Company - 1900- 1929

Company Law, including Partnership, Company Director Disqualification. See also Insolvency.

These cases are extracted from a very large database. The entries on that database are now being published individually to the main swarb.co.uk website in a much improved form. As cases are published here, the entry here will be replaced by a link to the same case in that improved form on swarb.co.uk. In addition the swarb.co.uk site includes very substantial numbers of cases after 2000. Please take the time to look.  

This page lists 70 cases, and was prepared on 18 May 2014. These case are being transferred one by one to the main swarb.co.uk site which presents them better, with links to full text where we have it, and much improved cross referencing.
Allan -v- Gold Reefs of West Africa Ltd; CA 1900
Dixon -v- Kennaway & Co [1900] 1 Ch 833
1900

Farwell J
Company, Estoppel
1 Cites

Farwell J: "There is no doubt on the authorities that a certificate under the seal of the company estops the company from denying the title of a person who has accepted and acted on the certificate. In Knights –v- Wiffen [LR 5 QB 660 at 665] Blackburn J defines estoppel as follows: "Where one states a thing to another, with a view to the other altering his position, or knowing that, as a reasonable man, he will alter his position, then the person to whom the statement is made is entitled to hold the other bound, and the matter is regulated by the state of facts imported by the statement.". I accept that as a good definition of estoppel …" and "It is plain that when Blackburn J uses the phrase "alter his position" he does not mean that an active alteration is necessary, but that it is sufficient if the person to whom the statement is made rests satisfied with the position taken up by him in reliance on the statement, so that he suffers loss."
Gluckstein -v- Barnes; Re Olympia Ltd, ex parte Gluckstein; HL 1900
Townsend -v- Jarman [1900] 2 Ch 698
1900

Farwell J
Company, Contract Casemap

A partner gave a covenant not to carry on the business of a corn, seed or manure merchant or nurseryman within a distance of 40 miles from Chard. The partners sold the business to a company, of which they remained directors. It was wound up, and the goodwill sold to Mr Townsend. Held. The benefit of the restrictive covenant passed as incident to the goodwill. Where there is a sale of the goodwill of a business, an assignment of a restrictive covenant will be implied, if it is not expressly excluded.
In re Ford, Ex parte the Trustee [1900] 2 QB 211
1900

Insolvency, Company Casemap
1 Citers
Dovey and The Metropolitan Bank (of England and Wales), Limited -v- Cory; 1901
Borland's Trustee -v- Steel Brothers & Co Ltd [1901] 1 Ch 279
1901

Farwell J
Company, Insolvency Casemap

Mr Borland was a shareholder. The company's articles contained pre-emption rights, such that on a shareholder's bankruptcy, he had, on receiving a transfer notice from the directors, to transfer his shares to a manager or assistant at a fair value calculated in accordance with the articles. His trustee said that the transfer articles were void because, among other reasons, they amounted to a fraud upon the bankruptcy laws, and could not prevail when bankruptcy had supervened, since the trustee was forced to part with the shares at less than their true value, and the asset was not fully available for creditors. Held: Farwell J said: "a simple stipulation that upon a man's becoming bankrupt that which was his property up to the date of the bankruptcy should go over to some one else and be taken away from his creditors, is void as being a violation of the policy of the bankrupt law". It was a commercial arrangement, and the provisions were were a fair agreement for the business of the company. They were binding equally on all shareholders. There was no suggestion of fraudulent preference, and nothing obnoxious to the bankruptcy law in a clause which provided that if a man became bankrupt he should sell his shares. The price was a fixed sum for all persons alike, and no difference in price arose in the case of bankruptcy. The purpose was that there should be in the company, if it were so desired, none but managers and workers in Burma. There was nothing repugnant in the way in which the value of the shares was to be ascertained. It would have been different if there were any provision in the articles compelling persons to sell their shares in the event of bankruptcy at something less than the price that they would have otherwise obtained, since such a provision would be repugnant to the bankruptcy law
He described the nature of a company share: "It is the interest of a person in the company, that interest being composed of rights and obligations which are defined by the Companies Act and by the memorandum and articles of association of the company." and one with limited liability in a company: "A share is the interest of the shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section 16 of the Companies Act 1862. The contract contained in the articles of association is one of the original incidents of the share. A share is . . an interest measured by a sum of money and made up of various rights contained in the contract, including the right to a sum of money of a more or less amount."
Borland's Trustee -v- Steel Brothers; 1901
Taff Vale Railway Co -v- Amalgamated Society of Railway Servants; HL 22-Jul-1901
Aerators Ltd -v- Tollitt [1902] 2 Ch 319
1902

Company
When looking at whether a proposed company name was too similar to an existing one, the registrar could look to the sort of name chosen by the existing company.
Re Joplin Brewery Co Ltd; ChD 1902
Percival -v- Wright; 1902
In re I C Johnson; CA 01-May-1902
Wise -v- The Perpetual Trustee Company Limited (Executors of WH Paling (Deceased); PC 13-Dec-1902
In re Yorkshire Woolcombers Association Ltd; ChD 1903
Pulsford -v- Devenish; ChD 1903
In re London and Globe Finance Corporation Ltd [1903] 1 Ch 728
1903
ChD
Buckley J
Insolvency, Crime, Company Casemap
1 Citers
A company which had gone from voluntary winding up, first to winding up under supervision and then to compulsory winding up, with the official receiver as liquidator. The company's former managing director was suspected of fraud, but the law officers declined to prosecute. Some of the shareholders wished to prosecute him, mainly at the expense of the company's assets (although they offered to pay into court at least £1,250 of their own money) while others opposed the prosecution as a waste of money. Held: The court authorised the liquidator, the official receiver, to do so at the expense of the company. Buckley J said: "the general scheme of the Acts with reference to the liquidation of a company no doubt is that the assets are to be realised to the best advantage for the benefit of those who are entitled to share in their distribution. But indications are not wanting that the assets may under the Acts be applied for some purposes other than these. Section 167 of the [1862 Act] is, having regard to the reasons which I have just given, one example of this, and in the [1890 Act] the same intent may be traced in sections 7 and 8 of that Act. These are sections which require the preparation of a statement of the company's affairs at the expense of the assets leading to a preliminary report, which is to show whether further inquiry is desirable as to matters relating to the promotion and the like, and, if necessary, to a public examination of parties incriminated, with the purpose, of course, of enforcing commercial morality. It is, therefore, in my judgement plain that the principle upon which I am to apply, or refuse to apply, section 167 is not measured or limited or even concerned with pecuniary benefit to be obtained for the shareholders or creditors."
and
' To deceive is, I apprehend, to induce a man to believe that a thing is true which is false, and which the person practising the deceit knows or believes to be false. To defraud is to deprive by deceit: it is by deceit to induce a man to act to his injury. More tersely it may be put, that to deceive is by falsehood to induce a state of mind ; to defraud is by deceit to induce a course of action."
Companies Act 1862 167
In re Anglo-Oriental Carpet Manufacturing Company; ChD 1903
Formby -v- Baker [1903] 2 Ch 539
1903

Company

The term "successors and assigns" was used in case of covenants given by limited companies to ensure that the covenants were not limited to being personal obligations of the company.
In re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 295
2 Jan 1903
CA
Romer LJ, Vaughan Williams LJ
Company, Banking Casemap

1 Citers
The court considered the nature of a debenture charge. Romer LJ: "I certainly do not intend to attempt to give an exact definition of the term 'floating charge', nor am I prepared to say that there will not be a floating charge within the meaning of the Act, which does not contain all the three characteristics …". "I certainly think that if a charge has the three characteristics that I am about to mention it is a floating charge. (1) If it is a charge on a class of assets of a company present and future; (2) if that class is one which, in the ordinary course of business of the company, would be changing from time to time; and (3) if you find that by the charge it is contemplated that, until some future step is taken by or on behalf of those interested in the charge, the company may carry on its business in the ordinary way as far as concerns the particular class of assets I am dealing with." and (Vaughan Williams LJ) "… what you do require to make a specific security is that the security whenever it has once come into existence, and been identified or appropriated as a security, shall never thereafter at the will of the mortgagor cease to be a security."
Illingworth -v- Houldsworth; HL 1904
Re Sussex Brick Co Ltd [1904] 1 Ch 598
1904

Vaughan Williams LJ, Stirling LJ
Company Casemap
1 Citers
The court should not generally order rectification of a company's registers where this would prejudice third party rights. Vaughan Williams LJ: "… I do not mean for a moment to suggest that any one is entitled to such an order ex debito justitiæ; it is a matter in the discretion of the judge, and there might be cases in which the judge, although he considered such an order essential to completely establishing the rights of the applicant, might refuse to do so because he thought it would work injustice to other members of the company. If I thought here that such an order would work injustice to other persons, especially to persons who are not in any way bound by the mistake of the company, I should feel considerable hesitation in making the order …"
Stirling LJ: "I may point out that the power … is not imperative. All it says is that the Court 'may' in a proper case make an order for rectification. Therefore the Court has full discretion to deal with every particular case which comes before it in such a way as may do complete justice …"
Re Tea Corporation [1904] 1 Ch 12
1904
CA
Vaughan Williams LJ, Romer LJ
Company Casemap
1 Citers
A scheme was proposed in a liquidation and a meeting of, inter alia, ordinary shareholders was proposed, who were to be given shares in the new company in place of their shares in the old, so to that extent they were affected by the scheme. The shareholders voted against the scheme; the other relevant participants voted in favour of it. On the hearing for sanction the scheme was held to stand. At first instance the amount of the company's assets was the subject of an agreement and that amount negatived as a fact the notion that there could be any return to shareholders, so they had no financial interest. Held: In those circumstances the vote of the shareholders could be disregarded.
Vaughan Williams LJ "In the present case the contributories were divided into two classes, preference shareholders and ordinary shareholders, and they voted in those classes, and the majority of the preference shareholders voted in favour of the scheme. It is said, however, that the scheme is rendered defective because the ordinary shareholders did not vote in favour of it. I think the right answer to this was given by Buckley J [the Judge at first instance]. You are to divide the shareholders into classes, and when you have done that you find that the preference shareholders have an interest in the assets. But when you come to the ordinary shareholders you find that they have no interest whatever in the assets, and Buckley J. was of opinion that, having regard to this fact, their dissent from the scheme was immaterial. I think that the learned judge was right in so holding. It seems to me that by the very terms of s. 24 you are to divide the contributories into classes and to call meetings of each class, and if you have the assent to the scheme of all those classes who have an interest in the matter, you ought not to consider the votes of those classes who have really no interest at all. It would be very unfortunate if a different view had to be taken, for if there were ordinary shareholders who had really no interest in the company's assets, and a scheme had been approved by the creditors, and all those were really interested in the assets, the ordinary shareholders would be able to say that it should not be carried into effect unless some terms were made with them." Romer LJ "Having regard to the evidence and the admissions made in the court below, I think [the judge] was right in drawing the inference that the ordinary shareholders had no interest and I base my judgment solely on that ground. That being so, I can see no difficulty in holding that this scheme is only an arrangement as between the company and their creditors and as between the company and the preference shareholders and as such it is authorised by s 2 of the Act of 1870 combined with s 24 of the Companies Act 1900. It is true that by the scheme some shares in the new company are offered to the ordinary shareholders in the old company; but I think that must be regarded as a gift by the creditors and the preference shareholders to the ordinary shareholders, and not as showing that they had an interest in the assets which they were surrendering."
Re South African Supply and Cold Storage Co [1904] 2 Ch. 268
1904

Buckley J
Company Casemap
1 Citers
The court had to construe the words "reconstruction or amalgamation" in the memorandum of association of a company: "The only question I have to decide is whether, in the case of each of these two companies, there has or has not been a winding-up "for the purpose of reconstruction or amalgamation." Neither of words, "reconstruction" and "amalgamation", has any definite legal meaning. Each is a commercial and not a legal term, and even as a commercial term, there is no exact definite meaning. In each case one has to decide whether the transaction is such that, in the meaning of commercial men, it is one which is comprehended in the term "reconstruction" or "amalgamation"". And "Then it remains to consider whether what was done was for the purpose of "reconstruction or amalgamation." What does "reconstruction" mean? To my mind it means this. An undertaking of some definite kind is being carried on, and the conclusion is arrived at that it is not desirable to kill that undertaking, but that it is desirable to preserve it in some form, and to do so, not by selling it to an outsider who shall carry it on – that would be a mere sale – but in some altered form to continue the undertaking in such a manner as that the persons now carrying it on will substantially continue to carry it on. It involves, I think, that substantially the same business shall be carried on and substantially the same persons shall carry it on. But it does not involve that all the assets shall pass to the new company or resuscitated company, or that all the shareholders of the old company shall be shareholders in the new company or resuscitated company. Substantially the business and the persons interested must be the same. Does it make any difference that the new company or resuscitated company does or does not take over the liabilities? I think not. I think it is none the less a reconstruction because from the assets taken over some part is excepted provided that substantially the business is taken, and it is immaterial whether the liabilities are taken over by the new or resuscitated company or are provided for by excepting from the scheme of reconstruction a sufficient amount to answer them. It is not, therefore, vital that either the whole assets should be taken over or that the liabilities would be taken over. You have to see whether substantially the same persons carry on the same business; and if they do, that, I conceive, is a reconstruction."
British Vacuum Cleaner Co Ltd -v- New Vacuum Cleaner Co Ltd; 1904
Law -v- Law [1905] 1 Ch 140
1905

Cozens-Hardy LJ
Contract, Company Casemap
1 Citers
A person with a right to rescind a contract may be held to have affirmed the contract even if there are some material facts which he did not know at the time of the affirmation. However: "… there is a duty resting upon the purchaser who knows, and is aware that he knows, more about the partnership accounts than the vendor, to put the vendor on possession of all material facts with reference to the partnership assets, and not to conceal what he alone knows; and that, unless such information has been furnished, the sale is voidable and may be set aside."
Ellis -v- Joseph Ellis & Co; CA 1905
In re West Coast Gold Fields Ltd; 1905
Sheffield Corporation -v- Barclay [1905] AC 392
1905
HL
Lord Halsbury, Lord Davey, Lord Robertson
Company Casemap
1 Cites
1 Citers
Authorised irredeemable stock in Sheffield Corporation was registered in the joint names of Timbrell and Honnywill. Timbrell executed an appropriate form of transfer of the stock in his own name but forged the signature of Honnywill. The forged transfer was in favour of a bank, Barclay's, as a lender. The bank sent the forged transfer to the Corporation for registration and the Corporation acted upon that request. The bank was thus given a stock certificate and, before or after that, the bank's stock was sold on to holders for value to whom, the Bank having returned its certificate to the Corporation, the Corporation gave fresh stock certificates. Timbrell died and Honnywill then discovered the fraud and successfully insisted in proceedings that the stock of which he had been defrauded should be restored to him, as it was, at the Corporation's expense. The Corporation then sued the bank for an indemnity. Had the Corporation any remedy against the bank which had asked it to act upon the forged transfer? Held: The corporation was entitled to an indemnity from the bank. Adopting Dugdale -v- Lovering: "The principle insisted upon by Mr Cave in his argument quoted above has been undoubtedly sanctioned as part of the law by several old decisions, and I think the principle as enunciated is well-established."
Lord Davey: "I think that the appellants [Sheffield Corporation] have a statutory duty to register all valid transfers, and on the demand of the transferee to issue to him a fresh certificate of title to the stock comprised therein. But, of course, it is a breach of their duty and a wrong to the existing holders of stock for the appellants to remove their names and register the stock in the name of the proposed transferee if the latter has, in fact, no title to require the appellants to do so. I am further of opinion that where a person invested with a statutory or common law duty of a ministerial character is called upon to exercise that duty on the request, direction, or demand of another (it does not seem to me to matter which word you use), and without any default on his own part acts in a manner which is apparently legal but is, in fact, illegal and a breach of the duty, and thereby incurs liability to third parties, there is implied by law a contract by the person making the request to keep indemnified the person having the duty against any liability which may result from such exercise of the supposed duty. And it makes no difference that the person making the request is not aware of the invalidity in his title to make the request, or could not with reasonable diligence have discovered it." and as to Dugdale v Lovering: "I am also of opinion that the authority keeping a stock register has no duty of keeping the register correct which they owe to those who come with transfers. Their only duty (if that be the proper expression) is one which they owe to the stockholders who are on the register. This point was decided by all the learned Judges who took part in the decision of the first case of Simm –v- Anglo-American Telegraph [5 QBD 188]. I will content myself with quoting the language of Cotton L.J. [at 214] "The duty of the company is not to accept a forged transfer, and no duty to make inquiries exists towards the person bringing the transfer. It is merely an obligation upon the company to take care that they do not get into difficulties in consequence of their accepting a forged transfer, and it may be said to be an obligation towards the stockholder not to take the stock out of his name unless he has executed a transfer; but it is only a duty in this sense, that unless the company act upon a genuine transfer they may be liable to the real stockholder."."
Ruben -v- Great Fingall Consolidated [1906] 1 AC 439
1906
HL
Lord James, Lord Loreburn, Lord Macnaghten, ord Davey
Company
1 Cites
1 Citers
The company secretary, to pursue a fraudulent objective of his own, presented to innocent lenders a share certificate appearing to be that of the company and appearing to be signed by two directors as well as by the secretary. However, the seal had been affixed by the secretary fraudulently and the secretary had forged the two signatures of the directors.
Lord Loreburn said: "I cannot see upon what principle your Lordships can hold that the defendants are liable in this action. The forged certificate is a pure nullity. It is quite true that persons dealing with limited liability companies are not bound to inquire into their indoor management, and will not be affected by irregularities of which they had no notice, But this doctrine, which is well established, applies only to irregularities that otherwise might affect a genuine transaction. It cannot apply to a forgery.
Another ground was pressed upon us, namely, that this certificate was delivered by Rowe in the course of his employment, and that delivery imported a representation or warranty that the certificate was genuine. He had not, nor was held out as having, authority to make any such representation or to give any such warranty. And certainly no such authority arises from the simple fact that he held the office of secretary and was a proper person to deliver certificates. Nor am I able to see how the defendant company is estopped from disputing the genuineness of this certificate. That, indeed, is only another way of stating the same contention. From beginning to end the company itself and its officers, with the exception of the secretary, had nothing to do either with the preparation or issue of the document.
No precedent has been quoted in support of the plaintiffs' contention except the case of Shaw v Port Philip Gold Mining Co(1). I agree with Stirling LJ in regarding that decision as one that may possibly be upheld upon the supposition that the secretary there was, in fact, held out as having authority to warrant the genuineness of a certificate. If that be not so, then in my opinion the decision cannot be sustained."
Lord Macnaghten said: "The thing put forward as the foundation of their claim is a piece of paper which purports to be a certificate of shares in the company. This paper is false and fraudulent from beginning to end. The representation of the company's seal which appears upon it, though made by the impression of the real seal of the company, is counterfeit, and no better than a forgery. The signatures of the two directors which purport to authenticate the sealing are forgeries pure and simple. Every statement in the document is a lie. The only thing real about it is the signature of the secretary of the company, who was the sole author and perpetrator of the fraud. No one would suggest that this fraudulent certificate could of itself give rise to any right or bind or affect the company in any way. It is not the company's deed, and there is nothing to prevent the company from saying so.
Then how can the company be bound or affected by it? The directors have never said or done anything to represent or lead to the belief that this thing was the company's deed. Without such a representation there can be no estoppel.
The fact that this fraudulent certificate was concocted in the company's office and was uttered and sent forth by its author from the place of its origin cannot give it an efficacy which it does not intrinsically possess. The secretary of the company, who is a mere servant, may be the proper hand to deliver out certificates which the company issues in due course, but he can have no authority to guarantee the genuineness of validity of a document which is not the deed of the company.
I could have understood a claim on the part of the appellants if it were incumbent on the company to lock up their seal and guard it as a dangerous beast and if it were culpable carelessness on the part of the directors to commit the care of the seal to their secretary or any other official. That is a view which once commended itself to a jury, but it has been disposed of for good and all by the case of Bank of Ireland v Trustees of Evans' Charities (1) in this House.
Of all the numerous cases that were cited in the opening none, I think, is to the point but Shaw v Port Philip Gold Mining Co.(1), and that, as it seems to me, cannot be supported unless a forced and unreasonable construction be placed on the admissions which were made by the parties in that action."
Lord Davey said: "It is admitted that Rowe was the proper person to deliver certificates to those entitled to them. From this harmless proposition, the appellant slides into another and very different one, that it was the secretary's duty to warrant on behalf of the company the genuineness of the documents he delivered. There is no evidence that any such duty or power was, in fact, entrusted to Rowe and it is too great a strain on my powers to ask me to imply it from the mere fact of his being the secretary or the proper person to deliver documents."
In Re Bourne [1906] 2 Ch 427
1906
CA
Vaughan Williams LJ
Company
1 Citers
On the dissolution of a partnership and in the absence of some agreement to the contrary, the partners have the right, and the duty, to realise the partnership properly and for the purpose of that realisation to carry on the business if it is necessary so to do.
Partnership Act 1890
Attorney-General -v- Mersey Railway Co [1907] AC 415
1906
HL
Company Casemap
1 Citers
Trimble -v- Goldberg [1906] AC 494
1906
PC
Lord Macnaghten
Company
1 Citers
The parties entered into a partnership to acquire "stands of land" for conversion into a township and subsequent re-sale. The land was acquired, along with shares in a company owning other stands in the same locality. One of the partners then bought that company's other stands himself, having been shown them while in Johannesburg for the purpose of finalising the terms of the partnership's acquisition. Held: The partner was not liable to account because "the purchase was not within the scope of the partnership", even though he found out about the land while on partnership business and his personal purchase was an identical type of investment to that of the partnership. A breach of contract arising as a result of breach of a term of good faith not to purchase property for a partner's own purposes sounds in damages.
The parties entered into partnership to acquire "stands of land" for conversion into a township and subsequent re-sale. The land was acquired, along with shares in a company owning other stands in the same locality. One of the partners then bought that company's other stands himself, having been shown them while in Johannesburg for the purpose of finalising the terms of the partnership's acquisition. Held. The partner was not liable to account because "the purchase was not within the scope of the partnership", even though he found out about the land while on partnership business and his personal purchase was an identical type of investment to that of the partnership.
De Beers Consolidated Mines Ltd -v- Howe, Surveyor of Taxes; HL 1906
In Re Jackson & Bassford Ltd; ChD 1906
In re Ehrmann Brothers Ltd; CA 1906
Hill -v- Clifford [1907] 2 Ch 236
1907
CA
Cozens-Hardy MR and Buckley LJ
Company Casemap

(Majority) An earlier decision of the GMC striking the defendant off the register of dentists was prima facie evidence of the truth of the charges against him.
In re Bulawayo [1907] 2 Ch 458
1907

Company
1 Citers
The court asked as to the possibility of appointing a company as a director of another company in the absence of an express power in the articles.
Companies Act 1862
Clark -v- Balm, Hill & Co; 1908
Great Eastern Railway Company -v- Lord's Trustee; HL 1909
Stubbs -v- Slater [1910] 1 Ch 632
1910

Neville J
Company, Equity Casemap


A deposit by guarantors who had agreed "to assign to [the Bank] their certificates of shares in [PPL] by way of deposit", together with endorsed transfers in blank, would create an equitable mortgage with an implied power of sale. Neville J discussed whether an agreement was collateral: "The concealed remuneration obtained by the agents in the present case is in the precise matter in which they were instructed to act as agents for their principal. Consequently it cannot be said, as in Hippisley v. Knee Brothers , that what they did was something which was collateral to, and not directly within, their duty as agents. That determines this matter so far as the question of commission is concerned."
Weiner -v- Harris [1910] 1 KB 285
1910
CA
Cozens-Hardy MR
Company Casemap
1 Citers
"It is quite plain that by the mere use of a well known legal phrase you cannot constitute a transaction that which you attempt to describe by that phrase. Perhaps the commonest instance of all, which has come before the courts in many phrases is this: two partners enter into a transaction and say "it is hereby declared that there is no partnership between us". The court pays no regard to that. The Court looks at the transaction and says "is this, in point of law, really a partnership?" It is not in the least conclusive that the parties have used a term or language intended to indicate the transaction is not that which in law it is."
In re John Tweddle & Company Ltd [1910] 2 KB 697
1910
CA
Farwell LJ
Insolvency, Company Casemap
1 Citers
The court discussed the official receiver's enquiries and report leading up to the public examination of former directors, saying: "Now those are functions of a judicial character which are cast upon him, not in the liquidation of the company for the benefit of the assets, but primarily at any rate for the protection of the public. One has to bear in mind that in 1890 there had been various company failures, and it was thought that more drastic legislation was required against directors and promoters and people standing in that position, and I have no doubt that this section was passed for that purpose. It is said, and with some truth, perhaps, that it is a little hard on the company if the view that we take is correct that the costs of all this should come out of the company's assets; but a company only exists by favour of and on the conditions imposed by the legislature, and it is not immaterial to observe that as long ago as 1862, under the 167th section of the Act of 1862, if directors were prosecuted (as mentioned in that section) the expense of the prosecution came out of the assets of the company".
Attorney-General -v- Boden [1912] 1 KB 539
1912

Company, Taxes - Other Casemap
1 Citers
There was a partnership between a father and his two sons. The sons were obliged to devote their whole time to the practice, the father only so much time as he wished. On his death the sons were to pay out to his estate the value of the capital but not including any charge for goodwill. The revenue sought to bring in the father's share of the goodwill. Held: Allowing for the different obligations, the sons acquired their father's share in the goodwill as bona fide purchasers for value. Where it can be shown that the partnership agreement represented a true bargain, it was arguable that the only asset that passed for estate duty purposes was the right of the estate to receive the payment provided for in the agreement.
Pink -v- Sharwood; 1913
Transvaal Lands Co -v- New Belgium (Transvaal) Land and Development Co [1914] 2 Ch 488
1914

Company Casemap

A director has a duty to account for any secret profit if he has an undisclosed and unapproved conflict of interest. The rule against self dealing applies to cases where the fiduciary has conflicting duties to each of the contracting parties.
Allen -v- Hyatt (1914) 30 TLR 444
1914

Company Casemap

The court considered the duties of directors toward shareholders in circumstances of them making representations to secure options to purchase shares of shareholders and undertaking to sell shares of shareholders in agency capacity.
Von Hellfield -v- E Rechnitzer and Mayer Frères & Co [1914] 1 Ch 748
1914
CA
Buckley Phillimore LJJ
Company, Litigation Practice Casemap
1 Citers
A French partnership did not carry on business within the UK. It was sued in its firm name in respect of a contract signed in the name of the firm. The evidence of French law did not establish that the French partnership was a totally separate legal entity from the individual partners in it, although it was a legal person for the purpose of service of legal proceedings upon it. Held: The Court upheld the judge's order setting aside the writ which named the firm as the defendant on the ground that Ord 48A did not apply and that the writ was not properly issued naming the firm as a defendant.
Phillimore LJ: "According to our modern practice there are three classes who can sue, or appear to writs, - persons, corporations, and firms. The introduction of partnerships is comparatively modern and since the Judicature Act, but the fact is merely for convenience of nomenclature and of service; the results are in the end the same as if the individuals composing them sued or were sued by their individual names. It is clear from the case of Dobson v Festi, Rasini & Co (1) that some similar procedure now obtains in Italy, and it appears from this case that some similar procedure now exists in France. That may well be, but our law, being very careful how it interferes with the rights of foreigners, has not allowed service to be effected upon individuals who are engaged in a foreign partnership by serving the partnership as in England. The foreign partners cannot be sued by their firm name, and there is nothing to enable service upon some manager carrying on business for the partners or service on one as service on the rest."
and "They are not enough for this purpose; they are not enough to shew - which is necessary for this purpose - that a société en nom collectif is like a corporation in this respect, not merely that it has a separate persona, but that it has a separate ownership of property and separate liability from the ownership or liability by or of the persons composing the aggregation. I can conceive certain cases of bodies of which one might be doubtful whether they were corporations or not; and upon a writ properly framed alleging that the body sued was a separate entity, and making it clear that no relief was sought against any individual opposing that entity any more than it would be against shareholders in a corporation, I can conceive it being possible to suggest that such a body might be treated as a corporation and might be sued and served as a corporation. But this is on the face of it apparently a partnership, and the affidavit of service of the writ plainly and boldly describes it as a partnership. The rules of English law provide that our ancient process in respect of English people should remain in respect of foreigners."
D & J Nicol -v- Dundee Harbour Trustees; HL 10-Dec-1914
Lennard's Carrying Company Limited -v- Asiatic Petroleum Company Limited; HL 1915
Daimler Co Ltd -v- Continental Tyre and Rubber Company (Great Britain) Limited; HL 1916
Cook -v- Deeks and Hinds; PC 1916
Healey -v- Societé Anonyme Francais Rubastic [1917] 1 KB 946
1917

Avory J
Company Casemap

A director of the company claimed arrears of salary for work done notwithstanding that he had been summarily dismissed for misconduct. There was no question of a claim for damages for breach of duty.
Hood -v- Anchor Line (Henderson Brothers) Limited [1918] AC 837
1918
HL
Contract, Company Casemap

An English court may exercise its jurisdiction in personam over the liquidator to enforce the contract between the chargee and the company, and may require the liquidator to pay the proceeds to the chargee, The Scottish courts did not recognise the validity of a floating charge on a company's assets. Whether term brough to notice of party.
Piercy -v- Mills; ChD 1920
Moriarty -v- Regent’s Garage & Engineering Co Ltd [1921] 1 KB 423
1921
KBD
Lush J, McCardie J
Company Casemap
1 Cites

A company director sought payment of his directors fees of £150 per annum where during the course of the year he had ceased to be a director. There was no allegation of impropriety on his part. The company’s articles provided that the directors should be entitled to fees of a certain amount per annum. The need for apportionment arose from the fact that the director in question had retired by agreement in the course of the year. Held: Directors’ fees constituted "salaries" for the purposes of the 1870 Act. The court could use the 1870 Act to apportion the payment due to him. The "Act, which was passed to remedy a grievance, undoubtedly affected common law rights and obligations." '…the attitude in the minds of the tribunals was to regard the Apportionment Act as a wrongful encroachment upon common law proprieties. I take exactly the opposite view. The Act remedied a grave injustice; it is a remedial Act, and the inclination of every tribunal should be to extend rather than to restrict its operation.' ( McCardie J). As to whether a salaried person would be entitled to apportionment if he had been dismissed for misconduct, the judges disagreed. Lush J: "…I should hesitate to agree with the suggestion that he can claim in such circumstances. It is quite true that the salary is to be considered as accruing from day to day, and it is quite true that a dismissed servant is entitled to salary that has already accrued at all events up to the date of the act of dishonesty, but the Act does not say that in such a case, or for all purposes, the salary shall be deemed to have accrued from day to day; it only says that it shall be considered as accruing from day to day. That provision was merely inserted to facilitate or to extend the apportionment which the legislature was saying should be made. The sum cannot logically be apportioned unless it is treated as accruing from day to day; it is only for that purpose that it is deemed to accrue from day to day. If something has happened during the service which forfeits the right to the salary it may well be that the servant cannot take advantage of the Act… " McCardie: "I do not fail to see the wide stretch of the results which follow from the decision we are now giving, and one of the questions that must arise in the future is whether or not the Apportionment Act will destroy the operation of the rule under which a servant who is dismissed for misconduct loses the whole of the money accruing to him, although he is entitled to get the money that has actually accrued… I express no opinion on this very serious question, which does not arise for direct decision. It may well be said that no servant dismissed for misconduct can rely on that misconduct as a basis for invoking a remedial Act… On the other hand I am not altogether satisfied as to the justice of denying the benefit of the Apportionment Act to a man who has been guilty of misconduct. Suppose a salary is payable half yearly to a man, and suppose he has fulfilled his duties with absolute propriety up to the last week; that he then commits an act which justifies his master in dismissing him. Upon the law as it stands the man gets nothing for his five and a half months’ work. Is it right that he should be deprived of remuneration for five and a half months’ work because during the last fortnight he has done something for which he has been dismissed? I express no opinion upon that point. Ere long it must arise for decision. "
Apportionment Act 1870
Jenkin -v- Pharmaceutical Society of Great Britain [1921] 1 Ch 392
1921

Company Casemap
1 Citers
At common law that a member of a company incorporated by Royal Charter is entitled to an order restraining the commission of acts outside the scope of the charter which may result in the forfeiture of the charter and the destruction of the society.
Moriarty -v- Regent’s Garage & Engineering Co Ltd [1921] 2 KB 766
2 Jan 1921
CA
Scrutton LJ
Company Casemap
1 Cites
1 Citers
Whilst the point was obiter in this case: "… it seems to me that there is no decision binding on the Court of Appeal as to whether directors’ fees are salary within the Apportionment Act in the case where the agreement… is simply for payment of so much per year. I do not express any opinion one way or another. It seems to me a very arguable point, and there does not seem to me at present anything to prevent that question being considered in the Court of Appeal when it arises."
Apportionment Act 1870
Belton -v- Bass; CA 1922
Union Bank of Australia Ltd -v- McClintock; PC 1922
Clarkson -v- Davies; PC 1923
Cruikshank -v- Sutherland; HL 1923
In Re City Equitable Fire Insurance Company Limited; ChD 1924
De Renzy -v- De Renzy [1924] NZLR 1065
1924

Stringer J
Commonwealth, Company
1 Citers
(New Zealand) Brothers were partners. One died and the other, wrongly believing himself entitled to do so under an agreement to purchase his brother's share, made a payment to his brother's estate of the purchase price for that share which he thought to be due and thereafter treated the business as his own. Held: There was no agreement to purchase. The deceased brother's estate was entitled to the profits attributable to the share of the deceased brother in the partnership assets, but that the size of the share was to be reduced by the reason of the payment made.
Performing Right Society Ltd -v- Ciryl Theatrical Syndicate Ltd [1924] 1 KB 1
1924

Atkin LJ
Company Casemap
1 Citers
The court looked at personal responsibility of the directors of a company for torts committed by the company: "If the directors themselves directed or procured the commission of the act they would be liable in whatever sense they did so, whether expressly or impliedly."
Loch -v- John Blackwood Ltd [1924] AC 783 PC; 93 LJPC 257; [1924] B&CR 209; 131 LT 719; 68 SJ 735; 40 TLR 732
1924
PC
Commonwealth, Company Casemap

The section gave five grounds upon which a company may be wound up and a 'just and equitable' ground. Held: the latter was not to be construed restrictively by ejusdem generis with the other grounds. A company could be wound up if a considerable proportion of the shareholders had a proper lack of confidence in the directors, and the directors had a preponderance of effective power.
Macaura -v- Northern Assurance Company Limited; HL 1925
In re Glyncorrwg Colliery Co Ltd [1926] Ch 951
1926

Company, Insolvency Casemap
1 Citers
In a receivership the costs of the receivership (including the cost of realising the property comprised in the charge) had priority to the claims of the charge holder. The preferential payments must be paid before the debenture holders "but not before the costs of liquidation".
Manley -v- Sartori; ChD 1927
In re Windsor Steam Coal Co. (1901) Ltd [1929] 1 Ch 151
1929

Company, Insolvency, Professional Negligence Casemap
1 Citers
The courts look more favourably on applications by gratuitous trustees than on those by paid trustees. In a company winding up the liquidator may be liable to the company for negligence on his part in making a compromise.