (1876), 2 Q. B. D. 194 ; Goodwin 
 v. Robarts (1875), 1 App. Cas. 476. 
 
 An idea at one time prevailed that an instrument under seal could 
 not by the law merchant acquire the character of negotiability, but 
 there appears to be no substantial foundation for this view. In 
 Crouch v. Credit Fonder, supra, the Court no doubt regarded Glyn v. 
 Baker, 13 East, 509, as a strong authority that a promissory note 
 could not be under seal, but in that case no evidence of negotiability 
 by custom was adduced, and in Venables v. Baring Brothers Sf Co., 
 (1892) 3 Ch. 527 ; and Bechuanaland Exploration Co. v. London 
 Trading Bank, (1898) 2 Q,. B. 658, where such evidence was adduced, 
 the instruments were held to be negotiable, though under seal. 
 
 By sect. 106 of the Act of 1908 the doubt as to the validity in 
 Scotland of debentures to bearer is removed. 
 
 20 ( 2 ) 
 
308 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Floating Charge. 
 
 Validity and The validity and effect of what is now called a “floating charge” 
 floating on P ro P er ty> both present and future, of a company was first 
 
 charge? recognized in Re Panama , Sfc. Co. (1870), L. R. 5 Ch. 318, by Giffard, 
 
 L. J. In that case the company had issued debentures, and thereby 
 charged its “undertaking” with the payment thereof. It was held 
 that the word “ undertaking ” meant all the property, present and 
 future, of the company, and that the charge thereon was effective and 
 was to operate by way of floating security. Giffard, L. J., said: “ I 
 take the object and meaning of the debenture to be this, that the word 
 ‘undertaking’ necessarily infers that the compan}^ will go on, and that 
 a debenture holder could not interfere until either the interest which 
 was due was unpaid, or until the period had arrived for the payment 
 of his principal and that principal was unpaid. I think the meaning 
 and object of the security was this, that the company might go on 
 during that interval, and, furthermore, that during the interval the 
 debenture holder would not be entitled to any account of mesne profits 
 or of any dealing with the property of the company in the ordinary 
 course of their business. I see no difficulty or inconvenience in 
 giving that effect to this instrument, but the moment the company 
 comes to be wound up and the property has to be realized, that 
 moment the rights of these parties beyond all question attach. My 
 opinion is that, even if the company had not stopped, the debenture 
 holders might have filed a bill to realise their security. I hold that 
 under these debentures they have a charge upon all property of the 
 company, past and future, by the term ‘ undertaking,’ and that they 
 stand in a position superior to that of the general creditors who can 
 touch nothing until they are paid.” 
 
 This decision was of the utmost importance, not merely because it 
 put this construction on the word “ undertaking” — a word which had 
 been largely used in debentures — but because it recognized clearly 
 what many other nations do not recognize — the legal validity of a 
 general charge on all the property of a company, both present and 
 future, by way of floating security. Long previously it had, no doubt, 
 been decided that in equity future property, or even possibilities, 
 could be effectually charged. Row v. Daicson (1749), 1 Ves. 331 ; 
 Townshend v. Windham (1750), 2 Yes. 1 ; Bennett v. Cooper (1845), 
 9 Beav. 252 (subsequently recognized in Tailby v. Official Receiver , 
 13 App. Cas. 523). And Holroyd v. Marshall (1862), 10 H. L. C. 191, 
 was sufficient to show that a charge on all the property, present 
 and future, of a company was not too indefinite to take effect, and 
 these principles being established there was, of course, no difficulty 
 in holding that such a charge — provided the intention was sufficiently 
 expressed — could be made subject to the company’s power to deal 
 with the property notwithstanding the charge. 
 
FLOATING CHARGE. 
 
 Ch. XXXII. 
 
 309 
 
 It is not necessary, however, to the creation of a floating charge 
 that the word “undertaking” should be employed. Any words 
 charging all the property of a going company will be construed as 
 meant to give a floating charge only, and for the very good reason 
 that unless so construed such a charge would paralyze the company’s 
 business. See Wheatley v. Silkstone Co., 29 C. 1). 715; Florence 
 Land Co., 10 C. D. 530; Colonial Trusts Corporation, 15 C. D. 465. 
 
 A charge on part only of the property where necessary to effectuate 
 the intention, expressed or implied, will be treated as a floating 
 charge. Re Yorkshire Woolcombers ’ Association ; Houldsworth v. 
 
 Yorkshire W oolcombers* Association, (1904) A. 0. 355. 
 
 A charge on furniture and plant “ which now are or may be placed 
 on the premises ” has been held to be a floating charge. National 
 Provincial Bank v. United Electric Theatres, (1915) W. N. 397. 
 
 The nature of a floating charge has been elucidated still further in Some subse- 
 subsequent cases, and the following points have been settled : — quent eases. 
 
 (1) A floating charge operates as an immediate and continuing 
 charge on the property charged subject only to the company’s 
 powers to deal with the property in the ordinary course of its 
 business. Florence Land Co., 10 C. D. 541 ; Re Standard Manu- 
 facturing Co., (1891) 1 Ch. 627 ; Hubbuck v. Helms , 56 L. T. 
 
 232; Foster v. Borax Co., (1901) 1 Ch. 326; Nelson Sf Co. v. 
 
 Faber Sf Co., (1903) 2 K. B. 367. 
 
 (2) A floating charge, unless otherwise agreed, leaves the company at 
 liberty to create specific mortgages ranking in priority to the 
 floating charge. Wheatley v. Silkstone Coal Co. (1885), 29 
 C. D. 715 ; Government Stock, Sfc. Co. v. Manila Rail. Co., 
 
 (1897) A. C. 81 ; Re Castell Sf Brown, Limited , (1898) 1 Ch. 315. 
 
 And by dealings with debtors to give them a right of set-off. 
 
 Biggerstaff v. Rowatfs Wharf, (1896) 2 Ch. 93; Nelson v. Faber , 
 supra. 
 
 (3) Notice of the floating charge does not postpone the subsequent 
 
 specific mortgages. Re Hamilton* sWindsor Ironworks, 12C.D.712. 
 
 (4) But a floating charge is valid as against execution creditors. In 
 re Opera, (1891) 3 Ch. (C. A.) 260; Taunton v. Sheriff of 
 Warwickshire, (1895) 2 Ch. 319 ; Re Standard Manufacturing 
 Co., (1891) 1 Ch. 627 ; Davey Sf Co. v. Williamson Sf Sons, 
 
 (1898) 2 Q. B. 194 ; Simultaneous Colour Printing Syndicate v. 
 
 Foweraker, (1901) 1 K. B. 771; Duck v. Tower Galvanizing Co., 
 
 (1901) 2 K. B. 314; London Pressed Hinge Co. (1905), 21 
 T. L. R. 32^. Save that if the execution creditor takes property 
 in execution, and completes the execution, e.g ., by seizure and 
 sale by the sheriff, or a garnishee order absolute (but not a 
 garnishee order nisi : Norton v. Yates , (1905) W. N. 175) whilst 
 
310 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 the charge floats, he obtains, it has been held, priority. Evans 
 v. Rival Granite Quarries , (1910) 2 K. B. 979. 
 
 (5) It is also valid as against the general creditors, whether in a 
 winding-up or otherwise. General South American Co ., 2 C. D. 
 337. 
 
 (6) But sect. 212 of the Act has qualified its operations to some 
 extent where debentures carrying a floating charge are issued 
 within three months of winding up. By this section a floating 
 charge created within three months of the commencement of a 
 winding up is invalid unless it is proved that the company was 
 solvent immediately after the creation of the charge, except to 
 the amount of any cash paid to the company at the time of or 
 after the creation of, and in consideration for, the charge, with 
 interest at 5 per cent. (Sect. 212.) Money paid a few days 
 before and in reliance on the charge is cash paid “ at the time ” 
 within this section. Columbia Fireproofing Co ., (1910) 2 Ch. 
 120. As to the meaning of “cash,” see Re Orleans Motor Co., 
 (1911) 2 Ch. 41. 
 
 (7) A floating charge, unless otherwise agreed, retains its floating 
 character until a receiver is appointed or a winding-up com- 
 mences. Re Florence Land Co ., supra; Government Stock , Sfc. 
 Co., supra ; Foster v. Borax Co., supra ; Nelson Sf Co. v. Faber 
 Sf Co., supra; Evans v. Rival Granite Quarries , (1910) 2 K. B. 
 979. The charge ceases to be a floating charge on a winding-up 
 even though the debentures are not repayable under the express 
 terms of the debentures. Re Crompton & Co., Ltd., (1914) 
 1 Ch. 954. 
 
 (8) [A landlord can distrain for rent before the appointment of a 
 receiver. Afterwards he can still distrain at common law, but 
 not as against a receiver appointed by the Court, without leave 
 of the Court, and not on lands not comprised in the lease. 
 Re Roundwood Colliery Co., (1897) 1 Ch. 373.] 
 
 The best general description of a floating security is that given by 
 Lord Macnaghten in Government Stock Co. v. Manila Rail. Co., (1897) 
 A. C. at p. 86. 
 
 “ A floating security,” said his Lordship, “ is an equitable charge on 
 the assets for the time being of a going concern ; it attaches to the 
 subject charged in the varying condition it happens to be from 
 time to time. It is of the essence of such a charge that it remains 
 dormant until the undertaking charged ceases to be a going concern, 
 or until the person in whose favour the charge is created intervenes. 
 His right to intervene may of course be suspended by agreement. But 
 if there is no agreement for suspension, he may exercise his right 
 whenever he pleases after default.” See also Houldsworth v. York- 
 shire Woolcombers , (1904) A. C. 355. 
 
FLOATING CHARGE. 
 
 Ch. XXXII. 
 
 Pending any such intervention, the company has a free hand Subsequent 
 to deal with and dispose of the property charged in the ordinary company ^ith 
 course of the company’s business. It may do so by way of property 
 sale, lease, exchange, specific mortgage, or otherwise, as it deems t ° 
 
 most expedient. Thus, an assignment by the company of arrears of charge, 
 rent made before the appointment of a receiver gives ’the assignees a 
 good title as against debenture holders having only a floating charge ; 
 but if the land is specifically charged by the debentures, the deben- 
 ture holders can claim the rents. Re Ind , Coope & Co., (1911) 2 Ch. 
 
 223. 
 
 This power to create a specific mortgage ranking on the property 
 charged in priority to the debenture charge, was clearly not at first con- 
 templated ; for Giffard, L. J., in Re Panama, See. Co., supra, in stating 
 that the company might, notwithstanding the charge, deal with its 
 property, added : “ I do not refer to such things as sales or mortgages 
 of property” ; but the law of debentures, like all branches of a living 
 law, is constantly growing ; and it was held in Re Florence Land Co. 
 
 (1878), 10 Ch. D. 530, and in Re Colonial Trusts (1880), 15 Ch. D. 
 
 465, that the floating charge left the company at liberty to create 
 specific mortgages or charges in priority to such floating charge. In 
 the latter case it was laid down (at p. 472) that it would be a monstrous 
 thing to hold that a floating security prevented the making of specific 
 charges, or specific alienations of property, because so to hold would 
 destroy the very object for which the money was borrowed — the 
 carrying on the business of the company. 
 
 In a subsequent case it was urged that where the subsequently- 
 created charge was only an equitable security, it ought not to have 
 priority over the equitable charge of the debenture holder ; but this, 
 too, was overruled. See TVheatley v. Silkstone Co. (1885), 29 Ch. D. 715,’ 
 where the company, after creating a floating charge on its under- 
 taking, had created a subsequent equitable charge in favour of its 
 bankers by deposit of title deeds, and North, J., after referring 
 to the authorities, said : “ Those authorities furnish a very clear 
 and intelligible principle to be followed in this case. I find that 
 the debenture is intended to be a general floating security over all the 
 property of the company as it exists at the time when it is to be put in 
 force ; but it is not intended to prevent, and has not the effect of in 
 any way preventing, the carrying on of the business in all or any of 
 the ways in which it is carried on in the ordinary course, and inas- 
 much as I find that in the ordinary course of business, and for the 
 purpose of the business, this mortgage was made, it is a good mort- 
 gage upon, and a good charge upon, the property comprised in it, and 
 is not subject to the claim created by the debentures.” 
 
 This decision is a specially strong one, because the debentures in 
 
312 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Prior mort- 
 gages, pro- 
 hibition of. 
 
 question were expressed to be by way of first charge on the under- 
 taking; but in regard to this the learned judge said: “I find also 
 that the ‘ first charge ’ referred to in the debentures is fully satisfied 
 by being the first charge against the general property of the company 
 at the time when the claim under the debentures arises, and can have 
 effect given to it. There will be a declaration, therefore, that the 
 charge of the plaintiffs is prior to the debentures.” See also Ward v. 
 Royal Exchange Shipping Co., 58 L. T. 174. 
 
 In balancing equities between debenture holders under a floating 
 charge and subsequent specific incumbrancers, it must not be for- 
 gotten that the debenture holders are presumed to be cognizant of 
 the above-mentioned decisions and to have contracted on the footing 
 thereof. 
 
 The extreme elasticity of a floating charge, and the wide powers 
 which it thus allows to the company of dealing with the debenture 
 holders’ property, are in some cases considered excessive, and, accord- 
 ingly, it is not uncommon to insert in the instrument creating 
 the charge words to the effect that the floating charge is not to 
 authorize the company to create any mortgage or charge ranking 
 in priority to or pari passu with the debentures, and this qualification 
 is for the most part effective. Thus, if the company creates a 
 mortgage in favour of any person who has notice of the floating charge 
 and qualification, such person ranks after the floating charge. But a 
 person who obtains a legal mortgage, and makes out (a) that he was not 
 aware of the existence of the floating charge; or (b) that though he was 
 aware of the charge he was not aware of the qualification, is entitled 
 to priority by virtue of the legal estate. English , Scottish, Sfc. Co. v. 
 Brunton, (1892) 2 Q. B. 700 ; Coveney v. Persse, (1910) 1 Ir. R. 194. 
 Such a qualification, too, in a floating charge is to be strictly construed. 
 See Brunton v. Electrical , Sfc. Corporation, (1892) 1 Ch. 434, where it 
 was held that the qualification did not prevent the company’s solicitor 
 from acquiring a lien in priority to the debentures ; and see Robson v. 
 Smith, (1895) 2 Ch. 118. Nor will the prohibition prevent a sub- 
 sequent equitable mortgagee who obtains the title deeds of property 
 comprised in the debenture holder’s security and takes without notice 
 from obtaining priority. Castell Sf Brown , Limited , (1898) 1 Ch. 315 ; 
 Standard Rotary Machine Co., 95 L. T. 829. Nor will it prevent a 
 mortgage to a vendor of after-acquired property to secure purchase- 
 money ( Wilson v. Kelland, (1910) 2 Ch. 306), or a mortgage to secure 
 an advance of part of the purchase-money by a third party. Re 
 Connolly Bros., Ltd., (1912) 2 Ch. 25. Where a specific charge is 
 made expressly subject to a floating charge, the specific charge is 
 postponed as from the date when the floating charge becomes 
 crystallised by the appointment of a receiver. Re Robert Stephenson 
 Sf Co., Ltd., 107 L. T. 33. 
 
PERPETUAL DEBENTURES AND DEBENTURE STOCK. Ch. XXXII. 
 
 313 
 
 Uncalled Capital. 
 
 As to mortgaging this, see supra , p. 270. 
 
 It is nearly always included in the security for debentures and 
 debenture stock. Prima facie it does not prevent the company from 
 forfeiting shares for non-payment of calls. Agency Land and Finance 
 Co ., 20 T. L. E. 41. 
 
 Perpetual Debentures and Debenture Stock. 
 
 For many years it has been quite common to issue debentures or 
 debenture stock described as “perpetual” or “irredeemable,” mean- 
 ing that such debentures were made payable only in the event of a 
 winding-up or some serious default by the company. Sometimes, also, 
 debentures and debenture stock were made payable at a remote period, 
 such as fifty or a hundred years after issue. In cases like these, doubts 
 often arose whether the securities were effective, or whether the in- 
 definite or prolonged postponement of the right of redemption was not in 
 effect a “ clog on the equity,” and, as such, void. See Company 
 Precedents, Part III., p. 122 et seq. To quiet these doubts, and to 
 bring the law into accord with what it has commonly been taken to be, 
 sect. 103 of the Act of 1908 enacts as follows : — 
 
 103. A condition contained in any debentures or in any deed for 
 securing any debentures [or debenture stock], whether issued or 
 executed before or after the passing of this Act, shall not be invalid 
 by reason only that thereby the debentures [or debenture stock] are 
 made irredeemable or redeemable only on the happening of a contin- 
 gency, however remote, or on the expiration of a period, however 
 long, any rule of equity to the contrary notwithstanding. 
 
 Trust Deeds. 
 
 Debentures and debenture stock are constantly secured by a trust or Trust deeds, 
 covering deed, conveying property of the company to trustees in 
 favour of the debenture holders, charging other property and containing 
 a number of ancillary provisions regulating the respective rights of 
 the company and the debenture holders. Whether there should be a 
 trust deed or not must depend on the circumstances ; where the 
 debentures are issued only for a temporary purpose, e.y., to bankers as 
 security for an overdraft or to other persons for a short term, or are to 
 be taken up by the directors, a deed may be dispensed with ; but in 
 transactions of any magnitude there is a growing disposition to 
 supplement the debentures by a trust deed, as improving the security. 
 
314 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Its advantages may be briefly summarised as follows : — 
 
 1 . It constitutes trustees charged with the duty of looking after the 
 
 rights and interests of the debenture holders. 
 
 2. The debenture holders can by these trustees of theirs enter and 
 
 sell the property comprised in the security. 
 
 3. The legal estate is vested in the trustees with the protection 
 
 which it carries with it. 
 
 As regards the frame of it, a trust deed usually contains a legal 
 mortgage of the principal properties, e.g ., in the case of a brewery, 
 the brewery and tied houses, and a general charge by way of floating 
 security on the rest of the assets and undertaking. Following on the 
 conveyance and charge comes a clause specifying the various events on 
 the happening of which the security is to become enforceable. 
 
 1. Default in payment of principal or interest. 
 
 2. Winding-up. 
 
 3. Breach of covenant. 
 
 4. Appointment of a receiver. 
 
 Other events are sometimes added. 
 
 The trust deed then provides that when the security becomes 
 enforceable, the trustees may at their discretion and shall, at the 
 request of a specified proportion of the debenture or debenture stock- 
 holders, sell the mortgaged premises, and apply the net proceeds in 
 paying off the debentures or debenture stock and hand the balance to 
 the company. 
 
 The deed also empowers the trustees to appoint receivers to carry 
 on the business ; provides for the trustees’ indemnity, for meetings of 
 the debenture holders, giving large powers to majorities, and imposes 
 on the company certain obligations as regards insurance, repairs, 
 furnishing information, further assurance, &c. In the case of debenture 
 stock, the trust deed, in addition to the above provisions, usually 
 constitutes the stock by a covenant therein contained — on the part of 
 the company — to pay the amount of the stock, and the interest, or by 
 an acknowledgment of indebtedness to the trustees for the amount 
 thereof. The trustees are commonly given remuneration by the deed, 
 but, unless otherwise provided, this ranks after the debenture or 
 debenture stock holders. Hodgson v. Accles, 51 W. B. 57 ; W. N. 
 (1902) 164. The deed usually provides otherwise, and gives the 
 trustees a lien, which is effective. Re Piccadilly Hotel , Ltd ., (1911) 
 2 Oh. 534. 
 
 The trustees are not usually entitled to remuneration after the 
 appointment of a receiver unless they render appreciable services after 
 such appointment. Re Locke Sf Smith , Ltd., (1914) 1 Ch. 687. 
 
 See further Company Precedents, Part III., pp. 93 et seq. and 323 
 et seq. ; and as to application of compensation money for refusal to 
 
REGISTRATION OF DEBENTURES. Ch. XXXII. 
 
 renew licences of public-houses, see Noakes v. Noakes, (1907) 1 Ch. 
 64 ; Dawson v. Braine's Tadcaster Breweries Co (1907) 2 Ch. 659 ; 
 Bentley's Yorkshire Breweries , (1909) 2 Ch. 609. As to income-tax 
 on distribution, see Smith v. Law Guarantee and Trust Society , (1904) 
 • 2 Ch. 569. 
 
 Registration of Debentures under Bills of Sale Acts. 
 
 In Standard Manufacturing Co ., (1891) 1 Ch. 627 (C. A.), it was Bills of Sale 
 held that the Bills of Sale Acts, 1878 and 1882, did not apply to Acts - 
 companies under the Act of 1862. The principle of the decision 
 (Lord Halsbury, L. C., being a party to it) was expressed by 
 Bowen, L. J., who delivered the judgment of the Court, in these 
 words: “We think that this appeal should therefore be allowed 
 with costs, both here and below, on the ground that the mortgages 
 or charges of any incorporated company, for the registration of 
 which other provisions have been made by the Companies Clauses Act, 
 
 1845, or the Companies Act, 1862, are not within the Bills of Sale 
 Act, 1878.” The Companies Act, 1908, gives in effect a legislative 
 recognition to this decision as good law. Debentures, not being 
 bills of sale within the Bills of Sale Acts, are accordingly not void as 
 against execution creditors for want of registration under those Acts. 
 
 See Standard Manufacturing Co., supra ; Taunton v. Sheriff of Warwick- 
 shire , (1895) 2 Ch. 319 ; Robson v. Smith, (1895) 2 Ch. 118; and Re Opera 
 Co., (1891) 3 Ch. 260. Nor are debentures in any way invalidated 
 by those Acts as against the liquidator of the company as repre- 
 senting creditors of the company ( Marine Mansions Co. (1867), 4 Eq. 
 
 601 ; Asphaltic Wood Co. (1878), 49 L. T. 159) ; and the fact that the 
 debenture holders’ chattel property remains at the date of winding-up 
 in the possession of the company as reputed owner makes no difference ; 
 for sect. 10 of the Judicature Act, 1875, has not introduced the order 
 and disposition clause into winding-up with other bankruptcy rules. 
 
 Crumlin Viaduct Works Co. (1879). 11 C. D. 755; Gorringe v. Irwell, 
 
 Sfc. Works (1886), 34 C. D. 129. 
 
 But now any mortgage or charge to secure debentures, or in the 
 nature of a bill of sale, must be registered under sect. 93 of the Act 
 of 1908, as to which see p. 277, ante. This is the substitute, in the 
 case of companies, for registration by individuals under the Bills of 
 Sale Acts. 
 
 Transfer of Debentures. 
 
 A debenture to bearer is transferable by delivery. So is a Transfer of 
 debenture-stock certificate to bearer. A debenture to registered debentures. 
 
316 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Blank 
 
 transfers. 
 
 holder is transferable in the manner specified therein ; and, if no 
 mode of transfer is specified, sect. 25 (6) of the Judicature Act, 
 1873, applies, and enables the owner to transfer by instrument in 
 writing ; and, after notice thereof to the company, the transferee can 
 sue in his own name. Prima facie , a transferee of a debenture not to 
 bearer takes subject to all equities. Supra , p. 292. But, as appears 
 above, the instrument usually excludes equities. As to forged transfers, 
 see p. 136. After a resolution to wind up voluntarily a debenture of 
 the company in the hands of a shareholder can only be assigned subj ect 
 to future calls. In re China Steamship Co., 7 Eq. 240 ; and see Re 
 Taunton, Delmard, Lane Co., (1893) 2 Ch. 175, and Partridge v. 
 Rhodesia Goldfields, (1910) 1 Oh. 239. It is otherwise where the 
 debenture is by its terms to be transferable free from equities. 
 Supra, p. 292. But even there the terms of the debenture may 
 be such that the transferee cannot, until registration, maintain 
 his title to the benefit of the provision. In practice, a transfer is 
 generally framed very much on the lines of the transfer of shares 
 given in Table A. and is signed both by the transferor and the 
 transferee, and is taken in to the office of the company to be 
 registered. Thereupon the company’s official registers the transfer, 
 and a note of registration is endorsed. 
 
 It was held in Driver v. Broad, (1893) 1 Q. B. 744, that debentures 
 creating a floating charge on the undertaking of a company which 
 included land created an interest in land, and that a contract for the 
 sale of such a debenture was a contract for the sale of an interest in 
 land within the 4th section of the Statute of Frauds, and therefore not 
 enforceable unless in writing signed by the vendor or his agent. This 
 would seem to apply to debentures to bearer charged on land as well 
 as to registered debentures ; but the solution of the difficulty is that 
 once delivery of a debenture to bearer is effected pursuant to the 
 contract, the bearer is brought into direct privity with the company 
 under whose seal the debenture is given, and his title is evidenced by 
 writing. 
 
 Where by the conditions a registered debenture is only transferable 
 by deed, it must be borne in mind that a blank transfer — that is, a 
 deed executed by the transferor with a blank for the name of the 
 transferee — is, as a deed, void ( Hibblewhite v. McMorine , 6 M. & W. 
 200), and the person with whom such a blank transfer is deposited 
 cannot fill up the blank and re-deliver the instrument without a 
 power of attorney under seal. This is very inconvenient. But where 
 a deed is not required, a transfer in blank, though inchoate, can 
 be made operative by filling up the blank, and the authority so to 
 fill it up may be oral or may be implied. See supra , p. 133. 
 
 Under the Forged Transfer Acts, 1891 and 1892, a company is now 
 
DEPOSIT OF DEBENTURES OR CERTIFICATES. Ch. XXXII. 
 
 317 
 
 empowered to make compensation to persons who have suffered loss 
 from accepting in good faith forged transfers of the company’s stock, 
 shares, or securities or transfers executed under a forged power of 
 attorney. 
 
 The stamp duty on a transfer of a debenture on sale is upon an ad 
 valorem scale, fixed by sect. 122 of the Stamp Act, 1891, and on a con- 
 tract note on a varying scale from 6d. to £1 fixed by the Finance 
 (1909-10) Act, 1910, s. 77. See Customs and Inland Revenue Act, 
 1893, c. 7, s. 3. 
 
 The stamp on surrender or discharge is 6d. per 100/. 
 
 Discount. 
 
 Debentures may be issued at a discount where the directors have 
 the general powers of the company, and there is nothing in the regula- 
 tions or memorandum to prevent issue at a discount. Re Anglo- 
 Danubian Co. (1875), 20 Eq. 339; Re Regent 1 s Canal , Sfc. Co. (1876), 
 3 Ch. D. 43 ; Campbell's case (1876), 4 Ch. D. 470. The considerations 
 which render the issue of the shares of a limited company at a discount 
 illegal bave no application to debentures or debenture stock. But 
 where a debenture issued at a discount contains a clause enabling 
 the holder to call for the allotment in satisfaction of fully paid up 
 shares equal to the full nominal amount of the debenture, that clause, 
 it has been held, is objectionable. Moseley v. Koffyfontein Mines , 
 Limited , (1904) 2 Ch. 108. 
 
 See also Bury v. Famatina Development Co., (1910) A. C. 439, 
 affirming the Court of Appeal. In this case bonus certificates payable 
 out of profits were issued with debentures, and it was held that to 
 satisfy such certificates by the issue of paid-up shares was ultra vires. 
 See supra , p. 69. 
 
 Deposit of Debentures or Certificates. 
 
 Sometimes money is raised by the deposit by the directors of deben- 
 tures or certificates of debenture stock which they have power to issue. 
 There is no objection primd facie to such a mode of raising money. 
 If the instrument deposited is negotiable the depositee gets the legal 
 title, and if the instrument is to registered holder the depositee 
 obtains a good equitable title, even though the debentures deposited 
 are only in blank. Re Regent' s Canal Ironworks Co. (1876), 3 Ch. D. 
 43 ; Re Strand Music Hall, 3 De G. & S. 147 ; Hampshire Land Co., 
 (1896) 2 Ch. 743. If the company is insolvent, the person with whom 
 the debentures are deposited can claim a dividend on the deposited 
 debentures pari passu with the other debentures of the series, until 
 the whole of the debt as security for which the debentures were 
 deposited has been paid. Re Regent's Canal Ironworks , 3 Ch. D. 43. 
 
318 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Debentures agreed to be Issued. 
 
 Effect of 
 agreement 
 only to issue 
 debentures. 
 
 Where money is advanced to a company upon the terms that deben- 
 tures charged upon the undertaking, or upon any specified property 
 of the company, shall be issued by way of security, the lender at once 
 obtains a charge in equity ; for equity treats that as done which ought 
 to be done. Levy v. Abercorris Slate Co., 37 C. D. 264 ; New Durham 
 Salt Co., 7 T. L. E. 13; Tailby v. Official Receiver, 13 App. Cas.'523. 
 The deposit by way of security of debentures containing a blank for 
 the payee’s name affords evidence of an agreement to give security by 
 complete debentures in the form of those so deposited. Re Strand 
 Music Hall, 3 De Gr. J. & S. 147 ; Re Queensland Land and Coal Co., 
 (1894) 3 Ch. 181 ; f Re Hampshire Land Co., (1896) 2 Ch. 743; Pegge 
 v. Neath District, Sfc. Co., (1898) 1 Oh. 183; Simultaneous Colour 
 Printing Syndicate v. Foweraker, (1901) 1 K. B. 771. 
 
 Thus, where a prospectus offered for subscription 20,000/. worth of 
 mortgage debentures “to be secured on the entire property of the 
 company,” and S. applied for debentures “upon the terms of the 
 company’s prospectus,” and a resolution to allot was passed by the 
 directors and notified to S., but no allotment took place, and after- 
 wards a trust deed was executed charging certain property specified 
 “ in the schedule ” in favour of the debenture holders, but no schedule 
 was annexed ; the Court in the winding-up held S. entitled to a charge 
 on the entire property of the company. Re New Durham Salt Co. 
 (1891), 2 Meg. 360; 7 T. L. E. 18. 
 
 The operation of these cases is, however, to some extent modified by 
 sect. 93 of the Companies Act, 1908, requiring particulars of every 
 mortgage or charge for securing debentures or debenture stock to be 
 registered “ within twenty-one days after the date of its creation,” and 
 in default avoiding the charge as against creditors. Hence it is appre- 
 hended that where there is an agreement for a charge, as in the case 
 last mentioned, the equitable charge must be registered ; even where, 
 as in the case of debentures executed in blank and deposited by way 
 of security, there is no accompanying memorandum of deposit. But 
 although the Court would be unable to treat an unregistered agreement 
 in writing to give a mortgage or charge as a subsisting charge {Ex 
 parte Mackay, 8 Ch. 643), it would in some cases be able to compel 
 the company to specifically perform the agreement by creating the 
 requisite securities {Ex parte Homan, Re Broadbent, 12 Eq. 598 ; Ex 
 parte Hauxwell, 23 C. D. 627), and might in such a case, if the com- 
 pany was solvent, allow an extension of the time for registration. See 
 sect. 96. 
 
 Scrip certificates for debentures or debenture stock, where the 
 
PRIORITIES OF DEBENTURE HOLDERS. Ch. XXXII. '319 
 
 debentures or trust deed are not to be issued or executed for some 
 time, are occasionally registered so as to afford interim protection. 
 
 Priorities of Debenture Holders. 
 
 Questions as to the priority of different series of debentures do not 
 often arise, but it may be well to indicate how they arise and how they 
 may be solved. 
 
 The priorities of debentures depend on various considerations — on 
 the true construction of the instrument or instruments creating them, 
 on the rule that the legal estate prima facie gives priority, or the rule 
 that prima facie he who is first in time has the better equity, and on 
 the registration or non-registration under sect. 93 of the Act, or under 
 sect. 14 of the Act of 1900, or sect. 10 of the Act of 1907. As a 
 general, almost invariable, rule, debenture holders of the same series 
 are made to rank pari passu inter se; even if it is not so expressed the 
 Court will, from slight indications, infer equality. Where such equality 
 exists, no individual debenture holder is allowed to get an advantage 
 for himself. If he gets judgment, the judgment enures for the benefit 
 of all the debenture holders ( Bowen v. Brecon Rail. Co ., L. It. 3 Eq. 
 541) : if he obtains a collateral security he holds it as trustee for all. 
 Small v. Smith , 10 App. Cas. 131 ; Landowners v. Ashford , 16 C. D. 
 411. The series constitutes, in fact, one great contributory mortgage. 
 Whether a company can redeem some of the debentures of a series and 
 re-issue them to rank pari passu with those left unredeemed is a nice 
 question, which must be determined on construction of the language of 
 the debenture, and the terms of sect. 104 of the Act. The object of 
 this section is to override the principle laid down by the Court. 
 George Routledge Co ., (1904) 2 Ch. 474; W. Tasker Sf So?is, (1905) 
 
 1 Ch. 283; Perth Electrical Tramways , (1906) 2 Ch. 216; Russian 
 Petroleum Co ., (1907) 2 Ch. 540, according to which a debenture 
 once paid off was extinguished, and could not be re-issued, and it 
 appears to have in a great measure done this. Fitzgerald v. Persse , 
 (1908) 1 Ir. R. 279. Though the construction of the section presents 
 many points of difficulty. 
 
 The issue of part of a series of debentures which are all to rank pari 
 passu does not by implication restrict the company’s power as regards 
 the terms on which the rest of the issue may be dealt with. Regent's 
 Canal , 3 C. D. 43. The company may even issue the balance of such 
 debentures, although a debenture holders’ action has been commenced, 
 at any time before a receiver has been appointed in the action. 
 Hubbard v. Hubbard , 68 L. J. Ch. 54 ; and see Geisse v. Taylor, (1905) 
 
 2 K. B. 658. 
 
 Priorities of 
 
 debenture 
 
 holders. 
 
 Unpaid 
 
 vendor. 
 
 Wilson v. 
 Kelland, 
 
 (1910) 2 Ch. 
 306 ; Hoffman 
 v. Boynton , 
 (1910) 1 Ch. 
 519. 
 
 Where two or more series of debentures are issued giving a floating 
 
320 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 charge, they will rank according to the date of issue, in the absence of 
 anything to show that they are to rank pari passu. James v. Boythorpe 
 Colliery Co., 2 Meg. 55; Gartside v. Silkstone Coal Co., 21 0. D. 762; 
 and see Lister v. Henry Lister Sf Son, 41 W. P. 330. Hence, where 
 mortgage debentures of a specific series are to rank pari passu, the 
 company cannot issue debentures of some further series to rank pari 
 passu with the original series, unless the terms of the last-mentioned 
 series have reserved such a power to the company, either expressly 
 or impliedly. Ibid. The reservation of a power to create mortgages 
 is not sufficient for this purpose. Re Benjamm Cope Sf Sons, (1914) 
 1 Ch. 800. 
 
 Specific Property charged. 
 
 Where a company issues a series of debentures, themselves charging, 
 or accompanied by a trust deed charging, specific property of the 
 company, such a charge ranks prima facie in priority to any subsequent 
 charge on the same property by the company on the principle qui prior 
 est tempore^ potior est jure ; but this rule yields to that reverence with 
 which the law always regards the legal estate and the bona fide pur- 
 chaser for value, and if, consequently, the company creates a subse- 
 quent charge, whether in favour of debenture holders, or otherwise, 
 and the persons in whose favour such charge is created advance their 
 money in good faith, without notice (actual or constructive) of the 
 prior debenture charge, and get the legal estate ; then, by virtue of 
 such legal estate, they take priority over the prior charge of the 
 debenture holders. It is to prevent this danger that the legal estate is 
 usually vested in trustees to secure the debenture holders. See Company 
 Precedents, Part III., p. 93. 
 
 Floating Charge. 
 
 As to property comprised in a floating charge, we have already seen 
 that debenture holders having a charge thereon may be postponed to- 
 subsequent specific mortgages (p. 312), and this, in some cases, 
 even though the conditions of the charge prohibit the creation of 
 prior mortgages (p. 312). If there is no such prohibition, the sub- 
 sequent specific mortgage takes priority, by virtue of the fact that 
 the floating security is a floating security, and, by its very nature, 
 therefore, permits the company, in carrying on its business, to 
 create charges in priority to it. If there is such a prohibition, then 
 the subsequent mortgagee takes priority — in cases where he does so 
 — by virtue of his good faith and the legal estate or a better equity. 
 Bower v. Foreign Gas Co., W. N. (1877) 222 ; Brunton v. Electrical 
 Engineering Co., (1892) 1 Ch. 434 ; Castell Sf Brown , (1898) 1 Ch. 315 ; 
 Valletort Sanitary Steam Laundry, (1903) 2 Ch. 654 ; and see Company 
 Precedents, Part III., p. 142 et seq. 
 
SPECIFIC PERFORMANCE. 
 
 Ch. XXXII. 
 
 32 i 
 
 Sect. 209 (2) (b) of the Act of 1908 gives local rates, clerks’ and 
 servants’ salaries and workmen’s wages priority in a winding-up over 
 debenture holders with a floating charge. See p. 410, post , and Ann. 
 Pr. 1915, p. 2196. 
 
 Majority Clauses. 
 
 Debenture trust deeds commonly, and sometimes debentures, con- 
 tain provisions enabling the majority — say three-fourths — of the 
 holders of the debentures or debenture stock at a meeting, to assent 
 to modifications of the rights of the holders as a class. The object 
 of such a power is, of course, to prevent a perverse or unreasonable 
 minority from obstructing a beneficial arrangement, e.y., where it may 
 be necessary to give the company time for payment of interest or to 
 allow reduction of the rate, or enable it to raise further funds by a 
 fresh issue of debentures to rank pari passu. The operation of such a 
 clause has been discussed in a number of cases ( Follit v. Eddy stone, 
 (1892) 3 Ch. 75 ; Mercantile Co. v. International Co. of Mexico , (1893) 
 1 Ch. 484, n. (C. A.); Mercantile Trust Co. v. River Plate Co., (1894) 
 1 Ch. 578: Re Dominion of Canada Freehold Estate Co., 55 L. T. 347 : 
 Sneath v. Valley Gold Co., (1893) 1 Ch. 477 (C. A.); Walker v. 
 Elmore's German Metal Co., 85 L. T. 767 (C. A.) ; Kent Collieries, 23 
 T. L. P. 559; Cox-Moore v. Peruvian Corporation, (1908) 1 Ch. 604); 
 Shaw v. Royce, Limited , (1911) 1 Ch. 138; Northern Assurance, Ltd. 
 v. Farnham United Breweries , (1912) 2 Ch. 125; and the result of 
 these cases may be summed up by saying that the powers of the 
 meeting depend entirely on the true construction of the provisions in 
 question. And each class of persons may vote in accordance with 
 their own interests, provided that the whole scheme is fair. Goodfellow 
 v. Nelson Line , Ltd., (1912) 2 Ch. 324. In several cases, the provisions 
 of the clause were held sufficient to enable the majority to bind the 
 class to accept shares of a new company in satisfaction of the secu- 
 rities of the existing company, but they have been held not to enable 
 the company to sell its assets and distribute them among those of the 
 debenture holders who were willing to accept the lowest price for their 
 debentures. New York Taxicab Co., (1913) 1 Ch. 1. See further 
 sect. 120 of the Act. 
 
 Specific Performance. 
 
 Specific performance of a contract to take or to subscribe for 
 debentures could not under the old law be enforced. Thus, if A. 
 agreed to take up debentures of the company, and failed to pay, he 
 could not be forced to pay up, the theory of law being that the com- 
 pany could get the loan elsewhere and did not need to invoke the 
 p. 21 
 
 Majority 
 
 clauses. 
 
 Return of 
 guarantee. 
 
 L. J., 21 Jan. 
 1911, p. 716; 
 H estop v. 
 Paraguay 
 Central, 
 
 54 L. J. 235. 
 
 Specific per- 
 formance. 
 
322 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Books. 
 
 special jurisdiction of equity to aid it. All that the company could do 
 was to sue the defaulter for the damages (if any) it had sustained. 
 South African Territories , Limited v. Walling ton, (1897) 1 Q,. B. 692 
 (C. A.); (1898) A. C. 309. By sect. 105, however, of the Act, “A 
 contract with a company to take and pay for any debentures of the 
 company may be enforced by an order for specific performance.” 
 
 Where debentures are issued payable by instalments, and the com- 
 pany has declared the debentures forfeited, the company cannot 
 recover calls made before the forfeiture under this section. Kuala 
 Pa hi Estate v. Mowbray , (1914) W. N. 321. 
 
 Books. 
 
 The books of the company may be a very important part of the 
 debenture holders’ security . v The words “ all the property of the 
 company ” in the debenture holder’s charge, though, prima facie , 
 amply sufficient to cover them, have been held not to extend to the 
 company’s books. See Clyne Tin Plate Co. (1882), 47 L. T. 439 ; Engel v. 
 South Metropolitan Co ., (1892) 1 Ch. 442. The generality of this 
 proposition seems, however, to require some qualification, at least, to . 
 render it reconcileable with Re Capital Fire Insurance Association 
 (1883), 24 0. D. 408. That case — which was one of solicitor’s lien — 
 draws a distinction between different kinds of books. There are 
 books which, by the provisions of the Companies Acts, are to be kept 
 at the office of the company, such as the register of members and the 
 register of mortgages ; and for the directors to mortgage or charge 
 these would, as Cotton, L. J., points out, be to deal with the property 
 of the company in a way inconsistent with its objects and constitution ; 
 and the same principle applies to books which, by the articles of 
 the company, are to be kept at its office — such, for instance, as the 
 directors’ minute-book ; but these obviously reasonable restrictions seem 
 the only just limit on the company’s power of creating a charge over 
 its books. 
 
 Debenture Stock. 
 
 In the matter of security, of payment of interest, and of transfer, 
 debenture stock differs hardly at all from debentures ; as to 
 the time of payment it differs in being generally made payable 
 only in the event of a winding-up, and not at a fixed date. It 
 is in its divisibility that debenture stock differs mainly from 
 debentures. A debenture is always for a fixed sum, say 100/., 
 and this sum is only transferable as an entirety ; whereas debenture 
 stock, unless the regulations otherwise provide, can be transferred in 
 any amounts, e.g ., 550/., or 71/., or 13/., and several small holdings 
 can be consolidated into one larger holding, a single certificate being 
 
DEBENTURE STOCK. 
 
 Ch. XXXII. 
 
 323 
 
 obtained for the aggregate amount. But, to prevent complications, 
 the articles commonly make the stock transferable in amounts of 
 not less than 1/., or 5/., or 10/. 
 
 Constitution. 
 
 Debenture stock, as mentioned above, is generally constituted by Constitution 
 a trust deed. The deed contains a covenant for the payment, either by trust deed, 
 at a fixed date or in certain events (e.y., a winding-up), of a specified 
 capital sum — say 100,000/. — which is to be called the stock, and for 
 the payment of interest, and gives to the trustees security, by way of 
 mortgage or charge, as in a debenture trust deed. It contains also 
 provisions for the keeping of a register of the beneficial owners of 
 the stock, and for transfers and transmissions thereof, and for the 
 issue to such owners of certificates of title, and for meetings of the 
 stock-holders, &c., and it usually reserves to the company power to 
 redeem at a premium before maturity. 
 
 Debenture stock of a company under the Companies Act, 1908, is 
 essentially different from debenture stock issued by railway and other 
 eompanies under the Companies Clauses Act, 1863. 
 
 Under the terms of the deed, there is not usually any direct contract 
 by the company with the stock-holder ; but he is a beneficiary, and, 
 as such, the Court will recognize and protect his title. Re Empress 
 Engineering Co. (1878), 16 Ch. D. 128; Gandy v. Gandy (1885), 
 
 80 C. D. 57. It is not easy to reconcile with this, Dunderland Iron 
 Ore Co ., (1909) 1 Ch. 446. 
 
 Stock Certificate. 
 
 The stock certificate issued to the owners usually runs as follows : — Form of stock 
 
 “ This is to certify that of is the registered proprietor of cer bfi cate - 
 
 £ debenture stock of the above-named company,” and is under 
 
 seal. 
 
 As to the danger of giving an incorrect certificate, see supra , 
 pp. 143, 144. 
 
 Remedies of Debenture and Debenture Stock-holders. 
 
 Where Debenture carries no Charge. 
 
 Where the debenture is not secured by any mortgage or charge, Remedies, 
 the remedy of the holder is either to bring an action to enforce the 
 debenture and obtain judgment and then levy execution on the 
 property of the company ; or he may, either before or after j udgment, 
 present a petition for the winding-up of the company, or, if there be 
 a winding-up in progress, he can prove in the winding-up for the 
 amount due to him, but, not having any security, he has no priority 
 
 21 ( 2 ) 
 
DEBENTURES AND DEBENTURE STOCK. 
 
 324 
 
 either in the winding-up or otherwise ; he ranks merely with the 
 ordinary creditors. 
 
 Debentures or Debenture Stock carrying a Mortgage or Charge. 
 
 In this case, the remedies open to the debenture holder or debenture 
 stock-holder necessarily depend on the terms of the security, and these 
 terms must be scrutinised accordingly. Ordinarily, the remedy of 
 a debenture holder, when the company is in default as regards prin- 
 cipal or interest, is to bring an action against the company to obtain 
 payment and to enforce his securities. Where a debenture holder is 
 required to give notice to the company prior to action he must do so. 
 Rogers Sf Co. v. British , etc. Association , 68 L. J. Q,. B. 14. In 
 such an action, the debenture holder plaintiff sues on behalf of himself 
 and the other members of the class, and the Court usually appoints 
 a receiver (if necessary a manager also), and by its judgment declares 
 the debentures to be a charge on the property, directs inquiries as to 
 who are the holders, and the amount due, and either orders a sale of 
 the property or gives* liberty to apply for a sale. See Company Prece- 
 dents, Part III., pp. 481 and 720 et seq. 
 
 As a rule the .undertaking of a company carrying on some service to 
 the benefit of the public cannot be sold. The Crystal Palace is not, 
 however, exempt from sale as a public undertaking. Crystal Palace 
 Co ., 130 L. T. N. 483. 
 
 Where Trust Deed. 
 
 Where there is a trust deed, whether for securing debentures or 
 debenture stock, the trustees can be plaintiffs in an action for 
 enforcing the charge ; but, commonly, the action is brought by a 
 holder of the debentures or debenture stock, and the company and 
 the trustees are made defendants. In such an action, similar relief 
 is usually granted. See Company Precedents, Part III., p. 481. 
 
 Appointment of Receiver .* 
 
 Receiver. In an action to enforce the security, the Court has power to 
 
 appoint a receiver, and is usually asked to exercise it ; and this power 
 is not confined to cases in which the principal or interest on the 
 debenture or debenture stock is in arrear. A receiver may be 
 appointed whenever the security is in danger. Thus, where a company 
 had become insolvent and closed its works, a receiver was appointed. 
 McMahon v. North Kent Iron Works, (1891) 2 Ch. 148. So, where a 
 winding-up of the company takes place or is imminent. Victoria 
 Steamboats Co., (1897) 1 Ch. 158 ; Hodson v. Tea Co., 14 C. D. 859 ; 
 Wallace v. Universal Co., (1894) 2 Ch. 547. Or, where a company is. 
 
 * See generally Riviere on Receivers. 
 
DEBENTURE STOCK. 
 
 Ch. XXXII. 
 
 325 
 
 disposing of its undertaking in violation of the terms of the security 
 (. Hubbuck v. Helms , 56 L. T. 232 ; but see Foster v. Borax Co., (1901) 
 1 Ch. 326) ; or where there are judgments against the company. 
 Edwards v. Standard Rolling Stock Syndicate , (1893) 1 Ch. 574. See 
 also Victoria Steamboat Co., Smith v. Wilkinson, (1897) 1 Ch. 158, in 
 which it was held that the power to appoint a receiver included, also, 
 power to appoint a manager in such cases ; and in such cases the 
 Court, after appointing a receiver, can enforce the security. Carshalton 
 Park Estate, (1908) 2 Ch. 62. The mere fact that the assets would, if 
 realised, be insufficient to pay the debenture holders in full is not a 
 valid ground for the appointment of a receiver. New York Taxicab 
 Co., (1913) 1 Ch. 1. But see Re Braunstein and Marjolaine, Ltd., 
 (1914) W. N. 335 ; 58 Sol. J. 755 ; and where the company proposed 
 to distribute among its members a reserve fund which was its only 
 remaining asset, a receiver was appointed. Re Tilt Cove Copper Co., 
 (1913) 2 Ch. 588. 
 
 Where the company is registered in this country, it is no objection 
 to the appointment of a receiver that the property is abroad. Ex parte 
 Pollard , 4 D. & C. 27 ; Coote v. Jecks , 13 Eq. 597. See Company 
 Precedents, Part III., p. 444. 
 
 The appointment of a receiver by the debenture holders under their 
 debenture does not necessarily prevent the Court from appointing a 
 receiver. Re “ Slogger ” Automatic Co., (1915) 1 Ch. 478. 
 
 Leave of the Court under the Courts (Emergency Powers) Act, 
 1914, is not necessary. Re Farnol, Eades, Irvine & Co., (1915) 1 Ch. 
 22. See further Appendix, p. 634. 
 
 If a receiver is appointed “ upon his giving security,” he is not 
 entitled to take possession until he has given security, and until then 
 he is not to be deemed to be in possession as against third parties. 
 Edwards v. Edwards , 2 C. D. 291. But if the order appoints the 
 receiver out and out, and orders him to give security, the appointment 
 takes effect at once, and he is entitled to take possession before 
 security given, and as against third parties is to be deemed to be in 
 possession as from the time the order is perfected. Morrison v. Skerne 
 Ironworks Co., 60 L. T. 588, in which case the appointment was held 
 good as against execution creditors ; and Ex parte Evans, 11 C. D. 
 691 ; 13 C. D. 252. So, a landlord who distrains after the making of 
 a receivership order, but before it is drawn up, will not be disturbed. 
 Lee v. Roundwood Colliery Co., (1897) 1 Ch. 373 
 
 When the Court appoints a receiver of property, it in effect takes 
 the custody of the property into its own hands — for the receiver is an 
 officer of the Court — and thus assumes the protection and safe keeping 
 of it for the benefit of the parties interested in it. The receiver being 
 an officer of the Court, any interference with him, whether by a party 
 to the action or by a stranger, is a contempt of Court and punishable 
 
326 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 accordingly. Thus, proceedings for recovery of possession cannot be 
 commenced by a first mortgagee without leave of the Court. Re 
 Metropolitan Amalgamated Estates , Ltd., (1912) 2 Ch. 497. See, how- 
 ever, as to independent actions by debenture holders, Cleary v. Brazil 
 Rail. Co., (1915) W. N. 178. [This decision maybe supported on the 
 ground that there was no interference with the company’s assets until 
 execution.] 
 
 The duty of a receiver as such is confined to taking possession and 
 protecting the property over which he is appointed. Manchester and 
 Milford Rail. Co., 14 C. D. 645. And see, as to the powers of a 
 receiver, Sivaby v. Dickon, 5 Sim. 629, 631 ; Bristow v. Needham, 
 2 R. 629 ; Parker v. Dunn, 8 Beav. 497 ; Ireland v. Eade, 7 Beav. 55 ; 
 Moss Steamship Co. v. Whinney , (1912) A. C. 254 (as to giving a lien 
 on the company’s goods) ; and Company Precedents, Part III., p. 450 
 et seq. 
 
 As to the power of a receiver to disregard contracts made by the 
 company, see Re Newdigate Colliery, (1912) 1 Ch. 468 ; Thames Iron- 
 works, 28 T. L. R. 273; (1912) W. N. 66; Re Great Cobar, Ltd., 
 (1915) 1 Ch. 682. 
 
 The question whether a receiver shall take proceedings in the name 
 of the company is entirely in the discretion of the Court. The plaintiff 
 in the debenture holders’ action cannot insist on proceedings by the 
 company against him being dropped. Viola v. Anglo-American Co., 
 (1912) 2 Ch. 305. 
 
 When a receiver and manager is appointed by the Court , he 
 “accepts the appointment on the terms that he will be personally 
 responsible to the creditors of the business, whilst he will be indemnified 
 out of the estate.” Per Rigby, L. J., Owen v. Cronck , (1895) 1 Q. B. 
 265 ; Burt v. Bull, (1895) 1 Q. B. (C. A.) 276; and Gosling v. Gaskell , 
 (1897) A. C. 57 5. But as to his indemnity when in default, see 
 British Power Traction Co., (1910) 2 Oh. 470; Re British Tea Table, 
 101 L. T. 707. 
 
 A receiver carrying on a company’s business may be personally 
 liable to compensate workmen under the Workmen’s Compensation 
 Act, 1897. 
 
 But a receiver in a debenture holders’ action will not, at the instance 
 of a landlord, be ordered to pay the rent of leasehold premises mort- 
 gaged by sub-demise to the trustees for the debenture holders, there 
 being no privity in such a case between the lessor and sub-lessees. 
 Hand v. Blow, (1901) 2 Ch. 721 ; and see Re J. W. Abbott Sf Co., 
 (1913) W. N. 284 ; 30 T. L. R. 13 (where the receiver was in pos- 
 session). 
 
 Where the security comprises leasehold property and fixtures, and 
 the company by passing a voluntary resolution to wind up forfeits 
 the lease, the receiver may remove the fixtures within a reasonable 
 
DEBENTURE STOCK. 
 
 Ch. XXXII. 
 
 327 
 
 time. Re Glasdir Copper Mines; English Electro-Metallurgical Co. v. 
 
 Glasdir Copper Mines , (1904) 1 Ch. 819. 
 
 A receiver is bound (sect. 107) to pay forthwith out of the first 
 assets coming to his hands creditors entitled to preferential payments 
 (see p. 410, post). If he distributes the assets or uses them up in 
 carrying on the business without providing for these preferential pay- 
 ments, he renders himself liable. Woods v. Winskill, (1913) 2 Ch. 303. 
 
 As to rates see National Provincial Bank v. United Electric Theatres , 
 
 (1915) W. N. 397. 
 
 The appointment of a receiver and manager, if of a permanent 
 character, operates as a discharge of the company’s servants. Reid v. 
 
 Explosives Co. (1887), 56 L. J. Q. B. 388. 
 
 A receiver or receiver and manager may be appointed in proceedings 
 commenced by originating summons. Re Francke , 57 L. J. Ch. 437 ; 
 
 Gee v. Bell , 35 C. D. 160 ; Ann. Pr., notes to Ord. LY. r. 5a. 
 
 A director appointed receiver and manager in a debenture holder’s 
 action is not thereby disentitled to be paid his fees as director. Re 
 South Western of Venezuela Rail. Co., (1902) 1 Ch. 701. 
 
 Under sect. 94 of the Act the appointment of a receiver must be 
 registered, see p. 478 ; and as to filing his accounts, see sect. 95 of the 
 Act, infra, p. 478. 
 
 Leave to Borrow. 
 
 In debenture holders’ actions the business of the company is com- Borrowing, 
 monly the most valuable asset, and in order to protect and preserve it 
 as a going concern, and for this or other pressing exigencies, the 
 Court has jurisdiction — which it frequently exercises — to authorize the 
 receiver to borrow money in priority to the debentures or debenture 
 stock. Greenwood v. Algebras ( Gibraltar ) Rail. Co., (1894) 2 Ch. 205 ; 
 
 Lathom v. Greenwich Ferry, 72 L. T. 790. The receiver should keep 
 within the limits allowed. Glasdir Copper Mines , (1906) 1 Ch. 365; 
 
 British Power Traction Co., (1906) 1 Ch. 497. 
 
 The jurisdiction to raise a salvage loan of this kind is beneficial to 
 all persons interested, and has saved many a well-known concern from 
 destruction. See as to this power, In re Regent's Canal Works (1876), 
 
 3 Ch. D. 411 ; Ex parte Izard (1883), 23 Ch. D. 75 ; Securities Invest- 
 ment Corp. v. Brighton Alhambra (1893), 68 L. T. 249 ; In re Ormerod, 
 
 W. N. (1890) 217 ; Milward v. Avill Sf Smart, 4 Mans. 403; Re 
 Glasdir Copper Mines, (1906) 1 Ch. 365; Robinson Printing Co. v. 
 
 Chic, Limited, (1905) 2 Ch. 123. 
 
 The expenses of realization rank before securities given by the 
 receiver and manager. Strapp v. Bull , (1895) 2 Ch. 1 ; Re Glasdir 
 Copper Mines , W. N. (1905) 57 ; Re London United Breweries, (1907) 
 
 2 Ch. 511. 
 
328 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 Foreclosure. 
 
 Foreclosure. 
 
 This is a remedy which is occasionally available in debenture holders’ 
 actions. See Sadler v. Worley , (1894) 2 Ch. 170; Elias v. Continental, 
 fyc. Co., (1897) 1 Ch. 511. But not, generally speaking, where deben- 
 tures and debenture stock are secured by trust deed. Schweitzer v. 
 May hew, 31 Beav. 37. As to the necessary parties, see Wallace v. 
 Ever shed, (1899) 1 Ch. 891 ; Elias v. Continental Co., supra. 
 
 Winding-up 
 
 Remedy by Winding-up Petition. 
 
 A debenture holder or debenture stock-holder, to whom the company 
 is indebted in a sum presently payable, can demand payment, and, if 
 default be made, can petition for the winding-up of the company, and 
 this, whether he be the registered holder of the security, or the holder 
 of a security to bearer. Re Olathe Silver Co. (1884), 27 Ch. D. 278 ; 
 Re Uruguay Central Rail. Co. (1879), 11 Ch. D. 372. And the mere 
 fact that he has obtained the appointment of a receiver does not preclude 
 him from applying for a winding-up order. Borough of Portsmouth 
 Tramways, (1892) 2 Ch. 362. As against the company he is entitled 
 to a winding-up order ex debito justifies, but not so as against the wishes 
 of the majority of the creditors. Western of Canada Co. (1873), 17 
 Eq. 1 ; Chapel House Colliery Co., 24 C. D. 259. The holder of a 
 mortgage debenture, who applies for a winding-up order, is not bound 
 to give up his security. Moor v. Anglo- Italian Bank (1878), 10 Ch. D. 
 681. Where there is nothing presently due to the debenture stock- 
 holder, he had formerly no locus standi to present a winding-up petition. 
 Re Melbourne Brewery Co., (1901) 1 Ch. 453 (Wright, J.). But if the 
 company is insolvent his position is, in this respect, altered by sect. 137 
 of the Act of 1908. 
 
 Action by- 
 debenture 
 holder. 
 
 Remedies without aid of Court. 
 
 A debenture holder is not bound to come in and enforce his rights in 
 a winding-up. He may exercise such powers of realization as are given 
 him by his securities, e.g., appointment of a receiver or sale, and, 
 where it is necessary to bring an action, he can apply to the Court 
 and the Court will give liberty to bring or proceed with the action as 
 a matter of course, winding-up notwithstanding. Lloyd v. David 
 Lloyd Sf Co. (1877), 6 Ch. D. (C. A.) 339; Joshua Stubbs, Limited, 
 (1891) 1 Ch. 475 ; Strong v. Carlyle Press, (1893) 1 Ch. 268. 
 
 A receiver may be appointed under a trust deed or debenture and 
 may, if so provided, be responsible as the agent of the company, 
 supra, p. 296. 
 
DEBENTURE STOCK. 
 
 Ch. XXXII. 
 
 329 
 
 Proof by Debenture Holders. 
 
 In the case of a solvent company a debenture or debenture stock- Proof, 
 holder can prove for his principal and interest ( In re Colonial Trust 
 Corporation (1879), 15 Oh. D. 473), and is not bound to value his 
 security before proving ( Kellock's case (1867), L. R. 3 Oh. 769). But if 
 the company is insolvent, which it is taken prima facie to be if in 
 winding-up {Re Milan Tramways Co. (1884), 25 Ch. D. 587), sect. 10 
 of the Judicature Act, 1875, applies, and the holders of secured deben- 
 tures who want to prove must value their securities, or must realize 
 them and then prove for the balance ; and for the purpose of ascer- 
 taining the balance for which he can prove, the debenture holder can 
 only apply the proceeds of his security in payment of interest accrued 
 up to winding-up. He may then prove as an unsecured creditor for 
 the balance of the principal and interest due at the commencement 
 of the winding-up after deducting the amount arising from realiza- 
 tion of his security. Quartermaine 1 s case , (1892) 1 Ch. 639. 
 
 Where a debenture is not payable and a winding-up commences, 
 the holder can nevertheless prove for the full amount of the principal 
 subject to a rebate of interest and also value and prove the liability to 
 pay future interest to maturity where, by the terms of the instrument, 
 the principal carries such interest to maturity. Re Browne and Winyrove, 
 ex parte Ador, (1891) 2 Q. B. (C. A.) 574. 
 
 Debenture holders and debenture stock-holders are entitled as 
 against their securities, whether the company be solvent or insolvent, 
 to take principal, interest up to date of payment, and costs. Cotterell v. 
 Stratton (1872), L. R. 8 Ch. 302 ; Re Talbot (1888), 39 C. D. 567. 
 
 As to interest after judgment, see Re European Central Rail. (1876), 
 
 4 Ch. D. 33 ; Re Sneyd (1884), 25 Ch. D. 338 ; Re Agriculturist Cattle 
 Co ., 4 Ch. D. 34, n. ; and Popple v. Sylvester (1883), 22 Ch. D. 98. 
 
 As to set-off, see Re Taunton , Delmard Sf Co., (1893) 2 Ch. 175 ; Re 
 Smith & Co., (1901) 1 Ir. R. 73 ; and Rhodesia Goldfields , (1910) 1 Ch. 
 
 239. 
 
 As to income tax, see Smith v. Law Guarantee and Trust Society , 
 
 (1904) 2 Ch. 569. 
 
 As to adding costs to the security, see Johnstone v. Cox (1881), 19 
 Ch. D. 17, 19. 
 
 As to costs in a representative debenture holder’s action, see Wright 
 v. Kirby , 23 Beav. 863; Ford v. Earl of Chesterfield, 21 Beav. 426; 
 Batten v. Dartmouth Harbour Commissioners, 45 C. D. 612; Carricky. 
 
 Wigan Tramways Co., W. N. (1893) 98; Re New Zealand Midland 
 Railway, Smith v. Lubbock , (1901) 2 Ch. 357 ; Re Clayton Engineering 
 and Electrical Construction Co., 90 L. T. 283; Mortgage Insurance Co. 
 v. Canadian Agricultural Coal Co., (1901) 2 Ch. 377. [These cases 
 
330 
 
 DEBENTURES AND DEBENTURE STOCK. 
 
 establish the rule that where the assets are insufficient to pay in full 
 the series of debentures on behalf of which the plaintiff sues, the 
 plaintiff is entitled to solicitor and client costs out of the fund. 
 Where, however, the assets are sufficient to pay this series in full, but 
 insufficient to pay any subsequent series in full, the plaintiff can only 
 get party and party costs out of the assets. See also Re W. C. Horne 
 & Sons , Ltd., (1906) 1 Oh. 271.] 
 
 The company and the subsequent incumbrancers, though necessary 
 parties ( Wilcox fy Co., W. N. (1903) 64) must, where sued by the first 
 debenture holders, look to the surplus for their costs. Clayton 
 Engineering Co., W. N. (1904) 28; 90 L. T. 283. [They are, however, 
 sometimes allowed costs where their presence has been beneficial to 
 the realization of the assets.] 
 
 A debenture holder, though suing on behalf of himself and others, 
 is dominus litis, and accordingly can stop the action when he chooses, 
 e.g., on his claim being satisfied. Ward v. Alpha Co., (1903) 1 Ch. 
 203. 
 
 As to the position of non-claiming debenture holders, see Ashley v. 
 Ashley, 4 C. D. 757, and Saragossa and Mediterranean Rail. Co., (1904) 
 A. C. 159. 
 
 Where a debenture is guaranteed by a guarantee company, both 
 companies being insolvent, the holder can prove in the winding-up of 
 the guarantee company for the balance remaining after realizing his 
 security ; but he is not directly entitled to the benefit of any re-insur- 
 ance effected by the guarantee company. Re Law Guarantee and 
 Trust Society, (1915) 1 Ch. 340. 
 
Ch. XXXIII. 
 
 CHAPTER XXXIII. 
 
 PROMOTERS. 
 
 The promoters of a company are those who form or float it, that is to Typical 
 say, the leading spirits of the enterprise, or principal actors, for not 
 every member of the dramatis persona, or every subordinate employed business, 
 by the promoters, is to be regarded as a promoter The typical 
 promoter — the promoter in the fullest sense of the term — starts 
 the scheme of forming the company, negotiates with the vendors (if 
 any), gets together the board of directors, retains brokers, bankers, 
 and solicitors for the company, has the memorandum and articles 
 of association prepared, provides the registration fees, drafts the 
 prospectus, pays for the expense of issuing it, &c. ; in a word, under- 
 takes — to use the language of Cockburn, C. J. — to form a company 
 with reference to a given project, and to set it going, and to take the 
 necessary steps to accomplish that purpose. Twycross v. Grant , 2 
 C. P. D. 469 ; Bagnall v. Carlton , 6 C. D. 371 ; Emma Co. v. Lewis , 
 
 40 L. T. 68 ; 4 C. P. D. 396 ; Lydney and Wigpool Co. v. Bird , 
 
 33 Ch. D. 85 ; Whaley Bridge v. Green , 5 Q. B. D. 109 ; Gluckstein v. 
 
 Barnes, (1900) A. C. 240 ; Re Sale Hotel and Botanical Gardens, 
 
 78 L. T. 368 (C. A.); Olympia, Limited, (1898) 2 Ch. 181 ; Lagunas 
 Nitrate Co. v. Lagunas Nitrate Syndicate, (1899) 2 Ch. 392; Leeds 
 and Hanley Theatre of Varieties, (1902) 2 Ch. 809. 
 
 But a person may be a promoter who has taken a much less active Construc- 
 part in the promotion proceedings. Anyone who assists in the pro- tively. 
 motion, e.g., by obtaining a director, or agreeing to place shares, or 
 negotiating an agreement, for a special fee or consideration payable if 
 the company is floated, may find himself held to be a promoter. 
 
 Persons who are engaged in the promotion of a company are some- 
 times extremely sensitive in regard to being termed promoters. A., 
 for example, may really be taking an active part in the promotion, yet 
 he will altogether disclaim the status of a promoter, and declare that 
 B. is the real promoter. Promotership is, however, a question of acts, 
 not words or names ; and if a man takes part — though only a subor- 
 dinate part — in the promotion, he must not be surprised to find him- 
 self saddled with the responsibility attaching in law to the promoter — 
 a responsibility of a most onerous character. 
 
332 
 
 PROMOTERS. 
 
 Fiduciary 
 position of 
 promoters. 
 
 No secret 
 
 profits 
 
 permitted. 
 
 The Fiduciary Relation of Promoters. 
 
 The promoters of a company, as Lord Cairns said in Erlanger v. 
 New Sombrero , 3 App. Cas. 1236, “stand undoubtedly in a fiduciary 
 position. They have in their hands the creation and moulding of the 
 company. They have the power of defining how, and when, and in 
 what shape, and under what supervision, it shall start into existence 
 and begin to act as a trading corporation ; ” and Lord Blackburn, in 
 the same case, after pointing out the extensive powers possessed by 
 promoters, said : “I think that those who accept and use such 
 extensive powers are not entitled to disregard the interest of the 
 corporation altogether. They must make a reasonable use of the 
 powers which they accept from the legislature ; and, consequently, 
 they do stand, with regard to that corporation, when formed, in 
 what is commonly called a fiduciary relation to some extent.” This 
 doctrine is now well established. See the cases below mentioned. 
 The importance of the rule, which thus creates a fiduciary rela- 
 tionship between the promoter and the company he brings into 
 existence, will be at once seen when we consider its consequences 
 — the corollary which the law deduces from it — namely, that a 
 promoter, being in a fiduciary position, may not make, either directly 
 or indirectly, any profit at the expense of the company he promotes, 
 without the knowledge and consent of the company, and that if he 
 does make a secret profit in disregard of this rule, the company can 
 compel him to account for it. Thus, in Emma Mining Co. v. Grant , 
 11 0 . D. 918 ; Bagnall v. Carlton , 6 Oh. D. 371 ; Gluckstein v. Barnes. 
 (1900) A. C. 240; Whaley Bridge Co. v. Green, supra; Mann v. 
 Edinburgh Northern Trams Co., (1893) A. 0 . 69 ; and Leeds and Hanley 
 Theatre of Varieties , Limited , supra , promoters were compelled to 
 surrender secret profits ; and the fact that the promoter is acting 
 as agent for the vendors, or for other promoters, will not exonerate 
 him from accounting to the company, when formed, for any secret 
 profit made by him. Lydney and Wigpool Iron Ore Co. v. Bird, 
 33 Ch. D. 85. The same principle applies where a promotei 
 desires to sell his own property to the company. He is quite entitled 
 to do so ; but he is bound to protect the company he has created — 
 so at least Lord Cairns held — by furnishing it with an independent and 
 competent board of directors, and by disclosing his interest in the 
 property to such directors, so that they can exercise an intelligent 
 judgment on the transaction. Erlanger v. New Sombrero Phosphate Co., 
 3 App. Cas. 1236. 
 
 The proposition of Lord Cairns must, however, be accepted with some 
 qualification in view of the remarks of Lindley, M.R., in Lagunas Nitrate 
 
THE FIDUCIARY RELATION OF PROMOTERS. Ch. XXXIII. 
 
 Co. v. Lagunas Nitrate Syndicate , (1899) 2 Ch. 302, 422. “Not- 
 withstanding,” he says, “all that has been said in Erlang er v. Neiv 
 Sombrero Phosphate Co. about the duties of the promoters of a company 
 to furnish it with an independent board of directors, that decision does 
 not require, or indeed justify, the conclusion that if a company is 
 avowedly formed with a board of directors who are not independent, 
 but who are stated to be the intended vendors or the agents of 
 the intended vendors of property to the company, the company can 
 set aside an agreement entered into by them for the purchase of such 
 property simply because they are not an independent board. After 
 Salomon's case I think it impossible to hold that it is the duty of the 
 promoters of a company to provide it with an independent board of 
 directors if the real truth is disclosed to those who are induced by the 
 promoters to join the company.” A promoter- vendor cannot evade 
 this liability of disclosure by putting in a nominee-vendor to sell 
 to the company ( Glasier v. Rolls (1889), 42 C. D. 442), or by 
 making disclosures merely to a board of directors who are under his 
 influence or in his pay. “It is,” said Lord Halsbury, L. C., in 
 Gluckstein v. Barnes , (1900) A. C. 247, “too absurd to suggest that 
 a disclosure to the parties to this transaction is a disclosure to the 
 company of what these directors were the proper guardians and 
 trustees. They were there to do the work of the syndicate, that is to 
 say, to cheat the shareholders ; and this, forsooth, is to be treated as a 
 disclosure to the company, when they were really there to hoodwink 
 the shareholders.” 
 
 “ Disclosure,” said Lord Macnaghten in the same case, “ is not the 
 most appropriate word to use when a person who plays many parts 
 announces to himself in one character what he has done and is doing 
 in another. To talk of disclosure to the thing called the company 
 when as yet there were no shareholders is a mere farce.” 
 
 So, too, a mere constructive disclosure will not do : that is, a 
 promoter of a company whose duty it is to disclose what profits he has 
 made does not perform that duty by making a statement not disclosing 
 the facts, but containing something which, if followed up by further 
 investigation, will enable the inquirer to ascertain that profits have 
 been made and what they amounted to. Re Olympia , Limited , (1898) 
 2 Oh. 153 (0. A.) ; Gluckstein v. Barnes , (1900) A. 0. 240. 
 
 Accordingly, to be effective, disclosure must be to the shareholders 
 as a body, not to a select circle of the promoters’ nominees. 
 Supposing, however, all the members of the purchasing company are 
 by the articles of association and prospectus or otherwise made aware 
 of the real facts of the case, the want of an independent board will 
 not invalidate the agreement. Volenti non Jit injuria. Salomon v. 
 Salomon , (1897) A. C. 22 ; British Seamless Paper Box Co., 17 Ch. D. 
 
334 
 
 PROMOTERS. 
 
 Remunera- 
 
 tion. 
 
 467 ; Lagunas Nitrate Co. v. Lagunas Syndicate, (1899) 2 Ch. 392 ; 
 Re Sale Botanical Gardens , 78 L. T. 368. 
 
 ■ Where a promoter in selling his property to the company does not 
 comply with his obligations as regards disclosure and otherwise, the 
 sale may be set aside at the instance of the company. See Erlang er v. 
 New Sombrero Co ., supra. And if for any reason rescission has 
 become impossible, the company is entitled to damages against the 
 promoter, and the measure of such damages is the difference in value 
 between the price paid by the company and the actual value of the 
 property at the date of the purchase. Leeds and Hanley Theatre of 
 Varieties , (1902) 2 Ch. 809 (C. A.). 
 
 When a promoter acquires property after he has commenced to 
 promote and sells it to the company, a question of fact is raised as to 
 whether or not he acquired it as trustee for the company. There is 
 no presumption of law that he did. Omnium Electric Palaces v. 
 Baines , (1914) 1 Ch. 332. 
 
 In relation to disclosure it must be borne in mind that a half dis- 
 closure is sometimes worse than none ; for example, if the prospectus 
 states that the promoters are making 30,000/., whereas they are really 
 making 50,000/., the partial concealment falsifies the statement made. 
 Gluckstein v. Barnes , (1900) A. C. 240. 
 
 The Act of 1908 now provides in sect. 81 for the fullest disclosure 
 by vendors to the company. See pp. 344 et seq. 
 
 Remuneration of Promoter. 
 
 “The services of a promoter are very peculiar. Great skill, 
 energy and ingenuity may be employed,” as Lord Hatherley, L. C., 
 said ( louche v. Metropolitan , Sfc. Co., L. R. 6 Ch. 671), “in con- 
 structing a plan and bringing it out to the best advantage.” 
 This is quite true ; and, accordingly, when a company has obtained 
 the benefit of such services, no one is disposed to complain of the 
 promoters getting some substantial advantage out of the promotion. 
 The misfortune is that promoters are rarely satisfied with a reasonable 
 remuneration. The modes in which promoters obtain their remunera- 
 tion vary considerably. Sometimes the promoters agree w-ith the 
 owner of a going business or some other property that they will form 
 and float a company to acquire the same, and the vendor in considera- 
 tion of their doing so agrees to pay them a commission or part of the 
 consideration for the sale when received. Sometimes the plan resorted 
 to is for the promoters to purchase the business, concession, patent or 
 other property, which the proposed company is formed to acquire, and 
 then to resell to the company at a profit. In other cases the 
 promoters form the company with part of its share capital in founders’ 
 
REMUNERATION OF PROMOTER. Ch. XXXIII. 
 
 335 
 
 shares, or deferred shares, and then take these founders’ or deferred 
 shares credited as paid up, in consideration of their paying the 
 expenses of forming and floating the company. 
 
 In such cases, that is, of shares allotted as fully paid hut not for 
 cash, a contract or particulars must still be filed (though sect. 25 of 
 the Companies Act, 1867, is repealed) under sect. 88 (1) (b), and 
 the shares must be entered as fully paid in the return of allotments 
 required by the same section of the Act. In other cases the promoters 
 are content to accept as their remuneration the privilege of subscribing 
 for a certain number of shares of small amount carrying valuable 
 rights, e.g., founders’ or deferred shares, and paying for the same in 
 cash, relying for their profit on the likelihood of such shares largely 
 increasing in value in the near future. 
 
 Sometimes promoters take an option to subscribe within a year for 
 a certain portion of the company’s unissued shares at par. If the 
 shares in the company are likely to go to a premium, such an option 
 may be of considerable value. As to the effect of a voluntary 
 winding-up on such option, see In re South African Trust Co., Ex 
 parte Hirsch (1896), 74 L. T. 769. 
 
 Under the enabling power in sect. 89 of the Act such an option 
 may be given as the consideration for subscribing for, underwriting 
 or placing shares. Hilder v. Dexter , (1902) A. 0. 474. 
 
 Sometimes the articles of association provide for the directors paying 
 a specified sum to the promoters in respect of their services in promoting 
 the company ; but a clause of this kind gives, it must be remembered, 
 merely an authority to the directors to pay such expenses, and does 
 not constitute a contract on which the promoter can sue the company. 
 Rotherham Alum, Sfc. Co., 25 C. D. 103. Nor will the presence of 
 such a clause justify the directors in paying out money without due 
 inquiry. Englefield Co., 8 C. D. 388 ; Marzetti' > s case, 28 W. E. 541. 
 
 Whatever be the nature of the remuneration, it must be disclosed in 
 the prospectus if paid within two years. See sect. 81 (1) (j). 
 
 A promoter can only recover from the company what he has paid in 
 preliminary expenses where he proves a contract by the company to 
 pay. English and Colonial Produce Co., (1906) 2 Ch. 435. According 
 to that decision, however, the promoter can, without proving a contract, 
 recover the registration fees, but this has since been overruled. See 
 National Motor Mail Coach Co., (1908) 2 Ch. 515, C. A., affirming 
 Swinfen Eady, J. 
 
 Statute of Limitation and Bankruptcy . 
 
 A promoter who has abused his fiduciary position is generally held 
 liable as a constructive trustee, and upon the footing that he has been 
 
336 
 
 PROMOTERS. 
 
 Liability. 
 
 guilty of fraud ; but a claim against him will be barred by a delay of 
 six years after the discovery by the company of the facts. Metropolitan 
 Bank v. Heiron, 5 Ex. Div. 325 ; Company Precedents, Part I., p. 140. 
 In case of bankruptcy of a promoter, an order of discharge does not 
 release him from any liability incurred by fraud or fraudulent breach 
 of trust. See Emma Silver Co. v. Grant, 17 C. D. 122, and Bank- 
 ruptcy Act, 1914, s. 28 (1). See also as to bankruptcy, Re Kent 
 County Gas Co., (1913) 1 Ch. 92. 
 
 Liability of Promoters in respect of Prospectuses. 
 
 Promoters who take part in the issue of prospectuses offering shares, 
 debentures or debenture stock for subscription may incur serious 
 liabilities in regard thereto. They may, if the prospectus omits to give 
 the information required by sect. 81 of the Companies Act, or makes 
 any untrue statement, be held liable to compensate subscribers for 
 any damage sustained by them. See further, Chapter XXXV., infra. 
 
Ch. XXXIV. 
 
 337 
 
 CHAPTER XXXIV. 
 
 UNDERWRITING. 
 
 Object of. 
 
 Business men now-a-days like, and quite properly, to cover all the 
 commercial risks they can. Hence the spread of insurance in 
 modern times. Underwriting is only an application of the same 
 principle to company formation. It is a safeguard — a precaution ; the 
 object being to insure against the risk that shares, debentures, or 
 debenture stock offered for subscription may not be taken up. The 
 investing public is variable and capricious ; it cannot be always relied 
 on to appreciate even the best and soundest undertakings. It is easily 
 alienated or put off. A very trifling circumstance will at times render an 
 appeal to the public to subscribe abortive. For instance, some enemy 
 of the concern writes a letter to the newspapers containing untrue 
 statements about the company. This may be sufficient to stop sub- 
 scriptions, even though the directors at once contradict the statements ; 
 so, too, if, just at the time that the prospectus is issued, some other more 
 attractive concern is appealing to the public, or if the money market 
 happens to be depressed, the public may decline to subscribe. In 
 order to meet contingencies like these, it is extremely common now to 
 get the shares, debentures, or debenture stock underwritten before 
 they are offered for public subscription. 
 
 Special circumstances, too, often demand that the success of an issue 
 should be assured : for instance, a company may have put its 
 “ minimum subscription” at 50,000/. ; if the public does not come in 
 and take up shares to that amount, the directors cannot go to 
 allotment, and the enterprise is ruined. Or a firm may be converting 
 its business into a company, and a large part of its assets consist of 
 loans, deposits and other capital left in the concern by a deceased 
 partner, and these liabilities the proceeds of the issue are intended to 
 clear off ; here, again, the failure of the issue would be disastrous. 
 Or a going company may wish to raise further funds by the issue of 
 new shares or debentures or debenture stock ; but, owing to the state 
 of the market or other special circumstances, a risk attends the issue. 
 
 22 
 
 p. 
 
338 
 
 UNDERWRITING. 
 
 Non-success would seriously damage the credit of the company. In 
 such cases underwriting is found of great use. 
 
 Form of Underwriting Agreement. 
 
 Generally, the underwriting is done by a number of persons, but at 
 times the whole of an issue is underwritten by a company or by one 
 or two persons. The modus operandi is as follows : — The underwriter 
 writes a letter addressed to the vendor or promoter or to the company 
 agreeing to underwrite a specified amount of what is to be offered, upon 
 the footing that he is only to be bound to take up his rateable propor- 
 tion of what the public does not take up ; and that in any event he is to 
 be paid a commission, either in cash or paid-up shares, or an option, 
 or in some other shape. Such a letter is generally expressed in the 
 form of an agreement, “ I agree to underwrite,” &c., but in law it 
 operates only as an offer ; and, to become binding — to be converted into 
 a contract — it must be accepted by the other party, and notice of such 
 acceptance given to the underwriter. Re Consort Deep , Sfc. Co ., (1897) 
 1 Ch. (C. A.) 575. The acceptance may be in writing or oral ( North 
 Charterland Co. (1896), 13 T. L. R. 80), and it is prima facie no 
 objection that the notice of acceptance is not given until after the list 
 has closed ( Hemp Cordage , Sfc. Co., (1896) 2 Ch. (C. A.) 121), for the 
 Court is not disposed to import into underwriting contracts implied 
 conditions in derogation of the express terms of the contract. Crown 
 Lease Proprietary Co., 14 T. L. R. 47. Where the agreement is to 
 underwrite on the terms of a specified prospectus, a serious variation 
 of the terms of the prospectus may vitiate the contract, even though 
 the agreement expressly allows for variations in the prospectus. 
 Warner International Co., Ltd., (1914) W. N. 61 ; 110 L. T. 456. 
 The underwriting letter usually provides that if the underwriter makes 
 default in applying, the other party to the underwriting agreement 
 may apply for the shares on his behalf. This authority, if properly 
 framed, is effective and irrevocable where there is a complete contract, 
 as above ; for, in such cases, it is one of the terms of the contract 
 that the authority shall subsist, and it is not open to one party to a 
 contract by any notice to the other to revoke what is a term of the 
 contract. Carter v. White, 25 Ch. D. 666 ; In re Hannan's Empress 
 Mining Co., Carmichael' s case, (1896) 2 Ch. (C. A.) 643. The executors 
 of a deceased underwriter are liable on the underwriting contract. 
 Warner Engineering Co. v. Brennan, 30 T. L. R. 191 ; Ex parte Pathi 
 Freres , (1914) 2 K. B. 299. 
 
 Conditions Precedent. 
 
 It happens sometimes, however, that such an authority is expressed 
 
PAYMENT OF UNDERWRITING COMMISSION. Ch, XXXIV. 
 
 in contingent terms, as, for instance, “I will, if called on by you , 
 subscribe, &c.,” or “If I make default you are to be at liberty, &c.” 
 Where this is the case, the authority does not arise until after condition 
 performed, that is, after the underwriter has been called on to sub- 
 scribe ; and, accordingly, if the other party exercises the authority 
 before that has been done, the allotment will be ineffective. Ormerod’s 
 case , (1894) 2 Ch. 474 ; Brussels Palace of Varieties v. Prockter , 10 
 T. L. R. 72 ; and see Sangster v. Netter , 9 T. L. R. 441. 
 
 Even where the underwriting letter has not been accepted by the 
 person to whom it was addressed, and there is, therefore, no contract, 
 the underwriter may, in some cases, be held bound by an application 
 made by the other party in professed exercise of the authority con- 
 ferred by the letter in his possession. Henry Bentley <$f Co., 69 L. T. 
 204 ; Ex parte Harrison , 69 L. T. 204 ; In re Bultfontein Sun Diamond 
 Mine (1896), 12 T. L. R. 461. 
 
 The principle of this is that the applicant has an apparent authority 
 from the underwriter to apply, and the underwriter is therefore, as 
 against the company accepting the application in good faith and 
 without notice of any qualification or condition affecting the authority, 
 estopped from denying the validity of the authority. Ex parte Harrison , 
 supra, is a good instance, where the collateral condition qualifying the 
 underwriting agreement was contained in a separate letter not shown 
 to the company by the applicant for shares. 
 
 The principle would, of course, not apply if the company knew from 
 the form of the letter or aliunde that the authority was qualified or 
 conditional. 
 
 An agreement to take shares must be distinguished from an agree- 
 ment to place shares. Gorrissen’ s case , L. R. 8 Ch. 507. One who 
 merely agrees to place does not underwrite, and is not bound to take 
 those he does not place. 
 
 Formerly the Court had no jurisdiction in the case of a contract 
 underwriting debentures or debenture stock to compel the underwriter 
 to specifically perform the contract. The company’s remedy — and it 
 was a very inadequate one — was to sue the underwriter for damages. 
 South African Territories v. Wallington, (1898) A. C. 809. But this 
 antiquated technicality has now been put an end to by sect. 105 of the 
 Act of 1908, which provides as follows : “A contract with a company 
 to take up and pay for any debentures [or debenture stock] of the 
 company may be enforced by an order for specific performance,” i.e., in 
 the particular case of underwriting that the underwriter shall pay over 
 to the company the purchase-money of the debentures or debenture stock 
 he takes, and shall receive the debentures or debenture stock in return. 
 
 An underwriting contract, if under hand, requires a 6d. stamp ; if 
 under seal, a 10s. stamp. The fact that the contract contains an 
 
 22 ( 2 ) 
 
340 
 
 UNDERWRITING. 
 
 authority to apply for shares on the underwriter’s behalf does not 
 render a power of attorney stamp requisite. Walker v. Remmett, 15 
 L. J. Ch. 8, 174. 
 
 Payment of Underwriting Commission by Company. 
 
 Prior to 1st January, 1901, the great mass of the underwriting was 
 done by arrangement between the promoters or vendors, or persons 
 ejusdem generis , and the underwriters. Companies were not much in 
 the habit of themselves entering into direct relations with under- 
 writers owing to the existence of grave doubts as to whether a 
 company could properly pay an underwriting commission for getting 
 its capital subscribed. See Faure Accumulator Co., 40 C. D. 141 ; 
 and Ooregum Co. v. Roper, (1892) A. C. 125. And although in 
 Metropolitan Coal Consumers' Association v. Scrimgeour, (1895) 2 Q. B. 
 604, the Court of Appeal was of opinion that the payment of a small 
 commission, e. g., 2^ per cent., by a company to brokers for their 
 services as such was not ultra vires, this decision did not by any means 
 remove all doubts and difficulties. 
 
 The Companies Act, 1900, s. 8, however, made important alterations 
 in the law as to payment by a company of a commission for the 
 underwriting of its share capital. It made it lawful for a company, 
 upon any offer of shares for public subscription, subject to certain 
 conditions, to pay such commission, and at the same time it prohibited 
 all payments or allotments of shares by way of commission, whether 
 direct or indirect, other than those expressly sanctioned, and it in 
 effect deprived vendors and promoters of the power to pay such com- 
 missions. This section was amended by sect. 8 of the Companies Act, 
 1907, which relaxed the restrictions imposed by the Act of 1900, and 
 not only allowed commissions to be paid when there was not offer of 
 shares to the public, but relieved vendors and promoters from the 
 prohibition against paying such commissions out of funds coming to 
 them from the company. Sect. 89 of the Act of 1908 has now taken 
 the place of these enactments. It runs as follows : — 
 
 Act of 1908. 89. — (1.) It shall be lawful for a company to pay a commission to any 
 
 person in consideration of his subscribing or agreeing to subscribe, 
 whether absolutely or conditionally, for any shares in the company, 
 or procuring or agreeing to procure subscriptions, whether absolute or 
 conditional, for any shares in the company, if the payment of the 
 commission is authorized by the articles, and the commission paid or 
 agreed to be paid does not exceed the amount or rate so authorized, 
 and if the amount or rate per cent, of the commission paid or agreed 
 to be paid is — 
 
 (a) In the case of shares offered to the public for subscription, 
 disclosed in the prospectus ; or 
 
PAYMENT OF UNDERWRITING COMMISSION. Ch. XXXIV. 
 
 341 
 
 (b) In the case of shares not offered to the public for subscrip- 
 tion, disclosed in the statement in lieu of prospectus, or in 
 a statement in the prescribed form* 1 signed in like manner 
 as a statement in lieu of prospectus and filed with the 
 registrar of companies, and, where a circular or notice, not 
 being a prospectus, inviting subscription for the shares is 
 issued, also disclosed in that circular or notice. 
 
 (2.) Save as aforesaid, no company shall apply any of its shares or 
 capital money either directly or indirectly in payment of any commis- 
 sion, discount, or allowance, to any person in consideration of his 
 subscribing or agreeing to subscribe, whether absolutely or con- 
 ditionally, for any shares of the company, or procuring or agreeing 
 to procure subscriptions, whether absolute or conditional, for any 
 shares in the company, whether the shares or money be so applied by 
 being added to the purchase money of any property acquired by the 
 company or to the contract price of any work to be executed for the 
 company, or the money be paid out of the nominal purchase money or 
 contract price, or otherwise. 
 
 (3.) Nothing in this section shall affect the power of any company 
 to pay such brokerage as it has heretofore been lawful for a company 
 to pay, and a vendor to, promoter of, or other person who receives 
 payment in money or shares from, a company shall have and shall be 
 deemed always to have had power to apply any part of the money or 
 shares so received in payment of any commission, the payment of 
 which, if made directly by the company, would have been legal under 
 this section. 
 
 Thus at last the vexatious restrictions imposed by the Act of 1900 
 on the payment of underwriters’ commission have to a great extent 
 been removed, and reasonable facilities have been given for securing 
 the placing of unissued shares. 
 
 On a reconstruction the new company may now pay a commission to 
 contractors to buy from the liquidator the balance of shares required 
 to carry through the reconstruction. Barrow v. Paringa Mines, (1909) 
 2 Ch. 658. 
 
 It may still, however, be convenient to refer to a few of the decisions 
 on the repealed sect. 8 of 1900. 
 
 1. “ Offer ... to the public .” ( Burrows v. Matabele Gold Reefs , 
 
 (1901) 2 Ch. 23 ; Booth v. New Afrikander Gold Mining Co., (1903) 
 1 Ch. 295. 
 
 An offer by a promoter to a few of his friends, relations or cus- 
 tomers was held not to be an offer to the public. Sleigh v. Glasgow 
 and Transvaal Options, Gr. F. 420, Ct. of Sess. See also Shewell v. 
 
 * This applies to private companies. 
 
42 
 
 UNDERWRITING. 
 
 Combined Incandescent Mantles Syndicate , 23 L. T. P. 482. But a 
 distribution of 3,000 copies of a prospectus among the members of 
 certain gas companies was held to be an offer to the public. South of 
 England Natural Gas Co , (1911) 1 Ch. 573. 
 
 It was held that articles authorizing payment of commission at a 
 certain rate per cent, did not authorize payment of a lump sum by way 
 of commission. Booth v. New Afrikander Gold Mining Co., supra. 
 
 As against these disabling decisions it was held that this section did 
 not prohibit the common and convenient practice in the City of remu- 
 nerating underwriters by giving them the call of shares at par or at a 
 premium. Hilder v. Dexter , (1902) A. C. 474. But it required all 
 the wisdom and good sense of the House of Lords to arrive at this 
 conclusion in the face of the unfortunate wording of the section. 
 
 Payment of a commission out of profits is not prohibited by the 
 section. 
 
 The restrictions of sect. 89 apply to a private company, though it 
 does not issue a prospectus. Dominion of Canada Syndicate v. Brig- 
 stocke, (1911) 2 K. B. 648. 
 
 Paragraph (3) must be read by the light of Metropolitan Coal 
 Consumers' Association v. Scrimgeour , (1895) 2 Q,. B. 604. It covers a 
 reasonable commission, say, as in that case, a commission not exceeding 
 2£ per cent, for brokerage to a broker. 
 
 Disclosure in Annual Summary and Balance Sheets. 
 
 Further provision for disclosure is made in sects. 26 and 90. 
 
 Sect. 26 of the Act requires that the annual summary shall state, 
 inter alia, (f) the total amount of the sums (if any) paid by way of 
 commission in respect of any shares or debentures or allowed by way 
 of discount in respect of any debentures since the date of the last 
 return. 
 
 Sect. 90 further provides for commission and discount appearing in 
 the company’s balance sheet : ‘‘Where a company has paid any sums 
 by way of commission in respect of any shares or debentures, or 
 allowed any sums by way of discount in respect of any debentures, the 
 total amount so paid or allowed or so much thereof as has not been 
 written off, shall be stated in every balance sheet of the company 
 until the whole amount thereof has been written off.” 
 
 Misrepresentation in Prospectus. 
 
 An underwriter who takes up shares on the faith of a prospectus 
 containing untrue statements has the same right to repudiate these 
 shares as any other subscriber for shares. Karberg's case , (1892) 
 3 Ch. 1 (C. A.). 
 
Ch. XXXV. 
 
 343 
 
 CHAPTEB XXXV. 
 
 PROSPECTUSES. 
 
 When a company is desirous of raising money* by a direct appeal to Prospectus, 
 the public, the usual course is for the company to issue a prospectus 
 offering for public subscription shares in the company or debentures 
 or debenture stock of the company. 
 
 For a time the stringent provisions of the Companies Act, 1900, in 
 regard to prospectuses largely diminished the number of cases in 
 which such an appeal was made, but the prospectus is now returning 
 into favour, and its advantages as a mode of appealing to the general 
 public are too great and obvious for it to be likely that it will be 
 replaced for long by any other method of appeal. 
 
 Filing Prospectuses. 
 
 The Companies Act, 1908 (re-enacting with modifications sect. 9 of 
 the Companies Act, 1900), makes provision for filing prospectuses 
 as follows : — 
 
 Prospectus. 
 
 80. — (1.) Every prospectus issued by or on behalf of a company or in Filing Q f 
 relation to any intended company shall be dated, and that date shall, prospectus, 
 unless the contrary be proved, be taken as the date of publication of 
 the prospectus. 
 
 (2.) A copy of every such prospectus signed by every person who 
 is named therein as a director or proposed director of the company, 
 or by his agent authorized in writing, shall be filed for registration 
 with the Registrar of Companies on or before the date of its 
 publication, and no such prospectus shall be issued until a copy 
 thereof has been so filed for registration. 
 
 (3.) The registrar shall not register any prospectus unless it is 
 dated, and the copy thereof signed, in manner required by this 
 section. 
 
 (4.) Every prospectus shall state on the face of it that a copy has 
 been filed for registration as required by this section. 
 
 (5.) If a prospectus is issued without a copy thereof being so filed, 
 the company, and every person who is knowingly a party to the issue 
 
 * As to iresh issues of capital during 1 the war, see the Treasury Regulations, 
 
 Appendix, p. 632. 
 
PROSPECTUSES. 
 
 $44 
 
 of the prospectus, shall be liable to a fine not exceeding five pounds 
 for every day from the date of the issue of the prospectus until a 
 copy thereof is so filed. 
 
 In reading the above requirements, it must be borne in mind that 
 under sect. 285 of the Act, prospectus means any prospectus, notice, 
 circular, advertisement, or other invitation offering to the public, for 
 subscription or purchase, any shares or debentures [or debenture 
 stock] of a company. 
 
 The object of sect. 80 is twofold: (1) to preserve an authoritative 
 record of the terms on which the public are invited by the company 
 to subscribe for shares or debentures, and (2) to secure that the 
 directors of the company accept responsibility for the statements in 
 the prospectus. 
 
 Form of Prospectus. 
 
 Heading. The prospectus usually states by way of heading the date of 
 
 filing, the name of the company, the amount of the capital, the 
 names of the directors and other officials, what is offered for sub- 
 scription — whether shares, debentures, or debenture stock — and the 
 Terms. terms of issue. This heading is followed by a concise narrative of 
 
 the circumstances in which the company is formed, and the prospects 
 it has of success. The prospectus also states where application forms 
 can be obtained, and offers the memorandum and articles, the 
 contracts, and the form of debenture and trust deed (if any) for 
 inspection. 
 
 Statements in Prospectus. 
 
 Rules for In framing the prospectus the following rules must be borne in 
 
 framing. mind 
 
 (1.) The prospectus should not contain any misrepresentation of any 
 material fact, or any deceptive or misleading statement, or any 
 ambiguous statement which is not true in every sense in which 
 it might be reasonably understood. 
 
 (2.) It should disclose every material fact and contract, subject to 
 the qualifications below mentioned. 
 
 (3.) The prospectus should comply with the requirements of sect. 81 
 of the Act. See p. 347. 
 
 (4.) Sect. 72 of the Act — as to the appointment of directors — should 
 be borne in mind. 
 
 (5.) The provisions of sect. 84 (substituted for sects. 3 and 5 of the 
 Directors’ Liability Act, 1890) should also be borne in mind, 
 and all due precautions taken accordingly. 
 
FILING PROSPECTUSES. 
 
 Ch. XXXV. 
 
 845 
 
 Neglect of these precautions may give the allottee — 
 
 (a) The right to rescind the contract and repudiate the allotment. 
 
 (b) The right to sue for damages or compensation » those who 
 have issued the prospectus, and others who are, by statute or 
 common law, responsible. 
 
 The obligation of those who issue prospectuses inviting application The golden 
 for shares was long since laid down by Vice-Chancellor Kindersley in 
 Brunswick, Sfc. Co. v. Muggeridge (1861), 1 Dr. & Sm. 383, in words prospectuses, 
 which Page Wood, V.-C., described as a “ golden legacy.” Henderson 
 v. Lacon (1867), 5 Eq. 249. “Those,” said the Vice-Chancellor, “who 
 issue a prospectus, holding out to the public the great advantages 
 which will accrue to persons who will take shares in a proposed 
 undertaking, and inviting them to take shares on the faith of the 
 representations therein contained, are bound to state everything with 
 strict and scrupulous accuracy, and not only to abstain from stating as 
 fact that which is not so, but to omit no one fact within their know- 
 ledge, the existence of which might in any degree affect the nature, or 
 extent, or quality, of the privileges and advantages which the pro- 
 spectus holds out as inducements to take shares.” And in Central 
 Railway of Venezuela v. Kisch, L. P. 2 H. L. 123, Lord Chelmsford 
 said that no misstatement or concealment of any material facts or 
 circumstances ought to be permitted ; that the public who were invited 
 by a prospectus to join in any new venture ought to have the same 
 opportunity of judging of everything which has a material bearing on 
 the true character of the adventure, as the promoters themselves 
 possessed, and that the utmost candour ought to characterise their 
 public statements ; and his Lordship referred with approval to the rule 
 laid down by Kindersley, V.-C., as above mentioned. 
 
 This “golden rule” is, perhaps, somewhat of a “counsel of 
 perfection ” ; at all events, it has been qualified by subsequent 
 decisions, not, indeed, as regards any active misstatements in the 
 prospectus, but as to the effect of mere non-disclosure. Thus, in Peek 
 v. Gurney , L. P. 6 H. L. 403, it was held that, to support an action 
 of deceit, there must be some active misstatement of fact, or, at all 
 events, such a partial or fragmentary statement of fact as that the 
 withholding of that which is not stated makes that which is stated 
 absolutely false. This, it will be observed, was said in regard to 
 an action of deceit, in which fraud is of the essence of the action, 
 and which differs essentially from one brought to obtain rescission 
 on the ground of misrepresentation of a material fact (per Herschell, 
 
 L. C., Derry v. Peek (1889), 14 App. Cas. 359); but Pomer, J., 
 in McKeown v. Boudard, Everard $ Co. (1896), 74 L. T. 712, has 
 held that, even in an action for rescission, proof of mere non-dis- 
 closure of material facts is not enough to entitle the plaintiff to 
 relief ; for the duty of disclosure in the case of a prospectus inviting 
 
346 
 
 PROSPECTUSES. 
 
 Company not 
 necessarily 
 responsible 
 for pro- 
 spectus. 
 
 share subscriptions, as Lord Watson said in Aaron' 8 Reef v. Twiss , 
 (1896) A. C. 273, is not the same as in the case of a proposal for 
 marine insurance. Thus, a prospectus not stating that the directors 
 have been presented with their qualification by the company’s con- 
 tractor will not entitle a person who has taken shares on the faith of 
 the prospectus to rescind his contract. Heymann v. European Central 
 Rail. Co ., 7 Eq. 154. The suppressio veri must be such as to falsify the 
 prospectus. A half truth, for instance, represented as a whole truth 
 may be tantamount to a false statement. Aaron's Reefy. Twiss,, (1896) 
 A. C. 276. “I do not care,” said Lord Chancellor Halsbury inthatcase, 
 “by what means it is conveyed — by what trick or device, or ambiguous 
 language ; all these are expedients by which fraudulent people seem 
 to think that they can escape from the real conditions of the transac- 
 tion. If, by a number of statements, you intentionally give a false 
 impression, and induce a person to act on it, it is not the less false, al- 
 though, if one takes each statement by itself, there may be a difficulty in 
 showing that any specific statement is untrue.” Note also the obser- 
 vations of Lord Watson in that case, at p. 287, and see Greenwood v. 
 Leather Shod Wheel Co., (1900) 1 Ch. 421 (C. A.), where the same 
 principle was acted on. The legislature plainly, however, recognized, 
 in sect. 38 of the Companies Act, 1867, the duty of disclosure (see 
 infra , p. 350), so far as dates and parties to material contracts are 
 concerned. And although the Companies Act, 1900, repealed that 
 section, it was only to substitute for it a still wider statutory duty — to 
 disclose a great number of material facts which should or may throw 
 light on the character of the undertaking. See the section below. 
 
 A company is not responsible for the statements in a prospectus 
 unless it is shown that the prospectus was issued by the company or 
 by someone with the authority of the company — by the board of 
 directors, for instance. If it is, the company is responsible, and 
 cannot keep a contract for shares obtained by it if the state- 
 ments contained in it were false or misleading. National Exchange 
 Bank v. Drew , 2 Macq. 124; Houldsworth v. City of Glasgow 
 Bank , 5 App. Cas. 317. The company is also responsible if, 
 though the prospectus is issued by the promoters, the board ratify 
 and adopt the issue, for the prospectus is the basis of the contract 
 for shares. Pulsford v. Richards , 17 Beav. 97 ; Jennings v. Broughton , 
 17 Beav. 234. Hence, if the company, acting by the board of 
 directors, allot shares knowing that they have been subscribed on a 
 particular prospectus or statement of facts, the company is responsible. 
 Henderson v. Lacon , 5 Eq. 249 ; Ross v. Estates Investment Co., 3 Oh. 
 682 ; Lynde v. Anglo, Sfc. Co., (1896) 1 Oh. 178 : Karberg's case , (1892) 
 3 Ch. 1. Where a company publishes an abridged prospectus abroad, 
 a foreigner who subscribes on the faith of it may be entitled to relief. 
 Roussell v. Burnham , (1909) 1 Oh. 127. 
 
DISCLOSURE UNDER THE COMPANIES ACT, 1908. Ch. XXXV. 
 
 847 
 
 Disclosure under the Companies Act, lu08. 
 
 Section 81 of the above Act provides as follows : — 
 
 81. — (1.) Every prospectus* issued by or on behalf of a company, 
 or by or on behalf of any person who is or has been engaged or inte- 
 rested in the formation of the company, must state — 
 
 (a) the contents of the memorandum of association, with the names, 
 
 descriptions, and addresses of the signatories, and the number 
 of shares subscribed for by them respectively; and the number 
 of founders or management or deferred shares, if any, and 
 the nature and extent of the interest of the holders in the 
 property and profits of the company ; and 
 
 (b) the number of shares, if any, fixed by the articles of association 
 
 as the qualification of a director, and any provision in the 
 articles of association as to the remuneration of the directors ; 
 and 
 
 (c) the names, descriptions and addresses of the directors or pro- 
 
 posed directors ; and 
 
 (d) the minimum subscription on which the directors may proceed 
 
 to allotment, and the amount payable on application and 
 allotment on each share ; and in the case of a second or sub- 
 sequent offer of shares, the amount offered for subscription 
 on each previous allotment made within the two preceding 
 years, and the amount actually allotted, and the amount, 
 if any, paid on the shares so allotted ; and 
 
 (e) the number and amount of shares and debentures which within 
 
 the two preceding years have been issued, or agreed to be 
 issued, as fully or partly paid up otherwise than in cash, 
 and in the latter case the extent to which they are so paid 
 up, and in either case the consideration for which those 
 shares or debentures have been issued or are proposed or 
 intended to be issued ; and 
 
 (f) the names and addresses of the vendors of any property pur- 
 
 chased or acquired by the company, or proposed so to be pur- 
 chased or acquired, which is to be paid for wholly or partly 
 out of the proceeds of the issue offered for subscription by 
 the prospectus, or the purchase or acquisition of which has 
 not been completed at the date of issue ol the prospectus, 
 and the amount payable in cash, shares, or debentures, to the 
 
 * By section 285 of the Act, it is enacted that unless the context otherwise 
 requires, ‘ ‘ Prospectus means any prospectus, notice, circular, advertisement or 
 other invitation offering to the public, for subscription or purchase, any shares or 
 debentures [or debenture stock] of a company.” 
 
348 
 
 PROSPECTUSES. 
 
 vendor, and where there is more than one separate vendor, or 
 the company is a sub-purchaser, the amount so payable to 
 each vendor : Provided that where the vendors or any of 
 them are a firm the members of the firm shall not be treated 
 as separate vendors ; and 
 
 (g) the amount (if any) paid or payable as purchase money in cash, 
 
 shares, or debentures, for any such property as aforesaid, 
 specifying the amount (if any) payable for good-will ; and 
 
 (h) the amount (if any) paid within the two preceding years, or 
 
 payable, as commission for subscribing or agreeing to sub- 
 scribe, or procuring or agreeing to procure subscriptions, for 
 any shares in, or debentures of, the company, or the rate of 
 any such commission : Provided that it shall not be necessary 
 to state the commission payable to sub-underwriters ; and 
 
 (i) the amount or estimated amount of preliminary expenses ; and 
 
 (j) the amount paid within the two preceding years or intended to 
 
 be paid to any promoter, and the consideration for any such 
 payment ; and 
 
 (k) the dates of and parties to every material contract, and a reason- 
 
 able time and place at which any material contract or a copy 
 thereof may be inspected : Provided that this requirement 
 shall not apply to a contract entered into in the ordinary 
 course of the business carried on or intended to be carried on 
 by the company, or to any contract entered into more than 
 two years before the date of issue of the prospectus ; and 
 
 (l) the names and addresses of the auditors (if any) of the company ; 
 
 and 
 
 (m) full particulars of the nature and extent of the interest (if any) 
 
 of every director in the promotion of, or in the property pro- 
 posed to be acquired by the company, or where the interest 
 of such a director consists in being a partner in a firm, the 
 nature and extent of the interest of the firm, with a state- 
 ment of all sums paid or agreed to be paid to him or to the 
 firm in cash or shares or otherwise by any person either to 
 induce him to become, or to qualify him as, a director or 
 otherwise for services rendered by him or by the firm in 
 connection with the promotion or formation of the company ; 
 and 
 
 (n) where the company is a company having shares of more than 
 
 one class, the right of voting at meetings of the company 
 conferred on the holders of the several classes of shares 
 respectively. 
 
 (2.) For the purposes of this section every person shall be deemed 
 to be a vendor who has entered into any contract, absolute or condi- 
 
DISCLOSURE UNDER THE COMPANIES ACT, 1908. Ch. XXXV. 
 
 349 
 
 tional, for the sale or purchase, or for any option of purchase, of any 
 property to be acquired by the company, in any case where — 
 
 (a) the purchase money is not fully paid at the date of issue of 
 
 the prospectus ; or 
 
 (b) the purchase money is to be paid or satisfied wholly or in part 
 
 out of the proceeds of the issue offered for subscription by 
 
 the prospectus ; or 
 
 (c) the contract depends for its validity or fulfilment on the result 
 
 of that issue. 
 
 (3.) Where any of the property to be acquired by the company 
 is to be taken on lease, this section shall apply as if the expression 
 “ vendor” included the lessor, and the expression “ purchase money” 
 included the consideration for the lease, and the expression u sub- 
 purchaser ” included a sub-lessee. 
 
 (4.) Any condition requiring or binding any applicant for shares or 
 debentures to waive compliance with any requirement of this section, 
 or purporting to affect him with notice of any contract, document, or 
 matter not specifically referred to in the prospectus, shall be void. 
 
 (5.) Where any such prospectus as is mentioned in this section is 
 published as a newspaper advertisement, it shall not be necessary in 
 the advertisement to specify the contents of the memorandum or the 
 signatories thereto, and the number of shares subscribed for by them. 
 
 (6.) In the event of non-compliance with any of the requirements of 
 this section, a director or other person responsible for the prospectus 
 shall not incur any liability by reason of the non-compliance, if he 
 proves that — 
 
 (a) as regards any matter not disclosed, he was not cognisant 
 
 thereof ; or 
 
 (b) the non-compliance arose from an honest mistake of fact on his 
 
 part : 
 
 Provided that in the event of non-compliance with the requirements 
 contained in paragraph (m) of sub-sect. (1) of this section no director or 
 other person shall incur any liability in respect of the non-compliance 
 unless it be proved that he had knowledge of the matters not disclosed. 
 
 (7.) This section shall not apply to a circular or notice inviting 
 existing members or debenture-holders of a company to subscribe 
 either for shares or for debentures of the company, whether with or 
 without the right to renounce in favour of other persons ; but, subject 
 as aforesaid, this section shall apply to any prospectus, whether issued 
 on or with reference to the formation of a company or subsequently. 
 
 (8.) The requirements of this section as to the memorandum and the 
 qualification, remuneration, and interest of directors, the names, de- 
 scriptions, and addresses of directors or proposed directors, and the 
 amount or estimated amount of preliminary expenses, shall not apply 
 
350 
 
 PROSPECTUSES. 
 
 in the case of a prospectus issued more than one year after the date at 
 which the company is entitled to commence business. 
 
 {9.) Nothing in this section shall limit or diminish any liability 
 which any person may incur under the general law or this Act apart 
 from this section. 
 
 The duty to Here we have the latest of a series of enactments in which the 
 
 be candid. legislature has sought to compel candour on the part of directors in 
 dealing with the public ; and there is good reason for insisting on 
 such candour. The directors know all about the intended company, 
 the public knows only what the directors choose to tell it. At first 
 the law contented itself, as we have seen, by declaring directors 
 to be under a general obligation of bona Jides in dealing with the 
 public, but this having proved insufficient, the Companies Act, 1867, 
 was passed, requiring disclosure in a prospectus of the dates and names 
 of the parties to any contract entered into by the company; in default 
 the prospectus was to be deemed fraudulent. Then came the Directors’ 
 Liability Act, 1890, further penalizing careless statements; then the 
 Companies Act, 1900; then the Companies Act, 1907 ; and now, in 
 the Companies Act, 1908, we have all this legislation consolidated and 
 culminating in the above elaborate scheme of statutory particulars. 
 As a rule, there is no great difficulty in complying, at any rate, 
 as regards a new company, with paragraphs (a) contents of memo- 
 randum, (b) directors’ qualification and remuneration, (c) directors’ 
 names and addresses, (d) the minimum subscription, (h) the amount 
 of underwriting commission, (i) the amount of preliminary expenses, 
 (j) the amount paid to any promoter, (1) the names of the auditors, 
 (m) the interest of the directors in the promotion or property of the 
 company — although in some cases this is not an easy thing. The chief 
 difficulty is connected with (f), as to the company’s vendor and the 
 amount payable to him in cash, shares and debentures, having regard 
 to the very wide meaning given to the word “vendor” in sub-sect. (2). 
 The object clearly is to strip off the mask — as Lord Davey said — 
 which often conceals the real vendor, and to get at the truth of who is 
 the person really profiting by the promotion and what amount of 
 profit he or the successive vendors are making between them at the 
 expense of the company. But the aim of the clause, laudable as it 
 may be, is one thing, and its operation is another. The conscientious 
 director is much embarrassed by it ; the unscrupulous director can 
 easily comply with the letter, and yet, by a multiplicity of details, 
 baffle inquiry and throw dust in the eyes of investors. 
 
 Moreover, the paragraph contains no qualifying words like para- 
 graph (k). It does not exclude particulars of purchases in the ordinary 
 course of business. In terms it requires the disclosure of particulars as 
 to transactions which may be wholly immaterial, and the disclosure of 
 
DISCLOSURE UNDER THE COMPANIES ACT, 1908. Ch. XXXV. 
 
 which may seriously prejudice the company. But it would seem that 
 the non-disclosure of immaterial matter would not involve substantial 
 risks, seeing that a subscriber, in such a case, would be puzzled to 
 prove that, had there been disclosure, he would not have subscribed. 
 See infra , p. 360. The paragraph does not require that the prospectus 
 should, in the case of a completed purchase, disclose the amount of 
 the purchase money paid by the vendor upon his acquisition of the 
 property. Brookes v. Hansen , (1906) 2 Ch. 129. 
 
 Several of the other paragraphs of the section as existing in the 
 Acts of 1900 and 1907 were found very objectionable — that is, 
 vexatious — in some cases. Thus the concluding part of paragraph (d) 
 was, in the case of companies which had been in existence for some 
 years, difficult to comply with. So, also, paragraphs (h) and (j) 
 involved going into matters which occurred many years ago, for there 
 was no limit as regards time. Paragraph (m), again — with reference 
 to directors 7 interests in the promotion or property of the company — 
 in some cases involved great difficulty. 
 
 So onerous and exacting has the law been found that it has not 
 been uncommon for companies to dispose of their shares and debentures 
 privately, leaving their purchaser to offer them to the public. This, 
 if he is not and has not been ‘ 4 engaged or interested in the formation 
 of the company,” he can do without troubling himself about the 
 section. 
 
 A person who took shares in a company on the faith of a prospectus 
 might be debarred by a waiver clause in the prospectus from pursuing 
 his remedy under sect. 38 of the Companies Act, 1869, for non-disclosure 
 of a contract in the prospectus, provided the waiver clause was honestly 
 made. Cackett v. Keswick , (1902) 2 Ch. 456; Greenwood v. Leather 
 Shod Wheel Co ., (1900) 1 Ch. 421 ; Macleay v. Tait, (1906) A. C. 24. 
 But a waiver clause is not available so far as sect. 81 of the Companies 
 Act, 1908, is concerned. See sub-sect. (4). 
 
 No penalty is imposed for non-compliance with the section, and the 
 inference seems to be that anyone aggrieved by the neglect of the 
 statutory duty has a right of action for damages against the directors 
 or promoters or other the persons responsible for the neglect. See as 
 to this Atkinson v. Newcastle • Waterworks Co ., 2 Ex. I). 441 ; Cowley 
 v. Newmarket Local Board , (1892) A. C. 345 ; Municipality of Pic ton v. 
 Geldert , (1893) A. C. 524 ; Saunders v. Holborn District Board of 
 Works , (1895) 1 Q. B. 64 ; Johnston v. Consumers Gas Co. of Toronto, 
 (1898) A. C. 447 ; South of England Natural Gas Co., (1911) 1 Ch. 
 573. 
 
 Paragraph (9) preserves the liability of directors and others to be 
 sued for misrepresentation under sect. 84, or in an action of deceit. 
 
352 
 
 PROSPECTUSES. 
 
 Rescission of 
 contract to 
 take shares, 
 debentures, 
 &c. where 
 prospectus 
 faulty. 
 
 When rig-lit 
 to rescind 
 lost. 
 
 Rescission of Contract. 
 
 Where shares, debentures or debenture stock are subscribed for on 
 the faith of a prospectus containing a misrepresentation, the allottee is 
 entitled to repudiate the shares and claim his money back, for it is a 
 general rule that a contract induced by a material misrepresentation 
 is voidable, and may, at the option of the party deceived, be rescinded, 
 and it makes no difference that the misrepresentation was an innocent 
 one. Smith's case , 2 Oh. 604, 615; Reese River , Sf’c., L. R. 4H. L. 
 79 ; London Sf Staffordshire Co., 24 Oh. D. 149. The same principle 
 applies to misrepresentations made by agents of the company and not 
 contained in a prospectus. Hilo Manufacturing Co. v. Williamson 
 (1912), 28 T. L. R. 164. 
 
 Though voidable, the contract is valid until rescinded, and a conse- 
 quence of this principle is that an allottee of shares who discovers 
 that he has been deceived is bound at once to make up his mind — to 
 elect — whether he will rescind his contract or not, for his name being 
 on the register he is being held out as a member and a contributor to 
 the assets. Supra , p. 126. 
 
 “It is impossible,” as Lord Cairns said, in Re Cachar Co., L. R. 
 2 Ch. 417, “to disembarrass these cases of the effect which a man’s 
 name being on the register has in inducing other persons to alter their 
 position.” 
 
 Hence, a very short delay after discovery, say a fortnight or so, may 
 deprive him of the right to rescind. See Scottish Petroleum, 23 0. I). 
 413; Taite’s case, 3 Eq. 795; Peel’s case, 2 Ch. 674; Shelton’s case, 
 68 L. T. 210. And the principle applies where he has the means of 
 knowledge as well as actual knowledge. Thus, even if he has no 
 absolute proof of misrepresentation he may lose his right to rescind if, 
 after being told that there has been a misrepresentation, he stands by 
 inactive and takes no steps to look into the matter. Ashley’s case, 9 
 Eq. 269 ; Scholey v. Central Rail. Co. of Venezuela , 9 Eq. 266, n. And 
 if so, it is doubtful whether he can rely on other misrepresentations 
 discovered during the trial of the action. Christineville Rubber Estates , 
 (1911) W. N. 216; 81 L. J. Ch. 63. 
 
 So, too, he may lose his right to rescind by an implied ratification ; 
 if, that is, after discovering that he has a right to rescind, he treats the 
 contract as subsisting, for instance, by endeavouring to sell the shares 
 ( Ex parte Briggs, 1 Eq. 483), or by executing a transfer ( Crawley’s case, 
 4 Ch. 322), or by paying calls or receiving dividends ( Scholey v. Central 
 Rail. Co., 9 Eq. 266, n. ; Re Dunlop- Truffault Cycle Co., Shearman’ s case , 
 66 L. J. Ch. 25), or by attending and voting at a general meeting 
 in person or by proxy ( Sharpley v. Louth , Sfc. Co., 2 C. I). 663) ; but 
 
DISCLOSURE UNDER THE COMPANIES ACT, 1908. Ch. XXXV. 
 
 353 
 
 he is allowed a reasonable time to obtain evidence before taking action. 
 Central Rail. Co. v. Kisch , 2 H. L. 99. Acting as a member is not a 
 bar when the shareholder has previously issued a writ claiming 
 rescission, for that is a definitive election to rescind. Tomlin's case , 
 (1898) 1 Ch. 104; Company Precedents, Part I., p. 180. Negotiations 
 may also excuse delay. Tibbatts v. Boulter (1895), 73 L. T. 534. A 
 transfer of part of the shares before discovery does not preclude relief 
 as to the rest. Re Mount Morgan , Sfc. Co., 56 L. T. 622. 
 
 A fortiori , is winding-up a bar to rescission, for, on winding-up, the 
 rights of the whole body of the company’s creditors have intervened. 
 Where, therefore, an allottee of shares waits until after the commence- 
 ment of the winding-up, his right to rescind is gone. Oakes v. Tur- 
 quand , L. E. 2 H. L. 325. If on the register at the commencement 
 of the winding-up, though under a voidable contract, he cannot escape 
 unless he has commenced legal proceedings to enforce rescission before 
 the date of the winding-up. Oakes v. Turquand , supra ; Burgess' case, 
 .o C. D. 507 ; Reese River Co. v. Smith, L. E. 4 H. L. 64. 
 
 An allottee, where the allotment is irregular under sect. 86 of the 
 Companies Act, 1908, is in a different position. It is enough that he 
 gives notice of avoidance, within the month allowed, without taking 
 legal proceedings. Re National Motor Mail Coach Co., (1908) 2 Ch. 
 228. 
 
 An allottee who repudiates is safe if the company gives in and 
 removes his name from the register, and an order of Court in such a 
 case is not necessary ( Wright' s case, L. E. 7 Ch. 55), for the company 
 is not bound to fight every claim. 
 
 Where the shareholder is suing for rescission, the Court can on 
 terms restrain a forfeiture of the shares pending the hearing. Lamb 
 v. Sambas Rubber, (1908) 1 Ch. 845. 
 
 Where a contract is rescinded for misrepresentation, it is rescinded 
 ab initio , and accordingly the shareholder cannot, in a winding-up, be 
 placed on the list of contributories even as a past member. Wright' s 
 case, supra. 
 
 A misrepresentation, to entitle an allottee to relief, must be one of 
 fact. Eaglesfield v. Marquis of Londonderry , 4 C. D. 702. It must 
 be material, and the applicant for shares must have relied upon it. 
 To give a few instances. Where it was stated that more than 
 one-half the first issue of shares had already been subscribed for, 
 when in fact such subscription was a sham one, this was held a mis- 
 representation entitling the applicant to rescission. Ross v. Estates 
 Investment Co., L. E. 3 Ch. 682 ; Kent v. Freehold Land Co., 3 Ch. 
 493; Henderson v. Lacon, 5 Eq. 249; Arnison v. Smith , 41 C. D. 
 348. 
 
 So where it was falsely stated that the surplus assets as appearing 
 
 r. 23 
 
 Winding-up 
 a bar to 
 rescission. 
 
 Prompt 
 repudiation of 
 shares, when 
 effective. 
 
 Injunction. 
 
 Rescission 
 
 retrospective. 
 
 Misrepresen- 
 tation to be 
 of fact to 
 entitle share 
 holder to 
 relief. 
 
354 
 
 PROSPECTUSES. 
 
 by the last balance sheet amounted to upwards of 10,000/. Re London 
 and Staffordshire Bank, 24 C. D. 149. 
 
 So where it was stated that a particular mine was in full operation 
 and making large daily returns when it was, in fact, unproductive and 
 worthless. Reese River v. Smith, L. R. 4 H. L. 64. 
 
 So where it was falsely represented that patented articles were a 
 commercial success and beyond the experimental stage. Greenwood v. 
 Leather Shod Wheel Co., (1900) 1 Ch. 421. 
 
 So where a promoter who was to get part of the purchase money 
 was untruly put forward as one of the vendors. Capel v. Sims, 58 
 L. T. 807. 
 
 So where it was stated untruly that the vendor was to pay all the 
 preliminary expenses. Re Liberian Government Concessions, 9 T. L. R. 
 136. 
 
 So where it was stated untruly that the company was the sole 
 manufacturer of asbestos in France and had a practical monopoly. 
 Hyde v. New Asbestos Co., 8 T. L. R. 121. 
 
 So where it was stated untruly that the company’s process was a 
 commercial success. Stirliny v. Passburg Grains, 8 T. L. R. 71. 
 
 So where it was stated that no promotion money was to be paid, 
 whereas there was in truth a large sum to be # so paid. Lodwick v. 
 Earl of Perth , 1 T. L. R. 76. 
 
 So where it was stated that the vendors of nitrate grounds had 
 obtained, brought to them in pipes, a supply of water, and that the 
 company would have the right of using a certain part of the water, 
 whereas in truth the water supply was insufficient. Lagunas Nitrate 
 Co. v. Lagunas Nitrate Syndicate, (1899) 2 Ch. 392, 397, 429. 
 
 A statement in a prospectus as to the persons who are to be directors 
 is a material statement, and, if untrue, a person subscribing on the 
 faith thereof is prima facie entitled to rescind. Re Scottish Petroleum 
 Co., 23 Ch. D. 413 ; and see Anderson’s case , 17 Ch. D. 373 ; Smith v. 
 Chadwick, 20 Ch. D. 50; Wainwrighf s case , 62 L. T. 30; Kent County 
 Gas Co., 95 L. T. 756. 
 
 Where a company was formed to buy a mine, and extracts from the 
 report of an expert were set forth which gave a misleading impression 
 of that report and induced the belief that the mine was similar to a 
 rich adjacent mine, it was held that a subscriber was entitled to relief. 
 Re Mount Morgan Co., 56 L. T. 622. 
 
 It is a misrepresentation to state in a prospectus that share capital 
 has been “ subscribed” when it has only been allotted in fully paid 
 shares to the company’s contractor ( Arnison v. Smith, 40 Ch. D. 567), 
 or that the company has contracted for the purchase of a property 
 when, in fact, there is only negotiation. Rossv. Estates Investment Co., 
 L. R. 3 Ch. 682. 
 
DISCLOSURE UNDER THE COMPANIES ACT, 1908 . Ch. XXXV. 
 
 355 
 
 A prospectus often refers to reports. In such a case, if the company Effect of 
 will take upon itself to assume the authenticity of the reports and to in 
 
 represent as facts the matters stated in those reports, it must take the prospectus, 
 consequences should they prove false. In re Reese River Silver 
 Mining Co., L. R. 2 Ch. 611 ; Rawlins v. Wickham, 3 De G. & J. 304 ; 
 
 Mair v. Rio Grande Rubber Estates, (1913) A. C. 853. If the company 
 does not intend to issue the shares on the basis of the facts stated in 
 the report, it must dissociate itself from the report in clear and unam- 
 biguous terms. Calculations of profits based on statements in the 
 report may amount to a misrepresentation. Re Pacaya Rubber Co., 
 
 (1914) 1 Ch. 542. But if the persons issuing a prospectus merely refer 
 to the report, e.g., of a mine, as telling all they know, and propose to 
 send out someone to test it, they will not be treated as guaranteeing its 
 truth. In re British Burmah Lead Co., 56 L. T. 815. Under the 
 Companies Act, 1908, s. 84, infra (re-enacting the Directors’ Liability 
 Act, 1880), directors who make untrue statements in a prospectus, pur- 
 porting to be extracts from reports or valuations by engineers, valuers, 
 accountants or other experts, must be prepared to show that the state- 
 ments fairly represent the expert opinion. 
 
 Other instances of misrepresentation may be found in Jackson v. 
 
 Turquand, L. R. 4 H. L. 305 ; Denton v. Macneil, 2 Eq. 352 ; Moore 
 v. Explosives Co., 56 L. J. Q. B. 235 ; Wright's case , L. R. 7 Ch. 55 ; 
 
 Lyon's case, 35 Beav. 646 ; Bellairs v. Tucker , 13 Q. B. D. 562; New 
 Brunswick Co. v. Conybeare, 9 H. L. C. 724 ; Nicol's case, 3 De 
 G. & J. 387 ; In re Devala Provident Gold Mining Co., 22 Ch. D. 593 ; 
 
 Arnison v. Smith, 41 Ch. D. 348 ; Drincqbier v. Wood, (1899) 1 Ch. 
 
 393. 
 
 The statement that something will be done is not a statement of 
 an existing fact within the rule. Beattie v. Ebury, 7 Ch. 804 ; Alderson 
 v. Maddison, 5 Ex. Div. 293 ; 8 App. Cas. 467 ; Bellairs v. Tucker, 
 supra. But a representation of belief, opinion, expectation, or Statement 
 intention is a representation of fact, for “the state of a man’s mind on U of belief, 
 is as much a matter of fact as the state of his digestion.” Per Bowen, P 
 L. J., Edgington v. Fitzmaurice, 29 C. D. 483. 
 
 Nor is there any safety in ambiguous statements, which, in one Ambiguous 
 sense, are true, though in another, not true, “which keep the word statements, 
 of promise to the ear and break it to the hope ” ; for the rule is that 
 the applicant is entitled to put any reasonable construction on such a 
 statement, and if, according to that construction, it is untrue, he is 
 entitled to relief. Hallows v. Fernie , 3 Ch. 476; Arkwrights. Newbold, 
 
 17 Ch. D. 322 ; Smith v. Chadwick, 9 App. Cas. 187. 
 
 One thing is clear on the authorities, and that is, that if a prospectus Reliance of 
 contains statements of fact, the recipient is entitled to rely thereon, 
 
 He is not bound to verify them. Thus, if the prospectus states the fact without 
 
 23 ( 2 ) 
 
356 
 
 PROSPECTUSES. 
 
 trying to 
 verify. 
 
 Notice of 
 contents of 
 documents by 
 prospectus 
 offered for 
 inspection. 
 
 Whether non- 
 compliance 
 with sect. 81 
 of the Act of 
 1908 gives 
 right to 
 rescind. 
 
 Prospectus to 
 he deemed 
 addressed to 
 all who apply 
 on strength 
 of it. 
 
 effect or terms of a document, or purports so to do, and offers it for 
 inspection, he is not bound to inspect it. He is entitled to assume in 
 either case that the prospectus is true; “for when men issue a 
 prospectus in which they make statements of the contracts made 
 before the formation of the company, and then state that the contracts 
 may be inspected at the office of the solicitors, it has always been held 
 that those who accepted these false statements as true, were not 
 deprived of their remedy merely because they neglected to go and 
 look at the contracts.” Per Jessel, M. R., Redgrave v. Hurd , 20 
 Oh. D. 14 ; and Smith v. Chadwick, 20 Ch. D. 57 ; 9 App. Cas. 187 ; 
 Re Mount Morgan West Gold Mine Co., 56 L. T. 622. The answer 
 is, “You put me off my guard” (per Lord Chelmsford) ; see also Aaron’s 
 Reef v. Twiss, (1896) A. C. 273, in which Lord Watson said : “ It was 
 argued for the company that, inasmuch as the contracts for the purchase 
 of the concession were generally referred to towards the end of the 
 prospectus, the respondent must be held to have notice of their 
 contents. This appears to me to be one of the most audacious pleas 
 that ever was put forward in answer to a charge of fraudulent 
 misrepresentation. When analyzed, it means simply that a person, 
 who has induced another to act upon a statement made with intent to 
 deceive, must be relieved from the consequences of his deceit if he has 
 given his victim constructive notice of a document, the perusal of 
 which would expose the fraud.” 
 
 The question whether breach of the requirements of sect. 81 of the 
 Companies Act, 1908, will give a subscriber the right to repudiate the 
 allotment made to him, and to compel rescission of the contract, remains 
 for consideration. When the breach involves the misstatement of a 
 material fact, there will, of course, be a right of rescission under the 
 general law, as above, pp. 352, 353, and in this connection it must be 
 borne in mind that the statement of a half truth may amount to a 
 misstatement. But where the breach consists in the mere omission 
 to state some fact which ought under this section to be stated, and the 
 omission to make that statement does not falsify that which is stated, 
 it will probably be contended, and it has been recently held, that 
 the section gives no right of rescission. Wimbledon Olympia , Limited , 
 (1910) 1 Ch. 630, followed by Swinfen Eady, J., in South of England 
 Natural Gas , &c. Co., W. N. (1911) 80. This accords with Gover’s case , 
 
 1 C. D. 191. 
 
 The proper office of a prospectus is to invite the public to take- 
 shares in the new company, and it is to be treated as, addressed 
 exclusively to those who subscribe for shares in response to it, and not 
 to other persons who may read it and buy shares in the market on the 
 faith of it. Those persons, therefore, who buy in the market cannot, 
 as a general rule, sue upon it. Nor will a false report made by 
 
SECT. 84 OF directors’ liability act, 1890. Ch. XXXV. 
 
 35 
 
 directors to a general meeting entitle a person who buys shares on 
 the faith of it from a shareholder (as distinguished from taking them 
 from the company) to rescind his contract. Ex parte Worth (1859), 
 4 Drew. 529 ; Peek v. Gurney , L. R. 6 H. L. 403 ; Nicol’s case, 3 
 De G. & J. 387. But this rule does not apply where it is shown that 
 the prospectus was intended and used to induce purchasers in the 
 market to buy the shares. Andrews v. Mockford, (1896) 1 Q,. B. 372 ; 
 and see Burantf s case (1858), 26 Beav. 268. 
 
 Sect. 84 re-enacting the provisions of the Directors’ 
 Liability Act, 1890. 
 
 The Directors’ Liability Act, 1890 (now incorporated in the Directors’ 
 Companies Act, 1908, s. 84), was passed with a view to strengthen the 
 supposed inadequacy of the law as declared in Peek v. Berry, 14 App. 
 
 Cas. 337, in respect of directors’ liability. In that case it was finally 
 decided that in order to obtain, in an action of deceit, any personal 
 remedy in damages against directors who issued a prospectus con- 
 taining untrue statements, it was necessary for the plaintiff to prove 
 affirmatively that the statements were made fraudulently, that is to 
 say, either with knowledge that they were false, or recklessly, i.e., not 
 caring whether they were true or false, or not believing them to be 
 true. To discharge this obligation — to prove a psychological fact — 
 was in many cases a matter of impossibility. It was not enough to 
 prove that the director sued had been guilty of the grossest negli- 
 gence, or that he made the statement without any reasonable grounds 
 for believing it to be true. The question was, had he made it fraudu- 
 lently — did he or did he not believe it to be true? The Act of 1890 
 altered this, and shifted the onus, and sect. 84 of the Act of 1908 has 
 adopted the same rule, and under the law as it now stands, if an allottee 
 once proves that a material statement in the prospectus is untrue, and 
 that he took shares on the faith of the prospectus and sustained 
 damage, he is entitled to sue every director and every person who has 
 authorized the issue of the prospectus, and to compel them to pay , 
 compensation for his loss. The statement once proved untrue in such 
 an action, the director is prima facie made liable. To escape, he must 
 prove affirmatively that he had reasonable grounds to believe the 
 statement to be true, and that he did, in fact, believe it to be true, or 
 as an alternative, he must prove that the statement, if made on the 
 authority of an expert, was, in fact, made on the authority of such 
 expert and fairly represented his opinion. See the words of the 
 section, infra. 
 
 Thus a director makes a statement which is untrue within the 
 
358 
 
 PROSPECTUSES. 
 
 meaning of sect. 84 of the Act of 1908 if he states in a prospectus 
 that the company has acquired a specified property, when in fact it 
 has not at the time acquired it, though the director honestly believes 
 that it has been acquired. The uncorroborated statements of a vendor, 
 still less of a vendor-promoter, afford no reasonable grounds for 
 believing that his statements are true. Adams v. Thrift , C. A., (1915) 
 2 Oh. 21. 
 
 When a director knows that a prospectus is being issued inviting 
 persons to take, e.g., debentures, and abstains from asking to see it 
 until after action brought on account of misrepresentations therein, it 
 is too late for him to give ‘ 1 reasonable public notice that it was issued 
 without his consent,” under Directors’ Liability Act, 1890, s. 3 
 (Companies Act, 1908, s. 84 (1) (c) (ii)). Drincqbier v. Wood , (1899) 1 
 Ch. 393. 
 
 As to the contribution from co-directors given by sect. 5 of the 
 Directors’ Liability Act, 1890 (Companies Act, 1908, s. 84 (4)), see 
 Gerson v. Simpson , (1903) 2 K. B. 197 ; Shepheard v. Brag , (1907) 2 
 Ch. 571. 
 
 It is not at all clear what is the period of limitation for bringing an 
 action under the Act. The Civil Procedure Act, 1833 (3 & 4 Will. 4, 
 c. 42), appears to fix two years, but dealing with the corresponding 
 provisions in the Act of 1890, the Court of Appeal in Thomson v. 
 Lord Clanmorris, (1900) 1 Ch. 718, disregarding the words of the Act, 
 held it inapplicable, and seemed inclined to think that six years was 
 the period under 21 Jac. 1, c. 16. 
 
 The cause of action first arises for the purposes of the Act when the 
 plaintiff sustains damage by reason of the breach of statutory duty. 
 Presumably — the action being for a statutory debt — a deceased direc- 
 tor’s estate is liable. Frankenburg v. Great Horseless Carriage Co ., 
 (1900) 1 Q. B. 504. As to proof in bankruptcy, see Bankruptcy Act, 
 1914, s. 30 ; and Greenwood v. Humber Sf Co., W. N. (1898) 162. 
 
 As to the measure of damages, see McConnell v. Wright , (1903) 1 
 Ch. 546. 
 
 Action of Deceit. 
 
 Old remedy The old remedy by action of deceit has now to a large extent been 
 deceit^ 011 °* superseded — so far as directors are concerned — by the easier and more 
 
 efficacious remedy under the Directors’ Liability Act, 1890, and sect. 84 
 of the Act of 1908, which has taken its place. To maintain an action 
 of deceit, as already mentioned, actual fraud had to be proved against 
 the defendant — that he knowingly made an untrue statement of a fact 
 in the prospectus. Peek v. Derry, 14 App. Cas. 337. 
 
 In such an action mere non-disclosure of facts was not and is not 
 
SECT. 38 OF THE COMPANIES ACT, 1867. Ch. XXXV. 
 
 359 
 
 sufficient, unless the non-disclosure is such as to make the statements 
 in the prospectus false. Peek v. Gurney , L. R. 6 H. L. 403 ; Aaron's 
 Reef v. Tiviss, (1896) A. C. 273. 
 
 The defendant in an action of deceit has various defences, though 
 some once open are now closed to him under the Directors’ Liability 
 Act, 1890, and sect. 84 of the Act of 1908. Thus, he may escape 
 if he can prove that he did believe the fact stated, even though 
 his belief was not based on reasonable grounds, for if he believed 
 the statement fraud is negatived ( Derry v. Peek, 14 App. Cas. 
 337) ; or, again, he may escape if he can prove that the plaintiff 
 was not, in fact, misled, e.g ., that he knew the statement to be 
 false when he applied for the shares, but he cannot avail himself, as 
 we have seen above, of the “ audacious plea ” that the plaintiff might 
 easily, by inquiry or otherwise, have ascertained that the statement was 
 untrue. Aaron’ s Reef v . Twiss, (1896) A. 0. 273. 
 
 Sect. 38 of the Companies Act, 1867. 
 
 This section was repealed by the Companies Act, 1900; but it 
 is desirable to refer to some of the decisions, as the repeal is without 
 prejudice to any right of action acquired under the section, and the 
 views taken by the Courts may throw much light on the corresponding 
 provisions of sect. 81 ( 1 ) (k) of the Act of 1908 {supra, p. 348). 
 
 Section 38 was expressed in the widest possible terms ; so wide, that Statement 
 the Courts, in order to make it workable, have been obliged to imply ^ prospectus 
 some limitation ; for it would be practically impossible to specify in a ( sect . 33 G f 
 prospectus, at any rate in some cases, all the various contracts that Companies 
 have been made by the directors or promoters of a company. Ac- 186 ^' 
 cordingly, after much litigation and difference of judicial opinion 
 (see Sullivan v. Mitcalfe, 5 C. P. D. 465 ; and Gover’s case, 1 Ch. D. 
 
 200 ), it was settled that what the section in effect required was, that 
 the prospectus should state the date and parties to every material 
 contract made by the company, or by the directors or promoters 
 thereof, meaning by material every contract which would be likely 
 to influence the judgment of an intending applicant as to whether 
 he should or should not take up shares ( Sullivan v. Mitcalfe , 
 supra, followed; Cackettv. Keswick, (1902) 2 Ch. 456). If material 
 it makes no difference whether the contract not disclosed is 
 executed or executory. Broome v. Speak, (1903) 1 Ch. 586 (C. A.) ; 
 
 71 L. J. Ch. 716 ; 72 L. J. Ch. 251. Nor can a director 
 escape liability for non-disclosure of a material contract, of the 
 existence of which he was aware, by professing ignorance of the con- 
 tents or materiality of the contract, or by alleging that he left the 
 matter to his legal advisers. Watts v. Bucknall, (1903) 1 Ch. 766 ; 
 
360 
 
 PROSPECTUSES. 
 
 Tait v. Macleay , (1904) 2 Ch. 631 ; Shepheard v. Broome, (1904) 
 A. C. 342. The importance of complying with the requirements of 
 the section was great ; for if not complied with the prospectus was to 
 be deemed fraudulent on the part of the promoters, directors, &c., 
 knowingly issuing the same as regards any person taking shares in 
 the company on the faith of such prospectus, unless he had notice of 
 such contract, that is, the undisclosed contract. 
 
 The omission to specify the contract may have been perfectly 
 innocent ; the director may have been acting under the advice of an 
 experienced solicitor; he may, in the exercise of an honest judgment, 
 have come to the conclusion that the contract was not material ; all 
 these things availed and avail him nothing. If he has, in fact, not 
 complied with the section, he is to be deemed the author of a 
 fraudulent prospectus. 
 
 To exonerate himself from this discreditable imputation he must 
 show that he was not responsible for the prospectus ; in other words, 
 that he was defrauded or deceived into giving his sanction to it. 
 Watts v. Bucknall , (1902, 2 Ch. 628; (1903) 1 Ch. 766; Hoole v. 
 Speak , (1904) 2 Ch. 732. 
 
 Nor was it possible to escape the section by making the contract a 
 merely verbal one, for it was held that a verbal contract was as much 
 within the section as a contract in writing ( Capet v. Sims Composition 
 Co., 36 W. R. 689 ; Arkwrights. Newbold, 17 C. D. 301), and where a 
 contract is rescinded by another contract the latter and perhaps both 
 may have to be specified. London and Northern Bank, Haddock' s case, 
 W. N. (1902) 84. 
 
 There is, however, this saving element in the situation, that in order 
 to obtain relief under the section the plaintiff must show that but for 
 the omission to disclose the contract he would not have subscribed. 
 This essential condition was not fully appreciated until the House of 
 Lords recognized it in Macleay v. Tait , (1906) A. C. 24. 
 
 The expression “ knowingly issue” in sect. 38 means issuing 
 with knowledge of the existence of the omitted contract. It is no 
 defence, as mentioned above, that the director or promoter honestly 
 considered the contract not to be material. Twycross v. Grant , 
 2 0. P. D. 542. 
 
 The section applied not only to a full prospectus or notice but also 
 to an abridged prospectus, even though the abridged prospectus stated 
 where a full prospectus can be obtained. Army, Sfc. Society v. Craig , 
 8 T. L. R. 227. But the section was confined to a prospectus offering 
 shares for subscription, and did not apply to one offering debentures 
 or debenture stock. Cornell v. Hay, L. R. 8 0. P. 328. 
 
 The extreme difficulty of determining in many cases whether a 
 
DEBENTURE PROSPECTUSES. 
 
 Ch. XXXV. 
 
 361 
 
 particular contract which had been made did or did not fall within 
 the section, and the desire in other cases of persons to escape from the 
 performance of the obligation imposed by the section, led to the 
 adoption of what was commonly known as a “ waiver clause,” that is to 
 say, to a condition in the prospectus followed by a corresponding clause 
 in the form of application to the effect that the applicant waived any 
 claim he might have for non-compliance with the section. Such waiver 
 clauses had been in use even before 1877, as witness the evidence of 
 the late John Morris before the Select Committee on the Companies 
 Acts in that year, and prior to the Act of 1900 had become almost 
 universal. 
 
 The view of the Court of Appeal in the more recent cases on the 
 subject ( Cackett v. Keswick, (1902) 2 Ch. 456, following Greenwood v. 
 Leather Shod Wheel Co., (1900) 1 Ch. 421, and Watts v. Bucknall, 
 supra) was, that a person who takes shares in a company, on the faith of 
 a prospectus, may be debarred by a waiver clause from pursuing his 
 remedy under sect. 38 of the Companies Act, 1867, for non-disclosure 
 of a contract in the prospectus, provided the waiver clause was honestly 
 made and directed the attention of the intending shareholder to the 
 nature of the contract in question. At last, in Macleay v. Tait , 
 (1906) A. C. 24, the House of Lords came to the same conclusion 
 that an honest waiver clause was valid. In excluding waiver 
 clauses in the future, for the purposes of the Companies Act, 1908 
 (see sect. 81 (4), substituted for sect. 10 of the Act of 1900), the 
 Legislature has no doubt been actuated, not so much by any intrinsic 
 objectionableness in the clause, as by a consideration of its liability to 
 abuse. 
 
 Non-compliance with sect. 38 did not give an allottee a right to 
 repudiate his shares, or any right of action against the company. 
 Governs case, 1 C. D. 182. The remedy given by the section was, by 
 implication, an action for damages against the directors or others who 
 have issued what is “to be deemed to be” a fraudulent prospectus. 
 In order to succeed in such an action the plaintiff must prove ( 1 ) that 
 the prospectus omitted to state the date and parties to some contract ; 
 
 (2) that such contract was material in the sense above mentioned ; 
 
 (3) that the applicant took shares in the company on the faith of 
 such prospectus ; and (4) that he has sustained damages — e.g., by 
 reason of the shares turning out to be worthless or being otherwise 
 depreciated. 
 
 Attention should be called to the concluding words of the section, 
 “ unless he had notice of such contract.” It seems that to be effective 
 the notice must be of the material contents of the contract, not merely 
 of its existence. Watts v. Bucknall, (1903) 1 Oh. 766. 
 
 And according to a decision ( Nash v. Calthorpe, W. N. (1905) 100) 
 
 Non-com- 
 pliance with 
 sect. 38 gives 
 no right to 
 repudiate 
 shares, but 
 remedy 
 against direc- 
 tors or others 
 for damages. 
 
 What is 
 ‘ ‘ notice of 
 contract” in 
 sect. 38. 
 
362 
 
 PROSPECTUSES. 
 
 Debenture 
 
 prospectuses. 
 
 the applicant for the purposes of (3) or (4) must prove that had 
 he known of the omitted contract he would not or might not have 
 taken the shares. 
 
 Debenture Prospectuses. 
 
 As to prospectuses offering debentures, debenture stock, and other 
 securities for subscription, the rules above stated apply for the most 
 part, but subject to the following qualifications : — 
 
 (1.) Mere delay after discovering misrepresentation is not so 
 dangerous as in the case of shares, for there is no holding out 
 as in the case of shares (see pp. 126, 352) ; nevertheless, any act 
 showing an election to affirm the contract destroys the right of 
 rescission; thus, if a debenture holder, entitled to repudiate, 
 after discovering the facts giving such right to repudiate, acts 
 as a debenture holder, e.y., by voting at a meeting or otherwise, 
 he thereby disentitles himself to relief. 
 
 (2.) Sect. 84 of the Act of 1908, replacing the Directors’ Liability 
 Act, 1890, is applicable to debenture prospectuses. 
 
 (3.) An action of deceit is available where there is a fraudulent 
 misrepresentation. 
 
 (4.) Sects. 80, 81 of the Companies Act, 1908, are also applicable. 
 
 A prospectus offering debentures or debenture stock is headed with 
 the name of the company, states the nominal and issued capital of the 
 company, the number and description of the debentures or debenture 
 stock offered, the nature of the security, the terms of issue, the names 
 of the directors, bankers, solicitors, brokers, auditors, and secretary, 
 the objects and prospects of the company, the facts required by sect. 
 81 of the Act of 1908 to be stated, how applications are to be made, 
 and where copies of the prospectus, of the memorandum and articles 
 of association, and of the debentures and debenture stock deed may 
 be inspected. 
 
Ch. XXXVI. 
 
 363 
 
 CHAPTER XXXVI. 
 
 STATEMENT IN LIEU OF PROSPECTUS. 
 
 The onerous and indefinite obligations as to disclosures imposed on 
 directors and promoters by sect. 10 of the Companies Act, 1900, to a 
 great extent checked the use of the prospectus for company promotion, 
 and augmented the number of companies floated by other means, 
 e.y., by obtaining subscriptions on forms of application accompanied 
 by oral statements, or by selling shares in the company in the stock 
 market through financiers and others, or by means of a pooling 
 syndicate, or otherwise. 
 
 To rectify this unfortunate result the legislature, in sect. 82 of the 
 Act of 1908 (replacing sect. 1 of the Act of 1907) requires, where a 
 prospectus is not issued [and the company is not a private company, 
 sect. 82 (2)], the filing of a statement in lieu of prospectus. The 
 section runs thus : — 
 
 82. A company which does not issue a prospectus on or with 
 reference to its formation, shall not allot any of its shares or debentures 
 [or debenture stock] unless before the first allotment of either shares 
 or debentures [or debenture stock] there has been filed with the 
 Registrar of Companies a statement in lieu of prospectus, signed by 
 every person who is named therein as a director or a proposed director 
 of the company or by his agent authorized in writing, in the form and 
 containing the particulars set out in the Second Schedule to this Act. 
 
 (2.) This section shall not apply to a private company or to a com- 
 pany which has allotted any shares or debentures before the first day 
 of July nineteen hundred and eight. 
 
 “ Prospectus ” in this section means, as provided by sect. 285, any 
 prospectus, notice, circular, advertisement, or other invitation offering 
 to the public for subscription or purchase any shares or debentures [or 
 debenture stock] of a company. 
 
 The statement in lieu of prospectus is to be framed in accordance 
 with the form set forth in the Second Schedule to the Act (see infra , 
 p. 536), and on referring to that form it will be seen that the disclosure 
 required is almost as extensive as that required in the case of a pro- 
 spectus inviting subscriptions for shares in a new company. 
 
364 
 
 STATEMENT IN LIEU OF PROSPECTUS. 
 
 Accordingly, in filling up the form of statement the observations in 
 Chapter XXXV. as to the contents of a prospectus may be referred to 
 in illustration and explanation. The statement is to be signed by 
 every person who is named in it as a director or a proposed director of 
 the company, or by his agent authorized in writing. 
 
 The statement is, amongst other things, to state the “ minimum 
 subscription (if any) fixed by the memorandum or articles of asso- 
 ciation on which the company may proceed to allotment.” These 
 words refer to sect. 85, which provides, in para. (7), that — 
 
 “ (7.) In the case of the first allotment of share capital, payable in 
 cash, of a company which does not issue any invitation to the public 
 to subscribe for its shares, no allotment shall be made unless the 
 minimum subscription, that is to say, 
 
 “ (a) The amount (if any) fixed by the memorandum or articles, and 
 named in the statement in lieu of prospectus, as the mini- 
 mum subscription upon which the directors may proceed to 
 allotment ; or 
 
 “ (b) If no amount is so fixed and named, then the whole amount 
 of the share capital other than that issued, or agreed to be 
 issued, as fully or partly paid up otherwise than in cash, 
 has been subscribed, and an amount not less than five per cent, of the 
 nominal amount of each share payable in cash has been paid to and 
 received by the company. 
 
 “ This sub-section shall not apply to a private company, or to a 
 company which has allotted any shares or debentures [or debenture 
 stock] before July, 1908.” 
 
 In this connection it is also necessary to bear in mind sect. 86, 
 making allotments in contravention of the above provision voidable, 
 and rendering directors liable ; and sect. 87, which prohibits the com- 
 pany from commencing business, or exercising its borrowing powers, 
 until the conditions therein specified have been complied with; and 
 sect. 83, which prohibits a company from varying before the statutory 
 meeting any contract referred to in the statement in lieu of prospectus, 
 except subject to the approval of the statutory meeting. 
 
 A person who applies for shares on the faith of statements con- 
 tained in a statement in lieu of prospectus has apparently the same 
 right of rescission, if they are false, as if they were contained in a 
 prospectus. But such misstatements or omissions in a statement in 
 lieu of prospectus, if not relied upon, do not render subsequent allot- 
 ments void. Blair Open Hearth , (1914) 1 Oh. 390. 
 
 The statement is clearly a document required by or for the purposes 
 of the Act, specified in the Fifth Schedule {viz., to comply with sect. 82), 
 and accordingly if any person wilfully makes in it a statement false in 
 
STATEMENT IN LIEU OF PROSPECTUS. Ch. XXXVI. 
 
 36 
 
 any material particular, knowing it to be false, be is guilty of a mis- 
 demeanour, and liable on indictment to imprisonment for a term not 
 exceeding two years with or without hard labour, and on summary 
 conviction to imprisonment for not exceeding four months with or 
 without hard labour, and in either case to a fine (not exceeding 10(U.), 
 in lieu of or in addition to such imprisonment. See sect. 281. 
 
 Sect. 72 also (as to appointment of directors), where applicable, 
 must be borne in mind. See pp. 181, 182. 
 
Ch. XXXVII. 
 
 m 
 
 CHAPTER XXXVII. 
 
 PRIVATE COMPANIES. 
 
 Section 37 of the Companies Act, 1907, gave at last, what had long 
 been desired, a definition of a Private Company. This definition, now 
 re-enacted by sect. 121 of the Act of 1908, as amended by the Com- 
 panies Act, 1913, runs thus: — 
 
 121. — (1.) For the purposes of this Act the expression “private 
 company ” means a company which by its articles — 
 
 (a) restricts the right to transfer its shares ; and 
 
 (b) (Act of 1913, s. 1 (2) (b)) limits the number of its members 
 
 (exclusive of persons who are in the employment of the com- 
 pany and of persons who having been formerly in the 
 employment of the company were while in such employment 
 and have continued after the determination of such employ- 
 ment to be members of the company) to fifty ; and 
 
 (c) prohibits any invitation to the public to subscribe for any shares 
 
 or debentures [or debenture stock] of the company. 
 
 (2.) A private company may, subject to anything contained in the 
 memorandum or articles, by passing a special resolution and by filing 
 with the Registrar of Companies such a statement in lieu of prospectus 
 as the company, if a public company, would have had to file before 
 allotting any of its shares or debentures, together with such a statutory 
 declaration as the company, if a public company, would have had to 
 file before commencing business, turn itself into a public company. 
 
 (3.) Where two or more persons hold one or more shares in a com- 
 pany jointly they shall, for the purposes of this section, be treated as 
 a single member. 
 
 But though the private company has now received statutory recog- 
 nition and an authoritative definition, it must not be supposed that the 
 private company — either the name or the thing — was first brought 
 into use by the Companies Act, 1907 ; for both the name and the thing 
 with substantially the same incidents and signification have been well 
 known for upwards of thirty years. The term was already in use — 
 though only to a limited extent — when the author’s work on “ Private 
 
PRIVATE COMPANIES. 
 
 Companies ” was first published some thirty years ago, and the 
 twenty-nine editions of that work which have appeared in the interval 
 may not have been without their effect in familiarizing the public with 
 this useful form of company association. Certain it is that private 
 companies, or incorporated partnerships as they may be called, consti- 
 tute more than a third nowadays of the whole number of companies 
 registered. 
 
 Many judicial references to the private company may be cited. As 
 long ago as 1881, in British Seamless Paper Box (1881), 17 Ch. D. 
 467, Cotton, L. J., said “when the company was formed it was 
 intended to be a private company, that is, it was intended to carry it 
 on without calling in the public, or issuing any shares except to then 
 existing shareholders.” AndLindley, L. J., in In re George Newman Sf 
 Co., (1895) 1 Ch. 685, observed: “ It is true that this company was a 
 small one, and is what is called a private company.” Lord Macnaghten 
 also, in Salomon v. Salomon & Co ., (1907) A. C. 22, said “ that among 
 the principal reasons which induce persons to form private companies 
 . . . are the desire to avoid the risk of bankruptcy, and the increased 
 facility afforded for borrowing money.” 
 
 But the term “ private company ” having now been appropriated 
 by the legislature to a company with precisely defined incidents, it 
 will, no doubt, in the future be used exclusively in its technical sense — 
 in the sense attached to it by the Act. 
 
 Not only does the legislature recognize the private company : it may 
 be said to bestow its benediction upon it. It grants it special privi- 
 leges and immunities. In particular, it gives no countenance to the 
 absurd prejudice which has at times prevailed against the so-called 
 “one-man” companies. So far from doing so it permits a private 
 company to consist of any two persons instead of seven, as in the case 
 of a public company, and thus facilitates, in no small degree, the for- 
 mation and working of small private companies. Moreover, the Act 
 goes still further. In particular — 
 
 1. Exceptional facilities are granted in regard to the formation of 
 a private company. Other companies have to comply with a whole 
 series of preliminary conditions before they can commence business, 
 including the filing of a prospectus, or of a detailed statement in lieu 
 of a prospectus. But a private company is formed in the simplest 
 way, by delivering to the registrar a memorandum and articles of 
 association and paying the requisite fees ; whereupon the certificate 
 of incorporation is issued, and the company can commence business at 
 once. See sect. 82 (2) and sect. 72 (3) as to filing consents and 
 contracts by directors. 
 
 2. Another important exemption is conceded to private companies 
 by sect. 26. That section requires every company, other than a 
 
868 
 
 PRIVATE COMPANIES. 
 
 private company, to file with the registrar annually “a statement in 
 the form of a balance-sheet, audited by the company’s auditors, and 
 containing a summary of its capital, its liabilities, and its assets, and 
 giving such particulars as will disclose the general nature of such 
 liabilities and assets, and how the values of the fixed assets have been 
 arrived at.” These requirements do not apply to a private company. 
 
 3. A private company is exempt from the provisions of sect. 65, 
 which requires the filing with the registrar of the report as to the 
 position of the company, which has to be sent to the members seven 
 days before the statutory meeting in accordance with the section. The 
 company is, however, bound to convene a statutory meeting. Gardner 
 v. Iredale, (1912) 1 Ch. 700. 
 
 4. A private company is exempt from the provisions of sect. 114, 
 which gives to the holders of preference shares, debentures and 
 debenture stock the same right to receive and inspect the balance- 
 sheets of the company and the reports of the auditors, and other 
 reports, as are possessed by the holders of ordinary shares in the 
 company. 
 
 5. Lastly, sect. 89 modifies the law in respect of the payment of 
 commissions to persons for subscribing, or underwriting, or placing 
 shares. Under sect. 8 of the Act of 1900, such commissions could 
 only be paid “ upon an offer of shares to the public ” for subscription, 
 but now private companies will be able to pay such commissions 
 without making any such offer. A statement in prescribed form must 
 then be filed for the purpose of disclosing the amount or rate of 
 commission. Sect. 89 (1) (b), and see the prescribed form, W. N_ 
 11th July, 1908, p. 223. 
 
 Eegard being had to these privileges and immunities — 
 
 1. Existing concerns hitherto worked as private companies will, no 
 doubt, as a general rule, where practicable, desire to bring themselves 
 within the definition of a private company under the Act of 1908, and 
 with a view thereto will pass the requisite special resolution. 
 
 2. Companies hereafter formed and intended to be worked as private 
 companies will, as a rule, be registered as private companies under the 
 Act of 1908, and their articles of association will be framed accordingly. 
 
 3. Existing public companies (whether formed before or after 1st 
 April, 1909), which can conveniently be worked as private companies, 
 will in like manner alter their regulations by special resolution. 
 
 In order to convert an existing company into a “ private company ” 
 within sect. 121 of the Act of 1908, it is necessary to pass a special 
 resolution altering the company’s articles so as to limit the number of 
 members, to prohibit any invitation to the public to subscribe for its 
 shares, debentures, or debenture stock, and impose restrictions on the 
 transfer of its shares. These alterations will satisfy the statutory 
 
PRIVATE COMPANIES. 
 
 Ch. XXXVII. 
 
 a69 
 
 definition, but they are not the only alterations requisite. The articles 
 generally must be considered, for there may be other provisions 
 inconsistent with those indicated, and they must be altered accordingly. 
 For example, power to issue share warrants to bearer must be struck 
 out. 
 
 The private character of such a company may at any time be 
 terminated in the manner indicated in sect. 121 of the Act, or by any 
 alteration of its articles, so as to remove any of the restrictions 
 required by sect. 121, or by default in complying with any of those 
 restrictions. Prior to the Companies Act, 1913, there was no prohi- 
 bition in the Companies Acts against disregarding the articles in so 
 far as they bring the company within the definition. Thus, where 
 the number of members in fact exceeded fifty, it was held that the 
 company had not ceased to be a private company. Park v. Royalties 
 Syndicate , Ltd., (1912) 1 K. B. 330. 
 
 But now by the Companies Act, 1913 — 
 
 Sect. 1(1). Where the articles of a company include the provisions 
 which, by sect. 121 of the Companies (Consolidation) Act, 1908, as 
 amended by this Act, are required to be included therein in order to 
 constitute the company a private company for the purposes of that 
 Act, and default is made in complying with any of those provisions, the 
 company shall cease to be entitled to the privileges and exemptions 
 conferred on private companies under the provisions of that Act men- 
 tioned in the schedule to this Act, and thereupon the said provisions 
 shall apply to the company as if it were not a private company : 
 
 (The schedule refers to sect. 26 (3) as to annual return in form of 
 balance sheet; sect. 114 as to the right of preference shareholders to 
 inspect balance sheets; sect. 115 and sect. 129 (iv) as to minimum 
 number of members of a company.) 
 
 Provided that the Court on being satisfied that the failure to comply 
 with the conditions was accidental or due to inadvertence or to some 
 other sufficient cause, or that on other grounds it is just and equitable 
 to grant relief, may, on the application of the company or any other 
 person interested and on such terms and conditions as seem to the 
 Court just and expedient, order that the company be relieved from 
 such consequences as aforesaid. 
 
 (3) Every private company shall send with the annual list of 
 members and summary required to be sent under sect. 26 of the 
 Companies (Consolidation) Act, 1908, a certificate signed by a director 
 or the secretary that the company has not since the date of the last 
 return, or in the case of a first return since the date of the incorporation 
 of the company issued any invitation to the public to subscribe for any 
 shares or debentures of the company ; and, where the list of members 
 discloses the fact that the number of members of the company exceeds 
 
 24 
 
 p. 
 
370 
 
 PRIVATE COMPANIES. 
 
 fifty, also a certificate so signed that such excess consists wholly of 
 persons who under sect. 121 of that Act as amended by this section 
 are to be excluded in reckoning the number of fifty. 
 
 Instances of 
 conversion 
 of concerns 
 into private 
 companies. 
 
 Instances of Conversion. 
 
 Many of the most successful trading concerns of the day have been, 
 and are being daily, converted into private companies ; in fact — 
 according to the Registrar’s estimate — fully one-third of the whole 
 number of companies registered are private companies. The following 
 are a few examples : — 
 
 Crosse & Blackwell, Limited (preserve makers). 
 
 De la Rue & Company, Limited (printers). 
 
 W. & A. Gilbey, Limited (wine merchants). 
 
 Henry Blacklock & Co., Limited (publishers of “ Bradshaw”). 
 
 Huntley & Palmer, Limited (biscuit makers). 
 
 J. J. Colman & Sons, Limited (mustard). 
 
 Marshall & Snelgrove (drapers). 
 
 Merryweather & Sons, Limited (fire engineers). 
 
 Mudie’s Select Library, Limited (circulating library). 
 
 Peter Robinson & Company, Limited (drapers, etc.). 
 
 The “Morning Post,” Limited (newspaper). 
 
 Various 
 objects of 
 conversion. 
 
 One man 
 company. 
 
 Different Objects sought by Conversion. 
 
 Although a large number of private companies are thus formed to 
 take over existing businesses, the main object of conversion in many 
 cases may be of a different character. Hundreds of companies and 
 syndicates are formed every year for the purpose of establishing and 
 carrying on some new business or to carry out some contemplated 
 undertaking, enterprise, or transaction, which can best be carried out 
 by means of the formation of a private company. 
 
 In these private companies, as already mentioned, it has in the past 
 been common for one, two, or three members to hold the great bulk of 
 the capital, whilst a few extra members held one share each, and were 
 merely nominees of the principal shareholder or shareholders. These 
 extra members were added whilst the Act required, as a condition of 
 incorporation, that there should be seven members, each holding at least 
 one share apiece, and it was necessary to provide for these extra 
 subscribers, but now two persons are sufficient to constitute a private 
 company, and thus the extra subscribers can be dispensed with 
 
 Thousands of companies have been formed in the last quarter 
 of a century in this way — i.e., with extra or nominee subscribers — 
 
ADVANTAGES. 
 
 Ch. XXXVII. 
 
 and it was not until the year 1894 that any doubt was enter- 
 tained as to the regularity of such companies. In that year, 
 however, in the case of Broderip v. Salomon , the regularity of a 
 company constituted on these lines was impeached in the High Court 
 of Justice. When the matter came before the Court of Appeal 
 ((1895) 2 Ch. (C. A.) 323), the learned judges were of opinion that 
 the Act contemplated the incorporation of seven independent bond 
 Jide members who had a mind and will of their own, and who were 
 beneficially and substantially interested in the concern, and not mere 
 nominees or trustees for some one or more principal shareholders ; 
 and they accordingly held a company not so constituted an abuse 
 of the Companies Acts, and the principal shareholder liable for the 
 debts of the company. This view, however, of the requirements 
 of the section was erroneous and unsound, and it was decisively 
 rejected by the House of Lords on appeal. See supra , p. 56, and 
 the report; Salomon v. Salomon 8f Co. } (1897) A. C. 22. The House 
 of Lords there held that the company whose legal status was challenged 
 was regularly and properly constituted, inasmuch as there were seven 
 members, each of whom held at least one share, and that this was the 
 condition, and the sole condition, imposed by the statute ; and it 
 declared that there was no foundation for the notion that such a 
 company was irregular because some or one of the seven members 
 happened to hold a relatively small, or relatively large, number of 
 shares, or held them in trust for the other member or members. The 
 same principle applies to private companies under the new Act. 
 
 Advantages. 
 
 The inducements to such conversion are : — 
 
 (1.) The protection of limited liability which the members obtain. 
 This alone is the greatest possible boon to traders. “If,” says the 
 ordinary law, “ you want to trade, you must risk all you have— every 
 farthing.” This is bad enough in the case of an individual trader, 
 but it is worse still in the case of a partner, for partnership is based 
 on mutual confidence, and if one partner abuses that confidence — nay, 
 if he is guilty only of indiscretion or want of judgment, without fraud — 
 he may commit his co-partner to ruinous liabilities by reason of the 
 doctrine of English law that each partner, so far as the outside world 
 is concerned, is the unlimited agent of the other partner or partners in 
 all matters within the scope of the partnership business. This risk is 
 eliminated by conversion. For not only the amount at stake is 
 limited, but the agency of the directors is restricted by articles of 
 which all the world has notice. 
 
 371 
 
 Broderip v. 
 Salomon , and 
 Salomon v. 
 Salomon <$• Co. 
 
 Advantages 
 of conversion 
 into private 
 companies. 
 
 24 (2) 
 
PRIVATE COMPANIES. 
 
 372 
 
 The Limited Partnerships Act, 1907, now allows a member of a 
 firm to acquire the privilege of limited liability, but the privilege is 
 qualified by statutory conditions, which put the “ limited partnership” 
 at a great disadvantage as compared with the private company. 
 
 (2.) The advantages incident to incorporation, particularly in 
 respect of the holding of property and the continuance of the concern 
 notwithstanding deaths, bankruptcy, transfer of shares, or other 
 change of interest or title. Take the case of a partner dying, for 
 instance. “The position of the executors of a deceased partner is,” 
 says the learned author of Lindley on Partnership, “ one of consider- 
 able hardship and difficulty : if they insist on an immediate winding-up 
 of the firm they may ruin those whom the deceased may have been 
 most anxious to benefit ; whilst if for their advantage the partnership 
 is allowed to go on the executors may run the risk of being ruined 
 themselves.” With incorporation these difficulties vanish. The shares 
 of the deceased partner form part of his estate and are bequeathed in 
 trust or otherwise dealt with as may be convenient, and the estate is 
 represented on the board of directors by his trustees or their nominees, 
 who being mere agents of the company can act without incurring 
 personal liability. The bankruptcy, again, of a partner dislocates a 
 partnership. With a company the trustee in bankruptcy sells the 
 shares of the bankrupt, or if worthless, disclaims ; the company on its 
 part proves for the estimated value of future calls, and there is an end 
 of it. So, again, in the matter of contracts, in the admission of new 
 members and the retirement of old members, in the sale, mortgage, 
 and settlement of shares the company enjoys a striking superiority. 
 The property again in the case of a partnership is constantly having to 
 be conveyed with the admission, retirement, death, or bankruptcy of a 
 partner ; with a company the property is vested in it as a body 
 corporate. Shareholders may come and go, but no changes of individual 
 membership affect the title. 
 
 (3.) The borrowing facilities, especially on debentures and debenture 
 stock. By means of these securities a company can raise a large sum 
 on easy terms by the contributions of a number of small lenders on the 
 same co-operative principle on which a company’s capital is subscribed. 
 They are securities, too, with which the public is familiar, easily 
 enforced and readily transferable. If issued by a company in good 
 repute they are a very marketable security. So advantageous, indeed, 
 is this mode of raising money found to be, that it is by no means 
 uncommon for a business to be converted into a company solely for 
 the purpose of raising a loan by the issue of debentures or debenture 
 stock. 
 
 (4.') The simplification of arrangements as between the members- 
 
SPECIMEN CASES. 
 
 Ch. XXXVII. 
 
 373 
 
 and the concern, which, in the case of an ordinary partnership, would 
 be extremely complicated. Thus, if a shareholder is indebted to a 
 company for money lent or in respect of a call made on his shares, the 
 company can sue for the loan or call without difficulty. Conversely, if 
 a shareholder lends money to the company, he can sue for it and 
 enforce any security given him by the company, just as if he were not 
 a shareholder, and should the company fail, he can prove for the 
 money lent in competition with the outside creditors. In the case of 
 partnership one partner cannot sue another except for an account, and 
 great inconveniences arise in seeking to enforce contracts between the 
 members of a partnership ; while should the firm become insolvent, a 
 member of it is disentitled to prove in competition with the outside 
 creditors of the firm. 
 
 Specimen Cases for Private Companies and Syndicates. 
 
 A firm consists of several members, each of whom has laid by some 
 private means which he is desirous of freeing from the risk of trade. 
 To effect this they convert the business into a private company, they 
 become the sole directors of the company, and they receive paid-up 
 shares in substitution for their interests in the business. Henceforth 
 their assets outside the business are free from risk. 
 
 A firm consists of several members, one of whom is entitled to the 
 greater part of the capital, and also to private means. He is disposed 
 to retire on the fortune he has accumulated. If his liability could be 
 limited, he would be willing to leave part of his capital in the business, 
 and to assume the position of a sleeping partner. The best way in 
 which this can be effected is by converting the business into a company, 
 and it is accordingly done. 
 
 A capitalist is willing to supply a trader, or a trading firm in whom 
 he has confidence, with additional capital in consideration of a share 
 of the profits, but does not wish to incur the liabilities of partner- 
 ship, though he wishes to have a voice in the management. 
 He therefore stipulates that the business shall be converted into a 
 company. He will then bring in the additional capital by taking 
 shares in the company to the amount agreed on, and paying for the 
 same in cash. In such a case it is very common for the capitalist to 
 stipulate also that he or his nominee shall be one of the directors for a 
 term of years, and sometimes that the shares to be allotted to him shall 
 be preference shares. 
 
 Another example is given by the late Sir Greorge Jessel, M. E. : “A 
 man dies, leaving his property to three or four sons. He is the senior 
 
b7i 
 
 PRIVATE COMPANIES. 
 
 Formation 
 
 and constitu- 
 tion 
 
 partner in a concern. If the capital were taken out the concern would 
 be ruined. The junior partners cannot go on ; they say to the children 
 who are not in the business, and who have succeeded to large fortunes, 
 ‘ If you shut up the business you will lose a great deal ; let us form it 
 into a limited company, which will enable you gradually to draw out 
 of the concern, and, in the meantime, it can go on as usual.’ I have 
 known that done with great success.” 
 
 The above are all cases of conversion, but great numbers of private 
 companies are formed to establish some new business or carry out some 
 special operation, or transaction, or adventure. 
 
 The following is an example : — 
 
 A., B. and C. desire to start a newspaper, or to supply a village or 
 town with waterworks, or to build a theatre or a town hall, or to 
 acquire and work a building estate, or to provide a race-course or a 
 cricket ground or swimming baths, or to erect some flats, or some 
 workmen’s dwellings ; but they do not wish to incur unlimited liability. 
 Accordingly they register a private company and take up shares thereof 
 to the extent of the capital which they are disposed to embark. Each 
 of the subscribers becomes a director, and further funds, if wanted, 
 are raised by the issue of further shares or of debentures. 
 
 Similar examples might be multiplied indefinitely. 
 
 Formation and Constitution. 
 
 A private company is constituted like any other company, namely, 
 by registration, with a memorandum and articles of association. It has 
 been affected in a number of points by the Act of 1908. Thus 
 the application to register must be signed by the subscribers and 
 be in a special form showing that the company does not issue an 
 invitation to the public to subscribe. It must also be accompanied by 
 a statutory declaration as provided in sect. 17. 
 
 The memorandum and articles must be subscribed by at least two 
 persons, and the number must be kept up to two. 
 
 The articles must contain special provisions, as required by sect. 121 
 of the Act. 
 
 If the articles require a share qualification for the directors, sect. 73 
 applies, and the directors must not act without one. 
 
 Private companies must, like public companies, make a return of 
 allotments to the registrar under sect. 88. 
 
 A private company can pay underwriting commission in respect of 
 shares in its capital. Sect. 89. 
 
TRANSFER OF SHARES. 
 
 Ch. XXXVII. 
 
 37 
 
 A private company may commence business immediately on its 
 incorporation. Sect. 87 (6). 
 
 A private company must hold the statutory meeting provided for by 
 sect. 65. 
 
 A private company must, under sect. 66, convene an extraordinary 
 meeting on requisition. 
 
 A private company must register its mortgages and charges under 
 sect. 93. 
 
 A private company must keep a register of its directors and notify 
 changes to the registrar. Sect. 75. 
 
 The provisions as to audit (sect. 112) and the altered form (sect. 26, 
 except sub-s. (3) ) of a company’s annual return also apply to private 
 companies. 
 
 A private company may register articles of its own, or it can adopt 
 Table A. altogether or in part. 
 
 Number of Members. 
 
 The articles have to limit the number of members to fifty, as required 
 by sect. 121. 
 
 Transfer of Shares. 
 
 It is now a statutory condition of a “private company” that its 
 articles “restrict the right to transfer its shares.” Sect. 121 (1) (a). 
 
 As to the particular form which this “restriction” shall take, 
 clauses are generally inserted with a view to preserving, as far as 
 practicable, the private character of the concern. The general 
 plan is to prohibit a member or his executors or administrators 
 from transferring his shares to any outsider, unless and until the 
 shares have first been offered to the continuing members, either 
 at par or at a fair value to be fixed by the auditor, or ascer- 
 tained by arbitration, or by some sliding scale, or at the “ current 
 price” fixed half-yearly by a general meeting, or at, say, ten times 
 the average yearly dividend, or at the amount paid up with an 
 addition proportioned to the average profits during, say, the last 
 three years past, or otherwise ; and the clauses usually go on to 
 provide that if none of the continuing members desire to purchase, 
 then that the shares may be transferred to an outsider ; but even in 
 that case the directors are usually given a very wide discretion as to 
 approving of the admission of an outsider. The validity of such 
 provisions is clear. Borland's Trustee v. Steel Brothers 8f Co ., (1901) 
 1 Ch. 279 ; Att.-Gen. v. Jameson , 2 Ir. P. 644. See, further, Company 
 Precedents, Part I. 11th ed. It is sufficient if the directors are given 
 a discretion as to registering transfers, but the restrictions must 
 extend to all shares, present and future. 
 
378 
 
 PRIVATE COMPANIES. 
 
 Directors. 
 
 Compulsory 
 
 retirement. 
 
 Directors. 
 
 The articles commonly vest the management in a small number of 
 directors, or in a “governing” or “permanent” or “life” director. 
 In the latter case it is a common course to insert provisions enabling 
 such governing or permanent director to appoint, if and when he 
 thinks fit, other persons to be ordinary directors to act under him, and 
 to determine their powers, duties, and remuneration ; also to remove 
 any ordinary director from office. A permanent or governing director 
 is generally given very wide powers in regard to the management of 
 the business of the company. Sometimes two or more persons are 
 appointed joint governing or permanent directors with like powers. 
 Usually, the powers of a governing or permanent director are limited 
 to the time during which he holds a certain large proportion of 
 the capital — e.y., one-half or one-third of the issued capital — and 
 sometimes his powers are made transmissible, in case of his death, to 
 his executors or their nominee, but so long only as the shares or a 
 large proportion of them remain part of his estate. 
 
 The weak point of the ordinary joint stock trading company is 
 undoubtedly its management by deputy ; but in the case of the private 
 company the shareholders manage the business and trade with their 
 own money. If profits are made they pocket them ; if losses occur 
 they must be met out of assets which they have personally supplied. 
 In the case, therefore, of private companies, there is the best possible 
 guarantee that the directors will not be negligent of their duties or 
 careless of the interests of the concern, and as a consequence their 
 solvency, as Vaughan Williams, L. J., once observed, compares very 
 favourably with that of other companies. 
 
 Compulsory Retirement of Members. 
 
 Unity of aim and unity of action is always of importance in any 
 co-operative enterprise, and to secure this it is very common to provide 
 that a large proportion in value of the shareholders — say nine-tenths 
 — shall be at liberty to buy out any small shareholder by paying him 
 the fair value of his share ; this is a safeguard which experience has 
 shown to be desirable ; for there is always a possibility that some 
 person may be admitted into the company who may afterwards be 
 found cantankerous, or a secret enemy, or otherwise detrimental to 
 the harmonious working of the company. 
 
OBLIGATIONS OF PRIVATE COMPANY. Ch. XXXVII. 
 
 377 
 
 Obligations of Private Company. 
 
 It must be borne in mind that a private company, though it has 
 special features of its own, is none the less subject to the pro- 
 visions of the Companies Acts, and must conform thereto. This 
 was pointed out by Lord Macnaghten in Trevor v. Whitworth, 
 12 App. Cas. 409. “ It is said,” remarked that learned judge, “that 
 
 the company was a family company ; but a family company, whatever 
 the expression means, does not limit its trading to the family circle. 
 If it takes the benefit of the Act it is bound by the Act as much as 
 any other company. It can have no special privilege or immunity. 
 It was said that the board did not want Whitworth’s shares to be sold 
 to outsiders or put on the market. Unfortunately there was nothing 
 special in that.” 
 
 Directors, too, of a private company will be equally liable for a 
 misapplication of the company’s funds or for other misfeasance. Thus, 
 in Newman Sf Co., (1895) 1 Ch. 685, one Newman had converted his 
 business into a private company, and had applied funds of the company, 
 with the privity and consent of the other members, to ultra vires 
 purposes, and it was held that he was guilty of misfeasance, and that 
 the fact that it was a private company did not in any way exempt or 
 protect him. A private company is subject to the restrictions of 
 sect. 89 as to underwriting commissions. Dominion of Canada Syndi- 
 cate v. Brigstocke, (1911) 2 K. B. 648. 
 
 See further as to private companies the twenty-ninth edition of the 
 author’s work intituled “ Private Companies and Syndicates.” 
 
 Conversion of Private into Public Company. 
 
 Sub-sect. (2) of sect. 121 {supra, p. 366) states how a private 
 company may turn itself into a public company. Not only has a 
 statement in lieu of prospectus to be filed, but the Eegistrar insists 
 that sect. 72 applies, and therefore that where the directors have not 
 subscribed the memorandum for their qualification shares the company 
 must procure them to sign and file a contract to take their qualifica- 
 tion shares, even though they already hold their qualification — which 
 seems somewhat absurd. However, there is a short cut open, for if 
 by special resolution the company deprives itself even of some of 
 the characteristics of a private company, e.g., the limit of members and 
 prohibition against issue of prospectus, it ceases to be a private 
 company, even though it has not complied with all the conditions in 
 sub-sect. (2). 
 
 Obligations 
 of private 
 company. 
 
 Conversion 
 into public 
 company. 
 
378 
 
 Companies 
 limited by 
 guarantee. 
 
 CHAPTER XXXVIII. 
 
 COMPANIES LIMITED BY GUARANTEE. 
 
 Besides companies limited by shares and unlimited, the Act of 1908 
 allows of the formation of companies limited by guarantee. Such 
 companies may be formed, with or without a capital divided into 
 shares. 
 
 The provisions relating to them may be found in sects. 4, 10 and 21 
 of the Act. 
 
 Sect. 4 is as follows : — 
 
 4. In the case of a company limited by guarantee — 
 
 (1) The memorandum must state — 
 
 (i) The name of the company, with “ Limited ” as the last word 
 
 in its name ; 
 
 (ii) The part of the United Kingdom, whether England, Scot- 
 
 land, or Ireland, in which the registered office of the 
 company is to be situate ; 
 
 (iii) The obj ects of the company ; 
 
 (iv) That the liability of the members is limited ; 
 
 (v) That each member undertakes to contribute to the assets of 
 
 the company in the event of its being wound up while he 
 is a member, or within one year afterwards, for payment 
 of the debts and liabilities of the company contracted 
 before he ceases to be a member, and of the costs, charges, 
 and expenses of winding up, and for adjustment of the 
 rights of the contributories among themselves, such 
 amount as may be required, not exceeding a specified 
 amount. 
 
 (2) If the company has a share capital — 
 
 (i) The memorandum must also state the amount of share 
 
 capital with which the company proposes to be registered 
 and the division thereof into shares of a fixed amount ; 
 
 (ii) No subscriber of the memorandum may take less than one 
 
 share ; 
 
 (iii) Each subscriber must write opposite to his name the 
 
 number of shares he takes. 
 
MODE OF FORMATION-REGISTER OF DIRECTORS. Ch. XXXVIII. 
 
 379 
 
 By sect. 10, in the case of a company limited by guarantee there 
 must be registered with the memorandum articles of association signed 
 by the subscribers to the memorandum, and prescribing regulations 
 for the company. A considerable number of associations have 
 availed themselves of this form of incorporation under the corre- 
 sponding provisions of the Act of 1862 (sects. 9 and 14) : for example, 
 associations for mutual insurance, e.y ., for insuring against marine 
 risks, for insuring against accidents, for indemnifying the members 
 against liability to pay compensation to injured employes, for trade 
 protection, for mutual information, for exploring mines, testing patents, 
 pooling shares and debentures, and for pooling and realising produce 
 of various kinds. The great majority of the companies which register 
 as companies limited by guarantee are, however, associations intended 
 to be supported by annual subscriptions or donations, and registered 
 by licence of the Board of Trade without the word “Limited.” See 
 sects. 19 and 20. 
 
 See also sect. 56 as to reduction of capital. 
 
 Prior to the Companies Act, 1900, it was permissible to form a com- 
 pany limited by guarantee, with articles dividing the undertaking into 
 shares of no nominal amount — a most convenient form of association ; 
 but sect. 27 of the Act of 1900 prohibited this, and sect. 21 of the Act 
 of 1908 has continued the prohibition. 
 
 Mode of Formation. 
 
 In order to form a company limited by guarantee, a memorandum n ow formed, 
 and articles of association must be prepared. The memorandum will 
 accord with Form B. in the Third Schedule to the Act of 1908, but 
 where there is a capital divided into shares the amount must be stated 
 as in Form A., and the two forms must be amalgamated. In either case 
 there is a clause by which every member of the company undertakes to 
 contribute, in the event of winding-up, a limited sum. See supra, 
 sect. 4. The quantum of this undertaking varies from Is. to 10/. and 
 upwards. If there are no defined shares, the words declaring that 
 “ the subscribers respectively agree to take the number of shares set 
 opposite their names ” must be omitted. The articles of association 
 will contain appropriate provisions. 
 
 Register of Directors. 
 
 A company limited by guarantee is bound to keep a register of its Directors, 
 members {supra, p. 124) and of mortgages {supra, p. 277), and must 
 give notice to the registrar of special resolutions. Supra , p. 240. 
 Moreover, sect. 75 of the Act provides that such a company shall keep 
 
380 
 
 COMPANIES LIMITED BY GUARANTEE. 
 
 St&mp. 
 
 at its office a register of its directors or managers, and shall send to the 
 registrar a copy of such register, and shall further notify any change 
 that takes place in such directors or managers. The executive body, 
 by whatever name called, will be the managers within the meaning of 
 this section. Directors who are ex officio members of the company are 
 not as such liable on the guarantee. Re Premier Underwriting Asso- 
 ciation (No. 2), (1913) 2 Ch. 81. Unless it has a capital divided into 
 shares a company limited by guarantee has not to make the annual 
 return as to its members, &c. in accordance with sect. 26. And com- 
 panies registered under sect. 23 of the Act of 1867, or sect. 20 of the 
 Act of 1908 (see supra , p. 250), are relieved from the obligations 
 imposed by sect. 75 of the Act of 1908. Sect. 88, as to return of 
 allotments, does not apply to a company limited by guarantee. 
 Persons who have ceased to be members of the company within a year 
 of a winding-up are not liable unless the existing members are unable 
 to satisfy the contributions required from them. Re Premier Under- 
 writing Association (No. 1), (1913) 2 Ch. 29. 
 
 Stamp Duty. 
 
 Upon the registration of a company limited by guarantee, the 
 memorandum must be stamped with duty as provided by Table B. in 
 the First Schedule to the Act. Where there is no capital divided 
 into shares the amount is proportioned to the number of members, 
 and accordingly the articles usually state that “ for the purposes 
 of registration the company is to consist of [e.g., 100] members.” 
 When the number is not to exceed twenty the fee is 2 1.\ when 
 it exceeds twenty, but does not exceed 100, the fee is bl. ; and so 
 on up to 20£. When the number is to be unlimited the fee is 20 1. 
 Most of the observations contained in this work apply mutatis mutandis 
 to companies limited by guarantee. 
 
 Where the company has a capital divided into shares the registra- 
 tion fees are the same as in the case of a company limited by shares. 
 See Table B. aforesaid. 
 
Ch. XXXIX. 
 
 381 
 
 CHAPTER XXXIX. 
 
 UNLIMITED COMPANIES. 
 
 Companies with unlimited liability are rarely formed now. While Unlimited 
 limited companies have been increasing by “ leaps and bounds,” un- com P ames - 
 limited companies have dwindled nearly to zero. Accordingly it will 
 not be necessary here to say much about them. The statutory require- 
 ments as to such companies are contained in sects. 5, 10, 57 and 58 of the 
 Act. An unlimited company requires a memorandum and articles of 
 association, and may have a joint stock capital divided into shares, or 
 no such capital. Its name will not include the word “Limited.” If 
 the company is wound up, the liability of its members to contribute to 
 the payment of the debts and costs of winding-up will be unlimited. 
 
 It having been held that mutual insurance associations, consisting of 
 more than twenty persons, are illegal unless registered, a consider- 
 able number of mutual insurance associations have been formed and 
 registered as unlimited companies, but it is now found preferable to 
 form and register such associations as companies limited by guarantee. 
 
 Of late years a good many loan clubs have been registered as un- 
 limited companies. Several banks and insurance companies are also 
 so registered. 
 
 Companies formed under the Act of 1844, or by special Act, or 
 otherwise, sometimes register as unlimited (see p. 385) in order at once 
 to wind up voluntarily. This is allowable. Southall v. British Mutual 
 Soc ., 6 Ch. 619. 
 
 Where an association is registered as an unlimited company, it is 
 always open to the members to re-register it as a limited company 
 under the provisions of sects. 57 and 58 of the Act. 
 
382 
 
 The legisla- 
 tion. 
 
 Scope of the 
 Act. 
 
 Deposits. 
 
 CHAPTEK XL. 
 
 THE ASSURANCE COMPANIES ACT, 1909 . 
 
 The growth of insurance companies, the accumulation of the colossal 
 funds which they control, and the constant extension of their business 
 to new classes of risks is one of the most striking commercial develop- 
 ments of the last half century. In a group of detached Acts — the 
 Life Assurance Companies Act, 1870 (33 & 34 Viet. c. 61), and the 
 Life Assurance Companies Act, 1871 (34 & 35 Viet. c. 58), and the Life 
 Assurance Companies Act, 1872 (35 & 36 Viet. c. 41), and the 
 Employers’ Liability Insurance Companies Act, 1907 (7 Edw. 7, c. 46) 
 — the Legislature had dealt in its usual piecemeal fashion with the 
 subject, and had established a variety of salutary rules for the 
 formation and regulation of life assurance companies and employers’ 
 liability insurance companies designed to secure their solvency and 
 stability. These Acts were set out in former editions of this work, and 
 commented on in Chapter XL. of the same work. But the time had 
 come when — like the Companies Acts — they needed to be revised, and 
 consolidated and extended ; and this useful work has now been 
 accomplished in the shape of the Assurance Companies Act, 1909 
 (9 Edw. 7, c. 49). This Act, set out infra , pp. 552 et seq., re-enacts with 
 amendments and additions (see infra ) most of the provisions 
 contained in the repealed Acts, and it extends these provisions to 
 companies for accident and fire insurance. 
 
 The principal points in this new legislation calling for notice are : — 
 (1) the scope of the Act; (2,) the requirements as to deposits; 
 (3) the separation and appropriation of the funds ; (4) balance sheets, 
 valuations and accounts ; (5) transfer of business and amalgamation ; 
 (6) winding-up ; (7) reduction of contracts. 
 
 1. Scope of the Act. — This is very comprehensive. The Act is to 
 apply to all companies (exclusive of Friendly Societies and Trade 
 Unions) whether established before or after the commencement of the 
 Act (1 July, 1910), and whether established within or without the 
 United Kingdom, to carry on within the United Kingdom assurance 
 business of any of the following classes : — (a) life assurance ; (b) fire 
 insurance ; (c) accident insurance ; (d) employers’ liability insurance ; 
 (e) bond investment business ; but subject as respects any class of 
 assurance business to the special provisions in regard to that class. 
 These special provisions or sets of rules will be found in sects. 30, 31, 
 32, 33, and 34 of the Act. 
 
 2. Deposits. — On this point sect. 2 of the Act introduces two important 
 
THE ASSURANCE COMPANIES ACT, 1909. 
 
 Ch. XL. 
 
 383 
 
 changes. It requires an assurance company to deposit in Court 
 20,000/. in respect of each class of business — life, fire, accident, 
 employers’ liability and bond investment business — which it transacts. 
 
 The deposit in each case is to be invested and the interest paid to the 
 company. In the case of a new company the deposit has to be made 
 before the certificate of incorporation is issued. The deposit under the 
 new Act is not dispensed with even though a deposit has already been 
 made under the Act of 1870 or 1907, and withdrawn (sect. 30 of 1870), 
 and the company might therefore have been assumed to be well- 
 established, sound and solvent. 
 
 Following up this principle of differentiating the various classes of 
 insurance business carried on by one and the same company, the 
 deposit is to become part of the assurance fund appropriated for each 
 particular class of insurance business. Under sect. 3 of the Act of 
 1870, the deposit was to be returned when the assurance fund 
 accumulated out of premiums amounted to 40,000/. (Le Phenix (1888), 
 
 58 L. T. 512 ; Scottish Economic Life Assurance Co. (1890), 38 W. R. 
 
 684 ; Colonial Mutual Soc. (1882), 21 Ch. D. 837 ; Popular Life Assur- 
 ance Co ., W. N. (1908) 222 ; Life and Health Assurance Association , 
 
 W. N. (1910) 45) ; but the Act of 1909 contains no such provision, and 
 the deposit therefore will have to remain in Court as a continuing 
 security for the policy holders. 
 
 3. Separation and Appropriation of Funds.-— The same principle of Funds, 
 differentiation is applied to the company’s funds. By sect. 3 of the 
 
 Act, there is to be a separate fund kept for each class of assurance 
 business, and the receipts in respect of assurance business of a class 
 are to be placed in such separate fund, and the fund is to be “ as 
 absolutely the security of the policy holders of the class as though it 
 belonged to a company carrying on no other business other than 
 assurance business of that class, ” and is not to be applied directly or 
 indirectly for any purposes other than those of the class of business to 
 which the fund is applicable. 
 
 4. Balance Sheets , Valuation and Accounts. — There is an important Balance 
 group of sections — sects. 4-9 — relating to these matters, designed to sheets ’ &c 
 secure as far as possible the financial soundness of the undertakings in 
 
 the interests of the public. 
 
 Sect. 4 provides for an annual revenue account, profit and loss account 
 and balance sheet framed in accordance with the scheduled forms. 
 
 Sect. 5 provides for periodical investigation and valuations at 
 intervals of not more than five years. 
 
 Sect. 6 provides for a statement of the assurance business. 
 
 Sect. 7 provides for the deposit of the accounts, statements, &c. with 
 the Board of Trade, who are to examine them, and if they find 
 
384 
 
 THE ASSURANCE COMPANIES ACT, 1909 . 
 
 Transfer and 
 amalgama- 
 tion. 
 
 Winding-up. 
 
 Novation. 
 
 anything “inaccurate or incomplete ” to call the company’s attention 
 to it. This official criticism may well prove a valuable guarantee. 
 
 Sect. 8 provides for the delivery to policy holders on request, copies 
 of the documents. 
 
 Sect. 9 provides for audit of the company’s accounts. 
 
 Sect. 10 provides for the keeping of registered holders’ addresses. 
 
 Sect. 1 1 provides for printing of the deed of settlement for furnish- 
 ing to shareholders and policy holders. 
 
 Sect. 12 in effect prohibits the publication of any notice as to the 
 capital without specifying the amount subscribed and the amount paid. 
 
 5. Transfer and Amalgamation. — Sect. 13, which takes the place of 
 sect. 14 of the Act of 1870, provides in effect that no assurance 
 company shall amalgamate with another or transfer its business to 
 another unless the amalgamation or transfer is sanctioned by the 
 Court in accordance with the section. After the transfer or amalgama- 
 tion is sanctioned, certain statements as to assets and liabilities, copies of 
 the transfer or amalgamation agreement, &c. are to be deposited with 
 the Board of Trade (sect. 14). It will be borne in mind that the 
 sect. 13, like sect. 14 of the Act of 1870, is not an enabling one. It 
 does not, that is, give a company by implication power to transfer or 
 amalgamate, but merely operates in restriction of the company’s power 
 if it has one ( Re Sovereign Life Assurance Co., 42 C. D. 540 ; Company 
 Precedents, 10th ed., Part I., p. 1224). 
 
 6. Winding-up . — Sect. 15 of the Act of 1909 makes special provision 
 for the winding-up of an assurance company. As to the method of 
 proof in respect of policies, see Re Law Car and General Insurance Co., 
 (1913) 2 Ch. 103. 
 
 7. Sect. 7 of the Life Assurance Companies Act, 1870, made special 
 provisions as to novation, and enacted that where a company has trans- 
 ferred its business to or has been amalgamated with another company, no 
 policy holder of the first-mentioned company who shall pay to the other 
 company the premiums accruing due in respect of its policy shall by 
 reason of any such payment made after the passing of this Act, or by 
 reason of any other act done after the passing of this Act, be deemed 
 to have abandoned any claim which he would have had against the 
 first-mentioned company on due payment of premiums to such 
 company, or to have accepted in lieu thereof the liability of the other 
 company, unless such abandonment and acceptance have been signified 
 by some writing signed by him or his agent lawfully authorised. 
 No similar provisions, strange to say, are to be found in the Act of 
 1909. Thus the old law appears to be restored, as to which see Family 
 Endowment Society, 5 Ch. 118 ; Spencer's case, 6 Ch. 362 ; Manchester , 
 London, Sfc. Assoc., 9 Eq. 643 ; Kettle' s case, 9 Eq. 306. 
 
Ch. XLI. 
 
 385 
 
 CHAPTER XLI. 
 
 REGISTRATION UNDER SECT. 249 OF EXISTING COMPANIES. 
 
 Part VII. of the Act of 1862 authorized the registration of companies Registration 
 existing before registration. These provisions have been re-enacted in yij er J^ 0 * m 
 sects. 249 — 255 of the Act of 1908. Most of the companies which so panies Act. 
 registered were old companies formed by deed of settlement or charter, 
 or letters patent obtained before the Act of 1862, but some companies Act of 1908 . 
 formed since that Act have been registered. If the company is a joint 
 stock company it can register as a company limited by shares ; otherwise 
 it must register as a company limited by guarantee or an unlimited 
 company. But in any case there must be at least seven members. 
 
 In order to register, a resolution for registration must be passed at a Mode, 
 meeting of the company, and application in writing must then be 
 made to the registrar accompanied by a copy of the company’s deed of 
 settlement, charter or other instrument by which it was constituted, 
 and a list of shareholders, &c., and in due course the registrar will 
 certify that the company is incorporated and, if so, with limited liability. 
 
 Thereupon the company is placed very much in the same position as if 
 it had originally been formed under Part I. of the Act. The course 
 of procedure is fully stated in sects. 249 — 257 of the Act, and the 
 necessary forms are given in Company Precedents, Part I., pp. 624 
 et seq. 
 
 The objects of existing companies in registering under this part of Object of 
 the Act are various. In most cases registration is dictated by a desire reglstrat i° n - 
 to obtain the benefit of limited liability and the advantages of incorpo- 
 ration. Sometimes the registration is adopted with a view to the 
 voluntary winding-up of the company ; for after registration that 
 course is open to the members. Occasionally the object is to recon- 
 struct the company ( infra , p. 423), when reconstruction cannot other- 
 wise be effected with the consent of every member. 
 
 p. 
 
 25 
 
386 
 
 Illegal 
 
 associations. 
 
 Decided 
 meaning 
 of above 
 provisions. 
 
 CHAPTER XLII. 
 
 ILLEGAL ASSOCIATIONS. 
 
 The Act of 1908, as we have seen, affords great facilities for forming 
 companies, but before it introduces the machinery of formation the 
 Act, in sect. 1, clears the ground by declaring illegal all large un- 
 registered companies or associations subsequently formed, and thus 
 indirectly compelling associations with anything but a very small 
 membership to avail themselves of the provisions of the Act. Section 1 , 
 the section in question (which is a re-enactment of sect. 4 of the Act 
 of 1862), provides, in effect, as follows : — 
 
 (1) That after the commencement of the Act no company, associa- 
 tion, or partnership consisting of more than ten members is to be 
 formed for carrying on the business of banking unless registered 
 under the Act or formed in pursuance of some other Act of 
 Parliament or of letters patent : and 
 
 (2) That no company, association, or partnership consisting of more 
 than twenty persons shall be formed after the commencement 
 of the Act for the purpose of carrying on any other business ( i.e ., 
 other than banking) that has for its object the acquisition of 
 gain by the company, association, or partnership, or by the 
 individual members thereof, unless it is registered under the 
 Act, or is formed in pursuance of some other Act, or of letters 
 patent, or is a company engaged in working mines within the 
 Stannaries [Devon and Cornwall]. 
 
 The meaning of these prohibitions, as interpreted by the Courts, is 
 that any company or association formed in violation of the section is 
 an illegal association, and the policy of the enactment is well expounded 
 by James, L. J., in Smith v. Anderson (1880), 15 Ch. D. at p. 273. 
 “ The object of the Act,” says the Lord Justice, “ was to prevent the 
 mischief arising from large trading undertakings being carried on by 
 large fluctuating bodies, so that persons dealing with them did not 
 know with whom they were contracting, and so might be put to great 
 expense, which was a public mischief to be repressed.” 
 
 And this object the Act may be said effectually to have accomplished. 
 Thus an association which is illegal cannot be wound up, under the 
 Act of 1908, at the instance either of the association, of a creditor, or of 
 a shareholder. Re South Wales Atlantic , Sfc. Co. (1875), 2 C. D. 763 ; 
 
ILLEGAL ASSOCIATIONS. 
 
 Ch. XLII. 
 
 387 
 
 Re Padstow Association (1882), 20 Ch. D. 137 ; Ex parte Hargrove 
 (1875), L. R. 10 Ch. 542; Ilfracombe Building Society , (1901) 1 
 Ch. 102. See, however, One and All Sickness Association , 25 
 T. L. R. 674. So, too, an action by an illegal association, whether 
 against a member or any other person, must fail if the illegality 
 of the association is disclosed. Re Day (1876), 1 Ch. D. 699. If the 
 association has lent money, and as security obtained a promissory 
 note, it cannot sue thereon. Shaw v. Benson , 11 Q,. B. D. 563. And, 
 conversely, a member or outsider cannot sue such an association, for 
 it can contract no debts ( Re London Marine Association (1869), 8 Eq. 
 176), and can enter into no contracts. Jennings v. Hammond (1882), 
 9 Q,. B. D. 229 ; and see Hume v. Record Reign Jubilee Syndicate , 80 L. T. 
 404. In a word, the association is a phantom. It has no legal existence. 
 
 Many attempts have been made to escape from the provisions of the 
 section, but seldom successfully; the words are too wide. It was at one 
 time thought, for example, that mutual assurance associations were 
 not within the section — not “ associations for gain ” ; but these doubts 
 — or hopes — were dispelled by the decision in Re Padstow Association 
 (1882), 20 Ch. D. 149. 
 
 In Re Thomas (1884), 14 Q. B. D. 379, again, it was contended that 
 an unregistered loan society consisting of more than twenty members 
 was not illegal, because in its inception it comprised less than twenty 
 members, but this contention was overruled. “ I cannot,” said Cave, J., 
 “ assent to the doctrine that, because a society is projected by less 
 than twenty people originally, and subsequently grows to more than 
 twenty, it is outside the Act and does not require registration. This 
 would be making a laughing-stock of the Act.” 
 
 These cases must, however, be read with Smith v. Anderson (1880), 
 15 Ch. D. 258, a decision of the Court of Appeal in which it was held 
 that an investment trust was not an illegal association although there 
 were more than twenty beneficiaries entitled to the benefit of it, the 
 ratio decidendi being that the business, if business it was, was carried 
 on by the trustees, who were less in number than twenty. 
 
 Wig field v. Potter (1881), 45 L. T. 612 ; Re Siddall (1885), 29 
 Ch. D. 1 ; Crowther v. Thorley , 50 L. T. 43, are other instances in 
 which unregistered land companies of more than twenty members have 
 been held to be not illegal on the ground that they were formed 
 merely for acquiring and dividing land between the members, and not 
 for carrying on any business of land jobbing or trafficking in land. 
 
 In a recent case ( Marrs v. Thompson , 17 T. L. R. 365 (C. A.)), the 
 trustees of an unregistered society consisting of more than twenty 
 members were held entitled to sue the society’s treasurer for the 
 recovery of money of the society in his hands, but it is not easy to 
 reconcile the decision with Re Padstow Association, supra . 
 
 25 ( 2 ) 
 
388 
 
 Acts and 
 Rules applic- 
 able. 
 
 Kinds of 
 winding'-up. 
 
 CHAPTER XLIII. 
 
 WINDING-UP. 
 
 A company once incorporated under the Companies Acts cannot be 
 put an end to except through the machinery of a winding-up ( Princess 
 of Reuss y. Bos, L. R. 5 H. L. 193), or by removal from the register 
 as a defunct company under sect. 242 of the Act of 1908, which takes 
 the place of sect. 7 of the Companies Act, 1880, as amended by sect. 26 
 of the Companies Act, 1900. 
 
 Acts and Rules applicable. 
 
 Parts IV. and VIII. of the Act (1908), and the Rules made under 
 that Act, contain the provisions applicable to the winding-up of 
 companies. 
 
 Modes of Winding-up. 
 
 The different kinds of winding-up are as follows : — 
 
 1 . By the Court. 
 
 2. Voluntary, (1) Purely voluntary. 
 
 (2) Under the supervision of the Court. 
 
 Of these two a simple voluntary winding-up is by far the more 
 common, and this is consonant with the policy of the Companies Act, 
 which contemplates that shareholders shall manage their own affairs, 
 and as one of them, winding-up : but the Act has defined certain 
 circumstances in which a creditor or contributory is entitled to invoke 
 the intervention of the Court and have the assets administered by the 
 Court. The original provisions relating to a compulsory winding-up by 
 the Court were contained in the Companies Act, 1862, sects. 74 — 128, 
 but they were supplemented and largely added to and altered by 
 the Companies (Winding-up) Act, 1890, and the rules and orders made 
 thereunder. 
 
OYER WHAT COMPANIES. 
 
 Ch. XLIII. 
 
 389 
 
 Courts having Jurisdiction to Wind up. 
 
 The following are the Courts having jurisdiction to wind up 
 companies in England and Wales : — the High Court, the Palatine 
 Courts of Lancaster and Durham, and, as a general rule, all the 
 County Courts having bankruptcy jurisdiction. Which of these 
 Courts, in any particular case, has jurisdiction to wind up a com- 
 pany depends on the amount of the paid-up capital of the company. 
 See sect. 131. If the paid-up capital is over 10,000/., then the 
 jurisdiction is in the High Court; but, as regards companies 
 whose registered office is within the jurisdiction of the Palatine 
 Courts aforesaid, these Courts have concurrent jurisdiction. If the 
 paid-up capital does not exceed 10,000/. the jurisdiction is in the 
 County Court, unless the registered office of the company is within 
 the metropolis, in which case the jurisdiction is in the High Court. 
 See Southsea Garage , Limited, 55 S. J. 314. The Stannaries jurisdic- 
 tion has now become vested in a County Court. See sect. 131 (4), and 
 Company Precedents, Pt. II. pp. 22 — 28. 
 
 Over what Companies. 
 
 The companies subject to this jurisdiction are the following: — 
 
 (a) Companies formed and registered under Part I. or registered 
 
 under Part VII. of the Act of 1908. 
 
 (b) Existing companies as defined in sect. 285 of the Act of 1908, 
 
 which says, “ existing company means a company formed 
 and registered under the ” Joint Stock Companies Acts, or 
 under the Companies Act, 1862. 
 
 (c) Companies registered but not formed under the Companies 
 
 Act, 1862. See sect. 246. 
 
 (d) Companies registered as limited under the Companies Act, 
 
 1879. 
 
 (e) Unregistered companies, as defined in Part VIII. of the Act 
 
 of 1908, that is to say, “Any partnership, association, or 
 company (except railway companies incorporated by Act of 
 Parliament) consisting of more than seven members and 
 not registered under this Act,” and having a registered 
 office in England and Wales. 
 
 Examples of unregistered companies which have been ordered to 
 be wound up are : — 
 
 1 . Companies" incorporated by special Act. 
 
 Bradford Navigation Co., 10 Eq. 331 ; Wey and Arun 
 Canal, 4 Eq. 197 ; Brentford Tramways Co., 26 C. D. 
 
 Courts having 
 jurisdiction. 
 
 Over what 
 companies 
 have Courts 
 jurisdiction r 
 
390 
 
 WINDING-UP. 
 
 527 ; South London Fish Market , 39 C. D. 324 ; Barton- 
 upon-Humher Water , 42 C. D. 585 ; St. Neots Water, 22 
 T. L. E. 478. 
 
 2. Companies incorporated by Eoyal Charter. 
 
 Oriental Bank Corporation , 54 L. J. Ch. 481 ; Bank oj 
 South Australia, (1895) 1 Ch. 578. 
 
 3. Foreign and colonial companies having assets and liabilities in 
 
 England. 
 
 Queensland Mercantile Agency, 58 L. T. 878; Mercantile 
 Bank of Australia, (1892) 2 Ch. 204; Jarvis Conklin 
 Mortgage, 11 T. L. E. 373; North Australian Co. v 
 Goldsborough Co., 61 L. T. 717; Syria Ottoman Rail. 
 Co., 20 T. L. E. 217. 
 
 4. Building societies formed prior to the Building Societies Act, 
 
 1874. 
 
 Doncaster Building Society, 3 Eq. 158; Queen! s Building 
 Society, L. E. 6 Ch. 815; Smith's Trustees v. Irving and 
 Fullarton Building Society, 6 F. 99, Ct. of Sess. ; Ilfra- 
 combe P. B. M. Building Society, [1907] 1 Ch. 102. 
 
 5. Trustees’ savings banks. 
 
 6. Friendly Societies. 
 
 Irish Mercantile Loan Society , [1907] 1 Ir. E. 98 ; Tean 
 Friendly Society (1914), 58 Sol. J. 234 ; Victoria Society, 
 Knottingley, (1913) 1 Ch. 167. 
 
 7. Life assurance companies. 
 
 Great Britain Mutual, 16 C. D. 246 ; Masonic and 
 General , Re Sharpe, (1892) 2 Ch. 154. 
 
 8. An association for purchase and division of an estate. Re 
 
 Osmondthorpe Hall Society, (1913) W. N. 243; 58 Sol. J. 13. 
 (A member who had paid up all instalments due from him 
 being treated as a contributory.) 
 
 See Company Precedents, Pt. II. p. 16 et seq. 
 
 Cases for Winding-Up. 
 
 The following are the several grounds on which a winding-up order 
 may be made : — 
 
 Sect. 129. A company may be wound up by the Court — 
 
 (i) if the company has by special resolution resolved that the 
 
 company be wound up by the Court : 
 
 (ii) if default is made in filing the statutory report or in holding 
 
 the statutory meeting : 
 
 (iii) if the company does not commence its business within a year 
 from its incorporation, or suspends its business for a whole 
 year : 
 
PETITION FOR COMPULSORY WINDING-UP ORDER. Ch. XLIII. 
 
 391 
 
 (iy) if the number of members is reduced, in the case of a private 
 company, below two, or, in the case of any other company, 
 below seven : 
 
 (v) if the company is unable to pay its debts : 
 
 (vi) if the Court is of opinion that it is just and equitable that the 
 
 company should be wound up. 
 
 Inability to pay Debts. 
 
 This is the usual ground for a petition. In sect. 130 the Act Inability to 
 states the cases in which a company is to be “ deemed unable to pay <iebts - 
 pay its debts.” See Appendix. In most cases the evidence is given 
 under the fourth paragraph of that section by proving “to the 
 satisfaction of the Court that the company is unable to pay its debts.” 
 
 The fact that the petitioner has made repeated applications for 
 payment, and that the company has neglected to pay, affords cogent 
 evidence that it is unable to pay its debts, and this is the evidence 
 generally relied on. Almost the only answer open to the company 
 is to show that the debt claimed is bond fide disputed, in which case 
 a winding-up petition is not a proper mode of enforcing it. Re Gold 
 Hill Mines , 23 C. D. 210. Where the debt is undisputed, it is futile 
 for the company to say, “We are able to pay our debts, but we do 
 not choose to pay this particular debt.” The Court will not listen 
 to such a defence. See Company Precedents, Pt. II. pp. 49 — 53. 
 
 The “Just and Equitable’’ Clause. 
 
 It was at one time thought that these words, as appearing in sect. 79 
 of the Act of 1862, ought to be confined to cases ejusdem generis with 
 the previous cases, but this construction was subsequently held 
 erroneous. Australian Joint Stock Co., W. N. (1897) 48 ; Sailing 
 Ship “ Kentmere” Co., W. N. (1897) 58. Under these words winding-up 
 orders have been made on the ground (a) that the substratum of the 
 company was gone ( German Date Coffee Co., 20 C. D. 169; Haven 
 Gold Co., 20 C. D. 151 ; Red Rock Gold Mining Co., 61 L. T. 785) ; 
 
 (b) that the company was a bubble [London and County Coal Co., 3 Eq. 
 
 355) ; (c) that the company was conceived and brought forth in fraud ; 
 
 (T. E. Brinsmead Sons, (1897) 1 Ch. 45); on appeal, (1897) 1 Ch. 
 
 406 ; (d) that full investigation was necessary ( Peruvian Amazon Co., 
 
 29 T. L. E. 384). 
 
 Petition for Compulsory Winding-up Order. 
 
 See as to this, sect. 137 of the Act of 1908. A petition may be Petition for 
 presented (1) by the company; (2) by any creditor; (3) by any con- co . m P ulsor Y 
 tributory ; (4) by the Official Eeceiver under sub-sect. (2) of sect. 137. ^der. ng UP 
 
392 
 
 WINDING-UP. 
 
 Creditor’s 
 
 petition. 
 
 And the right to petition, being a statutory right, cannot be excluded 
 by a clause in the articles of association. Re Peveril Gold Co ., (1898) 
 
 1 Ch. 122. 
 
 Petitions by the company are not very common ; for if a 
 company desires to wind up it has only to pass a special resolution, 
 or an extraordinary resolution for voluntary winding-up. See 
 sect. 182 of the Act. Sometimes the directors deem it advisable to 
 get a friendly creditor to present a petition in order to gain time to 
 pass a resolution for winding-up in the meanwhile, and then the 
 creditor at the hearing asks for a supervision order. Nor are peti- 
 tions by contributories very common, for the theory of the Act is 
 that shareholders shall manage their own affairs, and winding-up 
 is one of them. The great bulk of winding-up petitions are by 
 creditors, a petition for a winding-up order being a proper as w'ell 
 as effective mode of enforcing payment of a debt due from a company. 
 
 Creditor’s Petition. 
 
 Any person to whom the company is indebted in a sum of money 
 presently due is indisputably a creditor, and entitled to present a 
 petition. See sect. 137 of the Act. In this respect the Act re-enacts 
 the provisions of the Act of 1862, s. 82. Under that Act it was held 
 that the following could petition : — The assignee of a debt, whether at 
 law or in equity ( Paris Skating Rink Co., 5 C. D. 959 ; Re Montgomery 
 Moore Ship Collision Doors Syndicate , 72 L. J. Ch. 624) ; the deposi- 
 tary by way of mortgage of debentures to bearer, the interest on 
 which was in arrear ( Olathe Silver Mining Co ., 27 C. D. 278) ; the 
 executor of a deceased life policy holder in respect of an admitted 
 claim, a sum by the policy made payable out of the assets ( Masonic 
 and General Life Assurance Co., 32 C. D. 373) ; a secured creditor 
 ( Moor v. Anglo-Italian Bank, 10 C. D. 681), even after obtaining 
 the appointment of a receiver in an action. Borough of Portsmouth 
 Tramways Co., (1892) 2 Ch. 362. 
 
 But it was held that a garnishee order against a company did 
 not make the garnishor a creditor of the company ( Combined Weigh- 
 ing Machine Co., 43 C. D. 99) ; and that a person who had a claim 
 against the company for unliquidated damages was not a creditor 
 within the section ( Pen-y-Van Colliery Co., 6 C. D. 477); nor was a 
 person who had guaranteed the payment of a debt due from the 
 company, but had not paid such debt. Vron Colliery Co., 20 C. D. 
 442. It was also held that a landlord was not a creditor as regards 
 future rent ( United Club, 60 L. T. 665) ; nor the holder of a bill of 
 exchange not yet payable (W. Powell Sf Sons, W. N. (1892) 94); nor 
 a holder of debentures not yet payable. Melbourne Brewery Co., 
 (1901) 1 Ch. 453. But the Act of 1908 has in this respect 
 
creditor’s petition. 
 
 Ch. XLIII. 
 
 393 
 
 modified the law, for under sect. 137 a “creditor” includes “any Creditor’s 
 contingent or prospective creditor or creditors.” British Equitable 
 Bond , &c. Co., (1910) 1 Ch. 574. Such a creditor has, however, to give 
 security for costs, and before the hearing show a primd facie case. 
 
 (Sect. 137 (1) (c). ) A petitioning creditor who cannot get paid a sum 
 presently payable has primd facie a right, ex debito justifies , to a 
 winding-up order ( Bowes v. Hope Mutual , &c. Society (1845), 1 1 H. L. C. 
 
 402 ; Re Western of Canada, 17 Eq. 1 ; Re Chapel House Colliery Co. 
 
 (1883), 24 Ch. D. 259); even though the assets are overcharged by 
 debentures ( Alfred Melson <Sf Co., (1906) 1 Ch. 841; Criyglestone Coal 
 Co., (1906) 2 Ch. 327 ; Re Clandown Colliery Co., (1915) 1 Ch. 369 ; 
 and see now sect. 141 (1) of the Act). It has been held that the 
 Courts (Emergency Powers) Act, 1914 (see Appendix, p. 634), makes no 
 difference to this primd facie right ( Re Globe Trust , (1915) W. N. 221); 
 but see Re A Company , (1915) 1 Ch. 520. This primd facie right to a 
 winding-up order is qualified by another rule, viz., that the Court 
 will regard the wishes of the majority in value of the creditors, 
 and if, for some good reason, they object to a winding-up order, the 
 Court in its discretion may refuse the order. Re West Hartlepool Co. 
 
 (1874), L. R. 10 Ch. 618 ; Western of Canada Co. (1878), 17 Eq. 1 ; 
 
 Chapel House Colliery Co. (1883), 24 Ch. D. 259. See Company 
 Precedents, Pt. II. pp. 77, 78. Moreover, securities may be so framed 
 that the debenture or debenture stock holder is not a creditor capable of 
 petitioning ( Uruguay Central Co., 11 C. D. 372; JDunderland Iron Co., 
 
 (1909) 1 Ch. 446) ; but query whether this decision can be supported. 
 
 Whether the Court will make an order or not, does not depend 
 solely on the wishes of the creditors. The Court is now, under 
 Part IV. of the Act, invested with a wide jurisdiction in the in- 
 terests of commercial morality ; and if the facts disclose a strong 
 primd facie case for investigation into the formation or promotion of 
 the company, or the issue of debentures by it, the Court will make a 
 compulsory order irrespective of creditors’ opposition. Re Bishop <Sf Sons, 
 
 Limited, (1900) 2 Ch. 254; Re Lichtenstein, 23 T. L. R. 424; Re 
 Clandown Colliery Co., (1915) W. N. 75. 
 
 By sect. 197 of the Act, the voluntary winding-up of a company is 
 not to be a bar to the right of any creditor of such company to have the 
 same wound up by the Court if the Court is of opinion that the 
 rights of such creditor will be prejudiced by a voluntary winding-up 
 ( Re Gold Co., 11 Ch. D. 701 ; Re Hay craft Gold Reduction Co., (1900) 
 
 2 Ch. 230 ; Re Gutta Percha Corporation , (1900) 2 Ch. 665); but the 
 Court may in its discretion refuse the order if it will not benefit the 
 creditors generally, but only the petitioning creditor. Re Greenwood , 
 
 (1900) 2 Q. B. 306. 
 
;394 
 
 WINDING-UP. 
 
 Contribu- 
 
 tory’s 
 
 petition. 
 
 Contributory’s Petition. 
 
 Such petitions are comparatively rare ; for the Act establishes a 
 domestic tribunal as between the members and the company, and thus 
 enables the members themselves, by passing the requisite resolutions, 
 to determine whether there shall be a voluntary liquidation, or whether 
 the Court shall be asked to make a compulsory order. See sect. 182 ; 
 Langham Skating Rink (1877), 5 Ch. D. 683. Accordingly, a con- 
 tributory, to obtain an order, must make out a special case, and the 
 case usually made out is that it is just and equitable that the company 
 shall be wound up because the substratum of the company is gone. 
 See Re Suburban Hotel Co. (1867), L. R. 2 Ch. App. 737 ; Re German 
 Date Co. (1882), 20 Ch. D. 169 ; Re Haven Gold Co. (1882), 20 Ch. D. 
 151 ; Re Brinsmead Sf Sons, (1897) 1 Ch. 45 ; Symington v. Symington 1 s 
 Quarries, Limited , 8 F. 121, Ct. Sess. ; Pirie v. Stewart , 6 F. 847, 
 Ct. Sess. The substratum is held to be gone when the main object 
 for which the company was formed has become impracticable. Re 
 Suburban Hotel Co., supra. 
 
 In such a case shareholders may fairly claim that they ought no 
 longer to be forced to risk their property in going on. No contributory 
 of a company is, by sect. 137, to be capable of presenting a petition 
 unless (i) either the number of members is reduced, in the case of a 
 private company, below two, or in the case of any other company, 
 below seven, or (ii) the shares in respect of which he is a contributory 
 or some of them were originally allotted to him or have been held by 
 him and registered in his name for at least six months during the 
 eighteen months previously to the commencement of the winding-up, 
 or have devolved upon him through the death of a former holder : 
 the object, of course, being to prevent a person buying shares in order 
 to qualify himself to wreck the company. “ Held ” means standing in 
 the name of the contributory petitioner. Wala Wynaad , 21 C. D. 849. 
 
 Registration of a wife’s shares in the name of her husband is for 
 this purpose sufficient. (Sect. 137 (3).) 
 
 Occasionally, a contributory petitions on the ground that the 
 company is insolvent or unable to pay its debts ; but in such case the 
 petitioner, if fully paid, must allege and prove that there will be a 
 substantial surplus for the shareholders ( Re Rica Gold Co. (1879), 
 11 0. D. 36) ; otherwise he has no interest which the Court ought to 
 regard. But see now sect. 141, and see Company Precedents, 
 Pt. II. p. 73. 
 
 The Court may also make a compulsory order on the petition of a 
 fully-paid shareholder if satisfied that the voluntary winding-up is 
 likely to prejudice the shareholders. Re National Co. for Distribution 
 of Electricity, (1902) 2 Ch. 34. 
 
FORM OF PETITION. 
 
 Ch. XLIII. 
 
 395 
 
 It is open, too, to the petitioning shareholder to show the Court that 
 he will derive some real benefit from a compulsory order. Re Dore 
 Gallery , W. N. (1891) 98 ; Anglo- Austrian Co., 35 S. J. 469. 
 
 Mismanagement by directors is not a ground for a shareholder 
 petitioning. He should call a meeting. Re Professional Benefit 
 Building Society , L. R. 6 Ch. 862. 
 
 A shareholder who is in arrear with calls must make out a very 
 special case to justify his petitioning in such circumstances, and he 
 may be required to pay the calls into Court or to give an undertaking 
 for payment of them. Diamond Fuel Co., 13 C. D. 400 ; Crystal Reef 
 Co., (1892) 1 Ch. 408. 
 
 The fact that a voluntary winding-up is in progress is primd facie 
 a bar to a winding-up on a shareholder’s petition ( Bank of Gibraltar, 
 L. R. 1 Ch. 74 ; Imperial Bank of China, L. R. 1 Ch. 339 ; London 
 and Mercantile Discount Co., L. R. 1 Eq. 277), because a shareholder 
 is bound by the wishes of the majority ; but the Court has a discretion, 
 and if it sees cause will examine into the composition of the majority 
 passing the resolution to make sure that it represents the real wishes 
 of the shareholders. Re Varieties, (1893) 2 Ch. 235. Primd facie a 
 petition by a fully paid up shareholder alleging that the company has 
 no assets will be dismissed. Kaslo-Slocan Co., W. N. (1910) 13. 
 
 Petition by Official Receiver. 
 
 Sect. 137 (2) of the Act provides that where a company is being 
 wound up voluntarily or subject to supervision in England, a 
 petition may be presented by the official receiver attached to the Court 
 having jurisdiction to wind up the company, as well as by any other 
 person authorized in that behalf under the other provisions of this 
 section, but the Court shall not make a winding-up order on the 
 petition unless it is satisfied that the voluntary winding-up, or 
 winding-up subject to supervision, cannot be continued with due 
 regard to the interest of the creditors or contributories. 
 
 As to the meaning and operation of this section, see Re Jubilee Sites 
 Syndicate, (1899) 2 Ch. 204. 
 
 Form of Petition. 
 
 A petition to the High Court is headed : — 
 
 In the High Court of Justice. 
 
 (Companies Winding-up.) 
 
 Mr. Justice . 
 
 In the matter of the Companies (Consolidation) Act, 1908, 
 
 and 
 
 In the matter of the Company, Limited. 
 
 Form of 
 petition. 
 Rule 11, 
 p. 599. 
 
396 
 
 WINDING-UP. 
 
 
 It then proceeds thus : — 
 
 To His Majesty’s High Court of Justice. 
 
 The humble petition of of showeth as follows : — 
 
 Then follow statements as to the incorporation of the company, 
 situation of its registered office, amount of its paid-up capital (to show 
 jurisdiction), the circumstances founding the title to relief, e.g., that 
 the company is indebted to the petitioner in a specified sum, and that he 
 has made repeated applications for payment, but without success, that 
 the company is unable to pay its debts, and then the petition concludes 
 with the prayer 1 1 that the company may be wound up under the Com- 
 panies (Consolidation) Act, 1908.” There is a note at the foot to the 
 effect that it is “ intended to serve this petition on the company.” In 
 framing a petition, it is essential to allege a case for winding-up within 
 the Act. See sect. 129. If no case is alleged, the petition, unless the 
 Court should give liberty to amend, is demurrable, and will be dismissed 
 with costs. Re Wear Engine Works Co. (1873), L. R. 10 Ch. 188. 
 
 Rule 26, 
 
 p. 601 . 
 
 Presentation and Answering. 
 
 A winding-up petition to the High Court is presented at the office of 
 the Registrar in Winding-up, who appoints the time and place at which 
 the petition is to be heard. Winding-up Rules, 1909, r. 26. After a 
 petition has been presented, the petitioner must, on a day to be ap- 
 pointed by the registrar, not less than two days before the day appointed 
 for the hearing of the petition, attend before the registrar and satisfy him 
 that the petition has been duly advertised, that the prescribed affidavit 
 verifying the statements therein and the affidavit of service have been 
 duly filed, and that the provisions of the rules as to winding-up 
 petitions have been duly complied with by the petitioner. 
 
 Where several petitions are presented, they rank according to the 
 date of presentation. Re Building Societies Trust , 44 C. D. 144 ; Re 
 Bamford, (1910) 1 Ir. R. 390. 
 
 A summons under the Courts (Emergency Powers) Act, 1914, is not 
 necessary. Re A Company, (1915) 1 Ch. 520, and Appendix, p. 634. 
 
 Advertising 
 the petition. 
 Rule 27, 
 
 p. 601. 
 
 Advertisement of Petition. 
 
 Every petition is to be advertised seven clear days before the 
 hearing. City and County Bank, L. R. 10 Ch. 471 ; London India- 
 rubber, 14 W. R. 594. If the company’s registered office is within 
 ten miles of the Royal Courts of Justice, the advertisement is to be 
 inserted in the London Gazette and in one London daily morning news- 
 paper, or in such other newspaper as the Court directs ; in the case of 
 any other company, once in the London Gazette and once in a local 
 newspaper. See the Rules. Every advertisement of a petition is 
 
SERVICE EVIDENCE IN SUPPORT. Ch. XLIII. 
 
 397 
 
 to contain a note at the foot thereof stating that any person who 
 intends to appear on the hearing of the petition, either to oppose or 
 support, must send notice of his intention to the petitioner. Notice of 
 intention to appear must be given by any person intending to do so 
 (see Rule 33, p. 602), and must contain names and addresses. Descours , 
 Parry Sf Co., W. N. (1909) 50. 
 
 Any error in the title, name, day or place for hearing may render 
 the advertisement useless ( Manure Co., W. N. (1876) 234 ; Army 
 and Navy Hotel, 31 C. D. 644 ; Newcastle Co., W. N. (1888) 246 ; 
 London and Provincial Pure Ice , W. N. (1904) 136) ; but a formal 
 defect where no one is misled will not invalidate the petition. 
 Broad's v. Patent Co., W. N. (1892) 5; see Company Precedents, 
 Pt. II., p. 98. 
 
 The Court will restrain the issuing of the advertisements when 
 the petition is an abuse of the process of the Court. Re A Company , 
 (1894) 2 Ch. 349. 
 
 Service. 
 
 The petition is to be served on the company, unless it is presented 
 by the company itself. See Rules of 1909 ; Chester Co., 52 W. R. 
 189. Where it is impracticable to serve the petition in the manner 
 therein mentioned, the Court, e.g ., when the company’s registered 
 office is closed or pulled down, will make a special order, e.g., to 
 serve upon one or two officials connected with the company, and direct 
 that such service should be deemed to be service on the company. 
 See Company Precedents, Pt. II. p. 101. 
 
 Evidence in Support. 
 
 The Rules provide for the filing of an affidavit by the petitioner 
 in general terms, stating, in effect, that the statements in the 
 petition relating to his own acts and deeds are true, and that he 
 believes the other statements to be true. This is known as the statu- 
 tory affidavit, and the Rules make this affidavit prima facie evidence 
 of the statements in the petition. It must be sworn and filed within 
 four days after the presentation of the petition, and notice of the filing 
 must be given to the company. New Weighing Machine Co., W. N. 
 (1896) 48. 
 
 The object of the statutory affidavit is to prevent the abuse of 
 putting upon the file long affidavits in support of the petition which 
 may turn out to be unnecessary. Per Lindley, L. J., Re Gold Hill 
 Mines, 23 C. D. 214. 
 
 Affidavits, if put in in opposition to the petition, must be filed within 
 seven days of the date of the filing of the statutory affidavit. Winding- 
 up Rules, 1909 ; and Re Evans, W. N. (1892) 126. The petitioner 
 
 Service of 
 petition. 
 Rule 28, 
 
 p. 601 . 
 
 Evidence in 
 support of 
 petition. 
 Rule 29, 
 
 p. 601 . 
 
 Rule 35, 
 
 p. 602 . 
 
398 
 
 WINDING-UP. 
 
 may also be cross-examined as well as the opposing deponents ; but 
 the Court has a discretion as to allowing cross-examination in a 
 winding-up petition, and refused, for example, to allow a petitioner to 
 cross-examine the respondent company’s witnesses where the petitioner 
 had no direct evidence but the statutory affidavit, and wanted to 
 cross-examine as to the company’s business, means and bona /ides. 
 London Fish Market Co., 27 S. J. 600 ; and see Lie Emma Silver Mining 
 Co., L. P. 10 Ch. 194; Re West Devon Mine , W. N. (1884) 139. If 
 necessary, witnesses who decline to make affidavits can be called and 
 examined at the instance of any party interested. Company Precedents, 
 11th ed. Pt. II. pp. 191, 195. 
 
 Hearing 1 . 
 Rule 32, 
 
 p. 602 . 
 
 Hearing of Petition. 
 
 Upon hearing the petition the Court may dismiss the same with or 
 without costs, may adjourn the hearing conditionally or uncondition- 
 ally, may make an interim order, or any other order that it deems just. 
 Companies Act, 1908, s. 141. In all matters relating to the winding-up 
 — and winding-up includes the petition — the Court may, by sect. 145 of 
 the Act, have regard to the wishes of creditors and contributories, and 
 may, if expedient, direct meetings to be summoned to ascertain such 
 wishes. See in Appendix, s. 152. If the company is solvent, the wishes 
 of contributories, as the persons chiefly interested in the assets, carry 
 most weight; if the company is insolvent, the wishes of creditors. 
 Instances in which the Court has acted on this principle are Western of 
 Canada Co., 17 Eq. 1 ; Chapel House Colliery , 24 C. D. 259 ; Re Pro- 
 fessional Benefit Building Society, L. P. 6 Ch. 856 ; Re City and County 
 Bank, L. P. 10 Ch. 470 ; Haven Gold Company, 20 C. D. 151 ; T. E. 
 Brinsmead <8f Sons, (1897) 1 Ch. 45 ; affirmed (1897) lOh. 406. Since the 
 Winding-up Act, 1890, a new element — that of public policy in regard 
 to commercial morality — has been introduced into the consideration of 
 the question of the propriety of a winding-up order. It is illustrated 
 in Re Krasnapolsky Co., (1892) 3 Ch. 174 ; New Oriental Bank Cor- 
 poration, (1892) 3 Ch. 563 ; J. H. Evans Sf Co., W. N. (1892) 126 ; 
 General Phosphate Corporation, W. N. (1893) 142 ; Re Medical Battery 
 Co., (1894) 1 Ch. 444 ; Crigglestone Coal Co., (1906) 2 Ch. 327. See also 
 Bishop Sf Sons, Limited, (1900) 2 Ch. 254 ; Melson & Co., (1906) 1 Ch. 
 841 ; Re Clandown Colliery, (1915) W. N. 75. The principle of these 
 last three cases has now received statutory confirmation in sect. 141 (1) 
 of the Act of 1908, providing that an order is not to be refused on 
 the ground only that the assets of the company have been mortgaged 
 to an amount equal to or in excess of those assets, or that the company 
 has no assets. 
 
 The Court will not order a petition to stand over for a lengthened 
 
WINDING-UP ORDER. 
 
 Ch. XLIII. 
 
 399 
 
 period : it would not be just to the company. Chapel House Colliery 
 Co ., 24 C. D. 267. 
 
 The Court has now power, under the Winding-up Eules, to sub- 
 stitute as petitioner any creditor or contributory who in the opinion 
 of the Court would have a right to present a petition. 
 
 Commencement of Winding-up. 
 
 In the case of a winding-up by the Court the winding-up dates from 
 the presentation of the petition (sect. 139). A voluntary winding-up 
 dates from the passing of the (confirmatory) resolution (sect. 183). 
 Where a winding-up order is made after a voluntary winding-up has 
 commenced, the winding-up dates from the presentation of the petition. 
 Re Russell Hunting Record Co ., (1910) 2 Ch. 78. 
 
 As to commencement of winding-up for the purposes of preferential 
 payments, see p. 411, post. 
 
 Winding-up Order. 
 
 The order is to the effect that the company be wound up by 
 the Court under the Companies Act, 1908. 
 
 The effect of a winding-up order is, by sect. 205 (2) (which takes the 
 place of sect. 153 of the Act of 1862), to avoid all dispositions of the 
 property (including things in action) of the company made between 
 the commencement of the winding-up — i.e., the presentation of the 
 petition — and the winding-up order, unless the Court otherwise orders ; 
 but the practice of the Court is to allow such payments or dispositions 
 pending petition if made honestly and in the ordinary course of busi- 
 ness. Re Neath Harbour Smelting <Sf Rolling Works , 35 W. E. 827 ; 
 Re Wiltshire Iron Co., L. E. 3 Ch. 443 ; Re Liverpool Service Asso- 
 ciation, L. E. 9 Ch. 511 ; Bolognesi’s Case, L. E. 5 Ch. 567 ; Re Oriental 
 Bank Corporation, 28 C. D. 634; Gorringev. Invell Indiarubber Works, 
 34 C. D. 128. See Company Precedents, Pt. II. pp. 448, 449. 
 
 Costs. 
 
 The winding-up order usually gives the petitioning creditor and 
 the company their costs, and also one set of costs to creditors, and 
 one set to contributories supporting the petition ( Humber Ironworks 
 Co., L. E. 2 Eq. 15 ; 35 Beav. 346 ; European Banking Co., 2 Eq. 521 ; 
 Peckham Trams , 57 L. J. Ch. 462), but there is no hard and fast rule. 
 Where the contributories and the creditors appear by the same soli- 
 citor, one set of costs only will as a rule be allowed. Re Silberhiitte 
 Supply Co., Ltd., (1910) W. N. 81. The costs are paid in the first 
 
 Winding- up 
 order. 
 
 Rule 37 etseq., 
 
 p. 602. 
 
400 
 
 WINDING-UP. 
 
 Provisional 
 
 liquidators. 
 
 Subsequent 
 
 proceedings. 
 
 place (subject to incumbrances) out of the company’s assets. Rule 187 
 of 1909. See also on the subject of costs, Ibo Investment Trust , 
 Limited, (1904) 1 Ch. 26; Consolidated Exploration Co., (1899) 2 Ch. 
 599 ; Leyton and Walthamstow Cycle Co., 50 W. R. 93 ; Re Bamford , 
 (1910) 1 I. R. 390. 
 
 As to security for costs on appeal, Consolidated South Rand Mines , 
 W. N. (1909) 66; and as to costs on an appeal, see Ibo Investment 
 Trust, Limited , (1903) 2 Ch. 373. 
 
 Provisional Liquidators. 
 
 The Court has jurisdiction to appoint a provisional liquidator before 
 or after winding-up order. Sect. 149 (2), (3). An appointment before 
 winding-up is not often made, except by consent ; but, on the winding- 
 up order being made, the official receiver becomes, ipso facto, pro- 
 visional liquidator until a liquidator is appointed. See sect. 149 (3) (b) 
 of the Act, and Reid and Sons, (1900) 2 Q. B. 634. The powers of 
 a provisional liquidator are usually restricted, more or less, by the 
 Court under sect. 149 of the Act. See Company Precedents, Pt. II. 
 pp. 160—173. 
 
 Proceedings following on Winding-up Order. 
 
 When a winding-up order is made, the registrar sends to the official 
 receiver a notice informing him that the order has been pronounced. 
 The official receiver thus set in motion occupies a double position. He 
 is an officer of the Board of Trade appointed by it for the purposes of 
 winding-up under the Act, see sect. 146 ; but he is also answerable to the 
 Court for the performance of his duties. Notice is sent to him because, 
 on a winding-up order being made, the official receiver becomes virtute 
 officii provisional liquidator (see sect. 149 (3) (b) ) until a liquidator, 
 if any, is appointed. As provisional liquidator it is his duty to take 
 possession of and protect the assets, and to call on the directors to furnish 
 him with a statement of the company’s affairs, which has to be made 
 out in accordance with a statutory form and verified by affidavit (see 
 sect. 147 of the Act) ; and for the purpose of investigating the com- 
 pany’s affairs he may require the attendance of the persons furnishing 
 the report to answer questions. A director refusing to make out a 
 statement may be committed for disobedience. New Par Consols, 
 (1898) 1 Q. B. 673. Of this statement, when complete, the official 
 receiver prepares a summary for the information of creditors and 
 contributories, appending to it observations of his own on the forma- 
 tion, management, &c. of the company, and, as soon as practicable, 
 submits his preliminary report to the Court as to the causes of failure 
 
PROCEEDINGS FOLLOWING ON WINDING-UP ORDER. Ch. XLIII. 
 
 401 
 
 and the necessity for inquiry (sect. 148) ; but the unravelling of the 
 company’s affairs being a long business, it is not now necessary that 
 the first meetings of creditors and contributories provided for by 
 sect. 152 of the Act should be delayed until the investigation is con- 
 cluded, and they are consequently summoned at once for the purpose 
 of determining two preliminary questions : — 
 
 1 . Whether they desire a liquidator of their own choosing in place 
 
 of the official receiver as liquidator ; and 
 
 2. Whether there shall be a committee of inspection ; and, if so, of 
 
 whom it shall consist. 
 
 Creditors must prove a debt due to them from the company before 
 they can vote at this first meeting. See Rules of 1909, and Ex parte 
 Ruffle, L. R. 8 Ch. 1001 ; Re Parrott , 63 L. T. 777 ; Henry Lister Sf Co., 
 (1892) 2 Ch. 417 ; Re Newton, (1896) 2 Q,. B. 403. Voting may be in 
 person or by proxy. 
 
 The result of the wishes of the meetings on the points thus sub- 
 mitted to them is reported to the Court, and the Court fixes a day for 
 considering such wishes, and, if it approves, giving effect to them. If 
 there is a difference of opinion the Court is to decide. Sect. 152 (2). 
 Where a person other than the official receiver is appointed liquidator 
 he must notify his appointment to the Registrar of Companies, and 
 give security to the satisfaction of the Board of Trade before he can 
 act. Sect. 149 (3) (c). Company Precedents, Part II. p. 290 et seq. 
 
 The official receiver then hands over the “property” of the com- 
 pany to such liquidator. Companies Winding-up Rules, 1909. This 
 expression “ property ” does not include notes and memoranda 
 representing information obtained from officers of the company. Re 
 Lake George Mines , Limited, (1904) 1 Ch.' 803. 
 
 Duties and Powers of the Liquidator. 
 
 The liquidator’s principal duties — speaking generally — are to take 
 possession of and protect the assets, to make out the requisite lists of 
 contributories and of creditors, to have disputed cases adjudicated upon, 
 to realize the assets subject to the control of the committee of inspection 
 (if any) in certain matters, and to apply the proceeds in payment of the 
 company’s debts and liabilities, in due course of administration, and, 
 having done that, to divide the surplus amongst the contributories, and 
 to adjust their rights. But before he makes any such distribution he 
 ought to take every means to satisfy himself that all creditors are 
 paid, not only by advertising, but by writing to those creditors of 
 whose existence he knows, and asking them if they have any claims 
 
 26 
 
 Rule 115, 
 p. 613. 
 
 Duties of 
 liquidator 
 
 P. 
 
402 
 
 WINDING-UP. 
 
 Board of 
 Trade a adit. 
 
 against the company. See Pulsford v. Devenish , (1903) 2 Ch. 625. 
 As to payment of statute-barred debts, see Fleetwood and District 
 Syndicate , (1915) 1 Ch. 486. He must also be careful to provide, 
 before distribution, for income tax due to the Crown. New Zealand 
 Joint Stock Corporation , 23 T. L. R. 238. 
 
 A number of his statutory powers — not, of course, exhaustive — 
 are specified in sect. 151 of the Act of 1908, which takes the 
 place of sect. 94 of the Act of 1862. Some of these he can 
 exercise only with the sanction of the Court or of the committee of 
 inspection, if any; others without such sanction. For instance, the 
 liquidator may without any such sanction sell any property of the 
 company, prove in the bankruptcy or insolvency of any contributory, * 
 accept and make bills of exchange or promissory notes on security of 
 the assets, take out administration to a deceased contributory, execute 
 deeds, receipts, and other documents, and do and execute all other 
 things that may be necessary for winding up the affairs of the company 
 and distributing its assets: but he cannot (see sect. 151 of the Act) 
 bring or defend actions or other legal proceedings, civil or criminal, 
 or carry on the business of the company, or compromise with creditors 
 or contributories under sect. 120 of the Act, or make calls (Re North 
 Eastern Insurance Co ., (1915) W. N. 210), or employ a solicitor, without 
 the sanction of the Court or of the committee of inspection, if any. 
 The sanction required for the employment of a solicitor must be obtained 
 before the employment, except in cases of urgency. Sect. 151 (1) (c). 
 
 The liquidator or any creditor or contributory can apply to the 
 Court by summons to determine any question arising in the winding- 
 up (sect. 193). Questions between the company and third parties 
 cannot be determined on such a summons. Re Centrifugal Butter Co., 
 (1913) 1 Ch. 188. 
 
 A liquidator must pay all moneys received by him into the 
 Companies Liquidation Account at the Bank of England. If he 
 retains for more than ten days a sum exceeding 50/., he may be liable 
 to pay interest at 20 per cent. Companies Act, 1908, s. 154. See 
 Company Precedents, Part II. pp. 333 et seq. 
 
 But he may be allowed to have an account with any other bank 
 if the committee of inspection satisfy the Board of Trade that it is 
 desirable for the purposes of the liquidation. 
 
 Board of Trade’s Audit of Liquidator’s Accounts. 
 
 This is provided for in sect. 155 of the Act. See Company Prece- 
 dents, Part II. p. 297. 
 
THE COMMITTEE OF INSPECTION. Ch. XLIII. 
 
 403 
 
 Removal of Liquidator. 
 
 A liquidator may be removed by the Court “ on cause shown ” 
 (sect. 149 (6)). A liquidator was removed where he insisted on 
 acting in the interests of shareholders only, though there was no 
 reasonable prospect of paying the debts in full. Re Rubber and 
 Produce Investment Trust , (1915) 1 Ch. 382. 
 
 An order for removal was refused where the applicant had no 
 support from other creditors. Re Amalqamated Properties of Rhodesia, 
 30 T. L. R. 405. 
 
 The Committee of Inspection. 
 
 The creditors and contributories may, as stated above, at their first Committee 
 meetings decide to have a committee of inspection. This is a little bit of inspection, 
 of machinery which has been imported into winding-up from the 
 practice in bankruptcy. See sect. 160 of the Act of 1908. The committee 
 consists of a joint body of creditors and contributories, and its function 
 is to assist the liquidator and supervise his proceedings. It is to meet 
 at such times as the committee from time to time may appoint and is 
 to act by a majority. General meetings of creditors and contributories 
 may be summoned by the liquidator, and if any conflict of opinion 
 arises between such meetings and the committee of inspection, the 
 liquidator is to follow the directions of the meetings in preference to 
 those of the committee. The sanction of the committee, as an alterna- 
 tive to leave of the Court, is necessary to the exercise by the liquidator 
 of certain of his powers under sect. 151. The liquidator should not 
 obtain leave of the Court ex parte to appoint a solicitor or take any 
 similar step to which he knows the committee object. Re Consolidated 
 Diesel Engine , (1915) 1 Ch. 192. The Court, however, is by no means 
 bound by the decision of the committee. Re North Eastern Insurance 
 Co., (1915) W. N. 210. 
 
 The Court may also order the liquidator to summon a meeting with 
 a view to reconstitute the committee of inspection so as more fairly to 
 represent creditors. Re Radford and Bright, Limited (No. 1), (1901) 
 
 1 Ch. 272 ; see also Re Radford and Bright (No. 2), (1901) 1 Ch 735. 
 
 No member of the committee of inspection can become a purchaser 
 of the company’s assets either directly or indirectly, or derive any 
 profit out of winding-up transactions or receive any remuneration 
 without the sanction of the Court. This sanction of the Court must 
 in all cases be obtained before the business is commenced from which 
 the profit is derived ; it cannot be given after. Ex parte Gallard, 
 
 (1896) 1 Q. B. 68. 
 
 26 (2) 
 
404 
 
 WINDING-UP. 
 
 Contribu- 
 
 tories. 
 
 Rule 77 et seq., 
 p. 609. 
 
 Contributories. 
 
 An important part of a liquidator’s duty in getting in the company’s 
 assets is to require payment by contributories of the amount, if any, 
 uncalled on their shares in the company. 
 
 “ Contributory ” means every person liable to contribute to the assets 
 of a company under the Act in the event of the company being wound 
 up. See sect. 124 of the Act of 1908. The liability of a contributory 
 is defined in sect. 123 of the Act. For the purpose of enforcing this 
 liability the liquidator makes out a list of the persons he claims to 
 treat as contributories, and gives each of such persons notice that they 
 are included in the list and for what amount, and that he proposes on 
 a stated day to settle the list. On the day in question the liquidator 
 hears any objections by contributories to their being included in the 
 list, and after such hearing settles the list one way or the other finally, 
 and notifies the contributories. Any person who considers himself 
 aggrieved can apply to the Court by originating summons to have his 
 name removed from the list. The list of contributories is made out 
 in two parts, A. and B., in accordance with sect. 123 of the Act 
 of 1908. The A. contributories are the present members and are 
 primarily liable. The B. contributories are the past members — that is, 
 those who have ceased to be members within a year preceding the 
 winding-up — and these are only liable to contribute after the A. 
 contributories are exhausted. That is to say, a B. contributory is not 
 liable to contribute in respect of any debt of the company contracted 
 after he ceased to be a member, nor unless the existing members are 
 unable to satisfy the contributions required to be made by them, and 
 he cannot be called upon to pay more than the amount, if any. which 
 remains unpaid on the shares which he held ; see the section (sect. 123) 
 and Hilbert v. Banner , L. R. 5 H. L. 28 ; Webb v. Whiffin , L. R. 5 H. L. 
 718; Brett's case , 6 Ch. 800; 8 Oh. 800; and Morris's case , L. R. 
 7 Ch. 200; L. R. 8 Ch. 810. The list distinguishes also between 
 persons who are contributories in their own right and persons who are 
 contributories as representatives of others. 
 
 A call can only be made on contributories with the sanction of the 
 committee of inspection, if there is one, and if there is not, of the 
 Court. Sect. 166 of the Act. It is not necessary that debts or liabilities 
 should be established against the company before a call can be made. 
 “Debts and liabilities” in sect. 166 (Companies (Consolidation) 
 Act, 1908) mean estimated debts and liabilities. Re Contract 
 Corporation , L. R. 2 Ch. 95. In sanctioning a call the Court may 
 allow payment by instalments. Law Guarantee Society , 25 T. L. R. 
 565. A call made in winding-up is in the nature of a specialty 
 
SET-OFF. 
 
 Ch. XLIII. 
 
 405 
 
 debt. Buck v. Robson , L. ft. 10 Eq. 629; Re Muyyeridge , L. P. 
 10 Eq. 443. Payment of a call is enforced by an order of the 
 Court made in chambers on summons by the liquidator. Companies 
 Act, 1908, s. 166 ; Winding-up Pules, 1909. Such an order, called 
 a “balance order,” is a summary statutory proceeding for the pur- 
 pose of enabling the liquidator to get payment from a contributory 
 in lieu of proceeding by action. Ex parte Whinney , 13 Q,. B. D. 478. 
 A balance order is not, however, a “ final judgment” which will found 
 a bankruptcy notice against the contributory. Re Sanders , 13 
 
 Q. B. D. 476. An action lies by the liquidator in the name of the 
 company against a contributory for calls made before the winding-up, 
 notwithstanding that the liquidator has obtained a balance order in 
 the winding-up for payment of the same moneys under sect. 166 of the 
 Act. Westmoreland Slate Co. v. Feilden, (1891) 3 Ch. 15. Where 
 a director has received, in breach of trust, a present of paid-up 
 shares from the company’s vendor, he may be made liable for 
 misfeasance, but he cannot be made liable as a contributory for 
 unpaid shares. Carling's case , 1 Ch. D. 115 ; Re Innes Sf Co ., (1903) 
 2 Ch. 254. The same principle applies to arrears of calls on forfeited 
 shares. Ladies' Dress Association , Ltd . v. Pulbrook, (1900) 2 Q. B. 376. 
 
 Set-off. 
 
 By sect. 207 of the Act, in the winding-up of an insolvent company 
 the bankruptcy rules apply as regards the rights of secured and un- 
 secured creditors, debts provable, valuation of annuities and future 
 and contingent liabilities. This section incorporates into the winding- 
 up of companies sect. 31 of the Bankruptcy Act, 1914, which allows 
 set-off where there have been mutual credits, mutual debts or other 
 mutual dealings. Where, therefore, at the commencement of the 
 winding-up A. has a money claim against the company, and the com- 
 pany has a money claim against A., one claim can be set off against 
 the other, Sovereign Life Assurance Co. v. Dodd , (1892) 2 Q. B. 573, 
 at p. 578 ; H. E. Thorne Sf Sons, Ltd., (1914) 2 Ch. 438. 
 
 But a contributory in a limited company who is also a creditor of the 
 company cannot on a winding-up set off his debt against a call made 
 on him by the liquidator ( Grissell's case , L. P. 1 Ch. 528 ; Gill's case, 
 12 C. D. 755) until all the creditors have been paid in full (sect. 
 165 (3) ) ; and this is so though in an action by the company, before 
 winding up, to enforce the call the shareholder has obtained uncon- 
 ditional leave to defend under Ord. XIV. Re Hiram Maxim Lamp 
 Co., (1903) 1 Ch. 70; or though the company has agreed that there 
 shall be such a set-off. Re Tjaw Car Sf General Corporation, (1912) 
 
406 
 
 WINDING-UP. 
 
 Misfeasance 
 
 claims. 
 
 Pule 68 etseq., 
 p. 607. 
 
 1 Ch. 405. And the liquidator cannot set off a debt due to the com- 
 pany from a deceased insolvent contributory against the amount due 
 to the contributory in the liquidation. Re Peruvian Railway Construc- 
 tion Co., (1915) 2 Ch. 144. The principle is that where a person 
 entitled to contribute to a fund is also bound to make a contribution 
 in aid of that fund, he cannot be allowed to participate until he has 
 fulfilled his duty to contribute (S. C., at p. 150) ; and where the 
 question of set-off arises in respect of the estate of a deceased debtor, 
 the “ mutual dealings ” section does not apply, since there were no 
 mutual dealings between the company and his estate. S. C., and see 
 H. E. Thorne & Sons (above). 
 
 Misfeasance Claims. 
 
 It frequently happens that the promoters, directors, managers, or 
 other officers of a company are accountable to it for money of the 
 company misapplied by them or wrongfully received, or for which in 
 their fiduciary character they are accountable to the company ; or the 
 directors may have been guilty of some negligence or misfeasance for 
 which they are answerable to the company in damages. In these 
 cases the Companies Act, 1862, provided in sect. 165 a summary 
 remedy by misfeasance proceedings. This section was replaced by 
 sect. 10 of the Winding-up Act, 1890, which was wider in its scope 
 than the older section, and sect. 10 has again been replaced by 
 sect. 215 of the Act of 1908. It runs as follows : — 
 
 (1.) Where in the course of the winding-up of a company it appears 
 that any person who has taken part in the formation or promotion of 
 the company, or any past or present director, manager, liquidator, or 
 other officer of the company, has misapplied or retained or become 
 liable or accountable for any moneys or property of the company, or 
 been guilty of any misfeasance or breach of trust in relation to the 
 company, the Court may, on the application of the official receiver, or 
 of the liquidator, or of any creditor or contributory of the company, 
 examine into the conduct of such promoter, director, manager, liqui- 
 dator, or officer, and compel him to repay or restore the money or 
 property, or any part thereof respectively, with interest at such rate 
 as the Court thinks just, or to contribute such sum to the assets of 
 the company by way of compensation in respect of the misapplication, 
 retainer, misfeasance, or breach of trust as the Court thinks just. 
 
 (2.) This section shall apply notwithstanding that the offence is one 
 for which the offender may be criminally liable. . . . 
 
 It is the duty of the liquidator — as part of his general duty of 
 collecting the assets of the company — to proceed under this section 
 against delinquent directors and others when he sees good ground for 
 
MISFEASANCE CLAIMS. 
 
 Ch. XLIII. 
 
 407 
 
 doing so, and from the commencement of the Companies Act, 1862, the 
 misfeasance summons has been constantly resorted to : for example, 
 where directors have used the funds of the company for objects not 
 sanctioned by the company’s memorandum of association ( Cullerne v. 
 London and Suburban Building Society , 25 Q. B. D. 485 ; Re Liverpool 
 Household Stores, 59 L. J. Ch. 616; Joint Stock Discount Co.v. Brown , 
 L. R. 8 Eq. 381 ; Hardy v. Metropolitan Land Co ., L. R. 7 Ch. 427 ; 
 Coats v. Crossland , 20 T. L. R. 800) ; or paid dividends out of capital ( Re 
 National Funds Assurance Co., 10 C. D. 118 ; Flitcroft's case , 21 C. D. 
 519; Re Sharpe, (1892) 1 Ch. 154 ; Moxham v. Grant, (1900) 1 Q. B. 88), 
 or made secret profits (i/ay’s case , L. R. 10 Ch. 593; Carling' s case, 
 
 1 C. D. 115; Pearson's case , 5 C. D. 336), or sold their own property 
 to the company. Re Cape Breton Co., 29 0. D. 795. Bankers of a 
 company are not officers within the section ( Imperial Land Co. of 
 Marseilles, L. R. 10 Eq. 298), nor primd facie is the company’s solicitor 
 ( Great Western Forest of Dean, 31 C. D. 496); but he may be when 
 he does all the work for a fixed salary. Liberator Building Society, 
 71 L. T. 406. 
 
 An auditor, if an “officer” ox the company, may be proceeded 
 against under this section. Kingston Cotton Mills Co. (No. 2), (1896) 
 
 2 Ch. 279; London and General Bank, (1895) 2 Ch. 166. But an 
 accountant who is merely called in — pro hac vice — to audit the accounts 
 of the company is not an “ officer.” Western Counties Steam Bakeries , 
 (1897) 1 Ch. 617. See p. 227. No set-off is allowed on a proceeding 
 under the section. An order for payment of money under the above 
 misfeasance section constitutes a “ final judgment ” within the meaning 
 of the Bankruptcy Act, 1914, s. 1 (1) (g), and will found bankruptcy 
 proceedings (by way of bankruptcy notice) against the delinquent 
 director or officer. Sect. 215 (3). An order for security for costs will 
 not as a rule be made. Strand Wood Co., (1904) 2 Ch. 1. 
 
 Examination before the Registrar. 
 
 For the purposes of misfeasance proceedings and to ascertain what 
 assets are outstanding, the Court may, at the instance of the liquidator 
 under sect. 174 of the Act of 1908 (which takes the place of sect. 115 
 of the Act of 1862), summon before it any officer of the company or 
 person known or suspected to have in his possession any of the estate 
 or effects of the company, or supposed to be indebted to the company, 
 or any person whom the Court may deem capable of giving information 
 concerning the trade, dealings, estate or effects of the company. The 
 jurisdiction of the Court to make the order is discretionary. Joseph 
 Hargreaves , Limited , (1900) 1 Ch. 347. 
 
 The pendency of an action by the liquidating company against an 
 
 Rule 73, 
 
 p. 608. 
 
408 
 
 WINDING-UP. 
 
 Public 
 
 examination. 
 
 examinee or third party may be a ground for postponing the exami- 
 nation. Re London and Northern Bank , Ex parte Archer , 85 L. T. 
 698 ; and see Re North Australian Territory Co ., 45 Ch. D. 87. But 
 otherwise pendency of civil proceedings in the same matter is no 
 excuse. Re Reliance Taxi-Cab (1912), 28 T. L. R. 529. 
 
 The examination is held before the registrar in winding-up or an 
 examiner of the Court. It is a strictly private proceeding, and if a 
 witness is attended by his solicitor the registrar or examiner may, as 
 a condition of such solicitor being present, exact an undertaking from 
 him not to use the information acquired for any other purpose than 
 re-examination. Re London and Northern Bank ; Haddock's case , 
 (1902) 2 Ch. 73. To inspect the depositions when filed a special case 
 must be made. Merchants' Fire Office, (1899) 1 Ch. 432. An examinee 
 cannot refuse to answer any question unless it involves a question of 
 privilege or is incriminating. He must give all the information he is 
 capable of giving. Re Ottoman , W. N. (1867) 164. The examination 
 may be ordered to be made in open Court, but this should not be 
 done except in very exceptional circumstances. Re Property Insurance 
 Co ., (1914) 1 Ch. 775. As to public examination under sect. 175, see 
 below. 
 
 Public Examination of Directors and Others. 
 
 In addition to the report of the official receiver — referred to above, 
 p. 400 — summarizing the statement of affairs and commenting on the 
 history of the company, the official receiver may present a further 
 report stating the manner in which the company was formed and 
 whether, in his opinion, any fraud has been committed by any person 
 in the promotion or formation of the company, or by any director or 
 other officer of the company in relation to the company ; and the Court 
 may, after consideration of any such report, direct the persons 
 implicated, or the directors, to attend before the Court and be publicly 
 examined on oath. Sect. 175. This public examination was by the 
 Act of 1890 imported from bankruptcy, but the analogy of a director 
 and a bankrupt is not exact. The section 8 in the Act of 1890 was 
 at first largely resorted to, but its operation was considerably curtailed 
 by the decision of the House of Lords in Ex parte Barnes, (1896) 
 A. C. 146, and of the Court of Appeal in . Civil, Naval and Military 
 Outfitters , (1899) 1 Ch. 215, holding that no order for public examina- 
 tion of a particular person can be made unless the official receiver 
 expresses the opinion that such person has been guilty of fraud, and 
 shows how he is connected with the facts. The time for applying to 
 discharge an order for public examination is fourteen days from the 
 service of the order. National Stores, (1899) 2 Ch. 773. The number 
 
CREDITORS. 
 
 Ch. XLIII. 
 
 409 
 
 of persons — directors, promoters, officers, &c. — examined under this 
 jurisdiction in 1914 was, according to the latest Board of Trade return, 
 25. For all practical purposes of a winding-up — as distinguished 
 from the pillorying of delinquent directors before trial — the procedure 
 under sect. 174 is quite sufficient. 
 
 As to the control of the Court over questions to be put at a public 
 examination, see Re London and Globe Finance Co., 50 W. R. 253. 
 
 A liquidator will not be ordered personally to pay the costs of a 
 director- examinee who has exculpated himself, unless the liquidator 
 has accepted the position of a litigant. Tweddle Sf Co., (1910)2K. B. 
 697. 
 
 The Court may order the person procuring the examination to pay 
 the witnesses their costs. Appleton, French & Scrafton, Limited, (1905) 
 1 Ch. 749. 
 
 Creditors. 
 
 The remedy of a creditor is solely against the incorporated company. Creditors. 
 Oakes v. Turquand , L. R. 2 H. L. 357. When the legislature 
 introduced the principle of limited liability, it set up, as Lord Cairns 
 said ( Re Reese River Mining Co., L. R. 2 Ch. 616), the company, and 
 the company alone, as that with which creditors or third persons could 
 contract. 
 
 But creditors may have a claim in damages against a liquidator 
 personally for breach of his statutory duty, if he has not used proper 
 diligence to ascertain their claims before the company has been dis- 
 solved, and they have thus lost their remedy against it. Pulsford v. 
 
 Devenish, (1903) 2 Ch. 625 ; Argyll's Ltd. v. Coxeter (1913), 29 T. L .R. 
 
 355. 
 
 The company’s debts and liabilities are ascertained as they exist at 
 the date of the winding-up order ( Re General Rolling Stock Co., 20 
 W. R. 762 ; Winding-up Rules, 1909), for “ as the tree falls, so it 
 must lie.” Warrant Finance Co.'s case, L. R. 4 Ch. 647 ; Fmmerson’s 
 case, L. R. 2 Eq. 236 ; Duncan Sf Co., (1905) 1 Ch. 307. 
 
 Creditors entitled to Prove. 
 
 The creditors entitled to prove are specified in sect. 206 of the Act of what credi- 
 
 1908, subject to the qualifications introduced by sect. 207 of the same tors entitled 
 J . " L > J m to prove. 
 
 Act as regards insolvent companies, which last-mentioned section takes r u i G 88 et seq 
 
 the place of sect. 10 of the Judicature Act, 1875. Under the combined p. 611. 
 
 effect of these sections there is the widest possible scope for proof. 
 
 Every kind of liability, however difficult of valuation, is provable unless 
 
410 
 
 WINDING-UP. 
 
 Set-off 
 as regards 
 creditors. 
 
 Pari passu. 
 
 declared by tbe Court incapable of being fairly estimated ( Hardy v. 
 Fothergill (1888), 13 App. Cas. 351), the object of the Act being “to 
 put all unsecured creditors upon an equality, and to pay them pari 
 passu.” Per Lindley, L. J., Re Oak Pitts Colliery Co. (1882), 21 
 Ch. D. 329. Accordingly, not only creditors to whom the company is 
 indebted in sums presently due can prove, but also creditors whose debts 
 are not yet due, and not only creditors but persons who have any claim 
 or who may have any claim against the company, e.g., a person who 
 has a claim for damages for breach of contract ( j Bradford Tramways and 
 Omnibus Co ., 68 J. P. 362), or for the determination of a contract, e.g., 
 a policy of insurance, by the company’s going into liquidation ; any 
 liability, in fact, of the company existing at the commencement of 
 the winding-up may be proved, and not merely debts due at the 
 commencement of the winding-up. See Macfarlane’s claim (1884), 
 17 Ch. D. 339 ; Re Printing Co. (1878), 8 Ch. D. 538 ; Re Albion 
 Steel Co. (1877), 7 Ch. D. 547. 
 
 In the case of an insolvent company where there are mutual debts 
 and credits, or mutual dealings between the company and any other 
 person, an account, as in bankruptcy, is to be made out, and the 
 balance only proved for. So held on sect. 10 of the Judicature Act, 
 1875; Mersey Steel Co. v. Naylor, 9 App. Cas. 434; Company Prece- 
 dents, Pt. II. p. 526. But this rule only applies where the cross- 
 claims are “commensurable.” See Eberle’s Hotel Co. v. Jonas, 18 
 Q,. B. D. 459 ; and Mid- Kent Fruit Factory, (1896) 1 Ch. 567 ; Auri- 
 ferous Properties , Limited (No. 1), (1898) 1 Ch. 691 ; Leeds and Hanley 
 Co., (1904) 2 Ch. 45. 
 
 Payment Pari Passu and Preferential Payments. 
 
 All debts due to unsecured creditors must be paid pari passu and 
 equally. Black <$f Co.’s case, L. E. 8 Ch. 262. Judgment creditors 
 have no priority. Re Leinster Contract Corp., (1903) 1 Ir. E. 517. 
 This is the general rule, but it has exceptions, and on it the legis- 
 lature has further engrafted provisions for priorities in certain cases. 
 Thus the Crown has a prerogative to be paid first and in full out of 
 the assets of a company which is being wound up. Re Oriental Bank, 
 28 C. D. 643; Exchange Bank v. Reg., 11 App. Cas. 157 ; Company 
 Precedents, Part II. p. 506. And by sect. 209, parochial and other 
 rates, the salary of any clerk or servant (for four months before 
 winding-up, not exceeding 50/.) and the wages of any labourer or 
 workman (for two months before winding-up, not exceeding 2 51.) of a 
 company are given priority even over debenture holders (sub- sect. (2) 
 of sect. 209), and are to be paid pari passu and in full out of the 
 
SECURED CREDITORS. 
 
 Ch. XLIII. 
 
 411 
 
 assets. A secretary of a company who devotes himself exclusively to 
 the business thereof may be a clerk or servant within the section 
 ( Cairney v. Back , (1906) 2 K. B. 246), or a director employed as editor 
 of a paper. Re Beeton Sf Co., Ltd., (1913) 2 Ch. 279. Not so a 
 managing director {Newspaper Proprietary Syndicate, (1900) 2 Ch. 
 349), nor the contributors to a paper. Re Beeton Sf Co., ubi sup. 
 See also G. H. Morrison & Co., Ltd. (1912), 106 L. T. 731 (chemist’s 
 assistant). Where the company is wound up by the Court after a 
 voluntary winding-up has commenced, the date for the purposes of 
 this section under sub-sect. (5) is the date of the commencement of 
 the voluntary liquidation. Re Havana Exploration Co., (1915) 
 W. N. 348. Another priority is given under the Savings Bank Act, 
 s. 10, and by the Workmen’s Compensation Act, 1897, s. 5, as to which 
 s eeRePethick, Dix & Co., (1914) W. N. 403. See also sect. 241 of the 
 Act of 1908 as to club funds. As to priorities between rates and costs, 
 see Corporation of Westminster v. Chapman , (1915) W. N. 378. 
 
 Secured Creditors. 
 
 A secured creditor is one who has some mortgage, charge or lien on 
 the company’s property. 
 
 An execution creditor who has seized before the commencement of a 
 winding-up is a secured creditor ( Re Printiny and Numerical Registering 
 Co., 8 C. D. 538) ; but not if he has merely delivered the writ of f. fa. 
 to the sheriff. Ex parte Nelson, 14 C. D. 45. 
 
 A solicitor who holds a lien on documents of a liquidating company 
 for his costs against the company is a secured creditor, and must 
 mention his lien in his proof. Re Safety Explosives, Limited, (1904) 
 1 Ch. 226. 
 
 A creditor who has obtained the appointment of a receiver of land 
 by way of equitable execution is also a secured creditor. Anglo-Italian 
 Bank v. Davies , 9 C. D. 275. 
 
 A landlord is not a secured creditor because he has a power of 
 distress ( Thomas v. Patent Lionite Co., 17 C. D. 257 ; Re Coal 
 Consumers' Association, 4 Ch. D. 629) ; nor is a creditor of a company 
 who has obtained a garnishee order nisi attaching a debt due to the 
 company but has not served it on the debtor before a winding-up. 
 Re Stanhope Silkstone Collieries Co., 11 C. D. 160. But the attach- 
 ment of a debt due to a company by the service of a garnishee order 
 nisi before the filing of a petition to wind up the company constitutes 
 the garnishor a secured creditor with priority over the liquidator. 
 National United Investment Corp., (1901) 1 Ch. 950. 
 
 A secured creditor has several alternatives : — 
 
 1 . He may rest on his security and not prove. 
 
 2. He may realise his security and prove for the deficiency. 
 
 Secured 
 
 creditors. 
 
412 
 
 WINDING-UP. 
 
 Procedure. 
 
 Costs. 
 
 3. He may value it and prove for the deficiency after deduction of 
 
 the assessed value, in which case the liquidator may redeem 
 at such assessed value. 
 
 4 . He may surrender his security and prove for the whole debt. 
 
 Bankruptcy Act, 1914, s. 7 (2), and Schedule II. Rules 10 
 to 18, made applicable to winding-up by Judicature Act, 1875, 
 s. 10 ; Re Withernsea Brick Works , 16 C. D. 337. 
 
 If a creditor values his security he cannot prove for more than the 
 balance, though the security realises less than his valuation. Williams 
 v. Hopkins, 18 C. D. 370. If he wilfully omits to mention his security 
 in his proof, he will not generally be allowed to amend. Safety 
 Explosives, (1904) 1 Ch. 226. 
 
 Interest. 
 
 When a company has been ordered to be wound up, the interest 
 upon debts which carry interest ceases to run from the date of the 
 winding-up order, unless the assets are enough to pay all debts in 
 full. Humber Ironworks Co. v. Warrant Finance Co., L. R. 4 Ch. 647 ; 
 Hughes ’ case, 13 Eq. 623; conf. Ex parte Ador, (1891) 2 Q. B. 
 574. 
 
 Rule 97 of the Winding-up Rules, 1909, specifies certain cases in 
 which interest may be proved for {post, p. 611). 
 
 If by the course of dealing between the company and the creditor 
 there is an implied contract to pay interest, the creditor is entitled to 
 interest on admitted debts down to the date of paying the final divi- 
 dend, provided there are surplus assets. Duncan Sf Co., (1905) 
 1 Ch. 307. 
 
 Mode of Proving.. 
 
 The Court fixes a certain day within which creditors of the company 
 are to prove their debts or claims. Companies Act, 1908, s. 169. A 
 debt may he proved by delivering or sending through the post in a 
 prepaid letter to the liquidator an affidavit in the statutory form veri- 
 fying the debt. Winding-up Rules, 1909, r. 89. A creditor may come 
 in and prove at any time before final distribution of the assets, but he 
 cannot disturb any dividend already paid. Re General Rolling Stock 
 Co., L. R. 7 Ch. 646 ; Hicks v. May, 13 C. D. 236. The liquidator 
 examines every proof tendered, and notifies the person tendering it 
 either that he admits it or rejects the proof in whole or in part, or 
 requires further evidence. Winding-up Rules, 1909, rr. 88 — 114. A 
 creditor is, by the Winding-up Rules, to hear the cost of proving his 
 debt unless the Court otherwise orders. A mortgagee cannot prove 
 for mortgagee’s costs on winding-up of the company which guaranteed 
 
STAYING PROCEEDINGS. 
 
 Ch. XLIII. 
 
 413 
 
 the mortgage. Law Guarantee Trust , 108 L. T. 830. As to a solicitor 
 proving for costs due before winding-up, and taxation of such costs in 
 the winding-up, see Re Palace Restaurants , Ltd., (1914) 1 Ch. 492. 
 
 See Company Precedents, Part II. p. 505. 
 
 Staying Proceedings. 
 
 “ The object of the winding-up provisions of the Companies Act, staying. 
 1862,” said Lindley, L. J., in Re Oak Pitts Colliery Co ., 21 C. D. 329, 
 
 “is to put all unsecured creditors upon an equality and to pay them pari 
 passu.” To accomplish this it was indispensable that proceedings 
 against the company by way of action, execution, distress or other 
 process should be suspended ; otherwise the winding-up would 
 resolve itself into a scramble for the assets. Accordingly, sects. 
 
 140, 142, and 211 of the Act give the Court jurisdiction in various 
 cases to restrain proceedings. Sect. 24 (5) of the Judicature Act, 
 
 1873, modified these provisions to some extent, for, having regard 
 to that section, no proceeding in the High Court can be restrained 
 by injunction, but this has not altered in substance the jurisdiction. 
 
 All that is necessary, where an action is pending against the 
 company in the High Court, is to apply to the particular branch 
 of the Court in which it is pending for an order to stay pro- 
 ceedings. See Re Artistic Colour Co. (1880), 14 Ch. D. 502; Re 
 General Service Co., (1891) 1 Ch. 496. As regards inferior Courts 
 injunctions can be granted. This is, generally speaking, only neces- 
 sary where a winding-up petition is pending. Sect. 140. Where a 
 winding-up order has been made, the combined effect of sects. 142 and 
 211 is that such order operates automatically as a stay of all actions, 
 executions, distresses, sequestrations, &c. against the company, subject 
 to the discretion of the Court to allow such actions, executions, &c. to 
 proceed notwithstanding the winding-up. Re Vron Colliery Co. (1882), 
 
 20 Ch. D. 446. Thus, a distress levied before winding-up will not be 
 restrained, even though it be for rent in advance. VennePs Electrical 
 Appliances v. Thorpe , (1915) 2 Ch. 404. In this way creditors and 
 others are compelled to come in and prove their claims in the winding- 
 up, and a rateable and just distribution of the company’s assets is 
 effected. Re International Pulp Co. (1876), 3 Ch. D. 598. See further, 
 
 Company Precedents, Part II. p. 451 et seq. 
 
 Liberty to Proceed. 
 
 The power of the Court to allow actions and other proceedings to Liberty to 
 be brought, taken, or proceeded with, notwithstanding a winding-up proceed, 
 order (sect. 140 of the Act), is often exercised. Thus secured 
 creditors are, as a matter of course, given liberty to proceed with any 
 
414 
 
 WINDING-UP. 
 
 Wishes of 
 creditors and 
 contribu- 
 tories. 
 
 Misfeasance 
 and breach 
 •of trust. 
 
 action for enforcing their securities. Lloyd v. Lloyd Sf Co. (1877), 6 
 Ch. D. 339. So, too, liberty to proceed is often given where outsiders 
 are involved in some dispute with the company, and it is desirable that 
 the dispute should be decided in an action by the ordinary tribunals : 
 for instance, in the case of an action against the company for damages 
 under Lord Campbell’s Act, Re Thurso New Gas Co. (1889), 42 Ch. P. 
 491 ; or for specific performance, Thames Plate Glass Co. v. Land Co. 
 (1870), 11 Eq. 248; or for trespass, Wyley v. Exhall Coal Co ., 33 
 Beav. 538 ; or to proceed with an execution, where execution was 
 delayed by a trick, Armorduct Co. v. General Incandescent Co., (1911) 
 2 K. B. 143 (a voluntary liquidation) ; or to bring a new action for 
 the purpose of obtaining the fruits of an earlier action, National Pro- 
 vincial Insurance , 56 Sol. J. 290. McEwen v. London , Bombay and 
 Mediterranean Bank, 15 W. R. 245 ; Re Marine Investment Co., 17 
 L. T. 535 ; Re Strand Hotel Co., W. N. (1868) 2, are other examples. 
 The leave must not be given on an ex parte application. Western 
 Brazilian Telegraph Co. v. Bibby , 42 L. T. 821. Costs of unsuccessful 
 litigation by the liquidator are payable first out of the company’s 
 assets. Wenborn Sf Co., (1905) 1 Ch. 413; Re Pacific Coast Syndicate, 
 (1913) 2 Ch. 26. Proceedings against a company in liquidation may 
 be transferred to the Chancery Division and assigned to the Company 
 Judge (W. U. Rule 42) even though other parties are concerned. 
 Pacaya Rubber Co., (1913) 1 Ch. 218. See further, Company Prece- 
 dents, Part II. pp. 657 et seq. 
 
 Wishes of Creditors and Contributories. 
 
 The Court may have regard to these. See sect. 145 (substituted 
 for sect. 91 of the Act of 1862) and also sect. 118; Re Western of 
 Canada Oil Co., 17 Eq. 5 ; Re Chapel House Colliery Co., 24 Ch. D. 
 259; West Hartlepool Colliery Co., 10 Ch. 618; Re Great Western 
 Forest of Dean Consumers Co., 31 Ch. D. 773; Re Langham Skating 
 Rink Co., 5 Ch. D. 669 ; In re Suburban Hotel Co., L. R. 2 Ch. App. 
 737, and p. 140 ; Company Precedents, Part II. p. 121. 
 
 Misfeasance and Breach of Trust. 
 
 Sect. 10 of the Act of 1890, which was substituted for sect. 165 of 
 the Act of 1862, is now in its turn replaced by sect. 215 of the Act. 
 It affords a summary mode of enforcing claims against- directors, 
 trustees, and other officers, and against promoters of companies, in 
 respect of any moneys or property of the company, or misfeasances 
 or breaches of trust. See supra, pp. 206 et seq., for a number of cases in 
 which such claims have been enforced. See also Company Precedents, 
 Part II. pp. 697 et seq. 
 
FRAUDULENT PREFERENCE. 
 
 Ch. XLIII. 
 
 416 
 
 Compromises. 
 
 Sect. 214 of the Act of 1908 is now substituted for sects. 159 and Compromises. 
 160 of the Act of 1862. Under these sections the Court has a wide 
 power of sanctioning compromises with creditors and contributories, 
 and this power is frequently exercised. As to compromises with creditors 
 under sect. 120 of the Act (substituted for sect. 2 of the Joint Stock 
 Companies Arrangement Act, 1870), see infra, Arrangements. See 
 Company Precedents, Pt. II. p. 978 et seq. 
 
 Fraudulent Preference. 
 
 Sect. 210 of the Act of 1908 (substituted for sect. 164 of the Act of Fraudulent 
 
 1862) in effect renders the provisions of the bankruptcy law for the aud undue 
 ' -*■ x «/ preference, 
 
 time being on this subject applicable to winding-up. Gallagher , Slater 
 
 and Mason’s case (1882), 30 W. B. 378. To found a case of fraudu- 
 lent preference, it must appear that the transaction took place within 
 three months of the commencement of the winding-up, and that the 
 dominant motive in the mind of the company, acting by its directors, 
 was to prefer the creditor. If the payment, &c. was made by the 
 directors with a view to shielding themselves from civil or criminal 
 proceedings, or to relieve a surety, this is not a fraudulent preference. 
 
 Re Blackpool Motor Car Co., (1901) 1 Ch. 77 ; Blackburn Sf Co., (1899) 
 
 2 Ch. 725; Re Stenotyper, Limited, 8 Mans. 203; Jackson v. Bassford, 
 
 (1906) 2 Ch. 467. 
 
 Where a compulsory order supersedes a voluntary winding-up, the 
 “ commencement of the winding-up ” is the date of the presentation of 
 petition, njt of the resolution to wind up. Russell Hunting Record 
 Co., (1910) 2 Ch. 78. 
 
 The provision in sect. 210 of the Act, as to the fraudulent preference 
 by an insolvent company, like the analogous provision in sect. 44 of 
 the Bankruptcy Act, 1914, is for the benefit of all the creditors of the 
 eompany, and cannot be invoked if the result of recovering the pro- 
 perty comprised in the fraudulent instrument will not be for the 
 benefit of the creditors at large, but only of one creditor or one class 
 of creditors, e.g., debenture holders. Willmott v. London Celluloid 
 Co., 34 C. D. 147 ; Lx parte Cooper, L. B. 10 Ch. 510. 
 
 Sect. 31 of the Bankruptcy Act, 1914 — the mutual debts and credits 
 section — will not prevent a transaction from being a fraudulent 
 preference if it would be so but for the section. Kent’ s case, 39 
 C. D. 266. See Company Precedents, Part II. pp. 719 — 721. 
 
 Prosecution of Directors and Promoters. 
 
 The Court has power under sect. 217 of the Act of 1908 (substituted Prosecution, 
 for sect. 166 of the Act of 1862), to direct a prosecution of delinquent 
 
416 
 
 WINDING-UP. 
 
 Adjusting 
 rights of con 
 tributories. 
 
 directors, managers, officers, or members of the company, and in a 
 proper case will do so. London and Globe Finance Corporation , (1903) 
 1 Ch. 728. 
 
 Adjusting Rights of Contributories. 
 
 Subject to the payment of the creditors and of the costs of winding- 
 " up, the assets in a winding-up are distributable amongst the members 
 or contributories in accordance with their rights and interests; and 
 for this purpose it must be borne in mind that the uncalled capital is 
 to be regarded as part of the assets. Bridgwater Navigation Co., 
 14 App. Cas. 525 ; Welton v. Saffery, (1897) A. C. 299. 
 
 What those rights and interests are is to be ascertained, as a rule, 
 from the memorandum and articles. 
 
 In the absence of any special provision the assets available for dis- 
 tribution amongst the members, if sufficient or more than sufficient 
 to pay off the whole of the paid-up capital, are to be applied first in 
 paying off such paid-up capital, and the balance is to be distributed 
 amongst the members or contributories in proportion to the nominal 
 amount of the share capital held by them ; but, if insufficient to do 
 this, then such assets are distributable in such manner that the loss 
 of capital which has been sustained may be thrown on the members in 
 proportion to the nominal capital held by them respectively. Maude's 
 case , 6 Ch. 51 ; Driffield Gas Light Co., (1898) 1 Ch. 451 ; Anglo- Con- 
 tinental Corporation of Western Australia , (1898) 1 Ch. 327. Prima 
 facie , preference shares are not entitled to any preference in winding-up. 
 London Indiarubber Co., 5 Eq. 518 ; Welton v. Saffery , supra ; and supra, 
 p. 85. Where shares are unequally paid up, a call to equalize must, 
 unless the articles otherwise provide, be made: Maude's case , supra; 
 and on the same principle, where shares have been issued at a discount, 
 the amount credited by way of discount is to be treated as so much 
 uncalled capital, and the rights are to be adjusted accordingly. Welton 
 v. Saffery , supra. Sometimes the memorandum or articles contain ex- 
 press provisions as to the distribution of assets in winding-up, e.g ., 
 provide that the preference shares shall rank first, sometimes that the 
 ordinary shares shall take the whole of the surplus. In default of any 
 such special provisions the surplus is distributable among both classes 
 of shareholders in proportion to the nominal amount of the shares 
 held by them. Bridgwater Navigation Co., supra, p. 85 ; Re Odessa 
 Waterworks Co., W. N. (1897) 166 ; Re Mutoscope and Biograph Syndi- 
 cate, (1899) 1 Ch. 896; Crichton's Co., (1902) 2 Ch. 86. “Surplus 
 assets” in articles has no technical meaning. Re New Transvaal Co., 
 (1896) 2 Ch. 750. It may mean the fund remaining in the hands of 
 the liquidator after all claims of outside creditors and costs of winding- 
 
ADJUSTING RIGHTS OF CONTRIBUTORIES. Ch. XLIII. 
 
 417 
 
 up have been met [Crichton' s Oil Co ., (1902) 2 Ch. 86), or it may mean 
 what remains after payment also of the capital paid up on all classes 
 of shares. Ramel Syndicate , Ltd., (1911) 1 Ch. 749. The meaning 
 must in each case be determined by the context. 
 
 Where the liquidator proves for calls in the bankruptcy of a 
 shareholder, that does not make the shares paid-up for the purpose 
 of participating in surplus assets. West Coast Goldfields , (1906) 
 1 Ch. 1. 
 
 As to capital paid up in advance of calls, and interest thereon, see 
 Wakefield Rolling Stock Co ., (1892) 3 Ch. 165. 
 
 See further, Company Precedents, Pt. II. p. 597 et seq. 
 
 Release of Liquidator. 
 
 This is provided for in sect. 157 of the Act of 1908, and Winding-up 
 Rules, 1909, r. 197. 
 
 See Company Precedents, Pt. II. p. 783. 
 
 Unclaimed Dividends. 
 
 Sect. 224 of the Act makes special provision as to these. If un- 
 claimed for more than six months, they have to be paid into the Bank 
 of England to the Companies Liquidation Account. The liquidators 
 are bound to furnish accounts to the Board of Trade, and there are 
 stringent provisions for enforcing payment. See Company Precedents, 
 Part II. p. 348 et seq. ; and In re Land Mortgage Bank of Florida, 
 (1898) 1 Ch. 444. See infra. 
 
 Staying Winding-up Proceedings. 
 
 Sect. 144 of the Act gives the Court a discretion to stay the pro- 
 ceedings under a winding-up order. In exercising this discretion the 
 Court will be guided by the analogy of bankruptcy in rescinding a 
 receiving order — that is to say, it will consider the interests of com- 
 mercial morality and not merely the wishes of creditors, and will 
 refuse a stay if there is evidence of misfeasance or of irregularities 
 demanding investigation. Re Telescriptor Syndicate , (1903) 2 Ch. 174. 
 
 Dissolution of the Company. 
 
 When the affairs of the company have been completely wound up, 
 the Court is, by sect. 172 of the Act, to make an order that the com- 
 pany be dissolved from the date of such order, and the company is 
 dissolved accordingly. Notice of the order is to be communicated by 
 the liquidator to the Registrar, and the Registrar is to make a minute 
 of the order. 
 
 i>. 27 
 
 Release of 
 liquidator. 
 
 Unclaimed 
 
 dividends. 
 
 Staying 
 
 winding-up. 
 
 Dissolution 
 of company, 
 
418 
 
 WINDING-UP. 
 
 Under the old practice, it was the usual course, when a winding-up 
 was completed, to make an order for dissolution and for the destruc- 
 tion of the hooks, but, of late years, such orders have been less 
 commonly made. See Company Precedents, Pt. II. p. 792. 
 
 Upon dissolution the real assets revert to the donors or their heirs 
 (Co. Litt. 23 b), leases determine ( Hastings Corporation v. Letton , (1898) 
 1 K. B. 378), and personal assets vest in the Crown as bona vacantia. 
 Re Higginson , Ex parte Att.-Gen., (1899) 1 Q,. B. 329. But any trust 
 affecting the premises is not displaced. 
 
 As to obtaining a vesting order where a company which holds pro- 
 perty in trust is dissolved, see General Accident Co., (1904) 1 Ch. 147 ; 
 Taylor's Agreeme?it Trusts , (1904) 2 Ch. 737 ; Richard Mills Sf Co., 
 Smith v. The Co., W. N. (1905) 36 ; Bomore Road (No. 9), (1906) 
 1 Ch. 359. 
 
 The dissolution may be declared void within two years (sect. 223) ; 
 see Re Henderson’s Nigel, Ltd., (1911) W. N. 159 (undistributed assets, 
 the Crown not claiming them as bona vacantia). 
 
 A company some of whose shares were held by the dissolved company 
 was held to be “a person interested ” under the Act for the purpose 
 of enforcing a call on the shares. Re Spottiswoode, Dixon Sf Hunting, 
 Ltd., (1912) 1 Ch. 410. 
 
 Voluntary Winding-up. 
 
 Voluntary Of the companies which come to be wound up, by far the larger 
 
 winding-up. num t) er — about 90 per cent. — are wound up voluntarily; and this is in 
 accordance with the Companies Acts, which contemplate voluntary 
 winding-up as the normal mode of liquidation. Unregistered com- 
 panies cannot wind up voluntarily under the Act, but they can register 
 under Part VII. of the Act (Southall v. British Mutual , L. P. 6 Ch. 
 614), and then wind up voluntarily. The proceedings in a voluntary 
 winding-up are now subject to many statutory and official regulations 
 — as will be seen below — from which they were formerly exempt. 
 Voluntary winding-up is initiated by a resolution of the share- 
 holders. See sect. 182. This may be either a special resolution, 
 defined by sect. 69 of the Companies Act, 1908, requiring that 
 the company be wound up voluntarily, or an extraordinary reso- 
 lution to the effect that it has been proved to the satisfaction of the 
 shareholders that the company cannot, by reason of its liabilities, 
 continue its business, and that it is advisable to wind up the same. An 
 extraordinary resolution is a resolution passed at a single meeting by 
 the statutory majority as in sub- sect. (1) of sect. 69 of the Act 
 provided. Of these two the extraordinary resolution is the most con- 
 venient — as being the quickest — where the company is insolvent and 
 
VOLUNTARY WINDING-UP. 
 
 Ch. XLIII. 
 
 419 
 
 being pressed by creditors ; but it is inapplicable where the company 
 desires to wind up for reasons other than inability to carry on its 
 business by reason of its liabilities, v.y ., with a view to reconstruction ; 
 hence, in these cases the special resolution must be resorted to. In 
 either case the commencement of the winding-up dates from the 
 passing of the resolution. See sect. 183 of the Act. This, in the case 
 of a special resolution, is the date of the confirmatory resolution. 
 Sect. 69. Proper notices must be given, otherwise the resolution 
 will not be valid. Thus a resolution for voluntary winding-up is not 
 valid if passed at an extraordinary general meeting convened by the 
 secretary on his own initiative without the authority of the board of 
 directors. In re Haycraft Gold Reduction Co., (1900) 2 Ch. 230; Re 
 State of Wyoming Syndicate , (1901) 2 Ch. 431, supra , p. 164. As to 
 the proceedings at the meetings, see Company Precedents, Pt. II. 
 p. 835 et seq. The resolution, when passed, must be advertised in 
 the Gazette. See sect. 185 of the Act. 
 
 A resolution to wind up voluntarily is not necessarily invalid 
 because it is followed by other resolutions which are ultra vires. 
 Thomson v. Henderson Transvaal Estates , (1908) 1 Ch. 765. 
 
 After commencement of a voluntary winding-up the company is to 
 eease to carry on its business, except so far as may be required for the 
 beneficial winding-up thereof, but the corporate powers are to continue 
 until dissolution. Sect. 184. Notice of the passing of a resolution 
 to wind up voluntarily must be given by advertisement in the 
 Gazette. Sect. 185. The course of proceeding under a voluntary 
 winding-up is sketched in sect. 186 of the Act. A liquidator is to be 
 appointed, and with his appointment the directors’ powers are to 
 eease. He can be appointed as soon as the resolution for winding-up 
 has been passed even without notice. Bethell v. Trench Tubeless Co., 
 (1900) 1 Ch. 408. But the person so chosen as liquidator by the 
 shareholders is liable to be displaced or to have an additional 
 liquidator associated with him by a resolution of the creditors followed 
 by an application to the Court. See sect. 188 (2). See infra. 
 
 He must, within twenty-one days of his appointment, file with 
 the Registrar of Companies notice of his appointment in the form 
 prescribed by the Board of Trade. Sect. 187. See p. 499. 
 
 The liquidator may settle the list of contributories and make calls, 
 and the property of the company from that and other sources is to be 
 applied in satisfaction of the company’s liabilities pari passu, and 
 subject thereto is to be distributed among the members according to 
 their rights and interests in the company. The powers given to the 
 liquidator are very large. In addition to the other powers conferred 
 upon him by sect. 186, he may exercise — and without the sanction of 
 the Court— all the powers given by the Companies Act, 1908, s. 151, to a 
 
 27 ( 2 ) 
 
420 
 
 WINDING-UP. 
 
 liquidator in a winding-up by tbe Court. He can get an order for the 
 examination of directors and others under sect. 174, he can have 
 actions and executions against the company stayed ( Poole Firebrick Co ., 
 L. R. 17 Eq. 268 ; Currie v. Consolidated Kent Collieries Corporation , 
 (1906) 1 K. B. 134) ; he can get an order for delivery up of books and 
 papers in the hands of an auditor ( Findlay v. Waddell (1910), S. C. 
 670, Ct. Sess.), and he can take misfeasance proceedings under sect. 215 
 of the Act. He can sanction a transfer of shares after the date 
 of the winding-up. See sect. 205 of the Act ; Taylor , Phillips and 
 Rickards' cases , (1897) 1 Ch. 298. If he requires at any time the 
 advice or protection of the Court, he can apply for it under sect. 193 ; 
 and he constantly does so — usually by summons ( Wakefield Rolling 
 Stock Co ., (1892) 3 Ch. 165) — in such matters as borrowing, bringing 
 or defending actions, the making of calls, the taking of misfeasance 
 proceedings, compromises, adjusting the rights of contributories, 
 adjudicating on disputed claims, settling the list of contributories, 
 the payment of dividends, and many other like matters. Any con- 
 tributory or creditor or the liquidator may also apply under the section 
 to the Court. 
 
 The power for a creditor so to apply was first conferred by sect. 25 
 of the Act of 1900, and the power is preserved by sect. 193 of the 
 Act of 1908. 
 
 But no person other than the liquidator, a contributory or a creditor 
 has any locus standi under sect. 188 to make an application to the 
 Court in a voluntary winding-up, e.g., to remove the liquidator and 
 appoint a new one. New de Kaap , Limited, (1908) 1 Ch. 589. 
 
 Sect. 188 of the Act contains special provisions for safeguarding the 
 rights of creditors under a voluntary winding-up. These provisions 
 were introduced by the Companies Act, 1907. The liquidator is, 
 within seven days of his appointment, to send notice by post to all 
 persons who appear to him to be creditors of the company that a 
 meeting of the creditors will be held on a date not less than fourteen 
 or more than twenty-one days from the appointment of the liquidator, 
 at a specified place and hour. He is also to advertise the meeting in 
 the Gazette and in two local newspapers. At this meeting the 
 creditors are to determine whether an application shall be made to the 
 Court for the appointment of a liquidator in the place of the share- 
 holders’ nominee or to act jointly with him, or for the appointment of 
 a committee of inspection, and if they decide on any of these things 
 the application may be made to the Court by any creditor nominated 
 by the meeting, and the Court is empowered to make the order or 
 such other order as may seem just, having regard to the interests of 
 the creditors and contributories. No appeal is to lie from the order, 
 and the Court is given complete discretion as to the costs of the appli- 
 cation. 
 
VOLUNTARY WINDING-UP. 
 
 Ch. XLIII. 
 
 421 
 
 These provisions may be said to be a statutory recognition of Liquidator ’ s 
 Pulsford v. Devenish ((1903) 2 Ch. 625), in which Farwell, J., strongly ^^ors 
 emphasized the duty of a liquidator in regard to the payment of credi- 
 tors of the company. New Zealand Joint Stock , 23 T. L. R. 238. 
 
 It is not enough for him, the learned judge held, to advertise 
 for creditors ; he must write to any creditors of whose existence he 
 knows, and who have not sent in claims, and ask them if they have 
 claims. If the liquidator fails to perform his statutory duty under 
 sect. 188, and the company is dissolved, so that the creditor loses his 
 remedy against it, the liquidator is personally liable to the creditor in 
 damages. This is not in conflict with Knowles v. Scott, (1891) 1 Ch. 
 
 717. There the company had not been dissolved. 
 
 All costs, charges and expenses properly incurred in the volun- 
 tary winding-up of a company, including the remuneration of the 
 liquidator, are, by sect. 196 of the Act, payable out of the assets 
 of the company in priority to all other claims ; but this does not give 
 priority over secured creditors of the company except so far as the 
 liquidator’s costs are costs of preservation or realization, of which the 
 secured creditor has had the benefit. Regent's Canal Ironworks Co., 
 
 Ex parte Grissell, 3 C. D. 411 ; conf. Anglo- Austrian Printing Union, 
 
 (1895) 2 Ch. 891. 
 
 The Court has power to stay a voluntary winding-up, so that the 
 company may resume business, and the power is often exercised, e.g., 
 upon any arrangement with creditors. S.S. Titian, 36 W. R. 347 ; 
 
 Hafna Mining Co., 84 L. T. N. S. 403. The Court has power also to 
 stay proceedings against the company after a voluntary winding-up 
 has commenced (sect. 140). Westbury v. Twigg, (1892) 1 Q. B. 77 ; 
 
 Armorduct Co. v. General Incandescent Co., (1911) 2 K. B. 143. 
 
 A voluntary liquidator is subject to sect. 224 of the Act (substituted 
 for sect. 15 of the Companies Winding-up Act, 1890), and if the 
 winding-up is not concluded within one year after its commencement, 
 must send to the Registrar of Joint Stock Companies a periodical 
 return of the state of the liquidation, and must pay in unclaimed or 
 undistributed balances in his hands for six months into the Companies 
 Liquidation Account at the Bank of England. Moreover, if a voluntary 
 winding-up is unduly protracted or is not being conducted with a due 
 regard to the interests of the creditors or contributories, the official 
 receiver may present a petition to have the company wound up by the 
 Court. See sect. 137 (2) of the Act. So, again, by sect. 197 of the Act, 
 the voluntary winding-up of a company is not to be a bar to the right 
 of any creditor of such company to have it wound up by the Court if 
 the Court is of opinion that the rights of such creditor will be pre- 
 judiced by a voluntary winding-up. Re New York Exchange Co., 
 
 39 C. D. 415; Re Russell, Cordner 8f Co., (1891) 3 Ch. 171 ; National 
 
422 
 
 WINDING-UP. 
 
 Co. for Distribution of Electricity , (1902) 2 Ch. 34; Bishop Sf Sons, 
 (1900) 2 Ch. 254; Lichtenstein , 23 T. L. R. 424; and p. 394, ante. 
 These are safeguards against any abuse of the voluntary system. 
 
 As soon as the liquidator has done his work and the affairs of the 
 company are fully wound up, the liquidator makes up an account 
 showing the manner in which the winding-up has been conducted and 
 the property of the company disposed of, and calls, by advertisement in 
 the Gazette one month previously, a general meeting of the com- 
 pany for the purpose of laying the accounts before the shareholders, 
 and giving them any explanation that may be required. A return is 
 made to the registrar by the liquidator of the meeting having been 
 held and the date of it, and on the expiration of three months from 
 the registration of the return the company is to be deemed to be 
 dissolved. (See sect. 195 of the Act.) But the Court is given power 
 by sect. 223, at any time within two years, on the application of the 
 liquidator or any person interested, to declare the dissolution void. 
 
 Winding-up under Supervision. 
 
 Winding-up When a resolution has been passed by a company to wind up 
 
 under super- voluntarily, the Court may — by sect. 199 of the Act — make an 
 order directing that the voluntary winding-up shall continue, 
 but subject to the supervision of the Court, and on such terms and 
 conditions as the Court thinks just. In making or refusing a super- 
 vision order the Court has regard, as in the case of a petition for a 
 compulsory order, to the wishes of creditors and contributories. 
 Sect. 145. Thus the Court will not make the order on a share- 
 
 holder’s petition against the wishes of a majority of the other 
 shareholders, but if the resolution was passed by the prepon- 
 derating influence of a shareholder whose conduct is impeached 
 ( Varieties , Limited , (1893) 2 Ch. 235; Medical Battery , (1894) 1 Ch. 
 444), or if the petition is supported by creditors, the case is different 
 (. Lonsdale Vale Ironstone Co., 16 W. R. 601); so, too, a supervision 
 order may be made where investigation is required and the assets are 
 large. Barnedls Banking Co., 14 W. R. 722. The fact that creditors 
 were enabled by a supervision order to apply to the Court was a good 
 reason at one time for making the order ; but since the Companies Act, 
 1900, s. 25 (for which sect. 193 of the Act of 1908 is substituted), 
 giving creditors power to apply to the Court in a purely voluntary 
 winding-up, this ground no longer exists. There are two other 
 grounds, however, on which a supervision order is still useful — 
 (i) it operates automatically as a stay of actions and other proceedings 
 against the company just as a winding-up order does (see sect. 142 
 of the Act) ; and (ii) it is competent to the Court on making a 
 
WINDING-UP UNDER SUPERVISION. Ch. XLIII. 
 
 423 
 
 supervision order to appoint an additional liquidator or liquidators to 
 act with the existing liquidator. See sect. 202. This is a valuable 
 power, because in a large number of cases in which a supervision 
 order is asked the cause is dissatisfaction on the part of either 
 shareholders or creditors with the appointment or conduct of the 
 acting liquidator. 
 
 In making a supervision order the Court commonly inserts as 
 conditions of the order (1) that the liquidator shall file with the 
 registrar a monthly — now a quarterly ( Horner Sf Co., 5 Manson, 
 
 355) report in writing as to the position and progress made with 
 the winding-up and with the realization of the assets, and as to any 
 other matters connected with the winding-up as the Court may 
 from time to time direct, and (2) that no bills of costs, charges, or 
 expenses, or special remuneration of any solicitor employed by the 
 liquidator, or any remuneration, charges, or expenses of such liquidator, 
 or of any manager, accountant, auctioneer, broker, or other person 
 are to be paid out of the assets of the company unless such costs, 
 charges, expenses, or remuneration have been taxed or allowed by the 
 registrar. See Civil Service Brewery Co., W. N. (1893) 5 ; 37 S. J. 
 
 194; Waterproof Materials Co., W. N. (1893) 18; 37 S. J. 231; 
 
 Pritchard, Offor Sf Co., W. N. (1893) 153; New Morgan Gold Mining 
 Co., 0093 of 1893, and Theatrical Trust , 00177 of 1893. 
 
 The taxed costs of the solicitor employed by the liquidator incurred 
 during the period down to the date of the supervision order must be 
 paid out of the assets before any remuneration due to the liquidator 
 up to that time. So also must any costs properly incurred after the 
 date of the order in getting in assets of the company or in work done 
 on the instructions of the liquidator. Sanitary Burial Association , 
 
 (1900) 2 Ch. 289. 
 
 Separate costs of the company and the liquidators will not be 
 allowed as a rule on the petition. 
 
 A supervision order does not affect the commencement of the 
 winding-up, which is still the date of the resolution. 
 
 » 
 
 Reconstruction. 
 
 A company at times finds itself embarrassed by something in its Reconstruc- 
 constitution prejudicial to the successful carrying on of its business. tion - 
 It may have started with too restricted an objects clause in its 
 memorandum of association, and the desired extension may not fall 
 within the scope of relief afforded by sect. 9 of the Act, or, being 
 at an end of its financial resources, it may be necessary to provide 
 further capital to work the undertaking. In these and other cases it is 
 common for the company to reconstruct. There are, roughly speaking, 
 
424 
 
 WINDING-UP. 
 
 three ways of doing this : (1) By a sale and transfer of assets under 
 sect. 192 of the Act (substituted for sect. 161 of the Act of 1862). 
 (2) By a sale under the memorandum, followed by a winding-up. 
 See Company Precedents, Part I., p. 1431 et seq. (3) By proceedings 
 under sect. 120 of the Act (substituted for sect. 2 of the Joint Stock 
 Companies Arrangement Act, 1870). 
 
 Where the reconstruction is to be under sect. 192 of the Act a 
 special resolution should be passed that it is desirable to reconstruct, 
 that the company accordingly be wound up voluntarily, appointing 
 liquidators, and authorizing them, under sect. 192, to transfer the 
 undertaking to a new company on the terms of a specified draft 
 agreement in consideration — say — of paid-up, or partly paid-up, shares 
 in the new company, to be distributed amongst the members of the 
 old company or those who elect to take them. The sale must be to a 
 company ( Bird v. Bird's Patent Sewage (1874), L. P. 9 Ch. 358), or an 
 agent for a proposed company ( Re Hester <$f Co. (1874), 44 L. J. Ch. 
 757), not to an individual. The distribution is worked out in the 
 subsequent winding-up. 
 
 Subject to certain exceptions, any member may, under the section, 
 dissent from the sale and claim payment in cash of the value of his 
 interest. If this value cannot be agreed, it must be assessed by arbi- 
 tration. Sect. 192 ; Mysore Gold Co., 42 Ch. D. 535. A dissentient 
 member will not be given liberty to examine the officers of the company 
 under sect. 174 (replacing sect. 115, Companies Act, 1862), with a view 
 to obtaining evidence to enhance the value of his interest. British 
 Building Stone Co., (1908) 2 Ch. 450. The notice of dissent must 
 expressly give the liquidator notice either to abstain from carrying 
 the resolution into effect or to purchase the dissentient member’s 
 interest. Union Bank of King ston-upon- Hull, 13 Ch. D. 808, 810; 
 Be Demerara Rubber Co., (1913) 1 Ch. 331. The liquidator may, 
 however, waive technical informalities, such as incorrect service of the 
 notice of dissent. Brailey v. Rhodesia Consolidated, (1910) 2 Ch. 95. 
 The executors of a deceased member may exercise the right of dissent. 
 Llewellyn v. Kasintoe Rubber Estates, (1914) 2 Ch. 670. 
 
 Under sect. 162 of the Act of 1862, a sale could be made to a 
 foreign company (Ex parte Fox, L. R. 6 Ch. 176) : not so under sect. 
 192, for by sect. 285 “company” is defined so as not to include a 
 foreign company. Thomas v. United Butter Companies of France, 
 (1909) 2 Ch. 484. 
 
 It seems that a clause in the articles negativing the right of a 
 member to dissent is not valid. Paynev. The Cork Co., (1900) 1 Ch. 308 ; 
 Re Baring Gould Sf Sharpington, Sf'c. Syndicate, (1899) 2 Ch. 80, sed qu. 
 
 If the company proceeds under sect. 192, members who do not assent 
 or dissent may get nothing. Higg's case, 2 H. &M. 657. It is no objec- 
 
RECONSTRUCTION. 
 
 Ch. XLIII. 
 
 425 
 
 tion that the sale is to be for shares with liability on them — that is, for 
 partly paid-up shares. See Re City and County , 8fc. Investment Co., 13 
 Ch. D. 475 ; Postlethwaite v. Port Phillip Co., 43 C. D. 452. The notice 
 convening the meetings must show that the proceeding is under 
 sect. 192. The agreement may limit the time within which the 
 members must come in and claim their shares in the new company ; 
 if no time is fixed they have only a reasonable time to exercise 
 their option. Postlethwaite v. Port Phillip Co., supra; Burdett-Coutts 
 v. True Blue, (1899) 2 Ch. 616. A general meeting can only decide 
 on the nature of the consideration to be accepted from the new com- 
 pany. It cannot (unless the regulations of the old company so 
 provide) direct a distribution of the consideration, e.g., the shares, &c. 
 in the new company, otherwise than in accordance with the rights of 
 the contributories of the old company. Griffiths v. Paget (1876), 
 
 5 C. D. 894. To effect this it is necessary to take proceedings under 
 sect. 120 of the Act. A reconstruction agreement may provide com- 
 pensation for outgoing directors, but the notice of the meetings must 
 disclose same. Kayev. Croydon Tramways , (1898) 1 Ch. 358; Tiessen 
 v. Henderson, { 1899) 1 Ch. 861 ; Southall v. British Mutual, Sfc. Soc., 
 
 6 Ch. 614. 
 
 Amalgamation. 
 
 Where two or more companies desire to unite their undertakings, 
 the operation is commonly carried out under sect. 193 of the Act. 
 In some cases the amalgamation is effected by the registration of 
 a new company which takes over the several undertakings of the 
 existing companies; in other cases, one of the existing companies 
 takes over the undertaking or undertakings of the other concerns, but 
 to do this it must be expressly authorized by the company’s constitu- 
 tion, for it is not within the ordinary scope of a company’s objects to 
 purchase the goodwill of another. Ernest v. Nicholls (1857), 6 H. L. C. 
 414. See, further, as to the distinction between reconstruction and 
 amalgamation, and the procedure, Company Precedents, Part I. 
 p. 1481 et seq. 
 
 Reconstruction and Amalgamation by Sale under 
 a Power in the Memorandum. 
 
 Another mode of effecting a reconstruction or amalgamation has 
 been frequently adopted with success during the last twenty years, 
 viz. : — 
 
 (1.) To sell the company’s undertaking under a power {supra, 
 p. 66) in its memorandum of association for paid-up shares 
 
 Amalgama- 
 
 tion. 
 
 Reconstruc- 
 tion and 
 amalgama- 
 tion by sale 
 under power 
 in memo- 
 randum of 
 association. 
 
426 
 
 WINDING-UP. 
 
 in a new company to be allotted to the selling company or its 
 nominees ; 
 
 (2.) Subsequently to resolve on a voluntary winding-up, and pur- 
 suant to a power in the articles, to authorize the liquidator-, 
 after paying or providing for the debts and liabilities, to 
 distribute the surplus proceeds of sale, namely, the shares 
 amongst the members of the company according to their 
 rights and interests. 
 
 This mode was, in many cases, found preferable to proceeding under 
 sect. 161 of the Act of 1862 (sect. 192, 1908); for example, in cases 
 in which it was desired to reconstruct conditionally on the new com- 
 pany finding further capital by the issue of shares or debentures, or 
 conditionally on the selling company coming to some specified arrange- 
 ment with its debenture holders. In such cases the agreement for 
 sale reserved power to rescind if the condition was not fulfilled within 
 a specified time, and in case of rescission the selling company could 
 then continue its business; whereas, if it proceeded under sect. 161, that 
 would not have been feasible, for it would have passed into liquidation. 
 
 So, in the case of amalgamation, if several companies agreed to sell 
 their undertakings to a new company, or to one of the amalgamating 
 companies conditionally on the purchasing company placing further 
 capital or complying with some other condition. If the condition was 
 not fulfilled the agreements could be rescinded and the several com- 
 panies continue their business. 
 
 There was a further advantage in adopting this mode, in that it 
 enabled the company or companies to avoid the danger arising from 
 the provisions of sect. 161 in favour of dissentient members, for that 
 section has not uncommonly been used by dissentients for blackmailing 
 purposes. And the costs of an arbitration are in some cases capable 
 of being run up to a very large sum. In one case they amounted to 
 10,000/., or thereabouts. 
 
 There was ample authority for adopting this mode of reconstruction 
 or amalgamation. Thus, in Cotton v. The Imperial and Foreign Agency 
 and Investment Corporation , (1892) 3 Oh. 454, where this mode was 
 adopted, Ohitty, L. J. (then J.), refused an injunction to restrain the 
 company from acting on the agreement for sale to the new company, 
 holding that the agreement, made as it was under the power contained 
 in the company’s memorandum of association, was valid, notwith- 
 standing that it was made in contemplation of a voluntary winding-up 
 and distribution, and that the resolution for voluntary winding-up 
 and distribution in specie was passed shortly after the resolution 
 ratifying the agreement. His lordship did not decide that the pro- 
 posed distribution of the shares was valid, but there being power in 
 the articles to distribute in specie a distribution in exercise of the 
 
AMALGAMATION. 
 
 Ch. XLIII. 
 
 42 
 
 power was regarded with equanimity. So, too, in New Zealand , &c. 
 
 Co. v. Peacock , (18S4) 1 Q. B. 622, the validity of such a scheme came 
 into question. In that case the company, under a power in its 
 memorandum, agreed to sell its undertaking and a call to be made by 
 its directors, to a new company, and the sale was made in contempla- 
 tion of a voluntary winding-up and distribution. The call was made, 
 and afterwards the resolution for voluntary winding-up was passed. 
 
 In the action the liquidator sought to enforce payment of the call, and 
 it was objected that the call was made for the purposes of an ultra 
 vires scheme, and was therefore invalid ; but the Court of Appeal 
 l^Lindley, A. L. Smith, and Davey, L. JJ.) held that the scheme was 
 not ultra vires, and therefore that the call was not invalid. And these 
 decisions were followed in several other reported cases, and were 
 largely acted on. 
 
 In a recent case, however {Bisgood v. Hendersons , Sfc. Co., (1908) The Bisgood 
 1 Ch. 743, below referred to as the Bisgood case), a scheme of case - 
 reconstruction in its main features closely resembling that adopted 
 in Cotton v. The Imperial, Sfc. Corp., supra , has been held by the 
 Court of Appeal to be ultra vires on the ground or principle that 
 sect. 161 of the Act of 1862 by implication prohibits a company from 
 selling its undertaking for shares under a power in its memorandum — 
 where the sale is made at a time when a voluntary winding-up and 
 distribution of the shares is “ proposed.” In other words, the Court’s 
 view was that “ If the company is proposed to be wound up, and the 
 transaction is a sale and distribution, then .... the statute pro- 
 vides that sale by conversion into money may be replaced by exchange 
 for shares on the terms, but only upon the terms, of complying with 
 the provisions of sect. 161,” and as a corollary the Court held that 
 Cotton v. Imperial, &c. Corp., supra , was wrongly decided. 
 
 Serious doubts, however, exist whether the ground or principle of 
 the decision in the Bisgood case — namely, that the section is to be 
 treated as implying such a prohibition— is sound, although it may 
 be that the actual decision, looking to the special features of the case, 
 was correct. 
 
 The following are some of the principal objections which have been Objections 
 raised to the construction thus placed by the Court on sect. 161 of the to Bisgood 
 Companies Act, 1862, for which sect. 192 (in similar terms) of the Act etu *' 
 of 1908 is now substituted: — 
 
 In the first place it is objected that there is no sufficient reason 
 for implying the prohibition. The section is affirmative in its terms, 
 and (1) enables a liquidator who, in a voluntary winding-up, is selling 
 the undertaking to receive shares in another company in compensation 
 if he is authorized so to do by special resolution, and it also (2) enables 
 the company to give that authority to the liquidator by special resolu- 
 
428 
 
 WINDING-UP. 
 
 tion passed in the course of the winding-up or antecedently thereto. 
 And it is urged that there is nothing in the section or elsewhere in the 
 Act to indicate an intention on the part of the legislature to curtail or 
 derogate from the power of a company to sell under its memorandum 
 of association prior to the commencement of the winding-up. 
 
 It is conjectured that in treating the prohibition as implied by the 
 terms of sect. 161, the Court conceived that the implication was 
 justified by the well-known rule of construction recognized in 
 Chambers v. Manchester and Milford Railivay (5 B. & S. 588), and in 
 Baroness Wenlock v. River Dee Co. (10 App. Cas. 350) and other cases, 
 that where the legislature gives a company express power within certain 
 limits to do a specified thing, it is to be taken primd facie to impliedly 
 prohibit any transgression of the power so given. But applying that 
 rule to sect. 161, it is pointed out that the rule merely goes to prohibit 
 the liquidator of a company from selling for shares otherwise than 
 under the section, and to prohibit the company from authorizing its 
 liquidator , or proposed liquidator, to sell for shares in another com- 
 pany except under the section, and it is maintained that it is not 
 possible by applying the rule to spell out any intention to curtail the 
 powers of the company whilst a going concern. 
 
 It is also objected that, in arriving at the implication in question, the 
 Court seems to have overlooked sects. 131 and 133 of the Act of 1862 
 (replaced by sects. 184 and 186 of the Act of 1908), which have an im- 
 portant bearing on the construction of sect. 161 [192]. Under sect. 131, 
 there was an express provision that “in a voluntary winding-up the 
 company’s corporate state and all its corporate powers shall continue . . . 
 until the affairs of the company are wound up”; and under sect. 1 33 (5), 
 these corporate powers were to be exerciseable by the directors, with 
 the sanction of a general meeting or of the liquidators, so that where 
 a company has power under its memorandum to sell its undertaking 
 for shares in another company, that, being one of its corporate powers, 
 can be exercised in the course of a voluntary winding-up, with the 
 sanction of the company in general meeting or of the liquidators. And 
 such a sale would not be fettered in any way by sect. 161 [192], It 
 is an alternative power, and the fact that it is reserved is inconsistent 
 with the view of the Court of Appeal that the Act impliedly prohibits 
 in winding-up a sale for shares otherwise than under sect. 161. 
 
 Again, it is argued that it would have been easy for the legislature, 
 if so minded, to have inserted in sect. 161 [192] words to the effect 
 that “ except under or with reference to this section, no sale of the 
 company’s undertaking shall be made for shares or other interests in 
 any other company where a voluntary winding-up and distribution of 
 such shares is proposed.” 
 
 But the section observes a significant silence on this point, and what 
 
AMALGAMATION. 
 
 Ch. XLIII. 
 
 429 
 
 adds not a little to the force of this criticism is that it appears from 
 the context that where the legislature desired to invalidate transactions 
 entered into in contemplation of winding-up, it did so by express pro - 
 vision, e.g ., insect. 164 [210], where, by apt words, certain transactions 
 in contemplation of winding-up were invalidated. 
 
 Further, it is objected that to imply in sect. 161 the prohibition 
 relied on by the Court of Appeal is to disregard the principle recog- 
 nized and emphasized by the House of Lords in Salomon v. Salomon 
 Co., (1897) A. C. 22. In that case the Court of Appeal held that 
 the Act of 1862 impliedly contained provisions and conditions not 
 expressed in it, but the House of Lords reversed the decision, holding 
 that there was nothing to justify the implication, and that the Act of 
 1862 was to be taken as it stood, and that it was not for the Court to 
 supplement it by implied prohibitions and conditions. See supra , p. 57. 
 
 It is also objected that the principle of the Bisgood case is 
 inconsistent with the decision of the Court of Appeal in New Zealand , 
 &c. Co. v. Peacock, (1894) 1 Q. B. 622, above referred to (p. 427, supra), 
 and that the Court of Appeal in 1907 had no power to overrule that 
 decision of the Court of Appeal in 1894. 
 
 It is also objected that inasmuch as the decisions in Cotton v. The 
 Imperial, Sfc. Co. and in New Zealand, Sfc. Co. v. Peacock were of con- 
 siderable standing, and had been acted on in hundreds of cases by 
 thousands of people, they should not have been disturbed — the 
 principle stare decisis should have been acted on by the Court, and to 
 depart from that principle was mischievous. 
 
 It is also pointed out that the Court of Appeal misapprehended the 
 decision in Cotton v. The Imperial, &c. Co., for it represents Chitty, J., 
 to have decided in that case, that “under clauses in the memorandum 
 of association the company might sell its whole undertaking . . . and 
 might under the authority of special resolutions divide the proceeds of 
 sale amongst the members without the safeguard provided by sect. 
 161 ” ; whereas, in truth, all that the judge decided was that the sale 
 under the memorandum for shares was valid. 
 
 Nor, it is pointed out, do the decisions relied on by the Court 
 of Appeal in the Bisgood case justify the construction placed by 
 the Court on sect. 161. Thus, to take them in order, Welton v. 
 Saffery, (1897) A. C. 299, on which the Court placed great reliance, 
 when examined has in reality no application. It merely decided that 
 where the Act of 1862 expressly or impliedly prohibits a thing, such 
 as the issue of shares at a discount, the thing is ultra vires for all pur- 
 poses, and cannot be treated as binding on the members inter se in a 
 winding-up, even after the creditors have been paid off. The decision, 
 therefore, does not in any way show that Cotton v. The Imperial, tyc. 
 
430 
 
 WINDING-UP. 
 
 Arrange- 
 
 ments. 
 
 Corporation was wrongly decided, or that the implication made by the 
 Court of Appeal is justified. 
 
 So, too, Peveril Gold Mines , (1898) 1 Ch. 122, merely shows that a 
 company cannot by any provision in its articles deprive its members of 
 the right to petition for a winding-up of the company, and Re Baring- 
 Gould and Sharping ton Syndicate , (1899) 2 Ch. 80, and Payne v. Cork 
 Co., (1900) 1 Ch. 308, merely decided that where proceedings are taken 
 under sect. 161 the whole section must have effect, and therefore dis- 
 sentients cannot be deprived of their rights under the section by virtue 
 of a clause in the articles. 
 
 Taken together, the above objections to the principle on which the 
 Bisgood case was decided constitute, it must be admitted, a serious 
 impeachment of that principle. The Court, in its solicitude to prevent 
 what it called “iniquitous cases of reconstruction” — that is, cases in 
 which people were, in effect, obliged to elect whether they would take 
 partly paid shares or have them sold at perhaps a low price — seems to 
 have strained the construction of the Act. This is the more to be 
 regretted, because the decision might have been put on other grounds, 
 and because reconstruction schemes on the lines in effect sanctioned 
 in Cotton v. The Imperial, Sfc. Corporation have not at all been confined 
 to iniquitous cases. Large numbers of them have been of a perfectly 
 fair and bond Jide character, and have been carried through with entire 
 success. 
 
 It is to be hoped, therefore, that the principle of the Bisgood 
 decision will before long be re-considered by a higher tribunal. In 
 the meantime this decision has been followed and applied in Etheridge 
 v. Central Uruguay Railway, (1913) 1 Ch. 425. 
 
 Arrangements. 
 
 Companies, like individuals, find it necessary sometimes to make an 
 arrangement with their creditors. Such an arrangement with creditors, 
 in the case of a company, is commonly effected under sect. 120 of 
 the Act. See Appendix. The machinery of the Act is available 
 where there is, and also where there is not a winding-up in progress. 
 The course of proceeding is to apply to the Court by summons 
 in the first instance, to direct meetings of the different classes of 
 creditors (which includes debenture holders : Re Alabama , 8fc. Co ., 
 (1891) 1 Ch. (C. A.) 213; Slater v. Darlaston Steel Co., W. N (1877) 
 165), and of the members or contributories, to be held to consider 
 the proposed scheme of arrangement. The Court usually makes an 
 order for this purpose, appoints a chairman of the meetings, and 
 directs them to be convened by circular or advertisement. The resolu- 
 tion of the meeting is required to be passed by a three-fourths majority 
 
ARRANGEMENTS. 
 
 Ch. XLIII. 
 
 431 
 
 in value of those who are present in person or by proxy. In voting, 
 debenture holders ty bearer must produce their debentures. Re Wedg- 
 wood Coal Co. (1877), 6 Ch. D. 627. The resolution having been 
 passed by the requisite majority, a petition is then presented to 
 the Court to sanction the scheme ; and, if approved, an order in due 
 course is made. Schemes of the most varied character are adopted. 
 The commonest form of scheme is that a new company shall be 
 formed ; that the debenture holders of the existing company shall take 
 in exchange debentures or preference shares of the new company ; 
 that the unsecured creditors of the existing company shall take a 
 composition of so much in the pound payable partly in cash and 
 partly in shares, or partly in debentures ; and that the shareholders 
 shall receive shares in the new company with a liability attached. 
 Any scheme which is fair and reasonable, and made in good faith, 
 will be sanctioned. Re Alabama , Sfc. Co., (1891) 1 Ch. (C. A. N 213. 
 It is now settled that there is no objection to a scheme by which 
 debenture holders are to accept fully paid shares in satisfaction of 
 their debts, and the Court will under such a scheme compel dissentient 
 debenture holders to surrender their securities. Empire Co. (1890), 
 44 Ch. D. 402 ; and see Alabama Co., supra, and Re Dominion of 
 Canada Freehold Estate Co. (1886), 58 L. T. 347. Not uncommonly 
 the scheme provides that debenture holders of the existing company 
 shall grant an extension of time for payment, say, five or ten years, 
 and that creditors shall accept some composition, or, perhaps, second 
 debentures or shares, and that the winding-up shall be stayed, and 
 that the company shall resume business. This avoids the necessity 
 for a new company. For examples of other schemes, see Company 
 Precedents, Pt. II. pp. 997 et seq. 
 
 Sect. 120 of the Act of 1908 in effect re-enacts the Act of 1870, 
 with the extension introduced by sect. 24 of the Act of 1900 so as to 
 apply to an arrangement between the company and the members 
 thereof or any class thereof, and so as to make the section available 
 without a winding-up. 
 
 Where an arrangement was combined with a reconstruction under 
 sect. 161 of the Act of 1862, it was held that it ought to provide for 
 payment out of dissentient members. Canning Jarrah Timber Co., 
 (1900) 1 Ch. 708. And where there was in fact no arrangement with 
 creditors, but a scheme for the sale of the whole of the company’s 
 undertaking to a new company, without any provisions for dealing 
 with dissentient shareholders, the Court has declined to approve the 
 scheme. Re General Motor Cab Co., (1913) 1 Ch. 377. A reconstruc- 
 tion can, however, be carried out by this method where proper provision 
 is made for dissentient members. Re Sandwell Park Colliery Co., 
 (1914) 1 Ch. 589. And a bond fide arrangement with creditors may in 
 
432 
 
 WINDING-UP. 
 
 a proper case be sanctioned by the Court without giving to dissentient 
 members (by analogy to sect. 192 of the Act) the right to payment 
 oat of the value of their interests. Standard Exploration Co ., Buckley, J., 
 21st March, 1903 ; Sorsbie v. Tea Corporation , (1904) 1 Ch. 12 ; 
 Company Precedents, Part II., p. 997 et seq. 
 
 Proceedings in an English Court under the Joint Stock Companies 
 Arrangement Act, 1870, or under sect. 120 of the Act of 1908, or the 
 Companies Acts generally, cannot be pleaded in a colony as a defence 
 to an action by a colonial creditor, those Acts not extending to the 
 colonies or being intended to bind them. New Zealand Loan and 
 Mercantile Agency Co ., 67 L. J. P. C. 10 ; 77 L. T. 603 ; 46 W. B. 239. 
 
 Where a scheme of arrangement is proposed in regard to a company 
 not being wound up, the Court has no jurisdiction to restrain actions 
 and proceedings against the company. Booth v. Walkden Spinning 
 Co ., (1909) 2 K. B. 368. This is a defect in the Act. See contra, the 
 Eailway Companies Act, 1867, sect. 9, which provides whilst the 
 scheme is pending no execution shall be available without the leave of 
 the Court. 
 
 As to the form of proxy to be used, see form approved by Swinfen 
 Eady, J., W. N. (1910) 154. And as to separate class meetings, see 
 United Provident Assurance Co., (1910) 2 Ch. 477. 
 
 A creditor who did not put forward a claim at the time of the deed 
 of arrangement may be allowed to prove under it. Curtis v. B. U. R. T. 
 Co., Ltd., 28 T. L. E. 585. 
 
Ch. XLIV. 
 
 433 
 
 CHAPTER XLIY. 
 
 PENSIONS AND GRATUITIES. 
 
 The question whether it is within the powers of a company under Pensions and 
 the Act of 1908 to grant a pension or gratuity to an employee or ex- & ratui ties. 
 employee, or to his dependants, or to give a gratuity to its workmen 
 and others, not uncommonly arises for consideration. Sometimes the 
 company’s memorandum contains an express sanction for these objects, 
 e,y., it gives power to the company “ to establish and support, or aid in 
 the establishment and support, of associations, institutions, funds, 
 trusts, schemes and conveniences calculated to benefit employees or 
 ex- employees of the company or its predecessors in business, or the 
 dependants or connections of such persons, and to grant pensions and 
 allowances, and to make payments towards insurance, and to subscribe 
 and guarantee money for charitable or benevolent objects, or for any 
 exhibitions, or for any public, general, or useful object.” Such pro- 
 vision puts the company’s power in regard to the matters specified 
 beyond all question. 
 
 But apart from such an express sanction, a company may have, as Implied 
 incidental to its business, an implied power which will cover a part at P owers - 
 least of the ground. This was well pointed out by Bowen, L. J., in 
 Hutton v. West Cork Rail. Co ., 23 C. D. 672, where a company 
 had voted a gratuity to its directors: “You cannot say that 
 
 the company has only got power to spend the money which it is 
 bound to pay according to law ; otherwise the wheels of business 
 would stop. Nor can you say that directors, who have got all the 
 powers of the company given to them . . . are always to be limited 
 to the strictest possible view of what the obligations of the company 
 are. They are not to keep their pockets buttoned up unless they are 
 liable in a way which could be enforced at law or in equity. Most 
 businesses require liberal dealings. The test there again is not 
 whether it is bond fide, but whether as well as being bond fide it is 
 done within the ordinary scope of the company’s business, and whether 
 it is reasonably incidental to the carrying on of the company’s business 
 for the company’s benefit.” It was on this principle that Sir George 
 Jesse], M. R., in Hampson v. Price's Patent Candle Co., 24 W. R. 754, 
 
 p , 28 
 
434 
 
 PENSIONS AND GRATUITIES. 
 
 held that “a company might lawfully expend a week’s wages as 
 gratuities for its servants, because that sort of liberal dealing with 
 servants eases the relation between masters and servants, and is in the 
 end a benefit to the company.” So also in Henderson v. Bank of 
 Australia, it was held to be within the powers of a banking company 
 to give the family of a deceased manager a pension for a term of 
 years. See also Cyclists' Touring Club v. Hopkinson, (1910) 1 Ch. 179, 
 which shows that the principle is not confined to trading companies. 
 In any case the power of paying gratuities stops on the commencement 
 of a winding-up, for it is a power incidental to the carrying on of the 
 company’s business as a going concern. Hutton v. West Cork Rail. Co.. 
 23 0. D. 654 ; Stroud v. Royal Aquarium , W. N. (1903) 146 ; 89 L. T. 
 243. 
 
 A subscription for outside purposes, e.g., a subscription to the 
 Imperial Institute ( Tomkinson v. S. E. Rail. Co., 56 L. T. 813) stands 
 on a very different footing. It may be shown to be for the benefit of 
 the company, but in the absence of express authority it is not a form 
 of expenditure easy for directors to justify. 
 
CHAPTER XLY. 
 
 POWERS OF ATTORNEY. 
 
 The directors of a company sometimes have occasion to affix the 
 common seal of the company to a document (commonly called a power 
 of attorney) authorizing some person or persons on the company’s 
 behalf to execute or do some deed, instrument or thing, whether in 
 the United Kingdom or abroad. 
 
 Sect. 78 of the Act of 1908 runs as follows : — 
 
 S. 78. A company may by writing under its common seal empower any person, 
 either generally or in respect of any specified matters, as its attorney to execute 
 deeds on its behalf in any place not situate in the United Kingdom, and every deed 
 signed by such attorney on behalf of the company and under his seal shall bind the 
 company and have the same effect as if it were under its common seal. 
 
 Besides this, sect. 79 enables a company whose objects require or 
 comprise the transaction of business in foreign countries, to have an 
 official seal for use abroad if its articles authorize it. See infra. And 
 the articles very commonly contain more or less elaborate provisions 
 as to local management. See Company Precedents, Part I., p. 756. 
 Moreover, it is well to bear in mind sects. 46, 47 and 48 of the 
 Conveyancing and Law of Property Act, 1881. Under these the donee 
 of a power of attorney can execute and do any assurance, instrument 
 or thing in and with his own name and signature, and under his own 
 seal where sealing is required by the authority of the donor of the 
 power, and protect persons acting thereunder and allow of the deposit 
 of the original instrument in the High Court, and sects. 8 and 9 of the 
 Conveyancing Act, 1882, enable the power of attorney for valuable 
 consideration to be made irrevocable, and enable the power of attorney, 
 whether for value or not, to be made irrevocable for a fixed time. 
 
 Powers of attorney are strictly construed, as, for example, power of 
 attorney to act prior to the happening of some contingency may render 
 it necessary to prove that such contingency has not happened ( Danby 
 v. Coutis, 29 C. D. 500) ; and so the operation of a power of attorney 
 may be cut down with reference to what appears to have been the 
 
 28 (2) 
 
 Powers of 
 attorney. 
 
 Sect. 78 of 
 Act of 1908. 
 
 Strict 
 
 construction. 
 
436 
 
 POWERS OF ATTORNEY. 
 
 Put ou 
 inquiry. 
 
 Illegitimate 
 
 profits. 
 
 purpose for which it was executed. Attwood v. Munnings , 7 B. & C. 
 278 ; Jonmenjoy v. Watson , 9 A. C. 561 ; Jacobs v. Morris , (1902) 1 Ch. 
 816 ; Hambro v. Burnand, (1904) 2 K. B. 14. 
 
 Primd facie those who deal with a person acting under, or purport- 
 ing to act under, a power of attorney, are bound to inquire into the 
 authenticity of the power. De Bouchont v. Goldsmid, 5 Yes. 213, per 
 Lord Eldon; Sheffield v. London Joint Stock Bank , 13 A. C. 333; 
 Bryant v. Banque du Peuple , (1893) A. 0. 170. Where the agent is 
 acting under a written authority, and what he does comes within the 
 terms of that authority, the principal cannot repudiate on the ground 
 that the agent acted in his own interests and not in those of the 
 principal, unless the other party was aware of the facts. Hambro v. 
 Burnand, (1904) 2 K. B. 10. And where the agent has powers exer- 
 cisable in special circumstances, it seems that a person dealing with 
 him bond fide need not inquire whether those special circumstances 
 have arisen. Montaignac v. Shitta, 15 A. C. 357. An attorney is an 
 agent, and therefore subject to the well-settled rule that an agent 
 cannot appropriate any illegitimate profit. (Parker v. McKenna, 10 Ch. 
 96 ; Bray v. Ford , (1896) A. C. 44’: and as to sub-agents, Powell v. 
 Jones , (1905) 1 K. B. 11. Under the Stamp Act, 1891, a power of 
 attorney generally requires a 10s. stamp. 
 
Ch. XLVI. 
 
 437 
 
 CHAPTER- XLYI. 
 
 FOREIGN COMPANIES. 
 
 Section 274 of the Act (replacing sect. 35 of the Act of 1907) imposes 
 certain requirements on companies incorporated outside the United 
 Kingdom, which, on 1st July, 1908, has a place of business in the 
 United Kingdom or afterwards establishes such a place of business. 
 Such companies are required to file with the Registrar of Companies 
 
 (a) a certified copy of the charter, statutes, or memorandum and 
 
 articles creating the corporation and defining its constitution ; 
 
 (b) a list of the directors of the company ; 
 
 (c) the names and addresses of some one or more persons resident in 
 
 the United Kingdom authorized to accept service of process 
 and notices on behalf of the company. 
 
 In case of any alterations in any of these, notice of the alteration 
 must be filed with the registrar (1). 
 
 Service on the persons made agents for service under (c) is to be 
 sufficient (2). 
 
 Every such company must also file with the registrar an annual 
 statement, in the form of a balance sheet containing the particulars 
 required to be given in its annual summary by a company registered 
 in the United Kingdom with a share capital. 
 
 If the foreign company uses the word “Limited” as part of its 
 name the section makes further requirements. 
 
 (a) The company must, in every prospectus it issues inviting sub- 
 
 scriptions for its shares or debentures, state the country in 
 which it was incorporated. 
 
 (b) It must conspicuously exhibit in every place in the United 
 
 Kingdom where it carries on business the name of the 
 company and the country where it was incorporated. 
 
 (c) It must have the name of the company and of the country of its 
 
 incorporation mentioned in legible characters in all billheads 
 and letter paper, and in all notices, advertisements, and other 
 official publications of the company. 
 
 These are just and reasonable conditions, to which no honest foreign 
 trading company can fairly take exception; while to investors, or 
 persons having dealings with the foreign company in the United 
 Kingdom, they afford a much-desired information and protection. 
 
438 
 
 FOREIGN COMPANIES. 
 
 By sect. 275 of the Act, a company incorporated in a British 
 possession which has filed with the registrar the documents and 
 particulars specified in paragraphs (a), (b) and (c) of sub-sect. 1 of 
 sect. 275 is to have the same power to hold lands in the United 
 Kingdom as if it were a company incorporated under the Act. 
 
 A sale to a foreign company on reconstruction cannot be effected 
 under sect. 192 of the Act. Thomas v. United, Butter Cos., (1909) 
 2 Ch. 484. 
 
 Foreign or colonial companies having assets and liabilities in 
 England may be wound up by the Court in England. Re Mercantile 
 Bank of Australia, (1892) 2 Ch. 204. 
 
439 
 
 CHAPTEE XLYI1. 
 
 LEADING CASES. 
 
 It may be convenient here to bring together some of the leading cases Leading 
 in relation to companies under the Companies Acts. 
 
 1. — Andrews v. Gas Meter Co., (1897) 1 Ch. 361: which decided 
 that a company can, by taking the proper steps, create and issue 
 preference shares, although not authorized so to do by its memorandum 
 or by its articles as originally framed, and overruled Hutton v. Scar- 
 borough Cliff Hotel Co. (No. 2), 2 Dr. & Sm. 514. See supra, p. 83. 
 
 2. — Ashbury v. Watson (1885), 30 C. Div. 376 : which decided that 
 where the rights attached to several classes of shares are set out in the 
 memorandum of association they are unalterable. See supra , p. 88. 
 
 3. — Ashbury Railway Carriage and Iron Co. v. Riche (1874), L. E. 
 
 7 H. L. 671 : which decided that the powers of a company under the 
 Act of 1862 were limited by its objects. See supra , p. 61. 
 
 4. — Bahia and San Francisco Railway Co. (1868), L. E. 3 Q. B. 595 : 
 
 in which it was held that a company which issued a certificate of title 
 to shares might be estopped by persons acting thereon bond fide. See 
 other cases, supra, p. 143. 
 
 5. — Barnes, Ex parte, (1896) A. C. 146 : which decided that a public 
 examination of a person cannot be ordered under sect. 8 of the Com- 
 panies Winding-up Act, 1890, unless the official receiver has found 
 fraud against such person. See supra , p. 408. 
 
 6. — Barwick v. English Joint Stock Bank (1866), L. E. 2 Ex. 265 : 
 
 deciding that a company is answerable in an action of deceit for the 
 fraud of its directors in managing the affairs of the company to the 
 same extent as if the fraud were its own. See supra , p. 74, 
 
440 
 
 LEADING CASES. 
 
 7. — Bowes v. Hope Mutual Life Insurance Society (1865), 1 1 H. L. 0 
 
 402 : which decided that a creditor who cannot get paid is prima facie 
 entitled ex debito justitice to a winding-up order. See also Western of 
 Canada Co., 17 Eq. 1. See supra, p. 393. 
 
 8. — Bradford Banking Co. v. Briggs (1886), 12 App. Cas. 29 : 
 deciding that notice given to a company by an equitable mortgagee is 
 not notice of a trust which a company is prohibited from receiving by 
 sect. 30 of the Companies Act, 1862. See supra, p. 157. 
 
 9. — Re Bridgwater Navigation Co., Limited (1889), 14 App. Cas. 
 525 : which decided that where there were preference shares and 
 ordinary shares the holders of both classes were (subject to any pro- 
 vision to the contrary) entitled to share pari passu in the surplus assets 
 in the winding-up, after paying off the whole of the paid-up capital. 
 See supra, p. 85. 
 
 10. — British and American Trustee and Finance Corporation v. 
 Cooper, (1894) A. C. 399, and Poole v. National Bank of China, (1907) 
 A.C. 229, which decided that, under the Companies Acts, 1867 and 1877, 
 the Court had j urisdiction to sanction any kind of reduction whatsoever. 
 See supra, p. 93. 
 
 11. — British Equitable Life Assurance Co. v. Baily, (1906) A. C. 
 
 35 : which decided that a company may alter its articles so as to vary 
 a contract with an outsider, if the outsider has taken his contract 
 subject to the risk of the articles being altered. See supra, p. 49. 
 
 12. — Burkinshaw v. Nicolls (1877), 3 App. Cas. 1004 : which 
 decided that where a company issues a certificate to the effect that 
 certain shares were fully paid up, it may be estopped from denying 
 their being paid up as against anyone acting upon such certificate in 
 good faith. See also Bloomenthal v. Ford , (1897) A. C. 156 ; and 
 Balkis Co. v. Tompkinson, (1893) A. C. 396. See supra, p. 144. 
 
 13. — Davis v. Bank of England (1824), 2 Bing. 393: deciding that 
 a forged transfer of stock does not affect the title of the stockholder to 
 the stock and dividends on it. See supra, p. 135. 
 
 14. — Dovey v. Cory, (1901) A. C. 477 : deciding that a director is 
 entitled to rely on his subordinates doing their duty in the absence of 
 any ground for suspicion, and is not liable if, owing to the fraud or 
 neglect of such subordinates, the company sustains damage. See 
 supra, p. 202. 
 
LEADING CASES. 
 
 Ch. XLVII. 
 
 441 
 
 15. — Ernest v. Nicholls (1857), 6 H. L. C. 419: deciding* that all 
 who deal with a company are to be deemed to have notice of its 
 registered documents. See supra , p. 44. 
 
 16. — Foss v. Harbottle (1843), 2 Hare, 461 : which decided that the 
 Court will not interfere in the internal affairs of a company where 
 there is nothing ultra vires the company. It leaves the matter to the 
 majority. See supra , pp. 176, 242. 
 
 17. — Griffith v. Paget (1877), 5 C. I). 894; 6 C. D. 515: which 
 decided that, upon a sale under sect. 161 of the Companies Act, 1862, 
 it was not allowable to provide for a distribution of the assets otherwise 
 than in accordance with the legal rights of the parties. See supra , 
 p. 425. 
 
 18. — Grissell’s case (1865), 1 Ch. 528 : which decided that a share- 
 holder in a company who was a creditor thereof could in the winding- 
 up prove in competition with the outside creditors, but was not entitled 
 to set off his debt against calls. See supra , p. 405. 
 
 19. — Hardy v. Fothergill (1888), 13 App. Cas. 351 : deciding, in 
 effect, that every liability of a company, however difficult of valuation, 
 is provable in the winding-up, unless declared by the Court “ incapable 
 of being fairly estimated.” See supra , p. 410. 
 
 20. — Hartley’s case (1875), 10 Ch. 157 : which decided that where 
 shares have been issued for a consideration other than cash, and by 
 mistake the requisite contract had not been filed pursuant to sect. 25 
 of the Companies Act, 1867, it was open to the parties themselves to 
 rectify the mistake without going to the Court. See supra , p. 121. 
 
 21. — Kelher v. Baxter (1866), L. R. 2 C. P. 174 : which decided that 
 where A., before the incorporation of a company, purports to make 
 a contract on the company’s behalf with B., the company cannot ratify 
 such contract, and A. is personally liable on it. See supra , p. 253. 
 
 22. — New Sombrero Co. v. Erlanger (1862), 3 App. Cas. 1218: 
 which decided that the promoters of a company stand in a fiduciary 
 position to it. See supra , p. 332. 
 
 23. — Oakbank Oil Co. v. Crum (1883), 8 App. Cas. 65 : deciding 
 that primd facie a company has no power to pay a dividend in pro- 
 portion to the amount paid up on each share where a larger amount 
 is paid up on some shares than others, unless pursuant to the 
 Companies Act, 1867, s. 24 (3), its regulations so provide. See 
 supra , p. 214. 
 
 P. 
 
 29 
 
442 
 
 LEADING CASES. 
 
 24. — Oakes v. Turquand (1867), L. R. 2 H. L. 375: deciding (1) that 
 a contract induced by fraud or misrepresentation is not void, but 
 voidable at the option of the party defrauded ; until avoided, it is 
 valid ; (2) that it is too late to rescind after the rights of creditors 
 have intervened on a winding-up. See supra, p. 353. 
 
 25. — Ooregum Gold Mining Co. v. Roper, (1892) A. 0. 125 : deciding 
 that a company limited by shares has no power to issue its shares at a 
 discount, and that the registration of a contract under sect. 25 of the 
 Companies Act, 1867, made no difference. See supra , p. 69. 
 
 26. — Re Panama Mail Co. (1870), 5 Ch. 318: deciding that a 
 charge on a company’s undertaking by way of floating security is 
 effective. See supra , p. 311. 
 
 27. — Parker v. McKenna (1875), 10 Ch. 118: deciding that a director 
 cannot make any profit out of his agency without the knowledge and 
 consent of his principal — the company. See supra , p. 193. 
 
 28. — Peek v. Derry (1889), 14 App. Cas. 337 : which decided that, 
 in an action of deceit against directors, it was necessary to prove fraud. 
 See supra, p. 358. 
 
 29. — Peel’s case (1867), 2 Ch. 674 : which decided that the registrar’s 
 certificate of incorporation of a company was conclusive (see supra , 
 p. 51), and that subscribers for shares are to be taken to have read 
 the memorandum and articles of association. 
 
 30. — Peel v. London and North Western Railway Co. (No. 1), 
 (1907) 1 Ch. 5 : deciding that a company may legitimately do and 
 pay for out of its assets all such things as are reasonably necessary 
 for procuring members to express their views upon any questions 
 affecting the management of the company’s affairs, e.g., sending 
 stamped proxy forms, overruling Studdert v. Grosvenor, 33 Ch. D. 528. 
 See supra, p. 67. 
 
 31. — Pell’s case (1869), 5 Ch. 11 : which decided that where shares 
 have been issued as paid-up shares upon the footing that certain 
 specified property shall be accepted by the company as the consideration 
 for such shares, the Court will not, ichilst the contract stands, inquire 
 into the value of the consideration, even at the instance of a creditor. 
 See supra , p. 117. 
 
 32. — Re Reese River Silver Mining Co. (1867), L. R. 2 Ch. 609 : 
 deciding that an innocent misrepresentation in a prospectus may be a 
 ground for rescission. See supra, p. 355. 
 
LEADING CASES. 
 
 Ch. XL VII. 
 
 443 
 
 33. — Royal British Bank v. Turquand (1857), 6 E. & B. 327 : 
 
 which decided that those who deal with a company are not concerned 
 with the indoor management. See further, supra , p. 45. 
 
 34. — Ruben v. Great Fingall Consolidated, (1906) A. C. 439 : 
 
 deciding that a company is not liable on share certificates to which 
 the secretary has forged the names of the directors. See supra , 
 p. 136. 
 
 35 — Salomon v. Salomon & Son, (1897) A. C. 22 : which decided 
 that one-man companies are legal. See supra , pp. 56, 371. 
 
 36. — Spargo’s case (1873), 8 Ch. 407 : which decided that shares 
 might, within the meaning of sect. 25 of the Companies Act, 1867, be 
 paid up in cash by setting off by agreement a debt presently due to 
 the shareholder from the company against the amount due on the 
 shares. See further, supra , p. 122. 
 
 37. — Standard Manufacturing Co., Re, (1891) 1 Ch. 627 : deciding 
 that debentures and trust deeds do not require to be registered under 
 the Bills of Sale Acts. See supra , p. 315. 
 
 38. — Trevor v. Whitworth (1887), 12 App. Cas. 409 : which decided 
 that it was illegal for a company to buy its own shares. See supra, p. 66. 
 
 39. — Twycross v. Grant (1877), 2 C. P. D. 469 : as to the construc- 
 tion of sect. 38 of the Companies Act, 1867. See supra, p. 360. 
 
 40. — Walker v. London Tramways Co. (1879), 12 C. D. 705 : which 
 decided that a company cannot by a clause in its articles deprive its 
 shareholders of the statutory power of altering its regulations contained 
 in sect. 50 of the Companies Act, 1862. See supra , p. 47. 
 
 41. — Welton v. SafFery, (1897) A. C. 299 : which decided that shares 
 issued at a discount must, even as between the members in a winding- 
 up, be treated as imposing a liability to pay up the discount in cash. 
 See supra, p. 69. 
 
 42. — Weston’s case (1870), 4 Ch. 20 : which decided that the right 
 of transfer of shares in a company under the Act of 1862 is primd facie 
 free. See supra, p. 130. 
 
 43. — Will v. United Lankat Plantations, (1914) A. C. 11, deciding 
 that preference shares are not primd facie entitled to receive any 
 dividend beyond the fixed preferential dividend. See supra, p. 85. 
 
 29 ( 2 ) 
 

APPENDIX. 
 
APPENDIX 
 
 44 
 
 TABLE OE CORRESPONDING SECTIONS. 
 
 Act, 1862. 
 
 New Act. 
 
 Act, 1862. 
 
 New Act. 
 
 ect. 4 
 
 Sect. 1 
 
 Sect. 74 
 
 Sect. 124 
 
 6 
 
 11 
 
 75, 77 
 
 127 
 
 6 
 
 2 
 
 75, 90, 134 
 
 125 
 
 8 
 
 3 
 
 76, 99, 105 
 
 126 
 
 10 
 
 5 
 
 78 
 
 128 
 
 11 
 
 14 
 
 79 
 
 129 
 
 12 
 
 7 
 
 80 
 
 130 
 
 12 
 
 41 
 
 81 
 
 134, 135 
 
 13 
 
 8 
 
 81, 175 
 
 285 
 
 14 
 
 5 
 
 82 
 
 137, 138 
 
 14 
 
 10 
 
 84 
 
 139 
 
 14 
 
 12 
 
 85 
 
 140, 149 
 
 15 
 
 11 
 
 85, 92 • 
 
 149 
 
 16 
 
 14 
 
 86 
 
 141 
 
 17 
 
 15 
 
 87 
 
 142 
 
 17 
 
 244 
 
 88 
 
 143 
 
 19 
 
 18 
 
 89 
 
 144 
 
 20 
 
 8 
 
 90, 134 
 
 123 (3) 
 
 21 
 
 19 
 
 91 
 
 145 
 
 22 
 
 22 
 
 91, 149 
 
 219 
 
 23 
 
 24 
 
 92, 94 
 
 149, 150 
 
 24 
 
 29 
 
 92 
 
 149 (4), (5) 
 
 25 
 
 25 
 
 93 
 
 149 
 
 26, 27 
 
 26 
 
 94 
 
 149 
 
 27 (1), (4) 
 
 4 
 
 95 
 
 151 
 
 28 
 
 42 
 
 96 
 
 151 (4) 
 
 29 
 
 43 
 
 97 
 
 21, 151 (1) (d) 
 
 30 
 
 27 
 
 98, 99 
 
 163 
 
 31 
 
 23 
 
 100 
 
 164 
 
 32 
 
 30 
 
 101 
 
 165 
 
 33 
 
 31 
 
 102 
 
 166 
 
 34 
 
 44 
 
 103, 104 
 
 167 
 
 35, 36 
 
 32 
 
 105 
 
 126 (3) 
 
 37 
 
 33 
 
 106 
 
 168 
 
 38 
 
 123 
 
 107 
 
 169 
 
 39, 40 
 
 62 
 
 109 
 
 170 
 
 41,42 
 
 63 
 
 110 
 
 171 
 
 43 
 
 100, 101 
 
 111, 112, 113 
 
 172 
 
 44 
 
 108 
 
 115, 127, 154, 155, 
 
 166 285 
 
 45, 46 
 
 75 
 
 115, 117 
 
 174 
 
 47 
 
 77 
 
 118 
 
 176 
 
 48 
 
 115 
 
 119 
 
 177 
 
 50 
 
 13 
 
 120 
 
 178 
 
 51, 129 
 
 69 
 
 121 
 
 179 
 
 52 
 
 67 
 
 122, 123 
 
 180 
 
 53, 54 
 
 70 
 
 124 
 
 181 
 
 55 
 
 78 
 
 125 
 
 225 
 
 56—59 
 
 109 
 
 126 
 
 226 
 
 60 
 
 110 
 
 127 
 
 227 
 
 61 
 
 111 
 
 128 
 
 228 
 
 62 
 
 116 
 
 129 
 
 182 
 
 62, 64 
 
 285 
 
 130 
 
 183 
 
 64 
 
 117 
 
 131 
 
 184 
 
 65 
 
 276 
 
 131, 153 
 
 205 
 
 66 
 
 277 
 
 132, 142 
 
 185, 285 
 
 67 
 
 71, 74, 149 (10) 
 
 133 (8), (9), 
 
 , (10) 186 (y) 
 
 68 
 
 280 
 
 133, 141 
 
 186 
 
 69 
 
 278 
 
 134 
 
 123 (3) 125 
 
 70 
 
 — 
 
 135 
 
 190 
 
 71 
 
 118 
 
 136, 137 
 
 191 
 
 72, 73 
 
 119 
 
 138 
 
 193 
 
448 
 
 Appendix 
 
 Act, 1862. 
 
 New Act* 
 
 Act, 1862. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Seot. 139 
 
 Sect. 194 
 
 Sect. 174 (3) 
 
 Seot. 15 
 
 140 
 
 18 
 
 174 (6) 
 
 289 
 
 141 
 
 186 viiij 
 
 176 
 
 13, 245 
 
 142, 143 
 
 195 
 
 177 
 
 246 
 
 144 
 
 196 
 
 178 
 
 248 
 
 146 
 
 197 
 
 179, 180 
 
 249 
 
 146 
 
 198 
 
 181 
 
 260 
 
 147 
 
 199 
 
 183, 185 
 
 252 
 
 148 
 
 200 
 
 184 
 
 253 
 
 149 
 
 201 
 
 186 
 
 254 
 
 150 
 
 202 
 
 187 
 
 255 
 
 151 
 
 203 
 
 188 
 
 266 
 
 152 
 
 204 
 
 189 
 
 257 
 
 153 
 
 205 (2) 
 
 190 
 
 258 
 
 154 
 
 220 
 
 191 
 
 259 
 
 155 
 
 222 
 
 193 
 
 260 
 
 156 
 
 • 221 
 
 194 
 
 261 
 
 158 
 
 206 
 
 195 
 
 262 
 
 159, 160 
 
 214 
 
 196 
 
 263 
 
 161, 162 
 
 192 
 
 197 
 
 265 
 
 163 
 
 211 
 
 198 
 
 266 
 
 164 
 
 210 
 
 199 
 
 267, 268 
 
 165 
 
 215 
 
 200 
 
 269 
 
 166 
 
 216 
 
 201 
 
 270 
 
 167, 168 
 
 217 
 
 202 
 
 271 
 
 169 
 
 218 
 
 203 
 
 272 
 
 170 
 
 — 
 
 204 
 
 273 
 
 171 
 
 151 (6) 
 
 205, 206 
 
 286 
 
 172 
 
 238 
 
 207 
 
 287 
 
 171, 173 
 
 238, 290 
 
 208 
 
 288 
 
 
 Act, 1864. 
 Sect. 1—6 
 
 New Act. 
 Sect. 79 
 
 
 Act, 1867. 
 
 New Act. 
 
 Act, 1867. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 4, 7 
 
 Sect. 60 
 
 Sect. 16, 18 
 
 Sect. 52 
 
 5 
 
 123 (2) 
 
 19 
 
 54 
 
 6 
 
 165 
 
 20 
 
 238, 290 
 
 8 
 
 81 
 
 21, 22 
 
 41 
 
 9 
 
 46 
 
 23 
 
 20 
 
 9, 15 
 
 51 
 
 24 
 
 39 
 
 10 
 
 48 
 
 26 
 
 28 
 
 11 
 
 47 
 
 27—32 
 
 37 
 
 11, 12 
 
 50 
 
 32 
 
 26,37 
 
 12 
 
 285 
 
 34—36 
 
 38 
 
 13, 14 
 
 49 
 
 37 
 
 76 
 
 16, 17 
 
 53 
 
 Act, 1870. 
 Sect. 2 
 
 40 
 
 New Act. 
 Sect. 120 
 
 137 
 
 Act, 1877. 
 
 New Act. 
 
 Act, 1877. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 3 
 
 Sect. 46 
 
 Sect. 5 
 
 Sect. 41 
 
 4 
 
 48, 49, 51, 55 
 
 6 
 
 243 
 
 Act, 1879. 
 
 New Act. 
 
 Act, 1879. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 4, 9 
 
 Sect. 57 
 
 Sect. 8 
 
 Sect. 113 (5) ( 
 
 5 
 
 58, 59 
 
 8 (5) 
 
 113 
 
 6 
 
 251 
 
 10 
 
 263 (iii) 
 
 Act, 1880. 
 
 New Act. 
 
 Act, 1880. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 3 — 6 
 
 7 
 
 Sect. 40 
 242 
 
 Sect. 7 (8) 
 
 Sect. 285 
 
Table of Corresponding Sections. 
 
 449 
 
 Act, 1883. 
 
 New Act. 
 
 Act, 1883. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 2 
 
 Sect. 285 
 
 Sect. 3 (3), (6), (8) 
 
 Sect. 35 
 
 2, 3 (1) (2) 
 3 
 
 34 
 
 35, 36 
 
 3 (7) 
 
 36 
 
 Act, 1886. 
 
 New Act. 
 
 Act, 1886. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 3 
 
 Sect. 213 
 
 Sect. 5, 6 
 
 Sect. 181 
 
 4 
 
 5 
 
 208 
 
 135 
 
 6 
 
 136, 203 
 
 Act, 1887. 
 
 New Act. 
 
 Act, 1888. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 5 
 
 Sect. 41 
 
 Sect. 1 
 
 Sect. 209 
 
 Act, 1890 (W.-TJ.). 
 
 New Act. 
 
 Act, 1890 (W.-U.). 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 1 Sect. 131, 263 
 
 Sect. 12 (3) Sect. 151 (3), 214 (2) 
 
 1 (1) 
 
 264 (3), 264 (4) 
 
 12 (4) 
 
 151 (1) (c) 
 
 1, 2, 3 
 1 (1), 3 (3) 
 
 264 
 
 13 
 
 173 
 
 263 (e) 
 
 14 
 
 137 
 
 2 
 
 132 
 
 15 
 
 224 
 
 3 
 
 133 
 
 16 
 
 230 
 
 3—5 
 
 84 
 
 17, 18 
 
 231 
 
 4 (1), (3), 
 
 (5) 149 
 
 19 
 
 232 
 
 4(2) 
 
 146 
 
 20 
 
 155 
 
 4 (3) 
 
 149, 153 
 
 21 
 
 156 
 
 4 (4) 
 
 149 
 
 22 
 
 157 
 
 4 (6) 
 
 162 
 
 23, 24 
 
 158 
 
 5 
 
 161 
 
 25 
 
 159 
 
 6 
 
 152 
 
 26 
 
 237 
 
 7 
 
 147 
 
 27 
 
 233 
 
 8 (1), (2) 
 
 148 
 
 28 
 
 234 
 
 8 (3) — (9) 
 
 175 
 
 29 
 
 235 
 
 9 
 
 160 
 
 30 
 
 236 
 
 10 
 
 215 
 
 31 (1) 
 
 287 
 
 11 (1), (5) 
 
 229 
 
 31 (2) 
 
 122 
 
 11 (2) (4), (6) 154 
 
 32 (1) 
 
 285 
 
 12 (1), (3) 
 12 (2) 
 
 214 
 151 (2) 
 
 32 (3) 
 
 131 (8) 
 
 Act, 
 
 1890 (Directors’ Liability). New Act. 
 
 
 Sect. 3, 4 
 
 Sect. 84. 
 
 Act, 1893. 
 
 New Act. 
 
 Act, 1897. 
 
 New Act. 
 
 Sect. 1 
 
 Sect. 215 
 
 Sect. 2, 3 
 
 Sect. 209 
 
 Act, 1900. 
 
 New Act. 
 
 Act, 1900. 
 
 New Act. 
 
 Sect. 1 
 
 Sect, 17 
 
 Seot. 16 
 
 Sect. 97 
 
 1, 2 
 
 9 
 
 17 
 
 98 
 
 2 
 
 72 
 
 18 (1), (3) 
 
 16 
 
 3 
 
 73 
 
 18 
 
 99 
 
 4 
 
 85 
 
 20 
 
 75 
 
 4 (1), (5) 
 
 149 
 
 21, 22 
 
 112 
 
 5 
 
 86 
 
 24 
 
 120 
 
 6 
 
 87 
 
 25 
 
 193 
 
 7 
 
 88 
 
 26 
 
 242 
 
 8 
 
 89 
 
 28 
 
 281 
 
 9 
 
 80 
 
 29 
 
 41 
 
 10 
 
 81 
 
 30 
 
 279, 285 
 
 11 
 
 83 
 
 31 
 
 ' 245 
 
 12 
 
 65 
 
 32 (2) 
 
 285 
 
 12 (8) 
 
 129, 137, 141 
 
 34 
 
 17 
 
 13 
 
 66 
 
 34 (2) 
 
 93 
 
 14 
 
 15 
 
 93 
 
 96 
 
 34 (3) 
 
 276 (2) 
 
450 Appendix. 
 
 Act, 1907. 
 
 New Act. 
 
 Act, 1907. 
 
 New Act. 
 
 — 
 
 — 
 
 — 
 
 
 
 Sect. 1 (2), ) 
 
 [ Sect. 72 
 
 Sect. 25, 45 
 
 Sect. 69 
 
 and Sched. II. J 
 
 26 
 
 187 
 
 1 (21 
 
 83 
 
 27 
 
 188 
 
 1 (2), 4, ) 
 
 [ 87 
 
 28 
 
 130, 137 
 
 and Sched. II. J 
 
 29 
 
 141 
 
 1 (1), (5) 
 
 82 
 
 30 
 
 209 (5), 209 
 
 1 (3) 
 
 85 
 
 31 
 
 223 
 
 2 
 
 81 
 
 31 (1), (3) 
 
 195 
 
 3 
 
 80 
 
 32 
 
 279 
 
 5 
 
 92 
 
 , 33 
 
 84 
 
 6 
 
 88 
 
 34 
 
 73 
 
 7 
 
 90 
 
 35 
 
 274 
 
 7, 20, 21 
 
 26 
 
 36 
 
 106 
 
 8 
 
 89 
 
 37 
 
 2, 121 
 
 9 
 
 91 
 
 37 (4) 
 
 116, 129 
 
 10 (6) 
 
 99 
 
 38 
 
 120 
 
 10, 52 (1) 
 
 93 
 
 39 
 
 45 
 
 10, 17 
 
 101 
 
 40 
 
 108 
 
 11 
 
 94 
 
 41 
 
 95 
 
 13 
 
 212 
 
 42 
 
 20 
 
 14 
 
 103 
 
 43 
 
 34 
 
 15 
 
 104 
 
 44 
 
 109 
 
 16 
 
 105 
 
 45 
 
 70 
 
 18 
 
 102 
 
 46 
 
 284 
 
 19 (4) 
 
 112 
 
 47 
 
 283 
 
 19, 50 
 
 113 
 
 48 
 
 282 
 
 20 
 
 26 
 
 49 
 
 276 
 
 21 
 
 26 
 
 50 
 
 195 
 
 22, 23 
 
 65 
 
 50, and Sched. III. 
 
 30, 42, 53, 58 
 
 23 
 
 114 
 
 52 (1) 
 
 274, 281, 285 
 
 24 (1), (2) 
 
 64 
 
 52 (3) 
 
 296 
 
 24 (3) 
 
 Life Assubance 
 
 68 
 
 Act, 1908. 
 Sect. 1 
 Assubance 
 
 New Act. 
 
 Sect. 275 
 Life Assubance 
 
 Assubance 
 
 Act, 1870. 
 
 Act of 1909. 
 
 Act, 1870. 
 
 Act of 1909. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 2 
 
 Sect. 1 
 
 Sect. 14 
 
 Sect. 13 
 
 3 
 
 2 
 
 15 
 
 14 
 
 4 
 
 3 
 
 16 
 
 22 
 
 5 
 
 4 
 
 17 
 
 22 
 
 6 
 
 6 
 
 18 
 
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 — 
 
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 12 
 
 7 
 
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 28 
 
 13 
 
 Life Assubance 
 
 11 
 
 Assubance 
 
 Life Assubance 
 
 Assubance 
 
 Act, 1872. 
 
 Act of 1909. 
 
 Act, 1872. 
 
 Act of 1909. 
 
 — 
 
 — 
 
 — 
 
 — 
 
 Sect. 1 
 
 Sect. 2 
 
 Sect. 5 
 
 Sect. 18 
 
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( 451 ) 
 
 COMPANIES (CONSOLIDATION) ACT, 1908. 
 
 8 Edw. 7, c. 69. 
 
 An Act to consolidate the Companies Act, 1862, and the Acts 
 amending it. [21st December, 1908.] 
 
 \Came into operation ls£ April , 1909. See sect. 296.] 
 
 Be it enacted by the King’s most Excellent Majesty, by and with the advice and 
 consent of the Lords Spiritual and Temporal, and Commons, in this present 
 Parliament assembled, and by the authority of the same, as follows : — 
 
 PART I. 
 
 Constitution and Incoepoeation. 
 
 Prohibition of Large Partnerships. 
 
 1. — (1.) No company, association, or partnership consisting of more than ten 
 persons shall be formed for the purpose of carrying on the business of banking, 
 unless it is registered as a company under this Act, or is formed in pursuance of 
 some other Act of Parliament, or of letters patent. 
 
 (2.) No company, association, or partnership consisting of more than twenty 
 persons shall be formed for the purpose of carrying on any other business that has 
 for its object the acquisition of gain by the company, association, or partnership, 
 or by the individual members thereof, unless it is registered as a company under 
 this Act, or is formed in pursuance of some other Act of Parliament, or of letters 
 patent, or is a company engaged in working mines within the stannaries and 
 subject to the jurisdiction of the Court exercising the stannaries jurisdiction. 
 
 Memorandum, of Association. 
 
 2. Any seven or more persons (or, where the company to be formed will be a 
 private company within the meaning of this Act, any two or more persons) asso- 
 ciated for any lawful purpose may, by subscribing their names to a memorandum 
 of association and otherwise complying with the requirements of this Act in 
 respect of registration, form an incorporated company, with or without limited 
 liability (that is to say) , either — 
 
 (i) A company having the liability of its members limited by the memorandum 
 
 to the amount, if any, unpaid on the shares respectively held by them 
 (in this Act termed a company limited by shares) ; or 
 
 (ii) A company having the liability of its members limited by the memorandum 
 
 to such amount as the members may respectively thereby undertake 
 to contribute to the assets of the company in the event of its being 
 wound up (in this Act termed a company limited by guarantee) ; or 
 
 (iii) A company not having any limit on the liability of its members (in this 
 Act termed an unlimited company). 
 
 S. 4 of 1862. 
 
 Prohibition of 
 
 partnerships 
 
 exceeding 
 
 certain 
 
 number. 
 
 p. 386 
 
 Ss. 6 etseq. 
 of 1862. 
 Mode of 
 forming 
 incorporated 
 company, 
 pp. 21, 26 
 
452 
 
 Appendix. 
 
 S. 8 of 1862. 
 Memorandum 
 of company 
 limited by 
 shares, 
 pp. 26, 32 
 
 S. 9 of 1862. 
 Memorandum 
 of company 
 limited by 
 guarantee, 
 p. 378 
 
 S. 10 of 1862. 
 Memorandum 
 of unlimited 
 company. 
 
 p. 381 
 
 S. 11 of 1862. 
 Stamp and 
 signature of 
 memorandum. 
 
 p. 22 
 
 S. 12 of 1862. 
 Restriction on 
 alteration of 
 memorandum. 
 
 pp. 77, 81, 88 
 Ss. 13, 20 of 
 1862. 
 
 Name of 
 company and 
 change of 
 name, 
 p. 249 
 
 3. In the case of a company limited by shares — 
 
 (1.) The memorandum must state — 
 
 (i) The name of the company, with “Limited” as the last word in its 
 name ; 
 
 (ii) The part of the United Kingdom, whether England, Scotland, or 
 Ireland, in which the registered office of the company is to be 
 situate ; 
 
 (iii) The objects of the company ; 
 
 (iv) That the liability of the members is limited ; 
 
 (v) The amount of share capital with which the company proposes to be 
 registered, and the division thereof into shares of a fixed amount : 
 
 (2.) No subscriber of the memorandum may take less than one share ; 
 
 (3.) Each subscriber must write opposite to his name the number of shares he 
 takes. 
 
 4. In the case of a company limited by guarantee — 
 
 ( 1 . ) The memorandum must state — 
 
 (i) The name of the company, with “Limited” as the last word in its 
 
 name ; 
 
 (ii) The part of the United Kingdom, whether England, Scotland, or 
 
 Ireland, in which the registered office of the company is to be 
 situate ; 
 
 (iii) The objects of the company ; 
 
 (iv) That the liability of the members is limited ; 
 
 (v) That each member undertakes to contribute to the assets of the company 
 
 in the event of its being wound up while he is a member, or within 
 one year afterwards, for payment of the debts and liabilities of the 
 company contracted before he ceases to be a member, and of the costs, 
 charges, and expenses of winding up, and for adjustment of the rights 
 of the contributories among themselves, such amount as may be re- 
 quired, not exceeding a specified amount. 
 
 (2.) If the company has a share capital — 
 
 (i) The memorandum must also state the amount of share capital with which 
 
 the company proposes to be registered and the division thereof into 
 shares of a fixed amount ; 
 
 (ii) No subscriber of the memorandum may take less than one share ; 
 
 (iii) Each subscriber must write opposite to his name the number of shares 
 
 he takes. 
 
 5. In the case of an unlimited company — 
 
 (1.) The memorandum must state — 
 
 (i) The name of the company ; 
 
 (ii) The part of the United Kingdom, whether England, Scotland, or Ireland, 
 * in which the registered office of the company is to be situate ; 
 
 (iii) The objects of the company. 
 
 (2.) If the company has a share capital — 
 
 (i) No subscriber of the memorandum may take less than one share ; 
 
 (ii) Each subscriber must write opposite to his name the number of shares 
 
 he takes. 
 
 6. The memorandum must bear the same stamp as if it were a deed, and must 
 be signed by each subscriber in the presence of at least one witness who must attest 
 the signature, and that attestation shall be sufficient in Scotland as well as in 
 England and Ireland. 
 
 7. A company may not alter the conditions contained in its memorandum except 
 in the cases and in the mode and to the extent for which express provision is made 
 in this Act. 
 
 8. — (1.) A company may not be registered by a name identical with that by 
 which a company in existence is already registered, or so nearly resembling that 
 name as to be calculated to deceive, except where the company in existence is in 
 the course of being dissolved and signifies its consent in such manner as the registrar 
 requires. 
 
 (2.) If a company, through inadvertence or otherwise, is, without such consent 
 as aforesaid, registered by a name identical with that by which a company in 
 existence is previously registered, or so nearly resembling it as to be calculated to 
 deceive, the first -mentioned company may, with the sanction of the registrar, 
 change its name. 
 
Act of 1908 453 
 
 Companies (Consolidation) Act, 1908. 
 
 (3.) Any company may, by special resolution and with the approval of the Board 
 of Trade signified in writing, change its name. 
 
 (4.) Where a company changes its name, the registrar shall enter the new name 
 on the register in place of the former name, and shall issue a certificate of incor- 
 poration altered to meet the circumstances of the case. 
 
 (5.) The change of name shall not affect any rights or obligations of the company, 
 or render defective any legal proceedings by or against the company, and any legal 
 proceedings that might have been continued or commenced against it by its former 
 name may be continued or commenced against it by its new name. 
 
 9. — (1.) Subject to the provisions of this section a company may, by special 
 resolution, alter the provisions ‘of its memorandum with respect to the objects of the 
 company, so far as may be required to enable it — 
 
 (a) to carry on its business more economically or more efficiently ; or 
 
 (b) to attain its main purpose by new or improved means ; or 
 
 (c) to enlarge or change the local area of its operations ; or 
 
 (d) to carry on some business which under existing circumstances may con- 
 
 veniently or advantageously be combined with the business of the com- 
 pany ; or 
 
 (e) to restrict or abandon any of the objects specified in the memorandum. 
 
 (2.) The alteration shall not take effect until and except in so far as it is confirmed 
 on petition by the Court. 
 
 (3.) Before confirming the alteration the Court must be satisfied — 
 
 (a) that sufficient notice has been given to every holder of debentures of the 
 
 company, and to any persons or class of persons whose interests will, 
 in the opinion of the Court, be affected by the alteration ; and 
 
 (b) that, with respect to every creditor who in the opinion of the Court is 
 
 entitled to object, and who signifies his objection in manner directed by 
 the Court, either his consent to the alteration has been obtained or his 
 debt or claim has been discharged or has determined, or has been secured 
 to the satisfaction of the Court : 
 
 Ss. 1, 2 of 
 1890. 
 
 Alteration of 
 objects of 
 company, 
 p. 77 
 
 Provided that the Court may, in the case of any person or class, for special 
 reasons, dispense with the notice required by this section. 
 
 (4.) The Court may make an order confirming the alteration either wholly or in 
 part, and on such terms and conditions as it thinks fit, and may make such order 
 as to costs as it thinks proper. 
 
 (5.) The Court shall, in exercising' its discretion under this section, have regard 
 to the rights and interests of the members of the company or of any class of them, 
 as well as to the rights and interests of the creditors, and may, if it thinks fit, 
 adjourn the proceedings in order that an arrangement may be made to the satisfac- 
 tion of the Court for the purchase of the interests of dissentient members ; and may 
 give such directions and make such orders as it may think expedient for facilitating 
 or carrying into effect any such arrangement : Provided that no part of the capital 
 of the company may be expended in any such purchase. 
 
 (6.) An office copy of the order confirming the alteration, together with a printed 
 copy of the memorandum as altered, shall, within fifteen days from the date of the 
 order, be delivered by the company to the Registrar of Companies, and he shall 
 register the same, and shall certify the registration under his hand, and the certifi- 
 cate shall be conclusive evidence that all the requirements of this Act with respect 
 to the alteration and the confirmation thereof have been complied with, and thence- 
 forth the memorandum so altered shall be the memorandum of the company. 
 
 The Court may by order at any time extend the time for the delivery of docu- 
 ments to the registrar under this section for such period as the Court may think 
 proper. 
 
 (7.) If a company makes default in delivering to the Registrar of Companies any 
 document required by this section to be delivered to him, the company shall be 
 liable to a fine not exceeding ten pounds for every day during which it is in default. 
 
 Articles of Association. 
 
 10. — (1.) There may, in the case of a company limited by shares, and there 
 shall in the case of a company limited by guarantee or unlimited, be registered 
 with the memorandum articles of association signed by the subscribers to the 
 memorandum and prescribing regulations for the company. 
 
 S. 14 of 1862. 
 Registration 
 of articles. 
 
 pp. 21, 22, 37 
 
454 
 
 Appendix. 
 
 S. 15 of 1862. 
 Application 
 of Table A. 
 pp. 22, 37 
 
 Ss. 14, 16 of 
 1862. 
 
 Form, stamp, 
 and signature 
 of articles, 
 p. 37 
 
 Ss. 50, 176 of 
 1862. 
 
 Alteration of 
 articles by 
 special 
 resolution, 
 p. 46 
 
 (2.) Articles of association may adopt all or any of the regulations contained in 
 Table A. in the First Schedule to this Act. 
 
 (3.) In the case of an unlimited company or a company limited by guarantee the 
 articles, if the company has a share capital, must state the amount of share capital 
 with which the company proposes to be registered. 
 
 (4.) In the case of an unlimited company or a company limited by guarantee, 
 if the company has not a share capital, the articles must state the number of 
 members with which the company proposes to be registered, for the purpose of 
 enabling the registrar to determine the fees payable on registration. 
 
 11. In the case of a company limited by shares and registered after the com- 
 mencement of this Act, if articles are not registered, or, if articles are registered, 
 in so far as the articles do not exclude or modify the regulations in Table A. in 
 the First Schedule to this Act, those regulations shall, so far as applicable, be the 
 regulations of the company in the same manner and to the same extent as if they 
 were contained in duly registered articles. 
 
 12. Articles must — 
 
 (a) be printed ; 
 
 (b) be divided into paragraphs numbered consecutively ; 
 
 (c) bear the same stamp as if they were contained in a deed ; and 
 
 (d) be signed by each subscriber of the memorandum of association in the 
 
 presence of at least one witness, who must attest the signature, and 
 that attestation shall be sufficient in Scotland as well as in England and 
 Ireland. 
 
 13. — (1.) Subject to the provisions of this Act and to the conditions contained in 
 its memorandum, a company may by special resolution alter or add to its articles ; 
 and any alteration or addition so made shall be as valid as if originally contained 
 in the articles, and be subject in like manner to alteration by special resolution. 
 
 (2.) The power of altering articles under this section shall, in the case of an 
 unlimited company formed and registered under the Joint Stock Companies Acts, 
 extend to altering any regulations relating to the amount of capital or its dis- 
 tribution into shares, notwithstanding that those regulations are contained in the 
 memorandum . 
 
 S. 11 of 1862. 
 Effect of 
 memorandum 
 and articles. 
 
 S. 17 of 1862. 
 Registration of 
 memorandum 
 and articles. 
 
 Effect of 
 registration, 
 p. 51 
 
 S. 18 of 1862 
 and s. 1 of 1890. 
 Conclusiveness 
 of certificate of 
 incorporation. 
 
 p. 51 
 
 General Provisions. 
 
 14. — (1.) The memorandum and articles shall, when registered, bind the com- 
 pany and the members thereof to the same extent as if they respectively had been 
 signed and sealed by each member, and contained covenants on the part of each 
 member, his heirs, executors, and administrators, to observe all the provisions of 
 the memorandum and of the articles, subject to the provisions of this Act. 
 
 (2.) All money payable by any member to the company under the memorandum 
 or articles shall be a debt due from him to the company, and in England and 
 Ireland be of the nature of a specialty debt. 
 
 15. The memorandum and the articles (if any) shall be delivered to the Registrar 
 of Companies for that part of the United Kingdom in which the registered office of 
 the company is stated by the memorandum to be situate, and he shall retain and 
 register them. 
 
 16. — (1.) On the registration of the memorandum of a company the registrar 
 shall certify under his hand that the company is incorporated, and in the case of a 
 limited company that the company is limited. 
 
 (2.) From the date of incorporation mentioned in the certificate of incorporation, 
 the subscribers of the memorandum, together with such other persons as may from 
 time to time become members of the company, shall be a body corporate by the 
 name contained in the memorandum, capable forthwith of exercising all the 
 functions of an incorporated company, and having perpetual succession and a 
 common seal, with power to hold lands, but with such liability on the part of the 
 members to contribute to the assets of the company in the event of its being wound 
 up, as is mentioned in this Act. 
 
 17. — (1.) A certificate of incorporation given by the registrar in respect of any 
 association shall be conclusive evidence that all the requirements of this Act in 
 respect of registration and of matters precedent and incidental thereto have been 
 complied with, and that the association is a company authorized to be registered 
 and duly registered under this Act, 
 
Act of 1908 455 
 
 Companies (Consolidation) Act, 1908 . 
 
 (2.) A statutory declaration by a solicitor of the High Court, and in Scotland by 
 an enrolled law agent, engaged in the formation of the company, or by a person 
 named in the articles as a dii’ector or secretary of the company, of compliance with 
 all or any of the said requirements shall be produced to the registrar, and the 
 registrar may accept such a declaration as sufficient evidence of compliance. 
 
 18 . — (1.) Every company shall send to every member, at his request, and on 
 payment of one shilling or such less sum as the company may prescribe, a copy of 
 the memorandum and of the articles (if any). 
 
 (2.) If a company makes default in complying with the requirements of this 
 section, it shall be liable for each offence to a fine not exceeding one pound. 
 
 Associations not for Profit. 
 
 19 . A company formed for the purpose of promoting art, science, religion, 
 charity, or any other like object, not involving the acquisition of gaiu by the 
 company or by its individual members, shall not, without the licence of the Board 
 of Trade, hold more than two acres of land ; but the Board may by licence em- 
 power any such company to hold lands in such quantity, and subject to such 
 conditions, as the Board think fit. 
 
 20 . — ( 1 .) Where it is proved to the satisfaction of the Board of Trade that an 
 association about to be formed as a limited company is to be formed for promoting 
 commerce, art, science, religion, charity, or any other useful object, and intends to 
 apply its profits (if any) or other income in promoting its objects, and to prohibit 
 the payment of any dividend to its members, the Board may by licence direct that 
 the association be registered as a company with limited liability, without the 
 addition of the word “ Limited ” to its name, and the association may be registered 
 accordingly. 
 
 (2.) A licence by the Board of Trade under this section may be granted on such 
 conditions and subject to such regulations as the Board think fit, and those conditions 
 and regulations shall be binding on the association, and shall, if the Board so direct, 
 be inserted in the memorandum and articles, or in one of those documents. 
 
 (3.) The association shall on registration enjoy all the privileges of limited com- 
 panies, and be subject to all their obligations, except those of using the word 
 “Limited” as any part of its name, and of publishing its name, and of sending 
 lists of members and directors and managers to the Registrar of Companies. 
 
 (4.) A licence under this section may at any time be revoked by the Board of 
 Trade, and upon revocation the registrar shall enter the word “Limited” at the 
 end of the name of the association upon the register, and the association shall cease 
 to enjoy the exemptions and privileges granted by this section : 
 
 Provided that before a licence is so revoked the Board shall give to the association 
 notice in writing of their intention, and shall afford the association an opportunity 
 of being heard in opposition to the revocation. 
 
 Companies limited by Guarantee. 
 
 21.— (1.) In the case of a company limited by guarantee and not having a share 
 capital, and registered on or after the first day of January, nineteen hundred and 
 one, every provision in the memorandum or articles or in any resolution of the 
 company purporting to give any person a right to participate in the divisible profits 
 of the company otherwise than as a member shall be void. 
 
 (2.) For the purpose of the provisions of this Act relating to the memorandum 
 of a company limited by guarantee and of this section, every provision in the 
 memorandum or articles, or in any resolution, of any company limited by guarantee 
 and registered on or after the first day of January, nineteen hundred and one, 
 purporting to divide the undertaking of the company into shares or interests shall 
 be treated as a provision for a share capital, notwithstanding that the nominal 
 amount or number of the shares or interests is not specified thereby. 
 
 S. 19 of 1862. 
 Copies of 
 memorandum 
 and articles to 
 be given to 
 members. 
 
 S. 21 of 1862. 
 Restriction on 
 charitable and 
 other com- 
 panies holding 
 land, 
 p. 250 
 
 S. 23 of 1867. 
 Power to 
 dispense with 
 “ Limited ” 
 in name of 
 charitable 
 and other 
 companies, 
 p. 250 
 
 S. 27 of 1900. 
 Provision as 
 to companies 
 limited by 
 guarantee, 
 p. 378 
 
456 
 
 Appendix. 
 
 S. 22 of 1862. 
 Nature of 
 shares. 
 
 S. 23 of 1862. 
 Certificate of 
 shares or stock. 
 
 p. 142 
 
 S. 24 of 1862. 
 Definition of 
 member. 
 
 pp. 101, 103 
 
 S. 25 of 1862. 
 Register of 
 members, 
 p. 124 
 
 S. 26 of 1862. 
 Annual list 
 of members 
 and summary, 
 p. 123 
 
 PART II. 
 
 Distribution and Reduction of Share Capital, Registration of Unlimited 
 Company as Limited, and Unlimited Liability of Directors. 
 
 Distribution of Share Capital. 
 
 22. — (1.) The shares or other interest of any member in a company shall be 
 personal estate, transferable in manner provided by the articles of the company, 
 and shall not be of the nature of real estate. 
 
 (2.) Each share in a company having a share capital shall be distinguished by its 
 appropriate number. 
 
 23. A certificate, under the common seal of the company, specifying any shares 
 or stock held by any member, shall be prim A facie evidence of the title of the 
 member to the shares or stock. 
 
 2 4. — (1.) The subscribers of the memorandum of a company shall be deemed to 
 have agreed to become members of the company, and on its registration shall be 
 entered as members in its register of members. 
 
 (2.) Every other person who agrees to become a member of a company, and whose 
 name is entered in its register of members, shall be a member of the company. 
 
 25. — (1.) Eveiy company shall keep in one or more books a register of its 
 members, and enter therein the following particulars : — 
 
 (i) The names and addresses, and the occupations, if any, of the members, and 
 in the case of a company having a share capital a statement of the shares 
 held by each member, distinguishing each share by its number, and of 
 the amount paid or agreed to be considered as paid on the shares of 
 each member ; 
 
 (ii) The date at which each person was entered in the register as a member ; 
 
 (iii) The date at which any person ceased to be a member. 
 
 (2.) If a company fails to comply with this section it shall be liable to a fine not 
 exceeding five pounds for every day during which the default continues ; and every 
 director and manager of the company who knowingly and wilfully authorizes or 
 permits the default shall be liable to the like penalty. 
 
 26. — (1.) Every company having a share capital shall once at least in every year 
 make a list of all persons who, on the fourteenth day after the first or only ordinary 
 general meeting in the year, are members of the company, and of all persons who 
 have ceased to be members since the date of the last return or (in the case of the 
 first return) of the incorporation of the company. 
 
 (2.) The list must state the names, addresses, and occupations of all the past and 
 present members therein mentioned , and the number of shares held by each of the 
 existing members at the date of the return, specifying shares transferred since the 
 date of the last return or (in the case of the first return) of the incorporation of the 
 company by persons who are still members and have ceased to be members 
 respectively and the dates of registration of the transfers, and must contain a 
 summary distinguishing between shares issued for cash and shares issued as fully 
 or partly paid up otherwise than in cash, and specifying the following parti- 
 culars : — 
 
 (a) The amount of the share capital of the company, and the number of the 
 
 shares into which it is divided ; 
 
 (b) The number of shares taken from the commencement of the company up to 
 
 the date of the return ; 
 
 (c) The amount called up on each share ; 
 
 (d) The total amount of calls received ; 
 
 (e) The total amount of calls unpaid ; 
 
 (f ) The total amount of the sums (if any) paid by way of commission in respect 
 
 of any shares or debentures, or allowed by way of discount in respect of 
 
 any debentures, since the date of the last return ; 
 
 (g) The total number of shares forfeited ; 
 
 (h) The total amount of shares or stock for which share warrants are outstanding 
 
 at the date of the return ; 
 
 (i) The total amount of share warrants issued and surrendered respectively since 
 
 the date of the last return ; 
 
.Companies (Consolidation) Act, 1908. Act of 1908 457 
 
 (k) The number of shares or amount of stock comprised in each share warrant ; 
 
 (l) The names and addresses of the persons who at the date of the return are the 
 
 directors of the company, or occupy the position of directors, by whatever 
 name called ; and 
 
 (m) The total amount of debt due from the company in respect of all mortgages 
 
 and charges which are required (or, in the case of a company registered in 
 Scotland, which, if the company had been registered in England, would be 
 required) to be registered with the registrar of companies under this Act, 
 or which would have been required so to be registered if created after the 
 first day of July nineteen hundred and eight. 
 
 (3.) The summary must also (except where the company is a private company) 
 include a statement, made up to such date as may be specified in the statement, in 
 the form of a balance sheet, audited by the company’s auditors, and containing a 
 summary of its share capital, its liabilities, and its assets, giving such particulars 
 as will disclose the general nature of those liabilities and assets, and how the values 
 of the fixed assets have been arrived at, but the balance sheet need not include a 
 statement of profit and loss. 
 
 (4.) The above list and summary must be contained in a separate part of the 
 register of members, and must be completed within seven days after the fourteenth 
 day aforesaid, and the company must forthwith forward to the registrar of 
 companies a copy signed by the manager or by the secretary of the company. 
 
 (5.) If a company makes default in complying with the requirements of this 
 section it shall be liable to a fine not exceeding five pounds for every day during 
 which the default continues, and every director and manager of the company who 
 knowingly and wilfully authorizes or permits the default shall be liable to the like 
 penalty. 
 
 27. No notice of any trust, expressed, implied, or constructive, shall be entered 
 on the register, or be receivable by the registrar, in the case of companies registered 
 in England or Ireland. 
 
 28. On the application of the transferor of any share or interest in a company, 
 the company shall enter in its register of members the name of the transferee in 
 the same manner and subject to the same conditions as if the application for the 
 entry were made by the transferee. 
 
 29. A transfer of the share or other interest of a deceased member of a company 
 made by his personal representative shall, although the personal representative is 
 not himself a member, be as valid as if he had been a member at the time of the 
 execution of the instrument of transfer. 
 
 80. — (1.) The register of members, commencing from the date of the registration 
 of the company, shall be kept at the registered office of the company, and, except 
 when closed under the provisions of this Act, shall during business hours (subject 
 to such reasonable restrictions as the company in general meeting may impose, so 
 that not less than two hours in each day be allowed for inspection) be open to the 
 inspection of any member gratis, and to the inspection of any other person on 
 payment of one shilling, or such less sum as the company may prescribe, for each 
 inspection. 
 
 (2.) Any member or other person may require a copy of the register, or of any 
 part thereof, or of the list and summary required by this Act, or any part thereof, 
 on payment of sixpence, or such less sum as the company may prescribe, for every 
 hundred words or fractional part thereof required to be copied. 
 
 (3.) If any inspection or copy required under this section is refused, the company 
 shall be liable for each refusal to a fine not exceeding two pounds, and to a further 
 fine not exceeding - two pounds for every day during which the refusal continues, 
 and every director and manager of the company who knowingly authorizes or 
 permits the refusal shall be liable to the like penalty ; and, as respects companies 
 registerelin England or Ireland, any judge of the High Court, or the judge of 
 the Court exercising the stannaries jurisdiction in the case of companies subject to 
 that jurisdiction, may by order compel an immediate inspection of the register. 
 
 31. A company may, on giving notice bv advertisement in some newspaper 
 circulating in the district in which the registered office of the company is situate, 
 close the register of members for any time or times not exceeding in the whole 
 thirty days in each year. 
 
 32. — (1.) If- 
 
 (a) the name of any person is, without sufficient cause, entered in or omitted 
 from the register of members of a company ; or 
 
 p. 30 
 
 8. 30 of 1862. 
 Trusts not to be 
 entered on 
 register. 
 
 p. 158 
 
 8. 26 of 1867. 
 Registration of 
 transfer at 
 request of 
 transferor. 
 
 8. 24 of 1862. 
 Transfer by 
 personal 
 representative, 
 p. 139 
 8. 32 of 1862. 
 Inspection of 
 register of 
 members. 
 
 p. 124 
 
 S. 33 of 1862. 
 Power to 
 close register. 
 
 8. 35 of 1862. 
 Power of Court 
 to rectify 
 register. 
 
458 
 
 Appendix, 
 
 S. 87 of 1862. 
 Register to be 
 evidence. 
 
 p. 125 
 
 S. 2 of 1883. 
 Power for 
 company to 
 keep colonial 
 register, 
 p. 129 
 
 S. 3 of 1883. 
 Regulations 
 as to colonial 
 register. 
 
 p. 129 
 
 8. 3 of 1883. 
 Stamp duties 
 in case of 
 shares regis- 
 tered in 
 
 (b) default is made or unnecessary delay takes place in entering on the register 
 the fact of any person having ceased to be a member, 
 the person aggrieved, or any member of the company, or the company, may apply 
 to the Court for rectification of the register. 
 
 (2.) The application may be made, as respects companies registered in England 
 or Ireland, by motion in the High Court, or by application to a judge of the 
 High Court sitting in cliambeis, or by application to the judge of the Court exer- 
 cising the st.nnaries jurisdiction in the case of companies subject to that juris- 
 diction, and, as respects companies registered in Scotland, by summary petition to 
 the Court of Session, or in such other manner as the said Courts may respec- 
 ti\ely direct; and the Court may either refuse the application, or may order 
 rectification of the register, and payment by the company of any damages sustained 
 by any party aggrieved. 
 
 (3.) On any application under this section the Court may decide any question 
 relating to the title of any person who is a party to the application to have his 
 name entered in or omitted from the register, whether the question arises between 
 members or alleged members, or betw« en members or alleged members on the one 
 hand and the company on the other hand; and generally may decide any ques- 
 tion necessary or expedient to be decided for rectification of the register. 
 
 (4.) In the case of a company required by this Act to s< nd a list of its members 
 to the registrar of companies, the Court, when making an order for rectification 
 of the register, shall by its order direct notice of the rectification to be given to 
 the registrar. 
 
 33. The register of members shall be primd facie evidence of any matters by 
 this Act directed or authorized to be inserted therein. 
 
 34. — (1.) A company having a share capital, whose objects comprise the trans- 
 action of business iu a colony, may, if so authorized by its articles, cause to be kept 
 in any colony in which it transacts business a branch register of members resident 
 in that colony (in this Act called a < olonial register). 
 
 (2.) The company shall give to the registrar of companies notice of the situation 
 of the office wheie any colonial register is kept, and of any change in its situation, 
 and of the discontinuance of the offi e iu the event of its being discontinued. 
 
 (3.) For the purpose of the provisions of this Act relating to colonial registers 
 the term “ colony ” includes British India and the Commonwealth of Australia. 
 
 35. — (1.) A colonial register shall be deemed to be part of the company’s register 
 of members (in this and the next following section c lied the principal register). 
 
 (2.) It shall be kept iu the same manner in which the principal register is by 
 this Act required to be kept, except that the advertisement before closing the 
 register shall be inserted in some newspap* r circulating in the district wherein the 
 colouial register is kept, and that any competent Court in the colony may exercise 
 the same jurisdiction of rectifying the register as is under this Act exerciseable by 
 the High Court, and that the offences of refusing inspection or copies of a colonial 
 register, and of authorizing or permitting the refusal may be prosecuted summarily 
 before any tribunal in the colony having summary criminal jurisdiction. 
 
 (3.) The company shall transmit to its registered office a copy of every entry in 
 its colonial register as soon as may be after the entry is made ; and shall cause to 
 be kept at its registered office, duly entered up from t>me to time, a duplicate of its 
 colonial register, and the duplicate shall, for all the purposes of this Act, be deemed 
 to be part of the principal register. 
 
 (4.) Subject to the provisions of this section with respect to the duplicate register, 
 the shar< s registered in a colonial register shall be distinguished from the shares 
 registered in the principal register, and no transaction with respect to any shares 
 registered in a colonial register shall, during the continuance of that registration, 
 be registered in any other register. 
 
 (o.) The company may discontinue to keep any colonial register, and thereupon 
 all entries in that register shall be transferred to some other colonial register kept 
 by the company in the same colony, or to the principal register. 
 
 (6.) Subject to the provisions of this Act, any company may, by its articles, make 
 such provisions as it may think fit respecting the taeping of colonial registers. 
 
 36. In relat'on to stamp duties the following provisions shall have effect: — 
 
 (a) An instrument of transfer of a share registered in a colonial register shall 
 be deemed to be a transfer of property situate out of the United King- 
 dom, and, unless executed in any part of the United Kingdom, shall be 
 exempt from British stamp duty : 
 
Companies (Consolidation) Act, J 908. Act of 1908 459 
 
 (b) On the death of a member registered in a colonial register, the shares of 
 the deceased member shall, if he died domiciled in the United Kingdom, 
 but not otherwise, be deemed, so far as relates to British duties, to be 
 part of his estate and effects situate in the United Kingdom for or in 
 respect of which probate or letters of administration is or are to be 
 granted, or whereof an inventory is to be exhibited and recorded, in like 
 manner as if he were registered in the principal register. 
 
 37. — (1.) A company limited by shares, if so authorized by its articles, may, 
 •with respect to any fully paid-up shares, or to stock, issue under its common seal 
 a warrant stating that the bearer of the warrant is entitled to the shares or stock 
 therein specified, and may provide by coupons or otherwise, for the payment of the 
 future dividends on the shares or stock included in the warrant, in this Act termed 
 a share warrant. 
 
 (2.) A share warrant shall entitle the bearer thereof to the shares or stock therein 
 specified, and the shares or stock may be transferred by delivery of the warrant. 
 
 (3.) The bearer of a share warrant shall, subject to the articles of the company, 
 be entitled, on surrendering it for cancellation, to have his name entered as a 
 member in the register of members ; and the company shall be responsible for any 
 loss incurred by any person by reason of the company entering in its register the 
 name of a bearer of a share warrant in respect of the shares or stock therein 
 specified without the warrant being surrendered and cancelled. 
 
 (4.) The bearer of a share warrant may, if the articles of the company so provide, 
 be deemed to be a member of the company within the meaning of this Act, either 
 to the full extent or for any purposes defined in the articles : except that he shall not 
 be qualified in respect of the shares or stock specified in the warrant for being a 
 director or manager of the company in cases where such a qualification is required 
 by the articles. 
 
 (5.) On the issue of a share warrant the company shall strike out of its register 
 of members the name of the member then entered therein as holding the shares or 
 stock specified in the warrant as if he had ceased to be a member, and shall enter 
 in the register the following particulars, namely : — 
 
 (i) The fact of the issue of the warrant ; 
 
 (ii) A statement of the shares or stock included in the warrant, distinguishing 
 
 each share by its number ; and 
 
 (iii) The date of the issue of the warrant. 
 
 (6.) Until the warrant is surrendered, the above particulars shall be deemed to be 
 the particulars required by this Act to be entered in the register of members ; and, 
 on the surrender, the date of the surrender must be entered as if it were the date at 
 which a person ceased to be a member. 
 
 38. — (l.) If any person — 
 
 (i) with intent to defraud, forges or alters, or offers, utters, disposes of, or puts 
 off, knowing the same to be forged or altered, any share warrant or 
 coupon, or any document purporting to be a share warrant or coupon, 
 issued in pursuance of this Act ; or by means of any such forged or 
 altered share warrant, coupon, or document, purporting as aforesaid, 
 demands or endeavours to obtain or receive any share or interest in any 
 company under this Act, or to receive any dividend or money payable in 
 respect thereof, knowing the warrant, coupon, or document to be forged 
 or altered ; or 
 
 (ii) falsely and deceitfully personates any owner of any share or interest in any 
 company, or of any share warrant or coupon, issued in pursuance of this 
 Act, and thereby obtains or endeavours to obtain any such share or 
 interest or share warrant or ooupon, or receives or endeavours to receive 
 any money due to any such owner, as if the offender were the true and 
 lawful owner, 
 
 lie shall be guilty of felony, and being convicted thereof shall be liable, at the 
 discretion of the Court, to be kept in penal servitude for life or for any term not 
 less than three years. 
 
 (2.) If any person without lawful authority or excuse, proof whereof shall lie on 
 him, engraves or makes on any plate, woo l, stone, or other material any share 
 warrant or coupon purporting to be a share warrant or coupon issued or made by 
 any particular company in pursuance of this Act, or to be a olunk share warrant, or 
 coupon so issued or made, or to be a part of such a share warrant or coupon, or uses 
 any such plate, wood, stone, or other material for the making or printing of any 
 such share warrant or coupon, or of any such blank share warrant or coupon, or 
 
 30 (2) 
 
 colonial 
 
 registers. 
 
 S. 27 of 1867. 
 Issue and 
 effect of share 
 warrants to 
 bearer. 
 
 p. 141 
 
 S. 34 of 1867. 
 
 Forgery, 
 
 personation, 
 
 unlawfully 
 
 engraving 
 
 plates, &c. 
 
460 
 
 Appendix. 
 
 S. 24 of 1867. 
 Power of com- 
 pany to arrange 
 for different 
 amounts being 
 paid on shares. 
 
 S. 3 of 1880. 
 Power to 
 return 
 
 accumulated 
 profits in 
 reduction of 
 paid-up 
 share capital, 
 p. 93 
 
 S. 12 of 1862, 
 s. 21 of 1867. 
 Power of 
 company 
 limited by 
 shares to 
 alter its 
 share capital, 
 pp. 86, 88, 89 
 
 any part thereof respectively, or knowingly has in his custody or possession any 
 such plate, wood, stone, or other material, he shall be guilty of felony, and being 
 convicted thereof shall be liable, at the discretion of the Court, to be kept in penal 
 servitude for any term not exceeding fourteen years and not less than three years. 
 
 39. A company, if so authorized by its articles, may do any one or more of the 
 following things ; namely, — 
 
 (1.) Make arrangements on the issue of shares for a difference between the share- 
 holders in the amounts and times of payment of calls on their shares : 
 
 (2.) Accept from any member who assents thereto the whole or a part of the 
 amount remaining unpaid on any shares held by him, although no part of 
 that amount has been called up : 
 
 (3.) Pay dividend in proportion to the amount paid up on each share where a 
 larger amount is paid up on some shares than on others. 
 
 40. — (1.) When a company has accumulated a sum of undivided profits, which 
 with the sanction of the shareholders may be distributed among the shareholders in 
 the form of a dividend or bonus, it may, by special resolution, return the same, or 
 any part thereof, to the shareholders in reduction of the paid-up capital of the 
 company, the impaid capital being thereby increased by a similar amount. 
 
 (2.) The resolution shall not take effect until a memorandum, showing the par- 
 ticulars required by this Act in the case of a reduction of share capital, has been 
 produced to and registered by the registrar of companies, but the other provisions 
 of this Act with respect to reduction of share capital shall not apply to a reduction 
 of paid-up share capital under this section. 
 
 (3.) On a reduction of paid-up capital in pursuance of this section any share- 
 holder, or any one or more of several joint shareholders, may within one month 
 after the passing of the resolution for the reduction, require the company to retain, 
 and the company shall retain accordingly, the whole of the money actually paid on 
 the shares held by him either alone or jointly with any other person, which, in 
 consequence of the reduction, would otherwise be returned to him or them, and 
 thereupon those shares shall, as regards the payment of dividend, be deemed to be 
 paid up to the same extent only as the shares on which payment has been accepted 
 by the shareholders in reduction of paid-up capital, and the company shall invest 
 and keep invested the money so retained in such securities authorized for invest- 
 ment by trustees as the company may determine, and on the money so invested or 
 on so much thereof as from time to time exceeds the amount of calls subsequently 
 made on the shares in respect of which it has been retained, the company shall 
 pay the interest received from time to time on the securities. 
 
 (4.) The amount retained and invested shall be held to represent the future calls 
 which may be made to replace the share capital so reduced on those shares, whether 
 the amount obtained on sale of the whole or such proportion thereof as represents 
 the amount of any call when made produces more or less than the amount of 
 the call. 
 
 (5.) On a reduction of paid-up share capital in pursuance of this section, the- 
 powers vested in the directors of making calls on shareholders in respect of the 
 amount unpaid on their shares shall extend to the amount of the unpaid share 
 capital as augmented by the reduction. 
 
 (6.) After any reduction of share capital under this section the company shall 
 specify in the annual list of members required by this Act the amounts retained at 
 the request of any of the shareholders in pursuance of this section, and shall 
 specify in the statements of account laid before any general meeting of the 
 company the amount of undivided profits returned in reduction of paid-up share 
 capital under this section. 
 
 41. — (1.) A company limited by shares, if so authorized by its articles, may alter 
 the conditions of its memorandum as follows (that is to say), it may — 
 
 (a) increase its share capital by the issue of new shares of such amount as it 
 
 thinks expedient ; 
 
 (b) consolidate and divide all or any of its share capital into shares of larger 
 
 amount than its existing shares ; 
 
 (c) convert all or any of its paid-up shares into stock, and reconvert that stock 
 
 into paid-up shares of any denomination ; 
 
 (d) sub-divide its shares, or any of them, into shares of smaller amount than is 
 
 fixed by the memorandum, so, however, that in the sub-division the 
 proportion between the amount paid and the amount, if any, unpaid on 
 each reduced share shall be the same as it was in the case of the share 
 from which the reduced share is derived ; 
 
Companies (Consolidation) Act, 1908. Act of 1908 461 
 
 (e) cancel shares which, at the date of the passing 1 of the resolution in that 
 behalf, have not been taken or agreed to be taken by any person, and 
 diminish the amount of its share capital by the amount of the shares so 
 cancelled. 
 
 (2.) The powers conferred by this section with respect to sub-division of shares 
 must be exercised by special resolution. 
 
 (3.) Where any alteration has been made under this section in the memorandum 
 of a company, every copy of the memorandum issued after the date of the 
 alteration shail be in accordance with the alteration. 
 
 If a company makes default in complying with this provision it shall be liable 
 to a fine not exceeding one pound for each copy in respect of which default is 
 made ; and every director and manager of the company who knowingly and wil- 
 fully authorizes or permits the default shall be liable to the like penalty. 
 
 (4.) A cancellation of shares in pursuance of this section shall not be deemed to 
 be a reduction of -share capital within the meaning of this Act. 
 
 42. Where a company having a share capital has consolidated and divided its 
 share capital into shares of larger amount than its existing shares, or converted 
 any of its shares into stock, or reconverted stock into shares, it shall give notice to 
 the registrar of companies of the consolidation, division, conversion, or recon- 
 version specifying the shares consolidated, divided, or converted, or the stock 
 reconverted. 
 
 43. Where a company having a share capital has converted any of its shares 
 into stock, and given notice of the conversion to the registrar of companies, all 
 the provisions of this Act which are applicable to shares only shall cease as to so 
 much of the share capital as is converted into stock ; and the register of members 
 of the company, and the list of members to be forwarded to the registrar, shall 
 show the amount of stock held by each member instead of the amount of shares 
 and the particulars relating to shares hereinbefore required by this Act. 
 
 44. — (1.) Where a company having a share capital, whether its shares have or 
 have not been converted into stock, has increased its share capital beyond the 
 registered capital, and where a company not having a share capital has increased 
 the number of its members beyond the registered number, it shall give to the 
 registrar of companies, in the case of an increase of share capital, within fifteen days 
 after the passing, or in the case of a special resolution the confirmation, of the reso- 
 lution authorizing the increase, and in the case of an increase of members within 
 fifteen days after the increase was resolved on or took place, notice of the increase 
 of capital or members, and the registrar shall record the increase. 
 
 (2.) If a company makes default in complying with the requirements of this 
 section it shall be liable to a fine not exceeding five pounds for every day during 
 which the default continues, and every director and manager of the company who 
 knowingly and wilfully authorizes or permits the default shall be liable to the like 
 penalty. 
 
 45. — (1.) A company limited by shares may, by special resolution confirmed by 
 an order of the Court, modify the conditions contained in its memorandum so as to 
 reorganise its share capital, whether by the consolidation of shares of different 
 classes or by the division of its shares into shares of different classes : 
 
 Provided that no preference or special privilege attached to or belonging to any 
 class of shares shall be interfered with except by a resolution passed by a majority- 
 in number of shareholders of that class holding three -fourths of the share capital of 
 that class and confirmed at a meeting of shareholders of that class in the same 
 manner as a special resolution of the company is required to be confirmed, and every 
 resolution so passed shall bind all shareholders of the class. 
 
 (2.) Where an order is made under this section an office copy thereof shall be filed 
 with the registrar of companies within seven days after the making of the order, or 
 within such further time as the Court may allow, and the resolution shall not take 
 effect until such a copy has been so filed. 
 
 S. 28 of 1862 . 
 Notice to regis- 
 trar of consoli- 
 dation of share' 
 capital, conver- 
 sion of shares 
 into stock, &c. 
 
 S. 29 of 1862, 
 Effect of 
 conversion 
 of shares 
 into stock. 
 
 S. 34 of 1862. 
 Notice of 
 increase of 
 share capital 
 or of members. 
 
 S. 39 of 1907. 
 Reorganisa- 
 tion of share 
 capital. 
 
 p. 100 
 
 Reduction of Share Capital. 
 
 46. — (1.) Subject to confirmation by the Court, a company limited by shares, if S. 9 of 1867, 
 
 so authorized by its articles, may by special resolution reduce its share capital in g. 3 of 1897. 
 
 any way, and in particular (without prejudice to the generality of the foregoing gp ec j a i 
 
 , . . , , resolution for 
 
 (a) Extinguish or reduce the liability on any of its shares m respect of share reduction of 
 
 capital not paid up ; or share capital. 
 
 p. 91 
 
462 
 
 Appendix 
 
 8. 11 of 1867. 
 Application to 
 Court for con- 
 firming order. 
 
 p. 98 
 
 8. 10 of 1862. 
 Addition to 
 name of com- 
 pany of “ and 
 reduced.” 
 
 p. 99 
 
 S. 13 of 1867. 
 Objections 
 by creditors, 
 and settle- 
 ment of list 
 of objecting 
 creditors. 
 
 S. 11 of 1867. 
 Order con- 
 firming 
 reduction. 
 
 p. 98 
 
 S. 9 of 1867. 
 Registration 
 of order and 
 minute of 
 reduction, 
 p. 99 
 
 (b) Either with or without extinguishing or reducing liability on any of its shares,. 
 
 cancel any paid-up share capital which is lost or unrepresented by available 
 assets ; or 
 
 (c) Either with or without extinguishing or reducing liability on any of its 
 
 shares, pay off any paid-up share capital which is in excess of the wants 
 of the company, 
 
 and may, if and so far as is necessary, alter its memorandum by reducing the amount 
 of its share capital and of its shares accordingly. 
 
 (2.) A special resolution under this section is in this Act called a resolution for 
 reducing 1 share capital. 
 
 47 . Where a company has passed and confirmed a resolution for reducing share 
 capital it may apply by petition to the Court for an order confirming the reduction. 
 
 48 . On and from the confirmation by a company of a resolution for reducing 
 share capital, or where the reduction does not involve either the diminution of any 
 liability in respect of unpaid share capital or the payment to any shareholder of any 
 paid-up share capital, then on and from the presentation of the petition for con- 
 firming the reduction, the company shall add to its name, until such date as the 
 Court may fix, the words “ and reduced,” as the last words in its name, and those 
 words shall, until that date, be deemed to be part of the name of the company : 
 
 Provided that, where the reduction does not involve either the diminution of any 
 liability in respect of unpaid share capital or the payment to any shareholder of any 
 paid-up share capital, the Court may, if it thinks expedient, dispense altogether 
 with the addition of the words “ and reduced.” 
 
 49 . — (1.) Where the proposed reduction of share capital involves either diminu- 
 tion of liability in respect of unpaid share capital or the payment to any shareholder 
 of any paid-up share capital, and in any other case if the Court so directs, every 
 creditor of the company who at the date fixed by the Court is entitled to any debt 
 or claim which, if that date were the commencement of the winding up of the 
 company, would be admissible in proof against the company, shall be entitled to 
 object to the reduction. 
 
 (2.) The Court shall settle a list of creditors so entitled to object, and for that 
 purpose shall ascertain, as far as possible without requiring an application from any 
 creditor, the names of those creditors and the nature and amount of their debts or 
 claims, and may publish notices fixing a day or days within which creditors not 
 entered on the list are to claim to be so entered or are to be excluded from the right 
 of objecting to the reduction. 
 
 (3.) Where a creditor entered on the list whose debt or claim is not discharged or 
 determined does not consent to the reduction, the Court may, if it thinks fit, dispense 
 with the consent of that creditor, on the company securing payment of his debt or 
 claim by appropriating, as the Court may direct, the following amount ; (that is to 
 say,)— 
 
 (i) If the company admits the full amount of his debt or claim, or, though not 
 
 admitting it, is willing to provide for it, then the full amount of the debt 
 or claim ; 
 
 (ii) If the company does not admit or is not willing to provide for the full 
 
 amount of the debt or claim, or if the amount is contingent or not ascer- 
 tained, then an amount fixed by the Court after the like inquiry and 
 adjudication as if the company were being wound up by the Court. 
 
 50 . The Court, if satisfied, with respect to every creditor of the company who 
 under this Act is entitled to object to the reduction, that either his consent to the 
 reduction has been obtained or his debt or claim has been discharged or has deter- 
 mined, or has been secured, may make an order confirming the reduction on such 
 terms and conditions as it thinks fit. 
 
 51 . — ( 1 .) The registrar of companies on production to him of an order of the Court 
 confirming the reduction of the share capital of a company, and the delivery to him 
 of a copy of the order and of a minute (approved by the Court), showing with 
 respect to the share capital of the company, as altered by the order, the amount of 
 the share capital, the number of shares into which it is to be divided, and the amount 
 of each share, and the amount (if any) at the date of the registration deemed to be 
 paid up on each share, shall register the order and minute. 
 
 (2.) On the registration, and not before, the resolution for reducing share capital 
 as confirmed by the order so registered shall take effect. 
 
 (3.) Notice of the registration shall be published in such manner as the Court may 
 direct. 
 
Companies (Consolidation) Act, 1908. Act of 1908 463 
 
 (4.) The registrar shall certify under his hand the registration of the order and 
 minute, and his certificate shall be conclusive evidence that all the requirements of 
 this Act with respect to reduction of share capital have been complied with, and 
 that the share capital of the company is such as is stated in the minute. 
 
 52 . — (1.1 The minute when registered shall be deemed to be substituted for the 
 correspon dinar part of the memorandum of the company, and shall be valid and 
 alterable as if it had been originally contained therein : and must be embodied in 
 every copy of the memorandum issued after its registration. 
 
 (2.) If a company makes default in complying with the requirements of this section 
 it shall be liable to a fine not exceeding one pound for each copy in respect of which 
 default is made, and every director and manager of the company who knowingly 
 and wilfully authorizes or permits the default shall be liable to the like penalty. 
 
 53. A member of the company, past or present, shall not be liable in respect of 
 any share to any call or contribution exceeding in amount the difference (if any) 
 betweeu the amount paid, or (as the case may be) the reduced amount, if any, which 
 is to be deemed to have been paid, on the share and the amount of the share as fixed 
 by the minute: 
 
 Provided that if any creditor, entitled in respect of any debt or claim to object to 
 the reduction of share capital, is, by reason of his ignorance of the proceedings for 
 reduction, or of their nature and effect with respect to his claim, not entered on the 
 list of creditors, and, after the reduction, the company is unable, within the meaning 
 of the provisions of this Act with respect to winding up by the Court, to pay the 
 amount of his debt or claim, then — 
 
 (i) every person who was a member of the company at the date of the regis- 
 
 tration of the order for reduction and minute, shall be liable to contribute 
 for the payment of that debt or claim an amount not exceeding the 
 amount which he would have been liable to contribute if the company 
 had commenced to be wound up on the day before that registration ; and 
 
 (ii) if the company is wound up, the Court, on the application of any such 
 
 creditor, and proof of his ignorance as aforesaid may, if it thinks fit, 
 settle accordingly a list of persons so liable to contribute, and make and 
 enforce calls and orders on the contributories settled on the list as if 
 they were ordinary contributories in a winding up. 
 
 Nothing in this section shall affect the rights of the contributories among 
 themselves. 
 
 54. If any director, manager, or officer of the company wilfully conceals the 
 name of any creditor entitled to object to the reduction, or wilfully misrepresents 
 the nature or amount of the debt or claim of any creditor, or if any director or 
 manager of the company aids or abets in or is privy to any such concealment or 
 misrepresentation as aforesaid, every such director, manager, or officer shall be 
 guilty of a misdemeanour. 
 
 55. In any case of reduction of share capital, the Court may require the company 
 to publish as the Court directs the reasons for reduction, or such other information 
 in regard thereto as the Court may think expedient with a view to give proper 
 information to the public, and, if the Court thinks fit, the causes which led to the 
 reduction. 
 
 56. A company limited by guarantee and registered on or after the first day of 
 January nineteen hundred and one, may, if it has a share capital, and is so 
 authorized by its articles, increase or reduce its share capital in the same manner 
 and subject to the same conditions in and subject to which a company limited by 
 shares may increase or reduce its share capital under the provisions of this Act. 
 
 Registration of Unlimited Company as Limited. 
 
 p. 99 
 
 S. 16 of 1867. 
 Minute to 
 form part of 
 memorandum. 
 
 S. 16 of 1867. 
 Liability of 
 members in 
 respect of 
 reduced 
 shares. 
 
 S. 19 of 1867. 
 Penalty on 
 concealment 
 of name of 
 creditor. 
 
 S. 4 of 1877. 
 Publication 
 of reasons for 
 reduction. 
 
 S. 27 of 1900. 
 Increase and 
 reduction of 
 share capital 
 in case of a 
 company limited 
 by guarantee 
 having a share 
 capital. 
 
 57. — (1.) Subject to the provisions of this section, any company registered as S. 4 of 1879. 
 unlimited may register under this Act as limited, or any company already registered Registration 
 as a limited company, may re-register under this Act, but the registration of an 0 f unlimited 
 unlimited company as a limited company shall not affect any debts, liabilities, company as 
 obligations, or contracts incurred or entered into by, to, with, or on behalf of the limited/ 
 company before the registration, and those debts, liabilities, obligations, and ... ’ 
 contracts may be enforced in manner provided by Part VII. of this Act in the case P* 
 of a company registered in pursuance of that Part. 
 
 (2.) On registration in pursuance of this section the registrar shall close the 
 former registration of the company, and may dispense with the delivery to him of 
 
464 
 
 Appendix, 
 
 S. 5 of 1879. 
 Power of 
 unlimited 
 company to 
 provide for 
 reserve share 
 capital on re- 
 registration. 
 
 S. 5 of 1879. 
 Reserve 
 liability of 
 limited 
 company, 
 p. 271 
 
 J$s.4,7of 1867. 
 Limited 
 company may 
 have direc- 
 tors with 
 unlimited 
 liability. 
 
 S. 8 of 1867. 
 Special 
 resolution of 
 limited com- 
 pany making 
 liability of 
 directors 
 unlimited. 
 
 S. 39 of 1862. 
 Registered 
 
 copies of any documents with copies of which he was furnished on the occasion of 
 the original registration of the company, but, save as aforesaid, the registration 
 shall take place in the same manner and shall have effect as if it were the first 
 registration of the company under this Act, and as if the provisions of the Acts 
 under which the company was previously registered and regulated had been 
 contained in different Acts of Parliament from those under which the company is 
 registered as a limited company. 
 
 58. An unlimited company having a share capital may, by its resolution for 
 registration as a limited company in pursuance of this Act, do either or both of the 
 following things, namely : — 
 
 (a) Increase the nominal amount of its share capital by increasing the nominal 
 
 amount of each of its shares, hut subject to the condition that no part of 
 the increased capital shall be capable of beiug called up except in the 
 event and for the purposes of the company being wound up ; 
 
 (b) Provide that a specified portion of its uncalled share capital shall not be 
 
 capable of being called up except in the event and for the purposes of the 
 company being wound up. 
 
 Reserve Liability of Limited Company. 
 
 59. A limited company may by special resolution determine that any portion of 
 its share capital which has not been already called up shall not be capable of being 
 called up, except in the event and for the purposes of the company being wound up, 
 and thereupon that portion of its share capital shall not be capable of being called 
 up except in the event and for the purposes aforesaid. 
 
 Unlimited Liability of Directors. 
 
 60. — (1.) In a limited company the liability of the directors or managers, or 
 the managing director, may, if so provided by the memorandum, be unlimited. 
 
 (2.) In a limited company in which the liability of a director or manager is 
 unlimited, the directors or managers of the company (if any), and the member who 
 proposes a person for election or appointment to the office of director or manager, 
 shall add to that proposal a statement that the liability of the person holding that 
 office will be unlimited, and the promoters, directors, managers, and secretary (if 
 any) of the company, or one of them, shall, before the person accepts the office or 
 acts therein, give him notice in writing that his liability will be unlimited. 
 
 (3.) If any director, manager, or proposer makes default in adding such a state- 
 ment, or if any promoter, director, manager, or secretary makes default in giving 
 such a notice, he shall be liable to a fine not exceeding one hundred pounds, and 
 shall also be liable for any damage which the person so elected or appointed may 
 sustain from the default, but the liability of the person elected or appointed shall 
 not be affected by the default. 
 
 61. — (1.) A limited company, if so authorized by its articles, may, by special 
 resolution, alter its memorandum so as to render unlimited the liability of its 
 directors, or managers, or of any managing director. 
 
 (2.) Upon the confirmation of any such special resolution, the provisions thereof 
 shall be as valid as if they had been originally contained in the memorandum ; and 
 a copy thereof shall be embodied in or annexed to every copy of the memorandum 
 issued after the confirmation of the resolution. 
 
 (3.) If a company makes default in complying with the requirements of this 
 section, it shall be liable to a fine not exceeding one pound for each copy in respect 
 of which default is made ; and every director or manager of the company who 
 knowingly and wilfully authorizes or permits the default shall be liable to the like 
 penalty. 
 
 PART III. 
 
 Management and Administration. 
 
 Office and Name. 
 
 62. — (1.) Every company .shall have a registered office, to which all com- 
 munications and notices may be addressed. 
 
Act of 1908 465 
 
 Companies (Consolidation) Act, 1908. 
 
 (2.) Notice of the situation of the registered office, and of any change therein, 
 shall be given to the registrar of companies, who shall record the same. 
 
 (3.) If a company carries on business without complying with the requirements 
 of this section it shall be liable to a fine not exceeding five pounds for every day 
 during which it so carries on business. 
 
 63.— (1.) Every limited company — 
 
 (a) shall paint or affix, and keep painted or affixed, its name on the outside of 
 
 every office or place in which its bus’ ness is carried on, in a conspicuous 
 position, in letters easily legible : 
 
 (b) shall have its name engraven in legible characters on its seal : 
 
 (c) shall have its name mentioned in legible characters in all notices, advertise- 
 
 ments, and other official publications of the company, and in all bills of 
 exchange, promissory notes, endorsements, cheques, and orders for 
 money or goods purporting to be signed by or on behalf of the company 
 and in all bills of parcels, invoices, receipts, and letters of credit of the 
 company. 
 
 (2.) If a limited company does not paint or affix, and keep painted or affixed, 
 its name in manner directed by this Act, it shall be liable to a fine not exceeding 
 five pounds for not so painting or affixing its name, and for every day during which 
 its name is not so kept painted or affixed, and every director and manager of the 
 company who knowingly and wilfully authorizes or permits the default shall be 
 liable to the like penalty. 
 
 (3.) If any director, manager, or officer of a limited company, or any person on 
 its behalf, uses or authorizes the use of any seal purporting to be a seal of the 
 company whereon its name is not so engraven as aforesaid, or issues or authorizes 
 the issue of any notice, advertisement, or other official publication of the company, 
 or signs or authorizes to be signed on behalf of the company any bill of exchange, 
 promissory note, endorsement, cheque, order for money or goods, or issues or 
 authorizes to be issued any bill of parcels, invoice, receipt, or letter of credit of the 
 company, wherein its name is not mentioned in manner aforesaid, he shall be liable 
 to a fine not exceeding fifty pounds, and shall further be personally liable to the 
 holder of any such bill of exchange, promissory note, cheque, or order for money or 
 goods, for the amount thereof, unless the same is duly paid by the company. 
 
 Meetings and Proceedings. 
 
 64. — (1.) A general meeting of every company shall be held once at the least in 
 every calendar year, and not more than fifteen months after the holding of the last 
 preceding general meeting, and, if not so held, the company and every director, 
 manager, secretary, and other officer of the company, who is knowdngly a party to 
 the default, shall be liable to a fine not exceeding fifty pounds. 
 
 (2.) When default has been made in holding a meeting of the company in 
 accordance with the provisions of this section, the Court may, on the application 
 of any member of the company, call or direct the calling of a general meeting of the 
 company. 
 
 65. — (1.) Every company limited by shares and registered on or after the first 
 day of January nineteen hundred and one shall, within a period of not less than one 
 month nor more than three months from the date at which the company is entitled 
 to commence business, hold a general meeting of the members of the company 
 which shall be called the statutory meeting. 
 
 (2.) The directors shall, at least seven days before the day on which the meeting 
 is held, forward a report (in this Act called “the statutory report”) to every 
 member of the company and to every other person entitled under this Act to 
 ireceive it. 
 
 (3.) The statutory report shall be certified by not less than two directors of the 
 company, or, where there are less than two directors, by the sole director and 
 manager, and shall state — 
 
 (a) the total number of shares allotted, distinguishing shares allotted as fully or 
 
 partly paid up otherwise than in cash, and stating in the case of shares 
 partly paid up the extent to which they are so paid up, and in either case 
 the consideration for which they have been allotted ; 
 
 (b) the total amount of cash received by the company in respect of all the shares 
 
 allotted, distinguished as aforesaid ; 
 
 ((c) an abstract of the receipts of the company on account of its capital, whether 
 from shares or debentures, and of the payments made thereout, up to a 
 
 office of 
 company, 
 p. 243 
 
 S. 41 of 1862. 
 Publication 
 of name by 
 a limited 
 company, 
 p. 248 
 
 S. 24 of 1907. 
 Annual 
 general 
 meeting, 
 p. 163 
 
 S. 12 of 1900. 
 First statu- 
 tory meeting 
 of company, 
 pp. 161—163 
 
466 
 
 Appendix 
 
 S. 13 of 1900. 
 Convening of 
 extraordinary 
 general 
 meeting on 
 requisition, 
 pp. 163, 164 
 
 S. 52 of 1862. 
 Provisions as 
 to meetings 
 and votes. 
 
 date within seven days of the date of the report, exhibiting under distinc- 
 tive headings the receipts of the company from shares and debentures and' 
 other sources, the payments made thereout, and particulars concerning the 
 balance remaining in hand, and an account or estimate of the preliminary 
 expenses of the company ; 
 
 (d) the names, addresses, and descriptions of the directors, auditors (if any), 
 
 managers (if any), and secretary of the company ; and 
 
 (e) the particulars of any contract, the modification of which is to be submitted 
 
 to the meeting for its approval together with the particulars of the modi- 
 fication or proposed modification. 
 
 (4.) The statutory report shall, so far as it relates to the shares allotted by thfr 
 company, and to the cash received in respect of such shares, and to the receipts and 
 payments of the company on capital account, be certified as correct by the auditors, 
 if any, of the company. 
 
 (5.) The directors shall cause a copy of the statutory report, certified as by this 
 section required, to be filed with the registrar of companies forthwith after the- 
 sending thereof to the members of the company. 
 
 (6.) The directors shall cause a list showing the names, descriptions, and 
 addresses of the members of the company, and the number of shares held by them 
 respectively, to be produced at the commencement of the meeting, and to remain 
 open and accessible to any member of the company during the continuance of the 
 meeting. 
 
 (7.) The members of the company present at the meeting shall be at liberty to 
 discuss any matter relating to the formation of the company, or arising out of tho 
 statutory report, whether previous notice has been given or not, but no resolution 
 of which notice has not been given in accordance with the articles may be passed. 
 
 (8.) The meeting may adjourn from time to time, and at any adjourned meeting 
 any resolution of which notice has been given in accordance with the articles, either 
 before or subsequently to the former meeting, may be passed, and the adjourned 
 meeting shall have the same powers as an original meeting. 
 
 (9.) If a petition is presented to the Court in manner provided by Part IV. of 
 this Act for winding up the company on the ground of default in filing the statutory 
 report or in holding the statutory meeting, the Court may, instead of directing that 
 the company be wound up, give directions for the statutory report to be filed or a 
 meeting to be held, or make such other order as may be just. 
 
 (10.) The provisions of this section as to the forwarding and filing of the statutory 
 report shall not apply in the case of a private company. 
 
 66. — (1.) Notwithstanding anything in the articles of a company, the directors 
 of a company shall, on the requisition of the holders of not less than one-tenth of 
 the issued share capital of the company upon which all calls or other sums then 
 due have been paid, forthwith proceed to convene an extraordinary general meeting 
 of the company. 
 
 (2.) The requisition must state the objects of the meeting, and must be signed by 
 the requisitionists and deposited at the registered office of the company, and may 
 consist of several documents in like form, each signed by one or more requisitionists. 
 
 (3.) If the directors do not proceed to cause a meeting to be held within twenty- 
 one days from the date of the requisition being so deposited, the requisitionists, or 
 a majority of them in value, may themselves convene the meeting, but any meeting 
 so convened shall not be held after three months from the date of the deposit. 
 
 (4.) If at any such meeting a resolution requiring confirmation at another 
 meeting is passed, the directors shall forthwith convene a further extraordinary 
 general meeting for the purpose of considering the resolution and, if thought fit, 
 of confirming it as a special resolution ; and, if the directors do not convene the 
 meeting within seven days from the date of the passing of the first resolution, 
 the requisitionists, or a majority of them in value, may themselves convene the 
 meeting. 
 
 (5.) Any meeting convened under this section by the requisitionists shall be- 
 convened in the same manner, as nearly as possible, as that in which meetings are 
 to be convened by directors. 
 
 67. In default of, and subject to, any regulations in the articles — 
 
 (i) A meeting of a company may be called by seven days’ notice in writing, 
 
 served on every member in manner in which notices are required to be- 
 served by Table A. in the First Schedule to this Act : 
 
 (ii) Five members may call a meeting : 
 
Act of 1908 467 
 
 Companies (Consolidation) Act, 1908. 
 
 (iii) Any person elected by the members present at a meeting may be chairman 
 
 thereof : 
 
 (iv) Every member shall have one vote. 
 
 68. A company which is a member of another company may, by resolution of 
 the directors, authorize any of its officials or any other person to act as its repre- 
 sentative at any meeting of that other company, and the person so authorized shall 
 be entitled to exercise the same powers on behalf of the company which he repre- 
 sents as if he were an individual shareholder of that other company. 
 
 69. — (1.) A resolution shall be an extraordinary resolution when it has been 
 passed by a majority of not less than three-fourths of such members entitled to 
 vote as are present in person or by proxy (where proxies are allowed) at a general 
 meeting of which notice specifying the intention to propose the resolution as an 
 extraordinary resolution has been duly given. 
 
 (2.) A resolution shall be a special resolution when it has been — 
 
 (a) passed in manner required for the passing of an extraordinary resolution ; 
 
 and 
 
 (b) confirmed by a majority of such members entitled to vote as are present in 
 
 person or by proxy (where proxies are allowed) at a subsequent general 
 meeting, of which notice has been duly given, and held after an interval 
 of not less than fourteen days, nor more than one month, from the date 
 of the first meeting. 
 
 (3.) At any meeting at which an extraordinary resolution is submitted to be 
 passed or a special resolution is submitted to be passed or confirmed, a declaration 
 of the chairman that the resolution is carried shall, unless a poll is demanded, be 
 conclusive evidence of the fact without proof of the number or proportion of the 
 votes recorded in favour of or against the resolution. 
 
 (4.) At any meeting at which an extraordinary resolution is submitted to be 
 passed or a special resolution is submitted to be passed or confirmed a poll may be 
 demanded, if demanded by three persons for the time being entitled according to 
 the articles to vote, unless the articles of the company require a demand by such 
 number of such persons, not in any case exceeding five, as may be specified in the 
 articles. 
 
 (5.) When a poll is demanded in accordance with this section, in computing the 
 majority on the poll reference shall be had to the number of votes to which each 
 member is entitled by the articles of the company. 
 
 (6.) For the purposes of this section notice of a meeting shall be deemed to be 
 duly given and the meeting to be duly held when the notice is given and the 
 meeting held in manner provided by the articles. 
 
 70. — (1.) A copy of every special and extraordinary resolution shall within 
 fifteen days from the confirmation of the special resolution, or from the passing of 
 the extraordinary resolution, as the case may be, be printed and forwarded to the 
 registrar of companies, who shall record the same. 
 
 (2.) Where articles have been registered, a copy of every special resolution for 
 the time being in force shall be embodied in or annexed to every copy of the articles 
 issued after the confirmation of the resolution. 
 
 (3.) Where articles have not been registered, a copy of every special resolution 
 shall be forwarded in print to any member at his request, on payment of one 
 shilling or such less sum as the company may direct. 
 
 (4.) If a company makes default in printing or forwarding a copy of a special 
 or extraordinary resolution to the registrar it shall be liable to a fine not exceeding 
 two pounds for every day during which the default continues. 
 
 (5.) If a company makes default in embodying in or annexing to a copy of its 
 articles or in forwarding in print to a member when required by this section a copy 
 of a special resolution, it shall be liable to a fine not exceeding one pound for each 
 copy in respect of which default is made. 
 
 (6.) Every director and manager of a company who knowingly and wilfully 
 authorizes or permits any default by the company in complying with the require- 
 ments of this section shall be liable to the like penalty as is imposed by this section 
 on the company for that default. 
 
 71. — (1.) Every company shall cause minutes of all proceedings of general 
 meetings and (where there are directors or managers) of its directors or managers 
 to be entered in books kept for that purpose. 
 
 (2.) Any such minute if purporting to be signed by the chairman of the meeting 
 at which the proceedings were had, or by the chairman of the next succeeding 
 meeting, shall be evidence of the proceedings. 
 
 S. 24 of 1907. 
 Representation 
 of companies at 
 meetings of 
 other companies 
 of which they 
 are members. 
 
 Ss. 51, 129 of 
 1862. 
 
 Definitions of 
 extraordinary 
 and special 
 resolution, 
 pp. 236, 237 
 
 p. 239 
 
 S. 53 of 1862. 
 
 Registration 
 and copies 
 of special 
 resolutions. 
 
 p. 240 
 
 S. 67 of 1862. 
 Minutes of 
 proceedings 
 of meetings 
 and directors, 
 p. 244 
 
468 
 
 Appendix. 
 
 (3.) Until the contrary is proved, every general meeting of the company or 
 meeting of directors or managers in respect of the proceedings whereof minutes have 
 been so made shall be deemed to have been duly held and convened, and all pro- 
 ceedings had thereat to have been duly had, and all appointments of directors, 
 managers, or liquidators, shall be deemed to be valid. 
 
 S. 2 of 1900. 
 Restrictions 
 on appoint- 
 ment or 
 advertisement 
 of director. 
 
 p. 181 
 
 S. 3 of 1900. 
 Qualification 
 of director. 
 
 pp. 182-185 
 
 fi. 67 of 1862. 
 Validity of acts 
 of directors. 
 
 p. 189 
 
 S. 45 of 1862. 
 List of 
 directors to 
 be sent to 
 registrar. 
 
 Appointment , Qualification , of Directors. 
 
 72. — (1.) A person shall not be capable of being appointed director of a company 
 by the articles, and shall not be Earned as a director or proposed director of a com- 
 pany in any prospectus issued by or on behalf of the company, or in any statement 
 in lieu of prospectus filed by or on behalf of a company, unless, before the regis- 
 tration of the articles or the publication of the prospectus, or the filing of the 
 statement in lieu of prospectus, as the case may be, he has by himself or by his 
 agent authorized in writing — 
 
 (i) Signed and filed with the registrar of companies a consent in writing to act 
 
 as such director ; and 
 
 (ii) Either signed the memorandum for a number of shares not less than his 
 
 qualification (if any), or signed and filed with the registrar a contract in 
 writing to take from the company and pay for his qualification shares 
 (if any). 
 
 (2.) On the application for registration of the memorandum and articles of a 
 company the applicant shall deliver to the registrar a list of the persons who have 
 consented to be directors of the company, and, if this list contains the name of any 
 person who has not so consented, the applicant shall be liable to a fine not exceeding 
 fifty pounds. 
 
 (3.) This section shall not apply to a private company nor to a prospectus issued 
 by or on behalf of a company after the expiration of one year from the date at 
 which the company is entitled to commence business. 
 
 73. — (1.) Without prejudice to the restrictions imposed by the last foregoing 
 section, it shall be the duty of every director who is by the regulations of the 
 company required to hold a specified share qualification, and who is not already 
 qualified, to obtain his qualification within two months after his appointment, or 
 such shorter time as may be fixed by the regulations of the company. 
 
 (2.) The office of director of a company shall be vacated, if the director does 
 not within two months from the date of his appointment, or within such shorter 
 time as may be fixed by the regulations of the company, obtain his qualification, 
 or if after the expiration of such period or shorter time he ceases at any time to 
 hold his qualification ; and a person vacating office under this section shall be 
 incapable of being re-appointed director of the company until he has obtained his 
 qualification. 
 
 (3.) If after the expiration of the said period or shorter time any unqualified 
 person acts as "a director of the company, he shall be liable to a fine not exceeding 
 five pounds for every day between the expiration of the said period or shorter time 
 and the last day on which it is proved that he acted as a director. 
 
 74. The acts of a director or manager shall be valid notwithstanding any 
 defect that may afterwards be discovered in his appointment or qualification. 
 
 75. — (1.) Every company shall keep at its registered office a register containing 
 the names and addresses and the occupations of its directors or managers, and 
 send to the Registrar of Companies a copy thereof, and from time to time notify 
 to the registrar any change among its directors or managers. 
 
 (2.) If default is made in compliance with this section, the company shall be 
 liable to a fine not exceeding five pounds for every day during which the default 
 continues ; and every director and manager of the company who knowingly and 
 wilfully authorizes or permits the default shall be liable to the like penalty. 
 
 Contracts, §c. 
 
 S. 37 of 1867. 
 Form of 
 contracts, 
 p. 267 et seq. 
 
 76. — (1.) Contracts on behalf of a company may be made as follows (that is to 
 say) : — 
 
 (i) Any contract which if made between private persons would be by law 
 required to be in writing, and if made according to English law to be 
 under seal, may be made on behalf of the company in writing under 
 
Companies (Consolidation) Act, 1908. Act of 1908 469 
 
 the common seal of the company, and may in the same manner be 
 varied or discharged : 
 
 (ii) Any contract which if made between private persons would be by law 
 
 required to be in writing, signed by the parties to be charged therewith, 
 may be made on behalf of the company in writing signed by any 
 person acting under its authority, express or implied, and may in the 
 same manner be varied or discharged : 
 
 (iii) Any contract which if made between private persons would by law be 
 
 valid although made by parol only, and not reduced into writing, may 
 be made by parol on behalf of the company by any person acting under 
 its authority, express or implied, and may in the same manner be 
 varied or discharged. 
 
 (2.) All contracts made according to this section shall be effectual in law, and 
 shall bind the company and its successors and all other parties thereto, their heirs, 
 executors, or administrators as the case may be. 
 
 (3.) Any deed to which a company is a party shall be held to be validly executed 
 in Scotland on behalf of the company if it is executed in terms of the provisions 
 of this Act or is sealed with the common seal of the company and subscribed on 
 behalf of the company by two of the directors and the secretary of the company, 
 and such subscription on behalf of the company shall be equally binding whether 
 attested by witnesses or not. 
 
 77. A bill of exchange or promissory note shali be deemed to have been made, 8. 47 of 1862. 
 
 accepted, or endorsed on behalf of a company if made, accepted, or endorsed in Bills of exchange 
 the name of, or by or on behalf or on account of, the company by any person and promissory 
 acting under its authority. notes. 
 
 78. A company may, by writing under its common seal, empower any person, S. 55 of 1862. 
 either generally or in respect of any specified matters, as its attorney, to execute Execution of 
 deeds on its behalf in any place not situate in the United Kingdom ; and every deeds abroad, 
 deed signed by such attorney, on behalf of the company, and under his seal, shail peq 
 
 bind the company, and have the same effect as if it were under its common seal. 
 
 79. — -(1.) A company whose objects require or comprise the transaction of Act of 1862. 
 business in foreign countries may, if authorized by its articles, have for use in any Power for 
 territory, district, or place not situate in the United Kingdom, an official seal, company to 
 which shnll be a facsimile of the common seal of the company, with the addition have official 
 on its face of the name of every territory, district, or place where it is to be used. sea l f or use 
 
 (2.) A company having such an official seal may, by writing under its common abroad, 
 seal, authorize any person appointed for the purpose in any territory, district, or 
 place not situate in the United Kingdom, to affix the same to any deed or other 
 document to which the company is party in that territory, district, or place. 
 
 (3.) The authority of any such agent shall, as between the company and any 
 person dealing with the agent, continue during the period, if any, mentioned in 
 the instrument conferring the authority, or if no period is there mentioned, then 
 until notice of the revocation or determination of the agent’s authority has been 
 given to the person dealing with him. 
 
 (4.) The person affixing any such official seal shall, by writing under his hand, 
 on the deed or other document to which the seal is affixed, certify the date and 
 place of affixing the same. 
 
 (5.) A deed or other document to which an official seal is duly affixed shall bind 
 the company as if it had been sealed with the common seal of the company. 
 
 Prospectus 
 
 80. — (1.) Every prospectus issued by or on behalf of a companv or in relation S. 9 of 1909 
 to any intended company shall be dated, and that date shall, unless the contrary s. 3 of 1907. 
 be proved, be taken as the date of publication of the prospectus. Filing of 
 
 (2.) A copy of every such prospectus, signed by every person who is named prospectus 
 therein as a director or proposed director- of the company, or by his agent authorized 
 in writing, shall be filed for registration with the registrar of companies on or P' ” d 
 before the date of its publication, and no such prospectus shall be issued until 
 a copy thereof has been so filed for registration. 
 
 (3.) The registrar shall not register any prospectus unless it is dated, and the 
 copy thereof signed, in manner required by this section. 
 
 (4.) Every prospectus shall state on the face of it that a copy has been filed for 
 registration as required by this section. 
 
470 
 
 Appendix. 
 
 S. 10 of 1900, 
 s. 2 of 1907. 
 Specific 
 requirements 
 as to par- 
 ticulars of 
 prospectus, 
 p. 343 et seq . 
 
 (6.) If a prospectus is issued without a copy thereof being so filed, the company, 
 and every person who is knowingly a party to the issue of the prospectus, shall be 
 liable to a fine not exceeding five pounds for every day from the date of the issue 
 of the prospectus until a copy thereof is so filed. 
 
 81. — (1.) Every prospectus issued by or on behalf of a company, or by or on 
 behalf of any person who is or has been engaged or interested in the formation of 
 the company, must state — 
 
 (a) The contents of the memorandum, with the names, descriptions, and addresses 
 
 of the signatories, and the number of shares subscribed for by them respec- 
 tively ; and the number of founders or management or deferred shares, 
 if any, and the nature and extent of the interest of the holders in the 
 property and profits of the company ; and 
 
 (b) the number of shares, if any, fixed by the articles as the qualification of a 
 
 director, and any provision in the articles as to the remuneration of the 
 directors ; and 
 
 (c) the names, descriptions, and addresses of the directors or proposed directors ; 
 
 and 
 
 (d) the minimum subscription on which the directors may proceed to allotment, 
 
 and the amount payable on application and allotment on each share ; 
 and in the case of a second or subsequent offer of shares, the amount 
 offered for subscription on each previous allotment made within the two 
 preceding years, and the amount actually allotted, and the amount, if 
 any, paid on the shares so allotted ; and 
 
 (e) the numb-r and amount of shares and debentures which within the two pre- 
 
 ceding years have been issued, or agreed to be issued, as fully or partly paid 
 up otherwise than in cash, and in the latter case the extent to which they are 
 so paid up, and in either case the consideration for which those shares or 
 debentures have been issued or are proposed or intended to be issued ; and 
 
 (f) the names and addresses of the vendors of any property purchased or acquired 
 
 by the company, or proposed so to be purchased or acquired, which is to 
 be paid for wholly or partly out of the proceeds of the issue offered for 
 subscription by the prospectus, or the purchase or acquisition of which 
 has not been completed at the date of issue of the prospectus, and the 
 amount payable in cash, shares, or debentures, to the vendor, and where 
 there is more than one separate vendor, or the company is a sub-purchaser, 
 the amount so payable to each vendor : Provided that where the vendors 
 or any of them are a firm the members of the firm shall not be treated as 
 separate vendors ; and 
 
 (g) the amount (if any) paid or payable as purchase-money in cash, shares, or 
 
 debentures, for any such property as aforesaid, specifying the amount (if 
 any) payable for goodwill ; and 
 
 (h) the amount (if any) paid within the two preceding years, or payable, as com- 
 
 mission for subscribing or agreeing to subscribe, or procuring or agreeing 
 to p ocure subscriptions, for any shares in, or debentures of, the company, 
 or the rate of any such commission : Provided that it shall not be neces- 
 sary to state the commission payable to sub-underwriters ; and 
 
 (i) the amount or estimated amount of preliminary expenses ; and 
 
 (j) the amount paid within the two preceding years or intended to be paid to any 
 
 promoter, and the consideration for any such payment ; and 
 
 (k) the dates of and parties to every material contract, and a reasonable time and 
 
 place at which any material contrac t or a copy thereof may be inspected : 
 Provided that this requirement shall not apply to a contract entered into 
 in the ordinary course of the busiuess earned on or intended to be carried 
 on by the company, or to any contract entered into more than two years 
 before Ihe date of issue of the prospectus ; and 
 
 (l) the names and addresses of the auditors (if any) of the company ; and 
 
 (m) lull particulars of the nature and extent of the interest (if any) of every 
 director in the promotion of, or in the property proposed to be acquired by, 
 the company, or, where the interest of such a director consists in being a 
 paitner in a firm, the nature and extent of the interest of the firm, with a 
 statement of all sums paid or agreed to be paid to him or to the firm in 
 cash or shares or otherwise by any person either to induce him to become, 
 or to qualify him as, a director, or, otherwise for services rendered by him 
 or by the firm in connexion with the promotion or formation of the 
 company ; and 
 
Companies (Consolidation) Act, 1908. Act of 1908 471 
 
 (nowhere the company is a company having shares of more than one class, the 
 right of voting at meetings of the company conferred by the several classes 
 of shares respectively. 
 
 (2.) For the purposes of this section every person shall be deemed to be a vendor 
 who has entered into any contract, absolute or conditional, for the sale or purchase, 
 or for any option of purchase, of any property to be acquired by the company, in 
 any case where — 
 
 (a) the purchase-money is not fully paid at the date of issue of the prospectus ; 
 
 or 
 
 (b) the purchase-money is to be paid or satisfied wholly or in part out of the 
 
 proceeds of the issue offered f<>r subscription by the prospectus ; or 
 ^ (c) the contract depends for its validity or fulfilment on the result of that issue. 
 
 (3.) Where any of the property to be acquired by the company is to be taken on 
 lease, this section shall apply as if the expression “vendor” included the lessor, 
 and the expression ‘ ‘ purchase- money ” included the consideration for the lease, and 
 the expression “ sub - purchaser ” included a sub-lessee. 
 
 (4.) Any condition requiring or binding any applicant for shares or debentures to 
 waive compliance with any requirement of this section, or purporting to affect him 
 with notice of any contract, document, or matter not specifically referred to in the 
 prospectus, shall be void. 
 
 (5.) Where any such prospectus as is mentioned in this section is published as a 
 newspaper advertisement, it shall not be necessary in the advertisement to specify 
 the contents of the memorandum or the signatories thereto, and the number of 
 shares subscribed for by them. 
 
 (6.) In the event of non-compliance with any of the requirements of this section, 
 a director or other person responsible for the prospectus shall not incur any liabliity 
 by reason of the non-compliance, if he proves that — 
 
 (a) as regards any matter not disclosed, he was not cognizant thereof ; or 
 
 (b) the non-compliance arose from an honest mistake of fact on his part: 
 
 Provided that in the event of non-compliance with the requirements contained in 
 
 paragraph (m) of sub-section (1) of this section no director or other person shall 
 incur any liability in respect of the non-compliance unless it be proved that he had 
 knowledge of the matters not disclosed. 
 
 (7. ) This section shall not apply to a circular or notice inviting existing members 
 or debenture holders of a company to subscribe either for shares or for debentures 
 of the company, whether with or without the right to renounce in favour of other 
 persons, but subject as aforesaid, this section shall apply to any prospectus whether 
 issued on or with reference to the formation of a company or subsequently. 
 
 (8.) The requirements of this section as to the memorandum and the qualification, 
 remuneration, and interest of directors, the names, descriptions, and addresses of 
 directors or proposed directors, and the amount or estimated amount of preliminary 
 expenses, shall not apply in the case of a prospectus issued more than one year after 
 the date at which the company is entitled to commence business. 
 
 (9.) Nothing in this section shall limit or diminish any liability which any person 
 may incur under the general law or this Act apart from this section. 
 
 82. — (1.) A company which does not issue a prospectus on or with reference to 
 its formation, shall not allot any of its shares or debentures unless before the first 
 allotment of either shares or debentures there has been filed with the registrar of 
 companies a statement in lieu of prospectus signed by every person who is named 
 therein as a director or a proposed director of the company or by his agent authorized 
 in writing, in the form and containing the particulars set out in the Second Schedule 
 to this Act. 
 
 (2.1 This section shall not apply to a private company or to a company which has 
 allotted any shares or debentures before the first day of July nineteen hundred and 
 «ight. 
 
 83. A company shall not previously to the statutory meeting vary the terms of 
 a cout.act referred to in the prospectus or statement in lieu of prospectus, except 
 subject to the approval of the statutory meeting. 
 
 81.— (1.) Where a prospectus invites persons to subscribe for shares in or deben- 
 tures of a company, every person who is a director of thecompauy at the time of the 
 issue of the prospectus, and every person who has authorized the naming of him and 
 is named in the prospectus as a director or as having agreed to become a director 
 either immediately or after an interval of time, and every promoter of the company, 
 and every person who has authorized the issue of the prospectus, shall be liable to 
 pay compensation to all persons who subscribe for any shares or debentures on the 
 
 S. 1 of 1907. 
 Obligations 
 of companies 
 where no 
 prospectus 
 is issued. 
 
 p. 363 
 
 8. 11 of 1900, 
 s. 1 of 19 J7. 
 Restriction on 
 alteration of 
 terms mentioned 
 in prospe tu- or 
 statement in lieu 
 of prospectus. 
 
 p. 364 
 
 S 3 of 1900, 
 s. 33 of 1907. 
 Liability for 
 
472 
 
 Appendix. 
 
 statements in faith of the prospectus for the loss or damage they may have sustained by reason of 
 prospectus. any untrue statement therein, or in any report or memorandum appearing on the 
 face thereof, or by reference incorporated therein or issued therewith, unless it is 
 proved — 
 
 (a) With respect to every untrue statement not purporting to be made on the 
 authority of an expert, or of a public official document or statement, 
 that he had reasonable ground to believe, and did up to the time of the 
 allotment of the shares or debentures, as the case may be, believe, that 
 the statement was true ; and 
 
 (b With respect to every untrue statement purporting to be a statement by or 
 contained in what purports to be a copy of or extract from a report or 
 valuation of an expert, that it fairly represented the statement, or was a 
 correct and fair copy of or extract from the report or valuation. Provided 
 that the director, person named as director, promoter, or person who 
 authorized the issue of the prospectus, shall be liable to pay compensation 
 as aforesaid if it is proved that he had no reasonable ground to believe 
 that the person making the statement, report, or valuation was competent 
 to make it ; and 
 
 (c) With respect to every untrue statement purporting to be a statement made 
 by an official person or contained in what purports to be a copy of or 
 extract from a public official document, that it was a correct and fair 
 representation of the statement or copy of or extract from the document : 
 
 or unless it is proved — 
 
 (i) that having consented to become a director of the company he withdrew 
 
 his consent before the issue of the prospectus, and that it was issued 
 without his authority or consent ; or 
 
 (ii) that the prospectus was issued without his knowledge or consent, and that 
 
 on becoming aware of its issue he forthwith give reasonable public notice 
 that it was issued without his knowledge or consent ; or 
 
 (iii) that after the issue of the prospectus and before allotment thereunder, he, 
 
 on becoming aware of any untrue statement therein, withdrew his 
 consent thereto, and gave reasonable public notice of the withdrawal, 
 and of the reason therefor. 
 
 (2.) Where a company existing on the eighteenth day of August one thousand 
 eight hundred and ninety, has issued shares or debentures, and for the purpose of 
 obtaining further capital by subscriptions for shares or debentures issues a 
 prospectus, a director shall not be liable in respect of any statement therein, unless 
 he has authorized the issue of the prospectus, or has adopted or ratified it. 
 
 (3.) Where the prospectus contains the name of a person as a director of the 
 company, or as having agreed to become a director thereof, and he has not 
 consented to become a director, or has withdrawn his consent before the issue of the 
 prospectus, and has not authorized or consented to the issue thereof, the directors of 
 the company, except any without whose knowledge or consent the prospectus was 
 issued, and any other person who authorized the issue thereof, shall be liable to 
 indemnify the person named as aforesaid against all damages, .costs, and expenses 
 to which he may be made liable by reason of his name having been inserted in the 
 prospectus, or in defending himself against any action or legal proceedings brought 
 against him in respect thereof. 
 
 (4.) Every person who by reason of his being a director, or named as a director, 
 or as having agreed to become a director, or of his having authorized the issue of 
 the prospectus, becomes liable to make any payment under this section may recover 
 contribution, as in cases of contract, from any other person who, if sued separately, 
 would have been liable to make the same payment, unless the person who has 
 become so liable was, and that other person was not, guilty of fraudulent 
 misrepresentation. 
 
 (5.) Eor the purposes of this section — 
 
 The expression “promoter” means a promoter who was a party to the 
 preparation of the prospectus, or of the portion thereof containing the 
 untrue statement, but does not include any person by reason of his acting 
 in a professional capacity for persons engaged in procuring the formation 
 of the company : 
 
 The expression “ expert” includes engineer, valuer, accountant, and any other 
 person whose profession gives authority to a statement made by him. 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 473 
 
 Allotment . 
 
 to allotment, 
 p. 105 
 
 85. — (1.) No allotment shall he made of any share capital of a company offered to S. 4 of 1900. 
 the public for subscription, uuless the following 1 conditions have been complied with, Restriction as 
 namelv : — 
 
 (a) the amount (if any) fived by the memorandum or articles and named in the 
 
 prospectus as the minimum subscription upon which the directors may 
 proceed to allotment ; or 
 
 (b) if no amount is so fixed and named, then the whole amount of the share 
 
 capital so offered for subscription, 
 
 has been subscribed, and the sum payable on application for the amount so fixed 
 and named, or for the whole amount offered for subscription, has been paid to and 
 received by the company, 
 
 (2.) The amount, so fixed and named and the whole amount aforesaid shall be 
 reckoned exclusively of anv amount payable otherwise than in cash, and is in this 
 Act referred to as the minimum subscription. 
 
 (3.) The amount payable on application on each share shall not be less than five 
 per cent, of the nominal amount of the share. 
 
 (4.) If the conditions aforesaid have not been complied with on the expiration of 
 forty days after the first issue of the prospectus, all money received from applicants 
 for sh 4 res shall be forthwith repaid to them without interest, and, if any such 
 money is not s>> repaid within forty -eight days after the issue of the prospectus, the 
 directors of the company shall be jointly and severally liable to repay that money 
 with i> tere<t at the rate of five per ceutu n per annum from the expiration of the 
 fortv -eiyhth day : 
 
 Provided that a director shall not be liable if he proves that the loss of the money 
 was not, due to any misconduct or negligence on his part. 
 
 (5.) Any condition requiring 1 or binding any applicant for shares to waive com- 
 pliance with an' 1 requirement of this section sh dl be void. 
 
 (6.) This section, except sub-section (3) thereof, shall not apply to any allotment P- 106 
 of shares subsequent to the first allotment of shares offered to the public for 
 subscription. 
 
 (7.) In the case of the first allotment of share capital payable in cash of a 
 company w’ ich does not issue any invitation to the public to subscribe for its shares, 
 no allotment shall be made unless tbe minimum subscription (that is to say) : — 
 
 (a) the amount (if anv) fixed by the memorandum or articles and named in the 
 
 statement in lieu of prospectus as tbe minimum subscription upon which 
 the directors may proceed to allotment; or 
 
 (b) if no amount is so fixed and named, then the whole amount of the share 
 
 capital other thau that issued or agreed to be issued as fully or partly paid 
 up otherwise than in cash, 
 
 has been subscribed and an amount not less than five per cent, of the nominal 
 amou'it of each share payable in cash has been paid to and received by the 
 company. 
 
 This sub section shall not apply to a private company or to a company which has p. 106 
 allotted any shares or debentures before the first day of July nineteen hundred and 
 eight. 
 
 8'd. — (1.) An allotment made by a company to an anplicant, in contravention of S. 5 of 1900. 
 the provisions of the last f iregoing section shall bev ddable at t e instance of the Effect of 
 applicant within one month after the bolding of the statutory meeting of the company irregular 
 and not later, and shall be so voidable notwithstanding that the company is in allotment, 
 course of being wound up. p 
 
 (2.) If anv director of a company knowingly contravenes or permits or authorizes ^ 
 the contravention of any of the provisions of the last foregoing section with respect 
 to allotment, he shill be liable to compensate tbe company and the allottee 
 respectivelv for any loss, damages, or costs w'hich the eompauy or the allottee may 
 have sustai ed or incurred thereby : Provided that proceedings to recover any su h 
 loss, damages or costs shall not be commenced after the expiration of two years 
 from the date of the allotment. 
 
 87. — ( 1 ) A comp my shall not commence any business or exercise any borrowing S. 6 of 1900. 
 
 powers unless 
 
 (a) shares held subject to the payment of the whole amount thereof in cash 
 have been allotted to an amount not less in the whole than the minimum 
 subscription ; and 
 
 p. 31 
 
 Restrictions 
 on com- 
 mencement 
 of business. 
 
 p. 58 
 
474 
 
 Appendix. 
 
 S. 7 of 1900. 
 Return as to 
 allotments. 
 
 p. 118 
 
 54 & 55 Viet, 
 c. 39. 
 
 (b) every director of the company has paid to the company on each of the shares 
 
 taken or contracted to be taken by him, and for which he is liable to pay 
 in cash, a proportion equal to the proportion payable on application and 
 allotment on the shares offered for public subscription, or in the ease of 
 a company which does not issue a prospectus inviting the public to 
 subscribe for its shares, on the shares payable in cash ; and 
 
 (c) there has been filed with the registrar of companies a statutory declaration 
 
 by the secretary or one of the directors, in the prescribed form, that the 
 aforenaid conditions have been complied with ; and 
 
 (d) in the case of a company which does not issue a prospectus inviting the 
 
 public to subscribe for its shares, the> e has been filed with the registrar 
 of companies a stateim nt in lieu of prospectus. 
 
 (2.) The registrar of companies shall, on the filing of this statutory declaration, 
 certify that the company is entitled to commence business, and that certificate shall 
 be conclusive evidence that the company is so entitled : 
 
 Provided that in the case of a company which does not issue a prospectus 
 inviting the public to subscribe for its shares the registrar shall not give such a 
 certificate unless a statement in lieu of prospectus has been filed with him. 
 
 (3.) Any contract made by a company before the date at which it is entitled to 
 commence business shall be provisional only, and shall not be binding on the 
 company until that date, and on that date it shall become binding. 
 
 (4.) Nothing in this section shall prevent the simultaneous offer for subscription 
 or allotment of any shares and debentures or the receipt of any money payable on 
 application for debentures. 
 
 (5.) If any company commences business or exercises borrowing powers in con- 
 travention of this section, every person who is responsible for the contravention 
 shall, without prejudice to any other liability, be liable to a fine not exceeding fifty 
 pounds for every day during which the contravention continues. 
 
 (6.) Nothing in this section shall apply to a private company, or to a company 
 registered before the first day of January nineteen hundred and one, or to a 
 company registered before the first day of July nineteen hundred and eight which 
 does not issue a prospectus inviting the public to subscribe for its shares. 
 
 88. — (1.) Whenever a company limited by shares makes any allotment of its 
 shares, the company shall within one month thereafter file with the registrar of 
 companies — 
 
 (a) a return of the allotments, stating the number and nominal amount of the 
 
 shares comprised in the allotment, the names, addresses, and descriptions 
 of the allottees, and the amount (if any) paid or due and payable on each 
 share ; and 
 
 (b) in the case of shares allotted as fully or partly paid up otherwise than in 
 
 cash, a contract in writing constituting the title of the allottee to the 
 allotment together with any contract of sale, or for services or other con- 
 sideration in respect of which that allotment was made, such contracts 
 being duly stamped, and a return stating the number and nominal amount 
 of shares so allotted, the extent to which they are to be treated as paid up, 
 and the consideration for which they have been allotted. 
 
 (2.) Where such a contract as above mentioned is not reduced to writing, the 
 company shall within one month after the allotment file with the registrar of 
 companies the prescribed particulars of the contract stamped with the same stamp 
 duty as would have been payable if the contract had been reduced to writing, and 
 those particulars shall be deemed to be an instrument within the meaning of the 
 Stamp Act, 1891, and the registrar may, as a condition of filing the particulars, 
 require that the duty payable thereon be adjudicated under section twelve of 
 that Act. 
 
 (3.) If default is made in complying with the requirements of this section, every 
 director, manager, secretary, or other officer of the company, who is knowingly a 
 party to the default, shall be liable to a fine not exceeding fifty pounds for every 
 day during which the default continues : 
 
 Provided that, in case of default in filing with the registrar of companies 
 within one month after the allotment any document required to be filed by this 
 section, the company, or any person liable for the default, may apply to the Court 
 for relief, and the Court, if satisfied that the omission to file the document was 
 accidental or due to inadvertence or that it is just and equitable to grant relief, 
 may make au order extending the time for the filing of the document for such 
 period as the Court may think proper. 
 
Companies (Consolidation) Act, 1908. Act of 1908 475 
 
 Commissions and Discounts. 
 
 89. — (1.) It shall be lawful for a company to pay a commission to any person 
 in consideration of his subscribing- or agreeing to subscribe, whether absolutely or 
 conditionally, for any shares in the company, or procuring or agreeing to procure 
 subscriptions, whether absolute or conditional, for any shares in the company, if 
 the payment of the commission is authorized by the articles, and the commission 
 paid or agreed to be paid does not exceed the amount or rate so authorized, and if 
 the amount <>r rate per cent, of the commission paid or agreed to be paid is — 
 
 (a) In the case of shares offered to the public for subscription, disclosed in the 
 
 prospectus ; or 
 
 (b) In the case of shares not offered to the public for subscription, disclosed in 
 
 the statement in lieu of prospectus, or in a statement in the prescribed form 
 signed iu like manner as a statement in lieu of prospectus and filed with 
 the registrar of companies, and, where a circular or notice, not being a 
 prospectus, inviting subscription for the shares is issued, also disclosed 
 in that circular or notice. 
 
 (2.) Save as aforesaid, no company shall apply any of its shares or capital money 
 cither directly or indirectly in payment of any commission, discount, or allowance, 
 to any person in consideration of his subscribing or agreeing to subscribe, whether 
 absolutely or conditionally, for any shares of the company, or procuring or agreeing 
 to procure subscriptions, whether absolute or conditional, for any shares in the 
 company, whether the shares or money be so applied by being added to the 
 purchase money of any property acquired by the company or to the contract price 
 of any work to be executed for the company, or the money be paid out of the 
 nominal purchase money or contract price, or otherwise. 
 
 (3.) Nothiug in this section shall affect the power of any company to pay such 
 brokerage as it has heretofore been lawful for a company to pay, and a vendor to, 
 promoter of, or other person who receives payment in money or shares from, a 
 company shall have and shall be deemed always to have had power to apply any 
 part of the money or shares so received in payment of any commission, the pay- 
 ment of which, if made directly by the company, would have been legal under 
 this section. 
 
 90. Where a company has paid any sums by way of commission in respect of 
 any shares or debentures, or allowed any sums by way of discount in respect of 
 any debentures, the total amount so paid or allowed, or so much thereof as has not 
 been written off, shall be stated in every balance sheet of the company until the 
 whole amount thereof has been written off. 
 
 Payment of Interest out of Capital. 
 
 91. Where any shares of a company are issued for the purpose of raising money 
 ~to defray the expenses of the construction of any works or buildings or the pro- 
 vision of any plant which cannot be made profitable for a lengthened period, the 
 company may pay interest on so much of that share capital as is for the time being 
 paid up for the period and subject to the conditions and restrictions in this section 
 mentioned, and may charge the same to capital as part of the cost of construction 
 of the work or building, or the provision of plant : 
 
 Provided that — 
 
 (1.) No such payment shall be made unless the same is authorized by the 
 articles or by special resolution : 
 
 (2.) No such payment, whether authorized by the articles or by special reso- 
 lution, shall be made without the previous sanction of the Board of 
 Trade : 
 
 (3.) Before sanctioning any such payment the Board of Trade may, at the 
 expense of tbe company, appoint a person to inquire and report to them 
 as io the circumstances of the case, and may, before making the appoint- 
 ment, require the company to give security for the payment of the costs 
 of the inquiry : 
 
 ^4.) The payment shall be made only for such period as may be determined by 
 the Board of Trade ; and such period shall in no case extend beyond the 
 close of the half year next after the half year during which the works or 
 buildings have been actually completed or the plant provided : 
 
 31 (2) 
 
 S. 8 of 1900, 
 s. 8 of 1907. 
 Power to pay 
 certain com- 
 missions, and 
 prohibition 
 of payment 
 of all other 
 commissions, 
 discounts, &c. 
 p. 340 
 
 S. 7 of 1907. 
 Statement in 
 balance sheet 
 as to com- 
 missions and 
 discounts. 
 
 S. 9 of 1907. 
 Power ofj 
 company to] 
 pay interest 
 out of capital 
 in certain 
 cases, 
 p. 221 
 
476 
 
 Appendix. 
 
 57 & 58 Viet, 
 c. 12. 
 
 (5.) The rate of interest shall in no case exceed four per cent, per annum or 
 such lower rate as may for the time being be prescribed by Order in 
 Council : 
 
 (6.) The payment of the interest shall not, operate as a reduction of the amount 
 paid up on the shares in respect, of which it is paid : 
 
 (7.) The accounts of the company shall show the share capital on which, and 
 the rate at which, interest has been paid out of capital during the period 
 to which the accounts relate : 
 
 (8.) Nothing in this section shall affect any company to which the Indian 
 Railways Act, 1894, as amended by any subsequent enactment, applies. 
 
 Certificates of Shares, §c. 
 
 S. 5 of 1907. 92. — (1.) Every company shall, within two months after the allotment of any 
 
 Limitation of its shares, debentures, or debenture stock, and within two months after the 
 of time for registration of the transfer of any such shares, debentures, or debenture stock, 
 issue of complete and have ready for delivery the certificates of all shares, the debentures, 
 
 certificates. and the certificates of all debenture stock allotted or transferred, unless the con- 
 
 142 ditions of issue of the shares, debentures, or debenture stock otherwise provide. 
 
 (2.) If default is made in complving with the requirements of this section, the 
 company, and every director, manager, secretarv. and other officer of the company 
 who is knowingly a partv to the default,, shall be liable to a fine not exceeding five 
 pounds for every day during which the default continues. 
 
 Information as to Mortgages , Charges , §c. 
 
 S. 14 of 1900, 
 s. 10 of 1907. 
 Registration 
 of mortgages 
 and charges 
 in England 
 and Lreiand. 
 p. 277 
 
 93. — (1.) Every m rtgage or charge created after the first day of July nineteen 
 hundred and eight by a company registered in Englaud or Ireland and being 
 either — 
 
 (a) a mortgage or charge for the purpose of securing any issue of debentures ; or 
 
 (b) a mortgage or charge on uncalled share capital of the company ; or 
 
 (e) a morrgage or charge created or evidenced bv an instrument which, if 
 executed by an individual, would require registration as a bill of sale ; or 
 
 (d) a mortgage or charge on auy land, wherever situate, or any interest therein ; 
 
 or 
 
 (e) a mortgage or charge on anv book debts of the company ; or 
 
 (fl a floating charge on the undertaking or property of the company, 
 shall, so far as any security on the company’s propertv or undertaking is thereby 
 conferred, be void against the liquidator and any creditor of the company, unless 
 the prescrib 'd particulars of the mortgage or charge, together with the instrument 
 (if any) by which the mortgage or charge is cheated or evidenced, are delivered to 
 or received by the registrar of companies for registration in manner required 
 bv this Act within twenty-one days after the date of its creation, but without 
 prejudice to anv contract or obligation for repayment of the money thereby secured, 
 and when a mortgage or charge becomes void under this section the mouey secured, 
 thereby shall immediately become payable: 
 
 Provided that — 
 
 (i) in the case of a mortgage or charge created out of the United Kingdom 
 
 comprising solely property situate outside the United Kingdom, the- 
 delivery to and the receipt by the registrar of a copy of the instrument 
 bv which the mortgage or charge is created or evidenced, verified in tho 
 prescribed manner, shall have »he same effect for the purposes of this, 
 section as the delivery and receipt of the instrument itself, and twenty 
 one days after the date on which the instrument or copy could, in due- 
 course of post, and if despatched with due diligence, have been received 
 in the United Kiugdom. shall be substitute! for twentv-one days after 
 the date of the creation of the mortgage or charge, as the time within 
 which the particulars and instrument or copy are to be delivered to the- 
 registrar; and 
 
 (ii) where the mortgage or charge is created in the United Kingdom but 
 
 comprises property outside the United Kingdom, the instrument creating 
 or purporting to create the mortgage or charge may be sent for regis- 
 tration notwithstanding that further proceedings may be necessary to, 
 
Act of 1908 477 
 
 Companies (Consolidation) Act, 1908. 
 
 make the mortgage or charge valid or effectual according to the law of 
 the country in which the property is situate ; and 
 
 (iii) where a negotiable instrument has been given to secure the payment of 
 
 any book debts of a company, the deposit of the instrument for the 
 purpose of securing an advance to the company shall not for the purposes 
 of this section be tr< ated as a mortgage or charge on those book debts ; 
 and 
 
 (iv) the holding of debentures entitling the holder to a charge on land shall 
 
 not be deemed to be an interest in land. 
 
 (2.) The registrar shall keep, with respect to each company, a register in the 
 prescribed form of all the mortgages and charges created by the company after the 
 first day of July nineteen hundred and eight and requiring registration under this 
 section, and shall, on payment of the prescribed fee, enter in the register, with 
 respect to every such mortgage or charge, the date of creation, the amount secured 
 by it, short particulars of the property mortgaged or charged, and the names of 
 the mortgagees or persons entitled to the charge. 
 
 (3.) Where a series of debentures containing, or giving by reference to any 
 other instrument, any charge to the benefit of which the debenture holders of that 
 series are entitled pari pas»u is created by a company, it shall be sufficient if there 
 are delivered to or received by the registrar within twenty-one days after the 
 execution of the deed containing the charge or. if there is no such deed, after the 
 execution of any debentures of the series, the following particulars : — 
 
 (a) the total amount secured by the whole series ; and 
 
 (b) the dates of the resolutions authorizing the issue of the series and the date of 
 
 the covering deed, if any, by which the security is created or defined ; 
 and 
 
 (c) a general description of the property charged ; and 
 
 (d) the names of the trustees, if any, for the debenture holders ; 
 
 together with the deed containing the charge, or, if there is no such deed, one of 
 the debentures of the series, and the registrar shall, on payment of the prescribed 
 fee, enter those particulars in the register : 
 
 Provided that, where more than one issue is made of debentures in the series, 
 there shall be sent to the registrar for entry in the register particulars of the date 
 and amount of each issue, but an omission to do this shall not affect the 
 validity of the debentures issued. 
 
 (4.) Where any commission, allowance, or discount has been paid or made either 
 directly or indirectly by the company to any person in consideration of his sub- 
 scribing or agreeing to subscribe, whether absolutely or conditionally, for any 
 debentures of the company, or procuring or agreeing to procure subscriptions, 
 whether absolute or conditional, for any such debentures, the particulars required 
 to be sent for registration under this section shall include particulars as to the 
 amount or rate per cent, of the commission, discount, or allowance so paid or 
 made, but an omission to do this shall not affect the validity of the debentures 
 issued : 
 
 Provided that the deposit of any debentures as security for any debt of the 
 company shall not for the purposes of this provision be treated as the issue of the 
 debentures at a discount. 
 
 (5.) The registrar shall give a certificate under his hand of the registration of 
 any mortgage or charge registered in pursuance of this section, stating the amount 
 thereby secured, and the certificate shall be conclusive evidence that the require- 
 ments of this section as to registration have beeu complied with. 
 
 (6.) The company shall cause a copy of every certificate of registration given 
 under this section to be endorsed on every debenture or certificate of debenture 
 stock wdiich is issued by the company, and the payment of which is secured by the 
 mortgage or charge so registered : 
 
 Provided that nothing in this sub-section shall be construed as requiring a 
 company to cause a ceitificate of registration of any moitgage or charge so given 
 to be endorsed on any debenture or certificate of debenture stock which has been 
 issued by the company beiore the mortgage or charge was created. 
 
 (7.) It shall be the duty of the company to send to the registrar for registration 
 the particulars of every moitgage or charge created by the company and of the 
 issues of debentures of a series, requiring registration under ibis section, but 
 registration of any such mortgage or chaige may be effected on the application of 
 any person interested therein. 
 
478 
 
 Appendix. 
 
 S. 11 of 1907, 
 Registration 
 of enforce- 
 ment of 
 security. 
 
 S. 41 of 1907. 
 Filing of 
 accounts of 
 receivers and 
 managers. 
 
 S. 15 of 1907. 
 Rectification 
 of register 
 of mortgages. 
 
 S. 16 of 1900. 
 Entry of 
 satisfaction. 
 
 S. 17 of 1900. 
 Index to register 
 of mortgages 
 and charges. 
 
 S. 18 of 1900. 
 Penalties. 
 
 Where the registration is effected on the application of some person other than 
 the company, that person shall be entitled to recover from the company the amount 
 of any fees properly paid by him to the registrar on the registration. 
 
 (8.) The register kept in pursuance of this section shall be open to inspection by 
 any person on payment of the prescribed fee, not exceeding one shilling for each 
 inspection. 
 
 (9.) Every company shall cause a copy of every instrument creating any mortgage 
 or charge requiring registration under this section to be kept at the registered office 
 of the company : Provided that, in the case of a series of uniform debentures, a 
 copy of one such debenture shall be sufficient. 
 
 94. — (1.) If any person obtains an order for the appointment of a receiver or 
 manager of the propertv of a company, or appoints such a receiver or manag-er 
 under any powers contained in any instrument, he shall within seven days from the 
 date of the order or of the appointment under the powers contained in the instrument 
 give notice of the fact to the registrar of companies, and the registrar shall, on 
 payment of the prescribed fee, enter the fact in the register of mortgages and 
 charges. 
 
 (2.) If any person makes default in complying with the requirements of this 
 section he shall be liable to a fine not exceeding five pounds for every day during 
 which the default continues. 
 
 95. — (1.) Every receiver or manager of the property of a company who has been 
 appointed under the powers contained in any instrument, and who has taken 
 possession, shall, once in every half year while he remains in possession, and also on 
 ceasing to act as receiver or manager, file with the registrar of companies an 
 abstract in the prescribed form of his receipts and payments during the period to 
 which the abstract relates, and shall also on ceasing to act as receiver or manager 
 file with the registrar notice to that effect, and the registrar shall enter the notice 
 in the register of mortgages and charges. 
 
 (2.) Every receiver or manager who makes default in complying with the pro- 
 visions of this section shall be liable to a fine not exceeding fifty pounds. 
 
 96. A judge of the High Court, on being satisfied that the omission to register 
 a mortgage or charge within the time hereinbefore required, or that the omission or 
 misstatement of any particular with respect to any such mortgage or charge, was 
 accidental, or due to inadvertence or to some other sufficient cause, or is not of a 
 nature to prejudice the position of creditors or shareholders of the company, or that 
 on other grounds it is just and equitable to grant relief, may, on the application of 
 the company or any person interested , and on such terms and conditions as seem to 
 the judge just and expedient, order that the time for registration be extended, or, 
 as the case may be, that the omission or misstatement be rectified. 
 
 97. The registrar of companies may, on evidence being given to his satisfaction 
 that the debt for which any registered mortgage or charge was given has been paid 
 or satisfied, order that a memorandum of satisfaction be entered on the register, and 
 shall if required furnish the company with a copy thereof. 
 
 98. The registrar of companies shall keep a chronological index, in the pre- 
 scribed form and with the prescribed particulars, of the mortgages or charges 
 registered with him under this Act. 
 
 99. — (1.) If any company makes default in sending to the registrar of companies 
 for registration the particulars of any mortgage or charge created by the company, 
 and of the issues of debentures of a series, requiring registration with the registrar 
 under the foregoing provisions of this Act, then, unless the registration has been 
 effected on the application of some other person, the company, and every director, 
 manager, secretary, or other person who is knowingly a party to the default, shall 
 on conviction be liable to a fine not exceeding fifty pounds for every day during 
 which the default continues. 
 
 (2.) Subject as aforesaid, if any company makes default in complying with any of 
 the requirements of this Act as to the registration with the registrar of any mort- 
 gage or charge created by the company, the company and every director, manager, 
 and other officer of the company, who knowingly and wilfully authorized or per- 
 mitted the default shall, without prejudice to any other liability, be liable on 
 summary conviction to a fine not exceeding one hundred pounds. 
 
 (3.) If any person knowingly and wilfully authorizes or permits the delivery of 
 any debenture or certificate of debenture stock requiring registration with the 
 registrar under the foregoing provisions of this Act without a copy of the certificate 
 of registration being endorsed upon it, he shall, without prejudice to any other 
 
Act of 1908 479 
 
 Companies (Consolidation; Act, 1908. 
 
 liability, be liable on summary conviction to a fine not exceeding one hundred 
 pounds. 
 
 100. — (1.) Every limited company shall keep a register of mortgages and enter 
 therein all mortgages and charges specifically affecting property of the company, 
 giving in each case a short description of the property mortgaged or charged, the 
 amount of the mortgage or charge, and (except in the case of securities to bearer) 
 the names of the mortgagees or persons entitled thereto. 
 
 (2.) If any director, manager, or other officer of the company knowingly and 
 wilfully authorizes or permits the omission of any entry required to be made in 
 pursuance of this section, he shall be liable to a fine not exceeding fifty pounds. 
 
 101. — (1.) The copies of instruments creating any mortgage or charge requiring 
 registration under this Act with the registrar of companies, and the register of 
 mortgages kept in pursuance of the last foregoing section, shall be open at all 
 reasonable times to the inspection of any creditor or member of the company without 
 fee, and the register of mortgages shall also be open to the inspection of any other 
 person on payment of such fee, not exceeding one shilling for each inspection, as 
 the company may prescribe. 
 
 (2.) If inspection of the said copies or register is refused, any officer of the com- 
 pany refusing inspection, and every director and manager of the company authoriz- 
 ing or knowingly and wilfully permitting the refusal, shall be liable to a fine not 
 exceeding five pounds, and a further fine not exceeding two pounds for every day 
 during which the refusal continues ; and, in addition to the above penalty as 
 respects companies registered in England or Ireland, any j udge of the High Court 
 sitting in chambers, or the judge of the Court exercising the stannaries jurisdiction 
 in the case of companies subject to that jurisdiction, may by order compel an 
 immediate inspection of the copies or register. 
 
 102. — (1.) Every register of holders of debentures of a company shall, except 
 when closed in accordance with the articles during such period or periods (not 
 exceeding in the whole thirty days in any year) as may be specified in the articles, 
 be open to the inspection of the registered holder of any such debentures, and of 
 any holder of shares in the company, but subject to such reasonable restrictions as 
 the company may in general meeting impose, so that at least two hours in each day 
 are appointed for inspection, and every such holder may require a copy of the 
 register or any part thereof on payment of sixpence for every one hundred words 
 required to be copied. 
 
 (2.) A copy of any trust deed for securing any issue of debentures shall be 
 forwarded to every holder of any such debentures at his request on payment in the 
 case of a printed trust deed of the sum of one shilling or such less sum as may be 
 prescribed by the company, or, where the trust deed has not been printed, on pay- 
 ment of sixpence for every one hundred words required to be copied. 
 
 (3.) If inspection is refused, or a copy is refused or not forwarded, the company 
 shall be liable to a fine not exceeding five pounds, and to a further fine not exceed- 
 ing two pounds for every day during which the refusal continues, and every 
 director, manager, secretary, or other officer of the company who knowingly 
 authorizes or permits the refusal shall incur the like penalty. 
 
 S. 43 of 1862. 
 Company’s 
 register of 
 mortgages. 
 
 p. 276 
 
 S. 10 of 1907. 
 Right to 
 inspect copies 
 of instruments 
 creating 
 mortgages 
 and charges 
 and company’s 
 register of 
 mortgages. 
 
 S. 18 of 1907. 
 Right of 
 debenture 
 holders to 
 inspect the 
 register of 
 debenture 
 holders and 
 to have copies 
 of trust deed. 
 
 Debentures and Floating Charges. 
 
 103. A condition contained in any debentures or in any deed for securing any 
 debentures, whether issued or executed before or after the passing of this Act, 
 shall not be invalid by reason only that thereby the debentures are made irredeem- 
 able or redeemable only on the happening of a contingency, however remote, or 
 on the expiration of a period, however long, any rule of equity to the contrary 
 notwithstanding. 
 
 104. — (1.) Where either before or after the passing of this Act a company has 
 redeemed any debentures previously issued, the company, unless the articles or the 
 conditions of issue expressly otherwise provide, or unless the debentures have been 
 redeemed in pursuance of any obligation on the company so to do (not being an 
 obligation enforceable only by the person to whom the redeemed debentures were 
 issued or his assigns), shall have power, and shall be deemed always to have had 
 power, to keep the debentures alive for the purposes of re-issue, and where a 
 company has purported to exercise such a power the company shall have power, 
 and shall be deemed always to have had power, to re-issue the debentures either 
 by re-issuing the same debentures or by issuing other debentures in their place, 
 
 S. 14 of 1907. 
 
 Perpetual 
 
 debentures. 
 
 p. 313 
 
 S. 15 of 1907. 
 Power to 
 re-issue 
 redeemed 
 debentures in 
 certain cases. 
 
 p. 288 
 
480 
 
 Appendix. 
 
 S. 16 of 1907. 
 Spe ific per- 
 formance of 
 debenture 
 coni ra<t. 
 
 p 321 
 
 S. 36 of 1907. 
 Validity of 
 del entuies to 
 bearer in 
 Scotland. 
 
 Payments of 
 cei tain debts 
 out of assets 
 subject to 
 floating 
 charge in 
 priority to 
 claims uuder 
 the charge. 
 
 S. 44 of 1862. 
 Certain 
 companies 
 to publish 
 Staten ent in 
 schedule. 
 
 and upon such a re-issue the person entitled to the debentures shall have, and shall 
 be deemed always to have had, the same rights and priorities as if the debentures 
 had not previously been issued. 
 
 (2.) Where with the object of keeping debentures alive for the purpose of re-issue 
 they ha\e either before or after the passing of this Act, been trinsfeired to a 
 nominee of the company, a transfer from that nominee shall be denned to be a 
 re-issue for the purposes of this sect on. 
 
 (3.) Where a company has either before or after the passing of this Act 
 deposited any of its debentures to secure advances from time to time on current 
 account or otherwise, the debentures sh 11 not be deemed to have been r- denned 
 by reason only of the account of the company ha\ing ceased to be in debit whilst 
 the debentures remained so deposited. 
 
 (4.) The re*issue of a debenture or the i'sue of another debenture in its place 
 under the power by this section given to, cr deemed to have been possessed by, 
 a company, whether the re-issue or issue was made beio»< or after the passing 
 of this Act,, shall he treated as the issue of a new debenture for the purposes of 
 stamp duty, but it shall not 1 e so treated for the purposes of any provision limiting 
 the amount or number of debentures to be issued : 
 
 Provided that any person lending money on the security of a debenture re-i-sued 
 under this section which appears to be duly stamped may give tl e debenture in 
 evidence in any procee lings for enforcing his security without payment of the 
 stamp duty or any penalty in respect thereof, unless he had nol.ii-e or, but for 
 his negligence, might have discovered, that the debenture was not duly stamped, 
 but in any such case the company shall be liable to pay the proper stamp duty 
 and penalty. 
 
 (5.) Nothing in this section shall prejudice — 
 
 (a) the operation of any judgment or order of a Couit of competent jurisdic- 
 
 tion pronounced or made before the seventh day of Mar«-h nineteen 
 hundred and seveu as between the par ies to the proceedings in which 
 the judgment was pronounced or the order ma e, and anv appeal from 
 any such judgment or order shall be decided as if this Act had not been 
 passed ; or 
 
 (b) any power to issue debentures in the place of anv debentures paid off or 
 
 otherwise satisfied or extii guished, rested to a company by its deben- 
 tures or the securities lor the same. 
 
 105. A contract with a company to take up and pay for any debentures of the 
 company may be enforced by an order for specific performance. 
 
 106. Notwithstanding anything contained in the statute of tbe Scot* Parliament 
 of 1696, chapter twenty-five, debentures to bearer issued in Scotland are declared 
 to be valid and binding according to their terms. 
 
 107. - (1.) Where, in the case of a compai y registered in England or Inland, 
 either a receiver is appointed on behalf of the holders of any del eutures of the 
 company secured by a floating charge, or possession is takeu bv or on behalf of 
 those debenture holders of any property comprised in or sui'jeet to tbe charge, then, 
 if the company is not at the time in course of being wound up, the dc b's which in 
 every windin*-up are under the j rov : sions of 1 art IV. of this Act relating to 
 preferential payments to be paid in priority to all other debts, shall be paid 
 forthwith out of any assets coining to the hauds of the receiver < r other person 
 taking possession as aforesaid in priority to any claim for principal or inttrest in 
 respect of tbe debentures. 
 
 (2.) The periods of time mentioned in the said provisions of Part, IV. of this Aet 
 shall be reckoned from the date of the appointment of the receiver or of possession 
 being taken as aforesaid, as the ca-e mav be. 
 
 (3.) Any payments made under this section shall he recouped as far as may be out 
 of the assets of the company available for paymeut of general creditors. 
 
 [The above section represents the Preleiential Paj limits in Bankru] t« y Act, 1897 
 (60 & 61 Viet. c. 3).] 
 
 Statement to be published by Banking and certain other Companies. 
 
 108. — (1.) Every company being a limited banking company or- an insurance 
 company or a deposit, provident, or benefit society shall, b- fore it commences 
 business, and also on the first Monday in February and the first Tuesday in August 
 in every year during which it carries on business, make a statement in the form 
 marked C. in the First Schedule to this Act, or as near thtreto as circumstances 
 will admit. 
 
Act of 1908 
 
 481 
 
 Companies (Consolidation) Act, 1908. 
 
 (2.) A copy of the statement shall bo put up in a conspicuous place in the regis- 
 tered office of the company, and in every bianch office or place where the business of 
 the company is carried on. 
 
 (3.) Every member and every creditor of the company shall be entitled to a copy 
 of the statement, on payment of a sum not exceeding sixpence. 
 
 (4.) If default is made in compliance with this section, the company shall be 
 liable to a fine not exceeding five pounds for every day during which the default 
 continues ; and every director and manager of the company who knowingly and 
 wilfully authorizes or permits the default shall be liable to the like penalty. 
 
 (5.) For the purposes of this Act a company that carries on the business of 
 insurance in common with any other business or businesses shall be deemed to be an 
 insurance company. 
 
 (6.) This section shall not apply to any life assurance company nor any other 
 assurance company to which the provisions of the Life Assurance Companies Acts, 
 1870 to 1872, as to the annual statements to be made by such a company, apply 
 with or without modifications, if the company complies with those provisions. 
 
 Inspection and Audit. 
 
 109. — (1.) The Board of Trade may appoint ODe or more competent inspectors to 
 investigate the affairs of any company and. to report thereon in such manner as the 
 Board direct — 
 
 (i) In the case of a banking company having a share capital, on the application 
 of members holding not less than one-third of the shares issued : 
 
 (ii) In the case of any other company having a share capital, on the application 
 
 of members holding not less than one- tenth of the shares issued : 
 
 (iii) In the case of a company not having a share capital, on the application of 
 
 not less than one-fifth in number of the persons on the company’s 
 register of members. 
 
 (2.) The application shall be supported by such evidence as the Board of Trade 
 may require for the purpose of showing that the applicants have good reason for, 
 and are not actuated by malicious motives in requiring, the investigation ; and the 
 Board of Trade may, before appointing an inspector, require the applicants to give 
 security for payment of the costs of the inquiry. 
 
 (3.) It shall be the duty of all officers and agents of the company to produce to 
 the inspectors all books and documents in their custody or power. 
 
 (4.) An inspector may examine on oath the officers and agents of the company in 
 relation to its business, and may administer an oath accordingly. 
 
 (5.) If any officer or agent refuses to produce any book or document which under 
 this section it is his duty to produce, or to answer any questiou relating to the 
 affairs of the company, he shall be liable to a fine not exceeding five pounds in 
 respect of each offence. 
 
 (6.) On the conclusion of the investigation the inspectors shall report their 
 opinion to the Board of Trade, and a copy of the report shall be forwarded by the 
 Board to the registered office of the compauy, and a further copy shall, at the 
 request of the applicants for the investigation, be delivered to them. 
 
 The report shall be written or printed, as the Board direct. 
 
 (7.) All expenses of and incidental to the investigation shall be defrayed by the 
 applicants, unless the Board of Trade direct the same to be paid by the company, 
 which the Board is hereby authorized to do. 
 
 110. — (1.) A company may by special resolution appoint inspectors to investigate 
 its affairs. 
 
 (2.) Inspectors so appointed shall have the same powers and duties as inspectors 
 appointed by the Board of Trade, except that, instead of reporting to the Board, 
 they shall report in such manner and to such persons as the company in general 
 meeting may direct. 
 
 (3.) Officers and agents of the company shall incur the like penalties in case of 
 refusal to produce any book or document required to be prod uced to inspectors so 
 appointed, or to answer any question, as they would have incurred if the inspectors 
 had been appointed by the Board of Trade. 
 
 111. A copy of the report of any inspectors appointed under this Act, authenti- 
 cated by the seal of the company whose affairs they have investigated, shall be 
 admissible in any legal proceeding as evidence of the opinion of the inspectors in 
 relation to any matter contained in the report. 
 
 33 & 34 Viet, 
 c 61. 
 
 34 & 35 Viet, 
 c. . f 8. 
 
 35 & 36 Viet. 
 C. 41. 
 
 S. 56 of 1862, 
 Investigation 
 of affairs of 
 company by 
 Board of 
 Trade 
 inspectors. 
 
 S. 60 of 1862. 
 Power of 
 company 
 to appoint 
 inspectors. 
 
 S. 61 of 1862. 
 Report of 
 inspectors to 
 be evidence. 
 
482 
 
 Appendix 
 
 S. 19 of 1907. 
 Appointment 
 and remu- 
 neration of 
 auditors, 
 p. 227 
 
 S. 19 of 1907. 
 Powers and 
 duties of 
 auditors, 
 p. 225 
 
 112. — (1.) Every company shall at each annual general meeting appoint an 
 auditor or auditors to hold office until the next annual general meeting. 
 
 (2.) If an appointment of auditors is not made at an annual general meeting, the 
 Board of Trade may, on the application of any member of the company, appoint an 
 auditor of the company for the current year, and fix the remuneration to be paid to 
 him by the company for his services. 
 
 (3.) A director or officer of the company shall not be capable of being appointed 
 auditor of the company. 
 
 (4.) A person, other than a retiring auditor, shall not be capable of being 
 appointed auditor at an annual general meeting unless notice of an intention to 
 nominate that person to the office of auditor has been given by a shareholder to the 
 company not less than fourteen days before the annual general meetiug, and the 
 company shall send a copy of any such notice to the retiring auditor, and shall give 
 notice thereof to the shareholders, either by advertisement or in any other mode 
 allowed by the articles, not less than seven days before the annual general meeting : 
 
 Provided that if, after notice of the intention to nominate an auditor has been so 
 given, an annual general meeting is called for a date fourteen days or less after the 
 notice has been given, the notice, though not given within the time required by 
 this provision, shall be deemed to have been properly given for the purposes thereof, 
 and the notice to be sent or given by the company may, instead of being sent or 
 given within the time required by this provision, be sent or given at the same time 
 as the notice of the annual general meetiug. 
 
 (5.) The first auditors of the company may be appointed by the directors before 
 the statutory meeting, and if so appointed shall hold office until the first annual 
 general meeting, unless previously removed by a resolution of the shareholders in 
 general meeting, in which case the shareholders at that meeting may appoint 
 auditors. 
 
 (6.) The directors may fill any casual vacancy in the office of auditor, but while 
 any such vacancy continues the surviving or continuing auditor or auditors, if any, 
 may act. 
 
 (7.) The remuneration of the auditors of a company shall be fixed by the company 
 in general meeting, except that the remuneration of any auditors appointed before 
 the statutory meeting, or to fill any casual vacancy, may be fixed by the directors. 
 
 113. — (1.) Every auditor of a company shall have a right of access at all times 
 to the books and accounts and vouchers of the company, and shall be entitled to 
 require from the directors and officers of the company such information and 
 explanation as may be necessary for the performance of the duties of the auditors. 
 
 (2.) The auditors shall make a report to the shareholders on the accounts exam- 
 ined by them, and on every balance sheet laid before the company in general 
 meeting during their tenure of office, and the report shall state — 
 
 (a) whether or not they have obtained all the information and explanations they 
 
 have required ; and 
 
 (b) whether, in their opinion, the balance sheet referred to in the report is 
 
 properly drawn up so as to exhibit a true and correct view of the state of 
 the company’s affairs according to the best of their information and the 
 explanations given to them, and as shown by the books of the company. 
 
 .(3.) The balance sheet shall be signed on behalf of the board by two of the 
 directors of the company or, if there is only one director, by that director, and the 
 auditors’ report shall be attached to the balance sheet, or there shall be inserted at 
 the foot of the balance sheet a reference to the report, and the report shall be read 
 before the company in general meeting*, and shall be open to inspection by any 
 shareholder. 
 
 Any shareholder shall be entitled to be furnished with a copy of the balance 
 sheet and auditors’ report at a charge not exceeding sixpence for every hundred 
 words. 
 
 (4.) If any copy of a balance sheet which has not been signed as required by this 
 section is issued, circulated, or published, or if any copy of a balance sheet is 
 issued, circulated, or published without either having a copy of the auditors’ report 
 attached thereto or containing such reference to that report as is required by this 
 section, the company, and every director, manager, secretary, or other officer of the 
 company who is knowingly a party to the default, shall on conviction be liable to a 
 fine not exceeding fifty pounds. 
 
 (5.) In the case of a banking company registered after the fifteenth day of 
 August eighteen hundred and seventy-nine — 
 
 (a) if the company has branch banks beyond the limits of Europe, it shall be 
 
Act of 1908 483 
 
 Companies (Consolidation) Act, 1908. 
 
 sufficient if the auditor is allowed access to such copies of and extracts 
 from the hooks and accounts of any such branch as have been transmitted 
 to the head office of the company in the United Kingdom ; and 
 
 (b) the balance sheet must be signed by the secretary or manager (if any), and 
 where there are more than three directors of the company by at least three 
 of those directors, and where there are not more than three directors by all 
 the directors. 
 
 114 . — (1.) Holders of preference shares and debentures of a company shall have S. 23 of 1907. 
 
 the same right to receive and inspect the balance sheets of the company and the Rights of 
 reports of the auditors and other reports as is possessed by the holders of ordinary preference 
 shares in the company. _ shareholders, 
 
 (2.) This section shall not apply to a private company, nor to a company registered & c> as to 
 before the first day of July nineteen hundred and eight. receipt and 
 
 inspection of 
 reports, &c. 
 
 Carrying on Business with less than the legal Minimum of Members. 
 
 115 . If at any time the number of members of a company is reduced, in the S. 48 of 1862. 
 
 case of a private company, below two, or, in the case of any other company, below Prohibition 
 seven, and it carries on business for more than six months while the number is so 0 f carrying 
 reduced, every person who is a member of the company during the time that it so on business 
 carries on business after those six months, and is cognisant of the fact that it is w ith fewer 
 carrying on business with fewer than two members, or seven members, as the case than seven 
 may be, shall be severally liable for the payment of the whole debts of the company or j n the 
 contracted during that time, and may be sued for the same, without joinder in the case G f a 
 action of any other member. private com- 
 
 pany, two 
 members. 
 
 Service and Authentication of Documents. 
 
 116 . A document may be served on a company by leaving it at or sending it by 
 post to the registered office of the company. 
 
 117 . A document or proceeding requiring authentication by a company may be 
 signed by a director, secretary, or other authorized officer of the company, and need 
 not be under its common seal. 
 
 Tables and Forms. 
 
 118 . — (1.) The forms in the Third Schedule to this Act or forms as near thereto S. 71 of 1862. 
 
 as circumstances admit shall be used in all matters to which those forms refer. Armlication 
 
 (2.) The Board of Trade may alter any of the tables and forms in the First an q alteration 
 Schedule to this Act, so that it does not increase the amount of fees payable to the G f tables and 
 registrar in the said schedule mentioned, and may alter or add to the forms in the 
 said Third Schedule. 
 
 (3.) Any such table or form, when altered, shall be published in the London 
 Gazette, and thenceforth shall have the same force as if it were included in one of 
 the Schedules to this Act, but no alteration made by the Board of Trade in Table A. 
 in the said First Schedule shall affect any company registered before the alteration, 
 or repeal, as respects that company, any portion of that Table. 
 
 S. 62 of 1862. 
 Service of 
 documents 
 on company. 
 
 S. 64 of 1862. 
 Authentication 
 of documents. 
 
 Arbitrations. 
 
 119 . — (1.) A company may by writing under its common seal agree to refer and 
 may refer to arbitration, in accordance with the Railway Companies Arbitration 
 Act, 1 859, any existing or future difference between itself and any other company 
 or person. 
 
 (2 ) Companies parties to the arbitration may delegate to the arbitrator power to 
 settle any terms or to determine any matter capable of being lawfully settled or 
 determined by the companies themselves, or by their directors or other managing 
 body. 
 
 (3.) All the provisions of the Railway Companies Arbitration Act, 1859, shall 
 apply to arbitrations between companies and persons in pursuance of this Act ; and 
 in the construction of those provisions ‘ ‘ the companies ’ ’ shall include companies 
 under this Act. 
 
 S. 72 of 1862. 
 Arbitration 
 between 
 companies 
 and others. 
 
 22 & 23 Viet, 
 c. 59. 
 
484 
 
 Appendix 
 
 S. 2 of 1870. 
 Power to com- 
 promise with 
 creditors aud 
 members, 
 p. 430 
 
 S. 37 of 1907. 
 Meaning of 
 “ private 
 company.” 
 
 p. 366 
 
 Modes of 
 winding up. 
 
 p. 388 
 
 S. 38 of 1862. 
 Liabiliiy as 
 contributories 
 of present 
 and past 
 members, 
 p. 404 
 
 Power to Compromise . 
 
 120. — (1 .) Where a compromise or arrangement is proposed between a company 
 and its creditors or any class of them, or between the company and its members or 
 any class of them, the Court may. on the application in a summary way of the 
 company or of any creditor or member or the compauy or, in the case of a company 
 beiny wound up, of the liquidator, order a meeting of the creditors or class of 
 creditors, or of the members of the company or class of members, as the case may 
 be, to be summoned in such manner as the Court directs. 
 
 (2 ) If a majority in number representing three -fourths in value of the creditors 
 or class of creditors, or members or cliss of members, as the case may be, present 
 either in person or by proxy at the meeting, agree to any compromise or arrange- 
 ment, the compromise or arrangement shall, if sanctioned by the Court, be binding 
 on a'l the creditors or the class of creditors, or on the members or class of members, 
 as the case may be, aud al»o on the company or, in the case of a company in the 
 course of b^iug woun 1 up, on the liquidator and contributories of the company. 
 
 (3.) In this se* ti -u the expression “compauy ” means any company liable to be 
 wound up under this Act. 
 
 Meaning of “ Private Company .” 
 
 121. — (1.) For the purposes of this Act the expression “private company” 
 means a company which by iis articles — 
 
 (a) restricts the right to transfer its shares ; and 
 
 (b) limits t ie number of its memb' rs (exclusive of persons who are in the employ- 
 
 ment of the company) to fifty : and 
 
 (c) prohibits anv invitation to the public to subscribe for any shares or debentures 
 
 of the company. 
 
 (2 ) A private company may, subject to anything contained in the memorandum 
 or articles, by pissinsr a special resolution and by tiling with the registrar of com- 
 panies such a statement in lieu of prospectus as the company, if a public company, 
 would have had to file before allotting any of its shares or debentures, together with 
 such a statutory declaration as the company, if a public company, would have had 
 to tile before c-mmenciny business, turn itself into a public company. 
 
 (3.) Where two or more persons hold one or more shares in a company jointly 
 they shall, for the purposes of this section, be treated as a single member. 
 
 PART IV. 
 
 Winding Up. 
 
 * Preliminary. 
 
 122. — (1.) The winding up of a company may be either — 
 
 (i) bv the Court ; or 
 
 (ii) voluntary ; or 
 
 (iii) subject to the supervision of the Court. 
 
 (2.) The provisions of tin- Act with resi ect to winding up apply, unless the 
 contrary appeal s, to the winding up of a company in any of those modes. 
 
 Contributories. 
 
 123. — (1-) Tn the event of a company being wound up, every present and past 
 member shall, subject t<» the provisions of this section, be liable to contribute to the 
 assets of the company to an amount sufficient forpaymeut of itsdebts and liabilities 
 and the cost-, charyes, and expenses of the winding up, and for the adjustment of 
 the rights of the comributories among themselves, with the qualifications following 
 (that is to sav) : — 
 
 (i) A past member shall not be liable to contribute if he has ceased to be a 
 number for one year or upwards before the commencement of the 
 winning up : 
 
 (ii) A pa.-t member shall n t be liable to contr ibute in respect of any debt or 
 liability of the company contracted alter he ceased to be a member : 
 
Act of 1908 485 
 
 Companies (Consolidation) Act, 1908 . 
 
 (iii) A past member shall not be liable to contribute unless it appears to the 
 
 Court that the existing member* are unable to satisfy the contributions 
 required to be made by them in pursuance of ihis Act, : 
 
 (iv) In the case of a company limited by shares no contribution shall be 
 
 required from any mend er exceeding" the amount, if any, unpaid on 
 the shares in respect of w hich he is liable as a present, or past, member : 
 
 (v) In the case of a company limited by guarantee, no contribution shall be 
 required from any member exceeding the amount undertaken to be 
 contributed by him to the assets of the company in the event of its 
 being wound up : 
 
 (vi) Nothing in this Act shall invalidate any provision contained in any policy 
 of insurance or other contract whereby the liability of individual 
 members on the policy or contract, is restricted, or wh» rebv the funds of 
 the company are alone made liable in respect of the policy or contract : 
 
 (vii) A sum due to any member of a company, in his character of a member, by 
 way of dividends, profits, or otherwise, shall not be deemed to be a 
 debt of the company, payable to tl at member in a case of comp<tition 
 between himself and any other creditor not a member of the company ; 
 but any such sum may be taken into account, for the purpose of the 
 final adjustment of the rights of the contributories amony themselves. 
 
 (2.) In the winding-up of a limited company, any director or manager, whether 
 past or present, whose liability is, in pursuance of this Act, unlimited, shall, in 
 addition to his liability (if any) to contribute as an ordinary member, be liable to 
 make a further contribution as if he were at, the commencement of the winding-up 
 a member of an unlimited company : Provided that — 
 
 (i) A past director or manayer shall not be liable to make such further con- 
 tribution if he has ceased to hold office for a year or upwards before 
 the commencement of the winding-up : 
 
 (ii) A past director or manayer shall not be liable to make such further con- 
 tribution in respect, of any debt or liability of the company contracted 
 after he ceased to hold office : 
 
 (iii) Subje< t to the articles of the company, a director or manager shall not be 
 liable to make such further contribution m less the Court deems it 
 necessary to require that contribution in order to satisfy the debts and 
 liabilities of the company, and the costs, charges and expenses of the 
 winding-up. 
 
 (3.) In the windiny-up of a company limited by guarantee which has a share 
 capital, every member of the companv shall be lial le, in a.ddit ; on to the amount 
 undertaken to be contributed bv him to the assets of the company in the event of 
 its being wound up, to contribute to the extent of any sums unpaid on any shares 
 held by him. 
 
 124. The term “ contributory ” means every person liable to contribute to the 
 assets of a company in the event of its being wo< nd up and, in all proceedings 
 for determining and in all proceedings prior to the final determination of the persons 
 who are to be deemed contributories, includes any person all* ged to be a contributory. 
 
 125. The liability of a contributory shall create a debt (in Enyland and Irelai d 
 of the nature of a specialty) accruing due from hi'" at, the time when his liability 
 commenced, but payable at the times when calls are made for enforcing the 
 liability. 
 
 126. — (1.) If a contributory dies either before or after he has been placed on the 
 list of contributories, his personal repres* ntati es and h<s heirs and devisees, shall 
 be liable in a due conr.-e of administration to contribute to the assets of the 
 companv in discharge of his liability and shall be contributories accordinplv. 
 
 (2.) Where the personal representatives are placed on the list of contributories, 
 the heirs or devisees need not. be added, but, except in the ca.-e of heirs or devisees 
 of any such real estate in England, they maybe added as and when the Court 
 thinks fit. 
 
 (3.) If the personal representatives make default in paying any monev ordered 
 to be paid by them, proceedings mav be taken for adrninist ring the personal and 
 real estates of the deceased contributory, or either of them, and of compelling 
 payment thereout of the money due. 
 
 127. If a contributory be om< s bankrupt, either before or after he has been 
 placed on the list of contributories, then — 
 
 (1.) his trustee in bankreptev shall represent, him for all the purposes of the 
 winding up, and shall be a contributory accordingly, and may be called on 
 
 8 . 74 of 1862. 
 Definition of 
 contributoiy. 
 
 8. 75 of 1862'. 
 TVaturo of 
 li hili'v of 
 contributory. 
 
 S. 76 of 1862. 
 Contribu- 
 tories in case 
 of death of 
 member. 
 
 S. 75 of 1862. 
 
 Contributories 
 in case of 
 bankruptcy of 
 member. 
 
486 
 
 Appendix. 
 
 S. 78 of 1862. 
 Provision as 
 to married 
 women. 
 
 45 & 46 Viet, 
 c. 15. 
 
 44 & 45 Viet, 
 c. 21. 
 
 to admit to proof against the estate of the bankrupt, or otherwise to allow 
 to be paid out of his assets in due course of law, any money due from the 
 bankrupt in respect of his liability to contribute to the assets of the 
 company ; and 
 
 (2.) there may be proved against the estate of the bankrupt the estimated value of 
 his liability to future calls as well as calls already male. 
 
 128 . — (1.) The husbard of a female contributory married before the date of the 
 commencement of the Married Women’s Prop rty Act, 1882, or the Married Women’s 
 Property (Scotland) Act, 1881, as the case may be, shall, during the continuance of 
 the marriage, be liable, as respects any liability attaching to any shares acquired by 
 her before that date, to contribute to the assets of the company the same sum as she 
 would have been liable to contribute if she had not married, and he shall be a con- 
 tributory accordingly. 
 
 (2 ,) Subject as aforesaid, nothing in this Act shall affect the provisions of the 
 Married Women’s Property Act, 1882, or the Married Women’s Property (Scotland) 
 Act, 1881. 
 
 S. 79 of 1862. 
 Circumstances 
 in which 
 company may 
 be wound up 
 by Court. 
 
 S. 80 of 1862. 
 Company 
 when deemed 
 unable to pay 
 its debts, 
 p. 391 
 
 S. 1 of 1890. 
 Jurisdiction 
 to wind up 
 companies in 
 England. 
 
 Winding up by Court . 
 
 129 . A company may be wound up by the Court — 
 
 (i) if the company has by special resolution resolved that the company be 
 
 wound up by the Court : 
 
 (ii) if default is made in filing the statutory report or in holding the statutory 
 
 meeting : 
 
 (iii) if the company does not commence its business within a year from its 
 
 incorporation, or suspends its business for a whole year : 
 
 (iv) if the number of members is reduced, in the case of a private company, 
 
 below two, or, in the case of any other company, below seven : 
 
 (v) if the company is unable to pay its debts : 
 
 (vi) if the Court is of opinion that it is just and equitable that the company 
 
 should be wound up. 
 
 130 . A company shall be deemed to be unable to pay its debts — 
 
 (i) if a creditor, by assignment or otherwise, to whom the company is indebted 
 
 in a sum exceeding til ty pounds then due, has served on the company, 
 by leaving the same at its registered office, a demand under his hand 
 requiring the company to pay the sum so due, and the company has for 
 three weeks thereafter neglected to pay the sum, or to secure orcompjund 
 for it to the reasonable satisfaction of the creditor ; or 
 
 (ii) if, in England or Ireland, execution or other process issued on a judgment 
 
 decree or order of any Court in favour of a creditor of the company is 
 returned unsatisfied in whole or in part ; or 
 
 iii) if, in Scotland, the inducise of a charge for payment on an extract decree, 
 or an extract registered bond, or an extract registered protest have 
 expired without payment being made ; or 
 
 (iv) if it is proved to the satis taction of the Court that the company is unable 
 to pay its debts, and, in determining whether a company is unable to 
 pay its debts, the Court shall take into account the contingent and 
 prospective liabilities of the company. 
 
 131 . — (1.) The Courts having jurisdiction to wind up companies registered in 
 England shall be the High Court, the Chancery Courts of the counties palatine of 
 Lancaster and Durham, and the County Courts. 
 
 (2.) Where the amount of the share capital of a company paid up or credited as 
 paid up exceeds ten thousand pounds, a petition to wind up the company shall be 
 presented to the High Court, or, in the case of a company whose registered office 
 is situate within the j urisdiction of either of the palatine courts aforesaid, either to 
 the High Court or to the palatine court having jurisdiction. 
 
 (3.) Where the amount of the share capital of a company paid up or credited as 
 paid up dor-s not exceed ten thousand pounds, and the registered office of the com- 
 pany is situated within the jurisdiction of a County Court having jurisdiction under 
 this Act, a petition to wind up the company shall be presented to that County 
 Court. 
 
 (4.) Where a company is formed for working mines within the stannaries and is 
 not shown to be actually working mines beyond the limits of the stannaries, or to 
 be engaged in any other undertaking beyond those limits, or to have entered into 
 
Act of 1908 487 
 
 Companies (Consolidation) Act, 1908. 
 
 a contract for such working or undertaking, a petition to wind up the company 
 shall be presented to the Court exercising the stannaries jurisdiction whatever may 
 be the amount of the capital of the company and wherever the registered office of 
 the company is situate. 
 
 (5.) The Lord Chancellor may by order exclude a County Court from having 
 jurisdiction under this Act, and for the purposes of that jurisdiction may attach its 
 district, or any part thereof, to the High Court or any other County Court, and 
 may revoke or vary any such order or any like order made under the Companies 
 (Winding Up) Act, 1890. 
 
 In exercising his powers under this section the Lord Chancellor shall provide 
 that a County Court shall not have jurisdiction under this Act unless it has for 
 the time being jurisdiction in bankruptcy. 
 
 An order maie under this provision shall not affect any jurisdiction or powers 
 vested in any Couuty Court under or by virtue of the Stannaries Jurisdiction 
 (Abolition) Act, 1896. 
 
 (6.) Every Court in England having jurisdiction under this Act to wind up a 
 company shall for the purposes of that jurisdiction have all the powers of the Higli 
 Court, and every prescribed officer of the Court shall perform any duties which 
 an officer of the High Court may discharge by order of the judge thereof or 
 otherwise in relation to the winding up of a company. 
 
 (7.) Nothing in this section shall invalidate a proceeding by reason of its being 
 taken in a wrong Court. 
 
 (8.) For the purposes of this section the expression “registered office” means 
 the place which has longest been the registered office of the company during the 
 six months immediately preceding the presentation of the petition for winding up. 
 
 132 . Subject to general rules and to orders of transfer made under the authority 
 of the Supreme Court of Judicature Act., 1873, and the Acts amending it, the 
 jurisdiction to wind up companies of the High Court in Kngland under this Act 
 shall, as ihe Lord Chancellor may from time to time by general order direct, be 
 exercised, either generally or in specified classes of cases, either by such judge or 
 judges of the Chancery Division of the High Court as the Lord Chancellor may 
 assign to exercise that jurisdiction, or by the judge who, for the time being, 
 exercises the bankruptcy jurisdiction of the High Court. 
 
 133 . — ( 1 ) The winding up of a company by the Court in England or any 
 proceedings in the winding up may at any time and at any stage, aud either with 
 or without application from any of the parties thereto, be transferred from one 
 Court to another Court, or may be retained in the Court in which the proceedings 
 were commenced, although it may not be the Court in which they ought to have 
 been commenced. 
 
 (2.) The powers of transfer given by the foregoing provisions of this section 
 may, subject to and in accordance with general rules, be exercised by the Lord 
 Chancellor or by any judge of the High Court having jurisdiction under this Act, or, 
 as regards any case within the jurisdiction of any other Court, by the judge of 
 that Court. 
 
 (3.) If any question arises in any winding up proceeding in a County Court 
 which all the parties to the proceeding, or which one of them and the judge of 
 the Court, desire to have determined in the first instance in the High Court, the 
 judge shall state the facts in the form of a special case tor the opinion of the High 
 Court, and thereupon the special case and the proceedings, or such of them as may 
 be required, shall be transmitted to the High Court for the purposes of the deter- 
 mination. 
 
 131 . The Court having jurisdiction to wind up companies registered in Ireland 
 shall be the High Court : 
 
 Provided that where the High Court in Ireland makes an order for winding up 
 a company it may, if it thinks fit, direct that all subsequent proceedings in the 
 winding up be had in the Court of bankruptcy having jurisdiction in the place in 
 which the registered office or the company is situate ; and thereupon those pro- 
 ceedings shall be takeu in thac Court of bankruptcy accordingly, and that Court 
 shall, for the purposes of the winding up, have all the powers of the High Court 
 in Ireland. 
 
 1 15 . The Court having jurisdiction to wind up companies registered in Scotland 
 shall be the Court of Session in either division thereof, or, in the event of a remit 
 to a permanent Lord Ordinary, that Lord Ordinary during session, and in time of 
 vacation the Lord Ordinary on the bills. 
 
 53 & 54 Viet, 
 c. 63. 
 
 59 & 60 Viet, 
 c. 45. 
 
 S. 2 of 1890. 
 Conduct of 
 winding-up 
 business in 
 High Court 
 in England. 
 36 & 37 Viet, 
 c. 66. 
 
 S. 3 of 1890. 
 Transfer of 
 proceedings. 
 
 S. 81 of 1862, 
 J urisdiction 
 to wind up 
 companies 
 in Ireland. 
 
 S. 81 of 1862, 
 Jurisdiction 
 to wind up 
 companies 
 in Scotland. 
 
488 
 
 Appendix. 
 
 S. 6 of 1886. 
 Po ver in 
 Scotland to 
 remit winding 
 up to Lord 
 Ordinary. 
 
 S. 82 of 1862. 
 Provisions 
 as to applica- 
 tions for 
 winding up. 
 p. 391 
 
 S. 82 of 1862. 
 
 Effect of 
 
 winding-up 
 
 order. 
 
 p. 399 
 
 S 84 of 1862. 
 Com men rement 
 of winding-up 
 by Court. 
 
 S . 85 of 1 862. 
 Power to stay 
 or restrain 
 proe- eriiugs 
 agdnst 
 company. 
 
 S. 86 of 1862. 
 Powers of 
 Court on 
 hearing 
 petition, 
 p. 398 
 
 136. Where the Court in Scotland makes a winding-up order, it may, if it 
 thinks fit. at any time direct all subsequent proceeding’s in the winding up to be 
 taken hefore one of the permanent Lords Ordinary, and remit the winding up to 
 him accordingly, and thereupon that Lord Ordinary shall, for the purposes of the 
 wi 'ding- up, have all the powers and jurisdiction of the Court: 
 
 Provided that the Lord Ordinary may report to the division of the Court any 
 matter which may arise in the course of the winding up. 
 
 137. — (1.) An application to the Court for the winding up of a company shall 
 
 he by petition, presented subject to the provisions of this section either by the 
 company, or by any creditor or creditors (including any contingent or prospective 
 creditor or creditors), contributorv or contributories, or by all or any of those 
 parties, together or separately : Provided that 
 
 (a) A contributory shall not be entitled to present a petition for winding up a 
 
 company unless — 
 
 (i) either the number of members is reduced, in the case of a private 
 companv, below two, or, in the case of any other company, below seven; or 
 
 (ii) the shares in respect of which he is a contributory, or some of them, 
 either were originally allotted to him or have been held by him, and regis- 
 tered in his name, for at least six months during the eighteen months 
 before the commencement of the winding up, or have devolved on him 
 through the death of a former holder ; and 
 
 (b) A petition for winding up a company on the ground of default in filing the 
 
 statutory report, or in holding the statutory meeting, shall not be pre- 
 sented bv any person except a shareholder, nor before the expiration of 
 fourteen days after the last day on which the meeting ought to have been 
 held ; and 
 
 (c) The Court shall not give a hearing to a petition for winding up a company by 
 
 a contingent or prospe- tive creditor until such security for costs has been 
 given as the Court thinks reasonable, and until a primd facie case for 
 winding up has been established to the satisfaction of the Court. 
 
 (2 ) Where a company is being wound up voluntarily or subject to supervision in 
 England, a petition may be presented by the official receiver attached to the Court, 
 as well as by any other person authorized in that behalf under the oth* r provisions 
 of this section, but the Court shall not make a winding-up order on the petition 
 unless it is satisfied th't the voluntary winding up or winding up subject to 
 supervision cannot be continued with due regard to the interests of the creditors or 
 contributories. 
 
 (3.' Where under the provisions of this Part of this Act any person as being the 
 husband of a female contributory is himself a contributory, and a share has during 
 the whole or any part of the six months been held by or registered in the name 
 of the wife, or by or in the name of a trustee for the wife or for the husband, the 
 share shall, for the purposes of this section, be deemed to have been held by and 
 registered in the name of the husband. 
 
 138. An order for winding up a company shall operate in favour of all the 
 creditors and of all the contributories of the company as if made on the joint 
 petition of a creditor and of a contributory. 
 
 3 39. A winding up of a company by the Court shall be deemed to commence at 
 the time of the presentation of the petition for the winding up. 
 
 140. At any time after the presentation of a petition for winding up, and before 
 a winding-up order has been made, the company, or any creditor or contributory, 
 may— 
 
 (a) where any action or proceeding against the company is pending in the High 
 
 Court or Court of Appeal in England or Ireland, apply to the Court in 
 which the a' tion or proceeding is pending for a stay of proceedings 
 therein ; and 
 
 (b) where any other action or proceeding is pending against the company, apply 
 
 to the Court having jurisdiction to wiud up the company to restrain 
 further proceedings in thp actiou or proceeding ; 
 and the Court to which application is so made may, as the case maybe, stay or 
 restrain the proceedings accordingly on such terms as it thinks fit. 
 
 141. — (1.) On hearing the petition, the Court may dismiss it with or without 
 costs, or adjourn the hearing conditionally or unconditionally, or make any interim 
 order, or any other order that it deems just, but. the Court shall not refuse to make 
 a winding-up order on the ground only that tl e assets of the company have been 
 
Act of 1908 489 
 
 Companies (Consolidation) Act, 1908. 
 
 mortgaged to an amount equal to or in excess of those assets, or that the company 
 has no assets. 
 
 (2.) Where the petition is presented on the ground of default in filing the 
 statutory report or in holding the statutory meeting, the Court may order the 
 costs to he paid by any persons who, in the opinion of the Court, are responsible 
 for the default. 
 
 142. When a winding-up order has been made, no action or proceeding shall be 
 proceeded with or commenced against the company except by leave of the Court, 
 and subject to such terms as the Court may impose. 
 
 143. On the making of a winding-up order, a copy of the order must forthwith 
 be forwarded by the company to the registrar of companies, who shall make a 
 minute thereof in his books relating to the company. 
 
 144. The Court may at any time after an order for winding up, on the applica- 
 tion of any creditor or contributory, and on proof to the satisfaction of the Court 
 that all proceedings in relation to the winding-up ought to be stayed, make an 
 order staying the proceedings, either altogether or for a limited time, on such terms 
 and conditions as the Court thinks fit. 
 
 145. The Court may, as to all matters relating to a winding-up, have regard to 
 the wishes of the creditors or contributories as proved to it by any sufficient 
 evidence. 
 
 Official Receiver. 
 
 146. — (1.) For the purposes of this Act so far as it relates to the winding up of 
 companies by the Court in England, the term “ official receiver ” shall mean the 
 official receiver, if any, attached to the Court for bankruptcy purposes, or, if there 
 is more than one such official receiver, then such one of them as the Board of Trade 
 may appoint, or, if there is no such official receiver, then an officer appointed for 
 the purpose by the Board of Trade. 
 
 (2.) Any such officer shall for the purpose of his duties under this Act be styled 
 the official receiver. 
 
 147. — (1.) Where the Court in England has made a winding-up order, there 
 shall be made out and submitted to the official receiver a statement as to the affairs 
 of the company in the prescribed form, verified by affidavit, and showing the 
 particulars of its assets, debts, and liabilities, the names, residences, and occupa- 
 tions of its creditors, the securities held by them respectively, the dates when the 
 securities were respectively given, and such further or other information as may be 
 prescribed or as the official receiver may require. 
 
 (2.) The statement shall be submitted and verified by one or more of the persons 
 who are at the time of the winding-up order the directors and by the person who is 
 at that time the secretary or other chief officer of the company, or by such of the 
 persons being or having been directors or officers of the company, or having taken 
 part in the formation of the company at any time within one year before the 
 winding-up order, as the official receiver, subject to the direction of the Court, may 
 require to submit and verify the same. 
 
 (3.) The statement shall be submitted within fourteen days from the date of the 
 order, or within such extended time as the official receiver or the Court may for 
 special reasons appoint. 
 
 (4.) Any person making or concurring in making the statement and affidavit 
 required by this section shall be allowed, and shall be paid by the official receiver, 
 out of the assets of the company, such costs and expenses incurred in and about the 
 preparation and making of the statement and affidavit as the official receiver may 
 consider reasonable, subject to an appeal to the Court. 
 
 (5.) If any person, without reasonable excuse, makes default in complying with 
 the requirements of this section, he shall be liable to a fine not exceeding ten pounds 
 for every day during which the default continues. 
 
 (6.) Any person stating himself in writing to be a creditor or contributory of the 
 company shall be entitled by himself or by his agent at all reasonable times, on 
 payment of the prescribed fee, to inspect the statement submitted in pursuance of 
 this section, and to a copy thereof or extract therefrom. But any person untruth- 
 fully so stating himself to be a creditor or contributory shall be guilty of a contempt 
 of Court and shall be punishable accordingly on the application of the liquidator or 
 of the official receiver. 
 
 148. — (1.) Where the Court in England has made a winding-up order, the 
 
 82 
 
 8. 87 of 1862. 
 Actions stayed 
 on winding-up 
 order. 
 
 p. 413 
 
 S. 88 of 1862. 
 Copy of order 
 to be forwarded 
 to registrar. 
 
 S. 89 of 1862. 
 Power of Court 
 to stay wind- 
 ing-up. 
 
 8. 91 of 1862. 
 Court may have 
 regard to wishes 
 of creditors or 
 contributories. 
 S. 4 of 1890. 
 Definition of 
 official receiver. 
 
 S. 7 of 1890. 
 Statement of 
 company’s 
 affairs to be 
 submitted 
 to official 
 receiver. 
 
 S. 8 of 1890. 
 Report by 
 
 P. 
 
490 
 
 Appendix. 
 
 official 
 
 receiver. 
 
 8. 92 of 1862. 
 Appointment, 
 remuneration, 
 and title of 
 liquidators. 
 
 S. 92 of 1862. 
 Custody of 
 company’s 
 property. 
 
 official receiver shall, as soon as practicable after receipt of the statement of the 
 company’s affairs, submit a preliminary report to the Court — 
 
 (a) as to the amount of capital issued, subscribed, and paid up, and the estimated 
 
 amount of assets and liabilities ; and 
 
 (b) if the company has failed, as to the causes of the failure ; and 
 
 (c) whether in his opinion further inquiry is desirable as to any matter relating 
 
 to the promotion, formation, or failure of the company, or the conduct of 
 the business thereof. • 
 
 (2.) The official receiver may also, if he thinks fit, make a further report, or 
 further reports, stating the manner in which the company was formed and whether 
 in his opinion any fraud has been committed by any person in its promotion or 
 formation, or by any director or other officer of the company in relation to the 
 company since the formation thereof, and any other matters which in his opinion it 
 is desirable to bring to the notice of the Court. 
 
 Liquidators. 
 
 149. — (1.) For the purpose of conducting the proceedings in winding up a 
 company and performing such duties in reference thereto as the Court may impose, 
 the Court may appoint a liquidator or liquidators. 
 
 (2.) The Court may make such an appointment provisionally at any time after 
 the presentation of a petition and before (where the proceedings are in England) 
 the making of an order for winding up, or (where the proceedings are in Scotland 
 or Ireland) the first appointment of liquidators. 
 
 (3.) Where the proceedings are in England — 
 
 (a) If a provisional liquidator is appointed before the making of a winding-up 
 
 order, the official receiver or any other fit person may be appointed : 
 
 (b) On a winding-up order being made the official receiver shall by virtue of 
 
 his office become the provisional liquidator and shall continue to act as 
 such until he or another person becomes liquidator and is capable of 
 acting as such : 
 
 (c) When a person other than the official receiver is appointed liquidator he 
 
 shall not be capable of acting as liquidator until he has notified his 
 appointment to the registrar of companies and given security in the 
 prescribed manner to the satisfaction of the Board of Trade. 
 
 (4.) If more than one liquidator is appointed by the Court, the Court shall declare 
 whether any act by this Act required or authorized to be done by the liquidator is to 
 be done by all or any one or more of the persons appoi ted. 
 
 (5.) In a winding-up in Scotland or Ireland the Court may determine whether 
 any and what security is to be given by a liquidator on his appointment. 
 
 (6.) A liquidator appointed by the Court may resign or, on cause shown, be 
 removed by the Court. 
 
 (7.) A vacancy in the office of a liquidator appointed by the Court shall be filled 
 by the Court. 
 
 In a winding-up in England the official receiver shall by virtue of his office be 
 the liquidator during the vacancy. 
 
 (8.) Where a person other than the official receiver is appointed liquidator, he 
 shall receive such salary or remuneration by way of percentage i«r otherwise as the 
 Court may direct ; and, if more such persons than one are appointed liquidators, 
 their remuneration shall be distributed among them in such proportions as the 
 Court directs. 
 
 (9.) A liquidator shall be described as follows (that is to say) : — 
 
 (a) in a winding-up in England, where a person other than the official receiver 
 
 is liquidator, by the style of the liquidator, and, where the official 
 receiver is liquidator, by the style of the official receiver and liquidator, 
 and 
 
 (b) in a winding-up in Scotland or Ireland, by the style of the official 
 
 liquidator, 
 
 of the particular company in respect of which he is appointed, and not by his 
 individual name. 
 
 (10.) The acts of a liquidator shall be valid notwithstanding any defects that may 
 afterwards be discovered in his appointment or qualification. 
 
 150. — (1.) In a winding-up by the Court the liquidator shall take into his 
 custody, or under his control, all the property and things in action to which the 
 company is or appears to be entitled. 
 
Act of 1908 491 
 
 Companies (Consolidation) Act, 1908. 
 
 (2.) In a winding-up by the Court in Scotland or Ireland, if and so long as there 
 is no liquidator, all the property of the company shall be deemed to be in the 
 custody of the Court. 
 
 151.— (1.) The liquidator in a winding-up by the Court shall have power, in the 
 ’ case of a winding-up in England with the sanction either of the Court or of the 
 oommittee of inspection, and in the case of a winding-up in Scotland or Ireland 
 with the sanction of the Court — 
 
 (a) to bring or defend any action or other legal proceeding in the name and on 
 
 behalf of the company : 
 
 (b) to carry on the business of the company, so far as may be necessary for the 
 
 beneficial winding-up thereof : 
 
 (o) in the case of a winding-up in England, to employ a solicitor or other agent 
 to take any proceedings or do any business which the liquidator is unable 
 to take or do himself ; but the sanction in this case must be obtained before 
 the employment, except in cases of urgency, and in those cases it must be 
 shown that no undue delay took place in obtaining the sanction : 
 
 (d) in the case of a winding-up in Scotland or Ireland, to appoint a solicitor or 
 law agent to assist him in the performance of his duties. 
 
 (2.) The liquidator in a winding-up by the Court shall have power, but (subject 
 to the provisions of this section) in the case of a winding-up in Scotland or Ireland 
 only with the sanction of the Court — 
 
 (a) To sell the real and personal property, and things in action of the company 
 
 by public auction or private contract, with power to transfer the whole 
 thereof to any person or company, or to sell the same in parcels : 
 
 (b) To do all acts and to execute, in the name and on behalf of the company, all 
 
 deeds, receipts, and other documents, and for that purpose to use, when 
 necessary, the company’s seal : 
 
 (o) To prove, rank, and claim in the bankruptcy, insolvency, or sequestration of 
 any contributory, for any balance against his estate, and to receive 
 dividends in the bankruptcy, insolvency, or sequestration in respect of that 
 balance, as a separate debt due from the bankrupt or insolvent, and 
 rateably with the other separate creditors : 
 
 (d) To draw, accept, make, and indorse any bill of exchange or promissory note 
 
 in the name and on behalf of the company, with the same effect with 
 respect to the liability of the company as if the bill or note had been drawn, 
 accepted, made, or indorsed by or on behalf of the company in the course 
 of its business : 
 
 (e) To raise on the security of the assets of the company any money requisite : 
 
 (f) To take out in his official name, letters of administration to any deceased 
 
 contributory, and to do in his official name any other act necessary for 
 obtaining payment of any money due from a contributory or his estate 
 which cannot be conveniently done in the name of the company ; and in all 
 such cases the money due shall, for the purpose of enabling the liquidator 
 to take out the letters of administration or recover the money, be deemed to 
 be due to the liquidator himself : 
 
 (g) To do all such other things as may be necessary for winding up the affairs of 
 
 the company and distributing its assets. 
 
 ^(S.) The exercise by the liquidator in a winding-up by the Court in England of 
 the powers conferred by this section shall be subject to the control of the Court, 
 and any creditor or contributory may apply to the Court with respect to any 
 exercise or proposed exercise of any of those powers. 
 
 (4.) In the case of a winding-up in Scotland or Ireland the Court may provide by 
 any order that the liquidator may exercise any of the above powers, except the 
 power to appoint a solicitor or law agent, without the sanction or intervention of 
 the Court. 
 
 (5.) Where a liquidator is provisionally appointed by the Court, the Court may 
 limit and restrict his powers by the order appointing him. 
 
 (6.) In a winding-up by the Court in Scotland the liquidator shall, subject to 
 rules made under this Act, have the same powers as a trustee on a bankrupt 
 estate. 
 
 152. — (1.) When a winding-up order has been made by the Court in England, 
 the official receiver shall summon separate meetings of the creditors and con- 
 tributories of the company for the purpose of — 
 
 (a) determining whether or not an application is to be made to the Court for 
 appointing a liquidator in the place of the official receiver ; and 
 
 S. 95 of 1862. 
 Powers of 
 liquidator. 
 
 S. 6 of 1890. 
 Meetings of 
 credit or < and 
 cout ibutories 
 in English 
 winding-up. 
 
 32 (2) 
 
492 
 
 Appendix 
 
 S. 4 of 1890. 
 Liquidator to 
 give information 
 to official 
 receiver. 
 
 S. 11 of 1890. 
 Payments of 
 liquidator 
 in English 
 winding-up 
 into bank. 
 
 S. 20 of 1890, 
 Audit of 
 liquidator’s 
 accounts in 
 English 
 winding-up. 
 
 S. 21 of 1890. 
 
 Books to be kept 
 by liquidator in 
 English 
 winding-up. 
 
 S. 22 of 1890. 
 Release of 
 liquidators 
 in England. 
 
 (b) determining* whether or not an application is to be made to the Court for the 
 appointment of a committee of inspection to act with the liquidator, and 
 who are to be the members of the committee if appointed. 
 
 (2.) The Court may make any appointment and order required to give effect to 
 any such determination, and, if there is a difference between the determinations of 
 the meetings of the creditors and contributories in respect of any of the matters 
 mentioned in the foregoing provisions of this section, the Court shall decide the 
 difference and make such order thereon as the Court may think fit. 
 
 (3.) In case a liquidator is not appointed by the Court the official receiver shall 
 be the liquidator of the company. 
 
 153 . Where in the winding-up of a company by the Court in England a person 
 other than the official receiver is appointed liquidator he shall give the official 
 receiver such information and such access to and facilities for inspecting the books 
 and documents of the company, and generally such aid as may be requisite for 
 enabling that officer to perform his duties under this Act. 
 
 154 . — (1.) Every liquidator of a company which is being wound up by the 
 Court in England shall, in such manner and at such times as the Board of Trade, 
 with the concurrence of the Treasury, direct, pay the money received by him to 
 the Companies Liquidation Account at the Bank of England, and the Board shall 
 furnish him with a certificate of receipt of the money so paid : 
 
 Provided that, if the committee of inspection satisfy the Board of Trade that for 
 the purpose of carrying on the business of the company or of obtaining advances, 
 or for any other reason, it is for the advantage of the creditors or contributories 
 that the liquidator should have an account with any other bank, the Board shall, 
 on the application of the committee of inspection, authorize the liquidator to make 
 his payments into and out of such other bank as the committee may select, and 
 thereupon those payments shall be made in the prescribed manner. 
 
 (2.) If any such liquidator at any time retains for more than ten days a sum 
 exceeding fifty pounds, or such other amount as the Board of Trade in any 
 particular case authorize him to retain, then, unless he explains the retention to 
 the satisfaction of the Board, he shall pay interest on the amount so retained in 
 excess at the rate of twenty per cent, per annum, and shall be liable to disallowance 
 of all or such part of his remuneration as the Board may think just, and to be 
 removed from his office by the Board, and shall be liable to pay any expenses 
 occasioned by reason of his default. 
 
 (3.) A liquidator of a company which is being wound up by the Court in 
 England shall not pay any sums received by him as liquidator into his private 
 banking account. 
 
 155 . — (1.) Every liquidator of a company which is being wound up by the 
 Court in England shall, at such times as may be prescribed but not less than twice 
 in each year during his tenure of office, send to the Board of Trade, or as they 
 direct, an account of his receipts and payments as liquidator. 
 
 (2.) The account shall be in a prescribed form, shall be made in duplicate, and 
 shall be verified by a statutory declaration in the prescribed form. 
 
 (3.) The Board shall cause the account to be audited and for the purpose of the 
 audit the liquidator shall furnish the Board with such vouchers and information as 
 the Board may require, and the Board may at any time require the production of 
 and inspect any books or accounts kept by the liquidator. 
 
 (4.) When the account has been audited, one copy thereof shall be filed and kept 
 by the Board, and the other copy shall be filed with the Court, and each copy shall 
 be open to the inspection of any creditor, or of any person interested. 
 
 (5.) The Board shall cause the account when audited or a summary thereof to be 
 printed, and shall send a printed copy of the account or summary by post to every 
 creditor and contributory. 
 
 156 . Every liquidator of a company which is being wound up by the Court in 
 England shall keep, in manner prescribed, proper books in which he shall cause to 
 be made entries or minutes of proceedings at meetings, and of such other matters 
 as may be prescribed, and any creditor or contributory may, subject to the control 
 of the Court, personally or by his agent inspect any such books. 
 
 157 — (1.) When the liquidator of a company which is being wound up by the 
 Court in England has realised all the property of the company, or so much thereof 
 as can, in his opinion, be realised without needlessly protracting the liquidation, 
 and has distributed a final dividend, if any, to the creditors, and adjusted the rights 
 of the contributories among themselves, and made a final return, if any, to the 
 contributories, or has resigned, or has been removed from his office, the Board of 
 
Act of 1908 493 
 
 Companies (Consolidation) Act, 1908. 
 
 Trade shall, on his application, cause a report on his accounts to be prepared, and, 
 on his complying with all the requirements of the Board, shall take into considera- 
 tion the report, and any objection which may be urged by any creditor, or con- 
 tributory, or person interested against the release of the liquidator, and shall either 
 grant or withhold the release accordingly, subject nevertheless to an appeal to the 
 High Court- 
 
 (2.) Where the release of a liquidator is withheld the Court may, on the applica- 
 tion of any creditor, or contributory, or person interested, make such order as it 
 thinks just, charging the liquidator with the consequences of any act or default 
 which he may have done or made contrary to his duty. 
 
 » (3.) An order of the Board of Trade releasing the liquidator shall discharge him 
 from all liability in respect of any act done or default made by him in the adminis- 
 tration of the affairs of the company, or otherwise in relation to his conduct as 
 liquidator, but any such order may be revoked on proof that it was obtained by 
 fraud or by suppression or concealment of any material fact. 
 
 (4.) Where the liquidator has not previously resigned or been removed, his 
 release shall operate as a removal of him from his office. 
 
 158 . — (1.) Subject to the provisions of this Act, the liquidator of a company 
 which is being wound up by the Court in England shall, in the administration of 
 the assets of the company and in the distribution thereof among its creditors, have 
 regard to any directions that may be given by resolution of the creditors or contri- 
 butories at any general meeting, or by the committee of inspection, and any 
 directions given by the creditors or contributories at any general meeting shall in 
 case of conflict be deemed to override any directions given by the committee of 
 inspection. 
 
 (2.) The liquidator may summon general meetings of the creditors or contribu- 
 tories for the purpose of ascertaining their wishes, and it shall be his duty to 
 summon meetings at such times as the creditors or contributories, by resolution, 
 either at the meeting appointing the liquidator or otherwise, may direct, or when- 
 ever requested in writing to do so by one tenth in value of the creditors or 
 contributories as the case may be. 
 
 (3.) The liquidator may apply to the Court in manner prescribed for directions in 
 relation to any particular matter arising under the winding-up. 
 
 (4.) Subject to the provisions of this Act, the liquidator shall use his own 
 discretion in the management of the estate and its distribution among the creditors. 
 
 (5.) If any person is aggrieved by any act or decision of the liquidator, that 
 person may apply to the Court, and the Court may confirm, reverse, or modify the 
 act or decision complained of, and make such order in the premises as it thinks just. 
 
 159 . — ( 1 .) The Board of Trade shall take cognizance of the conduct of liquidators 
 of companies which are being wound up by the Court in England, and, if a liqui- 
 dator does not faithfully perform his duties and duly observe all the requirements 
 imposed on him by statute, rules, or otherwise with respect to the performance of 
 his duties, or if any complaint is made to the Board by any creditor or contributory 
 in regard thereto, the Board shall inquire into the matter, and take such action 
 thereon as they may think expedient. 
 
 (2.) The Board may at any time require any liquidator of a company which is 
 being wound up by the Court in England to answer any inquiry in relation to any 
 winding-up in which he is engaged, and may, if the Board think fit, apply to the 
 Court to examine him or any other person on oath concerning the winding-up. 
 
 (3.) The Board may also direct a local investigation to be made of the books and 
 vouchers of the liquidator. 
 
 Committee of Inspection , Special Manager , Receiver. 
 
 160. — (1.) A committee of inspection appointed in pursuance of this Act shall 
 consist of creditors and contributories of the company or persons holding general 
 powers of attorney from creditors or contributories in such proportions as may be 
 agreed on by the meetings of creditors and contributories, or as, in case of 
 difference, may be determined by the Court. 
 
 (2.) The committee shall meet at such times as they from time to time appoint, 
 and, failing such appointment, at least once a month ; and the liquidator or any 
 member of the committee may also call a meeting of the committee as and when he 
 thinks necessary. 
 
 Ss. 23, 24 of 
 1890. 
 
 Exercise and 
 control of 
 liquidator’s 
 powers in 
 England. 
 
 S. 25 of 1890. 
 Control of 
 Board of 
 Trade over 
 liquidators in 
 England. 
 
 S. 9 of 1890. 
 Committee 
 of inspection 
 in English 
 winding-up. 
 
494 
 
 Appendix. 
 
 S. 5 of 1890. 
 Fower in 
 England to 
 appoint 
 special 
 manager. 
 
 4 (6) of 1890. 
 Power in Eng- 
 land to appoint 
 official receiver 
 as receiver for 
 debenture 
 holders or 
 creditors. 
 
 S. 98 of 1862. 
 Settlement of 
 list of con- 
 tributories 
 and applica- 
 tion of assets. 
 
 S. 100 of 1862. 
 Power to re- 
 quire delivery 
 of property. 
 
 S. 101 of 1862. 
 Power to order 
 payment of 
 debts by 
 contributory. 
 
 (3.) The committee may act by a majority of their members present at a meeting, 
 but shall not act unless a majority of the committee are present. 
 
 (4.) Any member of the committee may resign by notice in writing signed by 
 him and delivered to the liquidator. 
 
 (5.) If a member of the committee becomes bankrupt, or compounds or arranges 
 with his creditors, or is absent from five consecutive meetings of the committee 
 without the leave of those members who together with himself represent the 
 creditors or contributories, as the case may be, his office shall thereupon become 
 vacant. 
 
 (6.) Any member of the committee may be removed by an ordinary resolution 
 at a meeting of creditors (if he represents creditors), or of contributories (if he 
 represents contributories) of which seven days’ notice has been given, stating the- 
 object of the meeting. 
 
 (7.) On a vacancy occurring in the committee the liquidator shall forthwith 
 summon a meeting of creditors or of contributories, as the case may require, to 
 fill the vacancy, and the meeting may, by resolution, re-appoint the tame or 
 appoint another creditor or contributory to fill the vacancy. 
 
 (8.) The continuing members of the committee, if not less than two, may act 
 notwithstanding any vacancy in the committee. 
 
 (9.) If there is no committee of inspection, any act or thing or any direction or 
 permission by this Act authorized or required to be done or given by the committee 
 may be done or given by the Board of Trade on the application of the liquidator. 
 
 161 . — (1.) Where the official receiver becomes the liquidator of a company, 
 whether provisionally or otherwise, he may, if satisfied that the nature of the 
 estate or business of the company, or the interests of the creditors or contributories 
 generally, require the appointment of a special manager of the estate or business 
 of the company other than himself, apply to the Court to, and the Court may on 
 such application, appoint a special manager thereof to act during such time as the 
 Court may direct, with such powers, including any of the powers of a receiver or 
 manager, as may be entrusted to him by the Court. 
 
 (2.) The special manager shall give such security and account in such manner as 
 the Board of Trade direct. 
 
 (3.) The special manager shall receive such remuneration as may be fixed by the 
 Court. 
 
 162 . Where an application is made to the Court to appoint a receiver on behalf 
 of the debenture holders or other creditors of a company which is being wound up 
 by the Court in England, the official receiver may be so appointed. 
 
 Ordinary Fouers of Court. 
 
 163 . — (1.) As soon as may be after making a winding-up order, the Court 
 shall settle a list of contributories, with power to rectify the register of members 
 in all cases where rectification is required in pursuance of this Act, and shall 
 cause the assets of the company to be collected, and applied in discharge of its 
 liabilities. 
 
 (2.) In settling the list of contributories, the Court shall distinguish between 
 persons who are contributories in their own right and persons who are contribu- 
 tories as being representatives of or liable to the debts of others. 
 
 164 . The Court may, at any time after making a winding-up order, require 
 any contributory for the time being settled on the list of contributories, and any 
 trustee, receiver, banker, agent, or officer of the company to pay, deliver, convey, 
 surrender, or transfer forthwith, or within such time as the Court directs, to the 
 liquidator any money, property, or books and papers in his hands to which the 
 company is prima facie entitled. 
 
 165 . — (1.) The Court may, at any time after making a winding-up order, make 
 an order on any contributory for the time being settled on the list of contributories 
 to pay, in manner directed by the order, any money due from him or from the 
 estate of the person whom he represents to the company, exclusive of any money 
 payable by him or the estate by virtue of any call in pursuance of this Act. 
 
 (2.) The Court in making such an order may, in the case of an unlimited com- 
 pany, allow to the contributory by way of set-off any money due to him or to the 
 
Companies (Consolidation) Act, 1908. Act of 1908 
 
 495 
 
 estate which he represents from the company on any independent dealing- or con- 
 tract with the company, but not any money due to him as a member of the company 
 in respect of any dividend or profit ; and may, in the case of a limited company, 
 make to any director or manager whose liability is unlimited or to his estate the 
 like allowance. 
 
 (3.) But in the case of any company, whether limited or unlimited, when all the 
 creditors are paid in full, any money due on any account whatever to a con- 
 tributory from the company may be allowed to him by way of set-off against any 
 subsequent call. 
 
 166 . — ( 1 .) The Court may, at any time after making a winding-up order, and 
 either before or after it has ascertained the sufficiency of the assets of the company, 
 make calls on and order payment thereof by all or any of the contributories for the 
 time being settled on the list of the contributories to the extent of their liability, for 
 payment of any money which the Court considers necessary to satisfy the debts and 
 liabilities of the company, and the costs, charges, and expenses of winding up, and 
 for the adjustment of the rights of the contributories among themselves. 
 
 (2.) In making a call the Court may take into consideration the probability that 
 some of the contributories may partly or wholly fail to pay the call. 
 
 167 . — ( 1 .) The Court may order any contributory, purchaser or other person 
 from whom money is due to the company to pay the same into the Bank of 
 England or any branch thereof to the account of the liquidator instead of to the 
 liquidator, and any such order may be enforced in the same manner as if it had 
 directed payment to the liquidator. 
 
 (2.) All moneys and securities paid or delivered into the Bank of England or any 
 branch thereof in the event of a winding-up by the Court shall be subject in all 
 respects to the orders of the Court. 
 
 168 . — (1.) An order made by the Court on a contributory shall (subject to any 
 right of appeal) be conclusive evidence that the money, if any, thereby appearing 
 to be due or ordered to be paid is due. 
 
 (2.) All other pertinent matters stated in the order shall be taken to be truly 
 stated as against all persons, and in all proceedings, except proceedings against the 
 real estate of a deceased contributory, in which case the order shall be only primd 
 facie evidence for the purpose of charging his real estate, unless his heirs or devisees 
 were on the list of contributories at the time of the order being made. 
 
 169 . — The Court may fix a time or times within which creditors are to prove 
 their debts or claims, or to be excluded from the benefit of any distribution made 
 before those debts are proved. 
 
 170 . The Court shall adjust the rights of the contributories among themselves, 
 and distribute any surplus among the persons entitled thereto. 
 
 171 . The Court may, in the event of the assets being insufficient to satisfy the 
 liabilities, make an order as to the payment out of the assets of the costs, charges, 
 and expenses incurred in the winding-up in such order of priority as the Court 
 thinks just. 
 
 172 . — (1.) When the affairs of a company have been completely wound up, the 
 Court shall make an order that the company be dissolved from the date of the 
 order, and the company shall be dissolved accordingly. 
 
 (2.) The order shall be reported by the liquidator to the registrar of companies 
 who shall make in his books a minute of the dissolution of the company. 
 
 (3.) If the liquidator makes default in complying with the requirements of this 
 section he shall be liable to a fine not exceeding five pounds for every day during 
 which he is in default. 
 
 173 . General rules may be made for enabling or requiring all or any of the 
 powers and duties conferred and imposed on the Court in England by this Act, in 
 respect of the matters following, to be exercised or performed by the liquidator as 
 an officer of the Court, and subject to the control of the Court ; that is to say, the 
 powers and duties of the Court in respect of — 
 
 (a) holding and conducting meetings to ascertain the wishes of creditors and 
 
 contributories ; 
 
 (b) settling lists of contributories and rectifying the register of members where 
 
 required, and collecting and applying the assets ; 
 
 (c) requiring delivery of property or documents to the liquidator ; 
 
 (d) making calls ; 
 
 (e) fixing a time within which debts and claims must be proved : 
 
 S. 102 of 1862. 
 Power of 
 Court to 
 make calls. 
 
 S. 103 of 1862. 
 Power to order 
 payment into 
 
 bank. 
 
 S. 106 of 1862. 
 Order on 
 contributory 
 conclusive 
 evidence. 
 
 S. 107 of 1862. 
 Power to ex- 
 clude creditors 
 not proving in 
 time. 
 
 S. 109 of 1862. 
 Adj ustment 
 of rights of 
 contributories. 
 
 S. 110 of 1862. 
 Power to order 
 costs. 
 
 S. Ill of 1862. 
 Dissolution 
 of company. 
 
 S. 13 of 1890. 
 Delegation 
 to liquidator 
 of certain 
 powers of 
 Court in 
 England, 
 
Appendix. 
 
 490 
 
 Provided that the liquidator shall not, without the special leave of the Court, 
 rectify the register of members, and shall not make any call without either the 
 special leave of the Court or the sanction of the committee of inspection. 
 
 S. 115 of 1862. 
 Power to 
 summon 
 persons 
 suspected 
 of having 
 property 
 of company. 
 
 S£8_of 1890. 
 Power in 
 England to 
 order public 
 examination 
 of promoters, 
 directors, &c. 
 
 Extraordinary Powers of Court. 
 
 174. — (1.) The Court may, after it has made a winding* -up order, summon before 
 it any officer of the company or person known or suspected to have in his possession 
 any property of the company or supposed to be indebted to the company, or any 
 person whom the Court deems capable of giving information concerning the trade, 
 dealings, affairs, or property of the company. 
 
 (2.) The Court may examine him on oath concerning the same, either by word of 
 mouth or on written interrogatories, and may reduce his answers to writing and 
 require him to sign them. 
 
 (3. ) The Court may require him to produce any books and papers in his custody 
 or power relating to the company ; but, where he claims any lien on books or papers 
 produced by him, the production shall be without prejudice to that lien, and the 
 Court shall have jurisdiction in the winding-up to determine all questions relating 
 to that lien. 
 
 (4.) If any person so summoned, after being tendered a reasonable sum for his 
 expenses, refuses to come before the Court at the time appointed, not having a 
 lawful impediment (made known to the Court at the time of its sitting, and allowed 
 by it) , the Court may cause him to be apprehended, and brought before the Court 
 for examination. 
 
 175. — (1.) When an order has been made in England for winding up a company 
 by the Court, and the official receiver has made a further report under this Act 
 stating that in his opinion a fraud has been committed by any person in the pro- 
 motion or formation of the company, or by any director or other officer of the 
 company in relation to the company since its formation, the Court may, after 
 consideration of the report, direct that any person who has taken any part in the 
 promotion or formation of the company, or has been a director, or officer of the 
 company, shall attend before the Court on a day appointed by the Court for that 
 purpose, and be publicly examined as to the promotion or formation or the conduct 
 of the business of the company, or as to his conduct and dealings as director or 
 officer thereof. 
 
 (2.) The official receiver shall take part in the examination, and for that purpose 
 may, if specially authorized by the Board of Trade in that behalf, employ a solicitor 
 with or without counsel. 
 
 (3.) The liquidator, where the official receiver is not the liquidator, and any 
 creditor or contributory, may also take part in the examination either personally or 
 by solicitor or counsel. 
 
 (4.) The Court may put such questions to the person examined as the Court 
 thinks fit. 
 
 (5.) The person examined shall be examined on oath, and shall answer all such 
 questions as the Court may put or allow to be put to him. 
 
 (6.) A person ordered to be examined under this section shall at his own cost, 
 before his examination, be furnished with a copy of the official receiver’s report, 
 and may at his own cost employ a solicitor with or without counsel, who shall be at 
 liberty to put to him such questions as the Court may deem just for the purpose of 
 enabling him to explain or qualify any answers given by him : Provided that if he 
 is, in the opinion of the Court, exculpated from any charges made or suggested 
 against him, the Court may allow him such costs as in its discretion it may 
 think fit. 
 
 (7.) Notes of the examination shall be taken down in writing, and shall be read 
 over to or by, and signed by, the person examined, and may thereafter be used in 
 evidence against him, and shall be open to the inspection of any creditor or con- 
 tributory at all reasonable times. 
 
 (8.1 The Court may, if it thinks fit, adjourn the examination from time 
 to time. 
 
 (9.) An examination under this section may, if the Court so directs, and subject 
 to general rules, be held before any judge of County Courts, or before any officer of 
 the Supreme Court, being an official referee, master, or registrar in bankruptcy, or 
 before any district registrar of the High Court named for the purpose by the 
 Lord Chancellor, or, in the case of companies being wound up by a palatine court, 
 
Act of 1908 497 
 
 Companies (Consolidation) Act, 1908. 
 
 before a registrar of that Court, and the powers of the Court under this section as 
 to the conduct of the examination, but not as to costs, may be exercised by the 
 person before whom the examination is held. 
 
 176 . The Court, at any time either before or after making a winding-up order, 
 •on proof of probable cause for believing that a contributory is about to quit the 
 United Kingdom, or otherwise to abscond, or to remove or conceal any of his pro- 
 perty for the purpose of evading payment of calls, or of avoiding examination 
 respecting the affairs of the company, may cause the contributory to be arrested, 
 and his books and papers and moveable personal property to be seized, and him 
 and them to be safely kept until such time as the Court may order. 
 
 177 . Any powers by this Act conferred on the Court shall be in addition to and 
 not in restriction of any existing powers of instituting proceedings against any 
 contributory or debtor of the company, or the estate of any contributory or debtor, 
 for the recovery of any call or other sums. 
 
 Enforcement of and Appeal from Orders. 
 
 178 . — ( 1 .) Orders made by the High Court in England or Ireland under this 
 Act may be enforced in the same manner as orders made in any action pending 
 therein. 
 
 (2.) For the purposes of this Part of this Act the Court exercising the stannaries 
 jurisdiction shall, in addition to its ordinary powers, have the same power of 
 enforcing any orders made by it as the High Court in England has in relation to 
 matters within its jurisdiction; and, for the last- mentioned purposes, the jurisdic- 
 tion of the judge of the Court exercising the stannaries jurisdiction shall be 
 deemed to be co- extensive in local limits with the jurisdiction of the High Court 
 in England. 
 
 179 . Where an order, interlocutor, or decree has been made in Scotland for 
 winding-up a company by the Court, it shall be competent to the Court, on pro- 
 duction by the liquidators of a list certified by them of the names of the contribu- 
 tories liable in payment of any calls, and of the amount due by each contributory, 
 and of the date when the same became due, to pronounce forthwith a decree 
 against those contributories for payment of the sums so certified to be due, with 
 interest from the said date till payment, at the rate of five per cent, per annum in 
 the same way and to the same effect as if they had severally consented to 
 registration for execution, on a charge of six days, of a legal obligation to pay 
 those calls and interest ; and the decree may be extracted immediately, and no 
 suspension thereof shall be competent, except on caution or consignation, unless 
 with special leave of the Court. 
 
 180 . — ( 1 .) Any order made by the Court in England for or in the course of 
 winding-up a company shall be enforced in Scotland and Ireland in the Courts that 
 would respectively have jurisdiction in respect of that company if registered in 
 Scotland or Ireland, and in the same manner in all respects as if the order had been 
 made by those Courts. 
 
 (2.) In like manner orders, interlocutors, and decrees made by the Court in 
 Scotland for or in the course of winding-up a company shall be enforced in 
 England and Ireland, and orders made by the Court in Ireland for or in the 
 course of winding-up a company shall be enforced in England and Scotland, by the 
 "Courts which would respectively have jurisdiction in respect of that company if 
 registered in that part of the United Kingdom where the order is required to be 
 enforced, and in the same manner in all respects as if the order had been made by 
 those Courts. 
 
 (3.) Where any order, interlocutor, or decree made by one Court is required to 
 be enforced by another Court, an office copy of the order, interlocutor, or decree 
 shall be produced to the proper officer of the Court required to enforce the same, 
 and the production of an office copy shall be sufficient evidence of the order, inter- 
 locutor, or decree, and thereupon the last-mentioned Court shall take the requisite 
 steps in the matter for enforcing the order, interlocutor, or decree, in the same 
 manner as if it had been made by that Court. 
 
 181 . — (1.) Subject to rules of Court, an appeal from any order or decision made 
 or given in the winding-up of a company by the Court under this Act shall lie in 
 the same manner and subject to the same conditions as an appeal from any order or 
 -decision of the Court in cases within its ordinary jurisdiction. 
 
 S. 118 of 1862. 
 Power to 
 arrest 
 absconding 
 contributory. 
 
 S. 119 of 1862. 
 Powers of 
 Court 
 
 cumulative. 
 
 S. 120 of 1862. 
 Power to en- 
 force orders. 
 
 S. 121 of 1862. 
 Order for 
 calls on con- 
 tributories in 
 Scotland. 
 
 S. 122 of 1862. 
 
 Enforcement 
 
 of orders 
 
 throughout 
 
 United 
 
 Kingdom. 
 
 S. 124 of 1862. 
 Appeals from 
 order. 
 
4 ( J8 
 
 Appendix. 
 
 S. 129 of 1862. 
 Circum- 
 stances in 
 which com- 
 pany may be 
 wound up 
 voluntarily. 
 
 S. 130 of 1862. 
 Commencement 
 of voluntary 
 winding-up. 
 
 S. 131 of 1862. 
 Effect of volun- 
 tary winding-up 
 on status of 
 company. 
 
 S. 132 of 1862. 
 Notice of resolu- 
 tion to wind up 
 voluntarily. 
 
 S. 133 of 1862. 
 Consequences 
 of voluntary 
 winding-up. 
 
 (2.) Provided, in regard to orders or judgments pronounced in Scotland by the 
 Lord Ordinary on the Bills in vacation, that — 
 
 (i) No order or judgment under the provisions of this Act specified in the 
 First Part of the Fourth Schedule to this Act shall be subject to review, 
 reduction, suspension, or stay of execution ; and 
 
 (ii) Every other order or judgment (except as hereinafter mentioned) shall be 
 subject to review only by reclaiming note, in common form, presented 
 within fourteen days from the date of the order or judgment : 
 
 Provided that orders or judgments under the provisions of this Act 
 specified in the Second Part of the Fourth Schedule to this Act shall, 
 from the dates of those orders or judgments, and notwithstanding any 
 reclaiming note against them, be carried out and receive effect until the 
 reclaiming note is disposed of by the Court. 
 
 (3.) Provided also, in regard to orders or judgments pronounced in Scotland by a 
 permanent Lord Ordinary to whom a winding-up has been remitted, that any such 
 order or judgment shall be subject to review only by reclaiming note in common 
 form, presented within fourteen days from the date of the order or judgment, but, 
 should a reclaiming note not be presented and moved during session , the provisions 
 of this section in regard to orders or judgments pronounced by the Lord Ordinary 
 on the Bills in vacation shall apply to the order or judgment. 
 
 (4.) Nothing in this section shall affect the provisions of this Act in reference to 
 decrees in Scotland for payment of calls in the winding-up of companies, whether 
 voluntarily or by or subject to the supervision of the Court. 
 
 Voluntary Winding Up. 
 
 182. A company may be wound up voluntarily — 
 
 (1.) When the period (if any) fixed for the duration of the company by the 
 articles expires, or the event (if any) occurs, on the occurrence of which 
 the articles provide that the company is to be dissolved, and the company 
 in general meeting has passed a resolution requiring the company to be 
 wound up voluntarily : 
 
 (2.) If the company resolves by special resolution that the company be wound 
 up voluntarily : 
 
 (3.) If the company resolves by extraordinary resolution to the effect that it 
 cannot by reason of its liabilities continue its business, and that it is 
 advisable to wind up. 
 
 183. A voluntary winding-up shall be deemed to commence at the time of the 
 passing of the resolution authorizing the winding-up. 
 
 184. When a company is wound up voluntarily the company shall, from the com- 
 mencement of the winding-up, cease to carry on its business, except so far as may 
 be required for the beneficial winding-up thereof : 
 
 Provided that the corporate state and corporate powers of the company shall, 
 notwithstanding anything to the contrary in its articles, continue until it is 
 dissolved. 
 
 185. When a company has resolved by special or extraordinary resolution to 
 wind up voluntarily, it shall give notice of the resolution by advertisement in the 
 Gazette. 
 
 186. The following consequences shall ensue on the voluntary winding-up of a 
 company : — - 
 
 (i) The property of the company shall be applied in satisfaction of its liabilities 
 pari passu, and, subject thereto, shall, unless the articles otherwise pro- 
 vide, be distributed among the members according to their rights and 
 interests in the company : 
 
 (ii) The company in general meeting shall appoint one or more liquidators for 
 the purpose of winding up the affairs and distributing the assets of the 
 company, and may fix the remuneration to be paid to him or them : 
 
 (iii) On the appointment of a liquidator all the powers of the directors shall 
 
 cease, except so far as the company in general meeting, or the liquidator, 
 sanctions the continuance thereof : 
 
 (iv) The liquidator may, without the sanction of the Court, exercise all powers 
 
 by this Act given to the liquidator in a winding up by the Court : 
 
 (v) The liquidator may exercise the powers of the Court under this Act of 
 settling a list of contributories, and of making calls, and shall pay tho 
 
Act of 1908 499 
 
 Companies (Consolidation) Act, 1908. 
 
 debts of the company, and adj ust the rights of the contributories among 
 themselves : 
 
 (vi) The list of contributories shall be privid facie evidence of the liability of the 
 persons named therein to be contributories : 
 
 (vii) When several liquidators are appointed, every power hereby given may be 
 exercised by such one or more of them as may be determined at the time 
 of their appointment, or in default of such determination by any number 
 not less than two : 
 
 (viii) If from any cause whatever there is no liquidator acting, the Court may, on 
 the application of a contributory, appoint a liquidator : 
 
 (ix) The Court may, on cause shown, remove a liquidator, and appoint another 
 liquidator. 
 
 187 . — ( 1 .) The liquidator in a voluntary winding-up shall, within twenty-one 
 days after his appointment, file with the registrar of companies a notice of his 
 appointment in the form prescribed by the Board of Trade. 
 
 (2.) If the liquidator fails to comply with the requirements of this section he 
 shall be liable to a fine not exceeding five pounds for every day during which the 
 default continues. 
 
 188 . — (1.) Every liquidator appointed by a company in a voluntary winding-up 
 shall, within seven days from his appointment, send notice by post to all persons 
 who appear to him to be creditors of the company that a meeting of the creditors 
 of the company will be held on a date, not being less than fourteen nor more than 
 twenty- one days after his appointment, and at a place and hour, to be specified in 
 the notice, and shall also advertise notice of the meeting once in the Gazette and once 
 at least in two local newspapers circulating in the district where the registered 
 office or principal place of business of the company was situate. 
 
 (2.) At the meeting to be held in pursuance of the foregoing provisions of this 
 section the creditors shall determine whether an application shall be made to the 
 Court for the appointment of any person as liquidator in the place of or jointly 
 with the liquidator appointed by the company, or for the appointment of a com- 
 mittee of inspection, and, if the creditors so resolve, an application may be made 
 accordingly to the Court at any time, not later than fourteen days after the date 
 of the meeting, by any creditor appointed for the purpose at the meeting. 
 
 (3.) On any such application the Court may make an order either for the removal 
 of the liquidator appointed by the company and for the appointment of some other 
 person as liquidator or for the appointment of some other person to act as liquidator 
 jointly with the liquidator appointed by the company, or for the appointment of a 
 committee of inspection either together with or without any such appointment of 
 a liquidator or such other order as, having regard to the interests of the creditors 
 and contributories of the company, may seem just. 
 
 (4.) No appeal shall lie from any order of the Court upon an application under 
 this section. 
 
 (5.) The Court shall make such order as to the costs of the application as it may 
 think fit, and if it is of opinion that, having regard to the interests of the creditors 
 in the liquidation, there were reasonable grounds for the application, may order 
 the costs of the application to be paid out of the assets of the company, notwith- 
 standing that the application is dismissed or otherwise disposed of adversely to the 
 applicant. 
 
 189 . — (1.) If a vacancy occurs by death, resignation, or otherwise in the office 
 of liquidator appointed by the company in a voluntary winding up, the company in 
 general meeting may, subject to any arrangement with its creditors, fill the 
 vacancy. 
 
 (2.) For that purpose a general meeting may be convened by any contributory or, 
 if there were more liquidators than one, by the continuing liquidators. 
 
 (3.) The meeting shall be held in manner prescribed by the articles, or in such 
 manner as may, on application by any contributory or by the continuing liqui- 
 dators, be determined by the Court. 
 
 190 . — (1.) A company about to be, or in course of being, wound up voluntarily 
 may, by extraordinary resolution, delegate to its creditors, or to any committee of 
 them, the power of appointing liquidators or any of them, and of supplying vacancies 
 among the liquidators, or enter into any arrangement with respect to the powers 
 to be exercised by the liquidators, and the manner in which they are to be exercised. 
 
 (2.) Any act done by creditors in pursuance of any such delegated power shall 
 have the same effect as if it had been done by the company. 
 
 S. 26 of 1907. 
 Notice by 
 liquidator of his 
 appointment. 
 
 S. 27 of 1907. 
 Rights of 
 creditors in 
 a voluntary 
 winding-up. 
 
 S. 140 of 1862. 
 Power to fill 
 vacancy in 
 office of 
 liquidator. 
 
 S. 135 of 1862, 
 Delegation 
 of authority 
 to appoint 
 liquidators. 
 
500 
 
 Appendix. 
 
 S. 136 of 1862. 
 Arrangement 
 when binding 
 on creditors. 
 
 S. 161 of 1862. 
 Power of 
 liquidator to 
 accept shares, 
 &c. as con- 
 sideration 
 for sale of 
 property of 
 company. 
 
 8 & 9 Viet, 
 c. 16. 
 
 8 & 9 Viet, 
 c. 17. 
 
 S. 138 of 1862. 
 Power to 
 apply to 
 Court. 
 
 S. 139 of 1862. 
 Power of 
 liquidator to 
 call general 
 meeting. 
 
 191. — (1.) Any arrangement entered into between a company about to be, or in 
 the course of being, wound up voluntarily and its creditors shall, subject to any 
 right of appeal under this section, be binding on the company if sanctioned by an 
 extraordinary resolution, and on the creditors if acceded to by three-fourths in 
 number and value of the creditors. 
 
 (2.) Any creditor or contributory may, within three weeks from the completion 
 of the arrangement, appeal to the Court against it, and the Court may thereupon, 
 as it thinks just, amend, vary, or confirm the arrangement. 
 
 192. — (1.) Where a company is proposed to be, or is in course of being, woundup 
 altogether voluntarily, and the whole or part of its business or property is proposed 
 to be transferred or sold to another company (in this section called the transferee 
 company), the liquidator of the first-mentioned company (in this section called the 
 transferor company) may, with the sanction of a special resolution of that company, 
 conferring either a general authority on the liquidator or an authority in respect of 
 any particular arrangement, receive in compensation or part compensation for the 
 transfer or sale, shares, policies, or other like interests in the transferee company, 
 for distribution among the members of the transferor company, or may enter into 
 any other arrangement whereby the members of the transferor company may, in 
 lieu of receiving cash, shares, policies, or other like interests, or in addition thereto, 
 participate in the profits of or receive any other benefit from the transferee company. 
 
 (2.) Any sale or arrangement in pursuance of this section shall be binding on the 
 members of the transferor company. 
 
 (3.) If any member of the transferor company who did not vote in favour of the 
 special resolution at either of the meetings held for passing and confirming the same 
 expresses his dissent therefrom in writing addressed to the liquidator, and left at the 
 registered office of the company within seven days after the confirmation of the 
 resolution, he may require the liquidator either to abstain from carrying the resolu- 
 tion into effect, or to purchase his interest at a price to be determined by agreement 
 or by arbitration in manner provided by this section. 
 
 (4.) If the liquidator elects to purchase the member’s interest the purchase money 
 must be paid before the company is dissolved, and be raised by the liquidator in 
 such manner as may be determined by special resolution. 
 
 (5.) A special resolution shall not be invalid for the purposes of this section by 
 reason that it is passed before or concurrently with a resolution for winding up the 
 company, or for appointing liquidators ; but, if an order is made within a year for 
 winding up the company by or subject to the supervision of the Court, the special 
 resolution shall not be valid unless sanctioned by the Court. 
 
 (6.) For the purposes of an arbitration under this section the provisions of the 
 Companies Clauses Consolidation Act, 1 84 5 , or, in the case of a winding-up in 
 Scotland, the Companies Clauses Consolidation (Scotland) Act, 1845, with respect to 
 the settlement of disputes by arbitration, shall be incorporated with this Act ; and 
 in the construction of those provisions this Act shall be deemed to be the special 
 Act, and ‘ ‘ the company ” shall mean the transferor company, and any appointment 
 by the said incorporated provisions directed to be made under the hand of the 
 secretary, or any two of the directors, may be made under the hand of the 
 liquidator, or, if there is more than one liquidator, then of any two or more of the 
 liquidators. 
 
 193. — (1.) Where a company is being wound up voluntarily the liquidator or 
 any contributory or creditor may apply to the Court to determine any question 
 arising in the winding-up, or to exercise, as respectst he enforcing of calls, or any 
 other matter, all or any of the powers which the Court might exercise if the com- 
 pany were being wound up by the Court. 
 
 (2.) The Court, if satisfied that the determination of the question or the required 
 exercise of power will be just and beneficial, may accede wholly or partially to the 
 application on such terms and conditions as the Court thinks fit, or may make such 
 other order on the application as the Court thinks just. 
 
 194. — (1.) Where a company is being wound up voluntarily, the liquidator may 
 summon general meetings of the company for the purpose of obtaining the sanction 
 of the company by special or extraordinary resolution, or for any other purposes he 
 may think fit. 
 
 (2.) In the event of the winding-up continuing for more than one year, the 
 liquidator shall summon a general meeting of the company at the end of the first 
 year from the commencement of the winding-up, and of each succeeding year, or 
 as soon thereafter as may be convenient, and shall lay before the meeting an 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 501 
 
 account of his acts and dealings and of the conduct of the winding-up during the 
 preceding year. 
 
 195. — (1.) In the case of every voluntary winding-up, as soon as the affairs of 
 the company are fully wound up, the liquidator shall make up an account of the 
 winding-up, showing how the winding-up has been conducted and the property of 
 the company has been disposed of ; and thereupon shall call a general meeting of 
 the company for the purpose of laying before it the account, and giving any 
 explanation thereof. 
 
 (2.) The meeting shall be called by advertisement in the Gazette, specifying the 
 time, place, and object thereof, and published one month at least before the 
 meeting. 
 
 (3.) Within one week after the meeting, the liquidator shall make a return to the 
 registrar of companies of the holding of the meeting, and of its date, and in 
 default of so doing shall be liable to a fine not exceeding five pounds for every day 
 during which the default continues. 
 
 (4.) The registrar, on receiving the return, shall forthwith register it, and on the 
 expiration of three months from the registration of the return the company shall be 
 deemed to be dissolved : 
 
 Provided that the Court may, on the application of the liquidator or of any other 
 person who appears to the Court to be interested, make an order deferring the date 
 at which the dissolution of the company is to take effect for such time as the Court 
 thinks fit. 
 
 (5.) It shall be the duty of the person on whose application an order of the Court 
 under this section is made, within seven days after the making of the order, to file 
 with the registrar an office copy of the order, and if that person fails so to do, he shall 
 be liable to a fine not exceeding five pounds for every day during which the default 
 continues. 
 
 196. All costs, charges, and expenses properly incurred in the voluntary winding- 
 up of a company, including the remuneration of the liquidator, shall be payable out 
 of the assets of the company in priority to all other claims. 
 
 197. The voluntary winding-up of a company shall not bar the right of any 
 creditor or contributory to have it wound up by the Court, if the Courtis of opinion, 
 in the case of an application by a creditor, that the rights of the creditor or, in the 
 case of an application by a contributory, that the rights of the contributories will 
 be prejudiced by a voluntary winding-up. 
 
 198. Where a company is being wound up voluntarily, and an order is made for 
 winding-up by the Court, the Court may, if it thinks fit, by the same or any sub- 
 sequent order, provide for the adoption of all or any of the proceedings in the 
 voluntary winding-up. 
 
 Winding Up subject to Supervision of Court. 
 
 199. When a company has by special or extraordinary resolution resolved to 
 wind up voluntarily, the Court may make an order that the voluntary winding-up 
 shall continue, but subject to such supervision of the Court, and with such liberty 
 for creditors, contributories, or others to apply to the Court, and generally on such 
 terms and conditions as the Court thinks just. 
 
 200. A petition for the continuance of a voluntary winding-up subject to the 
 supervision of the Court shall, for the purpose of giving jurisdiction to the Court 
 over actions, be deemed to be a petition for winding-up by the Court. 
 
 201. The Court may, in deciding between a winding-up by the Court and a 
 winding-up subject to supervision, in the appointment of liquidators, and in all 
 other matters relating to the winding-up subject to supervision, have regard to the 
 wishes of the creditors or contributories as proved to it by any sufficient evidence. 
 
 202. — (1.) Where an order is made for a winding-up subject to supervision, the 
 Court may by the same or any subsequent order appoint any additional liquidator. 
 
 (2.) A liquidator appointed by the Court under this section shall have the same 
 powers, be subject to the same obligations, and in all respects stand in the same 
 position as if he had been appointed by the company. 
 
 (3.) The Court may remove any liquidator so appointed by the Court, or any 
 liquidator continued under the supervision order, and fill any vacancy occasioned 
 by the removal, or by death or resignation. 
 
 203. — (1.) Where an order is made for a winding-up subject to supervision, the 
 liquidator may, subject to any restrictions imposed by the Court, exercise all his 
 
 S. 142 of 1862. 
 Final meeting 
 and dissolu- 
 tion. 
 
 S. 144 of 1862. 
 Costs of 
 voluntary 
 liquidation. 
 
 S. 145 of 1862. 
 Saving for 
 rights of 
 creditors and 
 contributories. 
 
 S. 146 of 1862. 
 Power of Court 
 to adopt 
 proceedings 
 of voluntary 
 winding-up. 
 
 S. 147 of 1862. 
 Power to order 
 winding-up 
 subject to 
 supervision. 
 
 S. 148 of 1862. 
 Effect of petition 
 for winding-up 
 subject to 
 supervision. 
 
 S. 149 of 1862. 
 Court may have 
 regard to wishes 
 of creditors and 
 contributories. 
 
 S. 150 of 1862. 
 Power for Court 
 to appoint or 
 remove 
 liquidators. 
 
 S. 151 of 1862. 
 Effect of super- 
 vision order. 
 
502 
 
 Appendix. 
 
 S. 152 of 1862. 
 
 Appointment 
 of voluntary 
 liquidator as 
 liquidator in 
 ■winding-up by 
 Court in Scot- 
 land or Ireland. 
 
 powers, without the sanction or intervention of the Court, in the same manner as 
 if the company were being- wound up altogether voluntarily. 
 
 (2.) A winding-up subject to the supervision of the Court is not a winding-up 
 by the Court for the purpose of the following provisions of this Act, namely, those 
 contained in sections one hundred and forty-seven, one hundred and forty-eight, 
 one hundred and forty-nine, except sub- section (10), one hundred and fifty-two, 
 one hundred and fifty-three, one hundred and fifty-four, one hundred and fifty-five, 
 one hundred and fifty- six, one hundred and fifty- seven, one hundred and fifty- 
 eight, one hundred and fifty-nine, one hundred and sixty, one hundred and sixty- 
 one, one hundred and sixty-two, one hundred and seventy- three, and one hundred 
 and seventy-five, but, subject as aforesaid, an order for a winding-up subject to 
 supervision, shall for all purposes, including the staying of actions and other 
 proceedings, the making and enforcement of calls, the power in Scotland to remit 
 the winding-up to a permanent Lord Ordinary, and the exercise of all other powers, 
 be deemed to be an order for winding-up by the Court. 
 
 204. Where an order has been made in Scotland or Ireland for winding up a 
 company subject to supervision, and an order is afterwards made for winding-up by 
 the Court, the Court may by the last-mentioned or by any subsequent order appoint 
 any person who is then liquidator, either provisionally or permanently, and either 
 with or without any other person, to be liquidator in the winding-up by the Court. 
 
 Ss. 131—153 
 of 1862. 
 Avoidance of 
 transfers, &c. 
 after com- 
 mencement of 
 winding-up. 
 
 S. 158 of 1862. 
 Debts of all 
 descriptions 
 to be proved. 
 
 Judicature 
 Act, 1875, 
 s. 10. 
 
 Application of 
 bankruptcy 
 rules in 
 winding-up of 
 insolvent 
 English and 
 Irish companies. 
 
 S. 4 of 1886. 
 Hanking of 
 claims in 
 Scotland. 
 
 19 & 20 Viet, 
 c. 79. 
 
 S. 1 of 51 & 52 
 Viet. c. 62. 
 Preferential 
 payments. 
 
 Supplemental Provisions. 
 
 205. — (1.) In the case of voluntary winding-up, every transfer of shares, except 
 transfers made to or with the sanction of the liquidator, and every alteration in the 
 status of the members of the company made after the commencement of the winding- 
 up, shall be void. 
 
 (2.) In the case of a winding up by or subject to the supervision of the Court, 
 every disposition of the property (including things in action) of the company, and 
 every transfer of shares, or alteration in the status of its members, made after the 
 commencement of the winding-up, shall, unless the Court otherwise orders, be void. 
 
 206. In every winding-up (subject in the case of insolvent companies to the 
 application in accordance with the provisions of this Act of the law of bankruptcy) 
 all debts payable on a contingency, and all claims against the company, present or 
 future, certain or contingent, ascertained or sounding only in damages, shall be 
 admissible to proof against the company, a just estimate being made, so far as 
 possible, of the value of such debts or claims as may be subject to auy contingency 
 or sound only in damages, or for some other reason do not bear a certain value. 
 
 207. In the winding-up of an insolvent company registered in England or 
 Ireland the same rules shall prevail and be observed with regard to the respective 
 rights of secured and unsecured creditors and to debts provable and to the valuation 
 of annuities and future and contingent liabilities as are in force for the time being 
 under the law of bankruptcy in England or Ireland, as the case may be, with 
 respect to the estates of persons adjudged bankrupt; and all persons who in any 
 such case would be entitled to prove for and receive dividends out of the assets of 
 the company may come in under the winding-up, and make such claims against 
 the company as they respectively are entitled to by virtue of this section. 
 
 208. In the winding-up of a company registered in Scotland, the general and 
 special rules in regard to voting and ranking for payment of dividends provided by 
 sections forty-nine to sixty-six of the Bankruptcy (Scotland) Act, 1856, or any 
 other rules in regard thereto which may be in force for the time being in the 
 sequestration of the estates of bankrupts in Scotland, shall, so far as is consistent 
 with this Act, apply to creditors of the company voting in matters relating to the 
 winding-up, and ranking for payment of dividends ; and for this purpose seques- 
 tration shall be taken to mean winding up, trustee to mean liquidator, and sheriff 
 to mean the Court. 
 
 2C9. — (1.) In a winding-up there shall be pud in priority to all other debts — 
 
 (a) All parochial or other local rates due from the company at the date herein- 
 after mentioned, and having become due and payable within twelve 
 months next before that date, and all assessed taxes, land tax, property 
 or income tax assessed on the company up to the fifth day of April next 
 before that date, and not exceeding in the whole one year’s assessment ; 
 
Act of 1908 503 
 
 Companies (Consolidation) Act, 1908. 
 
 (b) JA11 wages or salary of any clerk or servant in respect of services rendered 
 to the company during four months before the said date, not exceeding 
 fifty pounds ; and 
 
 (o) 'All wages of any workman or labourer not exceeding twenty-five pounds, 
 whether payable for time or for piece work, in respect of services 
 rendered to the company during two months before the said date : 
 Provided that where any labourer in husbandry has entered into a 
 contract for the payment of a portion of his wages in a lump sum at the 
 end of the year of hiring, he shall have priority in respect of the whole 
 of such sum, or a part thereof, as the Court may decide to be due under 
 the contract, proportionate to the time of service up to the said date ; 
 and 
 
 (d) Unless the company is being wound up voluntarily merely for the purposes 
 of reconstruction or of amalgamation with another company, all amounts 
 (not exceeding in any individual case one hundred pounds) due in respect 
 of compensation under the Workmen’s Compensation Act, 1906, the 
 liability wherefor accrued before the said date, subject nevertheless to 
 the provisions of section five of that Act. 
 
 (2.) The foregoing debts shall — 
 
 (a) Rank equally among themselves and be paid in full, unless the assets are 
 
 insufficient to meet them, in which case they shall abate in equal propor- 
 tions ; and 
 
 (b) In the case of a company registered in England or Ireland, so far as the 
 
 assets of the company available for payment of general creditors are 
 insufficient to meet them, have priority over the claims of holders of 
 debentures under any floating charge created by the company, and be 
 paid accordingly out of any property comprised in or subject to that 
 charge. 
 
 (3.) Subject to the retention of such sums as may be necessary for the costs and 
 expenses of the winding-up, the foregoing debts shall be discharged forthwith so 
 far as the assets are sufficient to meet th<-m. 
 
 (4.) In the event of a laudlord or other person distraining or having distrained 
 on any goods or effects of the company within three months next before the date of 
 a winding-up order, the debts to which priority is given by this section shall be a 
 first charge on the goods or effects so distrained on, or the proceeds of the sale 
 thereof : 
 
 Provided that in respect of any money paid under any such charge the landlord 
 or other person shall have the same rights of priority as the person to whom the 
 payment is made. 
 
 (5.) The date hereinbefore in this section referred to is — 
 
 (a) in the case of a company ordered to be wound up compulsorily which had 
 
 not previously commenced to be wound up voluntarily, the date of the 
 winding-up order ; and 
 
 (b) in any other case, the date of the commencement of the winding-up. 
 
 210. — (1.) Any conveyance, mortgage, delivery of goods, payment, execution, or 
 other act relating to property which would, if made or done by or against an 
 individual, be deemed in his bankruptcy a fraudulent preference, shall, if made or 
 done by or against a company, be deemed, in the event of its being wound up, a 
 fraudulent preference of its creditors, and be invalid accordingly. 
 
 (2.) For the purposes of this section the presentation of a petition for winding-up 
 in the case of a winding-up by or subject to the supervision of the Court, and a 
 resolution for winding-up in the case of a voluntary winding-up, shall be deemed to 
 correspond with the act of bankruptcy in the case of an individual. 
 
 (3.) Any conveyance or assignment by a company of all its property to trustees 
 for the benefit of all its creditors bhall be void to all intents. 
 
 211. Where any company (being a company registered in England or Ireland) is 
 being wound up by or subject to the supervision of the Court, any attachment, 
 sequestration, distress, or execution put in force against the estate or effects of the 
 company after the commencement of the winding-up shall be void to all intents. 
 
 212. Where a company is being wound up, a floating charge on the undertaking 
 or property of the company created within three months of the commencement of 
 the winding-up shall, unless it is proved that the company immediately after the 
 creation of the charge was solvent, be invalid, except to the amount of any cash 
 paid to the company at the time of or subsequently to the creation of, and in con- 
 
 6 Edw. 7, 
 c. 58. 
 
 S. 164 of 1862. 
 
 Fraudulent 
 
 preference. 
 
 S. 163 of 1862. 
 Avoidance of 
 certain attach- 
 ments, execu- 
 tions, &e. in case 
 of company re- 
 gistered in Eng- 
 land or Ireland. 
 S. 13 of 1907. 
 Effect of 
 floating charge. 
 Columbian Fire 
 Proofing Co., In 
 re , (1910) 2 Ch. 
 120 . 
 
504 
 
 Appendix. 
 
 S. 3 of 1886. 
 Effect in case 
 of company 
 registered in 
 Scotland of 
 diligence 
 within 60 days 
 of winding-up 
 by or subject 
 to supervision 
 of Court. 
 
 19 & 20 Viet, 
 c. 79. 
 
 S. 159 of 1862. 
 General 
 scheme of 
 liquidation 
 may be 
 sanctioned. 
 
 sideration for, the charge, together with interest on that amount at the rate of five 
 per cent, per annum. 
 
 213 . In the winding-up, by or subject to the supervision of the Court, of a com- 
 pany registered in Scotland, the following provisions shall have effect: — 
 
 (1.) The winding-up shall, in the case of a winding-up by the Court as at its 
 commencement, and in the case of a winding-up subject to supervision as 
 at the date of the presentation of the petition on which the supervision 
 order is pronounced, be equivalent to an arrestment in execution and decree 
 of forthcoming, and to an executed or completed poinding ; and no arrest- 
 ment or poinding of the funds or effects of the company, executed on or 
 after the sixtieth day prior to the commencement of the winding-up by the 
 Court, or to the presentation of the petition on which a supervision order 
 is made, as the case may be, shall he effectual ; and those funds or effects, 
 or the proceeds of those effects, if sold, shall be made forthcoming to the 
 liquidator : Provided that any arrester or poinder before the date of the 
 winding-up, or of the petition, as the case may be, who is thus deprived of 
 the benefit of his diligence, shall have preference out of those funds or 
 effects for the expense bond fide incurred by him in such diligence : 
 
 (2.) The winding-up shall, as at the respective dates aforesaid, be equivalent to a 
 decree of adjudication of the heritable estates of the company for payment 
 of the whole debts of the company, principal and interest, accumulated at 
 the said dates respectively, subject to such preferable heritable rights and 
 securities as existed at the said dates and are valid and unchallengeable, 
 and the right to poind the ground hereinafter provided : 
 
 (3.) The provisions of sections one hundred and twelve to one hundred and 
 seventeen, and of section one hundred and twenty, of the Bankruptcy 
 (Scotland) Act, 1856, shall, so far as is consistent with this Act, apply to 
 the realization of heritable estates affected by such heritable rights and 
 securities as aforesaid ; and for the purposes of this Act the words 
 “sequestration” and “trustee” occurring in those sections shall mean 
 respectively “ winding up” and “liquidator”; and the expression “the 
 Lord Ordinary or the Court ” shall mean “ the Court ” as defined by this 
 Act with respect to Scotland : 
 
 (4.) No poinding of the ground which has not been carried into execution by sale 
 of the effects sixty days before the respective dates aforesaid shall, except 
 to the extent hereinafter provided, be available in any question with the 
 liquidator : Provided that no creditor who holds a security over the heri- 
 table estate preferable to the right of the liquidator shall be prevented 
 fr )m executing a poinding of the ground after the respective dates afore- 
 said, but that poinding shall in competition with the liquidator be available 
 only for the interest on the debt for the current half-yearly term, and for 
 the arrears of interest for one year immediately before the commencement 
 of that term. 
 
 214 . — (1.) The liquidator may, with the sanction following (that is to say) — 
 
 (a) in the case of a winding-up by the Court in England with the sanction 
 
 either of the Court or of the committee of inspection ; 
 
 (b) in the case of a winding-up by the Court in Scotland or Ireland, and in the 
 
 case of any winding-up subject to supervision, with the sanction of the 
 Court ; and 
 
 (c) in the case of a voluntary winding-up, with the sanction of an extraordinary 
 
 resolution of the company, 
 do the following things or any of them : — 
 
 (i) Pay any classes of creditors in full ; 
 
 (ii) Make any compromise or arrangement with creditors or persons claiming 
 
 to be creditors, or having or alleging themselves to have any claim, 
 present or future, certain or contingent, ascertained or sounding only in 
 damages against the company, or whereby the company may be rendered 
 liable ; 
 
 (iii) Compromise all calls and liabilities to calls, debts, and liabilities capable of 
 
 resulting in debts, and all claims, presenter future, certain or contingent, 
 ascertained or sounding only in damages, subsisting or supposed to 
 subsist between the company and a contributory, or alleged contributory, 
 or other debtor or person apprehending liability to the company, and all 
 questions in any way relating to or affecting the assets or the winding- 
 up of the company, on such terms as may be agreed, and take any 
 
505 
 
 Companies (Consolidation) Act, 1908. Act of 1908 
 
 security for the discharge of any such call, debt, liability or claim, and 
 give a complete discharge in respect thereof. 
 
 (2.) In the case of a winding-up by the Court in England the exercise by the 
 liquidator of the powers of this section shall be subject to the control of the Court, 
 and any creditor or contributory may apply to the Court with respect to any exercise 
 or proposed exercise of any of those powers. 
 
 215 . — (1.) Where in the course of winding up a company it appears that any S. 165 of 1862. 
 person who has taken part in the formation or promotion of the company, or any Power of 
 past or present director, manager, or liquidator, or any officer of the company, has Court to as- 
 misapplied or retained or become liable or accountable for any money or property of boss damages 
 the company, or been guilty of auy misfeasance or breach of trust in relation to against 
 
 the company, the Court may, on the application of the official receiver, or of the delinquent 
 liquidator, or of any creditor or contributory, examine into the conduct of the directors &c. 
 promoter, director, manager, liquidator, or officer, and compel him to repay or 
 restore the money or property or any part thereof respectively with interest at such 
 rate as the Court thinks just, or to contribute such sum to the assets of the 
 company by way of compensation in respect of the misapplication, retainer, mis- 
 feasance, or breach of trust as the Court thinks just. 
 
 (2.) This section shall apply notwithstanding that the offence is one for which 
 the offender may be criminally responsible. 
 
 (3.) Where in the case of a winding-up in England an order for payment of 
 money is made under this section, the order shall be deemed to be a final judgment 
 within the meaning of paragraph (g) of sub-section (I) of section four of the 
 Bankruptcy Act, 1883. & 47 Viet. 
 
 (4.) So much of this section as refers to promoters, and to property of a company °* 62. 
 other than money, shall not apply to a winding-up in Scotland or Ireland. 
 
 216 . If any director, officer, or contributory of any company being wound up S. 166 of 1862. 
 destroys, mutilates, alters, or falsifies any books, papers, or securities, or makes or Penalty for 
 
 is privy to the making of any false or fraudulent entry in any register, book of falsification 
 account, or document belonging to the company with intent to defraud or deceive of books, 
 any person, he shall be guilty of a misdemeanour, and be liable to imprisonment 
 for any term not exceeding two years, with or without hard labour. 
 
 217 . — (1.) If it appears to the Court in the course of a winding-up by or subject S. 167 of 1862. 
 to the supervision of the Court that any past or present director, manager, officer, Prosecution 
 or member of the company has been guilty of any offence in relation to the of delinquent 
 company for which he is criminally responsible, the Court may on the application directors, &c. 
 of any person interested in the winding-up, or of its own motion, direct the 
 
 liquidator to prosecute for the offence, and may order the costs and expenses to be 
 paid out of the assets of the company. 
 
 (2.) If it appears to the liquidator in the course of a voluntary winding-up that 
 any past or present director, manager, officer, or member of the company has been 
 guilty of any offence in relation to the company for which he is criminally 
 responsible, the liquidator, with the previous sanction of the Court, may prosecute 
 the offender, and all expenses properly incurred by him in the prosecution shall be 
 payable out of the assets of the company in priority to all other liabilities. 
 
 218 . If any person, on examination on oath authorized under this Act, or in S. 169 of 1862. 
 any affidavit or deposition in or about the winding up of any company or otherwise Penalty on 
 
 in or about any matter arising under this Act, wilfully and corruptly gives false perjury, 
 evidence, he shall be liable to the penalties for wilful perjury. 
 
 219 —(1 ) Where by this Act the Court is authorized, in relation to winding-up, Ss. 91, 149 
 to have regard to the wishes of creditors or contributories, as proved to it by any of 1862.^ 
 sufficient evidence, the Court may, if it thinks fit, for the purpose of ascertaining Meetings to 
 those wishes, direct meetings of the creditors or contributories to be called, held, ascertain wishes 
 and conducted in such manner as the Court directs, and may appoint a person to of creditors or 
 act as chairman of any such meeting and to report the result thereof to the Court, contributories. 
 
 (2.) In the case of creditors, regard shall be had to the value of each creditor’s 
 debt. 
 
 (3.) In the case of contributories, regard shall be had to the number of votes 
 conferred on each contributory by the articles. 
 
 220 . Where any company is being wound up, all books and papers of the S. 154 of 1862. 
 company and of the liquidators shall, as between the contributories of the company, Books of com- 
 be nrima facie evidence of the truth of all matters purporting to be therein recorded. 
 
 221 . After an order for a winding-up by or subject to the supervision of the ® V1 
 
 Court, the Court may make such order for inspection by creditors and contributories ' °. 
 
 of the company of its books and papers as the Court thinks just, and any books bo^ks 0tKm ° 
 
 p. 83 
 
506 
 
 Appendix. 
 
 S. 155 of 1862. 
 Disposal of 
 books and 
 papers of 
 company. 
 
 S. 31 of 1907. 
 Power of 
 Court to 
 declare dis- 
 solution of 
 company void. 
 
 S. 15 of 1890. 
 Information 
 as to pending 
 liquidations 
 in England. 
 
 40 47 Viet, 
 
 o. 62. 
 
 S. 125 of 1862. 
 J udicial 
 notice of 
 signature of 
 officers. 
 
 and papers in the possession of the company may be inspected by creditors or con- 
 tributories accordingly, but not further or otherwise. 
 
 222. — (1.) When a company has been wound up and is about to be dissolved, 
 the books and papers of the company and of the liquidators may be disposed of as 
 follows (that is to say) : — 
 
 (a) In the case of a winding-up by or subject to the supervision of the Court in 
 
 such way as the Court directs ; 
 
 (b) In the case of a voluntary winding-up in such way as the company by 
 
 extraordinary resolution directs. 
 
 (2.) After five years from the dissolution of the company no responsibility shall 
 rest On the company, or the liquidators, or any person to whom the custody of the 
 books and papers has been committed, by reason of the same not being forthcoming 
 to any person claiming to be interested therein. 
 
 223. — (1.) Wliere a company has been dissolved, the Court may at any time 
 within two years of the date of the dissolution, on an application being made for 
 the purpose by the liquidator of the company or by any other person who appears 
 to the Court to be interested, make an order, upon such terms as the Court thinks 
 fit, declaring the dissolution to have been void, and thereupon such proceedings may 
 be taken as might have been taken if the company had not been dissolved. 
 
 (2.) It shall be the duty of the person on whose application the order was made, 
 within seven days after the making of the order, to file with the registrar of 
 companies an office copy of the order, and if that person fails so to do he shall be 
 liable to a fine not exceeding five pounds for every day during which the default 
 continues. 
 
 224. — (1.) Where a company is being wound up in England, if the winding-up 
 is not concluded within one year after its commencement, the liquidator shall, at 
 such intervals as may be prescribed, until the winding-up is concluded, send to the 
 registrar of companies a statement in the prescribed form and containing the 
 prescribed particulars with respect to the proceedings in and position of the 
 liquidation. 
 
 (2.) Any person stating himself in writing to be a creditor or contributory of the 
 company shall be entitled, by himself or by his agent, at all reasonable times, on 
 payment of the prescribed fee, to inspect the statement, and to receive a copy thereof 
 or extract therefrom ; but any person untruthfully so stating himself to be a 
 creditor or contributory shall be guilty of a contempt of Court, and shall be punish- 
 able accordingly on the application of the liquidator or of the official receiver. 
 
 (3.) If a liquidator fails to comply with the requirements of this section he shall 
 be liable to a fine not exceeding fifty pounds for each day during which the default 
 continues. 
 
 (4.) If it appears from any such statement or otherwise that a liquidator has in 
 his hands or under his control any money representing unclaimed or undistributed 
 assets of the company which have remained unclaimed or undistributed for six 
 months after the date of their receipt, the liquidator shall forthwith pay the same to 
 the Companies Liquidation Account at the Bank of England, and shall be entitled 
 to the prescribed certificate of receipt for the money so paid, and that certificate 
 shall be an effectual discharge to him in respect thereof. 
 
 (5.) For the purpose of ascertaining and getting in any money payable into the 
 Bank of England in pursuance of this section, the like powers may be exercised, 
 and by the like authority, as are exerciseable under section one hundred and sixty- 
 two of the Bankruptcy Act, 1883, for the purpose of ascertaining and getting in the 
 sums, funds, and dividends referred to in that section. 
 
 (6.) Any person claiming to be entitled to any money paid into the Bank of 
 England in pursuance of this section may apply to the Board of Trade for payment 
 of the same, and the Board may, on a certificate by the liquidator that the person 
 claiming is entitled, make an order for the payment to that person of the sum due. 
 
 (7.) Any person dissatisfied with the decision of the Board of Trade in respect of 
 any claim made in pursuance of this section may appeal to the High Court. 
 
 225. In all proceedings under this Part of this Act, all Courts, judges, and 
 persons judicially acting, and all officers, judicial or ministerial, of any Court, or 
 employed in enforcing the process of any Court, shall take judicial notice of the 
 signature of any officer of the High Court in England or Ireland, or of the Court of 
 Session in Scotland, or of the registrar of the Court exercising the stannaries juris- 
 diction, and also of the official seal or stamp of the several offices of the High Court 
 in England or Ireland, Court of Session, or Court exercising the stannaries juris- 
 
Companies (Consolidation) Act, 1908 . Act of 1908 507 
 
 ‘diction, appended to or impressed on any document made, issued, or signed under 
 'the provisions of this Part of this Act, or any official copy thereof. 
 
 226. — (1.) The judges of the County Courts in England who sit at places more S. 126 of 1862. 
 than twenty miles from the General Post Office, and the judge exercising the bank- Special com- 
 ruptcy jurisdiction of the High Court in Ireland and the assistant barristers and m ig 8 i 0 n for 
 recorders in Ireland, and the sheriffs of counties in Scotland, shall be commissioners receiving 
 
 for the purpose of taking evidence under this Act, where a company is wound up in evidence, 
 any part of the United Kingdom, and the Court may refer the whole or any part of 
 the examination of any witnesses under this Act to any person hereby appointed 
 •commissioner, although he is out of the jurisdiction of the Court that made the 
 winding-up order. 
 
 (2.) Every commissioner shall, in addition to any powers which he might law- 
 fully exercise as a judge of a county court, judge of the High Court, assistant 
 barrister or recorder, or sheriff, have in the matter so referred to him all the same 
 powers of summoning and examining witnesses, of requiring- the production or 
 delivery of documents, of punishing defaults by witnesses, and of allowing costs 
 and expenses to witnesses, as the Court which made the winding-up order. 
 
 (3.) The examination so taken shall be returned or reported to the Court which 
 made the order in such manner as that Court directs. 
 
 227. — (1.) The Court may direct the examination in Scotland of any person for S. 127 of 1862. 
 the time being in Scotland, whether a contributory of the company or not, in regard Court may 
 
 to the trade, dealings, affairs, or property of any company in course of being wound order exami- 
 up, or of any person being a contributory of the company, so far as the company na tion of 
 • may be interested therein by reason of his being a contributory ; and the order or persons in 
 •commission to take the examination shall be directed to the sheriff of the county in Scotland, 
 which the person to be examined is residing or happens to be for the time ; and the 
 sheriff shall summon that person to appear before him at a time and place to be 
 specified in the summons for examination on oath as a witness or as a haver, and to 
 produce any books or papers called for which are in his possession or power. 
 
 (2.) The sheriff may take the examination either orally or on written interroga- 
 tories, and shall report the same in writing in the usual form to the Court ; and 
 shall transmit with the report the books and papers produced, if the originals 
 thereof are required and specified by the order or commission, or otherwise copies 
 thereof or extracts therefrom authenticated by the sheriff. 
 
 (3.) If any person so summoned fails to appear at the time and place specified, or 
 refuses to be examined or to make the production required, the sheriff shall proceed 
 against him as a witness or haver duly cited and failing to appear or refusing to 
 give evidence or make production may be proceeded against by the law of Scotland. 
 
 (4.) The sheriff shall be entitled to such and the like fees, and the witness shall 
 
 be entitled to such and the like allowances, as sheriffs when acting as commissioners 
 
 under appointment from the Court of Session and as witnesses and havers are 
 •entitled to in the like cases according to the law and practice of Scotland. 
 
 (5.) If any objection is stated to the sheriff by the witness, either on the ground S. 128 of 1862. 
 
 •of his incompetency as a witness, or as to the production required, or on any other Affidavits &c. 
 
 ground, the sheriff may, if he thinks fit, report the objection to the Court, and i n United* 
 suspend the examination of the witness until it has been disposed of by the Court. Kingdom 
 
 228. — (1.) Any affidavit required to be sworn under the provisions or for the an q Colonies, 
 purposes of this Part of this Act may be sworn in Great Britain or Ireland, or 
 
 elsewhere within the dominions of His Majesty, before any Court, judge, or person 
 lawfully authorized to take and receive affidavits or before any of His Majesty’s 
 consuls or vice-consuls in any place outside His Majesty’s dominions. 
 
 (2.) All Courts, judges, justices, commissioners, and persons acting judicially 
 shall take judicial notice of the seal or stamp or signature (as the case may be) of 
 any such Court, judge, person, consul, or vice-consul attached, appended, or sub- 
 scribed to any such affidavit, or to any other document to be used for the purposes 
 of this Part of this Act. 
 
 229. — (1.) An account, called the Companies Liquidation Account, shall be kept S. 11 of 1390. 
 
 by the Board of Trade with the Bank of England, and all moneys received by the Companies 
 Board in respect of proceedings under this Act in connexion with the winding up Liquidation 
 of companies in England shall be paid to that account. Account 
 
 (2.) All payments out of money standing to the credit of the Board of Trade in defined, 
 the Companies Liquidation Account shall be made by the Bank of England in the 
 prescribed manner. 
 
 230. — (1.) Whenever the cash balance standing to the credit of the Companies S. 16 of 1890. 
 Liquidation Account is in excess of the amount which in the opinion of the Board Investment 
 
 33 ( 2 ) 
 
508 
 
 of surplus 
 funds on 
 general 
 account. 
 
 Ss. 17, 18 
 of 1890. 
 Separate 
 accounts of 
 particular 
 estates. 
 
 S. 19 of 1890. 
 Certain 
 receipts and 
 fees to be 
 applied in 
 aid of 
 
 expenditure. 
 Officers and 
 remuneration. 
 
 S. 28 of 1890. 
 Annual 
 accounts of 
 English 
 winding-up. 
 38 & 39 Viet, 
 c. 77. 
 
 Appendix. 
 
 of Trade is required for the time being to answer demands in respect of companies* 
 estates, the Board shall notify the excess to the Treasury, and shall pay over the 
 whole or any part of that excess as the Treasury may require, to the Treasury, to 
 such account as the Treasury may direct, and the Treasury may invest the sums 
 paid over, or any part thereof, in Government securities, to be placed to the credit 
 of the said account. 
 
 (2.) Where any part of the money so invested is, in the opinion of the Board of 
 Trade, required to answer any demands in respect of companies’ estates, the Board 
 shall notify to the Treasury the amount so required, and the Treasury shall there- 
 upon repay to the Board such sum as may be required to the credit of the Companies 
 Liquidation Account, and for that purpose may direct the sale of such part of the 
 said securities as may be necessary. 
 
 (3.) The dividends on investments under this section shall be paid to such account 
 as the Treasury may direct, and regard shall be had to the amount thus derived in 
 fixing the fees payable in respect of proceedings in the winding up of companies 
 in England. 
 
 231. — (1.) An account shall be kept by the Board of Trade of the receipts and 
 payments in the winding up of each company in England, and, when the cash 
 balance standing to the credit of the account of any company is in excess of 
 the amount which, in the opinion of the committee of inspection, is required for 
 the time being to answer demands in respect of that company’s estate, the Board 
 shall, on the request of the committee, invest the amount not so required in 
 Government securities, to be placed to the credit of the said account for the benefit 
 of the company. 
 
 (2.) When any part of the money so invested is, in the opinion of the committee 
 of inspection, required to answer any demands in respect of the estate of the 
 company, the Board of Trade shall, on the request of the committee, raise such 
 sum as may be required by the sale of such part of the said securities as may be 
 necessary. 
 
 (3.) The dividends on investments under this section shall be paid to the credit 
 of the company. 
 
 (4.) When the balance at the credit of any company’s account in the hands of 
 the Board of Trade exceeds two thousand pounds, and the liquidator gives notice 
 to the Board that the excess is not required for the purposes of the liquidation, 
 the company shall be entitled to interest on the excess at the rate of two per cent, 
 per annum. 
 
 232. The Treasury may issue to the Board of Trade in aid of the votes of 
 Parliament, out of the receipts arising in respect of the winding up of companies 
 in England from fees, fee stamps, and dividends on investments by the Treasury 
 under this Act, any sums which may be necessary to meet the charges estimated 
 by the Board in respect of salaries and expenses under this Act in relation to the 
 winding up of companies in England. 
 
 233. — (1.) The Board of Trade may, with the approval of the Treasury, appoint 
 such additional officers as may be required by the Board for the execution as 
 respects England of this Part of this Act, and may remove any person so 
 appointed. 
 
 (2.) The Board of Trade, with the concurrence of the Treasury, shall direct 
 whether any and what remuneration is to be allowed to any officer of. or person 
 attached to, the Board performing any duties under this Part of this Act in relation 
 to the winding up of companies in England, and may vary, increase, or diminish 
 that remuneration as they think fit. 
 
 (3.) The Lord Chancellor, with the concurrence of the Treasury, shall direct 
 whether any and what remuneration is to be allowed to any person (other than an 
 officer of the Board of Trade) performing any duties under this Act in relation to 
 the winding up of companies in England, and may vary, increase, or diminish that 
 remuneration as he thinks fit. 
 
 234. — (1.) The Treasury shall annually cause to be prepared and laid before both 
 Houses of Parliament an account for the year ending with the thirty -first day of 
 March, showing the receipts and expenditure during that year in respect of pro- 
 ceedings under this Act in relation to the winding up of companies in England, 
 and the provisions of section twenty-eight of the Supreme Court of Judicature 
 Act, 1876, shall apply to the account as if the account had been required by that 
 section. 
 
 (2.) The accounts of the Board of Trade under this Act in relation to the- 
 winding up of companies in England shall be audited in such manner as the 
 
Act of 1908 509 
 
 Companies (Consolidation) Act, 1908. 
 
 Treasury direct, and, for the purpose of the account to be laid before Parliament, 
 the Board shall make such returns and give such information as the Treasury 
 direct. 
 
 235. The officers of the Courts acting in the winding up of companies in 
 England shall make to the Board of Trade such returns of the business of their 
 respective Courts and offices, at such times and in such manner and form as may 
 be prescribed, and from those returns the Board shall cause books to be prepared 
 which shall, under the regulations of the Board, be open for public information 
 and searches. 
 
 S. 29 of 1890. 
 Returns by 
 officers in 
 English 
 winding-up. 
 
 236 — (1.) All documents purporting to be orders or certificates made or issued S. 30 of 189C 
 by the Board of Trade for the purposes of this Act and to be sealed with the seal of p 3 . 
 the Board, or to be signed by a secretary or assistant secretary of the Board, or any Q £ g oar( j 
 person authorized in that behalf by the President of the Board, shall be received in Trade 
 evidence and deemed to be such orders or certificates without further proof unless 
 the contrary is shown. 
 
 (2.) A certificate signed by the President of the Board of Trade that any order 
 made, certificate issued, or act done, is the order, certificate, or act of the Board, 
 shall be conclusive evidence of the fact so certified. 
 
 Rules and Fees. 
 
 237. — (1.) The Lord Chancellor may, with the concurrence of the President of 
 the Board of Trade, make general rules for carrying into effect the objects of this 
 Act so far as relates to the winding up of companies in England. 
 
 (2.) All general rules made under this section shall be laid before Parliament 
 within three weeks after they are made, if Parliament is then sitting, and, if Par- 
 liament is not sitting, within three weeks after the beginning of the next session of 
 Parliament, and shall be judicially noticed, and shall have effect as if enacted by 
 this Act. 
 
 (3.) There shall be paid in respect of proceedings under this Act in relation to the 
 winding up of companies in England such fees as the Lord Chancellor may, with 
 the sanction of the Treasury, direct, and the Treasury may direct by whom and in 
 what manner the same are to be collected and accounted for, and to what account 
 they are to be paid. 
 
 (4.) All rules made and directions given by the Lord Chancellor under this section 
 shall be adopted by the authority for the time being empowered to make rules 
 for regulating the practice or procedure in the Chancery Court of the county 
 palatine of Lancaster, but as so adopted shall have effect with the substitution of 
 the words “ vice-chancellor ” for the word “ judge,” and of the word “ registrar ” 
 for the word “master,” and of the words “chambers of the registrar” for the 
 words “chambers of the judge” and “judge’s chambers,” and any directions as 
 to the remuneration to be allowed to officers of that Court in respect of proceedings 
 under this Act shall be subject to the sanction of the Chancellor of the Duchy and 
 County Palatine of Lancaster. 
 
 (5.) The authority having power to make rules or give directions under this section 
 may, by any such rules or directions, repeal, alter, or amend any rules made and 
 directions given by the like authority under the Companies (Winding-Up) Act, 
 1890, which are in force at the commencement of this Act. 
 
 238. — (1.) Subject to the provisions of this Act with respect to rules and fees in 
 relation to the winding up of companies in England, rules of procedure for the 
 purposes of this Act, including rules as to costs and fees, may be made — 
 
 (a) As regards the High Court in England, by the authority having power to 
 
 make rules for the Supreme Court in England : 
 
 (b) As regards the Court of Session, by act of sederunt : 
 
 (c) As regards the High Court in Ireland, by the authority having power to make 
 
 rules for the Supreme Court in Ireland : 
 
 (d) As regards the Court exercising the stannaries jurisdiction, by the authority 
 
 having power to make rules for County Courts in England. 
 
 (2.) The authority having power to make rules under this section may by any 
 such rules repeal, alter, or amend any rules made by the like authority under the 
 Companies Act, 1862, or any Act amending the same, which are in force at the 
 commencement of this Act. 
 
 S. 26 of 1890. 
 Rules and 
 fees for 
 winding up 
 in England. 
 
 53 & 54 Viet, 
 c. 63. 
 
 S. 171 of 1862. 
 Powers to 
 make rules 
 of procedure. 
 
 25 & 26 Viet, 
 c. 89. 
 
510 
 
 Appendix. 
 
 S. 34 of 32 & 
 33 Viet, 
 c. 19, s. 34. 
 Attachment 
 of debt due to 
 contributory- 
 on winding up 
 in stannaries 
 Court. 
 
 S. 2 of 50 & 51 
 Viet. c. 43. 
 Preferential 
 payments in 
 stannaries 
 cases. 
 
 6 Edw. 7, 
 c. 58. 
 
 Provisions 
 as to mine 
 club funds. 
 
 Special Provisions as to Stannaries. 
 
 239. When several companies are in course of liquidation by or under the super- 
 intendence of the Court exercising the stannaries jurisdiction and acting under that 
 jurisdiction, if it appears to the judge that a person who is a contributory of one of 
 the companies is also a creditor claiming a debt against one of the other companies, 
 the judge may (if after inquiry he thinks fit) direct that the debt, when allowed,, 
 shall be attached, and payment thereof to the creditor suspended for a time certain 
 as a security for payment of any calls that are or may in course of liquidation 
 become due from him to the company of which he is a contributory ; and the amount 
 thereof shall be applied to such payment in due course : 
 
 Provided that such an order of attachment shall not prejudice any claim which 
 the company so indebted to the creditor may have against him by way of set off, 
 counterclaim, or otherwise, or any lawful claim of lien or specific charge on the debt 
 in favour of any third person. 
 
 240. In the application to companies within the stannaries of the provisions of 
 this Act with respect to preferential payments, the following modifications shall bo 
 made : — 
 
 (1.) In the case of a clerk or servant of such a company, the priority with respect 
 to wages and salary given by this Act shall be given to the extent of three 
 months only, instead of four months, and shall not extend to the principal 
 agent, manager, purser, or secretary : 
 
 (2.) All wages in relation to the mine of a miner, artizan, or labourer employed 
 in or about the mine, including all earnings by a miner arising from any 
 description of piece or other work, or as a tributer or otherwise, but not 
 exceeding an amount equal to three months’ wages, shall be included 
 amongst the payments which are, under this Act, to be made in priority 
 to other debts : 
 
 (3.) Wages of any miner, artizan, or labourer unpaid at the commencement of 
 the winding-up, and, subject to the provisions of section five of the 
 Workmen’s Compensation Act, 1906, all amounts (not exceeding in any 
 individual case one hundred pounds) due in respect of compensation under 
 that Act payable to a miner or the dependants of a miner the liability 
 wherefor accrued before the commencement of the winding-up, shall, to 
 the extent aforesaid, be paid by the liquidator forthwith in priority to all 
 costs, except (in the case of a winding-up by the Court) such costs of and 
 incidental to the making of the winding-up order as in the opinion of the 
 Court have been properly incurred, and to all claims by mortgagees, 
 execution creditors, or any other persons, except the claims of clerks and 
 servants in respect of their wages or salary, and, subject as aforesaid, the 
 Court may, by order, charge the whole or any part of the assets of the 
 company, in priority to all claims and to all existing mortgages or charges 
 thereon, with the payment of a sum sufficient to discharge the said wages 
 and amounts due in respect of compensation, with interest at a rate not 
 exceeding five per cent, per annum, and this charge may be made in 
 favour of any person who is willing to advance the requisite amount or any 
 part thereof ; and as soon as the said sum has been so advanced, the said 
 wages and amounts due in respect of compensation shall be paid without 
 delay so far as the amount advanced extends, and in such order of payment 
 as the Court directs. 
 
 241. — (1.) On the winding-up of a company within the stannaries, contributions 
 of the miners, artizans, or labourers for the purpose of a mine club, or accident, or 
 sick, or benefit fund shall not be deemed to be, or be applied as, part of the assets of 
 the company in liquidation of the debts of the company or otherwise, but shall be 
 accounted for by the purser or any other person in possession of the fund to the 
 liquidator, and shall be recoverable by him, and be applied in accordance with the 
 rules of the club. 
 
 (2.) Where the company is being wound up voluntarily, the liquidator or any 
 person claiming to be entitled to any such contributions or fund may apply to the 
 Court for directions, or to determine any question arising in the matter in the same 
 manner as if the company were being wound up by the Court. 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 511 
 
 Removal of Defunct Companies from Register. 
 
 242 . — ( 1 .) Where the registrar of companies has reasonable cause to believe that 
 a company is not carrying on business or in operation, he shall send to the company 
 by post a letter inquiring whether the company is carrying on business or in 
 operation. 
 
 (2.) If the registrar does not within one month of sending the letter receive any 
 answer thereto, he shall within fourteen days after the expiration of the month send 
 to the company by post a registered letter referring to the first letter, and stating 
 that no answer thereto has been received, and that if an answer is not received to 
 the second letter within one month from the date thereof, a notice will be published 
 in the Gazette with a view to striking the name of the company off the register. 
 
 (3.) If the registrar either receives an answer from the company to the effect that 
 it is not carrying on business or in operation, or does not within one month after 
 sending the second letter receive any answer, he may publish in the Gazette, and 
 send to the company by post, a notice that at the expiration of three months from 
 the date of that notice the name of the company mentioned therein will, unless 
 cause is shown to the contrary, be struck off the register and the company will be 
 dissolved. 
 
 (4.) If, in any case where a company is being wound up, the registrar has reason- 
 able cause to believe either that no liquidator is acting, or that the affairs of the 
 company are fully wound up, and the returns required to be made by the liquidator 
 have not been made for a period of six consecutive months after notice by the 
 registrar demanding the returns has been sent by post to the company, or to the 
 liquidator at his last known place of business, the registrar may publish in the 
 Gazette and send to the company a like notice as is provided in the last preceding 
 sub-section. 
 
 (5.) At the expiration of the time mentioned in the notice the registrar may, 
 unless cause to the contrary is previously shown by the company, strike its name 
 off the register, and shall publish notice thereof in the Gazette, and on the pub- 
 lication in the Gazette of this notice the company shall be dissolved : Provided 
 that the liability (if any) of every director, managing officer, and member of the 
 company shall continue and may be enforced as if the company had not been 
 dissolved. 
 
 (6.) If a company or any member or creditor thereof feels aggrieved by the 
 company having been struck off the register, the Court on the application of the 
 company or member or creditor may, if satisfied that the company was at the time 
 of the striking off carrying on business or in operation, or otherwise that it is j ust 
 that the company be restored to the register, order the name of the company to be 
 restored to the register, and thereupon the company shall be deemed to have 
 continued in existence as if its name had not been struck off ; and the Court may 
 by the order give such directions and make such provisions as seem just for placing 
 the company and all other persons in the same position as nearly as may be as if 
 the name of the company had not been struck off. 
 
 (7.) A letter or notice under this section may be addressed to the company at its 
 registered office, or, if no office has been registered, to the care of some director or 
 officer of the company, or, if there is no director or officer of the company whose 
 name and address are known to the registrar of companies, may be sent to each 
 of the persons who subscribed the memorandum, addressed to him at the address 
 mentioned in the memorandum. 
 
 PART V. 
 
 Registration Office and Fees. 
 
 243 . — (1.) For the purposes of the registration of companies under this Act, 
 there shall be offices in England, Scotland, and Ireland, at such places as the Board 
 of Trade think fit. 
 
 (2.) The Board of Trade may appoint such registrars, assistant registrars, clerks, 
 and servants as the Board think necessary for the registration of companies under 
 this Act, and may make regulations with respect to their duties ; and may remove 
 any persons so appointed. 
 
 S. 26 of 1900. 
 Registrar 
 may strike 
 defunct 
 company off 
 register. 
 
 S. 174 of 1862. 
 Registration 
 offices in 
 England, 
 Scotland, 
 and Ireland. 
 
512 
 
 Appendix. 
 
 8. 17 of 1862. 
 Fees. 
 
 S. 176 of 1862. 
 Application 
 of Act to 
 companies 
 formed under 
 former 
 Companies 
 Acts. 
 
 Application 
 of Act to 
 companies 
 .registered 
 under former 
 Companies 
 Acts. 
 
 (3.) The salaries of the persons appointed under this section shall be fixed by the 
 Board of Trade with the concurrence of the Treasury, and shall be paid out of 
 money provided by Parliament. 
 
 (4.) The Board of Trade may require that the office of the registrar of the Court 
 exercising in respect of the winding up of companies the stannaries jurisdiction 
 shall be one of the offices for the registration of companies within that jurisdiction. 
 
 (5.) The Board may direct a seal or seals to be prepared for the authentication 
 of documents required for or connected with the registration of companies. 
 
 (6.) Any person may inspect the documents kept by the registrar on payment of 
 such fees as may be appointed by the Board of Trade, not exceeding one shilling 
 for each inspection ; and any person may require a certificate of the incorporation of 
 any company, or a copy or extract of any other document or any part of any other 
 document, to be certified by the registrar, on payment for the certificate, certified 
 copy, or extract, of such fees as the Board of Trade may appoint, not exceeding 
 five shillings for a certificate of incorporation, and not exceeding sixpence for each 
 folio of a certified copy or extract, or in Scotland for each sheet of two hundred 
 words. 
 
 (7.) A copy of or extract from any document kept and registered at any of the 
 offices for the registration of companies in England, Scotland, or Ireland, certified 
 to be a true copy under the hand of the registrar or an assistant registrar (whose 
 official position it shall not be necessary to prove) shall in all legal proceedings be 
 admissible in evidence as of equal validity with the original document. 
 
 (8.) "Whenever any act is by this Act directed to be done to or by the registrar of 
 companies, it shall, until the Board of Trade otherwise directs, be done in England 
 to or by the existing registrar of joint stock companies, or in his absence to or by 
 such person as the Board may for the time being authorize ; in Scotland to or by 
 the existing registrar of joint stock companies in Scotland ; and in Ireland to or by 
 the existing assistant registrar of joint stock companies for Ireland, or to or by such 
 person as the Board may for the time being authorize in Scotland or Ireland, 
 in the absence of the registrar or assistant registrar ; but, in the event of the 
 Board altering the constitution of the existing registry offices or any of them, any 
 such act shall be done to or by such officer and at such place w'ith reference to the 
 local situation of the registered offices of the companies to be registered as the 
 Board may appoint. 
 
 244. — (1.) There shall be paid to the registrar in respect of the several matters 
 mentioned in Table B. in the First Schedule to this Act the several fees therein 
 specified, or such smaller fees as the Board of Trade may from time to time direct. 
 
 (2.) All fees paid to the registrar in pursuance of this Act shall be paid into the 
 Exchequer. 
 
 PAET VI. 
 
 Application of Act to Companies formed and registered under former 
 Companies Acts. 
 
 245. In the application of this Act to existing companies, it shall apply in the 
 same manner in the case of a limited company, other than a company limited by 
 guarantee, as if the company had been formed and registered under this Act as a 
 company limited by shares ; in the case of a company limited by guarantee, as if 
 the company had been formed and registered under this Act as a company limited 
 by guarantee ; and in the case of a company other than a limited company, as if 
 the company had been formed and registered under this Act as an unlimited 
 company : 
 
 Provided that reference, express or implied, to the date of registration shall be 
 construed as a reference to the date at which the company was registered under the 
 Joint Stock Companies Acts, or under the Companies Act, 1862, as the case may be. 
 
 246. This Act shall apply to every company registered but not formed under 
 the Joint Stock Companies Acts, or the Companies Act, 1862, in the same manner 
 as it is hereinafter in this Act declared to apply to companies registered but not 
 formed under this Act : 
 
 Provided that reference, express or implied, to the date of registration shall be 
 construed as a reference to the date at which the company was registered under the 
 Joint Stock Companies Acts, or the Companies Act, 1862, as the case may be. 
 
Act of 1908 513 
 
 Companies (Consolidation) Act, 1908. 
 
 247. This Act shall apply to every unlimited company registered in pursuance 
 •of the Companies Act, 1879, as a limited company, in the same manner as it applies 
 to an unlimited company registered in pursuance of this Act as a limited company : 
 
 Provided that reference, express or implied, to the date of registration shall be 
 construed as a reference to the date at which the company was registered as a 
 limited company under the Companies Act, 1879. 
 
 248. A company registered under the Joint Stock Companies Acts may cause 
 its shares to be transferred in manner hitherto in use, or in such other manner as 
 the company may direct. 
 
 PART VII. 
 
 Companies authorized to register under this Act 
 
 249. — (1.) With the exceptions and subject to the provisions mentioned and 
 •contained in this section, — 
 
 (i) any company consisting of seven or more members, which was in existence 
 on the second day of November eighteen hundred and sixty-two, 
 including any company registered under the Joint Stock Companies 
 Acts ; and 
 
 (ii) any company formed after the date aforesaid, whether before or after the 
 commencement of this Act, in pursuance of any Act of Parliament 
 other than this Act, or of letters patent, or being a company within the 
 stannaries, or being otherwise duly constituted by law, and consisting 
 of seven or more members ; 
 
 ■may at any time register under this Act as an unlimited company, or as a company 
 limited by shares, or as a company limited by guarantee ; and the registration 
 shall not be invalid by reason that it has taken place with a view to the company 
 •being wound up. 
 
 (2.) Provided as follows : — 
 
 (a) A company having the liability of its members limited by Act of Parliament 
 
 or letters patent, and not being a joint stock company as hereinafter 
 defined, shall not register in pursuance of this section : 
 
 (b) A company having the liability of its members limited by Act of Parliament 
 
 or letters patent shall not register in pursuance of this section as an 
 unlimited company, or as a company limited by guarantee : 
 
 (c) A company that is not a joint stock company as hereinafter defined shall 
 
 not register in pursuance of this section as a company limited by shares : 
 
 (d) A company shall not register in pursuance of this section without the assent 
 
 of a majority of such of its members as are present in person or by 
 proxy (in cases where proxies are allowed by the regulations of the 
 company) at a general meeting summoned for the purpose : 
 
 ■(e) Where a company not having the liability of its members limited by Act of 
 Parliament or letters patent is about to register as a limited company, the 
 majority required to assent as aforesaid shall consist of not less than three - 
 fourths of the members present in person or by proxy at the meeting : 
 
 (f) Where a company is about to register as a company limited by guarantee, 
 the assent to its being so registered shall be accompanied by a resolution 
 declaring that each member undertakes to contribute to the assets of the 
 company, in the event of its being wound up while he is a member, or 
 within one year afterwards, for payment of the debts and liabilities of 
 the company contracted before he ceased to be a member, and of the 
 costs and expenses of winding-up, and for the adjustment of the rights 
 of the contributories among themselves, such amount as may be required, 
 not exceeding a specified amount. 
 
 (3.) In computing any majority under this section when a poll is demanded regard 
 shall be had to the number of votes to which each member is entitled according to 
 the regulations of the company. 
 
 (4.) A company registered under the Companies Act, 1862, shall not be registered 
 in pursuance of this section. 
 
 250. For the purposes of this Part of this Act, as far as relates to registration 
 of companies as companies limited by shares, a joint stock company means a 
 company having a permanent paid-up or nominal share capital of fixed amount 
 •divided into shares, also of fixed amount, or held and transferable as stock, or 
 
 S. 246 of 1862. 
 Application of 
 Act to companies 
 re-registered 
 under Com- 
 panies Act, 1879. 
 42 & 43 Viet, 
 c. 76. 
 
 S. 178 of 1862. 
 Mode of trans- 
 ferring shares. 
 
 S. 179 of 1862. 
 Companies 
 capable 
 of being 
 registered. 
 
 S. 181 of 1862. 
 Definition of 
 joint stock 
 company. 
 
514 
 
 Appendix. 
 
 S. 6 of 1879. 
 Liability of 
 bank of issue 
 unlimited in 
 respect of 
 notes. 
 
 S. 183 of 1862. 
 Requirements 
 for registra- 
 tion by joint 
 stock com- 
 panies. 
 
 S. 184 of 1862. 
 Requirements 
 for registra- 
 tion by other 
 than joint 
 stock com- 
 panies. 
 
 S. 186 of 1862. 
 Authentication 
 of statements 
 of existing 
 companies. 
 
 S. 187 of 1862. 
 Registrar may 
 require evidence 
 as to nature of 
 company. 
 
 S. 188 of 1862. 
 On registration 
 of banking 
 company with 
 limited liability, 
 notice to be given 
 to customers. 
 
 divided and held partly in one way and partly in the other, and formed on the- 
 principle of having for its members the holders of those shares or that stock, and no 
 other persons ; and such a company when registered with limited liability under this 
 Act shall be deemed to be a company limited by shares. 
 
 251. — (1.) A bank of issue registered under this Act as a limited company shall 
 not be entitled to limited liability in respect of its notes ; and the members thereof 
 shall be liable in respect of its notes in the same manner as if it had been registered 
 as unlimited ; but if, in the event of the company being wound up, the general 
 assets are insufficient to satisfy the claims of both the note-holders and the general 
 creditors, then the members, after satisfying the remaining demands of the note- 
 holders, shall be liable to contribute towards payment of the debts of the general 
 creditors a sum equal to the amount received by the note-holders out of the 
 general assets. 
 
 (2.) For the purposes of this section the expression “ the general assets ” means 
 the funds available for payment of the general creditor as well as the note-holder. 
 
 (3.) Any bank of issue registered under this Act as a limited company may state- 
 on its notes that the limited liability does not extend to its notes, and that the 
 members of the company are liable in respect of its notes in the same manner as if 
 it had been registered as an unlimited company. 
 
 252. Before the registration in pursuance of this Part of this Act of a joint 
 stock company there shall be delivered to the registrar the following documents 
 (that is to say) : — 
 
 (1.) A list showing the names, addresses, and occupations of all persons who on a 
 day named in the list, not being more than six clear days before the day 
 of registration, were members of the company, with the addition of the 
 shares or stock held by them respectively, distinguishing, in cases where 
 the shares are numbered, each share by its number ; 
 
 (2.) A copy of any Act of Parliament, royal charter, letters patent, deed of settle- 
 ment, contract of copartnery, cost book regulations, or other instrument 
 constituting or regulating the company ; and 
 
 (3.) If the company is intended to be registered as a limited company, a state- 
 ment specifying the following particulars ; (that is to say) : — 
 
 (a) The nominal share capital of the company and the number of shares. 
 into which it is divided, or the amount of stock of which it consists ; 
 
 (b) The number of shares taken and the amount paid on each share ; 
 
 (c) The name of the company, with the addition of the word “ limited” 
 as the last word thereof ; and 
 
 (d) In the case of a company intended to be registered as a company 
 
 ♦ limited by guarantee, the resolution declaring the amount of the- 
 
 guarantee. 
 
 253. Before the registration in pursuance of this Part of this Act of any company 
 not being a joint stock company, there shall be delivered to the registrar — 
 
 (1.) A list Showing the names, addresses, and occupations of the directors or other 
 managers (if any) of the company ; and 
 
 (2.) A copy of any Act of Parliament, letters patent, deed of settlement, contraot 
 of copartnery, cost book regulations, or other instrument constituting or 
 regulating the company ; and 
 
 (3.) In the case of a company intended to be registered as a company limited by 
 guarantee, a copy of the resolution declaring the amount of the guarantee. 
 
 254. The lists of members and directors and any other particulars relating to 
 the company required to be delivered to the registrar shall be verified by a statutory 
 declaration of any two cr more directors or other principal officers of the company. 
 
 255. The registrar may require such evidence as he thinks necessary for the 
 purpose of satisfying’ himself whether any company proposing to be registered is 
 or is not a joint stock company as hereinbefore defined. 
 
 256. — (1.) Where a banking company which was in existence on the seventh 
 day of August eighteen hundred and sixty-two proposes to register as a limited 
 company, it shall, at least thirty days before so registering, give notice of its intention 
 so to register to every person who has a banking account with the company, 
 either by delivery of the notice to him, or by posting it to him at, or delivering it at, 
 his last known address. 
 
 (2.) If the company omits to give the notice required by this section, then as 
 between the company and the person for the time being interested in the account in 
 respect of which the notice ousrht to have been given, and so far as respects the- 
 
Act of 1908 515 
 
 Companies (Consolidation) Act, 1908. 
 
 account down to the time at which notice is given, hut not further or otherwise, 
 the certificate of registration with limited liability shall have no operation. 
 
 257 . No fees shall be charged in respect of the registration in pursuance of this 
 Part of this Act of a company if it is not registered as a limited company, or if 
 before its registration as a limited company the liability of the shareholders was 
 limited by some other Act of Parliament or by letters patent. 
 
 258 . When a company registers in pursuance of this Part of this Act with 
 limited liability, the word “limited” shall form and be registered as part of its 
 name. 
 
 259 . On compliance with the requirements of this Part of this Act with respect 
 to registration, and on payment of such fees, if any, as are payable under Table B. 
 in the first schedule to this Act, the registrar shall certify under his hand that the 
 company applying for registration is incorporated as a company under this Act, 
 and in the case of a limited company, that it is limited, and thereupon the company 
 shall be incorporated, and shall have perpetual succession and a common seal, with 
 power to hold lands ; and any banking company in Scotland so incorporated shall 
 be deemed to be a bank incorporated, constituted, or established by or under Act 
 of Parliament. 
 
 260 . All property, real and personal (including things in action), belonging 
 to or vested in the company at the date of its registration in pursuance of this Part 
 of this Act, shall on registration pass to and vest in the company as incorporated 
 under this Act for all the estate and interest of the company therein. 
 
 261 . Registration of a company in pursuance of this part of this Act shall 
 not affect the rights or liabilities of the company in respect of any debt or obliga- 
 tion incurred, or any contract entered into, by, to, with, or on behalf of, the company 
 before registration. 
 
 262 . All actions and other legal proceedings which at the time of the registra- 
 tion of a company in pursuance of this Part of this Act are pending by or against 
 the company, or the public officer or any member thereof, may be continued in 
 the same manner as if the registration had not taken place ; nevertheless execu- 
 tion shall not issue against the effects of any individual member of the company 
 on any judgment, decree, or order obtained in any such action or proceeding ; but, 
 in the event of the property and effects of the company being insufficient to satisfy 
 the judgment, decree, or order, an order may be obtained for winding up the 
 company. 
 
 263 . When a company is registered in pursuance of this Part of this Act — 
 
 (i) All provisions contained in any Act of Parliament, deed of settlement, 
 
 contract of copartnery, cost book regulations, letters patent, or other 
 instrument constituting or regulating the company, including, in the 
 case of a company registered as a company limited by guarantee, the 
 resolution declaring the amount of the guarantee, shall be deemed to 
 be conditions and regulations of the company, in the same manner and 
 with the same incidents as if so much thereof as would, if the company 
 had been formed under this Act, have been required to be inserted in 
 the memorandum, were contained in a registered memorandum, and the 
 residue thereof were contained in registered articles : 
 
 (ii) All the provisions of this Act shall apply to the company, and the members, 
 
 contributories, and creditors thereof, in the same manner in all respects 
 as if it had been formed under this Act, subject as follows (that is 
 to say) : — 
 
 (a) The regulations in Table A. in the First Schedule to this Act shall 
 not apply unless adopted by special resolution ; 
 
 (b) The provisions of this Act relating to the numbering of shares 
 shall not apply to an/ joint stock company whose shares are not 
 numbered ; 
 
 (c) Subject to the provisions of this section the company shall not 
 have power to alter any provision contained in any Act of Parliament 
 relating to the company ; 
 
 (d) Subject to the provisions of this section the company shall not 
 have power, without the sanction of the Board of Trade, to alter any 
 provision contained in any letters patent relating to the company ; 
 
 (e) The company shall not have power to alter any provision contained 
 in a royal charter or letters patent with respect to the objects of the 
 company ; 
 
 S. 189 of 1862. 
 Exemption of 
 certain com- 
 panies from pay- 
 ment of fees. 
 
 8. 190 of 1862. 
 Addition of 
 “ limited ” to 
 name. 
 
 S. 191 of 1802. 
 Certificate of 
 registration 
 of existing 
 companies. 
 
 S. 193 of 1862. 
 Vesting of 
 property on 
 registration. 
 
 S. 194 of 1862. 
 Saving for 
 existing 
 liabilities. 
 
 S. 195 of 1862. 
 Continuation, 
 of existing 
 actions. 
 
 S. 196 of 1862. 
 Effect of 
 registration 
 under Act. 
 
516 
 
 Appendix. 
 
 S. 1 of 1890. 
 Power to 
 substitute 
 memorandum 
 and articles 
 for deed of 
 settlement. 
 
 S. 197 of 1862 . 
 Power of 
 Court to stay 
 or restrain 
 proceedings. 
 
 (f) In the event of the company being wound up, every person shall 
 be a contributory, in respect of the debts and liabilities of the company 
 contracted before registration, who is liable to pay or contribute to the 
 payment of any debt or liability of the company contracted before regis- 
 tration, or to pay or contribute to the payment of any sum for the 
 adjustment of the rights of the members among themselves in respect 
 of any such debt or liability ; or to pay or contribute to the payment 
 of the costs and expenses of -winding-up the company, so far as relates 
 to such debts or liabilities as aforesaid ; and every contributory shall 
 be liable to contribute to the assets of the company, in the course of 
 the winding-up, all sums due from him in respect of any such liability 
 as aforesaid ; and, in the event of the death, bankruptcy, or insolvency, 
 of any contributory, or marriage of any female contributory, the pro- 
 visions of this Act with respect to the personal representatives, heirs, 
 and devisees of deceased contributories, to the trustees of bankrupt or 
 insolvent contributories, and to the liabilities of husbands and wives 
 respectively, shall apply : 
 
 (iii) The provisions of this Act with respect to — 
 
 (a) the registration of an unlimited company as limited ; 
 
 (b) the powers of an unlimited company on registration as a limited 
 company to increase the nominal amount of its share capital and to 
 provide that a portion of its share capital shall not be capable of being 
 called up except in the event of winding up ; 
 
 (c) the power of a limited company to determine that a portion of its 
 share capital shall not be capable of being called up except in the event 
 of winding. up; 
 
 shall apply notwithstanding any provisions contained in any Act of 
 Parliament, royal charter, deed of settlement, contract of copartnery, 
 cost book regulations, letters patent, or other instrument constituting or 
 regulating the company : 
 
 (iv) Nothing in this section shall authorize the company to alter any such 
 
 provisions contained in any deed of settlement, contract of copartnery, 
 cost book regulations, letters patent, or other instrument constituting 
 or regulating the company, as would, if the company had originally 
 been formed under this Act, have been required to be contained 
 in the memorandum and are not authorized to be altered by this 
 Act : 
 
 (v) Nothing in this Act shall derogate from any power of altering its consti- 
 
 tution or regulations which may by virtue of any Act of Parliament, 
 deed of settlement, contract of copartnery, letters patent, or other 
 instrument constituting or regulating the company, be vested in the 
 company. 
 
 264 . — (1.) Subject to the provisions of this section, a company registered in 
 pursuance of this Part of this Act may by special resolution alter the form of its 
 constitution by substituting a memorandum and articles for a deed of settlement. 
 
 (2.) The provisions of this Act with respect to confirmation by the Court and 
 registration of an alteration of the objects of a company shall so far as applicable 
 apply to an alteration under this section with the following modifications : — 
 
 (a) There shall be substituted for the printed copy of the altered memorandum 
 
 required to be delivered to the registrar of companies a printed copy of 
 the substituted memorandum and articles ; and 
 
 (b) On the registration of the alteration being certified by the registrar the 
 
 substituted memorandum and articles shall apply to the company in the 
 same manner as if it were a company registered under this Act with that 
 memorandum and those articles, and the ccmpany’s deed of settlement 
 shall cease to apply to the company. 
 
 (3.) An alteration under this section may be made either with or without any 
 alteration of the objects of the company under this Act. 
 
 (4.) In this section the expression “ deed of settlement ” includes any contract of 
 copartnery or other instrument constituting or regulating the company, not being 
 an Act of Parliament, a royal charter, or letters patent. 
 
 265 . The provisions of this Act with respect to staying and restraining actions 
 and proceedings against a company at any time after the presentation of a petition 
 for winding-up and before the making of a winding-up order shall, in the case of 
 a company registered in pursuance of this Part of this Act, where the application 
 
Act of 1908 517 
 
 Companies (Consolidation) Act, 1908. 
 
 to stay or restrain is by a creditor, extend to actions and proceedings against any 
 contributory of the company. 
 
 266 . Where an order lias been made for winding-up a company registered in S. 198 of 1862. 
 pursuance of this Part of this Act no action or proceeding shall bo commenced or Actions 
 proceeded with against the company or any contributory of the company in respect gta ^ on 
 of any debt of the company, except by leave of the Court, and subject to such terms W indiner- U r) 
 as the Court may impose. order ° 1 
 
 PART VIII. 
 
 Winding-up of Unregistered Companies. 
 
 267 . For the purposes of this Part of this Act the expression “ unregistered 
 company ” shall not include a railway company incorporated by Act of Parliament 
 (except in so far as is provided by the Abandonment of Railways Act, 1850, and 
 the Abandonment of Railways Act, 1869, and any Acts amending them), nor a 
 company registered under the Joint Stock Companies Acts, or under the Companies 
 Act, 1862, or under this Act, but, save as aforesaid, shall include any partnership, 
 association, or company consisting of more than seven members, and any trustee 
 savings bank certified under the Trustees Savings Banks Act, 1863, and any 
 limited partnership. 
 
 268 . — ( 1 .) Subject to the provisions of this Part of this Act, any unregistered 
 company may be wound up under this Act, and all the provisions of this Act with 
 respect to winding-up shall apply to an unregistered company, with the following 
 exceptions and additions : 
 
 (i) An unregistered company shall, for the purpose of determining the Court 
 
 having jurisdiction in the matter of the winding-up, be deemed to be 
 registered in that part of the United Kingdom where its principal place 
 of business is situate ; or if it has a principal place of business situate 
 in more than one part of the United Kingdom, then in each part of 
 the United Kingdom where it has a principal place of business ; and 
 the principal place of business situate in that part of the United 
 Kingdom in which proceedings are being instituted, shall, for all the 
 purposes of the winding-up, be deemed to be the registered office of the 
 company : 
 
 (ii) No unregistered company shall be wound up under this Act voluntarily or 
 
 subject to supervision : 
 
 (iii) The circumstances in which an unregistered company may be wound up 
 
 are as follows ; (that is to say,) 
 
 (a) If the company is dissolved, or has ceased to carry on business, or 
 is carrying on business only for the purpose of winding-up its affairs ; 
 
 (b) If the company is unable to pay its debts ; 
 
 (c) If the Court is of opinion that it is just and equitable that the 
 company should be wound up : 
 
 (iv) An unregistered company shall, for the purposes of this Act, be deemed to 
 
 be unable to pay its debts : — 
 
 (a) If a creditor, by assignment or otherwise, to whom the company is 
 indebted in a sum exceeding fifty pounds then due, has served on the 
 company, by leaving at its principal place of business, or by delivering 
 to the secretary or some director, manager, or principal officer of the 
 company, or by otherwise serving in such manner as the Court may 
 approve or direct, a demand under his hand requiring the company to 
 pay the sum so due, and the company has for three weeks after the 
 service of the demand neglected to pay the sum, or to secure or compound 
 for it to the satisfaction of the creditor ; 
 
 (b) If any action or other proceeding has been instituted against any 
 member for any debt or demand due, or claimed to be due, from the 
 company, or from him in his character of member, and notice in 
 writing of the institution of the action or proceeding having been served 
 on the company by leaving the same at its principal place of business, or 
 by delivering it to the secretary, or some director, manager, or principal 
 officer of the company, or by otherwise serving the same in such manner 
 as the Court may approve or direct, the company has not within ten 
 days after service of the notice paid, secured, or compounded for the 
 
 S. 199 of 1862; 
 Meaning of 
 unregistered 
 company. 
 
 13 & 14 Viet, 
 c. 83. 
 
 2 & 33 Viet, 
 c. 114. 
 
 26 & 27 Viet, 
 c. 87. 
 
 S. 199 of 1862. 
 Winding-up 
 of unregis- 
 tered com- 
 panies. 
 
<518 
 
 Appendix. 
 
 36 & 37 Viet, 
 o. 66. 
 
 40 & 41 Viet, 
 •o. 57. 
 
 SO & 51 Viet. 
 «. 47. 
 
 S. 200 of 1862. 
 Contribu- 
 tories in 
 winding-up 
 of unregis- 
 tered com- 
 pany. 
 
 S. 201 of 1862. 
 Power of Court 
 to stay or 
 restrain pro- 
 ceedings. 
 
 debt or demand, or procured the action or proceeding to be stayed, or 
 indemnified the defendant to his reasonable satisfaction against the 
 action or proceeding, and against all costs, damages, and expenses to be 
 incurred by him by reason of the same ; 
 
 (c) If in England or Ireland execution or other process issued on a 
 judgment, decree, or order obtained in any Court in favour of a creditor 
 against the company, or any member thereof as such, or any person 
 authorized to be sued as nominal defendant on behalf of the company, is 
 returned unsatisfied ; 
 
 (d) If in Scotland the inducise of a charge for payment on an extract 
 decree, or an extract registered bond, or an extract registered protest, 
 have expired without payment being made ; 
 
 (e) If it is otherwise proved to the satisfaction of the Court that the 
 company is unable to pay its debts : 
 
 (v) The Court having jurisdiction to wind up a railway company under the 
 Abandonment of Railways Act, 1850, and the Abandonment of 
 Railways Act, 1869, and the Acts amending them, shall be the High 
 Court in England or Ireland, or the Court of Session in Scotland accord- 
 ing as the railway was authorized to be made in England, Ireland, or 
 Scotland, and the special provisions of those Acts shall apply to the 
 winding-up with the substitution of references to this Act for references 
 to the Companies Acts, 1862 and 1867 : 
 
 Provided that, subject to general rules and to orders of transfer made, 
 as respects England, under the authority of the Supreme Court of J udi- 
 cature Act, 1873, and, as respects Ireland, under the authority of the 
 Supreme Court of Judicature (Ireland) Act, 1877, the jurisdiction of the 
 High Court in England or Ireland under this provision shall be exercised 
 by the Chancery Division of that Court : 
 
 (vi) A petition for winding up a trustee savings bank may be presented by the 
 National Debt Commissioners, or by a commissioner appointed under the 
 Trustee Savings Banks Act, 1887, as well as by any person authorized 
 under the other provisions of this Act to present a petition for winding 
 up a company : 
 
 (vii) In the case of a limited partnership the provisions of this Act with respect 
 to winding up shall apply with such modifications (if any) as may be 
 provided by rules made by the Lord Chancellor with the concurrence of 
 the President of the Board of Trade, and with the substitution of general 
 partners for directors. 
 
 (2.) Nothing in this Part of this Act shall affect the operation of any enactment 
 which provides for any partnership, association, or company, being wound up, or 
 being wound up as a company or as an unregistered company, under any enactment 
 repealed by this Act, except that references in any such first- mentioned enactment 
 to any such repealed enactment shall be read as references to the corresponding 
 provision (if any) of this Act. 
 
 269. — (1.) In the event of an unregistered company being wound up every person 
 shall be deemed to be a contributory who is liable to pay or contribute to the 
 payment of any debt or liability of the company, or to pay or contribute to the 
 payment of any sum for the adjustment of the rights of the members among 
 themselves, or to pay or contribute to the payment of the costs and expenses of 
 winding-up the company, and every contributory shall be liable to contribute to 
 the assets of the company all sums due from him in respect of any such liability 
 as aforesaid : 
 
 Provided that, in the case of an unregistered company within the stannaries, a 
 past member shall not be liable to contribute to the assets of the company if he has 
 ceased to be a member for two years or more either before the mine ceased to be 
 worked or before the date of the winding-up order. 
 
 (2.) In the event of the death, bankruptcy, or insolvency, of any contributory, or 
 marriage of any female contributory, the provisions of this Act with respect to the 
 personal representatives, heirs, and devisees of deceased contributories, to the trustees 
 of bankrupt or insolvent contributories, and to the liabilities of husbands and 
 wives respectively, shall apply. 
 
 270. The provisions of this Act with respect to staying and restraining actions 
 and proceedings against a company at any time after the presentation of a petition 
 for winding-up and before the making of a winding-up order shall, in the case of 
 
Act of 1908 519 
 
 Companies (Consolidation) Act, 1908. 
 
 ■an unregistered company, where the application to stay or restrain is by a creditor, 
 extend to actions and proceedings against any contributory of the company. 
 
 271 . Where an order has been made for winding-up an unregistered company, 
 no action or proceeding shall be proceeded with or commenced against any con- 
 tributory of the company in respect of any debt of the company, except by leave of 
 the Court, and subject to such terms as the Court may impose. 
 
 272 . If an unregistered company has no power to sue and be sued in a common 
 name, or if for any reason it appears expedient, the Court may by the winding-up 
 order, or by any subsequent order, direct that all or any part of the property, real 
 and personal (including things in action), belonging to the company, or to trustees 
 on its behalf, is to vest in the liquidator by his official name, and thereupon the 
 property or the part thereof specified in the order shall vest accordingly ; and the 
 liquidator may, after giving such indemnity (if any) as the Court may direct, bring 
 or defend in his official name any action or other legal proceeding relating to that 
 property, or necessary to be brought or defended for the purposes of effectually 
 •winding up the company and recovering its property. 
 
 273 . The provisions of this Part of this Act with respect to unregistered com- 
 panies shall be in addition to and not in restriction of any provisions hereinbefore 
 in this Act contained with respect to winding up companies by the Court, and 
 the Court or liquidator may exercise any powers or do any act in the case of 
 unregistered companies which might be exercised or done by it or him in winding 
 up companies formed and registered under this Act ; but an unregistered company 
 shall not, except in the event of its being wound up, be deemed to be a company 
 under this Act, and then only to the extent provided by this Part of this Act. 
 
 PART IX. 
 
 Companies established outside the United Kingdom. 
 
 274 . — ( 1 .) Every company incorporated outside the United Kingdom which 
 establishes a place of business within the United Kingdom shall within one month 
 from the establishment of the place of business file with the registrar of companies — 
 
 (a) a certified copy of the charter, statutes, or memorandum and articles of the 
 
 company, or other instrument constituting or defining the constitution of 
 the company, and, if the instrument is not written in the English language, 
 a certified translation thereof ; 
 
 (b) a list of the directors of the company ; 
 
 (c) the names and addresses of some one or more persons resident in the United 
 
 Kingdom authorized to accept on behalf of the company service of process 
 and any notices required to be served on the company ; 
 and, in the event of any alteration being made in any such instrument or in the 
 directors or in the names or addresses of any such persons as aforesaid, the company 
 shall within the prescribed time file with the registrar a notice of the alteration. 
 
 (2.) Any process or notice required to be served on the company shall be suffi- 
 ciently served if addressed to any person whose name has been so filed as aforesaid 
 and left at or sent by post to the address which has been so filed. 
 
 (3.) Every company to which this section applies shall in every year file with the 
 registrar such a statement in the form of a balance sheet as would, if it were a 
 company formed and registered under this Act and having a share capital, be 
 required under this Act to be included in the annual summary. 
 
 (4.) Every company to which this section applies, and which uses the word 
 
 Limited ” as part of its name, shall — 
 
 (a) in every prospectus inviting subscriptions for its shares or debentures in the 
 
 United Kingdom state the country in which the company is incorporated ; 
 and 
 
 (b) conspicuously exhibit on every place where it carries on business in the 
 
 United Kingdom the name of the company and the country in which the 
 company is incorporated ; and 
 
 (c) have the name of the company and of the country in which the company is 
 
 incorporated mentioned in legible characters in all bill -heads and letter 
 paper, and in a notices, advertisements, and other official publications of 
 the company, 
 
 8. 202 of 1862. 
 Actions stayed 
 on winding-up 
 order. 
 
 S. 203 of 1862. 
 Directions as 
 to property 
 in certain 
 cases. 
 
 S. 204 of 1862, 
 Provisions of 
 Part of Act 
 cumulative. 
 
 S. 35 of 1907. 
 Require- 
 ments as to 
 companies 
 established 
 outside the 
 United 
 Kingdom, 
 p. 437 
 
520 
 
 Appendix 
 
 Cap. 12 of 
 8 Edw. 7. 
 Power of com- 
 panies incor- 
 porated in 
 British posses- 
 sions to hold 
 lands. 
 
 S. 49 of 1907. 
 Prosecution 
 of offences. 
 
 S. 66 of 1862. 
 Applications 
 of fines. 
 
 S. 69 of 1862. 
 Costs in actions 
 by certain 
 limited 
 companies. 
 
 S. 32 of 1907. 
 Power of 
 
 (5. ) If any company to which this section applies fails to comply with any of the 
 requirements of this section the company, and every officer or agent of the company, 
 shall be liable to a fine not exceeding fifty pounds, or, in the case of a continuing 
 offence, five pounds for every day during which the default continues. 
 
 (6.) For the purposes of this section — 
 
 The expression “certified” means certified in the prescribed manner to be a 
 true copy or a correct translation ; 
 
 The expression ‘ ‘ place of business ’ ’ includes a share transfer or share registra- 
 tion office ; 
 
 The expression “director” includes any person occupying the position of 
 director, by whatever name called ; and 
 
 The expression “prospectus” means any prospectus, notice, circular, adver- 
 tisement, or other invitation, offering to the public for subscription or 
 purchase any shares or debentures of the company. 
 
 (7.) There shall be paid to the registrar for registering any document required by 
 this section to be filed with him a fee of five shillings or such smaller fee as may be 
 prescribed. 
 
 275. A company incorporated in a British possession which has filed with the 
 registrar of companies the documents and particulars specified in paragraphs (a), 
 
 (b), and (c) of sub-section (1) of the last foregoing section shall have the same 
 power to hold lands in the United Kingdom as if it were a company incorporated 
 under this Act. 
 
 PART X. 
 
 Supplemental. 
 
 Legal Proceedings , Offences , §c. 
 
 276. — (1.) All offences under this Act made punishable by any fine may be 
 prosecuted under the Summary Jurisdiction Acts. 
 
 (2.) In Scotland all prosecutions for offences or fines under the provisions of this 
 Act relating to — 
 
 (a) the appointment of directors ; 
 
 (b) the restrictions on commencement of business by a company ; 
 
 (c) returns as to allotments ; 
 
 (d) false statements in respect of which a penalty is provided by this Part of this 
 
 Act ; 
 
 (e) the filing of copies of a prospectus, an order revoking the dissolution, or an 
 
 order sanctioning the reorganisation of the share capital of a company ; 
 
 (f) the filing of notice of appointment of a liquidator or of the accounts of a 
 
 receiver or manager ; 
 
 (g) general meetings ; 
 
 (h) companies established outside the United Kingdom ; 
 
 (i) the issue of debentures and certificates of shares and debenture stock ; 
 
 (j) the issue, circulation, and publication of balance sheets ; 
 
 (k) unqualified persons acting as directors ; 
 
 (l) the inspection of registers of debenture holders and the furnishing of copies 
 
 of trust deeds ; 
 
 shall be at the instance of the Lord Advocate or a procurator fiscal as the Lord 
 Advocate may direct. 
 
 277. The Court imposing any fine under this Act may direct that the whole or 
 any part thereof be applied in or towards payment of the costs of the proceedings, 
 or in or towards the rewarding the person on whose information or at whose suit 
 the fine is recovered, and subject to any such direction all fines under this Act shall, 
 notwithstanding anything in any oth. r Act, be paid into the Exchequer. 
 
 278 Where a limited company is plaintiff or pursuer in any action or other 
 legal proceeding, any judge having jurisdiction in the matter may, if it appears by 
 credible testimony that there is re son to believe that the company will be unable 
 to pay the costs of the defendant if successful in his defence, require sufficient 
 security to be given for those costs, and may stay all proceedings until the security 
 is given. 
 
 k79 • If in any proceeding against a director, or person occupying the position 
 of director, of a company for negligence or breach of trust it appears to the Court 
 
Companies (Consolidation) Act, 1908. Act of 1908 521 
 
 hearing the case that the director or person is or may be liable in respect of the Court to 
 negligence or breach of trust, but has acted honestly and reasonably, and ought grant relief 
 fairly to be excused for the negligence or breach of trust, that Court may relieve in certain 
 him, either wholly or partly, from his liability on such terms as the Court may cases, 
 think proper. 
 
 280 . — (1.) In the case of a company subject to the stannaries jurisdiction, the S. 68 of 1862. 
 Court exercising the stannaries jurisdiction shall have and exercise the like juris- Jurisdiction 
 diction and powers, as well on the common law as on the equity side thereof, as the c f Stannaries 
 Court of the vice-warden of the stannaries possessed before the commencement of Court. 
 
 the Stannaries Court (Abolition) Act, 1896, by custom, usage, or statute in the case . „ ... 
 
 of unincorporated companies, but only so far as is consistent with the provisions of Vlct * 
 
 this Act and with the constitution of companies as prescribed or required by this c ’ 
 
 Act. 
 
 (2.) For the purpose of giving fuller effect to that jurisdiction, all process issuing 
 out of the said Court, and all orders, rules, demands, notices, warrants, and 
 summonses required or authorized by the practice of the Court to be served on any 
 company, whether registered or not registered, or on any member or contributory 
 thereof, or on any officer, agent, director, manager, or servant thereof, may be 
 served in any part of England without any special order of the judge for that 
 purpose, or by such special order may be served in any part of the British Islands, 
 on such terms and conditions as the Court may think fit : 
 
 Provided that no such service of process out of the limits of the stannaries in any 
 suit or plaint on the common law side of the Court shall be effected without the 
 special order of the judge made on a statement of the nature and object of the suit 
 or plaint. 
 
 (3.) All decrees, orders, and judgments of the said Court may be enforced in the 
 same manner in which decrees, orders, and judgments of the Court of the vice- 
 warden of the stannaries could before its abolition have been by law enforced, 
 whether within or beyond the stannaries. 
 
 281 . If any person in any return, report, certificate, balance sheet, or other S. 28 of 1900. 
 document, required by or for the purposes of any of the provisions of this Act p ena ity f or 
 specified in the Fifth Schedule hereto, wilfully makes a statement false in any f a i se 8 tate- 
 material particular, knowing it to be false, he shall be guilty of a misdemeanor, men t 
 
 and shall be liable on conviction on indictment to imprisonment for a term not 
 exceeding two years, with or without hard labour, and on summary conviction to 
 imprisonment for a term not exceeding four months, with or without hard labour, 
 and in either case to a fine in lieu of or in addition to such imprisonment as 
 aforesaid : 
 
 Provided that the fine imposed on summary conviction shall not exceed one 
 hundred pounds. 
 
 282. If any person or persons trade or carry on business under any name or S. 48 of 1907. 
 
 title of which ‘ ‘ Limited ’ ’ is the last word, that person or those persons shall, Penalty for 
 unless duly incorporated with limited liability, be liable to a fine not exceeding five improper use 
 pounds for every day upon which that name or title has been used. of word 
 
 “ Limited.” 
 
 Report by Board of Trade. 
 
 283 . The Board of Trade shall cause a general annual report of matters within 
 this Act to be prepared and laid before both Houses of Parliament. 
 
 Authentication of Documents issued by Board of Trade. 
 
 S. 47 of 1907. 
 Annual 
 report by 
 Board of 
 Trade. 
 
 284 . Any approval, sanction, or licence, or revocation of licence, which under 
 this Act may be given or made by the Board of Trade may be under the hand of a 
 secretary or assistant secretary of the Board, or of any person authorized in that 
 behalf by the President of the Board. 
 
 Interpretation , §c. 
 
 S. 46 of 1907 
 Authentica- 
 tion of docu- 
 ments issued 
 by Board of 
 Trade. 
 
 285 . In this Act, unless the context otherwise requires, the following expressions 
 have the meanings hereby assigned to them (that is to sav) : — 
 
 “Existing company” means a company formed and registered under the Joint 
 Stock Companies Acts, or under the Companies Act, 1862 ; 
 
 Ss. 129, 199 
 of 1862. 
 Interpreta- 
 tion. 
 
 ). 14 
 
 P. 
 
 34 
 
522 
 
 Appendix. 
 
 19 & 20 Viet, 
 o. 47. 
 
 Repeal of 
 Acts and 
 savings. 
 
 “Company” means a company formed and registered under this Act or an 
 existing company ; 
 
 “ Articles” means the articles of association of a company, as originally framed 
 or as altered by special resolution, including, so far as they apply to the 
 company, the regulations contained (as the case may be) in Table B. in the 
 Schedule annexed to the Joint Stock Companies Act, 1856, or in Table A. in 
 the First Schedule annexed to the Companies Act, 1862, or in that Table as 
 altered in pursuance of section seventy-one of that Act, or in Table A. in 
 the First Schedule to this Act ; 
 
 “Memorandum” means the memorandum of association of a company, as 
 originally framed or as altered in pursuance of the provisions of this Act ; 
 
 “Document” includes summons, notice, order, and other legal process, and 
 registers ; 
 
 “ Share ” means share in the share capital of the company, and includes stock 
 except where a distinction between stock and shares is expressed or implied ; 
 
 “ Debenture ” includes debenture stock ; 
 
 “Books and papers” and “ books or papers” include accounts, deeds, writings, 
 and documents ; 
 
 “The registrar of companies,” or, when used in relation to registration of 
 companies, ‘ ‘ the registrar,” means the registrar or other officer performing 
 under this Act the duty of registration of companies in England, Scotland, 
 or Ireland, or in the stannaries, as the case requires ; 
 
 “ The Court ” used in relation to a company means the Court having jurisdiction 
 to wind up the company ; 
 
 “Joint Stock Companies Acts” means the Joint Stock Companies Act, 1856, the 
 Joint Stock Companies Acts, 1856, 1857, the Joint Stock Banking Companies 
 Act, 1857, and the Act to enable Joint Stock Banking Companies to be 
 formed on the principle of limited liability, or any one or more of those Acts, 
 as the case may require ; but does not include the Act passed in the eighth 
 year of the reign of Her Majesty Queen Victoria, chapter one hundred and 
 ten, intituled An Act for the Registration, Incorporation, and Regulation of 
 Joint Stock Companies ; 
 
 “ The Gazette ” means, as respects companies registered in England, the London 
 Gazette ; as respects companies registered in Scotland, the Edinburgh 
 Gazette ; and, as respects companies registered in Ireland, the Dublin 
 Gazette ; 
 
 “ Real and personal,” as respects Scotland, means heritable and moveable ; 
 
 “ General rules” means general rules made under this Act, and includes forms ; 
 
 “Prescribed” means, as respects the provisions of this Act relating to the 
 winding-up of companies, prescribed by general rules, and as respects the 
 other provisions of this Act, prescribed by the Board of Trade ; 
 
 “ Company within the stannaries” meaus a company engaged in or formed for 
 working mines within the stannaries ; 
 
 “ The Court exercising the stannaries jurisdiction ” used in relation to any pro- 
 ceedings means the County Court in which the jurisdiction formerly exercised 
 by the Court of the vice- warden of the stannaries in respect of those proceed- 
 ings is for the time being vested ; 
 
 “Director” includes any person occupying the position of director by whatever 
 name called ; 
 
 “Prospectus” means any prospectus, notice, circular, advertisement, or other 
 invitation, offering to the public for subscription or purchase any shares or 
 debentures of a company. 
 
 Repeal of Acts and Transitional Provisions. 
 
 286. — (1.) The Acts mentioned in the First Part of the Sixth Schedule to this 
 Act are hereby repealed to the extent specified in the third column of that Part : 
 Provided that the repeal shall not affect — 
 
 (a) The incorporation of any company registered under any enactment hereby 
 
 repealed ; nor 
 
 (b) Table B. in the Schedule annexed to the Joint Stock Companies Act, 1856, 
 
 or any part thereof, so far as the same applies to any company existing 
 at the commencement of this Act ; nor 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 523 
 
 (o) Table A. in the First Schedule annexed to the Companies Act, 1862, or any 
 part thereof (either as originally contained in that Schedule or as altered 
 in pursuance of section seventy-one of that Act) so far as the same 
 applies to any company existing at the commencement of this Act ; nor 
 (d) The continuance in force of the enactments set out in the Second Part of 
 the Sixth Schedule to this Act, being the enactments continued in force 
 by section two hundred and five of the Companies Act, 1862. 
 
 (2.) The mention of particular matters in this section or in any other section of 
 this Act shall not prejudice the general application of section thirty-eight of the 
 Interpretation Act, 1889, with regard to the effect of repeals. 
 
 287. The provisions of this Act with respect to winding up shall not apply to 
 any company of which the winding-up has commenced before the commencement 
 of this Act, but every such company shall be wound up in the same manner and 
 with the same incidents as if this Act had not passed, and, for the purposes of the 
 winding up, the Act or Acts under which the winding-up commenced shall be 
 deemed to remain in full force. 
 
 288. Every conveyance, mortgage, or other deed, made before the commencement 
 of this Act in pursuance of any enactment hereby repealed, shall be of the same 
 force as if this Act had not passed, and for the purposes of that deed the repealed 
 •enactment shall be deemed to remain in full force. 
 
 289. — (1.) The offices existing at the commencement of this Act in England, 
 Scotland, and Ireland for registration of joint stock companies shall be continued as 
 if they had been established under this Act. 
 
 (2.) Registers of companies kept in any such existing offices shall respectively be 
 deemed part -of the registers of companies to be kept under this Act. 
 
 (3.) The existing registrars, assistant registrars, officers, clerks, and servants in 
 "those offices shall during the pleasure of the Board of Trade hold the offices and 
 receive the salaries hitherto held and received by them, but subject to any regula- 
 tions of the Board of Trade with regard to the execution of their duties. 
 
 (4.) The existing official receivers and officers of the Board of Trade appointed 
 for the execution of the Companies (Winding Up) Act, 1890, shall during the 
 pleasure of the Board of Trade hold the offices and receive the salaries or remunera- 
 tion hitherto held and received by them. 
 
 (5.) Persons, other than officers of the Board of Trade, performing any duties 
 under the Companies (Winding Up) Act, 1890, and receiving therefor any salary or 
 remuneration by the direction of the Lord Chancellor, shall during his pleasure 
 receive the salaries or remuneration hitherto received by them. 
 
 (6.) The Companies Liquidation Account under this Act shall be deemed to be in 
 continuation of the Companies Liquidation Account under the Companies (Winding 
 Up) Act, 1890. 
 
 290. Until revoked and except as varied under the powers of this Act, the 
 general rules and orders, and scales of fees, under the Companies (Winding Up) 
 Act, 1890, in force at the commencement of this Act, and the rules of Court in 
 force at the commencement of this Act in England, Scotland, and Ireland 
 respectively with respect to the procedure for reduction of capital, and to winding 
 up companies, and the practice and procedure for winding up companies in 
 England, Scotland, and Ireland respectively in force at the commencement of this 
 Act, shall, so far as they are not inconsistent with this Act, continue in force. 
 
 291. Where any enactment repealed by this Act is mentioned or referred to in 
 any document, that document shall be read as if the corresponding provision (if 
 any) of this Act were therein mentioned or referred to and substituted for the 
 repealed enactment. 
 
 292. Nothing in this Act shall affect the power of a company to alter its 
 memorandum under the provisions of section three of the Mortgage Debenture 
 Act, 1865. 
 
 293. Nothing in this Act shall affect the provisions of the Life Assurance Com- 
 panies Acts, 1870 to 1872, except that references in those Acts to any provision of 
 the Companies Act, 1862, shall be read as references to the corresponding provision 
 of this Act. 
 
 294. Nothing in this Act shall affect the provisions of section five of the Trade 
 Union Act, 1871, except that the reference in that section to the Companies Acts, 
 1862 and 1867, shall be read as a reference to this Act. 
 
 34 (2) 
 
 52 & 63 Viot. 
 c. 63. 
 
 Saving of 
 pending pro- 
 ceedings for 
 winding up. 
 
 S. 208 of 1862. 
 Saving of 
 deeds. 
 
 S. 174 of 1862. 
 Former regis- 
 tration offices, 
 registers, 
 official 
 
 receivers, &c. 
 continued. 
 
 Saving for 
 existing rules 
 of procedure, 
 &c. 
 
 Substitution of 
 provisions of 
 this Act for 
 provisions of 
 repealed Acts. 
 Saving 1 for 
 28 & 29 Viet, 
 c. 78, s. 3. 
 
 Saving for Life 
 Assurance Com- 
 panies Acts. 
 
 33 & 34 Viet, 
 c. 61. 
 
 34 & 35 Viet, 
 c. 58. 
 
 35 & 36 Viet. 
 
 c. 41. 
 
 Saving for 
 34 & 35 Viet, 
 c. 31, e. 5. 
 
524 
 
 Appendix. 
 
 Short title. 
 Commence- 
 ment of Act. 
 
 Sections 10, 
 11, 67, 263, 
 285. 
 p. 37 
 
 295. This Act may be cited as the Companies (Consolidation) Act, 1908. 
 
 296. This Act shall come into operation on the first day of April nineteen 
 hundred and nine. 
 
 SCHEDULES. 
 
 FIRST SCHEDULE. 
 
 TABLE A. 
 
 Regulations foe Management of a Company Limited by Shaees. 
 
 Preliminary. 
 
 1 . In these regulations, unless the context otherwise requires, expressions defined 
 in the Companies (Consolidation) Act, 1908, or any statutory modification thereof 
 in force at the date at which these regulations become binding on the company, 
 shall have the meanings so defined ; and words importing the singular shall include 
 the plural, and vice versd, and words importing the masculine gender shall include 
 females, and words importing persons shall include bodies corporate. 
 
 Business. 
 
 2. The directors shall have regard to the restrictions on the commencement of 
 business imposed by section eighty-seven of the Companies (Consolidation) Act, 
 1908, if, and so far as, those restrictions are binding upon the company. 
 
 Shares. 
 
 3. Subject to the provisions, if any, in that behalf of the memorandum of 
 association of the company, and without prejudice to any special rights previously 
 conferred on the holders of existing shares in the company, any share in the com- 
 pany may be issued with such preferred, deferred, or other special rights, or such 
 restrictions, whether in regard to dividend, voting, return of share capital, or other- 
 wise, as the company may from time to time by special resolution determine. 
 
 4. If at any time the share capital is divided into different classes of shares, the 
 rights attached to any class (unless otherwise provided by the terms of issue of the 
 shares of that class) may be varied with the consent in writing of the holders 
 of three-fourths of the issued shares of that class, or with the sanction of an 
 extraordinary resolution passed at a separate general meeting of the holders of the 
 shares of the class. To every such separate general meeting the provisions of these 
 regulations relating to general meetings shall mutatis mutandis apply, but so that 
 the necessary quorum shall be two persons at least holding or representing by 
 proxy one-third of the issued shares of the class. 
 
 5. No share shall be offered to the public for subscription except upon the terms 
 that the amount payable on application shall be at least five per cent, of the 
 nominal amount of the share ; and the directors shall, as regards any allotment of 
 shares, duly comply with such of the provisions of sections eighty-five and eighty- 
 eight of the Companies (Consolidation) Act, 1908, as may be applicable thereto. 
 
 6. Every person whose name is entered as a member in the register of members 
 shall, without payment, be entitled to a certificate under the common seal of the 
 company specifying the share or shares held by him and the amount paid up 
 thereon, provided that in respect of a share or shares held jointly by several persons 
 the company shall not be bound to issue more than one certificate, and delivery of a 
 certificate for a share to one of several joint holders shall be sufficient delivery- 
 to all. 
 
Act of 1908 625 
 
 Companies (Consolida tion) Act, 1908. 
 
 7. If a share certificate is defaced, lost, or destroyed, it may be renewed on 
 payment of such fee, if any, not exceeding one shilling, and on such terms, if any, 
 as to evidence and indemnity as the directors think fit. 
 
 8. No part of the funds of the company shall be employed in the purchase of, or 
 in loans upon the security of, the company’s shares. 
 
 Lien. 
 
 9. The company shall have a lien on every share (not being a fully-paid share) 
 for all moneys (whether presently payable or not) called or payable at a fixed time in 
 respect of that share, and the company shall also have a lien on all shares (other 
 than fully-paid shares) standing registered in the name of a single person, for all 
 moneys presently payable by him or his estate to the company ; but the directors 
 may at any time declare any share to be wholly or in part exempt from the pro- 
 visions of this clause. The company’s lien, if any, on a share shall extend to all 
 dividends payable thereon. 
 
 10. The company may sell, in such manner as the directors think fit, any shares 
 on which the company has a lien, but no sale shall be made unless some sum in 
 respect of which the lien exists, is presently payable, nor until the expiration of 
 fourteen days after a notice in writing, stating and demanding payment of such 
 part of the amount in respect of which the lien exists as is presently payable, has 
 been given to the registered holder for the time being of the share, or the person 
 entitled by reason of his death or bankruptcy to the share. 
 
 11. The proceeds of the sale shall be applied in payment of such part of the 
 amount in respect of which the lien exists as is presently payable, and the residue 
 shall (subject to a like lien for sums not presently payable as existed upon the 
 shares prior to the sale) be paid to the person entitled to the shares at the date of 
 the sale. The purchaser shall be registered as the holder of the shares, and he shall 
 not be bound to see to the application of the purchase money, nor shall his title to 
 the shares be affected by any irregularity or invalidity in the proceedings in 
 reference to the sale. 
 
 Calls on Shares. 
 
 12. The directors may from time to time make calls upon the members in respect 
 of any moneys unpaid on their shares, provided that no call shall exceed one-fourth 
 of the nominal amount of the share, or be payable at less than one month from the 
 last call ; and each member shall (subject to receiving at least fourteen days’ notice 
 specifying the time or times of payment) pay to the company at the time or times 
 so specified the amount called on his shares. 
 
 13. The joint holders of a share shall be jointly and severally liable to pay all 
 calls in respect thereof. 
 
 14. If a sum called in respect of a share is not paid before or on the day appointed 
 for payment thereof, the person from whom the sum is due shall pay interest upon 
 the sum at the rate of five pounds per cent, per annum from the day appointed for 
 the payment thereof to the time of the actual payment, but the directors shall be at 
 liberty to waive payment of that interest wholly or in part. 
 
 15. The provisions of these regulations as to payment of interest shall apply in 
 the case of nonpayment of any sum which, by the terms of issue of a share, 
 becomes payable at a fixed time, whether on account of the amount of the share, 
 or by way of premium, as if the same had become payable by virtue of a call duly 
 made and notified. 
 
 16. The directors may make arrangements on the issue of shares for a difference 
 between the holders in the amount of calls to be paid and in the times of payment. 
 
 17. The directors may, if they think fit, receive from any member willing to 
 advance the same all or any part of the moneys uncalled and unpaid upon any 
 shares held by him ; and upon all or any of the moneys so advanced may (until the 
 same would, but for such advance, become presently payable) pay interest at such 
 rate (not exceeding, without the sanction of the company in general meeting, six 
 per cent.) as may be agreed upon between the member paying the sum in advance 
 and the directors. 
 
 Transfer and Transmission of Shares. 
 
 18. The instrument of transfer of any share in the company shall be executed 
 both by the transferor and transferee, and the transferor shall be deemed to remain 
 
526 
 
 Appendix. 
 
 a holder of the share until the name of the transferee is entered in the register of 
 members in respect thereof. 
 
 19. Shares in the company shall be transferred in the following form, or in any 
 usual or common form which the directors shall approve : 
 
 I, A.B., of , in consideration of the sum of £ paid to me by C. D. 
 
 of (hereinafter called “the said transferee”) do hereby transfer tx> 
 
 the said transferee the share [or shares] numbered in the under- 
 taking called the Company Limited, to hold unto the said transferee, 
 
 his executors, administrators, and assigns, subject to the several conditions 
 on which I held the same at the time of the execution hereof ; and I, 
 the said transferee, do hereby agree to take the said share [or shares] 
 subject to the conditions aforesaid. As witness our hands, the day 
 of 
 
 Witness to the signatures of, &c. 
 
 20. The directors may decline to register any transfer of shares, not being fully- 
 paid shares, to a person of whom they do not approve, and may also decline to 
 register any transfer of shares on which the company has a lien. The directors 
 may also suspend the registration of transfers during the fourteen days immediately 
 preceding the ordinary general meeting in each year. The directors may decline to 
 recognize any instrument of transfer unless — 
 
 (a) a fee not exceeding two shillings and sixpence is paid to the company in 
 
 respect thereof, and 
 
 (b) the instrument of transfer is accompanied by the certificate of the shares to 
 
 which it relates, and such other evidence as the directors may reasonably 
 require to show the right of the transferor to make the transfer. 
 
 21. The executors or administrators of a deceased sole holder of a share shall be 
 the only persons recognized by the company as having any title to his share. In 
 the case of a share registered in the names of two or more holders, the survivors or 
 survivor, or the executors or administrators of the deceased survivor, shall be the 
 only persons recognized by the company as having any title to the share. 
 
 22. Any person becoming entitled to a share in consequence of the death or bank- 
 ruptcy of a member shall, upon such evidence being produced as may from time to 
 time be required by the directors, have the right, either to be registered as a 
 member in respect of the share, or, instead of being registered himself, to make 
 such transfer of the share as the deceased or bankrupt person could have made ; 
 but the directors shall, in either case, have the same right to decline or suspend 
 registration as they would have had in the case of a transfer of the share by the 
 deceased or bankrupt person before the death or bankruptcy. 
 
 23. A person becoming entitled to a share by reason of the death or bankruptcy 
 of the holder shall be entitled to the same dividends and other advantages to which 
 he would be entitled if he were the registered holder of the share, except that he 
 shall not, before being registered as a member in respect of the share, be entitled in 
 respect of it to exercise any right conferred by membership in relation to meetings 
 of the company. 
 
 Forfeiture of Shares. 
 
 24. If a member fails to pay any call or instalment of a call on the day appointed 
 for payment thereof, the directors may, at any time thereafter during such time as 
 any part of such call or instalment remains unpaid, serve a notice on him requiring 
 payment of so much of the call or instalment as is unpaid, together with any 
 interest which may have accrued. 
 
 25. The notice shall name a further day (not earlier than the expiration of 
 fourteen days from the date of the notice) on or before which the payment required 
 by the notice is to be made, and shall state that in the event of non-payment at or 
 before the time appointed the shares in respect of which the call was made will be 
 liable to be forfeited. 
 
 26. If the requirements of any such notice as aforesaid are not complied with, 
 any share in respect of which the notice has been given may at any time thereafter, 
 before the payment required by the notice has been made, be forfeited by a 
 resolution of the directors to that effect. 
 
 27. A forfeited share may be sold or otherwise disposed of on such terms and in 
 such manner as the directors think fit, and at any time before a sale or disposition 
 the forfeiture may be cancelled on such terms as the directors think fit. 
 
Act of 1908 -527 
 
 Companies (Consolidation) Act, 1908. 
 
 28. A person whose shares have been forfeited shall cease to be a member in 
 respect of the forfeited shares, but shall, notwithstanding, remain liable to pay to 
 the company all moneys which, at the date of forfeiture, were presently payable by 
 him to the company in respect of the shares, but his liability shall cease if and 
 when the company receive payment in full of the nominal amount of the shares. 
 
 29. A statutory declaration in writing, that the declarant is a director of the 
 company, and that a share in the company has been duly forfeited on a date stated 
 in the declaration, shall be conclusive evidence of the facts therein stated as against 
 all persons claiming to be entitled to the share, and that declaration, and the receipt 
 of the company for the consideration, if any, given for the share on the sale or 
 disposition thereof shall constitute a good title to the share, and the person to whom 
 the share is sold or disposed of shall be registered as the holder of the share and 
 shall not be bound to see to the application of the purchase money, if any, nor 
 shall his title to the share be affected by any irregularity or invalidity in the 
 proceedings in reference to the forfeiture, sale or disposal of the share. 
 
 30. The provisions of these regulations as to forfeiture shall apply in the case of 
 non-payment of any sum which, by the terms of issue of a share, becomes payable 
 at a fixed time, whether on account of the amount of the share, or by way of 
 premium, as if the same had been payable by virtue of a call duly made and 
 notified. 
 
 Conversion of Shares into Stock. 
 
 31. The directors may, with the sanction of the company previously given in 
 general meeting, convert any paid-up shares into stock, and may with the like 
 sanction reconvert any stock into paid-up shares of any denomination. 
 
 32. The holders of stock may transfer the same, or any part thereof, in the same 
 manner, and subject to the same regulations, as, and subject to which, the shares 
 from which the stock arose might previously to conversion have been transferred, 
 or as near thereto as circumstances admit ; but the directors may from time to time 
 fix the minimum amount of stock transferable, and restrict or forbid the transfer of 
 fractions of that minimum, but the miuimum shall not exceed the nominal amount 
 of the shares from which the stock arose. 
 
 33. The holders of stock shall, according to the amount of the stock held by 
 them, have the same rights, privileges, and advantages as regards dividends, voting 
 at meetings of the company, and other matters as if they held the shares from 
 which the stock arose, but no such privilege or advantage (except participation in 
 the dividends and profits of the company) shall be conferred by any such aliquot 
 part of stock as would not, if existing in shares, have conferred that privilege or 
 advantage. 
 
 34. Such of the regulations of the company (other than those relating to share 
 warrants) as are applicable to paid-up shares shall apply to stock, and the words 
 “share” and “ shareholder” therein shall include “ stock” and “ stock -bolder.” 
 
 Share Warrants. 
 
 3o. The company may issue share warrants, and accordingly the directors may in 
 their discretion, with respect to any share which is fully paid up, on application in 
 writing signed by the person registered as holder of the share, and authenticated by 
 such evidence, if any, as the directors may from time to time require as to the 
 identity of the person signing the request, and on receiving the certificate, if any, 
 of the share, and the amount of the stamp duty on the warrant and such fee as the 
 directors may from time to time require, issue under the company’s seal a warrant, 
 duly stamped, stating that the bearer of the warrant is entitled to the shares 
 therein specified, and may provide by coupons, or otherwise for the payment of 
 dividends, or other moneys, on the shares included in the warrant. 
 
 36. A share warrant shall entitle the bearer to the shares included in it, and the 
 shares shall be transferred by the delivery of the share warrant, and the provisions, 
 of the regulations of the company with respect to transfer and transmission of 
 shares shall not apply thereto. 
 
 37. The bearer of a share warrant shall, on surrender of the warrant to the 
 company for cancellation, and on payment of such sum as the directors may from 
 time to time prescribe, be entitled to have his name entered as a member in the 
 register of members in respect of the shares included in the warrant. 
 
528 
 
 Appendix 
 
 38. The bearer of a share warrant may at any time deposit the warrant at the 
 office of the company, and so long as the warrant remains so deposited the depositor 
 shall have the same right of signing a requisition for calling a meeting of the 
 company, and of attending and voting and exercising the other privileges of a 
 member at any meeting held after the expiration of two clear days from the time of 
 deposit, as if his name were inserted in the register of members as the holder of 
 the shares included in the deposited warrant. Not more than one person shall be 
 recognized as depositor of the share warrant. The company shall, on two days’ 
 written notice, return the deposited share warrant to the depositor. 
 
 39. Subject as herein otherwise expressly provided no person shall, as bearer of 
 a share warrant, sign a requisition for calling a meeting of the company, or attend, 
 or vote, or exercise any other privilege of a member at a meeting of the company, 
 or be entitled to receive any notices from the company ; but the bearer of a share 
 warrant shall be entitled in all other respects to the same privileges and advantages 
 as if he were named in the register of members as the holder of the shares included 
 in the warrant, and he shall be a member of the company. 
 
 40. The directors may from time to time make rules as to the terms on which (if 
 they shall think fit) a new share warrant or coupon may be issued by way of 
 renewal in case of defacement, loss, or destruction. 
 
 Alteration of Capital. 
 
 H 41. The directors may, with the sanction of an extraordinary resolution of the 
 company, increase the share capital by such sum, to be divided into shares of such 
 amount, as the resolution shall prescribe. 
 
 42. Subject to any direction to the contrary that may be given by the resolution 
 sanctioning the increase of share capital, all new shares shall, before issue, be offered 
 to such persons as at the date of the offer are entitled to receive notices from the 
 company of general meetings in proportion, as nearly as the circumstances admit, 
 to the amount of the existing shares to which they are entitled. The offer shall be 
 made by notice specifying the number of shares offered, and limiting a time within 
 which the offer, if not accepted, will be deemed to be declined, and, after the 
 expiration of that time, or on the receipt of an intimation from the person to whom 
 the offer is made that he declines to accept the shares offered, the directors may 
 dispose of the same in such manner as they think most beneficial to the company. 
 The directors may likewise so dispose of any new shares which (by reason of the 
 ratio which the new shares bear to shares held by persons entitled to an offer of 
 new shares) cannot, in the opinion of the directors, be conveniently offered under 
 this article. 
 
 43. The new shares shall be subject to the same provisions with reference to the 
 payment of calls, lien, transfer, transmission, forfeiture, and otherwise as the shares 
 in the original share capital. 
 
 44. The company may, by special resolution — 
 
 (a) Consolidate and divide its share capital into shares of larger amount than 
 
 its existing shares : 
 
 (b) By subdivision of its existing shares, or any of them, divide the whole, or 
 
 any part, of its share capital into shares of smaller amount than is fixed 
 by the memorandum of association, subject, nevertheless, to the pro- 
 visions of paragraph (d) of sub-section (1) of section forty-one of the 
 Companies (Consolidation) Act, 1908 : 
 
 (c) Cancel any shares which, at the date of the passing of the resolution, have 
 
 not been taken or agreed to be taken by any person : 
 
 (d) Reduce its share capital 'in any manner and with, and subject to, any 
 
 incident authorized, and consent required, by law. 
 
 General Meetings. 
 
 45. The statutory general meeting of the company shall be held within the period 
 required by section sixty-five of the Companies (Consolidation) Act, 1908. 
 
 46. A general meeting shall be held once in every year at such time (not being 
 more than fifteen months after the holding of the last preceding general meeting) 
 and place as may be prescribed by the company in general meeting, or, in default, 
 at such time in the month following that in which the anniversary of the company’s 
 
Act of 1908 529 
 
 Companies (Consolidation) Act, 1908. 
 
 incorporation occurs, and at such place, as the directors shall appoint. In default 
 of a general meeting being so held, a general meeting shall be held in the month 
 next following, and may be convened by any two members in the same manner as 
 nearly as possible as that in which meetings are to be convened by the directors. 
 
 47. The above-mentioned general meetings shall be called ordinary meetings ; 
 all other general meetings shall be called extraordinary. 
 
 48. The directors may, whenever they think fit, convene an extraordinary general 
 meeting, and extraordinary general meetings shall also be convened on such requi- 
 sition, or, in default, may be convened by such requisitionists, as provided by section 
 sixty-six of the Companies (Consolidation) Act, 1908. If at any time there are not 
 ■within the United Kingdom sufficient directors capable of acting to form a quorum, 
 any director or any two members of the company may convene an extraordinary 
 general meeting in the same manner as nearly as possible as that in which meetings 
 may be convened by the directors. 
 
 Proceedings at General Meeting. 
 
 49. Seven days’ notice at the least (exclusive of the day on which the notice is 
 served or deemed to be served, but inclusive of the day for which notice is given) 
 specifying the place, the day, and the hour of meeting and, in case of special 
 business, the general nature of that business shall be given in manner hereinafter 
 mentioned, or in such other manner, if any, as may be prescribed by the company 
 in general meeting, to such persons as are, under the regulations of the company, 
 entitled to receive such notices from the company ; but the non-receipt of the notice 
 by any member shall not invalidate the proceedings at any general meeting. 
 
 50. All business shall be deemed special that is transacted at an extraordinary 
 meeting, and all that is transacted at an ordinary meeting, with the exception of 
 sanctioning a dividend, the consideration of the accounts, balance sheets, and the 
 ordinary report of the directors and auditors, the election of directors and other 
 officers in the place of those retiring by rotation, and the fixing of the remuneration 
 of the auditors. 
 
 51. No business shall be transacted at any general meeting unless a quorum 
 of members is present at the time when the meeting proceeds to business ; save 
 as herein otherwise provided, three members personally present shall be a quorum. 
 
 52. If within half an hour from the time appointed for the meeting a quorum is not 
 present, the meeting, if convened upon the requisition of members, shall be dis- 
 solved ; in any other case it shall stand adjourned to the same day in the next 
 week, at the same time and place, and, if at the adjourned meeting a quorum is 
 not present within half an hour from the time appointed for the meeting the 
 members present shall be a quorum. 
 
 53. The chairman, if any, of the board of directors shall preside as chairman 
 at every general meeting of the company. 
 
 54. If there is no such chairman, or if at any meeting he is not present within 
 fifteen minutes after the time appointed for holding- the meeting or is unwilling to 
 act as chairman, the members present shall choose some one of their number to be 
 ■chairman. 
 
 55. The chairman may, with the consent of any meeting at which a quorum is 
 present (and shall if so directed by the meeting), adjourn the meeting from time to 
 time and from place to place, but no business shall be transacted at any adjourned 
 meeting other than the business left unfinished at the meeting- from which the adjourn- 
 ment took place. When a meeting is adjourned for ten days or more, notice of the 
 adjourned meeting shall be given as in the case of an original meeting. Save as 
 aforesaid it shall not be necessary to give any notice of an adjournment or of the 
 business to be transacted at an adjourned meeting.' 
 
 56. At any general meeting a resolution put to the vote of the meeting shall be 
 decided on a show of hands, unless a poll is (before or on the declaration of the 
 result of the show of hands) demanded by at least three members, and, unless a poll 
 is so demanded, a declaration by the chairman that a resolution has, on a show of 
 hands, been carried, or carried unanimously, or by a particular majority, or lost, 
 and an entry to that effect in the book of the proceedings of the company, shall 
 be conclusive evidence of the fact, without proof of the number or proportion of 
 the votes recorded in favour of, or against, that resolution. 
 
 57. If a poll is duly demanded it shall be taken in such manner as the chairman 
 •directs, and the result of the poll shall be deemed to be the resolution of the 
 meeting at which the poll was demanded. 
 
Appendix. 
 
 530 
 
 58. In the case of an equality of votes, whether on a show of hands or on a 
 poll, the chairman of the meeting at which the show of hands takes place or at 
 which the poll is demanded, shall be entitled to a second or casting vote. 
 
 59. A poll demanded on the election of a chairman, or on a question of adjourn- 
 ment, shall be taken forthwith. A poll demanded on any other question shall be 
 taken at such time as the chairman of the meeting directs. 
 
 Votes of Members. 
 
 60. On a show of hands every member present in person shall have one vote. On 
 a poll every member shall have ODe vote for each share of which he is the holder. 
 
 61. In the case of joint holders the vote of the senior who tenders a vote, whether 
 in person or by proxy, shall be accepted to the exclusion of the votes of the other 
 joint holders ; and for this purpose seniority shall be determined by the order in 
 which the names stand in the register of members. 
 
 62. A member of unsound mind, or in respect of whom an order has been made 
 by any Court having jurisdiction in lunacy, may vote, whether on a show of hands 
 or on a poll, by his committee, curator bonis , or other person in the nature of a 
 committee or curator bonis appointed by that Court, and any such committee, curator 
 bonis, or other person may, on a poll, vote by proxy. 
 
 63. No member shall be entitled to vote at any general meeting unless all calla 
 or other sums presently payable by him in respect of shares in the company have 
 been paid. 
 
 64. On a poll votes may be given either personally or by proxy. 
 
 65. The instrument appointing a proxy shall be in writing under the hand of the 
 appointor or of his attorney duly authorized in writing, or, if the appointor is a 
 corporation, either under the common seal, or under the hand of an officer or attorney 
 so authorized. No person shall act as a proxy unless either he is entitled on his 
 own behalf to be present and vote at the meeting at which he acts as proxy, or he 
 has been appointed to act^at that meeting as proxy for a corporation. 
 
 66. The instrument appointing a proxy and the power of attorney or other 
 authority, if any, under which it is signed or a notarially certified copy of that 
 power or authority shall be deposited at the registered office of the company not 
 less than forty- eight hours before the time for holding the meeting at which the 
 person named in the instrument proposes to vote, and in default the instrument 
 of proxy shall not be treated as valid. 
 
 67. An instrument appointing a proxy may be in the following form, or in any 
 other form which the directors shall approve : — 
 
 “ Company, Limited. 
 
 “1, , of , in the county of , being a member of the Company, 
 
 Limited, hereby appoint , of , as my proxy, to vote for me and on 
 
 my behalf at the [ordinary or extraordinary, as the case may be\ general 
 
 meeting of the company to be held on the day of , and at any 
 
 adjournment thereof. 
 
 “ Signed this day of .” 
 
 Directors. 
 
 68. The number of the directors and the names of the first directors shall be 
 determined in writing by a majority of the subscribers of the memorandum of asso- 
 ciation. 
 
 69. The remuneration of the directors shall from time to time be determined 
 by the company in general meeting. 
 
 70. The qualification of a director shall be the holding of at least one share in the 
 company, and it shall be his duty to comply with the provisions of section seventy- 
 three of the Companies (Consolidation) Act, 1908. 
 
 Dowers and Duties of Directors. 
 
 71. The business of the company shall be managed by the directors, who may 
 pay all expenses incurred in getting up and registering the company, and may 
 exercise all such powers of the company as are not, by the Companies (Consolida- 
 
Act of 1908 531 
 
 Companies (Consolidation) Act, 1908. 
 
 tion) Act, 1908, or any statutory modification thereof for the time being 1 in force, or 
 by these artic les, required to be exercised by the company in general meeting, subject 
 nevertheless to any regulation of these articles, to the provisions of the said Act, 
 and to such regulations, being not inconsistent with the aforesaid regulations or 
 provisions, as may be prescribed by the company in general meeting ; but no 
 regulation made by the company in general meeting shall invalidate any prior act 
 of the directors which would have been valid if that regulation had not been made. 
 
 72. The directors may from time to time appoint one or more of their body to the 
 office of managing director or manager for such term, and at such remuneration 
 (whether by way of salary, or commission, or participation in profits, or partly in 
 one way and partly in another) as they may think fit, and a director so appointed 
 shall not, while holding that office, be subject to retirement by rotation, or taken 
 into account in determining the rotation of retirement of directors ; but his appoint- 
 ment shall be subject to determination ipso facto if he ceases from any cause to be a 
 director, or if the company in general meeting resolve that his tenure of the office 
 of managing director or manager be determined. 
 
 73. The amount for the time being remaining undischarged of moneys borrowed 
 or raised by the directors for the purposes of the company (otherwise than by the 
 issue of share capital) shall not at any time exceed the issued share capital of the 
 company without the sanction of the company in general meeting. 
 
 74. The directors shall duly comply with the provisions of the Companies (Con- 
 solidation) Act, 1908, or any statutory modification thereof for the time being in 
 force, and in particular with the provisions in regard to the registration of the 
 particulars of mortgages and charges affecting the property of the company, or 
 created by it, and to keeping a register of the directors, and to sending to the 
 registrar of companies an annual list of members, and a summary of particulars 
 relating thereto, and notice of any consolidation or increase of share capital, or 
 conversion of shares into stock, and copies of special resolutions, and a copy of the 
 register of directors and notifications of any changes therein. 
 
 75. The directors shall cause minutes to be made in books provided for the 
 purpose — 
 
 (a) of all appointments of officers made by the directors ; 
 
 (b) of the names of the directors present at each meeting of the directors and 
 
 of any committee of the directors ; 
 
 (c) of all resolutions and proceedings at all meetings of the company, and of 
 
 the directors, and of committees of directors, 
 and every director present at any meeting of directors or committee of directors 
 shall sign his name in a book to be kept for that purpose. 
 
 The Seal. 
 
 76. The seal of the company shall not be affixed to any instrument except by the 
 authority of a resolution of the board of directors, and in the presence of at least 
 two directors and of the secretary or such other person as the directors may appoint 
 for the purpose ; and those two directors and secretary or other person as aforesaid 
 shall sign every instrument to which the seal of the company is so affixed in their 
 presence. 
 
 Disqualifications of Directors. 
 
 77. The office of director shall be vacated, if the director — 
 
 (a) ceases to be a director by virtue of section seventy-three of the Companies 
 
 (Consolidation) Act, 1908 ; or 
 
 (b) holds any other office of profit under the company except that of managing 
 
 director or manager ; or 
 
 (c) becomes bankrupt ; or 
 
 (d) is found lunatic or becomes of unsound mind ; or 
 
 (e) is concerned or participates in the profits of any contract with the 
 
 company : 
 
 Provided, however, that no director shall vacate his office by reason of his being 
 a member of any company which has entered into contracts with or done any 
 work for the company of which he is director: but a director shall not vote in 
 respect of any such contract or work, and if he does so vote his vote shall not be 
 counted. 
 
532 
 
 Appendix. 
 
 Rotation of Directors • 
 
 78. At the first ordinary meeting of the company the whole of the directors shall 
 retire from office, and at the ordinary meeting in every subsequent year one -third 
 of the directors for the time being, or, if their number is not three or a multiple of 
 three, then the number nearest to one-third, shall retire from office. 
 
 79. The directors to retire in every year shall be those who have been longest in 
 office since their last election, but as between persons who became directors on the 
 same day those to retire shall (unless they otherwise agree among themselves) be 
 determined by lot. 
 
 80. A retiring director shall be eligible for re-election. 
 
 81. The company at the general meeting at which a director retires in manner 
 aforesaid may fill up the vacated office by electing a person thereto. 
 
 82. If at any meeting at which an election of directors ought to take place the 
 places of the vacating directors are not filled up, the meeting shall stand adjourned 
 till the same day in the next week at the same time and place, and, if at the 
 adjourned meeting the places of the vacating directors are not filled up, the vacating 
 directors, or such of them as have not had their places filled up, shall be deemed 
 to have been re-elected at the adjoined meeting. 
 
 83. The company may from time to time in general meeting increase or reduce 
 the number of directors, and may also determine in what rotation the increased 
 or reduced number is to go out of office. 
 
 84. Any casual vacancy occurring in the board of directors may be filled up by 
 the directors, but the person so chosen shall be subject to retirement at the same 
 time as if he had become a director on the day on which the director in whose place 
 he is appointed was last elected a director. 
 
 85. The directors shall have power at any time, and from time to time, to 
 appoint a person as an additional director who shall retire from office at the next 
 following ordinary general meeting, but shall be eligible for election by the 
 company at that meeting as an additional director. 
 
 86. The company may by extraordinary resolution remove any director before 
 the expiration of his period of office, and may by an ordinary resolution appoint 
 another person in his stead ; the person so appointed shall be subject to retirement 
 at the same time as if he had become a director on the day on which the director in 
 whose place he is appointed was last elected a director. 
 
 Proceedings of Directors. 
 
 87. The directors may meet together for the despatch of business, adjourn, and 
 otherwise regulate their meetings, as they think fit. Questions arising at any 
 meeting shall be decided by a majority of votes. In case of an equality of 
 votes the chairman shall have a second or casting vote. A director may, and the 
 secretary on the requisition of a director shall, at any time summon a meeting 
 of the directors. 
 
 88. The quorum necessary for the transaction of the business of the directors may 
 be fixed by the directors, and unless so fixed shall (when the number of directors 
 exceeds three) be three. 
 
 89. The continuing directors may act notwithstanding any vacancy in their 
 body, but, if and so long as their number is reduced below the number fixed by 
 or pursuant to the regulations of the company as the necessary quorum of directors, 
 the continuing directors may act for the purpose of increasing the number of 
 directors to that number, or of summoning a general meeting of the company, but 
 for no other purpose. 
 
 90. The directors may elect a chairman of their meetings and determine the 
 period for which he is to hold office ; but, if no such chairman is elected, or if 
 at any meeting the chairman is not present within five minutes after the time 
 appointed for holding the same, the directors present may choose one of their 
 number to be chairman of the meeting. 
 
 91. The directors may delegate any of their powers to committees consisting of 
 such member or members of their body as they think fit ; any committee so formed 
 shall in the exercise of the powers so delegated conform to any regulations that may 
 be imposed on them by the directors. 
 
Act of 1908 53a 
 
 Companies (Consolidation) Act, 1908. 
 
 92. A committee may elect a chairman of their meetings : if no such chairman 
 is elected, or if at any meeting the chairman is not present within five minutes 
 after the time appointed for holding the same, the members present may choose 
 one of their number to be chairman of the meeting. 
 
 93. A committee may meet and adjourn as they think proper. Questions 
 arising at any meeting shall be determined by a majority of votes of the members 
 present, and in case of an equality of votes the chairman shall have a second or 
 casting vote. 
 
 94. All acts done by any meeting of the directors or of a committee of directors, 
 or by any person acting as a director, shall, notwithstanding that it be after- 
 wards discovered that there was some defect in the appointment of any such 
 directors or persons acting as aforesaid, or that they or any of them were dis- 
 qualified, be as valid as if every such person had been duly appointed and was 
 qualified to be a director. 
 
 Dividends and Reserve. 
 
 95. The company in general meeting may declare dividends, but no dividend 
 shall exceed the amount recommended by the directors. 
 
 96. The directors may from time to time pay to the members such interim 
 dividends as appear to the directors to be justified by the profits of the company. 
 
 97. No dividend shall be paid otherwise than out of profits. 
 
 98. Subject to the rights of persons, if any, entitled to shares with special 
 rights as to dividends, all dividends shall be declared and paid according to the 
 amounts paid on the shares, but if and so long as nothing is paid up on any of 
 the shares in the company dividends may be declared and paid according to the 
 amounts of the shares. No amount paid on a share in advance of calls shall, 
 while carrying interest, be treated for the purposes of this article as paid on the 
 share. 
 
 99. The directors may, before recommending any dividend, set aside out of the 
 profits of the company such sums as they think proper as a reserve or reserves 
 which shall, at the discretion of the directors, be applicable for meeting contin- 
 gencies, or for equalizing dividends, or for any other purpose to which the profits 
 of the company may be properly applied, and pending such application may, at the 
 like discretion, either be employed in the business of the company or be invested in 
 such investments (other than shares of the company) as the directors may from 
 time to time think fit. 
 
 100. If several persons are registered as joint holders of any share any one of 
 them may give effectual receipts for any dividend payable on the share. 
 
 101. Notice of any dividend that may have been declared shall be given in 
 manner hereinafter mentioned to the persons entitled to share therein. 
 
 102. No dividend shall bear interest against the company. 
 
 Accounts. 
 
 103. The directors shall cause true accounts to be kept — 
 
 Of the sums of money received and expended by the company and the matter 
 in respect of which such receipt and expenditure takes place, and 
 Of the assets and liabilities of the company. 
 
 104. The books of account shall be kept at the registered office of the company, 
 or at such other place or places as the directors think fit, and shall always be open 
 to the inspection of the directors. 
 
 105. The directors shall from time to time determine whether and to what extent 
 and at what times and places and under what conditions or regulations the accounts 
 and books of the company or any of them shall be open to the inspection of members 
 not being directors, and no member (not being a director) shall have any right of 
 inspecting any account or book or document of the company except as conferred by 
 statute or authorized by the directors or by the company in general meeting. 
 
 106. Once at least in every year the directors shall lay before the company 
 in general meeting a profit and loss account for the period since the preceding 
 account or (in the case of the first account) since the incorporation of the company, 
 made up to a date not more than six months before such meeting. 
 
 107. A balance-sheet shall be made out in every year and laid before the company 
 in general meeting made up to a date not more than six months before suck 
 
534 
 
 Appendix. 
 
 meeting. The balance-sheet shall be accompanied by a report of the directors as to 
 the state of the company’s affairs, and the amount which they recommend to be 
 paid by way of dividend, and the amount, if any, which they propose to carry to a 
 reserve fund. 
 
 108. A copy of the balance-sheet and report shall, seven days previously to the 
 meeting, be sent to the persons entitled to receive notices of general meetings in the 
 manner in which notices are to be given hereinunder. 
 
 Audit. 
 
 109. Auditors shall be appointed and their duties regulated in accordance with 
 sections one hundred and twelve and one hundred and thirteen of the Companies 
 (Consolidation) Act, 1908, or any statutory modification thereof for the time being 
 in force. 
 
 Notices. 
 
 110. A notice may be given by the company to any member either personally or 
 by sending it by post to him to his registered address, or (if he has no registered 
 address in the United Kingdom) to the address, if any, within the United Kingdom 
 supplied by him to the company for the giving of notices to him. 
 
 Where a notice is sent by post, service of the notice shall be deemed to be effected 
 by properly addressing, prepaying, and posting a letter containing the notice, and 
 unless the contrary is proved to have been effected at the time at which the letter 
 would be delivered in the ordinary course of post. 
 
 111. If a member has no registered address in the United Kingdom and has not 
 supplied to the company an address within the United Kingdom for the giving of 
 notices to him, a notice addressed to him and advertised in a newspaper circulating 
 in the neighbourhood of the registered office of the company, shall be deemed to be 
 duly given to him on the day on which the advertisement appears. 
 
 112. A notice may be given by the company to the joint holders of a share by 
 giving the notice to the joint holder named first in the register in respect of the 
 share. 
 
 113. A notice may be given by the company to the persons entitled to a share in 
 consequence of the death or bankruptcy of a member by sending it through the 
 post in a prepaid letter addressed to them by name, or by the title of representa- 
 tives of the deceased, or trustee of the bankrupt, or by any like description, at the 
 address, if any, in the United Kingdom supplied for the purpose by the persons 
 claiming to be so entitled, or (until such an address has been so supplied) by giving 
 the notice in any manner in which the same might have been given if the death 
 or bankruptcy had not occurred. 
 
 114. Notice of every general meeting shall be given in some manner hereinbefore 
 authorized to (a) every member of the company (including bearers of share warrants) 
 except those members who (having no registered address within the United King- 
 dom) have not supplied to the company an address within the United Kingdom for 
 the giving of notices to them, and also to (b) every person entitled to a share in 
 consequence of the death or bankruptcy of a member, who, but for his death or 
 bankruptcy, would be entitled to receive notice of the meeting. No other persons 
 shall be entitled to receive notices of general meetings. 
 
 Sections 244, 
 259. 
 
 TABLE B. 
 
 Table of Fees to be paid to the Registrar of Companies. 
 
 I . — By a Company having a Share Capital. 
 
 For registration of a company whose nominal share capital does not £ s. d. 
 
 exceed 2,000Z 2 0 0 
 
 For registration of a company whose nominal share capital exceeds 
 2,000£. , the following fees, regulated according to the amount of 
 nominal share capital (that is to say) ; £ s. d. 
 
 For every 1,000£. of nominal share capital, or part of 
 1,000£., up to 5,000£ 
 
 1 0 0 
 
Act of 1908 585 
 
 Companies (Consolidation) Act, 1908. 
 
 For every 1,000/. of nominal share capital, or part of £ s. d. £ 
 
 1,0001., after the first 5,000/., up to 100,000/ 0 5 0 
 
 For every 1,000/. of nominal share capital, or part of 
 
 1,000/., after the first 100,000/ 0 1 0 
 
 For registration of any increase of share capital made after the first 
 
 registration of the company, the same fees per 1 ,000/. , or part of 
 a 1 ,000/. , as would have been payable if the increased share capital 
 had formed part of the original share capital at the time of regis- 
 tration : 
 
 Provided that no company shall be liable to pay in respect of nominal 
 share capital, on registration or afterwards, any greater amount of 
 fees than 50/. , taking into account in the case of fees payable on 
 an increase of share capital after registration the fees paid on 
 registration. 
 
 For registration of any existing company, except such companies as 
 are by this Act exempted from payment of fees in respect of regis- 
 tration under this Act, the same fee as is charged for registering 
 a new company. 
 
 For registering any document by this Act required or authorized to be 
 registered, other than the memorandum or the abstract required to 
 be filed with the registrar by a receiver or manager or the state- 
 ment required to be sent to the registrar by the liquidator in a 
 winding-up in England 
 
 For making a record of any fact by this Act required or authorized to 
 be recorded by the registrar 
 
 0 
 
 0 
 
 s. d. 
 
 5 0 
 5 0 
 
 II. — By a Company not having a Share Capital. 
 
 For registration of a company whose number of members, as stated £ s. d. 
 
 in the articles, does not exceed 20 2 0 0 
 
 For registration of a company whose number of members, as stated 
 
 in the aiiicles, exceeds 20, but does not exceed 100 5 0 0 
 
 For registration of a company whose number of members, as stated 
 in the articles, exceeds 100, but is not stated to be unlimited, the 
 above fee of 51. , with an additional 5s. for every 50 members, or 
 less number than 50 members after the first 100. 
 
 For registration of a company in which the number of members is stated 
 
 in the articles to be unlimited 20 0 0 
 
 For registration of any increase on the number of members made after 
 the registration of the company in respect of every 50 members, or 
 
 less than 50 members, of that increase 0 5 0 
 
 Provided that no company shall be liable to pay on the whole a 
 greater fee than 20/. in respect of its number of members, taking 
 into account the fee paid on the first registration of the company. 
 
 For registration of any existing company, except such companies as 
 are by this Act exempted from payment of fees in respect of regis- 
 tration under this Act, the same fee as is charged for registering 
 a new company. 
 
 For registering any document by this Act required or authorized to be 
 registered, other than the memorandum or the abstract required to 
 be filed with the registrar by a receiver or manager or the state- 
 ment required to be sent to the registrar by the liquidator in a 
 
 winding-up in England 0 5 0 
 
 For making a record of any fact by this Act required or authorized to 
 
 be recorded by the registrar 0 5 0 
 
536 
 
 Appendix. 
 
 Section 108. 
 
 Section 82. 
 
 p. 471 
 
 FORM C. 
 
 Form of Statement to be published by Banking and Insurance Companies, 
 and Deposit, Provident, or Benefit Societies. 
 
 * The share capital of the company is , divided into shares of each. 
 
 The number of shares issued is . 
 
 Calls to the amount of pounds per share have been made, under which the 
 
 sum of pounds has been received. 
 
 The liabilities of the company on the first day of January (or July) were — 
 
 Debts owing to sundry persons by the company. 
 
 On judgment, 1. 
 
 On specialty, 1. 
 
 On notes or bills, 1. 
 
 On simple contracts, 1. 
 
 On estimated liabilities, 1. 
 
 The assets of the company on that day were — 
 
 Government securities [stating them]. 
 
 Bills of exchange and promissory notes, 1. 
 
 Cash at the bankers, 1. 
 
 Other securities, 1. 
 
 * If the company has no share capital, the portion of, the statement relating to capital and 
 shares must be omitted. 
 
 SECOND SCHEDULE. 
 
 THE COMPANIES (CONSOLIDATION) ACT, 1908. 
 
 Statement in lieu of Prospectus 
 filed by 
 
 Limited 
 
 pursuant to section eighty-two of the Companies (Consolidation) Act, 1908. 
 Presented for filing by 
 
 THE COMPANIES (CONSOLIDATION) ACT, 1908. 
 , Limited. 
 
 Statement in Lieu of Prospectus. 
 
 The nominal share capital of the company . . 
 
 Divided into 
 
 Shares of £ each. 
 
 >} >> >> 
 
 >» >> )> 
 
 Names, descriptions, and addresses of directors 
 or proposed directors. 
 
 Minimum subscription (if any) fixed by the 
 memorandum or articles of association on 
 which the company may proceed to allot- 
 ment. 
 
 Number and amount of shares and debentures 
 agreed to be issued as fully or partly paid- 
 up otherwise than in cash. 
 
 The consideration for the intended issue of 
 those shares and debentures. 
 
 1. shares of £ fully paid. 
 
 2. shares upon which £ 
 
 per share credited as paid. 
 
 3. debenture £ . 
 
 4. Consideration. 
 
Co mpa niks (Consolidation) Act, 1908. 
 
 Act of 1908 537 
 
 Names and addresses of (a) vendors of pro- 
 perty purchased or acquired, or proposed to 
 be (l) purchased or acquired by the com- 
 pany. 
 
 Amount (in cash, shares, or debentures) pay- 
 able to each separate vendor. 
 
 Amount (if any) paid or payable (in cash or 
 shares or debentures) for any such property, 
 specifying- amount (if any) paid or payable 
 for goodwill. 
 
 Total purchase price . . £ 
 
 Cash £ 
 
 Shares £ 
 
 Debentures £ 
 
 Goodwill £ 
 
 Amount (if any) paid or payable as commis- 
 sion for subscribing or agreeing to subscribe 
 or procuring or agreeing to procure sub- 
 scriptions for any shares or debentures in 
 the company, or 
 
 Rate of the commission 
 
 Amount paid. 
 
 , , payable. 
 
 Rate per cent. 
 
 Estimated amount of preliminary expenses , . 
 
 Amount paid or intended to be paid to any 
 promoter. 
 
 Consideration for the payment. 
 
 Name of promoter. 
 
 Amount £ . 
 
 Consideration : — 
 
 Dates of, and parties to, every material con- 
 tract (other than contracts entered into in 
 the ordinary course of the business intended 
 to be carried on by the company or entered 
 into more than two years before the filing 
 of this statement) . 
 
 Time and place at which the contracts or i 
 copies thereof may be inspected. 
 
 Names and addresses of the auditors of the 
 company (if any). 
 
 Full particulars of the nature and extent of 
 the interest of every director in the promo- 
 tion of or in the property proposed to be 
 acquired by the company, or, where the 
 interest of such a director consists in being 
 a partner in a firm, the nature and extent 
 of the interest of the firm with a statement 
 of all sums paid or agreed to be paid to 
 him or to the firm in cash or shares, or 
 otherwise, by any person either to induce 
 him to become, or to qualify him as, a 
 director, or otherwise for services rendered 
 by him or by the firm in connection with 
 the promotion or formation of the company. 
 
 Whether the articles contain any provisions 
 precluding holders of shares or debentures 
 receiving and inspecting balance sheets or 
 reports of the auditors or other reports. 
 
 Nature of the provisions. 
 
 (Signatures of the persons above-named as directors or proposed 
 directors, or of their agents authorized in writing. ) 
 
 P. 
 
 35 
 
 (a) For defini- 
 tion of vendo 
 see Section 81 (2) 
 of theCompan-’es 
 (Consolidation) 
 Act. 19.i8. 
 
 (b) See Section 
 81 (3) of the 
 Companies 
 (Consolidation) 
 Act, 1908. 
 
538 
 
 Appendix. 
 
 THIRD SCHEDULE. 
 
 FORM A. 
 
 Memorandum of Association of a Company limited by Shares. 
 
 1st. The name of the company is “The Eastern Steam Packet Company, 
 Limited.’’ 
 
 2nd. The registered office of the company will be situate in England. 
 
 3rd. The objects for which the company is established are, “ the conveyance of 
 passengers and goods in ships or boats between such places as the company may 
 from time to time determine, and the doing all such other thing’s as are incidental 
 or conducive to the attainment of the above object.” 
 
 4th. The liability of the members is limited. 
 
 5th. The share capital of the company is two hundred thousand pounds, divided 
 into one thousand shares of two hundred pounds each. 
 
 We, the several persons whose names and addresses are subscribed, are desirous 
 of being formed into a company, in pursuance of this memorandum of 
 association, and we respectively agree to take the number of shares in the 
 capital of the company set opposite our respective names. 
 
 Names, Addresses, and Descriptions of Subscribers. 
 
 Number of Shares 
 taken by 
 each Subscriber. 
 
 “ 1. John Jones, of , in the county of , merchant. . 
 
 200 
 
 “2. John Smith, of , in the county of 
 
 25 
 
 “ 3. Thomas Green, of , in the county of 
 
 30 
 
 “4. John Thompson, of , in the county of 
 
 40 
 
 “5. Caleb White, of , in the county of 
 
 15 
 
 “6. Andrew Brown, of , in the county of 
 
 5 
 
 “7. Caesar White, of , in the county of 
 
 10 
 
 Total shares taken 
 
 325 
 
 Dated the day of 19—. 
 
 Witness to the above signatures, 
 
 A. B., No. 13, Hute Street, Clerkenwell, London. 
 
 FORM B. 
 
 Memorandum and Articles of Association of a Company limited by Guarantee, 
 and not having a Share Capital. 
 
 Memorandum of Association. 
 
 1st. The name of the company is “The Mutual London Marine Association, 
 Limited.” 
 
 2nd. The registered office of the company will be situate in England. 
 
 3rd. The objects for which the company is established are, “the mutual insurance 
 of ships belonging to members of the company, and the doing all such other things 
 as are incidental or conducive to the attainment of the above object.” 
 
 4th. The liability of the members is limited. 
 
 5th. Every member of the company undertakes to contribute to the assets of the 
 company in the event of its being wound up while he is a member, or within one 
 year afterwards, for payment of the debts and liabilities of the company contracted 
 before he ceases to be a member, and the costs, charges, and expenses of winding up, 
 and for the adjustment of the rights of the contributories among themselves, such 
 amount as may be required not exceeding ten pounds. 
 
539 
 
 Companies (Consolidation) Act, 1908. Act of 1908 
 
 We, the several persons whose names and addresses are subscribed, are desirous of 
 ^ being formed into a company, in pursuance of this memorandum of association. 
 
 Names, Addresses, and Descriptions of Subscribers. 
 
 “1. John Jones, of , in the county of , merchant. 
 
 “ 2. John Smith, of , in the county of . 
 
 “ 3. Thomas Green, of , in the county of . 
 
 “ 4. John Thompson, of , in the county of . 
 
 “ 5. Caleb White, of , in the county of . 
 
 “ 6. Andrew Brown, of , in the county of . 
 
 “ 7. Caesar White, of , in the county of . 
 
 Dated the day of 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 13, Hute Street, Clerkenwell, London. 
 
 Articles of Association to accompany preceding Memorandum of Association. 
 
 Number of Members. 
 
 1. The company, for the purpose of registration, is declared to consist of five 
 hundred members. 
 
 2. The directors hereinafter mentioned may, whenever the business of the 
 association requires it, register an increase of members. 
 
 Definition of Members. 
 
 3. Every person shall be deemed to have agreed to become a member of the 
 company who insures any ship or share in a ship in pursuance of the regulations 
 hereinafter contained. 
 
 General Meetings. 
 
 4. The first general meeting shall be held at such time, not being less than one 
 month nor more than three months after the incorporation of the company, and at 
 such place, as the directors may determine. 
 
 5. A general meeting shall be held once in every year at such time (not being 
 more than fifteen months after the holding of the last preceding general meeting) 
 and place as may be prescribed by the company in general meeting, or, in default, at 
 such time in the month following that in which the anniversary of the company’s 
 incorporation occurs, and at such place, as the directors shall appoint. In default 
 of a general meeting being so held, a general meeting shall be held in the month 
 next following, and may be convened by any two members in the same manner as 
 nearly as possible as that in which meetings are to be convened by the directors. 
 
 6. The above-mentioned general meetings shall be called ordinary meetings; 
 all other general meetings shall be called extraordinary. 
 
 7. The directors may, whenever they think fit, and shall, on a requisition made in 
 writing by any five or more members, convene an extraordinary general meeting. 
 
 8. Any requisition made by the members must state the object of the meeting 
 proposed to be called, and mu-t be signed by the requisitionists and deposited at 
 the registered office of the company. 
 
 9. On receipt of the requisition the directors shall forthwith proceed to convene 
 a general meeting : if they do not proceed to cause a meeting to be held within 
 twenty -one days from the date of the requisition being so deposited, the requi- 
 sitionists or any other five members, may themselves convene a meeting. 
 
 Proceedings at General Meetings. 
 
 10. Seven days’ notice at the least, specifying the place, the day, and the hour 
 of meeting, and in case of special business the general nature of the business, shall 
 be given to the members in manner hereinafter mentioned, or in such other manner, 
 if any, as may be prescribed by the company in general meeting ; but the non- 
 receipt of such a notice by any member shall not invalidate the proceedings at any 
 general meeting. 
 
 35 (2) 
 
Appendix. 
 
 1 1 . All business shall be deemed special that is transacted at an extraordinary 
 meeting, and all that is transacted at an ordinary meeting, with the exception of the 
 consideration of the accounts, balance sheets, and the ordinary report of the directors 
 and auditors, the election of directors and otln r officers in the place of those retiring 
 by rotation, and the fixing of the remuneration of the auditors. 
 
 12. No business shall be transacted at any meeting except the declaration of 
 a dividend, unless a quorum of members is present at the commencement of the 
 business. The quorum shall be ascertained as follows (that is to say), if the members 
 of the company at the time of the meeting do not exceed ten in number, the quorum 
 shall be five ; if they exceed ten there shall be added to the above quorum one for 
 every five additional members up to fifty, and one for every ten additional members 
 after fifty, with this limitation, that no quorum shall in any case exceed thirty. 
 
 13. If within one hour from the time appointed for the meeting a quorum of 
 members is not present, the meeting, if convened on the requisition of the members, 
 shall be dissolved ; in any other case it shall stand adjourned to the same day in 
 the following week at the same time and place ; and if at such adjourned meeting a 
 quorum of members is not present, it shall be adjourned sine die. 
 
 14. The chairman (if any) of the directors shall preside as chairman at every 
 general meeting of the company. 
 
 15. If there is no such chairman, or if at any meeting he is not present at the 
 time of holding the same, the members present shall choose some one of their 
 number to be chairman of that meeting. 
 
 16. The chairman may, with the consent of the meeting, adjourn the meeting 
 from time to time and from place to place, but no business shall be transacted at 
 any adjourned meeting other than the business left unfinished at the meeting from 
 which the adjournment took place. 
 
 17. At any general meeting, unless a poll is demanded by at least three members, 
 a declaration by the chairman that a resolution has been carried, and an entry to 
 that effect in the book of proceedings of the company, shall be conclusive evidence 
 of the fact, without proof of the number or proportion of the votes recorded in 
 favour of or against the resolution. 
 
 18. If a poll is demanded in manner aforesaid, the same shall be taken in such 
 manner as the chairman directs, and the result of the poll shall be deemed to be the 
 resolution of the meeting at which the poll was demanded. 
 
 Votes of Members. 
 
 19. Every member shall have one vote and no more. 
 
 20. If any member is a lunatic or idiot he may vote by his committee, curator 
 bonis, or other legal curator. 
 
 21. No member shall be entitled to vote at any meeting unless all moneys due 
 from him to the company have been paid. 
 
 22. On a poll votes may be given either personally or by proxy. A proxy shall 
 be appointed in writing under the hand of the appointor, or if such appointor is a 
 corporation, under its common seal. 
 
 23. No person shall act as a proxy unless he is a member, or unless he is appointed 
 to act at the meeting as proxy for a corporation. 
 
 The instrument appointing him shall be deposited at the registered office of the 
 company not less than forty-eight hours before the time of holding the meeting at 
 which he proposes to vote. 
 
 24. Any instrument appointing a proxy shall be in the following form : — 
 
 Company, Limited. 
 
 , of , in the county of , being a member of the Company, 
 
 Limited, hereby appoint , of , as my proxy, to vote for me and on my 
 
 behalf at the [ordinary or extraordinary, as the case may be~\ general meeting of the 
 company, to be held on the day of , and at any adjournment thereof. 
 
 Signed this day of . 
 
 Directors. 
 
 25. The number of the directors, and the names of the first directors, shall be 
 determined by the subscribers of the memorandum of association. 
 
 26. Until directors are appointed the subscribers of the memorandum of associa- 
 tion shall for all the purposes of the Companies (Consolidation) Act, 1908, be deemed 
 to be directors. 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 541 
 
 Powers of Directors . 
 
 27. The business of the company shall be managed by the directors, who may 
 exercise all such powers of the company as are not by the Compauies (Consolidation) 
 Act, 1908, or by any statutory modification thereof for the time beinof in force, or 
 by these articles, required to be exercised by the company in general meeting ; but 
 no regulation made by the company in general meeting shall invalidate any prior 
 act of the directors which would have been valid if that regulation had not been 
 made. 
 
 Election of Directors . 
 
 28. The directors shall be elected annually by the company in general meeting. 
 
 Business of Company. 
 
 [Here insert Pules as to mode in which business of Lisurance is to be conducted .] 
 
 Audit. 
 
 29. Auditors shall be appointed and their duties regulated in accordance with 
 sections one hundred and twelve and one hundred and thirteen of the Companies 
 (Consolidation) Act, 1908, or any statutory modification thereof for the time being 
 in force, and for this purpose the said sections shall have effect as if the word 
 “ members ” were substituted for “shareholders,” and as if “first general meeting ” 
 were substituted for “ statutory meeting.” 
 
 Notices. 
 
 30. A notice may be given by the company to any member either personally, or 
 by sending it by post to him to his registered address. 
 
 31. Where a notice is sent by post, service of the notice shall be deemed to bo 
 effected by properly addressing, prepaying, and posting a letter containing the 
 notice, and unless the contrary is proved to have been effected at the time at which 
 the letter would be delivered in the ordinary course of post. 
 
 Names, Addresses, and Descriptions of Subscribers. 
 
 “1. John Jones, of , in the county of • , merchant. 
 
 “2. John Smith, of , in the county of . 
 
 “3. Thomas Green, of , in the county of . 
 
 “4. John Thompson, of , in the county of . 
 
 “ 5. Caleb "White, of , in the county of . 
 
 “6. Andrew Brown, of , in the county of . 
 
 “7. Caesar White, of , in the county of •. 
 
 Dated the day of , 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 13, Hute Street, Clerkenwell, London. 
 
 FORM C. 
 
 Memorandum and Articles of Association of a Company limited by Guarantee, 
 and having a Share Capital. 
 
 Memorandum of Association. 
 
 1st. The name of the company is “ The Highland Hotel Company, Limited.” 
 
 2nd. The registered office of the company will be situate in Scotland. 
 
 3rd. The objects for which the company is established are “the facilitating 
 travelling in the Highlands of Scotland by providing hotels and conveyances by 
 sea and by land for the accommodation of travellers, and the doing all such other 
 things as are incidental or conducive to the attainment of the above object.” 
 
 4th. The liability of the members is limited. 
 
 5th. Every member of the company undertakes to contribute to the assets of the 
 company in the event of its being wound up while he is a member, or within one 
 year afterwards, for payment of the debts and liabilities of the company, contracted 
 
542 
 
 Appendix. 
 
 before he ceases to be a member, and the costs, charges, and expenses of winding-up 
 the same and for the adjustment of the rights of the contributories amongst 
 themselves, such amount as may be required, not exceeding twenty pounds. 
 
 6th. The share capital of the company shall consist of five hundred thousand 
 pounds, divided into five thousand shares of one hundred pounds each. 
 
 We, the several persons whose names and addresses are subscribed, are desirous 
 of being formed into a company, in pursuance of this memorandum of asso- 
 ciation, and we respectively agree to take the number of shares in the capital 
 of the company set opposite our respective names. 
 
 Names, Addresses, and Description of Subscribers. 
 
 Number of Shares 
 taken by 
 each Subscriber. 
 
 <l 1. John Jones, of , in the county of 
 
 200 
 
 <l 2. John Smith, of , in the county of 
 
 25 
 
 “3. Thomas Green, of , in the county of 
 
 30 
 
 “4. John Thompson, of , in the county of 
 
 40 
 
 “6. Caleb White, of , in the county of 
 
 15 
 
 ”6. Andrew Brown, of , in the county of 
 
 5 
 
 “7. Caesar White, of , in the county of 
 
 10 
 
 Total sha,res taken 
 
 325 
 
 Dated the day of , 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 13, Hute Street, Clerkenwell, London. 
 
 Articles of Association to accompany preceding Memorandum of Association. 
 
 1. The directors may, with the sanction of the company iu general meeting, 
 reduce the amount of shares in the company. 
 
 2 The directors may, with the sanction of the company in general meeting, 
 cancel any shares belonging to the company. 
 
 3. All the articles of Table A. of the Companies (Consolidation) Act, 1908, 
 shall be deemed to be incorporated with these articles, and to apply to the company. 
 
 Names, Addresses, and Description of Subscribers. 
 
 “ 1. John Jones, of , in the county of , merchant. 
 
 “ 2. John Smith, of , in the county of . 
 
 “3. Thomas Green, of , in the county of . 
 
 “ 4. John Thompson, of , in the county of . 
 
 “5, Caleb White, of , in the county of . 
 
 “6. Andrew Brown, of , in the county of . 
 
 “7. Caesar White, of , in the county of . 
 
 Dated the day of , 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 13, Hute Street, Clerkenwell, London. 
 
 FORM D. 
 
 Memorandum: and Articles of Association of an unlimited Company having a 
 
 Share Capital. 
 
 Memorandum of Association. 
 
 1st. The name of the company is “ The Patent Stereotype Company.” 
 
 2nd. The registered office of the company will be situate in England. 
 
Act of 1908 
 
 543 
 
 Companies (Consolidation) Act, 1908. 
 
 3rd. The objects for which the company is established are “the working of a 
 patent method of founding and casting stereotype plates, of which method John 
 Smith, of London, is the sole patentee.” 
 
 We, the several persons whose names are subscribed, are desirous of being formed 
 into a company, in pursuance of this memorandum of association, and we re- 
 spectively agree to take the number of shares in the capital of the company set 
 opposite our respective names. 
 
 Names, Addresses, and Description of Subscribers. 
 
 Number of Shares 
 taken 
 
 by each Subscriber. 
 
 “ 1. John Jones, of , in the county of 
 
 3 
 
 “ 2. John Smith, of , in the county of 
 
 2 
 
 “3. Thomas Green, of , in the county of 
 
 1 
 
 “4. John Thompson, of , in the county of 
 
 2 
 
 “5. Caleb White, of , in the county of 
 
 2 
 
 “6. Andrew Brown, of , in the county of 
 
 1 
 
 “7. Abel Brown, of , in the county of 
 
 1 
 
 Total shares taken 
 
 12 
 
 Dated the day of , 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 20, Bond Street, London. 
 
 Articles of Association to accompany the preceding Memorandum of Association. 
 
 1. The share capital of the company is two thousand pounds, divided into twenty 
 shares of one hundred pounds each. 
 
 2. All the articles of Table A. of the Companies (Consolidation) Act, 1908 shall 
 be deemed to be incorporated with these articles, and to apply to the company. 
 
 Names, Addresses, and Description of Subscribers. 
 
 “1, John Jones, of , in the county of , merchant. 
 
 “2. John Smith, of , in the county of . 
 
 “3. Thomas Green, of , in the county of . 
 
 “4. John Thompson, of , in the county of . 
 
 “5. Caleb White, of , in the county of . 
 
 “6. Andrew Brown, of , in the county of . 
 
 “7. Abel Brown, of , in the county of . 
 
 Dated the day of , 19 — . 
 
 Witness to the above signatures, 
 
 A. B., No. 20, Bond Street, London. 
 
544 
 
 Appendix, 
 
 Section 26. 
 
 
 FORM E. as required by Part II. of the Act. 
 
 Summary of Share Capital and Shares of the Company, Limited, made up 
 
 to the day of , 19 — (being the fourteenth day after the date of the 
 
 first ordinary general meeting in 19 — ). 
 
 ( shares of £ each. 
 
 shares of £ each. 
 
 Total number of shares taken up (a) to the day of , 19 — (which number 
 
 must agree with the total shown in the list as held by existing members) . 
 
 Number of shares issued subject to payment wholly in cash . 
 
 * Number of shares issued as fully paid up otherwise than in cash . 
 
 Number of shares issued as partly paid up to the extent of per share 
 
 otherwise than in cash . 
 
 (b) There has been called up on each of shares £ . 
 
 There has been called up on each of shares £ . 
 
 (b) There has been called up on each of shares £ . 
 
 (c) Total amount of calls received, including payments on application and 
 allotment £ ~. 
 
 Total amount (if any) agreed to be considered as paid on shares which 
 
 have been issued as fully paid up otherwise than in cash £ . 
 
 Total amount (if any) agreed to be considered as paid on shares which 
 
 have been issued as partly paid up to the extent of per share £ . 
 
 Total amount of calls unpaid £ . 
 
 Total amount (if any) of sums paid by way of commission in respect of shares 
 or debentures or allowed by way of discount since date of last summary 
 £ . 
 
 Total amount (if any) paid on ( d ) shares forfeited £ . 
 
 Total amount of shares and stock for which share warrants are outstanding 
 £ . 
 
 Total amount of share warrants issued and surrendered respectively since 
 date of last summary £ . 
 
 Number of shares or amount of stock comprised in each share warrant . 
 
 Total amount of debt due from the company in respect of all mortgages and 
 charges which are required (or, in the case of a company registered in 
 Scotlaud, which, if the company had been registered in England, would be 
 required) to be registered with the registrar of companies, or which would 
 require registration if created after the first day of J uly nineteen hundred 
 and eight £ . 
 
 Statement in the form of a balance sheet made up to the day of , 19 — , 
 
 containing the particulars of the capital, liabilities, and assets of the 
 company. 
 
 (a) When there are shares of different kinds or amounts ( e.g ., Preference and Ordinary, or 10Z. 
 or 51.) state the numbers and nominal values separately. 
 
 ( b ) Where various amounts have been called or there are shares of different kinds state them 
 separately. 
 
 (c) Include what has been received on forfeited as well as on existing shares. 
 
 (d) State the aggregate number of shares forfeited (if any). 
 
 The Return must be signed at the end by the manager or secretary of the 
 company. 
 
 Presented for filing by 
 
545 
 
 Companies (Consolidation) Act, 1908. Act of 1908 
 
 List of persons holding" shares in the Company, Limited, on the day of 
 
 , 19 — } and of persons who have held shares therein at any time since the 
 
 date of the last return, showing their Names and Addresses, and an Account of 
 the Shares so held. 
 
 Folio in 
 Regis- 
 ter 
 
 Ledger 
 
 con- 
 
 taining 
 
 parti- 
 
 culars. 
 
 Names, Addresses, and 
 Occupations. 
 
 Account of Shares. 
 
 Re- 
 
 marks. 
 
 Sur- 
 
 name. 
 
 Chris- 
 
 tian 
 
 Name. 
 
 Ad- 
 
 dress. 
 
 Occu- 
 
 pation. 
 
 * Num- 
 ber of 
 Shares 
 held by 
 existing 
 Mem- 
 bers 
 at date 
 of Re- 
 turn. 
 
 tParticulars of 
 Shares transferred 
 since th« date of 
 the last Return by 
 Persons who are 
 still Members. 
 
 tParticulars of 
 Shares transferred 
 since the date of 
 the last Return by 
 Persons who have 
 ceased to be 
 Members. 
 
 Num- 
 ber. + 
 
 Date of 
 Registra- 
 tion of 
 Transfer. 
 
 Num- 
 ber. + 
 
 Date of 
 Registra- 
 tion of 
 Transier. 
 
 
 
 
 
 
 
 
 
 
 
 
 * The aggregate number of shares held, and not the distinctive numbers, must be stated, and 
 the column must be added up throughout so as to make one total to agree with that stated in the 
 summary to have been taken up. 
 
 + When the shares are of different classes these columns may be subdivided so that the number 
 of each class held or transferred may be shown separately. 
 
 t The date of registration of each transfer should be given as well as the number of shares 
 transferred on each date. The particulars should be placed opposite the name of the transferor 
 and not opposite that of the transferee, but the name of the transferee may be inserted in the 
 “ Remarks ” column immediately opposite the particulars of each transfer. 
 
 Names and Addresses of the persons who 
 the day of 19 — . 
 
 are the Directors of the Limited on 
 
 Names. 
 
 Addresses. 
 
 
 
 Note. — Banking companies must add a list of all their places of business. 
 
 Signature . 
 
 (State whether manager or secretary) . 
 
 FORM F. 
 
 Licence to hold Lands. Section 20. 
 
 The Board of Trade hereby license the to hold the lands hereunder described 
 
 (insert description of lands) [or to hold lands not exceeding in the whole acres]. 
 
 The conditions of this licence are [insert conditions , if any '] . 
 
546 
 
 Appendix. 
 
 Section 181. 
 
 s. 169. 
 s. 174. 
 
 s. 219. 
 s. 120. 
 s. 227. 
 
 88. 140, 142, 
 144, 266, 270, 
 271. 
 
 as. 149, 186, 
 202 . 
 s. 151. 
 
 8. 164. 
 s. 176. 
 s. 151 (5). 
 s. 199. 
 
 Section 281. 
 
 s. 17. 
 s. 72. 
 
 8. 87. 
 s. 88. 
 s. 65. 
 s. 26. 
 
 88. 112, 113. 
 s. 82. 
 s. 93. 
 s. 95. 
 s. 187. 
 s. 188. 
 s. 274. 
 s. 283. 
 
 FOUBTH SCHEDULE. 
 
 PART I. 
 
 Orders Pronounced in Vacation in Scotland which are to be Final. 
 Orders : — 
 
 As to time for proving claims. 
 
 As to the attendance of, and production of documents by, persons indebted to, 
 or having property of, or information as to the affairs or property of, a company. 
 
 As to meetings for ascertaining wishes of creditors or contributories. 
 
 As to summoning meetings of creditors or contributories where a compromise 
 is proposed. 
 
 As to the examination of witnesses in regard to the property or affairs of a 
 company. 
 
 PART II. 
 
 Orders Pronounced in Vacation in Scotland which are to take effect until 
 Reclaiming Note disposed of. 
 
 Orders : — 
 
 Restraining or permitting commencement or continuance of legal proceedings. 
 Appointing an official liquidator to fill a vacancy, or appointing (except to fill 
 a vacancy caused by the removal of a liquidator by the Court) a liquidator for a 
 winding up voluntarily or under supervision. 
 
 Sanctioning the exercise of any power by an official liquidator other than the 
 power to appoint a law agent or to sell property. 
 
 Requiring the delivery of property or documents to the official liquidator. 
 
 As to the arrest and detention of an absconding contributory and his property. 
 Limiting the powers of provisional official liquidators. 
 
 For continuance of winding-up under supervision. 
 
 FIFTH SCHEDULE. 
 
 Provisions referred to in Section 281 of the Act. 
 
 Provisions relating to — 
 
 The conclusiveness of certificates of incorporation ; 
 
 Restrictions on appointments or advertisement of directors 
 Restrictions on commencement of business ; 
 
 Returns as to allotments ; 
 
 Statutory meetings ; 
 
 The particulars as to directors and mortgage debt and the statement in the 
 form of a balance sheet in the annual summary ; 
 
 The appointment and remuneration, and powers and duties, of auditors ; 
 Obligations of companies where no prospectus is issued ; 
 
 Registration of mortgages and charges in England and Ireland ; 
 
 Filing of accounts of receiver and manager ; 
 
 Notice by liquidator in voluntary winding-up of his appointment ; 
 
 Rights of creditors in a voluntary winding-up ; 
 
 Requirements as to companies established outside the United Kingdom ; and 
 Annual report by Board of Trade. 
 
Companies (Consolidation) Act, 1908. 
 
 Act of 1908 547 
 
 SIXTH SCHEDULE. 
 
 PART I. 
 
 Enactments repealed. 
 
 Session and 
 Chapter. 
 
 Short Title of Act. 
 
 Extent of Repeal. 
 
 25 & 26 Viet, 
 c. 89. 
 
 The Companies Act, 1862. . 
 
 The whole Act. 
 
 27 Viet. c. 19. 
 
 The Companies Seals Act, 
 1864. 
 
 The whole Act. 
 
 30 & 31 Viet, 
 c. 131. 
 
 The Companies Act, 1867. . 
 
 The whole Act. 
 
 32 & 33 Viet, 
 c. 19. 
 
 The Stannaries Act, 1869. . 
 
 Sections twenty-five, twenty-six, and 
 thirty-four. 
 
 33 & 34 Viet, 
 c. 104. 
 
 The J oint Stock Companies 
 Arrangement Act, 1870. 
 
 The whole Act. 
 
 37 & 38 Viet, 
 c. 94. 
 
 Conveyancing (Scotland) 
 
 Act, 1874. 
 
 Section fifty- six. 
 
 38 & 39 Viet, 
 c. 77. 
 
 The Supreme Court of J udi- 
 cature Act, 1875. 
 
 Section ten, so far as relates to the 
 winding up of companies. 
 
 40 & 41 Viet, 
 c. 26. 
 
 The Companies Act, 1877. . 
 
 The whole Act. 
 
 40 & 41 Viet, 
 c. 57. 
 
 The Supreme Court of Judi- 
 cature (Ireland) Act, 1877. 
 
 Sub -section (1) of section twenty-eight, 
 so far as relates to the winding up 
 of companies. 
 
 42 & 43 Viet, 
 c. 76. 
 
 The Companies Act, 1879. . 
 
 The whole Act. 
 
 43 Viet. c. 19. 
 
 The Companies Act, 1880. . 
 
 The whole Act. 
 
 46 & 47 Viet, 
 c. 30. 
 
 The Companies (Colonial 
 Registers) Act, 1883. 
 
 The whole Act. 
 
 49 Viet. c. 23. 
 
 The Companies Act, 1886. . 
 
 The whole Act. 
 
 50 & 51 Viet, 
 c. 43. 
 
 The Stannaries Act, 1887 . . 
 
 Sections nine and ten ; section thirteen 
 from “Upon the winding up” to 
 the end of the section (being para- 
 graph (2)) ; and section thirty -one. 
 
 50 & 51 Viet, 
 c. 47. 
 
 The Trustee Savings Banks 
 Act, 1887. 
 
 Section three. 
 
 51 & 52 Viet, 
 c. 62. 
 
 The Preferential Payments 
 in Bankruptcy Act, 1888. 
 
 Sections one, two, and three, so far as 
 they relate to companies. 
 
 Section 286. 
 
548 
 
 Appendix. 
 
 Session and 
 Chapter. 
 
 Short Title of Act. 
 
 Extent of Repeal. 
 
 52 & 53 Viet, 
 c. 42. 
 
 The Revenue Act, 1889 . . 
 
 Section eighteen. 
 
 52 & 53 Viet, 
 c. 60. 
 
 The Preferential Payments 
 in Bankruptcy (Ireland) 
 Act, 1889. 
 
 Section four, so far as relates to com 
 panies. 
 
 53 & 54 Viet, 
 c. 62. 
 
 The Companies (Memo- 
 randum of Association) 
 Act, 1890. 
 
 The whole Act. 
 
 53 & 54 Viet, 
 c. 63. 
 
 The Companies (Winding- 
 up) Act, 1890. 
 
 The whole Act. 
 
 53 & 54 Viet, 
 c. 64. 
 
 The Directors Liability Act, 
 1890. 
 
 The whole Act. 
 
 56 & 57 Viet, 
 c. 58. 
 
 The Companies (Winding- 
 up) Act, 1893. 
 
 The whole Act. 
 
 60 & 61 Viet, 
 c. 19. 
 
 The Preferential Payments 
 in Bankruptcy Amend- 
 ment Act, 1897. 
 
 The whole Act. 
 
 61 & 62 Viet, 
 c. 26. 
 
 The Companies Act, 1898 . , 
 
 The whole Act. 
 
 63 & 64 Viet, 
 c. 48. 
 
 The Companies Act, 1900. . 
 
 The whole Act. 
 
 7 Edw. 7, 
 c. 24. 
 
 The Limited Partnerships 
 Act, 1907. 
 
 Sub -section (4) of section six. 
 
 7 Edw. 7, 
 c. 50. 
 
 The Companies Act, 1907. . 
 
 j The whole Act. 
 
 8 Edw. 7, 
 c. 12. 
 
 The Companies Act, 1908 . . 
 
 The whole Act. 
 
 part II. 
 
 Section 286. An Act to regulate Joint Stock Banks in England (7 & 8 Yict. c. 113), s. 47. 
 
 Existing com- Every company of more than six persons established on the sixth day of May 
 
 panies to have one thousand eight hundred and forty-four, for the purpose of carrying on the 
 the powers of trade or business of bankers within the distance of sixty-five miles from London, 
 suing and and not within the provisions of the Act passed in the session of the seventh and 
 being sued. eighth years of Queen Victoria, chapter one hundred and thirteen, intituled “An 
 Act to regulate J oint Stock Banks in England, ’ ’ shall have the same powers and 
 privileges of suing and being sued in the name of any one of the public officers 
 of such co-partnership as the nominal plaintiff, petitioner, or defendant on behalf 
 of such co-partnership ; and all judgments, decrees, and orders made and obtained 
 in any such suit may be enforced in like manner as is provided with respect to 
 such companies carrying on the said trade or business at any place in England 
 
549 
 
 Companies (Consolidation) Act, 1908. Act of 1908 
 
 exceeding- the distance of sixty -five miles from London under the provisions of 
 the Country Bankers Act, 1826, provided that such first-mentioned company shall 
 make out and deliver from time to time to the Commissioners of Inland Revenue 
 the several accounts or returns required by the last -mentioned Act, and all the 
 provisions of the last-recited Act as to such accounts or returns shall be taken 
 to apply to the accounts or returns so made out and delivered by such first- 
 mentioned companies as if they had been originally included in the provisions 
 of the last-recited Act. 
 
 The Joint Stock Banking Companies Act, 1857. 
 
 Pabt op s. 12. 
 
 Notwithstanding anything contained in any Act passed in the Session holden Power to form 
 in the seventh and eighth years of Queen Victoria, chapter one hundred and banking part- 
 thirteen, and intituled “An Act to regulate Joint Stock Banks in England,” or nerships of 
 in any other Act, it shall be lawful for any number of persons, not exceeding ten persons, 
 ten, to carry on in partnership the business of banking, in the same manner and 
 upon the same conditions in all respects as any company of not more than six persons 
 could before the passing of the Joint Stock Banking Companies Act, 1857, have 
 carried on such business. 
 
 Note on Capital Duty. 
 
 By sect. 112 of the Stamp Act, 1891, a statement of the amount which is to form 
 the nominal share capital of any company to be registered with limited liability 
 shall be delivered to the registrar of joint stock companies in England, Scotland, 
 or Ireland, and a statement of the amount of any increase of registered capital of 
 any company now registered or to be registered with limited liability shall be 
 delivered to the said registrar, and every such statement shall be charged with an 
 ad valorem stamp duty of 2s. for every 100/., and any fraction of 100/. over any 
 multiple of 100/. of the amount of such capital or increase of capital as the case 
 may be. 
 
 By the Finance Act, 1899 (62 & 63 Viet. c. 9), s. 7, 5s. is substituted for 2s. as 
 the ad valorem stamp duty by sects. 112 and 113 of the Stamp Act, 1891. 
 
 Sect. 12 of the Finance Act, 1896 (59 & 60 Viet. c. 28), extends the provisions of 
 sect. 113 of the Stamp Act, 1891, to certain other corporations and companies. 
 
 The Revenue Act, 1903 (3 Edw. 7, c. 46), s. 5, provides that the statement of the 
 amount of any increase of registered capital of any company registered under the 
 Companies Acts, 1862 to 1900, which is required by sect. 112 of the Stamp Act, 
 1891, to be delivered to the registrar of joint stock companies, shall be delivered, 
 duly stamped with the duty charged thereon, within fourteen days after the passing 
 of the resolution by which the registered capital is increased. 
 
 In Att.-Gen. v. Anglo- Argentine Tramways Co., Ltd., (1909) 1 K. B. 677, the 
 company had passed a special resolution authorizing the directors to increase the 
 capital by a sum not exceeding 5,000,000/. by the creation and issue from time to 
 time of new ordinary shares of 51. each, and it was held that the whole of such 
 5,000,000/. was chargeable with ad valorem duty as an increase of registered capital, 
 though in fact the directors had, pursuant to the resolution, only created and issued 
 capital to the amount of 2,000,000/. The grounds on which the learned judge 
 (Channell, J.) arrived at this conclusion appear to be based on a complete misappre- 
 hension of the scheme of operation of the Companies Act, 1862, in regard to a 
 company’s capital. The learned judge appears to have thought that the capital of 
 a company was not a mass of shares created and existing, but merely a figure 
 denoting the maximum beyond which the company might not go. It is submitted 
 that this is not the correct view, and that a company’s capital is not increased until 
 it is brought into actual existence, and that a mere authority to increase does not 
 operate as an increase until that authority is exercised. See Campbell's Case , 9 Ch. 1. 
 
550 
 
 Appendix. 
 
 Amendment 
 of the law 
 relating to 
 private com- 
 panies. 
 
 8 Edw. 7, 
 c. 69. 
 
 Short title 
 and con- 
 struction. 
 
 COMPANIES ACT, 1913. 
 
 3 & 4 Geo. 5, c. 25. 
 
 An Act to amend the provisions of the Companies (Consolidation) 
 Act, 1908, with respect to private Companies. 
 
 [15th August, 1913.] 
 
 Be it enacted by the King’s most Excellent Majesty, by and with the advice and 
 consent of the Lords Spiritual and Temporal, and Commons, in this present 
 Parliament assembled, and by the authority of the same, as follows: — 
 
 1. — (1) Where the articles of a company include the provisions which, by 
 section one hundred and twenty-one of the Companies (Consolidation) Act, 
 1908, as amended by this Act, are required to be included therein in order to 
 constitute the company a private company for the purposes of that Act, and 
 default is made in complying with any of those provisions, the company shall 
 cease to be entitled to the privileges and exemptions conferred on private 
 companies under the provisions of that Act mentioned in the Schedule to this 
 Act, and thereupon the said provisions shall apply to the company as if it were 
 not a private company: 
 
 Provided that the Court, on being satisfied that the failure to comply with the 
 conditions was accidental or due to inadvertence or to some other sufficient 
 cause, or that on other grounds it is just and equitable to grant relief, may, 
 on the application of the company or any other person interested and on such 
 terms and conditions as seem to the Court just and expedient, order that the 
 company be relieved from such consequences as aforesaid. 
 
 (2) In sub-section (1) of the said section one hundred and twenty-one of the 
 Companies (Consolidation) Act, 1908, for paragraph (b) the following para- 
 graph shall be substituted: — 
 
 “ (b) limits the number of its members (exclusive of persons who are in the 
 employment of the company and of persons who having been formerly 
 in the employment of the company, were while in such employment 
 and have continued after the determination of such employment to 
 be members of the company) to fifty; and” 
 
 (3) Every private company shall send with the annual list of members and 
 summary required to be sent under section twenty-six of the Companies (Con- 
 solidation) Act, 1908, a certificate signed by a director or the secretary that 
 the eompany has not, since the date of the last return, or in the case of a 
 first return since the date of the incorporation of the company, issued any 
 invitation to the public to subscribe for any shares or debentures of the com- 
 pany; and, where the list of members discloses the fact that the number of 
 members of the company exceeds fifty, also a certificate so signed that such 
 excess consists wholly of persons who under section one hundred and twenty-one 
 of that Act, as amended by this section, are to be excluded in reckoning the 
 number of fifty. 
 
 This Act may be cited as the Companies Act, 1913, and shall be construed 
 as one with the Companies (Consolidation) Act, 1908, and that Act and this 
 Act may be cited together as the Companies Acts, 1908 and 1913. 
 
Companies Act, 1918. 
 
 Act of 1913 551 
 
 SCHEDULE. 
 
 Provisions of the Companies (Consolidation) Act, 1908. 
 
 Sub-section (3) of section twenty-six (which relates to the making of an 
 annual return in the form of a balance sheet). 
 
 Section one hundred and fourteen (which relates to the right of preference 
 shareholders and debenture holders to receive and inspect balance sheets and 
 reports) . 
 
 Section one hundred and fifteen (which relates to the minimum number of 
 members with which a company may continue to carry on business). 
 
 Paragraph (iv) of section one hundred and twenty-nine (which makes the 
 reduction of the number of members of a company below the minimum a ground 
 for the winding up of the company). 
 
 Section 1. 
 
552 
 
 Appendix 
 
 S. 2 of 
 Assurance 
 Act, 1870. 
 Companies 
 to which Act 
 applies. 
 
 S. 2 of 1870. 
 Deposit. 
 
 THE ASSURANCE COMPANIES ACT, 1909. 
 
 9 Edw. 7, c. 49. 
 
 An Act to consolidate and amend and extend to other Companies 
 carrying on Assurance or Insurance business the Law relating 
 to Life Assurance Companies, and for other purposes connected 
 therewith. 
 
 Be it enacted by the King’s most Excellent Majesty, by and with the advice and 
 consent of the Lords Spiritual and Temporal, and Commons, in this present Par- 
 liament assembled, and by the authority of the same, as follows : — 
 
 Companies to which Act applies. 
 
 1. This Act shall apply to all persons or bodies of persons, whether corporate or 
 unincorporate, not being registered under the Acts relating to friendly societies or to 
 trade unions (which persons and bodies of persons arehereinatter referred to as assurance 
 companies), whether established before or after the commencement of this Act and 
 whether established within or without the United Kingdom, who carry on within 
 the United Kingdom assurance business of all or any of the following classes : — 
 
 (a) Life assurance business ; that is to say, the issue of, or the undertaking of 
 
 liability under, policies of assurance upon human life, or the granting of 
 annuities upon human life ; 
 
 (b) Fire insurance business ; that is to say, the issue of, or the undertaking of 
 
 liability under, policies of insurance against loss by or incidental to fire ; 
 
 (c) Accident insurance business ; that is to say, the issue of, or the undertaking 
 
 of liability under, policies of insurance upon the happening of personal 
 accidents, whether fatal or not, disease, or sickness, or any class of personal 
 accidents, disease, or sickness ; 
 
 (d) Employers’ liability insurance business ; that is to say, the issue of, or the 
 
 undertaking of liability under, policies insuring employers against liability 
 to pay compensation or damages to workmen in their employment ; 
 
 (e) Bond investment business ; that is to say, the business of issuing bonds or 
 
 endowment certificates by which the company, in return for subscriptions 
 payable at periodical intervals of two mouths or less, contract to pay the 
 bondholder a sum at a future date, and not being life assurance business 
 as hereinbefore defined ; 
 
 subject as respects any class of assurance business to the special provisions of this 
 Act relating to business of that class : 
 
 A company registered under the Companies Acts which transacts assurance 
 business of any such class as aforesaid in any part of the world shall for the pur- 
 poses of this provision be deemed to be a company transacting such business within 
 the United Kingdom. 
 
 General. 
 
 2. — (1) Every assurance company shall deposit and keep deposited with the 
 Paymaster- General for and on behalf of the Supreme Court the sum of twenty 
 thousand pounds. 
 
 (2) The sum so deposited shall be invested by the Paymaster- General in such of 
 the securities usually accepted by the Court for the investment of funds placed 
 under its administration as the company may select, and the interest accruing due 
 on any such securities shall be paid to the company. 
 
 (3) The deposit may be made by the subscribers of the memorandum of asso- 
 ciation of the company, or any of them, in the name of the proposed company, 
 and, upon the incorporation of the company, shall be deemed to have been made by, 
 and to be part of the assets of, the company, and the registrar shall not issue a 
 certificate of incorporation of the company until the deposit has been made. 
 
 (4) Where a company carries on, or intends to carry on, assurance business of more 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 553 
 
 than one class, a separate sum of twenty thousand pounds shall be deposited 
 and kept deposited under this section as respects each class of business, and the 
 deposit made in respect of any class of business in respect of which a separate 
 assurance fund is required to be kept shall be deemed to form part of that fund, and 
 all interest accruing 1 due on any such deposit or the securities in which it is tor the 
 time being 1 invested shall be carried by the company to that fund. 
 
 (5) The Pavmaster-General shall not accept a deposit except on a warrant of the 
 Board of Trade. 
 
 (6) The Board of Trade may make rules with respect to applications for warrants, 
 the payment of deposits, and the investment thereof or dealing 1 therewith, the 
 deport of stocks or other securities in lieu of money, the payment of the interest or 
 dividends from time to time accruing 1 due on any securities in which dep -sits are for the 
 time being invested, and the withdrawal and transfer of deposits, and the rules so 
 made shall have effect as if they were enacted in this Act, and shall be laid before 
 Parliament as soon as may be after they are made. 
 
 (7) This section shall apply to an assurance company registered or having its 
 head office in Ireland, subject to the following modifications: — 
 
 References to the Supreme Court shall be construed as references to the 
 Supreme Court of Judicature in Ireland, and references to the Pavmaster- 
 General shall be construed as references to the Accountant-General of the 
 last-mentioned Court. 
 
 3. — (1) In the case of an assurance company transacting other business besides 
 that of assurance or transacting more than one class of assurance business, a separate 
 account shall be kept of all receipts in respect of the assurauce business or of each 
 class of assurance business, and the receipts in respect of the assurance buduess, or, 
 in the case of a company carrying on more than one class of assurance busiuess, of 
 each class of business, shall be carried to and form a separate assurance fund with 
 an appropriate name : 
 
 Provided that nothing in this section shall require the investments of any such 
 fund to be kept separate from the investments of any other fund. 
 
 (2) A fund of any particular class shall be as absolutely the security of the policy 
 holders of that class as though it belonged to a company earning on no other 
 business than assurance business of that class, and shall not be liable for any con- 
 tracts of the company for which it would not have been liable had the busiuess of 
 the company been only that of assurance of that class, and shall not be applied, 
 directly or indirectly, for any purposes other than those of the class of business to 
 which the fund is applicable. 
 
 4. Every assurance company shall, at the expiration of each financial year of the 
 company, prepare — 
 
 (a) A revenue account for the year in the form or forms set forth in the First 
 
 Schedule to this Act and applicable to the class or classes of assurance 
 business carried on by the company ; 
 
 (b) A profit and loss account in the torm set forth in the Second Schedule to this 
 
 Act, except where the company carries on assurance business of one class 
 only and no other business ; 
 
 (c) A. balance sheet in the form set forth in the Third Schedule to this Act. 
 
 5. — (1) Every assurance company shall, once in every five years, or at such shorter 
 intervals as may be prescribed by the instrument constituting the company, or by 
 its regulations or byelaws, cause an investigation to be made into its financial con- 
 dition, including a valuation of its liabilities, by an actuary, and shall cause an 
 abstract of the report of such actuary to be made in the form or forms set forth in 
 the Fourth Schedule to this Act and applicable to the class or classes of assurance 
 business carried on by the company. 
 
 (2) The foregoing provisions of this section shall also apply whenever at any other 
 time an investigation into the financial condition of an assurance company is made 
 with a view to the distribution of profits, or the results of which are made public. 
 
 6. Every assurance company shall prepare a statement of its assurance business 
 at the date to which the accounts of the company are made up for the purposes of 
 any such investigation as aforesaid in the form or forms set forth in the Fifth 
 Schedule to this Act and applicable to the class or classes of assurance business 
 carried on by the company : Provided that, if the investigation is made annually by 
 any company, the company may prepare such a statement at any time, so that it be 
 made at least once in every five years. 
 
 S. 4 of 1870. 
 Separation 
 of funds. 
 
 S. 5 of 1870. 
 Accounts 
 and balance 
 sheets. 
 
 S. 70 of 1870. 
 Actuarial 
 report and 
 abstract. 
 
 S. 8 of 1870. 
 Statement 
 of assurance 
 business. 
 
 V. 
 
 36 
 
554 
 
 Appendix. 
 
 S. 5 of 1870. 
 Deposit of 
 accounts, &c. 
 with Board 
 of Trade. 
 
 8 Edw. 7, 
 c. 69. 
 
 S. 6 of 1870. 
 Right of share- 
 holders, &c. to 
 copies of 
 accounts, &c. 
 Audit of 
 accounts. 
 
 8 & 9 Viet. c. 16. 
 
 S. 7 of 1870. 
 List of 
 shareholders. 
 
 S. 13 of 1870. 
 Deed of 
 settlement. 
 
 Publication of 
 authorized, sub- 
 scribed, and 
 paid up capital. 
 
 8. 14 of 1870. 
 Amalgamation 
 or transfer, 
 p. 384 
 
 7. — (1) Every account, balance sheet, abstract, or statement hereinbefore required 
 to be made shall be printed, and four copies thereof, one of which shall be signed by 
 the chairman aud two directors of the company and by the principal officer of the 
 company and, if the company has a managing director, by the managing director, 
 shall be deposited at the Board of Trade within six months after the close of the 
 period to which the account, balance sheet, abstract, or statement relates : Provided 
 that, if in any case it is made to appear to the Board of Trade that the circum- 
 stances are such that a longer period than six months should be allowed, the Board 
 may extend that period by such period not exceeding three months as they think fit. 
 
 (2) The Board of Trade shall consider the accounts, balance sheets, abstracts, and 
 statements so deposited, and, if any such account, balance sheet, abstract, or 
 statement appears to the Board to be inaccurate or incomplete in any respect, the 
 Board shall communicate with the company with a view to the correction of any 
 such inaccuracies and the supply of deficiencies. 
 
 (3) There shall be deposited with every revenue account and balance sheet of a 
 company any report on the affairs of the company submitted to the shareholders or 
 policy holders of the company in respect of the financial year to which the account 
 and balance sheet relates. 
 
 (4) Where an assurance company registered under the Companies Acts in any 
 year deposits its accounts and balance sheet in accordance with the provisions of 
 this section, the company may, at the same time, send to the registrar a copy of 
 such accounts and balance sheet ; and, where such copy is so sent, it shall not be 
 necessary for the company to send to the registrar a statement in the form of a 
 balance sheet as required by sub- section (3) of section twenty- six of the Companies 
 (Consolidation) Act, 1908, and the copy of the accounts and balance sheet so sent 
 shall be dealt with in all respects as if it were a statement sent in accordance with 
 that sub-section. 
 
 8. A printed copy of the last -deposited accounts, balance sheet, abstract, or 
 statement, shall on the application of any shareholder or policy holder of the 
 company be forwarded to him by the company by post or otherwise. 
 
 9 . Where the accounts of an assurance company are not subject to audit in 
 accordance with the provisions of the Companies (Consolidation) Act, 1908, or the 
 Companies Clauses Consolidation Act, 1845, relating to audit, the accounts of the 
 company shall be audited annually in such manner as the Board of Trade may 
 prescribe, and the regulations made for the purpose may apply to any such company 
 the provisions of the Companies (Consolidation) Act, 1908, relating to audit, subject 
 to such adaptations and modifications as may appear necessary or expedient. 
 
 10 . Every assurance company which is not registered under the Companies Acts, 
 or which has not incorporated in its deed of settlement section ten of the Companies 
 Clauses Consolidation Act, 1845, shall keep a “ Shareholders’ Address Book,” in 
 accordance with the provisions of that section, and shall, on the application of any 
 shareholder or policy holder of the company, furnish to him a copy of such book, 
 on payment of a sum not exceeding sixpence for every hundred words required to 
 be copied. 
 
 11 . Every assurance company which is not registered under the Companies Acts 
 shall cause a sufficient number of copies of its deed of settlement or other instru- 
 ment constituting the company to be printed, and shall, on the application of any 
 shareholder or policy holder of the company, furnish to him a copy of such deed of 
 settlement or other instrument on payment of a sum not exceeding one shilling. 
 
 12 . Where any notice, advertisement, or other official publication of an assurance 
 company contains a statement of the amount of the authorized capital of the com- 
 pany, the publication shall also contain a statement of the amount of the capital 
 which has been subscribed and the amount paid up. 
 
 13 . — (1) Where it is intended to amalgamate two or more assurance companies, 
 or to transfer the assurance business of any class from one assurance company to 
 another company, the directors of any one or more of such companies may apply to 
 the Ccurt, by petition, to sanction the proposed arrangement. 
 
 (2) The Court, after hearing the directors and other persons whom it considers 
 entitled to be heard upon the petition, may sanction the arrangement if it is satisfied 
 that no sufficient objection to the arrangement has been established. 
 
 (3) Before any such application is made to the Court — 
 
 (a) notice of the intention to make the application shall be published in the 
 Gazette; and 
 
The Assurance Companies Act, 1909 . Act of 1909 555 
 
 (b) a statement of the nature of the amalgamation or transfer, as the case may 
 
 be, together with an abstract containing the material facts embodied in 
 the agreement or deed under which the amalgamation or transfer is 
 proposed to be effected, and copies of the actuarial or other reports upon 
 which the agreement or deed is founded, including a report by an inde- 
 pendent actuary, shall, unless the Court otherwise directs, be transmitted 
 to each policy holder of each company in manner provided by section 
 one hundred and thirty-six of the Companies Clauses Consolidation Act, 
 1845, for the transmission to shareholders of notices not requiring to be 
 served personally : Provided that it shall not be necessary to transmit 
 such statement and other documents to policy holders other than life, 
 endowment, sinking fund, or bond investment policy holders, nor in the 
 case of a transfer to such policy holders if the business transferred is not 
 life assurance business or bond investment business ; and 
 
 (c) the agreement or deed under which the amalgamation or transfer is effected 
 
 shall be open for the inspection of the policy holders and shareholders 
 at the offices of the companies for a period of fifteen days after the 
 publication of the notice in the G-azette. 
 
 (4) No assurance company shall amalgamate with another, or transfer its busi- 
 ness to another, unless the amalgamation or transfer is sanctioned by the Court in 
 accordance with this section. 
 
 14 . "Where an amalgamation takes place between any assurance companies, or 
 where any assurance business of one such company is transferred to another com- 
 pany, the combined company or the purchasing company, as the case may be, 
 shall, within ten days from the date of the completion of the amalgamation or 
 transfer, deposit with the Board of Trade — 
 
 (a) certified copies of statements of the assets and liabilities of the companies 
 
 concerned in such amalgamation or transfer, together with a statement of 
 the nature and terms of the amalgamation or transfer ; and 
 
 (b) a certified copy of the agreement or deed under which the amalgamation or 
 
 transfer is effected ; and 
 
 (c) certified copies of the actuarial or other reports upon which that agreement 
 
 or deed is founded ; and 
 
 (d) a declaration under the hand of the chairman of each company, and the 
 
 principal officer of each company, that to the best of their belief every 
 payment made or to be made to any person whatsoever on account of the 
 amalgamation or transfer is therein lully set forth, and that no other 
 payments beyond those set forth have been made or are to be made either 
 in money, policies, bonds, valuable securities, or other property by or with 
 the knowledge of any parties to the amalgamation or transfer. 
 
 15 . The Court may order the winding up of an assurance company, in accord- 
 ance with the Companies (Consolidation) Act, 1908, and the provisions of that Act 
 shall apply accordingly, subject, however, to the following modification : — 
 
 The company may be ordered to be wound up on the petition of ten or more 
 policy holders owning policies of an aggregate value of not less than ten 
 thousand pounds 
 
 Provided that such a petition shall not be presented except by the leave 
 of the Court, and leave shall not be granted until a prima facie case has 
 been established to the satisfaction of the Court, and until security for 
 costs for such amount as the Court may think reasonable has been 
 given. 
 
 16 . — (1) Where the assurance business or any part of the assurance business of 
 an assurance company has been transferred to another company under an arrange- 
 ment in pursuance of which the first-mentioned company (in this section called the 
 subsidiary company) or the creditors thereof has or have claims against the com- 
 pany to which such transfer was made (in this section called the principal company), 
 then, if the principal company is being wound up by or under the supervision of 
 the Court, the Court shall (subject as hereinafter mentioned) order the subsidiary 
 company to be wound up in conjunction with the principal company, and may by 
 the same or any subsequent order appoint the same person to be liquidator for the 
 two companies, and make provision for such other matters as may seem to the 
 •Court necessary, with a view to the companies being wound up as if they were one 
 •company. 
 
 S. 15 of 1870. 
 Statements 
 in case of 
 amalgama- 
 tion or 
 transfer. 
 
 S. 21 of 1870. 
 Special pro- 
 visions as to 
 winding up 
 of assuranoe 
 companies. 
 
 S. 4 of 1872. 
 Winding up 
 of subsidiary 
 companies. 
 
 36 ( 2 ) 
 
556 
 
 Appendix 
 
 S. 5 of 1872. 
 Valuation of 
 annuities and 
 policies. 
 
 S. 22 of 1870. 
 Power to Court 
 to reduce con- 
 tracts. 
 
 Exten«ion of 
 8 Edw. 7, c. 69, 
 s. 274. to all 
 assurance com- 
 panies estab- 
 lished outside 
 the United 
 Kingdom. 
 
 S. 22 of 1870. 
 Custody and 
 inspection of 
 documents 
 depo-it. d with 
 Bom d of Trade. 
 S. 17 of 1870. 
 Evidence of 
 documents. 
 
 S. 9 of 1870. 
 Alteration 
 of forms. 
 
 ( 2 ) The commencement of the winding up of the principal company shall, save as 
 
 otherwise ordered by the Court, be the commencement of the winding up of the 
 subsidiary company. '£3 '!> 
 
 ( 3 ) In adjusting the rights and liabilities of the members of the several com- 
 
 panies between themselves, the Court shall have regard to the constitution of the 
 companies, and to the arrangements entered into between the companies, in the 
 same manner as the Court has regard to the rights and liabilities of different classes 
 of contributories in the case of the winding up of a single company, or as near 
 thereto as circumstances admit. - ■ * 
 
 (4) Where any company alleged to be subsidiary is not in process of being wound 
 up at the same time as the principal company to which it is subsidiary, the Court 
 shall not direct the subsidiary company to be wound up unless, after hearing all 
 objections (if any) that may be urged by or on behalf of the company against its 
 being wound up, the Court is of opinion that the company is subsidiary to the 
 principal company, and that the winding up of the company in conjunction with 
 the principal company is just and equitable. 
 
 (5) An application may be made in relation to the winding up of any subsidiary 
 company in conjunction with a principal company by any creditor of, or person 
 interested in, the principal or subsidiary company. 
 
 ( 6 ) W T here a company stands in the relation of a principal company to one com- 
 pany, and in the relation of a subsidiary company to some other company, or where 
 there are several companies standing in the relation of subsidiary companies to one 
 principal company, the Court may deal with any number of such companies 
 together or in separate groups, as it thinks most expedient, upon the principles laid 
 down in this section. 
 
 17 . — ( 1 ) Where an assurance company is being wound up by the Court, or sub- 
 ject to the supervision of the Court, or voluntarily, the value of a policy of any 
 class or of a liability under such a policy requiring to be valued in such winding up 
 shall be estimated in manner applicable to policies and liabilities of that class pro- 
 vided by the Sixth Schedule to this Act. 
 
 (2) The rules in the Sixth and Seventh Schedules to this Act shall be of the same 
 force, and may be repealed, altered, or amended, as if they were rules made in pur- 
 suance of section two hundred and thirty -eight of the Companies (Consolidation) 
 Act, l! 08, and rules may be made under that section for the purpose of carrying 
 into effect the provisions of this Act with respect to the winding up of assurance 
 companies. 
 
 18 . The Court, in the case of an assurance company which has been proved to be 
 unable to pay its debts, may, if it thinks fit, reduce the amount of the contracts of 
 the company upon such terms and subject to such conditions as the Court thinks 
 just, in place of making a winding-up order. 
 
 19 . Section two hundred and seventy-four of the Companies (Consolidation) Act, 
 1908 (which contains provisions as to companies incorporated outside the United 
 Kingdom) shall apply to every assurance company constituted outside the United 
 Kingdom which carries on assurance business within the United Kingdom, whether 
 incorporated or not. 
 
 20 . The Board of Trade may direct any documents deposited with them under 
 this Act, or certified copies thereof, to be kept by the registrar or by any other 
 officer of the Board of Trade ; and any such documents and copies shall be open to 
 inspection, and copies thereof may be procured by any person on payment of such 
 fees as the Board of Trade may direct. 
 
 21 . — (1) Every document deposited under this Act with the Board of Trade, and 
 certified by the registrar or by any person appointed in that behalf by the President 
 of the Board of Trade to be a document so deposited, shall be deemed to be a docu- 
 ment so deposited. 
 
 ( 2 ) Every document purporting to be certified by the registrar, or by any person 
 appointed in that behalf by the President of the Board of Trade, to be a copy of a 
 documeut so deposited shall be deemed to be a copy of that document, and shall be 
 received in evidence as if it were the original document, unless some variation 
 between it and the original document be proved. 
 
 22 . The Board of Trade may, on the application or with the consent of an 
 assurance company, alter the forms contained in the schedules to this Act as 
 respects that company, for the purpose of adapting them to the circumstances of 
 that company. 
 
The Assurance Companies Act, 1909. Act of 1909 557 
 
 23 . Any assurance company which makes default in complying with any of the 
 requirements of this Act shall be liable to a penalty not exceeding one hundred 
 pounds, or, in the case of a continuing default, to a penalty not exceeding fifty 
 pounds for every day during which the default continues, and every director, 
 manager, or secretary, or other officer or agent of the company who is knowingly 
 a party to the default shall be liable to a like penalty ; and, if default continue for a 
 period of three months after notice of default by the Board of Trale (which notice 
 shall be published in one or more newspapers as the Board of Trade may, upon the 
 application of one or more policy holders or shareholders, direct), the default shall 
 be a ground on which the Court may order the winding up of the company, in 
 accordance with the Companies (Consolidation) Act, 1908. 
 
 24 . If any account, balance sheet, abstract, statement, or other document 
 required by this Act is false in any particular to the knowledge of any person who 
 signs it, that person shall be guilty of a misdemeanour and shall be liable on con- 
 viction on indictment to fine and imprisonment, or on summary conviction to a fine 
 not exceeding fifty pounds. 
 
 25 . Every penalty imposed by this Act shall be recovered and applied in the 
 same manner as penalties imposed by the Companies (Consolidation) Act, 19U8, are 
 recoverable and applicable. 
 
 26 . Any notice which is by this Act required to be sent to any policy holder 
 may be addressed and sent to the person to whom notices respecting such policy 
 are usually sent, and any notice so addressed and sent shall be deemed and taken 
 to be notice to the holder of such policy : 
 
 Provided that where any person claiming to be interested in a policy has given 
 to the company notice in writing of his interest, any notice which is by this Act 
 required to be sent to policy holders shall also be sent to such person at the address 
 specified by him in his notice. 
 
 27 . The Board of Trade shall lay annually before Parliament the accounts, 
 balance sheets, abstracts, statements, and other documents under this Act, or 
 purporting to be under this Act, deposited with them during the preceding year, 
 except reports on the affairs of assurance companies submitted to the shareholders 
 or policy holders thereof, and may append to such accounts, balance sheets, 
 abstracts, statements, or other documents any note of the Board of Trade thereon, 
 and any correspondence in relation thereto. 
 
 28 . — (1) This Act shall not affect the National Debt Commissioners or the Post- 
 master-General, acting under the authorities vested in them respectively by the 
 Government Annuities Acts, 1829 to 1888, and the Post Office Savings Bank Acts, 
 1861 to 1908. 
 
 (2) This Act shall not apply to a member of Lloyd’s, or of any other associa- 
 tion of underwriters approved by the Board of Trale, who carries on assurance 
 business of any class, provided that he complies with the requirements set forth in 
 the Eighth Schedule to this Act, and applicable to business of that class. 
 
 (3) Save as otherwise expressly provided by this Act, nothing in this Act shall 
 apply to assurance business of any class other than one of the classes specified in 
 section one of this Act, and a policy shall not be deemed to be a policy of fire 
 insurance by reason only that loss by fire is one of the various risks covered by the 
 policy. 
 
 29 . In this Act, unless the context otherwise requires, — 
 
 The expression “chairman” means the person for the time being presiding 
 over the board of directors or other governing body of the assurance 
 company ; 
 
 The expression “annuities on human life” does not include superannuation 
 allowances and annuities payable out of any fund applicable solely to the 
 relief and maintenance of persons engaged or who have been enyaged in 
 any particular profession, trade, or employment, or of the dependants of 
 such persons ; 
 
 The expression “ policy holder ” m p ans the person who for the time being is 
 the legal holder of the policy for securing the contract with the assurance 
 company ; 
 
 The expression “underwriter” includes any person named in a policy or 
 other contract of insurance as liable to pay or contribute towards the 
 payment of the sum secured by such policy or contract ; 
 
 S. 18 of 1870. 
 Penalty for 
 non-com- 
 pliance with 
 Act. 
 
 S. 19 of 1870, 
 Penalty for 
 falsifying 
 statements, 
 &c. 
 
 S. 20 of 1870. 
 Recovery and 
 ap plica i ion of 
 penalties. 
 Service of 
 notices. 
 
 S. 24 of 1870. 
 Accounts, &c. 
 to be laid 
 before Par- 
 liament. 
 
 Savings. 
 
 S. 2 of 1870. 
 Interpreta- 
 tion. 
 
558 
 
 Appendix. 
 
 The expression “ financial year ” means each period of twelve months at the 
 end of which the balance of the accounts of the assurance company is 
 stiuck, or, if no such balance is struck, then the calendar year; 
 
 The expression “ Court ” means the High Court of Justice in England, except 
 that in the case of an assurance company registered or having its head 
 office in Ireland it means, in the provisions of this Act, the High Court of 
 Justice in Ireland, and in the case of an assurance company registered or 
 having its head office in Scotland it means, in the provisions of this Act 
 other than those relating to deposits, the Court of Session, in either division 
 thereof; 
 
 The expression “Companies Acts” includes the Companies (Consolidation) 
 Act, 1908, and any enactment repealed by that Act ; 
 
 The expression “ registrar ” means the Registrar of Joint Stock Companies ; 
 
 The expression “ actuary ” means an actuary possessing such qualifications as 
 may be prescribed by rules made by the Board of Trade ; 
 
 The expression “ Gazette” means the London, Edinburgh, or Dublin Gazette, 
 as the case may be. 
 
 Application 
 to life assur- 
 ance com- 
 panies. 
 
 Application to Special Classes of Business. 
 
 30. Where a company carries on life assurance business, this Act shall apply 
 with respect to that business, subject to the following modifications: — 
 
 (a) “ Policy on human life ” shall mean any instrument by which the payment 
 
 of money is assured on death (except death by accident only) or the 
 happening of any contingency dependent on human life, or any instrument 
 evidencing a contract which is subject to payment of premiums for a term 
 dependent on human life ; 
 
 (b) Where the company grant annuities upon human life, “policy” shall 
 
 include the instrument evidencing 1 the contract to pay such an annuity, 
 and “ policy holder” includes annuitant ; 
 
 (c) The obligation to deposit and keep deposited the sum of twenty thousand 
 
 pounds shall apply notwithstanding that the company has previously 
 made and withdrawn its deposit, or been exempted from making any 
 deposit under any enactment hereby repealed ; 
 
 (d) Where the company intends to amalgamate with or to transfer its life 
 
 assurance business to another assurance company, the Court shall not 
 sanction the amalgamation or transfer in any case in which it appears to 
 the Court that the life policy holders representing one- tenth or more of 
 the total amount assured in the company dissent from the amalgamation 
 or transfer ; 
 
 (e) Nothing in this Act providing that the life assurance fund shall not be liable 
 
 for any contracts for which it would not have been liable had the business 
 of the company been only that of life assurance shall affect the liability of 
 that fund, in the case of a company established before the ninth day of 
 August eighteen hundred and seventy, for contracts entered into by the 
 company before that date ; 
 
 (f) In the case of a company carrying on life assurance business and established 
 
 before the ninth day of August eighteen hundred and seventy, by the 
 terms of whose deed of settlement the whole of the profits of all the 
 business carried on by the company are paid exclusively to the life policy 
 holders, and on the face of whose life policies the liability of the life 
 assurance fuud in respect of the other business distinctly appears, such of 
 the provisions of this Act as require the separation of funds, and exempt 
 the life assurance fund from liability for contracts to which it would not 
 have been liable had the business of the company been only that of life 
 assurance, shall not apply ; 
 
 (g) Any business carried on by an assurance company which under the provisions 
 
 of any special Act relating to that company is to be treated as life assurance 
 business shall continue to be so treated, and shall not be deemed to be other 
 business or a separate class of assurance business within the meaning of 
 this Act ; 
 
 (h) In the case of a mutual company whose profits are allocated to members 
 
 wholly or mainly by annual abatements of premium, the abstract of the 
 report of the actuary on the financial condition of the company, prepared in 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 559 
 
 accordance with the Fourth Schedule to this Act, may, notwithstanding 
 anything in section 5 of this Act, be made and returned at intervals not 
 exceeding five years, provided that, where such return is not made annually, 
 it shall include particulars as to the rates of abatement of premiums 
 applicable to different classes or series of assurances allowed in each year 
 during the period which has elapsed since the previous return under the 
 Fourth Schedule. 
 
 31. Where a company carries on fire insurance business, this Act shall apply 
 with respect to that business, subject to the following modifications : — 
 
 (a) It shall not be necessary for the company to prepare any statement of its fire 
 
 insurance business in accordance with the Fourth and Fifth Schedules to 
 this Act : 
 
 (b) Such of the provisions of this Act as relate to deposits to be made under this 
 
 Act shall not apply with respect to the fire insurance business carried on 
 by the company if the company has commenced to carry on that business 
 within the United Kingdom before the passing of this Act : 
 
 (c) Such of the provisions of this Act as relate to deposits to be made under this 
 
 Act shall not apply where the company is an association of owners or 
 occupiers of buildings or other property which satisfies the Board of Trade 
 that it is carrying on, or is about to carry on, business wholly or mainly for 
 the purpose of the mutual insurance of its members against damage by or 
 incidental to fire caused to the houses or other property owned or occupied 
 by them : 
 
 (d) It shall not be necessary to make a deposit in respect of fire insurance 
 
 business where the company has made a deposit in respect of any other 
 class of assurance business, and, where a company, having made a deposit 
 in respect of fire insurance business, commences to carry on life assurance 
 business or employers’ liability insurance business, the company may 
 transfer the deposit so made to the account of that other business, and 
 after such transfer the deposit shall be treated as if it had been made in 
 respect of such other business : 
 
 (e) So much of this Act as requires an assurance company transacting other 
 
 business besides assurance business, or more than one class of assurance 
 business, to keep separate funds into which all receipts in respect of the 
 assurance business or of each class of assurance business are to be paid 
 shall not apply as respects fire insurance business : 
 
 (f) The provisions of this Act with respect to the amalgamation of companies 
 
 shall not apply where the only classes of assurance business carried on by 
 both of the companies are fire insurance business, or fire insurance busi- 
 ness and accident insurance business, and the provisions of this Act with 
 respect to the transfer of assurance business from one company to another 
 shall not apply to fire insurance business. 
 
 32. Where a company carries on accident insurance business, this Act shall apply 
 with respect to that business, subject to the following modifications: — 
 
 (a) In lieu of the provisions of sections five and six of this Act the following 
 
 provisions shall be substituted : — 
 
 ‘ • The company shall annually prepare a statement of its accident 
 insurance business in the form set forth in the Fourth Schedule to this 
 Act and applicable to accident insurance business, and the statement 
 shall be printed, signed, and deposited at the Board of Trade in accord- 
 ance with section seven of this Act ’ ’ : 
 
 (b) Such of the provisions of this Act as relate to deposits to be made under this 
 
 Act shall not apply with respect to the accident insurance business carried 
 on by the company if the company has commenced to carry on that busi- 
 ness in the United Kingdom before the passing of this Act : 
 
 (c) It shall not be necessary to make or keep a deposit in respect of accident 
 
 insurance business where the company has made a deposit in respect of 
 any other cla-s of assurance business, and, where a company, having made 
 a deposit in respect of accident insurance business, commences to carry 
 on life assurance business or employers’ liability insurance business, the 
 company may transfer the deposit so made to the account of that other 
 business, and after such transfer the deposit shall be treated as if it had 
 been made in respect of such other business : 
 
 Application 
 to fire insur- 
 ance com- 
 panies. 
 
 Application 
 to accident 
 insurance 
 companies. 
 
560 
 
 Appendix. 
 
 (d) So much of this Act as requires an assurance company transacting- other busi- 
 
 ness besides assurance business, or more than one class of assurance business, 
 to keep separate funds into which all receipts in respect of the assurance 
 business or of each class of assuranee business are to be paid shall not 
 apply as respects accident insurance business : 
 
 (e) The provisions of this Act with respect to the amalgamation of companies 
 
 shall not apply where the only classes of assurance business carried on by 
 both of the companies are accident insurance business, or accident insur- 
 ance business and fire insurance business, and the provisions of this Act 
 with respect to the transfer of assurance business from one company to 
 another shall not apply to accident insurance business : 
 
 (f) The expression “policy” includes any policy under which there is for the 
 
 time being an existing liability already accrued, or under which a liability 
 may accrue : 
 
 (g) Where a sum is due, or a weekly or other periodical payment is payable, under 
 
 any policy, the expression “ policy holder ” includes the person to whom 
 the sum is due or the weekly or other periodical payment payable. 
 
 Application 33. — (1) Where a company carries on employers’ liability insurance business, 
 to employers’ this Act shall apply with respect to that business, subject to the following modifi- 
 liability cations : — 
 
 insurance (a) This Act shall not apply where the company is an association of employers 
 
 companies. which satisfies the Board of Trade that it is carrying on, or is about to carry 
 
 on, business wholly or mainly for the purpose of the mutual insurance of 
 its members against liability to pay compensation or damages to workmen 
 employed by them, either alone or in conjunction with insurance against 
 anv other risk incident to their trade or industry : 
 
 (b) This Act shall not apply where the company carries on the employers’ 
 
 liability insurance business as incidental only to the business of marine 
 insurance by issuing marine policies, or policies in the form of marine 
 policies, covering liability to pay compensation or damages to workmen 
 as well as losses incident to marine adventure or adventure analogous 
 thereto : 
 
 (c) In lieu of the provisions of sections five and six of this Act the following 
 
 provisions shall be substituted : — 
 
 “ The company shall annually prepare a statement of its employers’ 
 liability insurance business in the form set forth in the Fourth Schedule to 
 this Act and applicable to employers’ liability insurance business, and 
 shall cause an investigation of its estimated liabilities to be made by an 
 actuary so far as may be necessary to enable the provisions of that form to 
 be complied with, and the statement shall be printed, signed, and deposited 
 at the Board of Trade in accordance with section seven of this Act” : 
 
 (d) Such of the provisions of this Act as relate to deposits to be made under this 
 
 Act shall not apply with respect to the employers’ liability insurance 
 business carried on by a company where the company had commenced to 
 carry on that business within the United Kingdom before the twenty- 
 eighth day of Auyust nineteen hundred aud seven : 
 
 (e) As soon as the employers’ liability fund set apart and secured for the satis- 
 
 faction of the claims of policy holders of that class amounts to forty 
 thousand pounds, the Paymaster General shall, if the company has made 
 a deposit in respect of any other class of assurance business, return to 
 the company the money deposited in respect of its employers’ liability 
 insurance business, and it shall not thereafter be necessary for the com- 
 pany to keep any sum deposited in respect of that business, so long as the 
 sum deposited in respect of any other class of assurance business is kept 
 deposited : 
 
 (f) Win re money is paid into a County Couit under the provisions of the Eighth 
 
 Schedule to this Act, the Court shall (unless the Court for special reason 
 see* fit to direct otherwise) order the lump sum to be invested or applied 
 in the purchase of an annuity or otherwise, in such manner that the 
 duration of the benefit thereof mav, as far as possible, correspond with 
 the probable duration of the incapacity : 
 
 (g) The expression “policy” includes any policy under which there is for the 
 
 time being an existing liability already accrued, or under which any 
 liability may accrue: 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 561 
 
 (h) Where any sum is due, or a weekly payment is payable, under any policy, the 
 
 expression “policy holder” includes the person to whom the sum is due 
 or the weekly payment payable : 
 
 (i) If the company carries on employers’ liability insurance business outside the 
 
 United Kingdom, that business shall not be treated as part of the 
 employers’ liability insurance business carried on by the company for the 
 purposes of this Act. 
 
 (2) In the application of this section to Scotland the expression “ County Court ” 
 means Sheriff Court. 
 
 34. Where a company carries on bond investment business, this Act shall apply 
 with respect to that business, subject to the following modifications: — 
 
 (a) The expression “policy” includes any bond, certificate, receipt, or other 
 
 instrument evidencing the contract with the company, and the expression 
 “ policy holder ” means the person who for the time being is the legal 
 holder of such instrument : 
 
 (b) Such of the provisions of this Act as relate to deposits shall not apply with 
 
 respect to the bond investment business carried on by the company, if the 
 company has commenced to carry on that business in the United Kingdom 
 before the passing of this Act : 
 
 (c) As soon as the bond investment fund set apart and secured for the satisfaction 
 
 of the claims of the policy holders of that class amounts to forty thousand 
 pounds, the Paymaster- General shall, if the company has made a deposit 
 in respect of any other class of assurance business, return to the company 
 the money deposited in respect of its bond investment business, and it 
 shall not thereafter be necessary for the company to keep any sum 
 deposited in respect of that business, so long as the sum deposited in 
 respect of any other class of business is kept deposited : 
 
 (dl The first statement of the bond investment business of the company shall be 
 deposited at the Board of Trade on or before the thirtieth day of June 
 nineteen hundred and eleven : 
 
 (e) The company shall not give the holder of any policy issued after the passing 
 of this Act any advantage dependent on lot or chance, but this provision 
 shall not be construed as in any wise prejudicing any question as to the 
 application to any such transaction, whether in respect of a policy issued 
 before or after the passing of this Act, of the law relating to lotteries. 
 
 35. The Board of Trade may, on the application of any unregistered trade 
 union originally established more than twenty years before the commencement of 
 this Act, extend to the trade union the exemption conferred by this Act on regis- 
 tered trade unions, and may, on the application of an unregistered friendly society, 
 extend to the society the exemption conferred by this Act on registered friendly 
 societies if it appears to the Board, after consulting the Chief Registrar of Friendly 
 Societies, that the society is one to which it is inexpedient that the provisions of 
 this Act should apply. 
 
 Provisions as to Collecting Societies and Industrial Assurance Companies. 
 
 36. — (1) Amongst the purposes for which collecting societies and industrial 
 assurance companies may issue policies of assurance there shall be included 
 insuring money to be paid for the funeral expenses of a parent, grandparent, 
 grandchild, brother, or sister. 
 
 (2) No policy effected before the passing of this Act with a collecting society or 
 industrial assurance company shall be deemed to be void by reason only that the 
 person effecting the policy had not, at the time the policy was effected, an insurable 
 interest in the life of the person assured, or that the name of the person inter- 
 ested, or for whose benefit or on whose account the policy was effected, was not 
 inserted in the policy, or that the insurance was not one authorised by the Acts 
 relating to friendly societies, if the policy was effected by or on account of a person 
 who had at the time a bond fide expectation that he would incur expenses in con- 
 nection with the death or funeral of the assured, and if the sum assured is not 
 unreasonable for the purpose of covering those expenses, and any such policy shall 
 enure for the benefit of the person for whose benefit it was effected or his assigns. 
 
 (3) Any collecting society or industrial insurance company which, after the 
 passing of this Act, issues policies of insurance which are not within the legal 
 
 Application 
 to bond in- 
 vestment 
 companies. 
 
 Power of 
 Board of 
 Trade to 
 exempt un- 
 registered 
 trade unions 
 and friendly 
 societies. 
 
 Provisions as 
 to collecting 
 societies and 
 industrial 
 assurance 
 companies. 
 
562 
 
 Appendix. 
 
 59 Sc 60 Yict. 
 o. 25. 
 
 59 & 60 Yict. 
 o. 26. 
 
 powers of such society or company shall be held to have made default in complying 
 with the requirements of this Act ; and the provisions of this Act with respect to 
 such default shall apply to collecting societies, industrial insurance companies, and 
 their officers, in like manner as they apply to assurance companies and their 
 officers. 
 
 (4) Without prejudice to the powers conferred by section seventy- one of the 
 Friendly Societies Act, 1896, the committee of management or other governing 
 body of a collecting society having more than one hundred thousand members may 
 petition the Court to make an order for the conversion of the society into a mutual 
 company under the Companies (Consolidation) Act, 1908, and the Court may make 
 such an order if, after hearing the committee of management, or other governing 
 body, and other persons whom the Court considers entitled to be heard on the 
 petition, the Court is satisfied, on a poll being taken, that fifty-five per cent, at 
 least of the members of the society over sixteen years of age agree to the con- 
 version ; and the Court may give such directions as it thinks fit for settling a 
 proper memorandum and articles of association of the company ; but, before any 
 such petition is presented to the Court, notice of intention to present the petition 
 shall be published in the Gazette, and in such newspapers as the Court may direct. 
 
 When a collecting society converts itself into a company in accordance with the 
 provisions of this sub-section, sub-section (3) of sectiou seventy-one of the Friendly 
 Societies Act, 1896, shall apply in like manner as if the conversion were effected 
 under that section. 
 
 (5) In this section the expressions “ collecting society ” and “ industrial assuranoe 
 company ’ ’ have the same meanings as in the Collecting Societies and Industrial 
 Assurance Companies Act, 1896. 
 
 Repeal. 
 
 Short title 
 and com- 
 mencement. 
 
 Supplemental. 
 
 37. The enactments mentioned in the Ninth Schedule to this Act are hereby 
 repealed to the extent specified in the third column of that schedule : 
 
 Provided that nothing in this repeal shall affect any investigation made, or any 
 statement, abstract, or other document deposited, under any enactment hereby 
 repealed, but every such investigation shall be deemed to have been made and 
 every such document prepared and deposited under this Act. 
 
 38. — (1) This Act may be cited as the Assurance Companies Act, 1909. 
 
 (2) This Act shall come into operation on the first day of July nineteen hundred 
 and ten, except that as respects section thirty -six it shall come into operation on 
 the passing thereof. 
 
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 Act of 1909 563 
 
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 Act of 1909 
 
 565 
 
 
 
 
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(D.) — Form, applicable to Employers' Liability Insurance Business. 
 
 Revenue Account of the for the Year ending , 19 — , in respect of Employers’ Liability Insurance Business transacted within the United Kingd 
 
 Appendix 
 
 566 
 
 k Note 1 . — Items in this Account to be the net amounts after deduction of the amounts paid and received in respect of re-insurances of the Company’s 
 
 Note 2. If any sum has been deducted from the expenses of management account, and taken credit for in the Balanoe Sheet as an asset, the sum so 
 deducted to be separately shown in the above Account. 
 
(E .) — Form applicable to Bond Investment Business. 
 
 567 
 
 The Assurance Companies Act, 1909. Act of 1909 
 
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568 
 
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The Assurance Companies Act, 1909 
 
 Act of 1909 569 
 
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570 
 
 Appendix. 
 
 FOURTH SCHEDULE. 
 
 N.B. — Where sinking fund or capital redemption insurance business is carried 
 on, a separate statement signed by the actuary must be furnished, showing the 
 total number of policies valued, the total sums assured, and the total office yearly 
 premiums, and also showing the total net liability in respect of such business and 
 the basis on which such liability is calculated. 
 
 (A.) — Form applicable to Life Assurance Business. 
 
 Statement respecting the Valuation of the Liabilities under Life Policies and 
 
 Annuities of the , to be made and signed by the Actuary. 
 
 (The answers should be numbered to accord with the numbers of the corresponding 
 
 questions.) 
 
 1. The date up to which the valuation is made. 
 
 2. The general principles adopted in the valuation, and the method followed in 
 the valuation of particular classes of assurances, including a statement of the 
 method by which the net premiums have been arrived at, and whether these prin- 
 ciples were determined by the instrument constituting the company, or by its 
 regulations or byelaws, or how otherwise ; together with a statement of the manner 
 in which policies on under average lives are dealt with. 
 
 3. The table or tables of mortality used in the valuation. In cases where the 
 tables employed are not published, specimen policy values are to be given, at the 
 rate of interest employed in the valuation, in respect of whole-life assurance 
 policies effected at the respective ages of 20, 30, 4 0, and 50, and having been 
 respectively in force for five years, ten years, and upwards at intervals of five 
 years respectively ; with similar specimen policy values in respect of endowment 
 assurance policies, according to age at entry, original term of policy, and duration. 
 
 4. The rate or rates of interest assumed in the calculations. 
 
 5. The actual proportion of the annual premium income, if any, reserved as a 
 provision for future expenses and profits, separately specified in respect of assurances 
 with immediate profits, with deferred profits, and without profits. (If none, state 
 how this provision is made.) 
 
 6. The consolidated revenue account since the last valuation, or, in case of a 
 company which has made no valuation, since the commencement of the business. 
 (This return should be made in the form annexed. No return under this heading 
 will be required where a statement under this schedule is deposited annually.) 
 
 7. The liabilities of the company under life policies and annuities at the date of 
 the valuation, showing the number of policies, the amount assured, and tbe amount 
 of premiums payable annually under each class of policies, both with and without 
 participation in profits ; and also the net liabilities and assets of the company, with 
 the amount of surplus or deficiency. (These returns to be made in the forms 
 annexed.) 
 
 8. The principles upon which the distribution of profits among the shareholders 
 and policy holders is made, and whether these principles were determined by the 
 instrument constituting the company or by its regulations or byelaws or how other- 
 wise, and the number of years’ premiums to be paid before a bonus (a) is allotted, 
 and (b) vests. 
 
 9. The results of the valuation, showing — 
 
 (1) The total amount of profit made by the company, allocated as follows : — 
 
 (a) Among the policy holders, with immediate participation, and the 
 number and amount of the policies which participated ; 
 
 (b) Among policy holders with deferred participation, and the number 
 and amount of the policies which participated ; 
 
 (c) Among the shareholders ; 
 
 (d) To reserve funds, or other accounts ; 
 
 (e) Carried forward unappropriated. 
 
 (2) Specimens of bonuses allotted to whole-life assurance policies for 100£. 
 
 effected at the respective ages of 20, 30, 40, and 50, and having been 
 respectively in force for five years, ten years, and upwards, at intervals 
 of five years respectively, together with the amounts apportioned under 
 the various modes in which the bonus might be received with; similar 
 specimen bonuses and particulars in respect of endowment assurance 
 policies, according to age at entry, original term of policy, and duration. 
 
 Note.— Separate statements to be furnished throughout in respect of Ordinary 
 and Industrial business respectively, the basis of the division being stated. 
 
 Sections 5, 
 30, 32 and 
 33. 
 
The Assurance Companies Act, 1909 
 
 Act of 1909 
 
 571 
 
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572 
 
 Appendix. 
 
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The Assurance Companies Act, 1909 
 
 Act of 1909 573 
 
 (Form referred to under heading 1 No. 7, in Fourth Schedule (A).) 
 Valuation Balance Sheet of as at , 19 — . 
 
 Dr. £ 
 
 To net liability under life assur- 
 ance aud anuuity transactions 
 (as per summary sta temeut pro- 
 vided iu Fourth Schedule (A) ) 
 
 To surplus (if any) 
 
 Cr. £ 
 
 By life assurance and annuity 
 funds (as per balance sheet 
 under Schedule 3) 
 
 By deficiency (if any) 
 
 
 £ 
 
 
 
 (C .) — Form applicable to Accident Insurance Business. 
 
 Statement of the Estimated Liability in respect of Outstanding Claims arising 
 in the year of Account, and in the preceding year or years : computed as at 
 the end of the year in which the claims arose, and as at the end of the year of 
 Account ; with particulars as to the number and amount of the claims actually 
 paid in the intervening period. 
 
 I. Claims arising during the year of Account ending , 19 — . 
 
 (a) Particulars as to Claims arising, and settled, during the year of Account : — 
 
 Class of Claim. 
 
 n) 
 
 No. of Claims. 
 (2) 
 
 Total amount paid. 
 
 By Sums insured. 
 
 rs) 
 
 By Weekly 
 Allowance. 
 
 (4) 
 
 (i) Fatal claims 
 
 
 
 
 (ii) Non -fatal claims 
 
 Totals 
 
 
 
 
 
 (h) Particulars as to Claims arising during and outstanding at the end of the 
 year of Account : — 
 
 Class of Claim. 
 
 No. of 
 Claims. 
 
 Amount paid 
 during Year 
 of Account. 
 
 Estimated 
 
 Liability. 
 
 (1) 
 
 (2) 
 
 (3) 
 
 (4) 
 
 (i) Fatal claims 
 
 (ii) Non -fatal claims, involving payment of 
 
 sums insured. 
 
 (iii) Non- fatal claims, involving payment of 
 
 temporary weekly allowances : — 
 
 With maximum duiation, not exceeding 
 26 weeks. 
 
 With maximum duration exceeding 26 
 weeks, but not exceeding 52 weeks. 
 
 And so on, at intervals of 26 weeks, up to 
 the longest period O' er which temporary 
 weekly allowances are granted. 
 
 (iv) Non fatal claims, involving payment of 
 
 yearly allowances during permanent 
 total disablement. 
 
 Totals 
 
II. — Outstanding Claims which arose during the first year preceding the year of account, ending 
 
 574 
 
 Appendix 
 
 Totals ot 
 Columns (3), (4), 
 and (5). 
 
 (6) 
 
 Amount. 
 
 
 | 
 
 No. 
 
 
 1 
 
 Estimated 
 Liability in 
 respect of Claims 
 Outstanding as 
 at the End of 
 Year of Account. 
 
 (5) 
 
 Amount. 
 
 
 
 No. 
 
 
 
 Claims paid during the Period of 
 One Year between the above Date 
 and the End of Year of Account. 
 
 <D 
 
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 P-i 
 
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 (3) 
 
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 1 
 
 
 
 Estimated 
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 as at the 
 above Date. 
 
 (2) 
 
 Amount. 
 
 
 
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 Note. — If temporary weekly allowances are granted by the company for periods exceeding 52 weeks, particulars are to be furnished, in a form 
 or forms similar to II. above, showing, in respect of claims involving such extended allowances, the estimated liability as at the end of the year in 
 which such claims arose, and as at the end of the year of account ; and the number and amount of such actual claims paid during the intervening 
 period of two (or more) years ; distinguishing claims terminated, and not terminated, within such period. 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 575 
 
 III. Summary of Estimated Liability, in^respect of Claims Outstanding as at 
 the end of the Year of Account : — 
 
 As per column (4) of Statement I. (b) 
 
 » » (5) „ II 
 
 , , , , (5) of further schedules in the form of State- 
 
 ment II. (if required). 
 
 In respect of yearly allowances during permanent total ) 
 disablement, outstanding at the eud of the year of J- 
 account, but not included in the above Statements .... * 
 
 Total estimated liability, in respect of outstanding claims ) 
 as at the end of the year of account, as per First > £ 
 Schedule (C.) ) 
 
 (D .) — Form applicable to Employers' Liability Insurance Business. 
 
 Statement of the Estimated Liability in respect of Outstanding Claims arising 
 during each of the Five Years preceding the Year of Account, and in such 
 Year ; computed as at the end of the Year in which the Claims arose, and as at 
 the end of the Year of Account ; with Particulars as to the Number and 
 Amount of the Claims actually paid in the intervening Period. 
 
 I. — Claims arising during the year of account, ending , 19 — . 
 
 (a) Particulars as to claims arising and settled during the year of account : — 
 
 Class of Claim. 
 
 (1) 
 
 N umber. 
 
 (2) 
 
 Amount paid. 
 
 (3) 
 
 Fatal claims 
 
 
 £ 
 
 Non-fatal claims 
 
 Total 
 
 
 
 (b) Particulars as to claims arising during, and outstanding at end of, the year 
 of account : — 
 
 Class of Claim. 
 (1) 
 
 Number. 
 • (2) 
 
 Amount paid 
 during year of 
 account. 
 
 (3) 
 
 Estimated 
 
 Liability. 
 
 (4) 
 
 Fatal claims 
 
 
 £ 
 
 £ 
 
 Non-fatal claims 
 
 Total 
 
 
 
 
 
576 
 
 Appendix 
 
 II. — Outstanding claims -which arose during the first year preceding the year of account, 
 
 ending , 19 — . 
 
 Particulars 
 
 of 
 
 Claims. 
 
 Estimated 
 Liability in 
 respect of 
 Claims 
 
 outstanding as at 
 the above date. 
 
 Claims paid 
 during the period 
 of 1 year between 
 the above date 
 and the end of the 
 year of Account. 
 
 Estimated 
 Liability in 
 respect of Claims 
 outstanding as at 
 the end of the 
 year of Account. 
 
 Total of 
 Columns (3) 
 and (4). 
 
 (1) 
 
 ( 2 ) 
 
 ( 3 ) 
 
 ( 4 ) 
 
 (• 5 ) 
 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Fatal claims 
 
 Non-fatal claims — 
 
 Terminated 
 
 Not terminated .... 
 
 
 £ 
 
 
 £ 
 
 — 
 
 £ 
 
 
 £ 
 
 Total 
 
 
 
 
 
 
 
 
 
 III. — Outstanding claims which arose during the second year preceding the year of account, 
 
 ending the , 19 — . 
 
 Particulars 
 
 of 
 
 Claims. 
 
 Estimated 
 Liability in 
 respect of 
 Claims 
 
 outstanding as at 
 the above date. 
 
 Claims paid 
 during the period 
 of 2 years between 
 the above date 
 and the end of the 
 year of Account. 
 
 Estimated 
 Liability in 
 respect of Claims 
 outstanding as at 
 the end of the 
 year of Account. 
 
 Total of 
 Columns (3) 
 and (4). 
 
 (1) 
 
 ( 2 ) 
 
 Number. 
 
 Fatal claims 
 
 Non-fatal claims — 
 
 Terminated 
 
 Not terminated. . . . 
 
 Amount. 
 
 £ 
 
 1 3 ) 
 
 ( 4 ) 
 
 ( 5 ) 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 £ 
 
 £ 
 
 £ 
 
 Total 
 
The Assurance Companies Act, 1909 
 
 Act of 1909 577 
 
 IV. — Outstanding- claims which arose during the third year preceding the year of account, 
 
 ending the , 19 — . 
 
 Particulars 
 
 of 
 
 Claims. 
 
 Estimated 
 Liability in 
 respect of 
 Claims 
 
 outstanding as at 
 the above date. 
 
 Claims paid 
 during the period 
 of 3 years between 
 the above Hate 
 and the end of the 
 year of Account. 
 
 Estimated 
 Liability in 
 respect of < TLaims 
 outstanding as at 
 the end of the 
 year of Account. 
 
 Total of 
 Columns (3) 
 aud (4). 
 
 (1) 
 
 (2) 
 
 (3) 
 
 (4) 
 
 (5) 
 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount.. 
 
 Number 
 
 Amount. 
 
 Fatal claims 
 
 Non-fatal claims — 
 
 Terminated 
 
 Not terminated. . . . 
 
 
 £ 
 
 
 £ 
 
 — 
 
 £ 
 
 
 £ 
 
 Total 
 
 
 
 
 
 
 
 
 
 V. — Outstanding claims which arose during the fourth year preceding the year of account, 
 
 ending the , 19 — . 
 
 Particulars 
 
 of 
 
 Claims. 
 
 Estimated 
 Liability in 
 respect of 
 Claims 
 
 outstanding as at 
 the above date. 
 
 Claims paid 
 during the period 
 of 4 years between 
 the above d > te 
 and the end of the 
 year of Account 
 
 Estimated 
 Liability in 
 respect of Claims 
 outstanding as at 
 the end of the 
 year of Account. 
 
 Total of 
 Columns (3) 
 and (4). 
 
 (1) 
 
 (2) 
 
 (3) 
 
 (4) 
 
 (5) 
 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Fatal claims 
 
 Non-fatal claims — 
 
 Terminated 
 
 Not terminated. . . . 
 
 
 £ 
 
 
 £ 
 
 — 
 
 £ 
 
 
 £ 
 
 Total 
 
 
 
 
 
 
 
 
 
578 
 
 Appendix. 
 
 VI. — Outstanding claims which arose during the fifth year preceding the year of Account, ending 
 
 the , 19 — . 
 
 Particulars 
 
 of 
 
 Claims. 
 
 Estimated 
 Liability in 
 respect of Claims 
 outstanding as at 
 the above date. 
 
 1 
 
 Claims paid 
 during the period 
 of 5 years 
 between the 
 above date and 
 the end of the 
 year of Account. 
 
 Estimated 
 Liability 
 (included in 
 Statement VII. 
 and valued by 
 the method there 
 specified) in 
 respect of Claims 
 outstanding as 
 at the end of the 
 year of Account. 
 
 Total of 
 Columns (3) 
 and (4). 
 
 (1) 
 
 (2) 
 
 ( 3 ) 
 
 ( 4 ) 
 
 ( 5 ) 
 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Number. 
 
 Amount. 
 
 Fatal claims 
 
 Non-fatal claims — 
 
 Terminated 
 
 Not terminated .... 
 
 
 £ 
 
 
 £ 
 
 — 
 
 £ 
 
 
 £ 
 
 Total 
 
 
 
 
 
 
 
 
 
 Note. — In cases where the date at which the estimated liability required under column (2) in 
 Forms IV. V. and VI. above would fall in any year prior to 1908, such estimated liability is to be 
 returned as at the end of the year of account terminated in 1908, and the claims paid, required 
 under column (3) of such forms, are to be in respect of the period between the end of the year of 
 account terminated in 1908 and the end of the year of account rendered. 
 
 VII. — Statement respecting Claims of five years’ duration and upwards outstanding 
 as at the end of the year of Account. (To be made and signed by an Actuary.) 
 
 (1) The number of claims incumbent and having durations of five years and 
 upwards as at the end of the year of account, including those separately returned 
 under Form VI. above ; and the amount of the weekly payment, and of the annual 
 payment, due in respect of such claims ; separately stated in respect of each year 
 of life of the workmen, from the youngest to the oldest. (These particulars to be 
 returned under columns (1) to (4) of the tabular statement given below.) 
 
 (2) The estimated liability in respect of the claims specified above, computed, as 
 at the end of the year of account, on the basis of the amount which would be 
 required to purchase from the National Debt Commissioners, through the Post 
 Office Savings Bank, an immediate life annuity for the workmen equal to 75 per 
 cent, of the value of the weekly payment, according to the sex and true age of 
 the workers. (These particulars to be returned under column (5) of the tabular 
 statement given below, in respect of each year of life of the workmen, from the 
 youngest to the oldest.) 
 
 (3) If the estimated liability, as reserved under the First Schedule in respect of 
 the claims specified above, is computed on any basis other than that specified under 
 Heading No. (2) above, the whole of the particulars required under Headings (1 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 
 
 579 
 
 and (2) above are to be returned in columns (1) to (5) of the tabular statement given 
 below, together with the following additional particulars: — 
 
 (i) If the estimated liability is determined on the basis of the value of an 
 
 immediate life annuity : — 
 
 (a) The table of mortality upon which such life annuity values are 
 based ; 
 
 (b) The rate of interest at which such life annuity values are com- 
 puted ; 
 
 (c) Whether such life annuity values are discriminated according to 
 the sex of the workers ; 
 
 (d) The proportion of such life annuity values representing the 
 estimated liability ; 
 
 (e) The modifications (if any) made in the true ages of the workmen, 
 in deducing the estimated liability ; 
 
 (f) The amount of the estimated liability. (To be returned, in respect 
 of each year of life, in column (6) of the tabular statement given below.) 
 
 (ii) If the estimated liability is not determined on the basis of the value of an 
 
 immediate life annuity, full particulars are to be specified as to the 
 precise method adopted in deducing such estimated liability, and the 
 total amount of estimated liability is to be returned under column (6) of 
 the tabular statement given below. 
 
 Number 
 
 of 
 
 Claims. 
 
 (1) 
 
 Ages 
 of the 
 Workmen 
 as at the 
 end of the 
 Year of 
 Account. 
 
 (2) 
 
 Amount 
 
 of 
 
 Weekly 
 
 Payment. 
 
 (3) 
 
 Amount 
 
 of 
 
 Annual 
 
 Payment. 
 
 (4) 
 
 Estimated Liability 
 computed on 
 Basis of 75 per Cent. 
 
 of Value of Life 
 Annuity purchased 
 through the Post 
 Office. 
 
 (5) 
 
 Estimated 
 Liability if 
 computed on 
 Basis other 
 than that 
 specified in 
 Column 5. 
 
 (6) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Note. — Separate particulars to be furnished in respect of male and female 
 workers. 
 
 Summary of estimated liability in respect of outstanding claims as at the end of 
 the year of account — „ 
 
 As per column (4) of 
 
 Statement I 
 
 „ „ (4) 
 
 „ II 
 
 » » (4) 
 
 „ III 
 
 „ >> (4) • 
 
 „ iv 
 
 » >> (4) 
 
 „ V 
 
 „ „(5)or(6) 
 
 „ VII 
 
 Total estimated liability in respect of outstanding \ 
 claims as at the end of the year of account as per > £ 
 First Schedule (D) ' 
 
580 
 
 Appendix, 
 
 (E.) — Form applicable to Bond Investment Business. 
 
 Statement respecting- the Valuation of the Liability under Bonds and Endow- 
 ment Certificates of the , to he made and signed by the 
 
 Actuary. 
 
 (The answers should be numbered to accord with the numbers of the corresponding 
 
 questions.) 
 
 1. The date up to which the valuation is made. 
 
 2. The principles adopted in the valuation of the liabilities under bond investment 
 policies and endowment certificates, and whether these principles were determined 
 by the instrument constituting the company, or by its regulations or byelaws, or 
 how otherwise. 
 
 3. The rate or rates of interest assumed in the calculations. 
 
 4. The actual proportion of the annual income from contributions, if any, reserved 
 as a provision for future expenses and profits. (If none, state how this provision is 
 made.) 
 
 5. The consolidated revenue account since the last valuation, or, in the case of a 
 company which has made no valuation, since the commencement of the business 
 (This return should be made in the form annexed. No return under this heading 
 will be required where the valuation is made annually.) 
 
 6. The liabilities of the company under bond investment policies and endowment 
 certificates at the date of the valuation, showing the number of policies or cer- 
 tificates, the amounts assured, the amount of contribution payable annually, and the 
 provision for future expenses and profits ; also the net liabilities and assets of the 
 company, with the amount of surplus or deficiency. (These returns should be 
 made in the forms annexed.) 
 
 7. The principles upon which the distribution of profits among the bond and 
 certificate holders and shareholders is made, and whether those principles are 
 determined by the instrument constituting the company, or by its regulations or 
 byelaws, or how otherwise, and the time during which a bond investment policy or 
 endowment certificate must be in force to entitle it to share in the profits. 
 
 8. The results of the valuation, showing — 
 
 (1) The total amount of profit made by the company, allocated as follows : — 
 
 (a) among participating bond or certificate holders, with the number 
 so participating and the total amount of their bonds or certificates ; 
 
 (b) among the shareholders ; 
 
 (c) to reserve funds, or other accounts ; 
 
 (d) carried forward unappropriated. 
 
 (2) Specimens of profit allotted to policies or certificates for 100£. effected for 
 
 different periods, and having been in force for different durations. 
 
Consolidated Revenue Account of the for Years commencing , 19—, and ending 
 
 The Assurance Companies Act, 1909. 
 
 Act of 1909 581 
 
 
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 sum so deducted to be separately shown in the above Statement. 
 
(Foems referred to under Heading No. 6 in Fourth Schedule (E).) 
 
 Summaby and Valuation of the Bond Investment Policies or Endowment Ceetificates of the as at 
 
 582 
 
 Appendix 
 
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The Assurance Companies Act, 1909. 
 
 Act of 1909 58a 
 
 (Form referred to under Heading No. 6 in Fourth Schedule (E).) 
 Valuation Balance Sheet of the as at , 19 — . 
 
 Dr. £ 
 
 Cr. £ 
 
 To net liability under bond in- 
 
 By Bond Investment and En- 
 
 vestment and endowment certi- 
 
 dowment Certificate Fund 
 
 ficate transactions (as per sum- 
 
 (as per balance sheet under 
 
 mary statement provided in 
 
 Schedule 3) 
 
 Fourth Schedule (E) ) 
 
 To surplus (if any) 
 
 By deficiency (if any) 
 
 £ 
 
 £ 
 
 
 “ 
 
 FIFTH SCHEDULE. 
 
 N.B. — Where sinking fund or capital redemption business is carried on, a 
 separate statement, signed by the actuary, must be furnished showing the total sums 
 assured maturing in each calendar year and the corresponding office premiums. 
 
 (A .) — Form applicable to Life Assurance Business . 
 
 Statement of the Life Assurance and Annuity Business of the on the , 
 
 19 — , to be signed by the Actuary. 
 
 (The answers should be numbered to accord with the numbers of the corresponding 
 questions. Statements of re-assurances corresponding to the statements in 
 respect of assurances are to be given throughout.) Separate statements are to 
 be furnished in the replies to all the headings under this schedule for business 
 at other than European rates. Separate statements are to be also furnished 
 throughout in respect of ordinary and industrial business respectively. 
 
 1. The published table or tables of premiums for assurances for the whole term of 
 life and for endowment assurances which are in use at the date above mentioned. 
 
 2. The total amount assured on lives for the whole term of life which are in 
 existence at the date above mentioned, distinguishing the portions assured with 
 immediate profits, with deferred profits, and without profits, stating separately the 
 total reversionary bonuses and specifying the sums assured for each year of life from 
 the youngest to the oldest ages, the basis of division as to immediate and deferred 
 profits being stated. 
 
 3. The amount of premiums receivable annually for each year of life, after 
 deducting the abatements made by the application of bonuses, in respect of the 
 respective assurances mentioned under heading No. 2, distinguishing ordinary from 
 extra premiums. A separate statement is to be given of premiums payable for a 
 limited number of years, classified according to the number of years’ payments 
 remaining to be made. 
 
 4. The total amount assured under endowment assurances, specifying sums 
 assured and office premiums separately in respect of each year in which such 
 assurances will mature for payment. The reversionary bonuses must also be 
 separately specified, and the sums assured with immediate profits, with deferred 
 profits, and without profits, separately returned. 
 
 5. The total amount assured under classes of assurance business, other than 
 assurances dealt with under Questions 2 and 4, distinguishing the sums assured 
 under each class, and stating separately the amount assured with immediate profits, 
 with deferred profits, and without profits, and the total amount of reversionary 
 bonuses. 
 
 6. The amount of premiums receivable annually in respect of each such special 
 class of assurances mentioned under heading No. 5, distinguishing ordinary from 
 extra premiums. 
 
 7. The total amount of premiums which has been received from the commence- 
 ment upon pure endowment policies which are in force at the date above mentioned. 
 
 8. The total amount of immediate annuities on lives, distinguishing the amounts 
 for each year of life, and distinguishing male and female lives. 
 
 9. The amount of all annuities on lives other than those specified under heading 
 No. 8, distinguishing the amount of annuities payable under each class, and the 
 amount of premiums annually receivable. 
 
 Section fi. 
 
684 
 
 Appendix. 
 
 10. The average rate of interest yielded by the assets, whether invested or 
 uninvested, constituting the life assurance fund of the company, calculated upon 
 the mean fund of each year during the period since the last investigation, without 
 deduction of income tax. 
 
 It must be stated whether or not the mean fund upon which the average rate of 
 interest is calculated includes reversionary investments. 
 
 11. A table of minimum values, if any, allowed for the surrender of policies for 
 the whole term of life and for endowments and endowment assurances, or a state- 
 ment of the method pursued in calculating such surrender values, with instances of 
 the application of such method to policies of different standing and taken out at 
 various interval ages from the youngest to the oldest. In the case of industrial 
 policies, where free or paid up policies are granted in lieu of surrender values, the 
 conditions uuder which such policies are granted must be stated, with specimens as 
 prescribed for surrender values. 
 
 (E.) — Form applicable to Bond Investment Business. 
 
 Statement of the Bond Investment Business of the on the , 19 — . (To 
 
 be signed by the Actuary.) 
 
 (The answers should be numbered to accord with the numbers of the corresponding 
 questions. Statements of re-insurances, c Tres ponding to the statements in 
 respect of insurances, are throughout to be given.) 
 
 1. The published table or tables of rates of contribution for bond investment 
 policies and endowment certificates wh ch are in use at the date above-mentioned ; 
 with full particulars as to the terms and conditions on which advances are made 
 under such policies or certificates, whether on security of house property or land, or 
 otherwise. 
 
 2. The total amounts assured under policies or certificates which are in existence 
 at the date above-mentioned, distinguishing the portions insured with and without 
 profits, stating separately the total additions by way of bonus, and specifying such 
 sums insured and bonuses respectively according to the number of complete years 
 unexpired at such date. 
 
 3. The amount of premiums receivable annually, in respect of the respective 
 insurances mentioned under Heading No. 2, separately specified according to the 
 number of complete years unexpired at the date above mentioned. 
 
 4. The total amount of premiums which have been received from the commence- 
 ment upon all policies or certificates mentioned under Headings Nos. 2 and 3, 
 separately specified according to the number of complete years unexpired at the 
 date above mentioned. 
 
 6. The average rate of interest realised by the assets, whether invested or 
 uninvested, constituting the bond investment and endowment certificate fund of the 
 company, calculated upon the mean fund of each year during the period since the 
 last investigation, without deduction of income tax. 
 
 6 Full particulars as to the terms and conditions upon which surrenders of 
 policies and certificate- are granted, with specimens of the values allowed in respect 
 of different durations, and different uuexpired terms at the date of surrender. 
 
 7. Full particulars as to the terms and conditions upon which allowances are 
 made on the death of a policy or certificate holder, with specimen values as required 
 under Heading No. 6. 
 
 8. Full particulars as to the terms and conditions upon which transfers of the 
 interest in a policy or certificate are granted, whether on the death of the policy or 
 certificate holder, or during his lifetime. 
 
 9. Full particulars as to the terms and conditions upon which redemption of 
 advances is granted, with specimens of redemption values in respect of bonds or 
 certificates of different durations, and having Different unexpired terms, at the date 
 of redemption. 
 
 10. A tabular statement in respect of policies or certificates lapsed during the 
 period since the last investig ition, showing the number, the amount insured, the 
 yearly premiums, and the total premiums received from the commencement ; 
 classified according to the year in which such policies or certificates were effected, 
 an ! lapsed, respectively ; with a similar tabular .statement in respect of policies or 
 certificates surrendered during the period : Provided that policies or certificates 
 which have lapsed and been revived shall not be entered as lapses. 
 
 11. A state* i .ent of the totai number of advances made under policies or certificates 
 to the holders thereof, whether on the security of house property or land or other- 
 wise, and the total amount of such advances outstanding at the date above mentioned, 
 distinguishing the advances on first mortgage and those on second or subsequent 
 mortgage. 
 
The Assurance Companies Act, 1909. 
 
 Act of 1909 585 
 
 SIXTH SCHEDULE. 
 
 Rules fob Valuing Policies and Liabilities. 
 
 (A.) — As respects Life Policies and Annuities. 
 
 Rule for Valuing an Annuity. 
 
 An annuity shall be valued according to the tables used by the company which 
 granted such annuity at the time of granting the same, and, where such tables 
 cannot be ascertained or adopted to the satisfaction of the Court, then according to 
 such rate of interest and table of mortality as the Court may direct. 
 
 Rule for Valuing a Policy. 
 
 The value of the policy is to be the difference between the present value of the 
 reversion in the sum assured according to the contingency upon which it is payable, 
 including any bonus or addition thereto made before the commencement of the 
 winding-up, and the present value of the future annual premiums. 
 
 In calculating such present values interest is to be assumed at such rate, and the 
 rate of mortality according to such tables, as the Court may direct. 
 
 The premium to be calculated is to be such premium as according to the said rate 
 of interest and rate of mortality is sufficient to provide for the risk incurred by the 
 office in issuing the policy, exclusive of any addition thereto for office expenses and 
 other charges. 
 
 (B .) — As respects Fire Policies. 
 
 Rule for Valuing a Policy. 
 
 The value of a current policy shall be such portion of the last premium paid as is 
 proportionate to the unexpired portion of the period in respect of which the 
 premium was paid. 
 
 (C.) — As respects Accident Policies. 
 
 Rule for Valuing a Periodical Payment. 
 
 The present value of a periodical payment shall, in the case of total permanent 
 incapacity, be such an amount as would, if invested in the purchase of a life 
 annuity from the National Debt Commissioners through the Post Office Savings 
 Bank, purchase an annuity equal to seventy-five per centum of the annual value of 
 the periodical payment, and, in any other case, shall be such proportion of such 
 amount as may, under the circumstances of the case, be proper. 
 
 Rule for Valuing a Policy. 
 
 The value of a current policy shall be such portion of the last premium paid as is 
 proportionate to the unexpired portion of the period in respect of which the 
 premium was paid. 
 
 (D.) — As respects Employers ’ Liability Policies. 
 
 Rule for Valuing a Weekly Payment. 
 
 The present value of a weekly payment shall, if the incapacity of the workman 
 in respect of which it is payable is total permanent incapacity, be such an amount 
 as would, if invested in the purchase of an immediate life annuity from the National 
 Debt Commissioners through the Post Office Savings Bank, purchase an annuity 
 for the workman equal to seventy-five per cent, of the annual value of the weekly 
 payment, and in any other case shall be such proportion of such amount as may, 
 under the circumstances of the case, be proper. 
 
 Rule for Valuing a Policy. 
 
 The value of a current policy shall be such portion of the last premium paid 
 as is proportionate to the unexpired portion of the period in respect of which the 
 premium was paid, together with, in the case of a policy under which any weekly 
 ■payment is payable, the present value of that weekly payment. 
 
 (E.) — As respects Ronds or Certificates. 
 
 Rule for Valuing a Policy or Certificate. 
 
 The value of a policy or certificate is to be the difference between the present 
 value of the sum assured according to the date at which it is payable, including any 
 bonus or addition thereto made before the commencement of the winding up, and 
 the present value of the future annual premiums. 
 
 In calculating such present values, interest is to be assumed at such rate as the 
 Court may direct. 
 
 The premium to be calculated is to be such premium as, according to the said 
 rate of interest, is sufficient to provide for the sum assured by the policy or 
 certificate, exclusive of any addition thereto for office expenses and other charges. 
 
 p. 38 
 
 Section 17. 
 
586 
 
 Appendix. 
 
 Section 17. 
 
 Sections 28 
 and 33. 
 
 SEVENTH SCHEDULE. 
 
 Where an assurance company is being wound up by the Court or subject to the 
 supervision of the Court, the liquidator in the case of all persons appearing by the 
 books of the company to be entitled to or interested in policies granted by such 
 company, is to ascertain the value of the liability of the company to each such 
 person, and give notice of such value to such persons in such manner as the Court 
 may direct, and any person to whom notice is so given shall be bound by the 
 value so ascertained unless he gives notice of his intention to dispute such value in 
 manner and within a time to be prescribed by a rule or order of the Court. 
 
 EIGHTH SCHEDULE. 
 
 Requirements to be complied with by Underwriters being Members of Lloyd’s 
 
 or of any other Association of Underwriters approved by the Board of Trade. 
 
 (A.) — As respects Life Assurance Business. 
 
 1. Every underwriter shall deposit and keep deposited in such manner as the 
 Board of Trade may direct a sum of two thousand pounds. The Board of Trade 
 may make rules as to the payment, repayment, investment of, and dealing with, a 
 deposit, the payment of interest and dividends from any such investment, and for 
 any other matters in respect of which they may make rales under section 2 (6) of 
 this Act in relation to deposits made by assurance companies. The sum so deposited 
 shall, so long as any liability under any policy issued by the underwriter remains 
 unsatisfied, be available solely to meet claims under such policies. 
 
 2. The underwriter shall furnish every year to the Board of Trade a statement in 
 such form as may be prescribed by the Board showing the extent and character of 
 the life assurance business effected by him. 
 
 (B.) and (C.) — As respects Fire and Accident Insurance Business. 
 
 1. Except as hereinafter provided, every underwriter shall comply with the 
 following requirements : — 
 
 (a) He shall deposit and keep deposited in such manner as the Board of Trade 
 
 may direct a sum of two thousand pounds in respect of each class of busi- 
 ness. The Board of Trade may make rules as to the payment, repayment, 
 investment of, and dealing with, a deposit, the payment of interest and 
 dividends from any such investment, and for any other matters in respect 
 of which they may make rules under section 2 (6) of this Act in relation 
 to deposits made by assurance companies. The sum so deposited shall, so 
 long as any liability under any policy issued by the underwriter remains 
 unsatisfied, be available solely to meet claims under such policies. 
 
 (b) He shall furnish every year to the Board of Trade a statement, in such form 
 
 as may be prescribed by the Board, showing the extent and character of the 
 fire or accident insurance business effected by him 
 
 2. An underwriter who carries on fire insurance or accident insurance business, 
 may, in lieu of complying with the above requirements, elect to comply with the 
 under- mentioned conditions : — 
 
 (a) All premiums received by or on behalf of the underwriter in respect of fire 
 
 and accident insurance or re-insurance business carried on by him, either 
 alone or in conjunction with any other insurance business for which 
 special requirements are not laid down in this schedule, shall without any 
 apportionment be placed in a trusi fund in accordance with the provisions 
 of a trust deed approved by the Board of Trade : 
 
 (b) He shall also furnish security to the satisfaction of the Board of Trade (or, 
 
 if the Board so direct, to the satisfaction of the committee of the associa- 
 tion), which shall be available solely to meet claims under policies issued 
 by him in connection with fire and accident business and any other non- 
 marine business carried on by him for which special requirements are not 
 laid down in this schedule. 
 
 The security may be furnished in the form of either a deposit or a 
 guarantee, or partly in the one form and partly in the other. 
 
 The amount of the security to be furnished shall never be less than the 
 aggregate of the premiums received or receivable by the underwriter in the 
 last preceding year in connection with such fire and accident and other 
 non-marine business : 
 
 (c) The accounts of every underwriter shall be audited annually by an accountant 
 
 approved by the committee of the association, who shall furnish a certifi- 
 cate to the committee of the association and to the Board of Trade in a 
 form prescribed by the Board of Trade : 
 
The Assurance Companies Act, 1909. Act of 1909 587 
 
 (d) For the purpose of these requirements “non-marine insurance business” 
 means the business of issuing- policies upon subject-matters of insurance 
 other than the following, namely : — 
 
 Vessels of any description, including barges and dredgers, cargoes, 
 freights, and other interests which may be legally insured by, in, or in 
 relation to vessels, cargoes, and freights, goods, wares, merchandise, and 
 property of whatever description insured for any transit by land or water, 
 or both, and whether or not including warehouse risks or similar risks 
 in addition or as incidental to such transit. 
 
 (D ) — As respects Employers'’ Liability Insurance Business. 
 
 1 . Every underwriter shall deposit and keep deposited in such manner as the 
 ■(Board of Trade may direct a sum of two thousand pounds. The Board of Trade 
 .may make rules as to the payment, repayment, investment of, and dealing with, a 
 .deposit, the payment of interest and dividends from any such investment, and for 
 any other matters in respect of which they may make rules under this Act in rela- 
 tion to deposits made by assurance companies. The sum so deposited shall, so long 
 -as any liability under any policy issued by the underwriter remains unsatisfied, be 
 available solely to meet claims under such policies. 
 
 2. Where the person insured by any policy issued by an underwriter is liable to 
 make a weekly payment to any workman during the incapacity of the workman, 
 and the weekly payment has continued for more than six months, the liability 
 therefor shall before the expiration of twelve months from the commencement of 
 the incapacity be redeemed by the payment of a lump sum in accordance with 
 paragraph (17) of the First Schedule to the Workmen’s Compensation Act, 1906, 
 and the underwriter shall pay the lump sum into the County Court, and shall 
 inform the Court that the redemption has been effected in pursuance of the provi- 
 sions of this schedule. 
 
 3. The underwriter shall furnish every year to the Board of Trade a statement 
 in such form as may be prescribed by the Board showing the extent and character 
 of the employers’ liability business effected by him. 
 
 4. For the purposes of this schedule “policy” means a policy insuring any 
 employer against liability to pay compensation or damages to workmen in his 
 , employment. 
 
 (E) — As respects Bond Investment Business. 
 
 1. Every underwriter shall deposit and keep deposited in such manner as the 
 Board of Trade may direct a sum of two thousand pounds. The Board of Trade 
 may make rules as to the payment, repayment, investment of, and dealing with, a 
 deposit, the payment of interest and dividends from any such investment, and for 
 any other matters in respect of which they may make rules under section 2 (6) of 
 this Act in relation to deposits made by assurance companies. The sum so deposited 
 shall, so long as any liability under any policy issued by the underwriter remains 
 unsatisfied, be available solely to meet claims under such policies. 
 
 2. The underwriter shall furnish every year to the Board of Trade a statement in 
 such form as may be prescribed by the Board showing the extent and character of 
 the bond investment business effected by him. 
 
 NINTH SCHEDULE. 
 Enactments repealed. 
 
 Session and 
 Chapter. 
 
 Short Title. 
 
 Extent of 
 Repeal. 
 
 :33 & 34 Viet. c. 61 
 
 The Life Assurance Companies Act, 1870 ... . 
 
 The whole Act. 
 
 34 & 35 Viet. c. 58 
 
 The Life Assurance Companies Act, 1871 ... . 
 
 The whole Act. 
 
 .35 & 36 Vict.,c. 41 
 
 The Life Assurance Companies Act, 1872. . . . 
 
 The whole Act. 
 
 39 & 40 Viet. c. 22 
 
 The Trade Union Act Amendment Act, 1876.. 
 
 Section seven. 
 
 7 Edw. 7, c. 46 . . 
 
 The Employers’ Liability Insurance Com- 
 panies Act, 1907. 
 
 The whole Act. 
 
 Section 37. 
 
 38 (2) 
 
588 ' 
 
 Commencement 
 of order. 
 
 Revocation of 
 former orders. 
 
 Interpretation. 
 
 Application 
 of rules of 
 Supreme Court. 
 
 Title of petition. 
 
 GENERAL ORDERS. 
 
 3 May , 1909. 
 
 REDUCTION OF CAPITAL. 
 
 PROCEDURE ON APPLICATIONS FOR CONFIRMATION BY THE 
 COURT OF THE REDUCTION OF THE CAPITAL OF COMPANIES 
 UNDER THE COMPANIES (CONSOLIDATION) ACT, 1908. 
 
 Preliminary. 
 
 1. This order shall take effect and come into operation on the 1st day of April, 
 1909, and shall apply to all proceedings in the High Court of Justice with relation 
 to the confirmation by the Court of the reduction of the capital of companies 
 whether commenced before or after that day, but every such proceeding taken 
 before that day shall have the same validity as it would have had if this order had 
 not been made 
 
 2. The general orders of the Court of Chancery of the 21st day of March, 1868, 
 and the 2nd day of March, 1869, and the forms thereby prescribed are hereby 
 revoked and annulled piovided that such revocation aud annulment shall not pre- 
 judice or affect anything done or suffered before the date on which this order comes 
 into operation under any order or rule which is hereby revoked and annulled. 
 
 3. In this order — 
 
 “The Act” means tie Companies (Consolidation) Act, 1908, and sects. 46 to 
 66 thereof are particularly referred to. 
 
 “The Court” includes any judge of the High Court of Justice having for 
 the time being jurisdiction to confirm the reduction of the capital of 
 companies. 
 
 “Judge” means any judge of the High Court having for the time being 
 jurisdiction to confirm the reduction of the capital of companies, and 
 includes any registrar, master, or other officer exercising the powers of 
 any such judge. 
 
 “The petition” means the petition presented by the company for the con- 
 firmation by the Court of the reduction of the capital of the company. 
 
 “The company ” means the company which presents the petition for reduction 
 of its capital. 
 
 4. The rules of the Supreme Court for the time being in force, and the general 
 practice of that Court, including the course of procedure and practice in chambers, 
 shall apply as regards all proceedings in relation to the confirmation of any reduc- 
 tion of capital by the Court so far as mav be practicable, except if and so far as by 
 the Act or this order otherwise provided. In i articular, if and when the Court is 
 for the time being a judge of the Chancery Division, the provisions of Ord. V., 
 rule 9 (A), shall apply to all such proceedings as being business assigned within the 
 meaning of that rule. 
 
 5. The petition and all notices, affidavits and other proceedings under the 
 petition shall be intituled in the matter of the company, and in the matter of 
 “ The Companies (Consolidation) Act, 1908.” 
 
Reduction op Capital Rules. Rules of 1909 
 
 589 
 
 6. — (1.) When the petition has been presented, an application shall, in every 
 case, be made, ex parte, by summons in chambers, to the judge, for directions as 
 to the proceedings to be taken preliminary to the hearing of the petition or other- 
 wise with reference thereto. 
 
 (2.) Upon the hearing of the summons, or upon any adjourned hearing or hearings 
 thereof, or any subsequent application, the judge may make such order or orders, 
 and give such directions as he may think fit as to all the proceedings to be taken 
 on and with reference to the petition, and more particularly with respect to the 
 following matters, that is to say — 
 
 (a) The publication of notice of the presentation of the petition ; 
 
 (b) In cases within sect. 49 (1) of the Act, the proceedings to be taken for settling 
 
 the list of creditors entitled to object to the proposed reduction ; fixing the 
 date with reference to which the list of such creditors is to be made out, 
 pursuant to that section ; and generally fixing a time for and giving 
 directions as to all other necessary or proper steps in the matter of the 
 petition, whether expressly mentioned in any of the rules of this order 
 or not. 
 
 (3.) In cases within sect. 49 (1) of the Act, the first insertion in a newspaper of the 
 notice of presentation of the petition and fixing the date with reference to which the 
 list of creditors is to be made out, shall be directed to be made at such time before 
 the date so fixed as the judge shall think fit, not being, unless for special reasons 
 shown to the satisfaction of the judge, less than one calendar month before the date 
 so fixed, and in such cases the first order upon the summons for directions may 
 be in the Form No. 1 in the Schedule hereto, with such variations as the circum- 
 stances of the case may require. 
 
 7 . Notice of the presentation of the petition shall be published at such times, 
 and in such newspapers as the judge shall direct, and mav be in the Form No. 2 
 in the Schedule hereto, with such variations as the circumstances of the case may 
 require. 
 
 8. In cases within sect. 49 (1) of the Act the company shall, within such time 
 as the judge shall direct, file in the central office of the High Court of Justice an 
 affidavit made by some officer or officers of the company competent to make the 
 same, verifying a list containing so far as possible the names aud addresses of the 
 creditors of the company as defined by that section at the date fixed as mentioned 
 in Rule 6 (2) (b) of this order, and the amounts due to them respectively, or in 
 the case of any debt payable on a contingency or not ascertained or any claim 
 admissible to proof in a winding-up of the company the value, so far as can be 
 justly estimated of such debt or claim, and leave the said list and an office copy of 
 such affidavit at the chambers of the judge. 
 
 9 . The person making such affidavit shall state therein his belief that such list 
 is correct, and that there was not at the date so fixed as aforesaid any debt or claim 
 which, if that date were the commencement of the winding-up of the company, 
 would be admissible in proof against the company, except the debts and claims set 
 forth in such list, and shall state his means of knowledge of the matters deposed to 
 in such affidavit. Such affidavit may be in the Form No. 3 in the schedule hereto, 
 with such variations as the circumstances of the case may require. 
 
 10 . Copies of such list containing the names and addresses of the creditors, and 
 the total amount due to them (including the value of any debts or claims estimated 
 as aforesaid), but omitting the amounts due to them respectively, or (as the judge 
 shall think fit) complete copies of such list, shall be kept at the registered offi -e of 
 the company and at the offices of their solicitors and London agents (if any) aud 
 any person desirous of inspecting the same may at any time during the ordinary 
 hours of business inspect and take extracts from the same on payment of the sum 
 of one shilling. 
 
 11 . The company shall, within seven days after the filing of such affidavit, or 
 such further or other time as the judge may allow, send to each creditor who'e 
 name is entered in the said list a notice stating the amount of the proposed 
 reduction of capital, and the amount or estimated value of the debt or the con- 
 tingent debt or claim or both for which such creditor is entered in the said list, a nd 
 the time (such time to be fixed by the judge) within which, if he claims to be a 
 
 Summons for 
 directions. 
 
 Advertisement 
 of petition. 
 
 Affidavit as 
 to creditors. 
 
 Form of 
 affidavit. 
 
 Inspection of 
 list of creditors. 
 
 Notice to 
 creditors. 
 
590 
 
 Appendix. 
 
 Advertisement 
 as to list of 
 creditors. 
 
 Affidavit as 
 to result of 
 Rules 11 and 12. 
 
 Proceedings 
 where claim not 
 admitted. 
 
 Costs of proof. 
 
 Certificate as 
 to creditors. 
 
 creditor for a larger amount, he must send in his name and address, and the 
 particulars of his debt or claim, and the name and address of his solicitor (if any) 
 to the solicitor of the company ; and such notice shall be sent through the post in 
 a prepaid letter addressed to each creditor at his last known address or place of 
 abode, and may be in the form or to the effect of the Form No. 4 set forth in the 
 schedule hereto, with such variations as the circumstances of the case may require. 
 
 12 . Notice of the list of creditors shall, after the filing of the affidavit mentioned 
 in Rule 8 of this order, be published at such times, and in such newspapers, as the 
 judge shall direct. Every such notice shall state the amount of the proposed 
 reduction of capital, and the places where the aforesaid list of creditors may be 
 inspected, and the time within which creditors of the company who are not entered 
 on the said list, and are desirous of being entered therein, must send in their 
 names and addresses, and the particulars of their debts or claims, and the names 
 and addresses of their solicitors (if any) to the solicitor of the company ; and such 
 notice may be in the Form No. 5 set forth in the schedule hereto, with such varia- 
 tions as the circumstances of the case may require. 
 
 13 . The company shall, within such time as the judge shall direct, file in the 
 Central Office of the High Court of Justice an affidavit made by the person to 
 whom the particulars of debts or claims are, by such notices as are mentioned in 
 Rules 11 and 12 of this order, required to be sent in, stating the result of such 
 notices respectively, and verifying a list containing the names and addresses of the 
 persons (if any) who shall have sent in the particulars of their debts or claims in 
 pursuance of such notices respectively, and the amounts of such debts or claims, 
 and some competent officer or officers of the company shall join in such affidavit, 
 and shall in such list distinguish which (if any) of such debts and claims are 
 wholly, or as to any and what part thereof, admitted by the company, and which 
 (if any) of such debts and claims are wholly, or as to any and what part thereof, 
 disputed by the company. Such affidavit may be in the Form No. 6 in the schedule 
 hereto, with such variations as the circumstances of the case may require ; and such 
 list and an office copy of such affidavit shall, within such time as the judge shall 
 direct be left at the chambers of the judge. 
 
 14 . If any debt or claim, the particulars of which are so sent in, shall not 
 be admitted by the company at its full amount, then and in every such case, 
 unless the company are walling to appropriate in such manner as the judge shall 
 direct the full amount of such debt or claim, the company shall, if the judge 
 think lit so to direct, send to the creditor a notice that he is required to come in and 
 prove such debt or claim, or such part thereof as is not admitted by the company, 
 by a day to be therein named, being not less than four clear days after such 
 notice, and being the time appointed by the judge for adjudicating upon such 
 debts and claims, and such notice shall be sent in the manner mentioned in 
 Rule 11 of this order, and may be in the Form No. 7 in the schedule hereto, with 
 such variations as the circumstances of the case may require. 
 
 15 . Such creditors as come in to prove their debts or claims in pursuance of any 
 such notice as is mentioned in Rule 14 of this order shall be allowed their costs of 
 proof against the company, and be answerable for costs, in the same manner as in 
 the case of persons coming in to prove debts under an administration judgment. 
 
 16 . The result of the settlement of the list of creditors shall be stated in a 
 certificate by the Master in the case of an application to the Chancery Division or 
 by the Registrar in the case of an application to the judge in companies winding- 
 up, and such certificate shall state what debts or claims (if any) have been 
 disallowed, and shall distinguish the debts or claims the full amount of which 
 the companv are willing to appropriate, and the debts or claims (if any) the 
 amount of which has been fixed by inquiry and adjudication in manner pro- 
 vided by sect. 49 (3) of the Act, and this order, and the debts or claims (if any) 
 the full amount of which is not admitted by the company, nor such as the 
 company are willing to appropriate and the amount of which has not been 
 fixed by inquiry and adjudication as aforesaid ; and shall show which of the 
 creditors have consented to the proposed reduction, and the total amount of 
 the debts due to them, and the total amount of the debts or claims the payment 
 of which has been secured in manner provided by sect. 49 (3) of the Act and 
 the persons to or by whom the same are due or claimed ; but it shall not be 
 necessary to show in such certificate the several amounts of the debts or claims 
 
Reduction of Capital Rules. Rules of 1909 
 
 591 
 
 of any persona who have consented to tne proposed reduction or the payment of 
 whose debts or claims has been secured as aforesaid. 
 
 17 . The consent of any creditor, whether in respect of a debt due or presently 
 due or a debt payable on a contingency or not ascertained <>r a claim admissible to 
 proof in a winding-up of the company, may be evidenced in any manner which the 
 judge shall think reasonably sufficient having regard both to the amount of his 
 debt or claim and all the circumstances of the case. 
 
 18 . In any case within sect. 49 (1) of the Act, the petition shall not be heard 
 until the expiration of at least eight clear days from the filing of such certificate as 
 is mentioned in Rule 16 of this order. 
 
 19. Before the hearing of the petition, notices stating the day on which the same 
 is appointed to be heard shall be published at such times and in such newspapers as 
 the judge shall direct. Such notices may be in the Form No. 8 in the schedule 
 hereto, with such variations as the circumstances of the case may require. 
 
 20 . Any creditor settled on the said list whose debt or claim has not, before the 
 hearing of the petition, been discharged or determined, or been secured in manner 
 provided by sect. 49 (3) of the Act, and who has not before the hearing consented to 
 the proposed reduction of capital, may, if he think fit, upon giving two clear days’ 
 notice to the solicitor of the company of his intention so to do, appear at the hearing 
 of the petition and oppose the application. 
 
 21 . Where a creditor who appears at the hearing under the last preceding rule 
 is a creditor the full amount of whose debt or claim is not admitted by the company, 
 and the validity of such debt or claim has not been inquired into and adjudicated 
 upon under sect. 49 (3) of the Act, the costs of and occasioned by his appearance 
 shall be dealt with as to the Court shall seem just, but in all other cases a creditor 
 appearing under the last preceding rule shall be entitled to the costs of such 
 appearance, unless the Court shall be of opinion that in the circumstances of the 
 particular case his costs ought not to be allowed. 
 
 22 . When the petition comes on to be heard the Court may, if it shall so think 
 fit, give such directions as may seem proper with reference to the securing in 
 manner mentioned in sect. 49 (3) of the Act, the payment of the debts or claims of 
 any creditors who do not consent to the proposed reduction ; and the further 
 hearing of the petition may, if the Court shall think fit, be adjourned for the 
 purpose of allowing any steps to be taken with reference to the securing in manner 
 aforesaid the payment of such debts or claims. 
 
 23 . Where the Court makes an order confirming a reduction, such order shall 
 give directions in what manner, and in what newspapers, and at what times, notice 
 of the registration of the order and of such minute as mentioned in sect. 51 of the 
 Act is to be published ; and (unless it shall have dispensed altogether with the 
 addition of the words ‘ ‘ and Reduced ’ ’ or shall then dispense with any further use 
 thereof) shall fix the date until which the words “ and Reduced ” are to be deemed 
 part of the name of the company as mentioned in sect. 48 of the Act. 
 
 Fees. 
 
 24 . Solicitors shall be entitled to charge and be allowed for duties performed 
 under the Act in relation to matters dealt with by this order the same fees as they 
 have heretofore been entitled to charge and be allowed for the like duties performed 
 under the Companies Acts, 1862 to 1907, unless the Court or judge shall otherwise 
 specially direct. 
 
 25 . The same fees of Court shall be paid in relation to proceedings dealt with 
 by this order as have heretofore been paid in relation to like proceedings dealt with 
 by the General Orders of the 21st day of March, 1868, and the 2nd day of March, 
 1869, and such fees shall be collected by stamps in the like manner as the same 
 have heretofore been collected or in such other manner as may from time to time be 
 directed by the Lords Commissioners of His Majesty’s Treasury in pursuance of the 
 powers vested in them by the Public Officers’ Fees Act, 1879. 
 
 Evidence of 
 consent of 
 creditor. 
 
 Certificate 
 before hearing 
 of petition. 
 
 Advertisement 
 of hearing. 
 
 Who may 
 appear. 
 
 Costs of 
 appearance. 
 
 Directions at 
 the hearing. 
 
 Order confirm- 
 ing reduction. 
 
 Solicitors’ fees. 
 
 Court fees. 
 
592 
 
 Appendix 
 
 Form 1. 
 
 Form 2. 
 
 Form 3. 
 
 THE SCHEDULE. 
 
 No. 1 . Form of Order. [Rule 6 (3).] 
 
 In the High Court of Justice, 
 
 Chancery Division. 
 
 Mr. Justice 
 
 or 
 
 Companies Winding-Up, 
 
 Mr. Justice 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 
 of “ ihe Companies (Consolidation) Act, 1908.” 
 
 Upon the application of the petitioners by summons dated , and upon 
 
 hearing the solicitor for the petitioners, and on reading the petition presented to the 
 High Court of Justice, it. is ordered, that an inquiry be made what are the debts, 
 claims, and liabilities of or affecting the said company on the day of 
 
 19 , and that notice of the presentation of the said petition be inserted in [the 
 
 newspapers] on the day of , and [other times of insertion], and that a 
 
 list of the persons who are creditors of the company on the said day of , 
 
 aud an office copy of the affidavit verifying the same be left at the chambers of the 
 judge [or in the case of a petition to the judge in companies winding-up with the 
 registrar] on or before the day of 
 
 No. 2. [ See Rule 7.] 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 
 of “ The Companies (Consolidation) Act, 19(>8.” 
 
 Notice is hereby given that a petition for confirming a resolution reducing the 
 capital of the above < ompany from £ to £ was on the day of 
 
 presented to the High Court of Justice, and is now pending ; and that the list of 
 creditors of the company is to be made out as for the day of 19 . 
 
 C. & D., of 
 
 [Agents for A. & B., of ] 
 
 Solicitors to the Company. 
 
 No. 3. Affidavit verifying List of Creditors. 
 
 [Rule 9.] 
 
 (Title of Court as in Form 1.) 
 
 In the Matter of the Company, Limited and Reduced; and in the Matter 
 
 of ‘ The Companies (Consolidation) Act, 1908.” 
 
 I, A. B., of , make oath and say as follows: — 
 
 1. The paper writing now produced and shown to me, and marked with the 
 
 letter A, contains a list of the creditors of and persons having claims upon the said 
 company on the day of 19 (the date fixed by the order in this matter 
 
 dated ). together with their respective addresses, aud the nature and amount 
 
 of their respective debts or claims, and such list is, to the best of my knowledge, 
 information, and belief, a true and accurate list of such creditors and persons having 
 claims on ihe day aforesaid. 
 
 2. To the best of my knowledge and belief there was not, at the date aforesaid, 
 
 any debt, claim, or liability which, if such date were the commencement of the 
 windimr-up of the said company, would be admissible in proof against the said 
 companv other than and except the debts and claims set forth in the said list. I 
 am enabled to make this statement, from facts within my knowledge as the of 
 
 the said company, and from information derived upon investigation of the affairs 
 and the books, documents, and papers of the said company. 
 
 Sworn, &c. 
 
Reduction of Capital Rules. 
 
 Rules of 1909 
 
 593 
 
 List of Creditors referred to in the Inst Form. 
 
 A. 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 
 of “The Companies (Consolidation) Act, 1908.” 
 
 This list of creditors marked A was produced and shown to A. B., and is the 
 same list of creditors as is referred to in his affidavit sworn before me this 
 day of 19 . 
 
 X. Y., &c. 
 
 Names, Addresses, and 
 Descriptions of the 
 Creditors. 
 
 Nature of Debt or 
 Claim. 
 
 Amount or estimated Value 
 of Debt or Claim. 
 
 
 
 
 No. 4. [See Rule 11.] 
 
 In the Matter of the Company, Limited and Reduced; and in the Matter 
 
 of “The Companies (Consolidation) Act, 1908.” 
 
 To Mr. 
 
 You are requested to take notice that a petition has been presented to the 
 High Court of Justice, to confirm a special resolution of the above company for 
 reducing its capital to £ , and that in the list of persons admitted by the 
 
 company to have been on the day of creditors of the company, your 
 
 name is entered as a creditor [here state the amount of the debt or nature of the 
 claim~\. 
 
 If you claim to have been on the last-mentioned day a creditor to a larger amount 
 than is stated above, you must on or before the day of send the par- 
 
 ticulars of your claim and the name and address of your solicitor (if any) to the 
 undersigned at . In default of your so doing the above entry in the list of 
 
 creditors will in all the proceedings under the above application to reduce the capital 
 of the company be treated as correct. 
 
 Dated this day of 19 . 
 
 A. B., 
 
 Solicitor for the said company. 
 
 No. 5. [ See Rule 12.] 
 
 In the Matter of the Company, Limited and Reduced; and in the Matter 
 
 of “The Companies (Consolidation) Act, 1908.” 
 
 Notice is hereby given that a petition has been presented to the High Court of 
 Justice for confirming a resolution of the above company for reducing its capital 
 from £ to £ .A list of the persons admitted to have been creditors of 
 
 the oompany on the day of 19 , may be inspected at the offices of the 
 
 company at , or at the office of , at any time during usual business 
 
 hours, on payment of the charge of one shilling. 
 
 Any person who claims to have been on the last -mentioned day and still to be a 
 creditor of the company, and who is not entered on the said list and claims to be so 
 
 Form 4, 
 
 Form 5. 
 
594 
 
 Appendix. 
 
 entered, must on or before the day of send in his name and address, and 
 
 the particulars of his claim, and the name and address of his solicitor (if any) to the 
 undersigned at , or in default thereof he will be precluded from objecting to 
 
 the proposed reduction of capital. 
 
 Dated this day of 19 . 
 
 A. B., 
 
 Solicitor for the said company. 
 
 Form 
 
 [Rule 11.] 
 
 If notice is 
 issued under 
 Rule 12. 
 
 [Rule 13.] 
 
 If notice is 
 issued under 
 Rule 12. 
 
 [Rule 13.] 
 
 [Rule 13.] 
 
 No. 6. [Rule 13.] 
 
 (Title of Court as in Form 1.) 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 
 of “The Companies (Consolidation) Act, 1908.” 
 
 We, C. D., &c. [the secretary of the said company], E. F., of, &c. [the solicitor 
 of the said company], arid A. B., of, &c. [the managing director of the said 
 company], severally make oath and say as follows : — 
 
 I, the said C. D., for myself say as follows: — 
 
 1. I did, on the day of 19 , in the manner hereinafter mentioned, 
 
 serve a true copy of the notice now produced and shown to me and marked B, upon 
 each of the respective persons whose names, addresses, and descriptions appear in 
 the first column of the list of creditors, marked A, referred to in the affidavit 
 of filed on the day of 19. 
 
 2. I served the said respective copies of the said notice by putting such copies 
 
 respectively duly addressed to such persons respectively, according to their respective 
 names and addresses appearing in the said list (being the last known addresses or 
 places of abode of such persons respectively), and with the proper postage stamps 
 affixed thereto as prepaid letters, into the post office receiving house, No. , 
 
 in Street, in the county of , between the hours of and of 
 
 the clock, in the noon of the said day of 
 
 And I, the said E. F., for myself say as follows : — 
 
 3. A true copy of the notice now produced and shown to me, and marked C, has 
 
 appeared in the . of the day of 19 , the of the day 
 
 of 19 , &c. 
 
 4. I have, in the paper writing now produced and shown to me, and marked D, 
 
 set forth a list of all claims, the particulars of which have been sent in to me pursuant 
 to the said notice B, now produced and shown to me by persons claiming to be 
 creditors of the said company for larger amounts than are stated in the list of 
 creditors, marked A, referred to in the affidavit of , filed on the day 
 
 of 19 . 
 
 5. I have, in the paper writing now produced and shown to me, marked E, set 
 
 forth a list of all claims, the particulars of which have been sent in to me pursuant 
 to the notice referred to in the third paragraph of this affidavit by persons claiming 
 to be creditors of the said company on the day of 19 , not appearing 
 
 on the said list of creditors marked A, and who claimed to be entered thereon. 
 
 And we, C. D. and A. B., for ourselves say as follows : — 
 
 6. We have, in the first part of the said paper writing marked D (now produced 
 and shown to us), and also in the first part of the said paper writing, marked E 
 (also produced and shown to us), respectively set forth such of the said debts and 
 claims as are admitted by the said company to be due wholly or in part, and how 
 much is admitted to be due in respect of such of the same debts and claims 
 respectively as are not wholly admitted. 
 
 7. We have, in the second part of each of the said paper writings, marked D. 
 and E., set forth such of the said debts and claims as are wholly disputed by the 
 said company. 
 
 8. In the said exhibits D. and E. are distinguished such of the debts the full 
 amounts whereof are proposed to be appropriated in such manner as the J udge 
 shall direct. 
 
 Sworn, &c. 
 
Reduction of Capital Rules. Rules of 1909 
 
 595 
 
 Exhibit D., referred to in the last -mentioned Affidavit. 
 
 D. 
 
 In the Matter, &c. 
 
 List of debts and claims of which the particulars have been sent in to by 
 
 persons claiming to be creditors of the said company for larger amounts than are 
 stated in list of creditors made out by the company. 
 
 This paper writing, marked D., was produced and shown to C. D., E. F. , and 
 A. B. respectively, and is the same as is referred to in their affidavit sworn 
 before me this day of 19 . 
 
 X. Y. &c. 
 
 First Part. 
 
 Debts and Claims wholly or partly admitted by the Company. 
 
 Names, Addresses, 
 and Descriptions 
 of Creditors. 
 
 Particulars 
 of Debt or 
 Claim . 
 
 Amount 
 
 claimed. 
 
 Amount 
 admitted by the 
 Company to be 
 owing 
 to Creditor. 
 
 Debts proposed 
 to be 
 
 appropriated in 
 full, although 
 disputed. 
 
 
 
 
 
 
 Second Part. 
 
 Debts and Claims wholly disputed by the Company. 
 
 Names, Addresses, 
 and 
 
 Descriptions of 
 Claimants. 
 
 Particulars of 
 Claim. 
 
 Amount 
 
 claimed. 
 
 Debts proposed to 
 be appropriated in full 
 although disputed. 
 
 
 
 
 
 Exhibit E., referred to in the last Affidavit. 
 
 E. 
 
 In the Matter, &c. 
 
 List of debts and claims of which the particulars have been sent in to Mr. 
 by persons claiming to be creditors of the company, and to be entered on the list 
 of the creditors made out by the company. 
 
 This paper writing marked E. was produced and shown to C. D., E. F., and 
 A. B. respectively, and is the same as is referred to in their affidavit sworn 
 before me this day of 19 . 
 
 X. Y. &c. 
 
596 
 
 Appendix. 
 
 Form 7. 
 
 First Part. 
 
 [. Same as in Exhibit Z>.] 
 
 Second Part. 
 
 [Same as in Exhibit D.] 
 
 Note. — The names are to be inserted alphabetically. 
 
 No. 7. [ See Rule 14.] 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 of “The Companies (Consolidation) Act, 1908.” 
 
 To Mr. 
 
 You are hereby required to come in and prove the debt claimed by you against the 
 above company, by tiling your affidavit and giving notice thereof to Mr. , 
 
 the solicitor of the company, on or before the day of next ; and you are 
 
 to attend by your solicitor at the chambers of Mr. Justice , Room No. , 
 
 Royal Courts of Justice, Strand, in the County of London (or at the chambers of 
 the Registrar at ) on the day of ,19 , at o’clock in the 
 
 noon, being the time appointed for hearing and adjudicating upon the claim, and 
 produce any securities or documents relating to your claim. 
 
 In default of your complying with the above directions, you will [be precluded 
 from objecting to the proposed reduction of the capital of the company] or [in all 
 proceedings relative to the proposed reduction of the capital of the company be 
 treated as a creditor for such amount only as is set against your name in the list of 
 creditors]. 
 
 Dated this day of , 19 . 
 
 A. B., 
 
 Solicitor for the said Company. 
 
 No. 8. [< See Rule 19.] 
 
 In the Matter of the Company, Limited and Reduced ; and in the Matter 
 
 of “The Companies (Consolidation) Act, 1908.” 
 
 Notice is hereby given, that a petition presented to the High Court of Justice on 
 the day of , for confirming a resolution reducing the capital of the 
 
 above company from £ to £ , is directed to be heard before Mr. Justice 
 
 on the day of , 19 . 
 
 C. &D.,of 
 
 [Agents for E. & F., of ], 
 
 Solicitors for the Company. 
 
 3rd May, 1909. 
 
597 
 
 THE COMPANIES (WINDING-UP) RULES, 1909. 
 
 DATED 29th MARCH, 1909, MADE PURSUANT TO THE COMPANIES 
 (CONSOLIDATION) ACT, 1908 (8 Ed. VII. c. 69), AND THE 
 JUDICATURE ACT, 1881 (44 & 45 Vict. c. 68). 
 
 Preliminary. 
 
 1. Subject to the limitation hereinafter mentioned these Rules shall apply to the 
 proceedings in every winding-up under the Act of a company, which shall com- 
 mence on and after the date on which these Rules come into operation, and they 
 shall also, so far as practicable, and subject to any general or special order of the 
 Court, apply to all proceedings which shall be taken or instituted after the said 
 date, in the winding-up of a company which commenced on or after the first day 
 of January, 1891. Rules which from their nature and subject-matter are, or which 
 by the head lines above the group in which they are contained or by their terms are 
 made applicable only to the proceedings in a winding-up by the Court, shall not 
 apply to the proceedings in a voluntary winding-up, or winding-up under the 
 supervision of the Court. 
 
 2. In these Rules, unless the context or subject-matter otherwise requires : — 
 
 “The Act” means the Companies (Consolidation) Act, 1908. 
 
 “ The company ” means a company which is being wound up, or against which 
 proceedings to have it wound up have been commenced. 
 
 “ Court ” means the Court which has jurisdiction to wind up the company. 
 
 “Creditor” includes a corporation, and a firm of creditors in partnership. 
 
 “ Gazetted” means published in the London Gazette. 
 
 “ Judge ” means in the High Court the judge who for the time being exercises 
 the jurisdiction of the High Court to wind up companies, and in any 
 Court the judge thereof, or officer who exercises the powers of the 
 judge thereof. 
 
 ‘ ‘ Liquidator ’ ’ includes an official receiver when acting as liquidator. 
 
 “Official Receiver” includes any officer appointed by the Board of Trade to 
 discharge the duties of official receiver under the Act. 
 
 “Palatine Court ” means one of the Chancery Courts of the counties Palatine 
 of Lancaster and Durham. 
 
 “Proceedings” means the proceedings in the winding-up of a company under 
 the Act. 
 
 “Registrar ” means in the High Court any of the registrars in bankruptcy of 
 the High Court, and any person who shall be appointed to fill the office 
 of registrar under these Rules, and where a winding-up of a company 
 is in the district registry of Liverpool or Manchester means the district 
 registrar ; and in a County Court, where there are joint registrars means 
 either of such registrars, or a deputy registrar, and in any Court other 
 than the High Court, means the officer of the Court whose duty it is to 
 exercise in relation to a winding-up the functions which in the High 
 Court are exercised by a registrar or master. 
 
 “ The Rules” means these Rules, and includes the prescribed forms. 
 
 “ Sealed ” means sealed with the seal of the Court. 
 
 “ Taxing Officer” means the officer of the Court whose duty it is to tax costs 
 in the proceedings of the Court under its ordinary jurisdiction. 
 
 Words importing the masculine gender shall include females. 
 
 Words in the singular shall include the plural and words in the plural shall 
 include the singular. 
 
 The expression “person” shall include any body of persons corporate or 
 unincorporate. 
 
 Expressions referring to writing shall include printing, lithography, photo- 
 graphy, and other methods of representing or reproducing words in a 
 visible form. 
 
 Application 
 of Rules. 
 
 Interpretation 
 of terms. 
 
598 
 
 Appendix. 
 
 Use of forms in 
 Appendix. 
 
 Office of 
 registrar in 
 High Court. 
 
 Matters in High 
 •Court to be 
 heard in Court 
 and Chambers. 
 
 Proceedings in 
 Courts other 
 than High 
 •Court. 
 
 Applications in 
 ^Chambers. 
 
 3. — (1.) The forms in the Appendix, where applicable, and where they are not 
 applicable forms of the like character, with such variations as circumstances may 
 require, shall be used. Where such forms are applicable any costs occasioned by 
 the use of any other or more prolix forms shall be borne by or disallowed to the party 
 using the same, unless the Court shall otherwise direct. 
 
 (2.) Provided that the Board of Trade may from time to time alter any forms 
 which relate to matters of an administrative and not of a judicial character, or sub- 
 stitute new forms in lieu thereof. Where the Board of Trade alters any form, or 
 substitutes any new form in lieu of a form prescribed by these Rules, such altered 
 or substituted form shall be published in the London Gazette. 
 
 Court and Chambers. 
 
 4 . — (1.) All proceedings in the winding-up of companies in the High Court 
 shall from time to time be attached to one or more of the registrars, who shall, 
 together with the necessary clerks and officers, and subject to the Act and Rules, 
 act under the general or special directions of the judge. 
 
 (2.) Every other registrar may act for and in place of such registrar as above 
 mentioned in all proceedings under the Acts and Rules, including the holding of 
 public examinations, and when so acting such other registrar shall be deemed to be 
 the registrar for the purposes of the Act and Rules. 
 
 (3.) In every cause or matter within the jurisdiction of the judge, whether by 
 virtue of the Act, or by transfer, or otherwise, the registrar shall, in addition to 
 his powers and duties under the Rules, have all the powers and duties of a master, 
 registrar, or taxing master. 
 
 5. — (1.) The following matters and applications in the High Court shall be heard 
 before the judge in open Court : — 
 
 (a) Petitions. 
 
 (b) Appeals to the High Court from the Board of Trade and from the official 
 
 receiver when acting as official receiver and not as liquidator. 
 
 (c) Applications under section 223 of the Act. 
 
 (d) Applications by the Board of Trade under section 224 of the Act. 
 
 (e) Applications for the committal of any person to prison for contempt. 
 
 (f) Such matters and applications as the judge may from time to time by any 
 
 general or special orders direct to be heard before him in open Court. 
 
 (2.) Examinations of persons summoned before the High Court under section 174 
 of the Act, shall be held in Court or in Chambers as the Court shall direct. 
 
 (3.) Every other matter or application in the High Court under the Act to which 
 the Rules apply may be heard and determined in Chambers. 
 
 6. — (1.) In Courts other than the High Court the following matters and applica- 
 tions to the Court shall be heard in open Court : — 
 
 (a) Petitions. 
 
 (b) Public examinations. 
 
 (c) Applications under sub-section 1 of section 217 of the Act. 
 
 (d) Applications to rectify the register. 
 
 (e) Appeals from the official receiver and Board of Trade. 
 
 (f) Appeals from any decision or act of the liquidator. 
 
 (g) Applications relating to the admission or rejection of proofs. 
 
 (h) Proceedings under section 215 of the Act. 
 
 (i) Applications under section 223 of the Act. 
 
 (j) Applications for the committal of any person to prison for contempt. 
 
 (k) Such matters and applications as the judge may from time to time by any 
 
 general or special orders direct to be heard before him in open Court. 
 
 (2,) Any other matter or application may be heard and determined in Chambers. 
 
 7. Subject to the provisions of the Act and Rules in every Court : — 
 
 (1.) The registrar may under the general or special directions of the judge hear 
 and determine any application or matter which under the Act and Rules 
 may be heard and determined in Chambers. 
 
 (2.) Any matter or application before the registrar may at any time be adjourned 
 by him to be heard before the judge either in Chambers or in Court. 
 
 (3.) Any matter or application may, if the judge or as the case may be, the 
 registrar, thinks fit be adjourned from Chambers to Court, or from Court 
 .to Chambers. 
 
599 
 
 Companies (Winding-up) Rules. Rules of 1909 
 
 8. — (1.) Every application in Court other than a petition, shall be made by Motions and 
 motion, notice of which shall be served on every person against whom an order is summonses, 
 sought’ not less than two clear days before the day named in the notice for hearing Form 3. 
 the motion, which day must be one of the days appointed for the sittings of the 
 
 Court. 
 
 (2.) Every application in Chambers shall be made by summons, which, unless 
 otherwise ordered, shall be served on every person against whom an order is sought, 
 and shall require the person or persons to whom the summons is addressed to attend 
 at the time and place named in the summons. 
 
 9. Subject to the orders of the Lord Chancellor the place of sitting of each Place of sitting 
 County Court having jurisdiction under the Act shall for the purposes of such of County Court, 
 jurisdiction, be the town and place in which the Court holds its sittings for the 
 
 general business of the Court, under the County Courts Acts. 
 
 10. Subject to the provisions of the Act, the times of the sitting of each Court, Times for 
 other than the High Court in matters of the winding-up of companies shall be those ^hS^han tlm 
 which are appointed for the transaction of the general business of the Court, High Court, 
 unless the judge of any such Court shall otherwise order. 
 
 Proceedings. 
 
 11. — (1.) Every proceeding in a winding-up matter shall be dated, and shall Title of 
 
 with any necessary additions, be intituled as follows : — proceedings. 
 
 T Forms 1 and 
 
 In the Court 
 
 Companies (Winding-Up) 
 
 In the Matter of the Companies (Consolidation) Act, 1908. 
 with the name of the matter to which it relates. Numbers and dates may be 
 denoted by figures. 
 
 (2.) The first proceeding in every winding-up matter shall have a distinctive 
 number assigned to it in the office of the registrar, and all proceedings in any 
 matter subsequent to the first proceeding shall bear the same number as the first 
 proceeding. 
 
 12. All proceedings shall be written or printed, or partly written or partly Written or 
 printed on paper of the size of 13 in. in length and 8 in. in breadth, or thereabouts, printed 
 and must have a stitching margin ; but no objection shall be allowed to any proof procee 1D&S - 
 or affidavit on account only of its being written or printed on paper of other size. 
 
 13. All orders, summonses, petitions, warrants, process of any kind (including Process to be 
 notices when issued by the Court) and office copies in any winding-up matter shall sealed, 
 be sealed. 
 
 14. Every summons in a winding-up matter in the High Court shall be prepared Issue of 
 by the applicant or his solicitor, and issued from the office of the registrar. A summonses, 
 summons, when sealed, shall be deemed to be issued. The person obtaining the 
 summons shall leave in the registrar’s office a duplicate which shall be stamped 
 
 with the prescribed stamp and filed. 
 
 15. Every order, whether made in Court or in Chambers in the winding-up of a Orders, 
 company shall be drawn up by the registrar, unless in any proceeding, or classes of 
 proceedings, the judge or registrar who makes the order shall direct that no order 
 
 need be drawn up. Where a direction is given that no order need be drawn up, the 
 note or memorandum of the order, signed or initialled by the judge or the registrar 
 making the order, shall be sufficient evidence of the order having been made. 
 
 16. All petitions, affidavits, summonses, orders, proofs, notices, depositions, bills File of pro- 
 of costs, and other proceedings in the High Court in a winding-up matter shall be of^^iftr^ 0 ^ 06 
 kept and remain of record in the office of the registrar and, subject to the directions ^High* Court) . 
 of the Court, shall be placed in one continuous file, and no proceeding in any 
 winding-up matter shall be filed in the Central Office. 
 
 17. In Courts other than the High Court a file of proceedings in every winding- File of pro- 
 up matter shall be kept on which, subject to the directions of the Court, all ^^ts^other 
 petitions, affidavits, summonses, orders, proofs, notices, depositions, and other than High 61 
 proceedings in the matter shall be placed and remain of record as far as possible in Court, 
 continuous order. 
 
 18. In every Court all office copies of petitions, affidavits, depositions, papers and Office copies, 
 writings, or any parts thereof, required by the official receiver or any liquidator, 
 
600 
 
 Appendix. 
 
 Inspection 
 of file. 
 
 Use of file by 
 Board < f Trade 
 and official 
 receiver. 
 
 Defacement of 
 stamps. 
 
 contributory, creditor, officer of a company, or other person entitled thereto, shall 
 he provided by the registrar, and shall, except as to figures, be fairly written 
 out at length, and be sealed and delivered out without any unnecessary delay, and 
 in the order in which they shall have been bespoken. 
 
 19. Every person who has been a director or officer of a company which is being 
 wound up, and every duly authorised officer of the Board of Trade, shall be entitled, 
 free of charge, and every contributory and every creditor whose claim or proof has 
 been admitted, shall be entitled on payment of a fee of one shilling for each hour or 
 part of an hour occupied, at all reasonable times, to inspect the file of proceedings 
 and to take copies or extracts from any document therein, or to be furnished with 
 such copies or extracts at a rate not exceeding fourpence per folio of seventy-two 
 words. 
 
 20. Where, in the exercise of their functions under the Act or Rules, the Board 
 of Trade or the official receiver requires to inspect or use the file of proceedings the 
 registrar shall (unless the file is at the time required for use in Court or by him) on 
 request, transmit the file of proceedings to the Board of Trade or official receiver, as 
 the case may be. 
 
 21. Every officer of a Court who shall receive any document to which an adhesive 
 stamp shall be affixed, shall immediately upon receipt of the document deface the 
 stamp thereon, in the High Court in such manner as the Commissioners of 
 Inland Revenue may from time to time direct, and in any other Court by writing 
 partly on the stamp and partly on the document the name of the matter, or in 
 such other manner as the Commissioners of Inland Revenue may from time to 
 time direct, aud no such document shall be filed or delivered until the stamp 
 thereon shall have been defaced in manner aforesaid ; and it shall be the duty of 
 the party presenting or receiving such document to see that the defacement hereby 
 prescribed has been duly made. 
 
 Service and Execution of Process and Enforcement of Orders. 
 
 Duties of bailiff 
 in County Court. 
 
 Service. 
 
 Enforcement 
 of orders. 
 
 Form of 
 petition. 
 
 Forms 4 and 5. 
 
 22. — (1.) It shall be the duty of the high bailiff of a County Court to serve 
 such orders, summonses, petitions and notices as the Court may require him to 
 serve ; to execute warrants and other process; to attend any sittings of the Court 
 (but not sittings in Chambers) ; and to do and perform all such things as may be 
 required of him by the Court. 
 
 (2.) But this rule shall not be construed to require any order, summons, petition, 
 or notice to be served by a bailiff or officer of the Court which is not specially by 
 the Act or Rules required to be so served, unless the Court in any particular 
 proceeding by order specially so directs. 
 
 23. — (1.) All notices, summonses, and other documents other than those of 
 which personal service is required, may be sent by prepaid post letter to the last known 
 address of the person to be served therewith ; and the notice, summons, or document 
 shall be considered as served at the time that the same ought to be delivered in the 
 due course of post by the post office, and notwithstanding the same may be 
 returned by the post office. 
 
 (2.) No service shall be deemed invalid by reason that the name, or any of the 
 names other than the surname of the person to be served, has been omitted from the 
 document containing the person’s name, provided that the Court is satisfied that in 
 other respects the service of the document has been sufficient. 
 
 24. — (1.) Every order of a Court having jurisdiction to wind up a company, 
 made in the exercise of the powers conferred by the Acts and Rules, may be 
 enforced by such Court as if it were a judgment or order of the Court made in the- 
 exercise of its ordinary jurisdiction. 
 
 (2.) Every such order of a County Court, and every process issued therein may be 
 enforced, executed and d^alt with not only by such Court, but by any County 
 Court, whether such County Court has or has not jurisdiction to wind up a 
 company, as if such order or process were made or issued for the enforcement of a 
 judgment or order made by such last -mentioned Court in the exercise of its ordinary 
 jurisdiction. 
 
 Petition. 
 
 25. Every petition for the winding-up of a company by the Court, or subject 
 to the supervision of the Court, shall be in the Forms Nos. 4 and 5 in the Appendix,, 
 with such variations as circumstances may require. 
 
Companies (Winding-up) Rules. Rules of 1909 
 
 601 
 
 26. A petition shall be presented at the office or chambers of the registrar, who 
 shall appoint the time and place at which the petition is to be heard. Notice of the 
 time and place appointed for hearing the petition shall be written on the petition 
 and sealed copies thereof, and the registrar may at any time before the petition has 
 been advertised, alter the time appointed, and fix another time. 
 
 27. Every petition shall be advertised seven clear days before the hearing, as 
 follows : — 
 
 (1.) In the case of a company whose registered office, or if there shall be no such 
 office, then whose principal or last known principal place of business is or 
 was situate within ten miles of the principal entrance of the Royal Courts 
 of J ustice, once in the London Gazette , and once at least in one London daily 
 morning newspaper, or in such other newspaper as the Court directs. 
 
 (2.) In the case of any other company, once in the London Gazette , and once at 
 least in one local newspaper circulating in the district where the regis- 
 tered office, or principal or last known principal place of business, as the 
 case may be, of such company is or was situate, or in such other newspaper 
 as shall be directed by the Court. 
 
 (3.) The advertisement shall state the day on which the petition was presented, 
 and the name and address of the petitioner, and of his solicitor and London 
 agent (if any], and shall contain a note at the foot thereof, stating that 
 any person who intends to appear on the hearing of the petition, either to 
 oppose or support, must send notice of his intention to the petitioner, or to 
 his solicitors or London agent, within the time and manner prescribed by 
 Rule 33, and an advertisement of a petition for the winding-up of a company 
 by the Court which does not contain such a note shall be deemed 
 irregular. 
 
 And if the petitioner or his solicitor does not within the time hereby prescribed 
 or within such extended time as the registrar may allow duly advertise the petition 
 in the manner prescribed by the said Rule the appointment of the time and place at 
 which the petition is to be heard shall be cancelled by the registrar and the petition 
 shall be removed from the file in the Companies (Winding-up) Office unless the 
 judge or the registrar shall otherwise direct. 
 
 28. Every petition shall, unless presented by the company, be served upon the 
 company at the registered office, if any, of the company, and if there is no regis- 
 tered office, then at the principal or last known principal place of business of the 
 company, if any such can be found, by leaving a copy with any member, officer, or 
 servant of the company there, or in case no such member, officer, or servant can be 
 found there, then by leaving a copy at such registered office or principal place of 
 business, or by serving it on such member or members of the company as the Court 
 may direct ; and where the company is being wound up voluntarily, the petition 
 shall also be served upon the liquidator (if any) appointed for the purpose of 
 winding-up the affairs of the company. 
 
 29. Every petition for the winding-up of a company by the Court, or subject 
 to the supervision of the Court, shall be verified by an affidavit referring thereto. 
 Such affidavit shall be made by the petitioner, or by one of the petitioners, if more 
 than one, or, in case the petition is presented by a corporation, by some director, 
 secretary, or other principal officer thereof, and shall be sworn after and filed within 
 four days after the petition is presented, and such affidavit shall be sufficient primd 
 facie evidence of the statements in the petition. 
 
 30. Every contributory or creditor of the company shall be entitled to be fur- 
 nished, by the solicitor of the petitioner, with a copy of the petition, within 24 hours 
 after requiring same, on paying the rate of 4 d. per folio of 72 words for such 
 copy. 
 
 Official Receiver as Provisional Liquidator. 
 
 31. — (1.) After the presentation of a petition, upon the application of a creditor, 
 or of a contributory, or of the company, and upon proof by affidavit of sufficient 
 grounds for the appointment of the official receiver as provisional liquidator, the 
 Court, if it thinks fit, and upon such terms as in the opinion of the Court shall 
 be just and necessary, may make the appointment. 
 
 (2.) The order appointing the official receiver to be provisional liquidator shall 
 bear the number of the petition, and shall state the nature and a short description of 
 the property of which the official receiver is ordered to take possession, and the 
 duties to be performed by the official receiver. 
 
 (3.) Subject to any order of the Court, if no order for the winding-up of the 
 company is made upon the petition, or if an order for the winding-up of the 
 
 p. 39 
 
 Presentation 
 of petition. 
 
 Advertisement 
 of petition. 
 Form 6. 
 
 Service of 
 petition. 
 
 Forms 7 and 8. 
 
 Verification of 
 petition. 
 
 Form 9. 
 
 Copy of petition 
 to be furnished 
 to creditor or 
 contributory. 
 
 Appointment 
 of provisional 
 liquidator. 
 
 Form 10. 
 
602 
 
 Appendix 
 
 Attendance 
 before hearing 
 to show compli- 
 ance with rules. 
 
 Notice by 
 persons who 
 intend to 
 appear. 
 
 Form 11. 
 
 List of names 
 and addresses of 
 persons who 
 appear on the 
 petition. 
 
 Form 12. 
 
 Affidavits in 
 opposition and 
 reply. 
 
 Substitution of 
 creditor or 
 contributory for 
 withdrawing 
 petitioner. 
 
 Notice that 
 winding-up 
 order has been 
 pronounced to be 
 given to official 
 receiver. 
 
 Forms 13 and 14. 
 
 Documents for 
 drawing up 
 order to be left 
 with registrar. 
 
 company on the petition is rescinded, or if all proceedings on the petition are 
 stayed, or if an order is made continuing the voluntary winding-up of the company 
 subject to the supervision of the Court, the official receiver as provisional liquidator 
 shall be entitled to be paid, out of the property of the company, all the costs, 
 charges, and expenses properly incurred by him as provisional liquidator, including 
 the fees payable to the Board of Trade under the scale of fees in force for the time 
 being, and may retain out of such property the amounts of such costs, charges, 
 expenses, and fees. 
 
 Hearing of Petitions and Orders made thereon. 
 
 32. After a petition has been presented, the petitioner, or his solicitor, shall, on 
 a day to be appointed by the registrar, attend before the registrar and satisfy him 
 that the petition has been duly advertised, that the prescribed affidavit verifying 
 the statements therein, and the affidavit of service (if any) have been duly filed, and 
 that the provisions of the rules as to petitions for winding-up companies have been 
 duly complied with by the petitioner. No order for the winding-up of a company 
 shall be made on the petition of any petitioner who has not, prior to the hearing of 
 the petition, attended before the registrar at the time appointed, and satisfied him 
 in manner required by this rule. 
 
 33. Every person who intends to appear on the hearing of a petition shall serve 
 on, or send by post to, the petitioner, or his solicitor or London agent, at the 
 address stated in the advertisement of the petition, notice of his intention. The 
 notice shall contain the address of such person and shall be signed by him or by 
 his solicitor or London agent, and shall be served, or if sent by post shall be posted 
 in such time as in ordinary course of post to reach the address not later than six 
 o ? clock in the afternoon of the day previous to the day appointed for the hearing of 
 the petition. The notice may be in Form 1 1 with such variations as circumstances 
 may require. A person who has failed to comply with this rule shall not, without 
 the special leave of the Court, be allowed to appear on the hearing of the petition. 
 
 34. The petitioner, or his solicitor or London agent, shall prepare a list of the 
 names and addresses of the persons who have given notice of their intention to 
 appear on the hearing of the petition, and of their respective solicitors, which shall 
 be in Form 12. On the day appointed for hearing the petition a fair copy of the 
 list (or if no notice of intention to appear has been given a statement in writing to 
 that effect) shall be handed by the petitioner, or his solicitor or London agent, to 
 the Court prior to the hearing of the petition. 
 
 35. — (1.) Affidavits in opposition to a petition that a company may be wound up 
 under the order or subject to the supervision of the Court shall be filed within seven 
 days of the date on which the affidavit verifying the petition is filed, and notice of 
 the filing of every affidavit in opposition to such a petition shall be given to the 
 petitioner or the solicitor or London agent of the petitioner, on the day on which 
 the affidavit is filed. 
 
 (2.) An affidavit in reply to an affidavit filed in opposition to a petition shall be 
 filed within three days of the date on which notice of such affidavit is received by 
 the petitioner or the solicitor or London agent of the petitioner. 
 
 36. When a petitioner consents to withdraw his petition, or to allow it to be 
 dismissed, or the hearing adjourned, or fails to appear in support of his petition 
 when it is called on in Court on the day originally fixed for the hearing thereof, or 
 on any day to which the hearing has been adjourned, or, if appearing, does not 
 apply for an order in the terms of the prayer of his petition, the Court may, upon 
 such terms as it may think just, substitute as petitioner any creditor or contributory 
 who in the opinion of the Court would have a right to present a petition, and who 
 is desirous of prosecuting the petition. 
 
 Order to Wind up a Company. 
 
 37. When an order for the winding-up of a company, or for the appointment of 
 the official receiver as provisional liquidator prior to the making of an order for the 
 winding-up of the company, has been pronounced in Court, the registrar shall, on 
 the same day, send to the official receiver a notice informing him that the order has 
 been pronounced. 
 
 The notice may be in Forms 13 and 14 respectively, with such variations as 
 circumstances may require. 
 
 38. It shall be the duty of the petitioner, or his solicitor or London agent, and 
 of all other persons who have appeared on the hearing of the petition, at latest on 
 the day following the day on which an order for the winding-up of a company is 
 
Companies (Winding-up) Rules. 
 
 Rules of 1909 003 
 
 pronounced in Court, to leave at the registrar’s office all the documents required 
 for the purpose of enabling the registrar to complete the order forthwith. 
 
 39 . It shall not be necessary for the registrar to make an appointment to settle 
 the order, unless in any particular case the special circumstances make an appoint- 
 ment necessary. 
 
 40 . An order to wind up a company shall contain at the foot thereof a notice 
 stating that it will be the duty of the person who is at the time secretary or chief 
 officer of the company, and of such of the persons who are liable to make out or 
 concur in making out the company’s statement of affairs as the official receiver may 
 require, to attend on the official receiver forthwith on the service of the order at the 
 place mentioned therein. 
 
 41 . — (1.) When an order that a company be wound up, or for the appointment 
 of the official receiver as provisional liquidator has been made : — 
 
 (a) Three copies of the order sealed with the seal of the Court shall forthwith be 
 
 sent by post or otherwise by the registrar to the official receiver. 
 
 (b) The official receiver shall cause a sealed copy of the order to be served upon 
 
 the secretary or other chief officer of the company at the registered office 
 of the company (if any), or upon such other person or persons, or in such 
 other manner as the Court may direct, and if the order is that the company 
 be wound up by the Court, shall forward to the Registrar of Companies 
 the copy of the order which by section 143 of the Act is directed to be so 
 forwarded by the company. 
 
 (c) The official receiver shall forthwith give notice of the order to the Board of 
 
 Trade, who shall forthwith cause the notice to be gazetted. 
 
 (d) The official receiver shall forthwith send notice of the order to such local 
 
 paper as the Board of Trade may from time to time direct, or, in default 
 of such direction, as he may select. 
 
 (2.) An order for the winding-up of a company, subject to the supervision of the 
 Court, shall before the expiration of twelve days from the date thereof be advertised 
 by the petitioner, once in the London Gazette , and shall be served on such persons (if 
 nny) and in such manner as the Court shall direct. 
 
 Transfees of Actions and Proceedings. 
 
 42 . — ( 1 .) Where an order has been made in the High Court for the winding-up 
 of a company the judge shall have power, without further consent, to order the 
 transfer to him of any action, cause or matter pending in any other Court or Division 
 brought or continued by or against the company, and any action or proceeding by 
 a mortgagee or debenture holder of the company against the company for the 
 purpose of realising his security, or by any other person for the purpose of enforcing 
 a claim against the company’s assets or property which is pending in the High 
 Court or before any judge thereof, shall without further order be transferred to the 
 judge of the High Court. In the case of applications in Chambers in actions so 
 transferred where the practice in winding-up is different from the practice in the 
 Chancerv Division the practice in winding-up shall prevail. 
 
 (2.) Where any action brought by or against a company against which a 
 winding-up order has been made is transferred to the judge of the High Court, 
 the registrar may, under the general or special directions of the judge, hear, 
 determine and deal with any application, matter, or proceeding which, if the 
 action had not been transferred, would have been determined in Chambers. These 
 provisions shall apply to the proceedings in any action in which by the Rules of 
 the Supreme Court or otherwise the Chamber proceedings are directed to be dealt 
 with by the registrar. 
 
 43 . The judge of the High Court may at any time, for good cause shown, order 
 the proceedings in any Court other than the High Court to be transferred to the 
 High Court, or any proceedings in the High Court to be transferred from the High 
 Court to any other Court. 
 
 44 . The judge of any Court, other than the High Court or a Palatine Court, 
 may at any time, for good cause shown, order any proceedings which have been 
 commenced or are pending in his Court to be transferred to any Court which has 
 jurisdiction to order the winding-up of a company, not being the High Court or a 
 Palatine Court. 
 
 No appoint- 
 ment for 
 settling order. 
 
 Contents of 
 winding-up 
 order. 
 
 Form 15. 
 
 Transmission 
 and advertise- 
 ment of wind- 
 ing-up order. 
 
 Form 17. 
 
 Form 16. 
 
 Transfer of 
 actions. 
 
 Transfer of 
 proceedings by- 
 judge of High 
 Court. 
 
 Form 18. 
 
 Transfer of 
 proceedings by 
 judge of Court 
 other than 
 High Court or 
 Palatine Court. 
 Form 18. 
 
604 
 
 Appendix. 
 
 Notice of 
 application to 
 official receiver. 
 
 Procedure where 
 proceedings 
 transferred. 
 Form 19. 
 
 Transfer of 
 jurisdiction of 
 County Court. 
 
 Appointment of 
 special manager. 
 
 Accounting by 
 special manager. 
 Form 20. 
 
 Preparation of 
 statement of 
 affairs. 
 
 Form 26. 
 
 45. In a winding-up by the Court, notice of an application for a transfer of 
 proceedings shall before the hearing thereof, be served by the applicant on the 
 official receiver of the Court in which the proceedings are pending and on the 
 official receiver of the Court to which the proceedings are*sought to be transferred. 
 
 46. When an order for the transfer of proceedings has been made : — 
 
 (1.) The person on whose application the transfer has been made shall lodge with 
 the registrar of the Court to which the proceedings are transferred a sealed 
 copy of the order of transfer. 
 
 (2.) In a winding-up by the Court the official receiver of the Court to which the 
 proceedings are transferred shall become the official receiver in the pro- 
 ceedings. 
 
 (3.) The records of the proceedings shall be transmitted to the registrar of the 
 Court to which the proceedings are transferred, and in a winding-up by 
 the Court such registrar, as soon as he has received the records, shall give 
 notice of the transfer to the official receiver of his Court, who shall give 
 notice of the transfer to the Board of Trade. 
 
 (4.) The proceedings shall receive a new distinctive number. 
 
 47. Whenever the Lord Chancellor, by order under his hand, shall exclude any 
 County Court from having jurisdiction under the Act, or shall attach the district 
 or any part of the district of a County Court to the High Court, or any other 
 County Court, or shall detach the district or any part of the district of any County 
 Court from the district and jurisdiction of the High Court, any winding-up matters 
 pending in the Court or district to which the order relates shall become transferred 
 to such Court as shall be mentioned for the purpose in the order ; and, thereupon, 
 the rules as to transfer of proceedings shall apply to the transfer of such pending 
 proceedings in all respects as if the proceedings had been transferred by order of a 
 Court having power to transfer proceedings. 
 
 Special Manager. 
 
 48. — (1.) An application by the official receiver for the appointment of a special 
 manager shall be supported by a report of the official receiver, which shall be 
 placed on the file of proceedings, and in which shall be stated the amount of 
 remuneration which, in the opinion of the official receiver, ought to be allowed to 
 the special manager. No affidavit by the official receiver in support of the applica- 
 tion shall be required. 
 
 (2.) The remuneration of the special manager shall, unless the Court otherwise 
 in any special case directs, be stated in the order appointing him, but the Court 
 may at any subsequent time for good cause shown make an order for payment to the 
 special manager of further remuneration. 
 
 (3.) A copy of the order appointing a special manager shall be transmitted to the 
 Board of Trade by the official receiver. 
 
 49. Every special manager shall account to the official receiver, and the special 
 manager’s accounts shall be verified by affidavit, and, when approved by the official 
 receiver, the totals of the receipts and payments shall be added by the official 
 receiver to his accounts. 
 
 Statement of Affairs. 
 
 50. — (1.) Every person who under section 147 of the Act has been required 
 by the official receiver to submit and verify a statement as to the affairs of the 
 company, shall be furnished by the official receiver with forms and instructions for 
 the preparation of the statement. The statement shall be made out in duplicate, 
 one copy of which shall be verified by affidavit. The official receiver shall cause 
 to be filed with the registrar the verified statement of affairs. 
 
 (2.) The official receiver may from time to time hold personal interviews with 
 every such person for the purpose of investigating the company’s affairs, and it 
 shall be the duty of every such person to attend on the official receiver at such 
 time and place as the official receiver may appoint and give the official receiver all 
 information that he may require. 
 
605 
 
 Companies (Winding-up) Rules. Rules of 1909 
 
 51 . When any person requires any extension of time for submitting the state- Extension of 
 ment of affairs, he shall apply to the official receiver, who may, if he thinks fit, time for sub- 
 give a written certificate extending the time, which certificate shall be filed with fitting state- 
 the proceedings in the winding-up and shall render an application to the Court raen 0 a air8, 
 unnecessary. 
 
 52. After the statement of affairs of a company has been submitted to the Information 
 official receiver it shall be the duty of each person who has made or concurred in subsequent to 
 making it, if and when required, to attend on the official receiver and answer all “ ent of 
 such questions as may be put to him, and give all such further information as may 
 
 be required of him by the official receiver in relation to the statement of affairs. 
 
 53 . Any default in complying with the requirements of section 147 of the Act Default, 
 may be reported by the official receiver to the Court. 
 
 54 . A person who is required to make or concur in making any statement of Expenses of 
 affairs of a company shall, before incurring any costs or expenses in and about the statement of 
 preparation and making of the statement, apply to the official receiver for his a air8 ' 
 sanction, and submit a statement of the estimated costs and expenses which it is 
 intended to incur ; and except by order of the Court no person shall be allowed out 
 
 of the assets of the company any costs or expenses which have not before being 
 incurred been sanctioned by the official receiver. 
 
 Appointment of Liquidator in a Winding-up by the Court. 
 
 55 . — (1 .) As soon as possible after the first meetings of creditors and contributories Appointment of 
 
 have*been held the official receiver, or the chairman of the meeting, as the case may liquidator on 
 be, shall report the result of each meeting to the Court. of Creditors 
 
 (2.) Upon the result of the meetings of creditors and contributories being reported an q contribu- 
 te the Court, the Court may, if the meeting of creditors and the meeting of contri- tories. 
 butories have each passed the same resolutions, or if the resolutions passed at the Form 27. 
 two meetings are identical in effect, upon the application of the official receiver, 
 forthwith make the appointments necessary for giving effect to such resolutions. In 
 any other case the Court shall, on the application of the official receiver, fix a time 
 and place for considering the resolutions and determinations (if any) of the meetings, 
 deciding differences (if any), and making such order as shall be necessary. 
 
 (3.) When a time and place have been fixed for the consideration of the resolutions 
 and determinations of the meetings, such time and place shall be advertised by 
 the official receiver in such manner as the Court shall direct, but so that the 
 first or only advertisement shall be published not less than seven days before the 
 time so fixed. 
 
 (4.) Upon the consideration of the resolutions and determinations of the meetings 
 the Court shall hear the official receiver and any creditor or contributory. 
 
 (5.) If a liquidator is appointed a copy of the order appointing him shall be 
 transmitted to the Board of Trade by the official receiver, and the Board of Trade 
 shall, as soon as the liquidator has given security, cause notice of the appointment Forms 28 and 
 to be gazetted. The expense of gazetting the notice of the appointment shall be paid 103 (7). 
 by the liquidator, but may be charged by him on the assets of the company. 
 
 (6.) Every appointment of a liquidator or committee of inspection shall be Form 30. 
 advertised by the liquidator in such manner as the Court directs immediately after 
 the appointment has been made, and the liquidator has given the required security. 
 
 (7.) If a liquidator in a winding-up by the Court shall die, or resign, or be 
 removed, another liquidator may be appointed in his place in the same manner as 
 in the case of a first appointment, and the official receiver shall, on the request of 
 not less than one -tenth in value of the creditors or contributories summon meetings 
 for the purpose of determining whether or not the vacancy shall be filled ; but none 
 of the provisions of this rule shall apply where the liquidator is released under 
 section 157 of the Act in which case the official receiver shall remain liquidator. 
 
 56 . When the official receiver is liquidator of a company he shall be styled Style of official 
 
 “official receiver and liquidator.” receiver when he 
 
 is liquidator. 
 
 Security by Liquidator or Special Manager in a Winding-up by the Court. 
 
 57 . In the case of a special manager or a liquidator other than the official Standing 
 
 receiver, the following provisions as to security shall have effect, namely : — security to 
 
 (1.) The security shall be given to such officers or persons and in such manner as Boar 0 Ira<Ie * 
 the Board of Trade may from time to time direct. 
 
606 
 
 Appendix. 
 
 Form 29. 
 
 Failure to give 
 or keep up 
 security. 
 
 Report of official 
 receiver to be 
 filed. 
 
 Appointment of 
 time for con- 
 sideration of 
 report. 
 
 Consideration of 
 report. 
 
 Procedure con- 
 sequent on 
 order for public 
 examination. 
 Form 31. 
 
 Application for 
 day for holding 
 examination. 
 
 Appointment of 
 time and place 
 for public ex- 
 amination. 
 Forms 32 and 33. 
 
 (2.) It shall not he necessary that security shall be given in each separate 
 winding-up ; but security may be given either specially in a particular 
 winding-up, or generally, to be available for any winding-up in which the 
 person giving security may be appointed, either as liquidator or special 
 manager. 
 
 (3.) The Board of Trade shall fix the amount and nature of such security, and 
 may from time to time, as they think fit, either increase or diminish the 
 amount of special or general security which any person has given. 
 
 (4.) The certificate of the Board of Trade that a liquidator or special manager 
 has given security to their satisfaction shall he filed with the registrar. 
 
 (5.) The cost of furnishing the required security by a liquidator or special 
 manager, including any premiums which he may pay to a guarantee 
 society, shall he borne by him personally, and shall not be charged 
 against the assets of the company as an expense incurred in the 
 winding-up. 
 
 58. — (1.) If a liquidator or special manager fails to give the required security 
 within the time stated for that purpose in the order appointing him, or any extension 
 thereof, the official received shall report such failure to the Court, who may there- 
 upon rescind the order appointing the liquidator or special manager. 
 
 (2.) If a liquidator or special manager fails to keep up his security, the official 
 receiver shall report such failure to the Court, who may thereupon remove the 
 liquidator or special manager, and make such order as to costs as the Court shall 
 think fit. 
 
 (3.) Where an order is made under this rule rescinding an order for the appoint- 
 ment of or removing a liquidator, the Court may direct that another liquidator.is to 
 he appointed, and thereupon the same meetings shall be summoned and the same 
 proceedings may be taken as in the case of a first appointment of a liquidator. 
 
 Public Examination. 
 
 59. A report made by the official receiver pursuant to section 148 of the Act 
 shall state, in a narrative form, the facts and matters which the official receiver 
 desires to bring to the notice of the Court, and his opinion as required by the said 
 section. 
 
 60. The official receiver may apply to the Court to fix a day for the consideration 
 of the report, and on such application the Court shall appoint a day on which the 
 report shall he considered. 
 
 61 . The consideration of the report shall be before the judge of the Court personally 
 in Chambers, and the official receiver shall personally, or by counsel or solicitor, 
 attend the consideration of the report, and give the Court any further information 
 or explanation with reference to the matters stated in the report which the Court 
 may require. 
 
 62. Where the judge makes an order under section 175 of the Act, directing any 
 person or persons to attend for public examination : — 
 
 (a) The examination shall he held before the judge. Provided that in the 
 
 High Court the judge may direct that the whole or any part of the 
 examination of any such person or persons be held before the registrar, or 
 before any of the persons mentioned in sub-section 9 of the said section. 
 
 (b) The judge may, if he thinks fit, either in the order for examination, or by 
 
 any subsequent order, give directions as to the special matters on which 
 any such person is to be examined. 
 
 (c) Where on an examination held before the registrar, or one of the persons 
 
 mentioned in sub-section 9 of the said section, he is of opinion that such 
 examination is being unduly or unnecessarily protracted, or for any other 
 sufficient cause, he may adjourn the examination of any person, or any 
 part of the examination, to be held before the judge. 
 
 63. Upon an order directing a person to attend for public examination being 
 made, the official receiver shall apply for the appointment of a day on which the 
 public examination is to be held. 
 
 64. A day and place shall be appointed for holding the public examination, and 
 notice of the day and place so appointed shall be given by the official receiver to the 
 person who is to be examined by sending such notice in a registered letter addressed 
 to his usual or last known address. 
 
Rules of 1909 607 
 
 Companies (Winding-up) Rules. 
 
 65. — (1.) The official receiver shall give notice of the time and place appointed for Notice of public 
 holding a public examination to the creditors and contributories by advertisement in examination to 
 such newspapers as the Board of Trade from time to time direct, or in default of any contributories 
 such direction as the official receiver thinks fit, and shall also forward notice of the 
 appointment to the Board of Trade to be gazetted. 
 
 (2.) Where an adjournment of the public examination has been directed, notice 
 of the adjournment shall not, unless otherwise directed by the Court, be advertised 
 in any newspaper, but it shall be sufficient to publish in the Gazette a notice of the 
 time and place fixed for the adjourned examination. 
 
 66. — (1.) If any person who has been directed by the Court to attend for public Default in 
 examination fails to attend at the time and place appointed for holding or pro- attending, 
 ceeding with the same, and no good cause is shown by him for such failure, or if Form 
 before the day appointed for the examination the official receiver satisfies the 
 
 Court that such person has absconded, or that there is reason for believing that he 
 is about to abscond with the view of avoiding examination, it shall be lawful for 
 the Court, upon its being proved to the satisfaction of the Court that notice of the 
 order and of the time and place appointed for attendance at the public examination 
 was duly served, without any further notice, to issue a warrant for the arrest of 
 the person required to attend, or to make such other order as the Court shall 
 think j ust. 
 
 (2.) A warrant of arrest issued by the High Court under this rule shall be issued Warrants of 
 in the Central Office of the Supreme Court pursuant to an order of the Court directing arrest, 
 such issue. 
 
 67. The notes of every public examination shall, after being signed as required Notes of exami- 
 
 by section 175 (7) of the Act, be filed with the registrar. fifed. 011 10 ^ 
 
 Forms 36 and 37 . 
 
 Proceedings against Delinquent Directors, Promoters, and Officers. 
 
 68. — (1.) An application under section 215 of the Act shall in any Court Application 
 other than the High Court be made by motion to the Court. In the High Court a fg^ 8 ^ectors 
 the application shall be made by a summons returnable in the first instance in officers and 18 
 Chambers, in which summons shall be stated the nature of the declaration or order promoters, 
 for which application is made, and the grounds of the application, and which 
 summons, unless otherwise ordered by the Court, shall be served in the manner in 
 
 which an originating summons is required by the Rules of the Supreme Court to be 
 served on every person against whom an order is sought, not less than eight days 
 before the day named in the summons for hearing the application. Where the 
 application is made by the official receiver or liquidator he may make a report to 
 the Court stating any facts and information on which he proceeds which are 
 verified by affidavit, or derived from sworn evidence in the proceedings. Where 
 the application is made by any other person it shall be supported by affidavit to be 
 filed by him. 
 
 (2.) On the return of the summons the Court may give such directions as it shall 
 think fit for the hearing of the summons before the judge in Court, the taking of 
 evidence wholly or in part by affidavit or orally, and the cross-examination either 
 before the judge on the hearing in Court or in Chambers of any deponents to 
 affidavits in support of or in opposition to the application. 
 
 69. Where the application is made by motion, notice of the intended motion Notice of 
 shall be served on every person against whom an order is sought, not less than application, 
 eight days before the day named in the notice for hearing the motion. A copy of 
 
 every report and affidavit intended to be used in support of the motion shall be 
 served on every person to whom notice of motion is given not less than four days 
 before the hearing of the motion. 
 
 70. Where in the course of the proceedings in a winding-up by the Court an Use of deposi- 
 order has been made for the public examination of persons named in the order pur- tions taken at 
 suant to section 175 of the Act, and it appears from the examination that the nations ^ sami ~ 
 persons examined, or some of them, have misapplied, or retained, or become liable, 
 
 or accountable for moneys or property of the company, or been guilty of misfeasance 
 or breach of trust in relation to the company, then in any proceedings subsequently 
 instituted under section 215 of the Act, for the purpose of examining into the 
 conduct of the said persons, or any of them, and compelling repayment or restoration 
 to the company of any moneys or property, or contribution by way of compensation 
 
608 
 
 Appendix 
 
 Shorthand 
 
 notes. 
 
 Forms 34 and 35. 
 
 Committal of 
 contumacious 
 witness. 
 
 Form 38. 
 
 Depositions 
 at private 
 examinations. 
 
 to the assets of the company by such persons or any of them, the verified notes of 
 the examination of each person who was examined under the order shall, subject as 
 hereinafter mentioned, and to any order or directions of the Court as to the manner 
 and extent in and to which the notes shall be used, and subject to all just exceptions 
 to the admissibility in evidence against any particular person or persons of any of 
 the statements contained in the notes of the examinations, be admissible in evidence 
 against any of the persons against whom the application is made who, under 
 section 175 of the Act, and the order for the public examination, was or had the 
 opportunity of being present at and taking part in the examination. Provided that 
 before any such notes of a public examination shall be used on any such application, 
 the person intending to use the same shall, not less than fifteen days before the day 
 appointed for hearing the application, give notice of such intention to each person 
 against whom it is intended to use such notes, or any of them, specifying the notes 
 or parts of the notes which it is intended to read against him, and furnish him with 
 copies of such notes, or parts of notes (except notes of the person’s own depositions), 
 and provided also that every person against whom the application is made shall be 
 at liberty to cross-examine or re-examine (as the case may be) any person the notes 
 of whose examination are read, in all respects as if such person had made an 
 affidavit on the application. 
 
 Witnesses and Depositions. 
 
 71 . If the Court or the officer of the Court before whom any examination 
 under the Act and Rules is directed to be held shall in any case, and at any 
 stage of the proceedings, be of opinion that it would be desirable that a person 
 (other than the person before whom an examination is taken) should be appointed 
 to take down the evidence of any person examined in shorthand or otherwise, it 
 shall be competent for the Court or officer aforesaid to make such appointment. 
 The person at whose instance the examination is taken shall nominate a person for 
 the purpose, and the person so nominated shall be appointed, unless the Court or 
 officer holding the examination shall otherwise order. Every person so appointed 
 shall be paid a sum not exceeding one guinea a day, and a sum not exceeding %d. ■ 
 per folio of 90 words for any transcript of the evidence that may be required, and 
 such sums shall be paid by the party at whose instance the appointment was made, 
 or out of the assets of the company as may be directed by the Court. 
 
 72. — (1.) If a person examined before a registrar or other officer of the Court 
 who has no power to commit for contempt of Court, refuses to answer to the 
 satisfaction of the registrar or officer any question which he may allow to be put, 
 the registrar or officer shall report such refusal to the judge, and upon such report 
 being made the person in default shall be in the same position, and be dealt with in 
 the same manner as if he had made default in answering before the judge. 
 
 (2.) The report shall be in writing, but without affidavit and shall set forth the 
 question put, and the answer (if any) given by the person examined. 
 
 (3.) The registrar or other officer shall, before the conclusion of the examination at 
 which the default in answering is made, name the time when and the place where 
 the default will be reported to the judge, and upon receiving the report the judge 
 may take such action thereon as he shall think fit. If the judge is sitting at the 
 time when the default in answering is made, such default may be reported 
 immediately. 
 
 73 . — (1.) The official receiver may attend in person, or by an assistant official 
 receiver, any examination of a witness under section 174 of the Act, on whosesoever 
 application the same has been ordered, and may take notes of the examination for 
 his own use, and put such questions to the persons examined as the Court may allow. 
 
 (2.) The notes of the depositions of a person examined under section 174 of the 
 Act, or under any order of the Court before the Court, or before any officer of the 
 Court, or person appointed to take such an examination (other than the notes of 
 the depositions of a person examined at a public examination under section 175 of 
 the Act), shall not be filed, or be open to the inspection of any creditor, contributory, 
 or other person, except the official receiver or liquidator, unless and until the Court 
 shall so direct, and the Court may from time to time give such general or special 
 directions as it shall think expedient as to the custody and inspection of such notes 
 and the furnishing of copies of or extracts therefrom. 
 
Companies (Winding-up) Rules. Rules of 1909 
 
 609 
 
 Arrangements with Creditors and Contributories in a Winding-up by the 
 
 Court. 
 
 74 . In a winding 1 - up by the Court if application is made to the Court to sanction 
 any compromise or arrangement the Court may, before giving its sanction thereto, 
 hear a report by the official receiver as to the terms of the scheme, and as to the 
 conduct of the directors and other officers of the company, and as to any other 
 matters which, in the opinion of the official receiver or the Board of Trade, ought 
 to be brought to the attention of the Court. The report shall not be placed upon 
 the file, unless and until the Court shall direct it to be filed. 
 
 Collection and Distribution of Assets in a Winding-up by the Court. 
 
 75 . — (1.) The duties imposed on the Court by section 163 (1) of the Act, 
 in a winding-up by the Court with regard to the collection of the assets of 
 the company and the application of the assets in discharge of the company’s 
 liabilities shall be discharged by the liquidator as an officer of the Court subject to 
 the control of the Court. 
 
 (2.) For the purpose of the discharge by the liquidator of the duties imposed by 
 section 163 (1) of the Act, and Sub-Rule 1 of this Rule, the liquidator in a winding- 
 up by the Court shall for the purpose of acquiring or retaining possession of the 
 property of the company, be in the same position as if he were a receiver of the pro- 
 perty appointed by the High Court, and the Court may, on his application, enforce 
 such acquisition or retention accordingly. 
 
 76 . The powers conferred on the Court by section 164 of the Act shall be 
 exercised by the liquidator. Any contributory for the time being on the list of con- 
 tributories, trustee, receiver, banker or agent or officer of a company which is being 
 wound up under order of the Court shall, on notice from the liquidator and within 
 such time as he shall by notice in writing require, pay, deliver, convey, surrender 
 or transfer to or into the hands of the liquidator any sum of money or balance, 
 books, papers, estate or effects which happen to be in his hands for the time being 
 and to which the company is prima facie entitled. 
 
 List of Contributories in a Winding-up by the Court. 
 
 77 . The liquidator shall with all convenient speed after his appointment settle 
 a list of contributories of the company, and shall appoint a time and place for that 
 purpose. The list of contributories shall contain a statement of the address of, and 
 the number of shares or extent of interest to be attributed to each contributory, and 
 shall distinguish the several classes of contributories. As regards representative 
 contributories the liquidator shall so far as practicable observe the requirements of 
 section 163 (2) of the Act. 
 
 78 . The liquidator shall give notice in writing of the time and place appointed 
 for the settlement of the list of contributories to every person whom he proposes to 
 include in the list, and shall state in the notice to each person in what character and 
 for what number of shares or interest he proposes to include such person in the list. 
 
 79 . On the day appointed for settlement of the list of contributories the liqui- 
 dator shall hear any person who objects to being settled as a contributory, and after 
 such hearing shall finally settle the list, which when so settled shall be the list of 
 contributories of the company. 
 
 80 . The liquidator shall forthwith give notice to every person whom he has 
 finally placed on the list of contributories stating in what character and for what 
 number of shares or interest he has been placed on the list, and in the notice inform 
 such person that any application for the removal of his name from the list, or for 
 a variation of the list, must be made to the Court by summons within 21 days from 
 the date of the service on the contributory or alleged contributory of notice of the 
 fact that his name is settled on the list of contributories. 
 
 81 . — (1.) Subject to the power of the Court to extend the time or to allow an 
 application to be made notwithstanding the expiration of the time limited for that 
 purpose, no application to the Court by any person who objects to the list of con- 
 tributories as finally settled by the liquidator shall be entertained after the expiration 
 
 Report by 
 official receiver 
 on arrange- 
 ments and 
 compromises. 
 
 Collection and 
 distribution of 
 company’s assets 
 by liquidator. 
 
 Power of liqui- 
 dator to require 
 delivery of 
 property. 
 
 Liquidator to 
 settle list of 
 contributories. 
 Porm 42. 
 
 Appointment of 
 time and place 
 for settlement 
 of list. 
 
 Forms 43 and 44. 
 
 Settlement of 
 list of con- 
 tributories. 
 Form 45. 
 
 Notice to 
 contributories. 
 Form 46. 
 
 Application to 
 the Court to 
 vary the list. 
 Form 49. 
 
610 
 
 Appendix. 
 
 Variation of or 
 addition to list 
 of contribu- 
 tories. 
 
 Form 47. 
 
 Calls by- 
 liquidator. 
 
 Form 50. 
 
 Form 51. 
 
 Form 52. 
 
 Application to 
 the Court for 
 leave to make a 
 caH. 
 
 Form to 57. 
 
 Document 
 making the call. 
 Form 58. 
 
 Service of notice 
 of a call. 
 
 Forms 52, 53 
 and 59. 
 
 Enforcement 
 of call. 
 Forms 60, 61 
 and 62. 
 
 of 21 days from the date of the service on such person of notice of the settlement of 
 the list. 
 
 (2.) The official receiver shall not in any case be personally liable to pay any 
 costs of or in relation to an application to set aside or vary his act or decision 
 settling the name of a person on the list of contributories of a company. 
 
 82. The liquidator may from time to time vary or add to the list of contributories, 
 but any such variation or addition shall be made in the same manner in all respects 
 as the settlement of the original list. 
 
 Calls. 
 
 83. The powers and duties of the Court in relation to making calls upon contri- 
 butories conferred by section 166 of the Act, shall and may be exercised, in a 
 winding-up by the Court, by the liquidator as an officer of the Court subject to the 
 proviso to section 173 of the Act, and to the following regulations : — 
 
 (1.) Where the liquidator desires to make any call on the contributories, or any 
 of them for any purpose authorised by the Act, if there is a committee of 
 inspection he may summon a meeting of such committee for the purpose of 
 obtaining their sanction to the intended call. 
 
 (2.) The notice of the meeting shall be sent to each member of the committee of 
 inspection in sufficient time to reach him not less than seven days before 
 the day appointed for holding the meeting, and shall contain a statement 
 of the proposed amount of the call, and the purpose for which it is intended. 
 Notice of the intended call and the intended meeting of the committee of 
 inspection shall also be advertised once at least in a London newspaper, 
 or, where the winding-up is not in the High Court, in a newspaper 
 circulating in the district of the Court in which the proceedings are 
 pending. The advertisement shall state the time and place of the in- 
 tended meeting of the committee of inspection, and that each contributory 
 may either attend the said meeting and be heard, or make any communica- 
 tion in writing to the liquidator or members of the committee of inspection 
 to be laid before the meeting, in reference to the said intended call. 
 
 (3.) At the meeting of the committee of inspection any statements or representa- 
 tions made either to the meeting personally or addressed in writing to the 
 liquidator or members of the committee by any contributory shall be con- 
 sidered before the intended call is sanctioned. 
 
 (4.) The sanction of the committee shall be given by resolution, which shall be 
 passed by a majority of the members present. 
 
 (5.) Where there is no committee of inspection, the liquidator shall not make a 
 call without obtaining the leave of the Court. 
 
 84. In a winding-up by the Court an application to the Court for leave to make 
 any call on the contributories of a company, or any of them, for any purpose autho- 
 rised by the Acts, shall be made by summons stating the proposed amount of such call, 
 which summons shall be served four clear days at the least before the day appointed 
 for making the call on every contributory proposed to be included in such call ; or 
 if the Court so directs, notice of such intended call may be given by advertisement, 
 without a separate notice to each contributory. 
 
 85. When the liquidator is authorised by resolution or order to make a call on 
 the contributories he shall file with the registrar a document in the Form 58 with 
 such variations as circumstances may require making the call. 
 
 86. When a call has been made by the liquidator in a winding-up by the Court, 
 a copy of the resolution of the committee of inspection or order of the Court (if any), 
 as the case may be, shall forthwith after the call has been made be served upon 
 each of the contributories included in such call, together with a notice from the 
 liquidator specifying the amount or balance due from such contributory in respect 
 of such call, but such resolution or order need not be advertised unless for any 
 special reason the Court so directs. 
 
 87. The payment of the amount due from each contributory on a call may 
 be enforced by order of the Court, to be made in Chambers on summons by the 
 liquidator. 
 
Rules of 1909 611 
 
 Companies (Winding-up) Rules. 
 
 Proofs. 
 
 88. In a winding-up by the Court every creditor shall prove his debt unless the 
 judge in any particular winding-up shall give directions that any creditors or class 
 of creditors shall be admitted without proof. 
 
 89. A debt may be proved in any winding-up by delivering or sending through 
 the post an affidavit verifying the debt. In a winding-up by the Court the 
 affidavit shall be so sent to the official receiver or, if a liquidator has been 
 appointed, to the liquidator ; and in any other winding-up the affidavit may be so 
 sent to the liquidator. 
 
 90. An affidavit proving a debt may be made by the creditor himself or by 
 some person authorised by or on behalf of the creditor. If made by a person so 
 authorised, it shall state his authority and means of knowledge. 
 
 91. An affidavit proving a debt shall contain or refer to a statement of account 
 showing the particulars of the debt, and shall specify the vouchers, if any, by 
 which the same can be substantiated. The official receiver or liquidator to whom 
 the proof is sent may at any time call for the production of the vouchers. 
 
 92. An affidavit proving a debt shall state whether the creditor is or is not a 
 secured creditor. 
 
 93. An affidavit proving a debt may in a winding-up by the Court be sworn 
 before an official receiver, or assistant official receiver, or any officer of the Board 
 of Trade or any clerk of an official receiver duly authorised in writing by the Court 
 or the Board of Trade in that behalf. 
 
 94 . A creditor shall bear the cost of proving his debt unless the Court otherwise 
 orders. 
 
 95. A creditor proving his debt shall deduct therefrom all trade discounts, but 
 he shall not be compelled to deduct any discount, not exceeding five per centum on 
 the net amount of his claim, which he may have agreed to allow for payment 
 in cash. 
 
 96. When any rent or other payment falls due at stated periods, and the order 
 or resolution to wind up is made at any time other than one of those periods, the 
 persons entitled to the rent or payment may prove for a proportionate part thereof 
 up to the date of the winding-up order or resolution as if the rent or payment grew 
 due from day to day. Provided that where the liquidator remains in occupation of 
 premises demised to a company which is being wound up, nothing herein contained 
 shall prejudice or affect the right of the landlord of such premises to claim payment 
 by the company, or the liquidator, of rent during the period of the company’s or 
 the liquidator’s occupation. 
 
 97. On any debt or sum certain, payable at a certain time or otherwise, whereon 
 interest is not reserved or agreed for, and which is overdue at the date of the 
 winding-up order or resolution, the creditor may prove for interest at a rate not 
 exceeding four per centum per annum to that date from the time when the debt 
 or sum was payable, if the debt or sum is payable by virtue of a written instrument 
 at a certain time, and if payable otherwise, then from the time when a demand in 
 writing has been made, giving notice that interest will be claimed from the date 
 of the demand until the time of payment. 
 
 93. A creditor may prove for a debt not payable at the date of the winding-up 
 order or resolution, as if it were payable presently, and may receive dividends equally 
 with the other creditors, deducting only thereout a rebate of interest at the rate of five 
 pounds per centum per annum computed from the declaration of a dividend to the 
 time when the debt would have become payable according to the terms on which it was 
 contracted. 
 
 99 . In any case in which it appears that there are numerous claims for wages by 
 workmen and others employed by the company, it shajl be sufficient if one proof for 
 all such claims is made either by a foreman or by some other person on behalf of all 
 such creditors. Such proof shall have annexed thereto as forming part thereof, a 
 schedule setting forth the names of the workmen and others, and the amounts severally 
 due to them. Any proof made in compliance with this rule shall have the same 
 effect as if separate proofs had been made by each of the said workmen and others. 
 
 100. Where a creditor seeks to prove in respect of a bill of exchange, promissory 
 note, or other negotiable instrument or security on which the company is liable, such 
 bill of exchange, note, instrument, or security must, subject to any special order of 
 the Court made to the contrary, be produced to the official receiver, chairman of a 
 meeting or liquidator, as the case may be, and be marked by him before the proof 
 can be admitted either for voting or for any purpose. 
 
 Proof of debt. 
 
 Mode of proof. 
 
 Verification of 
 proof. 
 
 Contents of 
 proof. 
 
 Form 63. 
 
 Statement of 
 security. 
 
 Proof before 
 whom sworn. 
 
 Costs of proof. 
 Discount. 
 
 Periodical pay- 
 ments. 
 
 Interest. 
 
 Proof for debt 
 payable at a 
 future time. 
 
 Workmen’s 
 wages. 
 Form 64. 
 
 Production of 
 bills of exchange 
 and promissory 
 notes. 
 
612 
 
 Appendix. 
 
 Transmission of 
 proofs to liqui- 
 dator. 
 
 Notice to 
 creditors to 
 prove. 
 
 Examination of 
 proof. 
 
 Form 65. 
 
 Appeal by 
 creditor. 
 
 Expunging at 
 instance of 
 liquidator. 
 
 Expunging at 
 instance of 
 creditor. 
 Oaths. 
 
 Official receiver’s 
 powers. 
 
 Filing proofs by 
 official receiver. 
 
 Proofs to be 
 filed. 
 
 Form 66. 
 
 Procedure where 
 creditor appeals. 
 
 Time for dealing 
 with proofs by 
 official receiver. 
 
 101. Where a liquidator is appointed in a winding-up by the Court, all proofs 
 of debts that have been received by the official receiver shall be handed over to 
 the liquidator, but the official receiver shall first make a list of such proofs, and 
 take a receipt thereon from the liquidator for such proofs. 
 
 Admission and Rejection of Proofs, and Appeal to the Court. 
 
 102. Subject to the provisions of the Act, and unless otherwise ordered by the 
 Court, the liquidator in any winding-up may from time to time fix a certain day, 
 which shall be not less than fourteen days from the date of the notice, on or before 
 which the creditors of the company are to prove their debts or claims, or to be 
 excluded from the benefit of any distribution made before such debts are proved, 
 and the liquidator shall give notice in writing of the day so fixed by advertisement 
 in such newspaper as he shall consider convenient, and in a winding-up by the 
 Court to every person mentioned in the Statement of Affairs as a creditor, and who 
 has not proved his debt, and in any other winding-up to the last known address or 
 place of abode of each person who, to the knowledge of the liquidator, claims to be 
 a creditor of the company and whose claim has not been admitted. 
 
 103. The liquidator shall examine every proof of debt lodged with him, and the 
 grounds of the debt, and in writing admit or reject it, in whole or in part, or 
 require further evidence in support of it. If he rejects a proof he shall state 
 in writing to the creditor the grounds of the rejection. 
 
 104. If a creditor or contributory is dissatisfied with the decision of the liquidator 
 in respect of a proof, the Court may, on the application of the creditor or contribu- 
 tory, reverse or vary the decision ; but, subject to the power of the Court to extend 
 the time, no application to reverse or vary the decision of the liquidator in a 
 winding-up by the Court rejecting a proof sent to him by a creditor, or person 
 claiming to be a creditor, shall be entertained, unless notice of the application is 
 given before the expiration of 21 days from the date of the service of the notice of 
 rejection. 
 
 105. If the liquidator thinks that a proof has been improperly admitted, the 
 Court may, on the application of the liquidator, after notice to the creditor who 
 made the proof expunge the proof or reduce its amount. 
 
 106. The Court may also expunge or reduce a proof upon the application of a 
 creditor or contributory if the liquidator declines to interfere in the matter. 
 
 107. For the purpose of any of his duties in relation to proofs, the liquidator, 
 in a winding-up by the Court, may administer oaths and take affidavits. 
 
 108. In a winding-up by the Court the official receiver, before the appointment 
 of a liquidator, shall have all the powers of a liquidator with respect to the 
 examination, admission, and rejection of proofs, and any act or decision of his in 
 relation thereto shall be subject to the like appeal. 
 
 109. In a winding-up by the Court the official receiver, where no other 
 liquidator is appointed, shall, before payment of a dividend, file all proofs tendered 
 in the winding-up, with a list thereof, distinguishing in such list the proofs which 
 were wholly or partly admitted, and the proofs which were wholly or partly 
 rejected. 
 
 110. Every liquidator in a winding-up by the Court other than the official 
 receiver shall on the first day of every month, file with the registrar a certified 
 list of all proofs, if any, received by him during the month next preceding, 
 distinguishing in such lists the proofs admitted, those rejected, and such as stand 
 over for further consideration ; and, in the case of proofs admitted or rejected, 
 he shall cause the proofs to be filed with the registrar. 
 
 111. The liquidator in a winding-up by the Court, including the official receiver 
 when he is liquidator, shall, within three days after receiving notice from a creditor 
 of his intention to appeal against a decision rejecting a proof, file such proof 
 with the registrar, with a memorandum thereon of his disallowance thereof. 
 
 112. Subject to the power of the Court to extend the time in a winding-up by 
 the Court, the official receiver as liquidator, not later than fourteen days from the 
 latest date specified in the notice of his intention to declare a dividend as the time 
 within which such proofs must be lodged, shall in writing either admit or reject 
 wholly, or in part, every proof lodged with him, or require further evidence in 
 support of it. 
 
Companies (Winding-up) Rules. Rules of 1909 613 
 
 113 . Subject to the power of the Court to extend the time, the liquidator in a Time for dealing 
 winding-up by the Court, other than the official receiver, within twenty-eight days proofs by 
 after receiving a proof, which has not previously been dealt with, shall in writing 1( l uldator - 
 either admit or reject it wholly or in part, or require further evidence in support of 
 
 it. Provided that where the liquidator has given notice of his intention to 
 declare a dividend, he shall within fourteen days after the date mentioned in the 
 notice as the latest date up to which proofs must be lodged, examine, and in writing 
 admit or reject, or require further evidence in support of, every proof which has 
 not been already dealt with, and shall give notice of his decision, rejecting a 
 proof wholly or in part, to the creditors affected thereby. Where a creditor’s proof 
 has been admitted the notice of dividend shall be a sufficient notification of the 
 admission. 
 
 114 . The official receiver shall in no case be personally liable for costs in relation Cost of appeals 
 
 to an appeal from his decision rejecting any proof wholly or in part. from decisions 
 
 as to proofs. 
 
 General Meetings of Creditors and Contributories in relation to a 
 Winding-up by the Court. 
 
 115 . The meetings of creditors and contributories under section 152 of the Act First meetings 
 (hereinafter referred to as the first meetings of creditors and contributories) shall be of creditors and 
 held within twenty-one days, or if a special manager has been appointed then con nbu ories ' 
 within one month after the date of the winding-up order or within such further 
 
 time as the Court may approve. The dates of such meetings shall be fixed and 
 they shall be summoned by the official receiver. 
 
 116 . The official receiver shall forthwith give notice of the days fixed by him for Notice of first 
 
 the first meetings of creditors and contributories to the Board of Trade, who shall meetings to 
 gazette the same. Board of Trade. 
 
 117 . The first meetings of creditors and contributories shall be summoned as Summoning of 
 
 hereinafter provided. first meetings. 
 
 118 . The notices of first meetings of creditors and contributories may be in Form of notices 
 Forms 21 and 22 appended hereto, and the notices to creditors shall state a time of first meetings, 
 within which the creditors must lodge their proofs in order to entitle them to vote Forms 21 and 22. 
 at the first meeting. 
 
 119 . The official receiver shall also give to each of the directors and other officers Notice of first 
 of the company who in his opinion ought to attend the first meetings of creditors meetings to 
 and contributories seven days’ notice of the time and place appointed for each officers of 
 meeting. The notice may either be delivered personally or sent by prepaid post c° m P an y* 
 letter, as may be convenient. It shall be the duty of every director or officer who orm 23 ’ 
 receives notice of such meeting to attend if so required by the official receiver. 
 
 120 . The official receiver shall also, as soon as practicable, send to each creditor Summary of 
 mentioned in the company's statement of affairs, and to each person appearing from statement of 
 the company’s books or otherwise to be a contributory of the company a summary a airs ’ 
 
 of the company’s statement of affairs, including the causes of its failure, and any 
 observations thereon which the official receiver may think fit to make. The pro- 
 ceedings at a meeting shall not be invalidated by reason of any summary or notice 
 required by these Buies not having been sent or received before the meeting. 
 
 121 . In addition to the first meetings of creditors and contributories and in Liquidator’s 
 addition also to meetings of creditors and contributories directed to be held by the meetings of 
 Court under section 219 of the Act (hereinafter referred to as Court meetings of co^ribiitori <i 
 creditors and contributories), the liquidator may himself from time to time subject COn 1 u ones * 
 to the provisions of the Act and the control of the Court summon, hold and conduct 
 
 meetings of the creditors or contributories (hereinafter referred to as liquidator’s 
 meetings of creditors and contributories) for the purpose of ascertaining their wishes 
 in all matters relating to the winding-up. 
 
 122 . Except where and so far as the nature of the subject-matter or the context Application of 
 
 may otherwise require the succeeding Buies as to meetings hereinafter set out are rule ®. as to 
 intended to apply to first meetings, Court meetings and liquidator’s meetings of ° * 
 
 creditors and contributories, but so nevertheless that the said Buies shall take effect 
 
 as to first meetings subject and without prejudice to any express provisions of the 
 Act and as to Court meetings subject and without prejudice to any express 
 directions of the Court. 
 
 123 . The official receiver or liquidator shall summon all meetings of creditors ofmeet^ 11 ^ 
 and contributories by giving not less than seven days’ notice of the time and place ° mee 
 
614 
 
 Appendix. 
 
 Proof of notice. 
 Forms 76 and 77. 
 
 Place of 
 meetings. 
 
 Costs of calling 
 meeting. 
 
 Chairman of 
 meeting. 
 Form 79. 
 
 Ordinary reso- 
 lution of 
 creditors and 
 contributories. 
 
 Copy of resolu- 
 tion to be filed. 
 
 Non-reception 
 of notice by a 
 creditor. 
 
 Adjournment. 
 Form 78. 
 
 ■Quorum. 
 
 thereof in the London Gazette and in a local paper ; and shall not less than seven 
 days before the day appointed for the meeting send by post to every person 
 appearing by the company’s books to be a creditor of the company notice of the 
 meeting of creditors, and to every person appearing by the company’s books or 
 otherwise to be a contributory of the company notice of the meeting of contributories. 
 
 The notice to each creditor shall be sent to the address given in his proof, or if he 
 has not proved to the address given in the statement of affairs of the company, or to 
 such other address as may be known to the person summoning the meeting. The 
 notice to each contributory shall be sent to the address mentioned in the company’s 
 books as the address of such contributory, or to such other address as may be known 
 to the person summoning the meeting. 
 
 124. A certificate by the official receiver or other officer of the Court, or by the 
 clerk of any such person, or an affidavit by the liquidator, or his solicitor, or the 
 clerk of either of such persons, that the notice of any meeting has been duly posted, 
 shall be sufficient evidence of such notice having been duly sent to the person to 
 whom the same was addressed. 
 
 125. The meetings shall be held at such place as is in the opinion of the official 
 receiver or liquidator most convenient for the majority of the creditors or con- 
 tributories or both. Different times or places or both may if thought expedient be 
 named for the meetings of creditors and for the meetings of contributories. 
 
 126. The costs of summoning a meeting of creditors or contributories at the 
 instance of any person other than the official receiver or liquidator, shall be paid 
 by the person at whose instance it is summoned, who shall before the meeting is 
 summoned deposit with the official receiver or liquidator (as the case may be) such 
 sum as may be required by the official receiver or liquidator as security for the 
 payment of such costs. The costs of summoning such meeting of creditors or 
 contributories, including all disbursements for printing, stationery, postage, and 
 the hire of room, shall be calculated at the following rate for each creditor or 
 contributory to whom notice is required to be seut, namely, two shillings per 
 creditor or contributory for the first twenty creditors or contributories, one shilling 
 per creditor or contributory for the next thirty creditors or contributories, sixpence 
 per creditor or contributory for any number of creditors or contributories after the 
 first fifty. The said costs shall be repaid out of the assets of the company if the 
 Court shall by order, or if the creditors or contributories (as the case may be) shall 
 by resolution so direct. 
 
 127. Where a meeting is summoned by the official receiver or the liquidator, he, 
 or someone nominated by him, shall be chairman of the meeting. At every other 
 meeting of creditors and contributories the chairman shall be such person as the 
 meeting by resolution shall appoint. 
 
 128. At a meeting of creditors a resolution shall be deemed to be passed when 
 a majority in number and value of the creditors present, personally or by proxy, 
 and voting on the resolution, have voted in favour of the resolution, and at a 
 meeting of the contributories a resolution shall be deemed to be passed when a 
 majority in number and value of the contributories present, personally or by proxy, 
 and voting on the resolution, have voted in favour of the resolution, the value of 
 the contributories being determined according to the number of votes conferred on 
 each contributory by the regulations of the company. 
 
 129. The official receiver, or, as the case may be, the liquidator, shall file with 
 the registrar, a copy, certified by him, of every resolution of a meeting of creditors 
 or contributories. 
 
 130. Where a meeting of creditors or contributories is summoned by notice, the 
 proceedings and resolutions at the meeting shall, unless the Court otherwise orders, 
 be valid, notwithstanding that some creditors or contributories may not have 
 received the notice sent to them. 
 
 131. The chairman may with the consent of the meeting adjourn it from time 
 to time and from place to place, but the adjourned meeting shall be held at the 
 same place as the original place of meeting unless in the resolution for adjournment 
 another place is specified or unless the Court otherwise orders. 
 
 132. — (1.) A meeting may not act for any purpose except the election of a 
 chairman, the proving of debts and the adjournment of the meeting unless there are 
 present or represented thereat at least three creditors entitled to vote or three 
 contributories or all the creditors entitled to vote or all the contributories if the 
 number of the creditors entitled to vote or the contributories as the case may be 
 shall not exceed three. 
 
Companies (Winding-up) Rules. Rules of 1909 
 
 615 
 
 (2.) If within half an hour from the time appointed for the meeting- a quorum of 
 creditors or contributories is not present or represented the meeting- shall be 
 adjourned to the same day in the following week at the same time and place or to 
 such other day as the chairman may appoint not being less than seven or more than 
 twenty- one days. 
 
 133. In the case of a first meeting of creditors or of an adjournment thereof a 
 person shall not be entitled to vote as a creditor unless he has duly lodged with the 
 official receiver not later than the time mentioned for that purpose in the notice 
 convening the meeting or adjourned meeting a proof of the debt which he claims to 
 be due to him from the company. In the case of a Court meeting or liquidator’s 
 meeting of creditors a person shall not be entitled to vote as a creditor unless he has 
 lodged with the official receiver or liquidator a proof of the debt which he claims to 
 be due to him from the company and such proof has been admitted wholly or in 
 part before the date on which the meeting is held. Provided that this and the next 
 four following rules shall not apply to a Court meeting of creditors held prior to the 
 first meeting of creditors. 
 
 134. A creditor shall not vote in respect of any unliquidated or contingent debt, 
 or any debt the value of which is not ascertained, nor shall a creditor vote in respect 
 of any debt on or secured by a current bill of exchange or promissory note held by 
 him unless he is willing to treat the liability to him thereon of every person who is 
 liable thereon antecedently to the company, and against whom a receiving order in 
 bankruptcy has not been made, as a security in his hands, and to estimate the value 
 thereof, and for the purposes of voting, but not for the purposes of dividend, to 
 deduct it from his proof. 
 
 135. For the purpose of voting, a secured creditor shall, unless he surrenders his 
 security, state in his proof the particulars of his security, the date when it was 
 given, and the value at which he assesses it, and shall be entitled to vote only in 
 respect of the balance (if any) due to him after deducting the value of his security. 
 If he votes in respect of his whole debt he shall be deemed to have surrendered his 
 security, unless the Court on application is satisfied that the omission to value the 
 security has arisen from inadvertence. 
 
 136. The official receiver or liquidator may within twenty- eight days after a 
 proof estimating the value of a security as aforesaid has been used in voting at a 
 meeting require the creditor to give up the security for the benefit of the creditors 
 generally on payment of the value so estimated with an addition thereto of twenty 
 per cent. Provided that where a creditor has valued his security he may at any 
 time before being required to give it up correct the valuation by a new proof and 
 deduct the new value from his debt, but in that case the said addition of twenty per 
 cent, shall not be made if the security is required to be given up. 
 
 137. The chairman shall have power to admit or reject a proof for the purpose 
 of voting, but his decision shall be subject to appeal to the Court. If he is in doubt 
 whether a proof should be admitted or rejected he shall mark it as objected to and 
 allow the creditor to vote subject to the vote being declared invalid in the event 
 of the objection being sustained. 
 
 138. The chairman shall cause minutes of the proceedings at the meeting to be 
 drawn up and fairly entered in a book kept for that purpose and the minutes shall 
 be signed by him or by the chairman of the next ensuing meeting. 
 
 Creditors en- 
 titled to rote. 
 
 Cases in which 
 creditors may 
 not vote. 
 
 Votes of secured 
 creditors. 
 
 Creditor 
 required to 
 give up 
 security. 
 
 Admission and 
 rejection of 
 proofs for pur- 
 pose of voting. 
 
 Minutes of 
 meeting. 
 
 Proxies in relation to a Winding-up by the Court. 
 
 139. A creditor or a contributory may vote either in person or by proxy. The 
 succeeding rules as to proxies shall not (unless otherwise directed by the Court) 
 apply to a Court meeting of creditors or contributories prior to the first meeting. 
 
 140 Every instrument of proxy shall be in accordance with the form in the 
 Appendix and every written part thereof shall be in the handwriting of the person 
 giving the proxy or of any manager or clerk or other person in his regular 
 employment or of a commissioner to administer oaths in the Supreme Court. 
 
 141. General and special forms of proxy shall be sent to the creditors and con- 
 tributories with the notice summoning the meeting, and neither the name nor 
 description of the official receiver or liquidator or any other person shall be printed 
 ■or inserted in the body of any instrument of proxy before it is so sent. 
 
 Proxies. 
 
 Form of proxies. 
 Forms 80 and 81. 
 
 Forms of proxy 
 to be sent with 
 notices. 
 
616 
 
 Appendix. 
 
 General proxies 
 to managers or 
 clerks. 
 
 Special proxies. 
 
 Solicitation by 
 liquidator to 
 obtain proxies. 
 
 Proxies to 
 official receiver 
 or liquidator. 
 Holder of proxy 
 not to vote on 
 matter in which 
 he is financially 
 interested. 
 
 Proxies. 
 
 Forms 80 and 81. 
 
 Use of proxies 
 by deputy. 
 
 Filling in where 
 creditor blind or 
 incapable. 
 
 Dividends to 
 creditors. 
 Form 67. 
 
 142. A creditor or a contributory may give a general proxy to his manager or 
 clerk or any other person in his regular employment. In any such case the instru- 
 ment of proxy shall state the relation in which the person to act thereunder stands 
 to the creditor or contributory. 
 
 143. A creditor or a contributory may give a special proxy to any person to vote 
 at any specified meeting or adjournment thereof : — 
 
 (a) for or against the appointment or continuance in office of any specified person 
 
 as liquidator or member of the committee of inspection, and ; 
 
 (b) on all questions relating to any matter other than those above referred to and 
 
 arising at the meeting or an adjournment thereof. 
 
 144. Where it appears to the satisfaction of the Court that any solicitation has 
 been used by or on behalf of a liquidator in obtaining proxies or in procuring his 
 appointment as liquidator except by the direction of a meeting of creditors or con- 
 tributories, the Court if it thinks fit may order that no remuneration be allowed to 
 the person by whom or on whose behalf the solicitation was exercised notwithstanding 
 any resolution of the committee of inspection or of the creditors or contributories to 
 the contrary. 
 
 145. A creditor or a contributory may appoint the official receiver or liquidator 
 to act as his general or special proxy. 
 
 146. No person acting either under a general or a special proxy shall vote in 
 favour of any resolution which would directly or indirectly place himself, his 
 partner or employer in a position to receive any remuneration out of the estate of 
 the company otherwise than as creditor rateably with the other creditors of the 
 company. Provided that where any person holds special proxies to vote for an 
 application to the Court in favour of the appointment of himself as liquidator he 
 may use the said proxies and vote accordingly. 
 
 147. — (1.) A proxy intended to be used at the first meeting of creditors or con- 
 tributories, or an adjournment thereof, shall be lodged with the official receiver not 
 later than the time mentioned for that purpose in the notice convening the meeting 
 or the adjourned meeting, which time shall be not earlier than twelve o’clock at 
 noon of the day but one before, nor later than twelve o’clock at noon of the day 
 before the day appointed for such meeting, unless the Court otherwine directs. 
 
 (2.) In every other case a proxy shall be lodged with the official receiver or 
 liquidator not later than four o’clock in the afternoon of the day before the meeting 
 or adjourned meeting at which it is to be used. 
 
 (3.) No person shall be appointed a general or special proxy who is a minor. 
 
 (4.) Where a limited company is a creditor, any person who is duly authorised 
 under the seal of the creditor company to act generally on behalf of the creditor 
 company at meetings of creditors and contributories and to appoint himself or any 
 other person to be the creditor company’s proxy, may fill in and sign the form of 
 proxy on the creditor company’s behalf and appoint himself to be the creditor com- 
 pany’s proxy, and a proxy so filled in and signed by such a person shall be received 
 and dealt with as the proxy of the creditor company. 
 
 148. Where an official receiver who holds any proxies cannot attend the meeting 
 for which they are given, he may, in writing, depute some person under his official 
 control to use the proxies on his behalf, and in such manner as he may direct. 
 
 149. The proxy of a creditor blind or incapable of writing may be accepted, if 
 such creditor has attached his signature or mark thereto in the presence of a witness, 
 who shall add to his signature his description and residence ; provided that all 
 insertions in the proxy are in the handwriting of the witness, and such witness 
 shall have certified at the foot of the proxy that all such insertions have been made 
 by him at the request of the creditor and in his presence before he attached his 
 signature or mark. 
 
 Dividends in a Winding-up by the Couet. 
 
 150. — (1.) Not more than two months before declaring a dividend the liquidator 
 in a winding-up by the Court, shall give notice of his intention to do so to the 
 Board of Trade in order that the same may be gazetted, and at the same time to 
 such of the creditors mentioned in the statement of affairs as have not proved 
 their debts. Such notice shall specify the latest date up to which proofs must 
 be lodged, which shall not be less than fourteen days from the date of such notice. 
 
Companies (Winding-up) Rules. Rules of 1909 
 
 617 
 
 (2.) Where any creditor, after the date mentioned in the notice of intention to 
 declare a dividend as the latest date up to which proofs may be lodged, appeals 
 against the decision of the liquidator rejecting a proof, notice of appeal shall, 
 subject to the power of the Court to extend the time in special cases, be given 
 within seven days from the date of the notice of the decision against which the 
 appeal is made, and the liquidator may in such case make provision for the dividend 
 upon such proof, and the probable costs of such appeal in the event of the proof 
 being admitted. Where no notice of appeal has been given within the time specified 
 in this rule, the liquidator shall exclude all proofs which have been rejected from 
 participation in the dividend. 
 
 (3.) Immediately after the expiration of the time fixed by this rule for appealing 
 against the decision of the liquidator he shall proceed to declare a dividend, and 
 shall give notice to the Board of Trade (in order that the same may be gazetted), and 
 shall also send a notice of dividend to each creditor whose proof has been admitted. 
 
 (4.) If it becomes necessary, in the opinion of the liquidator and the committee 
 of inspection, to postpone the declaration of the dividend beyond the limit of two 
 months, the liquidator shall give a fresh notice of his intention to declare a dividend 
 to the Board of Trade in order that the same may be gazetted ; but it shall not be 
 necessary for the liquidator to give a fresh notice to such of the creditors mentioned 
 in the statement of affairs as have not proved their debts. In all other respects 
 the same procedure shall follow the fresh notice as would have followed the original 
 notice. 
 
 (5.) Upon the declaration of a dividend the liquidator shall forthwith transmit to 
 the Board of Trade a list of the proofs filed with the registrar under R. 110, which 
 list shall be in the Form 68 or 69 in the Appendix as the case may be. If the 
 winding-up is in a Court other than the High Court the list shall, on payment of 
 the prescribed fee, be examined by the registrar, with the proofs tendered for filing 
 and if found correct shall be certified by the registrar. If the winding-up is in the 
 High Court the liquidator shall, if so required by the Board of Trade, transmit to 
 the Board of Trade, office copies of all lists of proofs filed by him up to the date of 
 the declaration of the dividend. 
 
 (6.) Dividends may at the request and risk of the person to whom they are 
 payable be transmitted to him by post. 
 
 (7.) If a person to whom dividends are payable desires that they shall be paid to 
 some other person he may lodge with the liquidator a document in the Form 72 
 which shall be a sufficient authority for payment of the dividend to the person 
 therein named. 
 
 151 . Every order by which the liquidator in a winding-up by the Court is 
 authorised to make a return to contributories of the company, shall, unless the 
 Court shall otherwise direct, contain or have appended thereto a schedule or list 
 (which the liquidator shall prepare) setting out in a tabular form the full names 
 and addresses of the persons to whom the return is to be paid, and the amount of 
 money payable to each person, and particulars of the transfers of shares (if any) 
 which have been made or the variations in the list of contributories which 
 have arisen since the date of the settlement of the list of contributories. The 
 schedule or list shall be in the Form 74 with such variations as circumstances 
 shall require. 
 
 Attendance and Appearance of Parties. 
 
 152 . — ( 1 .) Every person for the time being on the list of contributories of the 
 company, and every person whose proof has been admitted shall be at liberty, at 
 his own expense, to attend proceedings, and shall be entitled, upon payment of 
 the costs occasioned thereby, to have notice of all such proceedings as he shall by 
 written request desire to have notice of ; but if the Court shall be of opinion that 
 the attendance of any such person upon any proceedings has occasioned any 
 additional costs which ought not to be borne by the funds of the company, it may 
 direct such costs, or a gross sum in lieu thereof, to be paid by such person ; and 
 such person shall not be entitled to attend any further proceedings until he has paid 
 the same. 
 
 (2.) The Court may from time to time appoint any one or more of the creditors 
 or contributories to represent before the Court, at the expense of the company, all 
 or any class of the creditors or contributories, upon any question or in relation to 
 any proceedings before the Court, and may remove the person so appointed. j^If 
 
 p. 40 
 
 Form 71. 
 
 Forms 68 and 69. 
 
 Form 72. 
 
 Return of 
 capital to 
 contributories. 
 Forms 73 and 74. 
 
 Attendance at 
 proceedings. 
 
618 
 
 Appendix. 
 
 Attendance of 
 
 liquidator’s 
 
 solicitor. 
 
 Remuneration 
 of liquidator. 
 
 Limit of 
 remuneration. 
 
 Dealings with 
 assets. 
 
 Restriction on 
 purchase of 
 goods by 
 liquidator. 
 
 Committee of 
 inspection not 
 make profit. 
 
 Costs of obtain- 
 ing sanction 
 of Court. 
 
 more than one person is appointed under this rule to represent one class, the persons 
 appointed shall employ the same solicitor to represent them. 
 
 (3.) No creditor or contributory shall be entitled to attend any proceedings in 
 Chambers unless and until he has entered in a book, to be kept by the registrar for 
 that purpose, his name and address, and the name and address of his solicitor (if 
 any) and upon any change of his address or of his solicitor, his new address, and 
 the name and address of his new solicitor. 
 
 153. Where the attendance of the liquidator’s solicitor is required on any pro- 
 ceeding in Court or Chambers, the liquidator need not attend in person, except in 
 cases where his presence is necessary in addition to that of his solicitor, or the 
 Court directs him to attend. 
 
 Liquidator and Committee of Inspection in a Winding-up by the Court. 
 
 154. — (1.) The remuneration of a liquidator, unless the Court shall otherwise order, 
 shall be fixed by the committee of inspection, and shall be in the nature of a 
 commission or percentage of which one part shall be payable on the amount realized, 
 after deducting the sums (if any) paid to secured creditors (other than debenture 
 holders) out of the proceeds of their securities, and the other part on the amount 
 distributed in dividend. 
 
 (2.) If the Board of Trade is of opinion that the remuneration of a liquidator as 
 fixed by the committee of inspection is unnecessarily large, the Board of Trade may 
 apply to the Court, and thereupon the Court shall fix the amount of the remunera- 
 tion of the liquidator. 
 
 (3.) If there is no committee of inspection the remuneration of the liquidator 
 shall, unless the Court shall otherwise order, be fixed by the scale of fees and 
 percentages for the time being payable on realizations and distributions by the 
 official receiver as liquidator. 
 
 155. Except as provided by the Act or the Rules, a liquidator shall not under any 
 circumstances whatever, make any arrangement for, or accept from any solicitor, 
 auctioneer, or any other person connected with the company of which he is liqui- 
 dator, or who is employed in or in connection with the winding-up of the company, 
 any gift, remuneration, or pecuniary or other consideration or benefit whatever 
 beyond the remuneration to which under the Act and the Rules he is entitled as 
 liquidator, nor shall he make any arrangement for giving up, or give up any part 
 of such remuneration to any such solicitor, auctioneer, or other person. 
 
 156. Neither the liquidator nor any member of the committee of inspection of a 
 company shall, while acting as liquidator or member of such committee, except by 
 leave of the Court, either directly or indirectly, by himself or any partner, clerk, 
 agent, or servant, become purchaser of any part of the company’s assets. Any 
 such purchase made contrary to the provisions of this rule may be set aside by 
 the Court on the application of the Board of Trade or any creditor or contributory, 
 and the Court may make such order as to costs as the Court shall think fit. 
 
 157. Where the liquidator carries on the business of the company, he shall not, 
 without the express sanction of the Court, purchase goods for the carrying on of 
 such business from any person whose connection with the liquidator is of such a 
 nature as would result in the liquidator obtaining any portion of the profit (if any) 
 arising out of the transaction. 
 
 158. No member of a committee of inspection shall, except under and with 
 the sanction of the Court, directly or indirectly, by himself or any employer, 
 partner, clerk, agent, or servant, be entitled to derive any profit from any 
 transaction arising out of the winding-up, or to receive out of the assets any 
 payment for services rendered by him in connection with the administration of 
 the assets, or for any goods supplied by him to the liquidator for or on account 
 of the company. If it appears to the Board of Trade that any profit or payment 
 has been made contrary to the provisions of this rule, they may disallow such 
 payment or recover such profit, as the case may be, on the audit of the liquidator’s 
 accounts. 
 
 159. In any case in which the sanction of the Court is obtained under the two 
 last preceding rules, the cost of obtaining such sanction shall be borne by the 
 person in whose interest such sanction is obtained, and shall not be payable out of 
 the company’s assets. 
 
619 
 
 Companies (Winding-up) Rules. Rules of 1909 
 
 160. Where the sanction of the Court to a payment to a member of a committee 
 of inspection for services rendered by him in connection with the administration of 
 the company’s assets is obtained, the order of the Court shall specify the nature of 
 the services, and such sanction shall only be given where the service performed 
 is cf a special nature. Except by the express sanction of the Court no remunera- 
 tion shall, under any circumstances, be paid to a member of a committee for 
 services rendered by him in the discharge of the duties attaching to his office as a 
 member of such committee. 
 
 161. — (1.) Where a liquidator is appointed by the Court, and has notified his Discharge of 
 appointment to the registrar of joint stock companies, and given security to the asset s^anded 
 Board of Trade, the official receiver shall forthwith put the liquidator into to liquidator, 
 possession of all property of the company of which the official receiver may have 
 custody ; provided that such liquidator shall have, before the assets are handed 
 over to him by the official receiver, discharged any balance due to the official 
 receiver on account of fees, costs, and charges properly incurred by him, and on 
 account of any advances properly made by him in respect of the company, together 
 with interest on such advances at the rate of four pounds per centum per annum ; 
 and the liquidator shall pay all fees, costs, and charges of the official receiver 
 which may not have been discharged by the liquidator before being put into 
 possession of the property of the company, and whether incurred before or after he 
 has been put into such possession. • 
 
 (2.) The official receiver shall be deemed to have a lien upon the company’s assets 
 until such balance shall have been paid and the other liabilities shall have been dis- 
 charged. 
 
 (3.) It shall be the duty of the official receiver, if so requested by the liquidator, 
 to communicate to the liquidator all such information respecting the estate and 
 affairs of the company as may be necessary or conducive to the due discharge of the 
 duties of the liquidator. 
 
 162. A liquidator who desires to resign his office shall summon separate meetings 
 of the creditors and contributories of the company to decide whether or not the 
 resignation shall be accepted. If the creditors and contributories by ordinary 
 resolutions both agree to accept the resignation of the liquidator, he shall file with 
 the registrar a memorandum of his resignation, and shall send notice thereof to the 
 official receiver, and the resignation shall thereupon take effect. In any other case 
 the liquidator shall report to the Court the result of the meetings and shall send a 
 report to the official receiver and thereupon the Court may, upon the application of 
 the liquidator or the official receiver, determine whether or not the resignation 
 of the liquidator shall be accepted, and may give such directions and make such 
 orders as in the opinion of the Court shall be necessary. 
 
 163. If a receiving order in bankruptcy is made against the liquidator, he shall 
 thereby vacate his office, and for the purposes of the application of the Act and 
 rules shall be deemed to have been removed. 
 
 Resignation of 
 liquidator. 
 
 Office of 
 liquidator 
 vacated by his 
 insolvency. 
 
 sanction of 
 payments to 
 committee. 
 
 Payments Into and Out of a Bank. 
 
 164. All payments out of the companies liquidation account shall be made in 
 such manner as the Board of Trade may from time to time direct. 
 
 Payments out of 
 Bank of Eng- 
 land. 
 
 165. — (1.) Where the liquidator in a winding-up by the Court is authorized to Special bank 
 have a special bank account, he shall forthwith pay all moneys received by him accoun t- 
 into that account to the credit of the liquidator of the company. All payments Forms 82 and 83. 
 out shall be made by cheque payable to order, and every cheque shall have marked 
 or written on the face of it the name of the company, and shall be signed by the 
 liquidator, and shall be countersigned by at least one member of the committee of 
 inspection, and by such other person, if any, as the committee of inspection may 
 appoint. 
 
 (2.) Where application is made to the Board of Trade to authorize the liquidator 
 in a winding-up by the Court to make his payments into and out of a special 
 bank account, the Board of Trade may grant such authorization for such time and 
 on such terms as they may think fit, and may at any time order the account to be 
 •closed if they are of opinion that the account is no longer required for the purposes 
 mentioned in the application. 
 
 40 ( 2 ) 
 
620 
 
 Appendix. 
 
 Record book. 
 
 Cash book. 
 
 Investment of 
 assets in secu- 
 rities, and reali- 
 zation of 
 securities. 
 
 Forms 84 and 85. 
 
 Audit of cash 
 book. 
 
 Form 86. 
 
 Board of Trade 
 audit of liquida- 
 tor’s accounts. 
 
 Books. 
 
 166. The official receiver, until a liquidator is appointed by the Court, and there- 
 after the liquidator, shall keep a hook to be called the “ Record Book ” in which he 
 shall record all minutes, all proceedings had and resolutions passed at any meeting 
 of creditors or contributories, or of the committee of inspection, and all such matters 
 as may be necessary to give a correct view of his administration of the company’s 
 affairs, but he shall not be bound to insert in the “ Record Book” any document of 
 a confidential nature (such as the opinion of counsel on any matter affecting the 
 interest of the creditors or contributories), nor need he exhibit such document to. 
 any person other than a member of the committee of inspection, or the official 
 receiver, or the Board of Trade. 
 
 167. — (1.) The official receiver, until a liquidator is appointed by the Court, and 
 thereafter the liquidator, shall keep a book to be called the “Cash Book” (which, 
 shall be in such form as the Board of Trade may from time to time direct), in which, 
 he shall (subject to the provisions of the rules as to trading accounts) enter from, 
 day to day the receipts and payments made by him. 
 
 (2.) The liquidator shall submit the record book and cash book, together with 
 any other requisite books and vouchers, to the committee of inspection (if any) 
 when required, and not less than once every three months. 
 
 Investment of Funds. 
 
 168. — (1.) "Where the committee of inspection are of opinion that any part of the 
 cash balance standing to the credit of the account of the company should be invested,, 
 they shall sign a certificate and request, and the liquidator shall transmit such cer- 
 tificate and request to the Board of Trade. 
 
 (2.) Where the committee of inspection are of opinion that it is advisable to sell 
 any of the securities in which the moneys of the company’s assets are invested, they 
 shall sign a certificate and request to that effect, and the liquidator shall transmit 
 such certificate and request to the Board of Trade. 
 
 (3.) Where in a winding-up by the Court in which there is no committee of inspec- 
 tion, or in a voluntary winding-up, or winding-up under the supervision of the- 
 Court, a case has in the opinion of the liquidator arisen under section 231 of the Act 
 for an investment of funds of the company or a sale of securities in which the 
 company’s funds have been invested, the liquidator shall sign and transmit to the 
 Board of Trade a certificate of the facts on which his opinion is founded, and a 
 request to the Board of Trade to make the investment mentioned in the certificate, 
 and the Board of Trade may thereupon, if it thinks fit, invest or sell the whole or 
 any part of the said funds or securities, as provided in the said section, and the said 
 certificate and request shall be a sufficient authority to tfie Board of Trade for the- 
 said investment or sale. 
 
 Accounts and Audit in a Winding-up by the Court. 
 
 169. The committee of inspection shall not less than once every three months, 
 audit the liquidator’s cash book and certify therein under their hands the day on 
 which the said book was audited. 
 
 170. — (1.) The liquidator shall, at the expiration of six months from the date- 
 of the winding-up order, and at the expiration of every succeeding six months, 
 thereafter until his release, transmit to the Board of Trade a copy of the cash book 
 for such period in duplicate, together with the necessary vouchers and copies of the 
 certificates of audit by the committee of inspection. He shall also forward with 
 the first accounts a summary of the company’s statement of affairs, showing thereon 
 in red ink the amounts realized, and explaining the cause of the non -realization of 
 such assets as may be unrealized. The liquidator shall also at the end of every six 
 months forward to the Board of Trade, with his accounts, a report upon the position 
 of the liquidation of the company in such form as the Board of Trade may direct. 
 
 (2.) When the assets of the company have been fully realized and distributed, the- 
 liquidator shall forthwith send in his accounts to the Board of Trade, although the 
 six months may not have expired. 
 
 (3.) The accounts sent in by the liquidator shall be verified by him by affidavit.. 
 
 Form 87. 
 
Companies (Winding-up) Rules. Rules of 1909 621 
 
 171. — (1.) Where the liquidator carries on the business of the company, he shall 
 keep a distinct account of the trading, and shall incorporate in the cash book the 
 total weekly amount of the receipts and payments on such trading account. 
 
 (2.) The trading account shall from time to time, and not less than once in every 
 month, be verified by affidavit, and the liquidator shall thereupon submit such 
 account to the committee of inspection (if any), or such member thereof as may be 
 appointed by the committee for that purpose, who shall examine and certify the 
 same. 
 
 172. When the liquidator’s account has been audited, the Board of Trade shall 
 certify the fact upon the account, and thereupon the duplicate copy, bearing a like 
 certificate, shall be filed with the registrar. 
 
 173. — (1.) The liquidator shall transmit to the Board of Trade with his accounts 
 a summary of such accounts in such form as the Board of Trade may from time to 
 time direct, and, on the approval of such summary by the Board of Trade, shall 
 forthwith obtain, prepare, and transmit to the Board of Trade so many printed 
 copies thereof, duly stamped for transmission by post, and addressed to the creditors 
 and contributories, as may be required for transmitting such summary to each 
 creditor and contributory. 
 
 (2.) The cost of printirtg and posting such copies shall be a charge upon the assets 
 of the company. 
 
 174. Where a liquidator has not since the date of his appointment or since the 
 last audit of his accounts, as the case may be, received or paid any sum of money on 
 account of the assets of the company, he shall, at the time when he is required to 
 transmit his accounts to the Board of Trade, forward to the Board of Trade an 
 affidavit of no receipts or payments. 
 
 175. — (1.) Upon a liquidator resigning, or being released or removed from his 
 office, he shall deliver over to the official receiver, or, as the case may be, to the new 
 liquidator, all books kept by him, and all other books, documents, papers, and 
 accounts in his possession relating to the office of liquidator. The release of a 
 liquidator shall not take effect unless and until he has delivered over to the official 
 receiver, or as the case may be to the new liquidator, all the books, papers, docu- 
 ments, and accounts which he is by this rule required to deliver on his release. 
 
 (2.) The Board of Trade may, at any time during the progress of the liquidation, 
 on the application of the liquidator or the official receiver, direct that such of the books, 
 papers, and documents of the company or of the liquidator as are no longer required 
 for the purpose of the liquidation, may be sold, destroyed, or otherwise disposed of. 
 
 176. Where property forming part of a company’s assets is sold by the liquidator 
 through an auctioneer or other agent, the gross proceeds of the sale shall be paid 
 over by such auctioneer or agent, and the charges and expenses connected with 
 the sale shall afterwards be paid to such auctioneer or agent, on the production of 
 the necessary certificate of the taxing officer. Every liquidator, by whom such 
 auctioneer or agent is employed, shall, unless the Court otherwise orders, be 
 accountable for the proceeds of every such sale. 
 
 Taxation of Costs. 
 
 177. Every solicitor, manager, accountant, auctioneer, broker or other person 
 employed by an official receiver or liquidator in a winding-up by the Court shall on 
 request by the official receiver or liquidator (to be made a sufficient time before the 
 declaration of a dividend) deliver his bill of costs or charges to the official receiver 
 or liquidator for the purpose of taxation ; and if he fails to do so within the time 
 stated in the request, or such extended time as the Court may allow, the liquidator 
 shall declare and distribute the dividend without regard to such person’s claim, and 
 subject to any order of the Court the claim shall be forfeited. The request by the 
 official receiver or liquidator shall be in the Form No. 89. 
 
 178. Where a bill of costs or charges in any winding-up has been lodged with tne 
 taxing officer, he shall give notice of an appointment to tax the same, in a winding-up 
 by the Court to the official receiver, and in every winding-up to the liquidator, 
 and to the person to or by whom the bill or charges is or are to be paid (as the 
 case may be). 
 
 Liquidator 
 carrying on 
 business. 
 
 Forms 88 and 
 88a. 
 
 Copy of accounts 
 to be filed. 
 
 Summary of 
 accounts. 
 
 Affidavit of no 
 receipts. 
 
 Proceedings on 
 resignation, &«. 
 of liquidator. 
 
 Disposal of 
 books. 
 
 Expenses of 
 sales. 
 
 Taxation of costs 
 payable by or to 
 official receiver 
 or liquidator or 
 by company. 
 
 Form 89. 
 
 Notice of ap“ 
 pointment. 
 
Appendix. 
 
 
 Lodgment of 
 bill. 
 
 Copy of the bill 
 to be furnished. 
 
 Applications 
 for costs. 
 
 Certificate of 
 taxation. 
 Form 90. 
 
 Certificate of 
 employment. 
 
 Scale of costs in 
 a County Court, 
 and taxation. 
 
 Review of 
 taxation at 
 instance of 
 Board of Trade. 
 
 179. The hill or charges, if incurred in a winding-up hy the Court prior to the 
 appointment of a liquidator, shall be lodged with the official receiver, and if incurred 
 after the appointment of a liquidator, shall he lodged with the liquidator. The 
 official receiver or the liquidator, as the case may be, shall lodge the hill or charges 
 with the proper taxing officer. 
 
 180. Every person whose bill or charges in a winding-up by the Court is or are 
 to he taxed shall, on application either of the official receiver or the liquidator, 
 furnish a copy of his hill or charges so to be taxed, on payment at the rate of 4 d. 
 per folio, which payment shall be charged on the assets of the company. The 
 official receiver shall call the attention of the liquidator to any items which, in his 
 opinion, ought to be disallowed or reduced, and may attend or be represented on the 
 taxation. 
 
 181. Where any party to, or person affected by, any proceeding desires to make 
 an application for an order that he be allowed his costs, or any part of them, 
 incident to such proceeding, and such application is not made at the time of the 
 proceeding 
 
 (1.) Such party or person shall serve notice of his intended application on the 
 official receiver in a winding-up by the Court and in every winding-up on 
 the liquidator. 
 
 (2.) The official receiver (if any) and liquidator may appear on such application 
 and object thereto. 
 
 (?.) No costs of or incident to such application shall be allowed to the applicant, 
 unless the Court is satisfied that the application could not have been made 
 at the time of the proceeding. 
 
 i£ 2. Upon the taxation of any bill of costs, charges, or expenses being com- 
 pleted, the taxing officer shall issue to the person presenting such bill for taxation 
 his allowance or certificate of taxation. The bill of costs, charges, and expenses, 
 together with the allowance or certificate, shall be filed with the registrar. 
 
 183. Where the bill or charges of any solicitor, manager, accountant, auctioneer, 
 broker, or other person employed by an official receiver or liquidator, is or are 
 payable out of the assets of the company, a certificate in writing, signed by the 
 official receiver or liquidator, as the case may be, shall on the taxation be produced 
 to the taxing officer setting forth whether any, and if so what, special terms of 
 remuneration have been agreed to, and in the case of the bill of costs of a solicitor, 
 a copy of the resolution or other authority sanctioning the employment. 
 
 184. In a County Court all costs properly incurred in a winding-up by the Court 
 shall be allowed on the lower scale in Appendix N. to the Rules of the Supreme 
 Court, and costs shall be taxed by the registrar in person. 
 
 185. — (1.) Where any bill of costs, charges, fees or disbursements which are 
 payable out of the assets of the company to any solicitor, manager, accountant, 
 auctioneer, broker or other person has been taxed by a registrar of a Court other 
 than the High Court, the Board of Trade may require the taxation to be reviewed 
 by the taxing officer of the High Court. 
 
 (2.) In any case in which the Board of Trade require such a review of taxation 
 as is above mentioned they shall give notice to the person whose bill has heen taxed, 
 and shall apply to the taxing officer of the High Court to appoint a time for the 
 review of such taxation and thereupon such taxing officer shall appoint a time for 
 the review" of, and shall review, such taxation and certify the result thereof. The 
 Board of Trade shall give to the person whose bill of costs is to be reviewed notice 
 of the time appointed for the review. 
 
 (3.) Where any such review of taxation as is above mentioned is required to be 
 made by the taxing officer of the High Court, the registrar whose taxation is to 
 be reviewed shall forward to the said taxing officer the bill which is required to be 
 reviewed. 
 
 (4.) The Board of Trade may appear upon the review of the taxation ; and if, 
 upon the review of the taxation, the bill is allowed at a lower sum than the sum 
 allowed on the original taxation, the amount disallowed shall (if the bill has been 
 paid) be repaid to the .official receiver or the liquidator, or other person entitled 
 thereto. The certificate of the taxing officer shall in every case of a review by 
 him under this rule be a sufficient authority to entitle the person to whom the 
 amount disallowed ought to be repaid to demand such amount from the person 
 liable to repay the same. 
 
Companies ( Winding-up) Rules. 
 
 Rules of 19 09 623 
 
 (5.) The costs of and incidental to the review shall be paid out of the assets of the 
 company or otherwise as the taxing’ officer or the Court may direct ; provided that 
 the cost of the attendance of a principal shall not be allowed if in the opinion of the 
 taxing officer he could have been sufficiently represented by his London agent. 
 
 Costs and Expenses Payable out of the Assets of the Company. 
 
 186. — (1.) Where a liquidator or special manager in a winding-up by the Court Liquidator’s 
 receives remuneration for his services as such, no payment shall be allowed on his charges, 
 accounts in respect of the performance bv any other person of the ordinary duties 
 
 which are required by statute or rules to be performed by himself. 
 
 (2.) Where a liquidator is a solicitor he may contract that the remuneration for 
 his services as liquidator shall include all professional services. 
 
 187. — (1.) The assets of a company in a winding-up by the Court, remaining after Costs payable 
 payment of the fees and actual expenses incurred in realizing or getting in the out of the assets, 
 assets, shall, subject to any order of the Court, and, as regards a winding-up to 
 
 which the provisions of the Stannaries Act, 1887,* apply, subject to that Act as 
 modified by the Act, be liable to the following payments, which shall be made in 
 the following order of priority, namely: — 
 
 First. The taxed costs of the petition, including the taxed costs of any person 
 appearing on the petition whose costs are allowed by the Court. 
 
 Next. The remuneration of the special manager (if any). 
 
 , , The costs and expenses of any person who makes, or concurs in making, 
 the company’s statement of affairs. 
 
 ,, The taxed charges of any shorthand writer appointed to take an examina- 
 tion. Provided that where the shorthand writer is appointed at the 
 instance of the official receiver the cost of the shorthand notes shall be 
 deemed to be an expense incurred by the official receiver in getting in 
 and realising the assets of the company. 
 
 ,, The liquidator’s necessary disbursements, other than actual expenses of 
 realisation heretofore provided for. 
 
 , , The costs of any person properly employed by the liquidator. 
 
 ,, The remuneration of the liquidator. 
 
 ,, The actual out-of-pocket expenses necessarily incurred by the committee 
 of inspection, subject to the approval of the Board of Trade. 
 
 (2.) No payments in respect of bills or charges of solicitors, managers, accountants, Costs, 
 auctioneers, brokers, or other persons, other than payments for costs and expenses 
 incurred and sanctioned under Rule 54, and payments of bills which have been 
 taxed and allowed under orders made for the taxation thereof, shall be allowed out 
 of the assets of the company without proof that the same have been considered and 
 allowed by the registrar. The taxing officer shall satisfy himself before passing 
 such bills or charges that the employment of the solicitor or other person in respect 
 of the matters mentioned in the bills or charges has been duly sanctioned. Provided 
 that the official receiver when acting as liquidator may without taxation pay and 
 allow the costs and charges of any person other than a solicitor employed by him 
 where such costs and charges are within the scale usually allowed by the Court and 
 do not exceed the sum of 'll. : provided always th«t the Board of Trade may require 
 such costs or charges to be taxed by the taxing officer. 
 
 (3.) Nothing contained in this rule shall apply to or affect costs which, in the 
 course of legal proceedings by or against a company which is being wound up by 
 the Court, are ordered by the Court in which such proceedings are pending or a 
 judge thereof to be paid by the company or the liquidator, or the rights of the 
 person to whom such costs are payable. 
 
 Statements by Liquidator to the Registrar of Joint Stock Companies. 
 
 188. The winding-up of a company shall, for the purposes of section 224 of the Conclusion of 
 Act, be deemed to be concluded : — winding-up. 
 
 (a) In the case of a company wound up by order of the Court, at the date on 
 which the order dissolving the company has been reported by the 
 liquidator to the Registrar of Companies, or at the date of the order of 
 the Board of Trade releasing the liquidator pursuant to section 157 of the 
 Act. 
 
 * 50 & 51 Viet. c. 43. 
 
Appendix. 
 
 6*4 
 
 (b) In the case of a company wound up voluntarily, or under the supervision of 
 the Court, at the date of the dissolution of the company, unless at such 
 date any funds or assets of the company remain unclaimed or undistributed 
 in the hands or under the control of the liquidator, or any person who has 
 acted as liquidator, in which case the winding-up shall not be deemed to 
 be concluded until such funds or assets have either been distributed or paid 
 into the companies liquidation account at the Bank of England. 
 
 Times for send- 
 ing liquidator’s 
 statements, and 
 regulations 
 applicable 
 thereto. 
 
 Form 92. 
 
 Form 93. 
 
 Affidavit of no 
 receipts or 
 payments. 
 
 Forms 92 and 93. 
 
 189 . The statements with respect to the proceedings in and position of a liqui- 
 dation of a company, the winding-up of which is not concluded within a year after 
 its commencement, shall be sent to the Registrar of Companies twice in every year 
 as follows : — 
 
 (1.) The first statement, commencing at the date when a liquidator was first 
 appointed and brought down to the end of twelve months from the com- 
 mencement of the winding-up, shall be sent within thirty days from the 
 expiration of such twelve months, or within such extended period as the 
 Board of Trade may sanction, and the subsequent statements shall be sent 
 at intervals of half a year, each statement being brought down to the end 
 of the half year for which it is sent. 
 
 (2.) Subject to the next succeeding rule, Form No. 92, with such variations as 
 circumstances may require, shall be used, and the directions specified in 
 the Form shall (unless the Board of Trade otherwise direct) be observed in 
 reference to every statement. 
 
 (3.) Every statement shall be sent in duplicate, and shall be verified by an 
 affidavit in the Form No. 93, with such variations as circumstances may 
 require. 
 
 190 . Where a liquidator has not during any period for which a statement has to 
 be sent received or paid any money on account of the company, he shall at the 
 period when he is required to transmit his statement, send to the registrar of 
 companies the prescribed statement in the Form No. 92, in duplicate containing 
 the particulars therein required with respect to the proceedings in and position of 
 the liquidation, and with such statement shall also send an affidavit of no receipts 
 or payments in the Form No. 93. 
 
 Payment of 
 
 undistributed. 
 
 and unclaimed 
 
 money into 
 
 companies 
 
 liquidation 
 
 account. 
 
 Unclaimed Funds and Undistributed Assets in the Hands of a Liquidator. 
 
 191. — (l ) All money in the hands or under the control of a liquidator of a 
 company representing unclaimed dividends, which for six months from the date 
 when the dividend became payable have remained in the hands or under the control 
 of the liquidator, shall forthwith, on the expiration of the six months, be paid into 
 the companies liquidation account. 
 
 (2.) All other money in the hands or under the control of a liquidator of 
 a company, representing unclaimed or undistributed assets, which under sub- 
 section 4 of section 224 of the Act, the liquidator is to pay into the companies 
 liquidation account, shall be ascertained as on the date to which the state- 
 ment of receipts and payments sent in to the Registrar of Companies is brought 
 down, and the amount to be paid to the companies liquidation account shall 
 be the minimum balance of such money which the liquidator has had in his 
 hands or under his control during the six months immediately preceding the 
 date to which the statement is brought down, less such part (if any) thereof as the 
 Board of Trade may authorize him to retain for the immediate purposes of the 
 liquidation. Such amount shall be paid into the companies liquidation account 
 within fourteen days from the date to which the statement of account is brought 
 down. 
 
 (3.) Notwithstanding anything in this rule, any moneys representing unclaimed 
 or undistributed assets or dividends in the hands of the liquidator at the date of the 
 dissolution of the company shall forthwith be paid by him into the companies 
 liquidation account. 
 
 (4.) A liquidator whose duty it is to pay into the companies liquidation account 
 at the Bank of England, money representing unclaimed or undistributed assets of 
 the company shall apply in such manner as the Board of Trade shall direct to the 
 Board of Trade for a paying-in order, which paying- in order shall be an authority 
 to the Bank of England to receive the payment. 
 
 (5.) Money at the credit of the account of the official liquidator of a company 
 with the Bank of England shall be deemed to be money under the control of 
 
Companies (Winding-up) Rules. 
 
 Rules of 1909 625 
 
 such official liquidator, and when such money has remained unclaimed or undistri- 
 buted for six months after the date of receipt it shall be transferred to the 
 companies liquidation account, and the official liquidator and master of the 
 Chancery Division of the High Court attached to the judge in whose chambers the 
 winding-up is proceeding shall draw and sign such cheques or orders as may be 
 necessary for the transfer of the money. An application to the Board of Trade 
 for payment out of moneys so transferred shall be signed by the official liquidator 
 and countersigned by the said master. 
 
 (6.) Money invested or deposited at interest by a liquidator shall be deemed to be 
 money under his control, and when such money forms part of the minimum balance 
 payable into the companies liquidation account pursuant to clause 2 of this rule, 
 the liquidator shall realize the investment or withdraw the deposit, and shall pay 
 the proceeds into the companies liquidation account, provided that where the 
 money is invested in Government securities, such securities may, with the per- 
 mission of the Board of Trade, be transferred • to the control of the Board of 
 Trade instead of being forthwith realized and the proceeds thereof paid into the 
 companies liquidation account. In the latter case, if and when the money repre- 
 sented by the securities is required wholly or in part for the purposes of the 
 liquidation, the Board of Trade may realize the securities wholly or in part and 
 pay the proceeds of realization into the companies liquidation account and deal 
 with the same in the same way as other moneys paid into the said account may be 
 dealt with. 
 
 192. Every person who has acted as liquidator of any company, whether the 
 liquidation has been concluded or not, shall furuish to the Board of Trade particulars 
 of any money in his hands or under his control representing unclaimed or undis- 
 tributed assets of the company and such other particulars as the Board of Trade 
 may require for the purpose of ascertaining or getting in any money payable into 
 the companies liquidation account at the Bank of England. The Board of Trade 
 may require such particulars to be verified by affidavit. 
 
 193. — (1.) The Board of Trade may at any time order any such person to submit 
 to them an account verified by affidavit of the sums received and paid by him as 
 liquidator of the company, and may direct and enforce an audit of the account. 
 
 (2.) For the purposes of section 224 of the Act and the rules, the Court shall 
 have, and, at the instance of the Board of Trade, may exercise all the powers 
 couf erred by the Bankruptcy Act, 1883,* with respect to the discovery and realization 
 of the property of a debtor, and the provisions of Part I. of that Act with respect 
 thereto shall, with auy necessary modification, apply to proceedings under section 224 
 of the Act. 
 
 191. An application by the Board of Trade for the purpose of ascertaining and 
 getting in money payable into the Bank of England pursuant to section 224 of 
 the Act, shall be made by motion, and where the winding-up is by or under the 
 supervision of the Court shall be made to and dealt with by the judge, and in a 
 voluntary winding-up shall be made to and dealt with by the judge of the High 
 Court. 
 
 195. An application by a person claiming to be entitled to any money paid into 
 the Bank of England in pursuance of section 224 of the Act, shall be made in 
 su<-h form and manner as the Board of Trade may from time to time direct, and 
 shall, unless the Board of Trade otherwise directs, be accompanied by the 
 certificate of the liquidator that the person claiming is entitled, and such further 
 evidence as the Board of Trade may direct. 
 
 196. A liquidator who requires to make payments out of money paid into the 
 Bank of England in pursuance of section 224 of the Act, either by way of dis- 
 tribution or in respect of the cost and expenses of the proceedings, shall apply in 
 such form and manner as the Board of Trade may direct, and the Board of Trade 
 may thereupon either make an order for payment to the liquidator of the sum 
 required by him for the purposes aforesaid, or may direct cheques to be issued to 
 the liquidator for transmission to the persons to whom the payments are to be 
 made. 
 
 Liquidator to 
 furnish in- 
 formation to 
 Board of Trail e. 
 Form 97. 
 
 Board of Trade 
 may call for 
 verified 
 accounts. 
 
 Forms 92 and 93. 
 
 Application to 
 the Court for 
 enforcing an 
 account, and 
 getting in 
 money. 
 
 Application for 
 payment out by 
 person entitled. 
 
 Application by 
 liquidator for 
 payment out. 
 
 * 46 & 47 Viet. e. 52. 
 
626 
 
 Appendix. 
 
 Proceedings for 
 release of 
 liquidator. 
 Forms 98, 99, 
 and ICO. 
 
 Appointment. 
 
 .Removal. 
 
 Personal per- 
 formance of 
 duties. 
 
 Assistant official 
 receivers. 
 
 Power of officers 
 of Board of 
 Trade and 
 official receivers’ 
 clerks in certain 
 cases to act for 
 official receivers. 
 Duties where no 
 assets. 
 
 Accounting by 
 official receiver. 
 
 Official receiver 
 to act for Board 
 of Trade where 
 no committee of 
 inspection. 
 Appeals from 
 Board of Trade 
 and official 
 receiver. 
 
 Release op Liquidator in a Winding-up by the Court. 
 
 197. — (1.) A liquidator in a winding-up by the Court before making application 
 to the Board of Trade for his release, shall give notice of his intention so to do 
 to all the creditors who have proved their debts and to all the contributories, 
 and shall send with the notice a summary of his receipts and payments as 
 liquidator. 
 
 (2.) When the Board of Trade have granted to a liquidator his release, a notice 
 of the order granting the release shall be gazetted. The liquidator shall provide 
 the requisite stamp fee for the Gazette , which he may charge against the company’s 
 assets. 
 
 Official Receivers and Board of Trade. 
 
 198. — (1.) Judicial notice shall be taken of the appointment of the official re- 
 ceivers appointed by the Board of Trade. 
 
 (2.) When the Board of Trade appoints any officer to act as deputy for or in the 
 place of an official receiver, notice thereof shall be given by letter to the Court to 
 which such official receiver is or was attached. The letter shall specify the duration 
 of such acting appointment. 
 
 (3.) Any person so appointed shall, during- his tenure of office, have all the status, 
 rights, and powers, and be subject to all the liabilities of an official receiver. 
 
 199. Where an official receiver is removed from his office by the Board of 
 Trade, notice of the order removing him shall be communicated by letter to the 
 Court to which the official receiver was attached. 
 
 200. The Board of Trade may, by general or special directions, determine what 
 acts or duties of the official receiver in relation to the winding-up of companies are 
 to be performed by him in person, and in what cases he may discharge his functions 
 through the agency of his clerks or other persons in his regular employ, or under 
 his official control. 
 
 201. An assistant official receiver, appointed by the Board of Trade, shall be an 
 officer of the Court, like the official receiver to whom he is assistant, and, subject to 
 the directions of the Board of Trade, he may represent the official receiver in all 
 proceedings in Court, or in any administrative or other matter. J udicial notice 
 shall be taken of the appointment of an assistant official receiver, and he may be 
 removed in the same manner as is provided in the case of an official receiver. 
 
 202. In the absence of the official receiver any officer of the Board of Trade duly 
 authorized for the purpose by the Board of Trade, and any clerk of the official 
 receiver duly authorized by him in writing, may by leave of the Court act on behalf 
 of the official receiver, and take part for him in any public or other examination 
 and in any unopposed application to the Court. 
 
 203. Where a company against which a' winding-up order has been made has 
 no available assets, the official receiver shall not be required to incur any expense 
 in relation to the winding-up without the express directions of the Board of Trade. 
 
 204. — (1.) Where a liquidator is appointed by the Court in a winding-up by the 
 Court, the official receiver shall account to the liquidator. 
 
 (2.) If the liquidator is dissatisfied with the account or any part thereof, he may 
 report the matter to the Board of Trade, who shall take such action (if any) thereon 
 as it may deem expedient. 
 
 (3.) The provisions of these rules as to liquidators and their accounts shall not 
 apply to the official receiver when he is liquidator, but he shall account in such 
 manner as the Board of Trade may from time to time direct. 
 
 205. Where there is no committee of inspection any functions of the committee 
 of inspection which devolve on the Board of Trade may, subject to the directions of 
 the Board, be exercised by the official receiver. 
 
 20 6 . An appeal in the High Court against a decision of the Board of Trade, or 
 an appeal to the Court from an act or decision of the official receiver, acting- 
 otherwise than as liquidator of a company, shall be brought within twenty- one 
 days from the time when the decision or act appealed against is done, pronounced, 
 or made. 
 
Rules of 1909 627 
 
 Companies (Winding-up) Rules. 
 
 207. — (1.) An application by the Board of Trade to the Court to examine on oath 
 the liquidator or any other person pursuant to section 159 of the Act, shall bo 
 made ex parte , and shall be supported by a report to the Court filed with the 
 registrar, stating the circumstances in which the application is made. 
 
 (2.) The report may be signed by any person duly authorized to sign documents 
 on behalf of the Board of Trade ; and shall for the purposes of such application be 
 primd facie evidence of the statements therein contained. 
 
 Books to be kept, and Returns made, by Officers of Courts. 
 
 208. — (1.) In the High Court the registrar and in the district registries of the High 
 Court at Liverpool and Manchester respectively the district registrars of the High 
 Court, and in a Court other than the High Court, the registrar shall keep books 
 according to the forms in the Appendix, and the particulars given under the 
 different heads in such books shall be entered forthwith after each proceeding has 
 been concluded. 
 
 (2.) The officers of the Courts whose dutv it is to keep the books prescribed by 
 these rules shall make and transmit to the Board of Trade such extracts from their 
 books, and shall furnish the Board of Trade with such information and returns as 
 the Board of Trade may from time to time require. 
 
 Gazetting in a Winding-up by the Court. 
 
 209. — (1.) All notices subsequent to the making by the Court of a winding-up 
 order in pursuance of the Act or the Rules requiring publication in the London 
 Gazette shall be gazetted by the Board of Trade. 
 
 (2.) Where any winding-up order is amended, and also in any case in which 
 any matter which has been gazetted has been amended or altered, or in which a 
 matter has been wrongly or inaccurately gazetted, the Board of Trade shall re- gazette 
 such order or matter with the necessary amendments and alterations in the pre- 
 scribed form, at the expense of the company’s assets, or otherwise as the Board of 
 Trade may direct. 
 
 219. — (1.) Whenever the London Gazette contains any advertisement relating to 
 any windinaf-up proceedings the official receiver or liquidator as the case may be 
 shall file with the proceedings a memorandum referring to and giving the date of 
 the advertisement. 
 
 (2.) In the case of an advertisement in a local paper, the official receiver or liqui- 
 dator as the case may be shall keep a copy of the paper, and a memorandum 
 referring to and giving the date of the advertisement shall be placed on the file. 
 
 (3.) For this purpose one copy of each local paper in which any advertisement 
 relating to any winding-up proceeding in the Court is inserted, shall be left with 
 the official receiver or liquidator as the case may be by the person who inserts the 
 advertisement. 
 
 (4.) A memorandum under this rule shall be primd facie evidence that the 
 advertisement to which it refers was duly inserted in the issue of the Gazette or 
 newspaper mentioned in it. 
 
 Arrests and Commitments. 
 
 211. A warrant of arrest, or any other warrant issued under the provisions of 
 the Act and Rules, may be addressed to such officer of the Court, or to such high 
 bailiff or officer of any County Court, whether such County Court has jurisdiction 
 to wind up a company or not, as the Court may in each case direct. 
 
 212. Where the Court issues a warrant for the arrest of a person under any of 
 the provisions of the Act or Rules, the prison (to be named in the warrant of 
 arrest) to which the person shall be committed shall, unless the Court shall other- 
 wise order, be the prison used by the Court in cases of orders of commitment made 
 in the exercise by the Court of its ordinary jurisdiction. 
 
 213. Where a warrant for the arrest of a person has been issued by a Court 
 other than the High Court under any of the provisions of the Act aud Rules, the 
 high bailiff of the Court, or other officer of the Court to whom the warrant is 
 addressed, may send the warrant of arrest to the registrar of any other Court (other 
 than the High Court) within the ordinary jurisdiction or district of which such 
 person shall then be or be believed to be, with a warrant annexed thereto under the 
 
 Applications 
 under sect. 159 
 (2) of the Act. 
 
 Books to be kept 
 by officers of 
 Courts. 
 
 Forms 101 
 and 102. 
 
 Gazetting 
 notices. 
 Form 103. 
 
 Filing memo- 
 randum of 
 Gazette notices. 
 Form 104. 
 
 To whom 
 warrants may 
 be addressed. 
 
 Prison to which 
 person arrested 
 on warrant is 
 to be taken. 
 
 Execution of 
 warrants of 
 arrest outside 
 ordinary juris- 
 diction of Court. 
 Forms 105 
 and 106. 
 
628 
 
 Appendix 
 
 Prison to which 
 a person arrested 
 is to be con- 
 veyed, and 
 production and 
 custody of per- 
 sons arrested. 
 
 Board of Trade 
 orders. 
 
 Enlargement or 
 abridgment of 
 time. 
 
 Formal defect 
 not to invalidate 
 proceedings. 
 
 Application 
 of existing 
 procedure. 
 
 hand of the high bailiff or officer and seal of the Court from which the warrant 
 originally issued, requiring execution of the warrant by the Court to which it is 
 so sent; and the registrar of the last- mentioned Court shall seal or stamp the 
 warrant with the seal of his Court, and issue the same to the high bailiff or other 
 proper officer of his Court, with an endorsement thereon in the Form 106 ; and 
 thereupon such last -mentioned high bailiff or officer may, and shall in all respects 
 execute the said warrant according to the requirements thereof, and all constables 
 and peace officers shall aid and assist within their respective districts in the execu- 
 tion of such warrant. 
 
 214. — (1.) Where a person is arrested under a warrant of commitment issued 
 under any of the provisions of the Act and Rules, other than sections 174 
 and 176 of the Act, and Rule 66 of the Rules, he shall be forthwith conveyed 
 in custody of the bailiff or officer apprehending him to the prison of the Court within 
 the ordinary jurisdiction of which he is apprehended, and kept therein for the time 
 mentioned in the warrant of commitment, unless sooner discharged by the order of 
 the Court which originally issued the warrant of commitment, or otherwise by law. 
 
 (2.) Where a person is arrested under a warrant issued under section 174 or 
 section 176 of the Act, or under Rule 66 of the Rules, he shall be forthwith 
 conveyed in custody of the bailiff or officer apprehending him to the prison of 
 the Court within the ordinary jurisdiction of which he is apprehended ; and the 
 governor or keeper of such prison shall produce such person before the Court 
 as it may from time to time direct, and shall safely keep him until such time as 
 the Court shall otherwise order, or such person shall be otherwise discharged by 
 law. Provided that where any such person is conveyed to a prison other than the 
 prison used by the Court which originally issued the warrant in cases of orders of 
 commitment made by such Court in the exercise of its ordinary jurisdiction, the 
 Court may by order direct such person to be transferred to such last -mentioned 
 prison ; and on receipt of such order the governor or keeper of the prison to which 
 such person has been conveyed, shall cause such person to be conveyed in proper 
 custody to the prison mentioned in such order, and the governor or keeper of such 
 last -mentioned prison shall, on production of such order and of the warrant of 
 arrest, receive such person, and shall produce him before the Court, as it may from 
 time to time direct, and shall safely keep him until such time as the Court shall 
 otherwise order, or such person shall be otherwise discharged by law. 
 
 Miscellaneous Matters. 
 
 215. The Board of Trade may from time to time issue general orders or regu- 
 lations for the purpose of regulating any matters under the Act or the Rules 
 w'hich are of art administrative and not of a judicial character. Judicial notice shall 
 be taken of any general orders or regulations which are printed by the King’s 
 printers, and purport to be issued under the authority of the Board of Trade. 
 
 216. The Court may, in any case in which it shall see fit, extend or abridge the 
 time appointed by the Rules or fixed by any order of the Court for doing any act 
 or taking any proceeding. 
 
 217. — (1.) No proceedings under the Act or the Rules shall be invalidated 
 by any formal defect or by any irregularity, unless the Court before which an 
 objection is made to the proceeding is of opinion that substantial injustice has 
 been caused by the defect or irregularity, and that the injustice cannot be remedied 
 by any order of that Court. 
 
 (2.) No defect or irregularity in the appointment or election of a receiver, liqui- 
 dator, or member of a committee of inspection shall vitiate any act done by him in 
 good faith. 
 
 218. In all proceedings in or before the Court, or any judge registrar or officer 
 thereof, or over which the Court has jurisdiction under the Act and Rules, where 
 no other provision is made by the Act or Rules, the practice, procedure, and 
 regulations shall, unless the Court otherwise in any spefcial case directs, in 
 the High Court be in accordance with the Rules of the Supreme Court and 
 practice of the High Court, and in a Palatine Court and County Court in accord- 
 ance, as far as practicable, with the existing Rules and practice of the Court in 
 proceedings for the administration of assets by the Court. 
 
629 
 
 Companies (Winding-up) Rules. Rules of 1909 
 
 District 
 Registries. 
 Annulment. 
 
 219. The provisions of Rule 2 of the Rules of the Supreme Court, 1887,* relating Petitions in 
 to petitions in the district registries of Liverpool and Manchester, shall apply to Manchester 0 
 petitions presented in those registries under the Act and Rules. 
 
 220. The Companies (Winding-up) Rules, 1903, and the forms thereby pre- 
 scribed are hereby revoked and annulled, provided that such revocation and annul- 
 ment shall not prejudice or affect anything done or suffered before the date on which 
 these rules come into operation under any rule or order which is hereby revoked and 
 annulled and that no rule or practice which was annulled or repealed by the said 
 rules and orders shall be revived by reason of the revocation and annulment hereby 
 effected. 
 
 221. These rules may be cited as the Companies (Winding-up) Rules, 1909. Short title and 
 
 They shall come into operation on the 1st day of April, 1909. commencement. 
 
 I concur, 
 
 The 29th day of March, 1909. 
 
 LOREBURN, C. 
 
 WINSTON S. CHURCHILL, 
 
 President of the Board of Trade. 
 
 * Rules of the Supreme Court, May, 1887, printed in Statutory Rules and Orders, 
 Revised (1st Edition), Vol. 7, p. 333. 
 
630 
 
 Appendix. 
 
 FORMS (LIST OF). 
 
 No. 1. — General title (High Court). 
 
 No. 2. — General title (County Court). 
 
 No. 3. — Form of summons (general). 
 
 No. 4. — Petition. 
 
 No. 5. — Petition by unpaid creditor on simple contract. 
 
 No 6. — Advertisement of petition. 
 
 No. 7.— Affidavit of service of petition on members, officers, or servants. 
 
 No. 8. — Affidavit of service of petition on liquidator. 
 
 No. 9. — Affidavit verifying petition. 
 
 No. 10. — Order appointing the official receiver as provisional liquidator after 
 presentation of petition and before order to wind up. 
 
 No. 11. — Notice of intention to appear on petition. 
 
 No. 12. — List of parties attending the hearing of a petition. 
 
 No. 13. — Notification to official receiver of orders pronounced on petitions for 
 winding-up. 
 
 No 14. — Notification to official receiver of orders pronounced for appointment 
 of official receiver as provisional liquidator prior to winding-up order being made. 
 
 No. 15. — Order for winding-up by the Court. 
 
 No. 16. — Order for winding-up subject to supervision. 
 
 No. 17. — Notice of order to wind up (for newspaper). 
 
 No. 18. — Order of transfer. 
 
 No. 19. — Notice of transfer of proceedings to the Board of Trade and official 
 receiver. 
 
 No. 20. — Affidavit by special manager verifying account. 
 
 No. 21. — Notice to creditors of first meeting. 
 
 No. 22. — Notice to contributories of first meeting. 
 
 No. 23. — Notice to directors and officers of company to attend first meeting of 
 creditors or contributories. 
 
 No. 24. — Memorandum of proceedings at adjourned first meeting. 
 
 No. 25. — List of creditors or contributories assembled to be used at every meeting. 
 No. 26.— Statement of affairs. 
 
 No. 27. — Report of result of meeting of creditors or contributories. 
 
 No 28. — Order appointing liquidator. 
 
 No. 29. — Certificate that liquidator or special manager has given security. 
 
 No. 30. — Advertisement of appointment of liquidator. 
 
 No. 31. — Order directing a public examination. 
 
 No. 32. — Order appointing a time for public examination. 
 
 No. 33. — Notice to attend public examination. 
 
 No. 34. — Application for appointment of shorthand writer to take down notes 
 of public examination and order thereon. 
 
 No. 35. — Declaration by shorthand writer. 
 
List of Forms. 
 
 No. 36. — Notes of public examination where a shorthand writer is appointed. 
 No. 37.— Notes of public examination wherp a shorthand writer is not appointed. 
 No. 38. — Report to the Court where person examined refuses to answer to 
 satisfaction of registrar or officer. 
 
 No. 39. — Order on persons to attend at Chambers to be examined. 
 
 No. 40. — Warrant against person who fails to attend examination. 
 
 No. 41. — Notice by liquidator requiring payment of money or delivery of books, 
 &c. to liquidator. 
 
 No. 42. —Provisional list of contributories to be made out by liquidator. 
 
 No. 43. — Notice to contributories of appointment to settle list of contributories. 
 No. 44. — Affidavit of postage of notices of appointment to settle list of contri- 
 butories. 
 
 No. 45. — Certificate of liquidator of final settlement of the list of contributories. 
 No. 46. — Notice to contributory of final settlement of list of contributories, and 
 that his name is included. 
 
 No. 47. — Supplemental list of contributories. 
 
 No. 48. — Affidavit of service of notice to contributory. 
 
 No. 49. — Order on application to vary list of contributories. 
 
 No. 50. — Notice to each member of committee of inspection of meeting for 
 sanction to proposed call. 
 
 No. 51. — Advertisement of meeting of committee of inspection to sanction 
 proposed call. 
 
 No. 52. — Resolution of committee of inspection sanctioning call. 
 
 No. 53. — Notice of call sanctioned by committee of inspection to be sent to 
 contributory. 
 
 No. 54. — Summons for leave to make a call. 
 
 No. 55. — Affidavit of liquidator in support of proposal to call. 
 
 No. 56. — Advertisement of intended call. 
 
 No. 57. — Order giving leave to make a call. 
 
 No. 58. — Document making a call. 
 
 No. 59. — Notice to be served with the order sanctioning a call. 
 
 No. 60. — Affidavit in support of application for order for payment of call. 
 
 No. 61. — Order for payment of call due from a contributory. 
 
 No. 62. — Affidavit of service of order for payment of call. 
 
 No. 63. — Proof of debt (general form). 
 
 No. 64. — Proof of debt of workmen. 
 
 No. 65. — Notice of rejection of proof of debt. 
 
 No. 66. — List of proofs to be filed under Rr. 110 and 111. 
 
 No. 67. — Notice to creditor of intention to declare dividend. 
 
 No. 68. — Certified list of proofs under R. 150 (5) Companies (Winding-up) 
 Rules, and application for issue of cheques for dividend on companies liquidation 
 account. 
 
 No. 69. — Certified list of proofs filed under R. 150 (5) Companies (Winding-up) 
 Rules, special bank case. 
 
 No. 70. — Notice to persons claiming to be creditors of intention to declare final 
 dividend. 
 
 No. 71. — Notice of dividend. 
 
 No. 72. — Authority to liquidator to pay dividends to another person. 
 
 No. 73. — Notice of return to contributories. 
 
632 
 
 Appendix. 
 
 No. 74. — Schedule or list of contributories holding paid-up shares to whom a 
 dividend or return is to be paid. 
 
 No. 75. — Notice of meeting (general form). 
 
 No. 76. — Affidavit of postage of notices of meeting. 
 
 No. 77. — Certificate of postage of notices (general). 
 
 No. 78. — Memorandum of adjournment of meeting. 
 
 No. 79. — Authority to deputy to act as chairman of meeting and use proxies. 
 No. 80. — General proxy. 
 
 No. 81. — Special proxy. 
 
 No. 82. — Application to Board of Trade to authorise special bank account. 
 
 No. 83. — Order of Board of Trade for special bank account. 
 
 No. 84. — Certificate and request by committee of inspection as to investment of 
 funds. 
 
 No. 85. — Bequest by committee of inspection to Board of Trade to sell securities. 
 
 No. 86. — Certificate by committee of inspection as to audit of liquidator’s 
 accounts. 
 
 No. 87. — Affidavit verifying liquidator’s account under sect. 155. 
 
 No. 88. — Liquidator’s trading account under sect. 155. 
 
 No. 88a. — Affidavit verifying liquidator’s trading account under sect. 155. 
 
 No. 89. — Bequest to deliver bill for taxation. 
 
 No. 90. — Certificate of taxation. 
 
 No. 91. — Begister to be kept by taxing officer. 
 
 No. 92. — Statement of receipts and payments, and general directions as to 
 statements. 
 
 No. 93. — Affidavit verifying statement of liquidator’s account under sect. 224 . 
 No. 94. — Liquidator’s trading account under sect. 224 . 
 
 No. 95. — List of dividends or composition. 
 
 No. 96. — List of amounts paid or payable to contributories. 
 
 No. 97. — Affidavit verifying account of unclaimed and undistributed funds. 
 
 No. 98. — Notice to creditors and contributories of intention to apply for 
 release. 
 
 No. 99. — Application by liquidator to Board of Trade for release. 
 
 No. 100. — Statement to accompany notice of application for release. 
 
 No. 101. — Begister of winding-up orders to be kept in the Courts. 
 
 No. 102. — Begister of petitions to be kept in the Courts. 
 
 No. 103. — Notices for London Gazette. 
 
 No. 104. — Memorandum of advertisement or gazetting. 
 
 No. 105. — Warrant to registrar of Court in whose district a person against 
 whom a warrant of arrest has been issued is believed to be. 
 
 No. 106. — Indorsement of warrant of arrest issued by a Court to which the 
 same has been sent for execution by the Court which originally issued it. 
 
SPECIAL PROVISIONS RELATING TO 
 COMPANIES DURING THE WAR. 
 
 ( See generally Pulling's Manual of Emergency Legislation , with 
 Supplements , where all these provisions are fully dealt with.) 
 
 TRADING WITH THE ENEMY. 
 
 The Trading with the Enemy Act, 1914 (4 & 5 Geo. 5, c. 87), declares^ 
 sect. 1 (2), that any person shall be deemed to have traded with the enemy if 
 he has entered into any transaction or done any act which was, at the time of 
 such transaction or act, prohibited by or under any proclamation issued by 
 His Majesty dealing with trading with the enemy for the time being in force, 
 or which at common law or by statute constitutes an offence of trading with 
 the enemy: 
 
 Provided that any transaction or act permitted by or under any such pro- 
 clamation sihall not be deemed to be trading with the enemy. 
 
 Sect. 1 (3). Where a company has entered into a transaction or has done 
 any act which is an offence under this s ection, every director, manager, secre- 
 tary, ox other officer of the company who is knowingly a party to the transac- 
 tion or act shall also be deemed guilty of the offence. 
 
 By sect. 2 (2) of the same Act, where it appears to the Board of Trade — 
 
 (b) in the case of a company, that one-third or more of the issued ^hare 
 
 capital or of the directorate of the company immediately before 
 or at any time since the commencement of the present war was 
 held by or on behalf of or consisted of persons who were subjects of, 
 or resident or carrying on business in, a State for the time being 
 at war with His Majesty; or 
 
 (c) in the case of a person, firm or company, that the person was or is, 
 
 or the firm or company were or are, acting as agent for any person, 
 firm, or company trading or carrying on business in a State for 
 the time being at war with His Majesty; 
 the Board of Trade may, if they think it expedient for the purpose of satisfying 
 themselves that the person, firm or company are not trading with the enemy, 
 by written order, give to a person appointed by them, without any warrant 
 from a justice, authority to inspect all books and documents belonging to or 
 under the control of the person, firm or company, and to require any person 
 able to give information with respect to the business or trade of that person, 
 firm or company, to give that information. 
 
 For the purposes of this sub-section, any person authorised in that behalf 
 by the Board of Trade may inspect the register of members of a company at 
 any time, and any shares in a company for which share warrants to bearer 
 have been issued shall not be reckoned as part of the issued share capital of the 
 company. 
 
 (3) If any person having the custody of any book or document which a 'per so, n 
 is authorised to inspect under this section refuses or wilfully neglects to pro- 
 duce it for inspection, or if any person who is able to give any information 
 which may be required to be given under this section refuses or wilfully neglects 
 when required to give that information, that person shall on conviction under 
 the Summary Jurisdiction Acts be liable to imprisonment with or without hard 
 labour for a term not exceeding six months, or to a fine not exceeding fifty 
 pounds, or to both such imprisonment and fine. 
 
 See also , as to the extension of the restrictions under these Acts , the Trading with the 
 Enemy [Extension of Powers) Act , 1915 (5 6 Geo. 5, c. 98). 
 
 By the Trading with the Enemy Amendment Act, 1916, s. 1 (5 & 6 Geo. 5, c. 105), 
 the Board of Trade may prohibit a company from carrying on business or require its 
 business to be wound up where the business is, by reason of the enemy nationality 
 
 p. 41 
 
634 
 
 Appendix. 
 
 Payment of 
 dividends, 
 &c. payable 
 to enemy. 
 
 or enemy association of the company or of its members or otherwise, carried on 
 wholly or mainly for the benefit of or under the control of enemy subjects. 
 
 (2) The Board may appoint a controller to conduct the winding-up and 
 exercise the powers of a liquidator. 
 
 (3) Assets due to enemies are to be paid to the Custodian. 
 
 (7) Where such an order has been made, no steps can be taken to wind up 
 the company without the consent of the Board of Trade. The Board may 
 present a winding-up petition. 
 
 Sect. 10. — (1) The Registrar may refuse to register a company where any 
 subscriber of the memorandum or any director is an enemy subject. 
 
 (2) No allotment or transfer of any share, stock, debenture, &c. made after 
 the 27th January, 1916, to or for the benefit of an enemy subject shall, unless 
 made with the consent of the Board of Trade, confer any rights, and the com- 
 pany shall not act on any such transfer, &c. (subject to penalties). 
 
 (3) A power to nominate directors is not to be exercised by an enemy subject. 
 
 Sect. 11. The Board of Trade may present a petition for winding up any 
 
 company which through its agents or branches has traded with the enemy 
 abroad. 
 
 Sect. 15. Enemy subject includes a company incorporated in an enemy State. 
 
 PAYMENT OF DIVIDENDS. 
 
 By the Trading with the Enemy Amendment Act, 1914, s. 1 (1), the Board 
 of Trade shall appoint a person to act as Custodian of enemy property (herein- 
 after referred to as “ the Custodian ”) for England and Wales, for Scotland, 
 and for Ireland respectively, for the purpose of receiving, holding, preserving, 
 and dealing with such property as may be paid to or vested in him in pursuance 
 of this Act, and if any question arises as to which Custodian any money is to 
 be paid to under this Act, the question shall be determined by the Board of 
 Trade. 
 
 (2) The Public Trustee shall be appointed to be the Custodian for England 
 and Wales, and shall, in relation to all property held by him in his capacity 
 of Custodian, have the like status, and his accounts shall be subject to the like 
 audit, as if the same were held by him in his capacity of Public Trustee, and 
 the Public Trustee Act, 1906, shall apply accordingly. 
 
 By sect. 2 (1), any sum which, had a state of war not existed, would have 
 been payable and paid to or for the benefit of an enemy, by way of dividends), 
 interest or share of profits, shall be paid by the person, firm or company by 
 whom it would have been payable to the Custodian to hold subject to the 
 provisions of this Act and any Order in Council made thereunder, and the 
 payment shall be accompanied by such particulars as the Board of Trade may 
 prescribe, or as the Custodian, if so authorised by the Board of Trade, may 
 require. 
 
 Any payment required to be made under this sub-section to the Custodian 
 shall be made — , 
 
 (a) within fourteen days after the passing of this Act, if the sum, had a 
 
 state of war not existed, would have been paid before the passing of 
 of this Act; and 
 
 (b) in any other case within fourteen days after it would have been paid. 
 
 (3) If any person fails to make or require the making of any payment or to 
 furnish the prescribed particulars within the time mentioned in this section, 
 he shall, on conviction under the Summary Jurisdiction Acts, be liable to a 
 fine not exceeding one hundred pounds or to imprisonment, with or without 
 hard labour, for a term not exceeding six months, or to both such fine and! 
 imprisonment, and in addition to a further fine not exceeding fifty pounds 
 for every day during which the default continues, and every director, manager, 
 secretary or officer of a company, or any other person who is knowingly a party 
 to the default shall, on the like conviction, be liable to the like penalty. 
 
 (5) For the purposes of this Act the expression “ dividends, interest or share 
 of profits ” means any dividends, bonus or interest in respect of any shares, 
 stock, debentures, debenture stock or other obligations of any company, any 
 interest in respect of any loan to a firm or person carrying on business for the 
 
Appendix. 
 
 635 
 
 purposes of that business, and any profits or share of profits of such a business, 
 and, where a person is carrying on any business on behalf of an enemy, any 
 sum which, had a state of war not existed, would have been transmissible by a 
 person to the enemy by way of profits from that business shall be deemed to foe 
 a sum which would have been payable and paid to that enemy. 
 
 Duty to Notify the Custodian. 
 
 By sect. 3 (2) of the same Act, every company incorporated in the United, 
 Kingdom and every company which, though not incorporated in the United 
 Kingdom, has a share transfer or share registration office in the United King- 
 dom shall, within one month after the passing of this Act, by notice in writing 
 communicate to the Custodian full particulars of all shares, stock, debentures, 
 and debenture stock and other obligations of the company which are held by 
 or for the benefit of an enemy; and every partner of every firm, one or more 
 partners of which on the commencement of the war became enemies or to which 
 money had been lent for the purpose of the business of the firm by a person 
 who so became an enemy, shall, within one month after the commencement of 
 this Act, by notice in writing communicate to the Custodian full particulars 
 as to any share of profits and interest due to such enemies or enemy, and, if 
 any company or partner fails to comply with the provisions of this sub-section, 
 the company shall, on conviction under the Summary Jurisdiction Acts, be 
 liable to a fine not exceeding one hundred pounds, and in addition to a further 
 fine not exceeding fifty pounds for every day during which the default con- 
 tinues, and the partner and every director, manager, secretary or officer of the 
 company who is knowingly a party to the default shall on the like conviction 
 be liable to the like fine, or to imprisonment, with or without hard labour, for 
 a term not exceeding six months, or to both such imprisonment and fine. 
 
 j Power of Custodian to Vote. 
 
 The Custodian may vote and do other acts in the character of a shareholder. 
 Re R. Pharaon et Fils, (1916) 1 Ch. 1. 
 
 REGISTRATION OF NEW COMPANIES. 
 
 By the Trading with the Enemy Amendment Act, 1914, s. 9 (1), during 
 the continuance of the present war a certificate of incorporation of a company 
 shall not be given by the Registrar of Joint Stock Companies until there has’ 
 been filed with him either — 
 
 (a) a statutory declaration by a solicitor of the Supreme Court, or, in 
 
 Scotland, by an enrolled law agent, engaged in the formation of the 
 company, that the company is not formed for the purpose or with the 
 intention of acquiring the whole or any part of the undertaking of 
 a person, firm or company the books and documents of which are 
 liable to inspection under sub-section (2) of section two (see p. 633, 
 ante ) of the principal Act; or 
 
 (b) a licence from the Board of Trade authorising the acquisition by the 
 
 company of such an undertaking. 
 
 (2) Where such a statutory declaration has been filed it shall not be lawful 
 for the company, during the continuance of the present war, without the 
 licence of the Board of Trade, to acquire the whole or any part of any such 
 undertaking, and if it does so the company shall, without prejudice to any 
 other liability, be liable on conviction under the Summary Jurisdiction Acts to 
 a fine not exceeding one hundred pounds, and every director, manager, secre- 
 tary, or other officer of the company who is knowingly a party to the default 
 shall on the like conviction be liable to the like fine or to imprisonment, with 
 or without hard labour, for a term not exceeding six months. 
 
 41 ( 2 ) 
 
636 
 
 Appendix. 
 
 NEW ISSUES OF, CAPITAL. 
 
 Treasury Announcement appearing in the Press, Friday, January 19th, 
 
 1915. 
 
 In connection with the re-opening of the Stock Exchanges the Treasury 
 have had under consideration the general conditions under which new issues of 
 capital in the United Kingdom can be permitted during the continuance of the 
 war. 
 
 It appears to the Treasury that in the present crisis all other considerations 
 must be subordinated to the paramount necessity of husbanding the financial 
 resources of the country with a view to the successful prosecution of the war. 
 Accordingly they wish it to be understood that until further notice they feel it 
 imperative in the national interest that fresh issues of capital shall be approved 
 by the Treasury before they are made. 
 
 Treasury approval will be governed by the following general conditions: — 
 
 (1) Issues for undertakings carried on or to be carried on in the United 
 
 Kingdom shall only be allowed where it is shown to the satisfaction 
 of the Treasury that they are advisable in the national interest. 
 
 (2) Issues or participations in issues for undertakings carried on or to be 
 
 carried on in the British Empire Over-Seas shall only be allowed 
 where it is shown to the satisfaction of the Treasury that urgent 
 necessity and special circumstances exist. 
 
 (3) Issues or participations in issues for undertakings carried on or to be 
 
 carried on outside the British Empire shall not be allowed. 
 
 (4) The Treasury will not in ordinary cases insist upon the above restric- 
 
 tions where issues are required for the renewal of Treasury bills 
 or other short instruments held here and falling due of foreign or 
 colonial Governments or municipal corporations or railways or other 
 undertakings. 
 
 All applications should be made in the first instance to the Treasury. 
 
 The Treasury will not be prepared to approve under paragraph 4 (3) of the 
 Temporary Regulations for the Re-opening of the Stock Exchange any dealings 
 in new issues which have not been approved by the Treasury before they are 
 made. 
 
 Notice issued by the Treasury. 
 
 (1) The restriction must be taken, for the present at any rate, as applying 
 to the issue of all capital, including that of private companies and that of the 
 nature of reconstruction of existing capital. 
 
 (2) The approval of the Treasury should be obtained for all fresh issues of 
 capital of whatever nature, whether made on behalf of a Government, munici- 
 pality, or other public body, or any company, whether public or private. 
 Treasury approval is not required for calls or instalments on shares, stock, 
 debentures or bonds already issued. 
 
 (3) All applications for approval of fresh issues should be addressed to the 
 Treasury, the envelope being marked “ Capital Issues.” In order to save 
 delay and reduce correspondence to a minimum, it is desirable that the fullest 
 particulars should be given in each case. 
 
 These regulations have apparently no direct legal force, see Sol. J. Vol. 59, 
 p. 556 ; but in conjunction with the Stock Exchange Rules and the reluctance 
 of Government officials to permit any evasion of them, they do place serious 
 practical difficulties in the way of fresh issues of capital. 
 
637 
 
 RESTRICTIONS ON ENFORCEMENT OF 
 JUDGMENTS AND SECURITIES. 
 
 COURTS (EMERGENCY POWERS) ACT, 1914. 
 
 4 & 5 Geo. 5, c. 78. 
 
 1. — (1) From and after the passing of this Act no person shall — 
 
 (a) proceed to execution on, or otherwise to the enforcement of, any 
 
 judgment or order of any Court (whether entered or made before 
 or after the passing of this Act) for the payment or recovery of a 
 sum of money to which this sub-section applies, except after such 
 application to such Court and such notice as may be provided for by 
 rules or directions under this Act; or 
 
 (b) levy any distress, take, resume, or enter into possession of any pro- 
 
 perty, exercise any right of re-entry, foreclose, realise any security 
 (except by way of sale by a mortgagee in possession), forfeit any 
 deposit, or enforce the lapse of any policy of insurance to which 
 this sub-section applies, for the purpose of enforcing the payment 
 or recovery of any sum of money to which this sub-section applies, 
 or, in default of the payment or recovery of any such sum of money, 
 except after such application to such Court and such notice as may 
 be provided for by rules or directions under this Act. 
 
 This sub-section shall not apply to any sum of money (other than rent not 
 being rent at or exceeding fifty pounds per annum) due and payable in pursu-> 
 ance of a contract made after the beginning of the fourth day of August 
 nineteen hundred and fourteen. 
 
 This sub-section applies to life or endowment policies for an amount not 
 exceeding twenty-five pounds, or payments equivalent thereto, the premiums 
 in respect of which are payable at not longer than monthly intervals, and have 
 been paid for at least the two years preceding the fourth day of August nineteen 
 hundred and fourteen. 
 
 (2) If, on any such application, the Court to which the application is made 
 is of opinion that time should be given to the person liable to make the payment 
 on the ground that he is unable immediately to make the payment by reason of 
 circumstances attributable, directly or indirectly, to the present war, the Court 
 may, in its absolute discretion, after considering all the circumstances of the 
 ease and the position of all the parties, by order, stay execution or defer the 
 operation of any such remedies as aforesaid, for such time and subject to such 
 conditions as the Court thinks fit. 
 
 It has been held that no application need be made under this Act before 
 commencing proceedings for foreclosure or the appointment of a receiver by 
 the Court. Re Farnol, Eades $ Co., (1915) 1 Ch. 22. 
 
 There is some doubt whether the appointment of a receiver by a debenture 
 holder under a power in the debentures is a taking of possession within the Act, 
 where the debenture provides that the receiver is to be the agent of the com- 
 pany. In such a case it has always been considered that the debenture holder is 
 not technically in possession; but it is understood that more than one learned' 
 judge has decided in Chambers that the Act applies. 
 
 As to the effect of the Act on a winding-up petition, see supra, pp. 393 and 
 396. 
 
 As to the position under the Act of a mortgagee in possession of debentures, 
 see Ziman v. Komata Reefs Gold Mining Co., Ltd., (1915) 2 K. B. 163. 
 
 Power of 
 courts to 
 defer execu- 
 tion, &c. 
 
INDEX 
 
 [Numbers iu Black Type refer to the Act and Rules in the Appendix.] 
 ABRIDGED PROSPECTUS, 346, 360. 
 
 ABROAD, 
 
 arrest of absconding contributory, 497 . 
 directors, notice to, of board meeting, 195. 
 property situate, company charging, 274. 
 seal for use, 259, 469 . 
 shareholders resident, notices to, 232. 
 
 ACCEPTANCE, 
 
 application for shares, of, 109. 
 bill of exchange, 264. 
 directors, by, of office, 181. 
 
 ACCIDENTAL OR DUE TO INADVERTENCE, 
 meaning in Act, 123. 
 
 ACCOUNTS, 
 
 audit of, 225, 492 (liquidators). 
 
 copies of, and balance sheet to be sent to members, 222, 223. 
 directors’ duty to keep, 222. 
 falsification, 505. 
 fraudulent, 224. 
 inspection of, by members, 222. 
 directors, right of, 223. 
 
 by preference shareholders and debenture holders, statutory right 
 of, 223. 
 
 inspectors, Board of Trade, by, 224. 
 liquidator’s, 492 . 
 provisions of articles, 222. 
 
 Table A as to, 533. 
 where kept, 223. 
 
 ACCUMULATED PROFITS, 
 
 application in reduction of capital, 93, 460 . 
 
 ACQUIESCENCE, 
 allottee, of, 110. 
 company may be bound by, 75. 
 
 ACQUIRING OTHER BUSINESSES, 
 power in memorandum, 64. 
 
 ACT OF PARLIAMENT, 
 codifying, construction, 17. 
 companies incorporated by, 4. 
 consolidating, 17. 
 
 power in memorandum to apply for, 66. 
 
 ACTIONS, 
 
 calls, for, 149. 
 
 company, against, service of writ in, 234. 
 debenture -holder, by, 324 et seq. 
 costs in, 329. 
 
 leave to commence or continue, 328. 
 
 1 
 
INDEX. 
 
 ACTIONS — continued. 
 
 in name of company, 242. 
 
 limited company, by, security for costs, 520. 
 
 minority of members, by, 242. 
 
 rescission of contract, 352. 
 
 specific performance, for, 115. 
 
 stay of, in winding-up (s. 142), 413, 489. 
 
 transfer, 487. 
 
 ACTS RELATING TO COMPANIES, LIST OF, 10—12. 
 
 ADJOURNMENT OF GENERAL MEETINGS, 
 how to be effected, 176. 
 discretion of chairman as to, 176. 
 improper, remedy of members for, 176. 
 meeting, of, no fresh notice necessary, 176. 
 
 ADJOURNMENT OF PETITION TO WIND UP, 488 
 
 ADJUSTING, 
 
 rights of contributories, 404, 416. 
 
 ADVERTISEMENT OF PETITION, 
 winding-up, injunction to restrain, 397. 
 
 ADVERTISEMENTS, 
 
 creditors’ meeting in winding-up, 420. 
 notice to shareholders by, 233. 
 of prospectus, what may be omitted in, 349. 
 winding-up petition, of, 396. 
 
 AFFAIRS OF COMPANY, 
 
 inspectors appointed by Board of Trade, 481 . 
 
 by special resolution, 481. 
 
 internal, 45. 
 
 AFFIDAVITS, 
 
 winding-up, in, 397, 398. 
 
 winding-up petition, in opposition to, time for filing, 397. 
 
 AGENT, 
 
 application for shares by, 103. 
 appointment and dismissal, 262. 
 director an, 177. 
 
 liability of company for acts of, 73, 74. 
 
 AGREEMENT, 
 
 charge, to give on property situate abroad, 273. 
 debentures, for, specific performance of, 321. 
 oral, how made, 256. 
 promoters, by, 332. 
 shares, to take, 113 et seq. 
 allotment, 104. 
 delay in, 112. 
 notice of, 109. 
 application, 103. 
 
 agent, by, 103, 113. 
 before incorporation, 109. 
 conditional, 112. 
 fictitious name, in, 104. 
 infant, in name of, 104. 
 oral, may be, 103. 
 withdrawal of , 103. 
 constituents of a valid, 103. 
 director’s share qualification, 182, 183. 
 filing, as to paid-up shares, 118 ct seq. 
 misrepresentation, voidable for, 352. 
 paid-up shares, as to, 118 et seq . 
 
 2 
 
INDEX. 
 
 AGREEMENT — continued . 
 shares, to take — continued. 
 rescission of, 352. 
 specific performance, 115. 
 voidable, valid till rescinded, 352. 
 withdrawal of application before allotment, 103. 
 under hand, form of, 255. 
 under seal, form of, 255. 
 
 ALIEN ENEMY. [See Enemy.] 
 
 ALLOTMENT, 
 
 conditional, no contract, 112. 
 delay in, 112. 
 
 duty of directors as to, 105, 473. 
 
 filing of contract for, when, 118, 119, 474. 
 
 first public, when it may be made, 105, 473. 
 
 irregular, right to repudiate, 107, 473. 
 
 letter of, stamp on, 110. 
 
 nature of, 104. 
 
 necessity for notice of, 109. 
 
 none necessary, in case of subscribers of memorandum, 102. 
 notice of, 109 ; by post, 109. 
 on application before incorporation, 109. 
 oral, 109. 
 
 paid-up shares, returns as to, 118. 
 posting notice, completes contract, 109. 
 renunciation, stamp on, 110. 
 restrictions on, 105, 473. 
 
 return of money on breach of conditions, 473. 
 returns as to, 118, 474. 
 unstamped, whether effective, 110. 
 waiver of notice of, 109. 
 
 ALTERATION, 
 
 articles of association, of, 46 et seq., 454. 
 
 limits of, 50. 
 capital, 86, 91, 460. 
 
 memorandum of association, of, 77, 78, 453. 
 preferential rights, 90. 
 
 Table A, 524. 
 
 substitution of memorandum and articles for deed of settlement, 516. 
 AMALGAMATION, 425. 
 
 AMBIGUITY, 
 
 memorandum of association, in, 39. 
 
 AMBIGUOUS STATEMENTS IN PROSPECTUS, 355. 
 
 AMENDMENTS, 175. 
 
 “AND REDUCED,” 
 use of, 99. 
 
 ANNUAL MEETING OF COMPANY, 163, 465. 
 
 ANNUAL RETURNS, 
 
 list of members, 123, 456. 
 to registrar, 123, 456, 457. 
 
 statement in summary in form of balance sheet, 457. 
 
 private company exempt from making, 457. 
 summary, 123. 
 
 APPEAL, 
 
 judge, from, in winding-up, 497. 
 liquidator, from, in winding-up by Court, 493. 
 
 3 
 
INDEX. 
 
 APPEALS AND RE- HEARINGS, 
 in winding-up, 493 , 497 . 
 
 APPLICATION FOR SHARES, 103. 
 
 APPLICATION OF NEW ACT 
 
 to companies registered under former Companies Acts, 513. 
 
 APPOINTMENT, 
 
 director, of, defect in, 191. 
 
 first directors, of, 180. 
 
 receiver, of, by debenture-holders, 295. 
 
 receiver, of, by the Court, 324. 
 
 secretary, of, 260. 
 
 solicitor in articles, of, effect of, 42. 
 
 APPORTIONMENT ACT, 1870, 
 dividends, as applicable to, 220. 
 
 ARBITRATION, 
 
 power of companies to refer to, 483 . 
 
 provisions of “ Railway Companies Arbitration Act, 1859,” to apply 
 to, 483 . 
 
 valuation of interest of dissentient shareholders on sale of assets. 
 424, 500. 
 
 ARRANGEMENT, 
 
 creditors and contributories, with, 430, 484 , 500 . 
 
 ARREST, 
 
 warrant of, winding-up, in, 497. 
 
 ART, 
 
 association formed to promote, 250, 455 . 
 
 ARTICLES OF ASSOCIATION, 37 et seq. 
 accounts, provisions as to, 222. 
 adoption of agreement, provision in, for, 46. 
 alteration of, 46 et seq., 454 . 
 by special resolution, 454 . 
 exemption from, invalid, 47. 
 limit of, 50. 
 
 provisions of Act, 46, 454 . 
 retrospective, 48, 49. 
 special or preferential rights in, 90. 
 to give preference, 47. 
 appointment of solicitor in, effect of, 42. 
 attestation of signatures to, 37. 
 audit, provisions as to, 225. 
 binding force of, 39 — 41, 454 . 
 board meetings, provisions as to, 194. 
 borrowing powers, as to exercise of, 269 et seq. 
 calls, liability defined as to, 146. 
 company, how far binding on, 40, 41. 
 constructive notice of, 44. 
 contract implied from acting on, 43. 
 contract with outsider, how far, 41, 42. 
 copies of, 37, 455 . 
 directors, 
 
 powers of, under, 189. 
 
 dividend, provisions as to declaration of, 213. 
 exclusion of Table A, 37. 
 
 4 
 
INDEX. 
 
 ARTICLES OF ASSOCIATION — continued. 
 first directors, appointment of, 180. 
 form of, 37, 454. 
 form and contents of, 37, 454. 
 going beyond memorandum, 38. 
 majority altering, oppressively to minority, 50. 
 meaning of term “ articles,” 38. 
 meetings, 161. 
 
 members, how far binding on, 39. 
 suing on, 41. 
 
 notices to members, provisions as to, 232. 
 
 operation of, 454. 
 
 paragraphs to be numbered, 37. 
 
 persons dealing with company bound to read, 44. 
 
 poll, as to, 171. 
 
 power for company to buy its own shares in, 38. 
 printed, must be, 37. 
 
 provision for payment of promotion moneys in, effect of, 41. 
 quorum for general meeting, fixing, 168. 
 registration of, 22, 453, 454. 
 effect of, 454. 
 
 relation of, to memorandum, 38. 
 removal of directors, 198. 
 remuneration of directors, fixing, 185. 
 requirements of Act, 454. 
 rotation of directors, 198. 
 signature of, by subscribers, 37, 454. 
 special articles, desirability of, 22. 
 stamping and signature of, 37, 454. 
 subject-matter of, 46. 
 subscription, form of, 37. 
 trusts, non -recognition, 155. 
 
 Table A, regulations of, when to apply, 22, 454. 
 ultra vires provisions in, 38. 
 when required, 37, 454. 
 
 ASSAULT, 
 
 company may be guilty of, 74. 
 
 ASSETS, 
 
 collection and distribution of, in winding-up by Court, 401, 491, 494„ 
 dispositions pending winding-up, 207. 
 unclaimed and undistributed, 412, 421, 506. 
 
 ASSIGNMENTS, 
 form of, 267. 
 
 to trustee for creditors, void (s. 210), 503. 
 
 ASSOCIATION CLAUSE, 34. 
 
 ASSOCIATIONS, 
 
 principal kinds of, 1 et seq. 
 
 ASSOCIATIONS NOT FOR PROFIT, 250, 455. 
 
 ASSURANCE COMPANIES ACT, 1909.. 382, 552. 
 
 “ AT OR BEFORE THE ISSUE,” 121. 
 
 ATTENDANCE, 
 
 board meetings, at, duty of directors, 205. 
 
 ATTORNEY, 
 
 deeds, to execute, abroad, power of companies to appoint, 75, 469. 
 transfer of shares under power of, 134. 
 
 5 
 
INDEX. 
 
 AUDIT, 
 
 accounts, of, provided for by articles, 225. 
 banking companies’ accounts, of, 229, 482. 
 liquidator’s accounts, by Board of Trade, 492. 
 provisions of Consolidation Act of 1908 . .227, 482. 
 
 Table A, 534. 
 
 AUDITORS, 
 
 action lies against, for breach of duty, 227. 
 agents of company, how far, 227. 
 duty of, 225. 
 
 how far bound by the books, 230. 
 insurers, are not, 226. 
 misfeasance by, 227. 
 new Act as to, 227, 482. 
 officers of company, when, 227. 
 provisions for appointment, 227. 
 reasonable skill only required of, 226. 
 secret reserves, how to be dealt with, 231. 
 
 Statute of Limitations, may set up, 227. 
 
 AUTHENTICATION, 
 
 notices by company, of, 233, 483. 
 documents issued by Board of Trade, 521. 
 
 BALANCE SHEET, 482 (Act). 
 
 auditor’s duty as to, 228, 229, 230. 
 copies of, to be sent to members, 223. 
 false, liability, 227. 
 
 statement in annual summary in form of, 457. 
 
 except where private company, 457. 
 statement of commissions and discounts, 475. 
 submitted at ordinary meeting, to be, 223, 228. 
 
 BANK OF ENGLAND, 
 
 payment of money into, in winding-up, 492. 
 
 BANK OF ISSUE, 
 
 provisions of sect. 251 of new Act as to unlimited liability as to notes, 
 
 514. 
 
 not entitled to register as limited under Part VII. in respect of notes, 
 
 514. 
 
 BANKING ACCOUNT, 
 
 power of company to keep, 64. 
 
 BANKING COMPANY, 
 audit of accounts of, 229. 
 
 prohibition as to number of members unless registered, 451. 
 statement, to publish, annually, 480, 481. 
 
 BANKRUPTCY, 
 
 compulsory transfer of shares on, 140. 
 disclaimer of shares by trustee, 140. 
 member’s, his liability for calls, 149. 
 rules apply in winding-up, 405. 
 trustee in, his rights as to shares, 139, 140. 
 
 BEARER, 
 
 debenture to, 297. 
 
 legality in Scotland of, 480. 
 negotiability, 302. 
 share warrants to, 140. 
 power to issue, 459. 
 
 BENEFIT SOCIETY 
 to file statement, 480. 
 
 6 
 
INDEX. 
 
 BILL IN PARLIAMENT, 
 promotion, 66. 
 
 BILL OF EXCHANGE, NOTE, &c., 469. 
 
 acceptance by director in name of company, 264. 
 acceptance under seal, 265. 
 company may seal instead of signing, 265. 
 company’s power to issue, 264. 
 
 director signing for company without “ limited ” to name, 265. 
 
 how accepted, 264, 265. 
 
 making of, by company, 264, 469. 
 
 name of company with “ limited ” must appear on, 265. 
 personal liability of director, when, 265. 
 power to draw and accept, inserted in memorandum, 65. 
 signed “ for or on account of ” the company, 266. 
 trading company has implied power to issue, 264. 
 when binding, 469. 
 
 BILLS OF EXCHANGE ACT, 1882.. 265. 
 
 BILLS OF SALE, 281. 
 registration, 277. 
 
 BILLS OF SALE ACTS, 
 
 debentures and debenture stock need not be registered under, 315. 
 
 BLANK, 
 
 debentures, in deposit of, effect of, 317. 
 instrument of proxy, 174. 
 transfers, 316. 
 
 of debentures, 316. 
 of shares, 133, 134. 
 
 BOARD MEETINGS, 
 attendance at, 194. 
 
 inspection of minute book not allowed to members, 222. 
 irregularities at, 195, 205. 
 liability for not attending, 205. 
 minutes of, 244. 
 
 form of, 245 et seq. 
 
 negligence by non-attendance at, 205. 
 notice of, 194. 
 
 directors abroad, 195. 
 need not specify nature of business, 195. 
 proceedings at, 194. 
 quorum at, 195. 
 resolutions of, 196. 
 
 vacancies in board, Table A, 531, 532. 
 
 BOARD OF TRADE, 
 
 annual report in winding-up, 521. 
 
 appointment by, of inspectors to investigate affairs of company, 481. 
 audit by, of liquidator’s accounts, 492. 
 authentication of documents, 521. 
 
 companies liquidation account, duties in relation to, 492, 507. 
 control of, over liquidator, 493. 
 
 licence to register a company, without using word “ limited,” 250. 
 notice to, of appointment of liquidator, 490. 
 official receivers and, 489, 490. 
 
 orders and certificates of, to be received in evidence, 506. 
 
 BONUS SHARES, 68. 
 
 BONUSES, 
 
 tenant for life, right of, to, 220. 
 to workmen, when allowable, 67. 
 
 7 
 
INDEX. 
 
 BOOK DEBTS, 
 
 mortgage of, and registration, 277. 
 
 BOOKS, 322, 505, 506. 
 charge on, 322. 
 
 debentures, when covering, 322. 
 entries in, primd facie evidence, where, 244. 
 evidence, to be, in winding-up, 505. 
 falsification of, penalty, 505. 
 inspection of, by members, 223. 
 inspection of, in winding-up, 505. 
 liquidator to keep, 492. 
 
 penalties for not producing, to inspector, 481. 
 required to be kept at office of company, 223. 
 winding-up, inspection in, 223, 505, 506. 
 
 BORROWING, 
 
 before company entitled to commence business, 58. 
 company, power of, 65, 269. 
 
 constructive notice of limit, 276. 
 debentures, 283. 
 
 exercise of, by directors, 190, 270, 275. 
 implied, when, 269. 
 instance of, 269. 
 
 internal regulations, where not complied with, 276. 
 limit of, 270, 473. 
 
 memorandum, when must be given by, 65. 
 mode of borrowing, 274. 
 objects clause, 65. 
 
 overdrawing banking account is a borrowing, 275. 
 property situate abroad, 273. 
 registering mortgages and charges, 277. 
 reserve capital charged, 271. 
 restrictions on, 270, 473. 
 security, power of company to give, 270. 
 subrogation of lender where moneys borrowed ultra vires, 275. 
 ultra vires, 275. 
 notice of, 276. 
 
 uncalled capital, charging, 270. [See Uncalled Capital.] 
 warranty of authority by directors, 276. 
 what companies have, 269. 
 receiver in debenture action, by, 327. 
 restricted by Act of 1908 . . 58. 
 
 BREACH OF TRUST, 
 directors, by, 205. 
 directors’ liability for, 206. 
 relief of directors, 520, 521. 
 
 BRIBE, 
 
 directors, to, 185, 192, 193, 206. 
 
 BROKERAGE, 
 
 underwriting shares, for payment by company, 67, 342, 475. 
 
 BUILDING SOCIETIES ACTS, 1894 and 1896.. 8. 
 BUILDING SOCIETY, 8. 
 
 a company within Companies (Winding-up) Act, 1890. .390. 
 winding-up of, 390. 
 
 8 
 
INDEX 
 
 BUSINESS, 
 
 carrying on, with less than seven (or two) members, 483. 
 commencement of, restrictions on, 58, 473. [See Commencement of 
 Business.] 
 
 enlarging area of, under Companies (Consolidation) Act, 1908.. 77, 
 
 453. 
 
 power in memorandum to sell, 66, 425 et seq. 
 
 Table A, 524. 
 
 “CALENDAR YEAR,” 
 
 “ year ” in Act means, 123. 
 
 CALLS, 
 
 action for, 149. 
 
 allotment moneys not a call, 146. 
 amount of, articles may fix, 147. 
 arrear, in, right of transfer where, 132. 
 bankrupt member, 149. 
 
 conditions necessary to make a good call, 147. 
 
 deceased member, 148. 
 
 directors’ discretion not interfered with, 147. 
 
 enforcing payment of, 149. 
 
 injunction to restrain, 149. 
 
 instalments, 148. 
 
 interest on, 148. 
 
 irregularity, 147, 191. 
 
 liability to, 146. 
 
 liability to pay, a specialty debt, 146. 
 limit on amount when fixed by articles, 147. 
 making, 147. 
 
 notice of call, time for, 147. 
 
 pari passu, should be, 147. 
 
 past, liability after forfeiture for, 148. 
 
 payment in advance of, 149. 
 
 power of Court to make, in winding-up, 495. 
 
 power of making, a trust, 146. 
 
 resolution for, 147, 196. 
 
 saleable assets, to increase, 148. 
 
 Table A, 525. 
 
 time and place for payment of, 147. 
 transferee’s liability for arrears of, 132. 
 transferor, while transfer unregistered, liable for, 132. 
 winding-up, in, 148, 495. 
 
 CANCELLATION OE SHARES, 
 not agreed to be taken, 93, 95, 461. 
 
 CAPITAL, 
 
 accretions to, 217. 
 
 alteration of, 86 et seq., 91 et seq., 460. 
 under Table A, 528. 
 
 amount of, to be stated in memorandum, when necessary, 32. 
 annual summary, as to filing, 123. 
 
 callable only in case of winding-up, company’s power to make, 464. 
 cancellation of, 93, 95. 
 circulating, what is, 217. 
 classes of shares, 33, 81. 
 
 on increase of, 88. 
 clause in memorandum, 32. 
 consolidation of shares, 89. 
 conversion of shares into stock, 89. 
 deferred shares, 85. 
 depreciation of, 95, 217. 
 division of, 33, 81. 
 
 9 
 
INDEX. 
 
 CAPITAL — continued. 
 duty on, 89, 534. 
 
 “fixed,” loss of, whether it affects profits for dividend, 217. 
 founders’ shares, 85. 
 increase of, 86 . 
 
 by special resolution, 86. 
 notice to be given to registrar, 461 . 
 what classes of new shares may be created, 88. 
 interest on, payment of, during construction of works, 475. 
 issue of, with preferential rights, 81. 
 loss of, 95. 
 
 dividends notwithstanding, 217. 
 new issues during war, 636. 
 new shares on increase of, 86. 
 
 where subject to conditions of memorandum, 88. 
 nominal, how fixed, 32, 81. 
 ordinary shares, 81. 
 payment of dividends out of, 215. 
 preference shares, 81. [See Preference Shares.] 
 when preferential as to, 85. 
 provisions of Act as to, 81. 
 
 reduction of, 91, 92. [See Reduction of Capital.] 
 jurisdiction of Court, 96. 
 re-organization of, 461. 
 reserve, mortgaging, 271 
 statement of, in memorandum, 32, 81. 
 subdivision of shares, 90. 
 uncalled, mortgaging, 270. 
 working, allowance for, 33. 
 
 CARRYING ON BUSINESS 
 
 with less than seven (or two) members, prohibition against, 58. 
 
 CASH, 
 
 meaning of term in Act, 122. 
 payment for shares in, 116. 
 
 subscriber of memorandum, when, must pay for shares in, 117. 
 what was payment in, under sect. 25 of Companies Act, 186 7., 11 9. 
 
 CEASE TO HOLD QUALIFICATION, 
 meaning, 189. 
 
 CERTIFICATE, 
 
 debenture stock, of, 323. 
 
 form of, 323. 
 delivery, time limit, 476. 
 false, liability, 139, 143. 
 incorporation, of, 51, 454. 
 
 conclusiveness of, 51, 454. 
 form of, 23. 
 operation of, 51. 
 restrictions on, during war, 632. 
 registration of mortgage, conclusiveness of, 279, 280. 
 shares, of, 456, 476. 
 
 accidental return of certificate, 139. 
 
 deposit of, by way of equitable mortgage, 145. 
 
 estoppel by, 143. 
 
 lost, renewing, 145. 
 
 nature and form of, 142. 
 
 note at foot, 145. 
 
 object of, 142. 
 
 primd facie evidence, to be, 142, 456. 
 stamp not required for, 145. 
 scrip, 145. 
 stock, 456. 
 
 10 
 
INDEX. 
 
 CERTIFICATION, 
 
 effect of, on transfer of shares, 138. 
 
 estoppel by, 139. 
 
 practice, as to shares, 138, 139. 
 
 CESSER OF MEMBERSHIP, 116. 
 
 CHAIRMAN, 
 
 adjournment of meeting, discretion as to, 176. 
 
 declaration as to resolution being carried, when conclusive, 169, 239. 
 general meetings, of, 169. 
 choice of, at, 169. 
 duties of, 169, 170. 
 
 minutes signed by, primd facie evidence, 244. 
 signature of, to minutes, 245. 
 
 CHAMBERS, 
 
 matters to be heard in, in winding-up, 396. 
 
 CHANGE, 
 
 name, of, by company, 250. 
 registered office, of, 243. 
 
 CHARGE, 
 
 books, on, validity of, 322. 
 
 creditor holding, is “secured” in winding-up, 411. 
 floating, nature of, 308. 
 registered debenture, in, 288. 
 registration under new Act, 277. 
 
 specific, may be created notwithstanding floating charge, 309, 310. 
 when created for purposes of registration, 280. 
 
 CHARGES (REGISTRATION OF), 277. 
 
 CHARGING ORDERS, 
 operation, 160. 
 
 CHARITY, 
 
 association formed to promote, 455. 
 
 registration without the word “limited,” 250, 455. 
 subscription to, 433. 
 
 CHARTER, 
 
 company incorporated by royal, 2. 
 
 distinguished from registered company, 3. 
 form of, 2. 
 powers of, 2, 3. 
 
 CHEQUE, 
 
 when “payment” for shares, 107. 
 
 CIRCULAR, 
 
 a prospectus, 522. 
 
 “CIRCULATING” CAPITAL, 216. 
 
 CLASS MEETINGS, 90, 91. 
 
 CLASSES OF NEW SHARES, 87, 88. 
 
 CLOSING REGISTER 
 of debentures, 292. 
 of members, 125. 
 
 CO-DIRECTOR, 
 
 fraud of, directors not liable for, 200. 
 
 COLONIAL REGISTER OF MEMBERS, 458. 
 
 11 
 
 P. 
 
 42 
 
INDEX, 
 
 COMMENCEMENT OF BUSINESS, 
 
 companies inviting subscriptions for shares, 23, 473, 474. 
 
 companies not so inviting, 24, 474. 
 
 contracts before, are provisional only, 59, 474. 
 
 minimum subscription before, when requisite, 58, 473. 
 
 private companies, 23, 474. 
 
 requirements of Act, 58, 473. 
 
 COMMERCE, 
 
 association formed to promote, 250, 455. 
 
 COMMISSION 
 
 for subscribing or underwriting or placing debentures, 477. 
 for subscribing or underwriting or placing shares, 117, 340, 475. 
 statement in balance sheet, 475. 
 to directors, 193. 
 
 accountability, 193. 
 underwriter, to, 340. 
 usual brokerage, 475. 
 
 COMMITTEE, 
 
 delegation by directors to, 197. 
 resolution for appointment of, 197. 
 
 COMMITTEE OF INSPECTION, 
 
 appointment of, in winding-up by Court, 401, 493, 494. 
 
 COMMON SEAL, 
 
 affixing does not necessarily make instrument a deed, 259. 
 affixing to deed, in escrow, 258. 
 
 when equivalent to delivery, 258. 
 company’s power to have, 454. 
 documents which must be under, 257, 258. 
 
 Foreign Seals Act, 259. 
 
 presumption that same regularly affixed, 257. 
 when requisite, 257. 
 who may use, 257. 
 
 COMPANIES, 
 
 different kinds, 1 et seq. 
 incorporated by Act of Parliament, 4. 
 by charter, 3. 
 under Act of 1844 . . 7. 
 
 COMPANIES ACTS, 1862—1908 (particulars of), 11. 
 
 COMPANIES ESTABLISHED OUTSIDE UNITED KINGDOM, 519. 
 COMPANY, 
 
 certificate of incorporation of, conclusive, 51, 52, 53, 454. 
 contracts of, 253. 
 
 corporate existence and powers of, 55. 
 definition of, in new Act, 14. 
 defunct, removed from register, 511. 
 
 distinct entity, not to be confused with the shareholders, is a, 55. 
 extension of objects, 77. 
 formation of, 21 et seq. 
 
 sketch of proceedings, 21 et seq. 
 legal persona, a, 55. 
 liability for acts of agents, 73, 74. 
 
 objects of, 29 et seq. ; 60 et seq. (powers). [See Objects of Company.] 
 
 office of, 243. [See Registeked Office.] 
 
 one man company, 56, 367. 
 
 partnership and, contrasted, 55, 56. 
 
 person is a, 55. 
 
 preliminary expenses, power to pay, 64. 
 ratification by, 253. 
 
 12 
 
INDEX. 
 
 COMPANY — continued. 
 registration of, 22. 
 
 preliminaries, 21, 22. 
 regulations, how far binding on, 39 — 43. 
 representative at meeting, 467. 
 special Act of Parliament, incorporated by, 4. 
 statutory powers, 75. 
 unincorporated, 5. 
 unlimited, 381. 
 unregistered, 5. 
 
 COMPANY LIMITED BY GUARANTEE, 
 articles, must have, 453. 
 requirements of Act, 378. 
 restriction as to capital, 455. 
 
 COMPROMISE, 
 
 company’s power to, 430, 484. „ 
 
 contributory, with sanction of judge to, 504. 
 winding-up, in, 504. 
 
 COMPULSORY ORDER, 
 petition for, 391. 
 
 COMPULSORY POWERS, 
 parliamentary companies, 4. 
 
 COMPULSORY RETIREMENT OE MEMBER, 
 private companies, 376. 
 
 CONCLUSIVENESS, 
 
 certificate of incorporation of, 51, 454. 
 
 chairman’s declaration of, as to resolution carried, 169, 171, 239. 
 registrar’s certificate of charge, 279. 
 
 CONDITION, 
 
 application for shares on, 112, 113. 
 
 CONDITIONS, 
 
 debenture to bearer, indorsed on, 298 — 300. 
 indorsed on registered debenture, 288 et seq. 
 provision as to floating charge, 289. 
 
 CONDITIONS PRECEDENT, 
 
 underwriting agreements, in, 338. 
 
 CONSIDERATION, 
 
 statement of, in debenture, 285. 
 
 CONSIDERATION OTHER THAN CASH, 
 filed contract, 117, 119, 474. 
 future services, 117. 
 issue of shares for, as fully paid, 117. 
 illusory or fraudulent, 117. 
 
 CONSOLIDATION OF SHARES, 89, 460, 461. 
 notice to be given, 461. 
 
 CONSTRUCTION, 
 
 general words, of, 72. 
 memorandum of association, of, 69 et seq. 
 
 13 
 
 42 (2) 
 
INDEX, 
 
 CONSTRUCTION OR INTERPRETATION OF OBJECTS, 69. 
 
 CONSTRUCTIVE NOTICE, 44 et seq., 234. 
 
 documents, of, cannot be used to cure misrepresentations, 356. 
 limit of borrowing power, of, 276. 
 of memorandum and articles, 44 et seq. 
 to company, 234. 
 
 CONTRACT, 
 
 admission of, 256. 
 
 before commencement of business, when provisional only, 59, 254. 
 company, by, 
 
 capacity of company, 253, 254. 
 form of, 254 — 256, 468, 469. 
 how made, 468, 469. 
 oral, 256, 469. 
 
 Statute of Frauds as affecting oral contracts, 256. 
 directors, by, 
 
 contract of company, is, 177. 
 power to make, 254, 255. 
 share qualification, to acquire, 183 — 185. 
 with knowledge of company of their profit, 193. 
 directors’, with company, 192. 
 directors’ liability as to, 199. 
 disclosure in prospectus, 347 et seq. 
 filing under Companies Act, 1867, s. 25 (repealed), 119. 
 consideration, statement of, 119. 
 omission to register, 121. 
 signature of, 255. 
 writing, must be in, 121. 
 filing under new Act, 119, 474. 
 form of, 254, 468. 
 implied from acting on articles, 43. 
 
 non-disclosure of, liability of director for, 192, 193, 205, 351. 
 obligation to disclose in prospectus, 348, 359. 
 oral, how made, 256. 
 
 filing particulars, 474. 
 paid-up shares, filing with registrar, 119. 
 power of company to, without seal, 255. 
 pre- incorporation, 253. 
 ratification of, by companies, 253. 
 seal, under, a deed, 255. 
 shares, to take, 113 et seq. 
 rescission of, 352 et seq. 
 specific performance, 115. 
 signature of, on behalf of company, 255. 
 ultra vires company, 253. 
 ultra vires directors, 253. 
 under hand, form of, 255. 
 under seal, form of, 255. 
 
 variation of, mentioned in prospectus or statement in lieu of pro - 
 spectus, 364, 471. 
 voidable, valid till rescinded, 352. 
 
 want of writing, effect of, under Statute of Frauds, 256. 
 
 CONTRACT TO TAKE DEBENTURES OR DEBENTURE 
 STOCK, 
 
 specific performance, 321, 480. 
 
 CONTRIBUTION, 
 
 directors, between, 211. 
 
 member, by, of company limited by guarantee, 378. 
 
 14 
 
INDEX, 
 
 CONTRIBUTORIES, 
 
 adjusting rights of, 404, 416. 
 administration of deceased’s estate, 491. 
 arrest, power to, where absconding, 497. 
 balance order against, 405. 
 first meetings of, 401, 491. 
 liability, 118, 484. 
 list, settling, 404. 
 
 meetings of, in winding-up, 401, 491. 
 order against, conclusive, 495. 
 
 payment of debts by, power of Court to order, 405, 495. 
 
 petition by, to wind up, 394, 488. 
 
 set-off against, 405. 
 
 who are, 404, 484. 
 
 wishes of, 398, 489. 
 
 CONVERSION, 
 
 business, of, into private company, 368 ; objects of, 370. 
 shares, of, into stock, 89, 460. 
 notice to registrar, 461. 
 
 Table A, 527. 
 
 CONVEYANCES, 
 company, to, 267. 
 form of, by company, 267. 
 saving in sect. 288 . . 523. 
 seal, to, by company, when necessary, 257. 
 
 COPIES, 
 
 accounts and balance-sheets to be sent to members, 223. 
 articles of association, of, 37. 
 
 memorandum and articles, of, to be supplied to members, 37, 455. 
 register of members, 124. 
 
 special resolution, of, company must supply, 240, 467. 
 
 of, to be annexed to copy of articles, 467. 
 
 CORPORATION, 
 
 nature of, 55. 
 
 representative of, at meeting, 467. 
 
 CORRESPONDING SECTIONS OF ACTS, 447. 
 
 COSTS, 
 
 debenture-holders, of, 329. 
 
 payable out of assets on winding-up, 399, 495, 623. 
 
 COUNTY COURT, 
 
 assignment to, of Stannaries jurisdiction, 389. 
 jurisdiction in winding-up, 389, 486. 
 transfer to, of winding-up proceedings, 487. 
 
 COUPON, 
 
 debenture to bearer, on, 298, 299. 
 registered debenture attached to, 301. 
 
 COURT, 
 
 power to convene meeting of company, 165, 166. 
 winding-up, having jurisdiction in, 389. 
 
 COURTS (EMERGENCY POWERS) ACT, 1914.. 325, 393, 396, 634. 
 as regards appointment of receiver, 325. 
 
 winding-up, 393. 
 before petition, 396. 
 
 15 
 
INDEX. 
 
 COVENANTS BY COMPANY, 
 
 form of, 267. 
 
 CREDITORS, 
 
 application by, under supervision order, 422. 
 
 arrangements with, 430, 484, 504. 
 
 assignment to trustee for, s. 210. .503. 
 
 first meetings of, in winding-up, 401, 491. 
 
 fraudulent preference, 415. 
 
 meetings of, in winding-up, 401, 491. 
 
 of company are not creditors of members, 56. 
 
 preferential, 327, 410, 502. 
 
 proof by, in winding-up, 409, 412, 495, 502. 
 
 secured, 411. 
 
 voluntary winding-up, right to apply to Court in, 422, 500. 
 who entitled to prove, 409. 
 winding-up petition by, 392. 
 wishes of, in winding-up, 398, 489. 
 
 CRIMINAL LIABILITY, 
 directors, of, for fraud, 209. 
 fictitious dividend, 215. 
 
 CROWN DEBTS, 
 
 priority in winding-up, 410. 
 
 CUMULATIVE DIVIDENDS, 84. 
 
 CUMULATIVE PREFERENCE SHARES, 
 as to, 84. 
 
 DAMAGES, 
 
 delinquent directors, against, 200 et seq. 
 DEADLOCK, 
 
 power of Court to appoint receiver, 165. 
 
 DEATH OF MEMBER, 
 call after, 148. 
 
 cesser of membership by, 116. 
 
 DEBENTURE HOLDERS, 
 
 accounts, inspection of, by, 223, 483. 
 action, costs in, 329. 
 modification of rights, 321. 
 proof in winding-up, 328, 329. 
 remedies of, 323. 
 
 DEBENTURES, 
 
 abroad, property situate, 273. 
 agreement to issue, 318. 
 
 bearer, to, 297 et seq. [See Debenture to Bearer.] 
 capable of being registered, 301. 
 
 Bills of Sale Acts, whether applicable to, 315. 
 
 blank, effect of deposit of, 316. 
 
 books, charge on, 322. 
 
 borrowing powers of company, 269 et seq. 
 
 charge in, 287. 
 
 charge in trust deed, 287. 
 
 charge, not containing, 283. 
 
 classes of, 284. 
 
 commissions for underwriting, &c., 477. 
 conditions indorsed on, 288. 
 consideration not expressed in, 285. 
 contract to take, specific performance, 321 
 
 16 
 
INDEX, 
 
 DEBENTURES — continued. 
 date for payment, 286. 
 
 default, provision for accelerating payment, 294. 
 
 ‘deposit of, to raise loan, 316. 
 discount, issue at, 317. 
 distinct from debenture stock, 284. 
 equities, clause excluding, 292. 
 
 power to assign, free from, 292. 
 floating charge as to, 308 et seq. [See Floating Charge.] 
 foreclosure, as to, 328. 
 foreign property secured on, 273. 
 forms of, 285 et seq. 
 instalments payable by, 322. 
 interest on, 286 ; covenant to pay, 286. 
 
 “ interest in the meantime,” meaning of, 286. 
 joint holders, 292. 
 judgment on, effect of, 286. 
 
 merger of interest in, whether, 286. 
 limit to amounts, 270. 
 majority clauses, 321. 
 meaning of, 283. 
 notice to holder, 297. 
 
 how to be given, 297. 
 pari passu clause, object of, 289. 
 payment, events accelerating, 294. 
 perpetual, 313, 479. 
 place of payment, 297. 
 
 power of company (on notice) to pay off, 293. 
 power to issue, in memorandum, 65. 
 priorities of, 319, 480 . 
 prospectus, as to, 362. 
 receiver, appointment of, by Court, 324. 
 leave to borrow, 327. 
 
 provision for appointment by holders or the trustees, 295. 
 receiver clause in conditions, 295. 
 redemption of, 293. 
 register of, clause in debenture, 290. 
 closing, 292. 
 
 .registered, 285 et seq. [See Registered Debenture.] 
 but with coupons to bearer, 301. 
 conditions usually indorsed on, 288. 
 registered holder alone to be recognized, 290. 
 registered holder, to, form of, 285 et seq. 
 
 object of payment to, 286, 290. 
 registration of, under Bills of Sale Acts, 315. 
 
 under Cos. Act, 1908, ss. 93, 100. .277 et seq. 
 re-issue, 288, 319, 479. 
 remedy of debenture holders, 323 et seq. 
 security, 270. 
 
 series, not necessarily one of a, 283. 
 set-off, 289. 
 
 specific performance of agreement for, 321, 480 . 
 stamp on surrender, discharge, or transfer of, 317. 
 time for payment, 286. 
 transfer of, 315. 
 
 conditions for, 288. 
 forged, 316. 
 free from equities, 292. 
 trust deed, secured by, 313. 
 
 reference to, in debentures, 296. 
 uncalled capital, charging, 270 et seq , 287. 
 what is a debenture, 283. 
 winding-up accelerates payment, 294. 
 remedy in, 328, 329. 
 
 17 
 
INDEX. 
 
 DEBENTURE PROSPECTUS, 
 particular features, 362. 
 
 DEBENTURE STOCK, 
 constituted, how, 323. 
 
 deposit of certificate by way of mortgage, 316, 317. 
 
 form of certificate, 323. 
 
 meaning of term, 284. 
 
 nature of, 284. 
 
 remedy of holders, 323 et seq. 
 
 DEBENTURE TO BEARER, 
 
 capable of being registered, 301. 
 
 characteristics, 297. 
 
 conditions indorsed on, 299 et seq. 
 
 constitution, 296. 
 
 coupons, 298. 
 
 form of, 298. 
 
 negotiability of, 302. 
 
 negotiable, condition as to treating as, 300. 
 perpetual, 313. 
 receiver appointed, 
 by Court, 324. 
 by holders or trustees, 296. 
 re-issue, 479 . 
 remedies of holders, 323. 
 
 Scotland, validity in, 480 . 
 
 transfer of, 315. 
 
 trust deed securing, 313. 
 
 DEBENTURE TO REGISTERED HOLDER, 
 with coupons to bearer attached, 301. 
 
 DEBTS, 
 
 proof of, in winding-up, 409, 411, 412. 
 
 DECEIT, 
 
 action for, 358. 
 
 DECLARATION, 
 
 chairman’s, as to resolution being carried, 169, 239. 
 
 special resolution, 239. 
 statutory, on formation of company, 53. 
 
 DECLARATION OF DIVIDENDS, 220. 
 
 DEED, 
 
 company’s, delivery of, 258. 
 
 delivery essential, 258. 
 
 escrow, executed by company as, 258. 
 
 execution abroad, 469 . 
 
 sealed by company, when delivered, 258. 
 
 transfer of shares, 133. 
 
 trust, to secure debentures, 313. 
 
 DEEDS OF SETTLEMENT, 
 common law companies, 5. 
 companies under Act of 1844. . 7, 8. 
 
 persons dealing with registered company bound to read, 44. 
 substitution of memorandum and articles for, power of Court, 516 . 
 unincorporated company, 5. 
 
 DEFAMATION, 
 
 speeches in, at general meetings, privilege, 174. 
 
 18 
 
INDEX. 
 
 DEFERRED SHARES, 85. 
 disclosure in prospectus, 347. 
 
 DEFINITIONS IN NEW ACT, 
 
 “articles,” 14. 
 
 “ books and papers,” 15. 
 
 “ circular” included in “ prospectus,” 15. 
 
 “ debenture ” includes debenture stock, 15. 
 
 “ director,” 15. 
 
 “ document,” 15. 
 
 “ memorandum,” 15. 
 
 “ prospectus,” 15. 
 
 “ share,” 15. 
 
 DEFUNCT COMPANIES, 
 restoration to register, 54. 
 striking off register, 54, 511 . 
 
 DELAY, 
 
 allotment, in, 112. 
 
 proceedings after discovery of misrepresentation in prospectus, 352 
 et seq. 
 
 removal of name from register of members, in obtaining, 127, 352. 
 
 DELEGATION, 
 
 directors, by, 197. 
 presumed, when, 45. 
 
 DELIVERY, 
 
 deed, of, by company, 258. 
 
 DEPOSIT, 
 
 certificates of shares, of, by way of equitable mortgage, 145. 
 debentures, of, to raise loan, 316, 317. 
 
 DEPOSIT COMPANY, 
 to file statement, 480 . 
 
 DEPOSITIONS, 
 
 private examinations, taken at, 507 . 
 public examination, of, 496 . 
 
 DIRECTORS, 
 
 abroad, notice to, 195. 
 
 accepting incompatible office, 189. 
 
 accountability of, for present of qualification, 193. 
 
 accounts, duty to keep, 222. 
 
 acting after disqualification, 191. 
 
 acts by, in excess of authority, 190. 
 
 agents of company, to what extent, 177. 
 
 appointment, 181. 
 
 defect in, knowledge of, 192. 
 defective, 191. 
 of first, 181. 
 restrictions on, 181. 
 
 appointment and qualification, provisions of Act, 468 . 
 attendance at board meetings, 195, 205. 
 authority, 
 
 acts by, in excess of, 190, 205 et seq. 
 right of persons dealing with, to assume, 44. 
 warranty of, 189, 199, 276. 
 bankrupt, meaning of term, 189. 
 
 bills of exchange, acceptance of, on behalf of company, 265. 
 borrowing powers of company, exercise of, 190, 270, 275. 
 
 19 
 
INDEX. 
 
 DIRECTORS — continued. 
 
 breach of trust by, 205, 209. 
 cases of, 206. 
 relief for, 207. 
 bribe to, 185, 192, 193. 
 call-making power, a trust, 146. 
 calls, duty to enforce payment of, 147. 
 calls, power as to, 146. [See Calls.] 
 committees of, 197. 
 compensation against, 357. 
 
 contracts by, if ultra vires them, may be ratified if intra vires the 
 company, 253. 
 in their own name, 199. 
 with company, 192. 
 with personal liability, 178, 199. 
 contribution between, 211. 
 
 Court will not force, on company, 198. 
 criminal liability, 209. 
 
 de facto director, company when bound by acts of, 45, 192. 
 
 definition of, in new Act, 15. 
 
 delegation by, powers of and limits to, 1 97. 
 
 described as “ council,” 177. 
 
 disclosure of benefits to be obtained, 192, 193. 
 
 discretion, have a large, 189. 
 
 as to call not interfered with, 147. 
 of, as to transfers of shares, 131. 
 dispositions while winding-up pending, 207. 
 disqualification, 188. 
 
 acting after, 183, 191. 
 
 Table A, 531. 
 
 dividend out of capital, liability, 206. 
 duty, breach of, 200 et seq. 
 error of judgment by, not liable for, 201. 
 excluding co-directors from acting, 198. 
 fees, 185. [See Directors, Remuneration.] 
 first directors, 181. 
 
 appointment of, 181. 
 
 appointment of, by subscribers of memorandum, 181. 
 naming in articles, restriction as to, 181. 
 force to act, Court will not, 198. 
 frauds by, 199, 209. 
 
 governing or permanent director, private company, in, 376. 
 imprudence of, 202. 
 indemnity, 211. 
 
 irregular proceedings, 190, 194, 195, 205. 
 
 irregularity in their proceedings, ratification by them, 195. 
 
 Liability Act, 1890, as re-enacted by new Act, 357, 471. 
 liability of, 199 et seq. 
 contracts, as to, 199. 
 criminal, 209. 
 frauds, for, 199, 209. 
 fraudulent accounts, 224. 
 joint and several, 212. 
 joint, contribution between, 211. 
 misfeasance and breach of trust, 205. 
 negligence, for, 200, 205. 
 non-disclosure, 358. 
 
 personal, where bill, note or cheque signed without using 
 “limited,” 265. 
 tort, 199, 209. 
 
 ultra vires application of funds, 208. 
 list of, to be sent to registrar, 468. 
 managing, delegation of authority to, 45. 
 maximum and minimum number of, 182. 
 meetings, notice of, 194. 
 
 20 
 
INDEX. 
 
 DIRECTORS — continued. 
 
 minutes, presumption of regularity, 196, 244, 467. 
 misapplication of company’s funds, 208. 
 misfeasance by, 205, 209. [See Misfeasance.] 
 misfeasance proceedings against, 406, 414, 505. 
 examples of, 206. 
 no set-off for, 206. 
 negligence of, 200, 205, 209. 
 notice to single director, effect of, 234, 235. 
 
 when abroad, 195. 
 number of, 182. 
 penalties, 208. 
 
 “ permanent directors,” 376. 
 
 personal liability on contracts, 178, 199, 265. 
 
 powers of (general), 189 et seq. 
 
 sinsrle one of several has none, except by delegation, 194. 
 Table A, 530. 
 private company, of, 376. 
 proceedings of, 194. 
 
 notice of board meeting, 194. 
 
 Table A, 532. 
 
 profit by, without knowledge of company, 193. 
 prosecution of, 209, 415. 
 public examination, 408, 496. 
 qualification of, 182, 468. 
 
 common form of clause, 182, 184. 
 condition precedent, 184. 
 construction of “eligible,” 184. 
 
 “ in his own right,” 184. 
 penalty for acting without, 183. 
 present of from promoter, &c., 185. 
 vacating office for want of, 183. 
 when bound to take from company, 183. 
 when must be obtained on registration, 181. 
 quorum of, 195. 
 
 to make call, 147. 
 
 reliance of, on subordinates, when not negligence, 204. 
 relief in case of negligence or breach of trust, 207, 520, 521. 
 removal of, 198. 
 
 remuneration, 185. [See Remuneration of Directors.] 
 apportionment of, 186. 
 articles fixing, effect of, 43. 
 prepaying shares to provide, 149. 
 where, not entitled to, 185. 
 resignation, 188. 
 resolutions of, 196. 
 
 forms of, 196, 197. 
 
 right of persons dealing with, to assume de jure, 44 — 46. 
 rotation, 198 ; Table A, 532. 
 sale by director to company, 192. 
 seal, affixing, formalities for, 257, 258. 
 
 power to use, vested in, 257. 
 secret benefit regarded as a bribe, 192, 193, 206. 
 
 sanction of company, 193. 
 subdelegation, power of, 197. 
 subscribers, appointment by, 181. 
 torts by, 200, 205, 209. 
 trustees, in what sense, 178, 179. 
 
 of their powers, 190. 
 ultra vires acts, 208. 
 unlimited liability of, when, 464. 
 unqualified, 
 
 director acting after becoming, penalty, 183. 
 remuneration of, 185. 
 
 21 
 
INDEX, 
 
 DIRECTORS — continued. 
 
 vacancies, power to act, notwithstanding, 195. 
 validity of acts, 468 . 
 
 warranty of authority, borrowing, on, 190, 275, 276. 
 
 DIRECTORS’ LIABILITY ACT, 1890.. 357. 
 
 DISCLAIMER IN BANKRUPTCY, 
 cesser of membership, by, 116, 140. 
 shares, of, by trustee of bankrupt member, 140. 
 
 DISCLOSURE, 
 
 directors, by, 192, 193. 
 promoter, by, 333. 
 
 prospectuses, in, 344 et seq ., 347 et seq. 
 
 DISCOUNT 
 
 company, limited, cannot issue its shares at, 29, 68, 475 . 
 debentures or debenture stock, issue at, 317. 
 registration of debentures or debenture stock, 279. 
 
 DISPOSITIONS BY DIRECTORS PENDING WINDING-UP, 207 
 
 DISPUTED DEBT, 
 
 winding-up, not a ground for, 391. 
 
 DISQUALIFICATION OF DIRECTORS, 188. 
 construction of clauses, 189. 
 director acting after, 191. 
 
 of, by not obtaining qualification, 188, 191, 192. 
 
 Table A, 531. 
 
 DISSOLUTION, 
 company, of, 417. 
 
 DISTRESS, 
 
 as against debenture holders, 310. 
 winding-up, effect on, 411, 413. 
 
 DIVIDENDS, 
 
 Apportionment Act, 1870. .220. 
 ascertainment of profits, for, 216 et seq. 
 bonuses, tenant for life right to, 220. 
 capitalization of, 221. 
 
 cash, company must primd facie pay in, 220, 221. 
 
 “circulating ” capital, 216. 
 
 making good before payment, 218. 
 construction of works, payment when allowable during, 221. 
 cumulative, 84. 
 debt, a, when declared, 219. 
 declaration of, 220. 
 
 power as to, 213. 
 enemy shareholders, 213, 634 . 
 fictitious, 215. 
 
 * ‘ fixed ’ ’ capital, 216. 
 founders’ shares, on, 85. 
 guarantee of, 219. 
 
 in proportion to amount paid, 214, 460 . 
 interest, not to carry, 533. 
 limitation, bar, 220. 
 neglect to sue for, 220. 
 pari passu, 214. 
 
 payment of, implied power, 213. 
 
 out of capital, 215, 217 et seq. 
 
 22 
 
INDEX. 
 
 DIVIDENDS — continued. 
 
 payment out of profits, 215 et seq. 
 preference shares, on, 215. 
 proportion in which payable, 214, 460 . 
 specific assets, paid in, 221. 
 
 Table A, 533. 
 
 tenant for life and remainderman, as between, 220. 
 transfer of shares, effect on, 220. 
 unclaimed, 220. 
 
 wasting property, power to pay out of income of, 216, 219. 
 winding-up, 412, 495 . 
 
 DOCUMENTS, 
 
 how to be authenticated, 483 . 
 how to he served, 483 . 
 
 referring to old Acts to be treated as referring to new Act, 623. 
 
 DOMESTIC IRREGULARITIES, 45, 242. 
 
 DURHAM PALATINE COURT, 
 jurisdiction in winding-up, 389. 
 
 DUTIES OF COMPANIES, 
 statutory, 76. 
 
 DUTY, 
 
 capital of companies, on, 89, 534. 
 guarantee, on company limited by, 535. 
 
 E JUS DEM GENERIS RULE, 
 in construing memorandum, 70. 
 
 EMPLOYERS’ LIABILITY INSURANCE, 
 
 deposit of 20,000^. before commencing business, 382, 383. 
 separation of funds, 382, 383. 
 
 ENEMY 
 
 shareholders, 
 
 dividends, 213, 634 . 
 notice to Public Trustee, 213, 634 . 
 votes of, 171. 
 when a company is, 243. 
 
 ENFORCEMENT OF SECURITY, 
 debenture holders, by, 323 et seq. 
 
 ENFORCING PAYMENT OF CALLS, 149. 
 
 ENTRIES, 
 
 books of company, in, primd facie evidence, in winding-up, 505 . 
 
 EQUITABLE MORTGAGE, 
 certificates of shares, of, 145. 
 
 EQUITIES, 
 
 notice as regards shares, 154. 
 
 notice of, to company where debenture holder registered, 291. 
 transfer of debenture free from, 292. 
 
 ERROR OF JUDGMENT BY DIRECTORS, 204. 
 
 ESCROW, 
 
 company can execute deed in, 258. 
 
 23 
 
INDEX. 
 
 ESTOPPEL 
 
 against company by act of agent, 74, 143. 
 certificate, by, 143. 
 
 EVIDENCE, 
 
 books to be, in winding-up, 505 . 
 certificate of incorporation, 51. 
 
 declaration of chairman as to resolution being carried, 171, 172, 239. 
 minutes, 244. 
 
 prima facie and conclusive, contrasted, 52. 
 register of members prima facie , 125. 
 verification of winding-up petition, 397. 
 
 EXAMINATION, 
 
 officers and other persons, of, in winding-up, 407, 408, 496 . 
 public, winding-up, in, 408, 496 . 
 
 EXCHANGE OE SHARES, 
 
 invalid, when, as a reduction of capital, 94. 
 
 EXECUTION, 
 
 stay of, in compulsory winding-up, 413. 
 transfer of shares, of, 133. 
 
 EXECUTORS AND ADMINISTRATORS, 
 deceased member, of, notice to, 233. 
 title to shares, 139. 
 transfer testator’s shares, may, 139. 
 
 EXISTING COMPANY, 
 
 application of new Act to, 512 . 
 defined in new Act, 14. 
 
 registration of, under Part VII. of Act, 379, 513 . 
 
 EXTENSION OF OBJECTS, 
 power of company as to, 77. 
 
 EXTRAORDINARY GENERAL MEETING, 
 adjournment, 176. 
 amendments, 175. 
 chairman, 169. 
 convene, who may, 164, 165. 
 nature of, 164. 
 poll, as to taking, 171. 
 proxies, 173. 
 quorum, 168. 
 requisition for, 466. 
 show of hands, 171, 172. 
 special business, 166. 
 votes at, 170. 
 what is, 163. 
 
 EXTRAORDINARY RESOLUTION, 236, 467. 
 copy to registrar, 467. 
 definition of, 467. 
 
 FALSE STATEMENTS, 
 
 criminal liability, 224, 521 . 
 in prospectus, liability, 346, 352, 357. 
 
 FALSIFICATION OF ACCOUNTS, 224. 
 
 24 
 
INDEX, 
 
 FEES, 
 
 directors’, 185. 
 
 registration, on, 22. 
 
 table of registration, 534, 535. 
 
 FICTITIOUS DIVIDEND, 215. [See Dividends.] 
 
 FICTITIOUS NAME, 
 
 application for shares in, 104. 
 
 FIDUCIARY RELATION, 
 directors’, 178. 
 promoter, of, 332. 
 
 FILING, 
 
 contract for issue of shares not paid up in cash, 118, 119. 
 prospectus with registrar, 343. 
 
 FINAL JUDGMENT, 
 
 order for payment of damages for misfeasance, a, 407. 
 
 FINES, 
 
 application of, towards costs, &c., 520. 
 
 FIRM, 
 
 registration as a member, 124. 
 
 FIRST ALLOTMENT, 
 when made, 105. 
 
 FIRST DIRECTORS, 181. 
 
 naming in articles, and qualification, 181 et seq. 
 
 FIRST MEETINGS, 
 
 creditors and contributories, of, 401, 491 . 
 
 “FIXED” CAPITAL, 217. 
 
 FLOATING CHARGE, 
 
 company’s power to deal with its assets notwithstanding, 311. 
 debenture, in, 289. 
 definition of, 308. 
 effect of, 309. 
 
 execution creditor and, 309. 
 
 general creditors, ranks before, 310. 
 
 legal mortgage, when it takes priority, 311. 
 
 postponement in winding-up to certain claims, 480 . 
 
 prohibition against creating charges in priority, 312. 
 
 purchaser for value without notice of, 312. 
 
 receiver, effect of appointment of, on, 310. 
 
 registration, 277. 
 
 specific mortgage, and, 311. 
 
 validity of, 308. 
 
 when it crystallizes, 310, 312. 
 
 whole or part of assets may comprise, 281. 
 
 winding-up, within three months of, 310. 
 
 FORECLOSURE, 
 
 debenture holders, by, 328. 
 
 FOREIGN COMPANIES, 
 
 requirements of sect. 274 of Act, 437, 519 . 
 winding-up of, 390. 
 
 25 
 
INDEX, 
 
 FOREIGN LAW, 
 
 how regarded, where English company agrees to charge land in 
 foreign country, 273. 
 
 mortgage here of land abroad, registration of, 273, 274, 278. 
 
 FOREIGN PROPERTY, 
 mortgaging, 273. 
 
 FOREIGN SEALS, 259, 469. 
 
 FOREIGNER, 
 
 shares, may take, 113. 
 
 FORFEITURE, 
 
 cesser of membership by, 116, 118. 
 directors’ discretion as to, 152. 
 lien clause in articles, under, 154, 160 et seq. 
 shares, of, 
 
 action to set aside, 152. 
 
 annul, power to, 152. 
 
 bankrupt holder, 151. 
 
 call made irregularly, 151. 
 
 collusion, by, 151. 
 
 interest wrongly demanded, 151. 
 
 irregularity in, 151. 
 
 liability after, 153. 
 
 liquidator no power to annul, 153. 
 
 provision in articles as to, 151. 
 
 relief against, 152. 
 
 strictissimi juris, 151. 
 
 Table A, 526. 
 
 threatening action against company, 152. 
 winding-up, after, 152. 
 to enforce charge, whether valid, 160. 
 
 FORGED TRANSFER ACTS, 316, 317. 
 
 FORGED TRANSFERS OF SHARES, 136. 
 compensation, 136. 
 estoppel by certificate, 136, 139. 
 
 FORGERY, 
 
 coupons, share warrants, and other documents, 459 
 FORMATION, 
 
 expenses of, power of company to pay, 64. 
 fees on registration, 22. [See Registration.] 
 general sketch of proceedings, 21 et seq. 
 mode of, 21, 451 et seq. 
 
 preliminaries to, where company is to be limited by shares, 21. 
 private company, of, 374. 
 
 FORMS, 
 
 acceptance of bill of exchange, 264, 265. 
 
 advertisement, winding-up petition, of, 396. 
 
 alteration of, by Board of Trade, in schedules to Act, 483. 
 
 certificate of incorporation, of, 23. 
 
 certification of transfers of shares, of, 138. 
 
 contract signed by company, 255. 
 
 conveyances by company, 267. 
 
 coupon to debenture to bearer, 299. 
 
 debenture stock, certificate, 323. 
 
 debenture to bearer, 297. 
 
 delegation of powers by directors, 197. 
 
 minutes, 245. 
 
 26 
 
INDEX. 
 
 FORMS — continued. 
 prospectus, 344. 
 proxy, 173. 
 
 qualification clause for directors, 182. 
 registered debenture, 285. 
 resolutions at board meetings, 196, 197. 
 transfer of shares, 133. 
 underwriting agreement, 338. 
 writ, by company, 268. 
 
 FOSS v. HARBOTTLE, 
 rule in, 176, 242. 
 
 FOUNDERS’ SHARES, 
 deferred shares, 85. 
 
 promoters taking their remuneration in, 335. 
 prospectus, statement of, in, 347. 
 
 redemption of, by issue of ordinary shares not allowed, 97. 
 FRAUD, 
 
 company liable for, 73. 
 criminal liability of directors, 199. 
 directors, by, 179, 199. 
 
 co-directors not liable for, when, 200. 
 majority of members, by, against minority, 191, 242. 
 
 FRAUDS, STATUTE OF, 
 
 contracts by company, as affecting, 256. 
 signature of chairman to minutes satisfies, 245. 
 
 FRAUDULENT ACCOUNTS, 224. 
 
 FRAUDULENT PREFERENCE, 415, 503. 
 
 “FREE FROM EQUITIES,” 
 transfer of debentures, 292. 
 
 FRIENDLY SOCIETIES ACT, 1896.. 8. 
 
 GASWORKS CLAUSES ACT, THE, 4. 
 
 GENERAL MEETINGS. [See Meetings.] 
 
 GENERAL WORDS, 
 construction of, 72. 
 
 GIFT, 
 
 director, to, of qualification, or as bribe, &c., 185, 192, 193, 206. 
 GRATUITY, 
 
 when company can grant, 67, 433. 
 
 GROSS NEGLIGENCE, 
 what is, 202. 
 
 GUARANTEE, COMPANY LIMITED BY, 378. 
 articles of (Forms B. and C.), 538 , 541 . 
 memorandum of, 452 . 
 profits only to members, 455 . 
 share capital, 455 . 
 stamp duty, 380. 
 
 what kinds of companies register as, 379. 
 
 27 
 
 p. 
 
 43 
 
INDEX, 
 
 HANDS, SHOW OF, 
 vote by, 171. 
 
 HEARING OF PETITION (winding-up), 398 
 
 HOLDING-OUT DOCTRINE, 
 
 de facto directors, 45, 191. 
 
 register of members, as applicable to, 126. 
 
 ILLEGAL ASSOCIATIONS, 386, 387, 451. 
 for gain, 386. 
 mutual assurance, 387. 
 
 IMPLIED CONTRACT, 
 
 articles, from acting on, 43. 
 
 IMPRUDENCE, 
 directors, of, 202. 
 
 INABILITY TO PAY DEBTS, 
 evidence of, 486. 
 ground for winding-up, 391. 
 
 INCIDENTAL OBJECTS, 
 
 within power of company, are, 64. 
 
 “ INCIDENTAL OR CONDUCIVE,” 
 construction of, 72. 
 
 INCORPORATED COMPANY, 
 a person in law, 55. 
 
 INCORPORATION, 
 
 certificate of, 51 et seq., 454. 
 
 conclusiveness of, 51 — 53, 454. 
 form of certificate of, 23. 
 
 statutory declaration of compliance with Act before issue of, 455. 
 impeaching- by sci.fa., 53. 
 mode of, 451. 
 
 without word “limited,” advantages of, 250. 
 
 INCREASE OF CAPITAL, 86—89, 460. 
 notice to registrar, 89, 461. 
 penalty for default, 89. 
 preference shares, 81 — 85. 
 
 classes of shares created on, 88. 
 
 INDEMNITY 
 
 by transferee of shares, 137. 
 
 director, to, taking qualification by promoter, 185. 
 directors’ right of, 211. 
 
 “INDOOR MANAGEMENT,” 
 irregularities in, 45. 
 
 INDORSED CONDITIONS, 
 
 registered debenture, on, 288 et seq. 
 
 INDUSTRIAL AND PROVIDENT SOCIETIES ACT, 1893.. 8. 
 
 28 
 
INDUSTRIAL SOCIETY, 
 company, and, 1, 8. 
 
 INDEX 
 
 INFANT, 
 
 allotment of shares to, misfeasance, 205. 
 application for shares in his name, 113. 
 shares, may take, 113, 115. 
 transfer of shares, 134. 
 voidable contract to take shares, 115. 
 
 “ IN HIS OWN RIGHT,” 
 meaning of, 184. 
 
 INJUNCTION, 
 
 director, against excluding, 198. 
 name, against use of misleading, by company, 249. 
 restraining advertisement of winding-up petition, 397. 
 calls, 146, 149. 
 forfeiture, 152. 
 
 proceedings on winding-up, 413. 
 
 INSOLVENCY, 
 
 company, of, a ground for winding-up, 391, 486 . 
 
 INSPECTION, 
 
 accounts, of, by members, 223. 
 
 books, of, 223. 
 
 committee of, 403, 491 , 493 . 
 
 company’s affairs, of, by Board of Trade, 224, 481 . 
 depositions, of, taken on examination, 482 , 493 . 
 register of members, of, 124, 456 . 
 register of mortgages, 280 (company’s), 
 registered office, at, 243. 
 
 right of, carries with it right to make extracts, 222, 223. 
 
 INSPECTORS, 
 
 examination of affairs by, 481 . 
 power of company to appoint, 481 . 
 report of, to be evidence, 481 . 
 
 INSURANCE COMPANY, 
 
 copy of balance sheet to be exhibited at registered office of, 223. 
 definition of, 552 . 
 
 enlarging business under Companies Act, s. 9. .77. 
 statement, to file, annually, 480 . 
 
 INTENTION, 
 
 representation of, a statement of fact, 355. 
 
 INTEREST, 
 
 calls, on, 148. 
 
 default in payment of, on debentures, 294. 
 during construction, 221, 475 . 
 moneys, on, paid in advance of calls, 150. 
 payment of, on debenture, 286. 
 
 INTERPRETATION, 
 
 section of the Act, sect. 285. . 521 . 
 
 IN THE MEANTIME, 
 
 meaning of such words in debenture, 286. 
 
 29 
 
 43 ( 2 ) 
 
INDEX. 
 
 IRREGULARITY, 
 
 board meeting, of, 194, 195, 205. 
 borrowing, in, ultra vires. 275. 
 call, in, 147, 192. 
 
 chairman, by, at general meeting, 169. 
 
 in adjourning meeting, 175. 
 directors’ appointment, in, 190, 191. 
 forfeiture of shares, in, 41, 151. 
 
 “ indoor management,” in, 45, 176. 
 meeting, in summoning, 164, 165. 
 mortgage, in execution of, by company, 45. 
 notice of, 45. 
 
 protection of bona fide outsider, 73. 
 seal, in affixing, 45, 258. 
 subscription of memorandum, in, 51. 
 transfer of shares, waiver, 133. 
 
 ISSUE OF SHARES, 
 
 registered contract, under, 119 et seq . 
 restrictions on, during the War, 636. 
 
 JOINT ADVENTURE, 
 
 clause in memorandum as to, 65. 
 
 JOINT AND SEVERAL LIABILITY, 
 calls, for, 525. 
 
 delinquent directors, of, 212. 
 
 JOINT GOVERNING DIRECTORS, 
 private company, in, 376. 
 
 JOINT HOLDERS 
 
 of registered debentures, 292. 
 
 of shares, 524. 
 
 transfer of shares by, 134. 
 
 JOINT STOCK COMPANIES ACTS, 
 
 application of Act to companies registered under, 512. 
 definition in Act of 1908 (sect. 250), 513. 
 
 JOINT STOCK COMPANIES ARRANGEMENT ACT, 1870, 
 s. 120 of new Act substituted for it, 484. 
 arrangements under new Act, 484. 
 
 JURISDICTION, 
 
 Court, of, in winding-up, 389. 
 register of members, to rectify, 127, 128. 
 
 “JUST AND EQUITABLE” CLAUSE, 391, 486. 
 
 “KNOWINGLY ISSUING,” 360. 
 
 LACHES, 
 
 company may be guilty of, 75. 
 
 LANCASTER PALATINE COURT, 
 jurisdiction in winding-up, 389. 
 
 30 
 
INDEX. 
 
 LAND, 
 
 power of company to hold, 75. 
 
 prohibition against company for art, science, charity, &c., holding 
 more than two acres, 455. 
 
 LANDS CLAUSES CONSOLIDATION ACT, 1845.. 4. 
 
 LEADING CASES, 
 
 summary of, 439 et seq. 
 
 LEASES, 
 
 form of, 267. 
 
 LEAVE, 
 
 action, to proceed with, after winding-up, 413. 
 borrow, to, for receiver and manager (deb. action), 327. 
 
 LEE v. NEUCHATEL CO., 
 rule laid down in, 216, 218. 
 
 LEGAL PERSONAL REPRESENTATIVES, 
 transfer by, of deceased members, 457. 
 
 LEGALITY OF OBJECTS, 29. 
 
 LENDING; MONEY, 
 
 power in memorandum, 65. 
 
 LIABILITY, 
 
 carrying on business with less than seven members, 58. 
 company, of, for acts of agent, 73, 74. 
 contributories, of, 118, 484, 485. 
 
 directors, of, 192, 199 et seq., 211, 212. [See Directors’ 
 
 Liability.] 
 
 joint and several, of delinquent directors, 212. 
 
 members, of, 116. [See Members.] 
 
 mode of limiting, 452. 
 
 secretary, of, 261. 
 
 shares, on, 118 et seq. 
 
 statement of limited, in memorandum, 21. [See Limited Liability.] 
 
 LIBELLOUS STATEMENTS 
 at general meetings, 174. 
 
 LIEN, 
 
 shares, on, 
 
 charge, operates as, 154, 159. 
 charging orders, 160. 
 
 clause exempting company from noticing trusts, 157, 158. 
 
 Conveyancing Act, 1881, application of, to, 159. 
 
 dividends, extends to, 159. 
 
 exemption clause, force of, 158. 
 
 forfeiture, 160. 
 
 how created, 154. 
 
 indebtedness of members for, 154, 159. 
 notice of mortgage, operations after, 159. 
 notice of trust section, effect of, on, 156 et seq. 
 operation where trusts not to be noticed, 159. 
 sale, 159. 
 
 subsequent mortgagee, 155 et seq. 
 subsequent purchasers, 155 et seq. 
 
 Table A, 525. 
 
 third persons, validity against, 154 et seq. 
 transfer of, 130. 
 where exemption clause, 155. 
 where no exemption clause, 157. 
 solicitor, of, on books, 223, 290. 
 
 31 
 
INDEX. 
 
 LIFE ASSURANCE COMPANY, 
 
 Act. [See Assurance Companies Act.] 
 amalgamation of, 384. 
 deposit by, 382. 
 
 separate account of life funds, 383. 
 transfer of business, 384. 
 valuation of policies, 585. 
 winding-up of, 384. 
 
 LIMITATIONS, STATUTE OF, 
 auditor may set up, 227. 
 directors, 179, 358. 
 dividends, as affecting, 220. 
 promoters, action against, barred by, 336. 
 secretary may set up, 262. 
 
 “LIMITED,” 
 
 adding the word, on registration under Part VII., s. 258, .515. 
 part of limited company’s name, is, 248. 
 prohibition of use of, 252. 
 
 use of, as part of name in all bills, notes, cheques, &c., 248. 
 when use of, dispensed with, 250, 455. 
 wrongful use of word, s. 282. .521. 
 
 LIMITED COMPANY, t 
 
 security for costs, s. 278 . . 520. 
 
 LIMITED LIABILITY, 
 
 attempt to obtain, under deed of settlement, 6. 
 
 lost if less than seven members, or two if a private company, 21, 58, 
 
 483. 
 
 policy of legislature as to, 248. 
 statement of, in memorandum, 32. 
 
 LIMITED PARTNERSHIP, 10. 
 
 LIQUIDATOR, 
 
 accounts, verifying, and audit, 492. 
 appointment of, 400, 401, 419, 490, 498. 
 
 by the Court, 499. 
 banking* account, 492. 
 books, to keep, 492. 
 carrying on business, 492. 
 control of Board of Trade over, 493. 
 
 creditors over, and committee of inspection, 493, 494. 
 creditors, duty as to, 401. 
 
 delegation to creditors of power to appoint, 499. 
 directions of Court, may apply for, 493, 500. 
 dissolving prematurely, remedy of creditors, 418. 
 duties of, 401 et seq., 491 et seq. 
 examination by, 496. 
 meetings, may summon, 500. 
 official receiver as provisional, 400, 490. 
 payments by, 402, 492. 
 
 powers of, in compulsory winding-up, 401, 491. 
 
 in voluntary winding-up, 419 et seq ., 498 et seq. 
 provisional, appointment of, 400, 490. 
 release of, 417, 492. 
 removal of, 403, 490, 501. 
 remuneration of, 490, 498. 
 security by, 490. 
 
 solicitor or agent, employment of, by, 402, 491. 
 
 special bank account, directions of Board of Trade, 507, 508. 
 
 style of, 490. 
 
 vacancy by death, resignation, &c., 499. 
 
 32 
 
INDEX. 
 
 LIST, 
 
 contributories, of, 404, 494. 
 
 directors of, to registrar, 181, 468. 
 
 of members, annual, to be sent to registrar, 456. 
 
 LOST CERTIFICATES, 
 shares, renewal of, 145. 
 
 LUNATIC, 
 
 transfer of shares by, 134. 
 voidable contract to take shares, 115. 
 
 MAJORITY, 
 
 clauses in debentures, 321. 
 
 oppression by, or fraud on minority of members, 50, 171, 242. 
 
 or fraud by, restrained, 171, 176, 242. 
 powers of, 241. 
 resolution requiring, 240. 
 rights of, of members, 90, 241. 
 ultra vires , cannot sanction act which is, 242. 
 
 or inconsistent with articles, 167. 
 
 MALICIOUS PROSECUTION, 
 company liable for, 74. 
 
 MANAGEMENT, 194, 200—205. [See Board Meetings.] 
 private company, 376. 
 
 MANAGER, 
 
 appointment and dismissal, 255, 262. 
 
 appointment of, and receiver (debenture holders), 324 — 327. 
 scope of authority, 255. 
 
 special power to appoint, in winding-up, 494. 
 
 MANAGING DIRECTOR, 
 
 right of persons dealing with, to assume authority, 45. 
 
 MARRIED WOMAN, 
 
 memorandum of association, may subscribe, 34. 
 shares, may take, 113. 
 
 MATERIAL CONTRACTS, 
 
 under (repealed) sect. 38 of Act of 1867, meaning of, 359. 
 
 MAXIMUM NUMBER, 
 directors, of, 182. 
 
 members of partnership or association, 451. 
 
 MEETING, STATUTORY, THE, 161, 465. 
 
 MEETINGS, 
 
 adjournment of, 176. 
 amendments, 175. 
 annual, 465. 
 board, 194. 
 
 chairman of general, 169. 
 
 his declaration, when conclusive, 169, 239. 
 his duties and powers, 169, 170. 
 convening, 164, 466. 
 
 Court, when it may convene, 165, 166, 465. 
 creditors and contributories, 401, 491, 500. 
 
 33 
 
INDEX. 
 
 MEETINGS — continued. 
 
 debenture holders, of, 321. 
 
 directors, of, 194, 205. [See Board Meetings.] 
 
 extraordinary, 163. 
 
 business transacted at, provided to be special, 166. 
 convention on requisition, 164, 165. 
 minutes, forms of, 245 — 247. 
 extraordinary resolution, 236. 
 
 first general meeting (statutory), duty of company to hold, within 
 what period, 161. 
 
 general, to be held once a year, 163, 465. 
 irregularity in convening, 164. 
 
 ratification by board, 164. 
 minutes of general, to be made and kept, 244, 467. 
 notice of, 164, 165. 
 
 construction, 166, 168. 
 
 contingent, not a good notice unless regulations allow, 168. 
 
 directors interested, 167. 
 
 frame of, 166. 
 
 members abroad, 232. 
 
 misleading form of, 167. 
 
 not construed strictly, 166. 
 
 omission to give, 166. 
 
 should specify date, place and time, 166. 
 
 special business, 166. 
 
 Sunday, whether dies non , 166. 
 one member may constitute, 168, 169. 
 ordinary general, 163. 
 
 minutes, form of, 245 — 247. 
 profit and loss account to be submitted, 223. 
 poll, 171. 
 
 power of liquidators to call general, in voluntary winding-up, 500. 
 
 privileged, proceedings at, are, 174. 
 
 proceeding at, Table A, 529. 
 
 proxies, 173. 
 
 quorum at, 168. 
 
 reporters at, 174. 
 
 requisition, convening, on, 164, 466. 
 resolutions at, 170, 236. [See Resolution.] 
 examples of, 196. 
 show of hands, 171. 
 special business at, 166. 
 special resolution, 237. 
 speeches at, defamatory, 174. 
 statutory, 161, 465. 
 votes at, 169 et seq. [See Vote.] 
 in default of regulations, 466. 
 multiplying by transfer, 171. 
 who may convene, 164. 
 
 winding-up, in, of creditors and contributories, 401, 491, 500. 
 direction of judge for, 491. 
 
 first meetings of creditors and contributories, 401, 491. 
 MEETINGS, GENERAL, 161 et seq. [See Meetings.] 
 
 MEMBERS, 
 
 acquisition of status by non -subscribers, 103. 
 actions in name of company by, 242. 
 
 agreement to become member, 101 el seq. [See Agreement to take 
 Shares.] 
 
 allotment, delay in, 112. 
 
 allottees, 103 et seq. 
 
 annual list, 123,456. 
 
 applicant mistaking company, 113. 
 
 articles, how far binding on or between, 41 — 43. 
 
 34 
 
INDEX. 
 
 MEMBERS — continued. 
 
 ; bankruptcy of, rights of trustee, 140. 
 
 bankrupt member, registration in succession to him, 140 
 as to calls, 149. 
 
 carrying on business where less than seven, 58. 
 cesser of membership, 116. 
 conditional application for shares, 112, 113. 
 company must keep number of, up to seven, 58. 
 death of, call after, 148. 
 
 registration in succession to, 102. 
 definition of, 101, 456 . 
 entry of, in register, 110. 
 estoppel by, 143. 
 
 on application of unauthorized agent, 114. 
 examples of agreements to become, 113, 114. 
 foreigner may be, 113. 
 
 general meetings of, 161 et seq. [See Meetings.] 
 infant may be, 113. 
 liability of , 118. 
 
 to pay for shares, 116, 484 . 
 majority, 
 
 fraud or oppression by, on minority, 50, 171, 242. 
 powers of, 241. 
 
 [See Majority.] 
 rights of, 91, 241. 
 married woman may be, 113. 
 minority of, action by, 50, 176, 242. 
 modes of becoming member, 101, 102. 
 name on register, effect of, 110. 
 
 number seven, or for private company two, the minimum, 58, 451 , 
 past member, 
 
 holder of forfeited shares, 153. 
 liability of transferor as, 132. 
 persons who have agreed to become, 101, 103. 
 private company, in, compulsory retirement of, 376. 
 register of, 124, 456 , 458 . [See Register of Members.] 
 closing, 125. 
 colonial, 129, 458 . 
 company must keep at office, 124. 
 contents, 110. 
 inspection, 124. 
 prima facie evidence, 125. 
 publicity, effect, 125, 126. 
 rectification, 127. 
 
 regulations, how far binding on or between, 39, 40. 
 resident abroad, notices to, 232. 
 return of, company 'must make annually, 76, 456 . 
 subscribers of memorandum, 102. 
 
 obligation to take and pay for shares, 116. 
 repudiation for misrepresentation not allowable, 102. 
 transfer, by, 130 et seq. 
 trustee liable, 118. 
 who are, 118. 
 
 MEMBERSHIP, 101 et seq. [See Members.] 
 cesser of , 116. 
 creation of, 101 et seq. 
 
 MEMORANDUM OF ASSOCIATION, 
 additional provisions inserted, 34. 
 unalterable, when, 34. 
 
 adoption of, by company formed with deed of settlement, 79. 
 alteration of, 77, 86, 89, 91, 100, 452 , 453 , 460 , 461 . 
 objects by special resolution, 77. 
 restriction on, 452 . 
 
 35 
 
INDEX. 
 
 MEMORANDUM OF ASSOCIATION— continued. 
 ambiguity in, explainable by articles, 39. 
 articles, relation of, to, 38. 
 association clause, 34. 
 bankrupt subscriber, 34. 
 bills of exchange, power in, to issue, 264. 
 capital clause, 32, 33. 
 company limited by shares, 452. 
 construction of, 69 et seq. 
 contents of, 21, 26, 452. 
 copies, company must supply, 455. 
 deferred shares, provisions for, 85. 
 dominant instrument, the, 38. 
 forms of, 538, 541, 542. 
 guarantee, of company limited by, 452. 
 implied condition as to equality of shares, none, 82. 
 
 “ limitation of liability ” clause, 32, 452. 
 
 name of company, statement of, in, 26, 27. [See Name of Com- 
 pany.] 
 
 notice of, people presumed to have, 44. 
 objects — 
 
 clause, operation of, 29. 
 
 clauses commonly inserted, 64, 65, 66. 
 
 extension of, 77. 
 
 implied, 64, 72. 
 
 incidental, 64, 72. 
 
 indefinite, 72. 
 
 specimen clauses, 64. 
 
 whether articles can be used to interpret, 31. 
 operation of, 454. 
 
 partly printed, partly written, may be, 21. 
 persons dealing with company bound to read, 44. 
 preference shareholders, rights of, when defined in, 81. 
 preferential rights, silence as to, implied condition, 82. 
 preparation of, 21, 26 — 36. 
 
 protection of outsiders dealing with company, 73. 
 provisions in, 21. 
 
 registered office, statement of, in, 28. [See Registered Office.] 
 registration of, 22, 454. 
 requisites of, 26. 
 
 sale of company’s undertaking, provision for, in, 66. 
 signature, 35, 452. 
 
 witnessing, 35. 
 stamp on, 22, 452. 
 
 subscriber of, liability to pay for the shares, 116. 
 subscription of, 34, 452. 
 
 by aliens, infants, &c., 34, 35. 
 
 by less than seven, or as to private company two, persons, 
 35, 58. 
 
 repudiation for misrepresentation, 102. 
 who may join in, 34, 35. 
 witnesses as to, 35. 
 
 substituted for deed of settlement, 516. 
 unlimited company, of, 381, 45a. 
 written or printed, may be, 2 1 . 
 
 MERCANTILE CUSTOM, 
 
 negotiability of debentures to bearer, 302 et seq. 
 
 MINIMUM, 
 
 members to preserve limned liability, 58, 483. 
 number of directors, 182. 
 number of members, 21, 451. 
 
 36 
 
INDEX. 
 
 MINIMUM SUBSCRIPTION (public prospectus), 105. 
 before commencement of business, 58, 473. 
 irregular allotment, 107. 
 waiver as to, 105, 473. 
 
 MINORITY, 
 
 members, of, action by, 50, 176, 242. 
 
 MINUTE BOOK, 
 
 charge on, validity of, 322. 
 
 directors’, not liable to be inspected by members, 222. 
 general meetings, 244, 467 , 468 . 
 
 MINUTES, 
 
 altered after signature, must not be, 247. 
 
 board meetings, of, 196, 244, 467. 
 
 contradicted by other evidence, may be, 244. 
 
 directors to keep, 245. 
 
 entry of resolution for call on, 147. 
 
 evidence, when, 467 , 468 . 
 
 forms of, 245 — 247. 
 
 board meeting, 247. 
 extraordinary general meeting-, 246. 
 ordinary general meeting, 245. 
 general meetings, of, 244, 467 , 468 . 
 mode of taking, 245, 246. 
 presumption of regularity, 244, 468. 
 reading and confirming, 244. 
 
 signature of chairman to, satisfies Statute of Frauds, 245. 
 signed by chairman primd facie evidence, 245. 
 
 MISAPPLICATION, 
 
 company’s funds, of, by directors, 205, 206. 
 
 MISFEASANCE AND BREACH OF TRUST, 205, 505. 
 allotment of shares to infant, 205. 
 auditor, by, 227. 
 
 bribe taken by director, 185, 192, 193, 206. 
 directors, by, 185, 192, 193, 206, 406 et seq. 
 liability for, 205. 
 
 payment of dividends out of capital, 215. 
 proceedings for, 406. 
 
 qualification received from vendor or promoter, 206. 
 
 remuneration, directors taking, in excess of what authorized, 193 
 
 rigging market, sums paid for, 206. 
 
 sale by director to company without disclosure, 206. 
 
 secret profits, 193, 206, 332. 
 
 set-off for, none, 206. 
 
 MISREPRESENTATION, 
 
 debentures, delay in repudiating, 362. 
 prospectus, in, 344 et seq., 352 et seq. [See Prospectus.] 
 instances of, 353 et seq. 
 rescission, 352. 
 
 MORTGAGES AND CHARGES, 
 
 bill of sale, in nature of, required registration, 277, 281. 
 
 boiTowing, company’s power to secure loan by, 65, 269. 
 
 company to keep copies, 479 . 
 
 constructive notice of, 276. 
 
 created for purposes of registration, 280. 
 
 debentures or debenture stock, to secure, registration required, 277. 
 
 entry of satisfaction, 478 . 
 
 floating charge requires registration, 277. 
 
 37 
 
INDEX 
 
 MORTGAGES AND CHARGES— continued. 
 foreign property, registration, 273, 278. 
 irregularly executed, 45. 
 register of, duty of company to keep, 4' 9. 
 registration at Somerset House, 277, 476. 
 open to inspection, 280. 
 rectification, 281, 282. 
 reserve capital, 271. 
 shares, of, by blank transfer, 133, 134. 
 
 specific, may be created notwithstanding floating charge, 311. 
 
 ultra vires , cases of, 275. 
 
 uncalled capital, registration required, 270. 
 
 MORTMAIN, 
 
 company’s power to bold notwithstanding, 454 455. 
 
 MUNITION WORK, 
 power to carry on, 64. 
 
 MUTUAL INSURANCE COMPANIES, 
 registering as unlimited, 381. 
 unregistered, held to be illegal associations, 387. 
 
 NAME OF COMPANY, 21, 26, 248, 452. 
 change of, 250, 452, 453. 
 
 special resolution for, 250. 
 contracts in name of, 199. 
 dispensing with word “limited,” 250. 
 examples of names, 27, 28. 
 
 injunction against company using misleading, 249. 
 
 “limited” must be last word (if company limited), 452. 
 
 painted or affixed outside office, must be, 248, 465. 
 
 policy of legislature in requiring, 248. 
 
 principles of Court in restraining use of deceptive, 249. 
 
 publication of, 248, 465. 
 
 restraining use of deceptive, 27, 249. 
 
 ‘ ‘ royal ” or “ imperial ’ ’ not to be used without the consent of Home 
 Office, 26. 
 
 similarity in companies’, 27, 249. 
 
 statement of, in memorandum of association, 26, 27. 
 
 NEGLIGENCE, 
 
 company liable for, 200. 
 directors, of, 200 et seq., 520. 
 liquidator, of, 421. 
 secretary, of, 262. 
 what is, 202 — 204. 
 
 NEGOTIABILITY, 
 
 debentures to bearer, of, 302 et seq. 
 proof of, 306. 
 
 NEGOTIABLE INSTRUMENTS, 
 
 name of company with “ limited” on, 248. 
 objects clause should empower company to issue, 65. 
 power of company to issue, 264. 
 
 NEW ISSUES, 
 
 restrictions on, during war, 636. 
 
 38 
 
 NOMINAL CAPITAL, 32, 33, 81. 
 
INDEX. 
 
 N ON-CUMULATIVE PREFERENCE SHARES, 84. 
 
 NON-DISCLOSURE, 192, 206, 344, 351, 359-361. 
 
 NOTICE, 
 
 allotment, of, 109. 
 authentication of, 233, 483. 
 board meeting, of, 194. 
 call, of, time for, 147. 
 company, by, 232, 268, 483. 
 form of, 166, 268. 
 how to be signed and given, 268. 
 company, to, 234, 483. 
 verbal, to, 234. 
 
 condition for service of, on registered debenture holder, 297. 
 conditional, 168. 
 construction of, 166, 168. 
 constructive notice, 165, 234. 
 
 articles, of, 44 et seq. 
 directors’ meeting, 194. 
 
 equities, of, when company is bound by, 157 et seq. 
 
 as affecting registered holder of debentures, 291 . 
 executors of deceased members, to, 233. 
 general meeting, of, 165. [See Meeting, Notice.] 
 contingency, when invalid, 168. 
 directors interested, 168. 
 omission to give to member, 166. 
 imperfect or misleading, 167, 168. 
 meeting, of. [See Meeting.] 
 
 of memorandum and articles, people presumed to have, 44. 
 of situation of office, 465. 
 on members, 232. 
 
 one, for two successive meetings, 168. 
 preventing estoppel, 145. 
 
 registrar, to, of situation of registered office, 243. 
 
 requisition, meeting on, 165. 
 
 resolution for voluntary winding-up, of, 498. 
 
 service of, on members, &c., 232. 
 
 service of, on company, 234, 483. 
 
 shareholders resident abroad, 232. 
 
 special resolution, of, 467. 
 
 Table A, 534. 
 
 two successive meetings, of, by one, 168. 
 verbal, 234. 
 
 NUISANCE, 
 
 company, by, 74. 
 
 NUMBER OF MEMBERS, 
 
 minimum to preserve limited liability, 58. 
 partnership, of, limited to twenty, 451. 
 
 NUMBERING SHARES, 
 provisions of Act, 456. 
 
 OBJECTS OF COMPANY, 
 
 advantages of considerable detail, 60, 61, 64. 
 alteration, 77 — 79, 453. 
 
 petition to Court, 79. 
 clause, framing, 64 — 66. 
 
 39 
 
INDEX. 
 
 OBJECTS OE COMPANY — continued. 
 construction of objects clause, 69. 
 extension of, 77 — 79, 453. 
 general words, effect of, 72. 
 legality of, 60 — 72. 
 
 memorandum of association, statement of, in, 29, 60. [See Memo- 
 randum of Association.] 
 powers, implied by, 64, 72. 
 principal and ancillary, 71. 
 whether articles can be used to interpret, 3 1 . 
 
 OFFICE OF COMPANY, 243, 464, 465. [See Registered Office.] 
 
 OFFICERS OF COMPANY, 
 
 appointment and dismissal, 262. 
 auditor, 225. 
 
 directors, 177. [See Directors.] 
 manager, 255. 
 
 proceedings against, for misfeasance, 205, 406 — 408. [See Direc- 
 tors.] 
 
 secretary, 260. 
 
 OFFICIAL RECEIVER, 489. 
 accounting by, 492, 494. 
 appointment of, 489. 
 liquidator to give information to, 492. 
 petition to wind up, may present, 395, 488. 
 report of, in winding-up, 400, 489, 490. 
 
 OMNIA RITE ACT A, 
 
 presumption as to, 45, 245. 
 
 right of persons dealing with a company to assume, Ibid. 
 seal presumed properly affixed, 257, 258. 
 
 ONE MAN COMPANY, 
 validity of, 56, 367. 
 
 OPTION, 
 
 to promoter, subscribe for shares, 335. 
 underwriters, to, 342. 
 
 ORAL CONTRACTS, 
 company, by, 256. 
 
 for issue of paid-up or partly paid-up shares, as to filing, 119. 
 
 ORDER AND DISPOSITION, 
 inapplicable to shares, 140. 
 
 ORDERS, 
 
 appeals from and re-hearing in winding-up, 497, 498. 
 enforcement of, 497. 
 
 in Scotland or Ireland, 497. 
 wind up, to, 399. 
 
 ORDINARY MEETINGS OF SHAREHOLDERS, 163. [See Meet- 
 ings. ] 
 
 ORDINARY SHARES, 33. [See Shares.] 
 
 40 
 
INDEX. 
 
 OUTSIDER, 
 
 protection of, dealing bond Jide , 45, 73, 245. 
 
 OVERDRAFTS, 
 
 on bank, a borrowing, 275. 
 
 PAID-UP SHARES, 
 
 consideration, whether Court will inquire into, 117 
 
 contract as to filing, 119 et seq., 474. 
 
 relief under Act of 1898 as to non -filing contract, 121. 
 
 repeal of sect. 25 of Act of 1867. . 120. 
 
 return as to allotment of, 118, 474. 
 
 PALATINE COURTS, 
 
 winding-up jurisdiction, 389. 
 
 PARI PASSU 
 
 clause, debenture, in, 289. 
 
 creditors, payment of, in winding-up, 410. 
 
 PARLIAMENT, 
 
 power to apply to, for Act, 66. 
 
 PART PERFORMANCE, 
 
 Statute of Frauds, 256. 
 
 PARTNERSHIP, 
 
 company contrasted with, 1, 55, 56. 
 exceeding twenty members, prohibition of, 451. 
 ordinary, distinguished from trading company, 1, 2. 
 person in law, not a, 1. 
 
 PAST MEMBER, 404, 484. 
 
 forfeited shares, ex-holder of, 153. [See Member.] 
 liability of transferor as, 138. 
 
 PAUPER, 
 
 transfer to, 130. 
 
 PAYMENT, 
 
 calls, in advance of, 149. 
 
 for shares, estoppel by certificate, 143. 
 
 otherwise than in cash, 118, 119. 
 in and out of bank by liquidator, 492, 507, 508. 
 
 PENALTIES, 
 
 allotment, 
 
 irregular, 107, 473. 
 not filing returns, 473. 
 not returning allotment money, 473. 
 annual returns, default in making, 119, 457. 
 application of penalties, 520. 
 books, for not producing, to inspectors, 481. 
 carrying on business with less than seven members, 58, 483. 
 commencing business prematurely, 58, 474. 
 concealment of name of creditor on reduction of capital, 463. 
 contract and return as to fully and partly paid shares, for not filing, 
 119, 474. 
 directors, 208. 
 
 dissolution of company, neglecting to report, 495 . 
 enforcement of, 520. 
 falsification of books, 505. 
 
 final meeting, neglecting to report holding of, 501. 
 increase of capital, for not giving notice of, 461. 
 
 41 
 
INDEX. 
 
 PEN ALTIES — continued. 
 
 Life Assurance Acts, for non-compliance with requirements, 557. 
 memorandum, alterations in, for neglecting 1 to notify to registrar, 453, 
 461. 
 
 memorandum and articles, refusing to supply, 455. 
 mortgages and charges, neglect to comply with the requirements of 
 Act, 478, 479. 
 name, 
 
 neglect in having it engraved on seal, 465. 
 not publishing it, 465. 
 omitting it from documents, 465. 
 perjury, 505. 
 prospectus not filed, 470. 
 qualification, director acting without, 468. 
 
 reduction of capital, not embodying a copy of the registered minute 
 in memorandum, 463. 
 
 register of directors or managers, neglect in keeping and sending 
 copy to registrar, 468. 
 register of members, 
 not keeping, 457. 
 
 refusing inspection or copies of register, 457. 
 registered office, for carrying on business without, 465. 
 share warrants, falsely personating owner, 459. 
 
 forgery or alteration of, 459. 
 special resolution, neglect to register, 467 . 
 
 neglect in embodying copy or annexing to articles, 467. 
 statement of assets and liabilities, neglect to publish (banking, 
 insurance, &c. companies), 481. 
 statutory meeting, neglect to hold, 466. 
 neglecting to file report for, 466. 
 
 neglecting to make statement of company’s affairs to, 466. 
 subdivision of shares, neglect to embody or annex to memorandum, 
 particulars of, 461. 
 
 use word “ limited” as last word of name, neglecting to, 248, 465. 
 PENSIONS AND GRATUITIES, 67, 433. 
 
 PERPETUAL DEBENTURES AND DEBENTURE STOCK, 313. 
 
 PERSON, 55. 
 
 PERSONATING 
 
 falsely, as owner of share, &c., 459. 
 
 PETITION, 
 
 company, by, form of, 268. 
 
 reduction of capital, sanction of Court to, for, 98, 462. 
 
 PETITION FOR WINDING-UP, 391 et seq., 488. 
 advertisement of, 396. 
 contents of, 395. 
 contributory, by, 394. 
 creditor, by, 392. 
 debenture holders, by, 328. 
 discretion of Court at hearing, 398, 488. 
 disputed debt, 391. 
 evidence in support, 397. 
 form of, 395. 
 hearing of, 398. 
 
 Official Receiver may present, in voluntary winding-up, 395, 488. 
 presentation of, 396. 
 service of, 397. 
 substratum gone, 394. 
 
 42 
 
INDEX. 
 
 PETITION FOR WINDING-UP — continued 
 title of, 395. 
 verification of, 397. 
 wishes of creditors, 398, 489 . 
 
 PLACE OF PAYMENT, 
 
 debenture, of, in alternative, 297. 
 
 POLICIES, 
 
 life assurance company, of, proof for, 384. 
 
 valuation of, 585. 
 
 POLL, 
 
 common law right, a, 172. 
 
 demand for, 172. 
 
 gen eral meet ings , 172. 
 
 how taken, 171, 172, 173. 
 
 nullifies show of hands, 172. 
 
 right to vote determined by register, 173. 
 
 special resolution, at, 237. 
 
 time of taking, ‘ ‘ then and there, ” 172. 
 
 vote by, 172. 
 
 POST, 
 
 notice of allotment by, 109. 
 of notices by, 234. 
 
 POWERS OF ATTORNEY, 435. 
 
 POWERS OF COMPANY, 60. [See Objects.] 
 action, to bring, 64. 
 amalgamation, 68. 
 articles, to alter, 75. 
 
 attorney, to execute deeds abroad, to appoint, 75. 
 bills of exchange, 264. 
 
 borrowing powers, 269 et seq. [See Borrowing Powers.] 
 
 call, making, 147 et seq. 
 
 capital, to reduce, 75. 
 
 colonial register, to keep, 75, 458 . 
 
 consolidate shares, to, 75, 460 , 461 . 
 
 contract, 253. 
 
 without seal, 75. 
 dividends, to declare, 214. 
 extension of, 77 et seq. 
 
 “incidental or conducive,” construction of, 72. 
 increase capital, to, 86. 
 
 intra vires acts and expenditure, examples of, 66 et seq. 
 
 lands, to hold, 75. 
 
 lend money, to, 65. 
 
 munition work, 64. 
 
 name, to change, 75. 
 
 pension, to pay to employe, 64. 
 
 promotion of other companies, 65. 
 
 protection of bond fide outsider, 73. 
 
 reduce capital, to, 92 et seq. [See Reduction of Capital.] 
 
 register of members, to keep, 75. 
 
 sale of undertaking, 66. 
 
 seal for foreign purposes, 75. 
 
 shares in other company, taking, 65, 67. 
 
 specimen clauses for insertion in memorandum, 64 — 66. 
 
 statutory powers independent of memorandum, 75. 
 
 subdivide shares, to, 75, 90. 
 
 uncalled capital, to mortgage, 270. 
 
 POWERS OF DIRECTORS, 189. [See Directors.] 
 
 Table A, 530. 
 
 P. 
 
 43 
 
 44 
 
INDEX. 
 
 PREFERENCE, FRAUDULENT, 415. 
 
 PREFERENCE SHARES, 81, 82. 
 
 alteration of articles to create, 46 et seq. 
 
 alteration of rights, 90, 91, 521. 
 
 capital, preference as to, 85. 
 
 cumulative and non-cumulative dividends, 84. 
 
 definition of rights in memorandum, 34, 88. 
 
 dividends on, 215. 
 
 increase of capital on, 87, 88. 
 
 issue, though memorandum silent, 87. 
 
 power in articles to issue, 82, 83. 
 
 power to take away preference by alteration of articles, 91. 
 rights in winding-up, 85. 
 
 rights of holders to receive and inspect balance sheets and reports, 483. 
 when shares in original capital can be issued as, 83. 
 
 PREFERENTIAL CREDITORS, 
 receiver must pay, 327, 480. 
 winding-up, in, 410, 502. 
 
 PREFERENTIAL RIGHTS, 
 alteration of, 90, 91. 
 
 PRE-INCORPORATION CONTRACTS, 253. 
 
 PRELIMINARIES, 
 
 formation of company, to, 21. 
 
 PRELIMINARY EXPENSES, 
 
 articles providing for payment of, 335. 
 power of company to pay, 64. 
 statement of, in prospectus, 348. 
 
 PREPAYMENT OF SHARES, 149. 
 interest on moneys paid for, 149, 150. 
 
 PRESENT 
 
 to directors from promoter, 206. 
 
 PRESUMPTION OF REGULARITY" 
 in internal matters, 44, 45. 
 
 PRIORITIES, 
 
 claims ranking before floating charge in winding-up, 327, 480. 
 debenture holders, of, 319. 
 
 preference shares, of, 33. [See Pbeference Shares.] 
 preferential creditors, of, 410, 502. 
 transfer of shares unregistered, where, 131. 
 
 PRIVATE COMPANY, 366 et seq., 484. 
 advantages of, 367, 368. 
 balance sheet, not to file, 368. 
 certificate to be sent with annual summary, 369. 
 compulsory retirement of objectionable shareholder, 376. 
 conversion into, objects of, 372, 373. 
 directors of, 376. 
 
 employees not counted in maximum number, 366. 
 
 exemptions, 368. 
 
 formation and constitution, 374. 
 
 governing or permanent director, 376. 
 
 instances of conversion into, 370. 
 
 judicial references, 367. 
 
 misapplication of funds, 377. 
 
 number of members allowable, 366. 
 
 44 
 
INDEX. 
 
 PRIVATE COMPANY — continued. 
 one man company, validity of, 367. 
 public not appealed to for subscriptions, 366. 
 shares, transfer of, 375. 
 statutory meeting and report, 368, 465. 
 subject to general law, 377. 
 subscription of memorandum, two sufficient, 35. 
 underwriting by, 341, 342, 368. 
 what is, 366, 484. 
 
 PRIVATE EXAMINATION 
 in winding-up, 407, 496. 
 
 PRIVILEGE, 
 
 proceedings at meetings, for, 174. 
 speeches at general meetings, for, 174. 
 
 PROBATE, 
 
 production on transmission of shares, 139. 
 
 PROCEEDINGS 
 
 in Court and Chambers (winding-up). See Appendix, Rules. 
 PROCEEDINGS OF DIRECTORS, 194. 
 
 PROFITS, 
 
 account of, and loss, keeping, 223. 
 
 accumulated, payment off of capital out of, 93, 460. 
 
 agreement for remuneration by, 221. 
 
 ascertainment of, for dividend, 215. 
 
 circulating capital, making good, 216. 
 
 dividends payable only out of, 215. 
 
 interest on moneys prepaid on shares not limited to, 150. 
 laxity in ascertainment, cases pointing to, 217. 
 secret, by director x 193. 
 
 PROMISSORY NOTES, 
 
 company’s power to accept, 264. [See Bill of Exchange.] 
 form of, 265. 
 
 “ limited ” must be inserted, 265. 
 
 power to make, in memorandum of association, 264. 
 
 when binding, 469. 
 
 PROMOTERS, 
 
 acts constituting promotion, 331. 
 
 articles providing for payment to, effect of, 41. 
 
 bankruptcy, 335. 
 
 disclosure by, to a nominee board, ineffective, 333. 
 
 fiduciary relation of, 332. 
 
 misfeasance, 505. 
 
 preliminary expenses, 335. 
 
 proceedings against, in winding-up, 414, 505. 
 
 prospectus, liability in respect of, 336. 
 
 payments to be specified, 348, 350. 
 public examination, in winding-up, 408, 496. 
 remuneration of, 334. 
 
 shares, option to subscribe, 335. 
 sale by, to company, 332—334. 
 secret profit by, 328, 332. 
 statute of limitations, 335. 
 who are, 331. 
 
 45 
 
 44 Cl) 
 
TNDEX. 
 
 PROOF, 
 
 admission of, 412. 
 
 affidavit in verification of, 412. 
 
 costs of, 412. 
 
 creditors, by, in winding-up, 409, 412. 
 debenture holders, by, 329. 
 
 PROPERTY, 
 
 disposition of, pending winding-up, 207. 
 
 floating charge on, 308 el seq. 
 
 power in memorandum to acquire, 65. 
 
 PROPOSAL, 
 
 in writing, accepted orally may be a sufficient contract, 256. 
 
 PROSECUTION 
 
 in winding-up, 415, 505 . 
 of legal offences, 520 . 
 
 PROSPECTUS, 
 
 abridged prospectus, disclosure required in, 346, 360. 
 advertisement in newspaper of, 346, 349. 
 ambiguous statements in, 355. 
 belief, statements as to, in, 355. 
 candour, duty of directors and promoters, 350. 
 constructive notice of documents offered for inspection, 356. 
 contracts (material) to be specified, 348, 359, 470 . 
 variation, 471 . 
 
 debentures or debenture stock, requirements, 362, 471 . 
 deceit, action for, on, 358. 
 definition in Act of 1908. .347, 522. 
 directors’ interests to be disclosed, 348. 
 
 Directors’ Liability Act, 1867. .357. 
 
 directors’ liability for non-disclosure in, 357, 471 , 472 . 
 
 contribution, 358, 472 . 
 disclosure in, 347, 470 . 
 expectation, statements as to, in, 355. 
 filing, 343. 
 form of, 344. 
 
 “golden rule,” Kindersley, V.-C., 345. 
 
 “ knowingly issuing,” 360. 
 
 “lessor” included in term “vendor,” 471 . 
 liability on non-compliance, 349, 471 . 
 memorandum of association to be stated, 347. 
 minimum subscription, particulars of, 347. 
 
 misrepresentations, giving right to rescind or damages, 352 et seq 
 intention, 355. 
 must be of fact, 353. 
 
 not cured by reference to documents, 356. 
 statement as to future, 355. 
 naming directors, and qualification, 347. 
 non-disclosure in, 345. 
 opinion, statements as to, 355. 
 
 original subscriber primd facie to be only addressed, 356. 
 
 payments for property or to promoter to be stated, 348. 
 
 preliminary expenses to be stated, 348. 
 
 qualification of directors to be stated, 347. 
 
 reference to documents, 356. 
 
 remedies for breach, 349. 
 
 remuneration of directors to be stated, 347. 
 
 reports referred to in, 355. 
 
 repudiation when winding up a bar, 353. 
 
 whether non-compliance with s. SI gives a right to, 356. 
 rescission of contract, 352. 
 statement in lieu of, 363, 536 . 
 
 46 
 
INDEX. 
 
 PROSPECTUS — continued. 
 
 to whom to be deemed addressed, 356. 
 vendors, definition of, 471 . 
 
 particulars to be stated, 347. 
 voting rights to be stated where classes of shares, 348. 
 waiver clause in, 349, 361. 
 
 PROTECTION OF OUTSIDERS, 
 dealing with company, 73. 
 
 PROVIDENT SOCIETY 
 not a company, 8. 
 special statement annually, 480 . 
 
 PROVISIONAL CONTRACTS, 
 how far effective, 254. 
 
 PROVISIONAL LIQUIDATOR, 
 appointment of, 400, 490 . 
 
 official receiver becomes, on winding-up, 400, 490 . 
 
 PROXIES, 172. 
 blank, in, 174. 
 form of, 172, 173. 
 lodging, before meeting, 174. 
 no common law right to vote by, 173. 
 show of hands, not usable on, 172. 
 stamp on, 173. 
 
 PUBLIC. 341. 
 
 PUBLIC EXAMINATION, 
 
 holding of, in winding-up, 408. 
 
 QUALIFICATION, 
 
 “ cease to hold,” meaning, 184. 
 directors, of, 182—185, 468 . 
 
 apportionment of, 186. 
 fine for acting without, 183. 
 first, 180. 
 
 obligation to take shares, 184. 
 present from promoter, 185. 
 
 “ in his own right,” meaning, 184. 
 subscribing memorandum for, 181. 
 
 when possession a condition precedent to valid election, 184. 
 
 QUORUM, 
 
 articles authorizing directors to fix, presumption, 45. 
 board meeting, 195. 
 directors, of, 195. 
 general meeting, at, 168. 
 
 RAILWAYS CLAUSES ACT, 1845.. 4. 
 
 RATES, 
 
 priority in payment, 410, 502 . 
 
 RATIFICATION, 
 company, by, 75. 
 
 contract on behalf of company, 253. 
 directors, by, of irregular proceedings, 195. 
 shareholder, by, of voidable contract, 352, 353. 
 
 47 
 
INDEX. 
 
 RECEIVER, 
 
 appointed by debenture holder, 296. 
 
 clause in debenture as to, 295. 
 appointed by the Court, 324. 
 borrowing by, 327. 
 
 Courts (Emergency Powers) Act, 325, 637 . 
 duties, 326. 
 
 fixtures, right to remove, 326, 327. 
 jeopardy, 324, 325. 
 
 leave required for proceedings after, 326. 
 liability of, 326. 
 officer of the Court, 325. 
 power to disregard contracts, 326. 
 preferential creditors, must pay, 327. 
 proceedings by, 326. 
 rent, liability for, 326. 
 right to indemnity, 326. 
 workmen’s compensation, 326. 
 discharge of servants, 327. 
 filing accounts, 478 . 
 manager, and, appointment, 325. 
 property abroad, 325. 
 registration of appointment, 327, 478 . 
 security, 325. 
 
 where no board of company, Court may appoint, 163. 
 
 RECONSTRUCTION, 423 et seq. 
 arrangement, 430. 
 
 dissentients must be provided for, 424. 
 object of, 423. 
 
 sale to new company, under power in memorandum, 425 et seq. 
 to a foreign company, 424. 
 
 under sect. 192 (substituted for sect. 161 of Act of 1862), 424, 500 . 
 underwriting on, 341. 
 
 RECONVERSION, 
 
 stock into shares, 460 . 
 
 RECTIFICATION OF REGISTER, 127, 281, 457 , 458 , 478 . [See 
 Register, rectification.] 
 
 REDEMPTION, 
 
 debenture, of, 293, 294. 
 
 REDUCTION OF CAPITAL, 91 et seq., 461 et seq. 
 all-round reduction, 95. 
 
 “ and reduced,” use of, 99, 462. 
 
 as between classes, 95 — 97. 
 
 certificate of registrar, 99. 
 
 creditors not entitled to object, when, 462. 
 
 rights of, on, 98, 462 . 
 minute as to reduction, 99, 462 . 
 modes of reduction, 92 et seq., 461 , 462 . 
 accumulated profits, out of, 96, 460 . 
 any mode may be sanctioned, 96, 98. 
 cancelling unissued or suiTendered shares, 93, 95, 461 . 
 capital not represented by available assets, 95, 462 . 
 
 not required, 94, 95, 462 . 
 forfeiture of shares, 93, 94. 
 lost capital, 95, 462 . 
 paying off paid-up capital, 94, 95, 462 . 
 payment off, on condition of return, 93, 460. 
 reduction of liability on shares, 94, 461 . 
 surrender of shares, by, 93. 
 
 48 
 
INDEX. 
 
 REDUCTION OF CAPITAL— continued. 
 order confirming 1 , 99, 462 . 
 pari passu the primary rule, 95. 
 petition for sanction of Court to, 98, 462 . 
 preference shares, position of, 95, 96. 
 resolution for, 92. 
 rules, 588 et seq. 
 sanction of Court, 
 
 proceedings to obtain, 98. 
 where not required, 93, 94. 
 special resolution for, 98. 
 
 REGISTER 
 
 of debentures and debenture stock, 290. 
 
 right to inspect, 479 . 
 of members, 124, 456 . 
 closing, 125, 457 . 
 colonial, 129, 458 . 
 contents, 124. 
 copies of, 457 . 
 
 entry of member in, 110 et seq. 
 
 entry of name on, on application of unauthorized agent, 115. 
 
 without agreement or assent, 115. 
 inspection, 124, 457. 
 
 remedy where right refused, 457. 
 name on, effect of, 110, 115. 
 penalty for not keeping, 456. 
 prima facie evidence, to be, 125, 458. 
 rectification of, 127, 457. 
 
 secretary no power of, 261. 
 
 where contract not registered under sect. 25 of Act of 1867 
 (repealed), 120. 
 
 trusts not to be entered, 157, 457 . 
 of mortgages and charges, 276 et seq. 
 
 REGISTERED CONTRACT. [See Filed Contract.] 
 
 REGISTERED DEBENTURE, 
 
 acceleration of payment in certain events, 294. 
 charge in, 287 et seq. 
 
 condition as to service of notices on holder, 296. 
 
 conditions indorsed on, 28,8 et seq. 
 
 consideration, statement of, 285. 
 
 date of payment, 285. 
 
 equities, exclusion of, 292, 293. 
 
 equities, notice of, 290. 
 
 form of, 285 et seq. 
 
 interest on, 286. 
 
 joint holders, 292. 
 
 notice by company to pay off, 293. 
 
 pari passu clause, 288. 
 
 reference to indorsed conditions, 287. 
 
 registered holder of, alone recognized, 291. 
 
 register to be kept, 290. 
 
 sealing, 288. 
 
 transfer of, 291, 292. 
 
 “free from equities,” 292. 
 to be in writing, 291. 
 uncalled capital, charge on, 287. 
 
 REGISTERED OFFICE, 243. 
 
 carrying on business without, involves penalty, 243. 
 change of, 243. 
 
 inspection of register of members at, 243. 
 
 49 
 
INDEX. 
 
 REGISTERED OFFICE — continued. 
 
 name of company to be kept painted or affixed at, 243. 
 notice of situation of, to be given to registrar, 465. 
 practice as to, 243. 
 
 register of mortgages to be kept at, 243. 
 service of notices at, 243. 
 situation of, 243. 
 
 statement as to, in memorandum, 21. 
 specified in memorandum, to be, 28. 
 
 REGISTER OF MEMBERS, 124. 
 
 book of, required to be kept at office of company, 124, 456. 
 closing of, 125, 457. 
 
 colonial, power of company to keep, 129. 
 contents of, 124. 
 copies from, 457. 
 
 delay in obtaining removal of name, 127. 
 effect of name remaining on, 126. 
 evidence of right to vote, 170. 
 evidence, to what extent, 125. 
 holding out doctrine applicable to, 126. 
 inspection of, 1 24. 
 
 mere entry does not constitute membership, 125, 127. 
 
 not conclusive, 125, 127. 
 
 notice of trust not to be entered on, 157, 457. 
 
 penalty for not keeping, 456. 
 
 pnmd facie evidence, 125, 458. 
 
 qualified entry, 112. 
 
 rectification of, 128, 457. 
 
 transfer, entry necessary to complete, 131. 
 
 wrongful removal of name, 112. 
 
 REGISTER OF MORTGAGES AND CHARGES, 276, 476, 479. 
 book of, required to be kept at office of company, 243. 
 certificate by registrar, 279, 280. 
 duty of company to keep, 276, 476, 479. 
 inspection of copies of, 280, 479. 
 loans guaranteed by Government, exemption of, 281. 
 penalties for default, 478. 
 rectification, 478. 
 satisfaction, entry of, 478. 
 
 REGISTRAR OF COMPANIES, 522. 
 
 duty as to registration of companies, 22. 
 
 name of new company, jurisdiction as to, 249, 250. 
 
 notice of increase of capital to be given to, 88. 
 
 REGISTRATION, 
 bills of sale, 281. 
 
 commission, allowance or discount — particulars, 279. 
 companies, of, first Registration Act, 7, 8. 
 conclusiveness of certificate of registrar, 279. 
 debentures and debenture stock, of, 277 et seq. 
 alternative mode, 278, 279. 
 
 existing companies, of, under Parts VI. and VII. of Act, 512, 513,514. 
 fees on, 22, 534. 
 
 foreign property, provisions as to, 278. 
 
 mortgages and charges, of. [See Register of Mortgages.] 
 
 office, 511. 
 
 proceedings for, 21 et seq. 
 rectification of register, 28 1 . 
 similarity in names, 27, 249. 
 substituted security, 281. 
 
 50 
 
INDEX. 
 
 REGISTRATION — continued. 
 
 transfer of shares, of, 130, 457. 
 unlimited company as limited, 463. 
 vendor of shares not bound to procure, 135. 
 
 REGISTRATION OF MEMORANDUM AND ARTICLES, 
 effect of, 39, 454. 
 
 REGULARITY, 
 
 presumption of, from minutes, 244. 
 
 Statute of Frauds, 245. 
 
 REGULATIONS OF COMPANY, 21, 37 et seq. [See Articles of 
 Association.] 
 
 RE-ISSUE, 
 
 debentures or debenture stock, of, 288, 479. 
 
 RELEASE OF LIQUIDATOR, 417, 492. 
 
 RELEASES, 
 form of, 267. 
 
 RELIEF AGAINST FORFEITURE, 152. 
 
 REMEDIES, 
 
 debenture holders, of, 323. 
 debenture stock-holder, of, 323. 
 
 REMOVAL, 
 
 directors, of, 198. 
 liquidator, of, 403, 490, 501. 
 
 REMUNERATION, 
 directors, of, 185. 
 
 action for, when it lies, 185. 
 apportionment, 186, 187. 
 not only payable out of profits, 185. 
 taking in excess of what authorized, misfeasance, 186. 
 promoter, 334. 
 renouncing future, 186. 
 secretary, 260. 
 
 RENT, 
 
 assignment of, as against debenture holders, 311. 
 distress for, in winding-up, 411, 413. 
 
 against debenture holders, 310. 
 
 RE-ORGANISATION, 
 
 share capital, of, 100, 461. 
 
 REPEALS BY NEW ACT, 522. 
 
 how far old provisions kept alive, 16, 523. 
 list of Acts repealed, 547, 548. 
 
 REPORT, 
 
 proceedings at meeting, of, privileged where sent to shareholder, 174. 
 prospectus, referred to in, 355. 
 statutory meeting before, 465. 
 
 REPRESENTATIVE 
 
 of company at meeting of another company, 467. 
 
 51 
 
INDEX. 
 
 REPUDIATION, 
 
 delay in, for misrepresentation, 352. 
 shares, of, prompt, must be, 127. 
 
 REQUISITION, 
 
 convening meeting on, 164, 165, 466. 
 
 RE-REGISTRATION OF COMPANIES, 385, 513. 
 
 RESCISSION, 
 
 cesser of membership by, 116. 
 contract for shares, 352. 
 losing right, 
 
 by delay, 127, 352. 
 voting, 352. 
 winding-up, 353. 
 
 misrepresentation in prospectus, 352. 
 non-disclosure, 345 et seq. 
 prompt repudiation necessary, 353. 
 contract for debentures, 352. 
 
 RESERVE CAPITAL, 
 mortgaging, 270, 271. 
 what is, 464. 
 
 RESERVE DIVIDENDS, 
 capitalizing, 221. 
 
 RESERVE FUND, TABLE A, 533. 
 
 RESIGNATION, 
 directors, of, 188. 
 
 RESOLUTION, 
 
 amendments, 175. 
 declaration of chairman, 239. 
 directors, of, 196. 
 
 forms of, 196. 
 extraordinary, 236, 467. 
 general meetings, at, 171. 
 how passed, 171 . 
 inconsistent with articles, 242. 
 requiring special majority, 240. 
 special, 237. [See Special Resolution.1 
 
 RETIREMENT, 
 
 compulsory, of objectionable shareholder, in private company, 376. 
 
 RETROSPECTIVE OPERATION OF NEW ACT, 
 control, 15, 16. 
 
 RETURN OF ALLOTMENTS, 118, 474. 
 
 RETURN OF MEMBERS (ANNUAL), 
 
 company must make, annually, 123, 456, 457. 
 
 RETURNS, 
 
 false, liability for, 521. 
 
 officers of Courts, by, to Board of Trade, 509. 
 to registrar, annual, of members, 123, 456. 
 
 Treasury, by, of receipts and expenditure under Companies Act, 
 
 508. 
 
 RIGGING MARKET, 
 sums paid for, 206. 
 
 52 
 
INDEX. 
 
 ROTATION, 
 
 directors, of, 198. 
 
 ROYAL CHARTERED COMPANIES, 2, 3. 
 powers of, 3. 
 
 RULE IN FOSS v. HARBOTTLE, 242. 
 
 RULE IN HOPKINSON v. ROLT, 
 
 operation as regards lien on shares, 157. 
 
 RULE IN ROYAL BRITISH BANK v. TURQUAND, 45. 
 
 RULE MAKING POWER, 
 
 Companies (Consolidation) Act, 1908, under, 509. 
 
 RULES, REDUCTION OF CAPITAL, 588. 
 
 RULES, WINDING-UP, 597. 
 
 SALE, 
 
 company, to, by member, 57. 
 director, by, to company, 192. 
 
 without disclosure, 206. 
 liquidator, by, 402, 419, 420. 
 new company, to, of undertaking, 425. 
 of shares to enforce lien, 159. 
 promoter, by, to company, 332, 334. 
 undertaking, of, 425. 
 
 SANCTION OF COURT, 
 
 reduction of capital, to proceedings to obtain, 94 — 96, 461 — 463. 
 
 SATISFACTION, 
 
 entry on register of mortgages, 478. 
 
 SCIENCE, 
 
 association formed to promote, 250. 
 
 SCOTLAND, 
 
 bearer debentures, law of, 480. 
 examination of persons in, 507. 
 winding-up, jurisdiction, 487. 
 
 SEAL, 
 
 affixing, formalities for, 257. 
 affixing, to escrow, 258. 
 
 not necessarily contract, 257, 469. 
 certificate not a deed, 259. 
 common, the, 257. 
 
 conveyances, demises, surrenders by company, when necessary to, 
 257. 
 
 directors authorized to affix, 257. 
 
 foreign countries, for, 259, 469. 
 
 name to be engraved on, 465. 
 
 power of company to contract without, 75, 257. 
 
 to have common, 75, 454. 
 presumption that, duly affixed, 257. 
 sealing deed by corporation imports delivery, 258. 
 
 Table A, 531. 
 
 transfer of shares, when under, 134. 
 use of, 257. 
 
 what transactions required for, 257. 
 who may use, 257. 
 
 53 
 
INDEX. 
 
 SEALING 
 
 registered debenture, 288. 
 
 SECRET PROFIT, 
 director, by, 193. 
 promoter, by, 332. 
 
 SECRET RESERVES, 
 
 auditors, bow to deal with, 231 . 
 
 SECRETARY, 
 
 appointment of, 260. 
 
 “ certify ” transfer, may, 261. 
 commission improperly received by, 261. 
 dismissal, 262. 
 duties of, 260. 
 
 estoppel against company, may create, 261 
 false declarations, 261. 
 falsification of books, liability, 261. 
 forgery of certificate, 261. 
 fraudulent conspiracy, 262. 
 
 letters by, prima facie written under authority, 245. 
 liability of, 261. 
 misfeasance, liability for, 261. 
 negligence of, 261. 
 
 no authority to make representations as to company’s affairs, 260. 
 
 powers and remuneration, 260. 
 
 share certificate, improperly issuing, 261. 
 
 Statute of Limitations, may set up, 262. 
 strike name off register, no power to, 261. 
 winding-up, whether equivalent to dismissal, 263. 
 
 SECURITY, 
 
 costs of limited company, 520. 
 debenture holder’s right to realize, 323 et seq. 
 floating charge by way of, 289 et seq. 
 implied power of company to give, 270. 
 liquidator, by, 490. 
 speeial manager, by, 494. 
 
 SERVICE, 
 
 and authentication of documents, 483. 
 notices on registered debenture bolder, 297. 
 notices, &c. of, on companies, 234, 483. 
 petition to wind up, of, 397. 
 
 substituted, of notice on company where no registered office, 243, 397. 
 SET-OFF, 
 
 contributory, against, 406. 
 
 by, 405. 
 
 debenture holder, by, 289, 329. 
 director no right of, in case of misfeasance, 185, 206. 
 in winding-up, 405. 
 
 shareholder whilst company a going concern, 149. 
 
 SHARE CAPITAL. [See Capital.] 
 
 SHARE CERTIFICATES, 142, 45S. [See Certificates.] 
 
 SHARE QUALIFICATION, 
 
 directors, of, 182 — 185. [See Directors.] 
 
 SHARE WARRANTS TO BEARER, 140, 459. 
 power of company to issue, 459. 
 
 Table A, 527. 
 
 54 
 
INDEX. 
 
 SHAREHOLDERS, 101—103, 110, 113—116. [See Members.] 
 SHARES, 
 
 acceptance of application, how notified, 103, 113 et seq. 
 agent applying for, 103, 104. 
 
 agreement to take, how constituted, 103, 115. [See Agreement to 
 take Shares.] 
 allotment, delay in, 1 12. 
 
 irregular board, by, 104. 
 nature of, 104. 
 restrictions on, 105, 473. 
 allotments, returns of, 118. 
 application for, 103. 
 conditional, 112. 
 by agent, 103, 109. 
 blank transfers of, 133. 
 calls on, 146. [See Calls.] 
 
 cancellation of, not agreed to be taken, 93, 95, 461. [See Cancel- 
 lation of Shares.] 
 
 certificates of, nature and form of, 142, 456. [See Certificate of 
 Shares.] 
 
 mortgage by deposit of, 145. 
 charging orders, 160. 
 classes of, 33, 81 etseq. 
 consolidation of, 89. 
 conversion of, into stock, 89. 
 
 Table A, 527. 
 deferred, 33, 85. 
 
 disclaimer of, by trustee of bankrupt member, 140. 
 discount, cannot be issued at, 29, 1.17, 416. 
 dividends on. [See Dividends.] 
 equities, notice, 154 et seq. 
 
 exchange of, when invalid as reduction of capital, 94. 
 forfeiture of, 151. [See Forfeiture.] 
 
 Table A, 526. 
 founders’, 33, 85. 
 increase of capital created on, 86. 
 
 issue of, at discount by limited company, ultra vires , 29, 117. 
 
 under registered contract, 118 et seq. 
 liability on, 116, 117. 
 lien on, 154. [See Lien.] 
 minimum subscription, 105. 
 new shares, creation of, 87. 
 numbering, 456. 
 
 numbers of, registered contract need not give, 121. 
 paid-up, contracts as to filing, 118 et seq. 
 payment for, 116, 146, 430. 
 estoppel, as to, 144. 
 in cash, 117, 122. 
 personal estate, 456. 
 
 preference, 81 et seq. [See Preference Shares.] 
 prepayment of, 149. 
 pre-preference shares, 88. 
 
 private company, transfer usually fettered, 375. 
 purchase by company of its own, ultra vires , 68. 
 qualification of directors, 182. 
 sale of, 130, 132. 
 
 specific performance of contract to take or allot, 115. 
 subdivision of, 90, 460. 
 
 surrender of, when a reduction of capital, 93, 94. 
 title to, estoppel by certificate, 143. 
 
 transfer and transmission of, 130, 457. [See Transfer of Shares 
 and Transmission of Shares.] 
 private company, in, 37 5, 376. 
 
 Table A, 525. 
 
 55 
 
INDEX. 
 
 SHARES — continued. 
 
 voidable contract, 107, 108, 110, 112 et seq., 352. 
 warrants to bearer, 140. 
 
 Table A, 527. 
 who liable to pay, 118. 
 who may take, 113. 
 
 SHARING PROFITS, 
 
 power in memorandum, 65. 
 
 SHOW OF HANDS, 
 
 general meetings, 171. 
 nullified by demand of poll, 172. 
 special resolution, at, 237, 239. 
 vote by, 171. 
 
 SIGNATURES 
 of officers, 
 
 judicial notice to be taken of, in winding-up, 506. 
 of subscribers of memorandum, 34 — 36. 
 of articles, 37. 
 
 SIMILARITY, 
 
 names of company, in, 26, 249. 
 
 SITUATION OF REGISTERED OFFICE, 
 statement as to, in memorandum, 21, 28, 243. 
 
 SOLICITOR, 
 
 employment of, by liquidator, 402, 491. 
 
 named in articles, no right of action against company, 42. 
 
 statutory declaration by, to obtain certificate of incorporation, 53. 
 
 “ SPECIAL BUSINESS,” 166. 
 
 notice convening extraordinary meeting must specify, 166. 
 what is, 166. 
 
 SPECIAL MANAGER, 
 account by, 494. 
 
 appointment of, in winding-up, 494. 
 security by, 494. 
 
 SPECIAL RESOLUTION, 237, 467. 
 
 copy of, to be sent to members and registrar, 467. 
 
 declaration of chairman, 239. 
 
 definition of, 237, 467. 
 
 interval between meetings, 237, 238. 
 
 meetings for, 237. 
 
 notice of, 237. 
 
 one notice for two meetings, 168. 
 proceedings by, 238. 
 registration, 467. 
 requirements for passing of, 238. 
 what may be done by, 238. 
 
 SPECIFIC PERFORMANCE, 
 
 agreement to take shares, of, 115. 
 
 debentures or debenture stock, of agreement for, 321, 480. 
 STAMP, 
 
 articles of association, on, 22, 454. 
 
 certificate of shares or stock, not required for, 145. 
 
 duty on company’s capital, 22, 534. 
 
 guarantee, company limited by, 380, 535. 
 
 56 
 
INDEX. 
 
 STAMP — continued. 
 
 memorandum of association, on, 22, 452. 
 proxy, on, 173. 
 
 surrender or discharge of debenture, 317. 
 transfer of debenture, on, 317. 
 transfer of shares, 135. 
 
 STAMP ACT, 1891, and FINANCE ACT, 1899.. 22. 
 
 STANNARIES 
 
 jurisdiction, s. 280. .389, 521. 
 
 STATEMENT 
 
 to be filed by Insurance, Deposit, Provident and Benefit Society, 480 
 
 STATEMENT IN LIEU OF PROSPECTUS, 363. 
 contracts, variation, 364. 
 form of, 536. 
 
 requirements of Act, 363, 471. 
 
 STATEMENT IN PRESCRIBED FORM, 
 by private company, on underwriting, 368. 
 
 STATEMENT OF AFFAIRS, 
 winding-up, in, 400, 489. 
 
 STATUS, 
 
 membership, of, 101 et seq., 110, 111. 
 
 STATUTE OF FRAUDS, 256. 
 
 minutes, whether a memorandum within, 256. 
 part performance, 256. 
 
 STATUTE OF LIMITATIONS, 
 auditor may set up, 227. 
 directors, 179. 
 dividends, as affecting, 220. 
 
 STATUTORY COMPANIES, 4, 62. 
 
 STATUTORY DECLARATION, 
 
 Act complied with, 24. 
 
 STATUTORY DUTIES, 75, 76. 
 
 STATUTORY MEETING, THE, 161, 465. 
 as to private company, 162, 368. 
 
 STATUTORY REPORT, 465. 
 
 to be forwarded to members seven days before statutory meeting, 465. 
 STAY, 
 
 voluntary winding-up, in, 421. 
 winding-up by Court, in, 413, 488, 516. 
 winding-up, of, 417, 421. 
 
 STOCK, 
 
 certificates of, 456. 
 
 conversion of shares into, 89, 460, 461. 
 notice on, 461. 
 
 Table A, 527. 
 reconversion, 89, 460. 
 
 STOCK EXCHANGE, 
 
 certificated transfer, good delivery by rules of, 138. 
 
 67 
 
INDEX. 
 
 SUBDIVISION OF SHARES, 89, 460, 461. 
 power of company, 75. 
 
 SUBROGATION, 
 
 doctrine of, in case of ultra vires borrowed moneys, 275. 
 
 “ SUBSCRIBED,” 
 
 statement in prospectus that share capital, 354. 
 
 UBSCRIBERS OF MEMORANDUM, 34, 102, 113, 
 agent, by hand of, 35. 
 alien, 34. 
 bankrupt, 34. 
 
 cash, must pay for shares in, 117. 
 first directors, may appoint, when, 181. 
 infant, 35. 
 
 less than seven, or two (private companies), effect on company, 58. 
 liability of, to pay for shares, 116, 122. 
 married woman, 34. 
 
 members of company are, 101, 102, 454, 456. 
 misrepresentation, repudiation, 36, 102. 
 notice of meeting, 166. 
 who may be, 34, 35, 101. 
 
 SUBSCRIBING SHARES, 101 et seq., 113 et seq. 
 commissions, 337 et seq. 
 
 SUBSCRIPTION OF MEMORANDUM AND ARTICLES, 34, 35, 
 37, 454. [And see Memorandum of Association.] 
 requirements of Act, 35. 
 witnesses to signatures of subscribers, 35, 37. 
 
 SUBSIDIARY COMPANIES, 
 
 winding-up of, with life assurance company, 555. 
 
 “SUCCESSORS,” 
 
 use of, unnecessary, 267. 
 
 SUMMARY AND LIST OF MEMBERS, 123, 456, 457. 
 
 SUNDAY, 
 
 whether a dies non , 166. 
 
 SUPERVISION ORDER, 422, 501. [See Voluntary Windino-up 
 under Supervision.] 
 
 SURPLUS ASSETS, 416. 
 
 SURRENDER OF SHARES, 
 cesser of membership, by, 116. 
 reduction of capital, when a, 94. 
 when allowable, 93. 
 
 TABLE A, 524. 
 accounts, 533. 
 
 applicable, when, 22, 37, 454. 
 
 audit, 534. 
 
 calls on shares, 525. 
 
 clause vesting general powers of company in directors, 530, 531. 
 conversion of^shares into stock, 527. 
 directors, 530. 
 
 58 
 
INDEX 
 
 TABLE A — continued. 
 
 disqualification of directors, 531. 
 
 dividends, 533. 
 
 forfeiture of shares, 526. 
 
 general meetings, 528. 
 
 increase of capital, 528. 
 
 notices, 534. 
 
 powers of directors, 530. 
 
 proceedings at general meetings, 529. 
 
 proceedings of directors, 532. 
 
 remuneration of directors, 530. 
 
 rotation of directors, 532. 
 
 share warrants, 527. 
 
 transfers of shares, 525. 
 
 transmission of shares, 526. 
 
 votes of members, 530. 
 
 TENANT FOR LIFE AND REMAINDERMAN, 
 dividends, as between, 22Q. 
 
 TESTIMONIUM CLAUSE, 
 form of, 255. 
 in debenture, 288. 
 
 TITLE, 
 
 shares, to, 
 
 estoppel by certificate (title), 143, 144. 
 
 TORTS, 
 
 company’s liability for, 74, 200. 
 directors, by, 205, 209 et seq. 
 
 TRADE SECRETS, 263. 
 
 TRADE UNIONS, 9. 
 
 Acts to remain in force, s. 294. .523. 
 no liability to be sued, 9. 
 
 TRADING COMPANY, 
 
 implied power of borrowing, 269. 
 
 TRADING WITH THE ENEMY, 
 penalties for, 633. 
 what is, 633. 
 
 winding-up in case of, 634. 
 
 TRANSFER OF DEBENTURES AND DEBENTURE STOCK, 315. 
 blank, 316. 
 forged, 316. 
 
 free from equities, 291, 316. 
 
 TRANSFER OF PROCEEDINGS, 
 winding-up, in, 487. 
 
 TRANSFER OF SHARES, 130, 442. 
 approval of, by directors, 130, 131. 
 attorney, by, 134. 
 
 bankruptcy of member, on, by trustee, 140. 
 blank transfers, 133, 134. 
 calls in arrear, where, 132. 
 
 liability of transferee, 132. 
 liability of transferor, 132. 
 certification of transfers, 138. 
 cesser of membership, by, 116. 
 deed when requisite, 133. 
 delay in registration, 132, 135. 
 
 p. 59 
 
 45 
 
INDEX. 
 
 TRANSFER OF SHARES — continued. 
 delivery of certificates, 135. 
 discretion of directors as to, 131, 132. 
 dividend on, 220. 
 execution of, 134, 135. 
 forged transfers, 136. 
 form of, 133. 
 
 free unless restricted by regulations, 130. 
 hand, under, 134. 
 incomplete till registered, 131. 
 
 indebtedness of member, company no primd facie right to refuse 
 registration, 132. 
 indemnity, 137. 
 infants, 134. 
 
 irregular, waiver by directors, 133. 
 joint holders, 134. 
 
 liability of transferor as past member, 137. 
 
 till registration, 132. 
 lien, where company has, 130. 
 lunatic, 134. 
 married woman, 134. 
 misdescription of consideration, 133. 
 pauper to, 130. 
 
 personal representatives, by, 139, 457. 
 priorities where unregistered, 131. 
 private company, in, 375. 
 usually fettered, 375. 
 
 refusal of, by directors when mala fide , 131. 
 registration necessary to complete, 131. 
 registration on application of transferor, 
 transferor’s right to require, 132, 457. 
 vendor not bound to procure, 135. 
 restrictions on, by articles, 130. 
 
 .seal, under, when requisite, 134. 
 stamp on, 135. 
 
 Table A, 525. 
 
 transferor becomes a past member, 137. 
 transmission of shares, 139. 
 vendor does not guarantee registration, 135. 
 winding-up, during, 137. 
 
 TRANSMISSION OF SHARES, 139. 
 executors all to concur in transfer, 139. 
 law as to, 139, 140. 
 probate to be produced, 139. 
 refusal to register, 140. 
 
 Scotch sequestrator’s rights, 140. 
 
 Table A, 526. 
 
 trustee in bankruptcy, his rights, 139. 
 
 TRESPASS, 
 
 liability of company, 74. 
 
 TRUST DEED, 
 
 constituting debenture stock, 313. 
 debentures, often used to secure, 313. 
 majority clauses in, 321. 
 provisions of, 313. 
 reference to, in debenture, 296. 
 
 TRUSTEE IN BANKRUPTCY, 
 disclaimer by, of shares, 140. 
 transfer by or to, 140. 
 transmission of shares, 140. 
 
 60 
 
INDEX. 
 
 TRUSTEES, 
 
 directors are, in what sense, 178, 179. 
 for debenture holders, remuneration, 314. 
 
 TRUSTS, 
 
 article exempting company from obligation to notice, 155, 156. 
 
 lien on shares, effect, 154 et seq. 
 
 notice of, not to be entered on register, 157, 158. 
 
 ULTRA VIRES , 66 et seq. [See Powers of Company.] 
 acts of directors, 199, 205, 208. 
 application of funds, 60 et seq ., 208. 
 articles containing provisions which are, 38. 
 borrowing, 275, 276. 
 
 remedy of lender, 275, 276. 
 subrogation of lender, 275. 
 contracts of company, 253. 
 majority of members not all-powerful, 242. 
 outsiders presumed to know constitution, 44. 
 
 protected dealing bona fide , 73. 
 payment of dividends out of capital, 215 et seq. 
 proceedings, 66, 68. 
 what acts are, and what not, 66 — 69. 
 
 ULTRA VIRES PROVISIONS AND REGULATIONS, 38. 
 
 UNCALLED CAPITAL, 
 
 charge on, in debenture, 270. 
 
 ‘ ‘ property, ’ ’ not, 271. 
 charging, what words will authorize, 271. 
 mortgaging, 271, 277. 
 
 what power sufficient to justify, 271. 
 reserve, 271. 
 
 UNCLAIMED DIVIDENDS, 
 winding-up, 417. 
 
 UNDERTAKING, 
 
 charge on, meaning of, in debentures, 287. 
 
 power of companies to sell, 66, 425. 
 
 power to sell, in memorandum, 66. 
 
 sale of, under s. 192. .425 et seq. 
 
 taking over, of another company, power of, 65, 68. 
 
 UNDERWRITING, 337 et seq. 
 
 acceptance of agreement or letter after list closed, 338. 
 commissions for, 340 et seq. 
 
 must not exceed what allowed by articles, 340, 341. 
 formerly only payable where public offers, 341. 
 promoters’ power to pay, 340, 341. 
 when permitted, 340. 
 
 conditions precedent in agreement or letter of, 338, 339. 
 disclosure, 342, 348. 
 form of agreement or letter, 338. 
 object of, 337. 
 
 private company, by, 341, 342, 368. 
 prospectus, statement in, 348. 
 repudiation for misstatements in prospectus, 342. 
 reconstruction, on, 341. 
 when contract complete, 340 et seq. 
 
 61 
 
 45 ( 2 ) 
 
UNDUE PREFERENCE, 
 in winding-up, 415, 503. 
 
 INDEX. 
 
 UNINCORPORATED COMPANY, 5. 
 nature of, 5. 
 
 origin of, 5, 6. 
 
 where constituted by contract, 6. 
 
 deed of settlement of, 6. 
 winding-up of, 389, 390. 
 
 UNLIMITED COMPANY, 381. 
 
 forms of memorandum and articles, 542. 
 re-registration as limited, 463. 
 
 may by resolution for re-registration provide for reserve capital, 
 
 464. 
 
 UNLIMITED LIABILITY OF DIRECTORS, 464. 
 
 UNREGISTERED ASSOCIATIONS, 
 illegality, 386. 
 land companies, 387. 
 mutual insurance, 387. 
 registration under Part VII. . . 385. 
 what are, 386. 
 
 winding-up of, sect. 267. .517. 
 
 UNTRUE STATEMENT IN PROSPECTUS, 
 liability, 357, 471. 
 
 VACANCY, 
 
 committee of inspection, in, 494. 
 
 directors, in number of, power to act, 195, 532. 
 
 VALUATION, 
 
 life assurance policies, of, 585. 
 
 VARIATION OF CONTRACTS, 
 
 referred to in prospectus or statement in lieu of, 364, 471. 
 
 VENDOR, 
 
 present of qualification to director by, 185. 
 promoter, 334. 
 
 prospectus, for purposes of, who is, 348, 349. 
 
 VERBAL CONTRACTS, 
 how made, 256. 
 
 VERBAL NOTICE, 
 to company, 234. 
 
 VOIDABLE CONTRACT, 
 
 to take shares, 107, 108, 110, 112 et seq., 352. 
 
 VOLUNTARY WINDING-UP, 418 et seq., 498 et seq. 
 applications to Court in, 420, 500. 
 circumstances for, 418, 498. 
 commencement, 419, 498. 
 conclusion of, 422, 501. 
 consequences of, 419, 498. 
 
 costs, charges, and expenses payable out of assets, 421. 
 creditor may apply to Court in, 420, 500. 
 
 62 
 
INDEX. 
 
 VOLUNTARY WINDING-UP— continued. 
 dissolution may be declared void, 422. 
 final meeting in, 422, 501. 
 forfeiture of shares in, 152. 
 liquidator’s appointment, 419, 498. 
 liquidator’s duties, 420, 499—501. 
 meetings, power of liquidators to call, 420, 422, 500. 
 not a bar to compulsory order, 421, 501. 
 resolutions for, 418. 
 stay of actions and executions, 421. 
 
 supervision, under, 422. [See Winding-up under Supervision. 
 
 VOTES, 
 
 company by its representative, 467. 
 contract as to, 170. 
 general meeting, at, 170. 
 
 multiplying by transfer, 171. 
 members, of, 
 
 fraud on minority, 50, 171. 
 rules as to, 169. 
 
 Table A, 530. 
 transfer to increase, 171. 
 no regulations, where, 466, 467. 
 poll, by, 172. [See Poll.] 
 property, a right of, 170. 
 proxies, 173. [See Proxies.] 
 register evidence of right to, 169. 
 show of hands, by, 172. 
 
 proxies not admissible on, 172. 
 special resolutions, 237. 
 use of, against interest of company, 170. 
 
 WAGES, 
 
 priority in winding-up, 410, 502, 503. 
 
 WAIVER, 
 
 clause in prospectus, invalidity, 349, 351. 
 minimum subscription, as to, 106, 473. 
 notice of allotment, of, 109. 
 
 WARRANTS, 
 
 share, to bearer, 140, 459. 
 
 WARRANTY OF AUTHORITY, 
 of directors, 145, 190, 275, 276. 
 
 WASTING PROPERTY, 
 
 power to pay net income of, in dividends, 216, 219. 
 
 WATERWORKS CLAUSES ACT, the, 4. 
 
 WINDING-UP, 
 
 accelerates payment of debenture, 294. 
 amalgamation, 425. 
 
 arrangements with creditors and contributories, 430, 484, 500. 
 
 bankruptcy rules in, 405, 502. 
 
 companies, what kinds may be wound up, 389. 
 
 compulsory. [See Winding-up (Compulsory).] 
 
 different kinds of, 388. 
 
 dissolution of company, 417, 422. 
 
 floating charge, effect of, 310, 480, 503. 
 
 foreign company, 390. 
 
 63 
 
INDEX. 
 
 WINDIN Gr- UP — con tin ued. 
 
 fraudulent preference, 415, 503 . 
 jurisdiction, 389, 486 . 
 liability in, 404, 416. 
 life assurance company, 384. 
 misfeasance, 406. 
 preferential creditors, 401, 502 . 
 rates, priority of, 410, 502 . 
 reconstruction, 423 et seq. 
 
 sale and transfer of assets under sect. 192. .425. 
 
 scheme of arrangement, 430, 484, 500. 
 
 set-off, 405. 
 
 surplus assets, 416. 
 
 transfers of shares during, 137. 
 
 under supervision, 422. [See Winding-up under Supervision. ] 
 unregistered companies, 389, 517 . 
 voluntary, 418. [See Voluntary Winding-up.] 
 wages, priority of, 410, 502 . 
 
 WINDING-UP (COMPULSORY), 
 
 accounts in, and audit of, 492 , 507 , 508 . 
 accounts to Parliament, annual, sect. 234.. 508 . 
 actions, transfer, 414, 487 . 
 
 liberty to proceed with, 413. 
 advertisements in, 396, 397. 
 affidavits in, 397, 507. 
 applications to Court in, 488 . 
 
 arrangements with creditors and contributories, 430, 484 , 500 . / 
 
 assets, 
 
 collection and distribution of, 401, 491 , 494 . 
 compulsory delivery, 494 . 
 
 attachment of debt due to contributory in Stannaries, sect. 239. . 510 . 
 audit, liquidator’s account, sect. 155. . 492 . 
 
 avoidance of attachments, executions and distresses, 413, 489 , 503 . 
 Bank of England, Court may order payment into, by contributory, 
 &c., sect. 167. . 495 . 
 
 banking account regulated by Court, 492 , 495 . 
 
 Board of Trade, powers in, 508 . 
 books and accounts, 492 . 
 
 disposal of, sect. 222. . 506 . 
 falsification of, sect. 216. . 505 . 
 inspection of, sect. 221. . 505 . 
 books to be evidence, sect. 220. . 505 . 
 
 liquidator to keep record and cash, sect. 156. .492. 
 calls, 148, 495. 
 
 meeting to sanction, 402. 
 power of Court to make, sect. 166. . 495 . 
 carrying on business in, 491 . 
 charge, effect on floating, s. 212. .310, 480 , 503 . 
 circumstances in which company may be wound up, 390, 391, 486 . 
 commencement of, 392, 399, 488 . 
 commission for receiving evidence, s. 226. . 507 . 
 committee of inspection, 401, 493 , 494 . 
 company’s liquidation account defined, s. 229. . 507 . 
 compromise, 430, 484 , 500 . 
 
 conclusion of, statement of liquidator, 417, 418, 495 . 
 contributories, 404, 484 — 486 . 
 absconding, s. 176.. 497 . 
 adjusting rights of, 416, 495 . 
 bankruptcy, 485 . 
 definition of, 485 . 
 liability of, 485 . 
 
 list of, power of Court to settle, s. 163. . 494 . 
 married women, 486 . 
 member’s death, in case of> 485 . 
 
 64 
 
INDEX. 
 
 WINDING-UP (COMPULSORY) — continued. 
 contributories — cont inued. 
 
 order for call on, in Scotland, s. 179 . .497. 
 order on, conclusiveness of, s. 168 . .495. 
 petition by, 394. 
 control of Board of Trade, 493. 
 costs of, proof, 412. 
 
 power of Court over, s. 1 7 1 . .495. 
 
 County Court’s jurisdiction in, 389. 
 
 Court, by, 391 et seq. 
 
 power of, to adjourn, 398, 488. 
 
 to dismiss petition, 488. 
 
 Courts having jurisdiction in, 389, 486. 
 
 creditors and contributories, Courts to regard wishes of, 414, 489. 
 creditors, 
 
 petition by, 392. 
 preferential, 410, 502. 
 proof by, 409, 412. 
 
 undisputed debt a primd facie right to order, 391. 
 custody of company’s property, s. 150 . .490. 
 
 Crown debts, 410. 
 
 debenture holders, petition by, 328. 
 proof by, 329. 
 
 debtor of company, bankruptcy and insolvency of, s. 151 . .491. 
 debts, priority of certain, over debenture holders, 410, 480. 
 proof of, 409, 412, 502. 
 
 defunct companies, striking off register, s. 242. .54, 511. 
 delivery of property, power of Court to order, s. 164. .494. 
 dispositions by directors or liquidators pending, or after, 207. 
 dissolution of company, 417, 495, 506. 
 notice to registrar, 495. 
 penalty for not reporting, 495. 
 power of Court to declare void, 506. 
 dividends in, 412, 495. 
 
 unclaimed, 417, 506. 
 ejusdem generis rule, 391. 
 
 estates, separate accounts of particular, s. 231 . .508. 
 examination of officers and other persons, 407, 408, 496, 507 
 (Scotland) . 
 
 fees in, scale of, 509. 
 
 application of, s. 232. .508. 
 first meetings, creditors and contributories, of, 401. 
 foreign company, of, 390. 
 
 “further” report, 489, 490. 
 fraudulent preference, 415, 503. 
 general meetings, 491. 
 general scheme of liquidation, s. 214. .504. 
 grounds for, 390, 391. 
 
 substratum gone, 391. 
 guarantee, company limited by, 380, 485. 
 hearing of petition, 398. 
 
 High Court, matters to be heard in, 389. 
 inability to pay debts, 391, 486. 
 information to be furnished, s. 224. .506. 
 injunction to restrain proceedings. [See Injunction.] 
 insolvent company, provisions as to proof, s. 207. .502. 
 interest on debts, 329, 412. 
 
 investment of funds on general account, s. 230. .507. 
 jurisdiction, 389, 486. 
 
 Ireland, in, 487. 
 
 Scotland, in, 487. 
 
 “just and equitable,” 391, 486. 
 
 leave to proceed with actions, &c., notwithstanding, 413, 488. 
 life assurance company, of, 384. 
 
 65 
 
INDEX. 
 
 WINDING-UP (COMPULSORY)-*™*™^. 
 
 liquidator, 400 et seq., 490 et seq. [See Liquidator.] 
 meetings of creditors and contributories, 401 , 491, 492, 505. 
 misfeasance and breach of trust, 406 , 505. 
 
 order for payment of damages for, a final judgment, 407. 
 notice of signatures, judicial, s. 225. .506. 
 official receiver, 489. [And see Official Receiver.] 
 order, 399. 
 
 appeals from, 497. 
 
 copy of, to be forwarded to registrar, 489. 
 effect of, 488. 
 
 enforcement of, ss. 178 , 180 . .497. 
 
 in Ireland and Scotland, 497. 
 
 ex debito justitice, when, 391. 
 
 may be made notwithstanding deficient or no assets, 393 , 488. 
 relates back, 399 , 488, 502. 
 wishes of creditors and contributories, 414 . 
 pari passu payment, 410 . 
 payment of debts by contributories, 404 , 495. 
 power to order, s. 165. .494. 
 
 • payments into and out of bank, 492. 
 perjury, penalty for, s. 218 . .505. 
 petition, 391 et seq. [See Petition to Wind up.] 
 preferential creditors, 410 , 502. 
 private examination, in, 407 , 496. 
 proceedings in, subsequent, 400 . 
 proofs in, 409 , 412 , 502. [See Proof.] 
 fixing time for, s. 169 . .495. 
 
 prosecution of delinquent directors and promoters, 415 , 505. 
 provisional liquidator, appointment of, 400 . 
 public examination in, 408 , 496. 
 
 purchaser may be ordered to pay money into the bank, 495. 
 
 rates, priority of, 410, 502. 
 
 receiver, s. 160. .493, 494. 
 
 release of liquidator, 417, 492. 
 
 restraining proceedings, 413, 488. 
 
 returns by officers, s. 235. .509. 
 
 returns by Treasury of receipts and expenditure, 508. 
 rules and fees, power of Court to make, s. 238 . . 509. 
 sale of property in, 402 , 491. 
 
 Scotland, examination of persons in, s. 227 . .507. 
 provisions as to, s. 213 . . 504. 
 ranking in, s. 208 . . 502. 
 secured creditors, 411. 
 special manager, appointment of, 493, 494. 
 
 Stannaries jurisdiction, transfer of, 389, 486, 487. 
 
 preferential payments in, s. 240 . .510. 
 statement of affairs, 400 , 489. 
 stay of actions, executions, &c., 413 , 488. 
 stay of winding-up proceedings, 417 (s. 144 ), 489. 
 surplus assets, 416 . 
 termination of, 417 , 422 , 495. 
 
 statements by liquidator to registrar, 495. 
 title of proceedings in High Court, 395 . 
 transfer of pending actions to judge in winding-up, 487. 
 transfers of shares during, 137 , 502. 
 unclaimed funds and undistributed assets, 417 , 506. 
 unregistered companies, 389 , 517. 
 wages, priority of, 410 , 502, 503. 
 wishes of creditors and contributories, 414 , 489. 491. 
 year, not finished within, 5t6. 
 
 WINDING-UP (VOLUNTARY), 418 et seq., 498. [See Voluntary 
 Winding-up.] 
 
 66 
 
INDEX. 
 
 WINDING-UP (UNDER SUPERVISION), 422, 501 et seq. 
 
 adoption by Court of proceedings in the voluntary winding-up, 501. 
 
 disposition of property, s. 205. .502. 
 
 operation of order, 422, 501, 502. 
 
 petition for, as to stay of actions, s. 200. .501. 
 
 power to appoint or remove liquidator, s. 202 . . 501. 
 
 restrictions contained in order, 423. 
 
 Scotland and Ireland, in, 502. 
 
 transfer of shares, s. 205 . . 502. 
 
 wishes of creditors and contributories, s. 201 . .501. 
 
 WITHDRAWAL OF APPLICATION FOR SHARES, 103, 108. 
 after allotment, 108, 352 et seq. 
 before allotment, 103. 
 
 WITNESSES, 
 
 signatures of subscribers of memorandum and articles, to, 34 — 36. 
 
 WORKING CAPITAL, 33. [See Capital.] 
 
 WORKMEN’S COMPENSATION ACT, 
 preferential payments under, 410. 
 
 WRIT, 
 
 company, by, 
 
 form of, 268. 
 service on company, 234. 
 
 WRITING, 
 
 transfer of shares, when only in, 133, 134. 
 
 LONDON: PRINTED BY C. F. RO WORTH, 88, FETTER LANE. E.C. 
 
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