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These cases are from the lawindexpro database. They are now being transferred to the swarb.co.uk website in a better form. As a case is published there, an entry here will link to it. The swarb.co.uk site includes many later cases.  














Company - From: 1900 To: 1929

This page lists 85 cases, and was prepared on 02 April 2018.

 
In re Ford, Ex parte the Trustee [1900] 2 QB 211
1900


Insolvency, Company

1 Citers


 
Allan v Gold Reefs of West Africa Ltd [1900] 1 Ch 656
1900
CA
Lord Lindley MR, Romer LJ
Company
The company had altered its articles so as to give itself a lien on paid up shares in respect of the failure of the shareholder to pay calls on other shares which had not been fully paid up. The effect of the amendment was to alter the contractual rights of the shareholder. Held: The amendment to the articles was within the power of the company under s.50 of the 1862 Act.
Lord Lindley MR said: "The power thus conferred on companies to alter the regulations contained in their articles is limited only by the provisions contained in the statute and the conditions contained in the company's memorandum of association. Wide, however, as the language of section 50 is, the power conferred by it must, like all other powers, be exercised subject to those general principles of law and equity which are applicable to all powers conferred on majorities and enabling them to bind minorities. It must be exercised, not only in the manner required by law, but also bona fide for the benefit of the company as a whole, and it must not be exceeded. These conditions are always implied and are seldom if ever expressed but if they are complied with I can see no ground for judicially putting any other restrictions on the power conferred by the section and those contained in it . . Speaking therefore generally and without reference to any particular case, the section clearly authorises a limited company, formed with articles which confer no lien on fully paid up shares, and which allow them to be transferred without any fetter, to alter those articles by special resolution, and to impose a lien and restrictions on the registry of transfers of those shares by members indebted to the company . . But then comes the question whether this can be done so as to impose a lien or restriction in respect of a debt contracted before and existing at the time when the articles are altered. Again speaking generally, I am of opinion that the articles can be so altered and that, if they are altered bona fide for the benefit of the company, they will be valid and binding as altered on the existing holders of paid up shares whether such holders are indebted or not indebted to the company when the alteration is made."
Romer LJ said: "certainly a shareholder could not say as against the company that he was entitled to special rights because he did not pay his debts."
Companies Act 1862 50
1 Citers



 
 Gluckstein v Barnes; Re Olympia Ltd, ex parte Gluckstein; HL 1900 - [1900] AC 240; [1900] 69 LJ CH 385; [1900] 82 LT 393; [1900] 16 TLR 321; [1900] 7 Mans 321
 
Townsend v Jarman [1900] 2 Ch 698
1900

Farwell J
Company, Contract
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.
1 Citers



 
 Dixon v Kennaway and Co; 1900 - [1900] 1 Ch 833
 
Dovey and The Metropolitan Bank (of England and Wales), Limited v Cory [1901] AC 477
1901
HL
Earl of Halsbury LC, Lord Davey
Company
In fulfilling this personal fiduciary responsibility, a director is entitled to rely upon the judgment, information and advice of a fellow director whose integrity skill and competence he has no reason to suspect.
Earl of Halsbury LC said '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.' However, in some circumstances, it is "the duty of the general manager and (possibly) of the chairman to go carefully through the returns from the branches, and to bring before the board any matter requiring their consideration"
No moral blame was attributed to the respondent Mr Cory. Lord Davey said: I think the respondent 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 . . 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 what was said by Sir George Jessel in Hallmark's Case, and by Chitty J. in In re Denham & Co., that directors are not bound to examine the entries in the company's books.
1 Citers


 
Borland's Trustee v Steel Brothers and Co Ltd [1901] 1 Ch 279
1901

Farwell J
Company, Insolvency
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."
1 Citers


 
Borland's Trustee v Steel Brothers [1901] 1 Ch 279
1901

Farwell J
Company
Farwell J defined a share: "a share is the interest of a 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".
1 Citers


 
Taff Vale Railway Co v Amalgamated Society of Railway Servants [1901] UKHL 1; [1901] AC 426
22 Jul 1901
HL
Lord Lindley
Company
A trade union, an unincorporated association, could be sued in its own name despite the absence of any statutory provision permitting it. Lord Lindley said that the problem of how to adapt legal proceedings to unincorporated societies consisting of many members was by no means new, and that the rules of common law had had to be altered to meet them.
1 Citers

[ Bailii ]
 
Burland and Others v Earle and Others [1901] UKPC 49; [1902] AC 83
9 Nov 1901
PC

Commonwealth, Company
(Ontario)
[ Bailii ]
 
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 [1902] 1 Ch 79
1902
ChD
Buckley J
Insolvency, Company
The applicants, owners of a solvent family business, sought to register a charge over the company's assets out of time. Held: Buckley J saw the application under s 15 of the 1900 Act as a similar application to the application to register out of time under s 14 of the 1878 Act. Buckley J referred to the usual practice in applications under s 14 of attaching to any order extending time a proviso to protect the rights of third parties. He said: "These applications are made without serving the creditors, and the orders ought to be drawn so as to save the rights of persons who have become creditors of the company before registration is effected, just as in the case of bills of sale. I therefore direct that there be added to the order the words: "but that this order be without prejudice to the rights of parties acquired prior to the time when the debentures shall be actually registered"; and I intimate my opinion that these words ought to be added in every case, unless there is some good ground to the contrary – eg, in cases in which the order could not prejudice the rights of any creditors." and "these orders are made readily upon proper evidence of accident or inadvertence for the reasons that by the insertion of these words [the without prejudice qualification] the rights of absent parties are not affected."
Companies Act 1900 15 - Bills of Sale Act 1878
1 Citers


 
Percival v Wright [1902] 2 Ch 421
1902


Company
The directors of a company owe their duty to the company as a whole, and are not trustees for individual shareholders or owe them a fiduciary duty merely by virtue of their offices. They may purchase their shares without disclosing pending negotiations for the sale of the company's undertaking.
1 Citers



 
 In re I C Johnson; CA 1-May-1902 - [1902] 2 Ch 101

 
 Wise v The Perpetual Trustee Company Limited (Executors of WH Paling (Deceased); PC 13-Dec-1902 - [1902] UKPC 59; [1903] AC 139
 
In re London and Globe Finance Corporation Ltd [1903] 1 Ch 728
1903
ChD
Buckley J
Insolvency, Crime, Company
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
1 Citers



 
 Formby v Baker; 1903 - [1903] 2 Ch 539
 
In re Anglo-Oriental Carpet Manufacturing Company [1903] 1 Ch 914
1903
ChD
Buckley J
Company, Insolvency
Debentures creating a charge had been issued, but not registered within 21 days. On 1 November 1901, an order was made with the usual proviso ("without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures shall be actually registered") extending time until 15 November 2001. The charge was registered on 15 November 2001. In the meantime, on 11 November, the company passed a resolution for voluntary winding up. Held: The proviso protected the whole general body of creditors. At the commencement of a winding up: "On November 11, 1901, by force of the Act of Parliament, the undertaking and assets of the company passed under the control of the liquidator, whose duty it was to convert them into money, and out of the proceeds to pay the creditors existing at that date. The assets have been said to be impressed in the hands of the liquidator with a statutory trust in favour of the creditors. Upon the commencement of the winding-up an immediate duty was cast upon the liquidator to collect the assets and distribute them among the creditors then existing. At that moment the debenture-holders were unsecured creditors of the company, for they did not hold any security registered as required by the Act of 1900. It has been argued on behalf of the debenture-holders that when registration was made on November 15, 1901, there arose a security which was not in existence at the date when the liquidation commenced. But whether that was so or not, the order extending the time for registration was made "without prejudice to the rights of parties acquired prior to the time when such trust deed and debentures shall be actually registered." Whatever the exact limit of those words may be, they certainly in my judgment include the rights of creditors, acquired on the passing of the winding up resolution, to have the assets realized and distributed among them pari passu."
1 Citers


 
In re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 284
1903
ChD
Farwell J
Banking, Company
Farwell J said: "A charge on all book debts which may now be, or at any time hereafter become charged or assigned, leaving the mortgagor or assignor free to deal with them as he pleases until the mortgagee or assignee intervenes, is not a specific charge, and cannot be. The very essence of a specific charge is that the assignee takes possession, and is the person entitled to receive the book debts at once. So long as he licenses the mortgagor to go on receiving the book debts and carry on the business, it is within the exact definition of a floating security."
1 Citers


 
Pulsford v Devenish [1903] 2 Ch 625
1903
ChD
Farwell J
Insolvency, Professional Negligence, Company
The liquidator in a voluntary liquidation negligently failed to inform the company's creditors of the liquidation, and distributed the company's assets to its contributories without regard to the creditors' claims. The company was later dissolved. Held: The creditors had a claim against the liquidator. The availability of the statutory remedy of a creditor under section 10 and the statutory right of a creditor to apply in a voluntary liquidation under section 138 ceased to exist when the company was dissolved. "But the duty to pay the debts is an absolute statutory duty, without limit in point of time and with no provision for the release of the voluntary liquidator.
It is not necessary to resort to trusteeship or equitable doctrines: the case is one of a duty imposed by a statute on an individual for the benefit of a class of persons, namely, creditors and the only peculiarity of the case is that the remedy created by the statute is not co-extensive in point of time with the duty, for the Act permits the destruction of the remedy before the duty has been performed.
Now the principles applicable to such a duty as I have mentioned are well settled and rest on the well-founded assumption that the Legislature does not intend its enactment to be brutum fulmen: if, therefore, a statute creates such a duty but no remedy, an action at common law (in former days action on the case) will lie for breach of such duty." and "It was urged in argument that the liquidator is merely the agent of the company; but assuming this to be so, I can see nothing inconsistent in the imposition on such agent of a duty to the company's creditors."
Companies Act 1890 10 138
1 Cites

1 Citers


 
In re Yorkshire Woolcombers Association Ltd [1903] 2 Ch 295
2 Jan 1903
CA
Romer LJ, Vaughan Williams LJ
Company, Banking
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."
1 Cites

1 Citers


 
Illingworth v Houldsworth [1904] AC 355
1904
HL
Halsbury, Macnaghten LL
Banking, Company
A clause in a floating charge allowing a company to continue to trade in the assets charged: "contemplates not only that it should carry with it the book debts which were then existing, but it contemplates also the possibility of those book debts being extinguished by payment to the company, and that other book debts should come in and take the place of those that had disappeared. That, my Lords, seems to me to be an essential characteristic of what is properly called a floating security. The recitals . . shew an intention on the part of both parties that the business of the company shall continue to be carried on in the ordinary way - that the book debts shall be at the command of, and for the purpose of being used by, the company. Of course, if there was an absolute assignment of them which fixed the property in them, the company would have no right to touch them at all. The minute after the execution of such an assignment they would have no more interest in them, and would not be allowed to touch them, whereas as a matter of fact it seems to me that the whole purport of this instrument is to enable the company to carry on its business in the ordinary way, to receive the book debts that were due to them, to incur new debts, and to carry on their business exactly as if this deed had not been executed at all. That is what we mean by a floating security." A floating charge: "A specific charge, I think, is one that without more fastens on ascertained and definite property or property capable of being ascertained and defined; a floating charge, on the other hand, is ambulatory and shifting in its nature, hovering over and so to speak floating with the property which it is intended to affect until some event occurs or some act is done which causes it to settle and fasten on the subject of the charge within its reach and grasp." (Lord Macnaghten)
1 Cites

1 Citers


 
British Vacuum Cleaner Co Ltd v New Vacuum Cleaner Co Ltd (1907) 2 Ch 312
1904

Parker J
Intellectual Property, Company
The plaintiff sought to restrain what it said was passing off by the defendant. The test to be applied in passing-off claims is whether there is such a close resemblance between the names as to be calculated to deceive. This is a question of fact. In such a case an injunction might be sought to restrain the use of a newly registered company's name, though Parker J refused one in this instance.
1 Citers


 
Re Tea Corporation [1904] 1 Ch 12
1904
CA
Vaughan Williams LJ, Romer LJ
Company
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."
1 Citers


 
Re South African Supply and Cold Storage Co [1904] 2 Ch 268
1904

Buckley J
Company
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."
1 Citers


 
Re Sussex Brick Co Ltd [1904] 1 Ch 598
1904

Vaughan Williams LJ, Stirling LJ
Company
The court should not generally order rectification of a company's registers where this would prejudice third party rights. Vaughan Williams LJ said: "I do not mean for a moment to suggest that any one is entitled to such an order ex debito justitiae; 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 . . "
1 Citers


 
The Citizens Life Assurance Company Limited v Brown [1904] UKPC 20; [1904] AC 423
6 May 1904
PC
Lord Lindley
Commonwealth, Company, Vicarious Liability
(New South Wales) A malicious libel was alleged. The life assurance company was vicariously liable in respect of a libel contained in a circular sent out by a person who was employed by the company under a written agreement as its "superintendent of agencies". By the terms of the agreement that person was to devote his whole time to furthering the company's business and was to be paid a salary weekly as well as a commission on policies procured by him. Held: He was a servant of the company for whose actions the company was liable. Once companies are recognised by the law as legal persons, they are liable to have the mental states of agents and employees such as dishonesty or malice attributed to them for the purpose of establishing civil liability.
Lord Lindley said: "If it is once granted that corporations are for civil purposes to be regarded as persons, ie as principals acting by agents and servants, it is difficult to see why the ordinary doctrines of agency and of master and servant are not to be applied to corporations as well as to ordinary individuals."
1 Cites

1 Citers

[ Bailii ]

 
 Sheffield Corporation v Barclay; HL 1905 - [1905] AC 392
 
Ellis v Joseph Ellis and Co [1905] 1 KB 324
1905
CA
Lord Collins MR, Cozens-Hardy, Mathew LJJ
Employment, Company, Personal Injury
A member of a partnership formed to work a mine worked in it as foreman. He took weekly wages from the profits. He suffered a fatal accident in the mine and his widow sought compensation under the 1897 Act from the surviving partners. To qualify he had to have been a workman, which was defined broadly in the Act and extended beyond employees strictly defined: "'Workman' includes every person who is engaged in an employment to which this Act applies, whether by way of manual labor or otherwise, and whether his agreement is one of service or apprenticeship or otherwise and is expressed or implied, is oral or in writing". The Court was asked whether, given his position as a partner, he came within the definition. Could he be regarded as a workman in the employ of the partnership with the other partners being his employer? Held: The action failed.
Lord Collins MR thought that he could not: "The supposition that the deceased man was 'employed', within the meaning of that term as used in the Act, would appear to involve that he, as one of the partners, must be looked upon as occupying the position of being one of his own employers. It seems to me that, when one comes to analyse an arrangement of this kind, namely, one by which a partner himself works, and receives sums which are called wages, it really does not create the relation of employers and employed, but is, in truth, a mode of adjusting the amount that must be taken to have been contributed to the partnership assets by a partner who has made what is really a contribution in kind, and does not affect his relation to the other partners, which is that of co-adventurer and not employee. Such a partner cannot put himself in the position of not being a partner when he is one, or of being a workman employed, when that position would involve that he would be both employer and employee. The definition of a 'workman' given in the Act might cover a person in such a position, apart from the difficulty that arises from the consideration that he would be his own employer; but that is not conclusive, because the applicability of the Act appears to depend not merely on the question whether the injured man was a workman within the definition given by the Act, but also on the existence of the relation of employer and workman. Sect.1 sub-s.1 provides that, "if in any employment to which this Act applies personal injury by accident arising out of and in the course of the employment is caused to a workman, his employer shall, subject as hereinafter mentioned, be liable to pay compensation in accordance with the first schedule to this Act." That section appears to me clearly to contemplate a relation between two opposite parties, of whom one is employer and the other employee. It seems to me obvious, when the true position of the deceased is analysed, that he was not such a workman as is contemplated by the Act, and that a person cannot for the purposes of the Act occupy the position of being both employer and employee".
Mathew LJ stated that it was legally impossible for the same person to occupy the position of being both master and servant, employer and employed.
Cozens-Hardy LJ held that "the Act only applies where there is on one side an employer, and on the other side a workman, who are different persons."
Workmen's Compensation Act 1897
1 Citers


 
In re West Coast Gold Fields Ltd [1905] 1 Ch 597
1905

Buckley J
Insolvency, Company
The shareholder was bankrupt, but the company, in which he owned shares on which the capital remined unpaid, was solvent and in voluntary liquidation. Held: The payment-up of the shares in full was a condition precedent to any participation in the distribution of surplus assets. Buckley J said: "The right view is that the person liable as contributory must discharge himself in that character before he can set up that, as a creditor, he is entitled to receive anything, and a fortiori, as it seems to me, before he can set up that, as a contributory, he is entitled to receive anything."
1 Citers


 
Law v Law [1905] 1 Ch 140
1905

Cozens-Hardy LJ
Contract, Company
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."
1 Citers


 
In Re Bourne [1906] 2 Ch 427
1906
CA
Vaughan Williams LJ
Company
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
1 Citers


 
Attorney-General v Mersey Railway Co [1907] AC 415
1906
HL

Company, Transport
The power to make by-laws encompasses not only a company's principle activity, but also all incidental and ancillary activities. The incidental power cannot be used to expand the company's activities, in this case by extending its business by operating its own buses from its terminus.
1 Citers


 
In Re Jackson and Bassford Ltd [1906] 2 Ch 467
1906
ChD
Buckley J
Company
Buckley J distinguished between (1) an agreement to give security which was "so expressed as to create a present equitable right to a security" and was thus registrable against te company registers; and (2) an agreement to give security which was so expressed as to be "merely an agreement that in some future circumstances a security shall in the future be created" (which would not require registration).
1 Citers


 
In re Ehrmann Brothers Ltd [1906] 2 Ch 697
1906
CA
Vaughan Williams, Romer and Cozens-Hardy LJJ
Insolvency, Company
Debentures had been issued after 1 January 1901 secured by a floating charge. It was was not registered in time. The judge had permitted registration, with a proviso as contained in In re I C Johnson, and registration was completed. A compulsory winding up petition was then filed, and the company then itself resolved to wind up. Buckley J allowed the petitioning creditor to take part in an inquiry as to the priorities between the debenture holder and the unsecured creditors. In that inquiry, Joyce J gave the unsecured creditors equal priority with the registered debenture holders. Held: The debenture holder's appeal succeeded, though the intervention of winding up before registration created rights in all the unsecured creditors protected by the proviso.
Vaughan Williams LJ said that the registration (pursuant to the extension) meant that the debentures were "no longer void", limiting the protective effect of the proviso to those who had acquired rights of, or against, the property the subject of the charge prior to registration. He said that Buckley J had expressed the matter too widely in In re Joplin Brewery if he had intended that the proviso protect unsecured creditors generally. He then referred to the dictum of Cozens-Hardy LJ in In re I C Johnson and made clear his view as to the effect of winding up: "Of course, that does not mean only creditors who individually have so done, [that is as Cozens-Hardy LJ in In re I C Johnson said: taken some proceedings to get a charge or security], but creditors who come within the operation and benefit of an order for winding-up giving the creditors a right to have such property administered for their benefit. That is the conclusion which I have come to in this case. I think that the intention of the Legislature, as appears by the statute itself, was, in a case where the omission to register was accidental and the extension of time was a just thing to grant, to place the debenture-holders in the same position as they would have been in if they had registered in due time. But of course the Legislature had to make provision for the rights of those who had obtained rights which existed at the time when the order for the extension of time was made. I do not think that the Legislature meant by that that an unsecured creditor, merely because he was an unsecured creditor at the time the extension order was made, should be allowed to say, "So far as I am concerned, that debenture which was not registered in due time, but which was registered under the order for extension, is a void debenture."
1 Cites

1 Citers



 
 Trimble v Goldberg; PC 1906 - [1906] AC 494
 
Ruben v Great Fingall Consolidated [1906] 1 AC 439
1906
HL
Lord James, Lord Loreburn, Lord Macnaghten, Lord Davey
Company
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."
1 Cites

1 Citers



 
 De Beers Consolidated Mines Ltd v Howe, Surveyor of Taxes; HL 1906 - [1906] AC 445
 
Hill v Clifford [1907] 2 Ch 236
1907
CA
Cozens-Hardy MR and Buckley LJ
Company
(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.
1 Citers


 
In re Bulawayo [1907] 2 Ch 458
1907


Company
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
1 Citers


 
Clark v Balm, Hill and Co [1908] 1 KB 667
1908

Phillimore J
Company
A company registered in Guernsey issued debentures creating floating charges over real and personal property in England. The court was asked whether the debentures ought to be deemed to be within the Bills of Sales Acts and so ought to have been registered as bills of sale in circumstances where the company was not obliged by the law of Guernsey to keep a register of charges. Held: The court applied Read v Joannon and Standard Manufacturing in the effect that all debentures of incorporated bodies were exempt from the Act of 1878; "there was a little error in the judgment of Vaughan Williams J." in Great Northern Ry. Co. and, "I must say that the reasoning of Wills J. in [Read v Joannon] commends itself to my mind."
1 Cites

1 Citers


 
Great Eastern Railway Company v Lord's Trustee [1909] AC 109
1909
HL

Company, Contract, Agency
The House was asked whether the appellant railway company had delivered the goods unconditionally to the goods owner so as to lose its lien for the price of coal carriage, or was there an agreement conferring "a right in equity to any personal chattels or to any charge or security thereon" under the 1878 Act. Held. (Majority) It had not done so. The lien which it exercised, therefore, was based upon its actual possession as carrier of the goods, which was not destroyed by its contractual arrangements with the receiver or by delivery up of the goods. A lien is a mere personal right of detention and therefore requires actual possession.
The word "charge" does not in its ordinary and accepted legal sense embrace a legal possessory lien even, so it would seem, if the contract gives the right of sale.
Bills of Sale Act 1878
1 Citers



 
 Weiner v Harris; CA 1910 - [1910] 1 KB 285

 
 In re John Tweddle and Company Ltd; CA 1910 - [1910] 2 KB 697

 
 Stubbs v Slater; 1910 - [1910] 1 Ch 632
 
Attorney-General v Boden [1912] 1 KB 539
1912


Company, Taxes - Other
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.
1 Citers



 
 Pink v Sharwood; 1913 - (1913) 30 RPC 725
 
Allen v Hyatt (1914) 30 TLR 444
1914


Company
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.
1 Citers


 
Dublin City Distillery (Great Brunswick Street, Dublin) Limited and Another v Doherty [1914] AC 823; 111 LT 8
1914
HL
Lord Parker of Waddington
Equity, Company, Insolvency
D had advanced monies to a distillery company on the security of manufactured whisky stored in a warehouse. On the occasion of each advance, the company delivered to D an invoice and a warrant which described the particulars of the whisky and stated that it was deliverable to D or his assigns. Held: A person against whom the unauthorised liquidator is litigating may not object to such lack of authorisation, for it is a matter between the liquidator and the creditors. Lord Parker stated: "in my opinion s.151 of the Companies (Consolidation) Act, 1908, which enables a liquidator in the case of a winding-up in Ireland to bring or defend legal proceedings with the sanction of the Court, was not intended to confer, and does not confer, on third parties any right to object to proceedings brought by a liquidator in the name of the company, on the ground that no such sanction has been obtained."
Delivery of the subject property is absolutely necessary to complete a pledge, although the transfer of possession may be actual or constructive: "There are, however, cases in which possession may pass to the pledgee without actual delivery, for example, whenever there is some agreement between the parties the effect of which is to change the possession of the pledger from a possession on his own account as owner into a possession as bailee for the pledgee: see Meyerstein v. Barber.(1) Such an agreement operates as a delivery of the goods to the pledgee and a redelivery of the goods by the pledgee to the pledger as bailee for the purposes mentioned in the agreement. A mere book entry cannot, however, have this effect . ."
The terms of the warrant were ambiguous. Lor Parker said that if the true meaning of the warrant was that it was intended to be an acknowledgement by the distillery company that it held the goods referred to as bailee for D or his assigns by indorsement: "it is sufficient to change the nature of the company's possession, operating as an actual delivery of the goods to [D], and a redelivery of the same goods by him to the company to hold as bailee for him. Under these circumstances, on the hypothesis that the company was in actual possession, [D] obtained a good pledge at common law."
Companies (Consolidation) Act 1908
1 Citers


 
Barron v Potter [1914] 1 Ch 895
1914


Company
Where all the directors of a company agree to something which the articles require to be decided by resolution, then the unanimous agreement of all the members of the company is as good as a formal resolution passed by a majority.
1 Citers


 
Transvaal Lands Co v New Belgium (Transvaal) Land and Development Co [1914] 2 Ch 488
1914


Company
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.
1 Citers


 
Von Hellfield v E Rechnitzer and Mayer Freres and Co [1914] 1 Ch 748
1914
CA
Buckley Phillimore LJJ
Company, Litigation Practice
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 and J Nicol v Dundee Harbour Trustees 1915 SC (HL) 7; [1915] AC 550; (1914) 2 SLT 418; [1914] UKHL 4
10 Dec 1914
HL
Lord Dunedin
Company
Whether a corporation created by a statute has a particular power depends exclusively on whether that power has been expressly given to it by the statute regulating it, or can be implied from the language used.
Lord Dunedin declared: "By the law of Scotland a litigant, and in particular a pursuer, must always qualify title and interest. Though the phrase 'title to sue' has been a heading under which cases have been collected from at least the time of Morison's Dictionary and Brown's Synopsis, I am not aware that anyone of authority has risked a definition of what constitutes title to sue. I am not disposed to do so, but I think that it may fairly be said that for a person to have such title he must be a party (using the word in its widest sense) to some legal relation which gives him some right which the person against whom he raises the action either infringes or denies."
1 Citers

[ Bailii ]
 
Hickman v Kent or Romney Marsh Sheep Breeders ' Association [1915] 1 Ch 881; [1914-15] All ER 900
1915

Astbury J
Company
The court was asked whether the articles of association created rights between the shareholders and the company, or simply between the shareholders inter se in respect of their rights as shareholders. The statutory provision was seen as creating the latter, but not necessarily the former. Held: It is the constitution of a company which confers rights on members including the right to exercise votes attached to shares. Articles regulating the rights and obligations of the members generally do create rights and obligations between them and the company respectively. A company cannot unilaterally vary its contracts by altering its articles unless that is the basis upon which the contract was made. A provision of a statutory contract cannot be enforced unless it affects the member in his or her capacity as a member

 
Lennard's Carrying Company Limited v Asiatic Petroleum Company Limited [1915] AC 705; [1914-15] All ER 280
1915
HL
Viscount Haldane LC
Company, Transport
The House was asked as to when the acts of an individual became those of his employer under section 502 ("any loss or damage happening without (the ship owner's) actual fault or privity"). Held: Viscount Haldane LC said: "It must be upon the true construction of that section in such a case as the present one that the fault or privity is the fault or privity of somebody who is not merely a servant or agent for whom the company is liable on the footing of respondeat superior but somebody for whom the company is liable because his action is the very action of the company itself. It is not enough that the fault should be the fault of a servant in order to exonerate the owner, the fault must also be one which is not the fault of the owner, or a fault to which the owner is not privy . ."
Viscount Haldane LC said: "My Lords, a corporation is an abstraction. It has no mind of its own any more than it has a body of its own; its active and directing will must consequently be sought in the person of somebody who for some purposes may be called an agent, but who is really the directing mind and will of the corporation, the very ego and centre of the personality of the corporation. That person may be under the direction of the shareholders in general meeting; that person may be the board of directors itself, or it may be, and in some companies it is so, that that person has an authority co-ordinate with the board of directors given to him under the articles of association, and is appointed by the general meeting of the company, and can only be removed by the general meeting of the company."
Merchant Shipping Act 1894 502
1 Citers



 
 In re Yenidje Tobacco Co Ltd; CA 1916 - [1916] 2 Ch 426; [1916-17] All ER 1050

 
 Daimler Co Ltd v Continental Tyre and Rubber Company (Great Britain) Limited; HL 1916 - [1916] 2 AC 307

 
 Lovesy v Palmer; 1916 - [1916] 2 Ch 233; [1916-1917] All ER 1034
 
Cook v Deeks and Hinds [1916] 1 AC 554; [1916] UKPC 10
23 Feb 1916
PC
Lord Parker of Waddington, Viscount Haldane, Lord Sumner, Lord Buckmaster LC
Company
Deeks and Hinds were the directors of a construction company. They negotiated a lucrative construction contract with the Canadian Pacific Railway. During the negotiations, they decided to enter into the contract personally, on their own behalves, and incorporated a new company, the Dominion Construction Company to carry out the work. The contract appeared to be taken over by this company, by whom the work was carried out and the profits made. A shareholder in the Toronto Construction Company brought a derivative action against the directors and the Dominion Construction Company. Because this was a derivative action, the Toronto Construction Company was also joined as a defendant. Held: Deeks and Hinds were guilty of a breach of duty in the course they took to secure the contract, and were to be regarded as holding it for the benefit of the Toronto Construction Company: "while entrusted with the conduct of the affairs of the company they deliberately designed to exclude, and used their influence and position to exclude, the company whose interest it was their first duty to protect." This led to the legal conclusion that: "men who assume the complete control of a company's business must remember that they are not at liberty to sacrifice the interests which they are bound to protect, and, while ostensibly acting for the company, divert in their own favour business which should properly belong to the company they represent."
1 Citers

[ Bailii ]
 
Bowman v Secular Society Limited [1917] AC 406; [1916-17] All ER 1
1917
HL
Lord Sumner, Lord Finlay LC, Lord Dunedin, Lord Parker of Waddington
Ecclesiastical, Crime, Company
The plantiff argued that the the objects of the Secular Society Ltd, which had been registered under the Companies Acts, were unlawful. Held: The House referred to "the last persons to go to the stake in this country pro salute animae" in 1612 or thereabouts.
A certificate of incorporation given by the Registrar in respect of any association should be conclusive evidence that all the requirements of the Act in respect of registration and of matters precedent and incidental thereto had been complied with, and that the association was a company authorised to be registered and duly registered under the Act.
Lord Finlay LC said that the certificate was conclusive as to the existence of the society as a duly incorporated company: "What the Legislature was dealing with was the validity of the incorporation and it is for the purpose of incorporation, and for this purpose only, that the certificate is made conclusive"
Lord Dunedin said: "The certificate of incorporation in terms of the section quoted of the Companies Act, 1900, prevents any one alleging that the company does not exist" "
Lord Parker of Waddington said: "The section does, however, preclude all His Majesty's lieges from going behind the certificate or from alleging that the society is not a corporate body with the status and capacity conferred by the Acts" . . And "[I]f the directors of the society applied its funds for an illegal object, they would be guilty of misfeasance and liable to replace the money, even if the object for which the money had been applied were expressly authorised by the memorandum."
Lord Sumner said of the offence of blasphemous libel: "Our courts of law, in the exercise of their own jurisdiction, do not and never did that I can find, punish irreligious words as offences against God. As to them they held that deorum injuriae dis curae. They dealt with such words for their manner, their violence or ribaldry or, more fully stated for their tendency to endanger the public peace then and there, to deprave public morality generally, to shake the fabric of society and to be a cause of civil strife. The words, as well as the acts, which tend to endanger society differ from time to time in proportion as society is stable or insecure in fact, or is believed by its reasonable members to be open to assault."
Lord Parker said: "In my opinion to constitute blasphemy at common law there must be such an element of vilification, ridicule, or irreverence as would be likely to exasperate the feelings of others and so lead to a breach of the peace"
Companies Act 1900 1
1 Citers


 
Healey v Societe Anonyme Francais Rubastic [1917] 1 KB 946
1917

Avory J
Company
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.
1 Citers



 
 Hood v Anchor Line (Henderson Brothers) Limited; HL 1918 - [1918] AC 837
 
Rodriguez v Speyer Brothers [1919] AC 59
1919

Viscount Haldane
Company, Litigation Practice
The courts will not give assistance to proceedings which, if successful would lead to the enrichment of an alien enemy, and therefore would tend to provide his country with the sinews of war. An enemy alien has no standing to commence proceedings here. However, because the rule is one of public policy, it does not apply if the case discloses no mischief against which the rule was intended to guard.
Lord Finlay LC said: "When a debt due to the firm is got in no partner has any share or definite interest in that debt; his right is merely to have the money so received applied, together with the other assets, in discharging the liabilities of the firm, and to receive his share of any surplus there may be when the liquidation has been completed."
1 Citers


 
Hindle v John Cotton Ltd (1919) 56 Sc LR 625; [1919] UKHL 625
3 Jul 1919
HL
Viscount Finlay, Viscount Cave, and Lords Dunedin, Shaw, and Wrenbury
Company
Viscount Finlay said: "Where the question is one of abuse of powers, the state of mind of those who acted, and the motive on which they acted, are all important, and you may go into the question of what their intention was, collecting from the surrounding circumstances all the materials which genuinely throw light upon that question of the state of mind of the directors so as to show whether they were honestly acting in discharge of their powers in the interests of the company or were acting from some bye-motive, possibly of personal advantage, or for any other reason."
1 Citers

[ Bailii ]
 
Young v Ladies' Imperial Club Ltd [1920] 2 KB 523
1920
CA
Lord Sterndale MR, Warrington LJ
Company
The purported expulsion of Mrs Young from the Ladies' Imperial Club was invalid for two reasons. First, one member of the executive committee had not been given notice of the meeting, even though she would not have attended it. Second, the notice of the meeting did not adequately disclose what business would be transacted.
Lord Sterndale MR said that the first of these reasons of itself invalidated the meeting
Warrington LJ said that the first was "the more important defect": "It seems to me of great importance that rules which have been made for the purpose of regulating the proceedings of the committee in respect of such a matter ought to be strictly adhered to."
1 Citers


 
Piercy v Mills [1920] 1 Ch 77
1920
ChD
Peterson J
Company
Peterson J said: "[D]irectors are not entitled to use their powers of issuing shares merely for the purpose of maintaining their control or the control of themselves and their friends over the affairs of the company, or merely for the purpose of defeating the wishes of the existing majority of shareholders. That is, however, exactly what has happened in the present case. With the merits of the dispute as between the directors and the plaintiff I have no concern whatever. The plaintiff and his friends held a majority of the shares of the company, and they were entitled, so long as that majority remained, to have their views prevail in accordance with the regulations of the company; and it was not, in my opinion, open to the directors, for the purpose of converting a minority into a majority, and solely for the purpose of defeating the wishes of the existing majority, to issue the shares which are in dispute in the present action."
1 Citers


 
Jenkin v Pharmaceutical Society of Great Britain [1921] 1 Ch 392
1921


Company
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.
1 Citers


 
Moriarty v Regent's Garage and Engineering Co Ltd [1921] 1 KB 423
1921
KBD
Lush J, McCardie J
Company
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 said: "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
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Moriarty v Regent's Garage and Engineering Co Ltd [1921] 2 KB 766
2 Jan 1921
CA
Scrutton LJ
Company
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
1 Cites

1 Citers


 
Union Bank of Australia Ltd v McClintock [1922] 1 AC 240
1922
PC

Commonwealth, Company
Where a partner obtains money by drawing on a partnership bank account without authority, he alone and not the partnership obtains legal title to the money so obtained.
1 Citers


 
Belton v Bass [1922] 2 Ch 449
1922
CA
Russell J
Company
The mortgagees of shares in a brewery wanted to a director to be able later to acquire the shares. They could not grant an option. They sold the shares to the director, as mortgagees, and lent the purchase price, interest free. The director could require the mortgagees to buy back the shares at the original purchase price. The result was as if they had granted an option. The mortgagor sought to have the transactions set aside, arguing that: "…it is said that the mortgagee exercised his power of sale with an indirect motive, not with the view of realizing his security, but with the object of conferring a benefit upon the defendant Garrard by giving him an option masquerading as a sale." Held: Russell J said: "I am unable accordingly to inquire into the motives of the defendants Bass, or to hold that the sale is vitiated because they desired to confer a benefit on the purchaser by selling to him upon terms, which included a fair price."
1 Cites

1 Citers



 
 Clarkson and Another v Davies and Others; PC 23-Oct-1922 - [1922] UKPC 79; [1923] AC 100

 
 Clarkson v Davies; PC 1923 - [1923] AC 100
 
Cruikshank v Sutherland (1923) 92 LJ(Ch) 136
1923
HL
Lord Wrenbury
Company
The executors of a deceased partner of the respondents sought relief. The assets had been taken over from an earlier partnership between the parties and had been brought into the accounts of the new partnership at the values at which they had stood in the books of the earlier partnership. The articles required a full and general account of the property, credits and liabilities of the partnership as at 30 April in each year. The accounts for 1915 and 1916 showed assets at book values. Mr Cruikshank died on 27 October 1916. Article 16 said that his estate was to be paid his share in the partnership ascertained by reference to the accounts prepared under article 13 for 30 April next after the death. The question was whether those accounts should be prepared on the basis of book values, or on some other basis. Held: Lord Wrenbury construed the partnership articles: "It is not, I think, disputed - and if it were, I should be of opinion that it could not successfully be disputed - that a full and general account of the partnership property will be an account at which the property will be brought in at its fair value. The articles are wholly silent as to the principle to be adopted in preparing this full and general account of the property - it remains simply that it must be a proper account of the property, whatever that is. What are the values to be attributed to the several assets falls to be determined by the partners by agreement, and - in case of dispute - is a matter for arbitration under clause 21 of the deed. . . . What the value is does not concern us. That is for an arbitrator, if there be a dispute. Your Lordships are concerned only to say what is the principle on which an arbitrator ought to act."
1 Cites

1 Citers



 
 Loch v John Blackwood Ltd; PC 1924 - [1924] AC 783; 93 LJPC 257; [1924] B&CR 209; 131 LT 719; 68 SJ 735; 40 TLR 732
 
In Re City Equitable Fire Insurance Company Limited [1925] Ch 407; [1924] 3 All ER 485
1924
ChD
Romer J
Company
The duty of reasonable care expected of a company's directors is generally said to be that of an ordinary prudent person might be expected to take in the circumstances on his own behalf, with the knowledge and experience of the director concerned. The court discussed the duties of a company director. Romer LJ said: "In respect of all duties that, having regard to the exigencies of business, and the articles of association, may properly be left to some other official, a director is, in the absence of grounds for suspicion, justified in trusting that official to perform such duties honestly."
1 Citers



 
 De Renzy v De Renzy; 1924 - [1924] NZLR 1065

 
 Performing Right Society Ltd v Ciryl Theatrical Syndicate Ltd; 1924 - [1924] 1 KB 1

 
 Macaura v Northern Assurance Company Limited; HL 1925 - [1925] AC 619; (1925) 133 LT 152; [1925] All ER 51
 
In re Glyncorrwg Colliery Co Ltd [1926] Ch 951
1926


Company, Insolvency
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".
1 Citers



 
 JC Houghton and Co v Northard, Lowe and Wills; HL 1927 - [1928] AC 1; [1927] All ER 97

 
 British American Nickel Corporation Ltd v M J O'Brien Ltd; PC 1927 - [1927] AC 369
 
Manley v Sartori [1927] 1 Ch 157
1927
ChD
Romer J
Company
The death of a partner caused the dissolution of the partnership. The survivors continued the partnership business on their own account. The question arose as to the entitlement of the personal representatives of the deceased partner to a share of the profits earned between the death of the partner and the winding up. Held: Romer J said: "Where . . the surviving partners, instead of realizing the assets and distributing the proceeds amongst the partners in accordance with their rights and interests, choose to carry on the business and make profits by virtue of the employment of any of the partnership assets, then, subject no doubt to making a proper allowance to the surviving partners for their trouble in so carrying on the business, such profits belong to all the persons interested in the partnership assets by means of which the profits have been earned in accordance with their rights and interests in those assets; that is to say, proportionately to their interests in those assets. That has been laid down in numerous cases and is affirmed by s. 42 of the Partnership Act of 1890 . . [The] profits . . were not divisible between the parties in accordance with their rights and interests in profits earned while the partnership was a going concern…. Now the rights of the deceased partner or his legal person representatives are rights over all the assets of the partnership. He has an unascertained interest in every single asset of the partnership, and it is not right to regard him as being merely entitled to a particular sum of cash ascertained from the balance-sheet of the partnership as drawn up at the date of his death…. [as] was pointed out by Wigram V-C in Willett v. Blanford, it does not necessarily follow that because the surviving partners have been carrying on the business the profits or the whole of the profits are attributable to the use of the partnership assets…. it may well be that in a particular case profits have been earned by the surviving partner, not by reason of the use of any asset of the partnership, but purely and solely by reason of the exercise of skill and diligence by the surviving partner; or it may appear that the profits have been wholly or partly earned not by reason of the use of the assets of the partnership, but by reason of the fact that the surviving partner himself provided further assets and further capital by means of which the profit has been earned. Those profits, so far as earned by sources outside the partnership assets, are not profits in which the executors of the deceased partner could be entitled to any share…. Where surviving partners continue to carry on the business, prima facie they are carrying it on by reason of their possession of the assets of the partnership; and the executors of the deceased partner are prima facie entitled to a share of the profits proportionate to his share in the assets of the partnership. It is for the surviving partners to show, if they can, that the profits have been earned wholly or partly by means other than the utilization of the partnership assets….."
Partnership Act 1890 42(1)
1 Citers



 
 The Ontario Jockey Club v McBride; PC 25-Jul-1927 - [1927] UKPC 83; [1927] AC 916
 
In re Windsor Steam Coal Co. (1901) Ltd [1929] 1 Ch 151
1929


Company, Insolvency, Professional Negligence
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.
1 Citers


 
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