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^  STEVENS  AND   SONS,   119.   CHANCERY  LANE,  LONDON.  W.C. ' 

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bLO 


COMPANY     PRECEDENTS 


THIRD      EDITION. 


^^"^^d/l 


BY   THE   SAME  AUTHOR. 

Fourth  Edition,  l2mo.    Price  2s.  Gd.,  cluth. 
THE 

SHAEEHOLDERS'    &    DIRECTORS' 
COMPANION. 

A  Manual  of  Every-clay  Law  and  Practice  for  Promoters,  Shareliolders, 
Directors,  Secretaries,  Creditors,  and  Solicitors  of  Companies,  under 
the  Companies  Acts,  1802  to  1880. 


ALSO,    BY  THE   SAME   AUTHOR, 

FiftJb  Edition.     Price  2.s\,  sewed. 

PRIVATE    COMPANIES, 

THEIR    FORMATION    AND    ADVANTAGES; 

Or,  How  to  Convert  your  Business  into  a  Private  Company,  and  the 
Benefit  of  so  doing. 


COMPANY    PRECEDENTS. 

OPINIONS    OF    THE    PRESS    ON    THE    SECOND    EDITION. 

"  The  vast  amount  of  the  capital  cinbaiked  in  the  uudertakin,!,'s  of  Companies  is  a 
iiuurantee  tliat  the  second  edition  of  Mr.  I'ahnei-'s  '  Company  Precedents  '  will  not  lack 
attention  from  shareholders,  directors,  and  counsel.  The  additions  that  have  been 
made  to  the  present  edition  are  not  of  secondary  interest ;  they  comprise  such  essentials 
as  directions  for  the  composition  of  prospectuses  and  for  practice  in  winding-up  and  in 
arran|,'ements  with  creditors  ....  We  can  conlidently  recommend  Mr.  I'almer's 
book  to  the  large  class  whom  it  concerns." — T/ie  Times. 

"  The  first  edition  of  this  book  appeared  in  1877,  and  in  our  review  of  it  we  '  ventured 
to  predict  that  j\[r.  Palmer's  notes  would  be  found  of  great  practical  utility  in  guiding 
opinions  on  many  complicated  ([uestions  of  law  and  practice.'  That  this  forecast  lias 
been  fulfilled  may  be  fairly  asserted,  not  only  from  the  appearance,  thus  early,  of  a 
second  edition,  but  also  from  the  reputation  which  ]\[r.  Palmer's  work  has  aci^uired 
.  .  .  .  In  our  review  of  the  first  edition  we  entered  so  fully  into  the  scope  and 
merits  of  ilr.  Palmer's  work,  that  it  is  unnecessary  for  us  again  to  call  attention 
thereto.  In  fact  '  Palmer's  Company  Precedents '  is  too  well  known  and  has  become 
too  much  of  a  standard  work  to  require  such  treatment.  To  those  who  arc  acquainted 
with  the  first  edition,  we  recommend  the  second  as  a  great  imjirovcment :  to  those  who 
are  not,  we  recommend  an  early  ac(|uaintance  therewith,  if,  either  as  lawyers  or 
business  men,  they  are  in  any  way  cimnected  with  Companies." — Laiv  Journal. 

"  The  favourable  opinion  wliich  we  exj)resscd  of  this  work  on  its  first  issue  has  been 
justified  by  the  speedy  demand  for  a  second  edition.  AVell  designed  and  ably  executed, 
it  has  proved  of  much  practical  utility  to  the  draftsman.  The  present  edition  lias  been 
thoroughly  revised  ....  Speaking  from  practical  experience  in  the  use  of  the 
volume,  we  can  confidently  recommend  it  to  the  Profession." — Laic  2Iagc(zinc. 

"  Use  of  the  first  edition  of  Mr.  Palmer's  book  in  practice  enables  us  to  speak  with 
some  confidence  of  the  excellence  of  its  design  and  of  the  execution  being  on  the  whole 
careful  and  satisfactory.  The  present  edition  appears  in  a  considerably  enlarged  form 
and  includes  a  large  number  of  new  forms  .  .  .  Both  as  regards  inemoraiula  and 
articles,  we  are  glad  to  observe  increased  attention  paid  to  the  '  private '  Company, 
which  now  occupies  so  much  of  the  attention  of  the  Company  draftsman  .  .  .  The 
orders  and  jjrecedents  in  winding-up  liave  been  enormously  increased  in  number,  and 
are  now  a  most  complete  collection,  covering  the  proceedings  at  every  stage.  It  will 
be  seen  that  the  scope  of  the  work  has  been  largely  increased."— /So/tciVo;'*'  Journal. 


STEVENS  k   SONS,  110,  CHANCERY  L.\NE,  LONDON,  W.C. 


COMPANY    PEECEDENTS 


FOR   USE   IN   RELATION   TO 


COMPANIES 


SUBJECT  TO  THE  COMPANIES  ACTS   18G2   TO   1883. 


ARRANGED   AS   FOLLOWS:- 


AGREEMENTS. 

MEMORANDA  and 

ARTICLES   OF   ASSOCIATION. 

RESOLUTIONS. 

NOTICES. 

CERTIFICATES. 

PROSPECTUSES. 

DEBENTURES. 

POLICIES. 


PRIVATE   COMPANIES. 

WRITS. 

PETITIONS. 

JUDGMENTS   AND    ORDERS. 

WINDING-UP. 

RECONSTRUCTION. 

AMALGAMATION. 

ARRANGEMENTS. 

SPECIAL   ACTS. 


(•alitb    OTopiou.?    Hotcs. 


FRANCIS  BEAUFORT  PALMER, 

OF   THE    IXXCR   TEMPT.E,    ESQ.,    BARRISTER- AT-LAW. 


THIRD     EDITION. 


LONDON : 
STEVENS    AND    SONS,    119,   CHANCERY  LANE, 

"^nia  ^nblis^evs    anb    §ool;sdkrs. 
1884. 


1.0XDO-V  : 

BRADBCRY,    AGNEW,    &    CO.,    PRI.N'TIiP.S,    WIUTEFRIAR* 


PREFACE    TO    THIED   EDITION. 


The  object  of  this  work  is  to  bring  together  a  body  of 
Forms  and  Precedents  for  use  in  relation  to  the  forma- 
tion, working,  and  winding-up  of  companies  under  the 
Companies  Acts,  1862  to  1883. 

A  considerable  amount  of  space  is  devoted  to  notes 
explaining  the  Forms  and  Precedents,  and  illustrating 
them  by  references  to  the  decided  cases  and  to  the 
statutes. 

In  this  edition  the  following  additional  divisions  have 
been  included,  viz. — Policies,  Private  Companies, 
Writs.  jMoreover,  a  great  many  new  forms  have  been 
inserted  in  the  other  divisions,  and  the  notes  throughout 
the  work  have  been  extended  and  revised.  By  the  adop- 
tion of  a  few  abbreviations— c.f/.,  "  co  "  for  "company," 
and  "  sd  "  for  "  said,"  much  space  has  been  gained. 

Considering  that   many  hundred  millions'"'   are   now 

*  It  appears  from  the  ]\irliamentary  Paper,  Session  1883,  c.  3542, 
that  the  paid-up  capital  of  .(^inpanics  believed  to  be  carrying  on  business 
in  February,  1883,  was  upwards  of  ,£410,000,000  ;  and,  besides  this,  it  is 
probable  that  £100,000,000  is  invested  in  debentures. 

749177 


Ti  PREFACE. 

invested  in  the  sliares  and  securities  of  companies  subject 
to  tlie  above  Acts,  it  is  obvious  that  the  matters  dealt 
with  in  the  following  pages  concern  the  interest  of  an 
important  section  of  the  community. 

The  author  trusts  that  the  work  will  be  found  practi- 
cally useful  to  members  of  both  branches  of  the  Pro- 
fession.    To  render  it  such  has  l^een  his  aim  throughout. 

In  conclusion,  the  author  begs  to  offer  his  cordial 
thanks  to  those  who  have  been  so  kind  as  to  assist 
him  in  the  present  edition  by  useful  suggestions,  by 
lending  him  orders  and  other  forms,  and  by  perusing 
and  correcting  some  of  the  proof  sheets. 


5,  New  Square,  LI^x•OI;N's  Inn, 
A2)ril,  1884. 


TABLE    OF    CONTENTS. 


AGREEMENTS. 
Form  PACK 

1.  Agreement  with  agent  for  intended  company  for  sale  of  business  of 

mechanical  engineer,  including  leaseholds  and  chattels.  Con- 
sideration :  Cash  and  shares.  Vendor  not  to  carry  on  similar 
business.     Power  to  rescintl        .         ,  ....         7 

2.  Contract  to  file  where  paid-up  shares  issued  without  cojnpliance 

with  Section  25  of  the  Act  of  1867         .         .       '.         .         .     .       14 

3.  Agreement  for  sale  of  patents.    Consideration  :  Cash  and  founders' 

shares K; 

4 — 9.  Miscellaneous  provisions  for  insertion  in  agreements  .         .     .       17 

10.  Agreement  for  sale  to  intended  company  of  tlie  business  of  a  waie- 

houseman.  Vendors  in  partnership.  Consideration  :  Cash  and 
deferred  shares.  Vendors  to  covenant  not  to  carry  on  .similar 
business,  and  not  to  part  with  shares  for  a  fixed  period      .         .       24 

11.  Agreement  for  sale  to  company  of  foreign  mines        .         .         .     .       28 

12.  Agreement    by  company  adapting    contract  made  on  its  behalf 

before  its  incorporation      ........       3Q 

13.  Agreement    by   company  adopting  with  modifications  contract 

made  before  its  incorporation :i() 

14.  Agreement  for  sale  of  sliip  to  single  ship  company        .         .         .       32 

15.  Agreement  for  sale  of  concession  to  promoter  who  is  to  form 

company 3:> 

16.  Agreement  1  ly  promoter  to  pay  preliminary  expenses  in  considera- 

tion of  part  of  tliL-  vendors'  shares .34 

17.  Agreement  to  pay  preliminary  expenses  in  consideration  of  com- 

mission        3.") 

18.  Agreement  by  promoter  t>>  guarantee  the  placing  of  capital  in 

consideration  of  founder's  shares    . 3<i 

19.  Agreement  as  to  issue  of  paid-up  sliares  pursuant  to  contiact  not 

filed 37 

20.  Agreement  to  issue  paid-up  shares  in  satisfaction  of  debt  due  by 

company 37 

21.  Agreement  to  allot  shares  at  a  discount 38 

22.  Agreement  for  the  issue  of  paid-up  shares  by  way  c>f  bonus  to 

debenture  holders 40 

23.  Agreement  with  trustees  to  guarantee  dividends  on  .shares  about 

to  be  oftered  for  sale 41 


TABLE    OF    CONTENTS. 


Form 

24.  Agreement  for  transfer  of  railway  coiieef^sion  and  for  constniclion 

of  railway      .         .         .         .         .         .         .         .         .         .     . 

25.  Agreement  for  sale  of  colliery  and  other  assets  to  company  on 

scheme  of  arrangement  under  the  Bankruptcy  Act    . 

26.  Agreement  for  sale  of  hotel  and  other  assets  on  a  sclieme  as  ahov 

27.  Agreement  to  sell  life  assurance  business  ..... 

28.  Syndicate  agreement  for  purcliase  and  re-sale  of  mines 

29.  Agreement  for  the  appointment  of  a  manager  by  a  company    . 

30.  Agreement  for  the  appointment  of  a  secretary  by  a  company 

31.  Agreement  ai")pointing  electrical  engineer  .... 


43 

45 

50 
53 
.■)() 
57 
58 
59 


MEMORANDA   OF   ASSOCIATION. 

32.  Of  company  limited  by  shares .  75 

33.  Of  company  limited  by  guarantee     .         .         .         .         .         .     .  76 

34.  Of   company  limited  by   guarantee  and  registered  without  the 

word "  limited"        .........  77 

35.  Of  unlimited  cnmpany      .........  81 


OBJECTS. 

36- 

-68.  Miscellaneous  clauses  for  insertion 

in  memoranda 

81 

69. 

Life   assurance   and   acci- 

90. 

Coffee  taverns    .         .     . 

98 

dent      .... 

89 

91. 

Public  hall     . 

99 

70. 

Maiine  insurance          .     . 

90 

92. 

Race  course 

99 

71. 

IMutual  ship  insurance  com- 

93. 

Co-o2)erative  store  . 

99 

pany     .... 

91 

94. 

Hotel  company  . 

100 

72. 

Fire,  accident,  and  guaran- 

95. 

Lilirary .         .      '   . 

100 

tee    

91 

96. 

Scliool  or  college 

100 

73. 

Guarantee  company. 

92 

97. 

Loan  club 

100 

74. 

Bank 

92 

98. 

Building  estate  . 

101 

75. 

Financial .... 

92 

99. 

Industrial  dwellings 

101 

76. 

Public  work  contractors  . 

93 

100. 

Colonization  and  land 

1(12 

77. 

Colonial  loan  agency  and 

101. 

Mining  . 

102 

investment        .         .     . 

94 

102. 

Coal  and  iron  com]iany 

103 

78. 

British  and  foreign  invest- 

103. 

Ship  o'miers 

.     103 

ments        .         .         .     . 

95 

104. 

Single  .steamship     . 

.     103 

79. 

Electric  light    . 

9() 

105. 

American  raih'oad 

104 

80. 

Electric  apparatus  manu- 

106. 

Tramway 

105 

factures     .         .         .     . 

96 

107. 

Gasworks  company    . 

.     105 

81. 

Waterworks  company 

96 

108. 

Excliange 

.     105 

82. 

Dock 

97 

109. 

Club. 

.     106 

83. 

Brewery  .... 

97 

110. 

Club-house 

.     106 

84. 

('otton  spinners    .         .     . 

97 

111. 

Club  (political)  . 

.     106 

85. 

Mechanical  engineers 

97 

112. 

Law  society     . 

.     107 

86 

Patents         .         . 

97 

113. 

Trade  protection 

.     108 

87. 

Hide,  .skin,  and  fat  . 

98 

114. 

Chamber  of  conmierce 

.     108 

88. 

Stationers,  &c.      .         .     . 

98 

115. 

Another 

.     109 

89 

Newspaper  proprietors     . 

98 

116. 

Builders'  Institute  . 

.     109 

TABLE    OF    CONTENTS. 


Form 

117.  Articles 


ARTICLES   OF  ASSOCIATION. 

;iciation  (general  form) 


1.   Preliminary      .         .  .114 

•2.  Ceititicates   .         .         .     .     117 
:i.  Calls  .         .         .         .118 

4.  Forfeiture  and  lien        .     .     121 
•").  Transfer  and  transmission 

(jf  shares        .         .         .     123 
<i.  Share  warrants     .         .     .     128 

7.  Conversion  of  shares  into 

stock     .         .         .         .128 

8.  Increase  and  reducti(jn  of 

capital      .         .         .     .     129 
y.  Borro-wing  pi  Avers     .         .     1,31 

10.  General  meeting  .         .     .     132 

11.  Proceedings     at     general 

meetings        .         .         .     13.5 

12.  Votes  of  memliers         .     .     137 


13.  Directors  . 

14.  Rotation  of  dii'ectors    . 

15.  Managing  director     . 

16.  Proceedings  of  directoi> 

17.  Minutes    . 

18.  Powers  oi  directors 

19.  Solicitors  . 

20.  Secretary 

21.  The  seal    . 

22.  Dividends     . 

23.  Accounts  . 

24.  Audit  . 

25.  Notices 

26.  Arbitration  . 

27.  Winding  up 

28.  Indemnity    . 


118.  Ai'ticles  of  association  adopting  Table  A.     . 

119.  Aiticles  of  association  of  law  society 

120 — 143.  Miscellaneous  clauses  for  insertion  in  articles 


lAGK 

114 

141 

14.-) 

147 

148 

l.")0 

151 

ir)(; 

156 

150 

157- 

160 

161 

163 

165 

165' 

167 

172 

174 

ISii 


RESOLUTIONS. 

144.  Alteration  of  articles       .         .         . 

145.  New  regulations  .... 

146.  Modification  of  Table  A.         .         .         . 

147.  Increase  of  capital        .... 

148.  Preference  shares     ..... 

149.  Another  form 

150.  Variation 

151.  A.  and  B.  shares  .... 
162.  Guaranteed  preference  shares 

153.  C-onversion  of  preference  into  ordinary 

154.  Conversion  of  shares  into  stock 

155.  Another       ...... 

156.  Consolidation  of  shares  .... 

157.  Subdivision 

158.  Another 

159.  Subdivision  into  tw(j  classes 

160.  Reduction  of  liability     .... 

161.  Return  of  capital  .... 


162.  Retiun  of  capital  liable  to  recall     . 

163.  Cancelling  lost  capital 

164.  Confirming  past  returns 

165.  Cancellation  of  unissued  shares   . 

166.  Cancellation  of  issued  shares 
166a.  Cancellation  of  purchased  shares 

167.  Paying  oft'  capital  out  of  profits 

168.  Change  of  name  .... 

169.  Resiilution  as  to  issue  of  debentures 


193 
194 
194 
194 
196 
196 
196 
196 
197 
197 
198 
198 
198 
198 
199 
199 
199 
199 
199 
200 
200 
201 
201 
201 
201 
201 
201 


TABLE    OF    CONTENTS. 


Form 

170.  Creation  of  debeutuiv  stock 

171.  Debenture  stock 

172.  Resolution  decUiring  the  conditions  on  which   sluire   warrants 

will  be  issued  ........ 

173.  Registration  of  existing  company 

174.  Application  for  registration  with  limited  liability 

175.  Application  for  registration  as  an  unlimited  company     . 

176.  Statement  with  a  view  to 

177.  Statutory  declaration  on  registration 

178.  Resolution  to  register  bank 


I'AGK 

202 

^02 

202 
206 
206 
206 
207 
207 
20? 


NOTICES. 


179. 
180. 
181. 
182. 
183. 
184. 
185. 
186. 

187. 
188. 

189. 

190 
191. 
192, 
193, 
194. 
195, 
196 
197. 
198, 
199 


shares 


Notice  of  allotment  o 

Nc)tice  of  call 

Another  ......... 

Notice  before  forfeiture  for  non-payment  of  call 
Notice  I  if  ordinary  general  meeting 
Notice  of  extraordinary  general  meeting 

Another  form . 

Notice   of  extraordinary   general   meeting  for   passing 

resolution . 

Notice  of  meeting  to  confirm  special  resolution 

Notice  of  ordinary  and  extraordinary  general  meetings  to  b 

on  same  day    ........ 

Notice  of  extraordinary  general  meeti)igs  for  passing  tM"o  s 

resolutions  in  three  meetings 
Subsecjuent  notice        ..... 
Requisition  of  members  for  a  general  nieetin 
Notices  Ijy  memliers  calling  meeting 
Notice  of  situation  of  office     . 
Notice  of  increase  of  capital 
Copy  of  special  lesi ilutions 
N(jtice  of  dividend  and  warrant  . 

Another 

Another 

Consent  to  new  company  using  name  of  old 


pecia 


lield 
pecial 


210 
211 
211 
211 
212 
212 
212 

212 
213 

214 

214 
214 
215 
215 
216 
217 
217 
217 
218 
218 
219 


CERTIFICATES. 

200.  Ordinary  certificate 

201.  Certificate  of  preference  shares 

202.  Certificate  of  stock 

203.  An(jtlier  form  of  certificate  of  preference  shares 

204.  Form  of  share  warrant        .... 

205.  Coupon  to  share  warrant        .... 

206.  Voucher  for  fresh  coupons 

206a.  Certificate  of  incoq)oration  .... 

207.  Certificate  on  registration  under  Part  Yll. 


225 
225 
226 
226 
226 
227 
227 
227 
227 


TABLE    OF    CONTENTS. 


Form 

208.  Skeleton  i)rospectus 

209.  Ajjplication  fur  shares 

210.  Bankers'  receipt     . 


PROSPECTUSES, 


I'AGK 

245 
24(; 
247 


DEBENTURES. 

211.  Ueljcntures  to  bearer  with  provisions  for  registration 
212. — 216.  Miscellaneoiis  clauses  . 

217.  Debenture  to  bearer.     Drawings 

218.  Debentures  to  order 

219.  Registered  debenture  . 

220.  Perpetual  debenture 

221.  Profit  or  income  debenture 

222.  Prospectus  of  issue  of  de])entures   . 

223.  Provisional  certificate  of  debentures 

224.  Prospectus  of  debenture  stock 

225.  Debenture  stock  certificate 

226.  Conditions  as  to  the  issue  of  debenture  stock 

227.  Trust  deed  for  securing  mortgage  debentures 


264 
2(W 
270 
271 
272 
273 
275 
27G 
277 
278 
279 
28(» 
2i^:i 


POLICIES. 


228.  Skeleton  of  life  policy    . 

229.  Ordinary  :  own  life     .         .         .         . 

230.  Own  life  for  term  of  years 

231.  Own  life  premium  ior  term  of  years    . 

232.  Life  of  another        .... 

233.  Endowment  :  own  life 

234.  Endowment :  life  of  another 

235.  At  death  of  survivor  .... 

236.  Joint  lives 

237.  Death  of  B.  provided  C.  then  living  . 

238.  Wife  and  children 

239.  Policy  of  unlimited  ctimpany 

240.  Clause  where  several  branches 

241.  Conditions  of  life  assurance 

242.  Eire  insurance  policy 

243.  Accident  policy  .... 

244.  Conditions  of  accident  policy 

245.  Railway  accident  policy 

246.  Employer's  liability  policy     . 

247.  Live  stock  insurance  jwlicy 

248.  Horse  insurauGe  policy  . 

249.  Transit  jjolicy     ..... 

250.  Damage  by  horses  and  vehicles  policy 

251.  Boiler  policy       ..... 

252.  Plate-glass  policy  .... 


290 
297 
297 
298 
298 
298 
298 
298 
298 
298 
298 
300 
301 
301 
309 
313 
314 
317 
317 
.320 


323 
324 
325 


xii  TABLE    OF    CONTENTS. 

Form  PACK 

253.  Hail  policy 327 

254.  '  Inarantee  of  honesty 328 

255.  Policy  on  .ship 330 

256.  Policy  (m  cargo 331 


PRIVATE   COMPANIES. 


257. 

Pvcliiiiiuary  agreement        ..... 

.     338 

258. 

Pestrictioii  on  i.ssiie  of  shares          .... 

.     .     340 

259. 

Another  form      ....... 

.     340 

260. 

Pestrirted  right  of  transfer 

.     .     341 

261. 

Ifetirement  of  dismissed  employe 

.     344 

262. 

.Vnotlier           ........ 

.     .     344 

263. 

Conijailsory  retirement 

.     344 

264. 

Another 

.     .     344 

265. 

Pestrictions  on  meniLers 

.     347 

266. 

Retiring  member  not  to  compete    .... 

.     .     .347 

267. 

Directors     ........ 

.     347 

268. 

Permanent  directors 

.     .     348 

269. 

Managing  director 

.     348 

270. 

Firm  appointed  managers 

.     .     349 

271. 

Power  to  appoint  other  directors 

.     349 

271a 

.  Power  for  meeting  to  appoint        .... 

.     .     349 

272. 

Remuneration  of  directors  ..... 

.     350 

273. 

Instruction  of  son  .         ...... 

.     .     350 

274. 

AV^hat  time  directors  to  give         .... 

.     350 

275. 

( Continuance  of  directors  in  office    .... 

.     .     350 

276. 

N'oting  at  directors'  meetings      .... 

.     351 

277. 

Interest  on  unpaid  shares       ..... 

.     .     ,351 

278. 

Ijalance  sheet      ....... 

.     351 

279. 

Audit 

.     .     .352 

280 

Deed  of  settlement 

.     352 

281. 

Power  foi'  trustees  of  will  to  convert  testatoi''s  Ini 

-iiness  into  a 

company     ........ 

.     .     358 

WRITS. 

282.  Common  lorni  writ     ..... 

283.  Rescission  of  contract  to  take  shares 

284.  Rescission  and  damages  where  fraud  . 

285.  Damages  for  fraud  without  rescission 

286.  Rescission  of  contract  for  sale  of  mine  to  company 

287.  Prihe  to  directors 

288.  Promoter's  secret  profit       .... 

289.  I  )el)enture  foreclosure 

I  )cbenture  trust  deed  .... 
Ultra  vires  agreenn-nt     ..... 
resolution  ..... 


290. 
291. 
292. 
293. 


Dividend  in  ]ireju(lice  of  preference  .shares 


360 
361 
361 
362 
.362 
363 
363 
364 
364 
364 
364* 
365 


TABLE    OF    CONTENTS. 


Form 
294. 
295. 
296. 
297. 
298. 


Dividend  out  of  capital 
Recovery  of  dividends  improperly  paid 
To  enforce  resolution  of  company 
Exclusion  of  director      .... 
To  restrain  de  facto  directors  from  autiui;' 


I'AO  K 

365 
36.5 
366 
366 
366 


299 

300 

301. 

302. 

303. 

304. 

305. 

306. 

307. 

308. 

309. 

310. 

311. 

312. 

313. 

314. 

315. 

316. 


PETITIONS. 

Petition  to  confirm  reductinn  of  capital 
■  Petition  to  confirm  reduction  of  capital  under  Acts  of  1877 
Order  to  reduce  capital  ... 
Order  to  reduce  by  cancelling  lost  capital  . 
Interim  order  dispensing  witli  use  of  words  *'  reduced  '' 
Advertisement  of  order  reducing  capital     . 
Petition  for  transfer  of  life  business        .... 
Winding-up  petition  of  judgment  creditor 

executrix  of  policy-holder 

■  debenture-bolder  . 

simple  contract  creditor    . 

where  prior  petitioner  settled 

•  by  company  unable  to  pay  its  del 

Ijy  fully  paid-up  shareholder 

for  sui^ervision  order 

to  Lancaster  Palatine  Court 

in  Stannaries    .... 

P 


Petition  to  star  windiu 


309 
370 
372 
373 
373 
373 
374 
375 
377 
378 
379 
380 
380 
381 
381 
383 
383 
384 


ORDERS. 


317. 
318. 
319. 

320. 
321. 
322. 
323. 
324. 

325. 
326. 
327. 
328. 
329. 
330. 

331. 
332. 
333. 


Contract  to  take  shares  set  aside 


Judgment  setting  aside  sale  of  concession  and  orderiiig  repay 
ment 

Sale  of  mines  set  aside        . 

Judgment  against  promoters  to  refund  secret  profit 

Director  ordered  to  pay  value  of  shares  received  from  promoters 

Promoter  and  director  ordered  to  refund  profits 

Liberty  to  take  proceedings  against  directors  to  n'Co\x-r  promo 
tion  money 

Order  not  to  proceed  against  promoters       .... 

Compromise  of  action  against  director    ..... 

Order  restraining  forfeiture  of  shares  .         .... 

Judgment  granting  ijerjietual  injunction  against  forfeiture     . 

Injunction  to  restrain  exclusion  of  <lirector 

Order  restraining  directors  from  holding  meeting  at  improper 
period         .......... 

Restraining  director.^;  from  improperly  rejecting  votes 

Amalgamation  declared  ultra  vires  and  restrained  . 

Sale  of  assets  declared  ultra  vires  and  restrained  ,      -  . 


386 

388 


388 
390 
391 
392 
393 

393 
394 
394 
394 
394 
39.') 

39.-. 
39.-) 
39(; 
397 


xiv  TABLE    OF    ('OXTENTS. 

Form  PAGE 

334.  Oitlcr  le.straiiiiii--  issue  of  preference  shares 397 

335.  Eights  of  jDi-eference  stock  hohlers  declared  .iiid  infringenieiits 

restrained         ..........  397 

336.  Payment  of  dividend  out  of  capital  restrained         .         .         .     .  398 

337.  Payment  of  dividends  out  of  capital 398 

338.  Order  restraining  comxmny  from  purchasing  its  own  sliares    .     .  398 

339.  Directors  ordered  to  make  good  breach  of  trust  ....  398 

340.  Another          .         .         .    ' 399 

341.  Usual  order  to  rectify •   .         •  400 

342.  Rectification  where  invalid  forfeiture 401 

343.  Where  c(jntruct  not  filed  pursuant  to  s.  25  nf  Act  of  1867  .         .  401 

344.  Another 402 

345.  Order  restraining  presentation  of  winding-up  petitions       .         .  402 

346.  Order  restraining  bankruptcy  proceedings  against  co.  in  France.  402 

347.  Order  for  plaiutift'  company  to  give  security 403 

348.  Another.     Fund  to  be  paid  into  a  bank     .         .         .         .         .  403 

349.  Declaratii)n.     Accounts.     Sale 403 

350.  Order  for  accounts  and  inquiries 404 

351.  Judgment  where   debentures  void  for  non-registration,  otticial 

lie),  appointed  receiver  without  further  security           .         .     .  40.5 

352.  Declaration  A  and  B  debentures 40.'i 

353.  Liquidator  to  sell,  liberty  to  debenture  holder  to  bid      .         .     .  406 

354.  Liberty  to  sue  defendant  on  behalf     ......  407 

355.  Trust  deed.     Accounts 407 

356.  Advertisement  for  claims 407 

357-  Receiver  and  manager    . 408 

358.  Receiver  and  manager  after  security  given 409 

359.  Provisional  liquidator  to  be  receiver 409 

360.  Clerk  of  company  to  be  receiver  and  manager  without  security .  410 

361.  Sale  on  motion 410 

362.  Sale  in  action  and  winding-up    .......  410 

363.  Approval  of  conditional  contract  for  sale 411 

364.  Approval  of  contract  for  lease 411 

365.  Receiver  to  borrow  20001 412 

366.  Liberty  to  borrow  from  debenture  holders  .         .         .         .412 

367.  Liberty  to  raise  money  to  pay  off  prior  incumbrances     .         .     .  412 

368.  Liberty  for  receiver  to  appoint  attorney 412 

369.  Liberty  to  appoint  attorney  to  carry  on  business  in  Russia,  &c.  .  413 

370.  Liberty  to  send  telegram 413 

371.  Liberty  to  surrender  lease    .         .         .         .         .         .         .         .413 

372.  Meeting  of  debenture  holders  to  be  convened          .         .         .     .  413 

373.  Advertisement  convening  meeting  of  debenture  holders     .         ,  414 

374.  Another 414 

375.  Another 414 

376.  Certificate  of  amount  due  to  debenture  holders       .         .         .     .  41.5 

377.  Distribution  of  cash 415 

378.  Dividend  to  debenture  holders 41,i 

379.  Another 41(5 

380.  Order  to  ])ay  off  debentures 416 


TABLE    OF    CONTENTS. 


XV 


Form 

381. 
382. 
383. 
384. 
385. 
386. 
387. 
388. 
389. 
390. 
391. 
392. 
393. 
394. 
395. 
396. 
397. 
398. 
399. 
400. 
401. 
402. 
405. 
406. 
407. 
408. 
409, 


AV I NDl NG-UP    (COMPU LSORY). 

PBEUMIXARY. 

Foiiiial  parts  of  ordinary  suiumous 

Formal  parts  of  notice  of  motion 

Formal  parts  of  affidavit         ..... 

Advertisement  of  presentation  of  petition  . 

AfHdavit  in  .support  of  petition       .... 

Order  extending  time  to  file  affidavit . 

Affidavit  of  service  of  petition        .... 

Order  for  service  ■where  office  closeil  . 

office  demolished     ..... 


Summons  for  security  for  costs        .... 
<  )rder  giving  liberty  to  amend    .... 

Another . 

Order  to  stand  over     ...... 

Order  giving  liberty  to  -withdraw   .... 

Order  hy  consent  dismissing       .... 

Order  where  debt  paid  before  hearing    . 

Another  -where  creditors  oppose 

Order  dismissing  petition  with  costs 

Order  dismissing  where  provisional  liquidat<jr    . 

Order  for  revivor  on  application  of  petitioiier's  execut 

—404.  "Winding-up  order   ..... 

"\\'inding-up  order  on  two  petitions 
Order  alL  »wing  costs  of  second  petition 
Order  transferring  petition  by  consent  . 
Notice  of  motion  for  transfer      .... 

410.  Eeft-rence  to  countv  court      .... 


I'Aci': 
417 
418 
418 
419 
420 
420 
420 
421 
421 
421 
421 
422 
422 
422 
423 
423 
423 
424 
424 
424 
424 
42o 
426 
42(5 
427 
427 
427 


]'nO  VISIONAL    LIQUID  A  Tuns. 

411.  Notice  of  motion  or  summons  for  the  appointment  of  a  provi- 

sional licj[uidator           ••.......  428 

412.  Order  on  .summons  appointing  provisional  lirjuidatoi-           .         .  429 

413.  Order  restricting  powers          ••......  429 

414.  Liberty  to  carry  on  business        .......  429 

415.  Liberty  for  prow  liq.  to  carry  on  business  and  advance  monex-    .  430 

416.  Provisi(jnal  liquidator  to  carry  on  appeal     .....  430 

417.  Order  directing  provisional  official  lifjuidatois  to  leave  a(C<mnt 

and  for  taxation  and  payment  of  costs         .         ....  43() 

418.  Order  discharging  provisional  liquidator     .         .         .         .         .431 

419.  Order  discharging  provisional  liquidator  Avho  has  neither  received 

nor  paid  money 431 

420.  Order  for  payment  to  late  prov.  liq.  of  certified  balance     ,         .  431 


MLSCELLAXEOUS. 


421.  Summons  to  proceed  with  winding-up 431 

422.  Certificate  that  copy  order  true  . 432 

423.  Advertisement  of  winding-up  order 432 

424.  Order  for  extending  time  for  advertising  windinf- up  order        .  432 


XVI 


TABLE    OF    CONTENTS. 


Al'I'OlNTMENT    OF    OFFICIAL    LIQUIDATOR. 
Form 

425.  Aiht'i'tisemeut  of  time  fixed  for  appointing    . 

426.  Altidavit  of  titness 

427.  Order  appointing  official  lirpiidator 

428.  Appointment  wliere  security  already  given 

429.  Appointment  where  guarantee  company  are  sureties 

430.  Advertisement  of  appointment   .... 


TACK 

432 
483 
433 

434 
434 
434 


tiKCUniTY    OF    OFFICIAL    LIQUID ATOU. 

431.  Summon.^  to  settle  security 434 

432.  ]>ond  where  guarantee  company  sureties 43") 

433.  Oi'der  extending  time  for  giving  security 437 

434.  Cliief  clerk's  certificate  of  security  given 437 

435.  Summons  to  reduce  security 438 

436.  Order  reducing  security 438 

437.  Another 438 

438.  Order  on  retirement  of  sureties 438 

439.  Summons  for  liberty  to  put  recognisance  in  suit     .         .         .     .  43i) 


ACCOUNTS    OF    OFFICIAL    LIQUID ATOU. 

440.  Summons  to  proceed  on  official  lirpidator's  account    . 

441.  Form  of  account 

442.  Affidavit  verifying  account 

443.  <  hief  clerk's  certificate 

444.  Another  certificate 

445, where  no  receipts 

446.  ^  'ertificate  on  passing  final  account     .... 

447.  Affidavit  of  no  receipts  or  payments  since  last  account 

448.  Summons  to  extend  time  to  leave  account 

449.  Summons  to  compel  off.  liq.  to  bring  in  his  account 

450.  Older  giN  iiig  liberty  to  executor  of  deceased  li(p  to  pass  account 

451.  Summons  bv  surety  for  liberty  to  attend  passing  of  account 

452.  Taberty  tn  issm-  an  attachment  against  off.  liq.  . 


43!) 
43!) 

440 
441 
441 
441 
441 
442 
442 
442 
442 
443 
443 


nFMUXKRATIOX   OF   OFFICIAL    LIQUIDATOR. 

453.  Summons  by  off.  liq.  for  liberty  to  retain  money  on  account  of 

remuneration      .         .         .         .         .         .         .         .         .     .     443 


454.  Affidavit  of  ofi'.  li(|.  as  to  remuneration 

455.  Affidavit  by  official  liquidator's  clerk      .         .         .         , 

456.  Affidavit  ]>y  official  li(pudator  in  support    . 

457.  Remuneration  to  be  assessed  and  paid    .         .         .         , 

458.  Allowance  on  account  of  remuneration 

459.  Order  for  payment  of  official  li(iuidator's  remuneration 

460.  Removal  of  official  lic^uidators 

461.  <  )rder  on  resignation 


445 
446 
44(5 
446 

447 
447 
447 
447 


DKLIVERY    OF    HOOKS. 


462.  Summons  to  compel  delivery  of  company's  books  and  papers     .     448 

463.  Order  agahist  the  company's  solicitors 448 


TABLE    OF    CONTENTS. 


xvu 


CAniiYING    OX    THE    IIUSINKSS. 
Form 

464.  Order  giving  liberty  to  carry  on  business  . 

465.  Order  to  carry  on  business  and  render  monthly  accounts 

466.  Liberty  to  open  local  banking  account 

467.  Lilierty  to  carry  on  business 

468.  Another 


PAGE 

449 
449 
449 
450 

450 


BORROWING. 


469.  Order  giving  official  liquidator  liberty  to  borrow 

470.  Another 

471.  Liberty  to  borrow  for  carrying  on  business     . 

472.  Liberty  to  official  liquidator  to  lend    . 


450 
451 
451 
451 


SALES   OF    PROPERTY. 

473.  Common  order  for  sale 452 

474.  Order  for  sale 452 

475.  General  liberty  to  sell 453 

476.  Order  for  inquiry  and  sale  where  incumbrances           .         .         .  45.3 

477.  Order  for  sale  subject  to  sjiecial  conditions 453 

478.  Liberty  to  sell  chattels 454 

479.  Liberty  to  sell  ship 454 

480.  Ai>proval  of  conditional  contract  for  sale 454 

481.  Approval  of  conveyances '454 

482.  Liberty  for  off.  liq.  to  concur  in  sale  ordered  in  action  by  deben- 

ture holders,  and  direction  that  company's  chattels  to  be  put 

up  for  sale  at  same  time 454 

483.  Directions  to  official  liquidator  to  concur  in  sale  by  trustees  for 

debenture  holders 455 

484.  Liberty  to  assign  last  days  of  terms 455 

485.  Order    giving    liqs.   liberty  to    tender  for  purchase    of    co.'s 

property 455 


MISCELLANEOUS    AUTHORITIES    TO    OFFICIAL    LIQUIDATORS. 

486.  Liberty  to  give  up  company's  office  and  take  another 

487.  Liberty  to  continue  man<>ger 

488.  Liberty  to  appoint  manager 

489.  Liberty  to  off.  liqs.  to  employ  secretary  to  prepare  account; 

490.  Appointment  of  surveyor  to  distinguish  fixtures  from  chattel 

491.  Another  form 

492.  Lilierty  to  have  inventory  and  valuation  of  chattels  made 

493.  Liberty  to  sue  debtors  and  sell  stock  in  trade 

494.  General  libertj'-  to  sue  on  bills  of  exchange 

495.  Liberty  to  pi'ove  in  bankruptcy 

496.  Liberty  to  bring  action  for  rent 

497.  Liberty  to  defend 

498.  Order  confirming  contract  to  grant  lease     . 

499.  Liberty  to  execute  power  of  attorney 

500.  Another  form 

501.  Lilierty  to  employ  agent  in  Peru    . 

502.  Order  giving  liberty  to  refer  to  arbitration 

503.  Liberty  to  go  abroad       ..... 

504.  Liberty  to  give  security  for  costs 


456 
456 
456 
456 
456 
457 
457 
457 
457 
457 
457 
458 
458 
458 
458 
459 
459 
460 
460 


xviii  TABLE    OF    CONTENTS. 

Form  PAGE 

505.  Liberty  to  return  valutable  deposited  with  bank  for  safe  custody  460 

506.  Liberty  to  discount  bill 460 

507.  Liberty  to  repay  premiums  paid  by  mistake 460 

CONTRlnUTuniKS. 

508.  Summons  to  strike  name  otf  list          ......  462 

509.  Summons  to  vary  certificate 462 

510.  Another 462 

51L   Order  to  strike  name  off  list 462 

512.  Order  to  place  name  in  list          .......  462 

513.  Order  to  settle  executors  in  list 462 

514.  Order  on  appeal  reversing  order  appealed  from   ....  462 

515.  Order  refusing  application  to  vary  certificate  .         ....  463 

516.  Order  varying  certificate      ........  463 

517.  Order  giving  time  to  file  evidence 463 

518.  Another 463 

519.  Another 464 

520.  Liberty  to  employ  detective        .......  464 

521.  Another 464 

622.  Call  to  full  account 464 

523.  Order  for  payment  of  calls  where  co.  unregistered           .         .     .  465 

524.  Liberty  to  take  proceedings  in  Ijankruptcy          ....  465 

525.  Libei'ty  to  pay  dividend  to  contributories       .....  465 

526.  Another 466 

527.  Liberty  to  divide  assets  in  specie 466 

ENFORCING    PAYMENT    OF   DEBTS. 

528.  Summons  to  enforce  payment  of  calls  made  before  winding-up  .  467 

529.  Order  to  pay  calls  made  before  winding  up        ....  467 

CREDITORS. 

530.  Affidavit  to  prove  debt  due  on  bill  of  exchange      .         .         .     .  469 

531.    by  partner  proving  debt  due  to  firm    ....  470 

632.  of  secretary  of  a  company  proving  debt  due  to  his 

company 470 

533.  by  off.  li(|.  proving  debt  due  to  his  company        .         .471 

534.  to  prove  deljt  due  on  debenture 471 

535. proving  debt  due  to  accountant 471 

536.  — proving  debt  due  to  director  for  fees        .         .         .     .  472 

537. proving  debt  due  to  solicitor 472 

538. —  proving  debt  for  goods  sold  and  delivered       .         .     .  472 

539. to  prove  mortgage  debt.     Valuation  of  security  .         .  472 

540.  Order  giving  time  to  file  evidence 473 

541.  Another 473 

542.  Order  for  Ijetter  particulars  of  claim 473 

543.  Summons  to  admit  claim 473 

544.  Order  to  admit 474 

545.  Another  order  to  admit 474 

546.  Order  to  vary  certificate  of  debts 474 

547.  Another 474 

548.  Order  giving  contriljutories  liberty  to  move  to  vary  certificates  .  475 


TABLE    OF    CONTENTS.  xix 

Form  PAGE 

549.  SuninKiiis  for  liljerty  to  prove  after  time  expired    .         .         .     .  475 

550.  Order  giving  liberty  to  prove  after  time  expired         .         .         .  475 

551.  Summons  for  liberty  to  paj'  dividend  to  creditors  .         .         .     .  475 

552.  Order  giving  liberty  to  i)ay  dividend 476 

553.  Another 476 

554.  Another 476 

555.  477 

556.  Liberty  to  pay  dividend  making  reserve  for  dis])uted  claims       .  477 

557.  Affidavits  by  official  liquidator  as  to  debts  incurred  in  the  wind- 

ing up     477 

558.  Liberty  to  official  liquidator  to  pay  rent 477 

559.  Liberty  to  pay  rates 478 

560.  Liberty  to  pay  costs,  &c. 478 

561.  Order  to  pay  crown  debt 478 


SECURED   CREDITORS. 

562.  Declaration  of  I'ights  of  mortgage  debenture  holders  and  order 

to  pay 479 

563.  Declaration  of  rights  in  favour  of  debenture  holders.     Inquiries  481 

564.  Inquiry  as  to  what  securities  given 482 

565.  Liberty  to  pay  off  mortgage  out  of  proceeds  of  sale  .         .     .  482 

566.  Order  for  payment  of  mortgagees        ......  482 

567.  Liberty  to  give  possession  of  property  to  trustees  for  deljenture 

holders 482 


A  TTEXDIXa    PllOCEEDIXas. 

568.  Liberty  to  creditors  to  attend 

569.  Liberty  to  contributory  to  attend 

570.  Liberty  to  debenture  holders  to  attend        .... 

571.  Appointment  of  committee  to  attend 

572.  Remuneration  of  committee 

573.  Committee  of  contributories 

574.  Appointment  of  creditor's  representative  for  limited  purjiose 


483 
483 
483 

484 
484 
484 
484 


SERVICE. 

575.  General  order  for  ser^^ce  out  of  jurisdiction 485 

576.  Liberty  to  serve  summons  out  of  jurisdiction      ....  485 

577.  Another 486 

578.  Liberty  to  serve  out  of  jurisdiction 486 

579.  Liberty  to  serve  creditors  out  of  jurisdictinu  with  peremptory 

notice  to  prove 486 

580.  Another 487 

581.  Order  for  substituted  service  of  summons 488 

582.  Order  for  substituted  service  of  petition 488 


DILLS. 

583.  ^lemorandum  as  to  bill  of  exchange 488 

584.  Memorandum  of  sanction  to  be  indorsed  on  bill     .         .         .     .     489 

I  2 


TABLE    OF    CONTENTS. 


RESTRAINING    AND    STAYING    ACTIONS    AND    PROCEEDINGS. 
Form 

585.  Order  restraining  county  court  action 

586.  County  court  execution  restrained  . 

587.  Order  restraining  actions  by  reference  to  schedule 

588.  Order  of  judge  of  Q.  B.  Div.  staying  proceedings 

589.  Order  restraining  proceedings  in  foreign  court 

590.  Order  restraining  issue  of  execution 

591.  Restraining  sheriff  from  selling   . 

592.  Restraining  removal  of  goods .... 

593.  Restraining  removal  or  sale  of  goods  . 

594.  Restraining  sale 

595.  Restraining  ])ersons  from  parting  -with  monies 

596.  Restraining  distress  for  rent  .... 
'597.  Order  restraining  distress  for  rate 

598.  Another 

599.  Notice  of  motion  to  dissolve  injimction 


I'AG  E 

490 
490 
490 
491 
491 
491 
492 
492 
492 
492 
493 
493 
493 
493 
493 


TRANSFER. 

600.  Order  transferring  actions 493 

601.  Order  for  transfer 494 

602.  Order  setting  aside  judgment  obtained  in  Com.  Pleas  Div.  in 

action  subsequently  transferred  to  Chancery  Div.    .        .        .     494 


LIllERTY    TO    BRING    ACTIONS,    tOc. 

603.  Liberty  to  debenture  holder  to  bring  action  . 

604.  Another 

605.  Specific  performances.     Administrations 

606.  Liberty  to  proceed  with  action  by  debenture  holders 

607.  Liberty  to  proceed  with  action  in  C.  P.  Div. 

608.  Execution  creditor  given  first  charge  .         .         .         , 

609.  Liberty  to  proceed  with  arbitration 

610.  Liberty  to  distrain 

611.  Another 

612.  Another 


495 
495 
495 
495 
495 
496 
496 
496 
497 
497 


DISCOVERY   AND    INSPECTION   OF   DOCUMENTS. 

613.  Summons  for  affidavit  of  documents  and  inspection 

614.  Order  for  affidavit  and  inspection        .... 

615.  Another 

616.  Order  against  several  respondents       .... 

617.  Order  for  inspection  under  s.  156    . 

618.  Order  for  inspection 

619.  Order  for  inspection  on  voluntary  winding-up 


498 
498 
499 
499 
500 
500 
500 


CROSS-EX  A  MINA  TION. 

620.  Notice  to  pi'oduce  deponent  for  cross-examination  at  hearing  of 
petition    ........... 


501 


.S7  'EC  I A  h    EX  A  MINERS. 


621.  Appointment  on  winding-up  petition 

622. to  lake  cross-examination  of  claimant  . 


501 
502 


TABLE    OP    CONTENTS.  xxi 

Form  PAGE 

623.  Appointment  in  general  terms 

624. on  petition  to  remove  liquidator 

625. with  provision  as  to  interpreter 

626.  Order  for  attendance  of  witness 

627.  Notice  to  produce  at  hearing  of  petition  .         .         .         , 

628.  Notice  to  produce  before  special  examiner  .... 


502 
502 
502 
503 
503 
504 


EXAMINATION    UNDER   Sec.    115. 

629.  Summons  to  attend  for  examination 

630.  Order  giving  liberty  to  summon 

631.  Another  form  providing  for  shorthand  notes  . 

632.  Another 

633.  Another 


505 
505  * 
506 
506 
506 


PROCEEDINGS    UNDER    Sec.    165. 

634.  Order  for  repayment  of  money  improperly  jiaid  for  preliminary 

expenses 508 

635.  Order  on  directors  to  repay  monies  improperly  retained  to  pay 

qualifications 509 

636.  Order  on  directors  as  to  half  premiums  which  ought  to  have 

been  invested 509 

637.  Order  declaring  liability  of  directors  to  refund  dividends  paid 

out  of  capital,  with  inquiries .     509 

638.  Order  against  directors  after  inquiry 510 

639.  Order  on  application  by  respondents  for  security  .         ...     510 


COMPROMISES. 

640.  Affidavit  of  contrilnitory  with  a  view  to  compromise  .        .511 

641.  Another 511 

642.  Summons  to  sanction  agreement  for  compromise         .         .         .  512 

643.  Affidavit  of  off.  liq.  as  to  proposed  compromise     .         .         .     .  512 

644.  Order  sanctit)uing  agreement  for  compromise      .         .         .         .513 

645.  Order  sanctioning  compromise 513 

646.  Another 513 

647.  Liberty  to  oft",  liq.  to  compromise  action 513 

648.  Liberty  to  compromise  with  debtor 514 

649.  Compromise  with  mortgagee 514 

650.  Order  giving  liberty  to  compromise 514 

651.  Compromise 515 


MEETING.''. 

652.  Memorandum  of  direction  for  meeting 515 


OFFICIAL  LIQUIDATOR'S    COSTS. 

653.  Usual  order  to  tax 516 

654.  Tax  costs  including  costs  of  action 517 

655.  Order  to  tax  including  costs  of  appeal 517 

656.  Tax  and  pay 517 

657.  O  o,er  where  change  of  solicitors 517 


xxii  TABLE    OF    CONTENTS. 

Form  PAGE 

658.  Afl&davit  as  to  costs  received  in  respect  of  compromises       .        .518 

659.  Taxing  Master's  certificate 518 

660.  Another      .  518 

661.  Summons  for  liberty  to  pay  costs 518 

662.  Order  giving  liberty  to  pay  costs 518 

663.  Another 519 

664.  Summons  to  tax  costs,  etc.,  including  anticipated  costs  of  dis- 

solving CO  519 


t 


APPEALS. 

665.  Notice  of  appeal  motion 519 

666.  Order  on  appeal  discharging  order 520 

667.  Order  on  appeal  attirming  order  appealed  from       .         .         .     .  521 

668.  Order  refusing  appeal 521 

669.  Order  restraining  advertisement  pending  appeal     .         .         .     .  521 

670.  Liberty  to  appeal 522 

671.  Order  allowing  liquidator's  costs  of  appeal     .        .        .        .     .  522 


STAYING    WINDING-UP. 

672.  Order  staying  winding  up  .         .        .        .        .        .        .        .  522 

UNCLAIMED    DIVIDENDS. 

673.  Order  to  pay  into  court 523 

674.  Order  to  pay  unclaimed  dividends  into  court      ....  523 

DISSOLUTION. 

675.  Dissolution  order 524 

676.  Another 525 

677.  Burn  books 525 

678.  Dissolution  where  guarantee  company  are  sureties      .         .         .  525 

679.  Order  for  distribution  of  assets  and  dissolution       .         .         .     .  526 

680.  Dissolution  order,  and  directions  as  to  unclaimed  dividends       .  526 
680a.  Kestoration  to  register 527 


VOLUNTARY  WINDING  UP. 

681.  Notice  of  first  meeting  to  pass  special  resolution  to  wind  up  .     .  527 

682.  Notice  of  second  meeting  to  confirm  special  resolution  to  wind  up  528 

683.  Notice  of  meeting  to  pass  extraordinary  resolution  to  wind  up   .  528 

684.  Ncjtice-  for  Ga:xttti  of  special  resolution  to  wind  up      .         .         .  528 

685.  Notice  for  Gazette  of  extraordinary  resolution  to  wind  up       .     .  529 

686.  Notice  to  Registrar  of  special  resolution  to  wind  up   .         .         .  530 

687.  Notice  to  contributories 530 

688.  (-all 531 

689.  Notice  of  call 532 

690.  Summons  or  notice  of  motion  to  enforce  calls     ....  532 

691.  Order  enforcing  cull  made  by  li({uidator 532 


TABLE    OF    CONTENTS.  xxiii 

Form  PAGE 

692.  Order  to  pay  calls  made  before  winding  up         ....  533 

693.  Another 534 

694.  Notice  of  motion  to  restrain  distress 534 

695.  Notice  to  creditors 535 

696.  Summons  for  adjudication  on  disputed  claims    ....  536 

697.  Order  for  inquiry  as  to  creditors  of  company 536 

698.  Declaration  of  dividend 536 

699.  Conveyance  of  freeholds 537 

700.  Eesolution 538 

701.  Another 538 

702.  Order  as  to  remuneration  of  liquidator 539 

703.  Summons  to  tax  costs 539 

704.  Order  to  bring  in  account  of  liquidator 539 

705.  Order  removing  liquidator 540 

706.  Another 540 

707.  Notice  of  motion 541 

708.  Formal  parts  of  summons  under  s.  138 541 

709.  Order  giving  general  liberty  to  apply 543 

710.  Another 543 

711.  Notice  convening  final  meeting 543 

712.  Notice  to  registrar  of  final  meeting 544 


WINDING  UP  UNDER  SUPERVISION. 


713.  Supervision  order 

714.  Another  appointing  liquidator     . 

715.  Order  for  appointment  of  liquidators 

716.  Liquidator  ordered  to  give  security 

717.  Order  as  to  appointing  solicitor  to  liquidation 

718.  Lilierty  to  bring  action        .... 

719.  Order  as  to  remunei'ation  of  liquidators  . 

720.  Taxation  of  liquidator's  costs 

721.  Order  removing  liquidator      .... 

722.  Liberty  to  call  final  meeting 


545 
545 
546 
546 
547 
547 
548 
549 
549 
550 


RECONSTRUCTION. 

723.  Agreement  with  a  view  to  reconstruction        ...         .     .  560 

724.  Resolutions  with  a  view  to  reconstruction 563 

725.  Notice  of  dissent  pursuant  to  s.  161 564 

726.  Agreement  for  reconstniction  sanctioned  by  the  court  in  the 

winding  up  of  The  Imperial  Mercantile  Credit  Association    .  964 


AMALGAMATION. 

727.  Agreement  with  a  view  to  an  amalgamation  with  an  existing 
company 


578 


xxiv  TABLE    OF    CONTENTS. 

Form  PAGE 

728.  Resolution  for  amalgamation 579 

729.  Agreement  by  liquidators  with  a  view  to  amalgamation  with  an 

existing  company 579 

730.  Resolution  for  the  amalgamation  of  two  companies  with  a  third     580 

731.  Resolution  for  amalgamation  to  be  effected  by  the  formation  of  a 

new  company 581 


ARRANGEMENT   UNDER   THE   ACT   OF   1870. 

732.  Order  for  meeting 588 

733.  Order  sanctioning  the  sale 588 

734.  Partial  continuance  of  liquidation 589 

735.  Arrangement  for  payment  of  unsecured  creditors  in  full,  deben- 

ture holders  to  give  time,  trust  deed  to  be  modified,  action 

and  winding  up  to  be  stayed 592 

736.  Order  for  meeting 594 

737.  Petition 594 

738.  Order  sanctioning  scheme 595 

739.  Arrangement  for  reconstruction  by  sale  to  new  company,  deben- 

ture holders  to  accept   debentures  and  unsecured  creditors 

composition 597 

740.  Order  confirming  scheme 597 

741.  Arrangement  for  reconstruction,  creditors  to  accept  liability  of 

new  company,  members  to  have  partly  paid  shares  in  new 

company 598 

742.  Notice  of  meetings 599 

743.  Petition  to  confirm  scheme 600 

744.  Notice  of  meetings  to  consider  scheme        .        .        .        .        .  601 

745.  Notice  of  meetings 602 

746.  Scheme  for  reconstruction  :    debenture  holders  take  shares  in 

new  company  .         .         .         • 603 

747.  Order  sanctioning  scheme 606 

748.  Notice  of  meeting  to  consider  scheme 607 

749.  Another.         ..." 608 


SPECIAL   ACTS. 


750.  Act   dissolving   and   re-incorporating  a  water-works  company 

formed  under  the  Act  of  1862 616 

751.  Act  dissolving  and  re-incorporating  a  comjjany  formed  under  the 

Act  of  1862,  and  conferring  varicnis  powers         .         .         .     .     621 
752i  Act  dissolving  and  re-incorporating  a  comjiany  inc(ir})orated  by 
royal  charter  and  conferring  ])ower  to  issue  preference  stock 
taking  priority  over  existing  stock 623 

753.  Act  for  dissolving  and  re-incorj)orating  company  for  continuing 

and  holding  a  cattle  market  and  for  other  purposes     .         .     .     628 

754.  Act  extending  the  objects  of  a  company  formed  under  the  Act  of 

1862 ...     628 


TABLE    OF    CONTENTS. 

Form 

755.  Act  extending  the  olyects  of  a  company  fomied  under  the  Act  of 


1862 


PAGE 


629 


756.  Act  for  amalgamating  two  companies  formed  under  the  Act  of 

1862  ]>y  the  formation  of  a  new  company  under  the  same  Act     630 

757.  Act  for  amalgamating  three  companies  by  dissoh-ing  and  re- 

incorporating them (335 

758.  Act  subdividing  shares,  authorising  conversion  into  preference 

and  ordinary,  authorising  repayment  of  capital  paid  in  advance 

of  calls  and  modifying  regulations 6.36 

759.  Act  authorising  a  company  formed  under  the  Act  of  1862  to 

create  debentures  ranking  in  priority  to  existing  debentures  .     639 


TABLE    OF    CASES. 


A. 


Aberaman  Ironworks  V.  Dickens  391 
ALenlare,  Klionda,  &c.,  Co.  .  .401 
Abrath  v.  North-Eastern  Railway 

Co 283 

Accidental  Death  Insurance  Co.    .     588 

Ins.  Co.  V.  Davis  .     119 

Adair  v.  Young  .  .  .  .17 
Adam's  Policy  Trusts  .  .  .  300 
Adamson's  Case  .  .  .  13,  145 
Addie  v.  The  Western  Bank  .     235 

Adinell's  Case  .  .  .  .210 
Agar  V.  Athenseum  Society  .  .187 
Aggs  V.  Nicholson  ...  5 
Agra  &  Masterman's  Bank,  Li  re 

250,  251,  252,  559,  585 
Agra  &  Masterman's  Bank,  //;  re, 

Ex  parte 250 

Air  Gas,  &c.,  Co.  ....  474 
Akary,  In  re  .  .  .  .  23 
Albert  Life  Assui'ance  Co.,  In  re 

375,  583,  584 
Albert  Life  Assurance  Co.,  Be  .  61 
Albion,  &c.,  Co.,  v.  Martin  .  .  145 
Albion  Life  Assurance  Co.  .  .  496 
Alderson  v.  Maddison  .  .  .  254 
Alexandra  Palace  Co.,  Limited     .      88, 

169,  171,  172,  448,  453,  454,  457,  463, 
504,  507,  508,  510 
Alexandria  Water  Co,  v.  Musgro\'e  222 
AlUance  Co.,  In  re  .  376,  423,  424 
AUman  v.  Doherty  .  .  .  339 
Alma  Spinning  Co.  .  .  143,  149 
Ambergate  Railway  Co.   \-.   Nor- 

cliffe 119 

Ambrose  Lake  Tin  Co.  .  .  40 
American  Bowling  Co.  .  451,  458 
Amos  V.  Chadwick  .  .  .  234 
Anderson's  Case  11,  12,  13,  40,  72, 112, 
241,  244,  245,  400,  463 


Anderson  v.  Butler's  Wharf  CV 
V.  Fitz<jerald 


PAGE 

261 
301 
454 
13 
461 


Anderson,  James,  &  Co. 

Andress'  Case 

Andrew's  Case 

Anglesea  Colliery  Co.,  In  re,      541,  542 

Anglo-American    Leather     Cloth 

Co.,  In  re  ....     450 

Anglo-Continental  Steamship  Co.     519 
Anglo-Danish  Steam   Navigation 

Co 340 

Anglo-Danubiau,  &c.,  Co.  ,  In  re 

131,  132,  152,  261 
Anglo-Egyptian  Co.,  lie  .  .  424 
Anglo-French  Co-operative  So- 
ciety, In  re  .  .  .  448,  508 
Anglo-Italian  Bank  v.  De  Rosaz  .  564 
Anglo-Moravian  Co.  .  .  .  516 
Appletreewick  Leatl  Mining  Co.  .  12 
Appleyard's  Case  .         .    13,  14,  38 

Argentine  Tramways  Co.  Limited 

196,  397,  543 
Arkwright  v.  Newlwld      231,  234,  235, 

236,  243 
Artistic  Coloiu-  Printing  Co.,  lie  489,  535 
Ashbury  Railway,  &c.,  Co.  v.  Riche  66, 
68,  112,  187,  193 
Ashley  v.  Ashley  .         .      211, 523 

Ashton  Vale  Iron  Co.  v.  Abbott  .     195 
Ashurst  V.  Mason  .         .168,  399 

Asiatic  Banking  Corporation      222,  224 

Askew's  Case 400 

Asphaltic  Wood  Co.      .         .         .261 
Association   of    Land    Financiers   424, 

434,  447 

Aston  Co 424 

Athena?um  Life  Assurance  Society 

V.  Pooley  .  .  .  .249 
Attorney-General  v.  Alexander  .  222 
V.  Great  Eastern     68 


TABLE    OF    CASES. 


Attorney-General  v.  Mayor,  &e.,  of 

Cambridge  ....  314 
Atwool  i\  Merry  weather  .  .138 
Andley  Hall  Cotton  Co.  .  51G,  518 
Australian  Co.,  Be       .  .      523,  542 

Australian,  &c.,  Co.  v.  Mounsey  .  83 
Aiistralian  Direct  Steam  Co.  .  521 
Auvergne  Bituminous  Rock  Co.  394,  456 


B. 

Bacon,  Ex  pnrte  ....  50 
Baglan  Hall  Colliery  Co.,  In  re  67,  71 
Bagnall  v.  Carlton     238,  239,  240,  391, 

392 
Bahia,  &c.,  Railway  Co.     117,  126,  223, 

252,  400 
Baird's  Case  .  .  .127,  355 
Baker  v.  Stevenson  ...  22 
Ballycummisk  Co.  .  .  525,  546 
Bangor,  &c.,  Co.  .  .  131,  195 
Bank  of  South  Australia  v.  Abra- 
hams          261 

Bank  of  Turkey  «.  Ottoman  Co.  152,  241 
Barber's  Case  .  .  .  .147 
Barned's  Banking  Co.  .  68,  82,  464 

Barned's  Banking  Co.,  Peel's  Case .  68 
Barnett's  Patent  Asphalte  Paving 

Co ^.     526 

Bari'ow,  &c.,  Co.,  In.  re.  .  12,  159 
Barrow's  Case  .  .  .  .13 
Barry  v.  Sao  Pedro  Brazil  Gas  Co.    406, 

413,  416 
Barter  v.  Dubeux  .         .         .     457 

Bartlett  v.  Holmes  .  .  .266 
Barton's  Trusts  .  .  .  .  1 59 
Bas(pie  Consolidated  Silver  Mining 

Co 499,  510 

Bateman's  Case  ....  504 
Bateman  v.  Lewin  ...  86 
Bath's  Case  ....  (J8,  154 
Bayswater  Club,  &c.,  Co.,  Limited       87 

Beck's  Case 210 

Beckford  r.  Wade  .         .         .     240 

Beer  v.  London  &  Paris  Hotel  .  4 
Belding  v.  Read  ....  259 
Bell  V.  Russia  Cojiper  Co.  .  .  413 
Belper  Laund  Colliery  Co.  .  492,  493 
Bennett  v.  Brumfit  .  .165,  263 
Bentham  Mills  Sjtinning  Co.,  In  re  125, 

128 


PAGE 

Bentley's  Case      ...  12,  13 

Berlin  Great  Market,  &c.,  Co.  .  487 
Bessemer  Steel  Co.  .  .  584,  587 
Betts  V.  De  Vitre  .         .         .17 

V.  Wilmot    .         .         .         .17 

Beverley  Iron  Co.  .  .  453,  494 
Binney  v.  luce  Hall  Coal  Co.,  117,  155 
Bird  V.  Bird's  Patent  Deodorising, 

&c.,  Co.  .  .  .  193,  397,  555 
Birmingham  Brewery  Co.  .  437,  443 
Black  V.  Homersham    .         .         .159 

V.  Mailable  .         .      131,  145 

Blackburn    Building    Society    v. 


Cunliffe     . 
Blaen  Caelan,  Co. 
Blake's  Case 

Blake  v.  The  Albion,  &c. 
Blakeley  Ordnance  Co. 


.     131 

.     499 
231,  244 

.     495 
152,  250,  251, 
260 
Bloxam  v.  Metropolitan  Rail.  Co.     169 
Blyth's  Case  ...        13,  483 

Blyth,  ,J.  &  A.,  Limited  .  .  320 
Bog  Mining  Co.  .  .  .  384,  543 
Bonham,  Inre      .         .         .         .     479 

Booker  &  Co 447 

Borough  of  Hackney  Co.,  lie  .  262 
Borradaile  v.  Hunter  .  .  .  306 
Bowen  v.  Hall  .  .  .  .61 
Bower  Allerton  Collieries  .  .  497 
Bower  v.  Foreign  &  Colonial  Gas 

Co 406 

Boyd's  Trusts,  In  re  .  .  .  427 
Boyle  V.  Bettws  Colliery  Co.  408,  409 
Bramah  v.  Roberts  ...  87 
Brampton  Railway  Co.  .         .     483 

Braunstein  v.   Accidental   Death 

Co 307 

Brentwood  Brick  Co.,  In  re  .     549 

Brett's  Case  .  .  .  .142  Add. 
Brett  V.  East  Lulia,  &c.,  Co.  61,  142 
Brick  &  Stone  Co.,  In  re     133,  141,  191, 

521 
Bridgewater  Co.,  In  re.  .  .  437 
Bridport  Co.,  In  re        .        .      142,  529 


Briggs,  Ex  parte   .         .         .         . 
Brighton  Arcade  Co.  v.  Dowling  . 

Clarendon  Hotel  Co. 

Bristol   &   South  American,    &c., 

Co 

Britannia  Iron  Works  . 
British  Alliance  Corporation 
British  Empire  Horse  . 


232 
531 
476 

.  459 
438,  514 
378,  424 

.  486 


TABLE    OF    CASES. 


PAOE 

British  Farmers,  &c.,  Co.      .      431,  521 
British  Fire  Office         .         .         .499 
British  &  Foreign  Gas  Co.,  Re      .     426 
British  Guardian  Life  Assurance 
Co.,  Limited    426,  427,  492,  507,  508, 
509,  510, 
British  Imperial  Assurance  Corpo- 
ration        .         .      461,  475,  507,  510 
British  India  Steam  Co.       .      263,  271 
British  Marine  Insurance  Co.       .     533 
'  British  National  Life  Assurance 

Association,  Ex  imrte         .         .       82 

British  Seamless  Paper  Box  Co.  20,  40, 

334,  399,  508 

Brown,  Bayley  &  Dixon       .      292,  497 


-  &  Co.  V.  Brown 

-,  John,  »&  Co.  V.  Keehle 

-  V.  Wedgwood  &  Co.  . 


Brown's  Case 
Browne  v.  Cole    . 
V.  Collins . 


18 
402 
409 
142 
267 
159 


Browning  v.  Great  Central  Alining 

Co .4,  60 

Brownlie  v.  Campbell  .  .  .241 
Bryn  Alyn,  &c.,  Co.  .  .  .401 
Brynkinalt  Collieries  .  .  448,  493 
Brynmawr  Coal  &  Iron  Cu.,  In  re    192, 

455 
Bryon  v.  Metropolitan,  &c.,  Omni- 
bus Co 83 

Buchan's  Case  .  .  .  .127 
Buenos  Ayres  Co.  .         .         .11 

Bull  V.  Morrell  ....  87 
Burgess's  Case  .  .  .  232,  233 
Burkinshaw  r.  Nicholls  13,  40,  224, 253 
Burnes  v.  Pennell  124,  170,  11 -2.  354 
Burt  V.  British  Nation  Life  Asso- 
ciation     .....     364 

Bush's  Case 13 

Bussche  v.  Alt  .  .  .  .  148 
Butler's  \\Tiarf  Co.        .         .      457,  520 


C. 

Cadiz  Waterworks  .  .  .  495 
Cadiz  Waterworks  Co.  v.  Barnett  402 
Calcutta  Jute  MHls      .        .  222 

Caledonian  Co.  v.  Sohvay    .  88 

Cambrian,  &c.,  Co.     135,  140,  19  .  505, 

559 
Campbell's  Case    .      131,  194,  £;  I  467 


Campbell  v,  Compagnie  Generale 

de  Bellegarde  .  .  .  .409 
Canada,  &c.,  Co.,  Limited  .  .516 
Canadian,  Land,  &c.,  Co.,  Coventry 

&  Dixon's  Case  .         .         .     508 

Cannon  v.  Trask .  .  .124,  395 
Cape's  Case  .....  355 
Cape  Breton  Co.  .  394,  452,  456,  460, 
461,  483,  500,  502,  506,  508 
Capital  Fire,  Re  .  .  .160,  448 
Cardiff  &  Merthyr,  &c.,  Co.  .     447 

Cargill  V.  Bower  .  .  231,  235,  362 
Carling's  Case  11,  12,  145,  363,  589 

Carmarthenshire  Anthracite  Coal 

Co 430 

Carriage  Co-operative,  Re  .  .  497 
Carter's  Case  ....  504 
Castellan  f.  Preston  .  309,310,311 
Cathcart,  Re         ....     504 

Catholic  Co 381 

Central  American  File  Co.  .  .481 
Central  Railway  Co.  of  Venezuela 

V.  Kisch     .         ,         .      230,  232,  241 

Cesena  Co 222 

Chapel  House  Colliery  Co.  .  379,  423 
Chapleo  v.  Brunswick  Society  132,  233 
Chapman's  Case  .  .  .  .61 
Chapman  r.  Barber's  Case    .         .     117 

f.  Pole  .        .        .311 

Chidley 50 

Chinery  .....  465 
Chisholm   v.    Cadiz    Waterworks 

Limited  ....  411,412 
Circle  Restaurant  v.  La  very .  .  402 
City  Bank,  In  re  .  .  83,  265,  271 
City  and  County  Bank  419,  516,  520 
City  &  County  Investment  Co., 

In  re  .         .      555,  556,  558,  577 

Civil,  &c.,  Supply  Association      .     420 

Clagett 474 

Clarbrough  v.  Toothill .  .  .23 
Clavk,  Ex  2)ctrte  .  .  .  .61 
Clarke  v.  Dickson  .  .  233,  235 
Clarke's  Case  .  .  .  .13 
Clement  v.  Mathews  .  .  .  259 
Clement's  Case  ....  504 
Clifoden  Benefit  Building  Society  428 
Clinch  V.  Financial  Corporation  68,  367, 
396,  558,  577 
Clyne  Tin  Works  .  .  261,  448 
Coal  Consumers'  Association  .  473 
Coates'  Case         ....       72 


TABLE    OF    CASES. 


Coates  V.  London,  &c.,  Railway  Co.  224 
Cocks,  Ex  2)nrte  ....  450 
Colborne  v.  Strawbridge       .  7,  219 

ColdhurstCo 200 

Collie's  Claim  .  .  .  .152 
Collingridge  v.  Eoyal   Insurance 

Co 309 

Collins  V.  Collins  ...       26 

Colonial    Life   Assurance    Co.    v. 
The  Home  &  Colonial  Assurance 
Co.,  Limited     ....       65 
Colonial  Mutual  ....       90 
Colonial  Trusts  Corporation     258,  259, 
261,  481,  547,  549 
Coltness  Iron  Co.  v.  Black   .      170,  222 
Commercial  Bank  Limited  .         .     448 
Commercial  Clothing  Co.      .         .     468 
Compagnie  de  Senegal  v.  Smith   .       24 
Connelly  v.  Steer  .         .         .261 

Contract  Corporation  .  .  499,  507 
Coote  V.  Jecks  ....  257 
Copper  Miners'  Co.  .  .  .  484 
Cork  &  Bandon  Railway  Co.  .  116 
CorneUi'.  Hay  .  .  .  .243 
Cornish  Consolidated,  &c.,  Corpo- 
ration .....  485 
Cornwall  Mining  Co.  v.  Bennett  .    119, 

120 
Cottam  V.  Eastern  Counties  Rail- 
way Co 223 

Count  D'Epineuil,  I)i  re  .  .  259 
County  Life  Assurance  Co.  150-156,  187 
Coventry  &  Dixon's  Case      .      142,  508 

Credit  Co 499,503 

Credit  Foncier  ....  372 
Crew  V.  Terry  .  .  .  .  50 
Creyke's  Case  ....  122 
Crickmer's  Case  .  .  .11,12,71 
Croft  V.  Day  ....  64 
Crookhaven  Mining  Co.  .  .  545 
Cropper  v.  Smith  .         .         .     520 

Croskey  v.  Bank  of  Wales    .     119,  152, 

15.3,  188 
Cross,  III  re  .  .  .  .  •  240 
Crouch  V.  Credit  Foncier  of  Eng- 
land .  .  .251,  252,  265 
Crown  Co-operative  Society  .  462 
Crown  Match  Co.  .  .  .492 
Crum  V.  Oakbank  Co.  .  .  .  89 
Cnimlin  Viaduct  Co.  .  261,  480,  482 
Cruse  r.  Smith  .  .  .  .426 
Cullen  r.  Thompson's  Trustees     .       93 


D. 

PAGE 

Da  Costa  v.  Scandret  .        .     307 

Daniell  v.  Tibbetts  .  .  .309 
D'Arcy  v.  The  Tamar  .  .  .150 
Darlaston  Coal  &  Iron  Co.  Limited    451, 

477,  587 


Davey  v.  Shannon 
Davies  v.  Goodman 
Davis,  Ex  farte    . 

V.  Ashwin  . 

Davison  v.  Gillies 
Davy  V.  Price 
Dawkins  v.  Antrobus 
Dawson  v.  Beeson 

V.  Fitzgerald 

V.  Owen  . 

De  Bussche  v.  Att 
De  Pass'  Case 


.  60 
.  261 
.  160 
.  410 
155,  169,  170,  398 
.  444 
.  121,  179 
25,  418 
.  24 
.  404,  413 
.  145 
.     123 


De  Rosaz  v.  Anglo-Italian  Bank 


De  Ruvigne's  Case 

Denham  &  Co. 

Denny,  Ex  parte  . 

Dent's  Case  . 

Dent  V.  London  Traniways 

Denton  Colliery  Co.     . 

V.  Macneil 

Derljyshire  Wagon  Co. 
Devonshire   Silkstone   Coal 


557, 
564 
12,  142,  363,507 
172 


.  400 
71,  112 
.  169 
14,  15 
.  232 
430,  490 
Co.  521, 
54(t 

Diamond  Fuel  Co.,  hi  re  381,  424,  508, 

520 

Dickenson  v.  Valpy 

Dickson  v.  Harrison 

Direct  United  States  Cable  Co. 

Dixon's  Case 

Doman's  Case 

Dominion  of  Canada  Co.       .      444. 

Doncaster,  Ex  j^c-rte 

Donnell  v.  Bennett 

Dorcase's  Society . 

Dougan's  Case 

Dowlais  Iron  Co. 

Downes  v.  Ship    . 

D'Oyley  r.  British  Chemical  Co, 


87 
520 
557 
311 
573 
461 
139 
339 
432 

87 
515 
245 
409, 
410 
459 

14 


Drake's  Patent  Concrete  Co. 
Droitwich  Salt  Co. 
Dronfield  Co.,  In  re     89,  154,  444,  461, 

516 
Drummond's  Case         .         .         .71 


TABLE    OF    CASES. 


PAGE 

Duckett  i).  Gover  .         .      367, 368 

Duke's  Case  ....       72 

Dunne  v.  English  .         .         .145 

Dunston  v.  Imperial,  &c.,  Co.  .  143 
Dyett's  Case  .  .  .  555,  561 
Dynevor  Collieries  Co.  .      425,  585 

Dynevor  Dvffryn,  &c.,  Co.,  In  re   458, 

584 


E. 


187 


223 
535 
422 

137 
23 


Eagle  Co.,  Ex  imrte    : 
Eaglesfield  v.  IMarquis  of  London- 
derry        ..... 
East  Kent  Shipping  Co. 
East  Llangynog  Lead  Co. 
East    Pant.,  &c.,   Co.  v.    Merry- 
weather     ..... 
Eastern  Counties  Railway  Co.,  Rn 
Ebbw  Vale  Co.     .         .         .170,  474 
Eclipse  Gold  Mining  Company, 

Limited  .  .  .  195,  536,  542 
Economic  Benefit  Society  .  .  458 
Edmunds  v.  Foster  .  .  .  133 
Edwards  f.  Aberavon,&c.,  Society       24 

V.  Midland  RaUway      98,  233 

Elder  v.  New  Zealand  Land  Co.    .     116 
Eley  V.  Positive  Government,  &c., 

Cq.  60,  61,  115,  152,  153,  156,  188 
Elkington's  Case  .  .  .  .246 
Emma  Silver  Mining  Co.     .         .515 

V.  Grant      238, 

239,  240,  392, 
457 

V.  Lewis    237, 

238, 239,  240 
Emmanuel,  Ex  'parte  .  .  .  450 
Emmerson's  Case  .         .         .428 

Empress  Engineering  Co.  1,30,  60, 188 
England  v.  Lord  Tredegar    .         .     308 
Englefield  Colliery  Co.,     152,  153,  188, 
237,  254,  507,  508 


English  Joint-Stock  Bank 

.      504, 

505 

Enthoven  v.  Hoyle 

.      263, 

271 

Era  Co.'s  Case 

87 

Erichsen  ii.  Last  . 

221 

Erimus  Iron 

525 

Erlanger  v.  New  Sombrero 

Co.    57, 

241 

Ernest  v.  NichoUs 

82,  115, 

241 

Esparto  Co., //(-re 

121 

Essex  Brewery  Co. 

39 

Estates  Investment  Co. 

464 

Estcourt  V.  Estcourt  Hop  Co. 
Eswick  V.  Hawkes 
Eupion  Fuel  &  Gas  Co. 
Ei;ropean  Bank    . 
Banking  Co.,  In  re 


Central  Co.,  In  re 

Evan's  Case         .        .         .        . 
Evans  v.  Coventry 

y.  Hearts  of  Oak  Society    . 

Exeter  &  Crediton  Railway  Co.  v. 
Buller 


TAOE 

65 
.  311 
.  462 
.  547 
.  380, 
424,  425 
.  265 
.  71 
.  185 
395 


368 


Fell,  Ex  parte  ....  490 
Ferrao's  Case  .  .  13,  516,  520 
Field  V.  Field  .  .  .  .494 
Fielding  &  Remington's  Case  .  199 
Financial  Corp(5ration,  In  re  82, 87, 168 

Insurance  Co.        .         .     504 

Firmstone's  Case  .    12,  41,  71,  244 

Fisher  v.  Hull  &  Barnsley  Railway 

Co 121,  171 

V.  Keane  .        .        .        .179 

Flagstaff  Co.,  Re  .         .      376,  423,  424 
Flitcroft's  Case     .  88,  89,  169,  171,  172, 
200,  240,  507,  508,  510 
Florence   Land  &  Public  Works 

Co.,  Limited     .         .         .      257,  258 

Forder  v.  Handyside    .         .         .     222 

Forest  of  Dean.  &c..  Co.,  Limited    168, 

457,  488,  508 

Fortune  Copper  Mining  Co.     420,  42 1^ 

453 
Foss  V.  Harbottle  .  .  366,  367 
Fothergill's  Case  .         .  13,  72 

Fox's  Case  .  193,  557,  558,  559,  576 
France  v.  Clark  .  .  .  125  Add. 
Frazer  v.  Cooper,  Hall  &  Co.  364,  407 
Freehold  Land  Co.  v.  Spargo  .  433 
Freeman  v.  Cooke  .  .  .  223 
Furnival  v.  Co< mibes    ...         3 

G. 

Gadd  v.  Houghton  ...  5 
Gamble  v.  Accident  Insurance  Co.  316 
Garden  Gully,  &c.,  Co.  v.  McLister    121, 

146,  188 
QavBtin,  Ex  parte  .         .         .511 

Gartside  v.  Silkstone  Co.      .         .     266 


TABLE    OF    CASES. 


PAGE 

Gaudet  Freres,  &c.,  Co.  .  .  589 
Gelly  Deg.  Colliery  Co.  .  .  18 
General  Estates  Co.,  In  re  251,  260,  271 
General  Exchange  Bank  .  .516 
General  Financial  Bank  380,  426,  4.33 
General  Horticultural,  lie  .  .  505 
General  Machinery  Purchase  Co. .  431 
General  Meat  Co.  ...     422 

General   Mining  Association   Li- 

,    mited 372 

General  Sewage  &  Manure  Co.      ,     476 
General  Share  Trust     .         .      489,  514 
General  South  American  Co.  Li- 
mited .      262,  459,  474,  480,  522 

491 

233 

68 


General  Works  Co. 

Gerhard  v.  Bates  . 

German  Date  Coffee  Co. 

Gibb  V.  Great  Southern  Mysore 

Gold  Co   .... 
Gibbs  V.  Guild 
V.  West's  Case     . 


386 

235 

83 

133 

120 

419 

222 

467,  533 

21,24 

.     376 

.     412 


Gibson  v.  Barton  . 

Gilbert's  Case 

Gilbert  v.  Endean 

Gilbertson  v.  Ferguson 

Gill's  Case  . 

Gillett  V.  Thornton      . 

Globe  Co.     . 

Globe  New  Patent,  &c.,  Co. 

Gold  Co.  11,  40,  240,  402,  504,  505,  542 

Gooch'sCase        .        .         .      126,499 

Good,  In  re  Lee    ....     476 

Goodwin  v.  Robarts      .         .      252,  254 

Gordon  v.  Cassel  Tramways  Co.    .     412 

Gorelj,  Ex  jMrte  .         .         .         .311 

Gouldstone  v.  TheRoyallnsurance 

Co 310 

Goulton  V.  London  Ai'chitectural 

Co 121,  394,  395 

Government  Security  Fire  Insur- 
ance Co.  Limited      .         .     423,  485 
Government  Security  Co.,  In  re 

Mudford's  Claim  .  .  .14 
Governor  &  Co.  of  Copper  Miners  478 
Cover's  Case  .         .      232,  242,  243 

Gower's  Case  ....  461 
Graff  V.  Evans  .  .  .  .106 
Gray  v.  Lewis  .  .  .  365,  367 
Great  Britain  Mutual  .  .  297,  375 
Great  Southern  i\Iysore  Co.  .     430 

Great  Western  Colliery  Co.  Lim.  422 
Great  Western  Laundry  Co.  .     547 


PAGE 

Great  Western  Van  Co.  .  .  452 
Great  Wheal  Polgooth  Co.    .    237,  238, 

508 
Greenbirt  v.  Smee  .  .  .  259 
Greenwood's  Case  .  .  254,  355 
Grey's  Brewery  .  .  .  483,  505 
GrifHth  v.  Paget  .  115,  167,  169,  189, 
241,  397,  556,  557,  561 
Grissell's  Case  ....  467 
Guardian    Fire    v.    Guardian    & 

General  .....  65 
Guinness  v.  Land  Corporation  of 

Ireland  ,36,  67,  84,  88,  112,  121,  155, 

169 
Gustard's  Case  ,  .  .  .125 
Gwendraeth  Colliery    .        .         .     447 


H. 


301, 


557 
123 
311 

457 
480 
493 
231 
450 
354 


Hafod  Hotel,  Re 

Hagire  v.  Danderson 

Haigh  f.  De  la  Cour 

Hale  V.  Bousteud 

Haly  V.  Barry 

Hall,  Ex  ixirte 

Hall  V.  Old  Talargoch  Co, 

V.  Conder 

Hallett  V.  Dowdall 
Hallows  V.  Fernie      142,  231,  232,  235, 

241 
Haly  V.  Barry  ....  480 
Hamilton,  Lord  Claude's  Case  .  133 
Hamilton's  Windsor  Iron  Works 

Co.  .  .  258,  452,  461,  481,  482 
Hammersmith  Town  Hall  Co.  428,  482 
Hampson  v.  Price's  Patent  Candle 

Co 152 

Hanley  Hotel  Co.  'Limited  .  .  493 
Harben  v.  Phillips  61,  ]  39,  147,  366, 
367,  368,  395,  396 
Hardy  v.  Green  ....  259 
Hargrove,  Ex  2}arte  .  .  .91 
Harper  v.  Paget  .  22,  193,  197,  397 
Harris's  Case  .  .  .148,  247 
Harrison  v.  Mexican  Railway  Co. 

131,  195 
Hart  V.  Clark       .        .         .        .121 

V.  Frontino  .         .         .         .223 

Hartley's  Case      ...  14,  15 

Harvev  Lewis'  Caye      .         .         .     143 


TABLE    OF    CASES. 


Harwich  Harbour  Co.  . 

483 

Hauxwell  v.  Hemingrosy 

258 

Haven  Gold  Co.  . 

68 

Ha\vne  Collieries  Co.   . 

548 

Hay's  Case  .         .         .         . 

145 

237 

Haycock's  Policy 

307 

Heaton's  Steel  &  Iron  Co. 

465 

520 

Heiron's  Case 

504 

Helby's  Case 

169 

Heliotyioe  Co. 

454 

Hemming,  ex  parte 

239 

V.  Maddick   . 

117 

Henderson  v.  Lacon,  230,  231,  234,  235, 

388 
Hendricks  v.  ^Montagu  .         .       65 

Henley  &  Co.       .         .         .         .     479 
Henry  v.  Great  Northern  Railway 

Co 181,  398 

Hereford  Engineering  Co.     .         .188 
Hereford  &  South  Wales  Co.,  In 

re 240 

545,  547,  555, 
558 
.     401 
Central 

.  232 
.  50 
.  357 
251,  272,  557 
.  496 
69,  127 
.  494 
.  474 
.  465 
258,  267, 
481 
.  160 
.  520 
.  466 
.  199 


Hester  &  Co.  Limited  . 

Hexham  Mining  Co.     . 
Heyman     v.    European 

Co.    . 
Hickman,  In  re    . 
Hickson  v.  Darlour 
Higg's  Case 
Hill  Pottery  Co,    . 
Hill's  Case   . 
Hillier  v.  &c. 

Hockley  Hall  Collieries  Co, 
Hodges,  Be  . 
Hodson  V.   Tea  Company, 

Holland  v.  Holland 
Holloway  v.  Cheston    . 
Hollybush  Colliery  Co. 
Holme's  Case 
Holmes  v.  Newcastle,  &c.,  Co.,  171,  367 
Holroyd  v.  Marshall 
Holthausen,  Ex  parte    . 
Holywell  Level  Silver  Co.   . 
Home  Assurance  Association,  In 
re      .....         . 

Home  Investment  Society,  In  re, 


Hooker's  Cream  Milk  Co.     . 
Hoole  V.  Great  Western  Railway 

Co 

Hooper  v.  Accidental  Death  Co.  . 


259 
257 
476 

423 
461,. 
516 

382 

159 
315 


PAGE 

Hooper  v.  New  Town  I\Ianure  .  414 
Hooper  Hill,  Re  .  .  .  .502 
Hooper's  Telegraph  Works,  430,  456, 
458,  483,  522 
Hope  V.   International  Financial 

Society,  112,  154,  188,  193,  367,  398 
Hopkin's  Trusts,  In  re  .  .159 
Hopkins,  iZe  .  .  .  .480 
Hopkins  v.  Worcester  &  Birming- 
ham Canal  .  .  .  258,  408 
Hopkins,  Gilkes  &  Co.  .  430,  477 
Horbury  Bridge,  &c.,  Co.,  136, 137,  191, 
192,  448,  542 
Home  V.  Foreign  Gas  Co.     .         .     422 

Hort's  Case 301 

Houldsworth  v.   City  of  Glasgow 

Bank  ...        14,  232,  233 

Household  Insurance  Co.     .         .     485 

Fire  Insurance  Co.  v. 

Grant 247 

Howard's  Case  ....  148 
Howbeacli  Coal  Co.  v.  Teague,  118,  141 
Hoyland  Co.,  Ee,.  .  .  428,  433 
Huggins  V.  Tweed  .  .  .  364 
Hull  Central  Drapery  Co.  .  .  490 
Humber  Iron  Works  Co.,  In  re,    380, 

425 
Humphreys  v.  Pearson  .         .515 

Hunt's  Claim  '  .  .  .  .168 
Hutton  V.  Scarborough  Cliff  Hotel 

Co.     .         .         .      131,  193,  195,  199 
Hydraulic       Engineering       Co., 
Limited 372 


Imperial  Bank  of  Cliina  v.  Bank 

of  Hind.  .  .  213,  558,  576,  577 
Imperial  Blackpool  Co.  .  .  134 
Imperial  Hydropathic  Co.  146,  147,  366  > 

381 

Land  Co.  of  Marseilles, 

In.  re  .     193,  213,  250,  251, 
254,  260,  499 
i\Iercantile  Credit  Asso- 
ciation, Limited      145,  550,  555,  564, 

577 

Ince  Hall  Co.,  Ee  ...       39 

Indian  Zoedone    ....     528 

'   Industrial  Coal  &  Iron  Co.   .         .     495 

'   Inns  of  Court  Hotel  Co.        .      153,260 


xxxiv 


TABLE    OP    CASES. 


PAGE 

International  Co.,  Re    .         .      262,  301 

Contract  Co.'s  Case, 

68,  82,  86,  506 
Life  Assurance   So- 
ciety     .         .         .     484 

Patent    Pull?,    &c., 

Co.  .  448,  487,  522 
Livestors'  Trust  Co.  .  .  .421 
Ipswich  Public  Hall  Co.  .  .  427 
Iron  Sliip,  &c.,  Co.  v.  Blunt  .     118 

V.  Hunt.         .     144 

Iron  Sliipbuilding  Co.  .         .     400 

Irrigation  Co.  of  France        .         .     555 
I  rvi  ne  v.  Union  Bank  of  Australia    131, 

187,  260 
Isle  of  AVight  Ferry  Co.  .  .519 
Eailway    Co.     v. 

Tahourdin         .         .         .     \^Z  Add. 
Ivy  House  &  Northwood  Colliery 

Co 451,  498 

Izard,  Ex  parte     ....     430 

J. 

Jablochkoff  Co.,  Re  .  .  .  423 
.Jackson,  In  re  ....  117 
•Jacoby  v.  Wliitmore  ...  25 
.Jamaica  Fibre  Co.  .  .  .  453 
James  v.  Eve  .  .  142,  171,  576 
.Jameson  v.  Koyal  Insurance  Co.  .  311 
.Japanese  Curtains  Co.  .  .  .  482 
iay,  Ex  parte,  In  rc^avxhow  .  127 
•Jennings  v.  Hammond  .         .       91 

.Johnson  v.  Lyttle's  Iron  Agency 

Limited         .      119,  121,  394 

V.  Benton        .         ,         .     223 

.Joint-Stock  Coal  Co.     .         .         .     496 

Discount  Co.  v.  Brown 

67,  86,  155,  400 
Jones  V.  Cwmarthan  Co.       .         .     222 

V.  Jones      ....       22 

V.  Swansea  Building  Society    481, 

495 

V.  Victoria  Graving  Dock  Co.     61 

Jones'  Case 71 

K. 

Karuth's  Case  .  .  .  .142 
Kellock  V.  Enthoven  .  .  .124 
Kellock's  Case  ....  480 
Kelner  i\  Baxter  ....  2 
Kennedy  v.  Panama  Mail  Co.       .     232 


page 

Kennoor  Fisheries  Co.  .  .  485 
Kent  V.  Freehold  Land  Co.       211,  231, 

388 
King  V.  Marshall  .         .         .261 

Kintrea,  Ex  parte  .         .         .     400 

Kirk  V.  Bell  ....  19 
Kit  Hill  Tunnel  Co.,  469,  473, 475,  476, 

480 
Knight's  Case  .  .  121, 491,  501 
Knox  V.  Gye  .  .  .  .143 
Krehl  v.  Great  Central  Co.  .        .     435 


L. 

Laeouchere  v.  Dawson        .        .      25 

r.  WharnclifFe        .     179 

Lambert  v.  Neuchatel  Co.     .         .169 

V.  Northern,  &c.,  Co.      .     143 

L'amy  ■;'.  Imperial  Chemical,  &c., 

Co 416 

Land  Credit  Co.  v.  Lord  Fermoy, 

88,  399 
Land  Credit  of  L-eland  Co.,  4,  148,  149, 

187 
Langdale  Chemical  Manure  Co., 

In  re 371 

Langer's  Case        .        .         .        .124 
Langham  Skating  Rink  Co.,     423,  430, 

448 
Lawrence  v.  Accidental  Death  Co.     315 

.     119 

.     245 

411,412 

.     210 

.       25 

.       67 

.     302 

.     301 

.     516 

.     125 

.     259 

415 

240 


i:  Wynn 

Lawrence's  Case  . 

Lee  V.  Bowei- 

Leeds  Banking  Co. 

Leggott  11.  Barrett 

Leifchild's  Case    .... 

Leslie  v.  French    .... 

Lethbridge  v.  Adams    . 

Levick,  Ex  2Mrtc   .... 

Lewis,  In  re  .... 

V.  Maddocks 

Limljert  v.  Mineral  Hill,  &c.,  Co. 
Lindsay  Petroleum  Co.  v.  Hurd  . 
Lisbon  Steam  Tramways  Co.  394,  460, 
503,  505,  513,  517 
Lishman's  Case  ....  261 
Liverpool,  &c.,  Co.  v.  Houghton  .  164 
Liverpool  Guarantee  Co.  .  .120 
Llanganneck  Collieries  Co.  .  .  455 
Llanrwst  Slate  Co.  .  .  .  525 
Lloyd  V.  Lloyd  &  Co.  .  .  481,  495 
Llynvi,  Tondu,  &c.,  Co.,     201,  371,  372 


TABLE   OF    CASES. 


PAGE 

Logan's  Case  .  .  .  .61 
Lombard  Bank  .  .  .  .469 
London  &  Asiatic,  &c.,  Co.   .         .     543 

Assurance  Corporation  v. 

The  London  and  West- 
minster Assurance  Cor- 
poration       ...       65 

&  Australian  Agency       .     528 

Bank  of  Scotland     .         .531 

&  Caledonian  Co.     .         .     545 

&  County  Banking  Co.  r. 

The  Capital  and  Couji- 

ties  Bank     .         .        64,  225 

Financial  v.  Kelk     .         .  66 

Fishmarket,  Re         .         .  502 

Guarantee  Co.  v.  Fearnley  330 

&  Hambiu'g  Bank     .         .  466 

India-rubber      Company, 

hire    .         .         .         .  189 

&  Manchester  Association  378 

&  Mercantile  Discount  Co.  137 

Paper,  &c.,  Co.           .         .  539 

&  Paris  Banking  Co.         .  381 

Pianoforte  Co.          .         .  401 

&  Provincial  Law  Assur- 

ance Society  v.  London 
&  Provincial,  &c.,  Co.  64,  72, 
463,  464 

&   South  -  "Western   Bank 

V.  Wentworth       .         .     125 

&    Southwark   Insurance 

Corporation  .         .     474 

&  Staffordshire         .      211,400 

&  Suburban  Bank,  I/i  re,    423 

489,  513 

Tramways  Co.  .         .     398 

&  Westminster  Co-opera- 

tive Store  Co.       .      421,  427 
Longdendale  Cotton  Co.,  In  re     .     383 

Lord  V.  Lee 22 

Los's  Ca.se  .....  557 
Louth  V.  The  Western  of  Canada 

Co 409 

Lowenthal,  Ex  parte  .  .  .471 
Lydney  Co.  v.  Bird  .  .  .  403 
Lyon's  Case  .         .         .         .149 

Lyster's  Case  .  .  .  .149 
Lyttle's  Cast  Steel  Co.  .         .431 


M. 


Macdonald  v.  Law  Union  Insur- 
ance Co 251,  302 

Macdougal  v.  Gardiner      133,  138,  366, 

367 

Macdougall   v.    Jersey    Imperial 
Hotel  Co.  .         .      116,  169,  367,  398 


Maclver's  Claim  . 
Mackay's  Case 
Mackley's  Case     . 
Mackreth  v.  Syraons 
Maclaren  v.  Stainton 
Maclure,  Ex  parte 
Madras  Co.,  Re 
Madrid  Bank  v.  Pelly 
Markets  Co. 


301,  485 
363,  507 
71 
570 
159 
61 
494 
188,  237,  516 
.  458 
.  469, 480 


Maggi,  In  re 

Mahoney  v.  East  Holyford  Min- 
ing Co.       .         .         .      154,  156,  187 

Main  Printing,  &c.,  Co.         .      488,  540 

Mair  v.  Himalaya  Tea  Co.   . 

V.  Railway  Passengers'  Co.  . 

Maitland's  Case    .... 

Malabar  Gold  AVashing  Co.  . 

Malaga  Lead  Co.,  J;i  re,  Firmstone's 
Case         ..... 

Malpaso  Gold  Co. 

Mammoth  CopperopoUs  of  Utah  . 


61 
315 
143 

502 

41 

424 

584 

383,  421 

.     520 

.     540 

.     420 

.       87 

.     419 


Manchester  Co.,  In  re  . 

Economic  . 

Manor  Silkstone  Coal  Co. 

Manui'e  Co.  . 

March  v.  Martin 

Marezzo  Marble  Co.     . 

Marine  Mansions  Co.    83,  260,  261,  481 

Marine  Mutual  v.  Young     .        .       91 

Marron  Bank  Co.  .         .         .     426 

Marsden  v.  City  &  County  Co.      .     327 

Marseilles  Extension  Co,      .      428,  469 

Marshall  v.  Glamorgan  Iron  and 


Coal  Co.    . 

.     187 

Martin's  Case 

.     557 

Marzetti's  Case 

152,  168,  507 

Masbach  v.  Anderson   . 

.     490 

Mason  v.  Harris    . 

.      138, 367 

V.  Taylor,  In  re 

.     263 

Massey,  In  re 

444,  516,  539 

A  n..« 

.     504 

Mathias  v.  Wilts  &  Berks  Canal 

Co. 

.       88 

V.  Yetts  . 

232.  234,  362 

TABLE    OF    CASES. 


Matthews  v.  Great  Northern  Kail- 


way  Co.    . 
Claude's  Case 
Mayhew's  Case     . 
!Mege  and  Augier's  Case 
Melhado  v.  Hamilton    . 
V.   Porto  Allegro 


181,  307 

157,  166 

.     355 

.       12 

.     195 

Rail- 

153,  188 

505,  513 

Telegraiih 

137,  367 


way  Co.    . 
Mendip  Hematite,  &c.,  Co 
]\Ienier    v.     Hooper's 

Works       . 
Merchant  Banking  Co.  of  London 

V.  Merchants,  &c.,  Bank     50,  65,  251 

V.  Phtenix 

Co 254 

Mersey  Docks  c.  Lucas  .      221,  222 

Steel  Co.  V.  Naylor  .    467,  469, 

480 

Metal  Tube  Co 514 

Metrop.,  &c..  Bank,  Eximrte  Davis  160 
j\Ietropolitan  Bank  v.  Heiron  240,  508 
JMidland  Railway  Co.  v.  Pye  .  357 
Mignotti's  Case  ....  71 
Milan  Tramway  Co.,  Limited  .  424, 
429,  469,  485,  503,  508 
Miller's  Case  .  .  .  .412 
JNIilligan  v.  Hellin  Sulphur  Co.  .  416 
Mills  V.  Bayley     ....       22 


V.  The  Northern  Railway  of 


Buenos  Ayres   . 
]\Iilnes  V.  Gery 
Mitcalfe,  In  re      . 
Mitcalfe's  Case 
Mitchell's  (Alex.)  Case 
Moffatt  V.  Farquhar 
Monte  Loreto  Gold,  &c.,  Co. 
Moon  V.  Durden  . 
Moor  V.  Ano-lo-Italian  Bank 


169,  172 
.  26 
.  475 

363,  507 
.  124 

124,  125 

.  475 

.  357 

258,  379, 

473 

.  307 

439,  447 
.  485 


Moore  v.  Woolsey 

]\Ioorwood  Moor  Coal,  &c.,  Co 

Murant's  Trusts,  In  re  . 

Morrison  v.  Thompson .         .         .145 

MoiTiston's  Patent,  &c.,  Co.  .         .     428 

Morvah,  Consols,  &c.,  Co.     .         .145 

Moscow  Gas  Co.  v.  International 

Financial  Society  .  .  .  403 
Moseley  v.  Cressey's  London  Co.  .  247 
Moule's  Patent  Co.  .  .  .  201 
Mowattv.  London  Co-oj).  Laundry 

Co.,  Limited  ....  408 
Mozley  v.  Alston  .        .        .     367 


PAGE 

Mudford's  Claim ....  14 
Muir  V.  City  of  Glasgow  Bank  .  117 
Munster's  Case  146,  147,  244,  366,  395 
Munt  V.  Shrewsbury  and  Chester 

Railway  Co.  .  .  .  .610 
Murray  v.  Bush  ....  142 
Mutual  Society,  Re  .  .  499,  500 
Mycock  V.  Beatson        .         .         .391 


Nant-y-Glo     &     Blaima     Iron 

Works  V.  Grove  .      237,  363,  393 

Nares  v.  Dering  .  .  .  .23 
Nassau  Phosphate  Co.  ...  71 
Natal  Investment  Co.  249,  250,  251 
Nation's  Case  .  .  .  .461 
National  Bank  v.  Hampson  .  .  259 
National  Coffee  Palace  .  .  247 
National  Credit,  &c.,  Co.,  In  re  .  421 
National  Funds  Assurance  Co.      .    172, 

431,  463,  464,  503,  507,  509,  520,  521 
Native  Iron  Ore  Co.  .  .  .  262 
Nelson  Mitchell  v.  City  of  Glasgow 

Bank 124 

New  Brunswick  and  Canada  Rail- 
way Co.  V.  Muggeridge  .  .  229 
New  CaUao  Co.,  Ee  .  .419,  420 
New  Civil  Service  Co-operation, 

In  re  ....  371,  373 
New  Clydach  Co.         .         .        .258 

New  Gas  Co 424 

New  London  and  Brazilian  Bank 

V.  Brocklebank  .         .         .     123 

New    Quebrada    Co.,    Pontifex's 

Case 402 

New  Sombrero  Phosphate  Co.  v. 

Erlanger  20,  149,  239,  240,  242,  243, 
363,  389 
New  Town  Manure  Co.  .  .  495 
New    Westminster    Brewery    v. 

Hannah 566 

New  Zealand  Kapanga,  &c.,  Co.  .  14 
Newport,  &c.,  Co.,  hi  re       .         .13 

Newspaper  Co 549 

Newton  v.  Hetherington  .  .  22 
Nicol's  Case  .  .  .  .232 
Niger  Merchants  v.  Capjier  .  .  402 
Noble's  Explosives  v.  Jones  .  .  17 
Norman  Patent  Sewing  Machine 

Co 443 


TABLE    OF    CASES. 


xxxvu 


PAGE 

North  British  Australian  Co.        .     373 
North  British  Co.  v.  London  Liver- 
pool Co.      310,  311 

r.  Moffatt         .     310 ' 

North  Buckley  Co.  .  .  .461 
North  Hafod  Co.  .         .         .525 

North-Western     of    Montevideo 

&c.,  Co 422 

North  Yorkshii-e  Iron  Co.,  In  re  .  497 
Northampton    Coal,   &c.,   Co.    v. 

Midland  AVagon  Co.  .         .     403 

Northfield  Iron  &  Steel  Co.       460,  527 

Northmoor  Co 200 

Norton  v.  Florence  Ladd  Co.  261,  265 
Norton  Iron  Co.,  Limited  .  380,  450 
Norwich  Provident  Co.         .      447,  483 


0. 

Oak  Pits  Colliery  Co.,  Be  .  .  497 
Oakbank  Co.  v.  Crum  .  .  157,  159 
Oakes  v.  Turrpand  232,  245,  388,  528 
Oakham  Collieries  Co.  .         .     493 

Oglesby's  Case  ....  22 
Oporto  Mining  Co.  .  .  .  525 
Oppenheim  v.   Wreck    Kecovery 

Co 415,  416 

Oriental  Colliery  Co.,  Limited  .  473 
Oriental  Commercial  Bank  .  .  549 
Oriental  Hotels  Co.  .  444,  481,  516 
Oriental  Island  Steam  Co.  .  .  525 
Oriental  Telegram  Agency  .  .  487 
Original  Hartlepool  Collieries  Co.    451, 

497 
Ornamental    Woodwork    Co.    r. 

Brown 116 

Orton  V.  Cleveland  Firebrick  Co.  143 
Orwell  Oyster  Fishery,  Limited  .  525 
Osbom  V.  Derbyshire,  &c.,  Co.  .  491 
Ottoman  Bank  v.  Farley  .  143,  145 
Ottoman  Co.,  Limited  .  .  443,  458 
Overend,  &c.,  v.  Gurney  180,  484,  485 
Overend,  Gurney,  &  Co.  v.  Gibbs    2,  82 

152,  399 
Owen's  Patent  Wheel .  .  .  380 
Oxford  Building  Society    447,  540,  546 


Paget  V.  Griffith   . 
Pagin  and  Gill's  Case  . 
Panama  Co.,  Limited  . 
Panama    Co.    v.    India 

Co 

Paragon  Co. 

Parkgate  Wagon  Co.     . 

Parker,  Ex  })arte  . 

V.  Lewis 

V.  McKenna 

Paris  Skating  Rink  Co.,  lie 


P. 
Padstow  Total  Loss 


91 


PAGE 

.     555 
.       13 

.      256,  260 
Rubber 

.     240 

.     493 

508,  566,  589 

.     400 

.     145 

.      143,  145 

133,  522 

; r.   Lord 

Monson 403 

Parson's  Case  .  .  .  .126 
Patent  Cocoa  Fibre  Co.  376,  423,  509 
Patent  File  Co.,  In  re,   83,  84,  131,  187, 

259 
Patent  Screwed  Boot  and  Shoe  Co., 

He 420 

Patent  Ventilating  Co.  .         .     372 

Pearce  &  Co.  ...        60, 188 

Pearson's  Case     128,  145,  237,  363,  507, 

511 
Peek  v.  Gurney     .         .         .      234, 235 

V.  Trimsaran  Co.  .      408,  409 

Peel's  Case  .  68,  70,  71,  232,  241,  245 
Pellatt's  Case  .  .  .  246,  247 
Pemberton  r.  Topham  .         .     364 

Pender  i:  Lusliington        124,  137,  193, 
366,  367,  368,  396 
Penerley  Mining  Co.    .         .         .     492 
Penhale  &  Lomax  Co.  .         .     383 

Peninsular  Co.  v.  Fleming  .  .  69 
Penn  v.  Lord  Baltimore  .  .  257 
Penney,  Ex  imrte  .        .         .125 

Pennington  v.  Bachr    .         .         .     263 

Pen-y-vanCo 382 

People's  Coal,  &c.,  Co.,  Limited  .  525 
Percy  &  Kelly,  &c.,  Co.  .  .  432 
Perry  r.  Glutton  Coal  Co.     .      404,  410 

V.  Oriental  Hotels  Co.     408,  409 

Peruvian  Railways  Co.,  In  re        68,  86 

V.  Thames, 

&c 68 

Petersburg  Gas  Co.  .  .  .  528 
Pet  re  v.  Petre  ....  240 
PhilUps  V.  Foxall  .  .  .  330 
Phcenix  Bessemer  Co.'s  Case       68,  112, 

261 
Phoenix  Co.,  Re    .         .         .        .136 

V.  Sheridan       .         .     306 

Phosphate  Sewage  Co.,  In  re        .     437 


TABLE    OF    CASES. 


Phosphate  Sewage  Co.   v.    Hart- 

mont  .         .         .      238,  239, 389 

Photographic  Co.  .         .         .     403 

Pickard  v.  Sears  .  .  232,  252,  253 
Pickering  v.  Stej)henson  .  .168 
Piercy  v.  Young  ....  22 
Pinkett  v.  Wright  .  .  .123 
Pinto  Silver  Mining  Co.       .         .     545 

Phmet,  &c.,  Co 500 

Plas-yn-Mho^vJ^s  Co.  .  .  .  496 
Plaskynaston  Tube  Co.  .  39,  372 
Plating  Co.  v.  Farquharson  .  .215 
Plynipton  Mining  Co.  i\  Wilkins, 

&c 390 

Pollard,  Ex  2)artc .  .  .  .257 
Pontifex's  Case  .  .  .  .402 
Poole  Firebrick  Co.,  Lire  310,  525,541 
Pope  &  Pearson  ....  200 
Portland  Cement  Co.  .  .  .  373 
Portuguese  Contract  Co.  .  .  503 
Positive  Government  Security  Life 

Assur.  Co.,  Limited .         .      371,  373 
Power  V.  Hoey     .        .        .        .168 

V.  O'Connor        ,         .         .     168 

Preston  v.  Llelville  .  .  .159 
Price  V.  Anderson  .  .  .159 
Printing,  &c.,  Co.  v.  Sampson  .  16 
Pritchard's  Case  .  .11,  12,  30,  115 
Public  Supply  Association,  In  re  .  507 
Puckle's  Case  .  .  .  .125 
'Pnlhrodk,  Ex  2Mi-te        .         .         .516 

V.   New   Civil   Service 

Co-op.  .       8,  87, 191,  195 

V.  Richmond  Co.  .       61,  366, 

395,  400 

Q. 

Quartz  Hill  Co.  .     215,  419,  501 
Queen  v.  Aspinall         .        .     240,  248 
V.    Government   Stock  In- 
vest. Co.      .      136,  191,  396 

V.  Gurney  &  others     .         .     236 

■ V.  Morton   ....     224 

r.  "Wimbledon  Local  Board     136 

Quilter  r.  Heatley         .         .         .504 

R. 

Railway  Share  Trust,  In  re        .  372 

Steel  &  Plant  Co.,  Ex 

inirie 507 

Ramsgill  Miniu"  Co.    .        .         .  454 


PAGE 

Ranby,  Ex  imrtr.  ....  50 
Ranee's  Case  .  .  158,  170,  507 
Randall  v.  Thonipson  .         .  22,  24 

Ranger  v.  Great  Western  Railway  233 
Raymond  v.  Tapson  .  .  .501 
Rayner  v.  Preston  .  .  .310 
Redgrave  v.  Hurd  .  232,  242,  362 
Reese  River  Silver  Mining  Co.  v. 

Smith 234 

Regent's  Canal  Co.  149,  451,  481,  516 
Canal   Iron   Works  Co., 

Ex  imrte  Grissell  .     539 
Canal  Iron  Works  Co., 

In  re   .         .      131,  261,  444 


United,  &c.,  Co. 

Regina  v.  Catholic  Co. 

v.  Marquita 

V.  Newton 

r.  Tewkesbury 

Retford  Waggon  Co.,  Limited 
Reynard  v.  Arnold 
Reynolds  v.  Accidental  Death  Co. 
V.  Arnold 


353 
133 

160 

133 

146 

473 

311 

315 

.  309 

.   61 

376,  381,  422 

.   496,  584 

.  121 


Rhodes  v.  Forwood 

Rica  Gold  Co.,  In  re 

Richards,  In  re     . 

Rigg's  Case  . 

Rio  Grande,  &c.,  Co.,  Limited  496,  526 

RiscaCoalCo 520 

River  Plate,  &c.,  Co.  .  .  .434 
Roberts,    Goodchap    v.     Roberts, 

In  re  .....     265 

Robinson  v.  Ashton  .  .  .170 
Rocke,  Ex  parte  ....  490 
Rodewald  v.  Wayne's  Co.     .      407,  409 

Rolfe,  Re 22 

'B.oli,  Ex  farte  .  .  .'  .117 
Romford  Canal  Co.  .  .  254,  272 
Roney's  Case  .  .  .  120,  151 
Roots  V.  Snelling  .  .  .  .232 
Rose  &  Co.  V.  Gardden  Lodge  Coal 

Co 490,  535 

Ross  V.  Estates  Investment  Co.     33,  57, 
231,  257,  388 

V.  Gutteridge        .         .         .239 

Rossiter  v.  Trafalgar  Co.  .  .148 
Rouse  V.  Meier  ...  22,  23 
Routh  V.  Webster         .         .        .244 

Rowe,  Re 425 

Rowland's  Case     .         .  12,  13,  224 

Royal  Bank  of  India's  Case      4,  68,  82, 

155 


TABLE    OF    CASES. 


PAGK 

Koyal  British  Bank      .         .         .523 

V.    Turqiiaud    115 

131,  146,  187,  260 

Victoria    Palace,    Tlieatre 

Syndicate  .         .         .         ■     465 

Euabon  Coal  Co.,  Limited  .  .  449 
Kumball  v.  MetroiDolitan  Bank  254,  277 
Riissell  V.  Russell         .         .         •     179 

V.  "Wakefield  Waterworks    171, 

364,  365,  367,  399 
Ryhope  Colliery  Co.  .  .  221,  222 
V.  Foyer        .     336 


Sahlgreen  &  Carrall's  Case 

156 

St.  George's  Advance  Co. 

525 

St.  Josepliberff  Cojiper  Co.    . 

466 

St.  Nazaire  Co.     . 

464 

St.  Thomas  Dock  Co.   . 

379, 

422 

Sands  v.  Thompson 

239 

Sanger's  Case 

124 

Sanitary  Carbon  Co.,  In  re  . 

135 

Sankey  Brook  Coal  Co. 

261 

Sargent,  Ex  imrte 

125 

400 

Saturn,  &c.,  Co.    . 

502 

506 

Scadding  v.  Lorant 

134 

Scholey  v.  Central  Co. 

211 

Scilly  Islands  Telegraph  Co. 

495 

Scott  V.  Avery 

24 

V.  Lord  Eljury 

2 

Scottish  Petroleum  Co.      116, 

143, 

149, 

210, 

232 

245 

Scovell's  Co. 

379 

Severn  Junction  Radway  Co. 

475 

Sewell's  Case 

199 

402 

Shackleford,  Ford  &  Co.  r.  Danger- 

field 

201 

Sharp  V.  Dawes     . 

118 

135 

Sharpe,  In  re 

494 

Sharpley  v.   Loirth  &  East  C( 

)ast 

Railway  Co.       .'        .      116, 

211 

232 

Shaw,  Ex  parte     . 

400 

V.  Benson   . 

91 

V.  Rowley  . 

119 

V.  Simmons 

91 

Sheard,  Ex  parte  . 

447 

Sheffield  Nickel  Co.  v.  Unwin 

18 

Purchasers  ^^o 

533 

Shilling  V.  Accidental  Death  Co.  . 

315 

Shirretf's  Case 

61 

PAGE 

Shropshire  Union,  &c.,  Co.  v.  The 

Queen  .....  224 
Silber  Light  Co.  .  .  .  501,  563 
Silkstone  Co.,  In  re  .  504,  505,  529 
Silver  Valley  Mines  383, 516,  517,  520 
Simm  V.  Anglo-American  Tele- 
graph Co.  ....  224 
Simpson  v.  Accitlental  Death  Co.       316 

V.    Westminster     Palace 

Hotel  Co 367 

Simpson's  Case  ....  246 
Sinclair  v.  Maritime  Passenger  Co.  315 
Su'  John  Moore  Gold  Mining  Co., 

In  re  ...      447,  506,  540 

Sir  E.  Pearson's  Case  .  .  .128 
Slater  v.  Darlaston,  &c.,  Co.  .     409 

Smith,  Ex  iHirte    ....     516 

V.  Accidental  Insurance  Co.     315 

V.  Anderson       .         .         91, 96 

V.  Chad  wick      .    234,  235,  Add, 

V.  Duke  of  Manchester  154,  168 

V.  Hull  Glass  Co.       .         .187 

V.  Sorb}'   ....     241 

V.  Wells    .         .         .         .419 

Smith's  Case  .      231,  232,  244,  400 

Smith,  Ward  &  Co.       .         .         .406 

Snell,  In  re 263 

Societe,  &c.  v.  Tilghman's  Co.  .  17 
Solors.  General  Society  r.  Laml>  .  306 
South  Barrule  Co.       \         .      384,  543 

■ Devon,  &c.,  Association       .     438 

Durham  Co.  v.  Shaw  .      393,  403 

Durham  Iron  Co.     262,  478,  516 

of  France  Lime  Co.     .         .     525 

of  Ireland  Colliery  Co.  r. 

Waddle.         .    ^    .        .        4 

Llanharran  Co.  .         .       18 

Wales  Atlantic,  &c.,  Cu.     .     474 

Southall  V.   British  Mutual  Life 
Assurance  Soc.     145,   555,  557,   559 
563,  576 
Southport    V.     West     Lancashire 

Banking  Co 570 

Southsea  Floral  Hall  Co.  .  .  462 
Sovereign  and  Belgian  Stores  Coal 

Co 465 

Spacknian  v.  Evans  .  .  120,  161 
Spargo's  Case        .         .         .  12,  13 

Stace  &  Worth's  Case  .  .  142,  576 
Stanhope  Silkstone  Collieries  Co.  480 
Stanley's  Case  .  .  .  261,  310 
Star  Rolling  Mills  Co.,  Limited   .     421 


xl 


TABLE    OF    CASES. 


I'ACJE 

State  Fire  Insurance  Co.       .        .     301 

Steel's  Case 247 

Steele  v.  Harmer  ....  87 
Stevenson  v.  Maclean  .  .  .  247 
Stewart,  £■«  jMirfe  .         .         .117 

Stewart's  Case  .  .  .  .400 
Stocken's  Case  .  .  .119,122 
Stokes  V.  Cox  ....  309 
Stockton,  In  re     .         .         •         .123 

Iron  Furnace  Co.,  In  re,     .520 

Malleable  Iron  Co.      124,  1 25 

Stoker  v.  Brocklebank,  &c.,  Co.  .  61 
Stone  V.  City  and  County  Bank,  232, 529 
Storfortli  Lane  Colliery  Co.  .     419 

Strand  Music  Hall,  In  re  .  131,  261 
Stranton  Iron  Works  .         .138,  400 

Steel  and  Iron  Co.         .     124 

Stringer's  Case,  125,  155,  170,  172,  507 
Strong  V.  Harvey  .  .  .310 
Stuart  V.  Norton  .  .  .  .134 
Stuart's  Trusts  .  .  .  .  18 
Stubbs  V.  Lister    .        .        .         .121 

Si;clie&Co 469 

Sulley  V.  Attorney- General  .  .  222 
Sullivan  v.  Mitcalfe  .  .  .  243 
Sutton  V.  Accidental  Death  Co.  .  315 
Sutton's  Trusts  ....  307 
Swan's  Case  ....     504 

Swiss  Times  Co 487 

Syers  v.  Brighton  Brewery  Co.  .  68 
Sykes  v.  Beadon  .         .        .         .     270 

Sykes'  Case 120 

Synion's  Case        .        .         •        .126 


T. 

Tahiti  Cotton  Co.  .  .  .117 
Talbot  V.  Earl  of  Shrewsbury  .  160 
Taurine  Co.,  Limited  .  124,  150,  458 
Tavarone  Mining  Co.  .  .  .  525 
Taylor  v.  Aston    ....     234 

V.  Canadian  Oil         .        .    414 

V.  Caldwell       .         .         .     316 

V.  McKeand      .         .         .     259 

V.  Midland  Railway  Co.    .     117 

■ V.  Railway  Steel  and  Plant 

Co 494,  496 

Tea  Co.,  In  re  The  .  .  434,  457 
Teasdale's  Case  .  .  154,  193,  194 
Tecoma  Silver  Mining  Co.  .  .  425 
Tees  Bottle  Co 125 


PAGE 
487 

61 
188 
374 
494 
317 


Teignmouth,  &c.,  Co.   . 
Telegraph  Despatch  Co.  v.  McLean 
Terrell  v.  Hutton 
Thames  &  Channel  Steamship  Co. 
Thames  Steam  Ferry  . 
Theobald  ;;.  Railway  Passenger  Co. 
Thermo-Electric    Generator    Co., 

Limited  .....  438 
Thomas  v.  Elson  ....  520 
Thos.  W.  Booker  &  Co.,  In  re,  449,  450, 

486 
Thompson  v.  Anderson         .         .       22 

r.  Hudson  .         .         .     267 

V.    Universal    Salvage 

Co 87 

Thorne  v.  Patent  Lionite  .  .  490 
Tillett  V.  Charing  Cross  Railway  .  26 
Times  Life  Assuranee  Co.,  Be  .  423 
Tinfoil  Decorative  Co. .  .  .  487 
Tor^rngton,  Ex  2)C(.rte  .  .  .471 
Totterill  v.  Fareham  Brick  Co.  .  149 
Totty,  ^x  ^;arie  .  .  .  .511 
Touche  V.  Metropolitan  Co.  .     153 

Towcaster  &  Co 424 

Trades  Bank  .  .  .  .419 
Trew  V.  Railway  Passengers  Co.  .  315 
Trimsaran  Coal  Co.  .  .  .  589 
Trower  &  Lawson's  Case  .  .  504 
Trueman's  Estate  .  .  516,  539 
Turquand,   Ex  2Mrte,   Fothergill, 

In  re        ...       50 

V.  Kirby      .         .         .465 

V.  ]\Iarshall .         .         .399 

Twycross  v.  Grant     235,  236,  237,  238, 

243 


U. 
Union  Bank   of  Kingston-upon- 

Hull,  In  re     .         .      542,  557 

~  Hill  Silver  Co.  .         .     163 

• Manufacturing  Co.    .         .     402 

Trust         .         .         .         .423 

United  Kingdom  Electric     .         .     494 

States  Cable  Co.        .         .     558 

Service  Co.       .         .         .     380 

Universal  Non-Tariff  Co.  .  .  309 
Universities  Corporation  .  .  517 
Upton  V.  Brown  .  .  .  .419 
Uruguay,  etc..  Railway  Company,     41, 

214,  379 


TABLE    OF    CASES. 


xli 


V. 

rAGK 

Van  United  Mining  Co.  .  .  526 
Vance  v.  East  Lancashire  Railway 

Co 610 

Vander  v.  Ashwell  .  .  .  485 
Vickerman  v.  Bonvilles  Co.  413,  455 
Vickers  v.  Vickers  ...  26 
Victoria  &  Fenton  Co.  .         .514 

Vining's  Case  ....  558 
Volunteer  Co-operative  Co.  .  .  548 
Von  Heyden  v.  Neustadt  .  .  17 
Vron  Colliery  Co.         .         .     495,496 


W. 

Waddell  I'.  Wolfe  ...  8 
Wain  r.  Walters  .  .  .  .11 
Walkham  United  Mines       .         .     423 

Walker,  i?c 23 

V.  Banagher  Distillery  Co.     535 

V.  London  Tramways  Co.    155, 

193 

V.  Mottram       ...       25 

Wallingford  v.  Mutual  Society  267,  270 
AVandswortli,  &c.,  Co.  r.  Wright  .  137 
Ward  &  Henry's  Case  .  .  .  400 
Ware    v.    The    Grand     Junction 

Waterworks  Co.  ...  88 
Warner  &  Powell's  Arl)itratiou  22,  23 
Warrant  Finance  Company's  Case     469 

Wasland  Co 432 

Waters  v.  Monarch  Co.  .         .     310 

Watford,  &c.,  Kailway  Co.  r.  Lon- 
don &  North  Western  Railway 
Co.  . 
Watney  v.  Musgro\e 
Watson  I'.  Beavan 

V,  Cave     . 

r.  Eales    . 


Watson,  Kipling  &  Co. 
Wayne's    IMerthyr    Steam 

Co 

Wear  Engine  Works  Co.,  In  re 
Wearmouth  Co.    . 
Webh  V.  Earle     . 
V.    Heme     Bay 


24 

222 

22 

364 

119 

478 


sioners 
V.  Whiffin  . 


Coal 

.     452 
376 
.     478 
.      181,  195 
Commis- 
153,  252,  272 
.     516 


Wuhster's  Case 
Wedgwood  Coal  Co.,  In  re, 


PAGE 

.  122 
168,  463, 
508,  584 
.  534 
.  132 
93,  234 
In 


Wednesbury  Newspaper  Co. 

Weeks  v.  Propert 

Weir  V.  Barnett    . 

Welsh  Flannel  &  Tweed  Co., 

re 119 

Welsh  Steam  Coal  .  .  .513 
Wescomh's  Case  ....  520 
West  V.  Baker  ....  50 
West  of  England  Bank  454,  457,  460, 
467,  478,  479,  514 

V.  Booker      83 

V.    March     359 

West  Hartlepool  Iron  Works  Co., 

In  re         ...      379,  383,  427 
West  India  &  Pacihc  Steamship 

Co.,  In  re  .... 

Westbourne  Grove  Drapery  Co.  . 
Western  Benefit  Society 

Brazilian  Co.  . 

of  Canada  Oil,  &c.,  Co. 


371 
545 
420 
495 
379, 
438 
473 


District  Bank 

Westminster  Association  v.    Up- 
ward          490 

Weston's  Case  .  .  .123, 363 
Wethered  r.  Yniscedwyn  Co.  .  409 
Whaley  Bridge  Co.  v.  Green  237,  239 
Whitaker  v.  Robinson  .         .     494 

White's  Case  .         .         .         12,13 

White  V.  British  Empire  Co.         .     306 

White  Star  Co 422 

Whitehouse,  In  re      211,  232,  532,  533, 

542 
Whiteley  Partners,  In  re      .      210,  247 
Whitewash  Paper  Co.  .         .         .     523 
Whitfield  r.  South  Eastern  Rail- 
way Co 98 

Whitworth's  Case  .  .  .  505 
Whittingham  v.  Thornborough  .  307 
Williams,  Ex  imrte     115,  241,  475,  480, 

494 

V.  Carwardine        .         .     252 

V.  Hathaway  .         .         3 

r.  Hopkins    .      469,  473,  474 

V.  St.  George's  Harbour 

Co.  .         .        .115 
1'.  Railway    Steel,    &c , 

Co.  .         .         .494 

V,  Stern         .        .        .123 

d 


xlii 


TABLE   OF   CASES. 


PAUE 

Wills  V.  Murray  .  .  .  .134 
Wincham  Shipbuilding  Co.,  In  re   120, 

517 
Wilson  V.  Church         .        .        .364 

V.  Duckett        .        .        .307 

V.  Lord  Bury    .        .168,  399 

Wing  V.  Harvey  ....  309 
Winspear  v.  Accident  Co.  .  .  315 
Withernsea  Co.  .  .  .  469, 480 
Woolaston's  Case  .        .        .121 

Woollen  Trade  Association  .  .  384 
Woolley  V.  Colman  .  .  .410 
Working  Men's  Mutual  Society  .  501 
Wreck  Recovery  Co.,  In  re  .  .  450 
Wright's  Case       .        .        .        .442 


PAGE 


Wye  Valley  Railway  Co.  v.  Hawes   171, 

172,  366 
Wynne's  Case      ....      87 


Yate  Collieries,  In  re  .        .        .    376 
Yelland's  Case     .        .        .        .61 

Yniscedwyn  Co 495 

Yorkshire,  &c.,  Co.       .        .        .160 

Fibre  Co.     .        .        .499 

Civil   Service   Supply 

Association, Limited    491 


Z. 


Zulueta's  Claim  . 


88 


NOTES   OF   SOME   EDITIONS   CITED,  AND 
ABBREVIATIONS. 


Buckley  on  the  Law  and  Practice  under  the  Companies  Acts,  4th  Ed.,  is 
cited  as  "  Buckley." 

Dart's  Vendors  and  Purchasers,  5tli  Ed.,  1876,  is  cited  as  "  Dart,  V.  P." 

Law  Reports.  The  Chancery  Appeal  cases  and  the  E(|uity  cases  are  cited 
as  «  Ch."  and  "  Eq."  simply. 

Law  Reports  :  New  Series.  In  citing  these  reports  the  notation  Div. 
(e.g.,  1  C.  Div.)  denotes  a  decision  of  the  Court  (jf  Appeal,  Avhile  the 
decisions  of  the  Courts  of  first  instance  are  referred  to  as  1  C.  D.,  2  Q.  B.  D. 
and  the  like. 

The  4th  Ed.  of  Mr.  Justice  Lindley's  work  on  Partnership  and  Com- 
panies. 

The  2nd  Ed.  of  Mr.  Pollock's  work  on  Partnership. 

Seton  on  Decrees,  4th  Ed.,  1877—1880. 

The  Companies  Act,  1862  (2.5  &  26  Vict.  c.  89)  is  sometimes  cited  as 
"  the  Act  of  1862  "  and  "  the  Act." 

The  Companies  Act,  1867  (30  &  31  Vict.  c.  131)  is  sometimes  cited  as 
"  the  Act  of  1867." 

The  Companies  Acts,  1862  and  1867,  are  sometimes  cited  as  "the  Acts  of 
1862  and  1867." 

The  Joint  Stock  Companies  Arrangement  Act,  1870  (33  &  34  Vict. 
c.  104)  is  sometimes  cited  as  "the  Act  of  1870." 

The  Companies  Act,  1877,  is  sometimes  cited  as  "  the  Act  of  1877." 

The  Rules  of  the  Supreme  Court,  1883,  are  sometimes  referred  to  as  "  the 
Rules  of  1883,"  and  sometimes  thus,  "Order ,  r. ." 

In  citing  orders  reference  is  made  to  the  Ijooks  kept  by  the  Registrars 
of  the  High  Court,  as  in  Seton. 


ADDENDA  AND   ERRATA. 


Page    66. — See  London  Financial  Association  v,  Kclk,  W.  N.  1884,  67,  as  to 
construction  of  objects. 

„      83. — In  Form  44  omit  the  word  "other." 

„      96. — Line  20  from  bottom,  read  "generation  "for  "generative." 

„     125.— France  v.  Clark,  now  reported  in  32  W.  E.  466  ;  5  L.  T.  1. 

„  134. — Isle  of  JFirjJit  By.  Co.  v.  Tahourdin,  now  reported  in  25  C.  Div.  ; 
50  L.  T.  131. 

„  141. — Clause  84  :  Add.  reference  to  York  Tramways  Go.  v.  J-Villows, 
8  Q.  B.  D.  685. 

„     142. — Brett's  Case,  now  reported  in  25  C.  Div.  283. 

„     172.— C.  Denlmm  d;  Go.  is  reported  in  32  W.  R.  487. 

„  234  et  scq. — Smith  v.  Chachvick,  affirmed  by  Houi~e  of  Lords,  W.  N. 
1884,  49. 

.,  262.— Br ocklelnirst  v.  Railicay  Printing  Co.,  W.  N.  1884,  70;  28 
S.  J.  358  ;  76  L.  T.  353,  as  to  operation  of  Bills  of  Sale  Act, 
1882,  on  debenture  trust  deed. 

„     372.— Last  line,  read  "  the  "  for  "  this." 

„  409. — Elkins  v.  Capital  Guarantee  Soc.  was  before  the  Ct.  of  Appeal, 
11  Jan.,  1884.  In  line  23  from  top,  insert  "order"  after 
supervision. 

508. — Re  Milan  Tramrmys  Co.,  now  reported  in  25  C.  Div.  587. 


COMPANY    PEECEDENTS. 


AGEEEMENTS. 


INTRODUCTORY    NOTES. 

Beforp;  conimenciiio-  lousiness,  a  company,  in  most  cases,  adopts,  or  Preliminary 
enters  into  a   "preliminary  contract"    for  the  purchase  of  a  specific  *'°''*''''*^^  """^^ 
property,  e.g.,  a  mine,  a  patent,  a  business,  a  concession,  or  an  estate, 
and  seyeral  of  the  following  forms  of  agreement  are  precedents  of  such 
contracts.     AAHiere  there  is  to  be  a  preliminary  contract,  one  or  other  of 
the  following  plans  is  usually  adopted  : — 

Plan  1. — Before  the  incorporation  of  the  company,  the  promoters  Plan  1. 
procure  the  owner  of  the  property  to  enter  into  an  agreement  with  some 
})erson,  on  behalf  of  the  intended  company,  for  the  sale  of  the  property 
to  the  company  upon  certain  terms  and  conditions.  The  memorandum 
and  articles  of  association  of  the  company  are  settled,  with  the  concur- 
rence of  the  vendor  and  of  the  promoters,  contemporaneously  with  this 
agreement.  In  the  articles  is  inserted  a  clause  referring  to  the  agreement 
[see  infra,  Form  117,  cl.  3],  and  authorising  the  directors  to  adopt  and 
carry  it  into  effect.  The  memorandum  and  articles  are  then  registered, 
and  the  registrar  issues  his  certificate,  whereupon  the  company  l)ecomes 
incorporated.  Shortly  after  the  incorporation  the  directors  hold  a 
meeting  at  which  the  preliminary  agreement  is  taken  into  consideration, 
and  a  resolution  jjassed  for  its  adoption,  Notice  of  the  adoption  is  Supplemental 
subsequently  given  to  the  vendor,  and  in  due  course  the  adoption  is  '^o^^^^^g* 
eftected  by  means  of  a  brief  supplemental  agxeement,  to  which  the  executed, 
vendor,  the  agent,  or  trustee,  and  the  company  are  parties,  whereby  the 
original  agreement  is  rendered  binding  on  the  company.  [See  form  of 
siich  agreement,  infra,  p.  ;}0.]  The  adopting  agreement  is  necessary, 
because  it  has  been  held  that  a  company  cannot  ratify  a  contract  made 
on  its  behalf  before  its  incorporation.  Emjyress  Engineer inri  Co.,lQQ. 
Div.  125,  and  see  note  to  Clause  3  of  Form  117  and  Form  139. 

Plan  2. — Before  the  incorporation  of  the  company  an  agreement,  piau  2. 
expressed  to  be  made  between  the  vendor  and  the  company,  for  the  sale 
of  the  property  to  the  company,  is,  with  the  privity  of  the  vendor  and 
the  promoters,  prepared.    The  memorandimi  and  articles  are  at  the  same 

B 


AGREEMENTS. 


Plan  3. 


Reasons  why 
Plan  1  pre- 
ferred. 


Eest  course. 


Personal 
liability  of 
person  con- 
tracting on 
fcehalf  of  a 
company  not 
yet  fonued. 


Agreement 
fihould  be 
framed  so  that 
his  liability 


time  ])rcparcd  and  settled  with  the  like  privity.  In  the  articles  is 
inserted  a  clause  [see  infra,  p.  115]  referrinu'  to  the  agreenient  and 
authorising  or  re(|uiring'  the  directors  torthwith  to  athx  the  seal  of  the 
company  thereto,  or  declaring  that  the  company  shall  forthwith  execute 
the  agreement.  The  memorandum  and  articles  are  then  registei'ed,  and 
the  registrar  issues  his  certificate.  Ki  the  first  meeting  of  the  directors 
the  agreement  is  taken  into  consideration,  and  a  resolution  passed  for 
its  adoption.  The  vendor  is  informed  of  the  resolution,  and  a  day 
appointed  for  comiiletion,  when  the  agreement  is  executed  and  in  due 
course  carried  into  eiFect. 

Plan  3. — This  plan  only  differs  from  Plan  2  in  one  respect,  namely, 
that  the  articles  do  not  expressly  refer  to  the  agreement,  but  authorise 
the  directors  to  jinrchase  the  property  on  such  terms  and  conditions  as 
they  think  fit.  These  general  powers  are  (|uite  as  effectual  as  an 
authority  to  adopt  or  enter  into  a  specific  agreement.  Ovcrmd  cj-  Gvrney 
Co.  V.  Gihh,  L.  E.  5  H.  L.  4(^0.  But  the  other  plans  are  generally 
adopted. 

Plan  1  is  sometimes  preferred  because  :  (d)  Before  going  to  the  expense 
of  forming  the  comiDany,  the  promoters  may  desire  to  have  the  vendor 
bound  to  sell  on  specified  terms.  This  reason  does  not  apply  where  the 
vendor  is  the  promoter,  or  where  the  promoters  arc  in  a  position  to 
dictate  to  him.  (J)  The  promoters  may  desire  absolutely  to  bind  the 
company  to  acquire  the  property  upon  the  terms  arranged  liy  them 
before  its  incorporation.  With  a  view  thereto,  the  terms  are  embodied 
in  a  contract  as  in  Plan  1,  and  in  the  articles  a  clause  is  inserted  direct- 
ing the  directors  to  carry  the  contract  into  effect.  Promoters  sometimes 
think,  and  perhaps  rightly,  that,  if  the  contract  has  already  been 
executed  and  only  waits  for  adoption,  the  directors  will  be  less  likely  to 
raise  questions  as  to  the  terms  fixed  than  would  otherwise  be  the  case. 
But  it  nn;st  not  be  supposed  that  any  such  clause  can  bind  the  directors, 
or  that  it  releases  them  from  the  obligation  to  consider  whether  or  no 
the  adoption  of  the  contract  is  for  the  company's  benefit. 

Whenever  there  is  no  particular  reason  for  adopting  Plan  1,  it  is 
expedient  to  adopt  Plan  2  or  3,  for  by  the  adoption  of  either  of  those 
plans,  the  company  becomes  bound  in  due  course  without  any  appearance 
of  the  contract  liaA'ing  been  forced  on  it,  and  without  the  necessity  for 
an  adopting  contract.     See  the  notes  to  Forms  117,  el.  3,  and  131),  infra. 

Where,  as  in  Plan  1,  a  person  purports  to  contract  as  agent  for  a 
company  not  yet  formed,  he  is,  in  the  absence  of  a  provision  in  the 
contract  to  the  contrary,  personally  liable  on  the  contract.  Kelnor  v. 
Easier,  L.  R.  2  C.  P.  174. 

Nor  is  he  relieved  from  liability  by  the  subsequent  adoption  of  the 
contract  by  the  company.     Scott  v.  Lord  Elnirij,  L.  R.  2  C.  P.  2iu}. 

It  is,  however,  seldom  or  never  the  intention  of  the  parties  tiiat  the 
agent  should  be  so  liable,  and  accordingly,  the  agreement  is  so  framed 
that  his  liability  will  be  merely  nominal.  This  is  effected  as  foUoMs  : 
The  agent  agrees  that  the  company  shall  purchase  the  property ;  a  future 


INTRODUCTOEY    NOTES. 


clay  is  fixed  for  the  coni]tletion  of  the  purchase  ;  it  is  provided  that  upon  should  be 

merely 
nominal. 


the  adoption  of  tlie  agreement  by  the  company,  the  liability  of  the  agent  "lereiy 


shall  cease,  and  that  if  the  company  does  not  adopt  the  agreement  before 
a  certain  day  (prior  to  the  day  fixed  for  completion),  the  agent  may  at 
any  time  afterwards  rescind  it.  The  effect  of  these  prdvisions  is,  that  if 
the  company  adopts  the  agreement,  the  agent  is  freed  from  liability,  and 
if  the  company  does  not  adopt  it  in  due  course,  the  agent,  before  the 
time  fixed  for  completion,  rescinds  the  agreement,  and  thereby  termi- 
nates his  liability  before  he  has  had  to  do  anything  under  the 
agreement. 

A  proviso  thus  Tnniiiiuj  the  liability  of  the  so-called  agent  is  valid  ;  Pi-oviso  limit- 
but,  not  uncommonly,  it  is  provided  that  he  shall  incur  no  2^<'rsonaV^°^^^^!'J^l^ 
responsihility  whatever.     Such  a  proviso  is  treated  as  repugnant  and  "ccus,  if  pur- 
void,  the  result  being  that  the  agent  is  personally  l)ound  to  perform  the  j^eHevtfliim 
contract.     See  FurniraU  \.  Coomlcs,  ."i  ]\I.  &  Gr.  78ti,  and  Willianis  v.  from  all 
Hathaicay,  G  C.  D.  544.  ^^^^^"'^"• 

"When  a  company  is  started  to  acquire  a  specific  property,  and  the  Power  to 
capital  is  to  be  raised  by  public  subscription,  it  is  not  unusual  so  to  ^■^•^ci"'^- 
frame  the  agreement  for  the  purchase  of  the  property,  that  if  within  a 
fixed  period  a  certain  number  of  shares  are  not  taken,  the  company  can 
rescind.  The  object  of  course  is,  that  if  the  com})any  should  fail  in 
raising  the  funds  necessary  to  enable  it  to  commence  business,  it  may  be 
able  to  get  rid  of  the  agreement.  Sometimes  a  similar  power  is  gi^•en 
to  the  vendor,  for  he  may  not  l)e  willing  to  sell  to  a  com})any  which  has 
not  the  means  to  develop  a  prdyterty  for  which  he  is  probably  to  be  paid 
partly  in  shares  ;  or  his  own  right  t(j  sell  may  be  contingent  on  a  certain 
number  of  shares  being  taken  up. 

As  to  filing  ^agreements  in'oviding   for  the  issue  of  paid-up  shares,  Filing  con- 
section  25  of  the  Act  of  1.SG7,  provides  that — 


ti-acts  as  to 
issue  of  imid 
up  shares. 


Every  share  in  any  company  shall  he  deemed  to  have  heen  issued,  and  to  he 
held,  subject  to  the  ixiyment  of  the  whole  amount  thereof  in  cash,  unless  the 
same  shall  have  been  otherwise  determined  by  a  contract  duly  made  in  writing 
and  filed  with  the  registrar  of  joint  stock  companies  at  or  before  the  issue  of 
such  shares. 

Accordingly,  whenever  an  agreement  provides  for  the  issue  of  ])aid-up 
or  partly  paid-up  shares  as  the  consideration  or  part  of  the  consideration 
for  property  or  rights  sold  or  services  rendered  to  the  company,  the 
agreement  should  be  duly  filed  pursuant  to  the  above  section  before  the 
shares  are  allotted,  otherwise  the  allottee  will  be  liable  to  pay  the  nominal 
amount  thereof  in  cash.     Sec  further  as  to  this  section,  infra,  p.  lo. 

As  to  what  contracts  of  a  company  must  be  under  seal.  Se:tion  37  of 

By  s.  37  of  the  Comi)anies  Act  1M(;7,  it  is  provided  as  follows  : —         ^^^  °*^  ^^5''^  =^* 

''  1  '  i  to  contracts. 

Contracts  on  behalf  of  any  company  under  the  principal  Act  may  be  made  as 
follows,  that  is  to  say, — 

(1.)  Any  contract  which,  if  made  between  private  persons,  would  be  by  law 
required  to  be  in  writing,  and  if  made  according  to  English  law  to  be 
\inder  seal,  may  be  made  on  behalf  of  the  company  in  writing  under 

B  2 


4 


AGEEEIklENTS. 


the  common  seal  of  the  company,  and  such  contract  may  be  in  the 
same  manner  varied  or  discharged  : 
(2.)  Any  contract  which,  if  made  between  private  persons,  would  be  by  law 
required  to  be  in  writing  and  signed  by  the  parties  to  be  charged 
therewith,  may  be  made  on  behalf  of  the  company  in  writing,  signed 
by  any  person  acting  under  the  express  or  implied  authority  of  the 
company,  and  such  contract  may  in  the  same  manner  be  varied  or 
discharged : 
(3.)  Any  contract  which,  if  made  between  private  persons,  would  by  law  be 
valid  although  made  by  jjarol  only,  and  not  reduced  to  writing,  may 
be  made  by  parol  on  behalf  of  the  company,  by  any  person  acting  luider 
the  express  or  implied  authority  of  the  comi^any,  and  such  contract 
may,  in  the  same  way  be  varied  or  discharged : 
And  all  contracts  made  according  to  the  provisions  herein  contained  shall  be 
effectual  in  law,  and  shall  be  binding  upon  the  company,  and  their  successors,' 
and  all  other  parties  thereto,  their  heirs,  executors,  or  administrators,  as  the 
case  may  be. 


Effect. 


Constniction 
of  Section  37. 

Authority  of 
agent. 


Contracts 
witliout  sen] 


Form  of  con- 
tract to  be 
executed  on 
behalf  of  a 
comijany. 


This  statutory  power,  it  will  be  ol)served,  applies  to  all  companies 
registered  under  the  Act  of  18G2,  and  hy  virtue  of  it  all  such  comi)anies. 
may,  except  as  regards  the  contracts  specified  in  Sub-section  (1),  con- 
tract without  seal.  The  power  may,  of  course,  be  qualified  by  the 
articles  of  association. 

As  to  who  is  a  "person  acting  under  the  express  or  implied  authority 
of  the  company,"  under  8ul)-sections  (2)  and  (3)  of  the  al)Ove  Section : — 

This  will  depend  on  the  regulations  of  the  company.  Generally 
speaking  the  directors  have  express  or  implied  authority  to  enter  into 
all  contracts  necessary  for  carrying  the  objects  of  the  company  intO' 
effect,  and  of  course,  a  l)oard  meeting  can  exercise  the  authority.  If  the 
board  appro\es  of  a  contract  the  directors  assembled  thereat  can  sign 
the  contract  on  behalf  of  the  company,  pursuant  to  8ul)-section  (2), 
In  most  companies  the  directors  can  delegate  their  powers,  or  any  of 
them,  to  committees  consisting  of  such  member  or  members  of  their 
body  as  they  think  fit,  and,  where  this  is  the  case,  the  po^ver  to  enter 
into  a  specific  contract,  or  into  contracts  generally,  can  be  vested  in  tlic 
committee,  and  a  contract  signed  by  the  committee  will  l)e  binding. 
Ho,  too,  where  there  is  power  to  appoint  agents,  etc.,  or  to  delegate  to  a 
manager  or  other  person.  See  further  as  to  who  is  a  duly  authorised 
person.  Beer  v.  Londoji  and  Paris  Hotel  Co.,  2(i  Eq.  412  ;  Jlroirning  v. 
(ireat  Ceniral  Jlininf/  Co.,  5  H.  &  N.  85G  ;  2!)  L.  J.  Ex.  ;51)t)  :  Ji'oi/af 
BanJc  of  Indices  Case,  4  Ch.  •J->2  ;  Pe  Land  Credit  Co.,  4  Ch.  4(;0.  As 
to  what  contracts  a  trading  company  may  make  without  seal  ai)ai't  from 
the  above  enactment,  see  /■<oitfh  of  Ireland  CoUienj  Co.  v.  Waddle,  Ij.  E. 
o  C.  P.  401)  ;  Pollock  on  Contracts,  133. 

As  to  the  form  which  a  contract  to  be  .signed  on  ])ehalf  of  a  company 
should  take : — Suppose  it  to  be  a  contract  between  A.  B.  and  the  conqiany. 
It  may  be  expressed  to  ha  made  {a)  "between  A.  B.  of  the  one  part,  and 
the  company  of  the  other  part,"  or  {b)  "  between  A.  B.  of  the  one  ])art, 
and  C.  J).  [tJte  person  or  persons  ai'f/iorisrd  lo  eniir  inio  //],  on  behalf  of 
the  company,  on   the  other  part."     Tlie  former  is  generally  considered 


INTEODUCTORY    NOTES.  5 

the  host  plan,  but  they  are  equally  effectual.  Aggs  v.  Kicliulson,  1  H,  & 
N.  Kif) ;  •>:>  L.  J.  Ex.  ;548. 

"Wliere  Plan  {a)  is  adopted  tiie  testimonium  clause  will  run  thus  :  "As 
witness  the  hands  of  the  said  A.  B.  and  of  C.  D.  [E.  F.  and  CI.  H.],  on 
behalf  of  the  company,"  or  "  in  witness  Avhereof  the  said  A.  B.  and  two 
of  the  directors  of  the  company  on  its  behalf  have  hereunto  set  their 
hands." 

Of  course  no  testimonium  clause  is  necessary,  and  it  will  be  sufficient 
if  the  contract  is  signed  thus  : 

A.  B., 

C.  D.,  for  the  Company. 
If  the  au'cnt  is  made  party  to  the  contract  as  in  plan  (h),  the  testi- 
monium clause,  if  used,  will  run  :  "As  witness  the  hands  of  the  said 
parties  hereto  the  day,  &c.,"  and  the  agent  can,  if  he  thinks  it  expedient, 
ex  aJjundaiiti  rauteld,  qualify  his  signature  by  jirefixing  or  adding  words 
showing  his  agency.  Howe\'er,  it  is  now'  settled  that  where  an  agent  Agent  signing 
enters  into  a  contract  on  behalf  of  another,  it  is  not  essential,  in  order  that  f.°"V''"?r  ^'^^ 

.       .  liable  if  it 

he  may  avoid  personal  responsibuity,  to  add  any  qualifying  words  to  his  appears  on 
si(inaturc,  e.ii.,  "as  agent  for  A.  B.,"  or  "on  behalf  of  A.  B.,"  or  '•  on  ^'"-'^  °^, '^°'^,' 

•^  "^  °  .  „  tract  that  he 

account  of  A.  B.,"  or  "for  A.  B."     Prima  fario  if  he  signs  without  quali-  signs  as  agent. 
fication  he  is  personally  liable,  but  it  is  a  question  of  intention,  and  if  in 
the  body  of  the  agreement  he  purport  to  contract  "as  agent,"  or  "on 
accoimt  of,"  or  "on  behalf  of,"  or  "for"  another,  he  will  escape  liability. 
See  Gadd  \. Houghton,  1  Ex.  Div,  3">7,  decided  by  the  Appeal  Court. 

As  to  stamps  : — 

An  agreement  not  u/idr')-  seal  Qntcved  into  by  or  on  behalf  of  a  company  stamps. 
generally  comes  under  the  following  heading  in  the  schedule  to  the  Stamp  Agreement  not 
Act,  1870:  "Agreement  or  any   memorandum  of  an  agreement  made  ^'^'^'■'^' '^^'''^• 
in  England  or  Ireland  under  hand  only,  or  made  in  Scotland  without 
any  clause  of  registration,  and  not  otherwise  specifically  charged  ^vith 
any  duty,  Avhether  the  same  lie  only  evidence  of  a  contract,  or  obligatory 
upon  the  parties  from  its  being  a  written  histriuneut,"  and  accordingly 
requires  a  Qd.  agreement  stamp. 

By  Section  36  of  the    Stamp  Act,  1870,  it  is    provided  that   the  Adhesive 

duty  of  Gd.  upon  an  agreement  may  be  denoted  by  an  adhesive  stamp,  ^t*'"!'^- 

W'hich  is  to  lie  cancelled  ])y  the  person  by  whom  the  agreement  is  first 

executed. 

The  mode  of  cancelling   is   prescribed   by  Section  24  of  the   Act,  How  to  he  • 
1  ^  cancelled, 

namely  : 

"  An  instrument,  the  duty  ui^on  which  is  required  or  permitted  by  law,  to  be 
denoted  by  an  adhesive  stamp,  is  not  to  be  deemed  duly  stamped  with  an  adhe- 
sive stamp  unless  the  person  required  by  law  to  cancel  such  adhesive  stamp 
cancels  the  same  by  writing  on  or  across  the  stamp  his  name  or  initials,  or  the 
name  or  initials  of  his  firm,  together  with  the  true  date  of  his  so  writing,  so 
that  tlie  stamp  may  Vje  etfectiially  cancelled,  and  rendered  incapable  of  being- 
used  for  any  other  instrument,  or  unless  it  is  otherwise  proved  that  the  stamp 
appearing  on  the  instrument  was  affixed  thereto  at  the  proper  time." 


AGREEMENTS. 


Stamp  for 
agreement 
under  seal. 


How  company 
should  make 
simple  con- 
tract. 


"Wlietlier 
agreement 
can  be  a 
conveyance. 


The  same  section  also  provides  that  every  jiersou  who,  being  required 
by  law  to  cancel  an  adhesive  stamp,  wilfully  neglects  or  refuses  duly  and 
effectually  to  do  so  in  manner  aforesaid  shall  forfeit  the  sum  of  1(»/. 

As  to  stamping  an  agreement  under  ihe  seal  of  a  company  : — 

It  is  generally  assumed  that  every  agreement  l)y  a  company  under  its 
seal  is  a  deed,  and  therefore  if  not  otherwise  specifically  charged  with 
duty  l»y  the  Stamp  Act,  1S70,  is  liable  as  a  "Deed  of  any  kind  whatso- 
ever, not  describi'd  in  this  schedule"  (Schedule  to  the  Act),  i.e.  rciiuires 
a  lOs.  deed  stani}) :  and  this  appears  to  be  the  correct  view.  This  is  the 
view  taken  l)y  the  Commissioners  of  Inland  Ilevenue,  and  accordingly 
every  contract  under  a  company's  seal  to  be  filed  with  the  liegisti'ar  of 
Joint  Stock  Companies  must  be  so  stamped  before  it  can  be  filed. 

Where  a  company  desires  to  make  a  simple  contract  in  writing,  the 
proper  ])\im  a})pears  to  be  to  procure  it  to  be  signed  on  behalf  of  the 
company  as  above  mentioned,  p.  4.  It  will  Ije  just  as  binding  as  if  under 
seal,  and  no  difficulty  can  then  arise  as  to  the  stamp. 

In  settling  an  agreement  for  sale  which  has  to  l)e  filed,  care  should  be 
taken  that  it  does  not  operate  as  a  conveyance  so  as  to  be  chargeable 
with  the  ad  valorem  duty  upon  conveyances  on  sale.  It  must  be  borne 
in  mind  that  by  S.  70  of  the  Stamp  Act,  1870,  "The  term  'Con^■eyauce 
on  Sale  '  includes  every  instrument  ....  whereby  any  property  upon  the 
sale  thereof  is  legally  or  equitably  transferred  to  or  -s'ested  in  the  pur- 
chaser or  any  other  person  on  his  behalf  or  by  his  direction."  Where 
the  agreement  provides  for  payment  of  the  consideration  and  completion 
at  some  future  time,  and  contains  jirovisions  as  to  making  out  title  or 
power  to  rescind,  it  cannot  possibly  be  held  a  coiiveyance,  but  questions 
do  sometimes  arise  on  carelessly  drawn  documents.  And  the  registrar 
is  ])Ound  under  a  penalty  of  10/.  to  see  that  every  document  filed  with 
him  is  duly  stamped,  S.  22  of  the  Stamp  Act,  1870. 


AGREEMENTS. 


Agreement  ivWi  afjent  for  intended  CoiiPANY  for  sale  of  Business  of    Form  1. 
jMechaxical  Exgixeer,  including  Leaseholds  and  Chattels. 
( 'onsidcration :  Cash  and  Sluires.     Vendor  not  to  carry  on  similar 
husiness.     Power  to  rescind. 

This  is  an  example  of  the  form  of  ao-reement  commonly  adoi)ted  in  Plan  1, 
supra, 1^.  1. 

AN  AGREEMENT  made  the day  of ,  between  A.,  of Parties. 

(hereinafter  caUed  tlie  vendor)   of  tlie  one  part,  and  ]>.,  of  ,  as 

trustee  for  and  on  l)ehalf  of  the  company  hereinafter  mentioned,  of  the 
other  part.  AYhereas  the  vendor  has  for  some  time  past  carried  on  Recitals, 
husiness  as  a  mechanical  engineer  upon  tlie  leasehold  hereditaments 
hereinafter  described  :  And  whereas  a  company  is  about  to  l)e  formed 
under  the  Comiianies  Acts,  18(;2  to  lS8o,  having  for  its  objects  among- 
other  things  the  acquisition  and  working  of  the  said  business  :  And 
whereas  the  memoraiulum  and  articles  of  association  of  the  company 
have,  with  the  privity  of  the  vendor,  Ijeen  already  i)repared  (r/):  And 
whereas  the  nominal  capital  of  the  company  is  to  be  «0,oO()/.,  divided 
into  10,(»0(»  shares  of  8/.  each  :  And  whereas  by  the  said  articles  of 
association  it  is  jirovided  that  the  directors  of  the  company  shall, 
immediately  after  the  incorporation  thereof,  adoi)t,  on  l^ehalf  of  the 
company,  and  carry  into  effect  an  agreement  therein  referred  to,  being 
these  presents  :  Now  it  is  hereby  agreed  as  follows  :— 

(a)  Sometimes  the  memorandum  and  articles  have  not  been  prepared  when 
the  agreement  is  executed,  and  in  such  case  the  third  and  fifth  recitals  should 
be  omitted. 

1.  The  vendor  shall  sell,  and  the  company  shall  purchase  :  First,  the  Agreement  for 
leasehold  hereditaments  described  in  the  schedule  hereto,  for  the  unex-  ^^^^' 
l)ired  residue  of  a  term  of  ninety-nine  years  therein  granted  by  the  Parcel 
indenture  of  lease  specified  in  the  same  schedule,  subject  to  the  rent 
reserved  by  the  said  indenture  of  lease,  and  the  covenants  and  con- 
ditions therein  contained,  and  on  the  lessees'  part  to  be  observed  and 
performed.    Secondly,  the  steam-hammers,  cranes,  steam-engines,  lathes, 
and  all  other  the  plant,  machinery,  tools,  stock-in-trade,  chattels,  and 
effects,  in  or  about  the   said  premises  firstly  described.     Thirdly,  the 
good-will  of  the  said  business,  and  all  book  and  other  debts  due  to  the 
vendor  in  connection  with  the  said  business,  and  the  full  benefit  of  all 


8  AGEEEMENTS. 

Form  1.     securities  for  sucli  debts,  and  of  all  contracts,  engagements,  rights,  and 
■  privileges,    to   ^vllicll   the  vendor  is   entitled   in   relation   to   the  said 

business. 
Consideration,  2.  The  consideration  for  the  said  sale  shall  l)e  the  sum  of  20,(h )()/., 
shares^"^'^  which  shall  be  paid  and  satished  as  follows  ;  namely,  as  to  the  sum  of 
4,0()OZ.  in  cash,  and  as  to  the  residue  by  the  allotment  to  the  vendor, 
or  his  nominee  (?>)  or  nominees,  of  1,500  fully  paid  up  (c)  shares  in  the 
company  of  8/.  each,  to  Ite  numbered  (d) to inclusive. 

(b)  As  to  the  validity  of  this,  see  infra,  p.  11. 

(c)  As  to  the  necessity  for  filing  this  agreement  with  the  Registrar  of  Joint 
Stock  Companies,  see  infra,  p.  10. 

((?)  As  to  giving  the  numbers,  see  infra,  p.  11. 

Vendor's  title  o.  The  title  of  the  ^•L■lKIor  to  the  said  leasehold  hereditaments  shall 
to  leaseholds,  commence  Vi'ith  the  said  indenture  of  lease,  [and  the  company  shall  not 
call  for  the  production  of,  or  investigate  or  make  any  objection  or 
recpiisition  in  resjiect  of  the  title  of  the  lessors,  or  the  right  to  grant 
the  lease,  and  the  production  of  a  receipt  for  the  last  payment  of  rent 
which  shall  have  accrued  due  under  the  said  indenture  of  lease  pre- 
viously to  the  completion  of  the  purchase  shall  be  accepted  by  the  com- 
pany as  conclusive  evidence  that  all  the  covenants  and  conditions  in  the 
lease  have  l)ecn  performed  and  observed  up  to  the  completion  of  the  pur- 
chase, or  that  all  lu'cachcs  thereof,  if  any.  have  been  waived  {f)']. 

(e)  Stringent  conditions  as  to  title  and  evidence  of  title  are  rarely  inserted 
in  agreements  for  sale  to  newly  formed  companies  and  in  general  the  words  in 
brackets  may  be  omitted  in  reliance  on  the  Y.  &  P.  Act,  1871,  s.  2,  and  the  Conv. 
Act,  1881,  s.  3.  It  is,  however,  conceived  that  those  enactments  do  not  prevent  a 
purchaser  from  raising  an  objection  discovered  oiiMftdc.  See  Waddell  v.  Wolfe, 
L.  K.  9  Q.  B.  olo.  Occasionally  a  clause  as  follows  is  inserted:  "  If  the  com- 
pany shall  insist  on  any  objection  or  requisition  as  to  title,  conveyance  or 
otherwise  which  the  vendor  shall  be  unable  or  on  the  ground  of  exi^ense,  de- 
lay or  otherwise  shall  be  unwilling  to  comply  with,  the  vendor  may,  notwith- 
standing any  previous  negotiation  or  litigation  by  notice  in  writing  rescind 
this  agreement  without  giving  rise  to  any  claim  for  expense  or  otherwise." 

Completion  of        ^-  ^'I'G  purchase  shall  l)e  completed  on  the day  of next,  at 

purchase.  the  officcs  of  Messrs. ,  the  vendor's  solicitor,  when  the  company 

shall  pay  the  said  sum  of  4,0001.,  cash,  to  the  vendor,  or  as  he  shall 

direct  (/). 

(./")  If  the  company  is  a  public  one,  in  which  the  capital  has  to  be  sought  l>y 
the  issue  to  the  public  of  a  prospectus,  some  months  Avill  be  allowed  for  com- 
pletion. But  if  it  is  the  conversion  of  a.  private  business  into  a  company  A\-ith- 
out  appeal  to  the  public  there  need  be  no  delay.  However,  in  any  event 
sufficient  time  must  be  allowed  to  get  the  agreement  filed  pursuant  to  s.  25  of 
the  Act  of  18G7.     See  infra,  p.  10. 

Allotment  •"»•  '''^it!  comjjany  shall  also,  on  or  before  the  said  day  of  • 

of  shares.  j^^xt,  allot  the  Said  1,000  shares  as  hereinbefore  provided. 


When  vendor         (J.  Uj^ou  such  payment  and  allotment  as  aforesaid  being   made  the 

to  execute 
assurances. 


"cs  &c  ^^^^or  shall,  at  the  expense  of  the  company,  execute  and  do  all  such 


FOEMS.  9 

assurances  and  things  as  may  reasonably  be  required  for  vesting  in  the     Form  1. 
company  the  said  prcnn'sos  agreed  to  be  herel)y  sold,  and  giving  to  it  the 
full  benefit  of  this  agreement. 

7.  If  from  any  cause  whatever  the  purchase  shall  not  be  completed  As  to  interest 

on  the day  of nexL,  the  company  shall  pay  interest  on  the  delayed.*^  ^^^ 

said  sum  of  4,000/.  at  the  rate  of  1 0  per  cent,  per  annum,  from  that  day 

until  the  ])urchase  shall  be  completed. 

8.  The  vendor  {[/)  shall  not  at  any  time  hereafter,  either  solely  or  Vendor  not 
jointly,  '^\-ith,  or  as  manager  or  agent  for  any  other  person  or  persons,  or  ^^jj^fj^/biisi- 
company,  directly  or  indirectly,  carry  on,  or  be  engaged,  or  concerned,  ness. 

or  interested  in  the  business  of  a  mechanical  engineer,  nor  permit  or 

suffer  his  name  to  l)e  used  or  employed  in  carrying  on  or  in  connection 

with  the  said  business,  within  100  miles  of  the  said  leasehold  premises, 

save  so  far  as  the  vendor  shall  as  a  member  of  the  comi)any  be  interested, 

i)V  as  an  officer  or  servant  or  agent  of  the  comi)any  l)e  employed,  in  the 

said  business  agreed  to  be  hereliy  sold  :  [And  in  case  the  vendor  shall  Liquidated 

commit  any  .bi'each  of  the  foregoing  stipulation,  he  shall  pay  to  the  '^''^"^^ses. 

company  [innnediately  on  every  such  breach]  the   sum  of /.,  as 

liquidated  damages  in  res})ect  thereof.] 

(g)  "  The  rule  established  by  the  modern  decisions  is  in  effect  as  follows  : — 
"  An  agreement  not  to  carry  on  a  particular  trade  or  business  is  a  valid  con- 
tract if  it  satisfies  the  following  conditions: — 1.  It  must  be  founded  on  a 
vahiable  consideration.  2.  It  must  not  be  unlimited  as  to  space.  3.  And  the 
restriction  must  not  go  beyond  what  in  the  judgment  of  the  court  is  reasonably 
necessary  for  the  protection  of  the  other  partj',  regard  being  had  to  the  natui*e 
of  the  trade  or  business."     Pollock  on  Contracts,  p.  313. 

9.  The   possession    of  the  said   premise-s  shall    I)e   retained   by  the  Possession 

\endor  up  to  the  said day  of next,  and  in  the  meantime  he  [.(jli^pietion. 

shall,  at  his  own  expense  and  for  his  own  benefit,  carry  on  the  said  Profits, 
business  in  the  same  manner  as  heretofore.     All  outgoings  in  respect  of  outgoings.' 
the  said  leasehold  premises  shall  be  discharged  by  the  Aendor  up  to  the 

said day  of  next,  and  as  from  that  day  the  outgoings  in 

respect  thereof  shall  Ije  discharged  and  the  possession  taken  by  the 
company.  Huch  outgoings  shall  if  necessary  be  a})portioned  between  the 
vendor  and  the  com})any. 

10.  The  comiiany  shall  undertake  and  perform  the  several  contracts  Oompany  to 
aud  engagements  the  benefit  whereof  is  hereljy  agreed  to  lie  sold,  aiid  H^,^  °pj"^^^g^g_ 
shall  indenniify  the  vendor,  his  heirs,  executors,  and  administrators,  and 

his  and  their  estates  and  effects,  from  and  against  all  actions,  proceed- 
ijigs,  costs,  and  exi)enses,  claims,  and  demands,  in  respect  thereof. 

11.  All  Ijooks  of  account  and  other  documents  relating  to  the  said  As  to  books  of 
business  shall  be  handed  over  to  the  eom])aiiy  on  the  completion  of  the  •^''^°"'^  • 
purchase. 

12.  Upon  (//;  the  ndoptiou  of  this  agreement  by  the  company,  the  Pi^'^l'^rge  of 
said  B.  sb.all  be  discharged  from  all  lialjility  in  respect  thereof.  liabilitv. 

(/()  As  to  this  clause,  see  sttjjra,  p.  3,  ct  scq. 


10 


AGEEEMENTS. 


Form  1. 

Eescission  of 
shares  not 
taken. 


Rescission  in 
default  of 
adoption. 

No  compensa- 
tion for  rescis- 
sion. 

Filing  the 
agreement. 


13.  Unless  1)cfore  tlic day  of next,  at  least shares  in 

tlio  company's  t'a])ital  shall  have  been  taken  np  [and  a  deposit  of  /. 

per  share  i)aid  thereon],  either  of  the  parties  hereto  may,  1)y  notice  in 
writing  to  the  other,  rescind  this  agreement.  And  after  adopting  this 
agreement  the  company  shah  stand  in  the  place  of  the  said  B.  for  the 
purposes  of  this  clause. 

In  the  case  of  ajjublic  company  the  above  is  commonly  inserted  so  that  if  the 
shares  are  not  satisfactorily  taken  up  before  the  time  for  completion  either 
pai-ty  may  abandon  the  sale. 

14.  If  this  agreement  shall  not  be  ado))te(l  l)y  the  company  l)efore 

the day  of- •  next,  either  of  the  parties  hereto  may,  by  notice 

in  wi-iting  to  the  other,  rescind  the  same.     [See  siqmi,  p.  o]. 

l."».  The  rescission  of  this  agreement,  imder  Clauses  13  or  14, shall  not 
gi\e  rise  to  any  claim  for  compensation,  expenses,  or  otherwise. 

l(i.  The  comjiany  shall  cause  this  agreement  to  l)e  filed  with  the 
Registrar  of  Joint-Stock  Companies  before  any  of  the  said  shares  are 
allotted. 

As  to  sjiecial  clause  where  vendor  a  jn-omoter,  see  infra,  p.  20. 

As  WITNESS  the  hands  of  the  parties  hereto,  the  day  and  year  first 
above  written. 

The  schedule  above  kefeered  to. 

\_T}iis  will  coniabi imrikulara  of  flw  Icaseliold  jirfmiscs.'] 


As  to  the  Issue  of  Paid-ui)  Shares. 

Issue  of  paid-         Companies  frecpiently  agree  to  issue  paid-up  or  partly  paid-up  shares,  in  con- 
up  shares,  si  deration  of  projjerty  or  rights  sold,  or  services  rendered  to  the  company.     In 
such  cases  s.  25  of  the  Act  of  18G7  must  be  borne  in  mind.     It  is  in  these  terms  : 

"  Every  share  in  any  company  shall  be  deemed  to  have  been  issued,  and  to  be 
held,  subject  to  the  payment  of  the  whole  amount  thereof  in  cash,  unless  the 
same  shall  have  been  otherwise  determined  by  a  contract  duly  made  in  writing- 
and  filed  with  the  Registrar  of  Joint  Stock  Comijanies  at  or  before  the  issue  of 
such  shares." 

Accordingly,  whenever  it  is  arranged  that  a  company  is  to  issue  fully  paid-up 
or  imrtly  paid-ui>  shares  for  a  consideration  other  than  cash,  e.g.,  in  considera- 
tion of  property  or  rights  sold  or  services  rendered  to  the  company,  the  con- 
tract (a)  must  be  put  in  writing,  and  (h)  must  be  filed  before  the  shares  ai'e 
issued. 

The  following  points  may  be  noticed  in  reference  to  this  section : 

(1.)  As  to  the  2>c'rties  to  the  contract. — If  the  company  is  in  existence  it  should 
be  made  a  party  thereto,  or  the  contract  should  be  made  by  some  jjerson  pur- 
porting to  act  on  behalf  of  the  comimny.  But  it  is  not  clear  that  this  is  essen- 
tial, and  it  wotild  seem  that  any  contract  in  writing  duly  filed  which  is  acted 
on  by  the  company  would  be  sufficient.  At  any  rate  an  agreement  made  between 
a  vendor  and  some  person  purporting  to  act  as  trustee  or  agent  for  an  intended 
company  is  sufficient  if  duly  filed.     Hartley's  case,  10  Ch.  159. 

(2.)  As  to  the  aggregate  number  of  shares  being  stated. — It  has  not  been  settled 
whether  the  contract  must  state  how  many  shares  are  to  be  issued  under  it  as 
paid-up.  Before  the  Act  of  18G7  there  was  no  need  in  a  contract  for  the  issue 
of  paid-up  shares  to  state  the  number,  e.g.,  a  company  could,  it  is  conceived. 


Parties 


As  to  statini 
number  of 
shares. 


FORMS.  1 1 

agree  to  purchase  projierty  at  a  valuation,  to  be  i^aitl  in  fully  paid-up  shares.      Form  1. 

or  to  purchase  goods  when  wanted  from  A.  in  consideration  of  paid-up  shares  ; 

and  it  may  be  contended  that   s.  25  was  not  intended  to  interfere  with  such 

contracts,  but  merely  to  require  them  to  be  in  writing  and  filed.     On  the  other 

hand  it  may  be  said  that  the  object  of  the  Legislatui-e  was  to  protect  the  public 

— to  enable  a  jjerson  about  to  deal  with  a  company  to  ascertain  its  position — 

and  accordingly  that  the  Act  ought  so  to  be  construed  as  best  to  effectuate  that 

intention.     Now,  if  the  filed  contract  need  not  show  the  number  of  shares  to  be 

issued  under  it,  a  person  examining  the  returns  at  the  registration  office  may  not 

be  able  to  obtain  any  insight  into  the  company's  jjosition,  e.g.,  he  may  see  that 

1000  shares  have  been  issued,  and  that  there  is  a  contract  under  which  they 

ir.ay  have  been  issued.     Until  the  point  has  been  settled  it  seems  advisable 

that  the  contract  filed  should  state  the  number  of  shares,  and  accordingly, 

whex'e  the  main  contract  does  not  state  the  same  a  sup^jlemental  contract  should 

be  filed  before  the  shares  are  issued. 

(3.)  As  to  the  denoting  numbers  of  the  shares. — The  contract  appai'ently  need  As  to  denoting 
not  specify  the  denoting  numbers  of  the  shares  to  be  issued.     A  doubt  on  this  ""mbers  oi 
point  was  expressed  by  Mellish,  L.  J.,  in  Pritchard's  case,  8  Ch.  95G  ;  but  in  the  '    ' 
Buenos  Ayres  Co.,  W.  N.  lS7o,  p.  59,  the  Master  of  the  Eolls  said,  "  he  could 
see  no  foimdation  for  the  doiibt."   While,  however,  it  would  not  seem  necessary, 
it  is  very  commonly  exiiedient  to  preserve  evidence  in  the  Registrar's  office  as 
to  the  numbers  of  the  shares  issued  as  jiaid-ui).     Accordingly,  it  is  well  to  give 
the  numbers  of  the  shares  in  the  contract  when  possible,  or  at  any  rate  before 
they  are  actually  issued  to  file  a  supplemental  agreement  giving  the  numbers. 

(i.)  As  to  issuing  to  nominees. — Where  by  a  contract  duly  filed  provision  is  Issue  to 
made  for  the  issue  of  paid-uj?  or  partly  paid-up  shares  to  A.,  such  shares  may  nominees  or 
be  issued  to  A.  or  to  his  nominees,  and  the  allottees  will  be  protected  by  such 
contract.     Carling's  case,  1  C.  Div.  121. 

(5.)  As  to  con  side  mtion. — Is  the  word  "contract"  in  s.  25  used  in  its  technical  Whether 
sense,  i.e.,  must  there  be  a  consideration  for  the  company's  promise  to  issue  the  consideration 
shares ?  The  same  question  arose  as  to  the  word  "agreement  "  in  s.  -i  of  the  ^•''*^'^*^'^  • 
Statute  of  Frauds,  and  in  Wain  v.  Walters,  1  East,  10,  Lord  Eldon  said  that, 
"  the  question  is  whether  that  word  [agreement]  is  to  be  understood  in  the 
loose,  incorrect  sense  in  which  it  may  sometimes  be  used,  as  synonymous  to 
promise  or  undertaking,  or  in  its  more  proper  and  correct  sense  as  signifying  a 
mutual  contract  on  consideration  between  two  or  more  jjarties  ?  The  latter 
appears  to  me  to  be  the  legal  constriiction  of  the  word,  to  which  we  are  bound 
to  give  effect : "  &c.  It  would  not  seem  unreasonable  to  hold  that  the  word 
contract  was  used  in  s.  25  in  its  technical  sense,  and  this  view  has  been  taken 
in  some  cases.  Thus,  in  Crickmer's  case,  James,  L.  J.,  said  that  the  contract 
"  must  be  a  contract  which  shows  what  shares  are  to  be  issued  fully  paid-up, 
and  for  u-hat  consideration  they  are  to  bo  issued."  And  in  Anderson's  case,  7  C. 
Div.  113,  Thesiger,  L.  J.,  said  in  reference  to  s.  25  :  "I  do  not  wish  it  to  be 
supposed  that  I  in  any  way  dissent  from  the  view  which  was  expressed  by  Mr. 
Higgins,  that  under  the  teiin  '  contract,'  used  in  that  s.  25,  the  document  would 
not  come  within  those  terms,  where  there  really  was  no  consideration  at  all.  I 
think  it  may  very  fairly  be  said — at  all  events  I  do  not  dissent  from  that  view — 
that  under  the  Avord  '  contract '  is  intended  a  contract  binding  in  law,  which  of 
coui'se  imports  a  consideration,  although  we  may  not  be  able  to  go  into  the 
question  of  what  was  the  value  of  the  consideration."  If  this  be  the  meaning 
of  the  word  "  contract,"  it  would  seem  that  where  a  company  agrees,  without 
any  consideration,  to  issue  paid-up  shares  to  A.,  and  the  agreement  is  put  in 
writing  and  dulj'  filed,  A.  will  be  liable  to  pay  the  whole  amount  of  the  shares 
in  cash,  because  no  "contract"  has  been  filed.  On  the  other  hand,  in  Ander- 
son's case,uhi  supra,  Jessel,  M.  E.,  appears  to  have  thought  that  a  document 
might  be  a  contract  within  the  naeaning  of  s.  25,  though  made  without  any  con- 
sideration. See  also  what  was  said  in  In  re  The  Gold  Company,  11  C.  Div.  701 ; 
but  it  was  not  necessary  to  decide  the  jKunt  in  either  of  these  cases.     Where 


12 


AGREEMENTS. 


Form  1. 

Failure  of 
consideration. 


Ultra  vires 
contract. 


Whether 
sufficient  to 
file  a  sub- 
contract. 


Articles  not 
a  contract 
■within 
Section  2"). 


Meaning  of 
word  "  cash '' 
in  Section  25. 


paid-up  shares  are  issued  under  a  contract  ilftly  filed,  the  failure  of  the  con- 
sideration for  which  they  were  issued  does  not  entitle  the  company  to  treat  the 
shares  as  uniDaid.  Thus,  in  Mcgc  and  Augier's  case,  W.  N.  lS7o,  208,  the  vendors 
agreed  to  assign  certain  i^atents  to  the  company  in  consideration  of  the  issue  to 
them  of  paid-up  shares.  The  contract  was  filed  and  the  shares  were  issued, 
but  the  vendors  failed  to  assign  the  patents.  It  was  held,  nevertheless,  by 
Jessel,  M.  E.,  that  the  vendors  could  not  be  put  on  the  list  of  contributors. 
See  also  Carling's  case,  1  C.  Div.  115.  So  too  where  paid-ui)  shares  are  issued 
under  a  contract,  fraudvdent  and  ultra  vires  of  the  directors,  but  duly  filed,  such 
shares  cannot  be  treated  by  the  comi^any  or  its  liquidator  as  unpaid.  De  Ru- 
vigne's  case,  5  C.  Div.  30G.  The  companj^  must  either  approbate  or  reprobate 
the  contract.  And  it  would  seem  that  where  paid-up  shares  are  issued  under  a 
contract  duly  filed  bvit  ultra  vires  of  the  company,  they  cannot  be  treated  as 
unpaid.  See  Anderson's  case,  per  Jessel,  M.  E..,  7  C.  Div.  75,  but  this  seems 
inconsistent  with  the  word  contract  being  used  in  its  technical  sense. 

(G.)  As  to  filing  suh-contract. — Where  an  agreement  in  writing  is  made  for  the 
issue  of  paid-uji  shares  it  sometimes  hapj^ens  that  the  jjarties  desire  to  avoid 
filing  it,  either  on  account  of  its  Ijeing  very  long  or  because  it  contains  matter 
Avhich  it  is  inexpedient  to  expose  to  public  inspection.  In  such  case  it  is  not 
uncommon  for  the  parties  to  execute  and  file  a  separate  contract,  briefly  refer- 
ring to  the  ijrincipal  agreement  and  providing  for  the  issue  of  the  paid-up 
shares.  See  example,  infra.  Form  19.  To  this  plan  there  would  seem  to  be  no 
objection,  at  any  rate  if  the  contract  filed  shows  the  consideration  for  which  the 
shares  are  issued. 

(7.)  Articles  not  a  contract  in  ivritvng. — As  a  general  rule  the  articles  of  asso- 
ciation cannot  be  deemed  a  contract  in  writing  within  the  meaning  of  s.  25  of 
the  Act  of  1807.  Firmstone's  case,  20  Eq.  521 ;  Crichmer's  case,  10  Ch.  Oil' ; 
Pritchard's  case,  8  Ch.  9G0.  Accordingly,  where  the  articles  provide  for  the 
issue  to  a  vendor,  promoter,  or  other  person  of  paid-up  shares,  a  separate  con- 
tract in  writing  must  be  executed  and  filed  before  the  issue  of  the  shares.  It 
may  be  that  the  articles  can  be  so  framed  as  to  operate  as  a  contract  within 
s.  25,  and  in  the  AjJj^letreewick  Lead  Mining  Co.,  18  Eq.  95,  it  was  held  by 
Malins,  V.-C,  that  a  contract  contained  in  the  articles  in  that  case  was  suffi- 
cient ;  but  <as  it  is  not  desirable  to  run  risk  in  such  matters  it  is  exjiedient  to 
file  a  separate  agreement. 

(8.)  As  to  the  meaning  of  tlie  icord  cash  in  s.  25. — Shares  are  to  "  be  deemed  to 
have  been  issued  and  to  be  held  subject  to  the  payment  of  the  whole  amount 
thereof  in  cash,"  unless  a  contract  is  filed.  The  word  cash  here  does  not  mean 
current  coin  or  bank  notes  merely.  Any  transaction  which  in  an  action  at  law 
for  calls  on  the  shares  would  have  supported  a  plea  of  payment  will  be  deemed 
to  be  payment  in  cash.  Thus  if  a  comijany  is  indebted  to  A.  in  a  sum  presently 
payable,  and  A.  is  the  holder  of  shares  unpaid  or  only  in  part  paid  up,  an  agree- 
ment between  A.  and  the  company  that  the  amount  shall  be  credited  as  paid 
up  on  the  share  is  equivalent  to  payment  in  cash,  and  the  contract  need  not  be 
in  writing  or  filed.  Sixtrgo's  case,  8  Ch.  107.  But  "  m  order  to  prove  a  plea  of 
payment  when  there  has  been  no  payment  in  money,  you  must  bring  the  trans- 
action within  these  two  propositions.  There  must  be  money  due  from  the  one  to 
the  other  on  both  sides,  and  the  i^arties  must  agree  to  set  one  demand  of  money 
against  the  other  demand  of  money."  Per  Brett,  L.  J.,  White's  case,  12  C.  Div. 
517. 

In  considering  whether  there  is  a  debt  due  to  the  comi^any  it  appears  that 
the  amoixnt  due  on  a  share,  even  though  not  actually  called  up,  may  be  treated 
as  a  debt  presently  due.  Spargo's  case,  8  Ch.  107;  White's  case,  uhi  supra;  Bent- 
ley's  case,  12  C.  D.  851. 

Moreover,  the  shares  need  not  have  >)een  allotted  prior  to  the  agreement  to 
set  off,  for  where  a  company  is  indebted  to  A.  in  cash,  and  A.  agrees  to  accept 
payment  in  fully  paid-up  shares,  that  amounts  to  payment  for  the  shares  in  cash. 
Jn  re  Barrow-in-Fuiness,  11  C.  Div.  100.     But  see  Rowland's  case,  12  L.  T.  785. 


FOEMS.  13 

And  where  a  person  has  a  bon'i  fide  claim  (even  though  unliquidated)  a<^ainst      Porm  1 

a  company,  and  by  way  of  compromise  it  is  arranged  that  in  catisfaetion,  or 

part  satisfaction,  the  company  shall  credit  a  sum  as  paid  up  on  the  share  of  the 
claimant,  or  of  some  other  person,  that  is  equivalent  to  cash.  Ferrao's  case^ 
9  Ch.  355  ;  Adamson's  case,  18  Eq.  C70 ;  Bentley's  case,  12  C.  D.  851. 

But  where  a  company  agrees  to  issue  paid-up  shares  in  consideration  of  pro 
perty  sold,  or  services  rendered,  it  is  impossible  to  treat  the  transaction  as  a 
cash  payment,  because  the  company  never  owed  and  never  intended  to  owe  any 
cash.  Andress'  case,  8  C.  Div.  12G ;  see  also  Pagin  and.  Gill's  case,  G  C.  Div.  081; 
and  Barrow,  uhi  supra.  And  the  fact  that  the  transaction  is  treated  in  the  books 
of  the  company  as  a  cash  payment  does  not  affect  the  matter.  Andress'  case, 
ubi  supra;  White's  case,  12  C.  D.  511;  Newport  Co.,  12  L.  T.  785;  W.  N.  1880,  80. 
And  where  the  sale  is  for  cash,  with  merely  an  option  to  satisfy  in  shares,  if 
the  option  is  exercised,  the  shares  cannot  be  regarded  as  paid  in  cash.  Barrow's 
case,  14  C.  Div.  182.  So  too  a  surrender  of  a  debenture  not  due  cannot  be  treated 
as  a  payment  in  cash.     Appleyard's  case,  18  C.  D.  587  ;   19  L.  J.  Ch.  290. 

It  must  be  borne  in  mind  that  in  order  that  a  transaction  may  be  treated  as 
payment  in  cash  there  must  be  bona  fides.  If  the  transaction  is  designed  with 
a  view  to  evade  the  Act  it  will  fail.  Spargo's  case,  ubi  svpra.  Accordingly  it  is 
not  uncommon  in  testimony  of  bona,  fides  to  file  contract,  even  when  a  trans- 
action would  clearly  amount  to  payment  in  cash. 

(9.)  As  to  meaning  of  issue. — As  the  contract  must  be  filed  before  the  "issue"  Jfeauin''  of 
of  the  shares,  it  is  of  course  important  to  ascertain  the  meaning  of  the  word  the  word 
issue  in  s.  25.     It  is  now  settled  that  the  issue  is  something  diii'erent  from  the  "issue"  iu 
allotment  of  the  share  or  the  issue  of  the  cex'tificates  of  title  thereto.     A  share  'Action  _.». 
is  issued  when  the  holder  has  acqiiired  an  absolute  right  thereto.    It  cannot  be 
considered  issued  before  allotment,  but  it  may  be  considered  issued  although 
the  certificate  of  title  has  not  been  issued.     See  Bush's  case,  9  Ch.  554  ;  Blyth's 
case,  4  C.  Div.  140;  and  Clarke's  case,  8  C.  Div.  612.     In  order  to  avoid  danger 
it  is  best  not  to  allot  till  the  contract  has  been  filed,  and  contracts  should  be 
framed  accordingly. 

(10.)  As  to  subscribing  memo randMin. — In  framing   a  preliminary  agreement  As  to  vendor 
jH-oviding  for  the  issue  of  paid-up  or  partly  paid-up  shares  it  must  be  con-  sul>scril)ing 
sidered  whether  it  is  desired  that  the  person  to  whom  the  shares  are  to  be  memoi-aiidum 
issixed  should  or  should  not  subscribe  the  memorandvim  of  association  for  the  °   ' ' ' 
same,  since  the  terms  of  the  agreement  will  vary  accordingly.     See  clause  2  of 
the  Form  at  p.  32.     It  is  now  settled  that  where  a  person  subscribes  the  memo- 
randum for  shares  he  is  ])rimn  facie  bound  to  pay  in  cash,  but  before  the  issue 
of  the  shares  he  can,  by  contract  with  the  company  duly  filed,  arrange  that  the 
shares  shall  be  credited  as  paid-up,  for  a  consideration  other  than  cash.    Fother- 
gill's  case,  8  Ch.  282  ;  Anderson's  case,  7  C.  Div.  75.     It  is  essential  to  identify 
the  shares,  e.  g.  the  contract  should  recite  the  subscription  and  provide  that  as 
the  consideration  for   [the  sale]  the  shares  so  subscriljed  for  shall  be  deemed 
fully  paid  up  or  as  the  case  may  be. 

(11.)  Result  of  not  filing  contract. — If  default  is  made  in  the  filing  of  acontract  Result  of  not 
in  writing  as  to  the  issue  of  paid-up  shares  for  a  consideration  other  than  cash,  filing  contract. 
the  persons  to  whom  shares  are  issued  under  it  will  be  liable  to  pay  up  the 
shares  in  cash.  It  was  at  one  time  thought  that  the  company  could  not  make 
calls  in  respect  of  shares  so  issued.  Spargo's  case,  8  Ch.  107.  But  in  the  recent 
case  of  Burkinshaw  v.  Nicholls,  3  App.  Case,  lOlG,  Earl  Cairns,  L.C.,  was  of 
opinion  that  the  shareholder  would  have  no  answer  to  an  action  for  such  calls. 
The  liability  attaches  not  only  to  the  original  holder  but  to  transferees  who 
have  notice  actual  or  constructive  that  no  contract  has  been  filed.  Blyth's  case, 
4  C.  D.  IW:  In  re  Newport,  c\'c.,  Co.,  Rowland's  case,  W.  N.  1880,  80;  42  L.  T. 
785.  Where,  however,  shares  subject  to  such  a  liability  are  transferred  to  a 
hon'i  fide  purchaser,  without  notice  of  the  liability,  who  accepts  the  shares  on  the 
footing  of  a  certificate  of  title  thereto,  describing  the  shares  as  fully  paid  up,  such 
purchaser  is  not  under  liability.     He  holds  the  shares  as  paid-up.     Burkinshaw 


14, 


AGEEEMENTS. 


Form  1. 


Who  is  Ijound 
to  see  to 


Remedy  wliere 
default  in 
tilin''. 


V.  NidwUs,  uhl  sMj3i-a.  And  if  the  sliares  are  subsequently  transferred  to  a 
person  who  has  notice  that  a  contract  was  not  filed,  they  will  even  in  his  hands 
he  free  from  liability.     Barrow's  case,  14  C.  Div.  433  ;  28  W.  E.  270. 

(12.)  As  to  party  bound  to  file. — Unless  otherwise  arranged  between  the  parties, 
the  obligation  of  seeing-  that  the  contract  is  filed  rests  with  the  company,  and 
if  the  company  issues  the  shares  before  the  contract  is  filed  it  is  liable  in 
damages.  In  re  Government  Security  Co.,  Mudford's  claim,  14  C.  D.  634;  28  W. 
K.  670  ;  Axjpleyard's  case,  18  C.  D.  587.  But  query  whether  these  cases  can  be 
relied  on,  regard  being  had  to  Houldsworth  v.  Glasgow  Bank,  5  App.  Cas.  317. 

(13.)  Remedy  where  default  in  filing. — If  shares  agreed  to  be  issued  as  fully 
paid  up  for  a  consideration  other  than  cash  have  been  issiied  without  the  filing 
of  a  proper  contract,  the  Court  will,  upon  the  aj^plication  of  the  company  or  of 
the  party  aggrieved,  make  an  ordei-  to  rectify  the  register  by  striking  out  the 
names  of  the  allottees,  to  the  intent  that  the  contract  or  a  contract  may  be 
filed  and  the  shares  re-issued.  New  Zealand  Kajxmga,  c'j-c,  Co.,  18  Eq.  17  ; 
Denton  Colliery  Co.,  18  Eq.  16;  and  see  "  Orders,"  infra.  But  it  must  be  shown 
that  the  allottees  were  ignorant  of  the  omission  to  file  the  contract.  See  the 
cases  last  mentioned  and  the  Droitwich  Salt  Co.,  W.  N.  1871,  133.  Instead  of 
applying  to  the  Court,  the  allottees  may  in  such  case  ajDply  to  the  company,  and 
the  directors  will  be  justified  in  cancelling  the  allotment  and  removing  the 
allottees'  names  from  the  register,  and  after  the  contract  has  been  filed,  re- 
issuing the  shares  to  the  parties  entitled  thereto.     Hartley's  case,  10  Ch.  157. 

As  to  issuing  shares  at  a  discount  and  bonus  shares,  see  infra,  p.  39. 


Form  2.     Coxtract  to  File  irlwre  Paid-up  Shares  msmc^Z  icWiout  rompJiancp  icifh 

i'^ecfion  -Jo  of  t/ie  Ad  of  1SC>7. 


Parties. 


Recitals. 


AX  AGrtEE:\rT  made  the 
called  the  co),  of  1st  part ;  — 


-  day  of between (hereinafter 

of (hereinafter  called  the  vendor), 


of  the  :ind  part ;  and  A.  on  Ix'half  of ,  the  several  jjersons  specified 

in  the  second  schedule  hereto  (hereinafter  called  the  shareholders),  of  the 

third  part :  Whereas  on  or  ahont  the day  of the  vendor  and 

the  CO  entered  into  the  agreemt  (hereinafter  called  the  preliminary  con- 
tract), a  copy  whereof  is  set  forth  in  the  first  schednle  hereto.  [And 
WHEREAS  shortly  afterwards  that  agreemt  was  duly  filed  with  Heji'istrar  ( f 
Joint  Stock  Companies.]  And  whereas  each  of  the  shareholders  is  the 
reii'istercd  holder  of  the  shares  of  which  the  parlars  are  set  opposite  his  or 
her  name  in  the  second  column  of  the  second  schedule  hereto  :  And 
WHEREAS  the  sd  shares  were  all  allotted  pursuant  to  the  prelimiiniry 
contract  and  by  the  direction  of  the  vendor,  and  upon  the  footing  that 
they  were  to  be  deemed  fully  paid.  Axd  whereas  doubts  liave  arisen 
whether  the  preliminary  contract  is  a  sufficient  contract  in  writing 
within  the  meaning  of  S.  25  of  the  Companies  Act,  18G7,  and  it  is  de- 
sired to  preclude  any  further  question  in  regard  thereto  [or,  Axd  whereas 
by  mistake  the  jircliminary  contract  was  not  filed  with  the  Registrar  of 
Joint  Stock  Companies  before  the  issue  of  the  sd  shares,  and  the  pai-ties 
hereto  were  at  the  time  of  such  issue,  and  until  recently,  wholly  ignoraut 


FORM: 


15 


of  the  omission  to  file  the  same,  and  they  have  required  tlic  co  to     Porm  2 

rectify  such   mistake]  :   And  "whereas  the   sd  A.  B.   has  been    duly 

authorised  to  enter  into  this  agreenit  on  hehalf  of  each  of  the  shareholders. 

XOW    THEREFORE    IT    IS   AGREED    aS  folloWS  : 

1 .  This  agreemt  shall  forthwith  be  filed  with  the  Registrar  of  Joint  File  contract. 
Stock  Companies. 

2.  The   CO   shall  forthwith   cancel  the  respive   allotments   made   as  Cancel 
aforesd,  and  shall  remove  the  name  of  each  of  the  shareholders  from  ^^Hotments. 
the  register  of  members  in  respect  of  such  shares,  and  the  certificate  of 

title,  if  any,  which  has  been  issued  to  or  is  held  by  each  of  the  share- 
holders shall  be  forthwith  given  up  to  the  co  to  be  cancelled. 

;>.  Subsequently  with  all  convenient  speed  the  co  shall  in  lieu  of  Ke-allotiiient. 
i-acli  of  the  shares  now  held  as  aforesd  allot  and  issue  to  the  present 
liolder  thereof  a  1/.  share  in  the  co's  capital,  and  every  share  so  allotted 
shall  be  deemed  for  all  purposes  to  be  fully  paid  up.  And  the  shares  so 
to  be  allotted  shall  be  uuml)ered  in  the  manner  specified  in  the  fourth 
column  of  the  same  schedule. 

4.  The  shares  allotted  pursuant  to   the  last  jDreceding  clause  hereof  Couslileratiun. 
shall  be  deemed  to  be  part  of  the  shares  to  the  issue  whereof  the  vendor 
became  entitled  under  the  preliminary  contract. 

As  WITXHSS,  &c. 


Fii-st  Column. 


First  Schedule. 
\_Copij  [yrcVtmiiianj  confracf.'] 

Second  Schedule. 

Second  Column.         Third  Column.        Fourth  Column. 


*  e.g.,  five  £1 
shares,  num- 
bered —  to  — 
inclusive. 


Where  shares  have  been  issued  credited  as  paid-up  for  a  consideration  othei 
than  cash,  and  by  mistake  a  proper  contract  has  not  been  filed,  it  may  be  pos- 
sible to  rectify  the  mistake  without  going  to  the  Court,  esjjecially  where  no 
return  has  been  made  to  the  Registrar.  See  Hartley's  case,  10  Ch.  157.  But 
the  (question  of  bona  fides  is  very  material.  Where  the  shares  have  been  issued 
without  the  execution  of  any  contract,  as  in  Denton  Colliery  Co.,  18  Eq.  17,  the 
contract  should  recite  the  facts  and  provide  for  the  issue  of  the  shares  and  their 
acceptance  in  satisfaction. 


16 


AGREEMENTS. 


Form  3. 

Parties, 
Recitals. 


AgreemeDt 
to  sell. 


Consideratii 


Incidental 
provisions. 


Completion. 


Agreement /or  8ale  fl/ Patents.     Consideration,  Cash,  and 
Founders'  Shares. 

AX  AGREEMT,  Sec,  parties,  Tciidor,  1  ;  co,  2. 

AVhereas  the  vendor  is  the  owner  of  the  several  patents  specified  in 
the  schedule  hereto  and  hereinafter  referred  to  as  the  scheduled  patents  : 
And  avhereas  the  capital  of  tlie  co  consists  in  part  of  100  founders' 
shares  of  1 1,  each 

Xow  these  presents  witness  and  declare  as  follows : 

1.  The  vendor  shall  sell  and  the  co  shall  purchase,  first,  the  scheduled 
l)atents  and  the  full  and  exclusive  benefit  thereof;  and,  secondly,  the 
benefit  of  all  improvements  on  the  indentions  referred  to  in  the  sd 
patents  respectively,  and  of  all  further  inventions  in  connection  with 

the  manufacture  of ,  which  have  l)een  already  or  may  hereafter  be 

made  by  the  vendor,  and  all  British  patents  which  may  be  ol)tained  by 
or  on  belialf  (jf  tlie  vendor  for  any  such  improvements  or  further  inven- 
tions, and  the  full  and  exclusive  benefit  thereof. 

Having  regard  to  the  Patents,  Designs,  and  Trade  Marks  Act,  1883  (  4G  & 
-17  Vict.  c.  57),  there  is  no  need  to  provide  that  the  purchaser  shall  be  entitled 
to  apply  for  extensions,  or  to  sue  for  infringement,  or  to  disclaim,  inasmuch  as 
the  Act  and  the  patent  together  confer  the  requisite  powers  on  the  owner  of  the 
patent  for  the  time  being.  As  to  the  validity  of  a  sale  of  future  inventions. 
See  Printing,  cj-c,  Co.  v.  Sampson,  19  Eq.  4:02  ;  Zi  W.  E.  103  ;  32  L.  T.  N.  S.  351. 

2.  As  the  consideration  for  the  sale  the  co  shall  pay  to  the  -vendor 
the  sum  of  o,0(»o/.  cash,  and  shall  issue  to  him  or  his  nujuinees  the  whole 
of  the  sd  founders'  shares,  and  such  shares  shall  be  deemed  for  all  pur- 
poses fiiUy  paid  up. 

".  The  vendor  shall  from  time  to  time,  Avitli  all  convenient  speed, 
communicate  to  the  co  or  its  assigns  all  such  improvements  and  further 
inventioiis,  and  shall  give  them  full  information  as  to  the  exact  mode  of 
working  and  using  the  same,  and  shall  from  time  to  time  at  the  request 
and  expense  of  the  co  execute  and  do  all  such  documents  and  things  as 
may  be  requisite  for  the  purpose  of  enabling  the  co  to  obtain  British 
patents  for  such  improvements  and  further  inventions,  and  shall  fi'om 

time  to  time  and  at  all  times  during  the  term  of years  to  be  computed 

from,  &c,,  and  without  making  any  charge  therefor,  give  all  such  advice, 
explanation,  and  instruction  to  the  directors  and  other  officers  and  work- 
men of  the  company  as  may  be  necessary  to  enable  them  effectually  to 
exercise  and  work  such  improvements  and  further  in^enticms  respec- 
tively, and  shall  for  such  purposes  at  the  expense  of  the  co  jirepare  and 
furnish  to  the  co  all  necessary  plans,  drawings,  and  models. 

4.  The  ])urchase  shall  be  completed  on  the day  of ,  at,  &c., 

when  the  said  sum  of  o,(H)OL  cash  shall  l)e  paid  to  the  vendor,  and  the 
sd  founders'  sliares  shall  ))e  allotted  as  aforesd.  And  thereupon  and 
from  time  to  time,  and  at  any  tiuie  afterwards,  the  vendor  shall  at  the 


FOEMS. 

expense  of  tlic  co  execute  aiul  do  all  such  assurance  [r/.s  in  Form 
1,  cL  G]. 

5.  Unless  before  the day  of next  at  least shares  in 

the  co's  capital  shall  have  been  taken  up  by  responsible  persons,  either 
of  the  parties  hereto  may  by  notice  in  writinji,-  to  the  other  rescind  this 
a.greemt,  and  such  rescission  shall  not  ^ivc  rise  to  any  claim  for 
expenses  or  otherwise. 

In  witness,  &c. 

[Add  Schedule  coniainiiKj pdriinikirs  cf  jiafenfa.^ 

The  above  precedent  does  not  deal  with  foreign  patents,  but  in  many  cases 
the  right  to  apply  for  them  is  included  in  the  sale.  Sometimes  the  company  is 
only  given  an  oi^tion  to  be  exercised  within  a  limited  time  after  communication 
to  acquire  patents  in  respect  of  improvements  and  fui'ther  inventions^  so  that  if 
the  company  does  not  elect  to  i^roceed  the  vendor  may  himself  proceed,  and  the 
same  plan  is  sometimes  adopted  as  regards  foreign  patents.  Occasionally 
special  provision  is  made  for  obtaining  foreign  i^atents  and  realizing  the  same 
by  sale  or  otherwise,  and  dividing  the  proceeds,  whether  consisting  of  cash, 
shares  or  otherwise,  between  the  vendor  and  the  company,  or  for  issuing  to  the 
vendor  jiaid-up  shares  in  the  company  equivalent  to  a  certain  proportion  of  such 
l^roceeds. 

Sometimes  companies  are  brought  out  (as  in  the  case  of  the  Electric  Light 
Companies  recently  formed)  with  an  exclusive  licence  or  concession  (acquired 
for  a  lump  sum  in  cash,  shares  or  otherwise)  to  use  patented  inventions  for  all  or 
si3ecified  purposes  within  a  limited  district.  But  there  was  great  difficulty  in 
framing  these  concessions  satisfactorily,  for  a  patented  article  duly  made  and  sold 
carried  with  it  a  licence  to  use  the  same  within  the  limits  of  the  jiatent  {Belts  v. 
Wihnot,  L.  E.  G  Ch.  239),  and  accordingly  any  person  who  could  duly  acquire 
the  i^atented  article  outside  the  district,  could  sell  and  use  it  within  the  district. 
The  difficulty  was  met,  but  by  no  means  effectually,  by  the  insertion  of  covenants 
by  the  grantor  and  grantee  not  to  sell  for  use  outside  their  respective  districts. 

However,  it  seems  probable  that  for  the  future,  instead  of  such  a  concession, 
it  will  be  found  advisable  to  purchase  and  obtain  an  assignment  of  the  patent 
for  the  particular  district,  under  s.  36  of  the  Act  of  1883,  above  referred  to. 
That  section  i^rovidos  that  "  A  patentee  (i.e.  the  owner  for  the  time  being)  may 
assign  his  patent  for  any  place  in  or  part  of  the  United  Kingdom  or  Isle  of 
Man,  as  effectually  as  if  the  patent  were  originally  granted  to  extend  to  that 
place  or  part  only."  This  jjrovision  ajjpears  admirably  calculated  to  facilitate  the 
concession  system,  and  it  would  seem  that  where  a  patent  for  a  district  has  been 
sold  it  will  not  be  lawful  to  sell  or  use  in  that  district  a  patented  article  made 
elsewhere.  Von  Heyden  v.  Neustadt,  1  i  C.  Div.  230 ;  Belts  v.  De  Vilre,  L.  R.  H 
H.  L.  1  ;  Adair  v.  Young,  12  C.  Div.  13  ;  Socu'lJ  des  Manufactures  de  Glare  v. 
Tilghman's  Co.,  25  C.  Div.  1  ;  32  W.  E.  71  ;  Noble's  Explosives  Co.  v.  Jones,  0  Ap. 
Cas.  5. 


17 


Form  3. 


Miscellaneous  Provisions  for  insertion  in  Agukements. 


Form  4. 


The   consideration  for  the  said  sale  shall  be   the   issue   in  manner  Consideration 
hereinafter  provided  of  fully  paid-uj)  shares  in  the  co's  capital  (herein-  ''''^^x*'j*^r  . ., 
after  called   vendors'   shares),   the    a<>-,uTc^-atc   nominal   value   whereof  time  beiug. 

C 


18 


AGREEMENTS. 


Porm  4.     shall   be  equal  to  the   aggregate   nominal  vahie   of  the   other   shares 

of  the  comiiany  for  the  time  being  issued,  but  so  that  the  aggregate 

nominal  value  of  the  vendors'  shares  to  be  issued  as  aforesaid  shall  not 
exceed  50,000/.  And  to  answer  this  clause  5,000  of  the  shares  in  the 
original  capital  of  the  company  shall  be  set  aside,  and  shall  be  numbered 

to inclusive. 

The  vendors'  shares  shall  be  issued  to  the  vendors  or  the  persons 
deriving  title  through  them  respectively  in  the  proportions  set  forth  in 
the  schedule  hereto,  and  at  the  times  following,  \'\z. :  at  the  time  fixed 

for  completion    by  clause  • hereof    so  many  as  shall  be  equal  in 

nominal  value  to  the  nominal  value  of  the  other  shares  then  already 
issued,  and  the  residue  fi'om  time  to  time  as  and  when  any  of  the 
remaining  shares  (exclusive  of  any  of  the  vendors'  shaix's)  shall  be  issued. 

Occasionally  a  clause  as  above  is  used.     It  is  expedient  to  file  further  agree-' 
ments  as  and  when  the  shares  are  to  be  issued,  see  supra,  p.  11. 

Form  5.         Upon   payment   of    the   cash   portion   of    the   purchase-money   the 

7,  7~  vendor  shall  enter  into  a  covenant  with  the  company  for  the  benefit  of 

Guarantee  of  '^         n   ^ 

profits  i>y         the  members  thereof  guaranteeing  that  the  net  profits  of  the  company  ni 

Tendi.v.  respect  of  the  said  business  during  each  of  the  three  years  next  following 

the day  of next  shall  amount  to  not  less  than  [10]  per  cent. 

per  annum  on  the  capital  of  the  com2)any  for  the  time  being  employed 
thereiji,  and  that  if  there  shall  be  a  deficiency  in  any  of  the  said  three 
years  the  vendor,  his  heirs,  executors,  or  administrators,  shall,  im- 
mediately after  the  same  shall  have  been  ascertained  and  notice  thereof 
given  to  him  or  them,  pay  to  the  company  in  trust  for  the  members 
thereof  the  amount  of  such  deficiency.  The  certificate  in  writing  of  the 
auditor  or  auditors  for  the  time  being  of  the  company  of  the  existence 
and  amount  of  any  such  deficiency  shall,  as  against  the  vendor,  be  con- 
clusive evidence  thereof  for  the  purposes  of  this  clause. 

Guarantee  of  Profits. 

It  is  l)j  no  means  uncommon,  where  a  going'  business  is  sold  to  a  company, 
for  the  vendor  to  guarantee  that  the  profits  shall,  during  a  limited  period, 
amount  to  a  particular  sum.  The  guarantee  is  usually  given  for  the  benefit  of 
the  shareholders,  and  is  stated  in  the  i^rospectus  as  an  attraction.  Where  the 
transaction  is  bona  fide  (i.e.,  is  not  a  mere  scheme  for  enabling  the  company  tO' 
pay  dividends  out  of  capital)  the  members  thereby  acquire  an  independent 
right,  which  they  will  be  able  to  rely  on  if  the  profits  are  insufiicient.  See  Re 
Gelly  Deg  Colliery  Co.,  38  L.  T.  440;  South  Llanharran  Co.,  12  Ch.  Div.  503. 
But  such  guarantees  require  to  be  very  carefully  framed.  See  Stuart's  Trusts, 
4  C.  D.  213,  where  it  was  held  that  the  guarantee  amounted  to  a  provision  foi* 
payment  of  dividends  out  of  capital,  and  accordingly  that  the  members  could 
not  claim  the  benefit  thereof  as  against  the  company's  creditors.  Sometimes 
the  performance  of  the  guarantee  is  secured  by  the  investment  of  a  fund  in  the 
names  of  trustees.  A  company  can  in  some  cases  release  a  guarantee  by  a 
vendor.  Sheffield  Nickel  Co.  v.  Umvin,  2  Q.  B.  D.  214.  Where  several  busi- 
nesses were  sold  to  a  company  it  was  held  that  the  discontinuance  of  one  of 
them  did  not  discharge  the  vendor  from  his  guarantee.     Brovn  4"  Co.  v.  Broun, 


FORMS.  19 

35  L.  T.  51 ;  3G  L.  T.  272.  Where  there  is  a  guarantee  fund,  it  is  sometimea  Form  5. 
provided  that  if  the  profits  in  any  year  amount  to  the  guaranteed  sum,  a  jmrt 
of  the  fund  shall  be  released.  In  the  South  Llanharran  Co.,iibi  supra,  it  was 
provided  that  any  monies  paid  under  the  guarantee  should  be  repaid  out  of  the 
surplus  profits  which  in  any  subsequent  year  remained  after  payment  of  a  10  per 
cent,  dividend  for  that  year. 

As  lietween  tlie  holders  of  the  12,000  shares  to  be  allotted  to  the     Form  6. 

vendors  pursuant  to  clause  hereof  (which  shares  are  hereinafter  ^T    ~     ; 

^  .      \  endors 

referred  to  as  the  vendors'  shares),  and  the  holders  of  tlie  othei*  shares  in  shares 
the  capital  of  the  company  which  have  l)een  already,  or  shall  hereafter  be  "'^^^^^'S'^- 
issued  not  exceeding  20,0i)0  in  number  (hereinafter  referred  to  as 
the  ordinary  shares),  the  profits  of  the  company,  from  the  first  day 
of  January,  18Hi,  to  the  31st  day  of  December,  1S8'.),  shall  be  applied, 
first  in  paying  to  the  holders  of  the  ordinary  shares  a  cumulative 
preferential  dividend  at  the  rate  of  6  per  cent,  per  annum  upon  the 
amount  for  the  time  being  paid  up,  or  credited  as  paid  up  on  the 
ordinary  shares  held  by  them  respectively  [not  exceeding  107.  per 
share].  Secondly,  in  paying  a  dividend  at  the  same  rate  to  the  holders 
of  the  vendors'  shares  u])on  the  amount  credited  as  paid  up  on  the 
vendors'  shares  held  Ijy  them  respectively  [and  to  the  holders  of  the 
ordinary  shares  upon  the  amount  paid  up,  or  credited  as  paid  up  on  the 
ordinary  shares  held  by  them  respectively  beyond  10/.  per  share]. 
Thirdly,  the  surplus  shall  l)e  applied  in  paying  dividends  on  the  ordinary 
shares  and  the  vendors'  shares  pari  passif.  in  proportion  to  the  amount 
paid  up  or  credited  as  paid  up  thereon  respectively.  Pijovided  always 
that  where  money  has  l)een  paid  up  in  advance  of  calls  upon  the  footing 
that  the  same  shall  carry  interest,  the  same  shall  not,  while  can-ying 
interest,  confer  a  right  to  paiticii)ate  in  profits  under  this  clause.  Upon 
each  of  the  certificates  of  title  issued  in  respect  of  the  vendors'  shares  or 
any  of  them  before  the  31st  day  of  December,  1889,  there  shall  l)e 
indorsed  a  memorandum  in  the  terms  set  forth  in  the  schedule  hereto. 

Sometimes  upon  the  sale  of  a  going  concern  the  vendor  agrees  to  give  a 
limited  preference  to  the  shares  taken  up  by  the  public,  as  above. 

The  memorandum  -sTill  refer  to  the  agreement,  and  set  out  the  clause,  and 
state  that  the  shai-es  included  in  the  certificate  form  part  of  the  vendor's  shares. 

Sometimes  where  a  mining  concern  is  sold  to  a  company  and  there  is  a  large      Form  7 

stock  of  ore  already  raised,  the  vendor  desires  to  i-eserve  an  interest  in  the  pro-  — — 

ceeds,  and  accordingly  stipulates  for  the  issue  of  certificates  as  follows  : 

As  the  residue  of  the  consideration  for  the  said  sale  the  company  shall  Certificates  to 
issue  to  the  vendor  100  certificates  under  the  company's  common  seal  in  yVd^'^^   ^^ 
the  form  set  forth  in  the  first  schedule  hereto,  and  shall  also  execute  and  representing  a 
deliver  to  the  vendor  a  deed  of  covenant  in  the   terms  set  forth  in  ^jroreds  f 
the  second  schedule  hereto.  ore  already 

raised. 


C  2 


20 


AGREEMENTS. 


Form  7. 

Form  of 
certificate. 


The 


Company,  Limited. 


Form  8. 

Agreement  not 


This  is  to  certify  that  the  bearer  is  entitled  to  oue-huudrcdth  part 
of  one-third  part  of  the  net  proceeds  of  the  S,0()0  tons  of  ore  acquired 
])y  the  above-named  company  nuder  the  agreemt  dated,  &<;.,  and 
made,  &c. 

This  certificate  is  issued  pursuant  to  clause  5  of  the  sd  agreemt, 
and  the  bearer  is  entitled  to  the  benefit  of  the  trust  deed  dated,  &c.,  and 
made,  &c.,  whereby  provision  is  made  for  the  crushing-  and  realisation  of 
the  sd  ore  and  for  the  division  from  time  to  time  of  one-third  of  the  net 
proceeds  amoug  the  holders  of  the  sd  certificates. 

Notice  of  every  dividend  declared  on  the  certificates  is  to  be  adver- 
tised in  the  Tinus,  and  the  receipt  of  the  l)earer  is  to  be  a  good  discharge 
for  wliate-s'er  may  become  payable  on  this  certificate. 

Before  any  dividend  Avill  lie  paid  to  the  bearer  this  certificate  must 
be  produced  to  the  company,  and  the  company  is  to  be  at  liberty  to 
endorse  thereon  a  memorandum  of  the  payment. 

Given  under  the  company's  common  seal,  this day  of . 

Generally  it  is  more  convenient  to  make  the  dividends  payable  on  i^resenta- 
tion  of  coupons  instead  of  as  above. 

The  validity  of  this  agreemt  shall  not  be  impeached  on  the  ground 
that  the  vendors,  as  promoters  or  otherwise,  stand  in  a  fiduciary  relation 


to\e  disputed  to  the  Company,  or  that  the  directors,  having  accepted  office  at  their 
though  vendor  I'equest,  do  not  constitute  an  independent  board,  nor  are  the  vendors  to 
be  accountable  for  any  profit  made  upon  the  re-sale  to  the  company. 

Looking  to  the  principles  laid  down  in  New  Sombrero  Co.  v.  Erlanger,  3  App. 
Cas.  1218  (compare  British  Seimless  Paper  Box  Co.,  17  C.  Div.  4G7)  there  is 
sometimes  considerable  difficulty  in  knowing  how  to  bind  a  company  where  the 
vendors  are  promoters,  e.g.,  in  the  case  of  a  private  company  where  they  are  in 
substance  both  vendors,  promoters,  and  purchasers.  With  a  view  to  prevent- 
ing any  question  a  clause  as  above,  with  suitable  modifications,  is  sometimes 
inserted  in  the  agreement,  and  the  agreement  is  referred  to  in  the  memorandum 
of  association  and  is  set  out  or  referred  to  in  the  articles,  and  a  clause  is  inserted 
in  the  articles  as  in  Form  115. 

It  is  conceived  that  these  precautions  (in  the  absence  of  fraud)  preclude  all 
question. 


Form  9. 

Liberty  for 
vendor  to 
remunerate 
promoters. 


The  vendors  are  to  be  at  lilierty  to  remunerate  for  their  services 
L.  and  M.,  and  any  other  persons  who  ha^'e  assisted  or  shall  assist  in 
forming  or  promoting  the  company.  Such  persons,  without  further  dis^ 
closure  to  the  company,  shall  respectively  be  at  liberty  to  accept  such 
remuneration,  notwithstanding  any  fiduciary  relation  (by  reason  of  their 
being  promoters  of  the  cum})any  or  otherwise)  that  may  sul)sist  between 
them  and  the  company  ;  and  the  vendors  shall  indemnify  the  company 
against  all  claims  and  demands  by  such  jicrsons  in  respect  of  their 
services  aforesaid. 

When  the  vendors  undertake  to  pay  preliminary  expenses  a  clause  as  above 
is  sometimes  insei'tod.  As  regards  the  persons  named  it  would  seem  to  be 
valid,  but  wlietber  it  would  protect  persons  not  named  is  open  to  question. 


i 


FORMS.  21 

As  to  them  it  may  be  said  that  a  promoter  cannot  retain  a  secret  profit,  and      Form  9. 
that  the  above  clause  does  not  afford  any  disclosure.  


If  any  difference  shall  arise  Ijetweeu  the  parties  hereto  touching  these  Arbitration, 
presents,  or  the  construction  hereof,  or  any  clause  or  thing  herein  con- 
tained, or  any  matter  in  any  way  connected  with  these  presents,  or  the 
oi3eration  thereof,  or  the  rights,  duties,  or  haljilities  of  either  party  in 
connection  with  the  prenn'ses  ;  then  and  in  e^'ery  or  any  such  case,  the 
matter  in  difference  shaU  be  referred  to  two  arbitrators,  one  to  be 
a|)pointed  by  each  of  tlie  parties  in  difference.  And  upon  every  or  any 
such  reference  the  costs  of  and  incident  to  the  reference  and  award 
respectively  shall  be  in  the  discretion  of  the  arbitrators,  or  umpire 
respectively,  who  may  determine  the  amount  thereof,  or  direct  the 
same  to  be  taxed,  as  between  solicitor  and  client,  or  otherwise,  and 
may  award  by  wJiom  and  to  whom  and  in  what  manner  the  same  shall 
be  borne  and  paid  :  And  the  submission  shall  be  made  an  order  of  the 
High  Court  of  Justice  upon  the  application  of  either  party,  and  such 
party  may  instruct  coimsel  to  consent  thereto  for  the  other  parties,  and 
the  death  uf  any  party  shall  not  operate  as  a  revocation. 

Occasionally  a  clause  as  above  is  inserted  in  agreements,  but  its  insei'tion  is 
not  to  be  recommended,  for  a  dispute  can  generally  be  settled  more  speedily 
and  with  less  expense  by  the  issiie  of  a  writ :  the  presence  of  the  clause  some- 
times causes  grave  inconvenience. 

Ajkbitratiox. 

The  following  are  some  of  the  effects  and  consequences  of  a  submission 
framed  as  above  : — 

In  case  of  the  death,  refusal  to  act  or  incapacity  of  any  arbitrator  appointed 
by  either  party,  such  party  will  be  entitled  to  substitute  a  new  arbitrator. — 
Section  13  of  the  Common  Law  Procedure  Act,  185 1  (in  this  note  referred  to  as 
"  the  Act "). 

If  one  party  fail  to  appoint  an  arbitrator,  either  originally .  or  by  way  of  sub- 
stitution as  aforesaid,  for  seven  clear  days  after  the  other  party  shall  have 
appointed  an  arbitrator,  and  shall  have  served  the  party  so  failing  to  appoint 
■with  notice  in  writing,  to  make  the  appointment,  the  party  who  has  appointed 
an  arbitrator  may  appoint  such  arbitrator  to  act  as  sole  arbitrator  in  the  refer- 
ence. And  an  award  by  him  will  be  binding  on  both  jxirties  as  if  the  ajjpoint- 
ment  had  been  by  consent.  However,  the  Court  or  a  judge  may  revoke  such 
api>ointment,  on  such  terms  as  shall  seem  just. — Section  13  of  the  Act  ;  and  see 
Gillett  V.  Thornton,  19  Eq.  399.     Daniel,  Forms,  p.  103U. 

This  section  does  not  apply  where  the  reference  is  to  be  to  three  arbitrators, 
Gumm  V.  Hallett,  14  Eq.  55. 

If  the  arbitrators  do  not  appoint  an  umpire,  then  either  party  may  serve  the 
arbitrators  with  a  written  notice  to  appoint  an  umpii-e ;  and  if,  within  seven 
clear  days  after  such  notice  shall  have  been  served,  no  umpire  be  appointed, 
any  judge  of  the  High  Coiu't,  upon  summons  to  be  taken  out  by  the  party 
having  served  such  notice,  may  appoint  an  umjiire.  Such  umpire  will  have  the 
like  power  to  act  in  the  reference,  and  make  an  award  as  if  he  had  been  ap- 
pointed by  consent  of  all  parties. — Section  12  of  the  Act. 

The  two  arbitrators  may  appoint  an  umpire  at  any  time  within  the  period 
during  which  they  have  power  to  make  the  award,  unless  they  are  called  u^Don 
by  notice  as  above  mentioned  to  make  the  api^ointment  sooner. — Section  14  of 
the  Act. 


^I'Z  AGEEEMENTS. 

Form  9.  The  arbitrator  acting-  under  sncli  a  sulnnission  must  make  his  award  under 

his  hand  within  three  months  after  he  shall  have  been  appointed,  and  shall 
have  entered  on  the  reference,  or  shall  h;ive  been  called  upon  to  act  by  notice 
in  writing  from  either  party,  but  the  parties  may  consent  in  writing  to  enlarge 
the  term  for  making  the  award  ;  and  the  Court  or  any  judge  thereof,  for  good 
cause  to  be  stated  in  the  rule  or  order  for  enlargement,  may  from  time  to  time 
enlarge  the  time  for  making-  the  award. — Sec.  lo  of  the  Act.  See  Baker  v. 
Stevenson,  L.  K.  2  Q.  B.  523. 

The  Court  has  jurisdiction  to  enlarge  the  term,  notwithstanding  thatthe  time 
for  making  the  award  has  elai^sed,  and  has  in  some  cases  exei'cised  it.  In  re 
Warner  and  Poivell's  Arbitration,  3  Eq.  261  ;  Lord  v.  Lee,  37  L.  J.  Q.  B.  121  ; 
Watson  V.  Beavan,  8  W.  E.  G12.     Seton,  p.  402. 

In  any  case  where  an  umpire  shall  have  been  appointed,  he  may  enter  upon 
the  reference  in  lieu  of  the  arbitrators,  if  the  latter  shall  have  allowed  their 
time,  or  their  extended  time,  to  expire  without  making  an  award,  or  shall  have 
delivered  to  any  party,  or  to  the  umpire,  a  notice  in  writing  that  they  cannot 
agree. — Section  lo  of  the  Act. 

The  arbitrator  may  state  his  award  as  to  the  whole  or  any  part  of  it  in  the 
form  of  a  special  case  for  the  ojDinion  of  the  Court. — Section  5  of  the  Act. 

The  authority  of  an  arbitrator  appointed  under  an  agreement  as  above,  pro- 
viding that  the  submission  shall  be  made  an  order  of  Court,  is  irrevocable, 
except  by  leave  of  the  Court ;  and  the  arbitrator  is  bound  to  proceed  with  the 
reference,  notwithstanding  any  such  revocation,  and  to  make  his  award, 
although  the  person  making  the  revocation  does  not  afterwards  attend  the 
reference,  3  &  4.  Will.  IV.,  c.  42,  s.  39.  Hence  the  importance  of  expressly  pro- 
viding that  the  submission  shall  l;)e  made  an  order  of  Court.  In  the  absence  of 
any  such  provision  the  submission  to  any  particular  person  or  persons  made  pur- 
suant to  the  agreement  may  be  revoked  at  any  time  before  the  award  is  made, 
notwithstanding  s.  17  of  the  Act,  which  provides  that  "  Every  agreement  or  sub- 
mission to  arbitration  by  consent  whether  by  deed  or  instrument  in  writing  not 
under  seal  may  be  made  a  rule  of  any  one  of  the  Superior  Courts  of  Law  or 
Equity  at  AVestminster,  on  the  application  of  any  party  thereto,  unless  such 
agreement  or  submission  contain  words  purporting  that  the  parties  intend  that 
it  should  not  be  made  a  rule  of  Coixrt,  &c."  Mills  v.  Batjley,  2  H.  &  C.  36  ; 
Thompson  v.  Anderson,  9  Eq.  523  ;  Re  Rouse  v.  Meier,  L.  R.  6  C.  P.  212  ;  Randall 
V.  Thompson,  1  Q.  B.  Div.  7 18  ;  In  re  Fraser,  32  W.  E.  240.  And  the  revocation 
may  be  made  even  where  the  submission  has  been  made  an  order  of  Court. 
Rouse  V.  Meier,  tibi  supra.  But  such  a  revocation  does  not  of  course  put  an  end 
to  a  general  agreement  to  refer,  as  in  the  above  clause,  and  accordingly  if 
after  the  revocation  an  action  Vje  brought  proceedings  may  be  stayed  under 
s.  11  of  the  Act  below  mentioned.  Piercy  v.  Young,  14  C.  D.  200.  Contra  where 
the  submission  is  of  existing  disputes  to  a  specific  i^erson,  Randall  v.  Thompson, 
ubi  supra.  It  will  be  borne  in  mind  that  the  agreement  to  refer  and  the  written 
appointment  of  the  arbitrators  or  arbitrator  duly  verified  together  constitute 
the  submission.  Newton  v.  Hetherington,  19  C.  B.  N.  S.  342 ;  13  W.  E.  864. 
Re  Wilcox,  I  C.  P.  667  ;  Ex  parte  Harper,  18  Eq.  599. 

The  application  to  make  a  submission  a  rule  of  Court  is  by  motion  ex  parte, 
Oglesby's  Arb.,  W.  N.  1879,  150.  The  execution  of  the  submission  must  be 
proved,  unless  the  application  is  consented  to.  Dan.  Ch.  Pr.  1902.  The  object 
of  inserting  the  words,  "  and  such  party  may  instruct  counsel  to  consent  thereto 
for  the  other  parties,"  is  to  avoid  the  necessity  for  this.  The  original  submis- 
sion must  be  filed  before  order.  Order  61,  r.  15. 

As  to  making  award  instead  of  submission  an  order  of  Court,  see  Jones  v. 
Jones,  14  C.  Div.  591,  and  Re  Rolfe,  28  S.  J.  165. 

It  is  expedient  to  give  the  arbitrator  power  to  award  costs,  for  in  the  absence 
of  exin-ess  authority  he  has  no  power  to  adjudicate  respecting  them  (Eussell  on 
Arbitration,  382),  and  each  party  must  bear  his  own  expenses  of  the  reference, 
and  is  liable  to  half  the  costs  of  the  award  ;  nor  in  the  absence  of  express  autho- 


FOEMS.  23 

rity  can  the  arbitrator  order  the  costs  to  be  taxed  as  between  solicitor  and      Form  9. 
client.     Ibid.  3S7. 

Costs  of  the  reference  include  costs  of  the  award.    Re  Walker,  9  Q.  B.  D.  431. 

The  Court  or  a  judge  }nay  at  any  time  and  from  time  to  time  remit  the 
matters  referred  or  any  of  them  to  the  reconsideration  and  redetermination  of 
the  arbitrator  upon  such  terms  as  to  costs  and  otherwise  as  to  the  Court  or 
judge  may  seem  proper. — Section  8  of  the  Act.  Warner  and  Powell's  Arbitratio7i, 
3  Eq.  2G1. 

An  arbitrator  who  has  signed  his  award  is  functas  officio,  and  cannot  even 
correct  a  clerical  error.     Hence  the  value  of  the  above  section. 

The  proceedings  upon  any  such  arbitration  shall  be  conducted  in  like  manner, 
and  subject  to  the  same  rules  and  enactments,  as  to  the  power  of  the  arbitrator 
and  of  the  Court,  the  attendance  of  witnesses,  the  production  of  documents, 
enforcing  or  setting  aside  the  award  ;ind  otherwise,  as  upon  a  reference  made 
by  consent  under  a  rule  of  Court  or  judge's  order. — Section  7  of  the  Act.  It 
was  at  one  time  doubted  whether  this  section  applied  -in  case  of  an  arbitration 
upon  a  svibiaission  in  writing,  but  there  seems  now  no  doubt  that  it  does. 
Rouse  V.  Meier,  L.  E.  (J  C.  P.  221.  Under  this  section,  coupled  with  Section  iO  of 
3  &  -4  Will.  IV.,  c.  -l^,  the  attendance  of  witnesses  and  the  production  of  docu- 
ments can  be  compelled.  In  re  Achai-y,  3  Ch.  Div.  125  ;  Clarhroiujh  v.  Toothill, 
17  C.  D.  787  ;  Rooney  v.  Whiteley,  W.  N.  1883,  225. 

Hence  there  is  no  need  to  provide  expressly  for  these  matters.  But  s.  10  of 
the  Act  lastly  mentioned  only  applies  where  the  agreement  provides  for  makint' 
the  submission  an  order  of  Court.     Kussell,  188. 

By  Lord  Brougham's  Act  of  1851,  to  amend  the  Law  of  Evidence,  it  is  pro- 
vided that  "  Every  judge,  officer,  commissioner,  arbitrator,  or  other  person  now 
or  hereafter,  having  by  law  or  by  consent  of  parties  authority  to  hear,  receive 
and  examine  evidence,  is  hereby  empowered  to  administer  an  oath  to  all  such 
witnesses  as  are  legally  called  before  them."  1-i  &  15  Vict.  c.  99,  s.  16.  Hence 
there  is  no  need  to  provide  for  that.  Sometimes  the  agreement  provides  that 
the  reference  shall  be  to  an  arbitrator  to  be  appointed  by  some  third  party  or 
firm.  This  becomes  an  effectual  submission  when  the  aijpointment  is  made  in 
writing.     Re  Willcox,  ubi  supra. 

There  is  no  need  to  provide  that  the  arbitrator  may  proceed  ex  jjttrte,  for  he 
may  certainly  do  so  in  a  proper  case.  Eussell,  205 ;  Nares  v.  Denny,  10  L.  T. 
N.  S.  305. 

But  it  may  be  well  to  provide  that  the  arbitrator,  arbitrators,  or  umpire,  may 
employ  an  accountant,  valuer,  or  other  expert,  for  any  purpose  connected  with 
the  reference,  and  may  take  the  opinion  of  counsel  upon  any  question  of  law, 
and  may  act  on  the  report  or  opinion  of  any  such  accountant,  valuer,  or  counsel, 
and  may  make  several  awards  instead  of  one,  and  every  such  award  shall  be 
binding  as  to  all  matters  to  which  it  extends  as  if  such  matters  were  the  only 
matters  referi-ed,  and  that  notwitlistanding  the  other  matters,  or  any  of  them, 
be  not  then  or  thereafter  awarded  on,  for  these  matters  require  to  be  specially 
provided  for.     Re  Eastern  Counties  Ry.  Co.,  3  De  G.  J.  &  S.  GIO. 

Death  of  a  party  befoi-e  the  award  revokes  the  submission  iinless  otherwise 
provided  as  above.     Eussell,  170. 

By  Section  11  of  the  Act,  it  is  provided  that  "Whenever  the  parties  to  any 
deed  or  instrument  in  writing  to  be  hereafter  made  or  executed,  or  any  of  them, 
shall  agree  that  any  then  existing  or  future  differences  between  them,  shall  be 
referred  to  arbitration ;  and  any  one  or.  more  of  the  parties  so  agreeing,  or  any 
person  or  persons  claiming  through  or  under  him  or  them  shall  nevertheless 
commence  any  action  at  law  or  suit  in  equity  against  the  other  pai-ty  or  parties, 
or  any  of  them,  or  against  any  person  or  persons  claiming  through  or  under 
him  or  them  in  respect  of  the  matters  so  agreed  to  be  referred  or  any  of  them, 
it  shall  be  lawful  for  the  Court  in  which  the  action  is  brought  or  any  judge 
thereof,  on  application  by  the  defendant  or  defendants,  after  appearance  and 
before  plea  or  answer,  upon  being  satisfied  that  no  suificient  reason  exists  why 


24  AGEEEMENTS. 

Form  9.      such  matters  cannot  be  or  ought  not  to  be  referred  to  arbitration  according-  to 

the  agreement ;  and  that  the  defendant  was  at  the  time  of  bringing  such  action 

or  suitj  and  still  is,  ready  and  willing  to  join  and  concur  in  all  acts  necessary 
and  proper  for  caiising  such  matters  so  to  be  decided,  to  make  a  rule  or  order 
staying  all  proceedings  in  such  action  on  such  terms  as  to  costs  or  otherwise, 
as  to  such  Coui't  or  judge  may  seem  fit.  Provided  always  that  such  rule  or 
order  may  at  any  time  afterwards  be  discharged  or  varied  as  justice  may  re- 
qiiire."  See  the  cases  of  Willesford  v.  Watson,  8  Ch.  473 ;  Gillett  v.  Thornton, 
19  Eq.  599;  Randall  v.  Thompson,  1  Q.  B.  Div.  748;  Re  Willcox,  uhi  supra; 
Compagnie  de  Senegal  v.  Smith,  W.  N.  1883,  180 ;  49  L.  T.  529. 

By  Section  72  of  the  Companies  Act,  1862,  it  is  provided  that  "  Any  comijany 
under  this  Act  may  from  time  to  time,  by  writing  iinder  its  common  seal,  agree 
to  refer,  and  may  refer  to  arbitration,  in  accordance  with  '  The  Eailway  Com- 
panies Ai-bitration  Act,  1859,'  any  existing  or  future  difference,  question,  or 
other  matter  whatsoever,  in  dispute  between  itself  and  any  other  company  or 
person;  and  the  companies  parties  to  the  arbitration  may  delegate  to  the  person 
or  persons  to  whom  the  reference  is  made,  power  to  settle  any  terms,  or  to  deter- 
mine any  matters  capable  of  being  lawfully  settled  or  determined  by  the  companies 
themselves,  or  by  the  directors  or  other  managing  body  of  such  companies." 

And  by  Section  73  of  the  same  Act,  it  is  provided  that  "  All  the  provisions  of 
'  The  Eailway  Companies  Arbitration  Act,  1859,'  shall  be  deemed  to  apply  to 
arbitrations  between  companies  and  persons  in  pursuance  of  this  Act :  and  in 
the  construction  of  such  provisions, 'the  companies'  shall  be  deemed  to  include 
companies  authorised  by  this  Act  to  refer  disputes  to  arbitration." 

The  power  given  by  these  sections  is  but  seldom  exercised.  The  submission 
must,  it  will  be  observed,  be  under  seal.  A  reference  in  accordance  with  "  The 
Railway  Companies  Arbitration  Act,  1859,"  has  this  advantage,  namely,  that  it 
ousts  the  jurisdiction  of  the  Courts.  See  Watford,  Sfc,  Ry.  Co.  v.  London  ^ 
N.  W.  Ry.  Co.,  8  Eq.  231. 

The  Act  of  1859  contains  a  simple  and  complete  code  of  regulations  as  to 
references  so  made.  It  will  be  found  at  full  length  in  Russell  on  Arbitration, 
p.  818,  and  in  Theobald  on  Railways,  p.  415.  It  does  not,  however,  enable  the 
arbitrator  to  award  costs  as  between  solicitor  and  client ;  and  though  the  sub- 
mission can  be  made  an  order  of  Court  on  the  aiiplication  of  any  party  in- 
terested, yet  there  is  no  jDrovision  dispensing  with  proof  of  execution,  or  as  to 
acting  on  opinion  of  counsel,  &c.,  or  as  to  death.  It  is  well,  therefore,  to  jjrovide 
for  these  matters  in  the  submission.  The  above  clause  (p.  21)  can  readily  be 
altered,  so  as  to  apply  to  a  submission  in  accordance  with  "  The  Railway  Com- 
panies Arbitration  Act,  1859."  A  submission  may  be  so  framed  that  no  action 
can  be  brought  until  after  there  has  been  a  reference.  See  Scott  v.  Avery,  5  H, 
L.  Cas.  811  ;  25  L.  J.  Ex.  308;  Edivards  v.  Aheravon,  Sfc,  Society,  1  Q.  B.  Div. 
5G3 ;  Dawson  v.  Fitzgerald,  1  Ex.  Div.  257. 


Form  10.  Agrkhjikxt  for  Sale  h  Ixtknuej)  C'uju'axy  of  the  Business  of  a 
Warehouseman.  Vendors  i/i  Paktnership.  Comideration : 
Cash  cnul  Bifm-rod  ^Sliares.  \'ciidors  to  Covenant  not  to  carry  07i 
similar  Business,  and  not  to  part  u:ilh  Shares  for  a  pxed  'period. 

Parties.  AX  AOREElMT  made  tliu  day  of ,  l)etwcen  A.,  of , 


B.^  of ,  C,  of ,  and  D.,  of ,  tradiiiu-  in  partiier.sliip  together 

as  warelionsemcn,  nnder  tlic  firm  of  M.  A.  and  Co.  (hereinafter  called  the 

vendors)  of  tlie  one  part,  and  the Company,  Limited  (hereinafter 

called  the  company)  of  the  other  part. 

/ 


t 


FOEMS.  OK 


Wheeeas  tho  \-enclors  have  for  sonic  time  past  carried  on  Ixisiuess    Form  10. 

toi>-etlier  in  partnersliip  as  warehousemen  at ,  in  the  citj  of :  j^gcitals. 

And  whereas  the  nominal  eajjital  of  the  company  is  oOU,OOU/.,  divided 
into  15,000  shares  of  20/.  each,  whereof  r),OoO  are  to  be  called  "A 
shares,"  and  to  have  certain  preferential  rights,  and  the  remaining" 
10,000  are  to  be  called  "deferred  shares." 

XOW  THESE  PRESEXTS  WITNESS  AND  DECLARE  aS  follows  : —  Agreement 

1.  The  vendors  shall  sell  and  the  company  shall  purchase  the  follow- 
ing property  :— 

First,  all  and  singular  the  leasehold  hereditaments  belonging  to  the  Tarcels. 
said  firm,  which  are  specified  in  the  first  schedule  hei'cto,  subject  as  to 

part  thereof,  namely,  No. , Street,  to  the  two  several  indentures 

of  mortgage  for  securing  the  principal  sums  of  15,000/.,  and  5,000/.  and 
interest,  respectively  S})ecit1ed  in  the  same  schedule  ; 

.Secondly,  all  the  plant,  machinery,  and  furniture,  in  and  about  the 
said  premises,  and  the  chattels  and  efiects  specified  or  referred  to  in  the 
second  schedule  hereto; 

Thirdly,  the  stock-in-trade,  and  the  benefit  of  all  contracts  and  en- 
gagements to  which  the  vendors  shall,  on  the day  of next,  be 

entitled  in  relation  to  the  said  business  ; 

Fourthly,  the  good-will  (a)  of  the  said  business,  [with  the  exclusive 
right  to  use  the  name  of  "  ^I.  A.  &  Co."  (jr  "  ^1.,  lirothers,"  as  part  of 
the  name  of  a  company,  and  represent  such  company  as  carrying  on  such 
business  in  continuation  of  the  said  firm  of  M.  A.  &  Co.,  and  in  suc- 
cession thereto,  and  the  right  to  use  the  words  "  late  M.  A.  S:  Co.,"  or 
any  other  words  indicating  that  the  business  is  carried  on  in  continuation 
of  or  succession  to  the  said  firm.] 

(a)  The  words  in  brackets  are  probably  implied  in  the  word  "  goodwill."  Wall-e  r 
V.  Levy,  10  C.  Div.  43G.  As  to  when  an  injunction  vnll  be  granted  to  restrain 
a  vendor  from  interfering  with  the  goodwill,  see  Lahouchere  v.  Dawson,  13  Eq. 
322  ;  Leggatt  v.  Barrett,  15  C.  Div.  307  ;  WalJcer  v.  Mottram,  19  C.  Div.  355  ; 
Dawson  v.  Beeson,  22  C.  Div.  50i. 

A  conveyance  of  the  goodwill  may  carry  the  benefit  of  covenants  not  to  com- 
pete by  employes  of  the  vendor.     Jacoby  v.  Whltmore,  -iO  L.  T.  335. 

2.  The  consideration  for  the  said  sale  shall  be  as  follows,  namely,  for  Consideration. 
the  property  first  mentioned,  52,330/.  ;  for  the  property  secondly  men- 
tioned, 11,400/.  :  and  for  the  property  fourthly  mentioned,  10,Ooo/. 

The  consideration  for  the  property  thii'dly  mentioned  shall  be  a  sum  Yahiatlon  o£ 
(^hereinafter  called  the  valuation  monies)  eijual  to  the  fair  ^■alne  thereof,  ^*'^'^'^- 
and  so  that  any  difference  in  regard  thereto  shall  be  referred  to  the 
decision  of  two  competent  valuers,  one  to  be  appointed  by  the  vendor 

and  the  other  liy  the  company  [or  by  Messrs. of ],  and  the 

submission  may  l)e  made  an  order  of  the  High  Court. 

Where  a  purchase  at  a  valuation  of  any  considerable  subject-matter  is  in- 
tended, it  is  desirable  so  to  frame  the  contract  that  the  valuation  shall  be  an 
arbitration  within  the  Common  Law  Procedure  Act,  1S5 1,  otherwise  serious  oss 
and  inconvenience  may  ensue. 


36 


AGREEMENTS. 


Form  10.  -■^'^  ag-reement  to  sell  at  a  price  to  be  fixed  by  valuers  is  not  a  submission  to 

arbitration  within  the  meanino^  of  the  Act,  for  there  is  no  "  difference"  between 

the  parties,  and  the  Act  only  applies  where  the  parties  have  agreed  to  refer 
some  difference.  Collins  v.  Collins,  26  Beav.  300  ;  7  W.  R.  115.  Accordingly 
in  that  case  the  Court  refused  to  appoint  an  umpii-e  on  the  valuers'  default. 
And  where  the  Act  does  not  apply  the  Court  has  no  power  to  appoint  a  valuer 
in  the  place  of  one  who  dies,  or  refuses  to  act,  or  to  remit  the  valuation  where 
a  mistake  has  been  made.  Where,  however,  the  agreement  is  framed  as  above 
the  submission  is  within  the  Act.  It  is  the  more  important  to  see  that  the  Act 
will  apply,  because,  until  the  valuation  has  been  effected,  the  Court  cannot 
enforce  sijecific  performance.  Milnes  v.  Gery,  14  Ves.  400  ;  Vickers  v.  Vichers, 
4  Eq.  429  ;  Tillett  v.  Charing  Co.,  26  Beav.  419;  5  Jur.  N.  S.  994.  Sometimes 
the  contract  provides  that  the  difference  "  shall  be  referred  to  arbitration  as 
hereinafter  provided,"  and  contains  the  usual  arbitration  clause.  Supra,  p.  21. 
See  also  Bos  v.  Helsham,  L.  E.  2  Ch.  79  ;  Richardson  v.  Smith,  5  Ch.  048  ;  Smith 
V.  Peters,  20  Eq.  oil ;  Milnes  v.  Gery,  1  i  Ves.  400  ;  Vickers  v.Vickers,  4  Eq.  529. 


The  deferred 
.-.hares  to  be 
.;dlotted  in 
])art  satisfac- 
tion of  pur- 
!-■  ha.se  money. 


How  sliaves  to 
be  allotted. 


Ooinpany  to 

undertake 
tlie  two 
jiiortgages. 


How  cash 
portion  of 
the  purchase 
money  to  he 
liaid. 


"When  yiwv- 
•cliase  to  be 
completed. 


"Meantime 
vendors  to 
carry  on  the 
business. 


4.  The  said  sums  of  r)2,f>30/.,  •),400/.,  and  10,00(»/.,  and  tlie  sum  of 
l.S8,270^..  part  of  the  amount  of  va.hiation  monies  pursuant  to  clause  3 
liereof,  making  together  2(»0,0<)0/.,  shall  be  paid  and  satisfied  l)y  the 
allotment  to  the  A'endors  of  the  said  10,000  deferred  shares  in  the 
company,  on  each  of  which  shares  the  sum  of  20L  shall  l)e  credited  in 
the  books  of  the  company  as  having  been  paid  up. 

5.  The  said  10,000  deferred  shares  shall  be  allotted  to  the  vendors  in 
the  proportions  following  :  namely,  to  the  said  A.  ■4:,(»0()  of  such  shares, 
to  the  said  B.  2,500  of  such  shares,  to  the  said  C.  2,000  of  such  shares, 
and  to  the  said  T).  the  residue  of  such  shares. 

(!.  The  company  shall  undertake  and  pay  the  said  mortgage  debts  of 
l">,00(i/.  and  5,000/.,  and  all  interest  to  become  due  thereon  as  from  the 

day  of ,  and  shall  indemnify  the  A'endors  respectively,  and  their 

respective  heirs,  executors,  administrators  estates  and  effects  from  and 
against  payment  of  the  said  mortgage  debts  and  interest,  and  from  and 
against  all  actions,  claims  and  demands,  in  respect  of  the  said  indentures 
of  mortgage  or  either  of  them. 

7.  The  residue  of  the  valuation  monies  shall  be  paid  in  cash,  as  to 
30,000/.,  part  thereof,  at  the  time  fixed  Ibr  the  completion  of  the  pur- 
chase, and  as  to  the  residue  by  three  e(iua.l  instalments,  on  the 

day  of ,  the day  of •,  and  the day  of ;  and  any 

instalment  not  paid  at  the  time  hereby  ai)})ointed  for  the  payment 
thereof  shall  thenceforth,  until  payment,  bear  interest  at  the  rate  of 
5  per  cent,  per  annum. 

<S.  The  purchase  shall  be  completed  on  the  —  day  of next, 

and  at  four  o'clock  in  the  afternoon  of  that  da.}'  possession  of  the  property 
agreed  to  be  hereby  sold  shall  be  given  to  the  ('((mpany,  provided  that 
the  company  shall  duly  pay  the  said  sum  of  3(),(ioo/.  and  allot  the  said 
shares  pursuant  to  clauses  r>  &  7  hereof. 

I).  Jn  the  meantime  the  business  shall  be  carried  on  by  the  vendors  in 
tlie  ordinary  and  usual  manner,  so  as  to  maintain  the  business  as  a  going 
concern  without  unduly  pressing  sales,  and  no  sales  being  made  except 
in  the  ordinary  way  of  business  and  at  the  ordinary  profit. 


FORMS.  27 

10.  As  from  the day  of uext  until  tlic  time  fi.xed  for  com-    Form  10. 

pletion  the  vendors  shall  be  considered  to  be  carrying  on  the  said  business  ];„j,iness^ 
on  account  and  for  the  benefit  of  the  company.  belong  to    ■ 

11.  On  or  at  any  time  after  the day  of next,  the  vendors  froiu^'^'^Jay 

shall  at  the  expense  of  the  company  execute  and  do  all  such  assurances  certain. 
and  things  as  may  reasonably  he  required  by  the  company  for  vesting  in  As  to  assur- 

-,         11         1  11         "i      •    •         1      -i  j_i       r    11  T  ni.  aiices  and 

it  the  pro})erty  agreed  to  ))e  herel)y  sold,  and  giving  to  it  the  full  henent  tilings  for 

of  the  said  sale.  canying  sale 

r.n  1  1,1  /■  ,1  ,  •         1        Ti       1        ±-     1       i'lto  effect. 

12.  Ihe  vi-ndors  sliall  iirocuve  Irom  the  respective  landlords  ot  the  ,,    , 

•  1    1  1     1  1  ■  T  1  ■   1  T  r        i-i       veiKlors  to 

said  leaselKild    premises  any  licences  -which  may  lie  necessary  i(ir  tlie  pj-ocm-g  licence 

assignment  tliereof  i)ursuant  to  this  agreemt.  *°  assign 

nil  1     1,  ■     1  -r     "\  ^  -,11        ,•  i  leaseuolds. 

13.  iiie  company  shall  nidemniiy  the  vemlors  against  all  actions  and  y    i  .  *  r, 

proceedings,  claims  and  demands,  in  respect  of  the  said  contracts  and  indemnified 
engagements  in  relation   to  tlie  said  business,  the  benefit  whereof  is  i'-'""''*^^""' 

'^   ®  '  tracts,  &c. 

agreed  to  be  hereby  sold. 

14.  The  company  shall  l)e  entitled  to  the  Ijenefit  of  the  current  fire 
insurance  of  the  said  leasehold  premises  and  stock  in  trade. 

15.  The  vendors  shall  discharge  all  outgoings  in  respect  of  the  said  Outgoing.--. 
leasehold  premises  njj  to  the day  of next,  and  as  from  that 

clay  the  company  shall  discharge  the  same,  and  such  outgoings  shall  if 
necessary  l)e  apportioned  for  the  purpose  of  this  clause. 

1(».  All  books  of  account  of  the  said  firm,  and  all  books  of  reference  Books  of 
to  customers,  and  all  other  l)Ooks  and  documents  of  the  said  firm  (except  account, 
such  as  relate  exclnsively  to  the  private  affairs  of  the  said  firm  or  the 
individual  members  thereof),  shall  Ije  delivered  by  the  vendors  to  the 
comjiauy  on  possession  being  gi\en  of  the  premises,  pursuant  to  the  pro- 
vision in  that  ])ehalf  hereinl)efore  contained,  and  the  company  shall 
thenceforth,  subject  to  the  following  pro^'iso,  be  entitled  to  the  custody 
thereof,  and  to  the  use  thereof  for  the  purposes  of  carrying  on  its 
business,  but  the  vendors  shall  have  free  access,  at  all  reasonable  times, 
to  such  of  the  said  books  and  documents  as  show  or  relate  to  the  out- 
standing book-debts  and  credits  of  the  vendors,  or  may  otherwise  be 
reciuisite  for  enabling  the  vendors  to  collect  and  get  in  the  assets  of  the 
said  firm  not  hereby  agreed  to  be  sold,  and  to  liquidate  the  affairs  thereof; 

17.  Provided  always  that  when  and  so  soon  as  any  of  the  said  books  of  rroviso. 
reference  and  other  books  shall  cease  to  be  necessary  for  the  carrying  cm 

of  the  said  business,  the  same  shall  be  delivered  over  to  the  vendors,  who 
shall  thereupon  l)ecome  absolutely  entitled  thereto. 

18.  The  vendors  shall  be  entitled  to  such  accommodation  as  they  may  Accouiiiiod;i- 
reasonably  require  in  the  coimting-house  of  the  company,  in  the  said  ^°".'" '^^'^'^  ^"^ 

,  °  r       V  '  lie  given  to 

leasehold  premises,  for  the  purpose  of  collecting  the  book  and  other  debts  vendors, 
due  to  the  said  firm  in  respect  of  the  said  business  and  liquidating  the 
affiiirs  thereof;  and  the  vendors  shall  make  all  such  book  and  other 
debts  payable  at  the  said  })remises,  and  at  no  other  place,  the  object 
being  to  secure  the  continued  resort  of  the  customers  of  the  said  firm  to 
the  said  premises,  and  so  to  give  to  the  company  the  full  benefit  of  the 
good-will  of  the  said  Imsiness. 


28 


AGREEMENTS. 


Form  10. 


Vendors  to 
hold  shares 
for  certain 
period. 


1!).  Each  of  the  veudors  shall  upon  the  request  and  at  the  costs  of  the 
couiiDany  enter  into  a  covenant  with  the  company  that  he  will  not  during 
the  period  of  twenty  years  from  the  date  hereof  either  solely  [see  siqora, 
]}.  9,  clause  8,  mutatis  mutandis.'] 

'20.  Each  of  the  vendors  shall,  if  he  shall  so  long  live,  retain  and  hold 
in  his  own  name  the  whole  of  the  shares  to  be  allotted  to  him  pursuant 
to  clause  5  hereof  for- a  period  of  six  calendar  months  from  the  allotment 
thereof,  and  shall  retain  and  hold  in  his  own  name  at  least  75  per  cent. 
of  the  said  shares  for  a  j^eriod  of  five  years  from  the  time  of  such  allot- 
ment {h). 

(6)  Such  a  clause  as  the  above  is  occasionally  inserted. 

21.  Unless  [sujjra,  p.  17]. 

22.  The  company  shall  cause  [supra,  p.  10]. 

As  WITNESS,  &C. 

[.4^/^/  sHu'dulcs  contahiiiKj  (1)  dcscriid'wn  of  leasehold  promises  and 
mortija(je^,  and  (2)  imriirulars  of  chattels  and  ejf'ecfs  referrinf/  lo  an  'in- 
ventor tj.] 


Parties, 


Agreement  for 
.sale. 


Inspection 


Form  11  Agreement  for  Sale  to  Co:\irANY  of  Forei(;x  Mixes. 

AX  AGPtEEMT  made  the day  of ,  between  A.,  of ,  in 

the  Repul)lic  of (hereinafter  called  the  vendor),  l)y  B.,  his  attorney, 

of  the  one  part,  and  The  ■ Co,  Limtd  (hereinafter  called  the  co),  of 

the  other  part :  "VYhhrej!Y  it  is  A(Ireei)  as  follows  : — 

1.  The  vendor  shall  sell,  and  the  co  shall  purchase  the  mines,  minium- 
rights,  mills,  stamps,  orehouses,  plant,  machinery  plant,  stock,  ore,  and 
other  property  and  rights  si)ccified  in  the  first  schedule  hereto,  and 
hereinafter  called  the  scheduled  jiremises. 

2.  The  CO  shall,  with  ail  reasonable  desjiatch,  direct  W.,  or  some 
otliei'  competent  person,  to  inspect  and  report  upon  the  value  of  the 
scheduled  premises,  and  unless  tlie  report  of  such  person  shall  be  deemed 
satisfactory  ))y  the  company,  the  company  shall  be  at  liberty,  by  notice 
in  writing  to  the  sd  B.,  to  rescind  this  agreemt,  j^rovidcd  such  notice  be 
given  before  the  ■ day  of . 

Title.  o.  The  vendor  sliall  make  out  to  the  satisfaction  of  the  company  a. 

good  title  to  the  scheduled  premises,  according  to  the  laws  in  force  in 
the  said  Re])ublic,  free  from  all  incumbrances,  except  any  royalties 
imposed  by  the  Alining  Code  of  the  sd  Bepublic. 

Consideration.  4.  The  cousou  for  the  sd  sale  shall  be  1()(),(M)0/.,  whereof 
2o,0()o/.  sliall  be  })aid  in  cash,  and  the  balance  shall  l)e  satisfied  by  the 
issue  to  the  vendor  or  his  nominees  of  debentures  for  securing  f>0,000/., 

and  r),<)(io  loJ.  .shares  of  the  company,  to  he  nnm1)ered  to 

inclusive,  and  to  be  considered  for  all  purjxjses  as  fully  paid  up. 


FOEMS. 


29 


r».  The  sale  shall  be  completed  at  L.,  in  the  sd  Eepublic,  on  the Form  11. 

day  of ,  when  the  vendor  shall  duly  transfer  the  scheduled  iireniises  " 

1  •,  •  1,1  -r-      ,         n  .  ■  ,  ,         -1  Completion. 

to  the  company  or  its  nominees,  and  the  certiricates  or  title  to  the  sd 

r),()00  shares,  and  the  sd  debentures  shall  be  handed  over  to  the  vendor. 

The  coin])any  shall   cause   its   agent   to   be   api)ointed   as   hereinafter 

mentioned  to  transmit  to  it  telegraphic  information  of  tlie  completion  of 

the  sd  transfer. 

G.  The  company  shall,  before  the  time  for  completion,  execute  the  sd  Transmission 

certificates  and  del>entures,  and  transmit  the  same  to  L,,  there  to  lie  °^  certificates 

.  and  debentures, 

ready  for  issue  at  the  time  for  completion.     Each  of  the  sd  certificates 

shall  comprise  — —  shares,  and  the  sd  debentures  shall  be  in  the  form 

set  forth  in  the  second  schedule  hereto. 

7.  The  company   shall  also  appoint  some   person   in   L,  to   lie   its  ^.^^^j. 

attorney  or  agent,  witli  full  powers  in  relation  to  the  completion  of  the 

sale,  and  shall  notify  such  a]ipointmeiit  to  the  vendor  or  not  less  than 

days  before  the  time  for  completion. 


Deposit. 


8.  Xot    less    tlian  days    before    tlie    time    for    comiiletion    the 

comimny  shall  pay  the  sd  sum  of  20,000?.  cash  to  J.  &  D.  u])on  trust  t( 

place  the  same  on  deposit  in  their  joint  names  at  the Bank,  in  the 

City  of  London,  and  to  keep  the  same  there  deposited  until  they  shall 
"be  satisfied  that  the  scheduled  i)remises  have  been  duly  transferred  in 
accordance  with  clause  5  hereof,  and  thereupon  to  withdraw  the  ^d 

deposit  and  any  interest,   and   pay  the   same   to   ,  the  vendor's 

agent  in  London,  or  as  he  shall  direct.  If  this  agreemt  shall  be  re- 
scinded under  clauses  2  or  11  hereof,  the  sd  deposit  and  interest  shah 
be  forthwith  withdrawn  and  paid  over  to  the  company. 

1).  Possession  of  the  scheduled  premises  shall  lie  given  to  the  company  possession 
at  the  time  for  completion,  and  the  vendor  shall  in  the  meantime  keep 
the  same  in  good  repair  and  condition,  and  shall  Avork  the  mines  and 
mills  in  as  full  and  effectual  a  manner  as  the  same  have  hitherto  l»een 

worked.     As  from  the day  of the  vendor  shall  be  deemed  to 

have  been  carrying  on  the  sd  mines  and  mills  for  tlie  benefit  of  the 
company  ;  and  he  shall  account  to  the  company  for  all  monies  and  other 
benefits  received,  and  shall  be  indemnified  liy  the  company  against  all 
expenses  whilst  so  caiTying  on  the  same. 

10.  The  vendor  shall  pay  all  the  costs  of  and  incidental  to  the  prejia-  Vendor  to  pay 
ration  and  execution  of  this  agreemt,  and  of  the  memorandum  and  i>i-eiitainary 
articles  of  association  of  the  company,  and  of  the  registration  thereof,  ^^^'^°*^^' 
and  of  all  stamps,  fees,  and  legal  expenses  incident  to  the  formation  of 
the  company,  and  generally  of  all  preliminary  expenses  whatever   in- 
curred in  relation  to  the  company  up  to  the  incorporation  thereof ;  and, 
if  the  result  of  the  inspection  to  be  made  pursuant  to  clause  2  hereof, 
shall  be  unsatisfactory  to  the  company,  or  if  the  vendor  shall  fail  to 
«how  a  good  title  to  the  sd  premises,  the  vendor  shall  also  pay  the  costs, 
charges,  and  expenses  incurred   by  the  company  in  relation   to   such 
inspection,  but  so  that  such  last-mentioned  costs,  charges,  and  expenses 
shall  not  exceed 1. 


:30 
Form  11. 

Rescission. 
Notices. 


AGEEEMENTS. 

11.  Unless  before,  &c.  [Form  3,  clause  5.] 

12.  For  tlie  purposes  of  this  agreciueiifc  any  notice  may  be  given  to 

the  vendor  l)y  leaving  the  same  for  him  at  the Bank  in  L.,  or  (at 

the  option  of  the  company)  by  leaving  the  same  at  No.  — ,  Street, 

in  the  city  of  London  ;  and  any  notice  so  left  shall  be  deemed  to  havo 
reached  the  vendor  at  the  expiration  of  forty-eight  hours  after  it 
is  so  left. 

In  witness,  &c. 


[AfhJ  srhedulrs- 
of  dehoniuro.'] 


-(1)  containing particuJws  of  mines,  ^-c,  and  (2)fornt 


Form  12.    Agreement  hi/  Company  adopting  contract  jiade,  on  its  behalf, 
BEFORE  ITS  incorporation.     For  indorsement  OH  Original  contracf. 


Parties. 


AN  AGREEMT  made  this 


day  of 


Recitals 


Adoption. 


-,  between  A.,  of  &c., 

of  the  first  part,  B.,  of,  &c.,  of  the  second  part,  and  The  Co, 

Limtd  (hereinafter  called  the  company),  of  the  third  part.     Whereas, 
since  the  execution  of  the  within  written  agreemt,  the  company  has  been 
incorporated  in  accordance  with  the  intention  in  that  behalf  referred  to 
in  such  agreemt  : 
Now  it  is  hereby  mutually  agreed  as  follows  : — 
1.  The  within  written  agreemt  is  hereby  adopted  by  the  company, 
and  shall  be  binding  on  the  company  in  the  same  manner,  and  be  read 
and  construed  in  all  respects  as  if  the  company  had  been  in  existence  at 
the  date  thereof,  and  had  by  these  presents  ratified  the  same. 
B.  disci] ai-geil.       2.  The  sd  B.  shall  from  henceforth  be  discharged  from  all   liability 
under  or  in  respect  of  the  sd  agreemt. 
In  avitness,  &c. 

Where  a  contract  is  raade  on  behalf  of  an  intended  company  [as  above, 
pp.  1,  7],  it  is  requisite  to  take  steps  to  bind  the  company  when  it  comes  into 
existence.  It  used  to  be  thought  that  a  company  could  ratify  such  a  contract, 
but  it  is  now  settled  that  it  cannot.  Em-press  Engineering  Co.,  16  C.  Div.  125. 
By  acting  on  the  contract  it  might  become  bound  on  equitable  principles, 
Pntchard's  Case,  8  Ch.  960;  but  the  usual  plan  is  to  execute  an  agreement  as 
above,  so  as  to  effect  a  novation  of  contract. 


Form  13.    A(iRKRMENT  hj  Company  adopting,  with  modifications,  contract 

made  before  its  incorporation. 

Recitals.  Parties  :  the   company,    1  ;  [the    vendor,  2  ;    A.,  3.     "\Vheri<;as   by 

an  agreement  (hereinafter  called  the  preliminary  contract)  dated,  &c., 
and  made  between  the  vendor,  of  the  one  part,  and  the  said  A.,  as  trustee 
for  the  company  (which  was  then  intended,  and  has  since  been  formed 


FOEMS. 


31 


under  the  Companies  Acts,  18G2   to   1883),  of  the   other  part,  it  was    Form  13. 
agreed  that  the  ^•endor  shonld  sell,  and  the  company  shonld  purchase 
certain  property  upon  the  terms,  and  subject  to  the  stipulations  therein 
expressed  :  Axj)  wiiEitEAS   a  copy  of   the   jireliminary  contract   is  set 
forth  in  the  schedule  hereto  : 

Now   THESE   PRESENTS    WITNESS   AND   DECLARE  aS  foUowS  : — 

1 .  The  preliminary  contract  is  licrel)y  adopted  by  the  company,  and  Adopting 
shall   (subject   as   hereinafter  provided)  be  bindino; — [«s  in  Form  11,  Preliminary 
.7.1]. 

2.  The  time  for  the  completion  of  the  sale  shall  be  postponed  to  the  Completion. 
day  of . 

3.  If  at   the   time   for   completion  less   than   10,000  shares  in   the  Modification  of 
company's  capital  have  been  taken  up,  the  cash  portion  of  the  purchase-  *^""^  °^  ^''^^^■^ 
money,  viz.,  50,00<)/.,  shall  be  satisfied  as  to  20.000/.  by  the  issue  to  the 

vendor,  or  his  nominees,  of  2,000  fully  jmid-u])  ]  0/.  shares  in  the 
company's  capital,  and  as  to  30,000/.,  as  follows  : — that  is  to  say,  at  the 
time  for  completion,  one  moiety  of  the  then  capital  monies  of  the  com- 
pany shall  1)0  paid  to  the  vendor,  and  the  other  moiety  shall  be  retained 
by  the  company  for  its  general  purposes  ;  and  out  of  the  capital  monies 
subsequently  paid  up  the  company  may  retaiii  for  its  general  purposes 
any  sum  not  exceeding  .").O00/.,  and,  subject  as  aforesaid,  shall  j)ay  such 
capital  monies,  as  and  when  received,  to  the  vendor  until  the  residue  of 
the  said  sum  of  3<),<i(»u/.  has  been  paid,  at  the  rate  of  5  per  cent,  per 
annum,  as  from  the  time  for  completion  to  the  time  of  actual  payment. 
And,  unless  Avithin  six  calendar  months  from  the  first  allotment  of  the 
company's  shares,  the  whole  of  such  residue  has  been  paid,  the  company 
may  at  any  time  thereafter  satisfy  the  balance  thereof,  then  remaining 
unpaid,  by  issuing  to  the  vendor  or  his  nominee  fully-paid  up  shares  to 
be  regarded  as  of  i^ar  value  {or  the  balance  shall  therefore  immediately 
become  payable  in  cash). 

4.  If  at  the  time  for  completion  less  than  — —  shares  shall  have  been  When  transfer 
taken  up,  then  upon  payment  of  the  amount  hereinbefore  made  payable  *° ''®  effected. 
at  the  time  for  completion,  and  upon  the  allotment  of  the  said  2,00n 

shares,  the  vendor  will  transfer  the  property  to  the  company  in  accord- 
ance with  clause of  the  preliminary  contract. 

5.  [_As  in  Form  12,  d.  2.]  p..  discliarged. 
(1.  Unless  before   the day  of  at  least shares    in  the  Tower  to 

company  shall  have  been  applied  for  liy  responsible  persons,  either  of  rescind, 
the  parties  hereto,  of  the  first  and  third  parts,  may  by  notice  in  writing 
to  the  other,  annul  the  sale,  and  thereupon  the  preliminary  contract  and 
these  presents  shall  become  void,  save  as  regards  this  and  the  last  pre- 
ceding clause  hereof. 

G.  Before  any  fully  paid-up  shares  are  issued  under  this  agreemt  a  Filing 
proper  contract  shall  Ite  filed  with  the  Registrar  of  Joint  Stock  Companies,  eont^act. 

In  witness,  kc, 

\^Add  schedule  containing  copy  of  preliminary  contract.'] 


33 


AGREEMENTS. 


Parties. 


Sale. 


Consideration. 


Form  14.  AoREE^^iENTybr  Sale  of  Ship  to  single  Ship  Company. 

Parties:  A.,  B.,  and  C,  "the  vendors"  (1),  and  "the  com- 
pany" (2). 

1.  The  vendors  shall  sell,  and  the  company  shall  purchase  the  steam- 
ship specified  in  the  schedule  hereto,  together  with  all  the  gear,  stores 
and  other  effects,  and  the  l)enefit  of  all  contracts  and  engagemts  therein 
mentioned. 

2.  The  conson  for  the  sd  sale  shall  l)e  32,0<)0/.,  which  shall  he 
satisfied  as  to  OjOOO/.  by  crediting  as  paid  up  the  eight  shares  which, 
by  the  company's  memorandum  of  association,  the  subscriljers  thereto 
(including  the  vendors)  \\\\\c  agreed  to  take  \\\^ ;  and  as  to  the  balance 
(20,()(>0i'.)  by  the  allotment  to  the  vendors,  in  the  proportions  specified 
in  the  second  schedule  hereto,  of  the  remaining  fifty-six  shares  in  the 
company's  capital :  such  shares  to  be  deemed  for  all  pur})Oses  fully  paid. 

Sometimes  the  vendors  and  their  friends  subscribe  the  memorandum  for  all 
the  shares. 

€ompletion.  o.  The  purchase  shall  be  completed  on  the  day  of ,  and 

thereupon  the  vendors  shall  transfer  the  sd  steamship  and  premises  to 
the  company,  free  from  incumbrances.     The  company  [^Fonn  9,  cL  U>.] 

No  diity  is  payable  on  the  sale,  transfer  or  other  disposition  of  any  ship  or 
vessel,  or  interest  or  jjroperty  therein.     See  Schedule  to  Stamp  Act,  1870. 

4.  This  au'reemt  shall  forthwith  be  filed,  supra,  p.  1,5. 

Ix   AVITNESS,  &C. 

[Schcdides — {1}  (jlv'uuj  parlars  of  slip,  ij-r. ;  (2)  shotring  Jmv  shares  fo 
he  apportioned.'] 

See  note  to  Form  104,  infra.  Sometimes  the  agreement  for  sale  provides  for 
the  appointment  of  some  of  the  vendors  as  managers  at  specified  remunera- 
tion ;  but  it  seems  better  not  to  disclose  this  in  an  agreement  which  must  be 
filed. 


Form  15. 

Parties. 
Sale. 


Option  to  pay 
in  shares. 


Agreement /fy  Sali-:  o/"  Concession  to  Pro^ioter,  vho  is  to  form 

Company. 

Parties  :  A.,  1  ;  and  B.,  2. 

1.  The  sd  A.  shall  sell,  and  the  sd  11  shall  purchase  the  concession 
specified  in  the  schedule  hereto,  and  the  full  benefit  thereof  at  the  price  of 
50,000?.,  whereof 1.  shall  foi-thwith  be  paid  to  the  said  A.  by  Avay  of 


2.  If  before  the day  of  [the  time  for  completion]  the  sd 

B.  shall  have  resold  the  sd  concession  to  a  company  duly  formed  under 
the  Companies  Acts,  1802  to  188:5,  for  the  purpose,  inter  alia,  of  ac(|uir- 
ing  and  carrying  out  the  sd  concession,  and  with  a  nominal  capital  of 
200,000/.,  divided  into  20,000  shares  of  10/.  each  [and  with  a  working 


FORMS.  33 

cajtital  of /.  at  the  least],  the  said  B,  shall  have  the  option  of  satisfy-    Form  15. 

iii<^-  any   i)art   of   the  balance   of   the  pnrchase-money   not   exceeding  "" 

40,000/.,  by  procuring  the  a,llotnient  or  transfer  to  the  sd  A.  of  fully 
paid-up  shares  in  such  company  to  l)e  treated  as  of  par  \alue. 

3.  The  said  A.  shall  show  a  good  title  to  the  sd  concession  in  himself  Title. 
or  some  other  person  willing  and  bound  to  conAcy  by  his  direction,  and 
shall  prove  that  the  concession  is  valid  and  in  full  force,  and  shall  duly 
transfer  the  same  to  the  sd  B.  or  his  nominee  at  or  before  the  time  for 
completion  hereinafter  fixed. 

4.  The  purchase  shall  be  completed  on  the day  of next,  at  Completiou. 

-,  or  at  such  other  place  in  the  city  of  London  as  the  sd  B.  shall 


fix,  and  thereupon  the  pnrchasc-m(»ney  shall  ])C  paid  or  satisfied  as  here- 
inbefore provided. 

.).  The  sd  B.  shall  liefore  the  time   hereinbefore  fixed  for  completion  Report  of  agent. 
ap]ioint  some  competent  agent  in  • — —  to  examine  and  report  on  the 
title  to  the  sd  concession    and  to   certify  the  transfer  thereof,  and  a 
telegram  from  such  agent  stating  that  the  title  is  satisfactory  and  that 
the  transfer  is  complete  shall  be  sufficient  evidence  of  the  facts. 

C.  The  said  B.  may  at  any  time  before  the day  of next,  l)y  Rescission. 

notice  in  writing  to  the  sd  A.,  annul  the  sale,  and  if  the  said  purchase- 
)noncy  shall  not  be  paid  or  satisfied  at  the  time  and  in  manner  aforesaid, 
then  and  in  such  case  the  sd  A.  may  at  any  time  afterwards  Ijy  notice  in 
writing  to  the  sd  B.  annul  the  sale. 

7.  If  the  sale  is  annulled  under  this  clause  the  deposit  shall  be  for- Forfeiture  of 
felted  to  the  sd  A.,  and  neither  party  shall  have  any  claim  against  the   '^^^''^^■ 
other  for  expenses,  damages,  or  otherwise. 

IX  WITNESS,  &c. 

\^The  SchcihiJo  containing 2)artkuhrs  of  concession.'] 

Not  iincomiuonly  an  agreement  as  above  is  made  without  any  provision  for 
a  deposit,  so  that  practically  it  imposes  no  liability  on  the  purchaser. 

The  promoter,  having  secured  the  agreement,  forms  his  company,  and  enters 
into  an  agreement  with  the  company  for  the  sale  of  the  concession  at  an  advance 
in  price.  There  is  no  objection  to  such  an  arrangement,  provided  that  due 
disclosiu-e  is  made  to  the  company.  But  great  care  must  be  taken  in  framing 
the  prospectus.     Ross  v.  Estates  Investment  Co.,  3  Ch.  089. 

Remuneration  of  Promoters. 

In  most  cases  the  promoters  of  a  company  expect  liberal  remuneration  for 
their  services,  and  sometimes  it  is  fairly  deserved :  nor  is  there  any  objection 
thereto,  provided  that  due  disclosure  is  made  to  the  company.  The  mode  of 
remuneration  is  usually  settled  by  the  promoters  themselves,  and  the  following 
are  several  of  the  modes  commonly  adopted  : — 

(1.)  The  promoters  purchase,  or  agree  to  purchase,  property  and  sell  it  at 

a  profit  to  the  company. 
(2.)  The  promoters  undertake  to  form  a  company  and  procure  it  to  purchase 
property,  and  the  owner  agrees  to  give  them  a  commission  payable 
either  in  cash  or  in  paid-up  shares.     The  contract  with  the  company- 
should  i-ecite  the  agreement. 

D 


84 


AGREEMENTS. 


Form  15.  ("^O  "^^^  promoters  agree  to  pay   the  preliminary  expenses,   or  to  place  a 

certain   number   of   shares,   in   consideration    whereof    the    company 

agrees  to  allow  them  a  commission. 

(1.)  The  capital  consists,  in  part, of  a  small  nvimber  of  shares — e.  g.,  100  of  11. 
each.  These  shares  are  called  "  deferred,"  or  "B,"  or  "founders," 
and  a  right  to  a  certain  share  of  the  surplus  profits  is  annexed  thereto 
— e.g.,  one-third  after  jjaying  a  6  per  cent,  dividend  on  the  other 
shares.  By  agreement  between  the  comjiany  and  the  promoters 
(referred  to  in  the  articles)  these  shares  are  issued  as  fully  paid  up. 
Sometimes  the  promoters  subscribe  the  memorandum  of  association 
for  such  shares,  and  pay  for  them  in  cash,  so  as  to  avoid  the  necessity 
of  filing  a  contract. 

(5.)  The  promoters  agree  to  pay  the  preliminary  expenses,  &c.,  in  con- 
sideration of  a  commission  on  the  nominal  amount  of  the  capital. 

(G.)  A  contract  is  made  under  which  the  promoters  receive  a  commission 
provided  a  certain  number  of  shares  are  taken  up  within  a  certain 
period.     The  articles  refer  to  this  contract. 

(7.)  The  articles  of  association  authorise  or  direct  the  directors  to  pay  a 
certain  sum  to  the  promoters. 

In  determining  the  mode  of  remuneration,  it  shovild  be  borne  in  mind 
that — 

(a.)  Disclosure  is  essential  [see  infra,  p.  239]  : 

(6.)  It  should  be  seen  that  the  executive  of  the  company  is  independent : 

(c.)  Having  regard  to  s.  38  of  the  Act  of  18G7,  it  is  desirable  to  avoid  a 
number  of  contracts  [see  infra,  p.  242]  : 

{d.)  The  remuneration  should  not  be  excessive,  otherwise  it  will  invite  hostile 
criticism,  if  not  proceedings. 


Form  16.    AfiEEEMEXT  It/  Promoter  fo  Pay  p-eliminari/  Expenses  i/i  considcra- 

fion  of  pari  of  I  he  Vendor's  Shares. 

Parties.  Parties,  A.,  1  ;  B.,  2. 

Eecitals.  "VVhereas,  the  saicl  A.  lia.s  entered  into  an  agreement  (hereinafter 

called  the  scheduled  contract)  with  the Limited  (hereinafter  called 

the  company),  for  the  sale  of  certain  patents  and  other  property  to  the 
company  in  consideration  of  20,000/.,  whereof  15,000/.  is  to  be  satisfied 
by  the  allotment  to  the  sd  A.  of  1,500  fully  paid-up  lU/.  shares  in  the 
capital  of  the  company  :  And  avhereas  by  the  scheduled  contract  it  is 
amono-  other  things  provided  that  the  sd  A.  shall  pay  all  the  prelimi- 
nary expenses,  that  is  to  say,  &c.,  down  to  the  first  allotment  of  shares : 
And  whereas  the  pr(jspectus,  a  copy  of  which  is  hereunto  annexed, 
has  been  approved  by  the  board  of  directors  of  the  company,  and  the 
sd  A.  has  obtained  their  authority  to  advertise  the  same  at  his  own 
expense. 

What  B.  to  do.        Now    therefore   IT    IS   AGREED   aS   follows  : 

1.  The  sd  T».  shall  advertise  and  circulate  the   said   prospectus   in 
accordance  with  the  scheme  set  forth  in  the  schedule  hereto,  and  shall 


FORMS.  35 

nsc  his  best  endeavours  to  induce  persons  to  apply  for  shares  in  tho    Form  16. 
company.  ^^ 

2.  The  said  B.  shall  pay  all  the  preliminary  exjienses  of  the  company  Furtker. 
specified  in   the  scheduled  contract,  and  shall   indemnify  the   sd   A. 
against  all  proceedings,  claims,  and  demands  in  rc&pect  thereof. 

;>.  If  the  sd  B.  shall  duly  perform  his  obligations  under  clauses  1  and  ConsiJeration. 

2  hereof  he  shall  be  entitled  to  of  the  said  1,500  fully  paid-up 

shares,  and  the  sd  A.  will  procure  the  company  to  allot  the  same  to  him 
accordingly. 

4.  Unless  before  the day  of  next shares  at  the  least  Conditions. 

in  the  capital  of  the  company  shall  lm^■e  lieen  taken  up  the  sd  B.  shall 
forfeit  all  claim  to  the  sd  fully  paid-up  shares,  and,  save  as  hereinbefore 
expressly  provided,  the  sd  B.  shall  not  be  entitled  to  any  remuneration  for 
his  services  in  respect  of  the  premises. 

Ix  "WITXESS,  &c. 

[Schedvle.'] 


Agreement  wiili  peomoter  to  pay  prelimixary  expenses  in  con-    Form  17. 
sideraiioii  of  commissiox.  ~ 

AN  AGREEMENT,  &c.     Parties :  Company,  1 ;  A.,  2  :  Faities. 

Whereby  it  is  agreed  as  follows  : — 

Whereas  a  prospectus  of  the  company  (whereof  a  copy  is  hereunto  Recital. 
annexed)  is  about  to  be  pulilished  and  circulated  in  accordance  with  the 
scheme  set  forth  in  the  schechde  hereto  : 

Now  therefore  it  is  agreed  as  follows  : — 

1.  The  sd  A.  shall  pay  all  the  preliminary  expenses  of  tho  company,  A.  to  pay  the 
that  is  to  say,  all  the  costs,  charges,  and  expenses  of  and  incidental  to  preliminary 

expenses. 

the  preparation  of  the  sd  prospectus  and  the  pu])lication  and  circulation 
thereof  in  accordance  with  the  sd  scheme,  and  of  and  incident  to  the 
preparation,  execution,  and  registration  of  the  company's  memorandum 
and  articles  of  association,  and  of  these  presents,  and  all  other  expenses 
of  and  incident  to  the  establishment  of  the  company  down  to  the  first 
allotment  of  shares  therein,  or  if  the  directors  of  the  company,  shall 

within  the  period  of  weeks  from  the  date  hereof  resoh'c  not  to 

proceed  to  allotment  then  down  to  the  date  of  such  resolution :  [Pro- 
vided that  the  company  shall  Ije  bound  to  proceed  to  allotment  if  more 

than shares  are  hond  fide  applied  for  within  the  sd  period].     And 

the  sd  A.  shall  indemnify  the  company  and  the  directors  thereof  from 
and  against  all  proceedings,  claims,  and  demands  in  respect  of  the 
sd  preliminary  expenses. 

2.  In  consideration  of  the  jiremises  the  company  shall,  within  1-4  days  Consideration, 
after  the  first  allotment  of  shares,  pay  to  the  said  A.  a  commission 

at  the  rate  of  [1]  per  cent,  on  the  nominal  capital  of  the  company,  viz., 

D    2 


36  AGEEEMENTS. 

Form  17.    ''.,  Init  in  the  event  of  sueli  resolution  as  aforesaid  being  passed 

■  ~  the  sd  A.  shall  not  Ijc  entitled  to  any  remuneration  in  respect  of  the 

premises. 
In  avitness,  &c. 

[Schedule:  sltoin'/i//  ihe  neivsfa/wrs  in  which  advertisements  are  to 
appear,  the  minimnm  nuinher  in  each,  and  the  numher  of  prospectuses  to  he 
circulated,  cjr.] 

It  is  a  common  thing  to  enter  into  an  agreement  as  above,  but  the  commission 
ought  to  be  moderate,  otherwise  questions  of  ultra  vires  may  be  raised.  Guiness 
V.  Land  Corj}.,  22  C.  Div.  38.3. 


rorm  18.    Agbeemext  hi/  promoter  to  guarantee  the  placixg  of  two-thirds  of 
the  CAPITAL  in  consideration  of  founders'  shares. 


Parties. 
Kecital. 


'Guarantee. 


Further 
jjrovision. 


Consideration. 


AN  AGEEEMENT.     Parties :  Company,  1  ;  A.,  2  : 

Whereas  the  capital  of  the  company  is  /.,  divided  into  

ordinary  shares  of  /.  each  and  200  founders'  shares  of  1/.  each: 

And  avhereas  a  prospectus,  &c.  [as  in  Form ] : 

Now  THEREFORE  IT  IS  AGREED  AS   FOLLOWS : — 

1.  The  said  A.  hereby  guarantees  that  two-thirds  at  the  least  of  the 
said  ordinary  shares  shall  be  lond  pde  applied  for  in  accordance  with  the 
terms  of  the  said  prospectus  before  the day  of . 

2.  If  two -thirds  of  the  sd  shares  at  the  least  shall  not  haA'e  been 

so  applied  for  before  the  sd day  of the  sd  A.  will,  within 

days  afterwards,  take  or  cause  to  be  taken  on  the  terms  of  the  sd 
prospectus  so  many  of  the  sd  ordinary  shares  as  with  those  then  already 
applied  for  as  afor,esaid  shall  make  up  the  sd  two-thirds. 

3.  In  consideration  of  the  premises  the  company  shall,  provided  that 
two-thirds  of  the  sd  ordinary  shares  are  ionil  fde  applied  for  upon  the 

terms  aforesaid  before  the  day  of  ,   immediately  after  the 

sd  day  of ,  allot  to  the  sd  A.  or  his  nominees  the  sd  200 

founders'  shares,  Avhicb  shall  be  considered  for  all  purposes  fully  paid  up 
[or,  and  the  sd  A.  will,  on  such  allotment  l»eing  made,  pay  or  cause  to 
1)0  paid  to  the  company  the  full  sum  of  1^.  per  share  in  respect  of  each 
of  the  sd  founders'  shares]. 

In  WITNESS,  &c. 


FORMS.  37 


Agreement   as  to   issue   of  paid-up    shares  pursuant  to  another    Form  19. 

CONTRACT  7Wt  filed.  '  ~ 


AN  AGREEMENT   luadc  the  day  of •  l.ftwecn,  &c.  [as  Parties. 

iu  Form  ^]. 

Whereas,  by  an  agreement  dated,  &c.,  and  made  l)etween  tlie  vendor  Recitals, 
of  the  one  part  and  A.  B.  on  behalf  of  the  company  (then  in  conrse  of 
formation)  of  the  other  part,  it  was  agreed  tliat  the  vendor  should  sell 

certain  property  known  as  the  mines,  and  that  the  consideration 

for  the  said  sale  should  be  the  sum  of /.,  whereof  5,000/.  was  to  be 

satisfied  by  the  allotment  to  the  vendor  on  or  before  the  day 

of of  50U  fully  paid-up  lo/.  shares  of  the  company:  And  whereas 

the  said  agreement  has  been    duly  adopted   by  the    company:    Now 
these  presents  witness  that  it  is  hereby  agreed  as  follows : — 

1.  The  company  shall  forthwith  cause  this  agreement  to  l)e  filed  with  Filing 

the  Regis,  of  J.  S.  Comp.  agreement. 

2.  On  the day  of  next  [the  time  fixed  by  the  agreement],  Allotment  of 

the  company  shall  allot  to  the  \endor  or  to  his  nominees fully  })aid-  ^^^^^*^^- 

np  shares  in  the  company. 

.".  The  said  shares  shall  be  numbered,  Szc,  and  shall  be  accepted  by  Numbers,  &i\ 
the  vendor  in  full  satisfaction  of  the  said  sum  of  5,000/. 

As  witness,  &c. 

Sometimes  {supra,  jj.  12),  it  is  not  considered  desirable  to  file  the  main  contract 
for  the  acquisition  of  the  company's  undertaking,  and  accordingly  a  short 
contract  as  above  is  filed.  This  would  seem  to  be  a  sufficient  compliance  with 
s.  25  of  the  Act  of  1867. 


Agree^ient    to   Issue   Paid-up   Shares    in  Satisfaction  of  Debt    Form  20. 

DUE    hi/   COJ[PANY. 

AN  AGREEMENT,  made  the day  of ,  between  The  A.  Parties. 

M.  B.  Company,  Limited  (hereinafter  called  the  A.  Company),  of  the 
one  part,  and  the  C.  D.  and  E.  Company,  Limited  (hereinafter  called 
the  C.  Company),  of  the  other  part.     Whereas  by  an  agreement,  dated  Recitals. 

the day  of ,  and  made  between  the  C.  Company,  of  the  one 

part,  and  the  A.  Company,  of  the  other  part  (being  the  agreement  No.  1 
referred  to  in  the  introduction  to  the  articles  of  association  of  the  A. 
Company),  the  A.  Company  agreed  to  pay  the  C.  Company  for  the  works 
and  matters  undertaken  by  the  C.  Company  in  connection  with  making 

and  constructing  a  dock  at the  sum  of  225,000/.,  whereof  the  sum 

of  75,000/.  is  payable  by  instalments  in  manner  therein  mentioned  : 
And  whereas  an  instalment  of  lo,000/.,  part  of  the  said  last-mentioned 


38 


AGEEEMENTS. 


Form  20. 


The  A.  Com- 
pany to  allot 
1000  shares  ; 

to  be  deemed 
fully  paid  up  ; 


and  to  be 
accepted  by  the 
C.  Company 
instead  of 
cash. 


sum,  will  become  p;i3'aljlc  to  the  C.  Company  on  the day  of 

next  : 

Now  IT  IS  HKREBY  AOREEl)  aS  folloWS  : — 

1.  The  A.  Company  shall  Ijeforc  the day  of next  procure  this 

agTcemcnt  to  be  filed  with  the  Registrar  of  Joint  Stock  Companies. 

2.  The  A.  Company  shall,  on  or  before  the day  of next 

allot  to  the  C.  Company  or  its  nominees  ],000  shares  of  101.  each  in  the 
A.  Company,  which  shares  shall  be  deemed,  for  all  purposes,  to  be  fully 
paid  up,  and  shall  1)C  numbered,  in  the  books  of  the  A.  Company  with 
the  numbers  ■ to inclusive. 

3.  Tlic  C.  Company  shall  accept  the  said  shares  in  full  satisfaction 
and  discharge  of  the  said  instalment  of  10,000/.,  and  of  all  claims  and 
demands  in  respect  thereof  (a). 

IX  WITNESS,  &C. 

(a).  As  this  instalment  is  not  presently  payable,  this  agreement  requires  to 
be  filed  under  s.  25  of  the  Act  of  1807.  If  the  instalment  were  presently  pay- 
able, the  transaction  would  amount  to  a  jjayment  for  the  shares  in  cash,  and  in 
that  case  it  would  not  be  necessary  to  file  the  agreement.  See  suxira,  p.  14. 
But  even  then  it  would  be  expedient  to  file  it  for  the  benefit  of  transferees,  who 
would  thereby  secure  the  preservation  of  evidence  that  the  shares  were  in  fact 
paid  w]}  in  cash.  See  supra,  y>.  13.  Where  paid-up  shares  are  to  be  issued  in 
satisfaction  of  a  debenture  not  yet  due,  a  contract  should  be  filed.  A%>pleyard's 
case,  18  C.  D.  587. 


Form  21. 

Parties. 


AcfUEEMENT    io   AbLOT    SHARES   (it  CI   DiSCOUXT. 


Recitals. 


Filing  agrcc- 
incnt. 

Allotment  of 
.shares. 


AN  ACxREEMENT,  made  the 


day  of 


between  The 


Company,  Limited  (hereinafter  called  the  Company),  of  the  one 

part,  and  A.  B.,  the  company's  secretary,  on  behalf  of  the  several  persons 
named  in  the  schedule  hereto  (hereinafter  called  the  applicants)  of  the 
other  part. 

In  this  case  it  is  assumed  that  each  application  declared:  "1  hereby  authorise 
the  company's  secretary  to  enter  into  a  proper  contract  on  my  l^ehalf  to  take 
any  shares  you  may  be  willing  to  allot  me,"  or  that  the  prospectus  contained  an 
authority. 

AVheheas  the  company  recently  issued  a  prospectus  inviting  applica- 
tions for  10,000  1/.  shares  in  the  company  at  a  discount  of  2s.  Gd.  per 
share,  and  each  of  the  apph'cants  is  willing  to  take  at  such  discount  the 
number  of  1/,  shares  set  opposite  his  or  her  name  in  the  schedule  hereto, 
and  has  paid  to  company  a  deposit  of  2^,  Od.  per  share  on  such  shares  : 

Now   TlIEREFOllE    IT    IS   AGREED  aS  follows  : 

1.  The  company  shall  fortliwith  cause  one  part  of  this  agreement  to 
be  filed  with  the  Registrar  of  Joint  Stock  Companies. 

2.  When  and  so  soon  as  this  agreement  has  been  so  filed,  the  company 
shall  allot  to  each  of  the  applicants  the  number  of  M.  sliares  in  the 
capital  of  the  company  set  opposite  his  or  her  name  in  the  sd  schedule. 


FOEMS.  89 

3.  In  cousideration  of  the  sum  of  2s.  Gd.  per  share  already  paid  as    Form  21: 
aforesaid,  and  of  the  further  sum  of  15s.  per  share  to  be  paid  as  to  5s.  RepaTment. 
per  share  on  allotment  and   as  to  the  balance  when  called  for,  each 
of  the  shares  so_,  allotted  shall  be  deemed  for  all  purposes  to  be  fully 
paid  up. 

As   WITXKSS,  &C. 


Xiiines,  .idilresscs,  anil  ilcsuriptious  of         |     Particulars  of  Share  to  be  aUottt'd  to 
ai^ilicants.                                                         each  aiiiilicaiit. 

N.  of 

Ten  shares  numbered  to 

■  inclusive. 

Opinions  differ  as  to  •whether  shares  in  a  company  formed  luider  the  Companies 
Act,  1SG2,  can  validly  be  issued  at  a  discount.  According  to  Lindley  (035),  it  is 
"to  say  the  least,  doubtful,"  and  in  Re  Essex  Brewenj  Co.,  30  L.  T.  SG2,  Jessel, 
M.E.,  appears  to  have  considered  that  an  issue  of  shares  at  a  discount  of  80 
per  cent,  was  idtra  vires  though  it  was  not  necessary  to  decide  the  point.  On 
the  other  hand,  it  was  held  by  Chitty,  J.,  in  Re  Ince  Hall  Co.,  23  C.  D.  o-lo,  that 
it  was  legal  when  the  directors  (having  large  powers)  considered  the  issue 
beneficial  to  the  company  ;  their  shares  were  issued  at  a  discount  of  10  per 
cent.  But  in  Plashynaston  Tube  Co.,  23  C.  D.  542,  Chitty,  J.,  expressed  doubts 
whether  an  issue  of  shares  at  a  discount  of  SO  per  cent,  was  legal.  It  is  con- 
ceived that  in  every  case  the  circumstances  must  be  regarded,  and  that  if  the 
issue  at  a  discount  is  made  hon'i  fide  with  a  view  to  the  company's  benefit,  it  is 
valid.  Where  a  company  is  in  want  of  funds  it  is  obviously  in  the  interest  of 
its  creditors  that  the  amount  should  be  raised  by  the  issue  of  shares  rather  than 
by  borrowing,  for  in  the  event  of  winding  up,  the  shareholders  can  get  nothing 
till  the  creditors  are  paid,  whereas  lenders  are  of  course  entitled  to  prove. 

Sujjpose  a  company  in  need  of  ^10,000.  Which  mode  of  raising  the  amount 
is  most  for  the  interest  of  its  creditors  V—{a)  by  the  issue  of  shares  at  a  dis- 
count of  50  per  cent.,  or  (6)  by  the  issue  of  debentures  ?  In  case  («)  the 
creditors  get  ^10,000  additional  security  free  from  any  claim  by  the  contri- 
butors ;  whereas,  in  case  (b),  though  the  assets  are  increased,  the  liabilities  are 
increased  pro  tanto.  Moreover  the  debentures  might  be  issued  at  a  discount 
(infra,  p.  2G1),  and  with  interest  at,  say,  20  per  cent,  (ibid.)  and  as  a  first  charge 
on  the  assets.  It  is  submitted  that  the  issue  of  shares  at  a  discount  does  not 
in  any  way  affect  the  creditors  of  a  company.  Before  the  Companies  Act,  18G7, 
there  might  have  been  ground  for  comijlaint,  since  a  creditor  might  have  said 
that,  looking  to  the  returns,  he  believed  the  shares  issued  to  have  been  paid  up 
in  cash  ;  but,  since  the  Act  of  18G7,  he  can  see  from  the  contracts  filed  pursuant 
to  s.  25,  whether  any  shares  have  been  issued  at  a  discount,  or  otherwise  than 
for  cash. 

Where  a  company  arranges  to  acquire  property  in  consideration  of  paid-up 
shares,  the  amount  will  of  course  be  fixed  with  regard  to  the  actual  not  the 
nominal  value  of  the  shares,  e.  g.  where  the  shares  are  below  par,  say  ,£1000  of 
shares  for  ,£500  of  property.     There  is  no  question  that  such  a  transaction  is 


40 


Form  21. 


AGREEMENTS. 

valid.  And,  if  so,  how  absurd  if  the  company  could  not  issue  the  ^1000  of 
shares  for  ^500  cash.  Whether  the  members  of  a  company  have  any  cavise  for 
complaint  must  depend  on  the  regulations,  but  it  would  seem  that  the  general 
Ijowers  usually  vested  in  the  directors  are  amply  sufficient  to  authoi-ize  the  issue 
of  shares  at  a  discount  (see  infra,  p.  151).  Of  course  the  agreement  must  be 
filed  pursuant  to  s.  25  of  the  Act  of  1867  {swpra,  p.  11).  And,  if  so  filed,  it  would 
seem  that,  even  if  ultra  vires,  the  allottees  could  not  be  held  liable  to  contribute 
beyond  the  agreed  amount.  Anderson' s  case,  7  C.  Div.  75  ;  Ince  Hall  Co.,  ubi 
siqira.  And  transferees  without  notice  woiild  be  protected  by  Burkinshaw  v. 
Nicholls,  3  Ap.  Gas.  1016.  Nevertheless,  until  the  validity  of  the  issue  of  shares 
at  a  discount  has  been  settled,  it  must  be  admitted  that  such  an  issue  is  not 
entirely  free  from  danger,  and  it  may  be  found  better  to  raise  funds  by  the  issue 
of  profit  debentures  or  debentures  at  a  discount  with  power  to  convert  into 
shares. 

Bonus  Shares. 

Sometimes  it  has  been  considered  desirable  to  create  and  distribute,  gratis, 
among  a  company's  members  new  shares,  which  are  to  be  deemed  fully  paid  uji. 
Such  shares,  are  generally  called  "bonus  shares,"  and  the  issue  of  them  is  called 
"watering  the  capital." 

Bonus  shares  have  been  issued  by  a  considerable  niiniber  of  comijanies,  and 
in  one  well-known  case  to  the  extent  of  nearly  a  million  and  a  half  of  nominal 
value.  However,  since  the  dicta  of  the  Court  of  Aj^peal  in  Be  The  Gold  Co., 
9  C.  Div.,  701,  it  is  probable  that  the  practice  of  issuing  bonus  shares  will  be 
discontinued.  It  seems  doubtful  whether  directors  issuing  bonus  shares  might 
not,  in  some  cases,  be  indicted  for  conspiracy  to  defraiid.  See  fiirther,  British 
Seamless  Co.,  17  C.  Div.  467. 

Sometimes  a  company  reconstructs  for  the  purpose  of  effecting  such  an 
operation.  See  further,  infra,  "  Eeconstruction."  There  is  no  objection  to  such 
a  scheme  if  the  assets  have  really  increased  in  value  ;  but  otherwise  it  might 
Savour  of  fraud.     Re  Gold  Co.,  ubi  supra  ;  Ambrose  Lake  Tin  Co.,  14  C.  Div.  390. 

Bonus  shares  issued  gratis  must  be  distinguished  from  shares  issued  by 
consent  in  satisfaction  of  a  bonus  or  dividend  duly  declared  and  warranted 
on  a  bond  fide  balance  sheet.  See  infra,  pp.  158,  159.  Such  an  issue  may  be 
quite  valid. 


Form  22.    Acjeeement  for  Ihi: 


Parties. 


Recitals, 


Issue  of  Paid-up   Shares  hy  way  of  lonus  fo 
Dei'.exture  Holders, 


AN  AOrtEEMEXT  made  the 


dav  of 


between  The 


Company,  Limited  (hereinafter  called  the  company),  of  the  one  part,  and 
the  several  per.sons  whose  munes  are  sul)scribed  hereto  (hereinafter  called 
tlie  debenture  holders),  of  the  other  part:  Whereas  the  company 
recently  issued  a  ])rosi)ectus  offering  to  receiAC  ajiplications  for  [lOOO] 

debentures  of  the  company  of  1,  each,  and  stating  (^inter  alia)  that 

the  company  would  allot  to  the  persons  who  should  take  such  debentures 
and  ])ay  the  full  amount  there(»f  to  the  company,  one  fully  paid-up 

/.  sjiare  in  the  capital  of  the  company  in  respect  of  every  such 

<lcbenture  taken  by  them  respectively :  And  whereas  each  of  the 
debenture  holders  has  taken  up  on  the  terms  of  the  said  prospectus  the 
number  of  such  delientures  set  opposite  his  name,  and  has  paid  to  the 
company  the  full  amount  thereof  : 


FORMS. 


41 


Now   THERKFORE   IT    IS   AGREED   AS   FOLLOWS:  Foim  22. 

1.  Tlie  company  shall,  <te.  [clause  1,  Foi'in  1],  siqn-a'\.  Filing  agree- 

•2.   When  aiul  so  soon  as  this  aoTeeiiiciit  shall  ha^•e  heeu  filed  as  afore-  "lent. 
said,   the  company  shall  allot  to  each  of   the   debentm-e   holders   the  Allotment  of 

number  of  ■ -(.  shares  m  the  company  also  set   opposite  his  name 

in  the  schedule  hereto. 

o.  Such  shares  shall  be  deemed  for  all  purposes  to  be  fully  paid  up,  To  l)e  deemed 
and  shall  be  numbered,  with  the  numbers  set  opjiosite  the  Uames  of  the  ^^^'    "^" 
debenture  holders  respectively. 

As  WITNESS,  the  common  seal  of  the  company,  and  the  hands  of  the 
debenture  lioldcrs  the  day,  &c. 

The  Co:\laion  Seal,  &c.  I    l.  s. 


(Signatures  of  the  tlebeiilure 

Xuiuber  of  shares  to  be 
iillotteil. 

Denoting  nuniT)evs  of  sh.ires  to  be 
allotted,  both  inclusive. 

From 

To 

It  is  not  uncommon  to  provide  for  the  issue  of  paid-up  shares  to  persons 
taking  debentures  ;  and,  provided  a  contract  is  duly  filed  before  the  issue,  it 
would  seem  to  be  a  valid  transaction.  See  In  re  Malaga  Lead  Co.,  Firynstone's 
case,  20  Eq.  521;  and  Uruguay  Central,  cf*c.,  Co.,  11  C.  D.  372. 

Sometimes  the  agreement  is  made,  as  in  Form  21,  the  letters  of  application 
having  been  framed,  as  there  stated,  or  a  paragraph  having  been  inserted  to 
the  effect  tliat  applicants  will  be  deemed  to  have  authorised  the  secretary,  &c. 

Occasionally,  instead  of  a  contract  as  above,  the  vendor  agrees  that  as  an 
inducement  to  persons  to  take  up  the  debentures,  he  will,  out  of  the  fully  j^aid- 
u})  shares  issued  to  him  by  the  company,  transfer  one  or  more  of  the  shares  to 
the  allottee  of  each  debentiu'e. 

As  to  s.  25  of  the  Act  of  ISG7,  see  su^rra,  i>.  12. 


Agreement    irilh  Trustees    fo   gnnrantco    Dividends   on    Shares    Form  23. 
(d)OHt  fo  ho  offered  for  Sale. 

AX  AGREEMENT,  etc.  Parties:  (1)  the  A.  Company;  (2)  the  Parties. 
B.  Company : 

Whereas  the  A.  Com])any  is  entitled  to  fiOOO  fully  paid-up  preference  Recittvls. 
shares  in  the  capital  of  the  B.  Company,  numbered to inclusive. 


42 


AGEEEMENTS. 


Form  23. 


"Guarantee. 


Payment. 


Coupons 


Tree  from 
«q\iities. 


Tntcriin 
dividends. 


Beneficiaries. 


and  is  about  to  offer  the  same  for  public  sale :  And  whereas  the  said 
shares  are  represented  by  share  warrants  to  l^earcr  which  have  been 
issued  to  the  A.  Company  :  And  avhereas  it  is  intended  to  annex 
to  each  of  the  said  share  warrants  a  certificate  to  the  effect  set  forth 
in  the  first  schedule  to  these  itresents  and  the  shares  comprised  in 
the  said  warrants  are  hereinafter  called  the  guaranteed  shares  :  And 
whereas  the  A.  Company  intends  to  issue  with  each  of  the  said  share 
warrants  five  interest  coujions  in  the  form  set  forth  in  the  second 
schedule  hereto,  and  each  of  the  said  coupons  is  to  mention  the  share  in 
respect  of  whicli  it  is  issued,  and  to  which  of  the  first  five  years  from  the 
incorporation  of  the  company  it  is  appropriated :  And  whereas  the  A, 
Company,  in  order  to  dispose  of  the  said  (iOOO  shares  on  the  most  favour- 
able terms,  has  determined  to  execute  this  agi'cement :  And  whereas 

the  said and have  agreed  to  become  trustees  for  the  purposes 

thereof  : 

XOW    THESE   presents   WITNESS  AND   DECLARE  as  follows  :  — 

1.  The  A.  Company  guarantees  that  the  B,  Company  shall,  in  respect 
of  each  of  the  first  five  years  next  following  the  incorporation  of  the  B. 
Company,  pay  a  dividend  at  the  rate  of  5  j^er  cent,  per  annum  on  the 
guaranteed  shares,  and  that  such  dividend  (hereinafter  called  the 
minimum  dividend)  shall  in  res])ect  of  each  of  the  said  five  years  be  paid 
during  such  year  or  within  three  calendar  niduths  after  the  expiration 
thereof. 

2.  As  regards  each  of  the  said  five  years,  if  the  B.  Company  shall  not 
pay  the  minimum  diA'idend  in  manner  aforesaid,  the  A.  Company  shall, 
in  respect  of  such  year,  })ay  the  minimum  dividend  on  the  guaranteed 
shares,  or  such  sum  as,  with  the  di^'idend,  if  any,  actually  paid  by  the  B. 
Company  in  respect  of  such  year,  shall  amount  to  the  minimum  dividend 
on  snich  shares. 

;5.  The  A.  Com})any  will  recognise  and  shall  be  entitled  to  treat  the 
l)earer  of  each  of  the  interest  coupons  intended  to  be  issued  with  the 
guaranteed  shares  as  aforesaid  as  the  absolute  owner  of  the  amount  (if 
anything)  which  shall  l)ecome  payable  by  the  A.  Company  under  the  last 
preceding  clause  hei'eof  in  respect  of  the  share  and  year  respectively 
mentioned  in  such  coupon,  and  the  A.  Company  will,  upon  presentation 
and  delivery  of  such  coupon,  but  not  otherwise,  pay  the  same  to  the 
bearer  of  such  coupon  accordingly,  and  the  delivery  of  such  coupon  shall 
be  a  good  discharge  to  the  A.  Company  for  the  money  so  paid. 

4.  The  bearer  of  each  of  the  said  interest  coupons  shall  be  entitled  to 
the  payment  of  what,  if  anything,  shall  be  payalile  in  respect  thereof  as 
aforesaid,  free  from  any  e(juities  between  the  company  and  any  other 
person. 

5.  In  determining  whether  the  B.  Comi)any  has  or  has  not  paid  the 
minimum  dividend  in  resi)ect  of  any  of  the  said  five  years,  several  divi- 
dends, whether  interim  or  otherwise  paid  in  respect  of  such  year,  shall  be 
treated  as  one  dividend  for  the  purposes  of  tliese  presents. 

C.  The   holders   of  the   said   interest   coupons   shall  respectively  be 


I 


FOEMS.  43 

entitled  to  the  benefit  of  the  trusts  hereliy  declared,  and  may  sue  the  A.  Form  23. 
Company  aceordin,2;ly. 

7.  The  statutory  i)owcr  of  appointing  new  trustees  hereof  shall  be  New  trustees, 
vested  in  the  A.  Company. 

In  witness,  &c. 

[^First  Schedidc  ronfainin/j  rncmoramlum  as  io  ijiurantee.'] 
[_S('Con<l  Schedule  containing  ceriijuale  and  form  of  coiq)on.'] 


Agreement  for  Transfer  of  Railway  Concession  and  for  Con-     Form  24. 
STRUCTiON  of  Railway. 

Space  can  only  be  found  for  an  outline  of  this  contract. 

AN    ACREE^IEXT,   &c.     Parties  :    the   company    (1)  ;   the   con-  Tarties. 
tractors  (2). 

Recitals  :  As  to  the  concession,  and  as  to  the  company's  capital,  and  as  Recitals, 
to  recognition  of  company  in  the  Republic  of : 

'Now,    &C.,   COVENANT   AS  FOLLOWS: 

1.  Contractors  to  vest  the  concessions  in  the  company  and  pay  all  Terms, 
expenses  incident  thereto. 

2.  Contractors  to  acquire  all  requisite  land  and  rights,  and  to  con- 
struct and  e(juip  the  railway  in  accordance  with  the  specification,  but 
contract  to  prevail  where  specification  and  contract  inconsistent. 

3.  AVorksto  be  carried  out  t<»  satisfaction  of  com])any's  chief  engineer, 
and  also  of  government  engineer. 

4.  Conti-actors  to  comply  with  all  local  laws,  and  to  gi^■e  all  notices 
to  local  authorities  and  others,  and  to  pay  all  damages  for  default. 

5.  Contractors  to  prepare  plans  and  to  submit  same  for  chief  engineer's 
approval,  and  all  re({uisite  modifications  to  be  made. 

(5.  After  commencing,  contractors  to  proceed  continuously,  so  as  to 
complete  the  works  within  three  years  from  notice  to  proceed. 

7.  Provision  for  extension  of  time  where  delay  caused  by  vis  major 
shipwreck,  fire,  strikes,  itc,  and  penalty  of  400/.  per  month  for  undue 
delay. 

S.  Contract  jirice  r)00,000/.  payal)le  (c/),  as  to  50,000/.,  in  cash  on  re- 
ceipt of  telegraphic  infdrmation  of  vesting  of  concessions  in  company, 
&c.  ;  (6),  as  to  2."),000/.  in  cash,  on  engineer's  certificate,  subject  to  re- 
tention  of   —   ])er   cent,    till    /.   accumulated   as   retention   fund. 

Certificates — how  to  l)e  made.  Payments  to  be  on  account  merely. 
Provision  for  final  certificate  ;  (r)  2i)0,000/.  in  deferred  shares. 

9.  Retention  fund  to  be  invested,  and  in  due  course  transferred  to 
contractors. 

10.  Schedule  of  prices  annexed  not  to  affect  contract  price,  and  is 
referred  to  merely  for  the  purpose  of  regulating  payments  on  account. 


44  AGEEEMENTS. 

Form  24.  n.  Payineiits  to  be  made  as  and  'when  cliief  engineer  certifies. 
Certificates  to  he  granted,  {a)  on  shipment  of  materials  ;  (h)  for  works 
done  in  the  Repuldic,  notification  Ity  telegram  ;  (c)  as  to  final  certificate. 

12.  Inspection  of  material  on  shipment;  examination  during  manu- 
facture ;  certificates  thereon ;  insurance  of  consignments  ;  bills  of 
lading  and  policies  to  be  delivered  to  company  ;  goods  paid  for  on 
shipment  to  belong  to  company. 

13.  Contractors  to  undertake  risk  of  transport,  cost  of  marine  insur- 
ance, and  loss  of  materials,  even  where  payment  made  on  shipment,  and 
title  in  company.     Contractors  to  receive  insurance  moneys. 

14.  Chief  engineer  and  his  successors. 

15.  Kesident  engineer  to  be  appointed,  who  is  to  be  deputy  of  chief 
engineer  ;  his  power  to  bind  company  ;  his  duties  ;  course  if  he  fails  in 
his  duty  ;  course  if  chief  engineer  does  not  give  certificates  ;  engineer's 
access  to  works, 

10.  Company's  exemption  from  customs  to  eiiurc  as  far  as  may  be  for 
contractor's  Itenefit.     Use  of  timber  on  waste  land,  ditto. 

17.  In  case  of  increase  in  works  and  extension  of  guarantee,  contract 
price  to  be  increased. 

18.  Engineers  to  l)e  at  liljerty  to  regulate  progress  of  works. 

19.  Limited  power  for  contractors  to  vary  course  and  gradient  of  line. 
&c.  Variation  by  direction  of  company.  Additional  expense,  how  to 
be  met  ;  sa^■ing  in  expense  not  to  diminish  price,  unless  claimed  by 
government. 

20.  Delivery  of  line  on  completion.  Lil)crty  to  deliver  in  sections  of 
not  less  than  10  miles. 

21.  Maintenance  by  contractors  for  six  months  after  completion. 
Certificate  for  maintenance. 

22.  Use  of  line  by  contractors.  Use  of  rolling  stock  by  contractors. 
Contractors'  materials,  &c.,  to  be  carried  by  company — payment  therefor. 

23.  Liberty  for  company  to  deduct  from  contract  price  all  monies  due 
from  contractor. 

2i.  Contract  not  to  Ijc  transferred,  l)ut  li])erty  to  sublet,  contractors 
remaining  responsible. 

25.  Re-execution  of  improperly  executed  work.  Removal  of  improper 
materials. 

2().  If  contractor*!  in  default  or  insolvent  the  works  may  be  taken  out 
of  their  hands,  and  company  may  complete  or  procure  completion  of 
same  at  expense  of  contractoi'S.  Disposition  of  surplus.  Taking  posses- 
sion not  to  vitiate  contract,  or  prejudice  company's  claim  for 
damages,  &c. 

27.  If  company  in  default  for  thirty  days,  contractors  may  suspend 
works  or  determine  contract  if  default  continues  for  a  further  fifteen 
days. 

2H.  Arbitration  clause. 

21).  How  notices  to  be  given. 

30.  Contractors   not  I)ound    to    proceed    until    company  gives   them 


FORMS. 


45 


notice  to  proceed.     Such  notice  not  to  be  given  until  the  whole  of  the    Form  24. 
preference  shares  taken  up  by  responsible  persons. 

ol.  If  notice  to  proceed  not  given  Avithiu  three  months,  contractors 
juay  determine  contract. 

Ix  WITNESS,  &c. 

[_)Sclii'did('  (oniaining  i</)frificatio/>.^ 

In  the  above  case  it  will  be  observed  that  the  contractors  agree  to  vest  the 
concession  in  the  company,  and  to  execute  the  works  for  a  lump  sum.  It  is  a 
jjlan  very  commonly  adopted,  not  onl^''  as  regards  foreign  railways,  docks, 
tramways,  and  other  undertakings,  but  as  regards  English  tramways,  hotels, 
and  the  like.  The  contractors  generally  acquire  the  concession,  order  to  con- 
struct the  tramway,  proposed  site  for  hotel,  or  other  property  by  piu-chase,  and 
then  fonu  or  procure  the  formation  of  the  company,  which  at  once  executes 
the  contract.  It  may  be  surmised  that  at  any  rate  in  some  cases  the  principal 
reason  for  adojiting  this  plan  is  to  avoid  disclosing  the  respective  amounts  to 
be  paid  for  the  concession,  and  the  execution  of  the  works. 


Agkeemext/w  Sale  0/ Colliery  and  otJwr  Assets  to  Compaxv  on       Form  25. 
Scheme  o/"  Arrangement  under  Bankruptcy  Act. 

AN  AGREEMENT  made  the  13th   day  of  Dec,  IS?:.,  between  T.  Parties. 

of  ,  public  accountant,  trustee  of  tl^e  estate  of  Messrs.  F.  &  H., 

in  liquidation,  of  the  1st  pt  ;  F.,  of  the  2nd  pt  ;  H.,  of ,  of  the 

3rd  pt  ;  Pt.,  of  the  4th  pt :  and  the  A.  &  P.  Co,  Limtd  (hereinafter 
called  '*the  co  ")  of  the  5th  pt. 

Whereas  on  or  about  the  ')i\\  day  of  June,  1875,  the  said  F.  &  H.,  Recitals. 

trading  under  the  firm  of as  ironmasters  and  colliery  proprietors, 

presented  a  p3titi(>n  to  the  TiOndon  Bankruptcy  Court  for  liquidation 
iresohdion  j/assed  and  jyr/lstered,  and  T.  apjwinfcd  receiver  and  manager, 
and  siihseqiienthj  irvstee']. 

And  whereas  the  assets  and  lial)ilitics  in  the  said  matter  include 
joint  assets  and  liabilities  of  the  said  delitors  and  separate  assets  and 
liabilities  of  each  of  them. 

And  whereas  the  joint  assets  in  the  said  matter  include  certain  coal 
and  iron  works,  hereditaments  and  property  sjiecified  in  the  first  and 
second  parts  of  the  first  schedule  hereto,  and  portions  of  the  said  prd- 
perty  specified  in  the  first  part  of  the  said  schedule  are  (besides  the 
mortgages  hereinafter  mentioned)  subject  to  [certain,  annuities  and 
vendor's  lien  for  0,000/.]. 

And  wherp:as  the  said  joint  assets  also  include  the  particulars  specified 
in  the  second  schedule  hereto. 

And  whereas  the  joint  liabilities  in  the  said  matter  includes  [^mort- 
fjagefor  128,000?.,  charged  on  the  A.  irorlcs']. 

And  whereas  the  said  joint  liabilities  also  includes  \_a  mortgage  for 
183,000/.,  charged  on  the  P.  propertg']. 


46  AGREEMENTS. 

Form  25.  And  whereas  the  property  on  which  the  said  sum  of  128,000?.  is  now 
cliarged  hy  way  of  first  mortgage  (subject  to  the  said  annuities)  is  here- 
inafter called  "  the  A.  property,"  and  the  property  on  Avhicli  the  said  sum 
of  183,000/.  is  now  charged  by. way  of  first  mortgage  is  hereinafter  called 
"  the  P.  property." 

And  whereas  the  remainder  of  the  joint  liabilities  in  the  said  matter 
consist  of  the  claims  of  creditors,  estimated  to  amount  together  to  a  sum 
of  900,000/.  or  thereabouts,  inclusive  of  a  claim  l)y  the  trustees  of  M,  for  a 
sum  of  ?>(),0G7/.,  in  respect  of  which  they  have  or  claim  to  have  remedies 
as  lessors  of  parts  of  the  said  property  and  certain  rents,  royalties,  rates, 
and  taxes,  salaries,  and  other  preferential  claims  accrued  prior  to  and 
accruing  since  the  said  5th  day  of  June,  1870. 

AxD  WHEREAS  it  is  apprehended  that  the  jn-escnt  selling  value  of  the 
mortgaged  property  is  not  greater  than  the  amount  of  the  charges 
thereon,  and  that  the  present  selling  value  of  the  pro})erty  not  in  mort- 
gage is  not  greater  than  15,000/. 

AxD  WHEREAS  it  is  apprehended  that  the  proofs  against  the  separate 
estate  of  the  said  F.  will  not  exceed  24,000/.,  and  that  the  proofs  against 
the  separate  estate  of  the  said  H.  will  not  exceed  200/. 

And  WHEREAS  it  is  apprehended  that  the  separate  assets  of  the  said 
F.  are  insufficient  to  meet  his  separate  lial)ilities,  but  that  the  separate 
assets  of  the  said  H.  may  be  more  tlian  sufficient  to  meet  his  separate 
liabilities. 

AxD  WHEREAS  the  company  has  been  formed  and  registered  with  a 
view  to  the  purchase  of  the  property  in  the  said  matter  (except  as  here- 
inafter mentioned)  on  the  terms  that  the  purchase-money  should  to  the 
extent  herein  appearing  be  represented  by  the  said  mortgages  as  modified 
in  a  manner  mentioned  in  the  company's  articles  of  association,  and  by 
debentures  of  the  company  issued  to  the  said  joint  creditors  as  hereinafter 
mentioned,  and  on  the  further  terms  of  the  scheme  of  settlement  of  the 
affairs  of  the  said  F.  &  H.  hereinafter  expressed  and  the  regulations  of 
the  company  define  and  descri1)e  the  A.  debenture  debt  and  the  B. 
debenture  del)t  hereinafter  referred  to  and  the  rights  of  the  holders 
thereof,  and  contain  jn-ovisions  to  the  effect  that  the  whole  of  the  profits 
of  the  company  are  to  l)e  applied  in  payment  off  of  tjie  said  mortgages, 
and  debentures  in  priority  to  any  payment  of  dividend  to  meml)ers  of 
the  company,  and  to  the  effect  that  as  and  when  the  principal  of  any 
mortgages  or  debentures  adopted  or  issued  as  purchase  money  for  pro- 
perty shall  be  paid  off"  out  of  profits  which  but  for  the  special  j^rovisions 
aforesaid  would  be  available  for  dividends  fully  paid-up  shares  may  be 
issued  to  the  members  of  the  company  to  the  extent  of  the  amount  so 
]y.\\(\  off. 

And  whereas  the  company  have  arranged  with  the  said  mortgagees 
for  the  modification  of  the  said  mortgages  necessary  to  admit  of  the  issue 
of  the  said  debentures  according  to  the    terms  aforesaid,  and  the  said 
.   arrangements  with  the  mortgagees  are  conditional  on  the  terms  herein- 
after mentioned. 


FOEMS.  4^ 

AxD  WHEREAS  the  said  R.  lias  agreed  to  find  the  sum  of  30,000/.  for    Form  25 

tlie  working  capital  of  the  company  and  to  lend  the  same  to  the  company 

so  as  to  hecome  the  A.  debenture  debt  of  the  company,  but  upon  the 
condition  that  the  separate  creditors  of  the  said  A.  sliall  take  the  joint 
acceptances,  drafts,  or  notes  of  the  said  It.  &  F.,  in  full  discharge  of 
their  claims,  and  that  the  assets  of  the  said  F.  shall  be  handed  o^'er  to 
him  as  hereinafter  expressed,  and  that  the  proofs  against  the  separate 
estate  shall  not  exceed  tlie  sum  of  24,000/.,  and  that  the  liquidation  of 
the  said  separate  estate  be  closed  on  or  before  10  Jan.  ISH). 

Axj)  WHEREAS  it  is  also  a  condition  of  the  arrangements  hereinafter 
expressed  that  the  proof  against  the  separate  estate  of  the  said  H.  shall 
not  exceed  200/.,  and  that  the  li(]nidation  of  the  said  separate  estate  be 
closed  on  or  before  10  Jan.  187(!. 

And  whereas  the  said  F.,  H.,  &  11.,  have  suliscribed  or  caused  to  be 
subscribed  the  memorandum  and  articles  of  association  of  the  company, 
to  the  intent  and  on  the  terms  that  under  the  powers  in  the  said  articles 
of  the  comjtany  should  issue  fully  jjaid-up  shares  to  represent  moneys 
paid  in  respect  of  the  principal  of  mortgages  and  del)entures,  and  Avhich 
would  otherwise  have  been  available  for  dividends,  and  should  execute  the 
agreement  hereinafter  expressed  in  that  l)ehalf. 

And  whereas  the  said  scheme  t)f  settlement,  the  terms  whereof  are 
herein  expressed,  has  been  sanctioned  by  special  resolutions  of  the 
creditors  in  the  said  matter  of  the  snid  liquidation,  and  has  been  duly 
ajjproved  by  the  court  in  pursuance  of  the  twenty-eighth  section  of  the 
Bankruptcy  Act,  1809. 

Now  IT  IS  hereby  agreed  as  follows  : — 

1.  The  said  T.,  as  such  trustee  as  aforesaid,  shall  make  over  and  assure  Sale  of  land, 
to  the  company  all  the  freehold  aud  leasehold  hereditaments  in  mort- 
gage as  aforesaid,  and  forming  joint   assets  in  the  said  matter  in  con- 
sideration of  the  obligation  of  the  company  to  jyay  off  the  said  mortgages 

and  shall  make  over  and  assure  to  the  company  all  the  freehold  and 
leasehold  hereditaments  not  in  mortgage  as  aforesaid,  forming  such  joint 
assets  in  consideration  of  the  obligation  of  the  company  to  pay  off  the 
said  lien  for  unpaid  purchase-money,  and  of  l),000/.  to  be  covered  and 
represented  by  B.  debentures  of  the  company  to  be  issued  as  herein- 
after mentioned,  subject,  as  to  the  premises  affected  thereby,  to  the 
annuities,  mortgages,  and  lien  hereinbefore  mentioned,  and  on  the  terms 
hereinafter  expressed. 

2.  The  said  T.,  as  such  trustee  as  aforesaid,  shall  make  over,  transfer,  Fale  of  otlier 
and  assure  to  the  company  all  other  the  assets  as  existing  at  the  date  ^^*^"^**^- 
hereof  iu  the  matter  of  the  said  licjuidation  (other  than  the  sej)arate 

assets  of  the  said  F.,  and  such  separate  assets  of  the  said  H.  as  may  be 
required  for  the  payment  of  his  separate  creditors,  and  the  assets  speciiied 
in    the    second   schedule   hereunder  written),  in   consideration  of  the 
remainder  of  the  B.  debentures  to  be  issued  as  hereinafter  mentioned 
and  on  the  terms  hereinafter  exjiressed. 

3.  The  company  shall  enforce  and  effectuate  the  said  arrangements  Company  to 


48 


AGrtEEMENTS. 


Form  25.    for  modifying  and  altering  the  said  mortgagees'  interest,  so  as  tocoufonn 

~      with  the  terms  of  the  articles  of  association  with  resjiect  to  the  A.  first 

mortgagees.       mortgage   deht,   and   the   I\   first   mortgage   debt   as   therein   defined 

respectively. 

Loan  by  R.  i.  The  said  11.  shall  lend,  and  the  company  shall  borrow  the  said  snm 

of  o(»,0()0/.,  so  as  to  form  the  A.  debenture  debt  of  the  company. 

Joint  creditors       (i.  The  company  shall  issue  to  each  of  the  joint  creditors  in  the  said 

to  have  15.        matter  (other  than  the  said  mortgagees,  but  including  the  trustees  of  M. 
debentures.  ^  ,  i     •       i    •     n    tT    i  i 

as  creditors  for  10,nC7Z.  part  only  of  then-  clanu),  B.  debentures  of  the 

company  representing  the  I>.  debenture  del)t,  according  to  the  terms  of 

the  articles  of  association  and  the  schedule  thereto,  for  the  amount  for 

which  each  creditor  has  jtroved  or  shall  prove  in  the  matter  of  the  said 

liquidation,  l)ut  not  including  any  interest  after  5  June,  1875. 

Issue  of  paid-        G.  As  and  when  the  company  shall  pay  off  any  part  t>f  the  principal  of 

Tip  shares  as      i-j^Q  A.  first  mortgage  debt,  the   P.  first  mortgage  debt,  and  the  B. 

mortgages  i)aul  .■^   o  :>  .     o  i 

off.  debenture  debt  (representing  together  the  j)urchase-money  for  the  said 

property)  out  of  ])rofits  which,  but  for  the  special  stipulations  for  the 
application  of  sucli  profits  to  the  payments  aforesaid  would  have  been 
available  for  dividends,  the  company  shall  (subject  to  the  provisions  of 
the  articles)  issue  to  the  members  of  the  company,  in  proportion  to  their 
shares,  fully  paid-up  shares  of  the  company  to  the  extent  of  tlie  amount 
so  paid  off. 
As  to  separate        7.  The  Said  T.,  as  such  trustee  as   aforesaid,  shall  hand  o^■er  the 
estate  of  A.       separate  estate  of  the  said  F.  to  him  in  exchange  for  the  joint  accept- 
ances, drafts,  or  notes  of  the  said  R.  and  F.  for  the  amount  of  the  proofs 
<;)f  the  creditors  respectively  against  such  separate  estate,  payable  not 
later  than  the   1st  IMar.  187(5  ;  and  the  said  E,.  and  F.,  at  their  own 
expense,  shall  give  such  acceptances,  drafts,  or  notes  accordingly,  and 
the  separate  creditors  shall  accept  the  same  in  full  discharge  of  their 
claims. 
As  to  separate       8.  The   said   T.,  as  such  trustee  as  aforesaid,  shall    hand  OA'cr  the 
estate  of  B.      surplus  (if  any)  of  the  separate  assets  of  the  said  H.,  after  })aymeut  of 
the  separate  creditors  of  the  said  H.  to  the  company,  to  be  paid  hj  them 
to  the  holders  of  the  P.  first  mortgage  deht,  as  part  of  the  first  instal- 
ment of  12,750?.  mentioned  in  the  schedules  to  the  said  Articles  as 
payable  in  respect  thereof,  and  the  said  surplus  (if  any)  shall  be  deemed 
for  that  pur])ose  to  be  jn-ofits  of  the  company. 
Application  of       !).  The  said  T.,  as  such  trustee  as  aforesaid,  shall  stand  possessed  of 

excepted  j-j^^   property   s])ecified  in  the  second   schedule   hereunder   written,    in 

property.  i      i       j       i 

trust  in  the  first  place  to  pay  to  the  trustees  of  M.  the  sum  of  20,0001., 

the  balance  of  their  said  claim  on  or  before  ;U  Dec.  1875  ;  and  in  the 

next  place,  to  pay  all  the  exi)enses  of  the  proceedings  in  the  said  li(juida- 

tion,  and  all  expenses  of  carrying  into  effect  the  scheme  of  settlement 

hereby  agreed  on,  including  the  costs  incurred  since  27  May,  ]  875,  by 

the  mortgagees  under  the  first  mortgage  of  the  A.  AVorks,  and  by 

and         ,  the  mortgagees  under  the  first  mortgage  of  tlie  P.  Works,  and 

to  be  incurred  by  them  in  carrying  into  effect  the  present  arrangements. 


FOEMS.  49 

except  as  lieroinafter  meutd  ;  unci  iu  the  next  place,  in  paymt  of  the  Form  25. 
rents,  royalties,  rates  and  taxes,  salaries  and  other  preferential  claims 
hinl)efore  parly  mentd  or  referred  to,  and  after  the  several  paymts 
afsd,  to  apply  the  balance  in  paymts  of  dividends  to  creditors,  to  be 
taken  on  account  of  the  B.  del)entures,  as  referred  to  in  the  articles  of 
association,  and  to  be  deemed  to  be  paymts  out  of  profits  of  the  co  for 
the  ppses  of  clause  G  of  this  aoreemt. 

lU.  For  realisincr  that  part  of  the  pi)ty  comimsed  iu  the  sd  second  Company  to 
schedule,  which  consists  of  coals,  pitwood,  oil,  horse-food,  and  other  excepted 
material  supplied  for  the  ppse  of  carrying  on  the  ])usiness,  the  sd  T.  shall  property, 
sell,  and  the  co  shall  pchase  the  same  at  a  price  admitted  or  (in  case  of 
dispute)  determined  by  arbitration  to  be  the  value  thereof. 

11.  The  co  shall  accept  such  title  as  the  sd  T.  has  to  the  ppty  hby  Title  accepted. 
agreed  to  be  made  over,  transfen-ed,  and  assured,  and  shall  pay  all  the 
expen.ses  of  preparing-  and  executing  the  deeds  for  efiectuating  that 

object.     The  assurances  shall  l)e  completed  as  soon  as  can  be  arranged. 

12.  If  the  liquidon  of  the  separate  estate  of  the  sd  A.  be  not  closed 
on  or  before  10  Jan.  187C,  or  if  the  proofs  against  the  sd  separate 
estate  shall  exceed  the  sum  of  24,0o0/.  \ji(jiecineni  to  he  void,  and  liqui- 
dation to  proceed']. 

13.  [iSimitar  prorision  as  to  B.'s  separate  estate.] 

14.  If  any  dispute  shall  arise  as  to  the  fi-ame  of  any  deed  required  for  Arbitration, 
effectuating   this   agreemt,   or   as  to    any    other   matter    under   these 
])reseuts  (whether  hiubefore  specifically  referred  to  arbitration  or  not) 

the  same  shall  be  referred  to  any  counsel  or  other  person  named  by  the 
judge  or  any  registrar  of  the  Loudon  Bankruptcy  Ct,  at  the  instance 
of  any  party  to  the  dispute,  and  [^stihmissioii  may  lie  nuule  order  of 
court,  i.yc.'\. 

Ix  AVITXESS,  &e. 

The  Scheditles  above  refekred  to. 

First  schedule  [FarticaJars  of  »i07i/ja[/ed properties]. 

Second  schedule  :  Sums  of  money  now  in  the  hands  of  the  sd  1\:  bills 
of  exchange  and  promissory  notes  now  held  by  the  sd  T.  ;  book  debts 
due  to  the  sd  estate  in  respect  of  the  sd  business  ;  securities  for  money 
due  to  the  sd  estate  ;  stock  and  shares  in  public  cos  ;  scrap  iron  and  old 
castings  and  certain  other  assets  ;  all  moneys  due  and  owing  to  the  said 
T.  as  such  trustee  in  respect  of  the  sales  made  of  coals,  iron,  and  other 
materials  in  carrying  on  the  business  of  the  co  as  aforesaid  ;  the  stock 
of  stores  remaining  on  hand,  of  coals,  pitwood,  oil,  horse-food,  and  other 
materials  supplied  to  the  sd  T.  as  such  trustee  in  cariying  on  the  sd 
business  ;  surplus  locomotive  and  other  engines,  and  any  other  assets 
Avhich  shall  be  determined  by  the  trustee  not  to  be  properly  taken  into 
account  for  the  purpose  of  the  sale  of  tlie  works  as  a  going  concern. 

[Other  Schedules.] 


50 


AGREEMENTS. 


Form  25.  Under  s.  28  of  the  Bankruptcy  Act,  1869,  the  Court  in  several  cases  sanctioned 
a  scheme  whereby  the  assets  were  made  over  to  a  company  in  consideration, 
of  shares  or  debentures  for  the  unsecured  creditors.  The  above  Form  is  taken 
from  an  agreement  consequent  on  a  scheme  which  was  so  sanctioned.  See  Ex 
parte  Turquand,  .3  C.  D.  445.  The  articles  of  association  provided  for  the  issue 
of  debentures  in  place  of  the  mortgages  on  the  A.  and  P.  properties,  and  for 
the  issue  of  the  B.  debentures  to  the  unsecured  creditors,  and  of  A.  debentures 
to  R.  The  profits  were  to  be  applied  in  payment  of  (1),  the  annuities;  (2), 
10,000? .  per  annum  towards  payment  of  principal  and  interest  on  the  128,000L 
debentures, and  12,750?.  per  anniuu  on  the  183,000L  debentures;  (.3), the  interest 
on  the  A.  debentures  to  be  issvied  to  E. ;  (4),  the  payment  of  the  B.  debentures. 
The  articles  provided  for  meetings  of  the  different  classes  of  debenture  holders, 
and  the  business  was  to  be  managed  by  a  committee  of  control  until  the  B. 
debentures  were  all  paid  off. 

The  following  are  a  few  of  the  cases  on  s.  28  of  the  Bankruptcy  Act,  1869 : — 
Merchant  Banking  Co.,  16  C.  Div.  :  the  Court  is  bound  to  consider  the  objec- 
tions of  dissentients:  and  all  the  circumstances:  In  re  Hickman,  32  W.  K.  173. 
Ex  parte  Bacon,  17  C.  Div.  447 :  after  scheme  accepted  bankrupt,  though 
undischarged,  can  apply  to  reduce  proof.  In  re  Chidley,  1  C.  D.  177  ;  Crew  v. 
Terry,  2  C.  P.  D.  403,  rights  of  execution  creditors  after  scheme.  Ex  parte 
Turqxiand,  3  C.  D.  445,  issue  of  debentures,  sureties  :  Ex  parte  Ranby,  14  C.  D. 
467,  taxation  of  trustees'  costs  after  scheme  :  West  v.  Baker,  1  Ex.  D.  44,  set- 
off, whether  effected  Vjy  scheme. 

Under  s.  18  of  the  Bankruptcy  Act,  1883,  the  Court  is  given  full  discretion  as 
to  approval  of  scheme,  and  to  enforce  or  annul  it.  The  scheme  is  to  bind  all  the 
creditors  except  (s.  19)  as  regards  debts  and  liabilities  not  aifected  by  an  order 
of  discharge  unless  the  creditor  assents  to  the  scheme.  As  to  the  excepted  debts 
and  liabilities,  see  s.  30,  which  includes,  inter  alia,  any  debt  or  liability  incurred 
by  means  of  any  fraud  or  fraudulent  breach  of  trust. 

For  schemes  under  the  Joint  Stock  Companies  Arrangement  Act,  1870,  see 
infra,  Form  728  et  seq. 


Form  26.    Agreement  for  sale  of  Hotel  and  other  assets  on  a  scheme  of 
ARRAxr; E:\rEXT  under  the  Bankruptcy  Act. 


Parties. 


Hccitals. 


AN   AGREEMT    made  the 


day  of ,  lietween  J.,  of,  &c., 


(hereinafter  called  the  trustee),  of  the  first  pt,  N.,  of,  &c.  (hereinafter 
called  the  debtor),  of  the  2nd  pt  ;  D.,  of,  (fee,  (hereinafter  called  the 
nitgee)  of  the  3rd  pt ;  B.  and  C,  of,  &c.  (hereinafter  called  the 
claimants),  of  the  4th  pt  :  the  creditors  of  the  debtor  (including- 
the  mtgee  for  the  sum  of  2,082/.  only,  and  including  the  grantee 
of  the  bill  of  sale  hereinafter  mentd),  such  creditors  (who  are  herein- 
after referred    to   as    the    creditors)   binding    themselves    by   special 

I'esolutions   as   hereinafter    mentd    of    the   5th  pt ;  and    the    P 

Hotel  Co,  Limtd.  (hereinafter  called  the  co),  of  the  Cth  pt.  Whas 
on,  and  for  some  time  prior  to   the  20th  January,  1877,  the  debtor 

carried  on  the  business  of  an  hotel  keeper  at  the  P Hotel,  19,  21, 

and  22,  X.  Place,  8outh  Kensington.  And  whas  on  the  sd  2Gth 
of  January,  1877,  the  debtor  presented  his  pcton  to  the  London 
Bankruptcy  Ct  for  the  liquidon  of  his  affairs  by  arrangemt  or  composi- 
tion with  his  creditors,  under  which  the  sd  J.  was,  on  26th  January, 
1877,  a])poiuted  recei\er  of  the  ppty  and  manager  of  the  business  of 


I 


FORMS.  51 


the  ilebtor  ;  utkI  subsequently  resolutions  for  liquidoii  by  arranu'emt  of 
his  sd  affairs  were  duly  i)assed  and  registered,  and  on  Oth  March, 
1877,  the  sd  J.  was  duly  appointed  trustee  of  the  ppty  of  the  debtor  : 
And  whas  on  ITtli  January,  1877,  the  debtor  executed  a  bill  of 
s;ile  whereby  he  granted  and  assigned  to  ^I.  (therein  mentd)  absolutely 
all  the  chattels  then  being  or  which  should  thereafter  be  in  or  about 
19,  X.  Place,  afsd,  subject  to  a  proviso  for  redemption  on  paymt  to  the 
sd  !M.  of  the  sums  in  the  sd  bill  of  sale  mentd  ;  l)ut  it  is  considered  that 
the  chattels  comprised  in  the  sd  Ijill  of  sale  have  become  and  are  vested  in 
the  trustee,  and  divisible  amongst  the  creditors,  as  being  in  the  possession, 
«rder,  or  disposition  of  the  debtor,  l)eing  a  trader,  by  the  consent  and 
permission  of  the  sd  j\L  at  the  time  of  the  filing  of  the  sd  ]K'ton  :  Anj) 
WHAS  at,  the  time  of  the  filing  of  the  sd  peton  the  debtor  was  indebted  to 
tlic  creditors  in  various  sums  of  money,  and  the  mtgee  was  a  creditor  of 
the  debtor  of  4,082/.,  holding  as  security  part  of  the  debtor's  estate — 
namely,  the  leases  of  Xos.  1'.),  21,  and  22,  X.  Place  afsd  :  Axi)  whas 
at  the  time  of  the  filing  of  the  sd  peton  the  debtor  was  bound  ])y 
certain  contracts  entered  into  between  the  claimants  and  himself, 
relating  to  the  letting  l)y  them  and  hiring  by  him  of  certain  house- 
hold furniture  and  effects,  under  a  system  commonly  called  the  three 
years'  hire  system,  and  which  sd  household  furniture  and  effects 
the  claimants  respectively  claim  as  their  own  ppty  :  And  whas  the 
mtgee  has  valued  his  sd  security  at  the  sum  of  2,000/.,  and  has  pro\'ed  in 
the  sd  liquidon  for  the  balance  of  his  claim  and  interest,  amounting  to 
the  sum  of  2,082/. :  AxD  whas  the  co  has  been  formed  and  registered 
with  a  view  to  the  pchase  from  the  trustee  by  the  co  of  the  business 

of  the  P Hotel,  with  the  fixtures  and  effects  therein,  the  ppty  of 

the  debtor  in  the  sd  liquidon,  other  than  and  except  the  sd  household 
furniture  and  effects  claimed  by  the  claimants  ;  and  with  a  view  to  the 
adoption  by  the  co  of  the  sd  contracts  for  letting  and  hiring  the  sd 
household  fm-iiiture  and  effects  claimed  by  the  claimants,  or  some  modi- 
fications thereof  upon  certain  terms  and  conditions  :  And  whas  it  has 
been  proposed  as  one  of  the  terms  of  the  sd  purchase  that  the  debtor  shall 
enter  into  the  engagemt  hereinafter  contd,  which  he  has  agreed  to 
do  provided  he  obtain  his  discharge  under  the  sd  liquidiui  :  A\]> 
WHAS  the  mtgee  has  agreed  with  the  co  to  take  debentures  of 
the  CO  secured  as  a  first  charge  upon  the  co's  undertaking  in  respect 
of  the  sd  sum  of  2,000/.,  reserving  his  right  to  vank  pari  jjas.su  with  the 
creditors  in  respect  of  the  balance  of  his  claim  so  proved  l)y  him  as  afsd: 
AxD  WHAS  it  is  desirable  that  the  liquidon  of  the  estate  of  the 
debtor  shall  be  closed  :  And  a\'HAs  having  regard  to  the  statemt 
of  his  affairs  submitted  by  the  debtor  to  the  statutory  meeting  of  his 
creditors  on  the  21st  day  of  February,  1877,  and  also  to  the  delay, 
expense,  and  loss  likely  to  accrue  from  the  winding-up  of  the  business 
of  the  sd  hotel,  and  in  disputing  the  several  claims  of  the  claimants  and  of 
the  sd  M.,  it  is  deemed  for  the  benefit  of  the  creditors  that  a  scheme 
should  be  adopted  for  transfciTing  to  a  co  the  business  of  the  sd 


Form  26. 


AGREEMENTS. 


Form  26. 


^.ssets  to  lie 
transferred. 


Coiupaiij-  to 
pay  certain 
expenses,  &c. 


Company  to 
issue  certain 
paid-up 
shai'es. 


As  to  -wislics 
of  creditors. 


As  to  claims 
by  holder  of 
bill  of  sale. 


Eclease  l»y 
claiitiants. 


Comjiany  to 
adopt  certain 
liabilities. 


hotel  as  a  going  concern,  and  accordingly  this  agreenit  as  a  scheme  of 
'  scttlemt  has  Ijeen  sanctioned  by  special  resolntions  of  the  creditors 
assembled  at  a  meeting  duly  convened  for  the  ppose  in  the  matter  of 
the  sd  liquidon,  subject  to  the  approval  of  the  Ct,  pursuant  to  the  28th 
section  of  the  Bankruptcy  Act,  18(5i). 

Now    IT    IS   HBY    AGREED  aS  folloWS  : 

1.  The  trustee  shall  assign,  transfer,  and  deliver  to  the  co  all 
the  estate  and  interest  vested  in  him  in  the  sd  leases  of  Nos.  10,  21,  and 
22,  X.  Place  afsd,  and  in  the  goodwill  and  business  of  the  sd  P— — 
Hotel,  and  the  fixtures,  furniture,  and  efiects,  the  ppty  of  the  debtor, 
therein,  other  than  and  except  the  household  furniture  and  effects  claimed 
by  the  claimants,  and  his  title  to  assign,  transfer,  and  deliver  as  afsd 
shall  be  accepted  l)y  the  co  without  question. 

2.  The  CO  will,  to  the  extent  to  which  the  balance  in  the  hands 
of  the  trustee  may  be  insufficient  for  those  pposes,  pay  all  tlie  expenses, 
including  rents,  rates,  taxes,  and  other  outgoings  and  disl)ursemts  in- 
curred by  the  receiver  and  manager  and  trustee  since  the  filing  of  the 
sd  peton,  and  all  other  the  expenses  of  and  incidental  to  the  sd 
peton  and  the  sd  liquidon,  and  the  carrying  on  of  the  business  of 
the  sd  hotel  by  such  receiver  and  manager  and  trustee,  and  of  and  inci- 
dental to  the  scheme,  and  the  assignmt,  transfer,  and  delivery  before 
mentioned  ;  and  will  deliver  to  the  mtgee  debentures  of  the  co  for  the  sd 
sum  of  2,0007.,  secured  as  a  first  charge  upon  the  undertaking  of  the  co. 

?).  The  CO  will  pay  to  the  trustee  in  cash  the  sum  of  1,835/.  2s.  Gd. 
and  will  issue  and  deliver  to  the  trustee,  or  his  nominees  the  creditors 
as  he  may  direct  fully  pd-up  ordinary  17.  shares  of  the  co  for 
0,5007.,  or  on  the  request  and  at  the  option  of  the  trustee  will,  in  lieu  of 
such  shares,  pay  in  cash  to  the  trustee  one-fifth  of  their  nominal  value, 
or  of  so  many  of  them  as  the  trustee  shall  require. 

4.  The  trustee  will  follow,  as  nearly  as  circes  will  ]iermit,  the 
Avishes  of  the  creditors  respectively  in  claiming  shares  or  cash  pursuant 
to  the  preceding  clause,  ]irovided  such  wishes  are  expressed  to  him  in 
writing  within  one  month  after  the  appro\"al  l)y  the  Ct  of  the  sd 
scheme.  In  default  of  any  such  expression  of  wish  by  any  of  the  credi- 
tors, the  trustee  Avill  act  as  if  such  defaulting  creditors  had  resjtectively 
expressed  a  wish  for  cash. 

5.  The  CO  will  take  all  risk  if  any  incident  to  the  claim  of  the 
sd  M.  to  the  ppty  in  aiul  possession  of  the  chattels  comprised  in  the 
sdbill  of  sale,  and  will  indenniify  the  trustee  from  all  claims,  demands, 
and  expenses  in  respect  thereof. 

().  The  claimants  will  release  the  estate  of  the  debtor  from  all  claims 
and  demands  if  any  in  respect  of  their  sd  several  contracts,  and  the 
trustee  will  release  his  claim  in  respect  of  the  sd  household  furniture  and 
eflFects  claimed  under  their  sd  several  contracts. 

7.  The  co  agrees  with  the  claimants  to  adopt  upon  modified  terms 
and  conditions,  which  have  been  arranged,  the  liabilities  of  the  delator 
under  the  sd  seA'eral  contracts. 


FORMS.  5  J 

fi.  Tlie  dcl)t(>r  agrees  tluit  he  -will  (if  he  obtain  his  discharge  under  JForm  26^ 

tlie  said  liquidon,  and   inuuediately  thereupon)    enter  into  a  covenant  Debtor  not  to 

with   the    CO   [not  fo   cam/  on  or  he   interested  in   Lusiness  of  hotel  l^^'7  °^^ 
'-  "^  .  business. 

Jcee^ier,  ij-c,  for  five  years,  in  thin  three  miles  j. 

9.  If  any  dispute  sliall  arise  as  to  the  mode  of  the  carrying  out  this  Arbitration, 
scheme  of  settlemt  or  otherwise  in  relation  to  the  sd  scheme  of  settle- 
mt  the  same  shall  be  referred  to  such  counsel  or  otlier  person  as  may 
be  named  by  the  judge  or  by  any  registrar  of  the  London  Bankruptcy 
Ct,  at  the  instance  of  any  party  to  the  dispute. 

In  witness,  &c. 

The  above  form  is  taken  from  an  agreement  sanctioned  by  the  London  Bank- 
ruptcy Court  a  few  years  since.  See  note  at  foot  of  Form  25.  It  is  not  usual 
to  make  the  creditors  as  above  parties  to  the  agreement.  See  fiirther, 
"  Arrangements,"  infra. 


Ageeement  to  sell  Assurance  Business.  Form  27. 


AN  ACJREEMT,  itc,  the  corjioration  ],  the  co  2,  where])y, 
subject  to  such  approval  and  confirmation  as  hereiuafter  mentd,  it  is 
agreed  as  follows  :■ — 

1.  Tlie  corporation  will  sell  and  transfer,  and  the  co  will  pchase  Sale. 
and  take  o\er  as  from  twelve  o'clock  at  midnight  on  the  thirtieth 
day  of  .June,  One  thousand  eight  hundred  and  eighty-one,  all  tlie  cor- 
poration's assurance  business,  in  W'hich  term  are  included  all  the  life 
policies,  hfe  policies  Avith  accidental  injury  benefits  combined,  and 
annuities  and  health  insurances  mentd  in  the  schedule  hto  (but  no 
others),  and  the  goodwill,  agencies,  and  connections  pertaining  thereto. 

2.  A  valuation  shall  be  made  of  the  liability  in  respect  of  the  several  Vahiation. 
contracts  specified  in  the  schedule  hto  by  A.  of  ,  actuary,  ujion 

the  following  bases  : — 

(a)  The  valuation  shall  he  made  as  on  the day  of . 

{b)  The  mortality  tables  to  be  employed  shall  be  the  institute  of 
actuaries'  Hni.  table  of  mortality  for  policies  on  which  less  than  five 
years'  premiums  have  been  paid,  and  the  institute  of  actuaries'  Hm.  (')) 
table  of  mortality  for  ])olicies  of  five  years'  standing  and  upwards,  and 
Mr.  Alexander  Glen  Finlaison's  governmt  life  annuitants  experience 
tables  ibr  annuities.  Interest  shall  be  calculated  at  four  ]).  c.  }i.  a.  I'lie 
premiums  to  be  valued  shall  be  the  net  premiums  only. 

{(•)  The  corporation  shall  furnish  to  tlie  sd  A.  all  necessary  par- 
lars  of  the  contracts  specified  in  the  schedule  hto,  and  shall,  if  re- 
quired l)y  him,  permit  him  to  examine  and  inspect  the  policy  registers 
and  all  the  original  documts  relating  thereto. 

i).  The    corporation  will,    within    fourteen   days  after  this   agreemt  Delivery  oE 
shall  have  been  appro\-ed  by  the  shareholders  of  the  corporation   by  ^®^"^'^*'^- 
special  resolution  and  sanctioned  and  confirmed   by  the   High   Court 


54 


AGEEEMENTS. 


Form  27. 


Interest. 


Allotr^ent  of 
paid-up  f^hares. 


Re-iBsuranee. 


Death  befoie 
completion. 


As  to  lialjili- 
ties. 


Delivery  of 
jolicies. 


of  Jusbico,  (liaiK'CTV  Division,  hand  over  in  cash,  approved  securities,  or 
otlier  assets  to  l>e  approved  by  the  co,  such  a  sum  as,  on  the  basis 
of  the  sd  ^•ah^ation,  shall  appear  to  be,  {a),  a  sufficient  reser\e  fund  for 
the  life,  accident  and  annuity,  and  health  policies  so  to  be  transferred  as 
afsd  :  {h),  a  sufficient  sum  to  jirovide  a  re^■ersionary  bonus  of  one  jiound 
ten  shillings  p.  c.  to  all  participating  i)olicy-holders  whose  policies  are  sa 
transferred,  the  ainount  thereof  to  be  certified  l»y  the  sd  A. 

4.  The  corporation  shall  pay  to  the  co  interest  at  4  p.  c.  p.  a.  on  the 

sum  so  ascertained  as  afsd  from  the  sd day  of to  the  date] of 

paymt,  and  all  premiums  becoming  due  after  the  sd day  of ■ 

shall  belong  to  the  co,  less  commission  allowed  thereout  to  agents. 

f).  The  CO  shall  allot  to  the  corporation  or  its  nominees  fully  pd-up 
shares  in  the  co  to  the  amount  of  one  year's  premium  income  on  the 
poKcies  specified  in  the  schedule  hto  by  way  of  pchase-mouey  for  ' 
goodAvill,  and  will  execute  any  supplemental  agreemt  relating  thereto 
to  meet  the  re(|uiremts  of  the  Companies  Act,  18G7.  Until  such 
confirmation  ami  sanction  as  afsd  the  co  shall  act  as  the  agents  of 
the  corporation  in  their  sd  business. 

G.  The  corporation  will  also,  on  such  confirmation  as  afsd,  transfer  to 
the  CO  the  benelit  of  all  re-insurances  which  shall  have  been  effected  by 
them,  or  any  other  insurances  having  any  connection  with  the  l)usines8 
so  to  be  transferred  as  afsd,  and  the  co  shall  be  at  liberty  to  use  the 
name  of  the  corporation  upon  indemnifying  them  from  any  loss  to  be 
incurred  thereby  in  any  proceedings  which  may  be  necessary  for  the 
ppose  of  enforcing  the  benefit  of  such  re-insurances. 

7.  If  any  of  the  persons  whose  lives  are  so  re-insured  shall  die  before 
such  confirmation  as  afsd  the  corporation  will  gi^e  the  co  the  benefit  of 
such  re-insurances  in  discharge  or  part  discharge  of  the  liability  in 
respect  of  the  insurances  effected  by  the  jx-rson  so  dying,  and  will  take 
or  permit  the  corporation  to  take,  npon  giving  such  indemnity  as 
afsd,  all  proceedings  necessary  to  enforce  the  re-insurances. 

8.  The  CO  shall,  as  such  agents  of  the  corporation,  until  such  con- 
firmation as  afsd,  and  afterwards  on  their  own  account  as  from  the  sd 

day  of  ,  undertake  and  assume  all  the  liabilities  and  risks  of 

the  corporation  under  their  life  assurance  and  other  policies  and  annui- 
ties specified  in  the  schedule  hto,  and  shall  indemnify  the  corporation 
against  all  claims  and  demands  in  respect  of  such  risks  and  liabilities. 
But  the  corporation  shall  pay  and  discharge  all  liabilities  under  any  of 
the  sd  policies  specified  in  the  sd  schedule  which  may  have  become 
claims  on  or  before  the  sd day  of . 

I).  The  corporation  will  deli^■er  over  to  the  co  all  the  policy  registers 
I'cnewal  registers,  indexes,  and  other  books  of  the  corporation,  not  being 
mere  books  of  account,  together  with  all  documts  upon  which  the 
policies  Averc  issued,  or  relating  thereto,  and  which,  after  such  confirmation 
as  afsd,  shall  become  the  ppty  of  the  co,  but  with  the  right  of  access 
thereto  on  thepart  of  the  coi"i)Oration,  and  will  do  all  other  acts  necessary 
and  proper  to  carry  out  the  sd  transfer,  and  will  in  all  other  respects  use 


FORMS.  55 

their  best  endeavours  to  promote  the  scl  life  assurance  aud  annuity    Form  27. 

business,  and  shall,  as  from  the  sd day  of ,  cease  to  carry  on  " 

and  will  nut  resume  life  assurance,  accident,  aud  annuity  business  except 
through  the  agency  and  for  the  benefit  of  the  co,  but  this  shall  not 
apply  to  any  existing  policy  or  contract  of  the  corporation  not  specified 
in  the  schedule  hto. 

10.  Each  policy-holder  in  the   corporation  cntled  to  iiarticiiiate    in  Provisions 

,     „  T  ,    T  •       ^  ,  n  ■  ,  for  benefit  of 

lu'onts  shall  be  entled  to  receive  irom  the  co  such  reversionary  ijonus  as  policy  holders. 

is  mentd  in  clause  3,  and  shall  at  the  actuarial  investigation  of  the  co,  to 

l)e  held  as  in  the  year  one  thousand  eight  hundred  and   eighty-five, 

and  in  all  other  declons  of  bonus  rank  j)ari jiassi/  for  Ijouus  in  the  co, 

on  the  same  terms  and  on  the  same  footing  so  far  as  he  legally  can  as 

the  j)ol  icy -holders  of  the  co. 

11.  All  existing  agents  of  the  corporation,  in  connection   with  the  Agents. 
business  to  be  transferred  as  afsd,  shall  if  such  agents  shall  consent  and 

the  CO  be  willing,  become  as  from  the day  of  • ,  the  agents  of  the 

CO,  but  for  the  ppose  only  of  transacting  and  promoting  the  sd  life 
assurance  and  annuity  business. 

12.  The  corpoi-ation  shall  do  all  acts  and  things  that  may  be  in  their  Agencies. 
power  for  transferring  such  agencies  so  far  as  the  co  shall  require  such 
transfer. 

l;!.  The  costs  of  and  incident  to  this  agroemt,  and  the  carrying  out  Costs. 
thereof  when  confirmed,  and  of  all  deeds  required  for  that  impose,  shall 
be  borne  by  the  parties  incurring  the  same. 

14.  Any  dispute  [jrfcrencp  to  arhitration  of  A.'].  Arhitration. 

IT).  This  agreemt  on  the  part  of  the  corporation  is  subject  to  Approval  of 
approval  l)y  the  shareholders  by  special  resolution,  and  to  the  sanction  ""^  ' 
and  confirmation  of  the  High  Ct  of  Justice,  Chancery  Division,  and 
the  costs  of  all  parties  of  and  incident  to  obtaining  such  sanction  and 
confirmation  (except  the  costs  of  any  appearance  liy  the  co)  shall  ])e 
paid  by  the  corporation,  and  if  such  approval,  confirmation,  and 
sanction  respectively  be  not  given  and  obtained  within  six  mouths  from 
the  date  of  these  jwesents,  or  such  extended  time  as  the  corporation  and 
CO  respectively  may  agree  upon,  the  parties  hto  are  to  be  placed  in  their 
original  position,  or  as  near  thereto  as  may  be  possible,  as  if  this 
agreemt  had  never  been  entered  into,  and  as  if  nothing  had  been  doue 
towards  carrying  it  into  effect,  and  without  any  right  to  compensation  on 
either  side  for  loss  or  expenses  incurred  in  connection  with  the  proposed 
transfer,  but  so  that  the  co  shall  be  fully  indemnified  against  all  lia- 
bilities properly  incurred  by  them  in  respect  of  the  obligations  hby  im- 
posed on  them  previously  to  such  coufirmation,  and  this  agreemt 
shall  cease  to  be  binding  except  for  the  pposes  of  such  restitution  and 
indemnity. 

IX   WITXESS,  &c. 

This  is  taken  from  a  form  recently  sanctioned  by  the  Court.  As  to  the 
transfer  of  the  business  of  a  life  assurance  company,  see  infra.  Form  288,  and 
Buckley,  ool. 


56 


AGEEEMENTS. 


Form  28,  Syndicate  Agree.^iext  fur  turchase  and  re-sale  of  Mines. 


Syndicate 
established. 

Members. 

Capital. 


Preliminary 
contract. 


Managers. 
Calls. 


Application  of 
funds. 

Conduct  of 
business. 


]';xpress  powers 
of  managers. 


]\lcetinc'.s. 


Division  of 

proceeds. 


Notices. 


Heads  of  Agreemt. 

1.  A   syndicate   is  hby  established  for  the   ppose  of  acquiring   the 

mines  situate  at ,  and  known  as  the mines,  and  of  disposing 

of  the  same  at  a  profit.     The  capital  of  the  syndicate  shall  Ije /., 

and  shall  be  considered  to  be  divided  into  - — —  shares  of  /.  each. 

The  holders  for  the  time  being  of  the  shares  shall  be  members  of  the 
syndicate.  Each  of  the  subscriljers  is  to  be  entled  to  the  number  of 
shares  set  opposite  his  signature.  The  shares  are  to  be  transferable,  but 
not  divisible.     A  transfer  must  be  registered. 

2.  In  entering  into  the  contract  dated for  the  acquisition  of  the 

sd  mines,  A.,  one  of  the  subscribers  hto,  shall  be  deemed  to  have 
been  acting  on  behalf  of  the  syndicate,  and  the  syndicate  shall  forthwith 
repay  him  the  deposit,  and  shall  indemnify  him  against  his  liabilities 
under  the  contract. 

3.  A.  and  B.  shall  be  managers  of  tlie  syndicate. 

•4.  1.  per  share  shall  be  pd  to  the  managers  forthwith,  and  they 

may  from  time  to  time  make  calls  on  the.meml:iers  in  proportion  to  their 
shares,  but  no  memljer  is  to  be  liable  to  pay  more  than  the  amount  of 
liis  shares. 

5.  All  moneys  pd  to  the  managers  in  respect  of  calls  or  otherwise 
shall  be  applied  for  the  pposes  of  the  syndicate. 

G.  Tlie  managers  shall  have  the  entire  control  of  the  affairs  of  the 
syndicate,  and  may  conduct  the  same  in  such  manner  as  they  think 
best. 

7.  It  is  expressly  declared  that  the  managers,  if  they  think  fit,  {a)  may 
sell  the  mines  to  a  persoii,  or  firm,  or  co  ;  {h)  may  form  and  float,  or  pro- 
cure the  formation  and  floating  of  a  co  to  pchase  the  mines  ;  (r)  may 
fix  the  price  and  agree  to  accept  any  pt  of  it  in  fully  pd  up  shares, 
debentures,  or  otherwise  ;  {d)  may  keep  the  mines  going  until  dis- 
posed of. 

8.  The  managers  may  convene  meetings  of  the  syndicate  to 
deliberate  and  decide  on  any  of  the  atfairs  of  the  syndicate  :  every  share 
to  confer  one  vote  :  majority  to  decide  :  votes  may  be  given  in  person 
or  by  proxy.     Three  days'  notice  of  each  meeting  to  be  given. 

!).  Tlie  conson  for  sale  or  disposition  of  the  mines  shall  be  ap- 
plied, first,  in  paying  all  debts  and  liabilities  of  the  syndicate;  secondly, 
in  repaying  any  capital  contributed  by  the  members  in  respect  of  their 
shares  ;  thirdly,  the  surplus  shall  be  divided  amongst  the  members  in 
pi'oportion  to  their  shares.  And  for  the  pposes  of  this  clause  the 
managers  may  convert  into  money  any  shares,  debentures,  or  other 
specific  assets,  and  may  divide  any  such  assets  in  specie,  and  make  such 
other  arrangemts  for  adjusting  the  rights  of  the  memljers  as  they 
think  fit. 

1(1.  Notices  to  each  subscriber  may  be  given  by  post,  addressed  to 


FOEMS. 


him   at   his  address   below    luentd. 
served  tAvelve  hours  after  posting. 
Dated  the day  of . 


Notice  so  ffiveii    to   be  deemed    Form  28. 


Signatures  and  addresses  of  subscribers. 

Number  of  s&ares  subscribed  for 

■ 

A  syndicate  is  a  partnership  or  company.  A  great  many  syndicates  are  from 
time  to  time  formed,  but,  as  regards  the  promotion  of  public  companies,  see 
infra,  note  to  Form  75,  a  syndicate  consisting  of  more  than  20  members  is 
illegal :  s.  i  of  the  Act  of  18G2.  Of  course  if  a  syndicate  promotes  and  sells  to 
a  company,  it  must  make  due  disclosure,  and  the  members  Avill  all  be  respon- 
sible for  the  fraud  of  the  manager.  Erlanger  v.  New  Sombrero  Co.,o  C.  Div.  75. 
See  also  Ross  v.  Estates  Invest.  Co.,  3  Eq.  134  ;  3  Ch.  681. 


A(;REEiiENT  for  the  Avpoixtmext  of  a  Maxager  lij  a  Co3II'axy.     Ih-    Form  29. 
muneration,  Salary,  and  Share  of  Profits.     Comimisation  in  case  of 
Dismissal. 


AX  AGREEMT,  &v.     Parties,  (1)  the  co,  (2)  B. 
Whereby  it  is  agreed  as  follows  : 


Parties. 


1.  The  sd  A.  shall  lie  the  first  general  manager  of  the  co,  and  as  such  Appointment 
general  manager  shall  perform  the  duties  and  exercise  the  powers  which  ^  "  ^^* 
from  time  to  time  may  l)e  assigned  to  or  vested  in  him  by  the  directors 

of  the  CO. 

2.  The  sd  A.    shall  hold  the  sd  office,    subject  as  hereinafter  \n-o-  Term. 
vided,  for  the  term  of years  fi-om  the  date  hereof. 

o.  The  sd  A.,  unless  prevented  l)y  ill-health,  shall,  during  the  sd  A.  to  per- 
term,  devote  the  whole  of  his  time,  attention,  and  abilities  to  the  busi-  ^°""  duties, 
ness  of  the  co,  and  shall  obey  the  orders  from  time  to  time  of  the 
Ijoard  of  directors  of  the  co,  and  in  all  respects  conform  to  and 
comply  with  the  directions  and  regulations  given  and  made  by  them, 
and  shall  well  and  faithfully  serve  the  co  and  use  his  utmost  endea- 
vours to  promdtc  the  interests  thereof. 

4.  There  shall  Ix'  ]xl  to  the  sd  A.,  as  such  general  manager,  a  salary  Salary, 
which  shall  be  as  follows,  namely  :  The  sum  of  300/.  for  the  first  year, 


58 
Form  29. 

When  to  be 
paid. 


Besides  share 
of  profits  as 
per  article;;. 


AGREEMENTS. 

the  sum  of  4( »(»/'.  for  the  second  year,  and  the  sum  of  oOo/.  for  each  sne- 
ceeding  year. 

r>.  The  sd  salary  shall  commence  from  the  date  hereof,  and  shall  be 

pd  quarterly  on  the day  of ,  &c.,  the    first  quarterly  })aymt 

to  he  made  on  the day  of next. 

C>.  In  addition  to  his  afsd  salary,  the  sd  A.  shall,  during  liis  tenure 


of  otiice  afsd,  be  entled  to  the  share  in  the  profits  of  the  co  which, 
under  the  sd  articles  of  association  thereof,  is  payable  to  the  general 
manager  of  the  time  being  of  the  co. 
A.  may  resign.  7.  The  sd  A.  shall  be  at  libty  to  resign  the  sd  office  at  any  time 
upon  giving  to  the  co  three  calendar  months'  notice  of  his  desire  so 
to  do. 

8.  [If,  before  the  expiration  of years  from  the  date  hereof,  the 

CO  is  wound  up,  or  by  any  other  means,  except  the  death  or  resigiuition 
of  the  sd  A.,  his  tenure  of  the  sd  office  shall  l)e  determined,  the  co 
shall  pay  to  the  sd  A.  the  sum  of  2.000/.  as  liquidated  damages  for  his 
loss  of  office.] 

IX  WITNESS,  &c.  {a). 


Compensation 
to  A.  in  case 
of  winding- 
up,  &c. 


Form  30. 

Parties. 
Recitals. 


Appointment. 
Salary. 


B.  entitled  to 
leave  of 
absence. 


Agreemrxt  for  the  Appoixtmext  of  a  Secretary  lij  a  Co^irAXY. 
Leave  of  Absence.     Power  to  Rescind. 


THIS    AGREEMT,    parties    (1),    the    co 
the  capital  of  the  co  is 1.,  divided  into  — 


and    (2),   B.      Whas 

-  shares  of  ■ /.  each  : 

Axi)  WHAS  the  directors  of  the  co  are,  by  the  articles  of  association 
thereof,  empowered  to  appoint  a  secretary  of  the  co,  cither  for  a  fixed 
term  or  fttherwise  as  therein  mentd,  and  to  fix  and  determine  his  remu- 
neration, which  may  l)e  by  way  of  salary  or  otherwise,  as  in  the  sd 
articles  mentd  : 

XOW   IT    IS   HIJY    AfiREED    aS    followS  : — ■ 

1.  The  sd  B.  shall  be  secretary  of  the  co  for  a  term  of  years, 

to  l)e  computed  from  the  date  hereof. 

2.  There  shall  be  pd  by  the  co  to  the  sd  B.,  as  such  secretary  as  afsd, 

a  salary  at  the  rate  of /,  per  annum.     Such  salary  shall  commence 

from  the  date  hereof,  and  shall  be  payal)le  (piarterly  on  every day 

of ■, day  of  ,  day  of  ,  and day  of ; 

the  first  of  such  quarterly    i)aymts    to  Ije  made  on  the   day  of 

next. 

^.  The  sd  B.  shall,  unless  prevented  [^siipra,  \).  oT]. 

4.  The  sd  B.  shall,  during  his  tenure  of  the  sd  office,  be  entled  to  leave 

of  absence  for  a  period  in  each  year  not  exceeding  weeks,  and, 

iiidess  otherwise  arranged  between  the  board  of  directors  of  the  co  and 
the  sd  ]>.,  such  leave  of  absence  shall  be  granted  in  each  year  as  follows, 
namely,  from  the day  of  to  the  day  of ,  &c.,  &c. 


(a)  See  infra,  p.  GO,  as  to  appointment  of  officers. 


FORMS.  ■  50 

The  afsd  salary  of  the  sd  I>.  sliuU  continue  uotwillistandino-  such  lea\  e    Form  30, 
of  absence. 

;").  lu  conson  of  the  premes,  tlie  co  shall  forthwith  allot  and  issue  to  Shares  to  he 
the  sd  B.  ten  of  its  shares,  which  shall  l.)e  numbered  in  the  books  of  the  a-"otte.l  to  i;. 

CO to  both  inclusive,  and  shall  be  deemed  for  all  pposes  fidly 

])d  up. 

0.  Either  of  the  parties  hto  may  determine  the  agreemt  by  giving- to  Power  to 

the  other  not  less  than calendar  months'  notice  in  writing,  and  '"esf""' • 

upon  the  expiration  of  the  period  specified  in  such  notice  the  sd  B.  shall 
cease  to  be  secretary  of  the  co. 

Ix   WITNESS,  &c. 


Agreement  ((jiiwini'mg  ELECTKiCAii  Entjixeer.  Form.  31. 


AX  AGREE:MT,  etc.     Parties  (I),  the  co  ;  (2),  A.  Parties. 

Whereby  it  is  agreed  as  follows: — 

1.  The  co  shall  employ  the  sd  A.  as  electrician  and  electric  engineer  A.  to  be 
or   adviser,  and  the  sd  A.  shall  serve  the  co  in  that    capacity  upon  *^  ^ctnciau. 
the  terms  and  subject  to  the  stipulations  hereinafter  expressed  and  contd, 

from  the day  of  until  this  agreemt  shall  have  been  deter- 
mined in  manner  hereinafter  provided. 

2.  The  duties  to  be  performed  by  the  sd  A.  shall  be  the  advising  to  Duties, 
the  best  of  his  ability  the  co  and  the  directors  of  the  co  in  all  matters 
relating  to  electricity  and  electric  light  and  power,  and  the  production 

and  the  use  of  electricity,  and  the  works,  machinery,  apparatus  and 
appliances  requisite  for  the  same,  and  also  the  superintendence  of  the 
works  of  the  co,  and  of  the  construction,  manufacture,  or  execution  of 
any  works,  machinery,  or  apparatus  which  may  be  constructed,  manu- 
factured, or  executed  by  or  for  the  co,  and  also  such  other  duties  as 
are  usually  discharged  by  persons  filling  similar  positions,  or  may  reason- 
ably be  assigned  by  the  co  to  him. 

d.  The  sd  A.  shall  in  the  discharge  of  his  duties  have  regard  to  and  A.  to  observe 
observe  and  comply  with  all  the  reasonable  regulations  and  directions    "'^'^  ^°"^' 
which  may  from  time  to  time  be  made  or  given  by  the  co,  either  gene- 
rally in  relation  to  the  lousiness  and  managemt  of  the  affairs  of  the 
CO,  or  specially  in  relation  to  the  duties  of  the  sd  A.,  and  he  shall  also 
in  all  respects  endeavour  to  promote  the  success  of  the  co's  business, 

4.  The  sd  A.  (except  when  prevented  by  illness)  shall  for  the  pposes  Business lioms, 
of  the  discharge  of  his  duties  under  this  agreemt,  and  so  far  as  a  due 
regard  to  his  health  and  strength  will  permit,  attend  at  such  offices, 
works,  or  establishmts  of  the  co,  or  at  such  other  places  and  at  such 
times  as  the  co  may  from  time  to  time  reasonably  direct,  and  in 
addition  to  the  usual  hours  of  attendance  at  such  other  times  in  the  day 
or  night  as  the  exigencies  of  the  businesses  or  works  of  the  co  require 
his  attendance ;  but  nevertheless  the  sd  A.  shall  be  entled  to  holidays 


60 


AGREEMENTS. 


Form  31.    oi'  vacations  not  exceeding  in  the  wliolc in  any  year,  and  to  lie 

taken  at  such  time  or  times  as  tlie  co  may  approve,  but  so  that  he  shall 
always  be  cntled  to  a  vacation  of  at  least  3  days  at  Christmas  and  Easter 
respectively. 

0.  The  sd  A.  shall  devote  his  best  energies  and  the  whole  of  his  time 
and  attention  to  the  co's  concerns  during  the  hours  of  Ijusiness  as  fixed 
by  the  last  preceding  clause,  and  except  as  hereinafter  provided  he  shall 
not,  without  the  consent  of  the  co,  employ  himself  in  or  about  any 
business  or  occupation  except  the  business  of  the  co. 

G.  Notwithstanding  anything  in  the  last  preceding  clause  contd,  the 
sd  A.  shall  be  at  liberty  to  give  to  other  persons  than  the  co  advice  with 
regard  to  electrical  matters  and  to  charge  therefor,  bnt  he  shall  not,  for 


A.  to  give 
whole  time. 


Liberty  to 
advise  other?;. 


the  ppose  of  giving  such  advice,  leave  the  county  of 
consent  in  writing  of  the  co. 
Sahuy.  7.  In   conson   of  the   performance    by   the    sd   A. 

his    agreenit    the    co    shall    pay  to    him   a    salary 

1,   p.  a.  l)y  monthly   paj^mts   on  the  day 

month. 

As  WITXESS,  &c. 


without  the 


of  his  part  of 
at  the  rate  of 
of  each  calendar 


The  following-  clauses  are  occasionally  used  • — 
Form  31a         Whenever  the  profits  of  the  co  made  during  the  financial  year  or  other  period 

. _  conipi'ised  in  the  accounts  submitted  to  the  oi-dinary  general  meeting  in  each 

Commission  on  year  are  more  than  sufficient  to  pay  a  dividend  on  the  pd-up  capital  of  the  co 

surplus  profits,  for  such  period  at  the  rate  of  5  p.  c.  p.  a.,  the  sd ,  in  addition  to  his  salary 

afsd,  shall  be  pd  a  sum  equal  to  25  p.  c.  of  the  excess. 

Form  31b.        ^^  addition  to  his  salary  afsd,  the  sd shall  he  cntled  to  a  commission  of 

10  p.  c.  on  the  profits  made  during  the  financial  year  or  other  period  comi^rised 


Commission  on  in  the  accounts  submitted  to  each  ordinary  general  meeting  of  the  co. 
l^rolits. 
Form  31c         Whenever  a  dividend  is  declared  by  the  co  in  general  meeting,  and  such 

"    dividend,   together   with   the   dividend   or   dividends,   if    any,  previously   pd. 

Commission  on  amounts  to  more  than  5  p.  c.  p.  a.  on  the  capital  of  the  co  for  the  time  being 
ividends.          pd  up  as  from  the  incorporation  of  the  co  to  the  time  of  the  declon  of  such  divi- 
dend, then,  and  in  such  case,  the  sd shall,  in  addition  to  his  afsd  salary, 

be  entled  to  a  commission  equal  to  10  p.  c.  of  the  excess,  such  commission  to 
be  pd  when  the  dividend  becomes  payable. 


Appointment 
of  officers 
by  articles  of 
association. 

An  .igrccment 
should  lie 
executed. 


Appointment  of  Officers  and  Agents. 

The  articles  of  a  company  often  purport  to  make  appointments  of  managers 
secretaries,  agents,  solicitors,  and  others ;  but  it  is  generally  expedient,  after 
the  incorporation,  for  persons  so  appointed  to  enter  into  an  agreement  in 
writing  with  the  company,  defining  the  terms  and  conditions  of  the  appoint- 
ment. It  has  been  settled  that  at  any  j-ate  a  j^erson  not  a  jjarty  to  the  articles 
cannot  rely  on  a  stipulation  contained  therein  as  an  agreement  by  the  comi:)any 
with  him.  Eley  v.  Positive  Government,  ^'c,  Co.,  1  Ex.  Div.  8S ;  Re  Peace  4'-  Co., 
^2  W.  R.  131 ;  Empress  Engineering  Co.,  IG  C.  Div.  125.  But  see  Terrell  v. 
Hutton,  '1  H.  L.  Cas.  1091.  As  to  what  is  evidence  of  an  ajipointment  of  an 
officer  by  the  company,  see  Browning  v.  Great  Central  Mining  Co.,  5  H.  &  N.  856; 
29  L.  J.  Ex.  399. 

Moreover,  if  the  agreement  is  not  to  l>e  performed  within  a  year,  it  is  neces- 
sary to  have  an  agreement  in  writing,  by  reason  of  s.  1  of  the  Statute  of  Frauds. 


FORMS.  61 

Eley  V.  Positive  Government,  Sfc,  Co.,  1  Ex.  Div.  20;  S.  C.  88  ;  Davey  v.  Shannon,     Porni  31 

•1  Ex.  D.  81.    However,  the  signature  of  the  secretary  of  a  company  to  a  minute 

recording  a  resolution  for  his  appointment  may  be  sufficient.     Jones  v.  Victoria 
Graving  Dock  Co.,  2  Q.  B.  Div.  314. 

Specific  performance  of  a  contract  for  hiring  and  service  ■will  not  be  decreed.  No  specific 
Stoker  v.  Brocklebank,  ^'c,    Co.,  3  M.  &  G.  250  ;  Br.ett  v.  East  India,  ^c.,  Co.,  2  performance  of 
H.  &  M.  404 ;  W.  R.  596  ;  Mair  v.  Himalaya  Tea   Co.,  1  Eq.  411.     But  if  the  ^'o^tract  for 
agent  is  a  member  of  the  company,  and  the  regulations  provide  for  his  emi^loy- 
ment,  he  might  be  able  to  obtain  an  injunction  restraining  the  directors  from 
interfering  with  him  (Pulbrook  v.  Richmond,  cfc,  Co.,  9  C.  D.  GIO).     Where, 
liowever,  the  majority  of  the  members  are  against  him  the  company  will  not 
be  restrained  {Harben  v.  Philli2)s,  28  C.  Div.  44),  unless,  perhaps,  where  there  is 
a  negative  covenant.     See  infra,  p.  339. 

A  resolution  or  oi'der  for  winding  up  is  equivalent  to  a  dismissal  of  a  com-  Pie.solution 
pany's  servants.     Chapman's  case,  1  Eq.  34G  ;  Shirreff's  case,  11  Eq.  417.  o^'  order  to 

And  if  an  agent  or  servant  has  been  appointed  for  a  term  at  a  salary,  he  will  ^md  iqi  = 
be  entitled  to  prove  in  the  winding  vip  for  the  valvie  of  his  salary  for  the  unex- 
pired residue  of  the  term.     Yelland's  case,  4  Eq.  350  ;  Ex  parte  Clark,  7  Eq.  550.  -^s  to  proof  in 
But  when,  in  addition  to  his  salary,  an  agent  is  to  have  a  commission  on  busi-  ^^^^'^  ^"°  "^'' 
ness  done,  he  is  not,  upon  a  winding  up,  entitled  to  prove  for  what  he  might  YcUand.s 
have  otherwise  earned.     Ex  parte  Maclure,  5  Ch.  736.     This  was  a  case  of  a     "*'^' 

voluntary  winding  up,  and  the  same  rule  must  d  fortiori  apply  in  a  compulsory  ■^S^'i*  cannot 
•     T •  '  prove  for 

winding  ui).  i  ^ 

iiitiirG  com* 
In  a  recent  case  before  the  House  of  Lords,  it  ajiijeared  that  an  agreement  mission. 

had  been  made  between  A.  and  B.,  that  B.  should  be  sole  agent  at  Liverpool  pj  .  .  r  . 
for  the  sale  of  A.'s  coal  during  a  term  of  years,  at  a  certain  commission;  A.' to  looocl  11.'  L. 
have  the  control  of  the  iirices,  with  power  for  him  to  rescind  if  B.  did  not  sell 
a  certain  minimum,  and  power  for  B.  to  rescind  if  A.  could  not  supply  a  certain 
minimum.  A.  sold  his  colliery  before  the  expiration  of  the  term,  and  it  was  held 
that  an  action  by  B.  against  A.  for  damages  for  breach  of  the  agreement  occa- 
sioned thereby  would  not  lie,  for  that  the  agreement  did  not  bind  A.  to  keep  his 
colliery,  or  to  send  any  coal  to  Liverjjool.     Rhodes  v.  Forwood,  1  Ap.  Cas.  257. 

It  follows  from  this  case  that  if  a  company  made  such  an  agreement,  and  then 
passed  into  liquidation,  the  agent  could  not  jirove  for  damages. 

But  where  a  business  is  sold  to  a  conqjany  on  the  terms  that  the  purchase 
money  shall  be  paid  off  out  of  profits,  an  agre'ement  to  carry  on  the  business 
maybe  implied.     Telegraph  Despatch  Co.  v.  McLean,  8.  Ch.  658  ;  Lindley,  378. 

It  is  very  common  exjiressly  to  fix  by  agreement  the  compensation  to  be  pay-  Agreement  to 
able  to  the  agent  in  case  his  agency  shall  be  terminated  by  the  company.    Thus,  payspecificsum 
in  Logan's  case,  9  Eq.  119  ;  14  W.  E.  273,  Logan  was  by  the  articles  ajipointed    %„p^^  ° 
managing  director  of  a  company,  at  800?.  per  annum,  and  a  commission  on  ^      '  '.  n 
profits.     It  was  also  provided  that :  "  In  the  event  of  the  said  L.  being  at  any     ''^""'  * 
time  deprived  of  or  removed  from  his  office  for  any  other  cause  than  gross  mis- 
conduct, the  directors  shall  pay  to  him  as  compensation  for  loss  of  office  a  sum 
equal  to  three  years'  salary    .     .     .     ."    The  company  was  ordered  to  be  wound 
up,  and  Logan  was  held  entitled  to  prove  for  three  years'  salary.     See  also 
Shirreff's  case,  14  Eq.  417  ;  20  W.  E.  966. 

But  where  an  order  had  been  made  to  wind  up  a  company  of  which  T.  was  an 
officer,  one  of  the  terms  of  his  engagement  being,  that,  "  5,000?.  be  paid  to  him 
if  the  company  discontinue  to  employ  him,"  it  was  held  by  Lord  Cairns,  that 
"  T.  was  not  entitled  to  prove  for  the  5,000?.,  as  there  was  no  voluntary,  active, 
and  intelligent  discontinuance  by  the  company  of  the  employment  of  T."  Re 
Albert  Life  Ass.  Co.,  Tait's  claim,  16  Sol.  J.  46. 

Where  A.  is  entitled  to  the  exclusive  services  of  B.,  and  C.  induces  B.  to  break 
the  engagement,  A.  may  be  entitled  to  sue  C.  for  damages.  Boiven  v.  Mall,  G 
Q.  B.  D.  339 ;  29  W.  R.  367. 


MEMOEANDA    OF    ASSOCIATION. 


INTRODUCTORY  NOTES. 


j\toile  of 
formin.^ 
foiiipuiiy. 


Section  G  of  the  Act  of  1802  ju-ovides  that : — 

G.  Any  seven  or  more  persons  associated  for  any  lawful  purpose  may,  by  sub- 
scribing- their  names  to  a  memorandum  of  association  and  otherwise  complying 
with  the  requisitions  of  this  Act  in  respect  of  registration,  form  an  incorporated 
company,  with  or  without  limited  liability. 


Mode  of 
hiiiitiiii,'  lia- 
l)ility  of 
meniber^. 


IVIeinoraiuhim 
of  asfoci;itiou 
of  a  coinjiany 
limited  l>y 
sliares. 


Memorandum 
of  association 
of  a  company 


And  section  7  provides  as  follows  :— 

7.  The  liability  of  the  members  of  a  company  formed  under  this  Act  may, 
according  to  the  memorandum  of  association,  be  limited  either  to  the  amount, 
if  any,  unpaid  on  the  shares  respectively  held  by  them,  or  to  such  amount  as 
the  members  may  respectively  luidertake  by  the  memorandum  of  association  to 
contribute  to  the  assets  of  the  company  in  the  event  of  its  being  wound  up. 

As  to  the  memorandum  of  a  cojnpany  limited  by  shares,  section  8 
provides  that : 

S.  Where  a  comijany  is  formed  on  the  jsrinciiile  of  having  the  liability  of  its 
members  limited  to  the  amount  unpaid  on  their  shares,  hereinafter  referred  to 
as  a  company  limited  by  shares,  the  memorandum  of  association  shall  contain 
the  following  things  ;  (that  is  to  say,) 

(1.)  The   name  of   the  proposed  company,  with  the  addition   of   the  word 

"  limited  "  as  the  last  word  in  such  name : 
(2.)  The  part  of  the  United  Kingdom,  whether  England,  Scotland,  ov  Ireland, 

in  which  the  registered  office  of  the  company  is  proposed  to  be  situate  : 
{:].)  The  objects  for  which  the  jn-oiiosed  company  is  to  be  established : 
(1.)  A  declaration  that  the  liabilitj^  of  the  members  is  limited  : 
(5.)  The  amount  of  capital  with  whicli  the  company  jn-oposes  to  be  registered 
divided  into  shares  of  a  certain  fixed  amount : 
Subject  to  the  following  regulations: 

(1.)  That  no  subscriber  shall  take  less  than  one  share  : 

(2.)  That  each  suT)scriber  of  the  memorandum  of  association  shall  write  op- 
posite to  his  name  the  nvunber  of  shares  he  takes. 

For  form  (jf  such  a  memorandum,  see  infra,  p.  75. 
As  to  the  memorandum  of  a  company  limited  by  j^uarantee,  section  9 
of  this  Act  provides  as  follows : — 

0.  Where  a  company  is  formed  on  the  principle  of  having  the  liability  of  its 
members  limited  to  such  amount  as  the  members  resjiectively  undertake  to 
contribute  to  the  assets  of  the  company  in  the  event  of  the  same  being  wound 


INTRODUCTORY    NOTES.  63 

up,  liereinafttT  i-fferrod  to  as  a  company  limited  Ly  guarantee,  the  mcmorandmu  limited  by 
of  association  shall  contain  the  following  things  ;  (that  is  to  say,)  guarantee. 

(1.)    [Name:  as  above. 2 

(2.)    [Registered  office  :  as  above. 1 

(3.)   [Objects:  as  above. 2 

(4.)  A  declaration  that  each  member  undertakes  to  contribute  to  the  assets  of 
the  company,  in  the  event  of  the  same  being  wound  up  during  the 
time  that  he  is  a  member,  or  within  one  year  afterwards,  for  payment 
of  the  debts  and  liabilities  of  the  company  contracted  before  the  time 
at  which  he  ceases  to  be  a  member,  and  of  the  costs,  charges,  and 
expenses  of  winding  up  the  company,  and  for  the  adjustment  of  the 
rights  of  the  contributories  amongst  themselves,  such  amount  as  may 
he  required,  not  exceeding  a  specified  amount. 

For  foi'in  of  such  a  memorandum,  see  infra,  \^.  7(;. 

And  section  14  of  this  Act  requires  that  where  the  company  has  a 
capital  divided  into  shares,  each  subscriber  must  take  one  share  at  least, 
and  is  to  write  opposite  his  name  on  the  memorandum  of  association  the 
number  of  shares  he  takes.     As  to  this  see  further,  infra,  p.  7(>. 

As  to  the  memorandum  of  an  unlimited  company,  section  10  of  this 
Act  provides  as  follows  : — 

10.  Where  a  company  is  formed  on  the  principle  of  having  no  limit  placed  Memorandum 

on  the  liability  of  its  members,  hereinafter  referred  to  as  an  unlimited  com-  "^'^  associatioa 

"pany,  the  memorandum  of  association  shall  contain  the  following  things  ;  (that  ?•    •?  \"^' 
f      *'  o  n    1  \  hmited 

IS  to  say,)  company. 

(1.)  The  name  of  the  proposed  company  : 

(2.)   [Registered  office:  as  above.'] 

(3.)   [Objects:  as  above.] 

For  form,  see  infra,  p.  81. 

With  regard  to  the  reoistration  of  the  memorandum  of  association,  it 
is  provided  by  section  17  of  this  Act  that : — 

17.  The  memorandum  of  association,  and  the  articles  of  association,  if  any,  Kegistratioa 

shall  be  delivered  to  the  Registrar  of  Joint  Stock  Comi>anies  hereinafter  men-  of  memo- 

tioned,  who  shall  retain  and  register  the  same :  There  shall  be  j^aid  to  the  I'l^Jum 

Registrar  by  a  company  having  a  capital  divided  into  shares,  in  resnect  of  the  "r     articles 

1        ,^  ,.        1  ■     .1      i    ,1  TIT-..,,,.  or  association, 

several  matters  mentioned  m  the  table  marked  B.  m  the  first  schedule  hereto, 

the  several  fees  therein  specified,  or  such  smaller  fees  as  the  Board  of  Trade 

may  from  time  to  time  direct ;  and  by  a  company  not  having  a  cajiital  divided 

into  shares,  in  respect  of  the  several  matters  mentioned  in  the  table  marked  C. 

in  the  first  schedule  hereto,  the  several  fees  therein  specified,  or  such  smaller 

fees  as  the  Board  of  Trade  may  from  time  to  time  dii-ect :  All  fees  i)aid  to  the 

said  Registrar  in  pursuance  of  this  Act  shall  be  paid  into  the  receipt  of  Her 

Majesty's  Exchequer,  and  be  carried  to  the  account  of  the  consolidated  fund  of 

the  United  Kingdom  of  Great  Britain  and  Ireland. 

Copies  of  tables  B.  and  C.  will  be  found  infra,  p.  7;!. 
As  to   the   effect  of   registration,  section    is  of   this  Act   pro^'ides 
that:— 

18.  Upon  the  registration  of  the   memorandum  of  association,  and  of  the  pifept  of 
articles  of  association  in  cases  where  articles  of  association  are  required  by  this  icistration. 
Act,  or  by  the  desire  of  the  parties  to  be  registered,  the  Registrar  shall  eertifv 

under  his  hand  that  the  comiiany  is  incorporated,  and  in  the  case  of  a  limited 


64. 


MEMOEANDA    OF    ASSOCIATION. 


StaiDp,  signa- 
ture, and 
effect  of 
memorandum 
of  association. 


Name  of 
company. 


Section  20. 


Improper  use 
of  name. 


Names  tle- 


comijany  that  the  company  is  limited  :  The  subscribers  of  the  memorandum  of 
association,  together  with  such  other  persons  as  may  from  time  to  time  become 
members  of  the  company,  shall  thereupon  l)e  a  body  corporate  by  the  name 
contained  in  the  memorandum  of  association,  capable  forthwith  of  exercisino- 
all  the  functions  of  an  incoriDorated  company,  and  having  perpetual  succession 
and  a  common  seal,  with  power  to  hold  lands,  but  with  such  liability  on  the 
part  of  the  members  to  contribute  to  the  assets  of  the  company  in  the  event  of 
the  same  being  wound  up  as  is'  hereinafter  mentioned  :  A  certificate  of  the  incor- 
poration of  any  company  given  by  the  Eegistrar  shall  be  conclusive  evidence 
that  all  the  requisitions  of  this  Act  in  respect  of  registration  have  been  complied 
with. 

As  to  the  stamp,  signature,  and  effect  of  menioranclum,  section  1 1  of 
this  Act  provides  as  follows  : — 

11.  The  memorandum  of  association  shall  bear  the  same  stamp  as  if  it  were 
a  deed,  and  shall  be  signed  by  each  subscriber  in  the  pi'esence  of,  and  be  attested 
by  one  witness  at  the  least,  and  that  attestation  shall  be  a  sufficient  attestation 
in  Scotland  as  well  as  in  England  and  Ireland  :  It  shall,  when  registered,  bind 
the  company  and  the  members  thereof  to  the  same  extent  as  if  each  member 
had  siibscribed  his  name,  and  affixed  his  seal  thereto,  and  thei'e  were  in  the 
memorandum  contained,  on  the  part  of  himself,  his  heirs,  executors,  and 
administrators,  a  covenant  to  observe  all  the  conditions  of  such  memorandum, 
subject  to  the  provisions  of  this  Act. 

With  regard  to  the  several  clauses  contained  in  the  memorandum  of 
association  : 

As  to  the  name: — 

This  clause  is  required  in  every  memorandum.  The  choice  of  the 
name  rests  with  the  subscrihers  of  the  memorandum.  They  are,  subject 
to  section  20  of  the  Act,  free  to  select  any  name  they  like,  so,  neverthe- 
less, that  the  word  limited  shall,  in  case  of  a  company  limited  by  shares 
ov  by  guarantee,  form  the  last  word  of  the  name.  [See,  however, 
i/ifra,  p.  ()").] 

Section  20  provides  that  : — 

20.  No  company  shall  be  registered  under  a  name  identical  with  that  by 
which  a  subsisting  company  is  already  registered,  or  so  nearly  resembling  the 
same  as  to  be  calculated  to  deceive,  except  in  a  case  where  such  subsisting 
company  is  in  the  course  of  being  dissolved,  and  testifies  its  consent  in  such 
manner  as  the  registrar  requires  ;  and  if  any  comi:)any,  through  inadvertence 
or  otherwise,  is,  without  such  conse<irt  as  aforesaid,  registered  by  a  name 
identical,  [c^-c,  provision /or  change  of  name. ^ 

The  registration  of  a  company  by  a  name  which  is  calculated  to 
deceive,  by  reason  of  its  identity  with  or  resemblance  to  the  name  used 
l)y  some  unregistered  company,  partnership,  or  person,  will  not  ])revent 
the  Courts  from  inter^'cning,  in  a  proper  case,  by  injunction,  to  jjrotect 
the  rights  of  such  last-mentioned  company,  partnership,  or  person.  As 
to  the  principles  on  which  the  Court  interferes,  see  the  notes  to  Croft  y. 
Day,  in  Tudor's  L.  C.  jMerc.  Law,  503  ;  and  Kerr  on  Injunctions,  47-i. 
But  in  most  of  the  reported  cases  against  companies  injunctions  have 
])een  refused. 

Se^|(?7/r  London  anil  Frovi/icial  Law  Assurance  Societtj  v.  The  Lo?ido7i 


INTEODUCTORY    NOTES. 


65 


and  ProrinridI  Joint  Sfock  Lift'  Assiirancr  Conqmnij,  17  L.  J.  Ch.  37  ;  scriptive  of 
The  Colonial  Life  Assuninre  Companij  v.  Tlic  Homo  and  Colonial  Assiir-  l°<^"'''*y- 
(Vice  Company,  Limited,  ;58  Bcav.  548  ;  33  L,  J.  Cb.  741  ;  The  London 
Assurance  Corporcdion  v.  The  London  and  Westminster  Assurance  Cor- 
poration, Limited,  \)  Jur.  N.  S.  843  ;  32  L.  J.  X.  S.  (iG4  ;  The  Merchant 
Banking  Conijianij  of  London  v.  The  Merchants  Joint  Stock  Bank,  f)  C.  D. 
r)(!0  ;  The  London  and  Countij  Banking  Company  v.  The  Capital  and 
Counties  Bank  ,-  mentioned  in  the  last  case  :  Caardian  Fire  and  Life  v. 
Guardian  and  General,  43  L.  T.  791.  See  also  Estcourt  v.  Estcourt  Hop 
Essence  Company,  10  Ch.  27G,  where  the  Lord  Chancellor  was  of 
opinion  that  an  injunction  would  have  heen  granted  but  for  the  plain- 
tiff's laches. 

In  the  second  case  mentioned  in  the  preceding  paragraph,  the  Master 
of  the  Rolls  in  refusing  an  injunction  said  that,  "The  object  of  this 
application  is  really  to  obtain  a  monopoly  of  the  use  of  the  Avord  colonial. 
.  .  .  But  if  a  company  which  does  colonial  business  cannot  call  itself 
*  colonial,'  it  is  obvious  that  under  a  species  of  assertion  that  the  word 
colonial  is  symbolical,  the  plaintiffs  might  prevent  every  other  person 
using  it  as  descriptive  of  his  trade.  Tt  is  obvious  such  a  claim  cannot 
be  maintained  ;  it  would  establish  a  monoply  of  the  words  'home'  and 
^colonial.'" 

In  Hendricks  v.  Montagu,  17  C.  D.  038,  an  injunction  Avas  granted 
at  the  suit  of  the  Universal  Life  restraining  the  registration  of  a  company 
as  the  Universe  Life. 

It  is  expedient  here  to  draw  attention  to  a  rule  made  some  years  ago  As  to  the  word 
by  the  Board  of  Trade,  viz.,  that  the  registrar  shall  not  register  any  *  '°^ 
memorandum  of  association  for  the  incorporation  of  a  company  by  a 
name  of  which  the  word  "  Royal "  forms  part,  unless  there  be  special 
circumstances  for  relaxing  the  rule,  e.y.,  where  the  word  "  Royal "  has 
been  used  in  connection  witli  jn-operty  which  the  company  is  to  acquire, 
or  where  jX'rmission  to  use  the  word  has  been  granted  by  the  Home 
Office.  This  rule  has  been  rigorously  enforced,  and  accordingly  there 
are  comparatively  few  companies  on  the  register  having  names  which 
include  the  word  referred  to. 

Where,  in  special  circumstances,  it  is  desired  to  register  Avitli  the  Avord 
*'  Royal,"  ap})lication  should  be  made  to  the  Home  Office. 

Before  finally  settling  on  a  name  and  getting  documents  printed,  it  is 
generally  desirable  to  ascertain  fi'om  the  Registrar  of  Joint  Stock  Com- 
panies that  no  objection  exists  to  the  proposed  name. 

Section  20,  as  above  mentioned,  p.  (!4,  jirohibits  the  registration  of  a  As  to  ex- 
second  company  Avith  the  same  name  as  a  subsisting  company,  "  except  ggg^j^"  2q 
in  any  case  Avhere  such  subsisting  company  is  in  course  of  being  dissolved 
and  testifies  its  consent  in  such  manner  as  the  registrar  requires.     The 
poAver  thus  given  is  fi-equently  exercised,  especially  in  cases  of  recon- 
struction or  amalgamation.     See  "  Reconstruction,"  infra. 

As  to  change  of  name,  see  "Resolutions,"  i^ifra.     As  to  omitting  Change  of 
the  word  limited,  in  some  cases  a  company  may  be  registered jflS  a  °'^™^- 

F 


66 


MEMOEANDA    OF    ASSOCIATION. 


limited  company  without  using  the  word  "  Limited "  as   part  of   its 

name.     These  cases  are  specified  in  Section  2o  of  the  Companies  Act, 

18G7.     See  'i)\fr(t,  p.  7H. 

As  to  ilip  rcfjif^icred  office  of  the  cojujtmi// : — 

Refistered  Clause  2  of   eAciy  memorandum  must  state   in  which  part  of  the 

office  of  Kingdom  the  registered  office  is  proposed  to  be  situate.     This  determines 

company.  ^yhere  the  company  is  to  he  registered,  and  also  the  jurisdiction  to  Avhich  it 

Avill  be  subject.    See  Section  Hi,  Sub-section  o,  and  Section  81  of  the  Act. 

As  to  tJie  objecfs  of  the  comiiCDuj : — 

Objects  of  Clause  3  of  the  memorandum  is  to  state  the  olgects  for  which  the 

company.         proposed  company  is  to  be  established.     It  is  now  well  settled  that  the 

objects  of  a  company,  as  declared  in  the  memorandum,  are  unalteral)le, 

i.e.  the  company  has  no  power  to  do  anything  not  expressly  or  impliedly 

authorised  by  its  objects.     Ashlunj  Railiray  Carriafje  Co.  v.  Rklie,  7. 

L.  R.  H.  L.  (IT);).     Anything  beyond  the  objects  is  ultra  vires. 

No  ratification       And  even  though  the  members  of  the  company,  unanimously,  antho- 

of  a.ci  vUra        ■      ^^     directors  to  affix  the  seal  of  the  comi^any  to  a  contract  vUra 

vires  the  ^         i.      j 

company.  vires  the  company,  the  contract  is  void.     Nor  can  the  members  ex  'post 

facto  sanction  or  ratify  a  contract  by  the  directors  which  is  ultra  vires 
the  company.  The  contract,  l)eing  wholly  void  in  its  inception,  is. 
incapable  of  ratification.  Ashburij,  Jtc,  Co.  v.  Riche,  vdi  stqira.  See 
also  Lindley,  2r)0. 
Objects  songlit  This  being  the  state  of  the  law,  it  is  essential  to  specify  the  objects  of 
stated"  ^  ^^^^  company  in  the  memorandum  with  the  greatest  care,  for  it  may 
entail  serious  inconvenience  if,  after  commencing  business,  the  company 
finds  that  its  objects  arc  too  restricted. 

The  following  are  a  few  recent  cases  in  which  companies  ha^'c  been 
unable  to  do  what  they  wanted  on  the  ground  that  it  would  huxe  been 
uUra  vires : — A  life  assurance  company  wanted  to  carry  on  the  business  of 
fire  insurance  :  a  brewery  company  wanted  to  cany  on  the  business  of  a 
malting  company :  a  company  formed  to  run  steamers  from  A.  to  B. 
wanted  to  ran  a  line  from  B.  to  D. :  a  company  formed  to  lend  money 
on  land  in  a  colony  wanted  to  lend  on  land  in  England:  a  colliery 
company  wanted  to  work  an  adjacent  mine  in  partnership  with  another 
company  :  a  submarine  cable  company  Avanted  to  enter  into  an  arrange- 
ment with  another  cable  company  for  joint  working :  a  steamshij)  com- 
pany running  vessels  betwijen  foreign  ports  wanted  to  sell  some  of  its 
vessels  to  a  foreign  company  which  would  have  ])rivileges  not  accorded 
to  an  English  company,  and  to  accept  pa^Tuent  in  shares :  a  comj^any 
formed  to  invest  and  lend  money  on  land  in  a  colony  wanted  to  act  as 
agent  for  lenders  and  to  guarantee  investments :  a  com})any  formed  to 
carry  on  l)usiness  as  stock  aiul  share  brokers  wanted  to  Iniy  and  sell  on 
its  own  account :  a  pier  company  wanted  to  establish  an  a(iuarium  on 
some  adjacent  land. 

In  several  of  these  cases  the  company  was  reconstructed  in  order  to 
acquire  the  necessary  powers.     See  "  Reconstruction,"  infra. 

It  is  therefore  exceedingly  desirable,  not  merely  to  state  the  main 


INTRODUCTOEY    NOTES. 


67 


objects  of  the  company,  but  also  any  ancillary  o])jects  which  the  com- 
pany is  intended  to  have,  or  may  possibly  require,  and  which  are  not 
necessarily  implied  from  the  statement  of  the  main  objects,  or  cannot 
with  confidence  be  left  to  the  operation  of  the  general  words  with  which 
every  memorandum  closes.  Practice  varies  as  to  where  to  draw  the  line, 
but  it  has  now  become  customaiy  to  set  out  the  objects  iu  considerable 
detail,  and  although  this  iu  many  cases  leads  to  the  statement  of  un- 
necessary particulars,  it  is  a  fault  on  the  right  side.  Indeed,  it  seems 
folly  to  leave  in  doubt  that  which  can  be  rendered  iudisputaljle  by  the 
insertion  of  a  few  words. 

It  was  formerly  not  unusual  to  state  the  ol)jec!;s  in  the  memorandum  Old  practice 
with  the  utmost  conciseness  and  then  in  the  articles  to  elal)orate  them —  '''f  .*°  stating 

objects. 

p.(j.^  tlie  objects  as  stated  in  the  memorandum  might  be :  "  The  working 
of  coal  mines  and  the  doing  of  all  such  things  as  are  conducive  or 
incidental  thereto."  The  articles  would,  inkr  alia,  contain  power 
for  the  directors  to  sell  the  undertaking  of  the  company  in  consideration 
of  cash  or  shares,  to  promote  other  companies,  to  purchase  and  hold 
shares  in  other  companies,  to  purchase  the  business  of  any  other  com- 
pany, and  undertake  the  liabilities  thereof,  to  enter  into  partnership 
ari'angements,  to  lend  money,  to  guarantee  contracts,  and  so  forth. 
Where  this  plan  was  adopted  there  was  great  danger  that  some  of  the 
])Owers  expressly  conferred  on  the  director  by  the  articles  would  be  held 
ultra  I'irrs  of  the  company. 

According  to  present  practice   the  reverse  of  this  plan  is  adopted.  Present 
Thus  in  the  above  case  the  powers  conferred  by  the  articles  on  the  P^^'^'ctice. 
directors  would  ])e  inserted  as  objects  of  the  company  in  the  memoran- 
dum, while  the  articles  would  empower  the  directors  to  exercise  all  the 
powers  of  the  company  not  l)y  statute  re(juired  to  be  exercised  in  general 
meeting,  suljject,  perhaps,  to  certain  restrictions. 

The  objects  clause  of  the  memorandum  generally  closes  with  the  fol-  Use  of  general 

lowing  words:  "And  to  do  all  such  other  things  as  are  incidental  or  ^!°J*^-^  "\ 

^  .  objects  clause, 

conducive  to  the  attainment  of  the  aliove  ol)]ects  or  any  of  them.'  ^^.       . 

These  w^ords  only  authorise  the  doing  somethiug  hom  fide  connected 

with  the  objects  to  be  obtained,  and  in  the  ordinary  course  of  business 

adapted  to  their  attainment.      Joint  S'toclr  Co.  v.  Brown,  3  Eq.  150. 

Thus,  where  a  company  was  formed  to  work  a  colliery,  it  was  held  that 

these  words  authorised  a  purchase  of  it.     In  ro  Baijlan  Hall  Colliery 

Co.,  5  Ch.  35G.     In  that  case  Giffard,  L.  J.,  said :  "  It  was  urged  that 

purchasing  thQ  collieiy  was  not  one  of  the  objects ;  but  the  company 

could  not  work  the  colliery  without  first  acquiring  some  interest  in  it, 

and  I  think,  therefore,  that  the  purchase  of  it  was  an  act  '  conducive  '  to 

the  attainment  of  the  primary  object."     Even  in  the  absence  of  these 

words  it  would  seem  that  the  necessary  power  might  have  been  implied. 

See  LcifrhiliVs  Case,  1  E(j^.  2o."),  where  a  company  was  formed  for  using 

patented  machinery,  and  it  was  held  that  a  purchase  of  the  patent  was 

intra  vires.     See  Gniness  v.  Land  Corporation  of  Ireland^  22  C.  Div.  34, 

as  to  the  limited  operation  of  the  words. 

F   2 


68 


MEMOEANDA    OF    ASSOCIATION. 


As  to  general 
words  giving 
company 
power  to  do 
■what  it 
"  thinks  " 
conducive  to 
attainment  of 
objects. 

Practice  of 
office. 


Power  to 
extend  objects 
cannot  be 
given. 


Mortgage 

Debenture 

Act. 


It  occasionally  happens  that  a  niemoranduni  declares  {uitcr  alia)  that 
the  objects  are  :  "  To  do  all  such  other  things  as  the  company  may  ih'mk 
incidental  or  conducive  to  the  attainment  of  the  above  objects."  Peru- 
vian Raihrays  Co.  v.  Thames,  iir.,  Co.,  2  Ch.  017  ;  but  it  is  conceived 
that  this  variation  does  not  really  extend  the  objects. 

Until  recently  it  was  the  practice  of  the  office  of  the  Registrar  of 
Joint  Stock  Companies  to  require  general  Avords  to  follow  the  statutory 
forms.  FeeFs  Case,  2  Ch.  (iTH  ;  but  this  practice  has  been  abandoned, 
and  general  words  may  be  made  as  extensiAe  as  desired.  It  is,  however, 
generally  considered  better  not  to  rely  too  much  on  the  effect  of  general 
words,  but  to  state  the  objects  in  sufficient  detail,  and  conclude  as  in  the 
statutory  forms. 

Foimerly,  it  was  by  no  means  uncommon  to  insert  in  the  objects 
clause  of  the  memorandum  words  to  the  following  effect:  "And  also 
such  additional  or  extended  objects  as  the  company  may  from  time  to 
time  determine."  Examples  niay  be  found  in  the  following  cases  : 
Clinch  V.  Financial  Corporation,  5  Eq.  452  ;  Syers  \.  Briyhton  Breicenj 
Co.,  13  W.  11.  221  ;  compare  with  Ashhary  Fidilway,  Ac,  Co.  v.  Riche, 
L.  R.  7  H.  L.  653. 

It  is  conceived  that  such  words  ought  never  to  be  inserted,  and  that 
the  Registrar  might  properly  decline  to  registrar  a  memorandum  con- 
taining them,  on  the  ground  that  the  objects  of  the  company  are  not,  in 
fact,  stated.  Barned's  Banlciny  Co.,  Feel's  Case,  2  Ch.  075.  If, 
nevertheless,  he  registers  the  company,  the  words,  it  would  seem,  must 
be  treated  as  null  and  void,  but  the  point  has  not  actually  been  decided. 
In  Ashhury,  t{:c.,  Co.  v.  Riche,  nbi  supra,  it  was  held  that  a  power  in  the 
articles  to  extend  the  objects  must  be  held  void. 

The  Court  will  put  a  fair  and  reasonable  construction  on  the  objects 
clause,  and  not  attempt  to  cut  it  down  unduly.  Bath's  Case,  H  Ch.  Div. 
334  ;  Royal  Bank  of  India's  Case,  4  Ch.  252  ;  International  Contract 
Co.'s  Case,  W.  X.  ISO!),  24  ;  In  re  Feruvian  Railways  Co.,  2  Ch.  023  ; 
International  Contract  Co.,  W.  X.  1869,  24 ;  17  ^\.  R.  454  ;  Pulhrool  v. 
Neaj  Civil  Service  Co-operation,  26  W.  R.  11  ;  New  Somlrero  Co.  v. 
Erlanyer,  5  Ch.  Div.  73  ;  Alt. -Gen.  v.  Great  Eastern,  5  App.  Cas.  473. 

But  general  words  will,  as  a  rule,  be  construed  as  merely  ancillary  to 
what  appears  to  be  the  principal  object  of  the  company.  Gnman  Date 
Coffee  Co.,  22  Ch.  Div.  109  ;  Haven  Gold  Co.,  Ilml.  151  ;  Ashhvry  Co. 
V.  Rkhe,  L.  R.  7  H.  L.  053.  Compare  these  with  International  Contract, 
tiM  supra,  and  Fhoenir  v.  Bessemer,  34  L.  J.  Ch.  683,  and  see  Addenda. 

It  may  here  be  mentioned  that  under  the  Mortgage  Debenture  Act, 
1865,  28  &  29  Vict.  c.  78,  s.  3,  amended  by  33  &  34  Vict.  c.  20,  com- 
panies formed  under  the  Act  of  1862  to  advance  money  on  land,  &c., 
may  limit  their  objects  by  special  resolution  so  as  to  obtain  the  benefit  of 
the  a])ove  Acts.  This  ]iower,  however,  ajipears  to  apply  only  to  com- 
panies "  already  constituted,"  i.e.,  in  1865. 


AVc  have  now  considered  the  clauses  of  the  memorandum  as  to  the 


INTRODUCrOIlY    NOTES.  69 

name,  office,  aud  objects  of  the  company.  These  are  the  only  clauses 
contained  in  the  memorandum  of  an  unlimited  company.  A  company 
limited  by  shares  has  two  more  clauses,  namely,  as  to  the  h'mited  liability 
and  as  to  the  capital.     Of  these  presently. 

A  company  limited  by  guarantee  has  only  one  more  clause,  namely,  Clause  as  to 
that  referring  to  the  guarantee.     As  to  the  form  of  this,  see  infra,  p.  70.  s^iarantee. 
The  amount  of  the  guarantee  Avill  depend  on  the  nature  of  the  com- 
pany.    If  the  company  requires  extensive  credit  it  will  be  "well  to  make 
the  amount  of  the  guarantee  considerable,  ej/.,  Oo/.  or  loO/.  per  meml)er. 
But  the  limitation  of  lialjility  l)y  guarantee  is  rarely  adopted,  except  in  Amount  of 
the  case   of  law  societies,  chambers  of  connnerce,  and   other   societies  g^i^^aiit<^6- 
of  an  analogous  character  (see  vifra,  p.  79)  ;    and  such   societies   do 
not  require  much  credit.     Accordingly  the   amount   of  the   guarantee 
commonly  runs  from  Is.  to  bl.  or  10/.  per  member.     The   same  kind 
of  company  is   generally  selected  where    the   objects   are   mutual   as- 
surance ;  but  mutual  assurance  societies  do  not  require   much   credit 
as  regards  outsiders,  and   the   amount  of  the   guarantee  has  no  bear- 
ing on  the  liability  of  members  inter  se,  and  a  5/.  guarantee  is  common 
enough. 

With  regard  to  a  company  limited  by  shares,  the  memorandum  must  Clause  as  to 
also  contain  a  declaration  that  the  liability  is  limited.     This  declaration  j|"Jj'j^jj^ 
does  not  prevent  the  articles  from  extending  the  liability  of  the  membei's 
mter  se.     HilVs  Case,  20  Eq.   59  ;  Peninsula  Co.  v.  Fleminj,  27  L.  T. 
N.  S.  93. 

The  5th  clause  of  the  memorandum  of  a  company  limited  by  shares  Capital. 
must  state  the  nominal  capital  and  the  number  of  shares  into  which  it 
is  divided,  with  the  amount  of  each  share. 

The  capital  so  registered  may  be  varied  in  the  following  particulars. 
It  may  be  increased  ;  it  may  be  consolidated  and  divided  into  shares  of 
larger  amount  than  the  existiug  shares  ;  and  paid-up  shares  may  be 
converted  into  stock  ;  the  shares  may  be  subdivided  ;  and  the  capital 
may,  with  the  sanction  of  the  Court,  be  reduced. 

As  the  capital  can  be  readily  increased,  there  is  no  object  in  starting 
with  a  very  large  nominal  capital ;  but  no  saving  is  effected  by  starting 
Avith  less  than  2,000/.  capital. 

The  amount  of  the  shares  depends  on  several  considerations.     If  the  Amount  of 

public   are  to  be  invited  to  apply  for  shares,  the  amount  should  be 

moderate,  for  it  is  generally  found  that  there  is  a  better  market  for  5/,  or 

10/.  shares  than  for  larger  ones.     Indeed  1/.  shares  are  very  popular. 

Moreover,  it  is  "-enerallY  expedient  not  to  leave  much,  if  any,  liability  on  Objection  to 

"  .  shares  only  la 

the  shares  issued.     So  long  as  shares  are  not  fully  paid  up,  their  value,  pan  jnid  up. 

unless  in  exceptional  cases,  is  impaired  by  the  existence  of  the  liability  ; 

and  if  the  company  should  experience  reverses,  its  shares  may  become 

almost  unmarketable.     Of  course,  under  the  Act  of  1867,  the  hability  How  to  get 

may  be  reduced  or  extinguished  ;  but  the  process  is  tedious  and  expen-  iiabiiitj% 

sive,  and  not  unlikely  to  damage  the  credit  of  the  company.     However, 

so  burdensome  are  shares  subject  to  any  considerable  liability,  that  the 


70 


MEMOEANDA    OF    ASSOCIATION. 


Whether 
power  to  issue 
preference 
shares  to  be 
inserted  in 
capital  clause. 


Association 
clause. 


Memoranclnm 
may  be  in 
writing  or 
printed. 

Witness. 


Certificate 
evidence  that 
requisitions 
of  Act  com- 
plied with. 


Act  of  18G7  is  not  uncommonly  resorted  to  to  get  rid  of  it.  Or,  what 
in  many  cases  is  much  simpler,  the  company  is  re-constructed  as  a 
company  with  the  same  name  and  objects,  but  with  reduced  liability. 
See  infra,  "  Eeconstruction.'" 

Of  course,  however,  there  may  be  cases  in  which  the  security  afforded 
by  the  existence  of  a  large  amount  of  uncalled  capital  may  be  deemed 
requisite  or  expedient,  e.g.,  in  a  banking,  investment,  or  insurance 
company. 

Some  persons  frame  the  capital  clause  of  the  memorandum  of  a  com- 
pany limited  by  shares  as  follows  :  "  The  capital  of  the  company  is 
20,000/.,  divided  into  2,000  shares  of  1()/.  each,  with  power  to  increase 
the  capital  and  to  issue  any  of  the  original  shares  or  shares  of  increased 
capital  as  preferential  or  guaranteed  or  deferred  shares."  See  also 
Form  32. 

The  object  of  so  framing  the  clause  is  to  secure  the  power  to  issue 
preference  shares,  for  some  doubt  existed  at  one  time  as  to  whether  a 
power  in  the  articles  alone  was  sufficient  authority.  This  doubt  no 
longer  exists  [see  "  Eesolutious,"  infra'],  and  there  seems,  therefore,  no  suffi- 
cient reason  for  so  framing  the  capital  clause,  excej^t  where  Table  A.  is 
adopted.  Where,  however,  the  original  capital  as  stated  in  the  memo- 
randum is,  ab  initio,  intended  to  be  divided  into  shares  of  different 
classes,  it  is  usual  to  state  the  fact  in  the  memorandum,  c.ff.,  "  The 
capital  of  the  company  is  100,0()0/.,  divided  into  .'),000  preference  shares 
of  10/.  each,  and  lo,()(i0  deferred  shares  of  5?.  each." 

On  referring  to  the  Forms  of  memoranda  of  association  given  below 
(p.  7")  ft  scq.),  it  will  be  seen  that  each  of  them  closes  with  a  declaration 
that  the  subscribers  desire  to  l)e  formed  into  a  company. 

It  will  be  observed  that  section  14  of  the  Act  rcfjuires  that,  "in  a 
company  limited  by  guarantee  or  unlimited,  and  having  a  capital 
divided  into  shares,  each  subscril)er  shall  take  one  share  at  the  least,  and 
shall  write  opposite  his  name  in  the  memorandum  of  association  the 
number  of  shares  he  takes."  It  is  generally  cousidered  that  the  word 
"  memorandum  "  in  this  paragraph  is  an  error  for  "  articles."  See 
Buckley,  p.  9.  However,  the  i)ractice  of  the  registrar  is  to  require  the 
number  of  shares  taken  to  be  stated  in  the  memorandum. 

The  memorandum  may  be  in  writing,  but,  where  articles  are  regis- 
tered, it  is  usually  printed  with  them.  If  in  writing,  it  is  sometimes 
filled  in  upon  a  skeleton  printed  form.  It  must  l)e  signed  hy  at  least 
seven  persons,  in  the  presence  of,  and  be  attested  by,  one  witness  at 
least.  It  is  very  connnon,  tliough  not  necessary,  for  the  same  witness 
to  attest  the  signatui'es  of  all  the  subscribers. 

The  Act  provides  that  a  certificate  of  the  incorporation  of  any  com- 
pany, given  by  the  registrar,  shall  be  conclusive  evidence  that  all  the 
requisitions  of  the  Act  in  respect  of  registration  have  been  complied 
with. 

Thus  in  PceVs  Case,  2  Ch.  074,  the  memorandum  of  a  comjtany  when 
brought  to  the  registrar  was  ol)jected  to  I)y  iu'm  as  l)eing  too  wide  in  its 


71 


INTRODUCTORY   NOTES. 

terms,  whereupon  the  bearer,  then  and  there,  without  any  communication 
with  the  persons  who  had  signed  it,  made  alterations  to  remove  the 
objections  of  the  registrar,  who  at  once  registered  it  in  the  altered  form. 
It  was  held,  nevertheless,  that  the  certificate  of  registration  haNing  been 
issued,  section  13  of  the  Act  applied,  and  that  no  person  could  be  allowed 
to  go  back  and  enter  intcj  an  examination  of  the  circumstances  attending 
the  original  registration. 

So,  also,  in  the  Kasmu  PhospJudr.  Co.^  2  Ch.   Div.  (WO,  an  order  infant 
had  been  made  to  wind  up  the  comjiany,  and  it  was  subsequently  dis-  subscriber. 
covered  that  one  of  the  seven  subscribers  to  the  memorandmn  was  an 
infant.     It  was  held,  nevertheless,  that  the  winding-up  order  was  valid, 
since  the  certificate  of  registration  which  had  been  issued  precluded  any 
question. 

As  to  how  far  the  conditions  contained  in  the  memorandum  of  asso-  :\[o(lifie<ation 

ciatiou  of  a  company  may  be  modified,  see  section  12  of  the  Act,  and  °^  (^ontlitions 
.    .  ,^       ,      .         ,,  contained  m 

rnfra,  "  Resolutions.  memorandum. 

As  to  the  effect  of  subscribing  the  memorandum  of  association  :     By  Effect  of 

section  23  of  the  Act  it  is  provided  that  :—  subscribing 

^  memorandum. 

"  The  subscribers  of  the  memorandum  of  association  of  any  company  under 
this  Act  shall  be  deemed  to  have  agreed  to  become  members  of  the  company 
whose  memorandum  they  have  subscribed,  and  upon  the  registration  of  the 
company  shall  be  entered  as  members  on  the  register  of  members  hereinafter 
mentioned ;  and  every  other  jierson  who  has  agreed  to  become  a  member  of  a 
company  under  this  Act,  and  whose  name  is  on  the  register  of  members,  shall 
be  deemed  to  be  a  member  of  the  company." 

Hence  a  subscriber  to  the  memorandum  is  indisputably  a  member  of 
the  company. 

In  a  company  limited  by  shares,  no  suljscriber  shall  take  less  than  one  Subscription 
share,  and  each  subscriber  shall  write  oi)posite  to  his  name  the  number  ""/^f^*''^^"*^ 

'  ^  ■■■  to  take  and 

of  shares  he  takes.     Section  S  of  the  Act.  pay  for  shares. 

The  subscriber  agrees  to  take  from  iho  companij  the  shares  set  oppo- 
site to  his  name,  and  to  jiay  for  them  in  money  or  money's  worth. 
Mignotii's  Case,  4  Eq.  2:)S.  The  fact  that  no  shares  have  ever  in  fact 
been  allotted  to  him,  and  that  his  name  has  never  been  put  on  the 
register,  will  not  relieve  him  ;  Fva/i's  Case,  2  Ch.  427,  unless  all  the 
shares  have  lieen  allotted  to  otlier  persons.  Macklei/s  Case,  1  Ch. 
Div.  247. 

As  to  what  is  payment  in  money's  worth,  see  DrummomVs  Case,  4  Ch. 
772  ;  PeWs  Case,  8  Eq.  222,  and  5  Ch.  11  ;  Jones'  Case,  (i  Ch.  48  ; 
Baglan  Hall  Co.,  T)  Ch.  34G. 

A  clause  in  the   articles   that   shares  subscribed  for  in   the  memo-  Clause  in 

randum  shall  be  deemed  to   l)e   fully  paid  up  is  ineffectual.      DenCs  reiievrsub-"° 

Case,  8   Ch.   67(1;    Crkhnier's  Case,   10  Ch.    G14  ;    Firmstone's  Ti'^se,  •'^criber  from 

20  Eq.  525.  "^''^^'^'^^■- 

The  shares  will  be  liable  to  payment  in  cash  unless  otherwise  provided  As  to  contract 

fii  1  f 

by  a  contract  in  writing,  filed  pursuant  to  the  25th  section  of  the  Act  of  to^Section"*5 

18G7.     See  supra,  p.  11.  of  the  Act 

of  I8t)7. 


72 


MEMOEANDA    OF    ASSOCIATION. 


Shares  must 
be  paid  in 
cash  unless 
contract  tiled 
before  issue. 


When  sliares 
"are  issued." 

Contract  made 
before  incor- 
poration suffi- 
cient if  filed. 

Whether 
intending 
vendor  should 
subscribe. 


Member 
entitled  to 
cojiy  of 
memorandum 
and  articles. 


By  sulj.st  ribing  the  memorandnm,  a  contract  is  made  to  pay  for  the 
shares  in  cash,  and  the  effect  of  section  25  is,  "  tliat  the  liahihty  to  ]iay 
in  cash  cannot  he  altered  at  all  l)y  snhscqnent  agTecment  and  arrange- 
ment with  the  directors  ;  it  can  only  he  effected  by  a  written  agTcement, 
which  written  agreement  mnst  be  entered  into  before  the  shares  are 
issned,  and  mnst  be  registered."  Per  Mellish,  L.  J.,  FoiherfiUVs  Case, 
8  C'h.  282  ;  Anderson's  Case,  7  Ch.  Div.  75. 

The  contract  must  idcntlfij  the  shares,  e.g.,  it  should  recite  the  fact  of 
the  subscription  or  intended  subscription  of  the  memorandum,  and  pro- 
vide that,  as  the  consideration  for  the  property  or  services  thereby  agreed 
to  be  sold  or  rendered,  the  shares  subscribed  for  shall  be  credited  with  so 
much  per  share  as  i)aid  up.  FolherijiW s  Case,  8  Ch.  270  ;  Coafs  Case, 
17  Eq.  ICD.     And  see  Form  14,  supra,  p.  ;52. 

As  to  what  is  meant  by  the  "  issue  "  of  the  shares,  see  supra,  p.  12. 

A  contract  made  on  behalf  of  the  company  before  its  incorporation  is 
a  sufficient  contract  within  section  25  of  the  Act  of  18(;7,  if  it  be 
adopted  and  acted  upon  by  the  company.     See  sajira,  p.  in. 

It  does  not  generally  seem  expedient,  where  a  preliminary  agreement 
is  made  for  the  sale  of  property  to  a  trustee  for  a  proposed  company, 
that  the  vejidor  should  subscribe  the  memorandum  for  the  numljer  of 
shares  which  are  to  l)e  allotted  to  him,  as  fully  paid  up,  pursuant  to  the 
contract  ;  for  there  is  always  the  possibility  that  the  company  will  not 
adopt  the  contract.  However,  in  many  cases,  e.g.,  in  the  case  of  private 
companies,  there  is  no  risk  of  this,  and  consequently  no  danger  in  sub- 
scribing. 

As  to  what  is  payment  in  cash,  see  S2ipra,  p.  12. 

The  memorandum  irrevocably  binds  a  subscril^er  thereof  to  take  the 
number  of  shares  set  opposite  his  name  from  the  company,  but  if  he 
subscribes  for  ja-eference  shares,  he  may  subsequently  agree  with  the 
company  to  take  ordinary  shares  instead,  for  as  regards  matters  not 
required  by  the  Act  to  be  stated  in  the  memorandum,  the  contract  con- 
tained in  it  is  revocable.  DiiJre's  Case,  1  Vh.  Div.  (i2o.  "Where  a  person 
subscribes  the  memorandum  for  shares,  no  allotment  is  required  to  render 
him  liable.  In  re  London  cj-  Provincial,  t|r.,  Co.,  5  Ch.  Div.  525.  By 
virtue  of  the  siibscription  he  is  entitled  to  the  shares. 

By  section  11)  of  the  Act  it  is  provided  as  follows  : — 

"  A  copy  of  the  memorandum  of  association,  having  annexed  thereto  the 
articles  of  association,  if  any,  shall  be  forwarded  to  any  member  at  his  request, 
on  payment  of  the  sum  of  one  shilling  or  such  less  sum  as  may  be  jH-escribed 
by  the  company  for  each  co^jy,  and  if  any  company  makes  default  in  forwarding 
a  copy  of  the  memorandum  of  association  and  articles  of  association,  if  any,  to 
a  member  in  jjursuance  of  this  section,  the  company  so  making  default  shall, 
for  each  offence,  incur  a  penalty  not  exceeding  11." 


Stamps  and 

fees. 


As  to  stamping  the  memorandum  of  association  : 
By  section  11  of  the  Act,  the  memorandum  is  required  to  bear  the 
same  stamp  as  if  it  were  a  deed,  i.e.,  a  105.  stamp. 

In  addition  to  this  it  must  before  registration  be  stamj)ed  with  com- 


INTEODUCTOEY   NOTES.  73 

panics  fee  stamps,  in  i-espcct  of  the  fees  payable  under  section  17  of  the 
Act.     See  siqyra,  p.  03. 

The  tables  of  fees  referred  to  in  section  17,  are  as  follou's  : — 


TABLE  B. 

Table  of  Fees  to  be  paid  to  the  Eegistrar  of  Joint-Stock  Companies  by  a 
company  having  a  capital  divided  into  shares. 

£    s.    d. 
For  registration  of  a  company  whose  nominal  capital  does  not  exceed 

2,0mi.,  a  fee  of 2    0    0 

For  registration  of  a  company  whose  nominal  capital  exceeds  2,000L, 
the  above  fee  of  21.,  with  the  following  additional  fees,  regulated 
according  to  the  amount  of  nominal  capital  (that  is  to  say)  : 

<£   s.   d. 
For  every  1,000?.    of  nominal  capital,  or   part  of 

l,000i.,  after  the  first  2,000?.,  up  to  o.OOOL    .         .10     0 
For  every    1,000?.  of  nominal  capital,  or   part  of 

1,000L,  after  the  first  5,000?.,  up  to  100,000?.         .050 
For   every   1,000?.    of   nominal  capital,  or  part   of 

1,000?.,  after  the  first  100,000? 0     10 

For  registration  of  any  increase  of  capital  made  after  the  first  regis- 
tration of  the  company,  the   same  fees  per   1,000?.,  or   part  of  a 
1,000?.,  as  would  have  been  payable  if  such  increased  capital  had 
formed  part  of  the  original  capital  at  the  time  of  registration. 
Provided  that  no  company  shall  be  liable  to  pay  in  respect  of  nominal 
capital  on  registration,  or  afterwards,  any  greater  amount  of  fees 
than  50?.,  taking  into  account  in  the  case  of  fees  payable  on  an 
increase  of  capital  after  registration  the  fees  paid  on  registration. 
For  registration  of  an  existing  company,  except  such  companies  as 
are  by   this    Act  exempted  from   payment  of   fees  in    respect  of 
registration  under  this  Act,  the  same  fee  as  is  charged  for  regis- 
tering a  new  company. 
For  registering  any  document  hereby  required  or  authorised  to  be 

registered,  other  than  the  memorandum  of  association      .         .         .050 
For  making  a  record  of  any  fact  hereby  authorised  or  required  to  be 
recorded  by  the  registrar  of  companies,  a  fee  of         .         .        .        .050 


TABLE  C. 

Table  of  Fees  to  be  paid  to  the  Eegistrar  of  Joint-stock  Companies  by  a 
company  not  having  a  capital  divided  into  shares. 

£  s.   d. 

For  registration  of  a  company  whose  number  of  members  as  stated  in 
the  articles  of  association  does  not  exceed  20     .         .         .         .         .200 

For  registration  of  a  company  whose  number  of  members,  as  stated 

in  the  articles  of  association,  exceeds  20,  but  does  not  exceed  100    .500 

For  registration  of  a  company  whose  number  of  members,  as  stated 
in  the  articles  of  association,  exceeds  100,  but  is  not  stated  to  be 
unlimited,  the  above  fee  of  5?.,  with  an  additional  5s.  for  every  50 
members  or  less  number  than  50  members  after  the  first  100. 

For  registration  of  a  company  in  which  the  number  of  members  is 

stated  in  the  articles  of  association  to  be  unlimited,  a  fee  of     .         .  20     0    0 

For  registration  of  any  increase  on  the  number  of  members  made 
after  the  registration  of  the  company  in  respect  of  every  50  mem- 
bers, or  less  than  50  members,  of  such  increase 0     5     0 


■74  MEMOEANDA    OF    ASSOCIATION. 

£     s.   d. 

Provided  that  no  one  company  shall  be  liable  to  pay  on  the  whole  a 
greater  fee  than  20?.  in  respect  of  its  number  of  members,  taking 
into  account  the  fee  paid  on  the  first  registration  of  the  company. 

For  registration  of  any  existing  company,  except  such  companies  as 
are  by  this  Act  exempted  from  payment  of  fees  in  respect  of  regis- 
tration under  this  Act,  the  same  fee  as  is  charged  for  registering  a 
new  company. 

For  registering  any  document  hereby  required  or  authorised  to  be  re- 
gistered, other  than  the  memorandum  of  association  .         .         .050 

For  making  a  record  of  any  fact  hereby  authorised  or  reqvured  to  be 

recorded  by  the  registrar  of  comimiiies,  a  fee  of        .         .        .        .050 


MEMOEANDA    OF    ASSOCIATION. 


Memorandum 
of  a  company, 
limited  by 
shares. 


The  Co.aipaxies  Acts,  1SG2  to  188:^.  Form  32. 

Companij  Limited  l)y  SJtares. 

Memoraudum  of  Association  of  the Co,  Limtd. 

1 .  The  name  of  the  eo  is  "  The Co,  Limtd." 

See  supra,  pp.  02,  Gi,  et  seq. 

2.  The  registered  oi!ice  of  the  co  will  be  situate  in  Enoland  [_or 
Scotland,  or  Ireland,  as  the  case  may  be]. 

See  supra,  p.  GG. 

3.  The  objects  for  which  the  co  is  established  arc  : — 
See  siqyra,  pp.  GO,  G7. 

(1.)  To,  &c.,  see  i/ifra,  "Objects,"  p.  89,  et  sefj. 

4.  The  lial)ility  of  the  members  is  limtd. 

See  supra,  pp.  G2,  G9. 

5.  The  capital  of  the  co  is /.,  divided  into shares  of J. 

each. 

See  supra,  p.  70.  Where  Table  A.  is  to  apply,  [infra,,  p.  Ill]  the  following' 
Tvords  should  he  added  to  this  clause  :  "  with  power  to  issue  any  shares  in  the 
original  or  in  any  new  capital  as  preference  shares." 

We,  the  several  persons  "whose  names  and  addresses  are  subscribed, 
arc  desirous  of  being  formed  into  a  co,  in  psuance  of  this  memorandum 
of  association,  and  we  respectively  agree  to  take  the  number  of  shares  in 
the  capital  of  the  co  set  opposite  our  respive  names. 


Names,  Addresses,  and  Description  of  Subscribers. 

Number  of  Shares  taken  liy 
eacii  Subscriber. 

1.  John  Jones,  of,  &c..  Merchant. 

2.  John  Smith,  of,  &c..  Landed  Proprietor. 
•3,  Thomas  Green,  of,  kc,  Grocer. 

4.  Henky  Thompson,  of,  &c.,  Commission  Agent. 

5.  Charles  Evans,  of,  &c.,  no  occupation. 

6.  William  Day,  of,  &c. ,  Surgeon. 

7.  Alfred  Jones,  of,  &c.,  Wine  Merchant. 

Total  Shares  taken 

Ten 

Ten 

Tliree 

Seven 

One 

One 

One 

Thirty-three. 

Dated  the  22iid  day  of  Jau.,  1884. 


76 


MEMOEANDA    OF    ASSOCIATION. 


Form  32.        AYitness  to  the  al)Ove  signatures, 
~  Samuel  Weller, 

10,  North  Street, 

Westminster. 

Or, 
Witness  to  the  above  signatures  of  John  Jones,  John  Smith,  William  Day, 
and  Alfred  Jones,  Samuel  Weller,  &c. 

Witness  to  the  above  signatures  of  Thomas  Green,  Henry  Thompson,  and 
Charles  Evans,  Martin  Clarke,  &c. 

Or, 
Witness  to  the  above  signatures  other  than  that  of  Thomas  Green, 

Samuel  Weller,  &c. 

Witness  to  the  above  signature  of  Thomas  Green, 

Martin  Clarke,  &c. 


Form  33. 

^Memorandum 
of  a  company, 
Hmited  by 
guarantee. 


The  Compaxies  Acts,  18G2  to  1883. 
Company  Limited  Inj  Guarantee. 
^lemonDidum  of  Association  of  the Co,  Limtd. 


1.  The  name  of  the  co  is  "  The 
See  suj)ra,  p.  63. 


Co,  Limtd." 


2.  The   registered   office  of  the  co  will  be  situate  in  England,  \or 
Scotland,  or  Ireland]. 
See  su'pro.,  p.  6G. 

o.  The  objects  for  which  the  co  is  established  are  : — 
(1.)  To,  &c.,  see  infra,  p.  89,  et  seq. 

4.  Every  member  of  the  co  undertakes  to  contribute  to  the  assets 
of  the  CO  in  the  event  of  the  same  being  wound  up  during  the  time 
that  he  is  a  meml)er,  or  within  one  year  afterwards,  for  payment  of  the 
debts  and  liabilities  of  the  co  contracted  before  the  time  at  which  he 
ceases  to  be  a  member,  and  the  costs,  charges,  and  expenses  of  winding- 
up  the  same,  and  for  the  adjustmt  of  the  rights  of  the  contribs 
amongst  themselves,  such  amount  as  may  be  required,  not  exceeding  10/. 
[See  supra,  p.  (!9.] 

We,  the  several  persons  whose  names  and  addresses  are  subscribed^ 
are  desirous  of  being  formed  into  a  co,  in  psuauce  of  this  memo- 
randum of  association. 

See  supra,  p.  70. 

Xnmes,  addresses,  and  descriptions  of  subscribers. 

Ut  supra,  p.  75.  And  if  there  is  a  share  capital,  state  the  number  of  shares 
taken  by  each  subscriber.     See  as  to  this,  svpi-a,  p.  7U. 

Dated  the day  of ,  1884. 

"Witness,  iV:c.,  see  siqua. 


FOEMS.  77 

The  IxcoTii'OPiATEi)  Law  Society.  Form  34. 

Memorandum  of  Assoc iai ion.  Jiemorandum 

•         •        mi  T  1  T  •         M  ''^  association 

1.  Ihc  name  of  the  society  is  "  Ihe Incorporated  Law  Society,    of  a  company, 

Ur,  "  The  Chamber  of  Commerce,"  or,  "  The i\redical  lusti-  ^i^^t^d  by  " 

'^'URrintGC    0.11(1 
tute."]      See  .s?//M-a,  p.  03,  ct  acq.  registered' 

2.  The  rei'-istered  office  of  the  society  \sinrra,  p.  <''<;1  pursuant  to 

"^  section  23  of 

3.  The  objects  for  which  the  society  \or.  Chamber,  or,  Institute,  &c.]  the  act  of 

is  established  are : — [See  infra,  p.  81,  107,  et  seqf\  l^^'^- 

4.  The  income  and  property  of  the  society,  Avhencesoever  derived, 
shall  be  applied  solely  towards  the  promotidii  of  tlie  objects  of  the 
society,  as  set  forth  in  this  memorandum  of  association,  and  no  ])ortion 
thereof  shall  be  pd  or  transferred,  directly  or  indirectly,  by  way  of 
dividend,  bonus,  or  otherwise  howsoever,  l)y  way  of  profit,  to  the  mem- 
bers of  the  society.  Provided  that  nothing  herein  coiitd  shall  pre- 
vent the  paymt,  in  good  faith,  of  remuneration  to  any  officers  or 
servants  of  the  society,  or  to  any  member  thereof,  or  other  person, 
in  return  for  any  services  actually  rendered  to  the  society. 

It  has  not  been  settled  -whether  this  clause  prevents  the  jjayment  of  interest 
on  money  borrowed  from  a  member.  The  first  paraofraph  of  the  clause  might 
reasonably  be  held  to  prohibit  only  a  payment  to  a  member  qxi^i  member,  but 
this  construction  would  render  the  proviso  superfluous.  In  order  to  oVjviate 
doubt  the  proviso  has,  in  several  cases,  with  the  sanction  of  the  Board  of  Trade 
been  modified  ;  e.g.,  by  the  addition  of  the  words  "  nor  prevent  the  paymt  of 
interest  at  a  rate  not  exceeding  5  p.  c.  p.  a.  on  money  bori'owed  from  any 
member  of  the  society,"  or  words  to  that  effect  {Banff  Town  and  County  Club, 
and  Worcester  Laiv  Society,  1SN2)  ;  or,  "  but  it  shall  nevei'theless  be  competent 
to  the  corporation  to  rej^ay  the  contributions  of  the  permanent  memVjers,  with 
interest  at  5  i).  c.  p.  a.,  and  also  to  remunerate"  {Corporation  of  Foreign  Bond- 
Ivolders) ;  "  or  be  deemed  to  exclude  any  member  of  the  association  from  the 
benefit  of  any  grant  made  in  furtherance  of  any  of  the  objects  of  the  associa- 
tion" {Incorporated  Free  <^*  Open  Church  Assoc,  1882). 

5.  The  fourth  paragraph  of  this  memorandum  is  a  condition  on  which 
a  licence  is  granted  ])y  the  Board  of  Trade  to  tlie  society,  in  pursuance 
of  section  23  of  The  Companies  Act,  I8(;7. 

r..  If  any  meml)er  of  the  society  pays  or  receives  any  dividend,  bonus, 
or  other  profit  in  contravention  of  the  fourth  paragraph  (»f  this  memo- 
randum, his  liability  shall  be  unlimited. 

7.  Every  memlier  of  the  society  undertakes  to  contribute  to  the  assets 
of  the  society,  in  the  event  of  the  same  l»eing  wound  up  during  the  time 
that  he  is  a  member,  or  within  one  year  afterwards,  for  payment  of  the 
debts  and  liabilities  of  the  society  contracted  before  the  time  at  which 
he  ceases  to  be  a  member,  and  of  the  costs,  charges,  and  expenses 
of  winding  up  the  same,  and  for  the  adjustmt  of  the  rights  of  the 
contribs  amongst  themselves,  such  amount  as  may  be  required,  not 
exceeding  five  pounds,  [or  ten  sJiillings,  or  vhaicvrr  ihe  amount  fi.red  on 
may  h(r\,  or  in  case  of  his  liability  becoming  unlimited,  such  other 
amount  as  may  be  required  in  psuauce  of  the  last  preceding  paragraph 
of  this  memorandum. 


78 


MEMOEANDA    OF    ASSOCIATION. 


Form  34. 


Section  23 
of  the  Act 
of  1867  fre- 
quently 
resorted  to. 


8.  If  upon  the  winding  up  or  dissolution  of  the  society  there  remains, 
after  the  satisfaction  of  all  its  debts  and  liabilities,  any  ppty  whatso- 
ever, the  same  shall  not  be  pd  to  or  distributed  among  the  members  of 
the  society,  but  shall  be  given  or  transferred  to  some  other  institution  or 
institutions  having  objects  similar  to  the  objects  of  the  society,  to  be 
determined  by  the  members  of  the  association  at  or  before  the  time  of 
dissolution,  and  in  default  thereof  by  such  judge  of  the  High  Ct  of 
Justice  as  may  have  or  acquire  jurisdiction  in  the  matter. 

9.  True  accounts  shall  be  kei)t  of  the  sums  of  money  received  and 
expended  by  the  association,  and  the  matter  in  respect  of  which  such 
receipt  and  expenditure  takes  place,  and  of  the  property,  credits,  and 
liabilities  of  the  association  ;  and,  subject  to  any  reasonable  restrictions 
as  to  the  time  and  manner  of  inspecting  the  same  that  may  be  imposed 
in  accordance  with  the  regulations  of  the  association  for  the  time  being, 
shall  be  open  to  the  inspection  of  the  members.  Once  at  least  in  every 
year  the  accounts  of  the  association  shall  be  examined,  and  the  correct- 
ness of  the  balance-sheet  ascertained  by  one  or  more  properly  quahfied 
auditor  or  auditors. 

We,  the  several  persons  whose  names  and  addresses  are  suljscribed, 
are  desirous  of  being  formed  into  a  society  in  psuance  of  this  memo- 
randum of  association. 

Names,  addresses,  and  descriptions  of  subscribers.  Date,  &c.,  as  in 
Form  70. 

Section  23  of  the  Act  of  18G7  provides  : — 

"  Where  any  association  is  about  to  be  formed  under  the  Act  of  18G2,  as  a 
limited  comi^any,  if  it  proves  to  the  Board  of  Trade  that  it  is  formed  solely  for 
the  pui'pose  of  promoting  commerce,  art,  science,  religion,  charity,  or  any  other 
tisefvil  object,  and  that  it  is  the  intention  of  siich  association  to  apply  the  pro- 
fits or  other  income  of  the  association  in  promoting  its  objects,  and  to  prohibit 
the  payment  of  any  dividend  to  the  members  of  the  association,  the  Board  of 
Trade  may,  by  licence,  under  the  hand  of  one  of  the  secretaries,  or  assistant- 
secretaries,  direct  such  association  to  be  registered  with  limited  liability,  with- 
out the  addition  of  the  word  limited  to  its  name,  and  such  association  may  be 
registered  accordingly,  and  upon  registration  shall  enjoy  all  the  privileges  and. 
be  subject  to  the  obligations  by  this  Act  imposed  on  limited  companies,  with 
the  exceptions  that  none  of  the  provisions  of  this  Act  that  require  a  limited 
company  to  iise  the  word  limited  as  any  j^art  of  its  name,  or  to  publish  its 
name,  or  to  send  a  list  of  its  members,  directors,  or  managers,  to  the  registrar, 
shall  apply  to  an  association  so  registered.  The  licence  of  the  Board  of  Trade 
may  be  granted  upon  such  conditions  and  subject  to  such  regulations  as  the 
Board  think  fit  to  impose,  and  such  conditions  and  regulations  shall  be  bind- 
ing on  the  association,  and  may,  at  the  option  of  the  Board,  be  inserted  in  the 
memorandum  and  articles  of  association,  or  in  both  or  one  of  such  documents." 

Section  23  has  proved  very  useful,  and  a  large  number  of  associations  have 
been  registered  under  it,  generally  as  companies  limited  by  guarantee,  e.g.,  law- 
societies,  chambers  of  commerce,  trade  protection  societies,  medical  societies, 
ap-ricultural  associations,  and  charitable  associations. 

For  a  list  of  some  of  the  associations  so  registered,  see  infra. 

An  association  desiring  to  be  incorporated  witli  limited  liability,  but  without 
the  word  limited  as  part  of  the  name,  and  for  that  pur^jose  to  obtain  a  licence 
from  the  Board  of  Trade  pursuant  to  s.  23  of  the  Act,  should,  according  to  the 
rules  now  in  force,  make  a  written  api^lication  to  the  Board  for  a  licence,  and 


FOEMS.  79 

toc^ether  -witli  such  ai^ijlication,  should  transmit  for  their  consideration  a  draft,     Form  34. 

in  duplicate,  of  the  proposed  memorandum  and  articles  of  association.     The 

drafts  and  any  subsequent  revisions  that  may  be  required  should,  whether  in 

print  or  manuscript,  be  on  foolscap-sized  pa^^er.     If  the  Board  of  Trade  are 

satisfied  that  the  application  should  be  entertained  they  will  furnish  a  notice 

of  siich  ajjplication,  to  be  inserted  in  a  local  newspaper  for  the  information  of 

the  public,  and  if  after  the  expiration  of  a  limited  time  there  appears  to  be  no 

sufficient  reason  why  the  licence  should  not  be  granted,  the  Board  of  Trade 

will  aj^prove  the   memorandum  and  articles  of  association,  with  or  without 

amendment,  and  grant  a  licence. 

The  Board  of  Trade  will  require  to  have  the  memorandum  and  articles  of 
association  settled  on  their  behalf  by  their  counsel,  at  the  expense  of  the  aijpli- 
cants,  for  which  purj^ose  a  fee  of  five  guineas  must  accompany  the  application. 
A  cheque  for  the  amount  should  be  made  payable  to  an  assistant  secretary  of  the 
Board  of  Trade.  The  Board  of  Trade  will  not  be  responsible  for  the  memorandum 
and  articles  being  properly  framed  as  regards  the  interests  of  the  association. 

The  Board  sanction  the  omission  of  the  word  "  company  "  in  the  memoran- 
dum and  articles,  and  the  substitution  of  the  word  chamber,  society,  corpora- 
tion, or  the  like. 

The  names  of  the  subscribers  to  the  memorandum  should  be  in  full,  the  ■ 
addresses  should  be  definite,  giving,  where  j)racticable,  the  name  of  the  street  i 
and  the  number  of  the  house. 

The  following  is  a  specimen  of  the  licence  issued  by  the  Board : — 

Whas  it  has  been  proved  to  the  Board  of  Trade  that  The Chamber   Form  34a. 

OF  Commerce,  which  is  aboiit  to  be  registered  under  the  Companies  Act,  1862, 
and  the  Companies  Act,  1867,  as  an  association  limtd  by  giiai'antee,  is  formed 
for  the  purpose  of  promoting  objects  of  the  nature  contemplated  by  the  23rd 
section  of  the  last-mentd  Act,  and  that  it  is  the  intention  of  the  said  cham- 
ber that  the  income  and  property  of  the  association,  whencesoever  derived, 
shall  be  applied  solely  towards  the  promotion  of  the  objects  of  the  association, 
as  set  forth  in  the  memorandum  of  association  of  the  said  chamber,  and  that  no 
portion  thereof  shall  be  pd  or  transferred,  directly  or  indirectly,  by  way  of 
dividend  or  bonus,  or  otherwise  howsoever,  by  way  of  profit  to  the  persons  who 
at  any  time  are,  or  have  been  members  of  the  said  association,-  or  to  any  of 
them,  or  to  any  person  claiming  through  any  of  them. 

Now,  therefore,  the  Board  of  Trade,  in  psuance  of  the  powers  in  them 
vested,  and  in  conson  of  the  provisions  and  subject  to  the  conditions  contd 
in  the  memorandum  of  association  of  the  said  chamber,  as  subscribed  by  eleven 
members  thereof  on  the  1th  day  of  June,  1875,  do  by  this  their  licence  direct  the 

Chamber  of  Commerce  to  be  registered  with  limtd  liability,  without  the 

addition  of  the  word  "  limited  "  to  its  name. 

Signed,  by  order  of  the  Board  of  Trade,  this day  of . 

HENRY  G.  CALCEAFT, 
An  Assistant  Secretary  of  the  Board  of  Trade. 

The  following  are  some  of  the  associations  which  have  been  incorj^orated 
with  a  licence  under  section  23  above  mentioned : — 

Associated    Chambers    of    Commerce,  City  and  Guilds  of  London  Institute 

1875.  for  the  Advancement  of  Technical 

Birmingham  Exchange,  1880.  Education,  1880. 

Birmingham        Medical        Institute,  Clifton  High  School  for  Girls,  1877. 

1874.  College  of  Organists,  1877. 

British  Dairy  Association,  1879.  Corporation  of  Foreign  Bondholders, 

British  Dental  Association,  1880.  1873. 

Cheltenham  Ladies'  College,  1880.  Dalrymple  Home  for  Inebriates,  1882. 

Church  of   England  General  Tempe-  Diirham,  &e.,  Botanical  and  Horticul- 

rance  Finance  Association,  1878.  tural  Society,  1881. 


80 


MEMORANDA    OF    ASSOCIAT.OX. 


Form  34a.    Glasgow  Institute  of  Fine  Arts,  1879. 

Glasgow  Mechanics'  Institute   1878. 

Halifax  Creditors'  Association,  1882. 
Home  Hospitals  Association  for  Paying 

Patients,  LS78. 
Huddersfield  Borough  Club,  1879. 
Huddersfield  Carlton  Club,  1875. 
Huddersfield    Cricket    and     Athletic 

Club,  1879. 
Incorporated  Council  of  Law  Eeport- 

ing,  1870. 
Incorijorated  Free  and  Open  Church 

Association,  1882. 
Institute  of  Chemistry  of  Great  Bri- 
tain and  Ireland,  1877. 
Institution  of  Mechanical  Engineers, 

1878. 
London      Chamber     of      Commerce, 

1881. 
Manchester  Coal  Exchange,  1882. 
Manchester  Girls'  High  School  Trust, 

1877. 
Metropolitan      Dairymen's      Society, 

187G. 
Mission  Home  for  English  Women  in 

Paris,  187G. 
National   Smoke  Abatement   Institu- 
tion, 1882. 


Newcastle-upon-Tyne  Junior  Liberal 
Club,  188U. 

Newnham  College,  1880. 

Palestine  Exploration  Fund,  1879. 

Parkes  Museum  of  Hygiene,  1882. 

Philological  Society,  1879. 

PhilosoiDhical  Society  of  Glasgow, 
1878. 

Physical  Society  of  London,  1878. 

Royal  Army  Coffee  Taverns  Associa- 
tion, 1881. 

Eoyal  School  of  Art  Needlework,  1878. 

Sacred  Harmonic  Society. 

Salisbury  Diocesan  Board  of  Finance, 
1882. 

ShefBeld  Incorporated  Society  of  Char- 
tered Accountants,  1882. 

Society  for  Promoting  the  Employ- 
ment of  Women,  1879. 

Teachers'  Training  and  Eegistration 
Society,  1878. 

Timber  Trades  Association,  1882. 

University  College,  Bristol,  1870. 

University  of  Durham  College  of  Me- 
dicine, 1877. 

Whitby  Institute  of  Popular  Arts, 
Sciences,  and  Literature,  1880. 

Yorkshire  College,  1878. 


In  many  cases  the  association  takes  over  the  rights  and  liabilities  of  some 
previously  existing  association. 

Besides  the  above,  various  Law  Societies,  Chambers  of  Commerce,  and  Trade 
Protection  Societies  might  be  mentioned. 

Where  an  association  is  about  to  be  established  for  any  charitable  or  other 
purpose  within  the  meaning  of  section  23  of  the  Act  of  18G7  (supra,  p.  78),  and  the 
power  to  pay  dividends  is  not  considered  essential,  it  will  be  found  very  advan- 
tageous to  obtain  a  licence  from  the  Board  of  Trade,  and  register  the  association 
vmder  that  section. 

The  advantage  of  so  doing  is  becoming  more  and  more  recognized,  and 
accordingly  applications  for  licences  to  register  under  section  23  are  increasing  in 
number. 

Associations  registered  under  that  section  are  generally  limited  by  gixarantee, 
and  accordingly  they  require  articles  of  association.  The  executive  is  generally 
called  "  The  Council  "  or  "  The  Committee  of  Management."  See  infra,  for 
articles  of  Law  Society. 

The  following  are  some  of  the  i-esulting  .advantages  :  The  association  becomes 
a  permanent  leg.al  entity,  .and  thereby  gains  stability  and  credit ;  the  property 
can  be  vested  in  .and  held  by  the  association  in  its  own  name,  and  thereby 
dealings  with  such  property  .are  much  facilitated  and  expense  as  to  tiiistees 
avoided ;  the  association  can  contract,  sue,  and  be  sued  in  its  own  name ;  the 
officers  can  act  without  incurring  any  personal  liaVjility. 

For  specimens  of  objects,  see  Form  111,  infra,  et  seq. 

The  notice  which  the  Board  of  Trade  requires  to  be  advertised  is  generjilly 
in  the  following  form  : 


Porm  34b.  Application  for  a  Licence  of  the  Board  of  Trade. 

Notice  is  hereby  given  th.at  in  psuance  of  the  23rd  section  of   the  Com- 
panies Act,  lf-G7,  .applicon  has  been  made  to  the  Board  of  Trade  for  .a  licence. 


FORMS.  81 

directing  an  association,  about  to  be  formed  under  the  name  of  The ,  to  be   Form  34b. 

registei'ed  with  limited  liability  without  the  addition  of  the  word  "  limited  "  to  

its  name. 

The  objects  for  which  the  association  is  established  are  :  [Jfere  they  are  stated^. 

Notice  is  hereby  further  pfiven  that  any  person,  company,  or  corpoi-ation  ob- 
jecting to  this  ajiplication  may  bring  such  objection  before  the  Board  of  Ti-ade, 

on  or  before  the day  of next  [about  a  month^,  by  a  letter  addressed  to 

the  Assistant   Secretary,  Eailway    Department,    Board   of   Trade,  Whitehall, 
London,  S.W.     Dated  this day  of . 

Section  21  of  the  Act  of  1862  provides  that : 

"  No  company  formed  for  the  purpose  of  promoting  art,  science,  religion.  Certain 
charity,  or  any  other  like  object,  not  involving  the  acquisition  of  gain  by  the  companies  not 
comijany  or  by  the  individual  members  thereof,  shall,  without  the  sanction  of    , 
the  Board  of  Trade,  hold  more  than  two  acres  of  land  ;  but  the  Board  of  Trade  ^cres  without 
may,  by  licence  under  the  hand  of  one  of  their  principal  secretaries  or  assistant  hcence. 
secretaries,  empower  any  such  company  to  hold  lands  in  such  qviantity  and 
subject  to  such  conditions  as  they  think  fit." 

Ajid  the  notion  aiJi^ears  to  prevail  that  all  companies  registered  under  s.  23 
of  the  Act  of  1SG7  are  within  this  enactment,  and  therefore  unable  to  hold 
more  than  two  acres  without  a  licence.  But  looking  to  the  decisions  (infra,  p.  91) 
as  to  the  meaning  of  the  words  "  involving  the  acquisition  of  gain,"  in  s.  4  of  the 
Act  of  18G2,  this  notion  does  not  appear  to  be  well  founded.  In  many  cases 
the  objects  of  the  association  do  involve  the  acquisition  of  gain  by  the  associa- 
tion if  not  by  the  members.  In  order  to  preclude  doubt,  the  Board  of  Trade 
sometimes  has  required  the  insertion  of  qualifying  words  in  the  objects.  (See 
infra,  Form  111,  cl.  9.) 


The  Companies  Acts,  18G2  and  1807.  Form  35. 

ilemorandum  of  Association  of  The Co.  .  Memorandnm 

.  01  unhniited 

1  The  name  of  the  co  is  "  Ihe  — —  Co.  company. 

2.  The  registered  office,  [sujira,  p.  75.] 

3.  The  objects  for  which  the  co  is  estabhshed  are  : — 

We,  the  several  persons  whose  names  and  addresses  are  subscribed,  are 
desirous  of  being-  formed  into  a  co  in  pursuance  of  this  memorandum 
of  association. 

Names,  addresses,  and  descriptions  of  subscribers. 

Dated  the day  of . 

Witness  [siqmi,  p.  7(5]. 


Common  Forms.  Form  36. 

For  use  in  connection  with  the  "  objects  clauses,"  given  infra,  p.  90,  d  seq. 

To  carry  on  any  other  businesses  which  may  seem  to  the  co  capable  of  ^x*]^*^'!"^  °" 
being  conveniently  carried  on  in  connection  with  the  above  or  calcu-  businesses. 

a 


82 


MEMOEANDA    OF    ASSOCIATION. 


Form  36.    latecl  directly  or  indirectly  to  enhance  the  value  of  or  render  profitable 
~~  any  of  the  co's  ppty  or  rights. 

The  above  is  frequently  adopted,  and  has  sometimes  been  found  very  useful. 


To  purchase 

other 

businesBes. 


Form  37.  To  acquire,  and  undertake  the  whole  or  any  pt  of  the  business,  ppty, 
and  liabilities  of  any  jjerson  or  co  carrying  on  any  business  which  this 
CO  is  authorised  to  carry  on,  or  possessed  of  ppty  suitable  for  the  pposes 
of  this  CO. 

The  above  ought  to  be  specified  among  the  objects,  if  the  company  is  intended 
to  have  the  power.  Ernest  v.  Nicholls,  G  H.  L.  401 ;  Lindley,  GOG.  Express 
mention  should  be  made  of  liabilities.  But  see  Overend,  Gui-ney  4'  Co.  v. 
Gibbs,  L.  E.  5  H.  L.  480,  as  to  what  is  sufficient. 


Form  38. 

To  enter  into 
partnership, 
take  sliares,  &c. 


To  enter  into  [partnership  or  into]  any  arrangement  for  sharing 
profits,  union  of  interests,  co-operation,  joint  adventure,  reciprocal  con- 
cession, or  otherwise,  with  any  person  or  co  carrying  on  or  engaged 
in  or  about  to  carry  on  or  engage  in  any  business  or  transaction 
which  this  co  is  authorised  to  carry  on  or  engage  in,  or  any  Inisi- 
ness  or  transaction  capable  of  being  conducted  so  as  directly  or  in- 
directly to  benefit  this  co.  And  [to  lend  money  to,  guarantee  the  con- 
tracts of  or  otherwise  assist  any  such  person  or  co,  and]  to  take  or 
otherwise  acquire  shares  and  securities  of  any  such  co,  and  to 
sell,  hold,  reissue,  with  or  without  guarantee,  or  otherwise  deal  with 
the  same. 

Very  clear  powers  are  necessary  to  enable  a  company  to  enter  into  partner- 
ship with  any  other  company  or  person,  or  to  take  shares  in  any  company. 
Ex  pcirte  British  Nation  Life  Assurance  Ass.,  8  Ch.  Div.  704.  The  powers  should 
be  expressly  conferred  by  the  memorandum  of  association,  though  the  power  to 
acquire  and  hold  shares  may  be  applied  from  the  natvire  of  the  company's 
business.  See  Royal  Bank  of  India's  Case,  4  Ch.  252,  and  see  Addenda.  It  was 
at  one  time  contended  that  it  was  illegal  for  one  company  to  take  shares  in 
another,  but  the  contrary  is  now  well  settled,  provided  the  memorandum  gives 
the  power.  Earned' s  Banking  Co.,  3  Ch.  105  ;  International  Contract  Company's 
Case,  W.  N.  1869,  24;  17  W.  E.  454;  In  re  Financial  Corporation,  28  W.  E.  760; 
W.  N.,  1880,  88. 

If  Clause  43,  infra,  is  used,  the  words  in  brackets  will  be  omitted ;  and  if 
Clause  57  is  also  used,  the  latter  part  of  the  above  clause  can  be  omitted. 


Form  39.        To  sell  the  undertaking  of  the  co  or  any  pt  thereof  for  such  conson 
^~^^  as  the  CO  may  think  fit,  and  iu  parlar  for  shares,  debentures,  or  securities 

undertaking,     of  any  other  CO  having  objects  altogether  or  in  pt  similar  to  those  of 
this  CO. 

A  clause  to  this  effect  is  not  uncommonly  inserted,  and  the  jsower  is  some- 
times found  useful.  •  Of  course  every  company  under  the  Act  of  1862  can  effect 
a  sale  of  its  undertaking  imder  s.  161  [infra,  "  Eeoonstruction  "],  but  only  by 
going  into  liquidation.  Circumstances,  however,  sometimes  arise  in  which  it 
is  more  beneficial  to  sell  without  winding  up,  especially  where  the  company  is 
in  difficulties,  or  where  the  number  of  dissentients  is  likely  to  be  considerable. 
If  the  sale  is  made  in  consideration  of  shares,  the  shares  can  be  held,  or 
sold,  but  they  cannot  in  general  be  distributed  except  in  a  winding  up.  See 
infra,  p.  159. 


FOEMS. 


83 


To  promote  any  other  co  for  the  ppose  of  acquiring  all  or  any  of   Form  40. 
the  ppty  and  liabilities  of  this  co  or  for  any  other  ppose  which  may  to  promote 
seem  directly  or  indirectly  calculated  to  benefit  this  co.  companies. 

Generally  to  pchase,  take  on  lease  or  in  exchange,  hire,  or  otherwise    Form  41. 
acquire,    any   real   and  personal   ppty,   and   any   rights,   or  privileges  m         j~ 
which  the  co  may  think  necessary  or  convenient  for  the  pposes  of    its  property,  &c. 
business  [and  in  parlar  any  land,  buildings,  easements,  machinery,  plant, 
and  stock-in-trade]. 

A  form  to  this  effect  is  generally  inserted.  Sometimes  the  words  in  brackets 
are  omitted  ;  but  it  is  usual  to  enumerate  a  number  of  items  whicli  the  company 
■will  be  likely  to  require. 

To   invest  and   deal    with   the    monies   of  the   co  not  immediately    Form  42. 
required  upon  such  securities  and  in  such  manner  as  may  from  time  to  I~7" 
time  be  determined. 

The  above  is  frequently  inserted,  though  probably  not  necessary  to  authorise 
an  interim  investment — e.  g.,  in  government  securities.  Sometimes  the  clause 
specifies  the  investments. 

To  receive  money  on  deposit  at  interest  or  otherwise,  and  to  lend    Form  43. 

money  [and  in  parlar]  to  customers  and  others  havino-  dealino-s  with  ^,        '. 

To  receive 
the  CO,  and  to  guarantee  the  performance  of   contracts  by  any  such  money  on 

persons.  deposit,  lend 

and  guarantee. 
The  above  is  commonly  used.     See  s.  -W  of  the  Act  as  to  dejiosit  companies. 
Where  power  to  lend  or  guarantee  is  desired,  it  should  be  expressly  taken,  unless 
the  other  objects  clearly  imply  it.    West  of  England  Bank  v.  Booker,  14:  C.  D.  317. 

To   raise   money   in   such   other  manner  as  the  co   shall  think   fit,    Form  44. 
and  in  parlar  by  the  issue  of  debentures,  or  debenture  stock,  perpetual  or  'ZTZ  : 

.  .  -,  '  r     1  rp^  borrow  and 

otherwise,   charged   upon   all   or  any  of   the  co's  ppty   (l)oth  present   mortgage,  &c. 
and  future)  including  its  uncalled  capital. 

The  above  is  now  very  commonly  inserted.  In  most  cases  it  is  unnecessary, 
for  a  power  to  borrow  is  readily  implied.  Bryon  v.  Metrojiolitan,  ^c.  Omnibus 
Co.,  3  D.  G.  &  J.  123  ;  G  W.  E.  817  ;  In  re  Marine  Mansions  Co.,  4  Eq.  601 ;  Ex  parte 
City  Bank,  3  Ch.  758.  "Where  a  company  has  power  to  borrow,  it  has  an  implied 
power  to  secure  the  repayment  of  borrowed  money  by  mortgage.  Australian, 
S(c.  Co.  V.  Mounsey,  4  K.  &  J.  733  ;  Bryon  v.  Metropolitan,  S^c.  Co.,  ubi  supra. 
Indeed  it  was  said  in  the  case  of  the  Patent  File  Co.  (6  Ch.  85),  by  Mellish,L.J., 
that  a  company  can  mortgage  unless  expressly  prohibited  from  doing  so.  See 
also  Gibbs'  and  West's  Case,  10  Eq.  212. 

As,  however,  the  objects  are  now  usually  stated  in  detail,  it  is  only  consistent 
expressly  to  invest  the  company  with  power  to  borrow  and  to  mortgage. 

As  to  mortgaging  uncalled  capital,  see  infra.  Debentures,  Introductory 
Note. 

To  remunerate  any  person  or  co  for  services  rendered,  in  placing  or    porm  45. 

assisting  to  place  any  of  the  shares  in  the  co's  capital,  or  any  deben- ■ 

,  ,,  ...         J..,  To  remunerate, 

tures  or  other  securities  or  the  co. 

This  clause  is  now  not  uncommonly  inserted,  as  companies  frequently  over- 

a  2 


84,  MEMOEANDA    OF    ASSOCIATION. 

Form  45.      step  the  limits  to  whioh  the  implied  j^ower  is  probably  subject.     See  Guiness  v. 
Land  Corp.,  22  C.  Div.  349. 


Form  46.        To  sell,  improve,  manage,  develop,  lease,  mto-e,  dispose  of,  turu  to 


To  sell  &e.       account,  or  otherwise  deal  with,  all  or  any  pt  of  the  ppty  of  the  co. 

This  is  almost  always  inserted,  and  expressly  invests  the  company  with  ample 
powers  of  dealing  with  its  property.     See  in  re  Patent  File  Co.,  6  Ch.  88. 

Form  47.  To  do  all  or  any  of  the  a)Jo^'e  things  [in  any  pt  of  the  world  and] 
rpp  j^gj  j^g  as  principals,   agents,   contractors,   trustees,    or   otherwise,  and  hy   or 

trustees,  &c.     through  trustees,  agents,  or  otherwise,  and  either  alone  or  in  conjunc- 
.  tion  with  others. 

The  above  is  frequently  inserted,  with  a  view  to  providing  for  contingencies. 

Form  48.  To  do  all  such  other  things  as  are  incidental  or  conducive  to  the 
General  words,  attainment  of  the  ahove  objects. 

As  to  this,  see  supra,  p.  G7,  et  seq. 

Form  49.  And  it  is  hby  declared  that  the  word  "  company "  in  this  clause. 
Interpretation  ^xcept  where  used  in  reference  to  this  co,  shall  be  deemed  to  in- 
clause.  elude  any  partnership  or  other  body  of  persons,  whether  corporated  or 

not  incorporated  [and  whether  domiciled  in  the  United  Kingdom  or 

elsewhere]. 

The  iise  of  a  clause  as  above  sometimes  conduces  to  brevity. 

Where  the  objects  are  variovis,  the  following  words  are  commonly  added, 
"and  so  that  the  objects  specified  in  each  paragraph  of  this  clause  shall, 
except  where  otherwise  exjaressed  in  such  paragraph,  be  in  nowise  limited  by 
reference  to  any  other  paragraph."  These  words  are  used  in  order  to  avert 
the  ejusdem  generis  construction  [^siipra,  p.  G8],  and  may  in  many  cases  be 
useful. 


ADDITIONAL    CLAUSES. 


For  occasional  use  in  connection  with  the  "  common  clauses,"  supra,  p.  81, 
et  seq. 

Form  50.        To  acquire  the  business  of  a now  carried  on  by  A.  at ,  and 

To  acf  uir  a     ^^^  '^vhole  or  any  of  the  real  and  personal  ppty  belonging  to  the  said  A. 
business.  in  connection  with  the  said  business,  and  to  undertake  all  or  any  of  the 

liabilities  of  the  said  A.  in  relation  to  such  business. 

Where  the  memorandum  contains  a  clause  as  above,  the  articles  generally 
contain  a  clause  as  in  Form  117,  cl.  3.  Sometimes,  however,  it  is  considered 
desirable  to  refer  to  the  preliminary  in  the  memorandum,  and  in  such  case  the 
words,  "  And  with  a  view  thereto,"  can  be  added  to  the  above  clause,  and  the 
clause  continued  as  in  Form  51  or  52. 

But  there  does  not  appear  to  be  any  particular  advantage  in  referring  to  the 
preliminary  agreement  in  the  memorandum,  excejit  Avhere  it  is  difficult  so  to 
express  the  objects  as  certainly  to  enable  the  company  to  carry  out  the  proposed 
agreement  without  any  question  of  ultra  vires. 


FORMS. 


85 


To  enter  into  and  carry  into  effect  (either  with  or  withont  niodifica-    Form  51. 
tion)  an  a^Teemt  which  has  already  been  prepared,  and  is  expressed  ^i      .     7~ 
to  be  made  between  [the  said]  A.  of  the  one  part,  and  the  co  of  the  a  contract. 
other  i)art,  a  copy  whereof  has  for  the   ppose  of  identification  been 
endorsed  with  the  signatures  [of  B.  C.  &  D.,  three]  of  the  subscril)ers 
hereto  [or  a  copy  whereof  is  set  forth  in  the  schedule  to  the  articles  of 
association  of  the  co]. 

Where  it  is  desired  to  mention  any  preliminary  agreement  in  the  memo- 
randum. Form  51  or  52  will  be  used,  according  as  Plan  I.  or  II.,  siqyra,  p.  1,  is 
adopted. 

To  adopt  and  carry  into  effect,  either  with  or  without  modification,    Form  52. 

an  agreemt  dated  the day  of ,  and  made  between   [the  sd]  ~    T~ 

A.  of  the  one  part  and  X.  on  behalf  of  this  co,  of  the  other  part,  a  copy  contract. 
Avhereof  [as  in  Form  51]. 

See  note  to  Plan  I.  supra,  p.  1. 

To  develop  and  turn  to  account  any  land  acquired  by  or  in  which  the    Form  53. 
CO  is  interested,  and  in  parlar  by  laying  out  and  preparing  the  same  ,j,^  ^^^  j^ 
for  building  pposes  ;   constructing,  altering,  pulling  down,  decorating,  land, 
maintaining,   fitting   up   and   improving   Imildings  and   con\eniences, 
and   by  planting,   paving,    draining,   farming,   cultivating,  letting  on 
building  lease  or  building  agreemt,  and   by  advancing  money  to  and 
entering   into   contracts   and   arrangemts   of   all  kinds  with   builders, 
tenants,  and  others. 

The  above  is  not  uncommonly  inserted  where  a  company  is  likely  to  have 
surplus  land. 

To   pchase   or   otherwise    acquire    any   patents,    brevets   iV invention.    Form  54. 
licences,  concessions  and  the  like,  conferring  any  exclusive  or  non-exchi-  ~         ;       ~ 

'        .  .  -IT  To  purchase 

sive  or  hmited  right  to  use  any  invention  which  may  seem  capable  of  patents. 
being  used  for  any  of  the  pposes  of  the  co,  or  the  acquisition  of  which 
may  seem  calculated  directly  or  indirectly  to  benefit  this  co,  and  to  use, 
exercise,  develop,  or  grant  licences  in  respect  of,  or  otherwise  turn  to 
account  the  ppty  and  rights  so  acquired. 

A  good  many  companies  insert  the  above,  especially  manufacturing  com- 
panies. 

To  enter  into  any  arrangemts  with  any  [governmts  or]  authorities    Form  55. 
[supreme],  municipal,  local,  or  otherwise,  that  may  seem  conducive  to  rpg  ^^^.^^^ 
the  co's  objects  or  any  of  them,  and  to  obtain  from  any  such  [governmt  arrangements 
or]  authority,  any  rights,  privileges,  and  concessions  which  the  co  may  Sties' " 
think  it  desirable  to  obtain,  and  to  carry  out,  exercise,  and  comply  with 
any  such  arrangemts,  rights,  privileges,  and  concessions. 

This  clause  is  frequently  used  with  more  or  less  modification. 


To  promote 
other  com- 
panies, &c. 


g  MEMORANDA    OF    ASSOCIATION. 

Form  56.  To  promote  any  other  co  for  the  ppose  of  acquiring  all  or  any  of 
the  ppty  and  liabilities  of  this  co,  or  of  advancing  directly  or  indirectly 
the  objects  or  interests  thereof,  and  to  take,  or  otherwise  acquire,  and 
hold  shares  in  any  such  co,  and  to  guarantee  the  paymt  of  any 
debentures  or  other  securities  issued  by  any  such  co. 

The  above  form,  with  more  or  less  variation,  is  frequently  used.  It  is 
obvious  that  if  the  company  is  to  have  such  power,  it  must  in  general  be 
expressly  conferred.  Where  the  objects  of  a  discount  company  were,  among 
other  things,  stated  to  be  "  the  making  and  procuring  loans  on,  and  the  invest- 
ing in,  securities,"  it  was  held  that  the  company  had  no  power  to  assist  in 
floating  another  company  by  taking  shares  therein.  Joint  Stock  Discount  Com- 
pany V.  Brown,  8  Eq.  381.  See  also  International  Contract  Company's  Case, 
W.  N.  1869,  24 ;  17  W.  R,  454. 


Form  57.        To  take,  or  otherwise  acquire,  and  hold  shares  in  any  other  co  having 
m  .  V    xT      objects  altogether  or  in  part  similar  to  those  of  this  co,  or  carrying  on 
any  business  capable  of  being  conducted  so  as  directly  or  indirectly  to 
benefit  this  co. 


in  other 
companies, 


See  note  to  Form  38. 
Form  40. 


This  form  is  sometimes  used  in  conjunction  with 


Form  58. 

Foreign 
registration. 


To  procure  the  co  to  be  registered  or  recognised  in  any  foreign 
country  or  place  [or  in and  elsewhere  abroad]. 

Where  a  company  intends  to  carry  on  business  abroad  the  above  is  some- 
times inserted.  See  also  Clause  55,  which  is  more  commonly  used  ;  but  if  a 
company  is  expressly  authorised  to  carry  on  business  abroad,  it  would  seem 
that  to  procure  registration  or  recognition  would  clearly  be  "incidental  or 
conducive." 

As  to  the  position  of  a  company  which  carries  on  business  in  a  foreign  country, 
see  Lindley,  1484 ;  Westlake,  294  ;  Bateman  v.  Lewin,  6  Ap.  Cas.  387. 


Form  59. 

To  construct 
works. 


To  construct,  improve,  maintain,  work,  manage,  carry  out,  or  control 
any  roads,  ways,  tramways,  railways,  branches  or  sidings,  reservoirs, 
watercourses,  wharves,  manufactories,  warehouses,  electric  works,  shops, 
stores,  and  other  works  and  conveniences  which  may  seem  calculated 
directly  or  indirectly  to  advance  the  co's  interests,  and  contribute  to, 
subsidise,  or  otherwise  assist  or  take  part  in  any  such  operations. 

This  is  very  often  inserted  with  appropriate  modifications. 

Form  60.        To  make,  accept,  indorse,  and  execute,  promissory  notes,  bills  of  ex- 
change, and  other  negotiable  instrumts. 

A  company  cannot  issue  negotiable  instruments  unless  it  has  an  express  or 
implied  power  given  to  it  by  the  memorandum.  An  implied  power  arises  where 
the  business  of  the  company  is  one  which  cannot,  in  its  ordinary  course,  be 
carried  on  without  the  issue  of  such  instruments,  or  where  upon  a  fair  con- 
struction of  the  memorandum  the  power  appears  incidental  or  conducive  to  the 
objects.     In  re  Peruvian  Raihvays  Co.,  2  Ch.  023. 

The  power  to  accept  and  issue  bills  and  other  negotiable  instruments  is  one 
with  which  it  is  generally  desired  to  endow  a  company,  and  where  the  desire 


To  accept 
bills,  &c. 


FORMS.  87 

exists,  it  is  exi^edient  to  provide  accordingly  in  the  memorandum,  at  any  rate     Form  60. 

where  the  company  is  not  formed  for  purposes  which  necessarily  imply   the ■ 

power. 

The  following-  are  cases  in  which  it  has  been  held  that  companies  had  no 
such  power.  Bramah  v.  Roberts,  3  Bing.  N.  C.  9G3,  which  was  a  case  of  a  gas 
company  ;  Dickenson  v.  Valpy,  10  B.  &  C.  128,  in  the  case  of  a  mining  company ; 
Steele  v.  Harmer,  14  M.  &  W.  831,  in  the  case  of  a  cemetei-y  company ;  Bull  v. 
Morrell,  12  Ad.  &  E.  745,  in  the  case  of  a  salt  and  alkali  comj^any  ;  Thompson  v. 
Universal  Salvage  Co.,  1  Ex.  G94,  in  the  case  of  a  salvage  company ;  Bateman  v. 
Mid-Wales  Railway  Co.,  L.  R.  1  C.  P.  499,  in  the  case  of  a  railway  company. 

To  coustruct,  maintain,  and  alter  any  buildings,  or  works,  necessary    Form  61. 
or  convenient  for  the  pposes  of  the  CO.  ZT     •, , 

This  is  very  commonly  inserted.  It  is  modified,  more  or  less,  to  suit  different 
companies.     See  also  Form  59. 

To  amalgamate  with  any  other  co  having  objects  altogether  or  in  part    Form  62. 

similar  to  those  of  this  co.  ";     ,       7. 

Amalgamation. 

"Amalgamation"  is  not  uncommonly  made  one  of  the  objects,  but  it  is  by 
no  means  clear  what  the  clause  authorises.  " To  amalgamate" probably  autho- 
rises a  company  to  acquire  the  business  and  liabilities  of  another  company. 
See  Pulbrook  v.  New  Civil  Service  Co.,  26  W.  R.  11 ;  Era  Case,  30  L.  J.  Ch.  137  ; 
32  L.  J.  Ch.  207 ;  but  where  it  is  desired  to  confer  this  power,  it  seems  better 
to  do  so  in  express  terms.  See  Form  37.  To  "amalgamate"  would  also 
aTpiiear  probably  to  authorise  a  sale  of  the  company's  business  in  consideration 
of  shares  in  the  purchasing  company.  Dougan's  Case,  8  Ch.  545  ;  Pulbrook  v. 
New  Civil  Service  Co.,  ubi  supra ;  Wynne's  Case,  8  Ch.  1007  ;  Re  Financial  Corp., 
28  W.  K.  7G0.  But  it  is  far  better  to  give  this  form  in  express  terms,  as  in 
Form  39. 

To  distribute  any  of  the  ppty  of  the  co  among  the  members  in  specie.      Form  63. 


This  clause  is  not  uncommonly  inserted,  and  may  be  found  convenient.  In  To  divide 
the  absence  of  such  a  clause,  either  in  the  memorandum  or  articles,  it  is  con-  ^^^®*^  ^^ 
ceived  that  a  majority  has  no  power  as  against  a  dissentient  minority  to 
authorise  a  distribution  of  assets,  e.g.,  shares  in  some  other  company,  in 
specie,  either  under  the  Act  of  1877,  or  in  a  winding  iip.  However,  the  Court 
might  perhaps  in  a  winding  up,  even  in  the  absence  of  a  clause  as  above, 
authorise  a  distribution  in  specie.  Thus  in  March  v.  Martin,  which  was  in 
effect  an  action  for  winding  up  an  unregistered  association  called  the  Municipal 
Trust,  Malins,  V.-C.  (10  June,  1880),  sanctioned  a  sheme  for  the  division  of 
the  assets  in  specie.  The  assets  consisted  of  municipal  bonds  and  uncollected 
coupons. 

The  Liquidation  Act,  1868  (31  &  32  Vict.  c.  68),  only  applied  where  winding-up 
proceedings  were  pending  at  the  passing  of  the  Act. 

Where  the  above  clause  is  inserted,  the  articles  of  association  generally  con- 
tain further  provisions  as  to  distribution.  It  would  seem  that  a  provision  in 
the  articles  is  sufficient. 

To  obtain  any  provisional  order  of  the  Board  of  Trade  or  Act  of    Form  64. 

Parliament  for  enabling  the  co  to  carry  any  of  its  objects  into  effect. 

'^  J        J  J  To  obtain 

Such  a   clause  is    commonly  inserted  in  the    case   of   water,    gas,    electric  Pi°''^'oniil 
light,  tramway,  and  fishery  companies.    Sometimes  the  words  "or  for  effecting 
any  modification  in  the  company's  constitution  "  are  added. 


8!S 


MEMOEANDA    OF    ASSOCIATION. 


Form  65.        jf  tliouglit  fit  to  obtain  any  Act  of  Parliamt  dissolving  the  co  and 
To  obtain         reincoi'poratiiig  its  members  as  a  new  co  for  any  of  the  oljjects  specified 

Act  of  lucor-    ill  this  meinorandum,  or  for  effcctino;  any  other  modification  in  the  co's 
yoration.  .,      .  o        j 

constitution. 

A  company,  like  any  other  subject,  may  without  special  authority  apply  to 
Parliament  for  any  purpose ;  but  the  funds  of  a  company  cannot  be  used  for 
the  piu'pose  of  obtaining  a  parliamentary  modification  of  its  constitution  unless 
the  memorandum  gives  the  requisite  authority.  Lindley,  628  ;  Ware  v.  Grand, 
Junction  Waterworks  Co.,  2  K..  &  M.  170 ;  Mathias  v.  Berks  Canal  Co.,  W.  N. 
187G,  p.  91 ;  Caledonian  Co.  v.  Solway,  32  W.  E.  101.  Hence  the  importance  of 
inserting  a  clause  as  above  when  an  apj^lication  is  at  all  probable. 

It  is  by  no  means  uncommon,  where  it  is  desired  to  procure  the  incorporation 
of  a  company  by  Special  Act,  for  the  promoters,  in  the  first  instance  to  form 
themselves  into  a  company,  under  the  Act  of  18G2,  for  the  desired  objects  ;  and 
also  for  the  express  purpose  of  applying  to  Parliament  for  an  Act,  dissolving, 
the  company  so  formed,  and  estaVjlishing  in  its  place  another  company  for  the 
like  objects,  but  regulated  by  the  "  Companies  Clauses  Consolidation  Act,  1845,' 
and  the  Acts  amending  the  same.  The  advantages  of  this  mode  of  procedure 
are  considerable.  If  promoters  are  not  incorj^orated,  there  is  room  for  much 
dispute  and  litigation  as  to  their  rights  and  liabilities  inter  se,  especially  if  the 
application  to  Parliament  is  abortive ;  but  if  they  are  incori)orated,  the  articles 
of  association,  and,  if  necessary,  specific  agreements  made  with  the  preliminary 
company,  determine  all  these  matters. 

Again,  a  company  incorjjorated  by  Act  of  Parliament,  is  not  bound  by  con- 
tracts made  before  its  incorporation  by  its  promoters,  unless  the  Act  confirms 
the  agreements.  But  if  the  promoters  have  formed  themselves  into  a  prelimi- 
nary company,  such  company  can  enter  into  all  necessary  contracts,  e.g.,  to 
purchase  land,  to  pay  compensation,  to  engage  officers,  and  so  forth,  and  all 
these  contracts  will  become  binding  on  the  Parliamentary  company,  because 
clauses  are  always  inserted  in  an  Act  which  dissolves  one  company  and  estab- 
lishes another  in  its  place,  transferring  the  contracts  and  liabilities  of  the 
former  to  the  latter. 

The  directors  of  the  preliminary  company  will  be  given  full  powers  to  take 
all  necessary  proceedings,  and  the  company  can  of  coiu-se  from  time  to  time 
alter,  vary,  and  control  their  powers  and  proceedings.  For  epitome  of  such  an 
Act,  see  infra. 

This  course  is  not  uncommonly  adopted  when  it  is  desired  to  vest  the  under- 
taking of  an  established  company  in  a  new  company,  and  the  transaction 
requires  the  authority  of  Parliament. 


Form  66. 

To  acquire  the 
company's 
own  shares. 


To  pchase  or  otherwise  acquire  on  such  terms  and  in  such  manner  as 
the  regulations  of  the  co  from  time  to  time  provide,  any  shares  in  the 
co's  capital. 

Such  a  clause  is  sometimes  inserted,  and  from  some  of  the  rejjorted  cases  it 
would  seem  to  have  been  considered  that  a  company,  if  authorized  by  its  memo- 
randum, might  exercise  the  power  without  the  sanction  of  the  Court.  Zulueta's 
Claim,  5  Ch.  Ill ;  Land  Credit  Co.  v.  Lord  Fermoy,  8  Eq.  7  ;  5  Ch.  7G3. 

Nevertheless  there  is  grave  reason  to  doubt  wTiether  this  is  so  in  the  case  of 
a  company  limited  by  shares. 

It  has  been  repeatedly  laid  down  [see  infra,  note  at  end  of  Form  117],  that  a 
company  cannot  return  or  pay  off  capital  without  the  sanction  of  the  Court. 
Flit  croft's  case,  21  C.  Div.  519  ;  Re  Alexandra  Palace,  ibid,  119;  Guiness  v.  Land 
Coriwration  of  Ireland,  22  C.  Div.  319  ;  and  though  the  last  mentioned  case  has 
left  open  the  question  whether  express  authority  in  the  memorandum  would 


POEMS. 


89 


abrogate  the  rule,  there  seems  every  probability  the  question  will  eventually     Form  66. 
be  answered  in  the  negative. 

Having  regard  to  the  Companies  Act,  1877,  whereby  power  was  for  the  fii'st 
time  given  "to  pay  off  capital  in  excess  of  the  company's  wants,"  it  seems  clear 
that  the  legislature  conceived  that  before  that  Act  there  was  no  such  power ; 
and  this  circumstance  furnishes  a  legislative  interpretation  of  the  prior  Acts 
which  is  clearly  admissible.  Maxwell,  23.  And  see  Crum  v.  Oakbank  Co.,  8  Ap. 
Cas.  tjo,  where  Lord  Selborne,  L.C.,  said,  in  reference  to  another  section  :  "The 
fact  that  the  legislature  thought  it  necessary  in  18(>7,  five  years  after  the 
original  Act,  to  declare  it  expressly,  and  to  make  that  power  dependent  upon 
authority  to  be  found  in  the  company's  regvilations,  either  as  originally  made 
or  as  altered,  is,  to  say  the  least,  decisive  against  the  suppositions  which  your 
lordships  ai"e  asked  by  the  appellants'  counsel  to  make  as  to  the  Act  of  18G2.  . 
.  .  .  The  appellants  say  that  under  this  Act  of  1862  they  can  do  the  very 
thing  which  in  1SG7  it  was  thought  necessary  to  give  express  power  to  do." 

"  Indeed,  looking  to  the  Act  40  &  41  Vict.  c.  26  [the  Act  of  1877],  it  clearly 
is  against  the  intention  of  the  legislature  that  any  jjortion  of  the  capital 
should  be  returned  to  the  shareholders  without  the  statutory  conditions  being 
complied  with."  Per  Jessel,  M.E.,  Flitcroft's  case,  21  C.  Div.  53.3.  Re  Dronfield, 
17  C.  Div.  76,  appears  scarcely  consistent  with  this  view,  but  there  would  have 
been  an  appeal  if  the  funds  had  not  run  short. 

It  should  be  box-ne  in  mind  that  where  a  company  seeks  a  quotation  for  its 
shares  on  the  London  Stock  Exchange,  its  regulations  must  prohibit  the 
l)urchase  of  its  own  shares.     See  infra  at  end  of  "  Prospectuses." 

Directors  who  make  an  ultra  vires  purchase  of  shares  are  liable  to  make  good 
the  amount.     [See  Orders,  infra,  and  note  at  p.  168.] 


[.4  clause  of  Jouljtful  validifi/.^ 

During  a  period  not  exceeding years  to  apply  a  competent  pt    Form  67. 

of  the  capital  in  paying  interest  on  the  paid-up  capital  for  the  time  77     '     TT 
being  at  a  rate  not  exceeding  5  p.  c.  p.  a.  capital. 

Within  the  last  few  years  several  companies  have  taken  express  power  to  pay 
interest  during  construction  of  works  or  otherwise  on  capital.  The  power  is 
generally  veiled  as  far  as  possible,  and  is  commonly  found  at  the  end  of  a 
clause. 

Whether  such  a  power  is  valid  has  yet  to  be  decided,  but  it  would  seem  that 
it  is  not.  It  is  clear  that  in  the  absence  of  power  in  the  memorandum  the 
payment  would  be  illegal.  See  Re  Alexandra  Palace  Co.,  and  Guiness  v.  Land  Cor- 
jaoration  of  Ireland,  ubi  supra.  And  these  cases  go  far  to  show  that  its  presence 
would  not  make  the  payment  legal.     [See  further,  note  at  p.  168,  infra. ^ 

To  undertake  and  execute  any  trusts  the  undertaking  whereof  may    Form  68. 
seem  desiraljle,  and  eitlier  gratuitously  or  otherwise.  TrTact^as 

Where  the  undertaking  of  trusts  is  contemplated,  power  should  be  taken, 
unless  Form  47  is  used  and  is  considered  sufficient. 


trustee. 


Objects  Clauses. 

1,  To  carry  on  the  business  of  life  assurance  in  all  its  branches,  and  in    Form  69. 
parlar  to  grant  or  effect  assm-ances  of  all  kinds  for  paymt  of  money  Life~assurance 
by  way  of  a  single  paymt  or  by  several  paymts,  or  by  way  of  im-  and  accident. 
mediate  or  deferred  annuities  upon  the  death  of  or  upon  the  attaining 
a  given  age  l)y  any  person  or  persons  subject  or  not  to  such  death  or 


90  MEMORANDA    OF    ASSOCIATION. 

Form  69.  attainmt  of  a  given  age  happening  in  the  hfetime  of  any  other  person  or 
persons,  or  upon  the  birth  or  failure  of  issue  or  subject  to  or  upon  the 
happening  of  any  contingency  or  event  dependent  upon  human  hfe,  or 
upon  a  fixed  or  certain  date  irrespective  of  any  such  event  or  contin- 
gency. 

2.  To  grant  annuities,  immediate  or  deferred,  payable  between  any 
fixed  dates,  or  contingent  as  to  their  commencement  or  determination 
upon  any  event  dependent  upon  human  life  or  the  birth  or  failure  of 
issue  or  otherwise. 

?>.  To  carry  on  the  business  of  insurance  against  personal  injuries 
by  accident  either  in  connection  with  life  policies  or  otherwise. 

4.  To  carry  on  the  business  of  insurance  against  loss  of  health 
or  incapacity  from  physical  causes  of  any  description  either  alone 
or  in  combination  with  life  assurance. 

5.  To  pchase  and  deal  in  reversionary  interests,  absolute  or  con- 
tingent, and  estates  for  life,  whether  determinable  or  not,  in  land  or  any 
description  of  real  or  personal  ppty,  including  copyhold,  lifeholds,  and 
leaseholds  in  England  or  elsewhere,  and  to  acquire  or  extinguish  by 
purchase  or  surrender  any  policy  or  grant  issued  by  the  co. 

C.  To  create  or  set  aside  out  of  the  capital  or  revenue  of  the  co  a 
special  fund  or  special  funds,  and  to  give  to  any  class  of  its  policy- 
holders, annuitants,  or  creditors  any  iireferential  right  over  any  fund 
or  funds  so  created,  and  for  such  or  any  other  pposes  of  the  co  to 
place  any  portion  of  the  co's  ppty  in  the  names  or  within  the  control  of 
any  one  or  more  trustee  or  trustees,  or  to  give  to  any  class  of  insurers 
a  right  to  participate  in  the  profits  of  tlie  co  or  of  any  branch  of  its 
business. 

7.  To  re-insure  all  or  any  of  the  risks  of  the  co,  and  to  undertake 
any  authorised  risks,  either  direct  or  by  way  of  re-insurance. 

S.  To  lend  money  on  such  terms  as  may  seem  expedient. 

[Add  Forms  37  to  42,  and  44  io  49 ;  also  (50,  61,  and  68.] 

If  the  company  is  to  be  for  life  insurance  only,  clauses  3  and  4  will  be  omitted ; 
but  it  seems  expedient  in  most  cases  to  take  power  to  carry  on  accident,  gua- 
rantee, and  other  branches,  though  the  company  may  not  intend  at  once  to 
exercise  the  powers. 

Before  a  company,  intending  to  issue  policies  of  assurance,  or  to  grant 
annuities  upon  human  life,  within  the  United  Kingdom,  can  be  incorporated 
under  the  Act  of  1862,  a  deposit  of  20,000L  must  be  paid  into  Court.  See  33  & 
34  Vict.  c.  01 ;  34  &  35  Vict.  c.  58 ;  and  35  &  36  Vict.  c.  41.  See  also  Buckley, 
et  seq.,  where  also  will  be  found  the  rules  of  the  Board  of  Trade.  Owing  to 
these  salutary  enactments,  comparatively  few  life  assurance  companies  are  now 
formed.  Where  the  20,000L  cannot  be  found  before  the  formation  of  the  com- 
pany, the  prospectus  can  be  advertised  as  of  an  intended  company,  and  it  can 
state  that  the  amount  will  be  dejiosited  in  due  course.  As  to  a  colonial 
company,  see  Re  Colonial  Mutual,  30  W.  K.  458. 

Form  70.        !•  '^^  insure  ships,  vessels,  boats,  and  craft  of  every  description,  and 

~ — : engines,  tackle,  gear,  equipment,  stores,  freight,  earnings,  profit,  cargo, 

insurance.        '^"^^^  other  matters  and  things,  against  loss  or  injury  by  or  through  perils 


FORMS.  91 

of  the  sea,  fire,  men-of-war  reprisals,  and  all  other  perils,  accidents,  and    Form  70. 
risks,  now  or  at  any  time  hereafter  commonly  undertaken   l)y  marine 
insurers  or  underwriters;   and  generally  to  carry  on  the   business   of 
marine  insurance  in   all   its   branches,   with   full   power   to   effect  re- 
insurances and  counter-insurances  as  may  seem  expedient. 
[Add  Forms  32  to  45,  ami  r^S,  GO,  a/id  (jl.] 

1.  To  insure  upon  the  mutual  principle  against  every  description  of    Form  71. 
marine  risk  which  may  be  lawfully  undertaken,  ships,  vessels,  and  craft  ^^^^^^i  gijjp 
of  all  kinds,  in  which  the  members  of  the  co  are  interested  as  owners,  insurance 
managing-owners,  mtgees,  agents  or  otherwise.  company. 

2.  To  pchase,  take  on  lease,  hire,  or  otherwise  acquire,  any  real  or 
personal  ppty  necessary  or  convenient  for  the  pposes  of  the  co. 

[Add  Forms  42,  GO,  61,  48,  49.] 

It  was  formerly  thought  that  mutual  insurance  societies  were  not  to  be  con- 
sidered as  formed  with  a  view  to  gain,  so  as  to  require,  if  consisting  of  more 
than  twenty  members,  to  be  registered  under  the  Act  of  1862.  See  s.  4  of  the 
Act.  Buckley,  p.  2  ;  Arnould  on  Marine  Insurance,  5th  ed.,  vol.  I.,  p.  152.  But 
in  Ex  parte  Hargrove  i^"  Co.,  10  Ch.  542,  Jessel,  M.E.,  decided  that  a  mutual 
insurance  society  was  within  s.  4  of  the  Act,  and  not  having  been  registered, 
was  an  illegal  association.  Since  this  decision,  several  hundred  mutual 
insurance  societies  have  been  registered.  Their  objects,  for  the  most  part,  are 
the  insurance  of  vessels  or  freight.  In  most  cases  only  a  particular  class  of 
vessels  is  insured,  e.  g.,  iron  steamships,  or  vessels  of  not  less  than  1000  tons 
burden,  or  vessels  engaged  in  a  particular  trade,  e.  g.,  coal  trade. 

In  most  cases  these  companies  are  limited  by  guarantee,  but  a  considerable 
number  are  registered  as  unlimited  companies.  The  articles  require  very 
careful  treatment,  as  many  of  the  forms  in  common  use  are  full  of  ambiguities, 
and  frequently  lead  to  dispute.     See  Marine  Mutual  v.  Young,  43  L.  T.  443. 

For  other  cases  of  illegal  associations,  see  Padstow  Total  Loss,  20  C.  Div.  137 
(mutual  marine)  ;  Wigjield  v.  Potter,  45  L.  T.  G12  (land)  ;  Jennings  v.  Hammond, 
9  Q.  B.  D.  225  ;  Shaw  v.  Benson,  11  Q.  B.  D.  563  (loan).  As  to  loan  clubs,  see 
Form  97.  As  to  legal  though  unregistered  concerns,  see  Smith  v.  Anderson, 
15  C.  Div.  247 ;  and  Shaw  v.  Simmons,  12  Q.  B.  D.  117  ;  and  Crowther  v.  Thorley, 
32  W.  E.  330. 

1.  To  cany  on  in  England  and  elsewhere  the  business  of  a  fire,  acci-    Form  72. 
dent,  guarantee,  and  general   insurance   co,  and   insurance  in    all  its  —         ] 
brandies   (excepting   life   assurance),  and   in   parlar  to  guarantee  the  ^.^^i 'o'uarautee. 
fidelity  of  persons  in  situations  of  trust  and  the  due  performance  of 

any  duty,  contract,  or  obligation  by  any  person  or  persons,  to  indemnify 
persons  who  are  or  may  become  sureties  for  others,  to  grant  or  effect 
assurances  against  or  upon  the  contingency  of  death,  injury,  damage  or 
loss  by  reason  of  accidents  of  any  description  to  human  beings,  and 
to  grant  or  effect  insurances  against  or  upon  the  contingency  of  injury, 
damage,  or  loss  by  reason  of  accidents  of  any  description  to  real  or 
personal  ppty  of  any  kind. 

2.  To  grant  assurances  against  loss  of  or  injury  to  personal  luggage 
or  effects  of  any  person  or  persons  travelling  by  any  train,  ship,  steamer, 
boat,  or  otherwise. 

3.  To  grant  assurances  against  loss  of  or  damage  to  parcels,  goods, 
and  merchandise  in  transit  by  land  or  sea. 


92 


MEMOEANDA    OF    ASSOCIATION. 


Form  72.  4.  To  g-raiit  insurances  against  or  upon  the  contingency  of  injury, 
damage,  or  loss  occurring  to  real  and  personal  p])ty,  including  growinc^ 
and  standing  crops,  rolling  stock,  and  all  other  fixed  and  moveable 
chattels,  caused  by  or  resulting  from  fire,  lightning,  explosions,  tempests, 
or  the  OA'crflow  or  inundation  of  water,  or  from  any  other  accidental 
cause. 

5.  To  grant  insurances  to  protect  principals  and  employers,  and 
otherwise  to  indemnify  principals  or  employers  from  or  against  injuiy, 
damage,  or  loss  by  reason  of  the  fraud,  theft,  robbery,  or  other  miscon- 
duct of  persons  in  their  eni|)loy,  or  acting  on  their  behalf,  and  to  grant, 
make,  effect,  or  procure  insurances  to  protect  principals  and  employers, 
and  otherwise  to  indemnify  principals  and  employers  from  or  against 
liability  by  reason  of  injury,  damage,  or  loss  occurring  to  or  caused  by 
agents,  servants,  or  other  employes  in  their  employ  or  acting  on  their 
behalf. 

G.  To  carry  on  any  other  businesses  (except  life  assurance)  which  can 
be  conveniently  carried  on  in  connection  with  the  above. 

lAdd  Forms  ?,!  to  49 ;  also  GO  and  Gl.] 


Form  73. 

(iuarantee 
company. 


1.  To  carry  on  the  business  of  a  guarantee  co  in  all  its  branches,  and, 
in  parlar,  to  issue  policies  guaranteeing  the  fidelity  of  persons  filling- 
or  al)out  to  fill  situations  of  trust  or  confidence,  and  to  guarantee  the 
l)ayment  of  rents,  and  the  performance  of  contracts  of  all  kinds. 

2.  Form-  72,  d.  G.     [Add  Forms  36  to  49.] 


Form  74. 

Bank. 


1.  To  establish  and  carry  on  the  business  of  a  bank,  whereof  the  head 
■  office  or  place  of  business  shall  be  in  London,  with  such  branches  or 

agencies  as  may  from  time  to  time  be  determined. 

2.  To  cany  on  the  business  of  l)anking  in  all  its  branches,  and,  in 
parlar,  to  lend  money  with  or  without  security,  and  to  discount  and 
deal  in  bills  of  exchange,  promissory  notes,  drafts  and  negotiable  instru- 
ments, and  in  bullion,  specie,  and  coin,  and  to  receive  money  and 
valuables  on  deposit  or  for  safe  custody,  and  to  transact  any  agency 
business  connnonly  transacted  by  bankers. 

3.  To  hold,  maintain,  improve,  and  deal  as  may  seem  expedient  with 
any  ppty  which  the  co  may  become  entitled  to  by  foreclosure  or 
otherwise,  and  for  the  purpose  of  better  realising  any  security,  to 
pchase  the  equity  of  redemption  of,  or  any  share  or  other  interest  in  any 
ppty  upon  which  or  upon  any  interest  in  which  the  co  may  have  a 
charge. 

[Add  Forms  37  /<?  41,  and  44  fo  48,  and  45,  G5,  (18.] 

Where  a  bank  is  to  carry  on  business  in  any  colony  or  elsewhere  abroad, 
much  wider  powers  are  generally  taken,  so  that  it  may  carry  on  financial 
operations  of  all  kinds. 


Form  75.        1.  To  negotiate  loans  and  to  lend  money. 
Financial.  -•  '^^^  indorse,  discount,  buy,  sell,  and  deal  in  bills  of  exchange,  pro- 


FORMS. 


93 


niissory  notes,  bonds,  debentures,  coupons,  and  other  negotiable  instru-    Form  75. 
ments  and  securities. 

S.  To  issue  on  commission,  subscribe  for,  take,  acquire,  and  hold,  sell, 
exchange  and  deal  in  shares,  stocks,  bonds,  obligations,  or  securities 
of  any  governnit  authority  or  co.  (4)  To  form,  promote,  sul)- 
sidize,  and  assist  cos,  syndicates,  and  partnerships  of  all  kinds. 
(5)  To  give  any  guarantee  for  the  paymt  of  money  or  the  perform- 
ance of  any  obligation  or  undertaking.  (G)  To  undertake  and  execute 
liny  trusts.  (7)  To  ac(piire,  improve,  manage,  work,  develop,  exercise 
all  rights  in  respect  of,  lease,  mtge,  sell,  dispose  of,  turn  to  account, 
and  otherwise  deal  with,  ppty  of  all  kinds,  and  in  parlar,  land, 
buildings,    concessions,  patents,  business   cctncerns    and   undertakings. 

(8)  To  enter  into  any  an'angemts  with  any  authorities  [^siqjra,  p.  80]. 

(9)  Generally  to  , carry  on  and  undertake  any  business,  undertaking, 
transaction,  or  operation  commonly  carried  on  or  undertaken  by  bankers, 
capitalists,  promoters,  financiers,  concessionaires,  contractors  for  public 
and  other  works,  merchants,  and  any  other  businesses,  &c.  [_as  in  Form 

[Add  Forms  47,  G4,  55,  58,  05,  G8.] 

See  also  4  Ch.  460  for  objects  of  financial  company,  and  17  W.  E.  454. 

Within  the  last  few  years  a  great  many  private  companies  have  been  formed 
for  financial  objects.  In  many  cases  these  companies  are  formed  by  persons 
who  desire  to  promote  public  companies,  or  even  a  single  public  company.  Such 
companies  are  taking  the  place  of  syndicates,  and  can  promote  much  more 
effectually.  The  members  of  the  promoting  company  do  not  become  promoters 
of  the  promoted  company  ;  disclosure  is  facilitated  ;  dangers  are  avoided ;  and 
other  benefits  accrue  from  the  adoption  of  this  course. 

But  a  promoter  company  invist  of  course  act  fairly  and  honestly,  or  else  it 
will  be  liable  just  as  any  other  fraudulent  promoter ;  and  further,  if  jarofits 
are  fraudulently  made  by  a  promoter  comj)any,  and  divided  among  its  members 
with  the  knowledge  of  the  fraud,  they  will  be  liable  to  repay.  Moreover,  if 
the  company  by  its  directors,  or  other  agents,  acts  fraudulently,  such  agents 
will  be  liable  as  well  as  the  company,  for  "  all  persons  concerned  in  the  com- 
mission of  a  fraud  are  to  be  treated  as  princij^als  ;  no  party  can  be  jiermitted 
to  excuse  himself  on  the  ground  that  he  acted  as  agent  or  servant  of  another." 
Per  Lord  Westbury,  Culleii  v.  Thompson's  Trustees,  4  Macq.  124  ;  Weir  v.  Barnett, 
3  Ex.  Div.  248. 


1.  To  construct,  execute,  carry  out,  equip,  improve,  work,  develop,    Form  76. 
administer,  mana^'e  or  control,  in  [the  colony  of  and  elsewhere!,  ^.TT        ', 

'  ^  '  L  J  J'  I'liljlie  work 

public  works  and  conveniences  of  all  kinds,  which  expression  in  this  contractors, 
memorandum  includes  railways,  tramways,  docks,  harbours,  piers, 
wharves,  canals,  reservoirs,  embankmts,  irrigations,  reclamation,  im- 
provemt,  sewage,  drainage,  sanitary,  water,  gas,  electric  light,  tele- 
phonic, telegraphic,  and  power  supply,  works  and  hotels,  warehouses, 
markets  and  public  buildings,  and  all  other  works  or  conveniences  of 
public  utility.  (2)  To  apply  for,  pchase,  or  otherwise  acquire  any 
•contracts,  decrees,  and  concessions,  for  or  in  relation^ to  the  construction, 
execution,  carrying  out,  equipmt,  improvemt,  managemt,  adminis- 
tration, or   control  of  public  works  and  conveniences,  and  to  undei'- 


94 


MEMORANDA    OF    ASSOCIATION. 


Form  76.  take,  execute,  carry  out,  dispose  of,  or  otherwise  turn  to  account  the 
"  "  ~  same.  (3)  To  carry  on  the  Inisiness  of  miners,  metallurgists,  builders 
and  contractors,  engineers,  farmers,  graziers,  ship-owners,  ship-builders, 
merchants,  importers  and  exporters,  and  to  buy,  sell,  and  deal  in  ppty  of 
all  kinds,  and  to  carry  on  any  other  businesses,  manufacturing  or  other- 
wise, which  the  co  may  think  calculated  directly  or  indirectly  to  advance 
its  interests.  (4)  To  pchase  or  otherwise  acquire,  issue,  re-issue,  sell, 
place,  and  deal  in  shares,  stocks,  bonds,  debentures  and  securities  of  all 
kinds,  and  to  give  any  guarantee  or  security  for  the  paymt  of  divi- 
dends or  interest  thereon  or  otherwise  in  relation  thereto.  (5)  To 
negotiate  loans,  to  lend  money,  securities,  and  other  ppty,  to  dis- 
count bills  and  securities,  to  become  sureties  and  guarantors  for  any 
pposes,  and  generally  to  carry  on  business  as  capitalists,  financiers, 
bankers,  and  merchants,  and  any  other  businesses,  &c.  \_Form  37 J. 
[Add  Forms  37,  38,  39,  40,  45  to  49  ;  also  Forms  55,  58,  G5,  (18.] 


Form  77. 

Colonial  loan 
agency  and 
investment 
company. 


(1)  To  invest  money  at  interest  on  the  security  of  fi'eehold  and  lease- 
hold land,  stock,  stations,  wool,  cattle,  shares,  securities,  merchandise, 

and  other  ppty  in  the  colony  of or  elsewhere,  and  generally  to  lend 

and  advance  money  to  such  persons  and  upon  such  terms  and  subject  to 
such  conditions  as  may  seem  expedient.  (2)  To  buy,  sell,  improve, 
manage,  lease,  turn  to  account,  dispose  of,  and  deal  in  land,  stock, 
stations,  wool,  cattle,  shares,  securities,  merchandise,  and  other  ppty  in 
the  sd  colony  and  elsewhere  [on  the  security  of  which  any  advances 
shall  have  been  made  by  the  co] ;  and  as  regards  land,  to  develop  the 
resources  thereof  by  clearing,  draining,  road-making,  farming,  grazing, 
planting,  building  or  improving,  mining,  settling  and  constructing 
public  works  and  conveniences.  (3)  To  construct,  execute,  carry  out, 
equip,  improve,  work,  administer,  manage,  or  control  railways,  tram- 
ways, \_&c.,  as  in  Form  7G],  markets,  parks,  churches,  chapels,  libraries, 
hospitals,  baths,  shops,  stores,  and  public  and  private  works  of  all  kinds 
in  New  Zealand  and  elsewhere  which  may  seem  calculated  directly  or 
indirectly  to  enhance  the  value  of  any  ppty  in  which  the  co  is  interested, 
and  generally  to  carry  on  any  businesses,  manufacturing  or  otherwise, 
which  can  be  conveniently  carried  on  in  connection  with  any  of  the  co's 
objects.  (4)  To  establish  and  subsidize  any  institutions,  associations, 
clubs,  and  convcuiences  for  the  benefit  of  the  co's  employes,  and  of  any 
tenants  or  other  persons  in  whose  welfare  the  co  is  interested,  and  to 
provide  for  their  religious,  sanitary,  and  educational  welfare,  and  to 
grant  money  for  these  pposes  or  any  of  them.  (5)  To  act  as  agents  for 
the  investmt,  loan,  paymt,  transmission,  and  collection  of  money,  and  for 
the  pchase,  sale,  and  improvemt,  developmt,  and  mauagemt  of  ppty,  in- 
cluding business  concerns  and  undertakings,  and  generally  to  transact 
and  undertake  all  kinds  of  agency  business,  whether  in  respect  of  agri- 
cultural, commercial,  or  financial  matters.  (G)  To  subscribe  for,  issue 
on   commission  or  otherwise,  and   deal   in   mtges,   bonds,   obligations. 


FOEMS.  95 

securities,  and  other  invcstmts,  and  in  parlar  those  charged  on  or  other-  ^orm  77. 
wise  in  connection  with  land  in  the  sd  colony.  (7)  To  give  any 
guarantee  in  relation  to  nitges,  loans,  investmts,  and  securities,  whether 
made  or  effected  or  acquired  through  the  co's  agency  or  otherwise,  and 
generally  to  guarantee  or  become  sureties  for  the  performance  of  any 
contracts  and  obligations.  (S)  To  receive  money  on  deposit  at  interest 
or  otherwise,  and  to  make,  draw,  accept,  indorse,  issue,  discount,  and 
otherwise  deal  with  promissory  notes,  bills  of  exchange,  letters  of  credit, 
circular  notes,  and  other  mercantile  instrumts.  (9)  [Generally  to 
undertake  and  transact  any  of  the  business  of  bankers,  merchants, 
capitalists,  and  financiers  which  may  seem  conducive  to  any  of  these 
objects.]  (10)  To  act  as  trustees  for  the  holders  of  or  otherwise  in 
relation  to  any  debentures,  bonds,  or  debenture  stock  issued  or  to  be 
issued  by  any  co,  and  generally  to  undertake  and  execute  any  trusts  the 
undertaking  whereof  may  seem  calculated  directly  or  indirectly  to  benefit 
this  CO. 

[Add  Forms  37  to  49  ;  also  Forms  55,  58,  65.] 

Sometimes  the  words  in  brackets  in  CI.  (2)  are  omitted  or  altered  to  "  on  the 
security  of  which  the  company  shall  have  power  to  make  advances."  And  in 
using  Form  49,  the  words,  "  and  so  that  the  word  property  herein  shall  be 
deemed  to  be  used  in  its  most  extensive  sense,"  may  be  inserted. 

Many  colonial  and  foreign  loan  and  investment  companies  have  been  esta- 
blished and  worked  with  great  success  during  the  last  ten  years.  Their  objects  vary 
considerably,  some  not  taking  power  to  huj  and  deal  in  land  [sitjn-a.  Clauses  2, 
3,  4],  but  merely  to  lend,  and  act  as  agents.  A  large  part  (say  80  per  cent.) 
of  capital  is  generally  left  uncalled,  and  ample  funds  are  raised  on  debentures. 
The  credit  of  some  of  these  companies  is  so  good,  that  they  are  able  to  raise 
lai-ge  sums  of  money  on  perpetual  debentures  [infra.  Form  220],  at  4  per  cent. 
per  annum,  and  the  dividends  paid  are  usually  very  large. 

(1)  To   raise  money  by  the  issue  of   shares,  debentures,  debenture    porm  78. 
stock,  bonds,  and  other  securities,  and  to  invest  the  monies  so  raised  or  ~T7~       ; 

,  .         ,  ...  „    ^        ■  1         •      ri.       British  and 

any  pt  thereot  m  the  acquisition  of  any  of  the  investmts  hereinaiter  foreign  imest- 
specified.  (2)  To  pchase,  take,  or  otherwise  acquire,  and  hold  any  n^ent. 
bonds,  stocks,  obligations,  and  securities  of  any  governmts,  states, 
dominions,  sovereigns,  or  authorities,  supreme,  municipal,  local  or  other- 
wise, and  any  bonds,  debenture  stocks,  scrip  obligations,  shares,  stocks, 
or  securities  of  any  cos  established  for  the  pposes  of  any  railway,  tram- 
way, gas,  water,  dock,  telegraph,  or  other  undertaking  of  public  utility. 
(3)  To  sell,  exchange,  and  dispose  of  any  investmts  of  the  co,  and  to 
vary  the  investmts  of  the  co  as  may  seem  expedient.  (4)  To  make  ad- 
vances upon,  hold  in  trust,  issue,  buy,  sell,  or  otherwise  acquire  or  dis- 
pose of  on  commission  or  otherwise,  any  such  in\'estmts  as  afsd,  and  to 
act  as  agent  for  any  of  the  above  or  the  like  pposes.  (5)  To  take, 
make,  execute,  enter  into,  commence,  carry  on,  prosecute,  and  defend  all 
steps,  contracts,  agreemts,  negotiations,  legal  and  other  proceedings, 
compromises,  arrangemts,  and  schemes,  and  to  do  all  other  acts, 
matters,  and  things  which  sliall  at  any  time  appear  conducive  or  ex- 


96 


MEMOEANDA    OF    ASSOCIATION. 


Form  78.  pedient  for  the  protection  of  the  co  as  liolders  of  or  interested  in  any 
such  investmts,  or  for  obtaining  pajmt  of  the  monies  payalile  in  respect 
thereof. 

[AfM  Forms  45  to  49  ;  (/ho  Forms  55,  58,  and  G5.] 

Investment  companies  as  above  are  not  uncommon,  and  have  been  found 
very  attractive.  In  many  cases  they  are  confined  to  investments  of  a  special 
class,  e.  g.,  foreign  and  colonial  government,  municipal,  railway,  telegraph,  &c. 
The  capital  is  generally  raised  by  the  issue  of  fully  paid-up  shares ;  and  not 
uncommonly  the  shares  are  in  two  classes — preference,  carrying,  say,  a  fixed 
preferential  dividend,  at  5  per  cent,  per  annum,  and  ordinary,  taking  the 
surplus  profits.  The  principal  objects  of  such  companies  is  "  to  enable  persons 
who  choose  to  invest  their  money  in  this  way  to  avail  themselves .  of  that 
Avhich  I  believe  to  be  one  of  the  most  certain  things  in  the  world,  viz.,  what 
is  called  the  doctrine  of  average — that  is  to  say,  that  if  a  large  number  of 
different  independent  securities  of  a  hazardous  description  are  held  together, 
the  loss  upon  some  will  be  compensated  by  the  gain  upon  others,  so  that  a 
tolerably  imiform  average  rate  of  interest  will  be  maintained."  Per  James,  L.J., 
Smith  V.  Anderson,  15  C.  Div.  270. 

Form  79.        (1)  To  carry  on  [at ,  and  elsewhere,  in  the  county  of  ],  the 

luisiness  of  an  electric  light  co  in  all  its  branches,  and  in  parlar  to  con- 
struct, lay  down,  establish,  fix,  and  carry  out  all  necessary  cables,  wires, 
lines,  accumulators,  lamps  and  works,  and  to  generate,  accumulate,  dis- 
tribute and  supply  electricity,  and  to  light  cities,  towns,  streets,  docks, 
markets,  theatres,  buildings,  and  places  both  public  and  private.  (2) 
To  carry  on  the  business  of  electricians,  mechanical  engineers,  suppliers 
of  electricity  for  the  pposes  of  light,  heat,  motive  power,  or  otherwise, 
and  manufacturers  and  dealers  in  all  a]iparatus  and  things  required  for 
or  capable  of  being  used  in  connection  with  the  generative  distribution, 
supply,  accumulation,  and  employmt  of  electricity.  [Add  Forms  30  to 
4f)  ;  also  Forms  53,  54,  55,  58,  59,  64,  Go,  68.] 

See  the  Electric  Lighting  Act,  1882,  45  &  46  Vict.  c.  56,  as  to  provisional 
orders. 


Electric  hglit. 


Form  80. 

Electric 

apparatus 

manufacturers. 


Form  81. 

Waterworks 
company. 


To  carry  on  the  business  of  manufacturers  of,  and  to  Iwy,  sell,  hire,  let 
and  deal  in  dynamos,  lamps,  wire  cables,  insulating  materials,  accumu- 
lators, telephones  and  other  apparatus,  materials  and  things  required 
or  capable  of  being  used  in  connection  with  the  generation,  distribution, 
supply,  accumulation  and  employmt  of  electricity,  and  generally  to 
carry  on  the  Ijusmess  of  electricians  and  mechanical  engineers  in  all 
these  branches. 

[Add  Forms  as  m  Form  79.] 

1.  To  su]ii»ly  the  town  of  ,  in   the  county  of  ,  and   the 

neighbourhood  thereof,  with  water,  and  to  carry  on  the  business  of  a 
waterworks  co  in  all  its  branches. 

•1.  To  sink  wells  and  shafts,  and  to  make,  build,  and  construct,  lay 
down,  and  maintain  reservoirs,  waterworks,  cisterns,  culverts,  filter-beds, 
main  and  other  pipes  and  appliances,  and  to  execute  and  do  all  other 
works  and  things  necessary  or  convenient  for  obtaining,  storing,  selling. 


FOEMS.  97 

delivering,   measuriiiir,  and   distribntint,'   water,  or   otlierwiso   for   the    Form  81. 
pposes  of  the  co. 

[Add  Forms  37  io  41),  5;],  r)4,  Hf),  and  58,  as  in  Form  70.] 

(1)  To  construct  and  establish  at a  dock  with  patent  and  other    Form  82. 

slips,  workshops,  buildinfjs,  machinery,  warehouses,  and  other  conve-  ^^~^ 
niences.  (2)  To  cany  on  the  businesses  of  propi'ietors  of  docks,  wharves, 
jetties,  piers,  warehouses  and  stores,  and  of  shipowners,  shijvbuilders, 
shipwrij^-hts,  engineers,  dredgers,  tug-owners,  wharlingers,  warehousemen, 
connnission  agents,  merchants,  and  any  other  businesses  which  can  bo 
conveniently  carried  on  in  connection  with  the  abo\e. 

\_Add  Forms  as  in  Form  70.] 

1.  To  carry  on  all  or  any  f)f  the  following  businesses,  namely,  brewers,  Form  83. 
maltsters,  hop  merchants,  distillers,  wine  and  spirit  merchants,  licensed  lirewery 
victuallers,  manufacturers  of  and  dealers  in  aerated  and  mineral  waters, 
hotel  keepers,  and  any  other  Imsine.sses  which  can  be  conveniently 
carried  on  liy  tlie  co  in  connection  with  the  above  or  any  of  them.  2. 
To  buy,  sell,  and  deal  in  tobacco,  tea,  coffee,  and  any  other  commodities 
connnonly  sold  by  licensed  victuallers,  or  which  may  be  rcfiuired  by  any 
persons  dealing  -^^ith  the  co. 

[Add  Fortiis  as  in  Form  70.] 

To  carry  on  all  or  any  of  the  businesses  following,  namely,  cotton    Form  84. 
spinners  and  doublers,  flax,  hemp,  and  jute  spinners,  linen  manufacturers,  Cotton 
flax,  hemp,  jute,  and  wool  merchants,  wool  combers,  worsted  spinners,  spinners, 
woollen  spinners,  yarn  merchants,  worsted  stuff"  manufacturers,  bleachers 
and  dyers,  and  makers  of  vitriol,  bleaching,  and  dyeing  materials,  and  to 
])chase,  comb,  prepare,  spin,  dye,  and  deal   in  flax,  hemp,  jute,  wool, 
cotton,  silk,  and  other  fibrous  substances,  and  to  weave  or  otherwise 
manufacture,  buy  and  sell  and  deal  in  linen,  cloth,  and  other  goods  and 
fal)rics,  and  to  supply  jiower. 

[Add  Forms  as  in  Form  70.] 

(1).  To  carry  on  the  business  of  mechanical  engineers,  machine  and    Form  85. 


engineering  tool  makers,  boiler  makers,  iron  founders,  brass  founders.  Mechanical 
millwrights,  metal  workers,  steel  converters,  colliery  owners,  metallur-  engineers, 
gists,  and  manufacturing  chemists,  and  to  buy,  sell,  manufactm-e,  repair, 
convert,  let  on  hire,  and  deal  in  machineiy,  rolling  stock,  iron,  steel, 
metal  implements,  tools,  utensils,  and  conveniences  of  all  kinds,  and 
[Add  Forms  as  in  Form  70.] 

1.  To  acquire  all  or  any  of  the  following  letters  patent,  namely,  &c.        Form  86. 

2.  To  acquire  any  inventions  capable  of  being  used  for  any  of  the  patents, 
pposes  for  which  the  inventions  specified  in  such  letters  patent  can  be 

used,  and  to  acquire  any  letters  patent  or  concessions  of  an  analogous 
character  whether  British  or  Foreign,  granted  in  respect  of  any  such 
inventions. 

H 


98 


MEMORANDA    OF    ASSOCIATION. 


Form  86. 


Form  87. 

Hide,  skin, 
and  fat. 


Form  88. 

Sttitioners,  &c. 


Form  89. 

Newspaper 
proprietors. 


Form  90. 

Coffee  taverns. 


3.  To  acquire  licences  to  work  and  use  any  inventions  Avhicli  tlie 
CO  is  authorised  to  acquire. 

4.  To  work,  develop,  exercise,  and  jironiote  the  user  of  any  inventions 
in  which  the  co  is  interested,  whether  as  owner,  licensee  or  otherwise, 
and  in  parlar  l)y  carryin<j^  on  any  businesses  which  may  be  conducive 
thereto,  and  Ijy  granting  licences. 

[Add  Forms  ',',G  to  49,  ho,  r.f),  oS,  5!),  (JO,  (;8.] 

To  buy,  sell,  j^repare  for  market,  manipulate,  turn  to  account  and  deal 
"  in  hides,  skins,  fat,  tallow,  grease,  oft'al,  and  other  animal  products,  and 

to  establish  in  the  town  of a  market  for  the  pjjose  of  conducting 

sales,  and  to  carry  on  any  other.     \_Form  .3(5.] 

[Add  Forms  ;J(;,  41  to  ■iC,  48,  54.] 

A  good  many  companies  with  objects  as  above  have  been  established  in  dif- 
ferent parts  of  the  country.  The  reguh^tions  generally  provide  that  no  person 
ehall  be  a  member  unless  he  is  a  butcher  by  trade,  and  that  no  member  shall 
hold  more  than  a  specified  number  of  shares,  and  tliat  a  member  ceasing  to  be 
a  butcher  must  retire,  and  sometimes  that  the  surj^lus  i>rofits  shall  be  divided 
among  the  members  in  proportion  to  their  dealings  with  the  company,  Some 
of  these  companies  have  been  very  successful,  especially  where  all  the  local 
butchers  join. 

To  carry  on  the  businesses  of  stationers,  printers,  lithographers,  en- 
gravers, die  sinkers,  envelope  manufacturers,  bookbinders,  account  book 
manufacturers,  machine  rulers,  numerical  printers,  card  board  manufac- 
turers, railway  ticket  manufacturers,  dealers  in  parchment,  dealers  in 
stamps,  agents  for  the  paymt  of  stamp  and  other  duties,  booksellers, 
publishers,  paper  manufacturers,  and  dealers  in  the  materials  used  in  the 
manufacture  of  paper,  engineers,  cabinet  makers,  and  dealers  in  or 
manufacturers  of  any  other  articles  or  things  of  a  character  similar  or 
analogous  to  the  foregoing,  or  any  of  them,  or  connected  therewith. 

[Add  Forms  30  to  41),  54,  01,  05,  68.] 

To  establish,  print,  and  publish  a  newspaper  or  newspapers  in , 

and  to  carry  on  the  business  of  newspaper  proprietors,  printers,  pub- 
lishers, and  advertising  agents. 

[Add  Forms  30  to  40,  and  53,  54,  08.] 

Such  companies  are  by  no  means  uncommon.     The  Newspaper  Libel  and  Ee- 
gistration  Act,  1881  (44-  &  45  Vict.  c.  GO,  s.  IS),  declares  that  the  provisions  of 
the  Act  as  to  the  registration  of  newspaper  proprietors  are  not  to  apply  to 
joint  stock  company  registei-ed  under  the  Act  of  1802. 

A  company  may  be  liable  to  an  action  for  a  libel.  Whitfield  v.  South  Eastern 
By.  Co.,  E.  B.  &  E.  115  ;  and  see  Edwards  v.  Midland  Ry.,  G  Q.  B.  D.  289, 703. 

1.  To  establish  at  coffee  taverns,  and  to  carry  on  there    the 

business  of  refreshmt-house  keepers,  upon  the  principle  that  no  intoxi- 
cating liquors  shall  be  sold  by  the  co,  and  to  provide  and  work  upon 
the  same  principle,  refreshmt-stalls,  carts,  and  barrows. 

2.  To  establish  libraries,  reading-rooms,  and  other  conveniences,  and 
to  provide  for  the  recreation  and  instruction  of  the  co's  customers  and 
their  fi'iends. 

[Add  Forms  30,  30,  41,  42,  44,  48,  01,  08.] 


FORMS.  99 

A  very  large  number  of  coffee  taverns  or  temperance  refreshment  companies    Form  90. 
have  been  formed  of  late.     In  1879  and  1880  scarcely  a  week  has  passed  with-  " 

out  the  formation  of  more  than  one.  Sometimes  the  objects  are  expressed  as 
above,  and  sometimes  clause  2  or  the  latter  part  thereof  is  omitted.  Occasion- 
ally the  company  takes  power  "to  sell  tea,  coffee,  toVjacco,and  other  provisions," 
but  it  is  generally  thought  better  not  to  take  such  power  as  being  likely  to 
offend  local  traders  who  might  otherwise  support  the  company. 

1.  To  provide  at  a  hall  and  other  suitable    rooms,  buildings,    Form  91. 


and  places,  and  to  permit  the  same  or  any  pt  thereof  to  be  used  on  puij^c  hdi. 
such  terms  as  the  co  shall  think  fit,  for  any  pposes,  public  or  private, 
and  in  parlar  for  public  meetings,  exhibitions,  concerts,  lectures,  dinners, 
theatrical  performances,  and  other  entertainmts,  and  for  reading, 
writing,  and  newspaper  rooms,  libraries,  baths,  laundries,  refreshmt 
rooms,  dressing  rooms,  shops,  l)usiness  offices  and  residences.  2.  To 
furnish  the  co's  ppty  with  such  furniture,  im])lemts,  machinery,  and 
conveniences  as  may  l)e  thought  desirable  with  a  view  to  the  sale, 
letting,  or  user  thereof.  3.  To  provide  gardens,  greenhouses,  and 
gi'ounds  for  recreation  and  amusemt.  4.  To  carry  on  the  Ijusiness  of 
an  hotel  and  restaurant  proprietor  and  wine  merchant,  o.  To  provide 
amusemt,  entertainmt,  and  instruction  for  shareholders  of  the  co  and 
others. 

[A(/d  Forms  ;-5(;,  38  fo  49,  a/id  ."io,  ."j-t,  Gl,  G5,  (oid  08.] 

(1)  To  pchase,  take  on  lease,  or  otherwise  acquire,  the  land,  as  hereds.    Form  92. 

known  as  the estate,  situate,  &c.     (2)  To  carrv  on  the  business  of  Z  ^ 

'  '  ^   ''  "  Race  course. 

a  race  course  co  in  all  its  branches,  and  in  parlar  to  lay  out  and  prei)are 
any  lands  for  the  running  of  horee  races,  steeple  chases,  or  races  of  any 
other  kind,  and  for  the  drilling  or  reviewing  of  troops,  and  for  any  other 
kind  of  athletic  sports,  and  for  playing  thereon  games  of  cricket,  bowls, 
golf,  curling,  lawn  tennis,  polo,  or  any  other  kind  of  amusemt,  recrea- 
tion, sport,  or  entertainmt,  and  to  construct  grand  or  other  stands, 
booths,  stabling  for  horses,  paddocks,  refreshmt  rooms,  and  other  erec- 
tions, buildings,  and  conveniences,  whether  of  a  permanent  or  temporary 
nature,  which  may  seem  directly  or  indirectly  conducive  to  the  co's 
objects,  and  to  conduct,  hold,  and  promote  race  meetings  and  athletic 
sports,  polo,  lawn  tennis,  and  other  matclies,'agTicultural,  horse,  flower, 
and  other  shows  and  exliibitions,  and  otherwise  utilize  the  co's  ppty  ant^ 
rights,  and  to  give  and  contribute  towards  prizes,  cups,  stakes,  and  other 
rewards.  (?>)  To  establish  any  clubs,  hotels,  or  other  conveniences  in 
connection  with  the  co's  ppty.  To  carry  on  the  business  of  hotel 
keepers,  tavern  keepers,  licensed  victuallers,  reft-eshmt  purveyors,  and 
market  gardeners,  &c. 

[Add  Forms  :){)  fo  41),  and  also  oS,  ."Jo,  {'>'>,  G8.] 

1.  To  carry  on  the  business  of  a  co-operative  store  in  all  its  branches,    Form  93. 

and  in  parlar  to  buy,  sell,  manufacture  and  deal  in  goods,  stores,  con-  ~  ~~ 

i-Tiiiii  1  Co-operative 

sumable  articles,  chattels  and  effects  of  all  kmds,  both  wholesale  and  store. 

retail,  and  to  transact  every  kind  of  agency  business. 

lAdd  Forms  37  to  40,  and  also  54,  5.">,  59,  65,  68.] 

H  2 


100 


MEMOEANDA    OF    ASSOCIATION. 


Form  94. 

Hotel 
company. 


Form  95. 

Library, 


Form  96. 


School  or 
college. 


Form 


Loan  clul). 


{1)  To  establish  a  hotel  or  liotels  at ,  in  the  county  of ,  and 

elsewhere,  as  may  be  determined.  (2)  To  carry  on  the  laisinesses  of 
liotel,  restaurant,  tavern,  and  lodging-house  keepers,  licensed  Aictuallers, 
wine,  beer,  and  spirit  merchants,  importers,  and  brokers  of  food  and 
foreign  and  colonial  i)roduce  of  all  descriptions,  hairdressers,  perfumers, 
jobmasters,  livery  stable  keepers,  jiroprietors  of  l)aths  and  laundries, 
tobacco  and  cigar  merchants,  agents  for  railway  cos  and  carriers, 
theatrical  and  opera  box  office  jiroprietors,  and  general  agents,  and  any 
other  business  or  businesses,  &c.     [Form  32.] 

[Add  Forms  37  to  49,  and  53,  55,  65,  (18.] 

(1)  To  establish  and  maintain  in  the  City  of and  elsewhere,  circu- 

"lating  libraries,  and  also  reading  and  writing  rooms,  and  a  reference 
library,  and  to  furnish  the  same  respectively  with  books,  reviews,  maga- 
zines, newspapers  and  other  publications,  including  instrumental  and 
vocal  music.  (2)  To  carry  on  the  business  of  booksellers,  stationers, 
publishers,  and  restaurant  proprietors,  and  to  carry  on  the  business  of 
booking  seats  at  theatres  and  other  places  of  entertainmt. 

[Add  Forms  3G  to  4!),  and  01,  G^.'] 

(1)  To  establish  and  carry  on  at a  school  [or,  college]  where 

■  students  may  obtain  on  moderate  terms  a  sound  [religious],  classical, 
mathematical,  and  general  education  of  the  highest  order.  (2)  To 
provide  for  the  delivery  and  holding  of  lectures,  exhibitions,  public- 
meetings,  classes  and  conferences  calculated  directly  or  indirectly  to 
advance  the  cause  of  education,  whether  general,  professional,  or  technical.. 

[Add  Forms  3(5  to  49  ;  also  53  and  (iO,  G8.] 

A  considerable  numlDBi'  of  school  and  college  companies  have  been  incorpo- 
rated. Sometimes  they  obtain  a  licence  from  the  Board  of  Trade  to  registcr 
without  the  word  "  Limited."     (See  supra,  p.  78.) 

(1)  The  accumulation  of  caj^ital  by  means  of  monthly  subscrij)tion>i 
or  otherwise  from  members,  and  also  by  l)orrowing  money  from  members 
or  any  other  persons  on  such  security  and  on  such  terms  as  may  from 
time  to  time  be  arranged.  (2)  To  advance  or  lend  any  of  the  afsd 
capital  or  other  monies  of  the  co  for  the  time  being  on  the  security  of 
freeholds,  leaseholds,  bills  of  exchange,  promissory  notes,  l)onds,  stock- 
in-trade,  chattels,  and  other  ppty,  real  or  personal.  (3)  To  acquire  any 
real  and  personal  ppty  which  the  co  may  think  it  desirable  to  acquire 
by  way  of  investmt,  or  with  a  view  to  resale  or  otherwise,  and  in  parlar 
any  freeholds,  leaseholds,  mtges,  shares,  and  securities. 

[Add  Forms  A^,  Co,  01,  08.] 

A  great  many  loan  clubs  have  been  formed  within  the  last  year  or  two.  In 
Nottingham  there  seems  to  be  a  mania  for  them.  In  most  cases  they  are 
formed  as  unlimited  companies  with  a  share  capital  not  of  any  fixed  amount, 
divided  into  shares  of,  say,  lOOL,  to  be  paid  by  monthly  instalments.  The 
regulations  generally  authorize  the  directors  to  make  general  rules  as  to  the 
payment  of  entrance  fees,  loans,  repayments,  fines,  &c.,  and  declare  that  they 


FOEMS.  101 

are  to  be  binding.     The  common  plan  is  to  have  a  monthly  meeting  for  pay-     Form  97. 

ment  of  subscriptions,  and  advances  are  made  in  accordance  with  lots  drawn, 

provided  siifiBcient  security  is  found.  Many  of  these  clubs  are  held  at  inna  or 
taverns,  and  are  named  accordingly,  e.  g.,  "  The  Unicorn  Inn  Third  Thursday 
Mutual  Loan  Club."  By  forming  this  company  with  a  deed  of  settlement 
(infra,  "  Private  Comiianies  "),  the  duty  on  registration  can  be  avoided,  s.  189 
of  the  Act. 

(1)  To  pchuse,  take   on  lease  or  in  exchange,  or  otherwise   acquire    Fonii  98. 

any  lands  and  buildings  in  the  county  of or  elsewhere,  and  any  ]{^„iijjng 

estate  or  interest  in,  and  any  rights  connected  with,  any  such  lands  and  estate, 
buildings.  (2)  To  develop  and  turn  to  account  any  land  acquired  l)y  or 
in  which  the  co  is  interested,  and  in  parlar  by  laying  out  and  preparing 
the  same  for  building  pposes,  constructing,  altering,  pulling  down,  deco- 
rating, maintaining,  furnishing,  fitting  up  and  improving  buildings,  and 
by  planting,  pa\ing,  draining,  farming,  cultivatinu",  letting  on  building 
lease  or  building  agreemt,  and  by  advancing  money  to  and  entering 
into  contracts  and  arrangenits  of  all  kinds  with  builders,  tenants,  and 
others.  (3)  To  construct,  maintain,  improve,  develo]),  work,  control 
and  manage  any  waterworks,  gasworks,  reservoirs,  roads,  tramways, 
electric  power,  heat  and  light,  supply  works,  telephone  works,  hotels, 
clubs,  restaurants,  baths,  places  of  worship,  places  of  amusemt,  pleasure 
grounds,  parks,  gardens,  reading  rooms,  stores,  shops,  dairies  and  other 
works,  and  comeniences  which  the  co  may  think,  directly  or  indirectly, 
conducive  to  these  objects,  and  to  contribute  or  otherwise  assist  or 
take  pt  in  the  construction,  maintenance,  developmt,  working,  control, 
and  managemt  thereof.  (4)  To  carry  on  all  or  any  of  the  following 
businesses,  namely,  builders  and  contractors,  decorators,  merchants,  and 
dealers  in  stone,  sand,  lime,  l)ricks,  timber,  hardware,  and  other  building 
requisites,  brick  and  tile  and  tcrra-cotta  makers,  job  masters,  carriers, 
licensed  victuallers,  house  agents,  and  any  other  businesses  which  may 
seem  to  the  co,  directly  or  indirectly,  conducive  to  any  of  these  objects. 
(5)  To  lend  money,  either  with  or  without  security,  and  generally  to  such 
persons  and  upon  such  terms  and  conditions  as  the  co  may  think  tit,  and 
in  parlar  to  23ersons  undertaking  to  Ijuild  on  or  improve  any  ppty  in  which 
the  CO  is  interested,  and  to  tenants,  bnilders,  and  contractors.  (G)  [^Form- 
ol.]  (7)  To  undertake  and  execute  any  trusts,  the  undertaking  of 
which  may  seem  to  the  co  desirable. 

lAdd  Forms  38  to  40,  o.^),  (IG.] 

(1)  To  provide  healthy  and  comfortable  dwellings  for  the  industrial    Form  99. 
classes.      (2)   To  pchase,  take  on  lease  or  in  exchange,  or  otherwise  iiuiustrial 
acquire  any  lands,  buildings,  and  hereds  suitaljle  for  any  of  the  pposes  dwellings, 
of  the  CO,  and  to  drain  and  build  on  such  land,  and  to  lay  out  and  ap- 
propriate any  land  for  roads,  streets,  squares,  gardens,  play  and  drying 
grounds,  and  to  improve,  adapt,  alter,  demolish,  or  otherwise  deal  with 
such  buildings.      (3)  To  establish,  provide,  furnish,  equip,  maintain, 
subsidise,  manage,  and  control  any  baths,  laundries,  washhouses,  shojjs, 
stables,  schools,  libraries,  dispensaries,  iuhrmaries,  provident  societies, 


10; 


MEMOEANDA    OF    ASSOCIATIOX. 


Form  99.  chilis  and  other  institutions,  works,  and  conveniences  for  the  henefit  of 
the  co's  tenants  and  others.  (4)  To  take  up  or  otherwise  ol)tain  loans 
from  the  Public  "Works  Commissioners  under  the  Lal)Ouring  Classes 
Dwelling  Houses  Act,  180(1,  or  any  other  Act,  and  generally  to  borrow 
or  raise  money  ujjon  such  terms  and  from  such  persons  and  in  such 
manner  as  the  co  may  think  fit. 
[.4.^/^?  Forms  as  in  Form  79.] 


Form  100. 

Colonization 
and  laud. 


Form  101. 

Minin< 


(!)  To  pchase  or  otherwise  accpiire  any  landed  jipty  in  the  State  of 

in  the  United  States  of  America,  and  in  parlar  in  all  or  any  of  the 

lands.  (2)  To  develop  the  resources  of  and  turn  to  account  the  lands, 
buildings,  and  rights  for  the  time  being  of  the  co  in  such  manner  as  the 
CO  may  think  fit,  and  in  parlar  l)y  clearing,  draining,  fencing,  planting, 
building,  improving,  farming,  grazing,  and  jnining,  and  by  promoting 
immigration,  establishing  towns,  villages,  and  settlemts.  (3)  To 
carry  on  the  business  of  farmers,  graziers,  meat  and  frnit  ])reservers, 
brewers,  planters,  miners,  metallurgists,  (puirry  owners,  brickmakers, 
])uilders,  contractors  for  the  construction  of  works,  both  iniblic  or 
pri^■ate,  merchants,  importers  and  exporters,  printers,  pul»lishers,  bankers, 
ship  builders,  ship  owners,  brokers,  and  any  other  businesses  which  may 
seem  calculated,  directly  or  iiulirectly,  to  develop  the  co's  pjity.  (4) 
To  construct,  carry  out,  supjiort,  maintain,  imiirove,  manage,  work, 
operate,  control,  and  superintend  railways,  tramways,  kc.  [see  Form  89, 
cl.  o],  hotels,  exchanges,  churches,  chapels,  parks,  schools,  museums 
places  of  recreation,  baths,  washhouses,  and  any  other  works  and  con- 
veniences which  may  seem  directly  or  indirectly  conducive  to  any  of 
these  objects,  and  to  contribute  to  or  otherwise  aid  or  take  pt  in  the 
constniction,  carrying  out,  support,  maintenance,  improvemt,  managemt, 
working  operations,  controlling,  and  superintending  the  same.  (5)  To 
lend  money  and  other  ppty,  to  guarantee  the  performance  of  contracts 
and  obligations  of  all  kinds,  to  act  as  agents  in  the  managemt,  sale,  and 
pchase  of  ppty,  and  generally  to  transact  lousiness  as  capitalists,  bankers, 
and  financiers.  (G)  To  carry  on  and  transact  any  other  businesses  and 
operations,  manufacturing,  commercial,  or  otherwise,  which  the  co  may 
think  directly  or  indirectly  conducive  to  any  of  its  objects,  or  capable  of 
being  conveniently  carried  on  in  connection  therewith. 

"lAM  Forms  ;58  to  49,  54,  05,  58,  G5,  C«.] 

(])   To  pchase,  take  on  lease,  or  otherwise  acquire  any  mines,  mim'ng 

rights,  and  metalh'ferous  land  in  the  county  of  [o/-,  the  kingdom 

of ],  or  elsewhere,  and  any  interest  therein,  and  to  explore,  work, 

exercise,  de\elop,  and  turn  to  account  tlie  same.  (2)  To  crush,  win, 
get,  (piarry,  smelt,  calcin,  refine,  dress,  amalgamate,  manii)ulate,  and 
prepare  for  market  ore,  metal,  and  mineral  substances  of  all  kinds,  and 
to  carry  on  any  other  metallurgical  operations  which  may  seem  condu- 
cive to  any  of  the  co's  objects.  (3)  To  buy,  sell,  manufactui-e,  and 
deal  in  minerals,  i)lant,  machinery,  implemts,  conveniences,  lu'ovisions. 


POEMS.  103 

and  thiii^-s  capal)le  of  l)C'ing  used  in  connection  Avith  mctallnrgical  ^onn  101. 
operations,  or  required  ))y  Avorkmen  and  otliers  cmploj-ed  by  the  co. 
(4)  To  construct,  carry  out,  maintain,  improve,  manage,  work, 
control  and  superintend  any  roads,  Avays,  traniAvays,  railways,  bridges, 
reserA-oirs,  AA-atercourses,  aqueducts,  AvharA-es,  furnaces,  sawmills,  crushing 
works,  hydraulic  Avorks,  electrical  Avorks,  factories,  Avarehouses,  ships, 
and  other  Avorks  and  couA-eniences  Avhich  may  seem  directly  or  indirectly 
conduciA'e  to  any  of  the  objects  of  the  co,  and  to  contribute  to,  subsidise, 
or  otherwise  aid  or  take  pt  in  any  such  operations. 
[A(Jd  Forms  oG  fo  49,  d/id  54,  'jo,  (U,  G'),  08.] 

1 .  To  carry  on  the  trades  or  businesses  of  iron  masters,  collieiy  pro-  Form  102. 
prietors,   coke   manufacturers,   miners,   smelters,  engineers,  steel   con- ^  ,    ^  .     ~ 

J^  '  _  ...  '         o  J  Qoal  and  iron 

A'crters,  and  ironfoundcrs,  in  all  their  respiA'e  branches.  company. 

2.  To  search  for,  get,  Avork,  raise,  make  merchantable,  sell,  and  deal 
in,  iron,  coal,  ironstone,  brick-earth,  bricks,  and  other  metals,  minerals, 
and  substances,  and  to  manufacture,  and  sell,  patent  fuel. 

[AdtJ  Forms  as  in  Form  70.] 

(1)  To  pchase,  charter,  hire,  build,  or  otherAvise  acquire  steam  aud  Form  103. 


other  ships  or  vessels,  Avith  all  equi})mts  and  furniture,  and  to  employ  g,j-  ^^.^^^^ 
the  same  in  the  conveyance  of  passengers,  mails,  troops,  munitions  of 
Avar,  liA'e  stock,  meat,  corn,  and  other  produce,  and  of  treasure  aud 
merchandise  of  all  kinds,  betAveen  such  ports  in  any  pt  of  the  world  as 
may  seem  expedient,  and  to  acquire  any  postal  subsidies.  (2)  To  buy, 
sell,  prepare  for  market,  and  deal  in  coal,  timber,  Ha'c  stock,  meat,  and 
other  merchandise  or  produce,  (oj  T(j  carry  on  the  business  of  mer- 
chants, carriers  by  land  and  Avater,  shipoAvners,  Avarehousemen,  Avarfin- 
gers,  barge  owners,  lightermen,  forwarding  agents,  underwriters,  and 
insurers  of  ships,  goods,  aud  other  ppty,  and  ice  merchants  and 
refrigerating  store  keepers. 

lAdd  Forms  ?>G  to  41),  54,  55,  58,  Ul,  65,  08.] 

(1)  To  pchase  or  otherwise  ac([uire  the  [steam]  ship  "  Strand  "  \_or  a  Form  104. 


steamship  now  in  course  of  construction  at and  intended  to  be  sin„ie 

called]  together  Avith  all  requisite  equipmt  for  the  same,  and  to  carry  on  steamsLip. 
the  business  of   a   steamship  proprietor  in  all  its  branches.      (2)  To 
pchase  or  otherAvise  acquire  any  other  steamship,  Init  so  that  the  co  shall 
not  at  any  one  time  own  more  than  one  steamship.     (?>)  To  employ,  &c. 
\_sep  Form  10;3]. 

\_Add  Forms  ;j8,  30,  41,  42,  43,  51,  47,  48.] 

The  formation  of  "  single  ship  "  companies  is  making  i-apid  progress  at  the 
chief  ports.  A  well-known  Liverpool  firm  (Messrs.  Leyland)  were  among  the 
first  to  set  the  example.  In  the  month  of  May,  ISSO,  they  transferred  eighteen 
vessels  to  as  many  private  companies,  and  since  then  large  numbers  of  other 
firms  and  individuals  have  followed  this  example.  Not  a  week  now  passes 
without  several  such  conversions,  and  sometimes  a  dozen  or  more  are  registered 
the  same  day.     In  some  cases  the  capital  ij3  divided  into  sixty-four  shares,  but 


104 


MEMOEANDA  OF    ASSOCIATION. 


Form  104.    ^^^-  slmres  are  frequently  adopted.     All  the  shares  excejit,  perhajDs,  a  few  for 

extra  subscribers,  are  issued  to  the  owner  or  owners  as  the  consideration  for  the 

tx'ansfer  of  the  ship.  The  owner  or  owners  are  generally  ajipointed  manager  or 
managers,  and  the  control  of  the  company  is  vested  in  them  subject  to  general 
meetings  of  the  members.  Sometimes  directors  are  appointed.  The  name  is 
usually  framed  thus,  "  The  Egeria  Steamship  Company,  Limited,"  or  "  The 
Ship  Carmen,  Limited."  (See  supra,  p.  32.)  It  seems  j^robable  that  these 
private  companies  for  working  single  shijis  will  be  generally  adopted.  Their 
advantages  are  obvious,  inasmuch  as  they  relieve  the  members  from  many 
onerous  liabilities  in  which  they  might  be  involved  by  the  negligence,  miscon- 
duct, or  improvidence  of  their  servants. 

Even  if  the  law  should  be  modified  in  this  respect,  the  many  other  advan- 
tages of  the  single  ship  system  will  probably  lead  to  its  general  adoption. 

Inconvenience  has  in  some  cases  been  caused  by  the  objects  being  too  limited, 
c.  (J.,  after  conversions  of  several  ships,  it  was  found  that  the  funds  of  one  com- 
pany could  not,  as  desired,  be  lent  to  another.  No  ad  valorem  duty  is  payable 
on  the  conveyance  of  the  ship  to  the  company. 


Form  105. 

American 
railroad. 


(1)  To  pcliase  or  otherwise  acquire  the  wliole  or  any  of  the  ppty  and 
rii^'hts  formerly  possessed  by  the  X,  Raih'oad  Co,  Ijiit  recently  sold  under 
certain  decrees  and  orders  of  the  Circuit  Ct  of  the  United  States,  for 

in  a  suit,  &c.,  and  with  a  view  thereto  to  enter  into  an  agreemt 

\_Form  T)!].  (2)  To  equip,  work,  maintain,  improve,  aud  operate  the  sd 
railroad  and  any  other  railroads  and  tramways  which  the  co  may  he 
possessed  of  or  interested  in,  or  over  which  it  may  have  running-  powers. 
(3)  To  construct,  pchase,  take  on  lease,  or  otherwise  acquire,  any  railways 
or  tramways,  which  may  seem  capable  of  being  worked  in  connection 
with  any  of  the  co's  lines  for  the  time  being,  or  calculated  directly  or 
indirectly  to  benefit  the  co,  aud  to  acquire  any  rights  over  or  in  con- 
nection with  any  such  railways  or  tramways.  (4)  To  carry  on  the 
l)usiness  of  a  telegraph  and  telephone  co  in  their  rcspive  branches. 
(.5)  To  carry  on  the  business  of  manufacturers,  mechanical  engineers, 
ship  owners,  shij)  builders,  carriers  by  land  or  water,  warehousemen, 
forwarding  agents,  and  insurance  agents  against  loss  or  damage  to  goods 
by  accident  or  otherwise.  (G)  \^Add  if  di'sircd  the  clauses  1,  2,  and  3,  of 
Form  100,  and  some  of  the  clauses  of  Form  7G.]  (7)  To  improve,  work 
and  facilitate  the  navigation  of  any  rivers,  lakes,  canals,  and  other  waters. 

\_Add  Forms  3G  to  49,  53,  54,  55,  58,  59,  and  G8  ;  i/tserti/i//  in  41  ilte 
ivord  "  coticessions"'\ 

When  a  foreign  company  gets  into  difficulties,  it  is  not  at  all  uncommon  to 
form  an  English  company  to  acquire  and  work  the  undertaking.  In  some  cases 
Avhere  this  has  been  done  the  line  has  been  bought  w\)  in  the  first  instance  by  a 
financier  Avho  subsequently  has  sold  his  bargain  to  the  comj^any  in  consideration  of 
deferred  shares.  Occasionally  it  is  found  desirable  to  form  a  local  company  to 
work  the  line,  all  the  shares  being  held  by  nominees  of  the  English  company. 
Sometimes  the  English  company  is  formed  in  the  first  place  to  acquire  certain 
securities  of  the  foreign  company,  and  then  to  acquire  the  line  by  foreclosure. 
The  above  line  can  readily  be  adai:»ted  to  a  company  formed  to  acquire  a  con- 
cession, e.  g.,  "To  acquire  and  undertake  a  concession  granted  by  the  Republic 

of for  the  construction  of  a  railway  from to ,  and  with  a  view&c, 

and  to  carry  out  and  perform  the  works  and  obligations  specified  in  the  said 
concession  with  or  Avithout  modification." 


FORMS.  105 

(1)  To  construct,  pchase,  lease,  or    otherwise  acquire  any  tramway  Form  106. 

or  tramways  in  the  counties  of  and  tlie  adjoininji-  counties.     (2)  Xramway. 

To  equip,  maintain,  and  work  (l)y  horse,  steam,  or  other  mechanical 
power.)  all  tramways  belonoing"  to  the  co,  or  ■which  this  co  may  possess 
a  right  to  run  over  and  work.  (;»)  To  carry  on  the  business  of  carriers 
of  goods  and  ]iassengers,  omnil)us  and  van  pro])rietors  and  manufacturers 
of,  and  dealers  in,  ti'amway  carriages,  trucks,  locomoti^■e  and  otlier 
engines,  and  other  chattels  and  effects  required  for  the  making,  main- 
tenance, equipmt,  and  working,  of  tramways.  (4)  To  enter  into  con- 
tracts with  any  j^erson  or  co,  as  to  interchange  of  traffic,  running 
powers,  joint  working,  or  otherwise  which  may  seem  expedient. 

[Add  Forms  3(5  fo  41),  0.3,  54,  55,  59,  04,  ('>5,  08.] 

Under  the  Tramwaj-s  Act,  1870,  (33  &  3-1  Vict.  c.  7S)  the  Board  of  Trade  can 
make  provisional  orders  in  certain  cases  authorizing  the  construction  of  tram- 
ways. One  of  the  rules  of  the  Board  provides  that  if  the  promoters  requii-e 
incorporation,  they  must  register  themselves  under  the  Companies  Act,  1862, 
and  many  companies  have  been  registei-ed  under  this  rule.  The  rules  can  be 
obtained  from  the  publishers  of  this  work,  and  forms  of  provisional  orders  will 
be  foiind  in  the  schedule  to  the  Coniiriuatory  Acts  passed  each  year.  See 
further  Sutton's  Tramways  Acts. 

(1)  To  manufacture,  sell,  and  supply  light  in  the  town  of ,  and  Form  107. 

elsewhere  in  the  parishes  of,  &c.,  in  the  county  of  ,  and  to  carry  on  ^      ~r 

the  business  of  a  gas-works  co  in  all  its  branches.  (2)  To  deal  with,  couipanv. 
manufacture,  and  render  saleable  coke,  coal-tar,  pitch,  asphaltum,  am- 
mouiacal  liquor  and  other  residual  products  obtained  in  the  manufac- 
ture of  gas.  (0)  To  construct,  manufacture,  and  maintain  works  for 
holding,  receiving,  and  jjurifying  gas,  and  all  other  buildings  and  works, 
meters,  pipes,  fittings,  machinery,  apparatus,  and  appliances  convenient 
or  necessary  for  the  jjposes  of  the  co.  (4)  To  manufacture,  buy,  sell, 
let  on  hire,  and  deal  in,  stoves,  engines,  and  other  apparatus  and  con- 
veniences which  may  seem  calculated,  directly  or  indirectly,  to  promote 
the  consumption  of  gas. 

[Add  Forms  as  in  Form  70.] 

The  Gas  and  Water  Works  Facilities  Act,  1870,  enables  the  Board  of  Trade 
in  certain  cases  to  make  provisional  orders,  authorizing  the  construction  of  gas 
and  water  works  and  the  acquisition  of  land,  &c.  One  of  the  rules  of  the  Board 
is  that  if  the  promoters  desire  incorporation  they  must  register  themselves 
under  the  Companies  Act,  1862,  and  a  considerable  number  of  companies  have 
been  formed  in  compliance  with  this  rule.  Copies  of  the  rules  can  be  obtained 
from  the  publishers  of  this  work,  and  forms  of  orders  can  be  found  in  the 
schedules  to  the  Confirmatory  Acts  passed  each  year.  See  also  the  Gas  and 
Water  Works  Facilities  Act,  1870,  Amendment  Act,  1873,  36  &  37  Vict.  c.  89. 

It  is  now  generally  thought  desu-able  to  take  powers  to  supply  electric  light 
as  well  as  gas.     See  Form  79. 

To  provide,  regulate,  and   maintain,  a  suitable  Ijuilding,  room,  or  Form  108. 
rooms,  for  a  [ ]  exchange,  in  the  city    of  :    to  adjust  con- 


troversies between  its  members,  to  establish  just  and  eipiitable  principles 


Exchange. 


lOG 

Form  108.   in  tlie 


MEMORANDA    OF    ASSOCIATIOX. 


—  trade  (hereinafter  called  the  trade),  to  maintain  nniformity 
in  rules,  regulations,  and  usages  of  the  trade  :  to  adopt  standards  of 
classification  in  the  trade,  to  acquire,  preserve,  and  disseminate  useful 
information  connected  with  the  trade  throughout  all  markets :  to 
decrease  the  local  risks  attendant  upon  the  business,  and  generally  to 

promote  the  trade  of  the  city  of  ■ ,  increase  its  amount  and  augment 

the  facilities  with  which  it  may  Ijc  conducted.  (2)  To  connnunicate 
with  chamhers  of  commerce,  and  other  mercantile  and  puldic  bodies 
throughout  the  world,  and  concert  and  jn'omote  measures  foi'  the  pro- 
tection of  the  trade  and  ])ersons  engaged  therein.  (;))  To  subscribe,  to 
become  a  member  of,  subsidize,  and  co-oi)erate  with,  any  other  associa- 
tion, whether  incorporated  or  not,  whose  objects  arc  altogether,  or  in  pt, 
similar  to  those  of  this  co,  and  to  procure  from  and  comnmnicate  to,  any 
such  association  such  information  as  may  be  likely  to  forward  th.e  objects 
of  the  society. 

[Add  Forms  38,  41  io  4!).] 

Coinijare  witli  Form  107,  sui->ra. 

Form  109.       To  establish  a  club  [of  a  non-political  character]  for  the  accommoda- 
tion of  members  of  the  co  and  their  friends. 
[Add  Forms  41,  42,  44,  40,  4,s,  Gl,  G8.] 

A  club  can  be  formed  as  a  coini:)any  limited  by  shares  or  by  guarantee.  The 
latter  is  the  more -convenient,  and  the  necessary  cajiital  can  be  provided  out  of 
entrance  fees  or  by  way  of  loan. 

In  Graft  v.  Evans,  8  Q.  B.  D.  373  ;  2G  L.  T.  317;  S.  J.  292,  it  was  held  that 
a  h on 'i  fide  unincorporated  club  is  not  bound  to  take  out  a  licence  for  the  sale 
of  intoxicating  liquors  on  the  ground  that  the  members  are  joint  owners  of  the 
property,  and  that  where  a  member  takes  and  pays  for  goods,  the  transaction 
is  not  a  sale,  as  he  is  himself  part  owner  of  the  goods.  The  members  of  an 
incorporatetl  club  are  not  joint  owners,  and  it  has  not  been  settled  whether 
stich  a  club  requires  a  licence.  In  practice  it  is  always  assumed  that  clubs  and 
co-operative  stores  are  not  within  the  Licensing  Acts,  and  this  would  seem  to> 
be  the  correct  view.     See  2G  S.  J.  292. 


Ohi 


Form  110. 


Club-house. 


Form   111. 

Club(poHtical), 


To  provide  a  club-house  and  other  conveniences  for  the  use  of  the 

members  of  the club,  and  to  furnish  and  maintain  the  same,  and 

to  permit  the  same  to  be  used  ))y  the  members  of  the  sd  club  either  gra- 
tuitously or  upon  such  terms  as  shall  be  agreed  on. 

\_Add  Forms  as  in  Form  llo.] 

(1)  To  afford  to  its  memVters  all  tJie  usual  privileges,  advantages,  con- 
veniences, and  acconnnodation  of  a  club.  (2)  To  take  over  the  effects 
and  b'abib'ties  of  the  present  unincorporated  association,  known  as  the 

[Liberal]  Club.     (:>)  To  i)romote  the  cause  of  [Liberalism],  and 

to  ])rovide  means  of  social  intercourse  between  persons  professing 
[Liberal]  })rincii)Ies.  (4)  To  consider  and  discuss  all  questions  affecting 
the  interests  of  the  community,  or  the  alteration  or  administration  of 
the  law.     (5)  To  procure  the  delivery  of  lectures  on  political  and  other 


FORMS.  107 

subjects.    ((!)  To  form  and  maintain  a  library  of  pob'tical,  liistorical,  and    Form  111. 

otber  literature  in .     (7)  To  render  voluntary  aid    to  [Liberal] 

candidates  in  tlie  parliamentary,  municipal,  and  other  elections  in  the 

boroughs  of ,  and  the  counties  of .     (!^)  To  peton  Parliamt. 

(!))  To  jx-hase,  hire,  or  otherwise  acquire,  for  the  pposes  of  the  club, 
any  real  or  personal  ppty,  and  in  parlar  any  lands,  buildings,  furniture, 
club  and  household  ett'ects,  utensils,  Ixjuks,  newspapers,  periodicals, 
musical  instrumts,  fittings,  apparatus,  ap])liances,  conveniences,  and 
accummodatinn,  and  so  far  as  the  law  or  the  license  of  the  Board  of  Trade 
may  from  time  to  time  allow,  to  sell,  demise,  let,  mtge,  or  dispose  of 
the  same,  (lo)  To  erect,  maintain,  imi)ro\e,  or  alter  any  buildings  for 
the  Piloses  of  the  club.  (11)  To  borrow  or  raise  money  by  the  issue  of 
or  upon  bonds,  debentures,  bills  of  exchange,  promissory  notes,  or  other 
obligations  or  securities  of  the  club,  or  by  mtge  or  charge  of  all  or  any 
pt  of  the  ppty  of  the  club.     (12)  To  do  [Form  W]. 

The  above  is  taken  from  the  ineniorandum  of  a  liberal  club  which  was  re- 
cently registered  by  licence  of  the  Board  of  Traae  without  the  word  "limited." 

(1)  To  support  and  protect  the  character,  status,  and  interest  of  the  Form  112. 
legal  profession  generally,  and  parly  of  solors  practising  Avithin  a  circuit  t  -n^  society 
having  a  radius  of  twenty-five  miles  from  the  Guildhall  of  the  city 

of  .     (2)  To  promote  honourable  practice,  to  repress  malpractice, 

to  settle  disputed  points  of  practice,  and  to  decide  all  questions  of  pro- 
fessional usage  or  courtesy  between  or  amongst  solors.  (:3)  To  consider 
all  questions  affecting  the  interests  of  the  profession,  and  to  initiate  and 
Avatch  over,  and  if  necessary,  to  peton  Parliamt,  or  promote  deputa- 
tions in  relation  to  general  measures  affecting  the  profession,  and  to 
procure  changes  of  law  or  practice,  and  the  jiromotion  of  improvemts  in 
the  princii)les  and  administration  of  the  law.  (4)  To  acquire  by  pchase, 
donation,  or  otherwise,  the  library  now  l)elonging  to  the  society  known 

as  the  Law  Society,  and  to  maintain,  extend,  and  inqu'ove  such 

library.  (."))  To  provide  rooms  and  other  fiicilities  for  the  holding  and 
conducting  of  sales  of  ppty,  meetings  of  creditors,  arbitration  meetings, 
and  other  like  matters.  (('»)  To  acquire  by  pchase,  taking  on  lease,  or 
otherwise,  lands  and  buildings,  and  of  all  other  ppty,  real  and  personal, 
which  the  society,  for  the  pposes  thereof,  may  from  time  to  time  think 
proper  to  acquire,  and  which  may  lawfully  be  held  by  them,  and  to  re- 
sell, under-lease  or  sub-let,  surrender,  turn  to  account,  or  dispose  of, 
such  ppty,  or  any  pt  thereof,  and  to  erect  u])on  any  such  land,  any 
building  for  the  p})oses  of  the  society,  and  to  alter  or  add  to  any  building- 
erected  upon  any  such  land.  (7)  To  borrow  [&c.].  (8)  To  encourage 
the  study  of  law  by  articled  clerks  of  solors,  and  for  that  ppose  the 
donation  on  such  terms  and  conditions  as  may  from  time  to  time  be 
prescribed,  of  a  prize  or  prizes,  or  other  rcAvards  or  distinctions.  (0) 
To  promote  information  on  legal  sul)jects  by  lectures,  discussions,  books, 
correspondence  with  public  bodies  and  individuals,  or  otherwise.  (10) 
IFonii  44]. 


108 


MEMORANDA    OF    ASSOCIATION. 


Form  112.         Taken  from  a  form  recently  passed  by  the  Board  of  Trade.     This  form  with. 
■~ slit>-ht  variation  has  also  been  adopted  in  the  case  of  societies  of  local  accountants. 


Trade  protec 
tion. 


Form  113.  !•  To  protect  the  members  of  tlie  society  against  persons  whose  cha- 
racter or  circes  render  them  unworthy  of  mercantile  credit,  and  to  facili- 
tate the  prompt  and  economical  realisation  of  the  estates  of  bankrupts 
and  persons  making  or  seeking  to  make  arrangemts  vv  compositions 
with  their  creditors. 

2.  To  diffuse  information  as  to  sound  principles  of  trading,  and  to 
impress  upon  the  mercantile  community  the  necessity  of  maintaining  an 
intimate  knowledge  of  the  state  of  their  aiPfairs  by  periodical  investiga- 
tions and  by  keeping  correct  sets  of  l»usiness  books, 

.3.  To  procure  information  for  members  as  to  the  standing  and 
responsibility  of  parties  with  Avhom  they  propose  to  transact  business. 

4.  To  collect  debts  for  members  upon  such  terms  as  may  ])e  deter- 
mined. 

o.  To  communicate  with  Chambers  of  Commerce  and  other  mercantile 
and  public  bodies  throughout  the  United  Kingdom,  and  concert  and 
promote  measures  for  the  protection  of  trade  and  traders. 

G.  To  c(jnsider,  originate,  and  sup}K)rt  improvemts  in  the  commercial 
laws. 

7.  To  subscribe  to,  become  a  mendjcr  of,  and  co-opei'ate  with  any 
other  association,  whether  incorporated  or  not,  whose  ol)jects  are 
altogether  or  in  pt  similar  to  those  of  this  society,  and  to  procure  fi-om 
and  communicate  to  any  such  association  such  information  as  may  be 
likely  to  forward  tlie  object  of  this  society. 

[Add  Form,  lUo,  el.  b  and  ('.;  Forms  ;')S,  4"2,  44. J 

Taken  from  a  form  which  has  been  approved  by  the  Board  of  Trade  on  several 
occasions. 


Form  114. 

Chamber  of 
Commerce. 


(1)  To  promote  and  protect  the  home,  colonial,  and  foreign  trade  and 
commerce,  and  the  manufactures,  of  the  United  Kingdom,  and  in  parlar 

the  trade,  commerce,  and  manufactures,  of  the  [borough]  of .     (2) 

To  consider  all  (piestions  connected  with  such  trade,  conmierce,  and 
manufactures,  (o)  To]H*omote  or  oppose  legislative  and  other  measures, 
affecting  such  trade,  commerce,  and  manufactures.  (4)  To  collect  and 
circulate  statistics,  and  other  information,  relating  to  such  trade,  com- 
merce, and  manufactures.  (5)  To  act  as  arbitrator  in  tlie  settlemt  of 
disputes  arising  out  of  commercial  transactions.  ((>)  To  boi'i'ow  any 
monies  required  for  the  pposes  of  the  chamber  upon  such  securities  as 
may  be  determined. 

{Add  Form.  10:^,  d.  C,  and  Forms  ;)8,  42,  44.] 

Taken  from  a  form  i:)assed  by  the  Board  of  Trade  on  several  occasions. 

Form   115  '^^^^  following  is  another  form  lately  passed : — 

(1)  The  promotion  of  the  trade  and  commerce,  and  shipjiing  and  manufac- 
tures of  ,  and  of   the  home,  colonial,  and  foreit!,-n  trades  of  the  United 

Kingdom.  (2)  The  collection  and  dissemination  of  statistical  and  other  in- 
formation relating  to  trade,  commerce,  sliipping,  and  manufactures.     (."5)  Tlie 


FOEMS. 


109 


promoting,  supporting,  or  opposing  legislative  or  other  mejisures  affecting  the    Form  115. 

afsd  interests.      (1)  The    undertaking,   by   arbitration    and  settlemt,  of  dis-  — ■ — — 

putes  arising  out  of  trade.  (5)  The  doing  of  all  such  other  things  as  may 
be  conducive  to  the  extension  of  trade,  commerce,  or  manufactures,  or  inci- 
dental to  the  attainmt  of  the  above  objects. 

1.  To  take  over  the  whole  or  any  of  the  assets  and  hal)iHties  of  tlic  un-    Form  116. 

incorporated  association  known  as  the  Biiiklers'  Society,  estahhslied  1884.  ^'.T.,     ; 

*'  IJuiIders 

2,  lo  promote  the  conson  and  discussion  of  all  questions  affecting- the  Institute. 

building  trade  (which  exi^ression  in  this  memorandum  includes  the  trade 
of  builders  and  of  contractors  for  the  execution  of  public  and  pri\-ate 
works,  and  all  ancillary  and  allied  trades,  and  every  branch  of  any  such 
tradej,  and  generally  to  watch  over  and  protect  the  interests  of  persons 
engaged  in  the  building  trade. 

;J.  To  give  the  Legislature  and  public  bodies  and  others  facilities  of  con- 
ferring with  and  ascertaining  the  views  of  persons  engaged  in  the  build- 
ing trade  as  regards  matters  directly  or  indirectly  affecting  that  trade. 

4.  To  confer  with  the  lloyal  Institute  of  British  Architects,  the 
Metropolitan  Board  of  AYorks,  and  any  other  })ublic  bodies  in  regard  to 
all  matters  affecting  the  building  trade. 

0.  To  originate  and  promote  improvemts  in  the  law,  and  to  support  or 
oppose  alterations  therein,  and  to  effect  improvemts  in  administration, 
and,  for  the  pposes  afsd,  to  peton  Parliamt,  and  take  such  other  ste])s 
and  proceedings  as  may  be  deemed  expedient. 

(I.  T(t  diffuse  among  its  members  information  on  all  matters  affecting 
the  building  trade,  and  to  print,  publish,  issue,  and  circulate  such  papers, 
periodicals,  books,  circulars,  and  other  literary  undertakings  as  may  seem 
conducive  to  any  of  these  objects. 

7.  To  improve  and  elevate  the  technical  and  general  knowledge  of 
l)ersons  engaged  in,  or  aljout  to  engage  in,  the  building  trade,  or  in  any 
emi)loyint,  manual  or  otherwise,  in  connection  therewith,  and  with  a  view 
thereto  to  provide  for  the  delivery  of  lectures  and  the  holding  of  classes, 
and  to  test  liy  examination  or  otherwise  the  competence  of  such  persons, 
and  to  award  certificates  and  distinctions,  and  to  institute  and  establish 
scholarships,  grants,  rewards,  and  other  benefactions. 

5.  To  promote  excellence  in  the  construction  of  buildings,  and  jnst 
and  honourable  practice  in  the  conduct  of  business  and  to  suppi-ess 
malpractice. 

0.  To  establish,  form,  and  maintain  a  library  and  collection  of  models, 
designs,  drawings,  and  othe  articles  of  interest  in  connection  with  the 
building  trade. 

10.  To  arrange  and  j^romote  the  adoption  of  equitable  fonns  of  con- 
tracts and  other  documts  used  in  the  building  trade  and  to  encourage 
the  settlemt  of  disputes  by  arbitration  and  to  act  as  or  nominate  arbitra- 
tors and  umpires  on  such  terms  and  in  such  cases  as  may  seem  expedient. 

11.  To  encourage  the  discovery  of  and  investigate  and  make  known 
the  nature  and  merits  of  inventions  which  may  seem  capal)le  of  being- 
used  by  persons  engaged  in  the  building  trade,  and  to  acquire  any  patents 


j-j^Q  MEMORANDA    OF    ASSOCIATIOX. 

Form  116.  or  licenses  relating  to  any  such  inveutiuns  with  a  view  to  the  user 

— ~" ~~  thereof  by  the  inembers  of  the  institute  and  others,  either  gratuitously  or 

npon  such  terms  as  may  seem  expedient. 

12.  To  establish,  subsidise,  promote,  co-operate  with,  receive  into 
union,  become  a  member  of,  act  as  or  appoint  trustees,  agents,  or  dele- 
gates for,  control,  manage,  superintend,  lend  monetary  assistance  to,  or 
otherwise  assist  any  associations  and  institutions,  incorporated  or  not 
incorporated,  with  objects  altogether  or  in  pt  similar  to  th(jse  of  the 
institute  and  not  being  a  trades  union. 

lo.  To  establish,  undertake,  superintend,  administer,  and  contribute 
to  any  charitable  or  benevolent  fund  from  whence  may  be  made  dona- 
tions or  advances  to  deserving  persons  who  may  be  or  ha\e been  engaged 
in  the  building  trade,  or  connected  with  any  jierson  engaged  therein, 
and  to  contribute  to  or  otherwise  assist  any  charitable  or  benevolent 
institutions  or  undertakings. 

14.  To  undertake  and  execute  any  trusts  which  may  seem  to  the 
institute  conducive  to  any  of  its  objects. 

IT).  To  provide  facilities  for  social  intercourse  between  the  members  of 
the  institute  and  their  friends,  and  if  thought  fit,  to  afford  them  all  or 
any  of  the  usual  privileges,  advantages,  conveniences,  and  accommoda- 
tioji  of  a  club. 

10.  To  admit  any  persons  (whether  ehgibleor  not  eligible  for  member- 
ship) to  be  associates  or  honorary  members  of  the  institute  on  such  terms, 
and  to  confer  on  them  such  rights  and  privileges  as  may  seem  expedient. 

17.  To  borrow  any  moneys  required  for  the  pposes  of  the  institute 
upon  such  terms  and  on  such  securities  as  may  be  determined. 

18.  Subject  to  the  provisions  of  the  21st  section  of  the  Cos  Act,  1802, 
to  pchase,  take,  lease,  exchange,  hire,  or  otherwise  acquire  any  real  and 
personal  ppty,  and  any  rights  or  privileges  necessary  or  convenient 
for  the  pposes  of  the  institute.  To  construct,  alter,  and  maintain  any 
buildings  requn-ed  for  the  pposes  of  the  institute. 

1!).  To  obtain  an  Act  of  Parhamt  for  the  dissolution  of  the  institute 
and  the  rc-incor]ioration  of  its  members  for  any  of  these  objects,  and  any 
other  Act  which  may  seem  conducive  to  any  of  these  objects. 

20.  To  sell,  im})rove,  manage,  develop,  lease,  mtge,  dispose  of,  turn  to 
account,  or  otherwise  deal  with  all  or  any  jit  of  the  ])pty  of  the  institute. 

21.  To  invest  the  moneys  of  the  institute  not  innuediately  required 
up(»n  such  securities  or  otherwise  in  such  manner  as  inayfrom  time  to 
time  be  determined. 

22.  To  di)  all  such  other  lawful  things  as  are  incidental  or  conducive 
to  the  attaimnt  of  the  above  ol)jects  or  any  of  them.  Provided  that  the 
institute  sliall  not  impose  on  its  members  or  sujiport  with  its  funds  any 
regulation  which,  if  an  object  of  the  institute,  would  make  it  a  trade 
union. 

Taken  from  a  form  i^assed  by  the  Board  of  Trade  in  1884. 


APiTICLES    OF    ASSOCIATION, 


INTRODUCTORY    NOTES. 

By  Section  14^  of  the  Act  it  is  provitled  as  f.dlows : —  Articles  of 

Association. 
11.  The  memorandum  of  association  may,  in  the  case  of  a  company  limited 

Iby  .shares,  and  shall,  in  the  case  of  a  comimny  limited  by  guarantee  or  unlimited, 
be  accompanied,  when  registered,  by  articles  of  association  signed  by  the  sub- 
scribers to  the  memorandum  of  association,  and  i^rescribing  such  regulations 
for  the  company  as  the  subscribers  to  the  memorandum  of  association  deem 
expedient :  the  articles  shall  be  expressed  in  separate  paragraphs  numbered 
arithmetically :  they  may  adojDt  all  or  any  of  the  j^rovisions  contained  in  the 
Table  marked  A.  in  the  first  schedule  hereto :  they  shall,  in  the  case  of  a 
company,  whether  limited  by  guarantee  or  unlimited,  that  has  a  capital  divided 
into  shares,  state  the  amount  of  capital  with  which  the  comi^any  proposes  to 
be  registered  ;  and  in  the  case  of  a  company  whether  limited  by  guarantee  or 
unlimited,  that  has  not  a  capital  divided  into  shares,  state  the  numh»er  of 
members  with  which  the  comjjany  proposes  to  be  registered,  for  the  purpose  of 
enabling  the  registrar  to  determine  the  fees  payable  on  registration  :  in  a 
•company  limited  by  guarantee  or  unlimited,  and  having  a  capital  divided  into 
shares,  each  subscriber  shall  take  one  share  at  the  least,  and  shall  MTite 
•opposite  to  his  name  in  the  memorandum  of  association  the  number  of  shares 
he  takes. 

And  Section  1  .j  provides  that : —  Application  of 

Table  A. 
15.  In  the  case  of  a  company  limited   by  shares,  if  the  memorandum  of 

association  is  not  accompanied  by  articles  of  association,  or  in  so  far  as  the 
articles  do  not  exclude  or  modify  the  regulations  contained  in  the  Table 
marked  A.  in  the  first  schedule  hereto,  the  last-mentioned  regulations  sliall, 
so  far  as  the  same  are  apjilicable,  be  deemed  to  V>e  the  regulations  of  the  com- 
pany, in  the  same  manner  and  to  the  same  extent  as  if  they  had  been  inserted 
in  ai-ticles  of  association,  and  the  articles  had  been  duly  registered. 

The  great  majority  of  companies,  formed  under  tlie  Act,  are  registered 
as  companies  hmited  hy  shares,  and  it  appears  from  Sections  14  and  15 
?il)ove-mentioned,  that  as  regards  such  companies  articles  of  association 
may  be  registered  witli  the  memorandum,  Init  if  not  that  Talde  A.  will 
apply. 

In  a  considerable  number  of   cases  no   articles   are  registered,  and  In  somo  cases 
Talkie  A.  accordingly  applies ;    grave  inconvenience  sometimes  results  "°„-^^/^"^  j^ 
from  the  adoption  of  this  course. 

It  is  also  by  no  means  uncommon  to  exercise  the  power  contained  in 
Section  15  by  registering  articles  which  adojtt  Table  A.  with  some 
modifications.     See  infra,  Form  118,  for  an  example. 

However,  it  is  generally  admitted  that  the  additional  expense,  and  it 


112 


AETICLES^  OF  ASSOCIATION. 


is  but  small,  of  preparing  and  registering  a  full  set  of  articles  is  anip!y 
recompensed  l)y  the  possession  of  a  complete  code  of  regulations. 
Section  1(>  of  the  Act  is  as  follows : — 

Articles  to  be         IG.  The  articles  of  association  shall  be  printed,  they    shall  bear  the  same 
printed.  stamp  as  if  they  were  contained  in  a  deed,  [i.  e.,  a  10s.  stamp],  and  shall  be 

signed  by  each  subscriber  in  the  presence  of,  and  be  attested  by,  one  witness 
at  the  least,  and  such  attestation  shall  be  a  sufficient  attestation  in  Scotland 
as  well  as  in  England  and  Ireland  :  when  registered,  they  shall  bind  the  com- 
pany and  the  members  thereof  to  the  same  extent  as  if  each  member  had 
subscribed  his  name  and  affixed  his  seal  thereto,  and  there  were  in  such 
articles  contained  a  covenant  on  the  part  of  himself,  his  heirs,  executors,  and 
administrators,  to  conform  to  all  the  regulations  contained  in  such  articles, 
subject  to  the  provisions  of  this  Act ;  and  all  monies  payable  by  any  member 
to  the  comimny,  in  pursuance  of  the  conditions  and  regulations  of  the  com- 
pany, or  any  of  such  conditions  or  regulations,  shall  be  deemed  to  be  a  del)t 
due  from  siich  member  to  the  company,  and  in  England  and  Ireland  to  be  in. 
the  nature  of  a  specialty  debt. 


Effect  of  reg 
tration. 


Contributories. 


Alteration  of 
articles. 

Usual  clauses. 

Ai-ticles  cannot 
authorise  any 
thing  ultra 
vires. 


Coiu't  will 
seek  to  recon- 
cile memoran- 
dum and 
ai'ticles. 


As  to  aiijjoint- 
ment  of 
officers  liy 
articles. 


Members 
entitled  to 
copy  of 
articles. 

Copies  of 


As  to  the  efPect  of  registering  the  memorandum  and  articles,  and  of 
the  issue  hj  the  registrar  of  the  certificate  of  incorporation,  see  sif/ira, 
p.  O-I. 

As  to  the  liability  of  present  and  past  members  to  contribute  in  t!ie 
winding  np,  see  Lindley,  l.'UiO,  of  scq. :  Buckley,  28,  ct  scq. 

As  to  the  alteration  of  the  articles  hj  special  resolution,  sec  infra, 
"  Resolutions." 

As  to  the  clauses  usually  inserted  in  articles,  see  infra,  p.  11  o,  cf  scq. 

It  is  well  settled  tliat  if  the  articles  as  originally  framed,  or  as  altered 
by  special  resolution,  ])urport  to  authorise  an  act  ])rohibited  by  law  or 
otherwise  ^iJIra  vires  the  company,  or  inconsistent  with  the  memoramlum, 
they  are  7^>-«  ianto  void.  A^^hhunj,  dr.,  Co.  \.  Riclin,  li.  R.  7  H.  L. 
671  ;  Hope.  V.  Iniernaiional  Financial  Soc,  4  C.  Diw  o27  :  Dent's  Case,. 
8  Ch.  7<)S;   Guiness  v.  Land  Corporaiion  of  Ireland,  22  (-.  Div.  o41». 

But  the  Court  will,  if  possible,  support  the  articles,  for  the  rule  of  con- 
struction is  that  if  contemporaneous  documents  can  be  read  in  two  ways, 
in  one  of  which  they  appear  consistent,  and  in  the  other  inconsistent, 
the  former  construction  will  be  preferred.  Per  Jessel,  M.  R.,  Phmnir 
Bessemer  Co.'s  Case,  44  L.  J.  N.  S,  083;  Andersons  Case,  7  Ch.  Div. 
75.  Nevertheless  this  rule  must  be  ai^plied  Avith  great  caution,  e.g.,  the 
articles  cannot  be  permitted  to  (jualify  or  vary  what  the  Act  requires  to 
be  stated  in  the  memorandum.  Guiness  v.  Land  Corporation  of  Ireland r 
vlri  supra. 

Articles  of  association  very  commonly  contain  clauses  ])urporting  ti> 
ap])oint  or  authorising  the  appointment  of  officers — e.fi.,  managers,  secre- 
taries, solicitors,  engineers,  and  others,  upon  certain  terms  as  to  remunera- 
tion.    See  as  to  such  clauses,  svpra,  p.  Go. 

As  to  each  member  being  entitled  to  a  co])y  of  the  memorandum  and 
articles,  see  svpra,  \\.  72. 

"Where  articles  of  association  have  been  registered,  a  copy  of  every 
special  resolution  for  the  time  being  in  force  ivS  to  be  annexed  to  or  em- 


INTRODUCTOEY   NOTES.  113 

bodied  in  every  copy  of  the  articles  of  association  that  may  be  issued  special 
after  the  passing  of  such  special  resolution.     Section  54  of  the  Act.         resolutions. 

Where  no  articles  of  association  have  been  registered,  a  copy  of  any 
special  resolution  is  to  be  forwarded,  in  print,  to  any  member  requesting 
the  same,  on  payment  of  one  shilling,  or  such  less  sum  as  the  com- 
pany may  direct.     Ihid. 

If  any  company  makes  default  in  complying  with  the  provisions  of  the  Penalty. 
above  section,  it  incurs  a  penalty  not  exceeding  1/.  for  each  copy  in  re- 
spect of  which  such  default  is  made ;  and  every  director  or  manager 
of  the  company  who  knowingly  and  wilfully  authorises  or  permits  such 
default  incurs  a  like  penalty.     Ibid. 

Before  registration  the  articles  must  be  stamped  with  a  10s.  deed  Stamps, 
stamp,  and  with  a  5s.  companies'  registration  stamp.      See  siqmi,  p.  73. 


AETICLES    OF    ASSOCIATION, 


Form  117. 


Articles  of  a 
company 
limited  by 
shares. 


The  Companies  Acts,  1802  to  1880. 

Articles  of  Association  of  The Co,  Limited. 

This  form  of  articles  includes  most  of  the  clauses  usiially  inserted,  and  it 
will  be  found  that  it  can  with  little  difficulty  he  so  altered  as  to  suit  the 
cii'cumstances  of  the  great  majority  of  the  companies  from  tinae  to  time  in 
course  of  formation.  Various  special  clauses  will  be  found,  infra,  Form  120, 
et  seq.,  some  of  which  may  be  occasionally  required. 


extraordinary 
resolution. 


Preliminary. 

Some  persons  insert  the  words  "  It  is  agreed  as  follows  "  at  the  beginning  of 
the  articles,  but  the  words  are  superfluous.  By  s.  16  of  the  Act  (supra,  p.  93), 
each  member  is  bound  by  an  implied  covenant  to  conform  to  the  regulations. 

Interpretation.      1.  In  these  presents,  unless  there  be  something  in  the  subject  or  con- 
text inconsistent  therewith, — 
Special  and  "  Special    resolution "    and   "  extraordinary    resolution "    have    the 

meanings  assigned  thereto  respectively  by  the  Companies  Act,   18G2 

(ss.  51  and  129). 
The  office.  "  The  office "  means   the   registered  office   for   the  time   being  of 

the  CO. 
The  register.         "  The  register  "  means  the  register  of  members  to  be  kept  pursuant  to 

Section  25  of  the  Companies  Act,  1862. 
Month.  "  Month  "  means  calendar  month. 

In  writing.  "  In  Writing  "  means  written  or  printed,  or  partly  written  and  partly 

printed. 

Words  importing  the  singular  number  only  include  the  plural  number, 

and  vice  versa. 

Words  importing  the  masculine  gender  only  include  the  feminine 

gender. 

Words  importing  persons  include  corporations. 

Some  persons  insert  a  long  list  of  words  and  expressions  in  the  interpretation 
clause,  but  the  practice  is  not  to  be  commended.  Probably  several  of  the  above 
might  be  omitted,  e.  g.,  "  special  "  and  "  extraordinary  "  resolution,  but  they  are 
retained  because  directors  and  members  are  not  always  very  familiar  with  the 
Act,  and  it  may  therefore  be  convenient  to  refer  thereto.  But  there  seems 
little  use  in  saying  that  "  the  directors "  means  the  "  directors  for  the  time 
being,"  that  "  member "  means  member  of  the  company,  and  so  forth.  See 
also  note  to  Clause  107  of  this  form. 


FOEMS.  115 

2.  Tlie  regulations  contd  in  Table  A.  [in  the  first  schedule  to  the   Form  117. 
Companies  Act,  1862]  shall  not  apply  to  the  co.  Table  A  not^to 

apply. 
See  supra,  p.  Ill,  s.  15  of  the  Act. 

3.  The  directors  shall  forthwith,  in  the  name  and  on  behalf  of  the  co,  Seal  to  be 

enter  into  an   agreemt  with  in  the  terms  of  the  draft  a   copy  atrreement. 

whereof  has,  for  the  ppose  of  identification,  been  endorsed  with  the  sig- 
natures of  A.,  B.,  and  C,  three  of  the  subscribers  hto,  and  shall  carry  the 

sd  agreemt  into  effect,  with  full  power,  nevertheless,  fi'om  time  to  time  to 
agree  to  any  modification  of  the  terms  of  such  agreemt,  cither  before  or 
after  the  execution  thereof. 

The  above  form  will  be  used  where  plan  II.,  supra,  p.  1,  is  adopted,  and  the 
agreement  is  not  mentioned  in  the  memorandum  of  association.  Where  it  is 
so  mentioned  the  clause  mil  run  thus :  "  The  directors  shall  forthwith  affix 
the  seal  to  the  agreement  mentioned  in  paragraph  of  Clause  3  of  the  company's 
memorandum  of  association,  and  shall  carry,  &c." 

Where  the  agreement  is  made  with  a  trustee  for  the  company  before  its 
incorporation,  the  clause  will  run  thus  : — 

"  The  directors  shall  [or  may]  forthwith  adopt  on  behalf  of  the  company  an 

agreement  dated  the day  of ,  and  made  between of  the  one  part, 

and on  behalf  of  this  company  of  the  other  part,  and  shall  [or  may]  carry 

the  same  into  effect,  with  full  power,  nevertheless,  at  any  time  and  from  time 
to  time,  to  agree  to  any  modification  thereof." 

Sometimes  the  words  "  a  copy  whereof  is  set  forth  in  the  schedule  hereto," 
are  introduced,  but  it  is  not  generally  advisable  to  set  out  the  agreement  in 
the  schedule.  The  object  of  setting  out  the  agreement  in  a  schedvde,  is  to 
give  the  members  the  fullest  notice  of  its  contents,  for  every  member  is  taken 
to  know  the  articles  of  association.  Ernest  v.  Nicholls,  6  H.  L.  Cas.  401 ;  Royal 
British  Bank  r.  Turquancl,  6  E.  &B.437  ;  Ex  parte  Williams,  2Eq.  218  ;  Griffith 
V.  Paget,  6  C.  D.  517.  But  as  a  measure  of  precaution  it  is  not  now  uncommon 
to  add  to  a  clause  as  above  (3)  the  words,  "  And  every  member  shall  be  deemed 
to  have  notice  of  the  contents  of  the  said  agreement,  and  to  sanction  the 
same."     See  further,  p.  242. 

It  used  formerly  to  be  the  custom  to  insert  in  the  articles  a  clause  declaring 
that  "  the  company  hereby  adopts  the  agreement,  &c."  But  there  are  grave 
doubts  as  to  the  operation  of  such  a  clause,  and  it  is  now  but  rarely  inserted. 
It  probably  does  no  more  than  authorise  the  directors  to  adopt  the  agreement. 
It  is  clear  that  such  a  clause  cannot  bind  the  company  in  favo.;r,  e.g.,  of  the 
vendor.     Eley  v.  Positive  Government  Co.,  1  Ex.  Div.  88. 

Nor  can  the  clause  operate  as  a  ratification  of  the  agreement,  "  because  it 
has  been  decided,  and,  as  it  appears  to  me,  well  decided,  that  there  cannot  in 
law  be  an  effective  ratification  of  a  contract  which  could  not  have  been  binding 
on  the  ratifier  at  the  time  it  was  made,  because  the  ratifier  was  not  then  in 
existence.  It  does  not  follow  from  that  that  acts  may  not  be  done  by  the 
company  after  its  formation  which  make  a  new  contract  to  the  same  effect 
as  the  old  one,  but  that  stands  on  a  different  principle."  Per  Jessel,  M.E., 
16  C.  Div.  125;  and  see  Pritchard's  case,  8  Ch.  960;  and  infra.  Form  139.  It 
is  obviously  undesirable  to  leave  matters  on  sach  a  footing  ;  for  it  is  difficult 
to  say  at  what  stage  a  company  becomes  bound  by  acting  on  the  agreement  ; 
and,  accordingly,  even  where  an  adoption  clause  is  inserted,  it  is  expedient  to 
execute  an  adopting  contract  as  above.     Form  12. 

Sometimes  words  are  added  to  the  clause,  as  follows  : — 

"  And  it  is  expressly  declared  that  the  validity  of  the  said  agreement  shall 
not  be  impeached,"  &c.  [as  in  Form  8]. 

I  2 


116 


ARTICLES    OF    ASSOCIATION. 


Porm  117.       4.  The  directors  shall  not    employ  the  funds  of  the  co  or  any  pt 
thereof  in  the  pchase  of  shares  of  the  co. 


Company's 
.shares  not  to 
be  pnrcha.sed 


Where  a  company  desires  to  obtain  the  quotation  of  its  shares  in  the  official 
list  of  the  London  Stock  Exchange^  such  a  clause  as  above  should  be  inserted 
in  order  to  comply  with  the  rules.  See  infra,  at  end  of  "  Prospectuses,"  for 
extract  from  rules. 


When  bnsiness      5.  The  husincss  of  the  CO  may  be  commenced  as  soon  after  the  incor- 
commeiiced.      poration  of  the  co  as  the  directors  shall  think  fit,  and  notwithstanding 
that  pt  only  of  the  shares  may  have  been  allotted. 

This  clause  is  often  inserted,  but  is  not  necessary,  for  a  company  may 
unqviestionably  commence  business,  and  the  directors  may  make  calls  before 
the  whole  capital  has  been  issued.  McDougall  v.  Jersey  Imperial  Hotel  Co., 
2  H.  &  M.  528 ;  Ornamental  Woodwork  Co.  v.  Brown,  11  W.  E.  600  ;  9  Jur.  N.  S. 
579.  The  above  clause,  however,  is  not  useless,  siiice  it  may  prevent  mis- 
understanding. 

The  terms  of  the  prospectus  may,  however,  give  a  member  an  equity  to 
restrain  the  comi^any  from  commencing  business  with  a  totally  insufficient 
capital.  Elder  v.  Neiv  Zealand  Land  Co.,  W.  N.  1874,  85  ;  30  L.  T.  285  ;  Sharj)ley 
V.  Louth  and  East  Coast  Ry.  Co.,  2  Ch.  Div.  663.  But  see  Be  Scottish  Petroleum 
Co.,  23  C.  Div.  422. 


Allotment  of 
shares. 


(!.  The  shares  shall  be  under  the  control  of  the  directors,  who  may 
allot  or  otherwise  dispose  of  the  same  to  such  persons,  on  such  terms 
and  conditions,  and  at  such  times  as  the  directors  think  fit,  [subject, 
nevertheless,  to  the  stipulations  contd  in  the  sd  agrecmt  with  reference 
to  the  shares  to  be  allotted  in  psuance  thereof.] 

The  words  in  brackets  will  be  omitted  if  no  agreement  is  referred  to  in  the 
articles. 

Section  25  of  the  Act  of  1867  must  be  borne  in  mind  ;  see  sujna,  p.  10,  et  seq. 
As  to  whether  shares  can  be  issued  at  a  discount,  see  supra,  p.  39  ;  as  to  bonus 
shares,  supra,  p.  40.  Sometimes  the  words  "  and  either  at  a  discount,  premium 
or  otherwise,"  are  inserted. 

7.  The  CO  may  make  arrangemts  on  the  issue  of  shares  for  a  dif- 
ference between  the  holders  of  such  shares  in  the  amount  of  calls  to  be 
pd  and  the  time  of  paymt  of  such  calls. 

Section  24  of  the  Act  of  1867  provides  that  nothing  in  the  Act  of  1862  shall 
be  deemed  to  prevent  any  company  under  that  Act,  if  authorised  by  its  regu- 
lations, as  originally  framed,  or  as  altered  by  special  resolution,  from  doing, 
inter  alia,  the  above.     It  seems,  therefore,  expedient  to  take  the  power. 

InstalmentB  on      ^-  If>  ^J  ^^^  conditions  of  allotmt  of  any  share,  the  whole   or  pt 

shares  to  be      of  the  amount  thereof  shall  be  payable  by  instalmts,  every  such  instahnt 
July  paid.  '  j 

shall,  when  due,  be  pd  to  the  co  by  the  holder  of  the  share. 

It  is  very  common  now  to  issue  shares  on  terms  that  fixed  sums  shall  be  paid 
on  application  and  allotment,  and  the  balance  or  a  considerable  part  thereof 
by  instalments  at  short  intei'vals.  It  is  therefore  expedient  to  insert  such  a 
clause  as  above.  By  the  joint  effect  of  the  above  clause,  and  of  section  16  of 
the  Act,  each  instalment  will  be  a  debt  due  to  the  company,  su2}ra,  p.  112.  In 
England  and  Ireland  it  will  be  a  specialty,  and,  therefore,  recoverable  within 
twenty  years.    3  &  4  Will.  IV.  c.  42,  s.  3.     Compare  Cork  and  Bandon  Ey.  Co., 


Shares  may  be 
issued  siibject 
to  ditferent 
conditions  as 
to  calls,  &c. 


FORMS. 


117 


13  C.  B.  826.     See  su;pra,  p.  112 ;  and  see,  as  to  section  70  of  tte  Act,  infra,    Poi^  117 

p.  120.     Unless  such  a  clause  is  inserted,  the  instahnents  do  not  constitute  a  — ■ 

statutory  debt.     Care  should  also  be  taken  that  the  forfeiture  clauses  extend 
to  unpaid  instalments.     See  clause  21,  infra. 

9.  The  joint  holders  of  a  share  shall  be  severally  as  well  as  j cm tly  Liability  of 

liable  for  the  paymt  of  uU  iiistabuts  and  calls  due  in  respect  of  such  ^"°'"*  ^'^^^^^'^ 
,  ■'■of  share. 

share. 

This  clause  is  not  uncommon.  It  appears  to  be  very  reasonable,  and  affords 
an  additional  security  to  the  company.  It  extends  only  to  instalments  payable 
and  calls  made  during  the  joint  lives. 

10.  The  CO  shall  be  entled  to  treat  the  registered  holder  of  any  share  Trusts  not 
as  the  absolute  o\yi\cv  thereof,  and  accordingly  shall  not  be  bound  recognised, 
to  recognise  any  equitable  or  other  claim  to  or  interest  in  such  share  on 

the  pt  of  any  other  person  save  as  herein  provided. 

The  above  clause  is  sometimes  inserted  and  may  be  usefiil.  It  goes  f\u-ther 
than  section  30  of  the  Act,  "  No  notice  of  any  trust,  expressed,  implied,  or 
constructive,  shall  be  entered  on  the  register,  or  be  receivable  by  the  registrar 
in  the  case  of  companies  under  this  Act,  and  registered  in  England  or  Ireland." 
It  would  seem  to  enable  the  company  to  treat  the  registered  holder  of  a  share 
as  the  absolute  o'svner  thereof  notwithstanding  any  notice  of  equities.  But  the 
clause  cannot  prevent  a  person  equitably  interested  in  shares,  from  procuring 
the  intervention  of  the  Court  to  pi-otect  his  rights.  Binney  v.  Ince  Hall  Coal 
Co.,35  L.  J.  Ch.  363  ;  Taylor  v. Midland  Ry.  Co.,  8  W.  E.401.  Nor  can  the  clause 
prevent  an  equitable  mortgagee  from  taking  the  shares  out  of  the  reputed 
o-\vnership  of  the  mortgagor,  by  giving  notice  to  the  company.  Ex  parte  Stewart, 
13  W.  K.  356 ;  11  Jur.  N.  S.  25  ;  In  re  Jackson,  12  Eq.  354.  And  so,  too,  as 
between  competing  equitable  assignees  of  shares,  he  who  first  gives  notice  to 
the  company  -will,  cceteris  paribus,  be  preferred,  notwithstanding  the  above 
clause. 

As  to  what  a  company  ought  to  do  where  it  receives  notice  not  to  register  a 
transfer,  see  Tahiti  Cotton  Co.,  17  Eq.  280:  Ex  parte  Roll,  W.  N.  187G,  91. 

The  company  need  not  register  a  person  as  a  member  imder  a  transfer  of 
shares  of  which  they  have  any  doubt,  but  can  leave  the  transferee  to  come  to 
the  Court  and  makeout  his  title.  Per  Mellor,  J.,  Bahia  ^  San  Francisco  Ry., 
L.  E.  3  Q.  B.  597. 

Under  section  30  of  the  Act,  a  trustee  who  is  the  registered  holder  of  shares 
is  personally  liable.  Chapman  v.  Barber's  case,  3  Eq.  361 ;  Hemming  v.  Maddick, 
7  Ch.  395.  And  the  same  rule  applies  to  Scotch  companies  even  where  the 
trustees  are  registered  "  as  trustees."  Muir  v.  City  of  Glasgow  Bank,  4  App. 
Cas.  337.  But  a  trustee  is  entitled  to  be  indemnified  by  his  cestui  que  trust. 
Hemming  v.  Maddick,  uhi  supra  ;  Buckley,  81. 


Ceetificates. 

11.  The  certificates  of  title  to  shares  shall  be  issued  under  the  seal  of  Certificates, 
the  CO,  and  signed  by  two  directors,  and  countersigned  by  the  secretary 

or  some  other  person  appointed  by  the  directors. 

As  to  the  serious  responsibility  incurred  by  a  company  in  issuing  certificates, 
see  infra,  "  Certificates,"  where  also  will  be  found  forms  of  certificates. 

12.  Every  member  shall  be  entled  to  one  certificate  for  the  shares  Members' 

right  to. 


]18 


AETICLES    OF    ASSOCIATION. 


Form  117.  registered  iu  his  name,  or  to  several  certificates,  each  for  a  pt  of  such 
shares.  Every  certificate  of  shares  shall  specify  the  number  of  the 
share  in  respect  of  which  it  is  issued  and  the  amount  pd  up  thereon. 

13.  If  any  certificate  be  worn  out  or  defaced,  then,  upon  production 
thereof  to  the  directors,  they  may  order  the  same  to  be  cancelled,  and 
may  issue  a  new  certificate  in  lieu  thereof  ;  and  if  any  certificate  be  lost 
or  destroyed,  then,  upon  proof  thereof  to  the  satisfon  of  the  directors, 
and  on  such  indemnity  as  the  directors  deem  adequate  being  given,  a 
new  certificate  in  lieu  thereof  shall  be  given  to  the  party  entled  to  such 
lost  or  destroyed  certificate. 

The  company  incurs  a  serious  responsibility  by  issuing  a  new  certificate, 
unless  the  old  one  is  cancelled ;  and  it  ought  not  to  be  done  except  on  very 
satisfactory  proof  of  loss  or  destruction,  or  on  a  satisfactory  indemnity  being 
given.     See  further,  infra,  "  Certificates." 


As  to  issue  of 
new  certificate 
in  place  of 
one  defaced, 
lost,  or 
destroyed. 


Fee. 


To  which  of 
joint-holders 
certificate  to 
he  issued. 


Calls. 


14.  The  sum  of  [one  shilling],  or  such  smaller  sum  as  the  directors 
may  determine,  shall  be  pd  to  the  co  for  every  certificate  issued. 

Whether  the  above  clause  should  be  used  or  the  following  one  is  a  matter  for 
consideration.  Both  are  common,  but  there  seems  no  particular  reason  why 
the  original  members  should  get  certificates  gratis.  It  is,  however,  usually 
so  provided  where  the  company  is  formed  to  effect  a  reconstruction  or  an  amal- 
gamation ;  and  promoters  sometimes  rec^uire  the  insex'tion  of  a  clause  as  to  issue 
of  certificates  gratis. 

The  following  is  another  form  : — 

Every  person  to  whom  shares  (in  the  original  capital)  shall  be  allotted  shall 
be  entitled,  gratis,  to  one  certificate  in  respect  of  each  share  allotted  to  him  ; 
but  for  every  other  certificate  there  shall  be  paid  to  the  comi)any  such  sum,  not 
exceeding  one  shilling,  as  the  directors  may  from  time  to  time  determine. 

15.  The  certificates  of  shares  registered  in  the  names  of  two  or  more 
persons  shall  be  delivered  to  the  person  first  named  on  the  register. 

Calls. 

10.  The  directors  may,  from  time  to  time,  make  such  calls  as  they 
think  fit  upon  the  members  in  respect  of  all  monies  unpd  on  the  shares 
held  by  them  respi^•ely,  and  not  by  the  conditions  of  allotmt  thereof 
made  payable  at  fixed  times,  and  each  member  shall  pay  the  amount  of 
every  call  so  made  on  him  to  the  persons  and  at  the  times  and  places 
appointed  by  the  directors.     A  call  may  be  made  payable  by  instalmts. 

Every  call  or  instalment  under  the  above  clause  becomes  a  debt,  for  which 
the  company  can  sue.     See  siq^ra,  note  to  Clause  8. 

As  to  an  action  against  a  member  for  calls  or  other  moneys,  see  infra,  note  to 
Clause  19a. 

It  is,  perhaps,  needless  to  say  that  a  call  made  by  persons  not  duly  ajjpointed 
directors  is  void.  Hoivbeach  Coal  Co.  v.  Teag^ie,  5  H.  &  N.  151 ;  29  L.  J.  Ex.  137; 
8  W.  R.  264.  So,  too,  it  will  be  a  valid  defence,  in  an  action  for  calls,  that  the 
directors  who  purported  to  make  the  call  were  not  duly  qualified.  The  Iron- 
ship,  ^c,  Co.  V.  Blunt,  3  C.  P.  484.     See  also  Sharp  v.  Datves,  2  Q.  B.  Div.  26. 

But  s.  67  of  the  Act  and  a  clause  like  112,  in/ro,  may  make  an  act  of  directors 
done  before  discovery  of  undue  appointment  or  disqualification  valid. 


FOEMS.  119 

A  minute  of  tlie  resolution  making  a  call  ought  to  be  made,  for  there  i3  some    Form  117. 

question  whether  the  call  can  otherwise  be  proved.     Cornivall  Mining  Co.  v.  -— 

Bennett,  5  H.  &  N.  4.23  ;  29  L.  J.  Ex.  157.  But  the  resolution  need  not  specify 
when,  where,  and  to  whom  the  call  shall  be  paid.  These  particulars  may  be 
fixed  by  subsequent  resolution.  Johnsonv.Lyttle's  Iron  Agency,  5  C.  Div.687.  See 
further,  as  to  calls,  Buckley,  401,  et  seq.  It  would  seem  that  even  without 
express  authority[a  call  may  certainly  be  made  payable  by  instalments.  ^?)i6er- 
gate  By.  Co.  v.  Norcliffe,  G  Ex.  629  ;  Lawrence  v.  Wynn,  5  M.  &  W.  355. 

17.  A  call  shall  be  deemed  to  have  been  made  at  the  time  when  the  When  call 
resolution  of  the  directors  authorising  such  call  was  passed.  havTbeen 

This  clause,  which  appears  in  Table  A.,  is  inserted  in  order  to  get  rid  of  any  °^*"®- 
doubt  as  to  whether  the  call  is  "  made,"  when  the  resolution  is  passed,  or  when 
notice  of  it  is  given  to  the  members.     Shaiv  v.  Bowley,  16  M.  &  W.  810.     See 
Clauses  31  &  33,  Infra,  in  connection  with  which  the  question  is  sometimes 
material. 

[\la.  Unless  the  co  in  general  meeting  shall  othenvise  determine,  no  Eestrictions 

call,  in  respect  of  the  shares  in  the  original  capital,  shall  exceed 1,  onpo^'er  to 

per  share,  or  be  made  payable  withm  months  after  the  last  pre- 
ceding call  was  payable.] 

The  above  clause  is  sometimes  used,  hwi  it  is  generally  considered  better  to 
leave  the  directors  free  to  exercise  their  discretion.  The  prospectus  not  un- 
commonly states  that  it  is  not  intended  to  make  calls  beyond  a  certain  amount, 
but  such  a  statement  of  intention  is  not  binding  on  the  company ;  and  it  was 
held  in  one  case  that  an  action  would  lie,  though  the  shares  were  applied  for  on 
the  faith  of  a  prospectus  which  stated  that  "No  further  calls  are  contem- 
plated." Accidental  Insurance  Co.  v.  Davis,  15  L.  T.  182.  Prinul  facie  a  pay- 
ment to  be  made  on  the  allotment  of  a  share  is  not  a  call.  Croshey  v.  Banlc  of 
Wales,  4  Giff.  314. 

18.  Fourteen  days'  notice  of  any  call  shall  be  given  specifying  the  Notice  of  call. 
time  and  place  of  paymt,  and  to  whom  such  call  shall  be  pd. 

It  is  always  expedient  to  allow  a  reasonable  time  for  payment  of  a  call.  If 
money  is  urgently  required,  the  directors  should  raise  it  temporarily  on  deben- 
tures or  mortgage,  or  otherwise,  so  as  to  allow  sufficient  time  for  the  members 
to  pay  up.  Where  so  many  "clear  days' notice  "  is  to  be  given,  the  day  of 
giving  the  notice  and  the  day  on  which  the  call  is  to  be  paid  should  not  be 
counted.  Watson  v.  Bales,  23  Beav.  294.  If  a  call  is  made  payable  by  instal- 
ments, the  notice  ought,  it  would  seem,  to  be  given  the  prescribed  number  of 
days  before  the  time  fixed  for  the  payment  of  the  first  instalment.  Notice 
must  be  given  in  accordance  with  the  regulations  of  the  company.  Watson  v. 
Bales,  ubi  supra.     And  see  CI.  150,  infra. 

19.  If  the  sum  payable  in  respect  of  any  call,  or  instalmt,  be  not  pd  When  interest 
on  or  before  the  day  appointed  for  paymt  thereof,  the  holder  for  the  °ns[ainien^t 
time  being  of  the  share  in  respect  of  which  the  call  shall  have  been  payable. 
made,  or  the  instalmt  shall  be  due,  shall  pay  interest  for  the  same,  at  the 

rate  of  107.  p.  c.  p.  a.,  from  the  day  appointed  for  the  paymt  thereof  to 
the  time  of  the  actual  paymt. 

What  the  rate  of  interest  should  be  is  a  matter  for  consideration.  Sometimes 
25  per  cent,  is  specified.     See  Stocken's  case,  3  Ch.  412. 

It  appears  that  such  a  clause  does  not  apply  to  calls  made  by  the  liquidators 
of  a  company.     In  re  Welsh  Flannel  and  Tweed  Co.,  20  Eq.  367. 


120 


AETICLES    OF    ASSOCIATION. 


Form  117.        The  duty  of  the  directors,  when  a  call  is  made,  is  to  compel  every  shareholder 

to  pay  to  the  company  the  amount  due  from  him  in  respect  of  that  call ;  and 

they  are  guilty  of  a  breach  of  their  diity  if  they  do  not  take  all  reasonable 
means  for  enforcing  that  payment.     Spademan  v.  Evans,  L.  R.  3  H.  L.  186. 


Evidence  in 
action  for  call. 


Payment  of 
calls  in 
advance. 


[19«.  On  the  trial  or  hearing  of  any  action  for  the  recovery  of  any 
money  due  for  any  call  it  shall  be  sufficient  to  prove  that  the  name  of 
the  member  sued  is  entered  in  the  register  of  members  of  the  co  as  the 
holder,  or  one  of  the  holders,  of  the  shares  in  respect  of  which  such  debt 
accrued;  that  the  resolution  making  the  call  is  duly  recorded  in  the 
minute  book ;  and  that  notice  of  such  call  was  duly  given  to  the  member 
sued,  in  psuance  of  these  presents  ;  and  it  shall  not  be  necessary  to  prove 
the  appointmt  of  the  directors  who  made  such  call,  nor  any  other 
matters  whatsoever,  but  the  proof  of  the  matters  afsd  shall  be  conclusive 
evidence  of  the  debt.] 

This  clause  is  sometimes  inserted;  it  is  not  contained  in  Table  A.  The  pro- 
visions of  the  Act  are  generally  deemed  sufficient.  They  are  as  follows  :  Section 
70  provides  that,  "  In  any  action  or  suit  brought  by  the  company  against  any 
member  to  recover  any  call  or  other  moneys  due  from  such  member  in  his 
character  of  member,  it  shall  not  be  necessary  to  set  forth  the  special  matter  ; 
but  it  shall  be  sufficient  to  allege  that  the  defendant  is  a  member  of  the  com- 
jDany,  and  is  indebted  to  the  company  in  respect  of  a  call  made  or  other  moneys 
due,  whereby  an  action  or  suit  hath  accrued  to  the  company."  Under  Section 
37,  the  production  of  the  register  is  sufficient  primd,  facie  evidence  of  member- 
ship ;  and  a  minute  of  the  resolution  making  the  call,  signed  as  required  by 
Section  07  of  the  Act,  is  sufficient  prinul  facie  evidence  of  the  call  having  been 
duly  made,  and  the  meeting  duly  held,  and  of  the  due  appointment  of  the 
directors. 

Notwithstanding  the  terms  of  the  above  clause,  there  is  no  doubt  that  the 
defendant  would  be  entitled  to  show  that  he  was  not  a  member.  It  would, 
however,  seem  that  as  against  a  member  the  clause  would  render  the  duly 
recorded  resolution  of  a  call  conclusive.  t5ee  and  consider  Cornwall,  8^c.,  Co. 
V.  Bennett,  5  H  &  N.  423  ;  29  L.  J.  Ex.  157  ;  and  Roney's  case,  4  D.  J.  &  S.  12  W. 
E.  815,  994. 

20.  The  directors  may,  if  they  think  fit,  receive  from  any  member 
willing  to  advance  the  same  all  or  any  pt  of  the  money  due  upon  the 
shares  held  by  him  beyond  the  sums  actually  called  for,  and  upon  the 
moneys  so  pd  in  advance,  or  so  much  thereof  as  from  time  to  time 
exceeds  the  amount  of  the  calls  then  made  upon  the  shares  in  respect  of 
which  such  advance  has  been  made,  the  co  may  pay  interest  at  such  rate 
as  the  member  paying  such  sum  in  advance  and  the  directors  agree 
upon. 

As  to  the  position  in  the  winding  up  of  persons  who  have  paid  in  advance,  see 
Maude's  case,  6  Ch.  51,  and  notes  to  CI.  152,  infra. 

The  power  to  receive  in  advance  is  a  trust  for  the  benefit  of  the  company. 
Hence,  where  directors  paid  up  in  advance  their  own  shares,  and  on  the  same 
day  appropriated  the  amount  in  payment  of  their  fees,  for  which  there  were,  at 
the  time,  as  they  knew,  no  other  available  assets,  it  was  held  that  the  transac- 
tion not  being  bonilfide,  the  directors  remained  liable  on  their  shares.  Sykes' 
case,  13  Eq.  255.  See  also  Gilbert's  case,  5  Ch.  559  ;  In  re  Wincham  Shipbuilding 
Co.,  9  C.  Div.  322 ;  and  compare  with  Liverpool  Guarantee  Co.,  30  W.  E.  378 ;  4G 
L.  T.  54. 


FORMS.  121 

It  has  not  been  settled  whether  under  this  clause  [Table  A.,  01.7]  interest  can    Form  117. 

be  paid  irrespective  of  profits.     According  to  Guiness  v.  Land  Corporation  of 

Ireland,  22  C.  Div.  3i9,  it  would  seem  not.  And  at  any  rate  if  the  bargain  is 
not  honCb  fide,  but  is.  designed  to  enable  the  company  to  pay  dividend  out  of 
capital,  it  will  be  ultra  vires.  In  Fisher  y.]HuII  ^  Barnsley  Ry.  Co.,  before  Jessel, 
M.  R.,  4  Mar.  1881,  shareholders  had  paid  in  advance,  and  it  was  alleged  that 
they  were  entitled  to  be  paid  interest  though  the  company  was  not  making  any 
profits,  but  the  M.  E.,  in  granting  an  injunction,  said  :  "I  can  see  that  there 
may  be  questions  of  bona  fides  involved,  which  may  or  may  not  affect  the  right 
of  the  company  to  pay  the  interest,  and  therefore  I  reserve  this  point  for  de- 
cision on  a  future  occasion." 


Forfeiture  axd  Lien. 

21.  Tf  any  member  fail  to  pay  any  call  or  instalmt  on  or  before  the  If  call  or 
day  appointed  for  the  paymt  of  the  same,  the  directors  may  at  any  time  p'^jj  notice"^ 
thereafter  during-  such  time  as  the  call  or  instalmt  remains  unpd,  serve  a  may  be  given, 
notice  on  such  member  requiring  him  to  pay  the  same,  together  with 

any  interest  that  may  have  accrued,  and  all  expenses  that  may  have  been 
incurred  by  the  co,  by  reason  of  such  non-paymt. 

The  power  of  forfeiture  is  a  most  valuable  one  for  enforcing  the  payment  of 
calls  and  instalments.  But  it  is  to  be  treated  as  strictissimi  juris,  and  accord- 
ingly any  irregularity  in  the  procediu-e  will  invalidate  the  forfeiture.  Hart  v. 
Clark,  6  H.  L.  Cas.  633  ;  The  Garden  Gully,  ^c,  Co.  and  McLister,  1  App.  Cas. 
39 ;  Johnson  v.  Lyttle's  Iron  Agency,  5  C.  Div.  687 ;  Goulton  v.  London  Archi- 
tectural Co.,  W.  N.  1877,  lil ;  Stuhhs  v.  Lister,  1  Y.  &  C.  81.  See  Form  327, 
infra. 

The  power  is  a  trust  to  be  exercised  for  the  benefit  of  the  company,  and,  if  it 
is  used  for  the  purpose  of  enabling  members  to  escape  from  their  liabilities,  the 
transaction  cannot  stand.  In  re  Esparto  Trading  Co.,  12  C.  Div.  191.  A  power 
to  forfeit  may  probably  be  inserted  by  special  resolution.  Baiukins  v.  Antrobus, 
17  C.  D.  615. 

22.  The  notice  shall  name  a  day  (not  being  less  than  fourteen  days  Form  of  notice. 
from  the  date  of  the  notice),  and  a  place,  or  places,  on  and  at  which  such 

call  or  instalmt  and  such  interest  and  expenses  as  afsd  are  to  be  pd. 
The  notice  shall  also  state  that  in  the  event  of  non-paymt  at  or  before  the 
time  and  at  the  place  appointed,  the  shares  in  respect  of  which  the  call 
was  made  or  instalmt  is  payable,  will  be  liable  to  be  forfeited. 

23.  If  the  requisitions  of  any  such  notice  as  afsd  are  not  complied  if  notice  not 
with,  any  shares,  in  respect  of  which  such  notice  has  been  given,  may,  comphed  with 

'*''■'  ,  o  7         J  ^  snares  may  be 

at  any  time  thereafter,  before  paymt  of  all  calls  or  instalmts,  interest  and  forfeited, 
expenses,  due  in  respect  thereof,  be  forfeited  by  a   resolution  of  the 
directors  to  that  effect.  Such  forfeiture  shall  include  all  dividends  declared 
in  respect  of  the  forfeited  shares,  and  not  actually  pd  before  the  forfeiture. 

The  forfeiture  may  be  held  valid  although  this  clause  has  not  been  strictly 
observed.     Woolaston's  case,  4  De  G.  &  J.  437  ;  Knight's  case,  2  Ch.  321. 

Of  coiirse  the  directors  are  not  bound  to  exercise  the  power  of  forfeiture. 
Rigg's  case,  1  Eq.  309. 

[23rt.  "When  any  shares  shall  have  been  so  forfeited,  notice  of  the  Notice  after 
resolution  shall  be  given  to  the  member  in  whose  name  it  stood  prior  to  *°'^^^^*"^^- 


122 


AETIOLES    OF    ASSOCIATION. 


Form  117.    the  forfeiture,  and  an  entry  of  the  forfeiture,  with  the  date  thereof,  shall 
~  forthwith  be  made  in  the  register.] 

This  clause  is  sometimes  inserted,  and  it  seems  reasonable  in  order  that  the 
member  may  have  an  opi^ortunity  of  getting  the  forfeiture  annulled  under 
Clause  37.  It  does  not  follow  that  the  failure  to  give  the  notice  invalidates  the 
forfeiture.     Webster's  case,  32  L.  J.  Ch.  135. 


Forfeited  share  94.  Any  share  SO  forfeited  shall  be  deemed  to  be  the  ppty  of  the  co, 
property  of  '^^^^  ^'^^  directors  may  sell,  re-allot,  and  otherwise  dispose  of  the  same  in 
company.         such  manner  as  they  think  fit. 


Power  to  annul 
forfeiture. 


Arrears  to  be 
paid  notwith- 
standing for- 
feiture. 


Effect  of 
forfeiture. 


Company's 
lien  on  shares. 


This  clause  is  almost  always  inserted. 

25.  The  directors  may,  at  any  time  before  any  share  so  forfeited  shall 
have  been  sold,  re-allotted,  or  otherwise  disposed  of,  annul  the  forfeiture 
thereof  upon  such  conditions  as  they  think  fit. 

2G.  i\.ny  member  whose  shares  have  been  forfeited  shall,  notwith- 
standing, be  liable  to  pay,  and  shall  forthwith  pay  to  the  co  all  calls,  in- 
stalmts,  interest,  and  expenses,  owing  upon  or  in  respect  of  such  shares 
at  the  time  of  the  foi'fciture,  together  with  interest  thereon,  from  the 
time  of  forfeiture  until  paymt,  at  [5]  p.  c.  p.  a.,  and  the  directors  may 
enforce  the  paymt  thereof  if  they  think  fit. 

In  the  absence  of  such  a  clause  as  above,  it  appears  that  the  forfeiture  would 
be  taken  to  preclude  the  company  from  suing  for  calls.  Stocken's  case,  3  Ch. 
412.  From  the  same  case  it  appears  that  the  liability  under  this  clause  must 
be  treated  as  a  new  one,  binding  under  s.  IG  of  the  Act,  (see  sujn-a,  note  to 
Clause  8,)  and  not  as  a  preservation  of  the  liability  existing  at  the  time  of  for- 
feiture. It  is  necessary  therefore  to  prescribe  the  rate  of  interest,  since  the 
provision  in  Clause  19  will  not  apply.     Stochen's  case,  ubi  supra. 

[20f/.  The  forfeiture  of  a  share  shall  involve  the  extinction  of  all 
interest  in,  and  also  of  all  claims  and  demands  against  the  co  in  respect 
of  the  share,  and  all  other  rights  incident  to  the  share  except  only  such 
of  those  rights  as  by  these  articles  are  expressly  saved.] 

Although  the  above  clause  is  sometimes  inserted,  it  appears  to  be  of  little  or 
no  value.  In  substance  it  merely  provides  for  that  which  is  otherwise  provided 
for,  namely,  that  a  forfeited  share  shall  be  deemed  to  be  the  property  of  the 
company.  If  strictly  construed,  it  would  deprive  a  future  holder  of  the  share  of 
the  right  of  voting  and  of  receiving  dividends,  &c.    See  Stocken's  case,  3  Ch.412. 

In  Creyke's  case,  5  Ch.  63,  it  was  contended  that  the  forfeiture  of  shares  in  a 
company  whose  articles  contained  such  a  clause  freed  the  forfeiting  member 
from  liability  even  as  a  past  member ;  but  it  was  held  that  this  was  not  so. 

27.  The  co  shall  have  a  first  and  paramount  lien  upon  all  the  shares 
registered  in  the  name  of  each  member  (whether  solely  or  jointly  with 
others),  for  his  debts,  liabilities,  and  engagemts,  solely,  or  jointly,  with 
any  other  person,  to  or  with  the  co,  whether  the  period  for  the  paymt, 
fulfilmt,  or  discharge  thereof  shall  have  actually  anived  or  not.  And 
such  lien  shall  extend  to  all  dividends  from  time  to  time  declared  in 
respect  of  such  shfires. 


rOEMS.  123 

It  is  usual  expressly  to  give  a  company  a  lien  as  above.     It  is  possible  tbat  a    Form  117. 
lien  might  be  implied  though  not  expressly  given,  Lindley,  70G ;  but  this  jdos- 
sibility  is  not  relied  on  in  practice.     See  Pinicett  v.  Wright,  2  Ha.  120 ;  12  CI. 
&  Fin.   764.      Probably  a  lien  on  the  shares  gives  a  lien  on  the  dividends 
without  express  mention.     Hague  v.  Danderson,  2  Ex.  741. 

As  to  the  above  clause,  see  In  re  Stockton,  ^'c,  Co.,  2  Ch.  Div.  101 ;  In  re 
Lewis,  G  Ch.  818  ;  Lindley,  G81 ;  Buckley,  413. 

28.  For  the  ppose  of  enforcing  such  h'on,  the  directors  may  sell  the  As  to  enforcing 
shares  subject  thereto,  in  such  manner  as  they  think  fit ;  hut  no  sale  ^'^"  '-"^  '*"■^^• 
shall  be  made  until  such  period  as  afsd  shall  have  arrived,  and  mitil 

notice  in  Avriting  of  the  intention  to  sell  shall  have  been  served  on  such 
member,  his  exs  or  ads,  and  default  shall  have  been  made  by  him  or 
them  in  the  paymt,  fulfilmt,  or  discharge  of  such  debts,  liabilities,  or  en- 
gagemts  for  seven  days  after  such  notice. 

The  lien  is  of  much  greater  value  if  it  can  be  enforced  in  a  summary  manner 
by  sale  of  the  share  subject  to  it.  Table  A.  (Clause  10),  does  not  confer  on  the 
company  a  power  of  sale.  The  restriction  contained  in  the  latter  part  of  the 
above  clause  has  only  recently  come  into  use,  but  it  seems  only  fair  and 
equitable.  See  observations  of  Jessel,  M.  E.,  In  re  StocMon,  S^c,  Co.,  ubi  supra. 
As  to  meaning  of  word  "default,"  Williams  v.  Stern,  5  Q.  B.  D.  409.  Where 
there  is  a  lien  but  no  power  of  sale,  an  action  is  necessary  to  effect  a  sale.  New 
London  Sf  Brazilian  Bank  v.  Brocklebank,  21  C.  Div.  302 ;  30  W.  E..  422. 

29.  The  net  proceeds   of  any  such  sale  shall  be  apphed  in  or  towards  Application  of 
satisfon  of  the  debts,  liabilities,  or  engagemts,  and  the  residue  (if  any)  pd  Proceeds  of 
to  such  member,  his  exs,  ads,  or  assigns. 

30.  Upon  any  sale  after  forfeiture  or  for  enforcing  a  lien  in  purported  Vahdity  of 
exercise  of  the  powers  hinbefore  given,  the  directors  may  cause  the  ^^^^^  "^'^6^' 

...  cii  clauses  24 

pchaser  s  name  to  be  entered  m  the  register  m  respect  oi  the  snares  or  and  28. 

stock  sold,  and  the  pchaser  shall  not  be  bound  to  see  to  the  regularity 

of    the  proceedings,   or  to  the   applicon  of    the  pchase-money,   and 

after  his  name  has   been  entered  in  the   register,  the  validity  of  the 

sale  shall  not  be  impeached  by  any  person,  and  the  remedy  of  any  person 

aggrieved  by  the  sale  shall  be  in  damages  only  and  against  tlie  co 

exclusively. 

Compare  this  Clause  with  Clause  22  of  Table  A.,  which,  however,  only  applies 
to  a  sale  on  forfeiture. 


Transfer  axd  Transmission  of  Shares. 

By  s.  22  of  the  Act,  shares  are  to  be  "  capable  of  being  transferred  in  manner 
provided  by  the  regulations  of  the  company."  Hence,  it  is  necessary  to  provide 
for  transfers  ;  but  it  is  well  settled  that,  save  so  far  as  restricted  by  the  articles, 
the  right  of  transfer  is  absolute.  It  would  not  be  within  the  province  of  this 
work  to  enter  into  a  consideration  of  the  numerous  cases  relating  to  transfer, 
but  the  following  may  be  mentioned :  Weston's  case,  4  Ch.  20.  According  to  'Weston's  case, 
the  principles  laid  dovra  in  this  case,  the  articles  are  not  to  be  looked  at  to  see 
whether  they  give  a  right  to  transfer,  for  the  statute  gives  that,  but  whether 
they  restrict  the  right.  See  also  De  Pass's  case,  4  D.  G.  &  J.  544.  Moreover, 
if  the  articles  restrict  the  right  in  a  specified  case,  then  the  maxim  "  expressio 
unius  est  exclusio  alterius  "  applies.       Weston's  case,  ubi  siq^ra.     So  where  there 


124 


AETICLES    OF    ASSOCIATION. 


Form  117.    ^'^'^^  po-wer  to  clecline  to  register  a  transfer  made  by  a  member  indebted  to  the 

company,  or,  in  case  of  shares  not  fully  paid  np,  to  a  transferee  of  whom  the 

directors  did  not  approve,  it  was  held  that  a  holder  of  fully  paid-up  shares, 
not  indebted  to  the  company,  might  distribute  his  shares  among  a  number 
of  nominees,  although  his  object  was  to  secure  to  himself  the  maximum  of 
voting  power  at  a  pending  meeting  of  the  company,  contrary  to  the  spirit  of 
the  regulations  of  the  company.  In  re  Stranton  Steel  and  Iron  Co.,  16  Eq.  559  ; 
and  Pender  v.  Lushington,  6  C.  D.  70.  See  also  Cannon  v.  Trash,  20  Eq.  675. 
Again,  the  Stockton  MalleaUe  Iron  Co.  (2  Ch.  Div.  101),  was  empowered  to 
decline  to  register  any  transfer  of  shares  whilst  the  member  making  the 
transfer  was  indebted  to  the  company  on  any  account  whatever.  The  company 
were  indorsees  of  a  bill  accepted  by  a  member,  but  not  yet  payable.  On  the 
construction  of  the  articles,  it  was  held  that  indebted  meant  indebted  in 
respect  of  a  debt  due  and  jmyable,  and  consequently  that  the  member  had  a 
right  to  transfer,  notwithstanding  that  the  company  held  his  acceptance.  See 
also  3Ioffattv.  Farquhar,  7  C.  D.  591;  and  Buckley,  pp.  22,  408. 

Where  a  company  is  threatened  with  insolvency,  it  may  be  the  duty  of  the 
exec\itive  to  refuse  to  register  transfers.  Alex.  Mitchell's  case,  4  App.  Cas. 
567 ;  Nelson  Mitchell  v.  City  of  Glasgow  Bank,  4  App.  Cas.  624.  But  see  contra 
Re  Taurine  Co.,  25  C.  Div.  118  ;    32  W.  E.  129  ;  49  L.  T.  514,  contra. 

Execution  of         ?>!•  The  instrumt  of  transfer  of  any  share  shall  be  signed  both  by  the 
transfer,  &c.      transferor  and  transferee,  and  the  transferor  shall  be  deemed  to  remain 

the  holder  of  snch  share  until  the  name  of  the  transferee  is  entered  in 

the  register  in  respect  thereof. 

See  Table  A.  (Clause  8).  The  object  of  requiring  the  transferee  to  execute 
the  transfer,  is  to  fix  him  with  an  agreement  to  take  the  shares,  and  thereby 
secure  him  as  a  member ;  for  by  s.  23  of  the  Act,  an  agreement  to  become  a 
member,  constitutes  membership.  See  hanger's  case,  37  L.  J.  Ch.  292  ;  W.  N. 
1868,  8  ;  and  Burnes  v.  Pennell,  2  H.  L.  Cas.  497  ;  Be  Tcmrine  Co.,  ubi  s^lpra. 

The  main  object  of  the  latter  part  of  the  clause  is  to  give  effect  to  the  pro- 
visions as  to  calls,  so  that  a  member,  upon  whom  a  call  has  been  made,  shall 
not  be  able  to  avoid  forfeiture  by  a  transfer. 

As  between  transferor  and  transferee  there  is  an  implied  contract  by  the 
latter  to  indemnify  the  former  against  all  liability  in  respect  of  the  shares 
during  the  time  that  the  transferee  holds  them.  Kellock  v.  Enthoven,  L.  E. 
9  Q.  B.  241. 

Form  of  32.  Thc  instrumt  of  transfer  of  any  share  shall  be  in  writing  in  the 

transfer.  following  form,  or  as  near  thereto  as  circes  will  admit : — 

I,  A.  B.,  of ,  in  conson  of  the  sum  of pounds  pd  to  me  by 

C.  D.,  of ,  hereinafter  called  the  sd  transferee,  do  hby  transfer  to 

the  sd  transferee  the  share  [or  shares]  numbered ,  standing  in  my 

name  in  the  books  of  The Co,  Limtd,  to  hold  unto  thc  sd  transferee, 

his  exs,  ads,  and  assigns,  subject  to  the  several  conditions  on  which 
[I]  held  the  same  immediately  before  the  execution  hereof :  and  I,  the 
sd  transferee,  do  hby  agree  to  take  the  sd  [share  or  shares]  subject  to 
the  conditions  afsd.     As  witness  our  hands,  thc day  of . 

Tt  is  generally  expedient  to  use  this  form.  It  differs  slightly  from  the  form 
given  in  Table  A.  ;  but  it  is  in  general  use,  and  can  be  purchased  at  stationers' 
and  elsewhere.  Sometimes  the  articles  require  a  transfer  to  be  by  deed;  but 
this  requisition  causes  inconveniences,  and  secures  no  benefit.  Where  the 
transfer  may  be  by  instrument  in  writing  as  above,  the  shareholder  may  sign  a 
blank  transfer,  and  hand  it  over  to  a  purchaser  or  mortgagee,  with  authority 


FOEMS.  125 

for  the  holder  of  it  for  the  time  being  to  fill  in  the  name  of  a  transferee,  and  such    Form  117. 

a  transfer  when  filled  up  can  be  sent  in  for  registration,  and  no  objection  can  be  

raised  by  the  company  to  its  validity.  Ex  parte  Sargent,  17  Eq.  273 ;  Tees  Bottle 
Co.,  33  L.  T.  834.  But  where  a  deed  is  required,  this  convenient  plan  is  not 
properly  available  ;  for  a  deed  executed  in  blank  is  inoperative.  Nevertheless, 
such  are  the  exigencies  of  business,  that  even  where  a  deed  is  required,  the  plan 
is  frequently  adopted,  in  the  expectation  thj),t  the  company  will  not  notice  or  take 
advantage  of  the  irregularity.  It  seems,  however,  desirable  to  make  this 
regulation  accord  with  the  general  practice. 

It  appears  from  the  decision  of  the  Coiu't  of  Appeal  in  France  v.  Clark,  19  Feb.^ 
188-i  (see  Addenda),  that  though  the  delivery  to  a  mortgagee  of  a  certificate  of 
title  and  blank  transfer  may  give  him  an  implied  right  to  insert  his  own  name, 
the  right  does  not  pass  to  his  assigns. 

3;].  The  directors  may  decline  to  register  any  transfer  of  shares  or  In  what  cases 
stock  upon  which  the  co  has  a  lieu  :  and  in  the  case  of  shares  not  fully  •^l^'^ctors  may 

■^  *'   dechne  to 

pd  up,  may  refuse  to  register  a  transfer  [to  a  transferee  of  whom  they  register 
do  not  approve].  transfer. 

Or  the  words  in  brackets  may  be  omitted,  and  the  following  substitiited : 
"  Without  assigning  any  reason  thei-efor." 

From  what  has  been  said  in  the  note  preceding  Clause  31,  it  appears  that  if 
the  right  of  transfer  is  to  be  restricted,  express  provisions  must  be  inserted  in 
the  articles  for  the  purpose.  It  is  not  found  in  practice  that  a  clause  as  above 
affects  the  marketable  value  of  the  shares ;  for  it  is  always  assumed  that  the 
transfer  will  be  passed,  and,  of  course,  it  generally  is.  If,  however,  the  com- 
pany has  a  lien,  the  clause  enables  it  to  preserve  the  same  ;  and  this  is  often 
a  matter  of  importance.  It  is  expedient,  as  above,  to  make  the  clause  ajiply 
to  any  case  where  the  company  has  a  lien,  and  not  merely,  as  is  often  done,  to 
the  case  of  a  member  who  is  "  indebted"  to  the  company.  See  In  re  Stockton 
Malleable  Iron  Co.,  2  Ch.  Div.  101 ;  and  see  also  supra,  note  to  Clause  27.  As 
to  Clause  10  of  Table  A.,  see  Ex  parte  Stringer,  9  Q.  B.  D.  436. 

It  is  generally  thought  sufficient,  in  addition  to  pi-oviding  for  the  preserva- 
tion of  the  lien,  to  give  the  directors  power  to  decline  to  register  a  transfer  of 
shares,  not  f'ally  paid  up,  to  a  transferee  of  whom  they  do  not  approve.  If  the 
company  gets  into  difficulties,  this  will  enable  the  directors  to  prevent  the  intro- 
duction of  insolvent  members.  Where  such  a  discretion  is  given,  the  directors 
will  not,  if  acting  bona  fide,  be  compelled  to  give  their  reasons  for  refusing  to 
register  a  transfer.  If  they  exercise  their  power  capriciously  or  wantonly,  it 
must  be  alleged  and  proved ;  the  Court  will  then  interfere,  but  not  otherwise.  Ex 
parte  Penney,  8  Ch.  452.  "  I  cannot,"  said  James,  L.J.,  in  this  case,  "conceive 
that  any  director  would  choose  to  accept  office,  or  exercise  the  power  entrusted 
to  him,  if  he  were  liable  to  be  called  upon  to  say  what  the  particular  reasons 
were,  or  the  particular  motive  was,  which  influenced  him  in  coming  to  the  con- 
clusion that  any  person  was  not  eligible  as  a  shareholder.  ...  I  am  of  opinion 
that  we  cannot  sit  as  a  Court  of  Appeal  from  the  conclusion  which  the  directors 
have  arrived  at,  if  we  are  satisfied  that  the  directors  have  done  that  which  alone 
they  could  be  compelled  by  mandamus  to  do,  to  take  the  matter  into  their 
consideration."  So  in  Puckle's  case,  Jessel,  M.E.,  said  that  where  the  articles 
aiithorised  the  directors  to  refuse  to  register  a  transfer,  "if  they  were  of 
opinion  that  the  transferee  was  not  a  responsible  person,"  there  was  no  appeal 
from  their  decision.     L.  J.,  Notes  of  Cases,  1875,  19. 

If  they  refuse,  they  are  not  under  any  obligation  to  send  notice  of  their 
refusal  to  the  transferor.     Custard's  case,  8  Eq.  438. 

It  has  not  been  settled  what  an  absolute  discretion,  vested  in  the  directors, 
as  to  the  registration  of  a  transfer,  warrants.  See,  however,  Moffatt  v.  Farquhar, 
7  C.  D.  591.  Restrictions  on  transfer  are  strictly  construed.  In  re  Bentham 
Mills  Spinning  Co.,  11  C.  Div.  900. 


126  AETICLES    OF    ASSOCIATION. 

Form  117.        [i^Sa.  No  transfer  shall  be  made  to  an  infant  or  person  of  unsound 

No  transfer  to   mind.] 

'      '  The  above  is  now  commonly  inserted.     Even  apart  from  such  a  clause,  a 

company  cannot  be  compelled  to  accept  an  infant  transferee ;  and,  if  shares 
be  transferred  to  an  infant,  the  company  may,  on  discovering  the  infancy, 
decline  to  confirm  the  transfer,  and  upon  motion  under  s.  35  of  the  Act,  can 
procure  the  rectification  of  the  i-egister  by  restoring  the  name  of  the  transferor. 
Symon's  case,  5  Ch.  301.  The  principle  is  that  a  man  who  execiites  a  transfer 
remains  liable,  unless  and  until  there  is  on  the  list  a  transferee  who  is  legally 
liable  to  the  company.  If,  however,  the  company  has  knowingly  acquiesced,  it 
will  he  bound.  Parson's  case,  8  Eq.  G5G.  And  so  also  if  it  has  allowed  the 
infant  to  transfer  his  shares.     Gooch's  case,  8  Ch.  26G. 

As  to  married  women,  see  the  Married  Women's  Property  Act,  1882  (45  &  4G 
Vict.  c.  75). 

This  Act  places  a  married  woman's  transferee  in  the  same  position  as  if  she 
were  sole.  But,  unless  satisfactory  evidence  of  separate  estate  is  produced, 
the  directors  might  properly  (where  they  have  a  discretion)  refuse  to  register 
a  transfer  to  a  married  woman  of  shares  involving  any  liability.  See  proviso 
at  end  of  s.  7  of  the  said  Act. 

Transfer  to  be       34.  Every  iustrumt  of  transfer  shall  be  left  at  the  office  for  registra- 
an?l  etidCTce    ^^*^'^^'  accompanied  by  the  certificate  of  the  shares  to  ])e  transferred,  and 
of  title  given,    such  other  evidence  as  the  co  may  require  to  prove  the  title  of  the 
transferor,  or  his  right  to  transfer  the  shares. 

This  clause  is  expedient  by  reason  of  the  liabilities  which  the  company  incurs 
if  it  issues  a  certificate  of  shares  in  pursuance  of  a  forged  transfer.  See  further, 
infra,  "  Certificates." 

The  utmost  caution  ought  to  be  used  in  regard  to  registration  of  transfers. 
It  is  very  common  to  give  notice  to  the  transferor  of  the  presentation  of  the 
transfer  before  it  is  registered.     In  re  Bahia,  ^c,  Co.,  3  L.  E.  Q.  B.  584. 

A  clause  has  of  late  found  its  way  into  a  good  many  articles,  providing,  inter 
alia,  that  the  directors  shall  not  be  bound  to  inquire  into  the  authenticity  of 
any  transfer  ;  but  such  a  clause  seems  inexpedient ;  and  where  a  quotation  on 
the  Stock  Exchange  is  desired,  the  Committee  of  the  London  Stock  Exchange 
always  require  the  clause,  if  contained  in  the  articles,  to  be  struck  out  by  special 
resolution. 

When  trans-  [34^/.  All  instrumts  of   transfer  which  shall  be  res-istered  shall   be 

Id's  to  nC 

retained.  retained  by  the  co,  but  any  iustrumt  of  transfer  which  the  directors  may 

decline  to  register  shall  be  returned  to  the  person  depositing  the  same.] 
The  above  is  sometimes  used. 

^ee  on  ^-55_  X  fee  not  exceeding  2s.  Gd.  may  be  charged  for  each  transfer,  and 

shall,  if  required  by  the  directors,  be  pd  before  the  registration  thereof. 
When  transfer       30.  The  transfer  books  may  be  closed  during  such  time  as  the  dircc- 
c'losed."'^   '°    tors  think  fit,  not  exceeding  in  the  whole  thirty  days  in  each  year. 

Table  A.  in  lieu  of  the  above  provides  (Claiise  11) : — 

"The  transfer  books  shall  be  closed  during  the  foiirteen  days  immediately 
preceding  the  ordinary  general  meeting  in  each  year.' 

By  Section  33  of  the  Act  it  is  provided  that  any  company  may,  upon  giving 
notice  by  advertisement  in  some  newspaper  circulating  in  the  district  in  which 
the  registered  office  of  the  company  is  situated,  close  the  register  of  members 
for  any  time  or  times  not  exceeding  in  the  whole  thirty  days  in  each  year. 


FOEMS.  127 

37.  The  cxs  or  ads  of  a  deceased  member  (not  being  one  of  several   Form  117. 
joint  holders)  shall  be  the  only  persons  recognised  by  the  co  as  having  Transmission  ^ 
any  title  to  the  shares  or  stock  registered  in  the  name  of  such  meml)er,  of  registered 
and  in  case  of  the  death  of  any  one  or  more  of  the  joint  holders  of  any  ^^'*''^^- 
registered  shares  or  registered  stock,  the  survivors  shall  be  the  only  ^.j^j 
persons  recognised  by  the  co  as  having  any  title  to  or  interest  in  such 

shares  or  stock. 

The  first  paragraph  of  this  clause  is  generally  inserted,  in  order  that  the 
company  may  not  be  involved  in  questions  of  administration,  but  may  look  to 
their  legal  personal  representatives  only. 

38.  Any  guardian  of  any  infant  member,  and  any  committee  of  a  ^^  t°  transfer 
lunatic  member,  and  any  person  becoming  entled  to  shares   in  con-  infants, 
sequence  of  the  death,  bankruptcy  [or  liquidon],  of  any  member,  upon  l^matics,  &c. 
producing  such  evidence  that  he  sustains  the  character  in  respect  of 

which  he  proposes  to  act  under  this  clause,  or  of  his  title,  as  the  directors 
think  sufficient,  may,  subject  to  the  regulations  as  to  transfers,  hinbefore 
contd,  transfer  such  shares  to  himself  or  any  other  person.  This  clause 
is  hereinafter  referred  to  as  "  the  transmission  clause." 

This  clause,  with  more  or  less  variation,  is  a  common  one.  It  is  generally 
expedient,  if  possible,  to  secure  a  living  responsible  member  in  the  place  of  a 
deceased  member  or  one  iinder  disability.  Of  course  if  any  person,  under  this 
clause,  becomes  a  member,  he  is  personally  liable  on  the  shares,  but  this  does 
not  affect  the  equities  subsisting  between  him  and  the  infant,  lunatic,  or  other 
member  in  whose  place  he  stands. 

Even  apart  from  this  clause,  the  personal  representatives  of  a  deceased 
member  can  transfer,  for  s.  24  of  the  Act  of  1862  provides  that  any  transfer  of 
the  share  or  other  interest  of  a  deceased  member  made  by  his  personal  repre- 
sentative shall,  notwithstanding  such  personal  representative  may  not  himself 
be  a  member,  be  of  the  same  validity  as  if  he  had  been  a  member  at  the  time 
■of  the  execution  of  the  instrument  of  transfer.  Until  transfer  under  this 
power,  or  until  the  personal  rei^resentative  personally  accepts  the  shares,  the 
estate  of  the  deceased  member  is  alone  liable.     See  Baird's  case,  5  Ch.  725. 

So  long  as  the  share  of  a  deceased  member  remains  standing  in  his  name,  his 
representatives  do  not  become  members  of  the  company  in  respect  thereof,  but 
so  soon  as  the  representatives  are  registered  as  the  holders,  they  become  per- 
sonally liable  thereon,  and  the  company  has  nothing  more  to  do  with  the  de- 
ceased member.  Sometimes  the  regulations  empower  the  representatives  to 
■elect  to  be  registered  or  to  transfer ;  but  it  is  desirable  to  require  the  execution 
of  a  transfer  as  above  in  order  to  preserve  a  formal  record  of  the  transaction. 
Some  companies  have  been  in  the  habit,  so  soon  as  probate  or  letters  of  admin- 
istration are  produced,  of  registei'ing  the  representatives  as  the  holders  of  the 
shares,  but  this  is  not  regular  in  the  absence  of  a  "  distinct  and  intelligent  re- 
quest on  the  part  of  the  executors."  Per  Lord  Cairns,  L.  C,  Buchan's  case,  4 
Ap.  Cas.  588.     As  to  survivoi'ship,  see  Hills'  case,  20  Eq.  595. 

By  s.  50  (3)  of  the  Bankruptcy  Act,  1883  (16  &  47  Vict.  c.  52),  when  any  part  of 
the  property  of  the  bankrupt  consists  of  shares  transferable  in  the  books  of  any 
company,  the  trustee  may  exercise  the  right  to  transfer  the  property  to  the  sanae 
extent  as  the  bankrupt  might  have  exercised  it  if  he  had  not  become  bankrupt. 
Accordingly  the  trustee's  right  of  transfer  cannot  be  fettered  to  a  greater  extent 
than  that  of  the  bankrupt.  This  is  not  always  borne  in  mind.  Of  course  pro- 
visions forfeiting  the  shares  of  a  bankrupt  member,  or  permitting  the  company 
to  dispose  of  them  compulsoi-ily,  cannot  be  relied  on.  Ex  ;parte  Jay,  in  re  Har- 
rison, 14  C.  Div.  19. 


128  AETICLES    OP    ASSOCIATION. 

Form  117.         See  In  re  Beniham  Mills  Spinning  Co.,  11  C.  Div.  900,  as  to  effect  of  Clauses 

10  &  13  of  Table  A.     Under  the  last-mentioned  clause  the  trustee  of  a  bankrupt 

can  insist  on  being  registered,  although  the  bankrupt  is  indebted  to  the  com- 
pany ;  not  so  under  Clause  38  of  this  Form. 


Shaee  Warrants. 

Power  to  issue       ;-]9,  The  CO,  with  respect  to  fully  pd-up  shares  or  stock,  may  issue 

"  warrants  (hereinafter  called  share  ^Yarrants),  stating  that  the  bearer  is 

entled  to  the  shares  or  stock  therein   specified,  and  may  provide  by 

coupons  or  otherwise  for  the  paymt  of  future  dividends  on  the  shares 

or  stock  included  in  such  warrants. 

The  Companies  Act,  1867,  s.  27,  et  seq.,  empowers  a  company  limited  by  shares, 
if  authorized  so  to  do  by  its  regulations  as  originally  framed  or  as  altered  by. 
special  resolution,  to  issue  share  warrants. 

The  share  warrants  must  be  under  the  seal  of  the  company,  and  will  entitle 
the  bearer  to  the  shares  or  stock  therein  specified ;  and  such  shares  or  stock  will 
be  transferable  by  delivery  of  the  share  warrant.  See  form  of  share  warrant, 
infra,  "  Certificates." 

As  to  conili-  40.  The  directors  may  determine,  and  from  time  to  time  vary,  the 

share  warrants  Conditions  upon  which  share  warrants  shall  be  issued,  and,  in  parlar, 
shall  be  issued,  upon  which  a  new  share  warrant  or  coupon  will  be  issued  in  the  place  of 
one  worn  out,  defaced,  lost,  or  destroyed  ;  upon  which  the  bearer  of  a 
share  warrant  shall  be  entled  to  attend  and  vote  at  general  meetings  ; 
and  upon  which  a  share  warrant  may  be  surrendered  and  the  name  of 
the  holder  entered  in  the  register  in  respect  of  the  shares  or  stock  therein 
specified.  Subject  to  such  conditions,  and  to  these  presents,  the  bearer 
of  a  share  warrant  shall  be  a  member  to  the  full  extent.  The  holder  of 
a  share  warrant  shall  be  subject  to  the  conditions  for  the  time  being  in 
force,  whether  made  before  or  after  the  issue  of  such  Avarrant. 

Sometimes  all  the  matters  referred  to  in  the  above  clause  are  expressly  pro- 
vided for  by  the  articles,  but  it  is  generally  thought  better  not  to  incumber  the 
articles  with  such  matters  of  detail,  since  in  the  great  majority  of  companies 
share  warrants  are  never  issued. 

For  form  of  conditions,  see  infra,  at  end  of  "  Eesolutions."  Sometimes,  e.  g., 
where  the  company  is  going  to  issue  share  Avarrants  at  once,  the  above  clause  is 
omitted,  and  in  lieu  thereof  the  conditions  are  set  forth  here  at  full  length. 

The  bearer  of  a  share  warrant  may,  if  desired,  be  deprived  of  the  right  of 
voting,  but  this  is  seldom  done. 

It  will  be  borne  in  mind  that  the  bearer  of  a  share  warrant  is  not  thereby 
qualified  for  office  when  a  share  qualification  is  required ;  s.  30  of  the  Act  of 
18G7.  But  of  course  the  articles  might  provide  that  the  qualification  of  a 
director  should  be  the  holding  of  share  warrants  for  so  many  shares.  See 
Pearson's  case,  4  Ch.  Div.  222. 


Conversion  of  Shares  into  Stock. 
Conversion  of       41.  Thc  CO  fin  general  meeting!  may  convert  any  pd-up  shares  into 

shares  into  ,      ,  ^        ^  oJ        J  j  i        i 

stock.  StOCK. 


POEMS. 


129 


Any  company  limited  by  shares,  if  authorized  by  its  regulations  as  originally    Form  117. 

framed,  or  as  altered  by  special  resolution,  may  convert  its  paid-up  shares  into 

stock.  S.  12  of  the  Act.  See  "  Resolutions/'  infra.  The  power  is  not  often 
exercised,  and  the  clauses  relating  to  it  might,  if  brevity  be  desired,  be  omitted. 
They  can  at  any  time  be  supplied  by  special  resolution.  If  the  words  in  brackets 
are  omitted,  the  directors  will  be  able  to  exercise  their  general  powers,  infra. 

See  further  as  to  conversion  of  shares  into  stock,  "  Resolutions,"  infra.  If 
desired,  the  clause  may  run  thus :  "  The  company  may  by  special  resolution 
convert,"  &c. 

4:2.  When  any  shares  have  been  converted  into  stock,  the  several  Transfer  of 
holders  of  such  stock  may,  thenceforth,  transfer  their  respive  interests  pj^hts^of 
therein,  or  any  pt  of  such  interests,  in  the  same  manner  and  subject  to  holders, 
the  same  regulations  as  and  subject  to  Avhich  shares  in  the  co's  capital 
may  be  transferred,  or  as  near  thereto  as  circes  will  admit.     But  the 
directors  may  from  time  to  time,  if  they  think .  fit,  fix  the  minimum 
amomit  of  stock  transferable,  aud  direct  that  fractions  of  a  jiound  shall 
not  be  dealt  with,  with  power,  nevertheless,  at  their  discretion  to  waive 
such  rules  in  any  parlar  case. 

43.  The  stock  shall  confer  on  the  holders  thereof  respectively  the  Eiglits  of 
same  privileges  and  advantages,  as  regards  participation  in  profits  and  «tock-liohleis. 
voting  at  meetings  of  the  co  and  for  other  pposes,  as  would  have  been 
conferred  by  shares  of  equal  amount  in  the  capital  of  the  co,  but  so  that 

none  of  such  privileges  or  advantages,  except  the  participation  in  profits 
of  the  co,  shall  he  conferred  by  any  such  aliquot  pt  of  consolidated  stock 
as  would  not,  if  existing  in  shares,  have  conferred  such  privileges  or 
advantages.  And,  save  as  afsd,  all  the  provisions  herein  contd  shall,  so 
far  as  circes  will  admit,  apply  to  stock  as  well  as  to  shares.  No  such 
conversion  shall  affect  or  prejudice  any  preference  or  other  special 
privilege. 

Increase  and  Reduction  of  Capital. 

44.  The  CO  [in  general  meeting]  may,  from  time  to  time,  increase  the  Power  to  iu- 
capital  by  the  creation  of  new  shares  of  such  amount  as  may  l)e  deemed  *^^^^^^  '^^^'^^'^ ' 
expedient. 

Any  company  limited  by  shares,  if  authorized  to  do  so  by  its  regulations  as 
originally  framed,  or  as  altered  by  special  resolution,  may  increase  its  cai)ital. 
Section  12  of  the  Act.  Under  the  above  clause  the  increase  can  be  effected  by 
a  simple  resolution  passed  at  an  extraordinary  meeting.  Not  uncommonly  it 
is  thought  better  to  require  the  sanction  of  a  special  resolution  to  an  increase. 
Thus :  "  44a.  The  company  may  from  time  to  time  by  special  resolution  in- 
crease," &c. ;  or,  the  words  in  brackets  can  be  omitted,  and  in  such  case  the 
directors  will  be  able  to  increase  the  capital  at  their  discretion. 

45.  The  new  shares  shall  be  issued  upon  such  terms  and  conditions,  On  what  con- 
and  with  such  rights  and  privileges  annexed  thereto  [as  the  general  <l'tious  new 

.  J-      1    11    J-  IT         shares  may  be 

meeting,  resolving  upon  the  creation  thereof,  shall  direct,  and,  it  no  issued.    As  to 
direction  be  given],  as  the  directors  shall  determine  ;  and  in  parlar  such  preferences, 
shares  may  be  issued  with  a  preferential  or  qualified  right  to  dividends, 
and  in  the  distribution  of  assets  of  the  co,  and  with  a  special  or  without 
any  right  of  voting. 

K 


130 


ARTICLES    OP    ASSOCIATION. 


Form  117. 


Power  to 
modify  rights. 


When  to  be 
offered  to 
existing 
members. 


How  Iav  new 
shares  to  rank 
■with  shftft'.i*  ill 
original 
capita). 


See  fiirther  "  Eesolutions/'  infra. 

If  clause  •44(1  is  used,  then  omit  the  words  within  brackets  in  the  above  clause 
and  substitute  these:  "as  by  the  special  resolution  creating  the  same  shall  be 
directed,  and  if  no  direction  be  given,"  &c. 

See  further  as  to  increase  of  capital,  infra,  where  forms  of  resolutions,  notices, 
«S:c.,  will  be  found. 

[-tort.  If  at  any  time  the  capital,  by  reason  of  the  issue  of  preference 
shares  or  otherwise,  is  divided  into  different  classes  of  shares,  all  or  any 
of  the  rights  and  privileges  attached  to  eac-h  class  may  be  modified  by 
agreemt  l)et\veen  the  co  and  any  person  purporting  to  contract  on  l)ehalf 
of  that  class,  provided  such  agreemt  is  confirmed  by  an  extraordinary 
resolution  passed  at  a  separate  general  meeting  of  the  holders  of  shares 
of  that  class  :  and  all  the  provisions  hereinafter  contd  as  to  general 
meetings  shall,  mufafis  mutamUs,  apply  to  every  such  meeting,  but  so 
that  the  cpiorum  thereof  shall  be  members  holding  or  representing  by 
proxy  two-thirds  of  the  nominal  amount  of  the  issued  shares  of  the 
class.] 

Where  there  are  different  claeses  of  shai'es  great  inconvenience  is  sometimes 
caused  by  there  being  no  powel'  fol'  the  majority  of  the  members  of  a  class 
to  bind  the  minority,  and  accordingly  the  insertion  of  a  clause  as  above  is 
desirable. 

•U!.  The  CO  [in  general  meeting]  may,  before  the  issue  of  any  new 
shares,  determine  that  the  same,  or  any  of  them,  shall  be  offered  in  the 
first  instance  to  all  the  then  members,  in  proportion  to  the  amount  of 
the  capital  held  by  them,  or  make  any  other  provisions  as  to  the  issue 
and  allotmt  of  the  new  shares :  but,  in  default  of  any  such  determination, 
or  so  far  as  the  same  shall  not  extend,  the  new  shares  may  be  dealt  with 
as  if  they  formed  pt  of  the  shares  in  the  original  capital. 

In  lieu  of  the  above  clause,  which  is  very  commonly  used,  the  following, 
which  is  similar  to  the  Clause  27  in  Table  A.,  may,  if  preferred,  be  substituted: 
"  Subject  to  any  direction  to  the  contrary  that  may  be  given  by  the  meeting 
that  sanctions  the  increase  of  capital,  all  new  shares  shall  be  offered  to  the 
members  in  proportion  to  the  existing  shares  held  by  them,  and  such  offer  shall 
be  made  by  notice  sj^ecifying  the  number  of  shares  to  which  the  member  is  en- 
titled, and  limiting  a  time  within  which  the  offer,  if  not  accepted,  will  be 
deemed  to  be  declined  ;  and  after  the  expiration  of  such  time,  or  on  the  receipt 
of  an  intimation  from  the  member  to  whom  such  notice  is  given,  that  he  declines 
to  accei)t  the  shares  offered,  the  directors  may  dispose  of  the  same  in  sucli 
manner  as  they  think  most  beneficial  to  the  company."  See  also  infra,  "  Pri- 
vate Companies,"  infra. 

47.  Except  so  far  as  otherwise  pnjvided  l)y  the  conditions  of  issue,  or 
by  these  presents,  any  cajutal  raised  by  the  ci'catioii  of  new  shares  shall 
be  considered  pt  of  the  original  cai)ital,  and  shall  be  subject  to  the  pro- 
visions berein  contd,  with  reference  to  the  i)iiymt  of  calls  and  instalmts, 
transfer  and  transmission,  forfeiture,  lien,  surrender,  and  otherwise. 

The  above  clause  ought  to  be  taken  into  consideration  upon  any  increase  of 
capital.  Where,  as  in  some  cases,  "  the  capital "  and  "  shares  "  are  specially 
interpreted,  it  would  seem  that  this  chxuse  might  be  dispensed  with.     See  also 


FOEMS.  l.:51 

observations  of  Kindersley,  V.  C,  in  reference  thereto.     Hutton  v.  Scarborough,    Form  117. 

Sj'c,  Co.,  13  W.  R.,  1061.     As  to  the  opei-ation  of  the  clause,  see  Harnson  v. 

Mexican  Ry.  Co.,  19  Eq.  358,  and  Bangor,  ^r.,  Co.,  20  Eq.  59. 

4S.  The  CO  may,  from  time  to  time,  by  special  resolution,  reduce  its  ReiUictiou  of 
capital  by  paying  off  capital  or  cancelling  capital  which  has  been  lost  or  ^'^^'^  '^ '  '  ^' 
is  unrepresented  by  available  assets,  or  reducing  the  lia1)ility  on  the 
shares  or  otherwise,  as  may  seem  expedient,  and  capital  may  be  pd  off 
upon  the  footing  that    it  may  be  called  up  again  or  otherwise.     And 
the  CO  may  also  subdivide  or  consolidate  its  shares  or  any  of  them. 

As  to  reduction  of  capital,  see  infra,  Form  160,  and  note,  "  Consolidation  and 
Subdivision";  see  infra.  Form  156,  157. 

[48rt.  The  special  resolution  whereby  any  share  is  subdivided   may  Subdivision 
determine  that  as  between  the  holders  of  the  shares  resulting  from  such  an*Jorj£aJ?^ 
subdivision,  one  of  such  shares  shall  have  any  j^reference  over  the  other 
or  others,  and  that  the  profits  applicable  to  the  paymt  of  dividends 
thereon  shall  be  appropriated  accordingly.] 

The  above  power  is  sometimes  found  useful.     Whether  it  coiild  be  taken  by 
special  resolution  is  not  clear. 


BoRROAvixa  Powers. 

49.  The  directors  may,  from  time  to  time,  at  their  discretion,  raise  or  Power  to 
borrow  any  sum  or  sums  of  money  for  the  pposes  of  the  co  [but  so  that  ^°"'^^'- 
the  monies  at  any  one  time  owing  shall  not,  without  the  sanction  of  a 
general  meeting,  exceed  the  nominal  amount  of  the  capital]. 

As  to  loans  by  directors,  see  Camx/helVscase,  4  C.  Div.  470  ;  Black  x.  Mallaluc, 
5  Jur.  N.  S.  1018. 

The  words  in  brackets  may  be  omitted,  and  the  following  substituted  :  "  But 

so  that  not  more  than I.  be  owing  at  any  one  time  without  the  sanction  of 

a  general  meeting." 

Where  the  company  has  power  to  borrow  and  mortgage,  as  to  which  see  supra. 
Form  44,  there  is  no  need  expressly  to  delegate  the  power  to  the  directors,  pro- 
vided that  the  articles  contain  a  general  delegation  to  them  of  the  powers  of 
the  company,  as  infra.  In  re  Patent  File  Co.,  6  Ch.  83 ;  Gibbs  and  West's  case, 
10  Eq.  312  ;  Anglo-Da.nubian,  ^'c.,' Co.,  20  Eq.  339. 

Nevertheless  it  is  usual  to  give  the  directors  express  power.  How  far  the 
power  should  be  fettered  or  limited  is  a  matter  of  arrangement.  It  is  by  no 
means  uncommon  to  vest  the  power  in  the  directors  absolutely.  If  this  is  to 
be  done,  omit  from  "but  so  that"  to  end  of  clause.  In  small  companies  it  is 
not  unusual  to  require  the  sanction  of  a  special  resolution. 

As  to  the  validity  of  securities  given  for  money  borrowed  beyond  the  limit, 
see  the  rule  in  the  Royal  British  Bank  v.  Turquand,  6  E.  &  B.  327  ;  Form  157 
(infra),  from  which  it  appears  where  there  is  power  to  borrow,  with  the  sanction 
of  a  general  meeting,  a  lender  may  assume  that  the  requisite  sanction  has 
been  obtained.  But  it  would  seem  that  the  passing  of  the  special  resolution 
uiust  not  be  assiuned.     Irvine  v.  Union  Bank  of  Australia,  2  App.  Cas.  379. 

See  case  of  ultra  vires,  borrowing  by  overdrawing  banking  account.  Black- 
burn Bldg.  Soc.  V.  Cunliffe,  22  C.  Div.  Gl. 

As  to  borrowing  on  the  security  of  deposited  debentures.  In  re  Strand  Music 
Hall,  3  De  G.  J.  &  S.  147  ;    Regent's  Canal  Ironworks,  3  C.  Div.  43. 

K  2 


132 


ARTICLES    OF   ASSOCIATION. 


Porm  117.         ^s  to  personal  liability  of  directors  to  lenders,  where  the  borrowing  powers 

— are  exceeded,  see  Weeks  v.  Propert,  L.  E.  8  C.  P.  427 ;  Chapleo  v.  Bruiiswick 

Soc,  G  Q.  B.  Div.  715;  and  cases  there  cited.  Even  where  directors  have  an 
unrestricted  power  to  borrow,  they  not  uncommonly  seek  the  sanction  of  a 
general  meeting  before  exercising  the  power. 


Conditions  on 
which  money 
may  he 
borrowed. 


Securities  may 
be  assignable 
free  from 

eiiiiities. 


r)0.  The  directors  may  raise  or  secure  tlic  repaymt  of  such  monies  in 
such  manner  and  upon  such  terms  and  conditions  in  all  respects  as  they 
think  fit,  and,  in  parlar,  by  the  issue  of  debentures  or  debenture  stock  of 
the  CO  charged  upon  all  or  any  pt  of  the  ppty  of  the  co  (l)oth  present 
and  future),  including  its  uncalled  capital  for  the  time  being. 

As  to  debentures,  see  infra,  "  Debentures." 

51.  Every  debenture  or  other  security  created  by  the  co,  may  be  so 
framed  that  the  same  shall  be  assignable  free  from  any  equities  between 
the  CO  and  the  original  or  any  intermediate  holders. 

This  clause  is  sometimes  inserted.  As  to  its  object,  see  infra,  introductory 
notes  to  "  Debentures."  Where  a  company  has  power  to  issue  negotiable 
instruments,  the  above  clause  is  probably  not  necessary,  s^t/pra,  p.  GO. 

52.  Any  debentures,  bonds,  or  other  securities,  n^ay  be  issued  at  a 
discount,  premium,  or  otherwise. 

This  clause  is  sometimes  inserted,  but  the  power  to  "  raise  "  money  given  by 
Clause  50,  and  the  general  powers  given,  infra,  are  probably  sufficient.  In  re 
Anglo-Danubian  Steam,  ^'c,  Co.,  20  Eq.  311. 

Register  of  53,  The  directors  shall  cause  a  proper  register  to  be  kept,  in  accord- 

iricepf'  *"     ^"^^  ^^^^  Section  4?,  of  the  Companies  Act,  18G2,  of  all  mtges  and 
charges  specifically  affecting  the  ppty  of  the  co. 

This  clause  is  inserted  by  way  of  reminder.  See  result  of  omission  to  register 
mortgage,  infra,  introductory  notes  to  "  Debentures." 


^Mortgage  of 

cancelled 

capital. 


54.  If  any  uncalled  capital  of  the  co  is  included  in  or  charged  by  any 
mtge  or  other  security,  the  directors  may  delegate  to  the  person  in  whose 
favour  such  mtge  or  security  is  executed,  or  to  any  other  person  in  trust 
for  him,  the  power  to  make  calls  on  the  members  in  respect  of  such  un- 
called capital,  and  to  sue  in  the  name  C)f  the  co  or  otherwise  for  the 
recovery  of  monies  becoming  due  in  respect  of  calls  so  made,  and  to  give 
valid  receipts  for  such  monies  ;  and  the  power  so  delegated  shall  subsist 
during  the  continuance  of  the  mtge  or  security,  notwithstanding  any 
change  of  directors,  and  shall  be  assignable  if  expressed  so  to  be. 

The  above  is  sometimes  used.  See  further  as  to  mortgages  of  uncalled  capital, 
infra,  "  Debentures." 


Wlieu  first 
general  meet- 
ing to  be  held. 


General  Meetinos. 

55.  The  first  general  meeting  shall  be  held  at  such  time,  (not  being 
more  than  four  months  after  the  registration  of  the  mcmoraiulnm  of 
association  of  the  co.)  and  at  such  place  as  the  directors  may  determine. 


FORMS.  133 

The  Companies  Act,  18G7,  requires  every  company  to  hold  a  first  meeting    Form  117. 

within  four  months  after  the  registration  of  its  memorandum  of  association.  

An  extraordinary  meeting  is  a  sufficient  comjjliance  with  this  provision.     Lord 
Claude  Hamilton's  case,  S  Ch.  oiS. 

.5(1.  Subsequent  general  meetings  shall  be  held  once  in  the  year — and  When  subse- 
in  every  subsequent  year,  at  such  thue  and  place  as  may  be  prescribed  by  '^'"^"*  s^^^^^^ 
the  CO  in  general  meeting,  and,  if  no  other  time  or  place  is  prescribed,  held. 

in  the  month  of  in  every  such  year  at  such  time  and  place  as  may 

be  determined  by  the  directors. 

The  Act  of  1SG2  provides  (s.  49)  that  "  A  general  meeting  of  every  comimny 
lander  this  Act  shall  be  held  once  at  least  in  every  year."  In  this  section, 
'  year'  means  calendar  year,  i.  e.,  the  period  of  time  commencing  on  the  1st  of 
January,  and  ending  on  the  31st  of  December,  and  not  the  period  of  twelve 
months,  ending  upon  the  anniversary  of  the  registration.  Gibson  v.  Barton, 
L.  E.  10  Q.  B.  329. 

But  it  seems  that  a  meeting  need  not  be  held  in  the  first  year  if  less  than 
four-  months  of  that  year  remain  when  the  company  is  registered.  Gibso7i  v. 
Barton,  L.  E.  10  Q.  B.  329.  See  s.  26  of  the  Act  as  to  the  return  of  a  list  of 
"all  f)ersons  who  on  the  fourteenth  day  succeeding  the  day  on  which  the 
ordinary  meeting  is  held,  are  members  of  the  company."  Default  in  forward- 
ing the  list  renders  the  company  and  its  directors  and  managers  liable  [s.  27] 
to  penalties.  See  the  case  last  mentioned,  and  Edmunds  v.  Forster,  45  L.  J. 
M.  C.  41,  and  Reg.  v.  Newton,  48  L.  J.  M.  C.  77.  The  company's  penalty  is  51. 
per  day.     Reg.  v.  Catholic,  48  L.  T.  675. 

Sometimes  provision  is  made  for  half-yearly  meetings. 

57.  The  above-raentd  general  meetings  shall  be  called  ordinary  general  Distinctiou 
meetings';  all  other  meetings  of  the  co  shall  be  called  extraordinary  ^^t^'^^"  o^-'^ii- 

1  , .  nary  and 

general  meetings.  extraordinary 

r>8.  The  directors  may  whenever  they  think  fit,  and  they  shall,  npon  meetings. 

a  recmisition  made  in  writing  by  members  holding  in  the  aggreo-ate  ^^^.^'^  ^'^*™" 

[one-hrth  of  the  issued  capital],  convene  an  extraordinary  meeting.  meeting  to  be 

called. 

This  is  a  very  usual  clause.  Sometimes  it  is  thought  better  to  prescribe  a 
fixed  number  of  shares.  In  such  case,  omit  the  words  in  brackets,  and  sub- 
stitute, "  not  less  than  [fifty^  shares."  Or  the  clause  may  run — "the  directors, 
&c.,  upon  a  requisition  made  in  ■m.-iting,  by  not  less  than  one-fifth  in  number 
of  the  members,  convene,  &c."  Sometimes  the  two  are  combined,  e.  g.,  "  upon 
a  requisition  in  writing,  made  by  any  five  or  more  members  holding,  &c."  If 
the  power  is  to  be  given,  it  is  as  well  not  to  fetter  the  exercise  by  conditions 
which  are  difficult  to  comply  with. 

The  fact  that  some  of  the  ftroposed  resolutions  could  not  be  put  to  the  meet- 
ing, does  not  render  the  requisition  inoiDerative.  Isle  of  Wight  Railway  Co.  v. 
Tahourdin,  32  W.  E.  297. 

The  Court  will  not  comj^el  directors  to  convene  a  general  meeting  pursuant 
to  a  requisition.  Macdougall  v.  Gardiner,  10  Ch.  GOG.  But  it  might,  perhaps, 
itself  convene  a  meeting,  if  there  were  no  directors,  and  no  other  mode  of 
procedure.  Per  Mellish,  L.J.,  S.  C.  Where  there  is  a  dead  lock,  s.  52  of  the 
Act  may  apply.  Brick  and  Stone  Co.,  W.  N.  1878,  14-0.  The  Queen's  Bench 
Division  can  grant  the  prerogative  writ  of  mandamus  ;  but  the  Chancery 
Division  can  only  grant  a  mandamus  in  an  action  or  matter.  Paris  Skating  Rink 
Co.,  G  C.  Div.  731. 

59.  Any  such  requisition  shall  sjiecify  the  object  of  the  meeting  re- 


J  34 


AETICLES    OF    ASSOCIATION. 


Form  of 
requisition 
for  iiieetim 


Form  117.  quired,  and  shall  be  signed  by  the  members  making  the  same,  and  shall 
be  deposited  at  the  office.  It  may  consist  of  several  documts  in  like 
form,  each  signed  l)y  one  or  mure  of  the  requisitionists.  The  meeting 
must  l)e  convened  for  the  pposes  specified  in  the  requisitions,  and  if 
convened  otherwise  than  by  the  directors,  for  those  pjioses  only. 

Doubts  are  sometimes  raised  whether  the  requisition  must  not  be  a  singhi 
document,  but  it  is  conceived  that  it  need  not.  However,  it  is  usual  now  to 
preclude  doubt  by  providing  as  above. 


When  requisi- 
tiouists  may 
call  meeting. 


Notice  of 
meeting. 


As  to  omission 
to  give  notice. 


Power  for 
memlier  to 
submit  resolu- 
tion. 


()<).  In  case  the  directors  for  fourteen  days  after  such  deposit  fail  to 
convene  an  extraordinary  meeting  to  be  held  within  twenty-one  days 
after  such  deposit,  the  requisitionists  [or  any  other  members  holding  the 
like  proportion  of  the  capital,]  may  themselves  convene  a  meeting  to  be 
lield  within  six  Aveeks  after  such  deposit. 

This  clause  must  be  modified  if  Clause  58  is  altered.  See  note  to  that  clause; 
e.  g.,  by  omitting  the  words  in  brackets,  and  inserting  these  :  "  or  any  members 
holding  not  less  than  fifty  shares;"  or  the  following:  "  or  any  members  not 
being  less  than  one-fifth  in  number  of  the  members  ;"  or,  "  or  any  five  or  more 
members  holding  the  like  proportion  of  the  capital." 

In  the  interests  of  members  it  is  desirable  to  enable  the  requisitionists  to  act 
after  a  fourteen  days'  default  (instead  of  twenty-one  or  twenty-eight  days,  as 
sometimes  worded)  ;  othei'wise  if  it  become  desirable  to  pass  a  special  resolu- 
tion against  the  wish  of  tlie  directors,  great  difiiculty  may  be  experienced. 

01.  Seven  clear  days'  notice  at  the  least,  specifying  the  place,  day,  and 
hour  of  meeting,  and,  in  case  of  special  business,  the  general  nature  of 
such  business,  shall  be  given,  either  by  advertisemt  or  by  notice 
sent  by  post  or  otherwise  served  as  hereinafter  provided.  [Whenever 
any  meeting  is  adjourned  for  twenty-one  days  or  more,  at  least  five 
days'  notice  of  the  place  and  hour  of  meeting  of  such  adjourned  meeting- 
shall  be  given  in  like  manner.] 

As  to  notices,  see  further,  infra,  and  "  Notices." 

An  adjourned  meeting  is  considered  a  continuation  of  the  original  meeting. 
See  Scadding  v.  Lorant,  1  H.  L.  Cas.  41S. 

In  the  absence  of  special  provision,  notice  of  an  adjourned  meeting  need  not 
he  sent  to  every  member.     Wills  v.  Murray,  1  Ex.  813. 

G2.  The  accidental  omission  to  give  any  such  notice  to  any  of  the 
members  shall  not  invalidate  any  resolution  passed  at  any  such  meeting. 

Sometimes  this  clause  runs  :  "  The  non-receipt  of  such  notice  by  any  member 
shall  not,  &c."     This  is  the  form  in  Table  A. 

In  one  form  or  the  other  the  clause  is  always  inserted. 

[(;2«.  Any  member  entled  to  vote  may,  subject  to  the  following 
provi.so,  submit  any  resolution  to  any  extraordinary  meeting  beyond  the 
matters  specified  in  the  notice  calling  such  meeting.] 

The  above  clause  is  occasionally  inserted.  The  word  "  beyond  "  will  be 
construed  in  a  very  limited  sense.  See  Pe>- Jessel,  M.R.  ;  Imperial  Blacki^ool  Co., 
2.3  C.  Div.  9. 


FOEMS.  28." 

Form  117. 

Proceedings  at  General  Meetings.  ~' 

Go.  The  business  of  an  ordinary  meeting  shall  l)e  to  receive  and  con-  Business  of 
sider  the  statemt  of  income  and  expenditure,  and  the  1«dance-sheet,  the  meetin"^ 
reports  of  the  directors  and  of  the  auditors,  to  elect  directors  and  other 
officers  in  the  place  of  those  retiring  l)y  rotation,  to  declare  dividends, 
and  to  transact  any  other  business  which,  under  these  presents,  ought  to 
be  transacted  at  an  ordinary  meeting.     All  other  business  transacted  at  Special 
an  ordinary  meeting,  and  all  business  transacted  at  an  extraordinary  '"^^'^^^•''' 
meeting,  shall  l)e  deemed  special. 

The  last  paragraph  of  this  clause  refers  to  Clause  61.  Sometimes  it  is  pro- 
vided that  all  special  business  shall  be  transacted  at  any  extraordinary  meet- 
ing ;  but  as  this  precludes  the  transaction  of  special  business  at  an  ordinary 
meeting  even  after  notice,  it  may  be  found  inconvenient.  Of  course  an 
extraordinary  meeting  can  be  convened  to  be  held  at  the  close  of  the  ordinary  ; 
but  if  proxies  are  wanted,  there  must  be  a  sejmrate  proxy  paper  for  each. 
Infra,  Clause  80. 

04.  Three  members  personally  present  shall  be  a  quorum  for  a  general  Quorum, 
meeting  for  the  choice  of  a  chairman,  the  declon  of  a  dividend  and  the 
adjuurnmt  of  the  meeting.  For  all  other  piloses  the  quorum  for  a 
general  meeting  shall  be  members  personally  present,  not  being  less  than 
[.5]  in  number,  and  holding,  or  representing  by  proxy,  not  less  than  one- 
tenth  pt  of  the  issued  capital  of  the  co.  No  business  shall  l)e  transacted 
at  any  general  meeting  unless  the  quorum  requisite  be  present  at  the 
commencemt  of  the  business. 

If  the  articles  do  not  say  "  personally  "  present,  can  a  member  present  by 
proxy  be  counted  in  a  quorum  ?  See  Cambrian,  S^'c,  Co.,  W.  N.  1876,  p.  6 ; 
31  L.  T.  773. 

Of  course  a  resolution  passed  at  a  meeting  at  which  a  quorum  is  not  present 
is  void  ;  and  so  also  if  passed  by  votes  of  persons  not  entitled  to  vote,  e.  g., 
because  indebted  to  the  company.  See  Clause  81,  infra,  p.  140,  and  the  case 
above-mentioned.  And  a  single  person  cannot  constitute  a  meeting.  Sharp  v. 
Dawes,  2  C.  B.  Div.  27  ;  In  re  Sanitary  Carbon  Co.,  W.  N.  1880,  223.  As  to 
whether  provisions  in  the  articles  as  to  quorum  apply  in  case  of  meetings 
held  for  passing  a  special  or  extraordinary  resolution  as  defined  by  ss.  51 
and  129  of  the  Act  of  1S62,  respectively,  see  infra,  introdiictory  notes  to 
"  Resolutions." 

Table  A.  provides  by  Clause  37  as  follows:  "No  business  shall  be  transacted 
at  any  general  meeting  except  the  declaration  of  a  dividend  unless  a  quorum, 
of  members  is  present  at  the  time  when  the  meeting  proceeds  to  business,  and 
such  quorum  shall  be  ascertained  as  follows  : — that  is  to  say,  if  the  persons  who 
have  taken  shares  in  the  company  at  the  time  of  the  meeting  do  not  exceed 
ten,  there  shall  be  added  to  the  above  quorum  one  for  every  five  additional 
members  up  to  fifty,  and  one  for  every  ten  additional  members  after  fifty,  with 
this  limitation,  that  no  quorum  shall  in  any  case  exceed  twenty." 

In  the  case  of  a  small  company  the  quorum  is  not  uncommonly  fixed  at  two 
or  three.     Sometimes  the  following  words  are  added  : 

On  a  show  of  hands  every  member  shall  have  one  vote  only,  and  proxies 
shall  not  be  entitled  to  vote  as  such. 

{]').  The  chairman  of  the  directors  shall  be  eutled  to  take  the  chair  at  ChainiKui  of 
everv  a;eneral  meeting,  or,  if  there  be  no  chairman,  or,  if  at  any  meetinsf  p*^"^'"^^  '"^^*" 


136 


AETICLES    OF    ASSOCIATION. 


Form  117.  lie  shall  not  1)C  present  -within  fifteen  minutes  after  the  time  aiipointcd 
for  holding-  such  meeting,  the  mcmhers  present  shall  choose  another 
director  as  chairman,  and,  if  no  director  be  present,  or,  if  all  the 
directors  present  decline  to  take  the  chair,  then  the  members  present 
shall  choose  one  of  their  number  to  be  chairman. 
Sometimes  provision  is  made  for  a  deputy  chairman. 


Wlien,  if 
quomiin  not 
present,  meet- 
ing to  be  ilis- 
solvetl,  and 
when  to  be 
adjourned. 


How  questions 
to  be  decided 
at  meetings. 

Casting  vote. 


()6.  If  within  half  an  hour  from  the  time  appointed  for  the  meeting  a 
quorum  is  not  present,  the  meeting,  if  convened  upon  such  requisition 
as  afsd,  shall  be  dissolved  ;  but  in  any  other  case  it  shall  stand  adjourned 
to  the  same  day  in  the  next  -week,  at  the  same  time  and  place,  and  if  at 
such  adjourned  meeting  a  quorum  is  not  present,  [those  members  -«'ho 
are  present  shall  be  a  (luorum,  and  may  transact  the  business  for  -uiiich 
the  meeting  was  called.] 

Or  the  words  in  brackets  nray  be  omitted,  and  the  following  inserted :  "  it 
shall  be  adjourned  sine  die."  This  is  the  form  in  Table  A.,  but  the  above  is 
now  frequently  used,  for  it  is  found  that  members  are  often  so  supine,  that  it 
is  almost  impossible  to  get  together  a  quorum,  although  the  business  may  be 
pressing. 

C)7.  Every  question  submitted  to  a  meeting  shall  be  decided,  in  the 
first  instance,  l)y  a  show  of  hands,  and  in  the  case  of  an  equality  of  votes 
the  chairman  shall,  both  on  show  of  hands  and  at  the  poll,  have  a  casting 
vote  in  addition  to  the  vote  or  votes  to  which  he  may  be  entled  as  a 
member. 

See  In  re  Horhury  Bridge,  S^'c.  Co.,  11  Ch.  Div.  109 ;  The  Queen  y.  Government 
Stock  Investment  Co.,  3  Q.  B.  D.  41'2.  If  the  number  of  votes  at  a  general 
meeting  is  equal  the  chairman  has  no  casting  vote  by  common  right. 

What  is  to  be        G8.  At  any  general  meeting,  unless  a  poll  is  demanded  by  at  least  [five] 

evidence  of       members,  or  by  a  member  or  members  holding  or  representing  by  proxy 

.1  resolution      or  entled  to  vote  in  respect  of  at  least  one-fifth  pt  of  the  capital  repre- 

wherc  poll  not  g^^ited  at  the  meeting,  a  declon  by  the  chairman  that  a  resolution  has 
demanded.  .  .  •'         . 

been  carried,  or  carried  by  a  parlar  majority  or  lost,  or  not  carried  by  a 

parlar  majority  and  an  entry  to  that  eff"ect  in  the  book  of  proceedings  of 

the  CO,  shall  be  conclusive  evidence  of  the  fact  without  proof  of  the 

number  or  proportion  of  the  votes  recorded  in  favour  of  or  against  such 

resolution. 

There  is  a  common  law  right  to  demand  a  poll,  but  the  regulations  may 
exclude  or  restrict  it.  The  Queen  v.  The  Wimbledon  Local  Board,  8  Q.  B.  Div. 
459  ;  better  reported  in  30  W.  R.  402,  and  4G  L.  T.  47. 

A  poll  need  not  be  demanded  publicly ;  it  is  sufficient  if  the  chairman  acts 
on  a  private  demand.     Re  Phoenix  Co.,  48  L.  T.  2G0. 

Poll.  G9.  If  a  poll  is  demanded  as  afsd,  it  sliall  be  taken  in  such  manner 

and  at  sucli  time  and  j)lace  as  the  chairman  of  the  meeting  directs,  and 
either  at  once  or  after  an  interval  or  adjournmt  or  otherwise,  and  the 
result  of  the  poll  shall  be  deemed  to  be  the  resolution  of  the  meeting 
at  which  the  poll  was  demanded. 

Occasionally  the  words  "  and  either  by  ballot  or  otherwise  "  are  inserted 
after  the  word  "  manner." 


FOEMS.  137 

As  to  a  scrutiny,  see  The  Wandsworth,  S^c,  Co.  v.  Wriglit,  18  W.  E.  728.     The    Pojin  X17. 
result  as  entered  on  tlie  minutes  is  prima  facie,  correct. 

In  Re  Hofhury  Bridge,  ^'c,  Co.,  11  Ch.  Div.  109,  Jessel,  M.E.,  is  reported  to 
have  said  that  "  where  a  poll  is  demanded  it  never  is  taken  then  and  there, 
and  I  am  by  no  means  of  oi:)inion  that  a  chairman  could  direct  it  to  be  so 
taken;"  and  Brett,  L.J.,  concurred.  See  also  Queen  v,  Wimbledon  Local  Board, 
ubi  supra.  In  the  wi-iter's  exjierience  a  poll  is  veiy  commonly  taken  then  and 
there,  and  it  is  therefore  desirable  to  frame  the  above  clause  so  as  to  authorise 
such  a  proceeding- ;  for  great  inconvenience  may  be  caused  if  a  question  can 
never  be  decided  without  adjoui-nment. 

Table  A.  (Clause  43)  does  not  contain  the  words  in  brackets  ;  and  where  they 
are  not  present,  it  seems  very  doubtful  whether  a  poll  can  be  properly  taken 
at  once.  However,  there  would  not  seem  in  such  case  to  be  any  objection  to 
a  direction  by  the  chairman  that  the  poll  should  be  taken  at  the  close  of  the 
meeting,  and  shall  be  continued  on  some  subsequent  day  or  days.  Where  a 
poll  is  duly  demanded,  the  meeting  is  deemed  in  contemplation  of  law  to  con- 
tinue until  the  poll  has  been  taken.  The  Queen  v.  Wimbledon  Local  Board,  ubi 
supra.  At  a  poll  a  member  can  vote  personally,  though  he  was  not  present 
at  the  meeting  where  it  was  demanded;  but  the  regulations  as  to  proxies 
generally  preclude  voting  by  proxy,  unless  the  proxy  letter  has  been  deposited. 
See  Clause  78,  infra.  Where  a  poll  is  demanded,  it  is  usual  if  the  poll  is  not 
to  be  taken  then  and  there,  to  adjourn  the  meeting  to  hear  the  result ;  but 
sometimes  there  is  no  formal  adjoui-nment,  but  it  is  arranged  that  notice  of 
the  result  of  the  poll  is  to  be  given.  There  would  not  seem  to  be  any  legal 
objection  to  the  last  mentioned  course. 

70.  The  chairman  of  a  general  meeting  may,  with  the  consent  of  the  Power  to  ad- 

nieeting,  aclionrn  tlie  same  from  time  to  time  and  from  place  to  place,  ^°^™  S'^^^^'^^ 

*"     Z  .  '-  ^         '  meeting, 

but  no  business  shall  he  transacted  at  any  adjourned  meeting  other  than 

the  business  left  unfinished  at  the  meeting  from  which  the  adjomiimt 

took  place. 

See  note  to  Clause  G4.  If  the  chairman  improperly  purports  to  adjourn  and 
leave  the  chair,  the  meeting  can  elect  some  other  chairman  and  proceed. 

71.  The  demand  of  a  poll  shall  not  prevent  the  continuance  of  a  Business  may 
meeting  for  the  transaction  of  any  business  other  than  the  (|uestion  on  P^ceed  not- 

''■  ''  i^  withstanduig 

which  a  poll  has  been  demanded.  demand  of 

poU. 

Votes  of  MEiiBERS. 

72.  Every  member  shall  ha^■e  one  vote  for  every  share  held  by  him  Votes  of 

[up  to  ten,  and  he  shall  have  an  additional  vote  for  every shares  members. 

beyond  the  first  ten  shares,  but  no  member  shall  have  more  than 

votes]. 

The  right  of  voting  always  deserves  careful  consideration.  Not  vmcommonly 
the  words  in  brackets  are  omitted  in  the  last  sentence.  Sometimes  a  class  of 
members  is  given  no  voting  power.  Sometimes  no  member  holding  less  than 
[.£100]  capital  is  given  a  vote. 

And  where  a  large  proportion  of  the  capital  is  to  be  issued  to  a  vendor,  his 
rights  of  voting  in  respect  thereof  are  sometimes  limited.  These  are  matters 
for  the  consideration  of  the  promoters. 

Although  a  member  is  entitled  to  vote  as  he  likes.  East  Pant,  ^'c,  Co.  v. 
Merry  weather ,  2  H.  &  M.  251 ;  London  Sf  Merc.  Dis.  Co.,  1  Eq.  277  ;  Pender  v. 
Lushington,  G  C.  D.  70 ;  a  majority  will  not  be  allowed  to  obtain  for  themselves 
an  advantage  at  the  expense  of  the  minority.     Menier  v.  Hooper's  Telegraph 


138 


AETICLES    OF    ASSOCIATION. 


Form  117.  ^V^<^rks,  9  Oh.  350;  see  also  Atwool  v. Merry  weather,  5  Eq.  -IGi;  Mason  v.  Harris^ 
—— '-  11  Ch.  Div.  97. 

A  member  is  entitled  to  transfer  his  shares  to  nominees  so  as  to  secure  to 
himself  the  maximum  of  voting  power,  and  the  directors  must  register  the 
transfers,  unless  the  articles  give  them  a  power  to  decline  which  is  applicable 
in  such  case.     Stranton  Iron  Co.,  IG  Eq.  559  ;  see  further,  supra,  CI.  30. 

However,  it  is  seldom  deemed  necessary  expressly  to  restrict  the  right  of 
transfer  in  this  respect.  Clause  81a,  infra,  is  however  sometimes  inserted,  and 
in  all  ordinary  cases  prevents  what  was  done  in  the  case  above  mentioned.  But 
though  Clause  81a  may  be  found  useful  in  this  respect,  it  is  open  to  objection 
on  the  score  of  inconvenience,  and  on  other  grounds. 

It  is  conceived  that  the  right  of  voting  is  a  right  of  property  (Pender  v. 
Lushing  ton,  uhi  supra)  which  cannot  without  consent  be  taken  away  or  altered 
by  special  resolution.     See  "  Eesolutions,"  infra. 


WIio  may  vote 
for  infant, 
lunatic,  &c., 


73.  Any  guardian,  or  other  person  eutled  under  the  transmission 
clause  [siqtra,  cl.  38]  to  transfer  any  shares,  may  vote  at  any  general 

and  subject  to  meeting  in  respect  thereof  in  the  same  manner  as  if  lie  were  the  registered 
tions  ^°"^  ^  holder  of  such  shares,  provided  that  forty-eight  hours  at  least  before  tho 
time  of  holding  the  meeting  at  Avhich  he  proposes  to  vote  he  shall  satisfy 
the  directors  of  his  right  to  transfer  such  shares,  or  unless  the  directors 
shall  have  previously  admitted  his  right  to  vote  at  such  meeting  in 
respect  thereof. 

74.  If  there  be  joint  registered  holders  of  any  shares,  the  member 
whose  name  stands  first  on  the  register,  and  no  other,  shall  be  en  tied  to 
vote  in  respect  of  such  shares,  l)ut  the  other  or  others  of  the  joint  holdei-s 
shall  be  eutled  to  be  present  at  the  general  meeting. 

The  above  clause  is  generally  used,  but  sometimes  the  following  is  inserted : — 
"  Where  there  are  joint  registered  holders  of  any  share  or  stock,  any  one  of 
such  persons  may  vote  at  any  meeting,  either  personally  or  by  proxy,  in  respect 
of  such  share  or  stock  as  if  he  were  solely  entitled  thereto ;  and  if  more  than 
one  of  such  joint  holders  be  present  at  any  meeting  personally  or  by  proxy,  that 
one  of  the  said  persons  so  present  whose  name  stands  first  in  the  register  in 
respect  of  such  shares  or  stock,  shall  alone  be  entitled  to  vote  in  respect 
thereof." 


In  what  cases 
no  poll. 


Proxies  per- 
mittefl. 


Instrument 
•appointing 


75.  Any  poll  duly  demanded  on  the  election  of  a  chairman  of  a 
meeting,  or  on  any  question  of  adjournmt,  shall  1)0  taken  at  the 
meeting,  and  without  adjournmt. 

It  seems  doubtful  whether  in  the  absence  of  express  power  a  poll  can  be  de- 
manded on  a  question  of  adjournment.  MacDougal  v.  Gardiner,  1  C.  Div.  13. 
However,  a  clause  as  above  is  frequently  inserted  and  seems  expedient.  Not 
uncommonly  it  is  provided  that  no  poll  shall  be  demanded  in  such  cases,  but  na 
good  reason  can  be  suggested  why  proxies  should  be  deprived  of  the  power  to 
vote  on  these  matters.  If  a  poll  cannot  be  demanded,  a  few  members  who 
happen  to  be  personally  present  may  be  able  to  effect  an  adjournment,  say, 
for  three  months,  though  at  a  poll  there  would  be  a  vast  majority  against 
.adjournment. 

7ii.  Votes  may  be  given  eitlier  personally  or  liy  proxy. 

There  appears  to  be  no  right  at  common  law  to  vote  by  proxy. 
Cori)oi"ations,  250  ;  hence  it  must  be  exjH'essly  given. 


See  Grant  on 


77.  The  instrumt  ap])ointing  a  prf>xy  shall  be  in  writing,  under  the 
hand  (if  the  appointor,  (ir,  if  such  appointor  is  a  coriMirntion,  under  its 


FOEMS.  1:39 

cominon  seal,  [and  shall  be  attested  by  one  or  more  witnesses].  ISTo  person   Form  117. 
shall  be  ai^poiutcd  a  proxy  who  is  not  a  member  of  the  co  and  qnalified  Di^oxyToljehT 

to  vote.  writing  ; 

The  words  in  brackets  are  sometimes  omitted,  for  attestation  may  be  for- 
gotten, and  in  that  case  the  instrument  is  not  available.  Harben  v,  Phillips, 
23  C.  Div.  li.  There  would  not  ai^jDear  to  be  any  legal  objection  to  a  proxy  in 
blank.     Ex  parte  Doncaster,  5  C.  Div.  911 ;  and  see  supra,  p.  125. 

78.  The  instrnmt  appointing  a  proxy  shall  be  deposited  at  the  regis-  ami  to  be 
tered  office  of  the  co  not  less  than  forty-eight  hours  before  the  time  for  ||^P"^'ted  at 
holding  the  meeting  at  which  the  person  named  in  such  iiistrumt  pro- 
poses to  vote,  [but  no  instrnmt  appointing  a  proxy  shall  be  valid  after 

the  expiration  of  twelve  months  from  the  date  of  its  execution.] 

Sometimes  the  words  within  brackets  in  the  above  clause  are  omitted,  and 
the  following-  substituted :  "  and  no  pi'oxy  shall  be  entitled  to  vote  except  at 
the  particvxlar  meeting-  mentioned  in  the  instrument,  or  any  adjournment 
thereof,  and  upon  every  poll  that  may  take  place  at  or  in  consequence  of  any 
such  meeting-  or  adjournment."  But  there  seems  no  sufficient  reason  why  a 
member  should  not  be  enaljled  to  appoint  a  proxy  for  a  specified  period,  e.  g., 
where  he  is  going  abroad.  It  was  very  proper  to  insert  such  a  provision  when 
the  law  would  not  permit  the  appointment  of  a  proxy  excej^t  in  regard  to  a 
specified  meeting.     See  infra,  note  to  Clause  80. 

[78a.  A  vote  given  in  accordance  with  the  terms  of  an  instrnmt  of  when  vote  i^y 
proxy  shall  be  valid  notwithstanding  the  in-evious  death  of  the  principal,  pi'oxyvalui 
or  revocation  of  the  proxy,  or  transfer  of  the  share  in  respect  of  whicli  rity  revoked. 
the  vote  is  given,  provid(,'d  no  intimation  in  writing  of  the  death,  revo- 
cation, or  transfer  shall  have  been  received  at  the  registered  office  of  the 
CO  l)efore  the  meeting.] 

This  is  occasionally  inserted  and  may  be  useful. 

79.  Holders  of  share  warrants  shall  not  be  entled  to  vote  by  proxy  in  iiniders  of 
resiiect  of  the  shares  or  stock  included  in  such  warrants.  ^'''"'®  warrants 

^  .  .  not  to  vote  oy 

80.  Every  mstrumt  of  proxy,  whether  for  a  specified  meeting  or  other-  jn-oxy. 

wise,  shall,  as  nearly  as  circes  will  admit,  be  in  the  form  or  to  the  effect  Form  of  proxy. 
following  :  — 

The Co,  Limtd.     I ,  of ,  in  the  county  of ,  lieing 

a  member  of  The Co,  Limtd,  hby  appoint ,  of  ,  [or  fail- 
ing him, of ,  or  failing  him, of ,]  as  my  proxy,  to 

vote  for  me  and  on  my  behalf  at  the  (ordinary  or  extraordinary  as  flic 

rase  may  he)  general  meeting  of  the  co  to  be  held  on  the day  of 

— — ,  and  at  any  adjournmt  thereof. 

As  witness  my  hand,  this day  of . 


Signed  by  the  sd in  the  presence  of . 

By  virtue  of  7  &  8  Vict.  c.  21,  s.  G,  and  19  &  20  Vict.  c.  81,  s.  2,  a  proxy 
could  only  be  appointed  for  a  specified  meeting,  but  both  those  Acts  were  re- 
pealed by  the  Inland  Revenue  Eepeal  Act,  1870  (33  &  31  Vict.  c.  99).  By  the 
Stamp  Act,  1870,  as  amended  by  31  Vict.  c.  1,  a  letter  or  power  of  attorney  or 
commission,  factory,  or  mandate,  or  other  instrument  in  the  nature  thereof  for 
the  sole  purpose  of  aj^pointing  or  authorising  a  proxy  to  vote  at  any  one  meeting 
at  which  votes  may  be  given  by  proxy,  whether  the  niimber  of  persons  named 


140 


AETICLES    OF    ASSOCIATION. 


Form  117. 


No  member 

entitled  to 
vote.  &c., 
wliile  call  due 
to  company. 


Resolution  in 
writinij  of 
directors,  in 
fcrtain  eases, 
to  be  equiva- 
lent to  resolu- 
tion of  ;„'eiienil 
meeting. 


in  sticli  instiaiment  be  one  or  more,  is  charged  with  the  duty  of  one  penny,  and 
any  other  instrument  appointing  a  proxy  is  liable  to  a  duty  of  10s. 

Hence,  a  proxy  as  above  only  requires  a  penny  stamp.  If  the  proxy  is  to  be 
for  a  specified  period,  e.  g.,  "  at  any  general  meeting  of  the  company  that  may 
be  held  before  the day  of  ,"  or  for  several  specified  meetings,  it  re- 
quires a  10s.  stamp.  It  is  often  found  convenient  to  name  several  in  the 
alternative  as  above,  lest  one  should  be  absent. 

Section  102  of  the  Stamp  Act,  1870,  provides  as  follows : — 
(1.)  Every  letter  or  power  of  attorney  for  the  purpose  of  appointing  a  proxy 
to  vote  at  a  meeting,  and  evei-y  voting  pajier,  hereby  respectively  charged 
with  the  duty  of  one  penny,  is  to  specify  the  date  upon  which  the  meet- 
ing at  which  it  is  intended  to  be  used  is  to  be  held,  and  is  to  be  available 
only  at  the   meeting  so  sjDecified,  or  any  adjournment  thereof.     [This 
paragraph  does  not  aj^jDly  where  a  10s.  dvity  is  jmid  as  above.] 
(2.)  The  said  duty  of  one  penny  may  be  denoted  by  an  adhesive  stamp  which 
is  to  be  cancelled  by  the  person  by  whom  the  instrument  is  executed. 
[As  to  mode  of  cancelling,  see  supra,  p.  5.] 
(3.)  Every  person  who  makes,  or  executes,  or  votes,  or  attempts  to  vote  under 
or  by  means  of  any  such  letter  or  jjower  of  attorney  or  voting  paper,  not 
being  duly  stamped,  shall  forfeit  the  sum  of  fifty  pounds. 
(■4.)  Every  vote  given  or  tendered  under  the  authority  or  by  means  of  any 
such  letter  or  power  of  attorney  or  voting  paper,  not  being  duly  stamped, 
shall  be  absolutely  null  and  void. 
(5.)  And  no  such  letter,  or  power  of  attorney,  or  voting  paper  shall,  on  any 
pretence  whatever  be  stamped  after  the  execution  thereof  by  any  person. 
When  proxies  are  sent  out  it  will  be  found  expedient  to  have  them  impressed 
with  the  requisite  stamp,  for  even  Avhere  i^recise  directions  as  to  the  proper 
mode  of  cancelling  an  adhesive  stamp  are  given,  it  is  generally  found  that  a  good 
many  shareholders  will  make  some  mistake.     It  would  seem  that  a  proxy  bear- 
ing a  stamj)  not  duly  cancelled  ought  not  to  be  counted.     As  to  the  statutory 
mode  of  cancellation,  see  supra,  p.  5. 

81.  No  mcu::bei'  shall  l)e  eiitled  to  be  present,  or  to  vote  on  any 
question,  either  jiersonally  or  by  proxy  or  as  proxy  for  another  member, 
at  any  general  meeting,  or  upon  a  poll,  or  be  reckoned  in  a  quorum, 
whilst  any  call  or  other  sum  shall  be  due  and  payable  to  the  co  in  respect 
of  any  of  the  shares  of  such  member. 

See  the  Camhrian,  S;c.,  Co.,  W.  N.  187G,  G.  The  following  clause  is  not 
uncommon : — 

81a.  No  member  shall  be  entitled  to  be  present  or  to  vote  on  any  question 
either  personally,  or  by  proxy,  or  as  proxy  for  another  member,  at  any  general 
meeting  or  upon  a  poll,  or  be  reckoned  in  a  quorum,  whilst  any  call  or  other 
sum  shall  be  due  and  payable  to  the  company  in  respect  of  any  of  the  shares  of 
such  member ;  and  no  member  shall  be  entitled  to  be  present  or  to  vote  in 
resioect  of  any  share  that  he  has  acquired  Ijy  transfer  at  any  meeting  held  after 
the  expiration  of  three  calendar  months  from  the  registration  of  the  companj' 
ess  he  has  been  jjossessed  of  the  share  in  respect  of  which  he  claims  to  vote 
•^.t  least  three  months  previously  to  the  time  fixed  for  holding  the  meeting 
at  Avhich  he  proposes  to  vote,  or  (if  such  meeting  be  an  adjourned  meeting)  to 
the  time  originally  fixed  for  holding  the  same. 

82.  Any  resolution  passed  by  the  directors,  notice  whereof  shall  l)e 
given  to  the  members  in  the  manner  in  which  notices  are  hereinafter 
directed  to  be  given,  and  which  sliall,  within  one  month  after  it  shall 
have  been  so  passed,  be  ratified  and  confirmed  in  writing  by  members 
entlcd  at  a  poll  to  thrce-fiftlis  of  the  votes,  sliall  be  as  valid  and  effectual 


FOEMS.  14,1 

as  a  resolution  of  a  general  meeting,  but  this  clause  shall  not  apply  to  a   Form  117. 

resolution  for  winding  up  the  co,  or  to  a  resolution  passed  in  respect  of  ' 
any  matter  whicli  by  the  statutes  or  these  presents  ouglit  to  be  dealt 
with  by  special  or  extraordinary  resolution. 

This  clause  is  now  commonly  inserted,  and  is  found  very  useful.  It  is  some- 
times next  to  impossible  to  g-et  a  general  meeting  together,  and  business  is 
obliged  to  be  left  in  abeyance  meantime. 


Directors. 

83.  The  number  of  the  directors  shall  not  be  less  than  [three]  nor  Number  of 

.-,         r  T  directors. 

more  than  [seven] . 

It  is  seldom  that  a  large  number  of  directors  is  a  benefit  to  a  company ;  if  the 
company  is  a  large  one,  and  there  is  much  business  to  be  done  by  the  Board,  it 
may  be  necessary  in  order  that  there  may  be  no  difficulty  in  securing  a  quorum ; 
but  in  many  companies  the  powers  and  duties  of  the  Board  are  for  the  most 
part  delegated  to  a  managing  director  or  manager,  and  where  this  is  the  case, 
there  is  no  reason  for  having  a  large  number  of  directors.  Even  where  this  is 
not  done,  it  is  found  that  a  moderate  number  are,  by  reason  of  the  increased 
individual  responsibility,  more  likely  to  work. 

84.  Tlie  persons  hereinafter  named  shall  be  the  first  directors,  that  is  First  directors. 
to  say  :  A.  of- ;  B.  of ;  and  C.  of ,  &c. 

It  is  usual  to  appoint  the  directors  by  the  articles,  but  the  plan  adopted  in 
Table  A.  is  sometimes  preferred,  namely,  to  provide  that:  84a.  "The  first 
directors  shall  be  named  by  the  subscribers  of  the  memorandum  of  association ;" 
or  thus:  "  The  first  directors  shall  be  appointed  by  the  subscribers  hereto,  or 
the  majority  of  them,  by  an  instrument  in  writing  under  their  hands."  How- 
beach  Coal  Co.,  Limited  v.  Teagne,  5  H.  &  N.  151  ;  29  L.  J.  Ex.  137  ;  8  W.  E. 
2G4. 

Where  the  subscribers  are  to  appoint  the  directors,  the  articles  generally 
declare  that :  "  Until  the  first  directors  shall  have  been  appointed,  the  sub- 
scribers to  the  memorandum  of  association  shall  be  deemed  to  be  the  directors." 
This  does  not  enable  a  meeting  at  which  so  many  of  the  subscribers  are  present 
as  would  constitute  a  quorum  for  a  meeting  of  directors  under  Clause  103,  to 
pass  a  resolution  binding  on  the  absent  subscribers.  Howbeach,  c^'c.  Co.  v.  Teague, 
oH.  &  N.  151. 

Where  no  directors  are  appointed,  and  a  meeting  cannot  be  called  in  accord- 
ance with  the  regulations,  section  52  of  the  Act  applies,  and  accoi'dingly  five 
members  can  call  a  meeting.     Brick  ^  Stone  Co.,  W.  N.  1878,  140. 

85.  The  directors  shall  have  power  to  appoint  any  other  persons  to  Tower  for 
be  directors  at  any  time  before  the  ordinary  general  meeting,  to  be  held  ap'J^oint''  ^"^ 

in  the  year ,  l)ut  so  that  the  total  number  of  directors  shall  not  at  additional 

any  time  exceed  the  maximum  number,  fixed  as  above.  '  "^'^  °'^" 

This  clause  is  very  commonly  inserted,  and  is  found  convenient,  especially 
where  less  than  the  maximum  number  are  appointed  by  the  articles.  Some- 
times it  is  considered  to  give  a  continuing  jjower,  e.  g.,  "power  from  time  to 
time  and  at  any  time  to  appoint  any  other  persons  to  be  directors  but  so,  &c." 
In  that  case  Clause  100  as  to  casual  vacancies  will  be  omitted. 

Although  it  is  often  done,  it  is  doubtful  whether,  under  such  a  clause,  or 
under  Clause  100,  infra,  directors  can  be  appointed  in  pursuance  of  a  contract 
with  some  person  or  company  for  the  purpose  of  giving  such  person  or  company 


142 


AETICLES    OF    ASSOCIATION. 


Form  117.    a  voice  in  the  management.    See  Stace  and  Worth's  case,  i  Ch.G82  ;  Jamesr.  Eve, 
L.  E.  G  H.  L.  189 ;  De  Ravigne's  case,  5  C.  Div.  30G. 


(Qualification 
of  directors. 


Power  for 
director  to 
retire. 


8f^.  The  qualification  of  every  director  shall  l)e  tlie  holding  in  his  own 

right  of  shares  or  stock  of  the  co  of  the  nominal  value  of  /.     [A 

director  may  act  before  acquiring  his  qualification.] 

It  has  become  not  uncommon  now  to  omit  the  qualification  clause.  It  affords 
very  little  real  security  to  shareholders,  and  sometimes  prevents  a  suitable 
man  from  accepting  office.     No  qualification  is  rec^uired  by  Table  A. 

It  was  decided  in  Brown's  case,  9  Ch.  102,  that  a  clause  as  above  does  not  bind 
a  director  to  take  his  qualification  shares  from  the  company.  It  will  be 
sufficient,  if,  within  a  reasonable  time  after  appointment,  he  acquire  the 
necessary  shares  in  any  other  legal  mode  by  which  shares  can  beacc^uired,  c.  g., 
by  purchase  in  the  market,  by  transfer  from  a  friend,  or  otherwise. 

But  Jessel,  M.R.,  in  Miller's  case,  3  C.  Div.  GGl,  was  of  opinion  that  the 
time  expires  when  the  director  acts,  and  that  he  thereupon  becomes  bound  to 
take  the  shares  from  the  company.  And  see  Karuth's  case,  20  Eq.  oOG ;  and 
Brett's  case,  49  L.  T.  481.  But  where  a  qualification  is  necessary,  and  a 
director  acts,  and  is  registered  as  the  holder  of  the  qualifying  shares,  he  will 
be  fixed  as  a  contribvitory,  even  though  he  was  not  aware  of  the  registration. 
See  the  above  cases. 

Acting  as  a  director  without  qualification  is  not  a  misfeasance  under  s.  1G5  of 
the  Act.  Coventry's  case,  14  C.  Div.  660.  But  a  person  so  acting  will  be  liable 
for  misconduct  or  breach  of  trust,  as  if  he  were  a  director  de  jure,  S.  C. 

The  words  in  backets  are  very  commonly  inserted,  in  order  that  a  director 
may  not  be  precluded  from  acting  until  he  has  obtained  the  shares.  See 
infra.  Clause  93,  for  provision  vacating  this  office,  if  he  does  not  obtain  the 
shares  within  a  limited  period. 

Sometimes  it  is  provided  that  "  no  person  shall  be  qualified  to  be  a  director 

who  is  not  a  holder  of  shares  to  the  nominal  amount  of 1."     In  such  the 

appointment  of  a  person  not  duly  qualified  is  void.  Percy  and  Kelly,  cfc,  Co., 
7  C.  Div.  132. 

Whether  the  acts  of  a  director  who  has  not  been  duly  appointed,  or  who  is 
disqualified,  are  void,  mustdepend  on  the  circumstances  of  the  case.  Clause  112, 
infra,  and  s.  67  of  the  Act  (see  infra,  p.  151),  will  api^ly  in  most  cases,  but  only 
as  to  acts  done  before  the  defect  or  disc^ualification  is  shown.  Hallowes  v.  Fernie, 
3  Ch.  4G7  ;  Miirray  v.  Bush,  G  H.  L.  53  ;  Bridport,  S^c,  Co.,  2  Ch.  191.  And  not, 
it  Avould  seem,  in  favour  of  any  person  at  the  time  of  the  act  done  having 
notice  of  the  defect  or  disqualification. 

As  to  liability  of  directors  whose  qualification  is  provided  bj'  the  promoters, 
see  Orders,  infra. 

81).  A  director  may  retire  fi'om  his  office  upon  giving  one  month's 
notice  in  writing  to  the  co  of  his  intention  so  to  do,  and  such  resigna- 
tion shall  t.dvc  effect  upon  the  expiration  of  such  notice  or  its  earlier 
acceptance. 

Instead  of  the  above  clause,  the  following  is  sometimes  used  : — 
89a.  A  director  may  at  any  time  give  notice  in  writing  of  his  wish  to  resign, 
by  delivering  such  notice  to  the  chairman  of  the  directors,  or  the  secretary,  or 
leaving  it  at  the  office  of  the  company,  or  by  tendering  his  written  resignation 
at  a  meeting  of  the  directors,  and  on  the  acceptance  of  his  resignation  by  the 
directors,  but  not  before,  his  office  shall  become  vacant. 

It  is  generally  deemed  expedient  to  pi'ovide  expressly  for  resignation  of 
directors.  Clause  89  is  very  commonly  used,  but  Clause  89a  is  sometimes 
preferred,  in  order  that  a  company  may  not  be  inconvenienced  by  the  sudden 
retirement  of  several  directors. 


FORMS.  143 

There  can  be  little  doubt  that  even  where  no  express  power  to  resign  is    Form  117. 

given,  a  director  has  an  implied  one.     See  Maitland's  case,  4  De  G.  M.  &  G. ■ 

7C9.     If  directors  were  to  be  regarded  as  trvistees,  the  -rule  would  api^ly  that 

ix  trustee  can  only  retire  under   a  power,  or  by   the  consent  of  the   parties  , 

interested.     But  it  is  submitted  that  a  director  is  only  a  trustee  as  regards 

the  powers  and  duties  annexed  to  his  office,  and  that  the  office  is  merely  that 

of  a  manager  or  agent  of  the  company.      See    Knox  v.   Gye,  5    H.    L.    G70  ; 

Parker  v.  McKenna,  10  Ch.  96 ;  Ottoman  Bank  v.  Farley,  17  W.  E.  7C1  ;  Thring, 

120 ;  and  there  is  no  doubt  that  an  agent  can  put  an  end  to  his  agency  on 

giving  proper  notice.     Eussell  on  Agency,  2nd  ed.,  253  ;    Story  on  Agency, 

Sth  ed.,  673. 

It  may  be  observed  that  Table  A.  contains  no  clause  as  to  resignation. 

In  practice  it  is  always  assumed  that  a  director  can  retire  mero  inotu, 
and  the  object  of  a  clause  is  to  fix  the  length  of  notice,  or  to  restrict  the 
right. 

'm.  The  directors  shall  he  pd  out  uf  the  funds  of  the  co  by  way  of  re-  l^emuneration 
'■  ''         ■;  or  directors, 

muneratioii  for  their  services  the  sum  f»f 1,  per  annum,  which  sum 

shall  be  divided  among  them  in  such  proportions  and  manner  as  the 

dii'ectors  may  determine. 

This  is  a  very  common  clause.  Sometimes  it  is  altered  thus  :  "Among  them 
in  proportion  to  their  respective  attendances  at  board  meetings." 

In  some  cases  the  clause  runs  :  "  Such  sum  as  the  company  in  general  meeting 
iinay  from  time  to  time  determine,  which  svim  shall,  &c." 

The  following  is  another  form  sometimes  adopted  : — 

■"The  remuneration  of  each  director  for  his  services  shall  be  the  sum  of 1. 

■per  annum ;"  or, 

"  The  remuneration  of  the  directors  shall  be  the  sum  of 1,  apiece  for  each 

attendance  at  a  meeting  of  the  directors." 

In  addition  to  fixed  remuneration  as  above,  the  directors  are  not  uncom- 
nuonly  given  a  share  in,  or  commission  on,  the  profits.     See  infra.  Form  128a. 

Directors  are  not  entitled  to  remuneration,  except  by  virtue  of  the  regula- 
tions of  the  company.  Dunstan  v.  Imperial  S^c.,  Co.,  3  B.  &  Ad.  125.  But  where 
the  articles  fix  remuneration  as  above,  the  directors  will  have  a  right  of  action 
in  respect  thereof,  Orton  v.  Cleveland  Firebrick  Co.,  3  H.  &  C.  868;  13  W.  E. 
869  ;  and  may  pay  themselves  out  of  the  funds  of  the  company.  Unless  the 
articles  provide  that  the  fees  shall  be  paid  out  of  the  profits  only,  there  is 
nothing  to  jn-event  their  being  paid  out  of  capital.  Harvey  Lewis'  Case,  26  L.  T. 
.073. 

If  the  articles  contain  j^rovision  for  remvmeration,  a  promise  by  a  director  to 
.•give  his  services  gratis,  is  a  7iudum  jjactum  in  the  absence  of  some  valid  con- 
sideration, and  therefore  not  binding;  Lambert  v.  Northern,  4'c.,  Co.,  18  W.  E. 
180  ;  at  any  rate,  as  regards  the  persons  who  were  members  of  the  comi:»any  at 
.the  time  of  the  pi'oiDise. 

'.)!.  The  continuing  directors  may  act  notwithstanding  any  vacancy  Directors  may 
in  their  body  :  [but  so  that  if  the  number  falls  below  the  minimum  above  *f *  notwitk 

•'       ^  .  .  .stanclini; 

fixed  the  directors  shall  not,  except  for  the  pjiose  of  filling  vacancies,  act  vacancy'! 
:  so  long  as  the  number  is  below  the  minimum]. 

Where  there  is  a  maximum  and  minimum  number  fixed  as  above  [Clause  83], 
the  directors  connot  act  if  the  number  falls  below  the  minimum.  Alma  Spinning 
Co.,  16.  C.  D.  681 ;  unless  there  is  power  to  act,  notwithstanding  vacancies. 
Scottish  Petroleum  Co.,  23  C.  Div.  431.  The  words  in  brackets  are  sometimes 
inserted  ;  and  occasionally  the  words  "so  long  as  the  minimum  number  exists" 
.are  used  instead.    But  they  may  cause  inconvenience.     Sometimes  the  words. 


144 


AETICLES    OF    ASSOCIATION. 


Form  117.  "  But  this  provision  shall  be  deemed  directory  only,"  are  added  to  Clause  83, 
i.  e.,  directory  as  distinguished  from  imperative  (Lindley,  82  i)  ;  but  the  word* 
are  not  intelligible  to  an  average  director. 


When  office  of 
director  to  be 
vacated . 


!12.  The  office  of  a  director  shall  he  yacatcd  : — 

(«.)  If  he  accepts  or  holds  any  other  office  under  the  co  [except  that 
of  managing  director]. 

The  words  in  brackets  will  be  inserted  where  the  articles  provide  for  the 
appointment  of  a  managing  director. 

In  the  Iroji  Ship,  Sfc,  Co.  v.  Hunt,  3  C.  P.  484,  the  articles  contained  a  provi- 
sion as  above  (a).  A.  had  been  appointed  secretary  at  a  salary,  and,  whilst 
secretary,  was  elected  a  director  and  acted  as  such,  still,  however,  continuing 
to  perform  the  duties  of  the  secretary.  It  was  held  that  the  acceptance  of  the 
office  of  director!  vacated  the  office  of  secretary,  and  that  the  subsequent  per- 
formance of  the  duties  of  the  latter  office  did  not  disqualify  him  under  (a). 

Sometimes  this  sub-section  is  omitted,  and  a  clause  inserted  that "  A  director 
may  hold  any  other  office  under  the  company  in  conjunction  with  the  office  of 
director."     In  a  small  company  this  may  be  convenient. 

(h.)  If  he  hecomo  bankrupt,  or  suspends  paymt,  or  compounds  with 

his  creditors. 
(c.)  If  he  be  found  lunatic  or  becomes  of  unsound  mind. 
(d.)  If  he  cease  to  hold  the  required  amount  of  shares  or  stock  to 

qualify  him  for  office,  or  do  ]iot  acquire  the  same  within  [three] 

months  after  election  or  appointmt. 
(f.)  If  he  absent  himself  from  the  meetings  of  the  directors  during  a 

period  of  three  calendar  months  without  special  leave  of  absence 

from  the  directors. 

This  subsection  is  sometimes  inserted. 

As  to  the  validity  of  acts  done  by  a  disqualified  director,  see  infra.  Clause 
112,  p.  150,  and  sujira,  p.  142. 

Sometimes  a  further  subsection  is  added  as  follows  : — 

[(/.)  If  he  is  concerned  in  or  participates  in  the  profits  of  any  contract 
Avith  or  work  dune  for  the  co ;  but  no  director  shall  vacate  his 
office  by  reason  of  his  being  a  member  of  any  co  which  has 
entered  into  contract  with  or  done  any  work  for  this  co,  or 
which  is  concerned  in  or  participates  in  the  profits  of  any  con- 
tract with  the  CO.] 

Where  this  is  used,  Clause  93,  infra,  will  be  omitted. 
Sometimes  a  further  paragraph  is  added  : 

(^.)  If  he  is  recjuested  iu  writing  by  all  his  co-directors  to  resign. 

Directors  may  0.3.  Xo  director  shall  be  disqualified  l)y  his  office  fi-om  contracting 
contract  with  y^\i\^  w^q  qq  either  as  vendor,  pchaser,  or  otherwise,  nor  shall  any  such 
contract  or  arrangemt  or  any  contract  of  arrangemt  entered  into  by  or 
on  l)ehalf  of  the  co  with  any  co  or  partnership,  of  or  in  which  any 
director  shall  be  a  member  or  otherwise  interested  be  avoided,  nor  shall 
any  director  so  contracting  or  being  such  member,  or  so  interested,  be 
liable  to  account  to  the  co  for  any  profit  ]-ealized  Ity  any  such  contract 
or  arrangemt  by  reason  only  of  such  director  holding  that  office  or  of 


company. 


FORMS.  ]  45 

the  fiduciary  relation  thereby  established,  but  no  such  director  shall  vote  Form  117. 
in  respect  of  any  such  contract  or  arrangcmt  [and  the  nature  of  his 
interest  where  it  does  not  appear  on  the  face  of  the  contract  must  be 
disclosed  by  him  at  the  meeting  of  the  directors  at  which  the  contract  or 
arrangcmt  is  determined  on,  if  his  interest  then  exists,  or  in  any  other  case 
at  the  first  meeting  of  the  directors  after  the  acquisition  of  his  interest]. 

Sometimes  the  words  in  brackets  are  omitted,  but  they  are  useful  as  a 
reminder. 

As  a  director  stands  in  a  fiduciary  relation  towards  the  company,  he  cannot, 
unless  the  articles  otherwise  provide,  contract  with  the  company.  Albion,  iSfc, 
Co.  V.  Martin,  1  C.  Div.  580.  Nor  does  it  make  any  difference  that  the  contract 
is  open  and  above  board  as  between  the  contracting  director  and  his  co-di- 
rectors.    Ibid. 

But  a  company  may  unquestionably  waive  the  benefit  of  the  rule.  Imperial, 
i^c.  Association  v.  Coleman,  G  Ch.  5G8  ;  L.  E..  G  H.  L.  190  ;  Southall  v.  British 
Mutual,  <^c.,  Society,  G  Ch.  619  ;  Black  v.  Mallalue,  7  W.  E.  303  ;  Adamson's 
case,  18  Eq.  G70 ;  and  it  has  now  become  very  common  to  do  so,  and  to  insert 
clauses  to  the  effect  of  the  above. 

It  may  be  convenient  here  to  refer  to  the  well  settled  rule,  that  an  agent 
cannot,  without  the  knowledge  and  consent  of  his  principal,  be  allowed  to  make 
any  profit  out  of  the  matter  of  his  agency  beyond  his  proper  remuneration. 
This  rule  applies  with  peculiar  stringency  to  the  directors  of  joint-stock  com- 
panies.    Hay's  case,  10  Ch.  GDI. 

The  rule  is  "  not  a  technical  or  arbitrary  rule.  It  is  a  rule  founded  upon  the 
highest  and  truest  principles  of  morality.  No  man  can,  in  this  court,  acting  as 
agent,  be  allowed  to  put  himself  into  a  position  in  which  his  interest  and  his 
duty  will  conflict."     Per  Lord  Cairns,  L.  C,  Parker  v.  McKenna,  10  Ch.  118. 

See  the  above  cases  and  the  following  : — 

Parker  v.  Lewis,  8  Ch.  1035  ;  Ottoman  Bank  v.  Farley,  17  W.  E.  7G1  ;  Carling's 
case,  1  Ch.  Div.  123  ;  Morvah,  Consols,  S^c,  Co.,  2  Ch.  Div.  1  ;  Morrison  v. 
Thompson,  L.  E.  9  Q.  B.  -ISO;  Pearson's  case,  5  C.  Div.  33G ;  Dunne  v.  English, 
18  Eq.  524;  Dc  Bussche  v.  Alt,  8  C.  Div.  300. 

Sometimes  the  voting  is  i^ermitted. 

Sometimes  a  clause  as  follows  is  inserted  : — 

93a..  A  director  of  this  company  may  be,  or  become,  a  director  of  any  com- 
pany promoted  by  this  company,  or  in  which  it  may  be  interested  as  a  vendor, 
shareholder  or  otherwise,  and  no  such  director  shall  be  accountable  for  any 
benefits  received  as  director  or  member  of  such  company. 

Such  a  clause  is  occasionally  inserted  where  the  formation  of  such  companies 
is  in  view. 


Rotation  of  Directors. 
04.  At  the  ordinary  general  meeting,  to  be  held  in  the  year ,  and  Rotation  and 

,  J.  T  1  ,.  i-i-iriiTi-  retirement  of 

at  every  succeedmg  ordmary  general  meeting,  one-third  or  the  directors,  directors, 
or,  if  their  number  is  not  a  multiple  of  three,  tben  the  numl^er  nearest 
to,  but  not  exceeding  one-third,  shall  retire  from  office.     [A  retiring 
director  shall  retain  office  until  the  dissolution  or  adjournmt  of  the  meet- 
ing at  which  his  successor  is  elected.] 

The  above  is  a  clause  which  is  in  very  general  use. 
Table  A.  provides  that : 

"At  the  first  ordinary  meeting  after  the  registration  of  the  company,  the  whole 
of  the  directors  shall  retire  from  office ;  and  at  the  first  ordinary  meeting  in  every 

L 


146 


ARTICLES    OF    ASSOCIATION. 


Form  117.    subsequent  year  ono-third  of  the  directors  for  the  time  being,  or,  if  their  num- 

ber  is  not  a  multiple  of  three,  then  the  number  nearest  to  one-third,  shall 

retire  from  office." 

Biit  that  clause  is  seldom  adopted  in  its  integrity.  The  promoters  generally 
nominate  the  first  directors,  and  it  is  considered  only  fair  that  they  should  have 
a  reasonable  time  to  try  their  policy.  Of  course,  if  the  conn:iany  chooses,  it  can. 
at  any  time  remove  them  under  Clause  99. 


Which  direc- 
tors to  retire. 


Meeting  to  fill 
lip  vacancies. 


9.5.  The  one-third,  or  otlier  nearest  number,  to  retire  at  the  ordinary 

meeting  to  be  held  in  the  year ,  shall,  unless,  the  directors  agree 

among  themselves,  be  determined  by  lot ;  in  every  subsequent  year  the 
one-third,  or  other  nearest  number,  who  have  been  longest  in  office  shall 
retire.  As  between  two  or  more  who  have  been  in  office  an  equal  length 
of  time  the  director  to  retire  shall  in  default  of  agreemt  between  them 
l)e  determined  by  lot.  The  length  of  time  a  director  has  been  in  office 
shall  be  computed  from  his  last  election  or  appointmt  where  he  has 
previously  vacated  office.  A  retiring  director  shall  be  eligible  for 
re-election. 

9G.  The  CO  at  any  general  meeting  at  which  any  directors  retire  in 
manner  afsd  shall  fill  up  the  vacated  offices  by  electing  a  like  number  of 
persons  to  be  directors  [and  may  fill  up  any  other  vacancies]. 

The  words  in  brackets  are  very  commonly  absent,  and  in  such  case  it  is  by 
no  means  clear  that  the  meeting  could  fill  up  a  vacancy  unless  it  was  caused  by 
retirement  "  in  manner  aforesaid."  But  see  Munster  v.  Cammell  Co.,  21  C.  D. 
188,  and  compare  with  Imperial  Hydropathic  Co.  v.  Hampson,  23  C.  Div.  1. 

Votes  given  in  favour  of  a  disqualified  person  may  be  thrown  away  where 
notice  of  the  disqualification  is  brought  home  to  the  voters.  Reg.  v.  Teivkesbury, 
L.  E.  3  Q.  B.  G35.  And  in  the  result  the  candidate  who  stands  next  may  be 
entitled  to  office. 


tors  to  remain 
in  office  till 
successors 
appointed. 


Retiring  direc-  97.  If,  at  any  general  meeting  at  which  an  election  of  directors 
ought  to  take  place,  the  places  of  the  retiring  directors  are  not  filled  up, 
the  retiring  directors,  or  such  of  them  as  have  not  had  their  places 
filled  up,  shall  continue  in  office  until  the  ordinary  meeting  in  the  next 
year,  and  so  on  from  year  to  year  until  their  places  are  filled  up,  unless 
it  shall  be  determined  at  such  meeting  to  reduce  the  number  of 
directors. 

If  by  reason  of  the  refusal  of  a  du-ector  to  continue  there  remains  a  vacancy, 
it  can  be  filled  up  as  a  casual  vacancy.     See  Mimster  v.  Cammell  Co.,  uhi  supra. 

But  for  this  clause  the  acts  of  a  director  who,  after  his  office  was  vacated, 
under  Clause  95,  continued  to  act,  would,  subject  to  s.  67  of  the  Act  (infra, 
p.  128,  note  to  Clause  112),  be  void  as  against  the  members.  The  Garden  Gully, 
cf"c.,  Co.  V.  McLister,  1  App.  Cas.  39.  Of  course,  as  regards  strangers,  the  jirin- 
ciple  of  the  Royal  British  Bank  v.  Turquand  would  apply.  See  infra.  Form 
157. 

98.  The  CO  in  general  meeting  may  from  time  to  time  increase  or 
reduce  the  number  of  directors,  and  may  [alter  their  qualification,  and 
may]  also  determine  in  what  rotation  such  increased  or  reduced  number 

reduce  number  jj.  ^^         ^^^^  of  office. 
01  directors. 


Power  for 
general 
meeting  to 
increase  or 


The  words  in  brackets  are  sometimes  found  useful. 


FOEMS.  147 

99.  The  CO  may  I)y  extraordinary   resolution   remove   any   director   Form  117. 
l)efore  the  expiration  of  his  })eriod  of  office,  and  appoint  another  [qnali-  p^^^.^j.  ^^ 
fied]  person  in  his  stead  :  the  person  so  appointed  shall  hold  office  during-  remove 
such  time  only  as  the  director  in  whose  place  he  is  appointed  would  have  ppgchi  Veso- 
held  the  same  if  he  had  not  been  removed.  lution. 

As  to  meaning  of  extraordinary  resolution,  see  infra,  "Resolutions."  Table  A. 
provides  for  removal  by  sj^ecial  resolution.  Sometimes  the  clause  is  framed  as 
follows  :  "  The  company  in  general  meeting  may,"  &c.  Unless  the  regulations 
give  the  requisite  authority,  a  director  cannot  be  removed  even  by  special 
resolution.     Imperial  Hydropathic  Co.  v.  Hampson,  23  C.  Div.  1. 

If  there  is  no  power  the  articles  must  first  be  altered,  and  then  the  power 
exercised.  However,  if  in  any  case  where  there  is  no  power  it  is  desired  to  act 
promptly,  a  sjiecial  resolution  can  be  jjassed  giving  power  to  a  general  meeting 
to  remove,  and  the  notice  convening  the  confirmatory  meeting  can  state  that 
if  the  resolution  is  confirmed  a  further  resolution  Avill  be  proposed  removing 
Mr.  A.  from  office.  Sometimes  the  majority  is  not  sufficiently  powerful  to  pass 
a  special  resolution  for  removal.  In  such  case  it  may  be  expedient  to  pass  a 
resolution  dismissing  the  director,  for  where  the  majority  is  against  a  director, 
the  Court  will  not  force  him  on  the  company  by  injunction.  Harbcn  v.  Phillips, 
14  C.  Div.  14. 

100.  Any  casual  vacancy  occurring  among  the  directors  may  be  filled  Directors  may 

up  by  the  directors,  but  any  person  so  chosen  shall  retain  his  office  so  *^'^  "P  casual 

•^       ■'  ^   ^  vacancies. 

long  only  as  the  vacating  director  would  have  retained  the  same  if  no 

vacancy  had  occurred. 

This  clause  is  usually  inserted.  It  would  be  extremely  inconvenient  in  most 
cases  if  a  general  meeting  of  the  company  had  to  be  called  to  fill  up  a  casual 
vacancy. 

A  casual  vacancy  means  any  vacancy  arising  otherwise  than  by  retirement 
imder  CI.  94.     Munster  v.  Cammell  Co.,  21  C.  D.  183. 

Where  the  directors  are  given  a  general  power  [supra,  note  to  CI.  85]  to 
appoint  additional  directors,  this  clause  will  be  omitted. 

100a.  No  person,  not  being  a  retiring  director,  shall,  unless  recom- When  candi- 
mended  by  the  directors  for  election,  be  eligible  for  election  to  the  office  '^'^^f.  ^°\  "^°® 
of  director  at  any  general  meeting,  unless  he,  or  some  other  member  in-  must  give 
tending  to  propose  him,  has,  at  least  seven  clear  days  before  the  meeting,  'lotice. 
left  at  the  office  of  the  co  a  notice  in  writing  under  his  hand  signifying 
his  candidature  for  the  office,  or  the  intention  of  such  member  to  pro- 
pose him. 

This  clause  is  found  convenient  and  for  the  benefit  of  a  company.  It  enables 
inquiries  to  be  made  as  to  a  candidate's  antecedents,  &c.,  &c.  See  Barber's  case, 
5  C.  Div.  9G3. 


MAXAGIXa   DlIlECTOK. 

101.  The  directors  may,  from  time  to  time  [with  the  sanction  of  a  Power  to 
general  meeting],  appoint  one  or  more  of  their  body  to  l)e  managing  •'^rP"^'"* 
director  or  managing  directors  of  the  co,  either  for  a  fixed  term  or  directs." 
without  any  limitation  as  to  the  period  for  which  he  or  they  is  or  are 
to  hold  such  office,  and  may  from  time  to  time  remove  or  dismiss  him  or 

L  2 


148 


AETICLES  OF  ASSOCIATION. 


Form  117.    them  from  office  and  appoint  another  or  others  in  his  or  their  place  or 
places. 

The  words  in  brackets  are  commonly  omitted.  The  above  and  the  following 
are  the  usual  clauses  as  to  a  managing  director.  It  seems  expedient  in  most 
cases  to  insert  them  in  order  to  avoid  the  necessity  of  having  to  alter  the 
articles.  Of  course  the  exercise  of  the  powers  contained  in  these  clauses  is 
optional.  Not  uncommonly  the  first  managing  director  is  appointed  by  the 
articles.     See  Forms,  infra,  "  Miscellaneous  Clauses." 


What  provi- 
sions he  will 
be  subiect  to. 


Kemnneration 
of  managing 
director. 


Powei's  and 
duties  of 
managing 
director. 


102.  A  managing  director  shall  not,  while  he  continnes  to  hold  that 
office,  be  snbject  to  retiremt  by  rotation,  and  he  shall  not  be  taken  into 
account  in  determining  the  rotation  of  retiremt  of  directors,  but  he  shall, 
subject  to  the  provisions  of  any  contract  between  him  and  the  co,  be 
snbject  to  the  same  provisions  as  to  resignation  and  removal  as  the 
other  directors  of  the  co,  and  if  he  cease  to  hold  the  office  of  dii'cctor 
from  any  cause  he  shall,  ipso  facto,  and  immediately,  cease  to  be  a 
managing  director. 

lOo.  The  remuneration  of  a  managing  director  shall  from  time 
to  time  be  fixed  by  the  directors  [or  by  the  co  in  general  meeting],  and 
may  be  by  way  of  salary,  or  commission,  or  participation  in  profits,  or  by 
any  or  all  of  those  modes. 

Sometimes  the  articles  give  him  a  commission  on  the  profits,  or  on  the  sur- 
plus profits,  or  on  the  dividend  paid. 

104.  The  directors  may  fi'om  time  to  time  entrust  to  and  confer  upon 
a  managing  director  for  the  time  being  such  of  the  powers  exercisal^le 
under  these  presents  by  the  directors,  as  they  may  think  fit,  and  may 
confer  such  powers  for  such  time,  and  to  be  exercised  for  such  objects 
and  Imposes,  and  upon  such  terms  and  coTiditions,  and  with  such  re- 
strictions as  they  think  exjicdient;  and  they  may  confer  such  powers, 
either  collaterally  with,  or  to  the  exclusion  of,  and  in  substitution  for,  all 
or  any  of  the  powers  of  the  directors  in  that  behalf  ;  and  may  from  time 
to  time  tevoke,  withdraw,  alter,  or  vary  all  or  any  of  such  powers. 

These  powers  will  be  conferred  by  resolution  of  the  directors.  In  the  absence 
of  express  power  to  delegate,  the  maxim  "  delegatus  non  potest  delegare,"  applies 
to  directors,  Howard's  case,  1  Ch.  5G1 ;  Harris'  case,  7  Ch.  587.  In  the  latter 
case  there  being  a  power  to  delegate,  it  was  held  that  an  allotment  made  by  a 
committee  instead  of  by  the  board  of  directors  was  valid.  See  also  Re  Land 
Credit  Co.,  4  Ch.  460.  See  the  general  power  of  delegation,  infra,  CI.  110.  For 
exceptions  to  rule,  see  Bussche  v.  Alt,  8  C.  Div.  300,  and  Rossiter  v.  Trafalgar 
Co..  27  Beav.  380. 


IMectings  of 
directoi's, 
quorum,  &c. 


Proceedings  of  Directors. 

10.'').  The  directors  may  meet  together  for  the  dispatch  of  business^ 
adjourn,  and  otherwise  regulate  their  meetings,  as  they  think  fit,  and 
may  determine  the  quorum  necessary  for  the  transaction  of  business. 
Until  otherwise  determined  three  directors  shall  be  a  quorum. 


POEMS. 


149 


As  to  whether  a  meeting  is  essential  to  the  transaction  of  bixsiness,  see  infra.    Form  117 

p.  150,  note  to  Clause  113.     Where  as  above  (Clause  S3)  it  is  provided  that  ^■ 

there  shall  be  a  certain  minimum  number  of  directors,  and  the  articles  fix  the 
quorum,  it  seems  that  if  by  vacancies  the  number  be  reduced  to  less  than  the 
minimum,  in  the  absence  of  a  clause  similar  to  91,  nothing  can  be  done  until 
the  minimum  number  is  made  up.  Kirk  v.  Bell,  IG  Q.  B.  290 ;  Scottish  Petro- 
Zeum  Co.,  23  C.  Div.  113. 

Where  directors  have  authority  to  delegate  their  powers,  such  a  delegation 
will  be  presumed  if  one  or  two  of  the  directors  act  for  the  company  in  a  matter 
properly  within  its  legitimate  business.  Totterdell  v.  Fareham  Brick  Co.,  1  C.  P. 
(574;  Re  Regent's  Canal  Co.,  W.  N.  1807,79;  Lyster's  case,  4  Eq.  233;  Lyon's 
case,  35  Beav.  GIG. 

And  a  formal  resolution  is  not  in  all  cases  necessary  :  "I  have  no  hesitation 
in  saying  that  it  was  not  necessary  for  the  directors  to  pass  any  resolution  in 
order  to  make  the  acceptance  of  the  bills  binding  on  the  company,  or  in  saying 
that  if  the  directors  met  togethex",  and  the  chairman,  with  their  knowledge, 
accepted  a  bill  of  exchange,  that  would  bind  the  company.  In  the  same  way, 
if  a  bill  of  exchange  had  been  accepted  by  the  chairman,  without  due  autho- 
rity, and  the  directors  afterwards,  knowing  that  the  acceptance  had  been  given 
and  dealt  with,  acted  on  the  footing  that  the  bill  had  been  properly  accepted, 
I  should  not  have  the  least  hesitation  in  saying  that  the  acceptance  would  bind 
the  company."     Per  Giffai-d,  L.  J.,  Re  Land  Credit  Co.,  4  Ch.  473. 

lOG.  A  director  may  at  any  time  [and  tlie  secretary,  upon  the  request  Director  may 

of  a  director,  shall]    convene  a  meeting  of  the  directors.      Questions  siii"i"on 

arising  at  any  meeting  shall  he  decided  hy  a  maiority  of  votes,  and  in  „     ™°' 

^  -,-.       !>       .       .-,        ^     ■  1     1,  1  ■,  .       How  questions 

case  01  an  equality  or  votes  the  chairman  shall  have  a  second  or  casting  to  ije  decided, 
vote. 

107.  The  directors  may  elect  a  chairman  of  their  meetings  and  deter-  chaiiman. 
mine  the  period  for  which  he  is  to  hold  office,  but  if  no  such  chairman 

is  elected,  or  if  at  any  meeting  the  chairman  is  not  present  at  the  time 
•appointed  for  holding  the  same,  the  directors  present  shall  choose  some 
one  of  their  number  to  be  chairman  of  such  meeting. 

Sometimes  the  first  chairman  is  specified  so  as  to  avoid  discussion. 

108.  A  meetiug  of  the  directors  for  the  time  being  at  which  a 
quorum  is  present  shall  be  competent  to  exercise  all  or  any  of  the 
authorities,  powers,  and  discretions  by  or  under  regulations  of  the  co  for 
the  time  being  vested  in  or  exercisable  by  the  directors  generally. 

This  clause  merely  expresses  that  which  has  hitherto  been  generally  assumed, 
but  as  some  doubt  has  been  raised  whether  the  ordinary  clause  as  to  a  quorum 
£103]  enables  a  board  meeting  to  act  in  regard  to  important  matters,  it  seems 
desirable  to  provide  as  above.  See  New  Sombrero  Co.  v.  Erlanger,  5  C.  Div.  73  ; 
3  Ap.  Cas.  1218;  Alma  Spinning  Co.,  21  C.  D.  183.  A  director  who  is  disquali- 
fied cannot  be  counted  in  a  quoi'um.     Ibid. 

109.  The  directors  may  delegate  any  of  their  powers  to  committees  Power  to 
consisting  of  such  member  or  members  of  their  body  as  they  think  fit.  •'^PPO'it  *^o™- 

llllttG6S  llicl 

Any  committee  so  formed  shall  in  the  exercise  of  the  powers  so  dele-  to  delegate, 
gated  conform  to  any  regulations  that  may  from  time  to  time  be  im- 
posed on  it  by  the  directors. 

This  clause  is  generally  inserted,  and  ia  of  great  practical  convenience.     See 


150 


ARTICLES  OF  ASSOCIATION. 


Form  117.  J^e  Taurine  Co.,  25  C.  D.  118 ;  32  W.  E.  129  ;  49  L.  T.  511.  It  will  be  observed 
that  the  committee  may  consist  of  one  member  only.  As  to  where  a  delegatioa 
will  be  presumed,  see  note  to  Clause  105,  supra,  ad  fin. 


Proceedings  of 
comiaittee. 


"When  acts  of 
directors  or 
committee 
valid,  not- 
withstanding 
defective  ap- 
pointment, &c 


110.  The  meetings  and  proceedings  of  any  snch  committee,  consisting 
of  two  or  more  members,  shall  be  governed  by  the  provisions  herein 
contd  for  regnlating  the  meetings  and  proceedings  of  the  directors,  so 
far  as  the  same  are  apj^licaljle  thereto,  and  are  not  sni:)erseded  by  any 
regulations  made  by  the  directors  under  the  last  preceding  clause. 

111.  All  acts  done  at  any  meeting  of  the  directors,  or  of  a  committee 
of  directors,  or  l)y  any  person  acting  as  a  director,  shall,  notwithstanding 
that  it  shall  afterwards  be  discovered  that  there  was  some  defect  in  the 
appointmt  of  such  directors  or  persons  acting  as  afsd,  or  that  they 
or  any  of  them  were  disqualified,  be  as  valid  as  if  every  such  person  had 
been  duly  appointed  and  was  qualified  to  be  a  director. 

This  clause  is  usiial.  It  goes  rather  further  than  s.  G7  of  the  Act.  See 
infra,  note  to  CI.  112.  See  also  County  Life  Ass.  Co.,  5  Ch.  288,  and  other  cases 
cited  in  note  to  CI.  88. 

Resohition  112.  A  resolution  in  writing,  signed  by  all  the  directors,  shall  be  as 

meetinc  valid.  Valid  and  effectual  as  if  it  had  been  passed  at  a  meeting  of  the  directors 
duly  called  and  constituted. 

This  clause  is  now  not  unfrequently  adopted,  and  is  found  convenient. 
Whether  in  the  absence  of  such  a  clause  directors  can  act  witliout  a  board 
meeting  has  not  been  finally  decided,  but  it  would  seem  that  they  can.  Collie's 
Claim,  12  Eq.  258 ;  but  see  D'Arcy  v.  The  Tamar,  cf-c,  Co.,  L.  E.  2  Ex.  158. 


Remuneration 
for  extra 
service. 


112a.  If  any  of  the  directors  shall  be  called  upon  to  perform  extra 
services  or  to  make  any  special  exertions  in  going  or  residing  abroad,  or 
otherwise  for  any  of  the  pposes  of  the  co,  the  co  shall  remunerate  the 
director  or  directors  so  doing,  either  by  a  fixed  sum  or  by  a  percentage 
of  profits  or  otherwise  as  may  be  determined,  and  such  remuneration 
may  be  either  in  addition  or  in  sul)stitution  for  his  or  their  share  in  the 
remuneration  above  provided. 

This  clause  is  sometimes  inserted. 


]\Iinntes  to  be 
made. 


Minutes. 

[112b.  Tlie  directors  shall  cause  minutes  to  be  duly  entered  in  books 
provided  for  the  ppose — 

(a)  Of  all  appointmts  of  officers. 

{!))  Of  the  names  of  the  directors  present  at  each  meeting  of  the 
directors  and  of  any  committee  of  directors. 

(r)  Of  all  orders  made  by  the  directors  and  committees  of  directors. 

{(I)  Of  all  resolutions  and  proceedings  of  general  meetings  and  of 
meetings  of  the  directors  and  conmiittees. 

And  any  such  minutes  of  any  meeting  of  the  directors,  or  of  any 
committee,  or  of  the  co,  if  pui'portiiig  to  be  signed  by  the  chairman  of 


FOEMS. 


151 


such  meetinf^,  or  by  the  chairman  of  tlic   next   succeeding  meeting,    Form  117. 
shall  be  receivable  as  2)rimd  facie  evidence  of  the  matters  stated  in  such 
minutes.] 

The  above  clause  is  sometimes  inserted  and  may  possibly  be  useful  as  a 
reminder,  but,  if  brevity  is  desired  it  can  be  omitted,  for  s.  67  of  the  Act  siiffi- 
ciently  provides  for  these  matters.     The  section  is  as  follows : — 

*'  Every  company  under  this  Act  shall  cause  minutes  of  all  resolutions  and 
proceedings  of  general  meetings  of  the  company.,  and  of  the  directors  or  man- 
agers of  the  company,  in  cases  where  there  are  directors  or  managers,  to  be 
duly  entered  in  books  to  be  from  time  to  time  provided  for  the  pui-pose  ;  and 
any  such  minute  as  aforesaid,  if  piirporting  to  be  signed  by  the  chairman  of 
the  meeting  at  which  such  resolutions  wei"e  passed,  or  proceedings  had,  or  by 
the  chairman  of  the  next  succeeding  meeting,  shall  be  received  as  evidence  in 
all  legal  proceedings  ;  and  iintil  the  contrary  is  proved  every  general  meeting 
of  the  comi^any  or  meeting  of  directors  or  managers  in  resjject  of  the  proceed- 
ings of  which  minutes  h^ive  been  so  made  shall  be  deemed  to  have  been  duly 
held  and  convened,  and  all  resolutions  passed  thereat  or  proceedings  had  to 
have  been  duly  passed  and  had,  and  all  appointments  of  directors,  managers, 
or  liquidators  shall  be  deemed  to  be  valid,  and  all  acts  done  by  such  dii-ectors, 
managers,  or  liquidators  shall  be  valid,  notwithstanding  any  defect  that  may 
afterwards  be  discovered  in  their  appointments  or  qualifications." 

Even  apai't  from  the  Act  the  clause  would  appear  to  be  effectual  as  against 
any  member  of  the  company  although  of  course  not  against  sti'angers.  See 
Honey's  case,  12  W.  E.  816,  994 ;  4  D.  J.  &  S.  -1-20. 


Powers  of  Directors, 

113.  The  managemt  of  the  business  and  the  control  of  the  co  shall  be  General 

vested  in  the  directoi*s,  who,  in  addition  to  the  powers  and  authorities  i'°^^*^^''''  °* 
'  '  •••  company 

by  these  presents  expressly  conferred  upon  them,  may  exercise  all  such  vested  in 
powers  and  do  all  such  acts  and  things  as  may  be  exercised  or  done  by  'l^'^ctors. 
the  CO  and  are  not  hby  or  by  statute  expressly  directed  or  required  to  l)e 
exercised  or  done  by  the  co  in  general  meeting,  l)ut  subject  nevertheless 
to  any  regulations  from  time  to  time  made  l)y  the  co  in  general  meeting  ; 
promled  that  no  regulation  shall  invalidate  any  prior  act  of  the  directors 
which  would  have  been  valid  if  such  regulation  had  not  been  made. 

The  above  clause  is  usual.  If  it  is  desired  to  limit  the  authority  of  the 
directors  express  provision  is  accordingly  made,  but  subject  thereto,  the 
general  powers  of  the  company  are  almost  always  given  to  the  directors.  See 
and  compare  Clause  55  of  Table  A. 

And  such  a  general  delegation  is  valid  and  effectual.  Thus  In  re  Patent  File 
Co.,  6  Ch.  83,  the  articles  authorised  the  borrowing  of  money  with  the  sanction 
of  an  extraordinary  meeting  of  the  company  ;  they  also  contained  a  clause 
substantially  the  same  as  above.  The  directors  overdrew  the  company's  bank- 
ing account,  and  being  required  by  the  bank  to  give  security,  deposited  title- 
deeds  of  property  belonging  to  the  company.  It  was  held  in  the  winding-up 
of  the  company,  that  the  mortgage  was  valid.  James,  L.J.,  said  (inter  alia,) 
that  it  was  "  plain  that,  under  these  articles,  the  directors  can  do  anytliing 
which  the  comj^any  could  do,  unless  it  is  an  act  which  they  are  specially  pro- 
hibited from  doing.  I  can  find  nothing  in  the  memorandum  or  articles  to 
prevent  the  directors  from  making  the  best  terms  they  can  with  a  creditor  of 
the  company  by  selling  or  pledging  part  of  the  property  of  the  company." 
And  Mellish,  L.J.,   said  (inter  alia),  "  The  articles  give  to  the  directors  the 


1'52  AETICLES    OF    ASSOCIATION. 

Form  117.    whole  powers  of  the  company,  subject  to  the  provisions  of  the  articles  and  of 

the  Companies  Act,  1S62,  and  I  cannot  find  anything  either  in  the  Act  or  the 

articles  to  prohibit  their  making  a  mortgage  by  deposit There  being 

nothing  in  the  articles  to  jjrohibit  the  giving  of  such  seciirity,  I  am  of  opinion 
that  the  company  can  give  it  as  Avell  for  a  past  debt  as  a  future  one."  See 
also  Collie's  claim,  12  Eq.  246. 

See  also  In  re  Anglo- Danubian,  ^c.,  Co.,  29  Eq.  339j  the  articles  contained 
express  power  to  bori-ow  (Clause  29),  and  also  (Clause  GG),  a  general  delega- 
tion of  powers  as  above.  The  question  was,  whether  the  directors  had  power 
to  issue  debentures  at  a  discount.  Jessel,  M.E.,  held  that  they  could  :  "  There 
is  nothing  in  these  articles  to  limit  the  amount  of  interest,  the  directors  might 
give  10  per  cent.,  20  per  cent.,  or  30  per  cent.,  and  they  might  give  that  interest 
by  way  of  discount.  If,  therefore,  I  went  on  the  mere  words  of  the  29th  clause, 
I  should  hold  this  was  within  their  powers.  But,  looking  to  the  GGth  clause, 
I  cannot  have  any  possible  doubt.  The  directors  can  do  anything  the  company 
can  do  ;  and  as  there  are  no  regulations  jjrescribed  by  the  articles  or  the  com- 
pany under  the  GGth  clause,  they  may  borrow  on  any  terms  they  think  fit." 

The  above  clause  is  substantially  the  same  as  Clause  55  of  Table  A.,  and 
Clause  90  of  the  Companies  Clauses  Consolidation  Act,  1S45.  In  the  recent 
case  of  Hampson  v.  Price's  Patent  Candle  Co.,  L.  J.  45  Ch.  437  ;  34  L.  T.  711 ; 
24  W.  E,.'754,  it  was  held  that  the  last-mentioned  clause  warranted  directors 
in  granting  out  of  the  funds  of  the  company  gratuities  to  the  workmen 
employed. 

Where  the  directors  propose  to  enter  into  some  contract,  or  do  something 
of  which  the  majority  disapprove,  it  may  sometimes  be  practicable  to  make  a 
regulation  under  the  above  clause  ;  and  if  the  directors  threaten  to  disobey, 
an  action  can  be  brought  in  the  name  of  the  company  to  restrain  them. 

Specific  powers      11+.  Without  prejudice  to  the  general  jDowers  conferred  by  the  last 
given  to  preceding  clause,  and  of  the  other  powers  conferred  by  these  presents,  it 

is  hby  expressly  declared  that  the  directors   shall  have  the  following 

powers,  that  is  to  say,  power : — 

From  what  is  said  in  the  note  to  Clause  113,  it  seems  that  many  of  the 
sub-sections  of  this  clause  might  without  danger  be  omitted.  Nevertheless,  it 
is  usual  expressly  to  confer  all,  or  some  of  the  powers  contained  in  them,  and 
reasons  for  doing  so  are  not  wanting,  e.  g.,  1.  Directors  like,  as  far  as  possible, 
to  have  express  authority,  for  where  express  authority  is  given  by  the  articles, 
the  company  cannot  complain  that  an  act  of  the  directors  j)ursuant  thereto  is 
^dtra  vires.  Thus  where  the  articles  authorised  the  directors  to  pay  6,000L  to 
the  promoters  of  the  company,  it  was  held,  on  demurrer,  that  payment  without 
taxation  was  not  improper.  Croskey  v.  Bank  of  Wales,  4  GifP.  314  ;  9  Jur.  N.  S. 
595.  See  however  Englefield  Co.,  8  C.  Div.  3SS  ;  Marzetti's  case,  28  W.  E. 
541.  So  where  the  articles  authorised  the  directors  to  acquire  a  specific  busi- 
ness "  upon  such  terms  and  under  such  stipulations  as  to  guarantee  or  other- 
wise as  may  be  agreed  upon,"  it  was  held  that  they  were  under  no  obligation 
to  consult  the  company  in  general  meeting  before  znaking  the  purchase, 
although  the  business  was  insolvent,  and  the  purchase  would  involve  under- 
taking vast  liabilities.  Overend  ^  Gurney  Co.  v.  Gibbs,  L.  E.  5  H.  L.  480.  See 
also  Blakely  Ordnance  Co.,  3  Ch.  159 ;  Bank  of  Turkey  v.  Ottoman  Bank,  14  W. 
E.  819 ;  Eley  v.  Positive,  Sfc,  Sac,  1  Ex.  Div.  88. 

2.  It  relieves  the  directors  from  responsibility,  for  in  the  absence  of  fraud  or 
crassa  negligentia,  they  will  not  be  under  any  personal  liability  to  the  com- 
pany, even  though  in  the  exercise  of  the  jjowers  entrusted  to  them  they  are 
guilty  of  imprudence  and  want  of  judgment,  which  result  in  a  great  loss  to 
the  company.     Overend  ^'  Gurney  Co.  v.  Gibbs,  ubi  supra. 

3.  Mortgagees,  vendors,  and  other  persons  dealing  with  a  company  like  to 
sec  the  powers  of  the  directors  in  black  and  white. 


FORMS.  153 

(1.)  To  take  sucli  steps  as  they  think  fit  to  cany  into  effect  the  sd   Form  117. 
a.^-reenit  of  the day  of .  IV)  caTry       "^ 

agreement 
If  Clause  3,  supra,  is  inserted,  this  should  be  omitted.  j^^Q  effect. 

(2.)  To  pay  the  costs,  charges,  and  expenses,  preliminary  and  inci-  To  pay 

dental  to  the  iiromotion,  formation,  establishmt,  and  registra-  pi'^limmary 

'^  '  o  expenses, 

tion  of  the  co. 

Such  a  power  will  not  give  a  promoter  a  right  of  action,  in  respect  of  jire- 
liminary  expenses,  against  the  comjiany.  Melhado  v.  Porto  Allegre  Ry.  Co., 
9  C.  P.  503  ;  at  any  rate  if  he  is  not  a  party  to  the  articles.  Eley  v.  Positive, 
<^'c.,  Soc,  1  Ex.  Div.  88.  See  also  Croskey  v.  Bank  of  Wales,  4  Giff.  318,  cited 
siipra,  and  In  re  Englefield  Colliery  Co.,  8  C.  Div.  388,  whex-e  directors  were 
held  liable  for  monies  paid  without  vouchers  or  inquiry. 

(3.)  To  pchase  or  otherwise  acquire  for  the  co  any  ppty,  rights,  or  To  acquire 
privileges,  which  the  co  is  authorised   to  acquire,  at  such  l'^'°l'®'^'*J'- 
price,  and  generally  on  such  terms  and  conditions  as  they 
think  fit. 

(4.)  At  their  discretion,  to  pay  for  any  rights  ac(iuired  by,  or  ser-  To  pay  for 
vices  rendered  to,  the  co,  either  wholly  or  partially  in  cash  or  IJebentureT 
in  shares,  bonds,  debentures,  or  other  securities  of  the  co,  and  &c. 
any  such  shares  may  be  issued  cither  as  fully  pd  up  or  with 
such  amount  credited  as  i)d  up  thereon  as  may  be  agreed 
upon,  and  any  such  bonds,  debentures,  or  other  securities  may 
be  either  specifically  charged  upon  all  or  any  pt  of  the  ppty 
of  the  CO  and  its  uncalled  capital,  or  not  so  charged. 

Debentures  issued  by  a  company  under  a  general  power  of  borrowing  in 
part  discharge  of  existing  liabilities  are  valid.  Inns  of  Court  Hotel  Co.,  6  Eq. 
82.  See  also  opinion  of  Blackburn,  J.,  in  Webh  v.  Heme  Bay  Commiss.,  L.  K. 
5  Q.  B.  654. 

If  paid-up  shares  are  issued  under  the  above  power,  a  contract  in  relation 
thereto  may  be  necessary  under  s.  25  of  the  Act  of  1807.  See  fiu-ther,  supra, 
p.  12. 

(5.)  To  secure  the  fulfilmt  of  any  contracts  or  engagemts  entered  To  secure 
into  by  the  co,  by  nitge  or  charge  of  all  or  any  of  the  ppty  of  contracts  by 
the  co  and  its  unpd  capital  for  the  time  being,  or  in  such        *  °  ' 
other  manner  as  they  may  think  fit. 

(6.)  To  appoint,  and  at  their  discretion  remove  or  suspend,  such  To  appoint 
managers,  secretaries,  officers,  clerks,  agents,  and  servants  for  officers,  &c. 
permanent,  temporary,  or  special  services,  as  they  may  from 
time  to  time  think  fit,  and  to  determine  their  duties  and  fix 
their  salaries  or  emolmnts,  and  to  require  security  in  such 
instances  and  to  such  amount  as  they  think  fit. 

(7.)  To  accept  from  any  member,  on  such  terms  and  conditions  as  To  accept 

shall  be  agreed,  a  suiTcnder  of  his  shares  or  stock  or  any  part  ^iiTender  of 
,  sbares. 

thereof. 

A  power  to  acce^st  surrenders  is  valid,  and  a  surrender  which  does  not  amount 
to  a  reduction  of  capital  is  not  open  to  any  objection,  e.  g.,  if  a  lOL  share  with 


154 


ARTICLES    OF    ASSOCIATIOX. 


Form  117. 


To  appoint 
trustees. 


To  liring  and 
defend  actions-', 
&c. 


To  refer  to 
arbitration. 


To  give 
receiptB. 


To  act  for 
company  in 
bankruptcy. 

To  appoint 
attornies. 


To  invest 
monies. 


5?.  paid  up  be  surrendered  for  two  shares  of  5L  each,  credited  with  21.  10s. 
paid  up  on  each  share.  Teasdale's  case,  9  Ch.  SI.  But  if  the  surrender  would 
amount  to  a  reduction  of  cajjital  it  woidd  seem  that  it  is  only  valid  if  (1)  it  is 
bom'i  fide  for  the  benefit  of  the  company,  or  (2)  is  carried  into  effect  as  a  reduc- 
tion of  capital  in  accordance  with  the  Act  of  1867.  Hope  v.  International 
Financial  Society,  -J.  C.  Div.  327  ;  In  re  Dronfield  Co.,  17  C.  Div.  76,  in  which 
case  it  was  held  that  a  company  might  even  pay  money  upon  a  surrender  where 
it  was  for  the  benefit  of  the  company.  See  supra.  Form  66,  and  note  at  end  of 
this  form. 

(8.)  To  appoint  any  i)erson  or  persons  to  accept  and  hold  in  trust 
for  the  CO  any  ppty  l)elonghig'  to  the  co,  or  in  which  it  i.s 
interested,  or  for  any  otlier  pposes,  and  to  execute  and  do  all 
such  deeds  and  things  as  may  be  reipiisite  in  relation  to  any 
such  trust. 

(9.)  To  institute,  coiiduct,  defend,  compound,  or  abandon  any  legal 
proceedings  hy  and  against  the  co,  or  its  officers,  or  otherwise 
concerning  the  affairs  of  the  co,  and  also  to  compound  and 
allow  time  for  paymt  or  satisfou  of  any  debts  due,  and  of  any 
claims  or  demands  hy  or  against  the  co. 

Every  company  has  an  implied  power  to  compromise  disputes.  Bath's  case, 
8  C.  Div.  331.  Such  a  clause  does  not  authorise  directors  to  pay  costs  of  petition 
to  wind  up  the  company  presented  by  themselves.  Smith  v.  Duke  of  Manchester, 
24  C.  D.  611;  32  W.  E.  83. 

(10.)  To  refer  any  claims  or  demands  l)y  or  against  the  co  to  arbitra- 
tion, and  observe  and  perform  the  awards. 

As  to  arbitration,  see  fui-ther,  supra,  p.  21. 

(11.)  To  make  and  give  receipts,  releases,  and  other  discharges,  for 
money  payable  to  the  co,  and  for  the  claims  and  demands  of 
the  CO. 

And  such  receipts  will  be  effectual,  even  though  the  acting  directors  are  not 
directors  tie  jure.     Mahoney  v.  East  Hohjford  Mining  Co.,  L.  E.  7  H.  L.  869. 

(12.)  To  act  on  behalf  of  the  co  in  all  matters  relating  to  bankrupts 
and  insolvents. 

(13.)  From  time  to  time,  to  provide  for  the  managemt  of  the  affairs  of 
tlic  CO  abroad  in  such  manner  as  they  think  lit,  and  in  parlar 
to  appoint  any  persons  to  be  the  attoruies  or  agents  of  the 
CO  witli  such  powers  (including  power  to  sub-delegate)  and 
upon  such  terms  as  may  be  thought  fit. 

The  above  should  be  inserted  ■where  the  company  is  likely  to  carry  on  lousi- 
ness abroad,  or  Form  136,  infra,  may  be  used.  As  to  sub-delegation,  see  supra. 
Clause  104,  and  Stuart  v.  Norton,  9  W.  E.  320. 

(14.)  To  invest  and  deal  with  any  of  the  monies  of  the  co  not  imme- 
diately required  for  the  j)poscs  thereof,  upon  such  securities 
and  in  such  manner  as  they  may  think  fit,  and  from  time  to 
time  to  vary  or  I'ealisc  such  investmts. 

A  power  to  invest  in  securities  does  not  warrant  an  application  for  a  number 


FOEMS.  ]55 

of  shares  in  a  proposed  company  with  a  view  to  promoting  it.     Joint-Stock  Dis-    Form  117. 
count  Co.  V.  Broicn,  3  Eq.  139  ;  8  Eq.  381.  — " — ' • 

(15.)  To  execute  in  tlie  name  and  on  behalf  of  the  co  in  favour  of  To  give 

1  •  1         1       J.    J.     security  liy 

any  director  or  otlier  person  who  may  incur  or  be  about  to  ^^^^  ^f 
incur  any  personal  liability,  whether  as  principal  or  surety,  iudemnity. 
for  the  benefit  of  the  co,  such  mtges  of  the  co's  ppty  (present 
and  future)  as  they  think  fit,  and  any  such  nitge  may  contain 
a  power  of  sale  and  such  other  powers,  covenants,  and  pro- 
visions, as  shall  be  agreed  on. 
(IG.)  To  give  to  any  officer,  or  other  person  employed  by  the  co,  a  Togiveper- 
commission   on  the  profits  of  any  parlar  business  or  trans-  j^rect°or  Ic 
action,  or  a  share  in  the  general  profits  of  the  co,  and  such 
commission,  or  share  of  profits,  shall  ])e  treated  as  pt  of  the 
working  expenses  of  the  co. 

An  interest  in  profits  is  often  found  to  render  the  services  of  an  agent  more 
beneficial  to  his  emiDloyer.  Apart  from  a  special  power,  a  person  standing  in  a 
fiduciary  relation  to  the  company  could  not  be  given  such  an  interest  by  the 
board. 

(17.)  Before  recommending  any  dividend,  to  set  aside,  out  of  the  To  estabhsli 
profits  of  the  co,  such  sum  as  they  think  proper  as  a  reserve  ^^^^^'^'^  ^^^'^' 
fimd  to  meet  contingencies,  or  for  etpialising  dividends,  or 
for  repairing,  improving,  and  maintainiug  any  of  the  ppty  of 
the  CO,  and  for  such  other  pposes  as  the  directoi-j-  shall  in 
their  absolute  discretion  think  conducive  to  the  interests  of 
the  CO  ;  and  to  invest  the  several  sums  so  set  aside  upon  such 
investmts  as  they  may  think  fit,  and,  from  time  to  time,  to 
deal  with  and  vary  sucli  investmts,  and  dispose  of  all  or  any 
pt  thereof  for  the  benefit  of  the  co,  and  to  divide  the  reserve 
fund  into  such  special  funds  as  they  think  fit. 

Where  the  regulations  do  not  provide  for  the  retention  of  any  part  of  the 
profits  by  way  of  reserve,  the  articles  can  no  doubt  be  altered  so  as  to  give  the 
power.  Binney  v.  Ince  Hall  Co.,  35  L.  J.  Ch.  363.  And  prinvi  facie  there  is 
nothing  to  compel  a  company  to  divide  the  whole  of  its  profits,  though  the  re- 
gulations might  be  so  framed.     Stringer's  case,  4  Ch.  49i. 

Of  course  the  above  power  does  not  relieve  the  company  from  its  obligation 
to  provide  for  depreciation,  and  otherwise  keep  its  capital  intact.  Davison  v. 
Gillies,  16  C.  D.  317;  Guiness  v.  Land  Corporation  of  Ireland,  22  C.  Div.  319; 
and  infra,  p.  169. 

Where  the  regulations  appropriate  the  reserve  fund  to  specific  purposes,  they 
can  be  altered.     ^Yal'ker  v.  London  Tramways  Co.,  12  C.  D.  705. 

(18.)  From  time  to  time  to  make,  vary,  and  repeal  byelaws  for  the  May  make 
regulation  of  the  business  of  the  co_,  its  officers  and  servants,  ^J'*^'^^^^- 
or  the  members  of  the  co,  or  any  section  thereof. 

Persons  dealing  with  a  company  are  deemed  to  have  notice  of  the  memoran- 
dum and  articles  of  association,  but  not  of  byelaws  made  by  the  directors. 
Moyal  Bank  of  India's  case,  1  Ch.  252. 


166 

Form  117. 

May  make 
contracts,  &c. 


ARTICLES    OF   ASSOCIATION. 

(10.)  To  enter  into  all  sucli  negotiations  and  contracts,  and  rescind 
and  vary  all  such  contracts,  and  execute  and  do  all  such  acts, 
deeds,  and  things  in  the  name  and  on  behalf  of  the  co  as  they 
may  consider  expedient  for  or  in  relation  to  any  of  the  matters 
afsd,  or  otherwise  for  the  pposes  of  the  co. 

There  can  be  little  doubt  that  such  a  clause  as  above  is  a  sufficient  authority 
to  the  directors  to  vary  contracts  expressly  adopted  by  the  articles.  See  and 
consider  Sahlgreen  ^  Carrall's  case,  3  Ch.  323. 


irst  solicitor.         [llici.   MeSSrS. 


Solicitors. 
of ,  shall  be  solors  of  the  co.] 


In  a  recent  case  the  articles  of  the  company  provided  that,  "  Mr.  A.  B.,  of 

,  shall  be  the   solicitor  of  the   comi^any,  and  shall  transact  all  the  legal 

business  of  the  company,  including  parliamentary  business,  for  the  iisual  and 
accustomed  fees  and  charges,  and  sliall  not  be  removed  from  liis  office  unless 
for  misconduct."  Mr.  A.  B.  was  employed  by  the  company  after  its  corporation, 
but  there  was  no  evidence  of  any  agreement  to  employ  him  on  the  terms  men- 
tioned in  the  articles.  He  was  not  a  subscriber  to  the  articles,  but  he  was  a 
member  of  the  company.  It  was  held  that  the  articles  did  not  constitute  a 
contract  between  the  company  and  Mr.  A.  B.,  and  that  he  could  not  sue  the 
company  for  refusal  to  emiiloy  him.  Eley  v.  Positive  Ass.  Soc,  1  Ex.  Div.  20 ; 
S.  C.  on  Apj3.  88.  In  the  Exchequer  Division  the  Court  was  also  of  opinion  that 
the  employment  was  intended  to  be  permanent,  and  that  the  articles  were  not 
a  sufficient  agreement  in  writing  within  section  4  of  the  Statute  of  Frauds. 


Secretary. 

First  secretary.      [1146.  Mr. ,  of ,  shall  hc  secretary  to  the  co.] 

Substitute.  [114c.  The   directors   may  appoint   a  temporary  substitute   for   the 

secretary,  Avho  shall,  for  the  pposes  of  these  presents,  be  deemed  to  be 

the  secretary.] 


Custody  of 
seal. 


The  Seal. 

[IIT).  The  directors  shall  pro^•ide  for  the  safe  custody  of  the  seal,  and 
the  seal  shall  never  be  used  except  by  the  authority  of  the  directors 
previously  given  and  in  the  presence  of  two  directors  at  the  least,  who 
shall  sign  every  instrumt  to  which  the  seal  is  affixed,  and  every  such 
instrumt  shall  be  countersigned  l)y  the  secretary  or  some  other  person 
ajipointed  by  the  directors.] 

A  clause  as  above  is  sometimes  inserted,  and  when  there  is  such  a  provision 
everyone  dealing  with  the  company  is  deemed  to  have  notice  of  it,  Vjut  such  a 
person  is  not  bound  to  ascertain  that  de  facto  directors  have  been  duly  ap- 
pointed. In  re  County  Life  Soc,  5  Ch.  288 ;  Mahony  v.  East  Holyford  Mining 
Co.,  L.  R.  7  H.  L.  809. 

In  case  foreign  or  colonial  business  is  in  contemplation.  Form  130  can  be 
inserted  here. 


FORMS.  157 

Form  117. 
Dividends,  — — — -- 

116.  Sul)ject  to  the  rights  of  members  entled  to  shares  issued  upon  Riglit  to 
special  conditions,  the  profits  of  the  co  sliall  be  divisil)le  among  the  ^^^°   ^' 
memljers  in  proportion  to  the  amount  i)d  up   on  the   shares  held  by 

them  respively.  Provided,  nevertheless,  that  where  capital  is  pd  up 
in  advance  of  calls  upon  the  footing  that  the  same  shall  carry  interest, 
such  capital  shall  not,  whilst  carrying  interest,  confer  a  right  to  partici- 
pate in  profits. 

Table  A.  provides  that  dividends  are  to  be  paid  to  the  members  "  in  propor- 
tion to  their  shares."  This  means  in  proportion  to  the  nominal  amount  of  the 
capital  held  by  each,  not  to  the  amount  paid  up.  Oakbank  Oil  Co.,  8  App.  Cas. 
65. 

Accordingly  a  .£10  share  with  ^£1  j^aid  up  will  take  as  much  as  a  ^10  fully  j^aid- 
up  share.  But  many  persons  consider  such  a  mode  of  division  inequitable,  and 
insist  on  a  provision  as  above  [Clause  116].  This  clause,  however,  does  not 
appear  altogether  fair,  for  it  must  be  borne  in  mind  that  the  company  trades  to 
some  extent  on  the  credit  of  its  uncalled  capital,  and  why  should  the  share- 
holders who  supply  that  credit  get  no  reward  ?  especially  as  in  the  event  of  the 
company  being  wound  up,  they  will,  unless  the  regulations  otherwise  provide, 
be  liable  to  contribute  to  the  losses  in  proportion  to  the  nominal  amount  of  the 
shares  held  by  them.  Maude's  case,  6  Ch.  51,  and  see  the  judgments  in  The 
Oakbank  Co.  v.  Crum,  ubi  supra. 

Accordingly  it  is  occasionally  provided  that  "  the  profits  of  the  company  in 
each  year  shall  be  applicable  to  the  payment  of  dividend  at  the  rate  of  5  p.  c. 
p.  a.  on  the  paid-up  capital,  and  the  sui-plus  shall  be  divided  among  the 
members  in  proportion  to  their  shares." 

The  regulations  of  some  companies  make  no  provision  as  to  the  proportions 
in  which  members  are  to  participate  in  dividends.  In  these  cases  it  would 
seem  that  they  are  entitled  to  participate  in  proportion  to  their  shares.  Wil- 
kinson V.  Cummings,  II  Hare,  37.    And  consider  Maude's  case,  iibi  supra. 

Where  there  are  different  classes  of  shares  in  the  original  capital  the  clause 
will  be  modified  accordingly.     See  Forms  126  and  127,  infra. 

117.  The  CO  in  general  meeting  may  declare  a  dividend  to  be  paid  to  Declaration  of 
the  members  according  to  their  rights  and  interests  in  the  profits.  dividends. 

Very  commonly  it  is  provided  that  "the  directors  may,  with  the  sanction  of 
the  company  in  general  meetings,"  declare  dividends,  but  the  general  practice 
is  for  the  meeting  to  declare  the  dividend,  and  it  therefore  seems  better  to 
frame  the  clause  as  above. 


[117 a.  Xo  larger  dividend  shall  be  declared  than  is  recommended  by  Restriction  ou 

amount  o" 
dividend. 


the  directors  (but  the  co  in  general  meeting  may  declare  a  smaller  divi-  *™°"'^*  °^ 


dend).] 

The  above  clause  is  commonly  used,  sometimes  with,  sometimes  without  the 
words  in  brackets. 

118.  Xo  dividend  shall  be  payable  except  out  of  the  profits  arising  Dividend  to 

from  the  business  of  the  co.  ^^  P^''^  "T*  °^ 

pronts  only. 

As  to  this  clause,  see  note,  infra,  p.  168. 

110.  "Where  a  share  is  issued  after  tlio  commencemt  of  any  financial  When  partici- 


15S 


AETICLES    OF    ASSOCIATION. 


Ijation  in 
profits  to 
commence, 


Form  117.  year  it  shall,  unless  otherwise  provided  by  tlic  terms  of  issue,  rauk  pari 
2)assu  Avitli  previously  issued  shares  as  regards  any  dividend  subsequently 
declared  in  respect  of  such  year. 

This  clause  would  appear  only  to  exj^ress  what  would  otherwise  be  implied, 
but  it  may  be  useful  as  a  reminder  that  if  shares  are  not  to  participate  fully  in 
the  accruing  dividend  provision  should  be  made  accordingly,  e.g.,  let  the  pro- 
spectus state  that  "  The  shares  will  rank  for  dividend  as  from  the of 

next  [or  last]." 

What  to  he  [120.  Tlic  dcclon   of    the    directors  as  to    the    amount   of   the  net 

profits   ^^       profits  of  the  co  shall  be  conclusive.] 

This  clause  is  common,  and  is  found  useful :  it  does  not  enable  the  directors 
to  declare  profits  where  in  reality  there  are  none. 


Interim 
dividends. 


Debts  may 
deducted. 


Dividend  may 
be  credited  on 
shares. 


121.  The  directors  may  from  time  to  time  pay  to  the  members  [on 
account  of  the  next  forthcoming  dividend]  such  interim  dividends  as  in 
their  judgmt  the  position  of  the  co  justifies. 

The  above  clause  is  now  very  commonly  inserted.  It  is,  of  course,  liable  to 
abuse.     The  words  in  brackets  are  sometimes  omitted. 

122.  Tlie  directors  may  retain  any  dividends  on  Avliich  the  co  has  <a 
lien,  and  may  apply  the  same  in  or  towards  satisfon  of  the  debts,  liabili- 
ties, or  engagemts  in  respect  of  which  the  lien  exists. 

123.  A  general  meeting  declaring  a  dividend  may  by  subsequent  reso- 
lution authorise  the  directors  to  ap)ily  the  same  or  any  part  thereof  in 
paying  up  j^/"0  tanto  the  capital  uncalled  on  the  shares  in  respect  of  which 
the  dividend  is  declared,  and  the  directors  may  give  effect  to  such  reso- 
lution accordingly,  but  any  member  whose  shares  are  fully  pd  up  shall 
be  entitled  to  be  pd  his  proportion  of  the  dividend  in  cash. 

A  clause  as  above  is  not  uncommonly  inserted.  It  has  not  been  settled 
whether  it  is  valid,  regard  being  had  to  s.  25  of  the  Act  of  1867  [supra,  p.  12]. 
But  it  would  seem  to  amount  to  a  cash  transaction.  It  is  clear  that  in  the 
absence  of  such  a  clause  a  shareholder  might  authorise  a  company  to  retain  any 
money  due  to  him  for  dividends  or  otherwise,  and  to  pay  up  his  shares  there- 
with, and  that  such  payment  would  be  equivalent  to  cash,  and,  this  being  so, 
thei-e  seems  no  reason  why  he  should  not  empower  a  general  meeting  to  give 
the  authority.  See  Ranee's  case,  6  Ch.  101-,  where  a  dividend  paid  by  crediting 
the  amount  on  the  shares  was  treated  as  equivalent  to  cash. 

And  sometimes  the  following  is  also  used  : — 

12.3a.  Any  general  meeting  declaring  a  dividend,  may  by  subsequent  resolu- 
tion authorise  the  directors  to  pay  such  dividend  wholly  or  in  jrt  by  the  dis- 
tribution of  specific  assets,  and  in  parlar  of  pd-up  shares  in  the  co's  cajjital, 
or  stock,  or  debentures  of  any  other  co,  or  ptly  in  one  mode  and  ptly  in  the 
other,  and  the  directors  may,  if  they  think  fit,  give  effect  to  such  resolution, 
and,  where  any  difficulty  arises  in  regard  to  the  distribution,  they  may  settle 
the  same  as  they  think  expedient,  and  in  parlar  may  issue  fractional  certifi- 
cates, and  may  fix  the  value  for  distribution  of  such  specific  assets,  or  any  pt 
thereof,  and  may  determine  that  cash  paymts  shall  be  made  to  any  members 
upon  the  footing  of  the  value  so  fixed,  in  order  to  adjust  the  rights  of  all 
parties,  and  may  vest  any  such  specific  assets  in  trustees  upon  such  trusts  for 
the  persons  entled  to  the  dividend  as  may  seem  expedient  to  the  directors. 
Where  requisite,  a  proper  contract  shall  be  filed  in  accordance  with  s.  23  of  the 
Companies  Act,  18G7. 


FORMS.  159 

It  is  sometimes  deemed  expedient  to  insert  a  claiise  as  above,  and  see  infra    Form  117. 

additional  words.     In  the  absence  of  express  authority  a  company  cannot  pay  — 

dividends  by  the  issue  of  shares  in  its  own  capital.  "  If  .  .  .  .  the  whole  of 
the  shareholders  are  not  willing  to  take  them  in  specie,  it  appears  to  me  that 
every  shareholder  in  the  company  who  is  inclined  has  the  clearest  right  to 
have  them  turned  into  money,  and  to  have  the  money  rateably  divided  among 
the  shareholders."  Per  Cairns,  L.  J.,  Hoole  v.  Great  Western  Railway  Co.,  3  Ch. 
262.  And  the  same  rule  appears  to  apply  to  other  specific  assets,  such  as  shares 
in  other  companies. 

The  decision  in  the  case  above  mentioned  is  at  variance  with  the  view 
expi'essed  in  Barton's  Trusts,  5  Eq.  2 14,  biit  see  contra.  In  re  Hoplcin's  Trusts, 
18  Eq.  700,  and  Oakhank  Co.  v.  Crum,  8  Ap.  Cas.  71,  showing  that  a  company 
has  no  power  whatever  to  pay  dividends  except  as  authorised  by  its  regulations. 

Where  paid-up  shares  in  a  company's  capital  are  issued  imder  a  clause  as 
above  it  may  be  prudent  to  file  a  contract,  though  probably  not  necessary.  Re 
Barrow-in-Furness  Co.,  l-A  C.  Div.  400. 

Even  where  the  articles  do  not  contain  any  express  power  as  above  it  may 
sometimes  be  possible  to  secure  the  desired  result  indirectly,  e.g.,  let  the  meet- 
ing which  sanctions  the  dividend  also  sanction  the  issue  of  new  shares  to  an 
equivalent  amount ;  let  the  directors  allot  (without  application)  the  shares  in 
the  proper  proportions,  and  send  out  the  dividend  warrants,  with  notice  of 
allotment,  and  request  the  return  of  the  warrant  with  an  authority  to  apply  the 
amount  in  paying  up  the  shares.  This  has  been  done  in  several  cases  by 
flourishing  companies,  and  the  shareholders  have  all  assented. 

124.  A  transfer  of  shares  or  stock  shall  not  pass  the  right  to  any  divi- 
dend declared  thereon  before  the  registration  of  the  transfer. 

By  virtue  of  the  Apportionment  Act,  1870  (.3.3  &  34  Vict.  c.  35),  all  dividends 
(see  extensive  definition  in  s.  5)  and  other  periodical  payments  in  the  nature  of 
income  are  to  be  considered  as  accruing  from  day  to  day,  and  are  to  be  appor- 
tionable  accordingly,  and  (s.  5)  are  to  be  deemed  to  have  accrued  during  and 
within  the  period  for  or  in  respect  of  which  the  payment  of  the  same  shall  be 
declared  or  expressed  to  be  made. 

The  Act  applies  to  a  specific  legacy  of  shares.  Pollock  v.  Pollock,  18  Eq.  329 ; 
Carr  v.  Griffith,  12  C.  D.  655.  But  a  bequest  of  the  shares  and  dividends  may 
exclude  the  Act.     Jones  v.  Ogle,  8  Ch.  192. 

As  between  tenant  for  life  and  remainderman  the  tenant  for  life  takes  all 
dividends  and  bonuses  declared  during  his  life.  Price  v.  Anderso7i,  15  Sim.  473  ; 
Re  Hopkin's  Trusts,  18  Eq.  696  ;  Preston  v.  Melville,  16  Sim.  163.  And  the  Act 
may  give  his  representatives  a  further  right  as  against  the  remainderman. 

It  has  however  been  held  that  where  a  dividend  is  paid  in  shares  it  is  to  be 
considered  capital.  Barton's  Trusts,  5  Eq.  544.  But  that  case  requires  recon- 
sideration with  reference  to  the  above  Act  and  to  Hoole  v.  Great  Western  Ry. 
Co.,  Re  Hopkin's  Trusts,  and  Oakbank  Co.  v.  Crum,  icbi  supra. 

To  avoid  question  it  may  be  well  to  add  to  cl.  123a  the  words  "  The  payment 
of  a  dividend  in  specie  shall  not  alter  or  affect  the  rights  of  the  persons  who 
would  have  been  entitled  thereto  if  paid  in  cash." 

As  to  the  meaning  of  "bonus"  in  a  settlement.  Hollis  v.  Allan,  14  W.  E. 
980.     W.  N.  1866,  291. 

According  to  Black  v.  Homersham,  4  Ex.  D.  24,  a  purchaser  of  shares  is 
entitled,  without  apportionment,  to  all  dividends  declared  after  the  contract 
for  sale  ;  but  the  Act  was  not  referred  to. 

125.  The  directors  may  retain  the  dividends  jiayable  upon  shares  or  Power  to  re- 
stock in  respect  of  Avhich  any  person  is,  nnder  the  transmission  clause  t-'ii"  ^^i^idends 

supra,  Clause  38],  entled  to  become  a  mem))er,  or  which  any  person  infant, 
under  that  clause  is  entled  to  transfer,  until  such  person  shall  become  a  '"^^ti^'  ^'^■ 
member  in  respect  of  such  shares  or  stock,  or  shall  duly  transfer  the  same. 


160 


AETICLES    OP    ASSOCIATION. 


Form  117. 

Dividend  to 
joint  holders. 


Notice  of 
dividend. 


Unclaimed 

dividends. 


126.  In  case  several  persons  are  registered  as  the  joint  holders  of  any 
share  or  stock,  any  one  of  snch  persons  may  give  effectual  receipts  for 
all  dividends  and  paymts  on  account  of  dividends  in  respect  of  snch 
share  or  stock. 

127.  Notice  of  the  declon  of  any  dividend,  whether  interim  or  other- 
wise, shall  be  given  [by  advertisemt,  and  also]  to  the  holders  of 
registered  shares  and  registered  stock  in  manner  hereinafter  provided. 

[128.  All  dividends  unclaimed  for  one  year  after  having  been  declared 
may  be  invested  or  otherwise  made  use  of  by  the  directors  for  the 
benefit  of  the  co  until  claimed,  and  all  dividends  unclaimed  for  five 
years  after  having  been  declared  may  be  forfeited  by  the  directors  for 
the  benefit  of  the  co.    No  dividend  shall  l^ear  interest  as  against  the  co.] 

The  committee  of  the  Stock  Exchange  object  to  the  above  clause  in  so  far 
as  it  provides  for  the  forfeiture  of  dividends  unclaimed  for  five  years,  and  ac- 
cordingly if  a  quotation  is  desired  it  should  be  modified  or  omitted.  Upon  the 
whole  it  seems  best  to  omit  it,  for  the  earlier  part  of  the  clause  might  be  con- 
sidered to  create  an  express  trust  so  that  the  company  would  remain  liable  for 
an  indefinite  period,  whereas  if  the  clause  is  omitted  it  may  be  that  the  com- 
pany is  only  liable  for  six  years ;  for  although  the  dividend  is  payable  under 
the  articles  which  are  for  some  purposes  equivalent  to  a  deed  ^siipra,  p.  112] 
it  is  not  necessarily  a  specialty  debt.  As  to  this  see  Holland  v.  Holland,  4  Ch. 
■4-19  ;  Lewin,  183  ;  and  see  Talbot  v.  Earl  of  Shrewsbury,  16  Eq.  28  ;  see  also  sec- 
tion 16  of  the  Act  [supra,  p.  112],  which  only  appears  to  bind  the  company  in  a 
qiialified  manner. 


Accounts  to 
be  kept. 


Where  to  be 
kept. 


Inspection 
members. 


Accounts. 

129.  The  directors  shall  cause  true  accounts  to  be  kept  of  the  sums  of 
money  received  and  expended  by  the  co,  and  the  matters  in  respect  of 
which  such  receipt  and  expenditure  takes  place,  and  of  the  assets,  credits, 
and  liabilities  of  the  co. 

130.  The  books  of  account  shall  be  kept  at  the  registered  office  of  the 
CO,  or  at  such  other  place  or  places  as  the  directors  think  fit. 

A  clause  in  the  articles  may  prevent  the  creation  of  a  lien  on  the  books. 
Ca'pital  Fire,  24  C.  Div.  408  ;  49  L.  T.  697 ;  32  W.  E.  260. 

131.  The  directors  shall  from  time  to  time  determine  whether  and  to 
what  extent,  and  at  what  times  and  places,  and  under  what  conditions  or 
regulations,  the  accounts  and  books  of  the  co,  or  any  of  them,  shall  be 
open  to  the  inspection  of  the  members  ;  and  no  member  shall  have  any 
right  of  inspecting  any  account  or  book  or  documt  of  the  co,  except  as 
conferred  by  statute  or  authorised  by  the  directors,  or  by  a  resolution  of 
the  CO  in  general  meeting. 

The  above  clause  is  not  uncommonly  used.  Few  companies  allow  members 
free  access  to  the  books. 

Where  a  right  of  inspection  is  given  as  regards  "  the  books,  wherein  the  pro- 
ceedings of  the  company  are  recorded,"  a  member  has  no  right  to  inspect  the 
minute  book  or  proceedings  of  directors.    Reg.  \.Mariquita,S(c.,  Co.,  1  E.  &  E.289. 

See  also  Metropolitan,  c^c.  Bank,  Ex  parte  Davis,  16  W.  E,.  668. 

A  right  of  inspection  given  by  the  articles  ceases  when  the  voluntary  wind- 
ing up  begins.     Yorkshire,  ^c.,  Co.,  9  Eq.  650  ;  18  W.  R.  541. 

Where  a  winding-up  order  has  been  made,  s.  156  of  the  Act  applies,  under 


FOEMS.  161 

whicli  the  Court  lias  express  power  to  permit  inspection  by  creditors  or  con-    Form  117. 
tributories.     See  Buckley,  2t)2.  

Table  A.  provides  as  follows  : — 

"  The  books  of  the  company  shall  be  kept  at  the  registered  office  of  the  com- 
pany, and,  subject  to  any  reasonable  restrictions  as  to  time  and  manner  of 
inspecting  the  same,  that  may  be  imposed  by  the  company  in  general  meeting, 
shall  be  open  to  the  inspection  of  the  members  duiing  the  hours  of  business." 

See  also  Table  A.,  Clause  VS. 

132.  At  the  ordinary  meeting  in  every  year  the  directors  shall  lay  Annual  state- 
before  the  CO  a  statemt  of  the  income  and  expenditm'e,  and  a  balance-  balance-sheet, 
sheet,  containing  a  summary  of  the  ppty  and  liabilities  of  the  co  made 
up  to  a  date  not  more  than  four  months  before  the  meeting,  from  the 
time  when  the  last  preceding  statemt  and  balance-sheet  were  made,  or,  in 
the  case  of  tlie  first  statemt  and  balance-sheet,  from  the  incorporation  of 
the  CO. 

13o.  Every  such  statemt  shall  be  accompanied  by  a  report  of  the  direc-  Annual  report 
tors  as  to  the  state  and  condition  of  the  co,  and  as  to  the  amount  which  they  °  ^I'^ectors. 
recommend  to  be  pd  out  of  the  profits  by  way  of  dividend  or  bonus  to 
the  members,  and  the  amount  (if  any)  which  they  propose  to  carry  to 
the  reserve  fund,  according  to  the  provisions  in  that  behalf  hinbefore 
contd  ;  and  the  statemt,  report,  and  balance-sheet  shall  be  signed  by  two 
directors,  and  countersigned  by  the  secretary. 

By  24  &  25  Vict.  c.  96,  s.  84,  directors  keeping  fraudulent  accounts,  or  pub- 
lishing fraudulent  statenients,  are  guilty  of  a  misdemeanour. 

134.  A  printed  copy  of  such  balance-sheet  and  report  shall,  seven  Copy  to  be 
days  previously  to  the  meeting,  be  served  on  the  registered  liolders  of  j^gj^^^^j.^ 
shares  in  the  manner  in  which  notices  are  hereinafter  directed  to  be 
served. 

Sometimes  it  is  provided  instead  of  this  that  the  balance-sheet  shall  lie  for 
inspection  at  the  office. 


Audit. 

135.  Once  at  least  in  every  year,  the  accounts  of  the  co  shall  be  Accounts  to 
examined,  and  the  correctness  of  the  statemt  and  balance-sheet  ascer-  ^^,^^^111^ 
tained  by  one  or  more  auditor  or  auditors. 

The  auditors  are  agents  of  the  company,  but  constructive  notice  of  facts 
coming  to  their  knowledge  is  not  imputed  to  the  shareholders.  Sj^ctchnoM  v. 
Evans,  L.  E.  3  H.  L.  171,  196,  236. 

136.  The  first  auditor  or  auditors  shall  be  appointed  by  the  directors  ;  Appointment 
subsequent  auditors  shall  be  appointed  by  the  co  at  the  ordinary  meeting  ^^'^  remunera 
in  each  year.     The  remuneration  of  the  auditors  shall  be  fixed  by  the  co  auditors. 

in  general  meeting.     Any  auditor  quitting  office  shall  be  eligible  for  re- 
election. 

Sometimes  the  first  auditors  are  appointed  by  the  articles. 

M 


162 


ARTICLES    OF    ASSOCIATION. 


Form  117. 

Provision  for 
case  of  single 
auditor. 

Who  ineligible 
as  auditors. 


Casual 
A'acancy. 


Auditors  to 
report  on 
annual  state- 
ment and 
balance-sheet. 


1P>7.  If  one  auditor  only  is  appointed,  all  the  provisions  herein 
contd  relating-  to  auditors  shall  apply  to  him. 

188.  The  auditors  may  he  members  of  the  co,  hut  no  person  shall  l)e 
eligible  as  an  auditor  who  is  interested,  otherwise  than  as  a  member  of 
the  CO,  in  any  transaction  thereof,  and  no  director  or  other  officer  shall 
be  eligible  during  his  continuance  in  office. 

139.  If  any  casual  vacancy  occurs  in  the  office  of  auditor,  the 
directors  shall  forthwith  fill  up  the  same. 

This  is  the  usual  clause.     Compare  with  Table  A.  Clauses  90  and  91. 

140.  The  auditors  shall  be  supplied  with  copies  of  the  statemt  of 
accounts  and  balance-sheet  intended  to  be  laid  before  the  co  in  general 
meeting  seven  days  at  least  before  the  meeting  to  which  the  same  are  to 
be  submitted,  and  it  shall  be  their  duty  to  examine  the  same  with  the 
accounts  and  vouchers  relating  thereto,  and  to  report  to  the  co  in  general 
meeting  thereon. 


The  above  is  a  common  provision  and  leaves  the  aiiditors  to  settle  the  nature 
of  their  report.  In  many  cases  an  auditor  merely  certifies  that  the  balance- 
sheet  accords  with  the  books,  e.g.,  "  We  have  examined  the  above  balance-sheet 
and  compared  the  same  with  the  books,  and  find  the  same  correct."  Such  a 
certificate  is  of  little  or  no  value.  Sometimes  the  form  prescribed  for  banks  by 
the  Companies  Act,  1879,  is  adopted,  viz.,  "  We  have  examined  the  above  ac- 
count and  certify  that  in  our  opinion  it  is  a  full  and  fair  balance-sheet  properly 
drawn  n-p,  so  as  to  exhibit  a  true  and  correct  view  of  the  state  of  the  company's 
affairs  as  shown  by  the  books  of  the  company."  But  having  regard  to  the  concluding 
words,  this  form  is  not  satisfactory,  e.g.,  it  affords  no  assurance  that  the  items 
entered  in  the  balance-sheet  as  assets  are  of  the  value  there  placed  on  them. 

Sometimes,  as  in  Clause  94-  of  Table  A.,  the  auditors  are  required  in  their 
repoi't  to  "  state  whether  in  their  opinion  the  balance-sheet  is  a  full  and  fair 
balance-sheet,  containing  the  particulars  required  by  these  regulations,  and 
properly  drawn  up  so  as  to  exhibit  a  true  and  correct  view  of  the  state  of  the 
company's  affairs,"  and  a  certificate  so  framed  is  of  much  greater  value,  but 
even  where  it  is  so  provided  the  auditor  usually  qualifies  his  opinion  by  refer- 
ence to  the  books  or  othei-wise. 

It  must  be  admitted  that  the  present  system  of  auditing  the  accounts  of 
public  companies  is  wholly  unsatisfactory.  Shareholders  generally  assume  that 
the  dvities  of  an  auditor  are  well  defined,  whereas  the  contrary  is  the  fact.  It  is 
also  assumed  that  their  duties  are  easily  discharged,  and  accoi'dingly  that  a  small 
remuneration  is  sufficient  compensation,  and,  further,  that  the  form  of  the 
auditors'  certificate  is  immaterial.  In  the  result  aiiditors  generally  take  care 
that  their  labours  shall  be  proportioned  to  their  remuneration  and  shelter 
themselves  from  resjwnsibility  under  an  empty  certificate. 


Inspection  of         Ml.  The  auditors  shall  at  all  reasonable  times  have  access  to  the 

books  by  ])oolvs  and  accounts  of  the  co,  and  they  may  in  relation  thereto  examine 

auditors.  -^         '' 

the  directors  or  other  officers  of  the  co. 

"When  ac-  142.  Every  account  of  the  directors,  when  audited  and  approved  by  a 

counts  to  be  ^  l-  ^     ^^     ^  i       •  i.  i  t 

deemed  finally  .-'^-'nc^'f  I  meetnig,  shall   be  conclusive,  except  as  regards  any  error  dis- 
settled.  covered  therein  within  three  months  next  after  the  approval  thereof. 

Whenever  any  such  error  is  discovered  within  that  period,  the  account 
shall  forthwith  Ije  corrected  and  thenceforth  shall  be  conclusive. 


FORMS.  163 

Form  117. 

Notices. 

143.  A  notice  may  be  served  by  the  co  upon  any  member  whose  How  notices 
registered  place  of  address  is  in  the  United  Kingdom,  either  personally  ^^  u,eiuV,erL 
or  by  sending  it  through  the  post  in  a  pre-pd  letter,  addressed  to  such 
member  at  his  registered  place  of  address. 

The  register  of  members,  to  be  kept  pursuant  to  Section  25  of  the  Act,  is  to 
contain  {inter  alia)  the  addresses  of  the  membez'S. 

As  to  notices  to  the  company,  the  Act  provides  :  How  notices 

Section  62. — Any  summons,  notice,  order,  or  other  document,  required  to  be  ^°  "^  given  ta 
served  upon  the  company,  may  be  served  by  leaving  the  same,  or  sending  it        1'    >• 
through  the  post  in  a  pre-paid  letter,  addressed  to  the  company,  at  their  regis- 
tered office. 

Section  63. — Any  document  to  be  served  by  post  on  the  company,  shall  be 
posted  in  such  time  as  to  admit  of  its  being  delivered  in  the  due  course  of  de- 
livery, within  the  period  (if  any)  prescribed  for  the  service  thereof ;  and  in 
proving  service  of  such  document,  it  shall  be  sufficient  to  prove  that  such 
document  was  properly  directed,  and  that  it  was  put  as  a  pre-paid  letter  into 
the  Post-office. 

Section  64. — Any  summons,  notice,  order,  or  proceeding,  requiring  authenti-  Authentica- 
cation   by  the  company,  may  be  signed  by  any  director,  secretary,  or  other  tion  of  notices 
authorised  officer  of  the  company,  and  need  not  be  under  the  common  seal  of    ^  companj . 
the  company,  and  the  same  may  be  in  writing  or  in  print,  or  partly  in  writing 
and  partly  in  print.     See  also  s.  41  of  the  Act. 

The  above  ss.  G2 — 64,  so  far  as  they  relate  to  notices,  are  sometimes  inserted 
as  clauses  in  the  articles. 

144.  Each   holder   of  registered  shares,   whose   registered  place   of  Members 
address  is  not  in  the  United  Kingdom,  may  from  time  to  time  notify  in  '^^''j!   j^ 
writing  to  the  co,  an  addi-ess  in  the  United  Kingdom,  which  shall  ])e 
deemed  his  registered  place  of  address  within  the  meaning  of  the  last 
preceding  clause. 

It  is  generally  deemed  expedient  to  make  special  provision  for  the  service  of 
notices  on  members  resident  abroad.  But  it  may  be  that  such  members  are  not 
entitled  to  notice.     Union  Hill  Silver  Co.,  22  L.  T.  400. 

14.5.  As  regards  those  members  who  have  no  registered  address  in  the  Notices  where 
United  Kingdom,  a  notice  posted  up  in  the  ofRce  shall  be  deemed  to  be  °°  ^*^'^^'^-'^^- 
Avell  served  on  them  at  the  expiration  of  twenty-four  hours  after  it  is  so 
posted  up. 

Sometimes  it  is  provided  that  in  such  case  a  member  shall  not  be  entitled  to 
any  notice. 

146.  The  holder  of  a  share  warrant  shall  not,  unless  otherwise  ex- No  notice  to 
pressed  therein,  be  entled  in  respect  thereof  to  notice  of  any  general  f;i°n'ie  warrants 
meeting  of  the  co. 

The  holder  of  a  share  warrant  is  generally  deprived  of  the  right  to  notice  of 
general  meetings.  Sometimes  he  is  permitted  to  appoint  an  address  for  service, 
but  the  objection  is,  that  the  company  will  have  no  means  of  ascertaining  when 
the  share  warrant  has  been  parted  with,  and  may,  unknowingly,  continue  to 
send  notices  to  a  person  who  has  ceased  to  be  a  member.     If  the  holder  of  a 

M  2 


164 


AETICLES    OF    ASSOCIATION. 


Form  117.  share  warrant  is  to  be  entitled  to  notice,  the  usnal  i^lan  is  to  provide  that  it 
shall  be  given  by  advertisement.  In  such  case;,  the  following  clause  will  })e  in- 
serted instead  of  the  above  : — 

"  Any  notice  required  to  be  given  by  the  company  to  the  holder  of  share 
warrants  shall  be  given  by  advertising  the  same  once  in  a  London  daily 
newspaper." 

The  objection  which  prevents  the  general  adoption  of  the  plan  is  the  publi- 
city ;  companies  do  not  like  to  publish  notice  of  their  private  affairs. 

The  following  clause  is  sometimes  adopted,  and  is  not  open  to  the  same  ob- 
jection : — 

"  The  holder  of  a  share  warrant  may  from  time  to  time  notify  in  writing  to 
the  company  some  place  in  England  to  be  called  his  address  for  service,  and 
notice  of  any  general  meeting  convened  within  the  six  months  next  following 
such  notification  shall  (unless  the  meeting  is  convened  by  advertisement)  be 
served  on  the  holder  of  such  share  warrant  by  sending  it  through  the  post  in  a 
pre-paid  letter  addressed  to  him  at  his  address  for  service.  But  save  as  afore- 
said the  holder  of  a  share  warrant  shall  not  be  entitled  to  notice  of  any  general  • 
meeting." 


Whcu  notice 
uiay  be  given 
by  advertise- 
ment. 

How  to  be 
advertised. 

Notice  to  joint 
holders. 


When  notice 
by  post  deemed 
to  be  served. 


Transferees, 
&c.,  bound  by 
prior  notices. 


Notice  valid 
though  mem- 
ber deceased. 


147.  Any  notice  required  to  be  i^iven  by  the  co  to  the  members,  or 
any  of  them,  and  not  expressly  provided  for  by  these  presents,  shall  be 
sufficiently  given  if  given  by  advertisemt. 

148.  Any  notice  required  to  be,  or  which  may  be  given  by  advertisemt, 
shall  be  advertised  once  in  two  London  daily  newspapers. 

149.  All  notices  shall,  with  respect  to  any  registered  shares  to  which 
persons  are  jointly  eutled,  be  given  to  whichever  of  such  persons  is 
named  first  in  the  register,  and  notice  so  given  shall  be  sufficient  notice 
to  all  the  holders  of  such  shares. 

150.  Any  notice  sent  l)y  post  shall  be  deemed  to  have  been  served  at 
the  expiration  of  twenty-four  hours  after  the  letter  containing  the  same 
is  posted,  and  in  proving  such  service  it  shall  be  sufficient  to  prove  that 
the  letter  containing  the  notice  was  j^roperly  addressed  and  put  into  the 
post-office. 

It  is  not  necessary  to  follow  literally  the  address  on  the  register,  provided 
that  a  substantially  accurate  designation  of  the  place  of  abode  is  given.  Liver- 
■pool,  kc,  Co.  V.  Houghton,  2-3  W.  E.  93. 

[150a.  Eveiy  person  who,  by  operation  of  law,  transfer,  or  other 
means  whatsoever,  shall  become  entled  to  any  share,  shall  be  bound  by 
every  notice  in  respect  of  such  share  or  stock  which,  previously  to  his 
name  and  addi'ess  being  entered  on  the  register,  shall  be  duly  given  to 
the  person  from  whom  he  derives  his  title  to  such  share  or  stock.] 

The  above  clause  is  not  uncommon,  but  it  is  not  by  any  means  essential,  and 
may  be  omitted  if  brevity  is  desired.  It  does  not  appear  in  Table  A.,  nor  in 
the  Companies  Clauses  Consolidation  Act,  1815. 

[150/;.  Any  notice  or  document  delivered,  or  sent  by  post  to  or  left  at 
the  registered  address  of  any  member  in  psuauce  of  these  presents,  shall, 
notwithstanding  such  member  be  then  deceased,  and  whether  or  not  the 
CO  have  notice  of  his  decease,  be  deemed  to  have  been  duly  served  in 
respect  of  any  registered  shares,  whether  held  solely  or  jointly  with  other 


FOEMS. 


1G[ 


persons  by  such  mcmljer,  until  some  other  pcrs<^n  be  registered  in  his   Form  117. 

stead  as  tlic  holder  or  joint  holder  thereof,  and  such  service  shall  for  all 

pposes  of  these  presents  be  deemed  a  sufficient  service  of  such  notice  or 
documt  on  his  or  her  heirs,  exs,  or  ads,  and  all  persons,  if  any,  jointly 
interested  with  him  or  lier  in  any  such  share,] 

This  clause  is  sometimes  inserted,  and  is  found  useful. 

[loOc.  The  signature  to  any  notice  to  be  given  by  the  co  may  be  How  notice  to 
■written  or  printed.]  ^-"^  signed. 

The  above  is  occasionally  inserted. 

A  person  may  sign  by  stamping  a  fac-simile  of  his  autograph.     Bennett  v. 
Bncmfit,  L.  E.  3  C.  P.  28. 

151.  Where  a  given  number  of  days'  notice,  or  notice  extending  over  How  time  to 
any  other  period,  is  required  to  be  given,  the  day  of  service  shall,  but  ^®  counted, 
the  day  upon  which  such  notice  will  expire  shall  not,  Ije  included  in  such  Healey,  278. 
number  of  days  or  other  period. 


Arbitration. 

[lolrt.  Whenever  any  difference  arises  between  tlie  co,  on  the  one  hand,  Differences  to 
and  any  of  the  members,  their  exs,  ads,  or  assigns,  on  the  other  hand,  refen-ed. 
touching  the  true  intent  or  construction,  or  the  incidents  or  consequences 
of  these  presents,  or  of  the  statutes,  or  touching  anything  then  or 
thereafter  done,  executed,  omitted,  or  suffered  in  psuance  of  these  pre- 
sents, or  of  the  statutes,  or  touching  any  breach,  or  alleged  breach  of 
these  presents,  or  any  claim  on  account  of  any  such  breach  or  alleged 
breach,  or  otherwise  relating  to  the  premes,  or  to  these  presents,  or  to 
any  statute  affecting  the  co,  or  to  any  of  the  affairs  of  the  co,  eveiy  such 
difference  shall  be  referred  to  the  decision  of  an  arbitrator,  to  be  ap- 
pointed by  the  parties  in  difference,  or  if  they  cannot  agree  upon  a 
single  arbitrator,  to  the  decision  of  two  abitrators,  of  whom  one  shall  be 
appointed  by  each  of  the  parties  in  difference,  or  an  umpire  to  be  ap- 
pointed by  the  two  arbitrators.     The  costs,  &c.,  supra,  p.  21.] 

An  arbitration  clause  is  sometimes  inserted,  but,  as  a  general  rule,  it  may  be 
omitted  with  advantage.     See,  further,  supra,  p.  21,  Form  9. 


Winding  Up. 

152.  If  the  CO  shall  be  wound  up,  and  the  surplus  assets  shall  be  in-  Distribution  of 
sufficient  to  repay  the  whole  of  the  pd-up  capital,  such  surplus  assets  ^^^ets. 
shall  be  distributed  so  that,  as  nearly  as  may  be,  the  losses  shall  be 
borne  by  the  members  in  proportion  to  the  capital  pd  up,  or  which  ought 
to  have  been  pd  up,  on  the  shares  held  by  them  respively  at  the  com- 
mencemt  of  the  winding  up.  But  this  clause  is  to  be  without  prejudice 
to  the  rights  of  the  holders  of  shares  issued  upon  special  conditions. 

Where  the  profits  are  to  be  divided  in  proportion  to  the  amount  paid  up  on 
the  shares,  it  seems  not  unreasonable  to  provide  that  upon  a  winding  up  the 


lOG  AETICLES    OF    ASSOCIATION. 

Porm  117.  losses  shallj  as  in  the  case  of  an  ordinary  partnership,  be  borne  in  the  same 
■      proportions,  and  the  above  chxiise  is  accordingly  used. 

In  connection  with  these  clauses,  it  may  be  well  to  consider  the  mode  in 
which  surplus  assets  are  dealt  with  upon  a  winding-up,  in  the  absence  of  special 
provisions. 

It  is  the  duty  of  the  liqiiidators  in  a  voluntary,  and  the  court  in  a  compulsory 
winding-up,  to  adjust  the  rights  of  the  contributories  inter  se  (s.  133,  subs. 
10,  and  s.  109  of  the  Companies  Act,  1862). 

If  all  the  shares  are  fully  paid  up,  no  difficulty  can  arise  ;  the  assets  are 
divided  pro  rata.  But  very  commonly  some  shares  are  fully  paid  up,  some  not. 
The  question  is  how  in  such  case  to  adjust  the  rights  of  the  contributories. 

It  is  now  well  settled  (see  Maude's  case,  6  Ch.  51,  and  cases  there  cited) 
that  in  the  absence  of  special  provisions  in  the  articles,  or  a  special  contract 
made  on  the  issue  of  the  shares,  the  adjustment  should,  as  far  as  possible, 
throw  the  loss  of  capital  on  the  niembei's  in  proi^ortion  to  the  nominal  amount 
of  capital  held  by  them  respectively,  e.  g.,  suppose  that  there  are  1,000  ^10 
shares  fully  paid  up,  and  1,000  ,£10  shares  with  ^5  paid  up,  i.  e.,  total 
paid-up  capital  ^£15,000,  and  that,  after  i^aying  the  creditors,  ,£5,000  only 
remains — the  loss  of  cajjital  (,£10,000)  must  be  borne  in  proportion  to  the 
nominal  capital  held,  viz.,  ,£5  per  share,  therefore  the  ,£5,000  nuist  be  paid 
over  to  the  holders  of  fully  paid-up  shares.  Suppose  that  the  loss  is  ^£5,000, 
eqxial  to  £2  10s.  per  share,  then  of  the  =£10,000  surplus  assets  £7,500  must  goto 
the  fully  paid  shares,  and  the  rest  to  the  £,5  paid  shares.  And  if  the  loss  is 
d£15,000,  i.  e.,  ,£7  10s.  per  share,  the  holders  of  the  ^65  paid  shares  must  pay  up 
.£2  10s.  per  share,  which  will  be  handed  over  to  the  holders  of  fully-paid  shares. 

This  rule  is  just  where  dividends  are  paid  in  proportion  to  the  nominal 
amount  of  the  shares  held,  for  it  is  only  reasonable  that  profits  and  losses 
should  be  borne  in  the  same  proportions,  but  the  rule  is  not  just  where  \_supra, 
CI.  116]  dividends  are  payable  in  proportion  to  the  capital  paid  up.  Assuming 
that  dividends  were  so  payable  in  the  hypothetical  cases  above  mentioned,  the 
holders  of  the  fully  paid-up  shares  would  have  been  taking  two-thirds  of  the 
profits,  and  the  holders  of  the  =£5  paid  shares  one  third.  Why  should  they  not 
bear  the  losses  in  the  same  proportions,  instead  of  according  to  the  rule  half 
and  half  ? 

As  to  preference  shares,  see  p.  189. 

Distribution  of      1 53.  If  tbc  CO  shall  bc  woimd  up,  the  liqs  (whether  voluntary  or 
assets  m  official)  luay,  with  the  sanction  of  an  extraordinary  resolution,  divide 

among  the  contribs,  in  specie,  any  pt  of  the  assets  of  the  co,  and  may, 
with  the  like  sanction,  vest  any  pt  of  the  assets  of  the  co  in  trustees 
upon  such  trusts  for  the  Ijenefit  of  the  contribs,  as  the  liqs,  with  the  like 
sanction,  shall  think  fit. 

Sometimes  power  is  given  to  distribute  assets  in  specie,  and  where  the  busi- 
ness of  a  comj^any  includes  the  acquisition  of  shares,  bonds,  or  seciirities  of 
other  companies,  such  a  power  may  be  useful,  for  the  Liquidation  Act,  1868 
(31  k  32  Vict.  c.  68),  which  authorises  a  division  in  specie,  only  apjilied  to 
liquidations  pending  in  18G8.  It  seems,  however,  that  the  Court  can,  in  a 
special  case,  authorise  a  distribution  in  sjjecie.     See  infra,  "  Winding  up." 

Salcimder  154.  If  at  any  time  the  liqs  of  the  co  shall  make  any  sale,  or  enter 

s.  161  of  tlie     into  any  aiTangemt  pursuant  to  section  KU  of  the  Companies  Act,  1862, 

Act  1862.        ^  dissentient  member,  within  the  meaning  of  that  section,  shall  not  have 

the  rights  thereby  given  to  him  ;  but  instead  thereof  he  may,  by  notice 

in  writing,  addi'cssed  to  the  liqs,  and  left  at  the  office  not  later  than 

fourteen  days  after  the  date  of  the  meeting  at  which  the  special  rcsolu- 


FOEMS.  X(37 

tion,  authorising-  such  sale  or  arrangemt,  was  i)assecl,  require  them  to  sell   Form  117. 
the  shares,  stock,  or  other  ppty,  option  or  privilege  to  which  under  the  "" 
arranjrenit  he  would  otherwise  have  become  entled,  and  to  pay  the  net 
proceeds  over  to  him  ;  and  such  sale  and  paymt  shall  be  made  accordingly. 
Such  last  mentioned  sale  may  be  made  in  such  manner  as  the  liqs  thiuk  fit. 

The  above  clause,  or  one  of  a  similar  character,  is  not  uncommonly  used  now, 
and  enables  a  company  much  more  effectually  to  take  advantage  of  section  161 
of  the  Act,  for  the  jjurpose  of  effecting  a  reconstruction  or  amalgamation .  Ac- 
cording to  the  Act,  dissenting  members  are  entitled  to  be  j^aid  the  value  of  their 
interests  in  the  selling  company  as  ascertained,  in  case  of  dispute,  by  arbitra- 
tion. Under  the  above  clause  they  are  only  entitled  to  the  selling  value  of  the 
shares  in  the  purchasing  company  which  would  otherwise  have  been  allotted  to 
them.  There  is  no  injustice  in  this,  for  it  may  reasonably  be  assumed  that  a 
sale  which  is  sanctioned  by  special  resolution  is  fair,  and  at  the  same  time  it 
facilitates  matters  considerably.  In  some  cases  the  clause  is  framed  with  a 
view  to  binding  every  member  to  take  the  shares  in  the  purchasing  company 
agreed  to  be  allotted  to  him ;  but  that  form  is  objectionable,  for  the  sale  may  be 
in  consideration  of  shares  only  partly  paid  up,  and  it  is  unreasonable  that  a 
dissenting  member  should  be  obliged  to  undertake  further  liabilities.  See 
further  as  to  Reconstruction  and  Amalgamation,  infra. 

15.5.  Any  such  sale  or  arrangemt,  or  the  special  resolution  confirm-  Special 
ing  the  same,  may  provide  for  the  distribution  or  appropriation  of  the  P™^^^*''^- 
shares,  cash,  or  other  benefits  to  be  received  hi  compensation  otherwise 
than  in  accordance  with  the  legal  rights  of  the  contribs  of  the  co,  and 
in  parlar,  any  class  may  he  given  preferential  or  special  rights,  or  may 
be  excluded  altogether  or  in  pt ;  but,  in  case  any  such  provision  shall  be 
made,  the  last  preceding  clause  shall  not  apply  to  the  intent  that  a 
dissentient  member  in  such  case  may  have  the  rights  conferred  on  him 
l)y  section  IGl  of  the  Companies  Act,  1862. 

This  clause  is  frequently  inserted  in  order  to  meet  the  inconvenience  which 
has  resulted  from  the  decision  in  Griffith  v.  Paget,  5  C.  D.  89i;  6  C.  D.  514; 
viz.,  that  upon  a  sale  under  section  IGl  of  the  Act,  the  special  resolution  cannot 
define  the  mode  in  which  the  shares  are  to  be  appropriated,  e.  g.,  two  shares  in 
the  new  company  for  every  preference  share  in  the  old,  and  one  share  in  the 
new  for  every  ordinary  share  in  the  old,  or  preference  for  preference,  and  or- 
dinary for  ordinary. 

Under  the  above  clause  such  a  scheme  can  be  carried  out  if  the  requisite 
majority  approve,  and  dissentients  will  be  paid  out.  See  infra,  "  Reconstruc- 
tion." 

150.  Every  director,  manager,  secretary,  and  other  officer  or  servant  of  Indemnity, 
the  CO,  shall  be  indemnified  by  the  co  against,  and  it  shall  be  the  duty 
of  the  directors  out  of  the  funds  of  the  co  to  pay,  all  costs,  losses,  and 
expenses  which  any  such  ofilcer  or  servant  may  incur  or  become  lial^le  to 
by  reason  of  any  contract  entered  into,  or  act  or  deed  done  by  him  as 
'such  officer  or  servant,  or  in  any  way  in  the  discharge  of  his  duties  ;  and 
the  amount  for  which  such  indemnity  is  provided  shall  immediately 
attach  as  a  lien  on  the  ppty  of  the  co  and  have  priority  as  between  the 
members  over  all  other  claims. 

The  above  clause  is  occasionally  inserted.     See  as  to  the  right  to  indemnity 


168 


AETICLES    or    ASSOCIATION. 


Form  117.    f>f  directors  and  other  agents,  Lindley,  759  ;  Hunt's  claim,  W.  N.  1872,  53  ;  Be 
'~  Financial  Corporation,  2S  W.  E.   7G0  ;  W.N.   1880,  88;   Wilson   v.  Lord  Bury, 

5  Q.  B.  D.  518 ;  Smith  v.  Duke  of  Manchester,  24  C.  D.  611 ;  32  W.  E.  83. 


Individual 

responsibility 
of  directors. 


Marginal 
notes. 


1.57.  Xo  director  or  otlicr  officer  of  the  co  shall  be  liable  for  the  acts, 
receipts,  neglects,  or  defaults  of  any  other  director  or  officer,  or  for 
joining  in  any  receipt  or  other  act  for  conformity,  or  for  any  loss  or 
expense  happening  to  the  co,  through  the  insufficiency  or  deficiency  of 
title  to  any  ppty  acquired  by  order  of  the  directors  for  or  on  behalf  of 
the  CO,  or  for  the  insufficiency  or  deficiency  of  any  security  in  or  upon 
which  any  of  the  monies  of  the  co  shall  be  invested,  or  for  any  loss  or 
damage  arising  from  the  bankruptcy,  insolvency,  or  tortious  act  of  any 
person  with  whom  any  monies,  securities,  or  effects  shall  be  deposited,  or 
for  any  other  loss,  damage,  or  misfortune  whatever  which  shall  happen 
in  the  execution  of  the  duties  of  his  respive  office  or  in  relation  thereto, 
unless  the  same  happen  through  his  own  wilful  act  or  default. 

The  above  clause  is  sometimes  inserted.  See  Lindley,  595,  as  to  liability  of 
directors  for  acts  of  each  other.  As  to  the  right  to  contribution,  see  Lindley, 
773,  et  seq.;  and  Ashurst  v.  Mason,  20  Eq.  225. 

In  the  case  last  mentioned,  shares  of  a  company  had  (pursuant  to  an  ultra 
vires  resolution  of  the  board)  been  purchased  and  transferred  into  the  name  of 
A..,  a  director,  in  trust  for  the  company.  It  was  held  that  A.  was  entitled  to 
contribution  from  the  directors  who  concurred  in  the  transaction  for  calls  he  had 
paid.     See  also  Power  v.  Hoey,  19  W.  E.  916  ;  and  Power  v.  O'Connor,  ibid.,  923. 

As  to  omitting  to  sue,  see  Re  Forest  of  Dean,  10  C.  D.  452  ;  Re  Wedgwood  Co., 
47  L.  T.  612.  As  to  general  position  as  fiduciary  agents,  see  Pickering  v. 
Stephenson,  14  Eq.  322 ;  Marzetti's  case,  28  W.  E.  541 ;  42  L.  T.  206 ;  Wilson  v. 
Loiv  Bury,  5  Q.  B.  Div.  519;  and  infra.  Form  339. 

158.  The  marginal  notes  hereto  shall  not  affect  the  construction  hereof. 

Sometimes  a  schedule  is  added  containing  a  cojiy  or  draft  of  an  agreement. 
See  supra,  p.  115. 

Names,  Addresses,  and  Descriptions  of  Subscribers, 

See  supra,  p.  112. 


Dated  the 


day  of 


Witness  to  the  above  signatures. 


Payment  of  Dividends  out  of  Capital. 

Illegality.  It  is  well  settled  that  in  the  case  of  a  company  limited  by  shares  the  pay- 

ment of  dividends  out  of  capital  is  illegal:  they  can  only  be  paid  out  of  profits. 
"  A  limited  company,  by  its  memorandum  of  association,  declares  that  its 
capital  is  to  be  applied  for  the  purposes  of  the  business.  It  cannot  reduce  its 
capital  except  in  the  manner  and  with  the  safeguards  provided  by  statute,  and, 
looking  at  the  Act  40  &  41  Vict.  c.  26  [the  Companies  Act,  1877J,  it  clearly  is 
against  the  intention  of  the  Legislature  that  any  portion  of  the  capital  should 
be  returned  to  the  shareholders  without  the  statutory  conditions  being  com- 
plied with.  A  limited  company  cannot,  in  any  other  way,  make  a  return  of 
capital :  the  sanction  of  a  general  meeting  can  give  no  validity  to  such  a  pro- 
ceeding, and  even  the  sanction  of  every  shareholder  cannot  bring  within  the 


FORMS.  100 

powers  of  the  company  an  act  which  is  not  within  its  powers.     If,  therefore,    Form  117. 

the  shareholders  had  all  been  present  at  the  meetings,  and  had  kno'v\'n  all  the 

facts  and  had  all  concurred  in  declaring  the  dividends,  the  pajanent  of  the 
dividends  would  not  be  effectually  sanctioned."  Per  Jessel,  M.  R.,  Flitcroft's 
case,  21  C.  Div.  533. 

"  A  payment  of  dividends  out  of  capital  is  contrary  to  the  constitution  of  the 
company,  and  is  incapable  of  ratification."  Per  Cotton,  L.  J.,  Flitcroft's  case, 
21  C.  Div.  o3G. 

"That  which  is  described  in  the  memorandum  as  the  capital  cannot  be 
diverted  from  the  objects  of  the  society.  It  is  of  course  liable  to  be  spent  or 
lost  in  carrying  on  the  business  of  the  company,  but  no  part  of  it  can  be 
returned  to  a  member  so  as  to  take  away  from  the  fund  to  which  the  creditors 
bave  a  right  to  look  as  that  out  of  which  they  are  to  be  paid."  Per  Cotton,  J., 
Guiness  v.  Land  Corp.,  22  C.  Div.  375. 

In  Macdovgall  v.  Jerseij  Imperial  Hotel  Co.,  2  H.  <t  M,  528;  12  W.  E.  1142, 
Wood,  V.-C,  said  : — 

*'  The  bill  avers  that  there  are  no  profits,  and  that  interest  has  been  paid,  or 
is  about  to  be  paid,  out  of  capital,  that  the  shareholders  have  paid-lL  per  share, 
and  are  discharged  to  that  extent,  and  that  they  are  now  about  to  take  back 
sums  equal  to  ol.  per  cent,  of  that  very  capital  in  the  shape  of  interest.  On 
grounds  of  public  policy,  and  on  every  principle  not  only  of  honesty  as  regards 
the  public  generally,  but  of  the  interests  of  this  company  itself,  I  feel  bound  to 
j)revent  this  proceeding.  This  is  not  in  accordance  with  the  contract  entered 
into  with  the  Legislature  on  behalf  of  the  public,  whereby  it  was  determined 
that  the  shareholders  should  be  liable  to  a  certain  defined  amount,  and  no 
more,  to  the  creditors  of  the  company,  and  not  in  accordance  with  the  contract 
between  the  parties  whereby  each  shareholder  was  protected  against  creditors 
to  the  extent  of  the  contributive  liability  of  all  the  others."  And  in  Re  Alexan- 
dra Palace  Co.,  21  C.  D.  160,  Fry,  J.,  referring  to  this  passage,  said : — 

"  In  my  view  that  lays  down  the  law  with  perfect  precision,  and  I  think  no 
subterfuge  by  which  it  is  attempted  to  return  capital  to  shareholders  and 
thereby  to  diminish  their  liability,  ought  to  be  countenanced  for  one  moment 
by  this  Court.  I  confess  it  was  with  some  surprise  that  I  heard  the  argu- 
ment addressed  to  me  at  the  bar  that  the  directors  were  at  liberty  to  pay  this 
money  out  of  capital  because  otherwise  they  could  not  carry  on  their  under- 
taking." Bent  V.  London  Tramways,  16  C.  D.  344,  and  Lambert  \ .  Neiichatel  Co., 
30  W.  E.  913,  are  inconsistent  with  the  decisions  of  the  Court  of  Appeal,  and 
therefore  must  be  disregarded. 

The  Court  will,  at  the  instance  of  a  single  shareholder,  interfere  by  injunc-  Injunction  to 
tion  to  restrain  the  payment  of  dividend  out  of  capital :  Macdougall  v.  Jersey  restrain. 
Imperial  Hotel  Co.,  2  H.  &  M.  528  ;  Guiness  v.  Land  Corporation  of  Ireland,  22 
C  Div.  349 ;  Davison  v.  Gillies,  16  C.  D.  347  ;  but  not  at  the  suit  of  a  mere 
simple  contract  creditor:  Mills  v.  Northern  Co.,  5  Ch.  621.  Nevertheless  it  would 
seem  that  there  may  be  cases  in  which  a  creditor  would  have  a  locus  standi. 
Flitcroft's  case,  20  C.  Div.  533. 

If  a  dividend  can  be  paid  out  of  profits  only,  and  not  out  of  capital,  it  is  "  Profits." 
important  to  determine  how  profits  are  to  be  ascertained.  It  would  seem  that 
they  are  to  be  ascertained  as  in  an  unincorporated  partnership,  viz.,  by  pre- 
paring a  fair  and  honest  balance-sheet,  "  for,  after  all,  these  companies  are 
commercial  paitnerships,  and  are,  in  the  absence  of  express  provisions,  statu- 
tory or  otherwise,  subject  to  the  same  considerations."  Per  Jessel,  M.  E., 
Griffith  V.  Paget,  6  C.  D.  515. 

In  Helby's  case,  2  Eq.  172,  Kindersley,  V.-C,  said  : — 

"  A  balance-sheet  or  summary  of  accounts  would  show  on  the  one  hand  all 
the  assets,  and  on  the  other  hand  all  the  liabilities  of  the  company  ;  and  it  was 
only  ou  that  sort  of  statement  that  any  safe  conclusion  could  be  di'awn  as  to 
the  question  whether  there  had  been  any  profit  for  the  half-year  or  not,  and 
whether  any  and  what  dividend  should  be  declared." 


170  ARTICLES    OF    ASSOCIATION. 

Form  117.         ^'"■^  among  the  liabilities  miist  be  included  the  liability  of  the  company  to 

its  members  in  respect  of  paid-up  capital.    This  is  the  universal  practice  as  well 

in  the  case  of  ordinary  partnerships,  as  of  companies. 

If  such  a  balance-sheet  shows  that  the  assets  exceed  the  liabilities,  the  excess 
is  profit. 

But  it  does  not  follow  that  the  whole  of  the  excess  is  applicable  to  the  pay- 
ment of  dividend,  e.g.,  it  may  consist  in  part  of  a  reserve  fund  of  accumulated 
profits  appropriated  to  specific  purposes,  or  of  unclaimed  dividends.  Such  items 
will  be  inserted  on  both  sides  of  the  account.  In  preparing  the  balance-sheet 
a  bond,  fide  estimate  should  be  made  of  the  value  of  the  assets,  or  of  the  extent 
of  any  liability,  and  an  erroneous  estimate  will  not  render  it  fravidulent.  Stringer's 
case,  4.  Ch.  475  ;  Bance's  case,  6  Ch.  10-1 :  Burnes  v.  Pennell,  2  H.  L.  Cas.  497. 
As  to  writini^  In  the  case  of  an  ordinary  partnership  it  is  a  common  practice  where,  upon 
off  lost  capital,  a  balance  sheet  being  made  out,  it  appears  that  a  loss  of  capital  has  been 
sustained,  to  write  oS  the  amount  and  start  afresh  with  the  reduced  capital, 
but  in  the  case  of  a  company  limited  by  shares  this  cannot  be  done  without  the 
sanction  of  the  Co\irt  under  the  Companies  Act,  1877,  and  accordingly  there 
can  be  no  subsequent  profits  until  the  loss  has  been  made  good.  It  is,  however, 
contended  by  Mr.  Buckley  in  his  admirable  work  (p.  459)  that  "  for  the  purpose 
of  determining  profits  you  must  disregard  accretions  to  or  diminutions  of 
capital."  But  it  is  submitted  that  this  contention  is  not  well  founded.  To 
adopt  it  is  to  introduce  a  rule  for  ascertaining  the  profits  of  a  limited  company 
which  is  not  applicable  in  the  case  of  an  ordinary  partnership,  and  that  to  the 
detriment  of  the  company's  creditors. 

In  Robinso7i  v.  Ashton,  20  Eq.  28,  Jessel,  M.E,.,  said  "  that  the  rise  or  fall  in 
the  value  of  fixed  plant  or  real  estate  belonging  to  a  partnership  was  as  much 
profit  or  loss  of  the  partnership  as  anything  else."  And  in  Davison  v.  Gillies, 
IG  C.  Div.  347,  the  same  judge  held  that  there  could  be  no  profit  until  depre- 
ciation had  been  made  good. 

See  also  Coltness  Iron  Co.  v.  Black,  6  App.  Cas.  329,  where  Lord  Blackburn  stated 
that  he  should  not  be  at  all  inclined  to  dispute  the  sufiiciency  of  the  definition 
in  Mr.  McCiilloch's  Political  Economy,  viz.,  "Profits  must  not  be  confounded 
with  the  produce  of  industry  primarily  received  by  the  capitalist.  They  really 
consist  of  the  produce  or  its  value  remaining  to  those  who  employ  their  capital 
in  an  industrial  undertaking  after  all  their  necessary  payments  have  been 
deducted,  and  after  the  capital  wasted  and  used  in  the  undertaking  has  been 
replaced.  If  the  produce  derived  from  an  undertaking,  after  defraying  the 
necessary  outlay,  be  insufiicient  to  replace  the  capital  exhausted,  a  loss  has  been 
incurred  ;  if  the  capital  is  merely  sufficient  to  replace  the  capital  exhausted 
there  is  no  surplus,  there  is  no  loss,  but  there  is  no  annual  profit,  and  the 
greater  the  surplus  is,  the  greater  the  jDrofit." 

Moreover,  if  a  company  can  pay  dividend  notwithstanding  a  loss  of  cajiital, 
what,  it  may  be  asked,  was  the  object  of  the  Companies  Act,  1877,  whereby 
power  is  given  to  cancel  "capital  which  has  been  lost  or  is  unrepresented  by 
available  assets  "  ?  As  a  matter  of  fact  it  is  notorious  that  the  Act  was  passed 
in  order  to  remedy  a  grievance,  viz.,  that  after  a  loss  of  capital  a  company  could 
not,  like  a  partnership,  write  off  the  amount  and  resume  payment  of  dividends. 
See  the  Ehhw  Vale  Co.,  4  C.  Div.  827,  and  also  the  evidence  taken  by  the 
Select  Committee  (1877)  of  the  House  of  Commons  on  the  Companies  Act,  1862 
and  1867,  and  in  particular  Ques.  and  Ans.  328,  335,  369,  371,  and  377,  in  the 
evidence  of  Mr.  Newmarch,  E.E.S.  This  gentleman,  in  answer  to  Question  262, 
said  :    "  I  am  entirely  in  favour  of  the  power  proposed  to  be  given  of  reducing 

the   capital   of    a   company Every   facility   should   be   given   to   them 

[companies]  which  can  be  given  without  doing  an  injustice  to  third  parties  ; 
and  therefore  in  the  case  of  a  public  company,  when  the  course  of  its  business 
has  been  unfortunate,  and  the  balance  sheet  can  only  be  adjusted  by  writing  off 
a  certain  part  of  the  paid-up  capital,  as  would  be  done  by  any  private  partner- 


POEMS.  171 

ship,  subject  to  due  notice  being  given  to  the  parties  concerned,  that  should  bo    Poi'in  117. 

done."  — ~ 

Again,  Ans.  331 : — "  In  the  case  of  a  limited  conapany  the  operation  cannot 
be  exactly  in  the  same  form  [as  in  a  partnership]  ;  the  public  company  would 
have  to  consult  its  shareholders,  and  say  to  them :  '  Gentlemen,  your 
5O0,O00L  has  been  reduced  to  100,000?. ;  unless  you  write  100,000L  off,  you  can 
have  no  dividend  till  the  100,000J.  is  recovered.  Which  do  you  prefer,  to  wait 
seven,  eight,  or  ten  years  to  recover  that,  or  to  reduce  the  paid-up  capital 
now  ?'     That  seems  to  me  a  case  where  the  law  should  offer  every  facility." 

Accordingly,  after  the  Act  of  1877  was  passed,  the  Ebbw  Vale  Company  again 
applied  to  the  Court  to  sanction  a  cancellation  of  lost  capital,  and  Jessel,  M.R., 
made  the  order,  saying  "  that  this  was  a  matter  which  was  now  very  properly 
left  in  the  discretion  of  the  company,  which  might  desire  to  reduce  its  capital 
by  writing  off'  losses.  The  power  ivas  extremely  beneficial,  inasmuch  as  it  enabled 
companies  to  declare  dividends  in  cases  where  but  for  the  power  no  dividends  would 
be  possible." — Times,  20  Jan.,  1878. 

Some  persons,  whilst  admitting  that  dividends  cannot  be  paid  out  of  capital,  "  During 
contend  that  where  a  company  engages  in  the  construction  of  works,  interest  construction, 
may  be  paid  on  cajjital  during  constiaiction.  Thus,  in  Re  Alexandra  Palac6  Co., 
21  C.  Div.  149,  where  dividends  on  preference  shares  had  been  paid  during  con- 
struction, it  was  contended  "thatthedividends  were  notpaid  out  of  capital;  and 
it  is  quite  proper  to  debit  to  capital  account  the  interest  on  capital  expended  on 
works,  such  as  buildings,  so  long  as  they  are  tmproductive  during  the  period  of 
construction."  But  Fry,  J.,  referring  to  this  contention,  said  that  covinsel 
"  has  very  ingeniously  argued  that  this  was  really  a  payment  out  of  profits  (so, 
at  least,  I  understood  his  argument),  because,  he  says,  you  are  entitled  to  compute 
interest  on  the  money  you  lay  out  before  it  becomes  remunerative,  and  to  treat 
that  interest  as  profit,  and  divide  it  accordingly  among  the  shareholders.  I 
cannot  yield  to  that  argument."  And  accordingly  the  directors  were  held 
jointly  and  severally  liable  to  make  good  the  amount. 

As  a  company  may  not  pay  dividends  directly  ovit  of  capital,  it  may  not  do  Through 
so  indirectly,  e.g.,  by  entei'ing  into  a  contract  with  another  company  or  person,  contractors. 
one  of  the  terms  of  which  is  that  the  latter  shall  jiay  interest  on  the  capital  of 
the  former.     James  v.  Eves,  G  H.  L.  385  :    "  There  is  no  doubt  that  if  it  cannot 
be  done  directly,  it  cannot  be  done  indirectly."     Per  Lord  Chelmsford,  L.C. 

And  in  Fisher  v.  Hull  ^  Barnsley  By.  Co.,  -i  Mar.  1881  (25  S.J.  353),  where  the 
contractors  had  agreed  to  pay  interest  during  construction,  Jessel,  M.E.,  granted 
an  injunction  restraining  the  payment,  and  the  company  in  two  subseqvient 
sessions  endeavoured  but  withoiit  success  to  obtain  legislative  authority.  See 
also  what  was  said  in  Wye  Valley  By.  Co.  v.  Hawes,  16  C.  Div.  489. 

The  payment  of  dividends  out  of  capital  is  regarded  as  a  breach  of  trust  on  Liability  of 
the  part  of  the  directors,  and  accordingly  they  are  jointly  and  severally  liable  directors, 
to  make  good  the  amount  with  interest  at  5  per  cent,  per  annum,  and  the  Statute 
of  Limitations  is  no  answer.    Flitcroft's  case,  21  C.  Div.  520;  Be  Alexandra  Palace, 
ibid.,  160. 

And  they  are  liable,  not  only  for  what  they  pay  themselves,  bvit  for  the  whole 
amount.  "I  do  not  see  how  to  make  any  distinction  between  what  the  directors 
retained  and  what  they  paid  to  other  shareholders."  Pe?' Cotton,  L.J.,  Flitcroft's 
case,  21  C.  Div.  536. 

It  is  true  that  a  member  who  receives  a  dividend  knowing  that  it  is  paid  out 
of  capital  may  be  liable  to  make  good  the  amount,  for  "  the  money  of  a  company 
is  a  trust  fund,  because  it  is  applicable  only  to  the  special  purposes  of  the  com- 
pany in  the  hands  of  the  agents  [i.e.  the  directors]  of  the  company,  and  it  is 
in  that  sense  a  trust  fvmd  applicable  by  them  to  those  special  purposes  :  and  a 
person  taking  it  from  them  with  notice  that  it  is  being  applied  to  other  pur- 
poses cannot,  in  this  Court,  say  that  he  is  not  a  constructive  trustee."  Per 
Jessel,  M.  E.,  PMssell  v.  Wakefield  Waterworks,  20  Eq.  479.  Holmes  v.  Newcastle 
Co.,  1  C.  D.  682. 


172 


AETICLES    OF    ASSOCIATION. 


Form  117.  But  even  in  sucli  cases  the  directors  will  be  primarily  ordered  to  make  good 
the  amount,  and  will  be  left  to  recover  from  the  other  members  if  they  can.  Re 
Alexandra  Palace  Co.,  20  C.  D. ;  National  Funds,  10  C.  D.  118. 

And  a  member  who  takes  a  dividend  in  good  faith,  not  knowing  that  it  is 
paid  out  of  capital,  is  not  liable  to  return  the  same.  Flitcroft's  case,  21  C.  Div. 
519  ;  C.  Denlmm  4'  Co.,  W.  N.  1883,  20i  ;  Wye  Valley  Railway  Co.  v.  Hawes, 
16  C.  Div.  489. 

This  is  a  common  case,  for  where  dividends  are  paid  out  of  capital  the  mem- 
bers can  in  most  cases  show  that  they  were  deluded  by  fraudulent  accounts. 
And  where  the  directors  represent  that  profit  has  been  made,  members  are  not 
bound  to  investigate. 

"  The  directors  made  an  express  representation  to  the  shareholders  that  pro- 
fits had  been  made,  and  the  effect  of  that  representation  cannot  be  taken  away 
by  shewing  that  documents  were  laid  before  the  shareholders,  a  thorough  in- 
vestigation of  which  would  have  shewn  that  the  representation  was  untrue, 
unless  it  is  also  shewn  that  they  did  investigate  them  and  discover  the  untruth." 
Per  Jessel,  M.  E.,  Flitcroft's  case,  21  C.  Div.  532. 

Not  only  are  directors  who  pay  dividend  out  of  capital  civilly  liable,  but  they 
may,  at  any  rate  in  some  cases,  be  prosecuted  for  conspiracy.   Burnes  v.  Pennell, 
2  H.  L.  Cas.  497. 
Kecoiniinr'-  I^  ^i^l  b®  borne  in  mind  that  where  a  company  has  expended  on  capital  ac- 

lirofit  expended  count  monies  which  would  otherwise  have  been  applicable  to  the  payment  of 
on  capital.  dividend  it  may  raise  an  equivalent  amount  by  issuing  new  shares  or  borrow- 

ing and  paying  dividend  thereout.  ^Mills  v.  Northern,  Sfc,  Co.  5  Ch.  621. 

And  if  upon  a  balance-sheet  it  appears  that  there  are  profits,  an  equivalent 
amount  may  be  raised  by  borrowing  or  otherwise  and  applied  in  paying  a  divi- 
dend, even  though  the  profits  have  not  been  realized  and  are  arrived  at  by  esti- 
mating the  assets  at  a  value  which  they  may  never  realize.  Stringer's  case, 
4  Ch.  475.  But  there  must  be  perfect  bona  fides.  As  to  ascertaining  profit 
for  the  purpose  of  income  tax,  see  note  at  end  of  Form  199.  As  to  inserting 
power  to  pay  dividends  out  of  capital,  see  supra,  p.  89. 

And  a  dividend  may  be  paid  out  of  profits  Avhich  have  not  been  realised. 


Criminal. 


Form  118. 

Articles  of 
fissociation  in 
])art  adopting 
Table  A. 


The  Companies  Acts  18G2  to  1879. 

Shares. 


Company  Limited  by 


Articles  of  Association  of  The Company  Limited. 

In  a  good  many  cases  articles  of  association  are  framed  as  in  this  form,  viz.,  by 
the  adoption  of  Table  A.,  subject  to  modifications.  See  swpra,  p.  111.  The  plan 
is  not  to  be  recommended,  for  it  is  extremely  desirable  to  have  the  regulations 
in  a  single  document,  but  it  is  often  adopted  to  save  expense.  The  clauses  of 
Form  117  are  hereinafter  referred  to. 


rrcliminary 
iigreement. 
Allotment  of 
shares. 
Instalments. 


1.  Subject  as  hereinafter  provided,  the  regulations  contd  in  the 
Table  marked  A.  in  the  first  schedule  to  the  Companies  Act,  1862  (here- 
i^fter  called  Table  A.),  shall  apply  to  this  co. 

This  clause  is  commonly  inserted  by  way  of  reminder,  but  it  is  not  necessary, 
for  so  far  as  not  excluded.  Table  A.  applies.     See  supra,  p.  111. 

2.  The  following  clauses  of  Table  A.  sliall  not  apply  to  this  co,  namely. 
Clauses  10, 22,  20,  27,  28,  37,  44,  52,  58,  54,  72, 1)0,  and  91. 

3.  The  directors  may  enter  into  [Clause  3.] 

4.  The  shares  shall  be  under,  &c.  [Clause  C] 

5.  If  by  the  conditions  of  allotmt,  &c.  [Clause  8],  and   the  word 


FOEMS.  173 

"call "where  used  in  Clauses  G,  7,  18,  and  19  of  Table  A.  shall  be   Form  118. 
deemed  to  include  an  instalmt. 

6.  The  directors  may  decline  to  register,  &c.  [Clause  ?>i).']  Transfers. 

7.  A  fee  not  exceeding  2s.  Gd.  may  be  charged  for  each  transfer.  Fee. 

8.  9,  10.     [Clauses  27,  28,  29.]  ^'^''^ 

11.  Upon  any  sale  in  purported  exercise  of  the  powers  respively  given  Validity  of 

by  Clause   10  hereof,  and   Clause  21  of  Table  A.,  the  directors,  &c.  ^'^^^^• 

[Clause  30.] 

12  to  17.      [Clause  44  to  48.]  Alteration  of 

^  „  capital. 

18  to  21.     [Clause  49  to  54.]  ]]oiTowing. 

22.  The  quorum  of  a  general  meeting  shall  be  three  memljers  person-  Quorum. 
ally  present. 

23.  The  words  "  or  carried  by  a  parlar  majority,  or  lost,"  shall  l)e  Modification  of 
inserted  in  Clause  42  of  Table  A.  after  the  word  "  carried,"  and  the     '    "" 
word  "  conclusive  "  shall  be  substituted  for  the  word  "  sufficient "  hi  the 

same  clause. 

24.  The  words  "and  either  at  once, or  after  an  interval  or  adjom'nmt,"  P*^!!- 
shall  be  inserted  in  Clause  43  of  Table  A.,  after  the  word  "  manner." 

25.  Every  share  shall  confer  one  vote.  Votes. 

26.  The  number  of  the  directors  shall  not  be  less  than        ,  nor  more  dii™tors° 
than 

,-     m  c       rni  oi  -|  First  directors. 

27.  Ihe  persons,  &c.  I  Clause  84.1 

-v^     mi       T       .  o       1-/^1  -I  Additional 

28.  Ihe  directors,  &c.  [Clause  8o.]  directors. 

29.  There  shall  be  pd,  &c.  [Clause  90.]  Remuneration. 

30.  The  qualification,  &c.  [Clause  88.]  Qualification. 

31.  The  words  "at  the  second"  shall  be  substituted  for  the  words  j;i.e'^toj.^_ 
"  at  the  first "  in  Clause  58  of  Table  A.  Power  of 

32.  A  meeting  of  directors,  at  which  a  quorum,  &c.  [Clause  109.]        ^^"'"^^^ 

33.  A  resolution  in  writing,  &c.  [Clause  113.]  Eesolution  ia 

34.  Subject  to  the  rights,  &c.  [  Clause  IIG.]  •'  writing. 

35.  The  company  in  general  meeting,  &c.  [Clause  117.]  Eight  to 

36.  The  directors,  &c.  [Clause  121.]  Dividends. 

37.  If  any  casual  vacancy  occurs  in  the  office  of  auditor,  the  directors  Interim 

M.,  dividends. 

"  '^  ^^P-  Auditor. 

38.  Each  holder,  &c.  [Clause  144  and  145.]  Address  for 

39.  If  the  company  shall,  &c.  [Clause  152.]  service. 

Distribution  of 
In  addition  to  the  above  clauses  it  may  be  deemed  desirable  to  provide  for  assets, 
the  issue  of  share  warrants  ;  for  division  of  the  original  capital  into  different 
classes  of  shares ;  enabling  directors  to  contract ;  managing   directors  ;  some 
express  powers  as  in  clause  114  ;  and  for  some  modification  of  the  provisiori^(|E 
Table  A.,  as  to  accounts  and  audita  &c.,  and  winding-up  clauses. 

Xames,  Aduressks,  and  Descriptions  of  Subscribers. 
{_Supra,  p.  112.] 
Dated,  &c. 


174 


AETICLES    OF    ASSOCIATION. 


Form  119. 


Articles  of  Association  of  the  iV Incorjwrated  Land  Society. 


i«sociation  of  These  articles  can  easily  be  so  modified  as  to  suit  almost  any  of  the  associations 
society  limited  I'eferred  to  supra,  p.  78.  In  the  case  of  a  chai-itable  association,  e.g.,  a  hospital, 
by  guarantee,  or  a  home  or  trust,  the  best  plan  is  to  provide  that  "  The  council  may  from  time 
to  time  determine  the  terms  and  conditions  on  which  any  person  shall  be  ad- 
mitted as  a  member  of  the  association/'  for  in  such  cases  there  is  generally  no 
reason  for  having  a  large  number  of  members  so  long  as  the  number  is  kept 
above  seven.  It  may  also  be  expedient  to  leave  it  to  the  council  to  fix  the 
annual  subscription,  if  any. 


Preliminary. 

Interprettition.      I.  In  these  articles,  unless  there  be  something  in  the  subject  or  context 
inconsistent  therewith,  [see  supra,  p.  114,  omitting  "the  directors".] 

■J.     For  the  purposes  of  registration,  the  society  is  declared  to  consist 
of  ;]U0  members. 


Number  of 
members. 


See  Supra,  p.  111. 

Power  to  'J-  The  council  may,  when  they  think  fit,   register  an  increase  of 

increase.  members. 


"Who  may 

become 

members. 

Apphcation 
for  member- 
ship. 


Proposer  ami 
seconder  of 
candidate. 

"When  candi- 
date to  be 
balloted  for. 


Members  of 
council  to  be 


l\lEMnERSHIP. 

4.  Any  solor  in  practice  in  N.,  or  witliin  twenty  miles  of  the  Town 
Hall  thereof,  may,  subject  to  the  following  regulations,  become  a  member 
of  tlie  society. 

i>.  Each  candidate  for  membership  shall  sign,  and  deliver  to  the 
secretary,  an  applicon  in  the  form  or  to  the  effect  following  : — 

To  the  Council  of  the  N.  Incorporated  LaAv  Society. 
Gentlemen, — 
I  desire  to  become  a  member  of  the  K  Incorporated  Law  Society ; 
and  I  hl)y  authorise  you,  in  the  event  of  my  being  elected,  to  enter  my 
name  in  the  register  of  members  of  the  society. 

Dated  this day  of ,  18 — . 

Name  in  full. 

Address. 

Signature. 

6.  Such  applicon  must  be  accompanied  by  a  note  in  writing,  signed 
l)y  two  members — tbe  one  pro})Osing,  the  other  seconding  the  candidate's 
election. 

7.  At  the  next  quarterly  meeting  of  tlie  council,  which  shall  be  held 
after  tbe  expiration  of  fourteen  days  from  the  receipt  of  any  such  appli- 
con, the  candidate  shall  be  balloted  for  by  the  council,  and  one  black 
baU  in  five  shall  exclude. 

8.  The  secretary  shall,  seven  days   at   least   before   each   quarterly 


FORMS. 


175 


meeting,  give  notice  in  writing  to  every  member  of  the  conncil,  stating  Form  119. 
the  name  and  address  of  each  candidate  (if  any),  to  be  balloted  for  at  ~         7. 

^      _     •'  ^'  given  notice 

the  approaching  meeting,  and  the  names  of  his  proposer  and  seconder,      of  applications 

J).     The  candidate's  name  shall  also  be  put  up  in  the  oJhce  or  library  ^JJ  J^^mber- 
of  the  society  seven  days  before  the  meeting  of  the  council  at  which  he  Candidates' 
is  to  be  balloted  for.  "'■^"^es  to  be 

10.  The  rights  and  privileges  of  every  member  shall  be  personal  to  office, 
himself  ;  they  shall  not  be  transferable  by  his  own  act,  or  by  oi)eration  Kiglits  of  _ 

r.  T  member.sliip 

^''^  ^^'^^'-  to  he  personal. 

11.  Any  member   may  withdraw   from   the   society  by  ginng  two  Power  to 

calendar  months'  notice  in  writing  to  the  secretary  of  his  intention  so  to  ^^it}>^'i'^^^'  ^'■'^^ 

^  *'  society. 

do,  and  upon  the  expiration  of  the  notice  he  shall  cease  to  be  a  member. 

An  express  j)ower  to  witlidraw  ought  to  be  given. 


12.  Any  person  who  shall,  l>y  any  means,  cease  to  be  a  member,  shall,  Arrears  to  be 
vertheless,  re 
lich,  at  the  t 
to  the  society. 


nevertheless,  remain  liable  for,  and  shall  pay  to  the  society,  all  monies  ]''^l\  ^^'  ^ 

'  '  i-    ''  'I '  witiiuiawmg 

which,  at  the  time  of  his  ceasing  to  be  a  member,  may  be  due  from  him  members. 


SUBSCRIPTIOXS   AND    EnTRANCE-FeES. 

13.  Every  member  shall  pay  to  the  society  an  annual  subscription  of  Annual  sub- 
such  amount  as  may  be  from  time  to  time  fixed  by  the  council,  with  the  ''^"^'  ^°"''' 
sanction  of  a  general  meeting. 

The  subscription  will  be  a  specialty  debt,  see  supra,  p.  116,  note  to  Clause  S. 

14.  Until  otherwise  determined,  such  annual  subscription  shall  be  two  Amount. 
guineas,  and  shall  be  payable,  in  advance,  on  the  1st  day  of  October  in 

each  year. 

15.  The  subscribers  hto,  and  any  memljcrs  elected  on  or  before  the  When  sub- 
1st  day  of  October  next,  shall  be  liable  to  pay  the  annual  subscription  as  ^e"ihbie*° 
from  that  day  only. 

16.  Any  member  elected  after  the  first  day  of  October  next  shall  be  Liability 
liable  to  pay  the  sd  annual  subscription  as  from  the  1  st  day  of  Octo])er  °[  |"k ""° 
[last  preceding  his  election  ;  the  subscription  for  the  current  year  to  be 

pd  by  him  immediately  after  his  election].  ^ 

Or  omit  the  words  in  brackets  and  substitute  the  words  "next  following  his 
election."  This  alteration  will  make  the  entrance  fee  cover  the  subsci'iption 
for  the  current  year.  t 

17.  An  elected  member  shall  pay  to  the  society,  immediately  after  Entrance  fees. 
his  election,  an  entrance-fee  of  such  amount  as  the  council  shall  from 

time  to  time  fix.     Until  otherwise  determined,  the  entrance-fee  shall  be 
three  guineas. 

18.  An  elected  member  shall  not   be  entled  to  exercise  any  of  the  Elected  mem- 
privileo-es  of  a  member  until  he  shall  have  pd  all  moneys  payable  by  ^^^'  "?*  *°  •  • 

'  "■  .  ^  J      f  ^  J  exercise  privi- 

him  to  the  society  upon  his  election,  and  if  he  shall,  for  one  calendar  leges  till  pay- 


176 


AETIOLES    OF    ASSOCIATION. 


Form  119.  month  after  his  election  shall  have  been  notified  to  him  in  writing  by 
the  society,  make  default  in  such  paymt,  he  shall  ipso  fado  cease  to  be 
a  member. 

[calls.] 
Occasionally  the  articles  of  chambers  of  commerce,  law  societies,  and  other 
associations  of  a  similar  character  [^swpra,  p.  64],  besides  a  power  to  increase 
the  annual  subscription,  contain  power  for  the  executive  to  make  calls   to  a 
limited  extent.     The  following  clauses  will  serve  as  an  example  : — 


ment  of  en- 
trance fee,  he 
Provision  for 
default. 


Powers  of 
council  as 
regards  mem- 
bers in  arrear. 


CALLS. 

The  council  may,  with  the  sanction  of  a  g-eneral  meeting,  from  time  to  time 
call  on  the  members,  -pari  passu,  to  contribute  funds  for  the  purposes  of  the  so- 
ciety or  any  of  them,  and  each  member  shall  pay  every  call  so  made  to  the 
persons,  and  at  the  times  and  places  appointed  by  the  council ;  but  no  member 
shall  be  called  on  to  pay  more  than  5L  in  any  one  year,  including  the  annual 
subscription  for  that  year. 

A  call  shall  be  deemed  to  have  been  made  at  the  time  when  the  resolution  of 
the  council  making  the  same  was  passed. 

Twenty-one  days'  notice  shall  be  given  of  each  call. 

10.  If  any  member  shall  neglect,  for  one  calendar  month,  to  pay  any 
money  due  from  him  to  the  society,  the  council  may,  by  notice  in 
writing,  request  him  to  pay  such  money.  The  notice  shall  appoint  a 
day  and  place  for  paymt,  and  a  C(jpy  of  this  clause  shall  be  subjoined 
thereto.  If  the  requisitions  of  such  notice  are  not  complied  with,  the 
council  may  suspend  the  privileges  of  such  member  for  such  period  as 
they  think  fit,  and  if  he  continue  in  default  for  twelve  calendar  months 
after  such  notice,  he  shall  upon  the  expiration  of  that  period  cease  to  be 
a  member. 

Here  insert  Clauses  20  to  36  as  to  general  meetings  ;  proceedings  thereat,  and 
votes  adopted  from  Form  117.  Substitute  "coimcil"  for  "  directors,"  and  "  mem- 
ber of  the  council  "  for  "  director."  Very  commonly  it  is  provided  that  "  every 
member  shall  have  one  vote,  and  voting  by  proxy  shall  not  be  permitted,  and 
that  a  poll  may  be  either  by  open  voting  or  by  ballot."  All  mention  of  shares 
and  dividends  will  be  omitted. 


Officers. 


The  council 


First  ofiicers. 


Officers. — The  Couxcil. 

o7.  There  shall  be  the  following  officers  of  the  society,  namely,  a  pre- 
sident, a  vice-president,  a  treasurer,  a  secretary,  two  auditors,  and  twelve 
ordinary  members  of  the  council.  The  afsd  officers  shall  act  without 
remuneration. 

;>8.  The  council  shall  consist  of  fourteen  members,  namely,  the  presi- 
dent, the  vice-president,  and  twelve  ordinary  members. 

Tlie  treasurer  and  secretary  may  also  bo  made  members. 

;5i).  Until  the  annual  meeting  in  the  year ,  the  following  shall  be 

the  officers  of  the  society  : — 

President,  A.,  of ;  vice-president,  B.,  of  ;  treasurer,  C,  of 


secretary,  D.,  of 


auditors,  E.,  of 


Ordinary  members  of  the  council,  A.,  B.,  C,  D.,  &c. 


FOEMS.  177 

40.  All  the  officers  of  the  society  shall  retire  at  the  annual  meeting   Form  119. 

in  the  year ,  and  at  each  subsequent  annual  meeting-  the  presideiit,  R^tiremenToT" 

the  vice-president,  the  treasurer,  the  secretary,  and  the  auditors  of  the  officers. 
society,  and  four  ordinary  members  of  the  council  shall  retire. 

In  some  cases  the  regulations  provide  that  the  president  and  vice-president 
shall  be  selected  by  the  council  out  of  their  o^vn  body,  instead  of,  as  in  these 
articles,  vesting  the  right  of  selection  in  the  society  at  large. 

41.  The  four  ordinary  members  of  the  council  to  retire  at  the  annual  Whicb  mem- 
meeting  in  each  year  shall,  unless  the  members  of  the  council  agree  ^^^'^  *°  ^'®^'^'^' 
amctng  themselves,  be  determined  by  lot. 

Sometimes  it  is  provided  that  all  the. officers  shall  be  elected  annually. 

42.  Xo  person  shall  Ije  eligible  as  an  officer  of  the  society  who  is  not  Kestrictimi 
a  member.     A  retiring   officer   shall   be   eligible   for   re-election.     Nogf^^^gj"'^ 
member  shall  at  the  same  time  be  treasurer,  secretary,  or  auditor  of  the 

society  and  a  memljer  of  the  council.  Any  officer  of  the  society  ceasing 
to  be  a  member  thereof  shall  q^so  facto  vacate  his  office. 

43.  At  each  annual  meeting  the  society  shall  fill  up  the  places  vacated  As  to  fining 

by  the  retiring  officers  of  the  society,  "^'  vacancies 

•'  °  _  _     •'  in  omces. 

44.  If  at  any  meeting  at  which  an  election  of  officers  ought  to  take  Provisions  in 
place,  the  places  of  the  vacating  officers  are  not  filled  up,  the  meeting  ^^^^  vacancies 
shall  stand  adjourned  till  the  same  day  in  the  next  week,  at  the  same 

time  and  place  ;  and  if  at  suclv  adjourned  meeting  the  places  of  the 
vacating  officers  are  not  filled  up,  the  vacating  officers,  or  such  of  them 
as  have  not  had  their  places  filled  up,  shall  continue  in  office  until  the 
annual  general  meeting  in  the  next  year,  and  so  on  fi'om  time  to  time 
until  their  places  are  filled  up. 

4").  If  any  casual  vacancy  shall  occur  in  the  office  of  president,  the  As  to  casual 
vice-president  shall   ipso  facto  liecome  president,  and  the  council  shall  o^^^of '" 
thereupon  elect  from  among  the  members  thereof  some  person  to  be  president. 
vice-president. 

4().  Any  casual  vacancy  in  the  council,  or  in  the  offices  of  treasurer,  Council  may 
secretary,  or  auditors  of  the  society,  may  be  filled  up  by  the  council.         vacancieTiu 

other  offices. 

Peocedure  of  Council. 

47.  The  council  shall  meet  quarterly,  in  the  months  of , ,  J^Ieetings  of 

,  and ,  in  each  year,  and  at  such  other  times  as  they  shall  '  ^ 

appoint.     The  council  may  make  such  regulations  as  they  think  proper 

as  to  the  summoning  and  holding  of  meetings,  and  for  the  transaction 
of  business  thereat,  and  they  may  adjourn  any  meeting,  and  may  fi-om 
time  to  time  fix  the  quorum  necessary  for  the  transaction  of  business  ; 
but,  until  they  shall  otherwise  determine,  five  members  of  the  council 
shall  form  a  quorum. 

48.  The  president  alone  or  any  two  memlx-rs  of  the  council  may  at  "^Vho  may 
any  time  summon  a  meeting  thereof.  ^^"oTclTcu" 

N 


178 


ARTICLES    OF    ASSOCIATION. 


Form  119. 

Chairman. 


How  questions 
to  be  aecided 
at  meeting  of 
council. 


Power  for 
council  to  act 
notwithstand- 
ing vacancies. 
Powers  to 
resign  office. 
When  council 
may  declare 
office  of  mem- 
ber vacant. 


49.  The  president,  or,  in  his  absence,  the  vice-president,  shall  take  the 
chair  at  all  meetings  of  the  conncil  ;  and  if  at  any  meeting  neither  of 
them  be  present  within  ten  minutes  after  the  time  appointed  for  holding 
the  same,  the  meml^ers  present  shall  choose  some  one  of  their  numV)er  to 
be  chairman  of  the  meeting. 

50.  Questions  at  any  meeting  of  the  council  shall  be  decided  by  a 
majority  of  votes,  and,  in  case  of  an  equality  of  votes,  the  chairman  shall 
have  a  second  or  casting  vote.  The  voting  as  to  the  election  of  members 
of  the  society  shall  be  by  ballot. 

51.  The  conncil  may  act,  notwithstanding  any  vacancy  in  their  body, 
so  that  the  number  be  not  reduced  below . 

52.  A  member  of  the  council  may  at  any  time  resign  by  giving  notice 
in  wi'iting  to  the  secretary. 

5;1  If  any  member  of  the  council  shall,  without  leave  of  absence 
gxanted  by  the  council,  be  absent  from  the  meetings  thereof  for  a  period 

of  consecutive  months,  the  council  may  declare  his  office  vacant, 

and  he  shall  thereupon  cease  to  be  a  member  of  the  council. 


Powers  of  the 
society  vested 
in  council. 


Powers  of  the  Cottntil. 

54.  The  mauagemt  of  the  business  and  the  control  of  the  society  shall 
be  vested  in  the  council,  who,  in  addition  to  the  powers  and  authorities 
by  these  articles  expressly  conferred,  upon  them,  may  exercise  all  such 
powers  and  do  all  such  acts  and  things  as  may  be  exercised  or  done  by 
the  society,  and  are  not  hereby  or  by  statute  expressly  directed  or  required 
to  be  exercised  or  done  by  the  society  in.  general  meeting. 

As  to  the  effect  of  this  clause,  see  supra,  p.  151. 


Specific  powers 
vested  in 
council. 


55.  Without  prejudice  to  the  general  powers  conferred  by  clause  54 
hereof,  the  council  shall  have  power  : 

(a.)  To  take  or  lease  any  buildings  for  the  pposes  of  the  society. 

(&.)  To  pchase  or  otherwise  acquire  any  books,  newspapers,  and 
documents. 

(f.)  To  determine  from  time  to  time  the  conditions  on  which  members 
may  use  the  lil)rary  and  remove  books,  but  so  that  no  member 
not  practising  within  the  town  of  N.  shall  be  allowed  to  remove 
any  book  from  the  library. 

(d.)  To  determine  what  persons  (if  any),  not  being  members  of  the 
society,  shall  be  allowed  to  use  the  library  (without  the  privilege 
of  removing  books),  and  to  make,  and  from  time  to  time  repeal 
and  alter,  rules  and  conditions  as  to  such  user. 

{e.)  To  appoint  and  from  time  to  time  remove  a  librarian,  and  to  fix 
the  remuneration  to  be  pd  for  his  services. 

(/.)  To  delegate,  subject  to  such  conditions  as  they  think  fit,  any  of 
their  powers  to  committees,  consisting  of  such  member  or 
members  of  the  council  as  they  think  fit,  and  to  make  such 


FOEMS.  170 

regulations  as  to  the  proceedings  of  such  committees  as  may   Form  119. 
seem  expedient.  " 

See  supra,  p.  148. 

(g.)  To  peton  Parhamt  in  the  name  of  the  society. 
(/i.)  To  enter  into  such  contracts  and  do  all  such  acts  and  things  as 
they  think  expedient  for  the  pposes  of  the  society. 

Accounts. 

5G.  The  council  shall  cause  true  accounts  to  be  kept  of  the  monies  Accounts, 
received  and  expended  by  the  society,  and  the  matters  in  respect 
of  which  such  receipt  and  expenditure  takes  place,  and  of  the 
assets,  credits,  and  liabihties  of  the  society. 

57.  The  accounts  shall  be  closed  on  the day  of  in  each  Annual 

year,    and  a  balance-sheet    containing    a    summary  of    the  ppty    and 
liabilities  of  the  society  on  that  day  shall  be  made  out. 

58.  Seven  days  before  each  annual  meeting  the  accounts  for  the  year  Accounts  to 

ending  with  the day  of last  preceding  such  meeting,  with  all  ^^  audited. 

vouchers  and  receipts,  and  also  the  balance-sheet,  shall  be  examined  l)y 

the  auditors,  who  shall  report  thereon  to  such  meeting. 

50.  A  printed  copy  of  the  balance-sheet   shall,  previously  to  each  Copy  of 

annual  meeting,  be  sent  to  the  members  in  the  manner  in  which  notices  [jala^ice-sbeet 
"'  _  to  be  sent  to 

are  hereinafter  directed  to  be  givefi.  members. 


Exclusion. 

GO.  Any  member  who  shall  fail  in  the  observance  of  any  regulation  of  Exclusion, 
the  society,  or  of  any  regulation  or  order  of  the  council,  or  who  shall  in 
the  judgmt  of  the  council  have  been  guilty  of  any  act  or  practice  or 
conduct  calculated  to  bring  discredit  on  the  profession  or  to  lower  its 
status,  may  be  excluded  fi'om  the  society  by  an  extraordinary  resolution. 
Such  member  shall  have  seven  clear  days'  notice  sent  him  to  attend  the 
meeting.  Any  member  so  excluded  shall  thereupon  cease  to  be  a  member, 
but  without  prejudice  to  Clause  12  hereof. 

Any  irregularity  in  the  proceedings  will  invalidate  the  expulsion.  Fisher  v. 
Keane,  11  C.  D.  353.  As  to  whether  such  a  rule  can  be  introduced  by  amend- 
ment, Dawkins  v.  Antrohus,  23  Sol.  J.  681;  Labouchere  v.  Earl  of  WharncUffe, 
13  C.  D.  3iG ;  see  also  Russell  v.  Russell,  It  C.  D.  133. 


XOTICER. 

CI.  A  notice  may  be  served  by  the  society  upon  any  member  either  Notices, 
personally  or  by  sending  it  througli  the  post  in  a  prej^aid  letter  addi'essed 
to  such  member  at  his  registered  address. 

02.  Any  notice  sent  by  post  shall  be  deemed  to  have  been  served  at  As  to  sending 
the  time  when  the  letter  containing  the  same  would  be  delivered  in  the  ^If^^^  ^' 

N  2 


180 


AETICLES    OF    ASSOCIATION. 


Form  119.  ordinary  course  of  the  post ;  and  in  proving  such  service  ifc  shall  be 
sufficient  to  prove  that  the  letter  containing-  the  notice  was  pro])crly 
addressed  and  put  into  the  post-office. 

Names,  addresses,  and  descriptions  of  subscribers. 

Dated  the day  of . 

WiTNP^.ss  to  the  above  signatures. 

,of . 


Form  120. 

Power  to 
acquire 

business. 


]\Il,SCELLANEOUS    CLAUSES. 

For  nse  in  Articles  of  Associafion. 
1 .  The  directoi's  may  pchase  or  acquire  upon  such  terms  and  under 
such  stipulations  as  to  guarantee  or  otherwise,  as  may  be  agreed  upon, 
the  business  and  goodwill  of  the  sd  Messrs. ■,  as  the  same  now  stands. 

The  above  was  the  authority  given  to  the  directors  of  Overend,  Gurney,  &  Co., 
Limited.  "  There  is  the  largest  possible  power  given  to  these  gentlemen  to  buy 
this,  which  was,  in  itself,  a  speculative  business,  and  they  are  to  do  it  entirely 
in  such  manner  as  they  may  think  expedient."  Per  Lord  Hatherley,  Overend, 
^c,  v.  Gurney,  1  Ch.  715. 

It  was  held  that  the  above  power  authorised  the  directors  to  purchase  the 
business  and  to  undei'take  the  liabilities  thereof.  "  I  have  no  doubt  whatever," 
said  Lord  Chelmsford,  "  that  the  words  '  as  the  same  now  stands '  must  mean 
that  the  business  is  to  be  taken  over  with  its  credits  and  liabilities,  that  is,  as 
the  biisiness  appeared  in  the  books  of  the  comimny."  S.  C,  5  H.  L.  505.  How- 
ever it  is  usual  in  emj)owering  directors  to  acquire  a  business,  exjjressly  to  refer 
to  the  liabilities. 

Form  121.        The  directors  may  pchase,  or  otherwise  acquire,  and  undertake,  upon 
Another  power  ^^^ch  terms  and  conditions  as  they  think  fit,  the  business  of  a -,  now 


to  acquire 
business. 


carried  on  by  Messrs. 


&  Co.,  at  ,  and  all,  or  any  pt  of  the 


ppty  and  liabilities  of  the  sd  firm  in  connection  with  the  sd  business. 


Form  122.       The  directors  may,  upon  such  terms  and  conditions  as  they  think  fit, 

acquire  all  or  any  pt  of  the  land  and  buildings  known  as  the 

Works,  at  ,  and  of  the  j^Iant,  machinery,  fixtures,  stock-in-trade, 

chattels,  and  eflfccts,  rights  and  privileges,  in  or  about  the  sd  works  or 

otherwise  belonging  to ,  in  connection  with  the  business  carried  on 

there  by  him,  and  undertake  all  or  any  of  the  contracts  and  liabilities  of 
the  sd ,  in  relation  to  the  sd  business. 


Another  ijower 
to  acquire 
business. 


Form  123.  1-  The  holders  of  the  preference  shares  shall  be  entled  to  receive  out 
Prefereiice^iml  ^'^  ^^^^  profits  of  the  CO,  as  a  first  charge,  a  cumulati\e  preferential  divi- 
deferred  dend  at  the  rate  of  10  p.  c.  p.  a.  on  the  amount,  for  the  time  l)eing,  pd 

.s  ares.  ^^^  ^^^  j.j^^  preference  shares  held  by  them  respi\ely. 

2.  Tlie  holders  of  the  deferred  shares  shall  l)e  entled  to  receive  out  of 
the  profits  of  the  co,  as  a  second  charge,  a  cumulative  dividend  at  the  rate 
of  5  [).  c.  p.  a.  on  the  nominal  amount  of  the  defeiTcd  shares  held  by  them 
respivcly. 


FOEMS. 


181 


?>.  The  surplus  profits  shall  be  applicable  to  the  paymt  of  dividend  to  Form  123. 
the  members  in  proportion  to  the  nominal  amount  of  the  capital  held      '       — 
by  them  respively. 

Where  the  original  capital  of  a  company  is  divided  into  several  classes  of 
shares,  it  is  usual  to  insert  clauses  defining  the  rights  of  the  holders  in  the  pro- 
fits, near  the  beginning  of  the  articles  of  association,  or  justbefoi'e  the  dividend 
clauses. 

These  clavises  are  usually  entitled  "  Preference  and  Deferred  Shares,"  or  as 
the  case  may  be,  and  generally  commence  with  a  statement  as  to  the  capital, 
e.  g.,  "  Of  the  capital  mentioned  in  the  memorandum  of  association,  10,000 
shares  shall  be  called  preference  shares,  and  10,000  shall  be  called  deferred 
shares,"  and  then  proceed  to  define  the  rights  of  the  holders.  But  where  the 
division  is  effected  by  the  memorandum  of  association,  the  clauses  defining 
the  rights  of  the  shareholders  can  be  intituled,  "  Appropriation  of  Profits,"  and 
inserted  near  the  beginning  of  the  articles,  or  just  before  the  dividend 
clauses. 

As  to  the  form  of  the  dividend  clause  wliere  there  are  preference  shares,  <S:c., 
see  sinjra,  p.  157,  note  to  clause  IIG. 

In  defining  the  rights  of  the  holders  of  preference  shares  in  regard  to 
dividends,  it  is  necessary  to  ascertain  whether  the  dividend  payaVjle  to  them  is 
to  be  non-cumulative,  i.  e.,  contingent  on  the  profits  of  each  year  being  sufficient, 
or  cumulative,  i.  e.,  so  that  the  deficiency  of  any  one  year  is  to  be  made  uji  out 
of  the  profits  of  subsequent  years. 

Prima  facie  where  one  class  of  shares  is  to  carry  a  dividend  at  a  fixed  rate  in 
preference  to  another  class,  the  dividend  will  be  cumulative,  and  therefore 
payable  out  of  the  profits  whenever  accrxiing.  Thus  in  Webb  v.  Earlc,  20  Eq. 
557,  jjreferencft  shares  had  been  created  with  a  preferential  dividend  of  lOL 
per  cent,  per  annum  payable  half-yearly,  and  it  was  held,  that  if  the  profits 
of  any  year  were  insufficient  to  pay  the  dividend  in  full  to  the  preference 
shareholders,  the  deficiency  ought  to  be  made  good  out  of  subsequent  profits. 
See  also  Henry  v.  Great  Northern  Ry.  Co.,  5  De  G.  &  J.  COG ;  G  W.  K.  87  ; 
Matthews  v.  Great  Northern  Ry.  Co.,  28  L.  J.  Ch.  375;  7  W.  R.  233;  and 
Forms  214,  215,  infra. 

Sometimes  the  word  "  cumulative  "  is  used  as  above  ;  and  there  can  be  little 
doubt  that  the  addition  of  that  word  precludes  any  question  as  to  the  right  of 
the  holders  of  preference  shares  to  be  paid  arrears  of  dividends  out  of  jjrofits 
whenever  accruing.     See  Webb  v.  Earle,  ubi  supra. 

Not  uncommonly  where  a  dividend  is  intended  to  be  cumulative  it  is 
expressly  j^rovided  that  the  holders  of  the  shares  shall  have  "  a  right  to  resort 
to  the  profits  of  subsequent  years  to  make  up  any  deficiency  in  the  dividend 
of  preceding  years." 

If  a  dividend  is  intended  to  be  non-cumulative,  the  clause  must  either  be  so 
framed  that  there  is  no  room  to  contend  that  it  is  cumulative,  infra.  Form  12G, 
or  it  may  be  expressly  provided  that  there  shall  be  no  right,  in  case  of 
deficiency,  to  resort  to  subsequent  profits. 

As  to  giving  a  preference  in  the  distribution  of  assets,  see  Form  140. 

1.  Of  the  shares  mentd  in  the  memorandum  of  association  of  the  co,    Form  124. 

10,000  shall  Ije   called  preference  shares,  and  10,000  shall   be  called  ~'^  : 

^  rreierence  and 

ordinary  shares.  ordinary 

2.  The  holders  of  the  preference  shares  shall  be  entled  to  receive  out  ^li^^'es- 
of  the  profits  of  each  year  a  preferential  dividend  for  such  year  at  the 

rate  of  6  p.  c.  p.  a.  on  the  amount  for  the  time  being,  pd  up  on  the 
preference  shares  held  by  them  res[)ively. 


182 


AETICLES    OF    ASSOCIATION. 


Form  124.  3.  The  surplus  profits  in  each  year  shall  be  applicable  to  the  paynit  of 
dividends  to  the  holders  of  the  ordinary  shares  in  proportion  to  the 
capital  pd  up  thereon. 

Sometimes  where  preference  shares  are  to  carry  a  non-cumulative  dividend 
it  is  thouofht  better  to  frame  the  chiuse  as  above  rather  than  expressly  to 
provide  that  there  shall  be  no  claim  for  arrears  in  case  of  deficiency  in  the 
profits  of  any  one  year. 

Form  125.        1-  The  holders  of  the  guaranteed  preference  shares  shall  he  entled  to 

'Z        ~    ,       a  cumulative  preferential  dividend  of  8  p.  c.  p.  a.  on  the  nominal  amount 
•jTuaranteed  ^  ,    1 1  ,  •      i 

preference  and  of  the  preference  shares  held  by  them  respu'cly. 

ordinary  .).  Hubject  to  the  rights  of  the  holders  of  the  guaranteed  preference 

shares,  the  holders  of  the  ordinary  shares  shall  be  entled  to  be  pd,  out  of 

the  surplus  profits  in  each  year,  a  dividend  at  the  rate  of  10  p.  c.  p.  a. 

for  that  year  on  the  amount  credited  as  pd  up  on  the  ordinary  shares 

held  by  them  respively. 

3.  The  residue  of  the  surplus  i)rofits  in  each  year  shall  belong  to  and 
]>e  divided  among  the  members  in  proportion  to  the  shares  held  by  them 
respively. 

■1.  If  at  any  time  before  the day  of ,  18 — ,  the  dividends  pd 

to  the  holders  of  the  guaranteed  preference  shares  in  respect  thereof 
(wheth(.'r  the  same  shall  have  been  pd  out  of  the  profits  of  the  co,  or 

under  the  sd  agrcemt  of  the day  of ),  shall  amount  in  the 

aggregate  to  80  p.  c.  on  the  nominal  amount  thereof,  then,  and  in  such 
case,  the  preference  hinbefore  gi\en  to  such  shares  shall  cease  to  exist, 
and  thenceforth  the  guaranteed  preference  and  ordinary  shares  shall  rank 
2)riri  /iass2(  for  dividend. 

It  is  hj  no  means  uncommon  to  insert  such  a  clause  as  above. 


Contingent 
termination 
of  preference. 


Form  126. 

Clause  ]iro- 
viding  for 
approjn-iation 
of  profits. 


As  already  mentioned  {sujrra,  p.  181),  the  provisions  as  to  payment  of  pre- 
ferential dividends  are  sometimes  inserted  in  a  clause  introduced  in  that  part 
of  the  articles  which  relates  to  the  payment  of  dividends.  The  two  following 
clauses  are  examples  : — 

1.  The  profits  of  the  co  made  during  the  financial  year,  or  other  period 
comprised  in  the  accounts  sulanitted  to  the  ordinary  general  meeting  in 
each  year,  shall  be  applical)le  in  oi'der  of  priority  and  manner  following  : — 

First.  To  the  paymt  of  a  cumulative  preferential  dividend  at  the  rate 
of  (I  yi.  c.  p.  a.  on  the  capital  pd  nj)  on  the  A.  shares. 

Secondly.  To  the  paymt  of  a  dividend  for  such  period  at  the  like  rate 
on  the  capital  pd  up  on  the  B.  shares. 

Thirdly.  Tho  residue  shall  be  applicable  to  the  paymt  of  a  further 
dividend  on  the  pd-up  capital,  or  may  l)e  carried  to  reserve,  or  otherwise 
dealt  with  as  the  co  in  general  meeting  determines. 


Form  127.        First.  To  the  paymt  of  a  divideiul  at  the  rate  of  G  p.  c.  p.  a.  for  such 
Another  fonnT  period  on  the  capital  pd  up  on  the  preference  shares. 


FOEMS.  ]  83 

Secondly.  Of  the  surplus  sucli  pt  (not  exceeding  10  p.  c.)  as  the   Form  127. 
directors  determine  may  be  carried  to  the  reserve  fund  to  be  established        ' 
psuant  to  clause  hereof. 

Thirdly.  The  balance,  or  a  competent  pt  thereof,  shall  be  applicable 
to  the  paymt  of  a  dividend  for  such  period  on  the  cajjital  pd  up  on  the 
deferred  shares  at  the  rate  of  5  p.  c.  i).  a. 

Fourthly.  "What  remains  shall  be  applicable  [as  in  Form  12G]. 

First.  To  the  paymt  of  a  preferential  dividend  for  such  period  at  the   Form  128, 
rate  of  Ki  p.  c.  p.  a.  on  the  capital  pd  up  on  the  shares  (other  than  the  Another^         ^ 
founders'  shares). 

Secondly.  Of  the  surplus,  four-fifths  shall  be  applicable  to  the  paymt 
of  further  dividend  on  such  pd-up  capital. 

Thirdly.  The  residue  shall  be  divided  rateably  among  the  holders  of 
the  founders'  shares. 

First  and  secondly,  as  in  Form  12G.  Form  128a. 

Thirdly.  Of  the  surplus,  10  p.  c.  shall  be  pd  to  the  directors  as  further 
reniuneratiou  for  their  services  ;  20  p.  c.  shall  be  caiTied  to  the  redemp- 
tion fund  to  be  estabhshed  as  afsd ;   and   70  p.  c.  [as  in  Form  12G, 

The  profits,  &c.,  as  in  Form  12G. 

1.  In  paying-  to  the  members  a  dividend  for  such  year  or  other  period  Form  129. 
at  the  rate  of  G  p.  c.  p.  a.  on  the  pd-up  capital.  Special  form. 

2.  Of  the  residue,  three-fourths  shall  be  divided  among  such  of  the 
members  holding  not  less  than  five  shares  each  as  shall  have  contributed 
to  the  co's  business  during  such  year  or  other  period  rateably  in  pro- 
portion to  the  amount  of  the  ft-eight  contributed  by  them  respively. 

3.  What  remains  shall  be  divided  among  the  members  in  proportion 
to  the  nominal  amount  of  the  shares  held  by  them  respively. 

Occasionally  profits  are  divided  so  as  to  j^ive  members  an  inducement  to  deal 
"with  the  company.      This  plan  has  sometimes  been  adopted  with  great  success. 


Redemption  of  Preference  Shares. 

(1)  Each  member  entled  to  any  of  the  preference  shares  mentd  in  the   Form  130. 
Memorandum  of  Association  of  the  co  shall  hold  the  same  subject  to  R^cjoinption 
redemption  out  of  the  profits  of  the  co  applicable  to  that  ppose  as  herein- 
after provided, 

Eedemption  out  of  profits  does  not  of  course  amount  to  a  reduction  of  capital, 
and  would  not  seem  open  to  objection,  but  it  may  be  desirable  to  make  the  re- 
demption one  of  the  objects  of  the  company. 

(2)  The  redemption  of  the  sd  i)reference  shares  shall  be  effected  by  Redemptiou 
the  operation  of  a  redemption  funj^irwirich  shall  be  created  and  formed  ^"'"^ 


184 


ARTICLES    OF    ASSOCIATION. 


Form  130.  by  means  of  the  appropriation  to  that  ppose  of  the  proportion  of  net 
profits  of  the  co  specified  in  clause hereof. 

The  dh'cctors  shall  invest  the  monies  from  time  to  time  carried  to  the 
credit  of  the  redemption  fund  in  or  upon  such  investmts  as  they  think 
proper,  with  full  power  from  time  to  time  to  ^'ary  sucli  investmts  and  to 
realize  the  same  as  occasion  may  require. 

{ij)  AVhenever  the  sd  redemption  fund  shall  amount  to  200/.  or  more 
the  directors  shall  apply  the  same  in  the  re;lemption  of  so  many  of  the 
sd  preference  shares  as  it  shall  be  competent  to  redeem  upon  the  footing 
that  the  sum  payable  for  the  redemption  of  each  share  shall  be  10  p.  c. 
beyond  the  amount  pd  up  thereon. 

(4)  The  parlar  preference  shares  to  be  redeemed  on  each  occasion 
shall  be  selected  by  lot  in  such  manner  as  the  directors  may  determine. 

(5)  The  selection  shall  be  made  on  such  day  and  at  such  place  as  the 
directors  shall  appoint,  notice  thereof  being  given  in  some  London  daily 
newspaper  at  least  one  week  previously,  and  every  holder  of  a  preference 
share  may  attend  thereat. 

(G)  Forthwith,  after  such  selection,  notice  of  the  distinguishing 
numbers  of  the  preference  shares  drawn  for  redemption  shall  be  given 
to  the  members  in  manner  hereinafter  provided,  or,  if  the  directors  think 
fit,  l:)y  advertiscmt  in  a  London  daily  newspaper. 

(7)  Where  any  preference  share  has  been  selected  for  redemption,  the 
CO  shall,  at  any  time  after  the  expiration  of  one  month  after  the  selection, 
upon  demand  in  writing  by  the  person  entled  to  such  share,  pay  to  him 
the  redemption  monies,  and  in  the  meantime  such  share  shall  cease  to 
carry  dividends,  and  to  confer  a  right  of  voting,  or  any  other  rights  of 
membership,  but  the  directors  may  ai)ply  any  such  redemption  monies  in 
satisfon^jro  fanfo  of  any  lien  the  co  may  have  on  the  share  under  clause 
hereof. 

(8)  Upon  paymt  of  the  redemption  monies  payable  in  respect  of  any 
preference  share,  the  same  shall,  if  recpiired  by  the  directors,  be  sur- 
rendered or  transferred  as  they  shall  direct. 

(9)  If  the  redemption  monies  payable  in  respect  of  any  share  are  not 
by  reason  of  the  co's  default  pd  within  fourteen  days  after  such  demand 
as  afsd,  they  shall  carry  interest  till  paymt  at  the  rate  of  5  p.  c.  y>.  a., 
but  in  no  other  case  shall  such  monies  carry  interest. 

(10)  Every  preference  share  redeemed  in  manner  afsd  shall  thence- 
forth be  deemed  the  p])ty  of  the  co,  and  may  be  sold,  re-allotted,  or 
otherwise  disposed  of  by  the  directors  as  they  think  fit. 


Investment. 


Application  to 
redemption 
and  bonus  of. 
£10  per  cent. 


Selection. 


How  selection 
made. 


Notice  of 
drawing. 


Payment  at  the 
registered 
office  or 
bankers  of  the 
company. 


Surrender. 


Interest. 


Effect  of 
redemption. 


Form  131.        There  shall  be  jid  to  the  directors  as  remuneration  for  theii-  services, 

the  sum  of /.  per  annum,  and  also  the  share  of  surplus  jii-ofits  specified 

in  clause hereof,      [See  Form  128.]      Such  remuneration  shall  be 


Share  of 
surplus  profits 
to  directors. 


divided  among  them  in  such  manner  as  the  directors  may  fi-om  time  to 
time  agree  [or  in  such  manner  that  the  chairman's  sliares  shall  be  double 
that  of  any  other  director]. 


FORMS.  ]85 

There  shall  be  pd  to  the  directors  as  remuneration  for  their  services,   Form  132. 
-/.  per  annum,  and  also,  in  each  year  in  which  a  dividend  is  paid  to  commission  to 


the  members  exceeding  (I  p.  c.  on  the  amoimt  pd  up  on  the  shares  held  directors, 
by  them,  the  sum  of  [Kjc]/.,  in  respect  of  every  one  p.  c.  of  dividend  so 
pd  in  excess  of  G  p.  c. 

The  directors  shall  receive,  by  way  of  remuneration,  in  each  year  the   Form  133. 

sum  of  /.,  and  such  further  sum  as  may  be  equal  to  5  p.  c.  of  the  j)^g^.tyj.7 to 

net  profits  of  the  co  in  that  year,  payable  out  of  the  surplus  remaining  have  percent- 
after  paymt  of  the  preferential  dividend  to  the  holders  of  A  shares,  and  ^'-^^  °'^  i'™*^**- 
of  a  di\"idend  of  7  p.  c.  p.  a.  on  the  amount  pd  u[)  on  the  ordinary 
shares,  so  far  as  such  surplus  will  extend,  and  all  such  remuneration 
shall  be  divided  so  that  there  shall  be  given  to  the  chairman  of  the 

directors  equal  pts  thereof,  and  to  each  of  the  other  directors  one 

oqual  pt  thereof. 

The  directors  may,  from  time  to  time,  a})point  a  general  manager  of   Form  134. 
the  business  of  the  co,  and  may  remove  and  discharge  any  such  person  Mana'^ers. 
and  appoint  a  substitute,  and  the  directors  shall  take  such  security  (if 
any)  for  the  good  conduct  and  satisfactory  discharge  of  the  duties  of 
such  general  manager  as  they  shall  in  their  discretion  think  sufficient. 

See  Evans  v.  Coventry,  8  De  G.  M.  &  G.  835  ;  25  L.  J.  N.  S.  Ch.   191,  as  to 
taking  security.     For  appointment  of  firm  see  Form  270. 

1.  The  sd shall  be  the  first  manager  of  the  co,  and  shall  not;  Ije  Form  135. 


removable  from  office  otherwise  than  by  his  own  resignation  or  by  special  Appointment 
resolution,  and  shall,  while  holding  that  office,  devote  the  whole  of  his  of  first 
time  and  attention  to  the  business  of  the  co,  and  shall  exercise  and  per-         ° 
form  the  functions  and  duties  prescribed  by  the  directors. 

2.  The  salary  of  the  sd  as  such  manager  shall  be  at  the  rate  of 

/.  i)er  annum,  payable  monthly,  on  the  first  day  of  every  month : 

he  shall  also,  while  holding  such  office,  be  entled  to  a  commission  equal 
to  5  p.  c.  on  the  net  profits  of  the  co  in  each  year  in  which  the  same 

shall  be  more  than  sufficient  to  pay  a  dividend  at  the  rate  of p.  c 

on  the  pd-up  capital  of  the  co. 

3.  The    decloii    of    the    directors,  as    to    the    amount  of    the    net 
X^rofits  of  the  co  in  each  year,  shall  be  conclusive  as  against  the  sd . 

1.  The  directors  may,  from  time  to  time,  provide  for  the  managemt  Form  136. 
of  the  attairs  of  the  co  abroad  in  such  manner  as  they  shall  think  fit,  and  L,jeai  mana^e- 
the  provisions  contd  in  the  four  next  fohowing  clauses  sliall  be  without  ment. 
l^rejudice  to  the  general  powers  conferred  by  this  clause. 

2.  The  directors  from  time  to  time,  and  at  any  time,  may  establish  Local  Board. 
any  Local  Boards  or  agencies  for  managing  any  of  the  affairs  of  the  co 

abroad,  and  may  appoint  any  persons  to  be  members  of  such  local  Board, 
or  any  managers  or  agents,  and  may  fix  their  remuneration. 

3.  The  directors  from  time  to  time,  and  at  any  time,  may  delegate  to 


186 


ARTICLES    OF    ASSOCIATION. 


Delegation. 


Powei-s  of 
attorney. 


Form  136.  any  person  so  appointed  any  of  the  powers,  authorities,  and  discretions 
for  the  time  being  vested  in  the  directors,  and  may  authorise  the  mem- 
bers for  tlic  time  being  of  any  such  Local  Board  or  any  of  them  to  fill  up 
any  vacancies  therein,  and  to  act  notwithstanding  vacancies,  and  any 
such  appointmt  or  delegation  may  be  made  on  such  terms  and  subject  to 
such  conditions  as  the  directors  may  think  fit,  and  the  directors  may  at 
any  time  remo\'e  any  person  so  appointed,  and  may  annul  or  vary  any 
such  delegation. 

4.  The  directors  may  at  any  time,  and  from  time  to  time,  by  power 
of  attorney  under  the  seal,  appoint  any  })ersons  to  l)e  the  attornies  of  the 
CO  for  such  pposes  and  with  such  powers,  authorities,  and  discretions 
(not  exceeding  those  vested  in  or  exercisable  by  the  directors  under  these 
I)resents),  and  for  such  period  ami  subject  to  such  conditions  as  the 
directors  may  from  time  to  time  think  tit,  and  any  such  appointmt  may 
(if  the  directors  think  fit)  be  made  in  favour  of  the  members  or  any  of 
the  members  of  any  Local  Board  estal)lished  as  afsd,  or  in  favour  of  any 
CO,  or  of  the  members,  directors,  nominees,  or  managers  of  any  co  or 
firm  or  otherwise  in  favour  of  any  fluctuating  body  of  persons,  whether 
nominated  directly  or  indirectly  by  the  directors,  and  any  such  power  of 
attorney  may  contain  such  provisions  for  the  protection  or  convenience 
of  persons  dealing  with  such  attornies  as  the  directors  think  fit. 

In  carrying  on  business  abroad  it  is  generally  found  that  a  wide  power 
of  attorney  under  the  company's  common  seal  is  requisite,  and  hence  the 
importance  of  providing  accordingly.  The  same  instrument  can  authorise  the 
attornies  to  exercise  the  powers  of  the  Acts  below  mentioned,  and  to  exercise 
any  other  jjowers  which  it  may  seem  desirable  to  delegate  to  them.  See 
s.  55  of  the  Act  of  18G2,  and  s.  8  of  the  Conv.  Act,  1882,  45  &  4G  Vict. 
c.  39. 


Sub-delega- 
tion, 


Seals  Act. 


Form  136a, 


Colonial 
register. 


5.  Any  such  delegates  or  attornies  as  afsd  may  be  authorised  liy  the 
directors  to  sub-delegate  all  or  any  of  the  powers,  authorities,  and  discre- 
tions for  the  time  being  vested  in  them. 

G.  The  CO  may  exercise  the  powers  conferred  by  the  Companies'  Seals. 
Act,  LS04,  and  such  powers  shall  accordingly  be  vested  in  the  directors. 
And  the  co  may  cause  to  be  kept  in  any  colony  in  which  it  transacts 
business  a  branch  register  of  members  resident  in  such  colony,  and  the 
word  "  colony  "  in  this  clause  shall  have  the  meaning  assigned  thereto 
by  the  Companies  (Colonial  llegisters)  Act,  18S;>  ;  and  the  directors  may 
fi'om  time  to  time  make  such  provisions  as  they  may  think  fit  respecting- 
the  keeping  of  any  such  branch  register. 

The  following  is  a  more  elaborate  form  : — ■ 

] .  The  CO  may  cause  to  be  kept  in  Queensland,  or  in  any  other  colony 
in  Australasia  in  which  it  transacts  business,  a  branch  register  or  registers. 
of  members  resident  in  Queensland,  or  in  such  other  colony  as  the  case 
may  be.  And  the  directors  may  from  time  to  time  ai)])oint  an  authority 
in  (Queensland,  or  in  any  other  colony  in  which  a  branch  register  is  kept, 
to  a])prove  of  or  reject  transfers,  and  to  direct  the  registration  of  ap- 
proved transfers  in  the  branch  register  of  such  colony,  and  every  such 


FOEMS.  187 

authority  may,  iu  respect  of  transfers  or  other  entries  proposed  to  be  Form  136a. 
rejjistercd  iu  the  lu'anch  register  for  which  such  authority  is  appointed, 
exercise  all  the  jiowers  of  the  directors  iu  the  same  manuer  and  to  the 
same  extent  aud  effect  as  if  the  directors  themselves  \Yere  actually  present 
in  the  colony  and  exercised  the  same. 

'1.  Subject  to  the  provisions  of  the  Companies  (Colonial  Eegisters)  Act, 
1H>:>3,  and  to  the  foregoing  pro\isions,  the  directors  may,  from  time  to 
time,  make  such  provisions  as  they  may  think  tit  respecting  the  keeping 
of  such  branch  reu-ister  or  registers. 


Any  mtge,  bond,  or  other  security  bearing  the  common  seal  of  the  co  Form  137. 
aud    issued    for   ^■alual)le    conson,  shall   be    l)iuding   on   the  co,  not-  -^yi^.^^^ 
Avithstauding  any  irregularity  touching  the  authority  of  the  directors  to  securities 
issue  the  same  [and  no  person  taking  any  such  security  shall  be  bound  be^leemed 
to  ascertain  that  the  amount  then  due  l)y  the  co  on  mtge  or  other  se-  valid. 
curities  d()es  not  exceed  one-half  of  the  nominal  capital  of  the  co]. 


The  words  in  brackets  will  of  course  be  modified  to  suit  the  circumstances. 
The  above  clause  is  occasionally  inserted.  In  re  Patent  File  Co.,  G  Ch.  85. 
But  it  would  seem  to  be  merely  the  expression  of  the  rule  settled  in  a  series  of 
cases,  of  which  Royal  British  Bank  v.  2\irquand,  G  E.  &  B.,  is  a  leading  one. 
The  rule  is  that  where  a  company  is  regulated  by  an  Act  of  Parliament, 
general  or  special,  or  by  deed  of  settlement  or  memorandum  and  articles  of 
association  registered  in  some  public  office,  persons  dealing  with  the  directors 
are  bound  to  read  the  Act  and  registered  documents,  and  to  see  that  the  pro- 
posed dealing  is  not  inconsistent  therewith,  but  that  is  all :  they  need  not 
inquire  into  the  regularity  of  the  proceedings.  They  may  assume  that  all  is 
being  done  regularly.  Thus  where  the  articles  give  power  to  borrow  with  the 
sanction  of  a  general  meeting,  a  lender  need  not  inquire  whether  the  resolution 
has  been  passed.  Royal  British  Bank  v.  Turquand,  ubi  su])ra ;  Agar  v.  Athenwum 
Society,  3  C.  B.  N.  S.  725  ;  G  W.  E.  277.  And  see  Ex  parte  Eagle  Co.,  4  K.  &  J. 
549  ;  G  W.  E.  779,  as  to  execution  of  policies.  In  re  Land  Credit  of  Ireland,  4 
Ch.  4G0,  it  was  held  that  as  the  company  had  power  to  accept  bills,  certain  ac- 
ceptances could  not  be  impeached  on  the  ground  that  they  were  irregularly 
issued.  So  also  it  has  been  held  that  the  pviblic  is  entitled  to  assume  that  a 
person  ostensibly  acting  as  the  comjmny's  agent  or  director  has  been  duly  ap- 
pointed. Smith  V.  Hull  Glass  Co.,  11  C.  B.  897;  In  re  County  Life,  5  Ch,  288  ; 
Mahoney  v.  East  Holyford  Co.,  L.  E.  7  H.  L.  8G9. 

But  it  would  seem  that  a  i>erson  is  not  entitled  to  assume  that  a  special 
resolution  has  been  passed.     Irvine  v.  Union  Bank,  2  App.  Cas.  379. 


No   pchase,   sale,   conti-act,  or   agreemt,   made   or   entered   into   by  Form  138. 
the  directors,  or  act  done  l»y  the  directors,  to  which  the  assent  of  the  ^^^^^  ^^^^^^g^ 
CO  iu  general  meeting  shall  be  given,  shall  be  afterwards  impeached  or  to  by  company 
objected  to  by  reason  that  the  same  is  not  within  or  is  opposed  to  the  "^pej^ched  as 
business  and  objects  of  the  co,  or  that  a  dissolution  of  the  co  may  be  uJfra  vires. 
therel)y  rendered  necessary,  or  on  any  other  ground  whatsoever. 

A  clause  to  the  above  effect  is  sometimes  inserted.  See  Marshall  v.  Glamorgan 
Iron  and  Coal  Co.,  7  Eq.  137,  in  which  Giffard,  V.  C,  assumed  that  it  was  valid. 
But  having  referred  to  the  Ashhury  Co.  v.  Riche,  L.  E.  7  H.  L.  G53,  it  seems  ex- 


188 


AETIC'LES    OF    ASSOCIATION. 


Form  138.    tremely  doubtful  whether  it  would  be  held  valid.   See  also  Hope  v.  International 
"  Financial  Society,  •!■  C.  Div.  327  ;  and  Garden  Gully,  ^c,  Co.  v.  McLister,  1  Aiip. 

C'as.  54. 

Form  139.       In   cunsoii    of   tlic  great  labour,   expenses,  and  risk   ^vhicli   A.  B., 

Remuneration   ^''^^^  ^^  ^^^^  subscribers  of  the  inenioranduni  of  association,  has  incurred 

of  promoter,      and  been  put  to  in  and  relating  to  the  promotion  and  formation  of  the 

CO,  and  in  registering  the  memorandum  and  articles  of  association  thereof, 

the  CO  shall  when  and  so  soon  as shares  shall  have  been  allotted, 

pay  to  the  sd  A.  B.,  his  exs,  ads,  or  assigns,  the  sum  of  ■ /. 

See  Croshey  v.  Bank  of  Wales,  1  Giff.  317  ;  Madrid  Bank  v.  PeUy,  7  Eq.  U2  ; 
Englejield  Colliery  Co.,  8  C.  Div.  388. 

As  between  the  company  and  a  person  who  is  not  a  party  to  the  articles  of 
association  such  a  clause  as  the  above  does  not  amount  to  a  contract  on  which 
the  company  could  be  sued  at  law.  Melbado  v.  Porto  Allegro  Ry.  Co.,  L.  R.  9 
C.  P.  503  ;  Eley  v.  Positive  Government  Co.,  1  Ex.  Div.  88.  But  if  the  company 
adopts  and  takes  the  benefit  of  the  acts  of  its  promoters  they  may,  at  any  rate 
Avhere  the  regulations  provide  that  they  shall  be  paid  out  of  the  funds  of  the 
company,  have  an  equitable  right  to  be  paid  accordingly.  Thus  in  Terrell  v. 
Hutton,  i  H.  L.  1093,  the  regulations  (Art.  41)  jDrovided  that  a  sufficient  part 
of  the  funds  should  be  a^jpropriated  in  payment  of  the  pi-eliminary  exi^enses, 
and  the  solicitor  who  had  acted  anterior  to  and  after  the  formation  was  held 
entitled  to  prove.  The  Lord  Chancellor  said,  "  Quite  independently  of  the 
Winding-up  Acts  it  has  been  long  ago  established  (Lord  Cottenham  eniinciated 
the  proposition  m.any  times)  that  these  companies  caiinot  take  the  benefit  of 
what  has  been  done  by  those  who  have  formed  them  without  thereby  incurring 
responsibilities  to  those  persons.  Now  that  observation,  which  has  been 
extended  to  a  very  great  class  of  cases  inider  the  Winding-up  Acts,  aj^plies  in 
my  mind  pre-eminently  to  a  solicitor  who  is  doing  that  without  which  the 
company  never  could  have  existed.  It  is  an  old  and  well-known  principle  in 
the  law  that  when  one  person  does  an  act  as  an  agent  for  some  other  person, 
though  then  quite  unknown  to  that  other,  if  afterwards  the  latter  adopts  the 
Act,  it  is  just  the  same  as  if  he  had  authorised  it  from  the  beginning.  I 
think  that  principle  will,  with  the  aid  of  the  44th  article,  enable  your 
Lordships  safely  and  distinctly  to  come  to  a  conclusion  here.  I  am  not  certain 
that  it  would  not  have  been  sufficient  without  that  article.  That  which  was 
done  for  the  necessary  purpose  of  forming  the  company,  or  in  the  jirosecution 
of  the  necessary  business  of  the  company  after  it  was  formed,  is  to  be  treated 
as  a  debt  of  the  company  ab  initio."  Lord  Brougham  and  Lord  St.  Leonards 
concurred,  the  latter  saying  i^iter  alia  that  "  any  argument  to  show  that  there 
would  be  a  difficulty,  in  the  way  of  recovering  at  law  ...  is  of  itself  a 
sufficient  reason  for  giving  the  party  relief  in  equity  if  the  demand  constitutes 
an  equitable  debt."  And  see  Hereford  Engineering  Co.,  2  C.  Div.  021  ;  and 
comj^are  with  Empress  Engineering  Co.,  IG  C.  Div.  125 ;  and  Ex  parte  Pearce  4' 
Co.,  32  W.  R.  131.  Tlie  two  last-mentioned  cases  go  to  show  that  where  a 
company  agrees  with  A.  [e.g.  the  vendor]  to  pay  B.  a  sum  of  money  [e.g.  for 
the  preliminary  expenses]  B.  cannot  sue  the  company  for  the  amount  under  the 
contract,  though  he  may  be  entitled  to  make  some  claim  on  the  footing  that 
the  company  has  taken  the  benefit  of  his  services.  Terrell  v.  Hutton  was  not 
cited  in  these  cases.  But  B.  can  sue  if  a  trust  can  be  made  out,  e.g.  if  it  is 
declai-ed  that  A.  is  trustee  for  B.  Empiress  Engineering  Co.,  ubi  supra.  And 
see  3Iurray  v.  Flavell,  49  L.  T.  G90. 


Form  139a.      Every  director,  manager,  auditor,  trustee,  member  of  a  committee, 
Secret  claufiT  ^^^^^^'>  Servant,   agent,  accountant,    or  other  person  employed  in  the 


FOEMS.  189 

business  of   the  co,  sliall,  l)efore  entcriiiti:  upon  his  duties,  sign  a  de-  Form  139a. 
clon,  pledging  himself  to  observe  a  strict  secrecy  respecting  all  trans-  "~ 

actions  of  the  co  with  the  customers  and  the  state  of  accounts  with 
individuals  and  in  matters  relating  thereto  and  shall  ])y  such  declon, 
pledge  himself  not  t(j  reveal  any  of  the  matters  which  may  come  to  his 
knowledge  in  the  discharge  of  his  duties,  except  when  required  so  to  do 
by  the  directors  or  by  any  meeting,  or  by  a  court  of  law,  or  l)y  the  person 
to  whom  such  matters  relate,  and,  except  so  far  as  may  be  necessary,  in 
order  to  comply  with  any  of  the  provisions  in  these  presents  contained. 

The  surplus  assets  of  the  co  upon  the  winding  up  thereof  shall  be  Form  140. 
applied  :  first,  in  repaying  to  the  holders  of  the  sd  preference  shares  the  hq^  surplus 
amount  pd  up  thereon  ;  then,  in  repaying  to  the  holders  of  the  defen'ed  ''^^^ets  to  be 
and  other  shares  the  amount  pd  up  on  such  shares  ;  and  the  residue  (if 
any)  shall  be  divided  among  the  meml)ers  in  proportion  to  the  nominal 
amount  of  the  capital  held  by  them  respively. 

In  the  absence  of  special  provision  the  holders  of  preference  shares  stand  in  a 
winding  up  on  a  level  with  the  holders  of  the  ordinary  shares.  In  re  London 
Indiaruhher  Co.,  o  Eq.  519  ;  Griffith  v.  Bagot,  G  C.  D.  511.     See  sujyra,  p.  16G. 

If  the  CO  shall  be  wound  up  the  surplus  assets  shall  be  applied,  in  the  Form  141. 
first  place,  in  repaying  to  the  holders  of  the  A.  shares  the  amount  pd  up  p,-eference  to 
thereon,  and  the  residue  shall  l)elong  to  the  holders  of  the  B.  shares.         liolders  of  A. 

shares. 

In  the  event  of  the  co  being  wound  up  the  surplus  assets  remaining   Form  142. 
after  the  return  of  the  whole  of  the  pd-up  capital  shall  belong  as  to  nine-  Founders'       ' 
tenths  to  the  holders  of  the  shares  other  than  the  founders'  shares,  and  as  shares, 
to  the  residue  to  the  holders  of  the  founders'  sliares. 

In  the  event  of  the  co  being  wound  up  the  surplus  assets  thereof  shall  Form  143. 
be  applied  :  first,  in  repaying  to  the  holders  of  the  shares  other  than  g    gj^j_  * 

those  to  be  issued  pursuant  to  the  said  agreemt  of  the day  of , 

the  full  amount  pd  up  on  the  shares  held  by  them  respectively ;  secondly, 
in  paying  to  the  holders  of  the  shares,  to  be  issued  pursuant  to  the  sd 
agreemt,  the  amount  credited  as  pd  up  thereon  ;  and  the  residue  (if  any) 
of  such  surplus  assets  shall  belong  to  and  be  di\"ided  among  the  members 
in  proportion  to  the  nominal  amount  of  capital  held  by  them. 


EESOLUTIONS. 


mTRODUCTORY  NOTES. 

Ordinary  tj\^^^  rc<2:ulatioiis  of  a  company  <2;ciiera]]y  provide  that  divers  acts  shall 

he  done  hy  the  company  in  general  meeting — e.ff.,  that  officers  shall  be 
appointed  at  the  ordinary  general  meeting,  or  that  the  directors  may 
borrow  money  or  declare  a  dividend  or  convert  shares  into  stock  with 
the  consent  of  the  company  in  general  meeting.  In  such  cases  the  act 
will  be  done  on  the  consent  given  by  a  resolution  of  the  memljers 
present  in  person,  or  by  proxy,  where  ju-oxies  are  allowed,  at  a  general 
meeting  of  the  company.  AVhether  the  meeting  should  be  an  ordinary 
or  an  extraordinary  one  must  depend  on  the  nature  of  the  business  and 
the  regulations  \_stq)ra,  p.  135].  The  meeting  must  have  been  duly 
called  [sup-a,  p.  1?)4].  A  proper  quorum  must  be  present  [s7q/m, 
p.  1:55].  If  a  poll  is  duly  demanded  regard  must  be  had  to  the  number 
of  votes  to  which  each  member  is  entitled  by  the  regulatious  of  the 
company. 

With  regard  to  "special"  and  "extraordinary"  resolutions: — It  is 
extremely  common  to  provide  by  the  regulations  that  certain  acts  shall 
only  be  done  by  special  resolution  of  the  company,  or  l>y  extraordinary 
resolution.  And,  moreover,  the  Acts  of  18(!2  and  1SG7  require  or 
eual)le  a  company  to  do  various  things  by  special  or  extraordinary 
resolutions,  as  will  be  seen  in  the  note?  to  the  following  resolutions.  See 
also  index  under  "  Special  Resolution." 

It  will  be  convenient  here  to  state  what  is  meant  by  the  expressions 
special  resolution  and  extraordinary  resolution  respectively  ; — 

j^j  ,     .  1.  As  to  a  special  resolution  :  Section  51  of  the  Act  of  18C2  provides 

passing  .spcuiul  that  t 

resolution. 

"  A  resolution  passed  by  a  company  under  this  Act  shall  he  deemed  to  be 
special  whenever  a  resolution  has  been  passed  by  a  majority  of  not  less  than 
three-fourths  of  such  members  of  the  company  for  the  time  being  entitled  ac- 
cordino-  to  the  regulations  of  the  company  to  vote,  as  may  be  present  in  person 
or  by  proxy  (in  cases  where  Vjy  the  regulations  of  the  company  proxies  are  al- 
lowed), at  any  general  meeting  of  which  notice  specifying  the  intention  to  jn-o- 
pose  such  resolution  has  been  duly  given,  and  such  resolution  has  been  confirmed 
by  a  majority  of  such  members  for  the  time  being  entitled  according  to  the 
regulations  of  the  compauy  to  vote,  as  may  be  present  in  person  or  by  proxy  at 
a  subsequent  general  meeting,  of  which  notice  has  been  duly  given,  and  held 
at  an  interval  of  not  less  than  fourteen  days,  nor  more  than  one  month  from  the 


INTRODUCTORY  NOTES.  Iq^ 

date  of  the  meeting  at  -which  such  resolution  was  first  passed  :  at  any  nieetin'^ 
mentioned  in  this  section,  unless  a  poll  is  demanded  by  at  least  five  memVjcrs. 
a  declaration  of  the  chairman  that  the  resolution  has  been  carried  shall  be 
deemed  conclusive  evidence  of  the  fact,  without  proof  of  the  number  or  pro- 
portion of  the  votes  recorded  in  favour  of  or  against  the  same :  notice  of  any 
meeting  shall,  for  the  purposes  of  this  section,  be  deemed  to  be  duly  given  and 
the  meeting  duly  held,  whenever  such  notice  is  given  and  meeting  held  in 
manner  prescribed  by  the  regulations  of  the  company  :  in  computing  the  ma- 
jority under  this  section  when  a  poll  is  demanded,  reference  shall  be  had  to  the 
number  of  votes  to  which  each  member  is  entitled  by  the  regulations  of  the 
company. 

Not  less  than  fourteen  days  in  the  above  section  means  fourteen  clear  days. 

'2.  As  to  an  extraordinary  resolution  :  Section  121)  of  the  Act  of  18G2  What  is  an 
provides  that  :—  extraordinary 

^  resolution. 

"  For  the  purposes  of  this  Act  any  resolution  shall  be  deemed  to  be  extraor- 
dinary which  is  passed  in  such  manner  as  would,  if  it  had  been  confirmed  by  a 
subsequent  meeting,  have  constituted  a  special  resolution  as  hereinbefore 
defined." 

As  regards  the  quorum  of  a  meeting  to  pass  a  special  or  extraordinary  Quorum. 
resolutioTv,  the  section  provides  that  the  meeting  shall  he  deemed  to  be 
duly  held  whenever  it  is  held  in  manner  prescribed  by  the  regulations, 
and  it  follows  that  such  quorum  as  the  regulations  prescribe  must  be 
present.     Camhrian  Co.,  23  AV.  R.  405  ;  31  L.  T.  X.  S.  773. 

Sometimes  the  quorum  of  a  general  meeting  provided  by  the  articles 
is  so  large  that  all  the  existing  members  if  assembled  would  not  consti- 
tute a  quorum,  e.g.,  where  the  quorum  is  to  consist  of  a  fixed  numl)er  of 
members,  say  1<),  holding  a  fixed  proportional  of  capital,  e.g.,  ](),00(>/., 
and  the  company  proves  abortive.  But  in  such  case  it  is  conceived 
that  as  it  is  impossible  to  comply  with  the  clause  it  becomes  inoperative, 
and  section  52  of  the  Act  applies.  Brick  ^-  Stone  Co.,  W.  X.,  ]S78,  14U; 
22  S.  J.  ()25.     That  section  is  as  follows  : — 

In  default  of  any  regulations  as  to  voting  every  member  shall  have  one  vote, 
and  in  default  of  any  regulations  as  to  summoning  general  meetings  a  meeting 
shall  be  held  to  be  duly  summoned,  of  which  seven  days'  notice  in  writing  has 
been  served  on  every  member  in  manner  in  which  notices  are  required  to  be  served 
by  the  Table  marked  A.  in  the  first  schedule  hereto,  and  in  default  of  any  regula- 
tions as  to  the  persons  to  summon  meetings  five  members  shall  be  competent  to 
summon  the  same,  and  in  default  of  any  regulations  as  to  who  is  to  Vje  chairman 
of  such  meeting  it  shall  be  competent  for  any  person  elected  by  the  members 
present  to  preside. 

Where  a  question  is  put  by  the  chairman,  it  is  usual,  in  the  first  Show  of  hands, 
instance,  to  take  a  show  of  hands,  and,  unless  the  regulations  otherwise 
provide,  this  course  should  be  adopted.  In.  re  Horhury  Bridge  Co.,  11 
€.  Div.  109.  And  it  appears  from  this  case  that  upon  a  show  of  hands 
2)roxies  are  not  to  be  regarded^ — uuless,  indeed,  the  regulations  otherwise 
provide— and  the  number  of  hands  only  is  to  be  counted.  See  also  The 
Queen  v.  Government  Stock  Co.,  3  Q.  B.  D.  442  ;  Pulbrook  v.  New  Civil 
Servile,  2G  AV.  R.  11. 

As  to  notices  convening  meetings  to  pass  resolutions,  whether  special,  Notices  of 
extraordinary,  or  otherwise,  see  infra,  Form  183,  ct  seq^.  meetmgs. 


192 


KESOLUTIONS. 


Notices  to 
registrar. 

Chainium's 
declaration. 


As  to  notices  to  be  given  to  registrar  of  joint-stock  companies  upon 
passing  of  special  resolutions,  see  infra,  Form  10."»,  el  soq. 

The  regulations  generally  provide  tliat  where  a  i)oll  is  not  demanded, 
the  chairman's  declaration  shall  ])e  sufficient  or  conclusi\'e  evidence. 
See  si/jiir/,  p.  loC.  And  it  will  be  observed  that  in  the  case  of  a  si)ecial 
or  extraordinary  resolution  the  Act  makes  the  declaration  conclusive. 
Sec  section  5]  al)ovc. 

It  has  been  held  that  the  word  "conclusi\"e"  operates  for  all  purposes, 
e.g.,  so  as  to  exclude  evidence  that  there  was  no  quorum.  Re  Brynmmrr 
Coal  Co.,  W.  N.,  1877,  45.  However,  too  much  reliance  must  not  be 
placed  on  that  decision,  for  section  'A  merely  jnakes  the  declaration  con- 
clusive when  it  is  made  "at  any  meeting  mentioned  in  this  section,"  and  it 
seems  more  than  doubtful  whether  a  meeting,  at  which  a  quorum  is  not 
jireseut,  or  not  duly  convened,  can  ]:»e  considered  such  a  meeting.  How- 
ever, it  is  expedient  to  ol)tain  the  declaration  in  all  cases  where  a  poll  is 
not  duly  demanded. 

Where  the  declaration  is  made  at  a  meeting  duly  called  and  con- 
stituted, it  is  no  doubt  conclusive  that  the  requisite  majority  has  voted 
in  favour  of  it,  and  accordingly  where  the  regulations  merely  say  that  the 
declaration  is  to  be  "sufficient  evidence,"  th^i  mQim'&j^rimd  facie  evidence. 
Re  Horlnn'H  Ptmhje  Co.,  vVi  siqyra. 


EE  SOLUTIONS. 


That  the  articles  of  association  be  altered  in  manner  following  : —  Form  144. 

ia.)  Article  5  shall  be  cancelled.  77;^     ~.       , 

^     -'  Alteration  of 

(b.)  In  article  7  the  word  "fonr"  shall  be  snl)stituted  for  the  word  articles. 

"seven." 
(c.)  The  following  article  shall  be  substituted  for  Article  20,  namely, 

"  The  CO  may,"  &c. 
(d.)  The  following-  article  shall  lie  inserted  after  Article  24,  namely, 

'2ia,  "  The  directors  may,"  &c. 
(f.)  The  directors  may  at  any  time,  &c.,  and  Article  30  shall  l)c 

modified  accordingly. 

Section  50  of  the  Act  provides  thiit : — 

"  Subject  to  the  provisions  of  this  Act,  and  to  the  conditions  contained  in  the 
memorandum  of  association,  any  company  formed  under  this  Act,  may,  in 
general  meeting  from  time  to  time,  by  passing  a  special  resolution  in  manner 
hereinafter  provided,  [see  supra,  p.  190],  alter  all  or  any  of  the  regulations  of 
the  company  contained  in  the  articles  of  association  or  in  the  table  marked  A. 
in  the  first  schedule,  where  such  table  is  applicable  to  the  company,  or  make 
new  regulations  to  the  exclusion  of  or  in  addition  to  all  or  any  of  the  regu- 
lations of  the  company,  and  any  regulations  so  made  by  special  resolution  shall 
be  deemed  to  be  regulations  of  the  company  of  the  same  validity  as  if  they 
had  been  originally  contained  in  the  articles  of  association,  and  shall  be 
subject  in  like  manner  to  be  altered  or  modified  by  any  subsequent  special 
resolution." 

A  company  cannot  by  special  resolution  authorise  or  ratify  an  act  ultra  vires, 
in  the  sense  being  beyond  the  objects,  of  the  company.  Ashhury,  ^'c,  Co.  v. 
Rlche,  L.  E.  7  H.  L.  653  :  Hope  v.  International  Financial  Society,  4  C  Div.  327. 
Nor  can  it  by  special  resolution  infringe  the  rights  of  any  member,  e.g.,  by 
creating  preference  shares  where  there  is  no  power  (Hutton  v.  Scarborough  Cliff 
Hotel  Co.,  13  W.  R.  1059),  or  by  converting  shares  of  one  class  into  shares 
of  another,  whei'e  there  is  no  power ;  or  by  imposing  any  further  liability 
(Teasdale's  case,  9  Ch.  54),  or  by  capitalizing  arrears  of  dividends;  or  by 
depriving  any  member  of  the  right  to  vote,  that  being  an  individual  right  of 
property.  Pender  v.  Liishington,  (j  C.  D.  70  ;  see  Harper  v.  Paget,  infra,  p.  197  ; 
Fox's  case,  6  Ch.  170  ;  Bird  v.  Bird's  Co.,  9  Ch.  358.  But  with  these  restric- 
"tions  a  company  can  alter  its  regulations  as  it  thinks  fit.  Walker  v.  London 
Tramways  Co.,  12  C.  D.  705,  notwithstanding  a  prohibition  therein  contained. 

Where  a  resolution  is  intended  to  authorise  or  effect  something  not  authorised 
by  the  regulations  as  they  stand,  it  is  desirable,  in  the  first  place,  to  alter  the 
regulations  so  as  to  give  the  necessary  authority  and  then  to  exercise  that 
authority.  See  Imperial  Hydropathic  Co.  v.  Hampson,  23  C.  Div.  1,  where  Cotton, 
L.  J.,  said,  "  In  my  opinion  it  is  an  entire  fallacy  to  say  that  because  there  is 
power  to  alter  the  regulations,  you  can  by  a  resolution  which  might  alter  the 

O 


194 


EESOLUTIONS. 


Form  144.    regulations,  do  tliat  which  is  contrary  to  the  regulations  as  they  stand  in  a 

-particular  and  individual  case."     See,  however,  what  Mellish,  L.  J.,  said  in 

Teasdale's  case,  9  Ch.  51.  Accordingly  where  it  is  desired  to  remove  an  officer 
and  the  articles  give  no  power,  first  pass  a  special  i-esohition  to  the  effect  that  the 
company  in  general  meeting  may  remove  any  officer,  and  then  by  ordinary  resolu- 
tion exercise  the  power.  There  wovild  not  seem  to  be  any  objection  to  passing  the 
resolution  for  removal  at  the  meeting  at  which  this  special  resolution  is  confirmed, 
or  at  a  meeting  held  immediately  afterwards.  So  when  the  articles  restrict  the 
borrowing  powers,  and  it  is  desired  to  borrow  in  excess,  first  the  articles  must 
be  alterecVand  then  the  authority  given. 


Form  145. 

New  regula- 
tions. 


New  articles 
adopted. 


That  the  regulations  coiitd  in  the  printed  documt  snhmitted  to  the 
meetino-,  and  for  the  ppose  of  identification  subscribed  by  the  cliairman 
thereof,  be  and  the  same  are  hby  approved,  and  tliat  such  reg'ulations  be 
and  they  are  hby  adopted  as  the  regulations  of  the  co,  to  the  cxclusiou 
of  all  the  existing  regulations  thereof. 

Where  a  large  number  of  alterations  have  to  be  made,  it  is  generally  more 
convenient  to  adopt  new  regulations.  And  this  course  may  be  expedient  where 
the  wisdom  of  the  alterations  is  apparent  to  the  board ;  but  it  is  not  desired 
to  point  out  the  exact  nature  of  the  proposed  alterations.  Where  this  course 
is  adopted,  a  copy  of  the  new  regulations  should  lie  for  inspection  at  the 
office,  and  the  notice  convening  the  meetings  should  state  the  fact ;  and  in. 
some  cases  it  may  be  deemed  exjjedient  to  send  out  printed  copies  with  the 
notices.  Where  it  is  desired  that  the  meeting  shall  be  at  liberty  to  amend 
the  draft  at  the  meeting,  the  notice  miist  be  specially  framed,  e.  g.,  let  it  con- 
vene the  meeting  (1)  to  consider  and,  if  thought  fit,  approve  the  di-aft  new 
regulations  which  will  be  submitted  to  the  meeting  ;  and  in  the  event  of  the 
approval  thereof,  with  or  without  modifications,  (2)  to  consider  and,  if  thought 
fit,  to  pass  a  resolution  to  the  effect  "  that  the  new  regulations  already  approved 
by  this  meeting,  and  for  the  purpose,"  &c.,  as  in  Form  145. 

When  new  regulations  are  adopted,  care  must  be  taken  not  to  insert  any 
claiise  not  warranted  by  the  memorandum  and  original  regulations,  e.  g.,  if 
there  was  originally  no  power  to  create  preference  shares,  the  power  cannot  be 
taken  by  special  resolution.     See  infra. 


Form  146.        That  the  regulations  contd  in  Table  A,  in  so  far  as  they  apply  to 

^r  7^7 — ; — ^,  this  CO,  be  altered  as  follows  : — ■ 
Alodification  of 

Table  A.  1.  In  clause,  itc. 


Form  147. 

Increase  of 
ctiintal. 


That  the  capital  of  the  co  be  increased  to  50,000/.,  by  the  creation  of 
2,000  new  shares  of  5/.  each. 

The  power  to  increase  the  cajjital  is  generally  made  exerciseable  by  the 
company  in  general  meeting,  i.  e.,  by  a  simple  resolution,  or  by  special  or 
extraordinary  resolution,  or  by  the  comijany  simply.  In  the  last  case  the 
directors  can  generally  exercise  the  power  under  their  general  powers.  See 
p.  151,  suj)ra. 

See  further  as  to  inci-ease  of  capital  and  creation  of  jireference  shares,  sui^-a, 
p.  181,  et  seq. 

Whether  the  capital  be  increased  by  resolution  of  the  company,  or  by 
resolution  of  the  directors,  notice  to  the  registrar  must  be  given  within  fifteen 
days  from  the  date  of  the  passing  of  the  resolution,  or  in  default  the  company 
and  every  director  and  manager  will  be  liable  to  a  penalty  of  5L  per  day.  See 
further,  infra,  p.  217,  s.  31  of  the  Act. 

Upon  increasing  the  capital,  it  is  not  necessary  to  purport  to  alter  the  memo- 
randum of  association.     Camjibell's  case,  9  Ch.  21. 


POEMS.  195 

As  to  the  Issue  of  Preference  Shares.  Forni  147. 

Power  to  increase  capital  can,  as  already  mentioned  [supra,  p.  129],  be 
taken  by  special  resolution  where  the  articles  do  not  contain  the  necessary 
authority. 

But  the  new  shares  cannot  be  given  any  preference  or  priority  over  the 
shares  in  the  original  capital,  unless  the  memorandum,  or  articles  as  originally 
drawn,  contains  the  necessary  authority. 

If  both  memorandum  and  articles  of  a  company  are  silent  on  the  subject, 
it  is  an  implied  condition  that  the  members  shall  be  entitled  to  rank  equally 
as  regards  dividend  without  any  preference  or  priority  between  themselves, 
and  as  s.  12  of  the  Act  (see  sujjra,  p.  70),  prohibits,  with  certain  exceptions, 
any  alteration  of  the  conditions  contained  in  the  memorandum,  this  condition 
is  unalterable.  The  implication,  however,  does  not  arise  when  the  memo- 
randum provides  for  the  issue  of  preference  shares ;  and  it  is  rebutted  where 
the  articles  registered  at  the  same  time  as  the  memorandum  award  pre- 
ferential rights,  or  authorise  the  issue  of  preference  shares.  Hutton  v.  Scar- 
borough Cliff  Hotel  Co.,  2  Dr.  &  Sm.  51 1  (1)  ;  13  L.  T.  57 ;  13  W.  K.  1059  ; 
Melhado  v.  Hamilton,  29  L.  T.  N.  S.  3G1 ;  21  W.  S.  G19  ;  Harrison  v.  Mexican 
Railway  Co.,  19  Eq,  3G8  ;  Bangor,  t\'c.,  Co.,  20  Eq.  59;  Pulhrook  v.  Neiv  Civil 
Service  Co.,  2G  W.  R.  11. 

Not  to  be  able  to  issue  preference  shares  is  often  found  a  serious  incon- 
venience and  loss  to  a  company. 

And  it  is  now  well  settled  that  a  power  to  issue  preference  shares  inserted 
in  the  articles  is  sufficient  (Harrison  v.  Mexican  Ry.  Co.,  vhi  supra),  the  practice 
which  at  one  time  was  not  uncommon  of  refen-ing  to  the  issue  of  preference 
shares  in  the  capital  clause  of  the  memorandum  has,  to  a  considerable  extent 
been  abandoned.    See  supra,  p.  70. 

Power  in  the  articles  to  increase  the  capital  "  by  the  issue  of  new  shares  of 
such  nominal  amount,  and  on  such  conditions  as  such  resolution  may  deter- 
mine," is  not  sufficient  to  authorise  the  issue  of  preference  shares.  Melhado  v. 
Hamilton,  21  W.  E.  G19  ;  29  L.  T.  N.  S.  3G1. 

But  where  the  articles  aiithorise  an  increase  of  capital  by  the  issue  of  new 
shares  "  with  such  rights  and  privileges,  or  with  such  restrictions  and  on  siich 
terms  and  conditions  as  the  company  in  general  meeting  directs,"  preference 
shares  can  be  created.     Wehb  v.  Earl,  20  Eq.  5.5G. 

Where  there  was  power  to  increase  the  capital  in  siich  manner,  and  to  1>e 
issued  with  and  subject  to  such  rules,  regulations,  privileges  and  conditions  as 
the  company,  &c.,  should  think  fit,  the  Master  of  the  Rolls  held  that  the  words 
"privileges  and  conditions  "were  words  of  extensive  meaning,  and  fully  autho- 
rised the  issue  of  new  shares  with  a  preference  both  as  regards  dividends  and 
in  a  winding  up.    Harrison  v.  Mexican  Ry.  Co.,  itbi  supra. 

Of  course  a  company  may  only  have  power  to  give  a  preference  as  regards 
dividends.  But  it  may  be  very  desirable,  especially  Avhere  new  shares  are  to  be 
issued,  to  provide  that  the  holders  thereof  shall  be  repaid  their  capital  out  of 
the  assets  in  priority  to  the  other  members.  See  the  observations  on  this  point 
of  Malins,  V.-C,  Eclipse  Gold  Mining  Go.,  17  Eq.  190. 

Whether  the  company  can  confer  this  privilege  must  depend  on  the  con- 
struction of  the  articles.  Power  for  the  company  to  increase  its  capital  "  upon 
such  terms,  and  either  with  or  without  special  privileges  or  2>references  to  the 
holders  of  the  shares  in  such  increased  capital  as  it  may  from  time  to  time 
deem  expedient,"  enables  it  to  give  a  preference  as  regards  capital  as  well  as 
dividends.     In  re  Bangor,  dij'c.,  Co.,  20  Eq.  59. 

But  there  is  a  great  distinction  between  creating  shares  having  a  jireference 
over  those  already  issued,  and  in  creating  shares  with  deferred  rights.  And 
it  would  seem  that  shares  with  only  a  deferred  right  to  dividend  may  be 
issued  without  any  special  authority  in  the  articles  as  originally  framed,  for 
the  persons  who  take  such  shares  will  be  bound  by  their  contract,  and  so  will 
their  transferees.     Ashton  Vale  Iron  Company  v.  Abbot,  W.  N>  187G,  119. 

o  2 


19G 


EESOLUTIONS. 


Form  148. 


Preference 
shares. 


The  followiiifif  arc  sonic  examples  of  resolutions  creatin<(  preference 
shares  of  ditt'erent  kinds  : 

Tliat  the  capital  of  the  co  he  increased  to  25,000/.  l)y  the  creation  of 
2,(H»0  new  shares  of  5/.  each,  to  be  called  preference  shares,  and  to  confer 
on  the  holders  thereof  the  rij^ht  to  a  fixed  cumulative  preferential  divi- 
dend at  the  rate  of  (!  p.  c.  p.  a.  on  the  amount  for  the  time  being  pd  up 

on  such  shares  [which  dividend  shall  be  i)ayable  half-yearly  on  the  • 

day  of and day  of j. 


Another  form. 


Form  149.        ^'  That  the  capital  be  increased  to  30,000/.  Ijy  the  creation  of  10,0(>0 
new  shares  of  1/.  each. 

2.  That  the  new  shares  be  called  preference  shares,  and  that  the 
holders  thereof  l)e  entid  to  a  preferential  dividend,  at  the  rate  of  5/.  p.  c. 
p.  a.,  payable  out  of  the  jirofits  of  each  year,  without  any  right  in  case  of 
deficiency  to  resort  to  the  ])rofits  of  subsequent  years. 

3.  That  in  the  event  of  the  co  being  wound  up,  the  holders  of  the  sd 
preference  shares  shall  be  entld  to  have  the  surplus  assets  of  the  co 
applied  in  the  first  place  in  repaying  to  them  the  amount  pd  up  on  the 
preference  shares  held  by  them  respively,  l)ut  that  the  residue  of  such 
surplus  assets  shall  belong  to  and  be  divided  among  the  other  members 
of  the  CO. 


Form  150. 

Variation. 


The  following  may  be  used  instead  of  Clause  2  above  : — 
That  the  new  shares  shall  be  called  ]ireference  shares,  and  that  the 
holders  thereof  shall  be  entld  to  be  pd  out  of  the  profit  of  each  year  a 
preferential  dividend  for  such  year  at  the  rate  of  5/.  p.  c. 

It  is  sometimes  preferred  because  it  does  not  expressly  call  attention  to  the 
contingency  of  the  profits  being  deficient.  In  either  case  the  dividend  will  be 
non-ciimnlative.     See  supra,  p.  195. 


Form  151. 

A.  and  B. 
shares. 


1.  That  the  capital  of  the  co  be  increased  to  100,000/.  by  the  creation 
of  3,000  new  shares  of  10/.  each. 

2.  That  the  new  shares  be  called  A.  shares,  and  that  the  holders  thereof 
be  entld  to  a  cumulative  preferential  dividend  at  the  rate  of  fi  p.  c.  p.  a. 
on  the  nominal  amount  of  such  shares,  which  dividend  shall  he  payable 
half-yearly,  on  the day  of and day  of . 

3.  That  the  co  shall  be  entld  to  create  further  new  shares  to  rank  in 
all  reB\icctfi  pari  jxissu  with  the  said  A.  shares,  l)ut  so  that  the  aggregate 
amount  of  the  A.  shares  for  the  time  being  issued,  and  of  such  further 
new  shares,  shall  not  at  any  one  time  exceed  one-half  the  amount  of  the 
pd-up  capital  of  the  co. 

Where  it  is  desired  to  reserve  such  a  power  as  above,  express  jjrovision  should 
be  made  accordingly,  otherwise  the  company  will  not  be  permitted  [unless 
indeed  the  articles  contain  a  clause  as  above,  Form  117,  cl.  45a.j  to  derogate 
from  the  rights  of  the  holders  of  the  preference  shares.  Thus  in  the  recent 
oase  of  the  Argentine  Tramways  Co.,  Limited,  the  capital  was  divided  into  pre- 
ferred and  deferred  shares.     The  latter  (100,000L)  had  been  issued  as  paid-up 


FORMS. 


197 


to  the  vendor.     Arrangements  were  made  by  the  directors  for  the  surrender  of    Form  151. 

the  deferred  shares  in  consideration  of  20,000L  new  preferred  shares  to  rank  in  ^^ — 

all  respects  equally  with  the  original  preferred  shares.  Pursuant  to  this  ar- 
rangement a  resolution  for  the  creation  of  the  new  shares  was  unanimously 
passed  at  an  extraordinary  meeting  of  the  company,  and  a  further  meeting  for 
its  confirmation  was  called.  Meantime  the  action  of  Harper  v.  Paget  was 
brought  by  one  of  the  holders  of  original  preferred  on  behalf  of  himself  and  all 
other  the  preferred  shareholders  in  the  company  against  Lord  Alfred  Paget 
and  other  directors  and  the  company,  seeking  for  an  injunction  to  prevent  the 
carrying  of  the  resolutions  into  effect.  And  the  injunction  was  granted.  See 
"Orders,"  infra. 

Sometimes  it  is  considered  better  to  give  an  implied  power  to  modify  the 
rights  attached  to  the  holders  of  preference  shares,  e.g.,  "  No  new  share  entitled 
to  rank  jMri  passu  with  or  to  any  preference  over  the  said  A.  shares  shall  [before 

the day  of ]  be  issued  by  the  company  without  the  consent  in  wi-iting 

of  the  holders  of  two-thirds  of  the  A.  shares  for  the  time  being  outstanding." 


4.  That  tlic  A.  shares  shall  not  confer  any  right  of  votiiiu-  at  any 
j:,'oneral  meeting  of  the  co,  nor  shall  they  (|nalify  any  person  to  be  a 
director  of  the  co. 

").  That  in  the  event  of  the  co  being  wonnd  up,  the  surplus  assets 
thereof  shall  be  api)lied  in  the  first  place  in  repaying  to  the  holders  of 
the  A.  shares,  and  of  any  other  shares  entld  to  rank  pi/ri  passu  with 
them,  the  full  amount  pd  up  thereon,  and  that  subject  as  afsd,  such 
surplus  assets  shall  l)elong  to  and  be  divided  among  the  other  members 
of  the  CO. 

0.  That  the  directors  be  and  they  are  hby  authorised  to  issue  the  sd 
4,o(i0  shares  to  such  persons,  and  to  be  pd  for  by  such  instalmts  or 
otherwise  as  they  think  fit,  and  without  being  bound  to  offer  the  same  or 
any  of  them  to  existing  members  of  the  co. 

1.  That  the  capital,  &c.  Form  152. 
'2.  That  the  sd  new  shares  be  called  "  new  preference   guaranteed  Guaranteed 

shares,"  and  that  the  holders  thereof  be  entled  to  a  cumulative  ])vc-  P»"efereuce 

.  .         shares. 

ferential  dividend  at  the  rate  of  12  p.  c.  p.  a.,  on  the  amount  for  the  time 
being  pd  up  on  such  shares,  such  dividend  to  be  payable  in  priority  to 
all  other  dividends  except  those  payable  to  the  holders  of  the  existing 
preference  shares. 

3.  That  in  the  event  of  the  co  being  wound  up  [siquv,  p.  lltC, 
iUKfa fis  mv fa n (US']. 


Sometimes   a   power  to  convert   preference  into   ordinary  shares  is   given.    Form  153. 
Thus :— 

Any  holder  of  such  shares  may  give  the  co  six  calendar  months' 
notice  in  writing  of  his  desire  to  convert  the  preference  shares  held  by 
him  or  any  pt  thereof,  into  ordinary  shares,  and  upon  the  expiration  of 
such  notice  the  same  shall  be  deemed  to  l)e  converted  accordingly,  and 
shall  thenceforth  confer  the  same  rights  and  privileges  as  the  other 
ordinary  shares  in  the  co's  capital. 


198 


EESOLUTIONS. 


Conversion  of 
shares  into 
stock. 


Form  154.        That  the  lo,(iOO  shares  in  the  capital  of  the  co  which  have  been  issued 
and  fully  pd  up  be  converted  into  stock. 

By  section  12  of  the  Act  of  18G2,  any  company  limited  by  shares  may  so  far 
modify  the  conditions  contained  in  its  memorandum  of  association,  if  authorised 
so  to  do  by  its  regiilations  as  originally  framed  or  as  altered  by  special  resolu- 
tion as  (inter  alia)  to  convert  its  paid-up  shares  into  stock. 

The  articles  generally  empower  a  company  to  convert  any  of  its  paid-up 
shares  into  stock.  Sometimes  the  sanction  of  the  company  in  general  meeting 
or  by  special  or  extraordinary  resolution  is  required,  but  where  this  is  not  the 
case  the  directors  can  generally  exercise  the  power  under  such  a  clause  as  lit 
of  Form  117. 

As  to  notice  of  conversion  to  be  given  to  Registrar  of  Joint- Stock  Companies, 
see  infra. 


Form  155.        That  the  whole  of  the  preference  shares  in  the  capital  of  the  co  be 
T^Tj^'^;  converted  into  stock,  to  be  called  preference  stock. 


Form  156. 

Consolidation 
of  shares. 


1 .  That  the  shares  in  the  capital  of  the  co  be  consolidated  in  such 
manner  that  every  five  of  the  existing  shares  shall  constitute  one  r>/. 
share,  upon  which  the  sum  of  oZ.  shall  be  credited  as  having  been  pd  up. 

•J.  That  the  existing  certificates  of  shares  be  called  in  by  the  directors 
and  cancelled,  and  that  new  certificates  be  issued,  subject  to  the  provi- 
sions contd  in  clauses of  the  articles  of  association. 

Section  12  of  the  Act  of  18(32  permits  any  company  limited  by  shares  so  far 
to  modify  the  conditions  contained  in  its  memorandum  of  association,  if 
authorised  to  do  so  l)y  its  regulations  as  originally  framed,  or  as  altered  by 
special  resolvition  in  manner  hereinafter  mentioned,  as  to  {inter  alia)  consoli- 
date and  divide  its  capital  into  shares  of  larger  amount  than  its  existing  shares. 
It  is  usual  to  insert  the  necessary  authority  in  the  ai'ticles,  (see  supra.  Form 
117,)  although  it  is  but  seldom  exercised.  Even  though  not  inserted,  a  single 
special  resolution  is  sufficient. 


Form  157. 


Subili 


That  each  of  the  existing  10/.  shares  be  di\ided  into  two  5/.  shares, 
upon  each  of  which  the  sum  of  41.  shall  be  credited  as  pd  up. 

Sections  21  and  22  of  the  Act  of  18G7  provide  as  follows : — 

Any  company  limited  by  shares,  may  by  special  resolution,  so  far  modify  the 
conditions  contained  in  its  memorandum  of  association,  if  authorised  so  to  do 
by  its  I'egulations  as  originally  framed,  or  as  altered  by  special  resolution,  as, 
by  subdivision  of  its  existing  shares  or  any  of  them,  to  divide  its  cajntal,  or  any 
part  thereof,  into  shares  of  smaller  amount  than  is  fixed  by  its  memorandum  of 
association. 

Provided  that  in  the  subdivision  of  the  existing  shares  the  proportion  between 
the  amount  which  is  paid  and  the  amount  (if  any,)  which  is  unpaid  on  each 
share  of  reduced  amount  .shall  be  the  same  as  it  was  in  the  case  of  the  existing 
share  or  shares  from  which  the  share  of  reduced  amount  is  derived. 

Section  22  provides  that :  The  statement  of  the  number  and  amount  of  the 
shares  into  which  the  capital  of  the  company  is  divided,  contained  in  every 
copy  of  the  memorandum  of  association  issued  after  the  passing  of  any  such 
special  resolution,  shall  be  in  accordance  with  such  resohition ;  and  any  com- 
pany which  makes  default  in  complying  with  the  jirovisions  of  this  section 
shall  incur  a  jjenalty  not  exceeding  IL  for  each  copy  in  respect  of  which 
such  default  is  made,  and    every  director  and  manager  of  the  company  who 


FORMS. 

knowingly  or  wilfully  authorises  or  permits  such  default  shall  incur  the  like 
penalty. 

Before  this  enactment  it  was  illegal  to  subdivide  shares.  Holmes'  case,  2  Ch. 
714.;  Fielding  and  Remington  s  case.  Ibid.     See  also  Sewell's  case,  3  Ch.  131. 

For  clause  to  be  inserted  in  articles  giving  the  requisite  power,  see  supra, 
p.  131. 

The  power  is  to  be  exercised  by  special  resolution ;  hence  if  the  articles  do 
not  contain  the  necessary  authority,  two  special  resolutions  are  necessary,  as  in 
the  case  of  a  reduction  of  capital. 

Notice  of  a  special  resolution  subdividing  the  shares  must  be  given  to  the 
Kegistrar  of  Joint-Stock  Companies.     See  infra,  p.  21G. 


199 
Form  157. 


That  each  of  the  existing  50/.  shares  l)e  divided  into  five  fully  pd  up   Form  158. 
10/.  shares. 


That  each  of  the  existing  shares  of  the  co  bo  divided  into  two  shares  Form  159. 
of  5/.  each,  one  of  which  shall  he  called  a  preference  share,  and  the  other 
an  ordinary  share  ;  and  that  the  holders  of  the  sd  ])reference  shares 
shall  be  entld  to  be  pd  out  of  the  profits  of  each  year  a  ju-eferential 
dividend  at  the  rate  of  '>  p.  c.  for  such  year,  aud  that  the  surplus  profits 
of  each  year  shall  be  applied  in  payment  of  dividends  on  the  sd  ordinary 
shares. 

The  above  resolutions  would  not  seem  to  offend  against  the  principles  on 
which  Hutton  v.  Scarborough  Cliff  Hotel  Co.  was  decided.  See  supra,  p.  195.  It 
would  not  seem  to  be  an  alteration  of  the  constitution  of  the  company,  or  a 
fraud  on  the  minority,  or  otherwise  ultra  vires  the  company.  However,  the 
point  remains  to  be  decided.  The  Anglo-American  Telegraphic  Company, 
Limited,  passed  sjjecial  resokitions,  in  1876,  for  the  division  of  its  capital 
(stock)  into  preferred  and  ordinary  stock  ;  but  the  division  was  not  compiilsory  : 
the  resolution  merely  authorised  the  dii-ectors  to  receive  the  surrender  of  his 
stock  from  any  member  willing  to  surrender,  and  to  issue  to  him  jjreferred  and 
ordinary  stock  in  equal  moieties  to  same  nominal  amount.  See  supra,  j).  131, 
for  express  power. 


That  the  ca])ital  of  the  co  be  reduced  from   100,000/.,  divided  into    Form  160. 
10,000  shares  of  10/.  each,  to  50,000/.,  divided  into  10,000  shares  of  Reduction  of 
71.  10s.  each.  liability. 


In  this  case  the  liability  is  reduced  by  21.  10s.  per  share. 
infra,  as  to  reduction  of  capital. 


See  "  Petitions," 


That  the  capital  of  the  co  be  reduced  from  50,000/.,  divided  into   Form  161. 
5,000  shares  of  10/.  each,  to  30,0()0/.,  divided  into  5,000  shares  of  3/.  Return  of       ' 
each,  and  that  such  reduction  be  effected  by  returning  to  the  holders  of  capital, 
the  4,200  shares  that  have  been  issued  pd  up  capital  to  the  extent  of  2/. 
per  share,  and  by  reducing  the  nominal  amount  of  all  the  shares  fi'om 
5/.  to  3/. 


That  in  respect  of  each  share  in  the  co's  capital,  upon  which  the  sum    Form  162. 
of  4/.  105.  has  been  pd  up,  capital  be  pd  off  to  the  extent  of  1/.  upon  the  lieturn  liable 

to  recall. 


200  EESOLUTIONS. 

Form  162.    footiiif;;  that  tlie  amount  returned  or  any  ])t  thereof,  may  he  called  up 
"^       —  j^g.^j,j_      Kortlimoor    Co.,   confirmed,    Dth    Feh.,   188P),   Kay,   J.      For 
similar  order,  see  CoJdIiurst  Co.,  Hall,  Y.-C,  Jan.  1SS2. 

Some  comijanies  have  acted  on  the  notion  that  capital  can  be  paid  off  as 
above  without  the  sanction  of  the  Court,  but  Flitcroffs  case,  21  C.  Div.  519, 
explodes  this  notion.  "Looking  to  the  Act  (10  i  11  Vict.  c.  20  ;  i.e.,  the  Com- 
panies Act,  1S77),  it  clearly  is  against  the  intention  of  the  Legislature  that  any 
portion  of  the  capital  should  be  retvirned  to  the  shareholders  without  the  statu- 
tory conditions  being  complied  with."     Per  Jessel,  M.  E.,  ibid.,  p.  533. 

In  the  two  cases  above  referred  to,  orders  were  made  sanctioning  a  return 
upon  such  a  footing,  the  Court  being  of  opinion  that  its  sanction  was  requisite. 

The  V.-C.  of  the  Lancaster  Palatine  Court  takes  the  same  view,  as  ajjpears 
from  the  following  and  many  other  orders  : — 

*'  That,  in  respect  of  each  of  the  shares  in  the  capital  of  the  company  upon, 
which  the  sum  of  3L   10s.  or  more  has  been   paid-up,  capital  be  paid  off  or. 

returned  to  the  extent  of  21.  per  share  on shares,  Sec,  so  as  to  reduce  the 

capital  paid  up  on  all  such  shares  to  the  sum  of  3/.  jjer  share,  upon  the  footing 
that  the  amount  paid  off  or  returned  on  each  share,  or  any  part  of  it,  may  be 
called  up  again  in  the  same  manner  as  if  it  had  never  been  paid."  Re  West- 
wood  Spinning  Co.,  confirmed  by  order  of  Lancaster  Palatine  Court,  3  Aug.  1883. 

Form  163.  That  the  capital  of  the  co  be  reduced  from  .")()( i,0( id/.,  divided  into 
Cancellin"-  lost  500,000  shares  of  1/.  each  to  125,(K)0/.  divided  into  500,000  shares  of  bs. 
capital.  each,  and  that  such  reduction  be  effected  by  cancellinf^  capital  which 

has  been  lost,  or  is  unrepresented  by  available  assets,  to  the  extent  of 
15s.  per  share  upon  each  of  the  203,727  shares  which  haxe  been  issued, 
and  are  now  outstanding,  and  by  reducing  the  nominal  amount  of  all 
the  shares  in  the  co's  capital  from  1/.  to  o.s.  per  share. 

In  cancelling  capital  which  has  been  "  lost  or  is  unrepresented  by  available 
assets,"  it  is  usual  to  use  those  woi'ds  in  the  resolution,  but  they  may  be 
omitted,  if  desired,  and  the  words  "  paid-ui)  capital  "  can  be  substituted. 

Form  164.  That  the  ca])ital  of  the  co  be  reduced  from  400,000/.,  di\ided  into 
Confirming  4,000  sliares  of  100/.  each,  of  which  1,00(1  are  preference  shares  and 
past  retuins,  2,000  are  ordinary  shares,  to  200,000/.,  divided  into  2,r)0o  ordinary 
shares  of  100/.  each,  and  that  such  reduction  lie  effected  ]»y  cancelling 
so  many  of  the  sd  preference  shares  as  have  not  been  taken  or  agreed  to 
be  taken  Ijy  any  ])erson,  and  by  paying  off  as  capital  in  excess  of  the 
wants  t»f  the  co  the  capital  pd  up  and  not  yet  repaid,  on  so  many  of  the 
sd  preference  shares  as  have  been  taken,  aiul  by  confirming,  and  the  co 
does  hby  confirm  the  re})aymt  of  the  capital  on  so  many  of  the  sd  pre- 
ference shares  as  haAc  already  been  pd  oflF,  and  that  the  preference  shares 
upon  which  the  capital  pd  uji  has  been,  or  shall  be,  repaid  as  afsd  lie 
cancelled.  Poiic  &  Pearson,  Lhntd,  confirmed  24th  Dec,  1H81,  by  the 
HighCt. 

Where  capital  has  been  improperly  x-eturned,  it  is  desirable  to  get  the  sanc- 
tion of  the  Court  as  above,  so  as  to  get  rid  of  the  liability  on  the  part  of  the 
<liroctors  for  the  breach  of  trust. 


FORMS.  201 

That  the  capital  ho  reduced  from,  &c.,  to,  &c.,  hy  caucelhng  10,00(>  of   Form  165. 
the  existin<i:  preference  shares,  which  liave  nut  been  taken  or  agreed  to  Cancellation  of 
be  taken  by  any  person.  unissued 

shares. 
Under  s.  5  of  the  Companies  Act,  1877,  a  special  resolution  as  above  operates 
■without  the  sanction  of  the  Court.     And  where  the  regulations  give  the  requi- 
site power  (e.g.,  by  resolution  of  a  general  meeting),  a  special  resolution  is  not 
requisite. 

That  the  capital  be  reduced,  &c.,  by  cancelling-  the  shares  numbered    Form  166. 
which  have  been  surrendered  to  the  co.  Caiu'ellatiou  i>i 

In  such  a  case  the  sanction  of  the  Court  must  be  obtained,  but  if  the  shares 
are  fully  jiaid  up,  and  nothing  has  been  paid  for  the  surrender,  the  consent  of 
creditors  will  not  be  requisite.  See  s.  1  of  the  Companies  Act,  1877.  See 
Llynvi  Co.,  2G  W.  R.  55 ;  37  L.  T.  373. 

That  the  205  fully  pd-up  shares  already  pchased  by  the  directors  out  Form  166a. 

of  the  reserve  fund  be  cancelled,  and  that  the  capital  of  the  co  be  reduced  cancellation  of 

by  the  sum  of  2,i'>i)i)L  being  the  nominal  amount  of  such  shares,  ac-  purchased 

T      1     ,  „  ,  shares, 

cordingly  be  conhrmed. 

Moule's  Patent  Co.,  confirmed  4  May,  1883. 

That  out  of  the  accumulated  profits  of  the  co  there  be  returned  to   Form  167. 
each  member  a  sum  e(iual  to  K)  it.  c.  on  the  capital  pd  up  on  the  shares  p.^^.jj,„  ^^- 
held  l)y  him  in  reduction  of  such  capital,  and  to  the  intent  that  the  un-  capital  out 
paid  capital  may  be  increased  by  a  similar  amount.  ^  ^'" 

S.  3  of  the  Companies  Act,  1880,  provides  that — 

"  When  any  company  has  accumulated  a  sum  of  undivided  profits  which  with 
the  consent  of  the  shareholders  may  be  distributed  among  the  shareholders  in 
the  form  of  a  dividend  or  bonus,  it  shall  be  lawful  for  the  company  by  special 
resolution  to  return  the  same,  or  any  part  thereof,  to  the  shareholders,  in 
reduction  of  the  paid-up  capital  of  the  company,  the  unpaid  capital  being 
thereby  increased  by  a  similar  amount.  The  powers  vested  in  the  directors  of 
making  calls  upon  the  shareholders  in  respect  of  moneys  unpaid  upon  their 
shares  shall  extend  to  the  amount  of  the  unpaid  capital  as  augmented  by  such 
reduction." 

S.  5  of  the  Act  empowers  any  shareholder,  within  one  month  after  the  2)ass- 
ing  of  the  resolution,  to  require  the  company  to  retain  moneys  payable  to  him 
under  any  such  resolution,  and  to  invest  and  pay  him  the  interest.  S.  G  re- 
quires the  amount  returned  to  be  specified  in  the  annual  returns.  See  Buck- 
ley, 529. 

Chaxge  of  ISTame. 
That  the  name  of  the  co  be  changed  to  the Co,  Limtd.  Form  168. 

As  to  change  of  name,  see  s.   13  of  the  Act  of    1802.     The  proper  course  Change  of 
is  to  pass  a  special  resolution  as  above  and  then  apply  to  the  Board  of  Trade  name. 
for  liberty  to  make  the  change.     LiVjerty  is  readily  granted.     The  change  is 
not  complete  until  the  new  certificate  of  incorporation  for  which  the  section 
provides  is  issued.     Shackle/ord,  Ford  cf  Co.  v.  Dangerfield,  L.  E.  3  C.  P.  407. 

That  the  directors  be  and  they  are  hby  authorised  to  create  and  issue   Form  169. 
debentures  providing  for  the  paynit  of  principnl  sums  not  exceeding  Resolution  as 


202 


RESOLUTIONS. 


to  issue 
debentures 


Form  169.  50,00(1/.  with  interest  at  tlic  rate  of  5  p.  c.  p.  a.,  such  dehcn- 
tures  to  be  in  such  form  and  to  l)e  secured  in  such  manner,  and  to 
be  issued  to  such  persons  and  on  such  terms  as  the  directors  think 
expedient. 

When  debentures  are  to  be  issiied,  the  sanction  of  a  general  meeting  may  by 
the  reguhitions  be  necessary  ;  and  even  when  it  is  not,  directors  sometimes 
think  it  expedient  to  ask  for  the  sanction. 


Form  170. 

Creation  of 

debenture 

stock. 


Form  171. 

Debenture 

.stock. 


Form  172. 


That  the  directors  be  and  they  are  hby  authorised  to  create  and 
issue  a  debenture  stock  of  the  nominal  amount  of  100,000?.,  such  stock 
to  1)0  called  Perpetual  5  p.  c.  Debenture  Stock,  and  to  carry  interest 
at  the  rate  of  5  p.  c.  p.  a.,  and  to  be  represented  by  debentures,  certi- 
ficates, or  otherwise,  as  may  seem  expedient,  and  to  be  payable  or 
redeemable  in  such  events,  and  to  be  secured  in  such  manner,  and 
g-enerally  to  be  issued  on  such  tei'ms  as  the  directors  think  fit. 

It  should  be  seen  that  there  is  nothing  in  the  regulations  inconsistent  with 
the  issue  of  debenture  stock.  If  there  is,  the  requisite  alterations  should  be 
made.     See  further,  infra,  "  Debentures." 

That  the  directors  be  and  they  are  hby  authorised  from  time  to 
time  to  create  and  issue  mtge  debenture  stock  of  the  co  to  an  amount 
not  exceeding  one-third  of  the  pd  capital  of  the  co  f(»r  the  time  being, 
upon  the  footing  that  the  aggregate  amount  of  the  sd  stock  for  the  time 
outstanding  and  the  interest  thereon  shall  rank  j/arl  passu  as  a  first 
charge  on  the  undertaking  and  revenue  of  the  co,  the  stock  to  be  issued 
at  such  times  in  such  amounts  and  on  such  terms  and  conditions  as  the 
directors  shall  from  time  to  time  determine  for  the  ppose  of  redeeming 
by  exchange  or  other^^'ise  the  outstanding  debentures  of  the  co,  and  any 
other  ])poses  to  Avhich  capital  of  the  co  shall  be  lawfully  applical)le. 

That  the  directors  be  and  they  are  hby  authoi'ised  to  make  such 
provisions  as  they  think  fit  for  efibctuating  the  sd  charge  and  for 
the  registration  and  transfer  of  the  sd  stock  and  for  the  delivery  of  cer- 
tificates thereof  and  for  the  issue  of  stock  warrants  to  bearer,  transfer- 
able by  delivery  and  of  interest  coupons  attached  to  such  Avarrants  or 
otherwise,  and  for  the  conversion  of  warrants  to  bearer  into  registered 
stock,  and  of  registered  stock  into  warrants  to  bearer,  and  generally  as 
to  the  form  and  incidents  of  all  documts  relating  to  the  stock. 

That  the  directors  be  and  they  are  hby  authorised  fi'om  time  to  time 
to  pchase  in  the  market,  and  hold  and  deal  with  any  amount  of  such 
stock  for  the  ppose  of  any  reserve  fund  or  investmt  of  the  co,  and  with 
the  sanction  of  a  general  meeting  to  apply  other  monies  of  the  co  to  the 
])cliase  in  the  market  of  any  such  stock  for  cancellation,  and  with  the 
like  sanction  afterwards  to  re-issue  stock  in  lieu  of  all  or  any  of  the 
stock  so  caricelled,  pro\'ided  that  the  amount  of  the  stock  for  the  time 
being  outstanding  shall  never  exceed  tlie  prescribed  limit. 

Resolution  declaring  the  ccniditions  on  which  share  warrants  will  be 
issued. 


FOEMS.  203 

The  following  are  conditions  suitable  to  be  made  by  the  directors  binder  Clause    Form  172. 

32,  supra,  j).  128.    If  the  words  within  brackets  in  that  clause  are  not  struck  out " ■• 

the  conditions  must  be  submitted  to  the  company  in  j^eneral  meeting  for  its 
approval. 

That  the  following  conditions  as  to  the  issue  of  share  warrants  l^e  Upon  whose 
made  jmrsnant  to  Clause of  the  articles  of  association  of  the  co.        Avan-ant  to 

1.  Xo  share  warrant  shall  be  issued  except  upon  a  request  in  writing  be  issued. 
l)y  the  person  for  the  time  being  upon  the  register  of  members  as  the 
liolder  of  the  share  or  stock  in  respect  of  which  the  share  warrant  is  to 

be  issued. 

'For  form  of  share  warrant,  see  infra,  "  Certificates."    » 

There  can  be  no  doubt  that  if  the  company  issue  a  share  warrant  to  a  person 
who  is  not  entitled,  it  will  be  estopjied  from  denying  the  right  of  any  jixirchaser 
from  him.  See  further,  introductory  notes  to  "Certificates."  The  iitmost  care 
ought  therefore  to  be  used.  Sometimes  these  clauses  are  embodied  in  the 
articles  of  association. 

2.  The  request  shall  be  in  such  form,  and   authenticated  by  .sucli  Regulations  as 
statutory  declon  or  othei"  evidence   as   to  the  identity  of  the  person  ^"  ''si^is^t- 
making  the  same,  and  of  his  right  or  title  to  the  share  or  stock,  as  the 
directors  shall  from  time  to  time  require,  and  shall   l)e   lodged  at  the 

office  of  the  co. 

3.  Before  the  issue  of  a  share  wai'rant  the  certificate  (of  any)  then  Certificates  to 
outstanding  in  respect  of  the  shares  or  stock  intended  to  be  included  in  ^f  j^""^"^" 

it  shall  be  delivered  up  to  the  directors  unless  they  dispense  with  this 
condition. 

If  the  certificate  is  left  outstanding  it  will  be  more  or  less  a  risk  of  the 
company,  and  the  directors  may  reasonably  require  an  indemnity. 

4.  Any  person  applying  to  have  a  share  waiTant  issued  shall  at  the  Stamp  duty, 
time  of  applicon  pay  to  the  directors  the  stamp  duty  payable  in  respect 
thereof,  and  also  such  fee,  not  exceeding  1.?.,  for  each  share  Avarrant  as 

the  directors  shall  fi'om  time  to  time  fix. 

By  virtue  of  the  Companies  Act,  18G7,  s.  33,  "There  shall  be  charged  on  every 
share  warrant  a  stamp  duty  of  an  amount  equal  to  three  times  the  amount  of 
the  ad  valorem  stamp  duty  which  would  be  chargeable  on  a  deed  transferring 
the  share  or  shares  of  stock  specified  in  the  warrant,  if  the  consideration  for 
the  transfer  were  the  nominal  value  of  such  share  or  shares  or  stock." 

By  33  &  31  Vict.  c.  97,  s.  127  : — "  If  a  share  warrant  is  issued  without  being 
duly  stamjied,  the  company  issuing  the  same,  and  also  every  person  who  at  the 
time  when  it  is  issued  is  the  managing  director,  or  secretary,  or  other  principal 
officer  of  the  company,  shall  forfeit  the  sum  of  oOl. 

5.  Share  warrants  shall  be  issued  under  the  seal  and  be  signed  by  one  Execution, 
(lirector  and  countersigned  liy  the  secretary  or  some  other  officer  in  the 

l^lace  of  the  secretary  appointed  by  the  board  for  that  ppose. 

C.  Each  share  warrant  shall  contain  such  mimber  of  shares  or  amount  Number, 
of  stock  and  lie  in  such  laniiuage  and  form  as  the  directors  shall  think 


204 


KESOLUTTONS. 


Form  172. 


Coupons. 


Number  of 
coupons. 


Payment  of 
dividends. 


Bearer  of 
coupon  alone 
recii>rnised. 


As  to  worn 
or  defaced 
warrants. 

As  to  lost  <i 

destroyed 

■vvaiTant. 


Fee  on  issue 
of  new- 
warrant. 


On  wli.'it  fiiii- 
ditions  holder 
of  warrant 
may  mAc 


fit.  The  miiiibor  originally  attached  to  cacli  share  shall  he  stated  in  the 
share  warrant. 

7.  Coupons  ])ayahle  to  hearer  of  such  nuuiljcr  as  the  directors  shall 
think  fit,  shall  be  attached  to  share  warrants  providing  for  the  paymt 
of  the  dividends  or  interest  upon  and  in  respect  of  the  shares  or  stock 
included  therein,  and  the  directors  shall  provide  as  they  shall  from  time 
to  time  think  fit  for  the  issue  of  fresh  coupons  to  the  bearers  for  the  time 
being-  of  share  warrants  when  the  coupons  attached  thereto  shall  be 
exhausted. 

<S.  p]ach  couiHin  shall  be  distinguished  by  the  number  of  the  share 
warrant  to  which  it  l)elongs,  and  by  a  number  showing  the  i)lace  it 
holds  in  the  series  of  coupons  belonging  to  the  warrant.  The  coupons 
shall  not  l)e  expressed  to  be  payable  at  any  parlar  period,  nor  shall  they 
contain  any  statemt  as  to  the  amount  which  shall  be  payal)le. 

'.).  Upon  any  dividend  or  interest  being  declared  to  be  payable  upon 
the  shares  or  stock  specified  in  any  share  warrant  the  directors  shall  pub- 
lish an  advcrtisemt  in  one  daily  newspaper  published  in  London,  and 
in  sucii  other  newspapers,  if  any,  as  they  shall  think  fit,  stating  the 
amount  per  share  or  p.  c.  payable,  the  date  of  paymt,  and  the 
serial  number  of  the  coupon  to  be  presented,  and  thereu])on  any  person 
presenting  and  delivering  up  a  coupon  of  that  serial  number  at  the 
])lace  or  one  of  the  places  stated  in  the  coupon,  or  in  the  sd  advertisemt, 
shall  be  entitled  to  receive  at  the  expiration  of  such  number  of  days  (not 
exceeding  five)  after  so  delivering  it  up  as  the  directors  shall  from  time 
to  time  direct,  the  dividend  or  interest  payal)le  on  the  shares  or  stock 
specified  in  the  share  warrant  to  which  the  sd  coupon  shall  l)elongv 
according  to  the  notice  which  shall  have  l)een  so  given  by  advcrtisemt. 

10.  The  CO  shall  be  entled  to  recognise  an  absolute  right  in  the 
bearer  for  the  time  being  of  any  coupon  so  advertised  as  afsd  for  paymt 
to  such  amount  of  dividend  or  interest  on  the  share  warrant  whereto  the 
sd  coupon  shall  belong  as  shall  have  been  as  afsd  declared  payable  upon 
presentation  and  delivery  of  the  coupon,  and  the  deli\'ery  of  such  coupon 
shall  be  a  good  discharge  to  the  co  accordingly. 

1 1 .  If  any  share  Avarrant  or  coupon  be  worn  out  or  defaced,  the 
directors  will,  up(»n  the  surrender  thereof  for  cancellation,  issue  a  new 
one  in  its  stead, 

1 2.  If  any  share  warrant  or  coupon  be  lost  or  destroyed,  the  directors 
will,  ui)on  the  loss  or  destruction  being  established  to  their  satisfaction, 
and  uj)on  such  indennuty  being  given  to  the  co  as  they  shall  think 
ade(|uate,  issue  another  share  warrant  or  coupon  in  lieu  thereof. 

]:•).  In  every  case  provided  for  by  conditions  11  and  12  a  fee  of  2.s.  Gd., 
exclusive  of  all  expenses  attending  the  investigation  of  evidence  of  loss 
or  destruction,  and  of  an  indemnity  to  the  co,  shall  be  pd  to  the  co  by 
the  ])erson  availing  himself  of  those  conditions. 

14.  No  person  shall  as  bearer  of  a  share  warrant  be  entled  to  attend, 
or  vote,  or  exercise  in  resjjcct  thereof  any  of  the  rights  of  a  member,  at 
any  general  meeting  of  the  co,  or  sign  any  requisition  for  or  aid  in  call- 


FOEMS.  205 

ing  auy  general  meeting,  unless  three  days  at  least  before  the  day  Form  172. 
appointed  for  the  meeting,  in  the  first  case,  and  unless  before  the  requi- 
sition is  left  at  the  office,  in  the  second  case,  he  shall  have  deposited  the 
share  warrant  at  the  office,  or  such  other  place  as  the  directors  a])puint, 
together  with  a  statemt  in  writing  of  his  name  and  address,  and  unless 
the  share  warrant  shall  remain  so  deposited  until  after  th(;  general  meet- 
ing, or  any  adjournmt  thereof  shall  have  been  held.  The  names  of  more 
than  one  as  joint  holders  of  a  share  warrant  shall  not  be  received. 

This  and  the  following  clause  are  found  to  work  well.  They  prevent  perso- 
nation, and  are  convenient  both  to  the  holders  of  share  wai'rants  and  to  the 
company.     The  certificate  requires  no  stamp. 

l."».  There  shall  be  delivered  to  the  person  so  depositing  a  share  war-  Certificate  of 
rant  a  certificate  stating  his  name  and  address,  and  the  number  of  '^  ^i'*'*^''- 
shares  or  the  amount  of  stock,  represented  by  the  share  warrant  so 
deposited  by  him,  and  such  certificate  shall  entitle  him  to  attend  and 
vote  at  a  general  meeting  in  the  same  way  as  if  he  were  a  registered 
member  of  the  co  in  respect  of  the  shares  or  stock  specified  in  the 
sd  certificate.  Upon  delivering  up  of  the  sd  certificate  to  the  co 
the  share  warrant  in  resi)ect  whereof  it  shall  have  been  given,  shall  be 
returned. 

The  certificate  may  be  as  follows  : — 

The Co,  Limtd. 

Xo. . 

This  is  to  certify  that   A.  B.,  of ,  has,  in  accordance  with  the 

regulations  of  the  co,  dcjiosited  the  undermentioned  share  Avarrants,  in 
respect  of  which  he  is  entled  to  attend  the  general  meeting  of  the  co,  to 
l)e  held  at  . ,  on  the day  of . 


Dated,  &c. 


Particulars  of  share  wai'rants  deposited. 


-,  Secretary. 


10.  Xo  person  as  liearer  of  any  warrant  shall  V)e  entled  to  exercise  When  warrant 
nny  of  the  rights  of  a  member  (save  as  hinbefore  expressly  provided  in  t°  ^^  produced, 
respect  of  general  meetings),  without  producing  such  warrant  and  stating 
Ids  name  and  address,  and  (if  and  when  the  directors  so  requii'c)  per- 
mitting an  indorsemt  to  be  made   thereon  of  the  fact,  date,  ppose,  and 
consequence  of  its  production. 

The  above  clause  is  occasionally  used. 

17.  If  the  bearer  of  a  share  warrant  shall  surrender  it  to  be  cancelled,  Surrender  of 
iind  shall  therewith  lodge  at  the  office  a  declaration  in  writing,  signed 
l)y  him,  in  such  form,  and  authenticated  in  such  manner  as  the  directors 
require,  requesting  to  be  registered  as  a  member  in  respect  of  the  shares 
r)V  stock  specified  in  the  sd  share  wairant,  and  stating  in  such  declara- 
tion his  name,  address,  and  occupation,  he  shall  be  entled  to  have  his 


206 


EESOLUTIONS. 


Form  172.  name  entered  as  a  member  in  the  register  of  members  of  the  co  in 
res]:)ect  of  the  shares  or  stock  specified  in  the  share  warrant  so  surren- 
dered. 

Section  29  of  the  Act  of  1867  provides  that  "  The  bearer  of  a  share  warrant 
shall,  subject  to  the  regulations  of  the  company,  be  entitled  on  surrendering 
such  warrant  for  cancellation,  to  have  his  name  entered  as  a  member  in  the 
register  of  members, — (hence  it  is  necessary  to  provide  for  the  surrendei",) — 
and  the  company  shall  be  responsible  for  any  loss  incurred  by  any  jierson  by 
reason  of  the  company  entering  in  its  register  of  members  the  name  of  any 
bearer  of  a  share  warrant  in  resjject  of  the  shares  or  stock  specified  therein 
without  the  share  warrants  being  surrendered  and  cancelled." 

Cleaning  of  18.  In  the  above  conditions  share  "warrant  means  a  warrant  in  respect 

share  wan  ant.  ^^|>  ^  (^\y^Y^,  or  shares,  or  of  stock  of  the  CO,  issued  pursuant  to  the  Com- 
panies Act,  1807,  and  the  articles  of  association  of  the  co. 


Form  173. 

Registration 
of  existing 
company. 


Form  174. 


Application  for 
registration 
with  limited 
liability. 


That  the  co  be  registered  under  the  Companies  Act,  18G2  [as  a  co 

limtd  l)y  shares,  and  that  the  co's  name  be  changed  to  The Co, 

Limtd.] 

As  to  the  registration  of  existing  companies,  see  Part  VII.  of  the  Companies 
Act,  1862. 

The  words  in  brackets  should  be  omitted  where  the  company  is  going  to 
register  as  an  unlimited  company,  and  even  where  it  is  to  x-egister  as  a  limited 
company  they  would  seem  unnecessary,  though  commonly  used. 

Tlie  following  are  the  ordinary  forms  of  application  : — 

The  Companies  Act,  1862. 

Applicon  for  a  certificate  of  incorporation  as  a  limtd  co  by  The Co. 

The  Co  constituted  by  [deed  of  settlemt],  dated  the  ,  desires  to 

register  itself  as  a  co  limtd  by  shares  under  the  Companies  Act,  1862,  by  the 

name  of   The  Co,  Limtd,  and  for  that  ppose  presents  the  undermentd 

documts  for  registration  under  the  sd  Act.     Dated,  &c. 

Doeumts  presented  for  registration  with  the  foregoing  applicon  : — 

1.  Copy  of  the  [deed  of  settlemt]  constituting  the  co. 

2.  List  of  the  members  of  the  co  made  up  to  the day  of  . 

',].  Statemt  showing  the  nominal  capital  (if  any)  of  the  co,  its  division  into 
shares,  the  number  of  shares  taken,  and  the  amount  jxl  on  each  share ; 
also  the  name  of  the  co  and  the  situation  of  its  registered  office. 
•4.  Copy  resolution  of  the  co  assenting  to   its  registration  as  a  limtd  co,  and 
adding  the  word  "  Limtd  "  to  its  name. 

o.  Declon  by of  the  co  verifying  the  parlars  set  forth  in  the  documts 

above  mentd. 
Where  the  co  is  already  registered,  e.g.  under  7  &  8  Vict.  c.  110,  the  words 
"  constituted  by  deed  of  settlemt "  in  the  above  form  will  be  altered  to  "  com- 
pletely registered  imder  the  Act  7  &  8  Vict.  c.  110  ; "   [or,  as  the  case  may  be] 
and  item  1  of  the  documt  will  be  omitted. 

The  applicon  is  to  be  signed  by  a  director,  secretcxry,  or  other  authorised 
officer  of  the  co. 


The  Companies  Act,  1862. 

Form  175  Applicon  for  certificate  of  incorporation  by  the . 

■ The Co  constituted  by ,  dated [or,  completely  registered,  Ac] 

Apphration  for  desires  to  register  itself  under  the  Companies  Act,  1862,  and  for  that  jipose 
regis  r.ttion  as    pj-^ggj^^^g  ^j^g  undermentd  documts  for  registration  under  the  sd  Act.     Dated,  (to. 


FORMS. 


207 


Documts  presented  for  registration  with  the  foregoing  applioon  : —  Form  175. 

1.  Copy  of  the constituting  the  co.  '    ;        ^ 

2.  List  of  members  of  tlie  co  made  up  to  the day  of . 

.  '■  ''  company. 

'3.  Statemt  of  the  registered  office  of  the  co. 

4.  Copy  resohxtion  of  the  co  assenting  to  its  registration. 

5.  Declon  by  — — -  of  the  co  verifying  the  parhxrs  set  forth   in  the  documts 

above  mentd. 
Where  the  co  is  ah-eady  registered,  items  1  &  1  will  be  omitted. 

The  Companies  Act,  1862. 
Limtd  Co. 

Statemt  of  the  nominal  caintal  of  The  Co,  its  division  into  shares,  the    Form  176. 

number  of  shares  taken,  and  amount  fixed  thereon  as  at  the day  of  . 

Also  the  name  and  registered  office  of  the  co. 

Amount  of  nominal  capital. 

Number  of  shares  into  which  it  is  divided  and  amount  of  each  share. 

Number  of  shares  taken  up  to  the day  of . 

Amount  i^aid  on  each  share. 

Name  of  company. 

Registered  office. 

Dated . 

[The  above  is  to  be  registered  with  the  application  for  incorporation  as  a 
limited  company.  See  s.  183.  It  should  be  signed  in  the  same  manner  as 
Form  17-i.] 

We of and of ,  being  two  of  the  [directors  of  the Co],    Form  177. 

Do  solemnly  and  sincerely  declare  that  the  parlars  set  forth  in  the  several  docu- 

ments  accompanying  this  declon,  and  marked  respively  with  the  letters  — —  are  ,  ^.^  ^^^ 
true  ;  and  we  make  this  solemn  declon  conscientiously  believing  the  same  to  i-gfristration 
be  true,  and  by  virtue  of  the  j^rovisions  of  an  Act  of  Parliament  made  and 
passed  in  the  sixth  year  of  the  reign  of  his  late  Majesty,  intituled  "An  Act  to 
repeal  an  Act  of  the  present  session  of  Parliament,"  intituled  "  An  Act  for  the 
more  effectual  abolition  of  oaths  and  affirmations  taken  and  made  in  various 
departments  of  the  State,  and  to  substitute  declons  in  lieu  thereof,  and  for  the 
more  entire  sup2>ression  of  voluntary  and  extra-judicial  oaths  and  affts,  and  to 
make  other  provision  for  the  abolition  of  unnecessai-y  oaths." 

Declared,  &c. 

[As  to  the  above  form,  see  s.  180  of  the  Act.  The  declaration  should  be  made 
by  two  of  the  directors  or  other  principal  officers  of  the  company.] 

As  to  rcg-istration  midcr  the  Companies  Act,  1871',  42  &  40  Yict. 
c.  7(5. 

Under  this  Act  any  companj'  registered  before  or  after  the  passing  of  the 
Act  as  an  unlimited  company  may  register  under  the  Companies  Acts,  18G2  to 
1879,  as  a  limited  company,  s.  4.  The  chief  object  of  this  enactment  was  to 
enable  banking  companies  already  registered  as  unlimited  to  re-register  as 
limited  companies,  and  most  of  these  companies  have  already  availed  themselves 
of  the  power. 

On  the  registration  in  pursuance  of  the  Act  of  1879,  of  a  comimny  which  has 
already  been  registered,  the  registrar  is  to  close  the  former  registration,  and 
may  [and  usually  does]  dispense  with  the  delivery  of  copies  of  any  documents 
with  copies  of  which  he  was  furnished  on  the  original  registration  ;  but  save  as 
aforesaid  the  registration  is  to   take  place  in  the  same  manner  and  have  the 


208 


EESOLUTIONS. 


Form  177.  same  effect  as  if  it  were  the  first  registration  of  the  company :  s.  9.  Accord- 
ingly  the  above  forms  can  with  slight  modifications  be  adojited. 

A  simple  resolution  for  registration  under  the  Act  of  1879,  will  follow  the 
terms  of  Form  173,  supra,  p.  20G,  substituting  the  words  "  Acts  18G2  to  1883," 
for  the  words  "  Act  of  18(32." 

But  usually  the  powers  conferred  by  s.  5  of  the  Act  of  1879  are  exercised. 
That  section  is  as  follows  : — 

"  An  unlimited  company  may  by  resolution  passed  by  the  members  when 
assenting  to  registration  as  a  limited  company  under  the  Companies  Acts,  1802 
to  1879,  and  for  the  purpose  of  such  registration  or  otherwise,  increase  the 
nominal  amount  of  its  capital  by  increasing  the  nominal  amount  of  each  of  its 
shares.  Provided  always  that  no  part  of  such  increased  capital  shall  be 
capable  of  being  called  uji  except  in  the  event  of  and  for  the  purposes  of  the 
company  being  wound  up.  And  in  cases  where  no  such  increase  of  nominal  capital 
may  be  resolved  upon,  an  unlimited  comi)any  may,  by  such  resolution  as  afore- 
said, provide  that  a  portion  of  its  uncalled  ca^jital  shall  not  be  capable  of  being 
called  up,  except  in  the  event  of  and  for  the  purposes  of  the  company  being 
Avound  uj).  A  limited  company  may  by  special  resolution  declare  that  any  por- 
tion of  its  capital  which  has  not  been  already  called  up  shall  not  be  capable  of 
being  called  up,  except  in  the  event  of  and  for  the  purposes  of  the  company 
being  wound  up  ;  and  thereupon  such  portion  of  capital  shall  not  be  capable  of 
being  called  up,  except  in  the  event  of  and  for  the  purposes  of  the  company 
being  wound  up." 

The  following  is  an  example  of  a  resolution  for  registration  and  increase  of 
Ciipital,  pursuant  to  s.  5  : — 

rorm  178.  Tliat  this  co,  uow  registered  under  the  Companies  Act,  1802,  as  an 
unlimtd  co,  be  registered  under  the  Companies  Acts,  18G2  to  1871),  as  a 
CO  limtd  by  shares  :  And  that  for  the  ppose  of  such  registration  the 
nominal  amount  of  tlie  capital  be  increased  from  2,000,000/.  to 
3,000,000/.,  by  increasing  the  nominal  amount  of  each  share  from  i'tOl. 
to  75/.  :  And  that  no  part  of  such  increased  capital  shall  be  capable  of 
being  called  up  except  in  the  event  of  and  for  the  pposes  of  the  co  being 

wound  up,  and  that  the  name  of  the  co  be  changed  to  the Co, 

Limtd. 

For  resolution  where  capital  is  not  increased,  see  infra.  Form  173. 

It  is  conceived  that  s.  188  of  the  Companies  Act,  18(12,  applies  where  a  bank- 
ing company  re-registers  under  the  Act  of  1879,  and  this  view  has  been  generally 
acted  on.  The  following  are  copies  of  the  circular  letters  issued  by  the  London 
and  County  Bank  previously  to  registration. 

Sir, — I  am  desired  by  the  directors  of  the  company  to  give  you  notice  that  .at 
an  extraordinary  meeting  of  the  shareholders  of  the  company  held  on  the  20tli 
day  of  February,  1880,  the  following  resolution  was  passed  : — "  That  the  London 
snid  County  Banking  Company  be  registered  as  a  limited  company  under  the 
Oomj^anies  Acts,  1802  to  1879,  that  the  name  of  the  company  l^e  changed  by 
adding  thereto  the  word  Limited,  and  that  of  the  capital  uncalled  upon  the  10(),0(X) 
shares  of  HOI.  each,  constituting  the  capital  of  the  company,  the  sum  of  10?.  per 
share  shall  not  be  capable  of  being  called  up  except  in  the  event  of  and  for  the 
purposes  of  the  comjjany  being  wound  up. 

And  that  it  is  intended  to  register  the  company  as  a  limited  company  accord- 
ingly. This  notice  is  given  in  compliance  with  s.  188  of  the  Companies  Act, 
1802. 

I  .am.  Sir,  your  obedient  servant. 

To ,  Gcner.al  Manager. 


FOEMS.  2li9 

The  above  was  accompanied  by  a  letter  as  follows  : —  Form  178. 

Sir, — I  am  requested  to  forward  to  you  the  notice  on  the  other  side,  by 
which  you  will  observe  that  it  is  intended  to  register  this  Bank  as  a  limited 
company  under  the  Act  of  the  last  session  of  Parliament.  This  course  has 
been  adopted  by  this  Bank  in  common  with  most  of  the  other  unlimited 
London  Banks,  and  in  order  to  give  the  most  ample  security  to  customers  it 
has  been  determined  to  increase  the  subscribed  capital  of  the  Bank,  and  issue 
additional  shares. 

The  present  subscribed  capital  of  .3,750,OOOL  will  be  increased  to  S,000,OOOZ., 
whilst  the  paid-up  capital  and  Eeserve  Fund  will  be  increased  from  2,250,000?. 
to  3,000,000L  The  result  of  the  arrangements  Avhen  completed  will  be  that 
in  addition  to  the  whole  of  the  property  and  assets  of  the  Bank  the  cus- 
tomers will  be  secured  by  the  liability  of  the  shareholders  to  the  extent  of 
5,000,000?.  A  copy  of  the  last  balance-sheet  is  annexed,  and  I  am  requested 
to  inform  you  that  the  business  of  the  Bank  will  be  conducted  in  all  respects 
as  heretofore. 

I  am,  &c., 


NOTICES. 


mTRODUCTORY   NOTES. 

The  ref^ulatious  of  a  company  generally  provide  that  notice  shall  be 
given  to  the  members  of  all  general  meetings,  and  also  upon  or  in' 
relation  to  divers  other  matters.  The  mode  of  ser\-ing  or  giving  such 
notices  is  duly  provided  for  by  the  articles  {supra,  p.  103),  or  by  Table 
A,  when  it  applies  {snpra,  p.  111). 

By  section  G4  of  the  Act,  "  any  summons,  notice,  order,  or  proceeding- 
requiring  authentication  by  the  company,  may  be  signed  by  any  director, 
secretary,  or  other  authorised  officer  of  the  company,  and  need  not  bo 
under  the  common  seal  of  the  company,  and  the  same  may  be  in  writing 
or  in  print,  or  partly  in  writing  and  partly  in  print."  The  foll(jwing  arc 
some  of  the  forms  of  notices  in  general  use  : — 

The Co,  Limtd. 

Xo.  — . 

Form  179.        ^^^> — I  9,m  directed  to  inform  you  that,  in  compliance  with  your 

;.^  T      ',         applicon,  dated,  &c., shares  of  10/.  each  in  The Co,  Limtd, 

Notice  of  - 

allotment  of      have  been  allotted  to  you. 

^^^'"■es-  I  am,  &c., 

,  Secretary. 

To  • ,  &c. 

This  requires  a  penny  stamp.  See  Stamp  Act,  1870.  But  an  iinstamped 
letter  may  be  a  notice  siifEcient  to  bind  the  allottee.  Whiteley  Partners,  42 
L.  T.  11,  28  W.  R.  2-tl. 

For  the  ordinary  form  of  application,  see  svj^ira,  p.  183. 

Sometimes  before  allotment  the  directors  find  that  some  material  statement 
in  the  prospectus  is  not  correct.  The  discovery  ought  to  be  communicated  to 
applicants.     Scottish  Petroleum,  23  C.  Div.  •1-13. 

And  it  is  sometimes  desirable  so  to  frame  the  notice  of  allotment  that  it  will 
oblige  the  allottee  to  signify  his  assent  to  the  allotment  notwithst.anding  the 
discovery.  This  can  readily  be  done,  e.g.,  by  adding  a  statement  to  the  effect 
that  "the  allotment  is  conditional  on  your  signing  and  returning  the  enclosed 
form  within  seven  days."  Unless  the  applicant  complies  with  the  condition  he 
is  not  bound.  Leeds  Banking  Co.,  2  Dr.  &  Sm.  115  ;  3  D.  J.  &  S.  30.  AddinelVs 
case,  1  Eq.  225 ;  Beck's  case,  9  Ch.  392. 

Sometimes  a  like  discovery  is  not  made  until  after  allotment.  In  such  case 
it  may  be  expedient  to  send  out  a  circular  fairly  disclosing  the  facts  incidentally 
or  otherwise,  and  asking  the  recipients  to  sign  and  return  a  proxy  or  some 
other  document  which  if  signed  will  operate  as  a  waiver  of  this  right  to  rescind. 


FORMS.  211 

Where  an  allottee  who  has  a  right  to  rescind  a  contract  for  misrepresentation   Form  179. 

acts  as  a  member  after  knowledge  of  the  facts,  he  loses  his  right.    Ashley's  case, "  ' 

9  Eq.  2G3  ;  Kent  v.  Freehold  Land  Co.,  4  Eq.  588  ;  Whitehouse's  case,  3  Eq.  79t ; 
Scoley  V.  Central  Co.,  9  Eq.  2GG  ;  Shapley  v.  Louth  Ry.  Co.,  2  C.  Div.  084  ; 
Pollock,  507. 

It  is  very  desirable  to  obtain  some  acknowledgment  of  the  circular  on  the 
part  of  the  allottee,  for  otherwise  he  may  swear  he  never  received  the  circular, 
and  it  has  been  held  that  the  ordinary  jirovisions  in  the  articles  as  to  the  service 
of  notice  do  not  ai^jily  to  such  a  circular.  In  re  London  4'  Staffordshire,  24  C.  D. 
149.  If  by  admission  of  an  allottee  or  otherwise  the  i-eceipt  of  the  circular  is 
proved,  he  will  be  presumed  to  have  read  the  contents.  Scholey  v.  Central  Ry. 
9  Eq.  26G. 

It  will  be  borne  in  mind  that  a  person  is  a  member  "  who  has  agreed  to 
become  a  member."  Section  23  of  the  Act  of  18G2.  Accordingly  if  a  company 
allots  shares  and  sends  notice  of  allotment,  and  the  allottee  accepts  the  same, 
he  will  be  bound  just  as  much  as  if  he  had  applied. 


The Co,  Limtd. 

Xo/  — , Street,  &c. 

Sir, — I  beg  to  give  you  notice  that  at  a  meeting  of  the  directors  of   Form  180. 

tliis  CO  held  here  on,  &c.,  a  call  of -I.  per  share  was  made  upon  all  ^  ..  ^    '    ,. 

the  members,  and  that  the  same  will    Ite  payable  at  the  Bank, 

Xo.  — ,  Lombard  Street,  Loudon,  E.C.,  or  at  the  office  of  tlie  co,  ou  the 

day  of next. 

The  amount  payable  by  you  in  respect  of  such  call  on  the shares 

held  by  you  is /. 

I  am,  &c., 

,  Secretary. 

To . 


I  beg  to  give  you  notice  that  at  a  meeting,  &c.,  it  was  resolved  : —   Form  181. 

"  That  a  call  of  /.  per  share  be  made  on  all  the  members,  payal)le  ^^^^^jj^^.j, 

on  the of at ."     The  sum  payable  by  you  is /.,  and 

I  am  directed  to  remind  you  that  in  accordance  witli  clause  —  of  the 
co's  articles  of  as.sociation,  if  the  amount  is  not  pd  on  or  before  the  day 
appointed  for  the  paymt  thereof,  you  will  l)e  liable  to  pay  interest  for 
the  same  at  the  rate  of  [10]  p.  c.  p.  a,,  from  the  day  appointed  for  the 
paymt  thereof  to  the  time  of  the  actual  paymt. 

The Co,  Limtd. 

Xo.  — , Street,  &c. 

Sir, — In  my  letter  of  the •  day  of ,  I  gave  you  notice  that  at   Form  182. 

a  meeting,  &C.  Notice  before 

I  am  now  instructed  to  inform  you,  that  the  directors  require  you  on  forfeiture  for 

or  before  the day  of ,  to  pay  the  sd  sum  of  /.,  together  ^f  ^aii. 

with  interest  thereon,  at  the  rate  of p.  c.  p.  a.  from  the  sd day 

of ,  and  that  in  the  event  of  non-paymt  of  the  sd  call  and  interest, 

p  2 


NOTICES. 


Form  182.  on  or  before  the  sd 


day  of 


at  the  place  afsd,  the  shares  in 


respect  of  which  such  call  was  made,  will  be  liable  to  be  forfeited. 

I  am,  &c., 
To ,  &c.  ,  Secretary. 


The 


Co,  Limtd, 


Form  183. 


Notice  of 
ordiiiiuy 
genenil 
meeting. 


meeting  of 

Street, 

o'clock 


Notice  is   hby  given  that  the  fourth  ordinary  general 

The  Co,  Limtd,  will  be   held  at    the  Hotel,  • 

London,  E.G.,  on  Monday,  the day  of  ,  1884,  at  • 

in  the  afternoon  [for  the  pposes  following,  namely,  to  receive  and  con- 
sider the  annual  statemt  of  accounts  and  balance-sheet,  and  the  reports 
of  the  directors  and  auditors  thereon,  to  elect  directors  and  other  officers 
in  the  place  of  those  retiring  by  rotation,  to  sanction  the  declon  of  a 
dividend  and]  to  transact  the  [other]  ordinary  business  of  the  co. 

The  transfer  books  of  the  co  will  be  closed  from day  the th 

to day  the th,  both  days  inclusive. 


Dated,  &c. 

No.  — ,  — 


Street,  &c. 


By  order. 
A.  B.,  Secretary, 


Form  184. 

Xotice  of  ex- 
traonlinary 
general 
nieetincr. 


If  the  articles  only  require  the  objects  of  an  extraordinary  meeting  to  be 
specified  in  notices  calling  general  meetings,  the  words  in  brackets  can  be 
omitted. 

The Co,  Limtd. 

Notice  is  hby  given,  that  an  extraordinary  general  meeting  of  The 
Co,  Limtd,  will  be  held  at,  &c.,  on,  &c.,  at  o'clock  in  the 


Form  185. 

Another  form. 


afternoon,  when  the  subjoined  resolution  will  be  proposed. 

Resolution. 

That,  &c.  \_sct  it  ovt.'\ 

No.  — , Street,  &c.  By  order. 

[Office  of  Co].  A.  B.,  Secretary. 

The Co,  Limtd. 

Notice  is  hby  given  that  an  extraordinary  meeting  of  the  above-named 


co  will  be  held  at,  &c.,  on,  c^-c,  at 


o'clock  in  the  afternoon,  for  the 


ppose  of  considering,  and,  if  thought  fit,  passing  a  resolution  [or,  when 
a  resolution  will  be  proposed]  authorising  the  directors  [^.<7.,  "to  raise 
the  sum  of 1.  by  the  issue  of  mtge  debentures  or  otherwise."] 

Dated,  &c.  By  order. 

No.  «&c.  A.  B.,  Secretary. 


The 


Co,  Limtd. 


Form  186. 


Notice  of  ex- 
traordinary 
^eneral  meet- 


Notice  is  hby  given  that  an  extraordinary  general  meeting  of  The 
— ■  Co,  Limtd,  will  be  held  at  \_c.[i.,  "  The  Terminus  Hotel,  Cannon 


Street,  in  the  City  of  London,"  or  "  the  registered  office  of  the  co,  No." 
Tng  for  passing  &c.],  ou day  of ,  1884,  at o'clock  in  the  afternoon,  when 


special  resolu- 
tion. 


the  subjoined  resolution  will  be  proposed. 


POEMS. 


21: 


Should  the  rcsohitiou  Ix;  passed  by  the  required  majority,  it  ^vill  be   Form  186. 
submitted  for  confirmation  as  a  special  resolution  to  a  second  extra- 
ordinary  meeting  which  will  l)e  subsequently  convened  [or  which  in  the 

absence  of  further  notice  will  be  held  on  the day  of at  the 

same  time  and  place]. 

Resolution. 
That,  &c. 

[ffere  set  out  the  resolution.^ 

Dated .  By  order  of  the  Board. 

No.  — , Street, .  A.  B.,  Secretary. 

Where  it  is  intended  to  pass  a  special  resolution,  the  notice  of  the  first  meet- 
ing ought  to  inform  members  expressly  or  impliedly  of  the  fact.  But  some 
resolutions  imijly  the  intention,  e.  g.,  a  resolution  purporting  to  alter  the 
articles.  It  has  not  been  settled  whether  the  exact  terms  of  the  proposed  reso- 
lution must  be  set  out  in  this  notice.  Section  51  of  the  Act  says,  "of  which 
notice  sj^ecifying  the  intention  to  propose  such  resolution  has  been  duly  given," 
[supra,  p.  190]  but  it  is  conceived  that  this  will  not  be  strictly  construed,  and 
that  provided  fair  notice  of  the  subject-matter  of  the  proposed  resolution  is 
given  it  is  suflicient.  See  Imperial  Bank  v.  Bk.  of  Hind.  5  Eq.  91.  And  where 
the  notice  is  framed  in  general  terms  it  would  seem  that  an  amendment  might 
properly  be  proposed,  provided  that  the  amended  resolution  falls  within  the 
notice.     See  Imperial  Hydropathic  v.  Hampson,  23  C.  Div.  p.  9. 

But  if  a  notice  points  exclvisively  to  a  specific  resolution,  e.  g.,  "to  increase 
the  capital  to  lO.OOOL  by  the  creation  of  5,000  new  shares  of  IL  each,"  it  would 
seem  that  no  modification  or  amendment  of  such  resolution  could  be  made  at 
the  meeting.  Where  it  is  desired  to  leave  room  for  amendment  the  words 
"  either  with  or  without  modification "  should  be  inserted  before  the  word 
"  passing,"  or  the  notice  should  be  framed  more  generally.  It  would  seem 
that  a  resolution  cannot  be  confirmed  so  as  to  become  a  special  resolution,  unless 
the  notice  of  the  first  meeting  gave  direct  or  indirect  notice  that  it  was  in- 
tended to  proceed  by  special  resolution. 

As  regards  the  use  of  the  words  in  brackets  at  the  end  of  the  above  notice, 
there  would  not  prim'h  facie  appear  to  be  any  objection  to  convening  the  two 
meetings  by  the  one  notice,  but  of  course  if  the  first  meeting  is  adjourned  so 
that  there  would  not  be  fourteen  clear  days  between  the  two  meetings,  a  fresh 
notice  may  be  requisite.  And  occasionally  the  regulations  provide  that  "  not 
less  than  seven  days,  and  not  more  than  twenty -one  days  notice  shall  be  given"; 
this  may  interfere  with  a  simple  notice. 

The Co,  Limtd. 

Notice  is  hby  given,  that  an  extraordinary  general  meeting  of  The    Form  187. 

Co,  Limtd,  will  be  held  at,  &c.,  on  the  10th  February,  1884,  when  Zrr.~~~      T 

'  .  ,  .  J}  >  JNoticeof meet- 

the  suljjoined  resolution,  which  was  passed  at  the  extraordinary  general  ing  to  confirm 

meeting  of  the  co  held  on  the th  of  January,  1884,  will  be  submitted  ^l""''^'^  '''''"'''* 

for  confirmation  as  a  specuil  resolution. 

That,  &c. 

[Set  out  resolution  as  passed."] 

Dated,  &c.  By  order. 

No.  — , Street,  &c.  A.  B.,  Secretary. 

It  seems  clear  that  no  modification  of  the  resolution  can  be  permitted  at  the 


:14 


NOTICES. 


Form  187.  confirmatory  meeting'.  It  must  either  be  passed  or  rejected.  There  must  be 
an  interval  of  fourteen  clear  days  between  the  two  meetings.  See  section  51, 
supra,  p.  190. 


The 


Co,  Limtd. 


Porm  188.        Notice  is  hl)y  o-iveii,  that  an  extraordinary  general  meeting;-  of  The 

Notice  of  onli- ^^^'  Limtd,  will  bc  held  at,  &c.,  on,  &c.,  at o'clock  in  the 

nary  aud  aftcruoon,  whcii  the  .subjoined  resolution,  ■which  was  passed  at  the  extra- 

general  meet^    ordinary  meetinu-  of  the  co,  held  on,  &c.,  will  be  submitted  for  confirma- 
ings  to  be  liuld  tiou  as  a  Special  resolution. 

on  same  <  ay.  j^^^  notice  is  hby  also  given  that  at  the  same  place,  and  on  the  same 
day,  at o'clock  in  the  afternoon,  or  so  soon  afterwards  as  the  extra- 
ordinary general  meeting  shall  be  concluded,  the  fourth  ordinary  general 
meeting  of  the  co  will  be  held  for  the  ppose  of  [see  supra,  p.  i(»4]  trans- 
acting the  ordinary  business  of  the  co. 

Dated,  &c.  By  order. 

No.  — ,  — —  Street,  &c.  A.  B.,  Secretary. 

Sometimes  it  is  found  convenient  to  convene  an  extraordinary  meeting  fox" 
the  same  day  as  the  ordinary  meeting,  but  it  must  be  borne  in  mind  that  a 
separate  proxy  is  reqviisite  for  each  of  two  meetings  though  held  the  same  day^, 
supra,  p.  140. 

Whei-e  two  successive  siJecial  resolutions  have  to  be  passed  it  is  not  unusual 
to  pass  them  in  three  meetings,  or  to  hold  the  two  central  meetings  on  the 
same  day,  as  follows.  See  Form  1S9,  infra.  It  seems  better  to  adopt  the 
course  last  mentioned,  for  it  might  be  contended  that  a  special  resolution  does. 
not  become  effective  until  the  close  of  the  meeting. 

Notice  of  ifoefimi. 
The Co,  Limtd. 


Form  189. 


Notice  is  hby  given,  that  an  extraordinary  general  meetiug,  &c.,  when 
the  subjoined  resolution  will  be  proposed. 

Should  the  sd  resolution  be  passed  by  tlie  required  majority,  it  will 
be  submitted  for  confirmation  as  a  special  resolution  to  a  second  extra- 


Notice  of 

extraordinary 
.general  meet- 
ings for  pass- 
ing two  special  Ordinary  meeting  to  be  subsequently  con\'ened. 

I'e.-iohitions  in 

liiree  nieetings,  -n       ■#    .  • 

Resolimon. 


That  the  articles  of  association  of  the  co  be  altered  by  the  insertion 
therein  immediately  after  Article  10  of  the  following  Article,  namely  : — 
1(1^/.  The  CO  may  from  time  to  time  reduce  the  capital. 


Form  190. 

Siibsc'inent 
notice. 


The 


Co,  Limtd. 


Notice  is  hby  given,  that  an  extraordinary  general  meeting  of  The 

Co,  Limtd,  will  be  held,  &c,,  when  the  resolution.  That  [«s  ahove\ 

which  was  passed  at  the  extraordinary  meeting  of  the  co  held  on  the 

inst.,  will  be  submitted  for  confirmation  as  a  special  resolution.  Should 
such  resolution  l)e  duly  continued,  the  following  resolution  will  1)C  i)ro- 
poscd  at  the  same  meeting,  and,  if  passed  by  the  requisite  majority,  will 


FORMS. 


215 


be  submitted  for  confirmation  as  a  special  resolution  to  a  subsequent   Form  190. 

extraordinary  <i-eueral  meeting,  which  will  be  held  on  the day  of 

at  the  same  time  and  place. 

Resolution. 

That  the  capital  of  the  co  be  reduced  fi'om 1,  divided  into 

shares  of 1.  each,  to 1,  divided  into  ■ shares  of /.  each. 

Dated,  &c.  ]jy  order. 

No.  — ,  SzQ.  A.  B.,  Secretary. 

If  there  are  to  be  four  meetings,  the  notice  will  provide  for  two 
meetings  on  the  same  day,  as  in  Form  189,  mutatis  mutandis. 

To  the  Directors  of  the Co,  Limtd, 

"VVe,  the  undersigned  meml)ers  of  the  above-named  co,  holding  in  the   Form  191. 

aggregate shares  and  upwards  in  the  capital  thereof,  do  hby,  in  K^TuisitioiToT 

psnance   of    the    provisions   in  this   behalf    contd  in   the    articles   of  members  for  a 
association  of  the  co,  require  you  to  convene  an  extraordinary  general  Sonera  ^ 

meeting  of  the  co,  to  be  held  on  Monday,  the th  day  of  June,  1884, 

at  six  o'clock  in  the  afternoon,  for  the  ppose  of  considering,  and,  if 
thought  fit,  passing,  the  subjoined  resolntion. 

Resolutio7i. 

That,  &c.  \_sct  it  o?/i.] 
Dated,  &c. 

See  supra,  p.  1.3 1,  Clause  GO. 

iSTotice  [_as  in  Form  184,  adding .-] 

This  notice  is  given  by  the  undersigned  members  of  the  co  [or  by  the   Form  192. 
direction  of  the  members  of  the  co  specified  in  the  schedule  hto  and]  ^^  ..      , 
holding  in  the  aggTegate  upwards  of  one-fifth  of  the  capital  in  exercise  members 

of  the  power  conferred  by  article of  the  co's  articles  of  association,  ^'■^^^^^'i  ">^et- 

the  directors  having  failed  for days  after  the  deposit  of  a  requisition 

in  accordance  with  such  articles  of  association  to  convene  a  meeting  for 
the  pposes  above  meutd. 

Dated,  &c.  \_Names  of  conveners.'] 

If  the  words  in  brackets  are  used,  a  schedule  of  names  will  be  added,  and 
the  notice  will  be  sitrned  by  some  person  on  behalf  of  the  conveners.  In  either 
case  printed  signatures  would  probably  be  sufficient. 


Winding  up  Notices. 

See  infm.  Winding  up. 

Sometimes  in  view  of  a  winding  up  it  is  desirable  to  send  out  a  circular  to 
shareholders  making  grave  statements  as  to  the  directors  and  promoters,  &c. 
See  Quartz  Hill  Co.  v.  Beall,  20  C.  Div.  501  ;  30  W.  E.  58i,  and  Plating  Co.  v. 
Farquharson,  17  C.  D.  19,  as  to  restraining  such  circulars. 


c)iQ  NOTICES. 

Form  192. 

Notices  to  the  Registrars  of  Joint-Stock  Companies. 

The  Act  requires  a  considerable  number  of  notices  to  be  given  to  the  regis- 
trar. Every  such  notice  requires  a  5s.  stamp.  See  Table  B.  in  the  first 
schedule  to  the  Act  of  1862,  and  suxira,  p.  73.  The  notices  are  in  many  cases 
made  out  on  skeleton  forms  supplied  by  the  registration  agents. 

The  following  are  some  of  the  cases  in  which  a  notice  must  be  given : — 

Notice  to  Office. 

Section  39  of  the  Act  provides  that :  "  Every  company  under  this  Act  shall 
have  a  registered  office,  to  which  all  communications  and  notices  may  be  ad- 
dressed. If  any  company  under  this  Act  carries  on  business  without  having 
such  an  ofiice,  it  shall  incur  a  jienalty  not  exceeding  five  pounds  for  .every  day 
during  which  business  is  so  carried  on." 

And  section  -10  jirovides  that :  "  Notice  of  the  situation  of  such  registered 
office,  and  of  any  change  therein,  shall  be  given  to  the  registrar,  and  recorded 
by  him.  Until  such  notice  is  given,  the  company  shall  not  be  deemed  to  have 
complied  with  the  provisions  of  this  Act,  with  respect  to  having  a  registered 
office." 

The  ordinary  form  of  notice  is  as  follows  : — 


The Co,  Limtd. 

Form  193.       To  the  Registrar  of  Joint  Stock  Cos  : — 

The  Co,  Limtd,  hby  give  you  notice,  in  accordance  with  the 

Companies  Act,  1862,  that  the  registered  office  of  the  co  is  situated 
at,  &c. 

Dated,  &c.  A.  B.,  Secretary. 

The  notice  on  change  of  office  is  the  same  as  above,  only  that  the  word 
"  now  "  is  inserted  before  the  word  "  situated." 

Notice  of  Consolidation  of  Shares  and  Conversion  of  Shares  into  Stock. 

By  section  28  of  the  Act :  "  Every  company  under  this  Act  having  a  capital 
divided  into  shares,  that  has  consolidated  and  divided  its  capital  into  shares  of 
larger  amount  than  its  existing  shares,  or  converted  any  portion  of  its  capital 
into  stock,  shall  give  notice  to  the  registrar  of  joint-stock  companies  of  such 
consolidation,  division,  or  conversion,  specifying  the  shares  so  consolidated, 
divided,  or  converted." 

Notice  of  Increase  of  Capital  or  in  Number  of  Members. 

Section  3i  of  the  Act  is  as  follows  :  "  Where  a  company  has  a  capital  divided 
into  shares,  whether  such  shares  may  or  may  not  have  been  converted  into 
stock,  notice  of  any  increase  in  such  capital  beyond  the  registered  capital,  and 
where  a  company  has  not  a  capital  divided  into  shares,  notice  of  any  increase 
in  the  number  of  members  beyond  the  registered  member,  shall  be  given  to  the 
registrar  in  the  case  of  an  increase  of  capital,  within  fifteen  days  from  the  date 
of  the  passing  of  the  resolution  by  which  such  increase  shall  have  been  autho- 
rised, and  in  case  of  an  increase  of  members  within  fifteen  days  from  the  time 
at  which  such  increase  of  members  has  been  resolved  on  or  has  taken  jjlace ; 
and  the  registrar  shall  forthwith  record  the  amoiint  of  such  increase  of  capital 
or  niemliers  :  if  such  notice  shall  not  be  given  within  the  period  aforesaid,  the 
company  in  default  shall  incur  a  penalty  not  exceeding  five  pounds  for  every 
day  during  which  such  neglect  to  give  notice  continues,  and  every  director  and 


FORMS.  237 

manager  of  the  company  who  shall  knowingly  and  wilfully  ai^thorise  or  jiermit    Foritl  193. 

such  default  shall  incur  the  like  penalty."  

The  usual  form  of  notice  is  as  follows : — 

The Co,  Limtd. 

To  the  Registrar  of  Joint  Stock  Cos  :—  Form  194. 

The Co,  Limtd,  hbj  give  you  notice,  that  by  a  resolution  of  the  Notice  of 

<'0  in  general  meeting,  passed  the day  of  [ilte  form  vwst  he  increase  of 

varied  if  the  increase  is  effected  by  special  resohdion,  or  ly  resolution  of  ' 
the  directors'],  the  nominal   capital  of  the  co  has  been  increased  by  the 

addition  thereto  of  the  sum  of 1.,  divided  into shares  of 1. 

each,  beyond  the  registered  capital  of /. 

Dated,  &c.  A.  B.,  Secretary. 

In  addition  to  a  5s.  registration  stamj),  a  notice  of  increase  of  capital  or  in 
number  of  members  must  be  stamped  as  above  mentioned,  p.  216. 

Notice  of  Special  Resolution. 

By  s.  53  of  the  Act  it  is  provided  that :  "  A  copy  of  any  special  resolution 
that  is  passed  by  any  company  under  this  Act  shall  be  printed  and  forwarded 
to  the  registrar  of  joint-stock  companies,  and  be  recorded  by  him.  If  such  copy 
is  not  so  forwarded  within  fifteen  days  from  the  date  of  the  confirmation  of  the 
resolution,  the  comj^any  shall  incur  a  penalty  not  exceeding  two  pounds  for 
every  day  after  the  expiration  of  such  fifteen  days  during  which  such  copy  is 
omitted  to  be  forwarded,  and  every  director  and  manager  of  the  company  who 
shall  knowingly  and  wilfully  authorise  or  permit  such  default  shall  incur  the 
like  penalty." 

The  following  is  the  form  used  : — 

(Copy.) 

Special  Resolutions. 

The  ~^^  Co,  Limtd. 

Passed  — th ,  1877.     Confirmed  — th ,  1877. 

At  an  extraordinary  general  meeting  of  The  Co,  Limtd,  duly  Form  195. 

convened  and  held  at,  &c.,  on  the  — th  day  of ,  1884,  the  subjoined  „^  ^  ^^  suecial 

special  resolution  was  duly  passed,  and  at  a  subsequent  extraordinary  resolutions, 
general  meeting  of  the  sd  co,  also  duly  convened  and  held  at  the  same 

place  on  the  — th  day  of  ,  188-1,  the  subjoined  special  resolution 

was  duly  confirmed. 

"  That,"  &c.  ,  Secretary. 

A  special  or  extraordinary  resolution  need  not  be  advertised  in  the  Gazette 
unless  it  is  for  winding  up. 

The Co,  Limtd. 

Xo.  — .     24, Street,  S.W.     8th  August,  1883. 

To , 


Form  196. 


The  directors,  by  virtue  of  the  powers  given  to  them  by  clause  —  of  Notice  of 
the  articles  of  association,  having  determined  to  pay  an  interim  dividend  warrant. 


218  NOTICES. 

Form  196.    of  —  p.  c.  [fi'co  of  income  tax]  upon  the  ordinary  shares  [or  the  pcl-up 
capital]. 

I  beg  to  hand  you   herewith  a  warrant   [or  draft]   for  /.,  the 

amount  of  such  dividend  in  respect  of ■  lU/.  shares  [upon  which  the 

sum  of /.  has  been  pd]. 

This  half-sheet  is  to  l)e  retained  by  the  shareholder,  who  must  sign 
the  warrant  at  the  foot  hereof,  and  pass  that  only  through  a  banker  for 
paymt. 


The 


Co,  Limtd-. 


Interim  Dividend,  I880. 

To  the Bank,  Limtd.         3rd  August,  1888. 

Pay  to  the  owner  of the  sum  of 1. 

For  the  above-named  co, 

,  Directors. 

Signatures  of  Shareholders, ,  Secretary. 

Form  197.       Herewith  I  beg  to  hand  you  a  warrant  for  the  dividend  at  the  rate 

Anotlier  *^^  —  P-  ^-J  ^^P^^^ shares   in  respect  of  which  the  sum  of  /. 

has  been  pd  at  meeting,  with  the  interim  dividend  of  —  p.  c.  pd  on 

the last,  the  dividend  of  8  p.  c.  p.  a.  for  the  year  ending  , 

1883. 


The 


Co,  Limtd. 


Form  198.        I  ani  instructed  to  forward  you  the  subjoined  statemt  for  tlie  amount 
Anotlier.  '^f  the  dividend  on  the  shares  therein  mentd,  free  of  income  tax,  and  tho 

warrant  annexed  for  the  amount. 

Dividend  Statement. 


Description 
of  Shares. 

Rate  per 
cent. 

Number  of 
Shares. 

Period. 

Amount. 

This  dividend  statemt  to  be  retained  by  the  proprietor. 


Total  £■ 


X.B. — Proprietors  are  requested  to  give  to  secretary  early  notice  of 
any  change  of  address. 


rOEMS.  210 

The Co,  Limtd.  Form  19Sa. 

Xo.  — .  Twexty-Third  Dividend.  AnotUcr. 

Dividend  for  the  half  year  ending  —  June,   188 — ,  at  the  rate  of 

eight  pounds  [8/.]  p.  c.  p.  a.,  payable  on  and  after  th  August, 

188—,  at  tlie Bank, Street,  E.C. 

£     s.     d. 
Six  Months  on  [lo]  fully  pd  up  10/.  shares,  each  at 

ds.  per  share 

Less  income  tax  at  the  rate  of  — (J.  in  the  /. 


The  ahove  claim  stands  in  the  name  of 


This  portion  to  he  retained  by  the  shareholder. 
The  warrant  to  be  torn  oft",  and  presented  at  the  bankers  after  being 
signed  at  the  foot. 

/  hhij  ccriifij  that  I  hare  deducted  fur  income  tax,  the  amoinii  set  forth 
ill  the  above  statemt,  and  that  the  amovnt  so  dedvcted  witj  he 2^d  hij  me  to 
the  pro2>er  officer  for  receijd  of  taxes. 

,  Secretary. 

X.B. — Persons  requiring  repaymt  of  income  tax  are  informed  that 
the  inland  revenue  will  receive  this  statemt  as  a  voucher  in  claiming 
taxes. 

See  as  to  income-tax,  note,  infra,  p.  220. 

To  the  Registrar  of  Joint  Stock  Cos:—  Form  189. 

I,  the  undersigned,  being  the  liq  of  the  A.  Co,  Limtd,  give  you  notice  consent  to 
that  the  sd  co  is  in  course  of  being  dissolved,  and  I  hl;)v,  under  the  mo-  "^"'  co'"iw".v 

.  1        "i     1     IP     /•    1  using  luime  ot 

visions  of  the  Companies  Act,  18G2,  section  20,  and  on  behali  oi  the  co,  oi,i. 
testify  its  consent  to  the  registration  of  a  new  co,  by  the  name  of  the  A. 
Co,  Limtd. 

C.  D,,  Secretary.  A.  B.,  Liquidator. 

Dated,  &c. 

The  above  is  the  ordinary  form.  The  registrar  requires  it  to  be  signed  by 
the  liquidator,  or  by  two  of  the  directors,  or  by  the  whole  of  the  members, 
Avhen  the  subscribers  to  the  memorandvim  of  association  are  the  only  members, 
or  by  any  other  person  duly  authorised  at  a  general  meeting,  the  date  of  which 
should  be  given,  and  to  be  countersigned  by  the  secretary  (if  any). 

See  further  infra,  introductory  notes  to  "  Eeconstruction  "  and  "Amalgama- 
tion." 

For  other  notices,  see  Index. 

Income-Tax. 

By  Schedule  D.  to  the  2nd  section  of  10  &  17  Vict.  c.  31.,  duties  are  granted 
to  the  Crown  (inter  alio) — 

"  For  and  in  respect  of  the  annual  profits  or  gains  arising  or  accruing  to  any 


220 


NOTICES. 


Form  199     person  residing  in  the  United  Kingdom  from  any  kind  of  property  whatever, 

'-  whether  situate  in  the  United  Kingdom  or  elsewhere,  and  for  or  in  respect  of 

the  annual  profits  or  gains  arising  or  accruing  to  any  person  residing  in  the 
United  Kingdom  from  any  profession,  trade,  employment  or  vocation,  whether 
the  same  shall  be  respectively  carried  on  in  the  United  Kingdom  or  elsewhere, 
and  to  be  charged  for  every  twenty  shillings  of  the  annual  amount  of  such 
profits  and  gains. 

"  And  for  and  in  respect  of  the  annual  profits  or  gains  arising  or  accruing  to 
any  person  whatever,  whether  a  subject  of  Her  Majesty  or  not,  although  not 
resident  within  the  United  Kingdom,  from  any  property  whatever  in  the 
United  Kingdom,  or  any  profession,  trade,  emijloyment  or  vocation  exercised 
within  the  United  Kingdom,  and  to  be  charged  for  every  twenty  shillings  of 
the  annual  amount  of  such  profits  and  gains." 

And  by  s.  5  the  duties  imposed  by  that  Act  are  directed  to  be  assessed  under 
the  regulations  of  5  &  6  Vict.  c.  35,  and  the  Acts  therein  mentioned  or  re- 
ferred to. 

By  5  &  G  Vict.  c.  35,  s.  40,  it  is  enacted  that  "all  ...  .  companies  .  .  .  ., 
whether  corporate  or  not  corporate,  shall  be  chargeable  with  such  and  the  like 
duties  as  any  persons,"  and  certain  officers  thereof  are  required  [s.  5-i]  to  make 
the  requisite  returns. 

By  s.  12,  any  person  not  resident  in  Great  Britain,  whether  a  subject  of  Her 
Majesty  or  not,  shall  be  chargeable  in  the  name  of  any  trustee  .  .  .  .,  or  of  any 
factor,  agent,  or  receiver  having  the  receipt  of  any  pi-ofits  or  gains  arising  as 
herein  mentioned  and  belonging  to  such  persons 

By  s.  100  the  duties  granted  by  s.  1,  Schedule  D.  (corresponding  with  Sche- 
dule D.  above  referred  to)  are  directed  to  be  assessed  under  certain  rules,  of 
which  the  following  may  be  given  : — 

First.  The  duty  to  be  charged  in  respect  thereof  shall  be  computed  on  a 
sum  not  less  than  the  full  amount  of  the  balance  of  the  profits  or  gains  of  such 
trade,  manufacture,  adventure,  or  concern  upon  a  fair  and  just  average  of  three 
years  ending  on  such  day  of  the  year  immediately  preceding  the  year  of 
assessment  on  which  the  accounts  of  the  said  trade,  manufacture,  adventure, 
or  concern  shall  have  been  usually  made  uiJ,  or  on  the  5th  day  of  April  pre- 
ceding the  year  of  assessment,  and  shall  be  assessed,  charged,  and  paid  without 
other  deduction  than  is  hereinafter  allowed  :  Provided  always,  that  in  cases 
where  the  trade,  manufacture,  adventure,  or  concern  shall  have  been  set  up 
and  commenced  within  the  said  period  of  three  years,  the  computation  shall 
be  made  for  one  year  on  the  average  of  the  balance  of  the  profits  and  gains 
from  the  period  of  first  setting  uj?  the  same  :  Provided  also,  that  in  cases  where 
the  trade,  manufacture,  adventure,  or  concern  shall  have  been  set  up  and 
commenced  within  the  year  of  assessment,  the  computation  shall  be  made 
according  to  the  rule  in  the  sixth  case  of  this  schedule. 

Second.  The  said  duty  shall  extend  to  every  person,  body  politic,  or  cor- 
poi-ate  fi'aternity,  fellowship,  comijany,  or  society,  and  to  every  art,  mystery, 
adventure,  or  concern  carried  on  by  them  respectively  in  Great  Britain  or 
elsewhere  as  aforesaid,  except  always  such  adventui-es  or  concerns  on  or  about 
lands,  tenements,  hereditaments,  or  heritages  as  are  mentioned  in  Schedule  (A.), 
and  directed  to  be  therein  charged. 

Third.  In  estimating  the  balance  of  profits  and  gains  chargeable  under 
Schedule  (D.),  or  for  the  purpose  of  assessing  the  duty  thereon,  no  sum  shall 
be  set  against,  or  deducted  from,  or  allowed  to  be  set  against  or  deducted  from 
such  profits  or  gains  on  account  of  any  sum  exiDended  for  repairs  of  premises 
occupied  for  the  purpose  of  such  trade,  manufacture,  adventure,  or  concern, 
nor  for  any  sum  expended  for  the  suiij^^y  of  repairs  or  alterations  of  any  imple- 
ments, utensils,  or  articles  employed  for  the  puri^ose  of  such  trade,  manufac- 
ture, adventure  or  concern  beyond  the  sum  usually  exjDended  for  such  pui-poses 
according  to  an  average  of  three  years  jireceding  the  year  in  which  such 
assessment  shall  be  made,  nor  on  account  of  loss  not  connected  with,  or  arising 


FOEMS.  221 

out  of  such  trade,  manufacture,  adventure  or  concern,  nor  on  account  of  any  Form  199. 
capital  withdrawn  therefrom,  nor  for  any  sum  employed,  or  intended  to  be 
employed,  as  capital  in  such  trade,  manufacture,  adventure  or  concern,  nor  for 
any  capital  employed  in  improvement  of  premises  occupied  for  the  purposes  of 
such  trade,  manufacture,  adventure  or  concern,  nor  on  account  nor  under  pre- 
tence of  any  interest  which  might  have  been  made  on  such  sums,  if  laid  out  at 
interest,  nor  for  any  debts  except  bad  debts,  proved  to  be  such  to  the  satis- 
faction of  the  commissioners  respectively,  nor  for  any  average  loss  beyond  the 
actual  amount  of  loss  after  adjustment,  nor  for  any  sum  recoverable  under  an 
insurance  or  contract  of  indemnity. 

Fourth.  In  estimating  the  amovint  of  the  profits  and  gains  arising  as 
aforesaid,  no  deduction  shall  be  made  on  account  of  any  annual  interest,  or 
any  annuity  or  other  annual  payment  payable  out  of  such  profits  or  gains. 

The  following  rules  which  apj^ear  in  the  same  section  may  also  be  mentioned  : 

First — In  estimating  the  balance  of  the  profits  or  gains  to  be  charged  accord- 
ing to  either  of  the  first  or  second  cases,  no  sum  shall  be  set  against  or  deducted 
from  or  allowed  to  be  set  against  or  deducted  from  such  profits  or  gains  for  any 
disbursements  or  expenses  whatever,  not  being  money  wholly  and  exclusively 
laid  out  or  expended  for  the  purposes  of  such  trade,  manufacture,  adventure, 
or  concern,  or  of  such  profession,  employment,  or  vocation,  nor  for  any  disburse- 
ments or  expenses  of  maintenance  of  the  parties,  their  families,  or  establish- 
ments, nor  for  the  rent  or  value  of  any  dwelling  house  or  domestic  offices,  or 
any  part  of  such  dwelling  house  or  domestic  offices,  except  such  part  thereof  as 
may  be  used  for  the  purposes  of  such  trade  or  concern  not  exceeding  the  pro- 
portion of  the  said  rent  or  value  hereinafter  mentioned,  nor  for  any  sum  ex- 
pended in  any  other  domestic  or  private  purposes  distinct  from  the  purposes  of 
such  trade,  manufacture,  adventure,  or  concern,  or  of  such  profession,  emjiloy- 
ment,  or  vocation. 

Second — The  computation  of  the  duty  to  be  charged  in  respect  of  any  trade, 
manufacture,  adventure,  or  concei-n,  or  any  profession,  whether  carried  on  by  any 
person  singly,  or  by  one  or  more  persons  jointly,  or  by  any  corporation,  company, 
fraternity,  or  societ j%  shall  be  made  exclusive  of  the  profits  or  gains  arising  from 
lands,  tenements,  or  hereditaments  occupied  for  the  purpose  of  such  profession, 
trade,  manufacture,  adventure,  or  concern. 

By  5  &  6  Vict.  c.  80,  s.  2,  "  All  persons  intrusted  with  the  payment  of 
annuities  or  any  dividends  or  shares  of  annuities  payable  out  of  the  revenue  of 
any  foreign  state  to  any  persons,  corporations,  companies  or  societies  in  Great 
Britain,  or  acting  therein  as  agents,  or  in  any  other  character,"  are  to  make  a 
return  of  the  same  as  therein  mentioned,  are  to  pay  the  duty  on  such  annui- 
ties, &c.,  out  of  the  monies  in  their  hands  on  behalf  of  the  persons  entitled  to 
the  same,  and  by  IG  &  17  Vict.  c.  34,  s.  10,  these  provisions  are  extended 
to  "  all  interest,  dividends,  or  other  annual  payments  payable  out  of  or  in 
respect  of  the  stocks,  funds,  or  shares  of  any  foreign  company,  society, 
adventure  or  concern,"  and  intrusted  to  persons  in  the  United  Kingdom  for 
payment. 

And  by  s.  9  of  29  Vict.  c.  3G,  the  last  mentioned  provisions  are  extended  to 
dividends  and  interest  when  the  title  of  the  person  to  whom  the  same  may  be 
payable  is  shown  by  registration  or  entry  of  the  name  of  such  person  in  any 
book  or  list  ordinarily  kept  in  the  United  Kingdom. 

By  subsequent  Acts  the  duties  are  continued.  See  the  Customs  and  Inland 
Eevenue  Act,  1883,  iG  Vict.  c.  10. 

As  to  the  duties  on  mines,  quarries,  docks,  waterworks,  cana'.s.  Sec,  see  5  &  G 
Vict.  c.  35,  s.  GO,  and  Mersey  Docks  v.  Lucas,  8  App.  Cas.  89G,  and  Ee  Ryhope 
Colliery  Co.,  7  Q.  B.  D.  185. 

The  following  cases  may  be  mentioned  :  Registration  in  England  is  not  con- 
clusive evidence  that  the  company  resides  here,  but,  "  if  you  find  that  a  com- 
pany which  is  registered  in  a  particular  country,  acts  in  this  country,  has  its 
office  and  receives  dividends  in  this  country,  you  may  say  that  those  facts,  coupled 


222  NOTICES. 

Form  199.  with  registration,  lead  you  to  tlic  conclusion  that  its  residence  is  in  that 
country."  Hviddlestone,  B.,  Calcutta  Jute  Mills,  1  Ex.  D.  •lo3.  But  in  no  case 
has  it  been  held  that  a  comjjany  registered  here  is  not  a  resident.  Ceserea  Co., 
ibid.;  Alexandria  Water  Co.  v.  Musgrove,  11  Q.  B.  Div.  171.  As  to  "exercising 
a  trade  "  in  England,  see  Eiichsen  v.  Last,  8  Q.  B.  Div.  41 1,  a  foreign  tele- 
graph company. 

A  company  resident  here  and  carrying  on  business  abroad  must  pay  duty 
on  all  its  profits,  whether  made  at  home  or  abroad.  Alexandri<i  Water  Co. ; 
Calcutta  Jute  Mills,  ubi  supra;  and  also  on  dividends  intrusted  to  it  for  distri- 
bution here ;  but  not  so  as  to  be  doubly  charged.  Alexandria  Water  Co.,  ubi 
supra. 

As  to  deductions :  none  can  be  allowed  for  depreciation  of  buildings, 
plant,  &c.  Forder  v.  Handyside,  1  Ex.  D.  233  ;  or  for  depreciation  of  leases, 
Watney  v.  Musgrove,  5  Ex.  D.  241  ;  or  for  interest,  Mersey  Docks  v.  Lucas,  8  App. 
Cas.  891  ;  Alexandria  Water  Co.  v.  Musgrove,  11  Q.  B.  D.  174 :  in  the  case  last 
mentioned  the  interest  was  payable  abroad  to  bondholders.  See  also  Coltness 
Iron  Co.  V.  Black,  G  App.  Cas.  315,  that  no  allowance  for  sinking  new  pits  can  be 
made.  A  foreign  company  residing  abroad,  but  having  an  agency  here,  must 
pay  on  all  its  profits  made  here,  and  on  any  dividends  intrusted  to  the  agency 
here  for  distribution.  Atty.-Gen.  v.  Aleacander,  L.  E.  10  Ex.  20 ;  Gilbertson  v. 
Ferguson,  7  Q.  B.  Div.  5G2.  Accordingly  it  is  sometimes  found  expedient, 
where  a  company  is  carrying  on  a  concern  .abroad,  to  vest  it  in  a  local  company, 
in  which  the  parent  company  will  hold  shares ;  by  so  doing  the  parent  company 
avoids  the  duty  on  undivided  profits,  and  on  profits  applied  in  making  good 
depreciations,  extending  works,  &c. 

As  to  the  position  of  a  British  partnership  carrying  on  business  here  and 
abroad,  see  what  was  said  in  Gilbertson  v.  Ferguson,  7  Q.  B.  Div.  568  ;  and  as 
to  position  of  foreign  partnership,  see  Sulley  v.  Atty.-Gen.,  5  H.  &  N.  711 ;  29 
L.  J.  Ex.  4G4. 

As  to  the  effect  of  change  in  partnership  and  conversion  of  concern  into  com- 
pany, see  Ryhope  Colliery  Co.,  7  Q.  B.  D.  485. 

As  to  assessing  an  undertaking  as  a  quarry  or  mine,  see  Jones  and  The 
Cvsmorthan  Co.,  5  Ex.  Div.  93. 


CERTIFICATES. 


IXTRODUCTORY   NOTES. 

By  section  31  of  the  Act :  A  certificate  under  tlie  common  seal  of  tlie  Certificates 
company,  specifying  any  sliare  or  shares  or  stock  held  by  any  member  of  •?"■."'"'  •^'^'"'^ 
a  company,  shall  he  prima  facie  evidence  of  the  title  of  the  memlter  to  title, 
the  share  or  shares  or  stock  therein  specified,  and  section  ;->2  j^vovides 
for  the  keeping  of  a  rogistei'  of  members.     "  This  power  of  granting 
certificates  is  to  give  shareholders  the  opportunity  of  more  easily  deal- 
ing with  their  shares  in  the  market,  and  to  afford  facilities  to  them  of  oiiject  of. 
selling  their  shares  by  at  once  showing  _a  marketable  title,  and  the  effect 
of  this  facility  is  to  make  the  shares  of  greater  value.     The  power  of 
giving  certificates  is,  therefore,  for  the  lienefit  of  the  company  in  general ; 
and  it  is  a  declaration  by  the  coni})any  to  all  the  world  that  the  person  in 
whose  name  the  certificate  is  made  out,  and  to  whom  it  is  given,  is  a 
shareholder  in  the  company,  and  it  is  given  by  the  company  with  the 
intention  that  it  should  be  so  used  l)y  the  person  to  whom  it  is  given, 
and  acted  upon  in  the  sale  and  transfer  of  shares."    Per  Cockburn,  C  J. 
In  re  Baliia,  dr.,  Rij.  Co.,  L.  R.  3  Q.  B.  595  ;  Smith's  L.  C,  Vol.  II.. 

"While,  however,  the  benefit  is  as  above  stated,  it  behoves  the  directors  Re.-ponsi- 
to  use   the  utmost   care  in   issuing  certificates,  for   on   the   principle  !''''*'<?^  ^^ 

'-  '^       issuing. 

illustrated  by  Piclcard  v.  Scars,  G  Ad.  &  E.  409,  and  Freeman  v.  Cooke, 

2  Ex.  054,  the  compauy  is  estopped  from  denying  the  truth  of  the 

representation  contained  in  the  certificate  as  regards  any  person  dealing 

with  the  shares  in  reliance  thereon.     Thus  in  the  case  of  In  re  BaJna,  Forged 

<J-r,,  Fi/.  Co.,  nU  supra,  the  company  acting  upon  a  forged  transfer,  *™"'^^^''- 

issued  a  certificate  to  the  transferee.     A.,  in  reliance  on  this  certificate. 

purchased  and  })aid  for  the  shares  specified  in  it,  and  they  were  duly 

transferred  into  his  name.     The  forgery  AAas  subsequently  discovered, 

and  the  company  was,  under  section  35  of  the  Act,  ordered  to  restore 

the  name  of  the  real  o\\iier  to  the  register.     It  was  held  in  an  action  by  Liability  of 

A.,  against  the  company,  that  he  was  entitled  to  recover  as  damages  for  company. 

the  loss  of  the  shares,  the  value  of  the  shares  at  the  time  the  company 

first  refused  to  recognise  him  as  a  memljer,  with  interest  at  4  per  cent. 

from  that  time. 

See  also  Hart  v.  Frontino,  L.  R.  5  Ex.  Ill  ;  EaglesfieJd  v.  J/arqui.'^ 
of  LondonderriJ,  4  Ch.  Div.  G93  ;  Cottam  v.  Eastern  Counties  Rij.  Co., 
1  J.  &  H.  243  ;  and  Johnson  v.  Betiton,  9  Eq.  181  ;  Seton  1345. 


o.>4  CERTIFICATES. 

The  rule,  however,  does  not  apply  where  the  person  to  whom  the 
certificates  are  issued  is  a  trustee  for  the  company.  In  such  a  case  the 
company  may  refuse  to  register  the  transfer,  Shrojjshire  Union,  &c.,  Co. 
V.  The  Qumi,  L.  R.  7  H.  L.  400. 

And  it  must  be  shown  that  the  party  acted  on  the  certificate,  for  if 
he  merely  relies  on  a  forged  transfer,  and  is  registered  and  receives  a 
certificate  of  title,  the  company  is  not  estopped  as  against  him.  Shnm 
V.  Anglo-American  Telegraph  Co.,  5  Q.  B.  Div.  188,  and  see  Coates  \\ 
L.  &  S.  W.  Ry.  Co.,  41  L.  T.  553.  Where  a  certificate  has  been  issued 
describing  a  share  as  fully  paid  up  or  partly  paid  up,  a  purchaser  of  the 
share  acting  on  the  faith  of  the  certificate,  is  entitled  to  hold  the  share 
as  paid  up.  Burhinshaiv  v.  NichoUs,  3  App.  Cas.  1004.  And  see  svpra, 
p.  13.  But  where  A.,  being  entitled  to  an  allotment  of  paid-up  shares 
under  a  contract  which  requires  filing  but  is  not  filed,  procures  an  allot- 
ment to  B.,  who  receives  a  certificate  accordingly,  the  company  is  not 
estopped  as  against  B.     RowJcmcVs  Case,  W.  N.  1880,  80 ;  42  L.  T.  785. 

Stamp.  A  certificate  that  a  person  is  the  holder  of  shares  or  stock  in  a  company 

does  not  require  any  stamp.     It  is  not  a  deed.     The  Queen  v.  3Iorton, 

Scrip  certi-  L.  R.  2  C.  C.  R.  22.  But  a  scrip  certificate  or  other  document  entitling 
any  person  to  become  the  proprietor  of  any  share  of  any  company  or  pro- 
posed company,  requires  a  If?,  stamp,  and  any  person  who  executes, 
grants,  issues,  or  delivers  out  any  such  document  before  the  same  is 
stamped,  is  liable  to  a  penalty  of  201.  Stamp  Act,  1870,  section  101. 
See  clauses  as  fo  certificates,  siqmt,  p.  117,  et  seq. 


ficate. 


CEETIFICATES, 


The Co,  Limtd. 

Incorporated  under  the  Companies  Acts,  18G2  and  18G7.  Form  200. 

Capital  100,000?.,  divided  into  5,000  shares  of  20/.  each.  o^dh^ 

No.  .  207.  shares.       certificate. 

This  is  to  certify  that  A.  B.,  of ,  is  the  holder  of shares, 

numbered to inclusive,  in  the  above-named  co,  subject  to  the 

articles  of  association  thereof,  and  that  the  sum  of /.    has  been  pd 

up  upon  each  of  the  sd  shares. 

Given  under  the  common  seal  of  the  sd  co,  this day  of . 

The  common  seal  of  ttie  sd  co  ■svas  hereunto  affixed  in  the  presence  of — 
Directors. 
Secretary. 

Occasionally  an  abstract  of  the  clauses  contained  in  the  articles  of  associa- 
tion which  regulate  the  right  of  transfer  [^supra,  p.  117],  and  give  the  company 
a  lien  [stipra,  p.  12-i],  is  indorsed  on  the  certificate. 


The Co,  Limtd. 


No. 


Form  201. 


Capital  100,000?.,  divided  into  .5,000  preference  shares  of  10?.  each, 
and  5,000  ordinary  shares  of  10?.  each.  preference 

This  is  to  certify  that  A.  B.,  of ,  is  the  holder  of of  the  shares. 

above-mentd  preference  shares,  numbered,  &c.,  in  the  Co  Limtd, 

subject  to  the  articles  of  association  thereof,  and  that  upon  each  of  the 
sd  shares  the  fuU  amount  of  10?.  has  been  pd  up. 

Given,  &c. 

In  the  case  of  preference  shares,  the  certificate  sometimes  states  the  i-ate  of 
dividend,  and  whether  cumulative  or  not. 


226 


CEETIFICATES. 


Form  202. 

Certificate  of 
stock. 


The Co,  Limtd. 

Capital  100,000/.  stock 

No. . 

This  is  to  certify  that  A.  B.,  of  - 


— /. 


-I.,  is  the  holder  of  the  sum  of 
-I.  stock  of  the  above-named  co,  subject  to  the  articles  of  association 


thereof. 
Given,  &c. 


The 


Co,  Limtd. 


Form  203.       No. 


Another  form 
of  certificate 
of  i^reference 
shares. 


Capital  50,000/.,  divided  into  4,000  ordinary  shares  of  10/.  each,  and 
1,000  10  p.  c.  preference  shares  of  10/.  each,  which  preference  shares 
were  created  by  the  special  resolution  of  the  above-named  co,  passed  the 
day  of ,  a  copy  of  which  is  indorsed  hereon. 

This  is  to  certify  that  A.  B.,  of,  &c.,  is  the  holder  of of  the 

sd  preference  shares,  numliered to inclusive,  in  the  above- 
named  co,  subject  to  the  articles  of  association  thereof,  and  that  the  sum 
of /.  has  been  pd  up  upon  each  of  the  sd  shares. 

Given,  &c. 


The 


Form  204. 

Form  of  share 
•warrant. 


Co,  Limtd. 


No. 


Capital,  &c. 
Share  "Warrant. 


-/.  shares. 


— /.  each,  in  the  above-named  co,  subject  to 
and  to  the  conditions  indorsed  hereon.     [See 


This  is  to  certify  that  the  bearer  of  this  wan'ant  is  entled  to 
fully  pd  up  shares  of  — 
the  regulations  of  the  co. 
siqn^a,  p.  203.] 

Given,  &c. 

As  to  share  warrants,  see  supra,  pp.  128,  203. 

By  s.  33  of  the  Act  of  18G7 :  "  There  shall  be  charged  on  every  share  warrant 
a  stamp  duty  equal  to  three  times  the  amount  of  the  ad  valorem  duty  whicli 
would  be  chargeable  on  a  deed  transferring  the  share  or  shares  or  stock  speci- 
fied in  the  warrant,  if  the  consideration  for  the  transfer  were  the  nominal  value 
of  such  share  or  shares  or  stock." 

For  the  ad  valorem  duty  on  transfers,  see  the  Schedule  to  the  Stamp  Act, 
1870,  under  "  Conveyance  or  Transfer  on  Sale."     It  is  as  follows  : — 

£     s.  d. 
Where  the  amount  or  value  of  the  consideration  for  the  sale  does  not 

exceed  £5         .... 
Exceeds  £5  and  does  not  exceed  ,£10 
10  ..  „         15 


15 
20 
25 
50 
75 
100 


20 
25 
50 


100 

125     . 

And  so  forth. 


0 

0 

6 

0 

1 

0 

0 

1 

6 

0 

2 

0 

0 

2 

6 

0 

5 

0 

0 

7 

6 

0 

10 

0 

0 

12 

6 

FOEMS.  227 

So  that  tlie  proper  stamp  for  a  share  warrant  issued  in  respect  of  one  lOJ.   Form  204. 
share  will  be  3s.  ~ 

By  s.  127  of  the  Stamp  Act,  1870,  it  is  provided  that :  "  If  a  share 
warrant  is  issued  without  being  duly  stamped,  the  company  issuing  the  same, 
and  also  every  person  who,  at  the  time  when  it  is  issued,  is  the  managing 
director  or  secretary,  or  other  principal  officer  of  the  company,  shall  forfeit 
the  sum  of  50L" 

The Co,  Limtd. 

Share  Warrant  to  Bearer. 
^Q  Form  205. 

Coupon,  No.      .     First  Dividend.  Coupon  to 

Payable  at  the  go's  office.  «^a^«  warrant. 

Secretary. 

It  is  not  uncommon  to  annex  to  a  share  warrant  a  series  of  coupons  numbered 
consecutively.  When  they  are  exhausted  fresh  coupons  are  issued.  They 
require  no  stamp.  Where  such  coupons  are  issued  it  is  desirable  in  the  con- 
ditions [supra,  p.  203]  to  provide  that  the  delivei-y  of  a  coupon  shall  be  a  good 
discharge  to  the  company  for  the  corresponding  dividend.  Sometimes  a  note 
is  added  to  the  coupons  stating  that:  "This  coupon  must  be  brought  to  the 
company's  office  iipon  the  dividend  being  declared,  in  order  that  it  may  be  ex- 
amined and  vouched." 

On  the day  of ,  and  at  the  expiration  of  each  succeedino-  Form  206. 

period  of  ten  years,  the  bearer,  upon  presentation  of  the  appropriate  y'    j^^. 
voucher,  will  be  entled  to  a  fresh  sheet  of  coupons  and  a  new  voucher.      fresh  coupon.^. 

Where  share  warrants  are  likely  to  be  dealt  in  abroad  they  ai-e  generally 
printed  in  two  or  more  languages  side  by  side. 

I  HEREBY  CERTIFY  that  The Co,  Limtd,  is  this  day  incorporated  Form  206a. 

under  the  Companies  Acts,  180 2  to  1883,  and  that  this  co  is  limtd.  Certificate  of 

Given  under  my  hand  this day  of .  incorporation. 

Section  18  of  the  Act  of  1862  makes  the  registrar's  certificate  of  the  incor- 
poration conclusive  evidence  that  all  the  requisitions  of  the  Act  in  respect  of 
registration  have  been  complied  with.     See  supra,  p.  64. 

I  HEREBY  CERTIFY  that  A.  B.  &  Co.,  Limtd  (which  was  constituted  Form  207. 
by  articles  of  association,  dated  18th  April,  1883),  is  this  day  incorpo-  certificate  on 
rated  under  the  Companies  Acts,  1802  to  1880,  and  that  this  co  is  limtd.  registration 

(liven  under  my  hand  at  London  tliis  10th  day  of  May,  1883.  Yll^'^    ^' 

See  s.  192  of  the  Act  as  to  conclusive  character  of  certificates.  When  the 
deed  is  called  a  "deed  of  settlement,"  the  certificate  is  framed  accordingly. 


Q  2 


PEOSPECTUSES. 


INTRODUCTORY  NOTES. 

Prospectus.  Where  it  is  intended  to  appeal  to  the  public  for  the  capital  to  work  a 

company,  the  usual  course  is  to  issue  a  prospectus  inviting  applications- 
for  shares.  Formerly  a  prospectus  was  almost  always  issued  hpfore  the 
formation  of  a  company ;  hut  since  the  Act  of  18G2,  which  has 
rendered  the  formation  of  a  company  so  inexpensive  and  simple  a 
matter,  it  has  become  the  general  practice  to  issue  the  prospectus  after 
the  formation  {i.e.,  the  registration)  of  the  company.  And  it  is  desir- 
able to  continue  this  practice,  since  it  prevents  many  disputes  and 
difficulties  which  used  to  arise  under  the  old  practice. 

How  prepared  Jn  most  cases  the  prospectus  is  prepared  by  or  under  the  direction  of 
pu  s  et .  ^j^^  promoters  before  the  company  is  formed,  and  after  its  formation  is 
submitted  to  the  directors  of  the  company,  who  pass  a  resolution 
approving  of  it,  with  or  or  without  modification,  and  directing  it  to  be 
issued.  The  mode  in  which  the  prospectus  is  brought  to  the  notice  of 
the  public  varies  considerably.  In  some  cases  the  parties  rely  almost 
entirely  on  the  gratuitous  circulation  of  printed  copies  of  the  pro- 
spectus, but  generally  the  document,  or  an  abridgment  thereof,  is 
advertised  more  or  less  extensively  in  the  newspapers. 

FoiTD.  A  prospectus  is  usually  headed  with  the  name  of  the  company,  and 

generally  states  the  nominal  capital,  the  number  and  descrijition  of  the 
shares  offered,  the  terms  of  issue,  the  names  of  the  directors,  bankers, 
sohcitors,  brokers,  auditors,  and  secretary,  or  of  some  of  them,  the  objects 
and  prospects  of  the  company,  how  applications  for  shares  are  to  be  made, 
what  contracts  have  been  made,  and  where  copies  of  the  prospectus  and 
of  the  memorandum  and  articles  of  association  and  of  the  contracts  can 
be  seen. 

Skill  required       The  preparation  of  a  prospectus  requires  both  skill  and  judgment, 

bmtyTnvolved.  ^"^^  involves  great  responsibility  ;  for  not  only  does  the  success  of  the 
company's  appeal  to  the  public  depend  to  a  considerable  extent  on  the 
attractiveness  of  the  document,  but,  if  it  is  improperly  framed,  the  com- 
pany, its  directors  and  promoters,  may  be  exposed  to  litigation  and 
liabilities  of  the  most  harassing  and  serious  character. 

Practice,  As  already  mentioned,  the  prospectus  is  usually  prepared  by  or  under 

the  direction  of  the  promoters,  and  with  the  privity  of  the  directors. 
Very  commonly  legal  advice  is  taken  on  the  draft,  for  ignorance  of 


INTEODUCTOEY   NOTES.  229 

law  or  waut  of  judgmeut  on  the  part  of  those  who  issue  a  prospectus 
may  lead  to  the  most  unfortunate  and  even  ruinous  consequences.  As 
appears  below,  lona  fides  and  honesty  are  not  a  sufficient  protection. 
A  person  may  be  fully  aware  that  he  is  bound  to  state  all  material  facts ; 
but  from  his  position,  perhaps  blinded  by  his  sanguine  expectations,  he 
may  be  unable  to  form  an  impartial  judgment  as  to  what  facts  are 
material.  He  may  know  well  enough  that  he  must  abstain  from  mis- 
representation ;  but  be  totally  unable  to  see  that  an  ingeniously-framed 
statement  which  he  or  some  other  person  desires  to  insert  is  misleading. 
He  may  believe  a  statement  to  be  true  ;  but  be  forgetful  or  ignorant  of 
the  danger  he  incurs  in  stating  as  a  fact  that  which  he  only  knows  by 
heai-say.  He  may  think  that  as  documents  are  oflFered  for  inspection, 
applicants  will  be  fixed  with  knowledge  of  their  contents,  and  may  not 
notice  in  the  prospectus  that  which  renders  the  offer  nugatory.  He  may 
imagine  that  this  or  that  is  only  a  small  matter,  and  may  be  sm-prised  a 
few  months  later  to  find  that  his  want  of  judgment  has  led  to  his  being 
made  a  defendant  in  seventy  or  eighty  actions. 

The  memorandum  and  articles  of  association  and  any  preliminary 
contracts  are  generally  settled  at  the  same  time,  for  these  documents  are 
very  coimnonly  framed  in  contemplation  of  the  prospectus,  and  with 
reference  to  what  it  is  desired  therein  to  say  or  not  to  say.  The  pro- 
spectus should  not  be  finally  settled  until  after  the  formation  of  the 
company. 

A  prospectus  has  in  general  to  be  considered  in  the  interests —  Interests  to  be 

1.  Of  the  applicants  for  shares  ; 

2.  Of  the  company  ; 

3.  Of  the  directors  ; 

4.  Of  the  promoters  ; 

5.  Of  the  vendor  ; 

and  in  many  cases  the  same  hand  has  to  settle  the  document  with  a 
due  regard  to  the  interests  of  all  these  persons. 

It  may  be  convenient  here  to  refer  to  these  interests  separately  : — 


As  TO  THE  Interests  of  Applicants  for  Shares. 

In  the  interests  of  appHcants  for  shares  the  prospectus  should  be  so  Interests  of 
framed  that  persons  taking  shares  upon  the  faith  of  it  may  not  have 
any  cause  for  complaint.  Accordingly  it  should  not  contain  any  mis- 
representation, and  should  disclose  all  material  facts.  As  was  said  by 
Yice-Chancellor  Kindersley,  in  the  case  of  the  New  Bnmsunck  and 
Canada  Ry.  Co.  v.  Mwjgeridge,  1  Dr.  and  Sm.  38 — "  Those  who 
issue  a  prospectus  holding  out  to  the  public  the  great  advantages 
which  will  accrue  to  persons  who  will  take  shares  in  a  proposed  under- 
taking, and  inviting  them  to  take  shares  on  the  fiiith  of  the  representa- 
tions therein  contained,  are  bound  to  state  everything  with  scrict  and 
scrupulous  accuracy,  and  not  only  to  abstain  from  stating  as  fact  that 
which  is  not  so,  but  to  omit  no  one  fact  within  their  knowledge  the 


230  PEOSPECTUSES. 

existence  of  which  might  in  any  degree  affect  the  nature,  or  extent,  or 
quality  of  the  privileges  and  advantages  which  the  prospectus  holds  out 
as  inducements  to  take  shares." 

The  rule  laid  down  in  this  passage  was  termed  a  "golden  legacy  "  Ly 
Page-Wood,  V.-C,  in  Henderson  v.  Lacon,  5  Eq.  2G2,  and  it  was 
cited  with  approbation  in  the  case  of  the  Ceniral  Ry.  Co.  of  Ve- 
nezeula  v.  Kisch,  L.  R.  2  H.  L.  113.  In  this  case  Lord  Chelmsford, 
L.  C,  in  giving  judgment,  said :  "  In  an  advertisement  of  this 
description  [«>.,  a  prospectus]  some  allowance  must  always  be  made  for 
the  sanguine  expectations  of  the  promoters  of  the  adventure,  and  no 
prudent  man  will  accept  the  prosj^ects  which  are  always  held  out  by  the 
originators  of  every  new  scheme,  without  considerable  abatement.  But 
although,  in  its  introduction  to  the  public,  some  high  colouring,  and 
evcu  exaggeration,  in  the  description  of  the  advantages  which  are  likely, 
to  be  enjoyed  by  the  subscribers  to  an  undertaking  may  be  expected, 
yet  no  mis-statement  or  concealment  of  any  material  facts  or  circum- 
stances ought  to  be  permitted.  In  my  opinion,  the  public,  who  are  in- 
vited by  a  prospectus  to  join  in  any  new  adventure,  ought  to  have  the 
same  opportunity  of  judging  of  everythmg  ivhieli  has  a  material  heariuf/ 
on  its  true  cJmracter,  as  the  promoters  themselves  possess.  It  cannot  be  too 
frequently  or  too  strongly  impressed  upon  those  w^ho,  having  projected 
any  undertaking,  are  desirous  of  obtaining  the  co-operation  of  persons 
who  have  no  other  information  on  the  subject  than  that  which  they 
choose  to  convey,  that  the  utmost  candour  and  honesty  ought  to 
characterise  their  published  statements."  It  should  also  be  seen,  in  the 
interests  of  shareholders,  that  s.  38  of  the  Act  of  1867  is  complied  with. 
See  infra,  p.  242  et  seq. 


As  TO  THE  Interests  of  the  Company. 

Interests  of  It  is  obviously  for  the  interest  of  the  company  that  its  members 

company.  should  have  no  cause  to  complain  that  they  have  been  entrapped  into 

taking  shares  by  an  improperly  framed  prospectus,  for  such  complaints 
are  calculated  seriously  to  damage  the  company's  credit,  and  to  cripple 
its  operations. 
Repudiation  of  But  in  the  interest  of  the  company  the  main  point  to  be  looked  to 
is,  that  the  members  shall  not  be  aljle  to  repudiate  their  shares.  In 
this  view  the  utmost  care  must  be  taken  that  the  prospectus  is  free 
from  misrepresentations,  and  that  it  discloses  all  material  facts,  for  it  is 
well  settled  that  a  person  taking  shares  upon  the  faith  of  a  prospectus 
which  does  not  comply  with  these  rules,  is  entitled,  upon  discovering 
the  trutli,  to  have  the  contract  rescinded,  and  to  recover  any  money  paid 
to  the  company  in  respect  of  his  shares. 

The  following  are  some  of  the  cases  in  which  relief  has  been  given  on 
the  ground  of  misrepresentation.  The  Central  Ry.  Co.  of  Venezuela  v 
Kisch,  L.  R.  2  H.  L.  99,  where  the  prospectus  untruly  stated  (1)  that 
the  contract  for  the  execution  of  the  company's  works  had  been  entered 


INTRODUCTORY   NOTES.  231 

into  with  a  responsible  contractor,  (2)  untruly  stated  that  the  contract 
price  was  considerably  within  the  available  capital,  (3)  did  not  mention 
that  the  concession  which  the  company  was  formed  to  carry  out  had 
been  purchased  ft'om  the  ori<>inal  grantees  at  a  cost  of  50,000?.,  (4) 
held  out  the  advantages  of  a  guarantee  as  to  interest  on  capital  given 
by  the  contractor,  but  did  not  mention  that  it  was  limited  to  a  certain 
amount ;  and  upon  the  application  of  a  person  who  had  taken  shares  on 
the  fiiith  of  the  prospectus,  the  contract  was  rescinded.  So  in  Ross  v. 
Estates  Investment  Co.,  3  Eq.  122,  3  Ch.  G82,  the  prospectus  untruly 
stated  that  "  more  than  half  the  first  issue  of  shares  has  been  ah-eady 
subscribed  for,"  and  that  "  upwards  of  70,000/.  has  already  been  ex- 
pended on  this  estate  l)y  the  vendor  in  buildings  and  improvements,  in 
addition  to  the  purchase  money  paid  by  him  for  the  land."  It  was 
held  that  the  plaintiff,  who  had  taken  shares  on  the  faith  of  the  pro- 
spectus, was  entitled  to  have  his  contract  set  aside,  and  his  deposit 
returned. 

In  another  case  the  prospectus  of  a  mining  company  stated  that  a 
particular  mine,  containing  "  several  very  valuable  claims,  some  of  which 
are  in  fiiU  operation,  and  make  large  daily  returns,"  had  been  contracted 
to  be  purchased.  The  mine  was,  in  fact,  worthless,  and  there  were  no 
claims  in  operation.  It  was  held  that  a  person  who  had  taken  shares  on 
the  fiiith  of  the  prospectus  was  entitled  to  relief.  Smith's  Case,  2  Ch. 
€04  ;  L.  R.  4  H.  L.  64.  See  also  Kent  v.  Freehold  Land  Co.,  4  Eq.  588, 
S  Ch.  493  ;  Henderson  v.  Lacon,  5  Eq.  249  ;  Blake's  Case,  34  Beav.  639  ; 
Cargill  v.  Boiver,  10  C.  D.  502  ;  Hall  v.  Old  Talcmjocli  Co.,  3  C.  D.  749. 
And  "  Orders,"  infra. 

A  single  misrepresentation  of  or  omission  to  state  a  material  fact  may 
be  sufficient  to  entitle  a  person  to  repudiate  his  shares. 

Moreover  the  danger  of  ambiguous  statements  should  be  borne  in  Careless 
mind,  for  "  if  persons  publishing  a  prospectus  use  such  careless  language  ^^^^S^^se- 
that  their  statements,  literally  read,  are  untrue,  although  this  literal 
sense  is  different  from  what  they  intended,  this  amounts  to  a  misrepre- 
sentation, for  which  they  may  be  responsible  to  any  one  who  is  deceived 
or  injured  by  it."  Per  Lord  Chelmsford,  L.  C,  Hallows  v.  Fernie,  3 
Ch.  475.  And  d  fortiori  the  person  deceived  will  be  entitled  to  repudiate 
his  shares.     See  infra,  p.  387. 

A  person  who  issues  a  prospectus  "  is  not  only  answerable  for  what  he 
in  his  o^v^l  mind  intended  to  represent,  but  he  is  answerable  for  what 
any  one  might  reasonably  suppose  to  be  the  meaning  of  the  words 
he  has  used."    Per  Cotton,  L.  J.,  Arhvright  v.  Newhold,  17  C.  Div.  322. 

It  is  true  that  the  shares  cannot  be  repudiated  unless  the  applicant  Reliance  on 
was  induced  to  enter  into  the  contract  by  the  misrepresentation  or  prospectus, 
omission.  But  it  must  be  borne  in  mind  that  the  onus  of  proving  non- 
rehance,  at  any  rate  in  the  case  of  a  misrepresentation,  is  on  the  com- 
pany ;  for  "  if  it  is  a  material  representation  calculated  to  induce  [the 
shareholder]  to  enter  into  the  contract,  it  is  an  inference  of  law  that  he 
was  induced  by  the  representation  to  enter  into  it,  and  in  order  to  take 


23a 


PEOSPECTUSES. 


Alteration 
before  allot- 
ment. 


Belief. 


Inspection. 


away  his  title  to  be  relieTcd  fi-om  the  contract  on  tlic  ground  that  the 
representation  was  untrue,  it  must  be  shown  either  that  he  had  knowledge 
of  the  facts  contrary  to  the  representation,  or  that  he  stated  in  terms  or 
showed  clearly  by  his  conduct  that  he  did  not  rely  on  the  representa- 
tion." Per  Jessel,  M.  R.,  Redgrave  v.  Hnrd,  20  C.  Div.  21.  See,  how- 
ever, the  observations  of  Pollock,  B.,  on  this  passage,  in  Roots  v, 
S'nclBig,  48  L.  T.  X.  S.  218. 

And  where  a  representation  is  made  in  a  prosjjectus  (e.g.  that  A.  is  a 
director),  and  before  allotment  the  circumstances  are  altered  (e.g.  by  A.'s 
resignation),  the  alteration  ought  to  be  communicated  to  the  applicant, 
and  he  is  entitled  to  repudiate.     ScotlisJt  Fefroleum  Co.,  2d  C.  Div.  438. 

And  where  a  misrepresentation  as  to  a  material  fact  in  a  prospectus  is 
untrue  in  point  of  fact,  it  is  wholly  immaterial,  where  rescission  of  con- 
tract is  sought,  that  the  directors,  when  they  made  it,  believed  it  to  be 
true.  See  judgment  of  Lord  Cairns,  L.  C,  Smith's  Case,  2  Ch.  004  ; 
L.  R.,  4  H.  L.  71)  ;  Matthias  v.  Yetts,  4G  L.  T.  502  (Ct.  of  Ap.). 

Nor  if  a  prospectus  contains  misrepresentations,  can  the  evil  results  be 
prevented  by  offering  applicants  the  opportunity  of  examining  documents 
Avhicli  would  correct  the  misrepresentations.  Central  Rg.  Co.  of  Vene- 
zuela V.  Kisch,  L.  R.  2  H.  L.  120.  The  applicant  is  entitled  to  say, 
"  You  at  least  who  ha^'c  stated  what  is  untrue,  or  have  concealed  the 
truth  for  the  purpose  of  drawing  me  into  a  contract,  cannot  accuse  me  of 
want  of  caution,  because  I  relied  on  your  fairness  and  honesty."  Per  Lord 
Chelmsford,  Central  Rg.  v.  Kisch,  L.  E.  2  E.  &  L  App.  99.  "  The  representa- 
tion once  made  releases  the  party  from  an  investigation,  even  if  the  oppor- 
tunity is  afforded."     Per  Cotton,  L.  J.,  Redgrave  v.  Hwd,  2<)  C.  Div.  23. 

But  in  the  absence  of  fraud  or  misrepresentation,  it  would  seem  that 
offering  a  contract  or  other  document  for  inspection  operates  as  a  dis- 
closure of  the  facts  which  an  inspection  would  disclose.  See  infra,  p.  241. 

It  is  not  every  misrepresentation  or  suppression  that  will  confer  a  right 
to  relief.  Denton  v,  Ifameil,  2  Ec[.  352  ;  HaUoivs  v.  Fernie,  3  Ch.  467 ; 
Hegman  v.  Enropean  Central  Co.,  7  Eq.  154  ;  Kennedg  v.  Panama  Mail 
Co.,  L.  R.  2  Q.  B.  580  ;  Govefs  Case,  1  C.  D.,  182  ;  but  in  settling  a 
prospectus  it  is  desirable,  as  far  as  possible,  to  avoid  risk. 

A  person  who  has  been  induced  by  misrepresentation  to  take  shares 
may  lose  his  right  to  relief  l:)y  delay  :  Sianyleg  v.  Soutii  Co.,  2  C.  Div. 
G85  ;  Heyman  v.  Enropea^i  Central  Co.,  nil  sap'a ;  PeeVs  Case,  2  Ch. 
r,74  ;  or  by  dealing  with  his  shares  in  a  manner  inconsistent  with  re- 
pudiation :  ex  iiarte  Briggs,  1  Eq.  483  ;  Nicol's  Case,  3  De  G.  &  J. 
.387  ;  Whitehouse's  Case,  3  Eq.  790  ;  or  by  reason  of  a  winding-up 
supervening  before  he  has  commenced  proceedings  to  rescind  the  con- 
tract :  Oa/ces  v.  Turqiiand,  L.  R.  2  H.  L.  325  ;  Stone  v.  Citg  and 
County  Banh  3  C.  P.  Div.  282  ;  Hovldsworth.  v.  Citg  of  Glasgoiv  Banh, 
5  App.  Cas.  317  ;  Burgess's  Case,  28  AV.  R.  793  ;  Scottish  Petroleum  Co., 
23  C.  Div.  413  ;  but  these  considerations  are  of  little  moment  in  the 
preparation  of  the  prospectus.  See  p.  210  as  to  issuing  circular  after 
discovery  of  misrepresentation. 


INTEODUCTOEY    NOTES.  2-33 

"Where  a  person  has  been  induced  to  take  shares  by  fraudulent  mis-  Company  liable 
representations  contained  in  a  prospectus  issued  by  the  company's  *"  -^mases. 
directors,  he  is  entitled  not  only  to  have  the  contract  rescinded,  but  he 
may  also  sue  the  company  for  the  damages  he  has  sustained.  HouUh- 
ivortli  V.  Ciiy  of  Glasgow  Banl:,  5  App.  Cas.  317.  It  was  formerly  sup- 
posed that  a  company  in  such  case  could  only  be  compelled  to  return 
Avhat  it  had  received,  and  could  not  be  made  liable  in  damages  for  the 
fraud  of  its  agent,  but  the  contrary  is  now  settled.  A  company  is  liable 
for  the  fraud  or  other  A\Tongful  act  of  its  agent  just  as  any  other  prin- 
cipal, and  for  the  purpose  of  pleading  the  fraud  or  other  act  may  be  im- 
puted to  the  company.  See  the  case  last  mentioned,  and  Edwarils  v. 
JlicUand  By.,  C  Q.  B.  D.  287  ;  Chapter  v.  BrwiswicJr  Co.,  G  Q.  B.  Di^-. 
702  ;  Ahrath  v.  Norih-Eastcm  By.  Co.,  32  ■\V.  E.  50  ;  Banycr  v.  Great 
Western  By.,  5  H.  L.  80  ;  Lindley,  32u  ;  Grant  on  Corps.,  278. 

But  a  person  cannot  sue  the  company  for  damages  unless  he  rescinds 
his  contract  to  take  the  shares.  HouJdswortJi  \.  City  of  Glasyoiv  Banlc, 
uhi  supra  and  Burgess's  Case. 

And  if  by  reason  of  delay  or  acquiescence,  or  the  winding  up  of  the 
company  or  otherwise,  he  has  lost  the  right  of  rescission,  he  loses  also  the 
right  to  sue  the  company  for  damages,  >S'.  C.  This  does  not,  however,  pre- 
vent him  from  suing  the  directors  or  other  persons  who  actually  made 
the  misrepresentations.  See  further,  infra.  As  to  s.  38  of  the  Act  of 
1867,  see  vffra,  p.  242. 


As  TO  THE  Interests  of  the  Directors. 

In  seeing  that  the  prospectus  is  jn'operly  fi-amed,  the  interests  of  the  As  to  interestfi 
directors  are  in  a  great  measure  identical  with  those  of  the  company,  for  °^  ^^i^'ectors. 
the  company's  want  of  success  involves  more  or  less  loss  of  credit  or  of 
prospective  profit  to  the  directors.  But  the  directors  have  an  additional 
interest  in  the  matter  by  reason  of  the  serious  liabilities  in  which  they 
may  be  involved  by  taking  part  in  the  issue  of  an  improperly  framed 
prospectus.     Of  these  the  following  may  be  mentioned  : — 

(a.)  Where  a  person  is  induced  by  fraudulent  misrepresentation  in  a  Liai>iHty  for 
prospectus  to  take  shares  in  a  company  and  sustains  loss,  he  can  bring  an  ^'^^^epresenfca- 
action  of  deceit  and  compel  the  directors  or  other  persons  who  issued  the 
prospectus  to  make  good  his  loss.  Gerhard  v.  Bates,  2  Ell.  &  Bl.  47G  ; 
17  Jur.  N.  S.  1097,  is  an  example  of  an  action  of  deceit.  There  the 
prospectus  stated  that  the  promoters  did  not  hesitate  to  gTiarantee  to  the 
bearers  of  12,00(i  shares  a  minimum  annual  dividend  of  33/.  per  cent. 
The  defendants,  who  issued  the  prospectus,  had  no  ground  for  offering 
such  a  guarantee,  and  the  shares  turned  out  worthless.  It  was  held  that 
the  plaintiff,  who  had  taken  shares  on  the  faith  of  the  prospectus,  was 
entitled  to  recover  damages  from  the  defendants. 

8o  in  ClarU  v.  Diclcson,  G  C.  B.  N.  S.  453  ;  5  Jur.  X.  S.  1030,  the 
prospectus  represented  that  it  had  Ijeen  agreed  that  the  proprietor  should 
make  over  his  interest  in  the  mines  fur  5,00n/.  in  money  and  5,000/.  in 


closure  not 
actionable 


234  PROSPECTUSES. 

paid-up  sliiirep.  In  reality  the  agreement  was  not  made  Avith  the  proprietar 
but  with  two  of  the  directors,  and  the  defendants  were  held  liable.  See 
also  cases  cited  in  Peelo  v.  Gurmy,  L.  R.  6  H.  L.  377. 

In  Henderson  v.  Lacon,  5  Eq.  24:9,  the  prospectus  falsely  stated  that 
"  the  directors  and  their  friends  have  subscribed  a  large  portion  of  the 
capital,  and  they  now  offer  to  the  pubhc  the  remaining  shares,"  and  ifc 
was  held  that  the  directors  must  make  good  the  loss  the  plaintiff  had  sus- 
tained. See  "Orders,"  infra.  See  also  Pcelc  v.  Gurneij,  uM  si/pra ; 
Arhivrigid  v.  Neivlold,  17  C.  Div.  301  ;  28  W.  E.  829  ;  42  L.  T.  785  ; 
Smitli  V.  Chadwklc,  20  C.  Div.  27,  and  Addenda  ;  Weir  v.  Barneff,  3  Ex. 
Div.  33,  24G  ;  Amos  v.  Chadiviclc,  4  C.  D.  8G9  ;  9  C.  Div.  459. 
Mere  iion-dis-  In  order  to  establish  a  claim  against  the  directors  or  other  persons 
who  issue  the  prospectus,  they  must  be  proved  guilty  of  active  misrepre- 
sentation ;  mere  silence  is  not  sufficient.  "Mere  non-disclosure  of  mate- 
rial facts,  however  morally  censurable,  however  that  non-disclosure  might 
be  a  ground  in  a  proper  proceeding  at  a  proper  time  for  setting  aside  an 
allotment  or  purchase  of  shares,  would  in  my  opinion  form  no  ground  for 
an  action  in  the  nature  of  an  action  for  misrepresentation.  There  must, 
in  my  opinion,  be  some  active  misstatement  of  fact,  or,  at  all  events,  such 
a  partial  and  fragmentary  statement  of  fact,  as  that  the  withholding  of 
that  Avhich  is  not  stated  makes  that  which  is  stated  absolutely  false." 
Per  Lord  Cairns,  Peck  v.  Gurneij,  L.  R.  (i  H.  L.  403. 

In  such  an  action  "  it  is  necessary  to  prove  that  a  statement  has  been 
made  which,  to  the  knowledge  of  the  person  making  it,  was  false,  or 
which  was  made  by  him  with  such  recklessness  as  to  make  him  liable 
just  as  if  he  knew  it  to  be  false,  and  that  the  plaintiff  acted  on  that 
statement  to  his  damage."  Per  Cotton,  L.J.,  Arlnvright  v.  NewMd,  17 
C.  Div.  320. 

And,  "  even  though  the  statement  may  be  untrue,  yet,  if  it  was  made 
in  good  faith,  and  the  defendant  had  reasonable  gi'ounds  for  believing 
it  to  be  true,  the  defendant  will  succeed."  Per  Jessel,  M.R.,  Smlllt  v. 
Cluulwklc,  20  C.  Div.  45,  and  Addenda. 

But  a  party  may  be  liable  without  intending  to  deceive :  he  may 
issue  a  prospectus  "  believing  his  statement  to  be  true,  and  not  intending 
to  deceive  ;  but  he  may  through  carelessness  have  made  statements  which 
are  not  true,  and  which  he  ought  to  have  known  were  not  true,  and  if 
he  does  so  he  is  liable  in  an  action  for  deceit  ;  he  cannot  be  allowed  to 
escape  merely  because  he  had  good  intentions  and  did  not  intend  to 
defraud."  Per  Jessel,  M.R.,  SmWi  v.  Chadwkk,  uhi  supra.  And  where 
a  fact  is  once  within  a  man's  knowledge  he  cannot  excuse  a  misstatement 
regarding  it  on  the  ground  of  forgetful u ess.  Matthias  v.  Yetts,  46  L.  T. 
497.  And,  "  there  may  undoubtedly  be  a  fraudulent  representation,  if 
made  dishonestly,  of  that  which  the  party  does  not  know  to  be  untrue,  if 
he  does  not  know  it  to  be  true."  Per  Parke,  B.,  Taylor  v.  Ashton,  11  M, 
&  W.  401.  But  there  are  judicial  dicta  which  carry  the  matter  still 
further  ;  thus  in  Eeese  River  Silver  Mininy  Co.  v.  Smith,  L.  R.  4  H.  L. 
79,  Lord  Cairns  said  :  "  When  I  say  '  a  fraud,'  I  do  not  enter  into  any 


INTEODUCTORY    NOTES. 


135 


question  with  reg'ard  to  the  imputations  of  what  may  be  called  '  fraud ' 
in  the  more  invidious  sense  against  the  directors.  I  think  it  may  be 
quite  possible,  as  has  been  alleged,  that  they  were  ignorant  of  the 
untruth  of  the  statements  made  in  their  prospectus.  But  I  apprehend  it 
to  be  a  rule  of  law,  that  if  persons  take  upon  themselves  to  make  asser- 
tions as  to  which  they  are  ignorant,  whether  they  are  true  or  untrue, 
they  must  in  a  civil  point  of  view  be  held  as  responsible  as  if  they  had 
asserted  that  which  they  knew  to  be  untrue." 

Liability  may  be  incurred  even  when  the  words  are  ambiguous.  "  In  Ambiguity, 
that  case  the  plaintiff  must  tell  us  what  he  relied  on.  It  is  for  him  to 
say,  '  I  relied  on  the  stateuicnt  in  this  meaning  ;  that  meaning  I  took ; 
if  it  is  ambiguous,  it  is  the  fault  of  the  defendant,  and  relying  on  that  I 
entered  into  the  contract.'  "  SmitJi.  v.  Chadwick,  20  C.  Div,  45,  and 
Addenda ;  Clarice  v.  Dicli-son,  G  C.  B.  N.  S.  14;").     And  see  infra,  p.  387. 

Moreover,  if  persons  who  issue  a  prospectus  use  such  careless  language 
that  their  statements  literally  read  are  untrue,  although  the  literal  sense 
is  different  from  what  they  intended,  this  amounts  to  a  misrepresentation 
for  which  they  are  responsible  to  any  one  who  is  deceived  or  injured  by 
it.     Hallows  V.  Fernie,  3  Ch.  475. 

Where  a  person  is  entitled  to  sue  the  directors  or  others  for  misrepre-  Directors  may 

sentation  in  a  prospectus,  he  is  not  bound  to  repudiate  his  shares.     If  he  H^  ^"^^^  though 
^        -^  ^  shares  retained, 

keeps  the  shares  and  they  are  of  any  value,  the  damages  will  be  reduced 

'pro'tanto.     Twycross  v.  Grant,  C.  P.  Div.  542  ;  ArJcivrif/ht  v.  Neirhold,  17 

C.  Div.  301.  And  the  right  of  action  is  not  lost  by  a  winding-up  super- 
vening. Addie  V.  Tltp  Western  Banlc,  L.  E,.  1  H.  L.  Sc.  145  ;  Henderson 
V.  Lacon,  5  Eq.  249  ;  Cargill  v.  Bower,  10  C.  D.  502.  Nor  is  the  party 
complaining  bound,  as  in  a  proceeding  to  rescind  a  contract,  to  ])roceed 
forthwith.  He  can  bring  his  action  at  any  time  within  the  limit  (viz., 
six  years)  allowed  by  law,  for  an  action  on  the  case.  21  Jas.  I.  c.  10  ; 
Peeh  V.  Gurncy,  L.  R.  6  H.  L.  384.  The  time,  however,  only  runs  from 
the  discovery  of  the  fraud,  or  from  the  time  when,  with  reasonable 
diligence,  the  fraud  might  have  been  discovered.  Gihls  v.  Guild, 
9  Q.  B.  D.  59. 

But  it  may  be  observed  here  that  the  directors  who  issue  a  false  pro-  Directors  only 
spectus  are  only  liable  to  the  original  allottees  of  shares  ;  they  are  not  ^'.'['^'^  ^^ 
liable  to  subsequent  purchasers  of  the  shares  unless  some  direct  con- 
nection between  the  directors  and   the  transferees  can   be  made   out. 
Peelc  V.  Gurnei/,  L.  R.  6  H.  L.  401. 

Moreover  an  action  for  relief  on  the  ground  of  fraudulent  misrepre-  Personal 
sentation  is  of  a  personal  character,  and  accordingly,  unless  it  can  be  ^jl^^'^''^" 
shown  that  the  estate  of  the  party  making  the  representation  has  received 
benefit  fi-om  the  deceit,  his  executors  cannot  be  made  liable.     FeeJc  v. 
Gurney,  ul)i  supra. 

But  the  right  of  action  of  the  party  who  has  been  defrauded  survives, 
and  passes  to  his  personal  representatives.     Twycross  v.  Grant,  4  C.  P. 

D.  40. 

As  to  the  measure  of  damages  in  an  action  for  misrepresentation,  see  Measure  of 

damages. 


236  PEOSPECTUSES. 

Tivycross  v.  Grant,  2  C.  P.  Div.  542  ;  Arhcriijht  v.  Kewlold,  17  C.  D. 
oil  ;  28  W.  R.  829. 

Liability  mv\kv      (J,, )  A  director  who  knowingly  issues   a  prospectus  which  does  not 
Act  0/1867      tjomply  w^ith  s.  38  of  the  Act  of  18(17,  is  Hable  to  an  action  for  damages 

sustained  by  any  person  taking  shares  on  the  faith  of  the  prospectus. 

See  further,  infra,  p.  242  ct  seq. 
Criminal  (r.)  As  to  criminal  proceedings.     By  s.  84  of  24  &  25  Yict.  c.  !)G,  it 

is  provided  that : — 

"  Whosoever  being  a  director,  manager,  or  public  officer  of  any  body  corpo- 
rate or  public  company,  shall  make,  circulate,  or  publish,  or  concur  in  making, 
circulating,  or  publishing  any  written  statement  or  account  which  he  shall  know- 
to  be  false  in  any  material  particular,  with  intent  to  deceive  or  defraud  any 
member,  shareholder,  or  creditor  of  such  body  corporate  or  public  company,  or 
with  intent  to  induce  any  person  to  become  a  sJiareholder  or  partner  therein,  or  to 
intrust  or  advance  any  property  to  such  body  corporate  or  public  company,  or 
to  enter  into  any  security  for  the  benefit  thereof,  shall  be  guilty  of  a  misde- 
meanour, and,  being  convicted  thereof,  shall  be  liable  at  the  discretion  of  the 
Court  to  any  of  the  punishments  which  the  Court  may  award,  as  hereinbefore 
last  mentioned." 

The  punishments  referred  to  were  : — "to  be  kept  in  penal  servitude  for 
any  term  not  exceeding  seven  years  and  not  less  than  three  years, — or 
to  be  imprisoned  for  any  term  not  exceeding  tw^o  years,  with  or  without 
hard  lal)our,  and  with  or  without  solitary  confinement." 

A  prospectus  is  a  "  written  statement  "  within  the  meaning  of  this 
enactment,  and  accordingly  if  a  prospectus  is  issued  containing  fraudu- 
lent misrepresentations,  the  directors  issuing  it  will  be  liable  to  prosecu- 
tion under  the  Act ;  they  may  also  be  ijrosecuted  for  conspiracy  to 
commit  the  statutory  offence.  Moreover,  any  person,  whether  a  director 
or  not,  who  issues  or  takes  part  in  the  issue  of  a  prospectus  containing 
fraudulent  misrepresentations,  may  be  prosecuted  for  conspiracy  to 
defraud.  But  of  course  such  persons  cannot  be  convicted,  unless  it  can 
be  proved  that  they  knew  the  representations  to  be  false,  and,  acting 
upon  that  knowledge  and  with  the  intention  to  deceive  and  defraud, 
issued  the  prospectus.  It  should,  however,  be  borne  in  mind,  that  if  a 
prospectus  containing  misrepresentations  is  issued  it  may  not  be  difficult 
to  make  out  a  ^;;w?r? /<^/f /e  case  against  those  who  issued  it,  for  "every 
man  must  be  tnkcn  jJrimd  facie,  at  least,  to  have  intended  what  are  the 
natural  and  necessary  consequences  of  his  acts  ;  and  if  you  find  that  there 
was  misrepresentation,  and  that  it  has  ended  in  deft'auding  the  parties  to 
whom  it  was  addressed,  the  fair  and  legitimate  inference  is,  that  the 
intention  w^as  that  the  act  done  should  carry  with  it  the  consequences 
that  have  followed."  Per  Cockburn,  C.  J.,  in  The  Queen  v.  Gurney  and 
Others.     Fiidason's  Report,  j).  254. 

Tbe  presumption  may  be  rebutted,  as  it  was  in  the  case  last  mentioned, 
but  it  is  desirable  that  the  prospectus  should  be  so  framed  that  there  may 
not  be  any  I'oom  whatever  for  criminal  proceedings. 


INTRODUCTORY    NOTES.  037 

As  to  Commissions  to  Direciors  : 

111  settliiiG^  the  prosi)ectus  in  the  interest  of  the  directors  it  is  desirable  I^iability  for 

^  .      -  secret  coraniis- 

to  inqmre  whether  they  or  any  of  them  have  been  promised  or  expect  ^ion  or  l)ribe. 

any  commission  or  payment  from  the  vendor  (if  any)  or  the  })roiuoters. 

If  possilde,  such  commissions  and  payments  should  be  avoided  ;   but 

sometimes  they  are  unavoidable,  and  where  this  is  so,  the  only  thine;  to 

be  done  is  to  see  that  due  disclosure  is  made  to  the  company  and  the 

members  thereof,  for  any  secret  benefit  will  be  regarded  as  a  bribe,  and 

the  reception  thereof  will  be  a  misfeasance  for  which  the  directors  will 

be  answerable  to  the  company.     Hai/s  Case,  10  Ch.  593  ;  Madrid  Banh 

V.   Felly,   7   Eq.   447 ;    Pearson's    Case,   .5  C.   Div.   336  ;    Englefield 

Colliery  Co.,  8  C.  D.  388  ;  Nant-y-Glo  Co.  v.  Grove,  12  C.  D.  738  ; 

'■IQ  W.  R.  504,  and  "  Orders,"  infra. 

As  to  the  mode  in  which  disclosure  should  l)e  made,  see  infra,  p.  241. 

As  TO  THE  Interests  of  Promoters. 

Before  proceeding  to  consider  the  interests  of  the  promoters  in  regard  ^^lio  are 
to  the  settlement  of  the  prospectus,  it  would  be  desirable  to  define  the 
word  "  promoter,"  but  no  satisfactory  definition  can  be  found.  How- 
ever, there  seems  no  doubt  that  "  the  word  is  not  a  word  of  art,  it  must 
be  understood  by  lawyers  as  it  would  by  laymen  ";  per  Bramwell,  L.  J., 
Twycross  v.  Grant,  2  C.  P.  Div.  503  ;  and  that  it  "involves  the  idea  of 
exertion  for  the  purpose  of  getting  up  and  starting  a  company — of  what 
is  called  'floating'  it."  Per  Lindley,  J.,  Emma  Silver  Mininy  Co.  v. 
Leivis,  4  C.  P.  D.  4o7. 

In  T  ivy  cross  v.  Grant,  Cockburn,  C.  J.,  said,  "A  promoter,  I  appre- 
hend, is  one  who  undertakes  to  form  a  company  with  reference  to  a 
given  project,  and  to  set  it  going,  and  who  takes  the  necessary  steps  tf» 
iiccomplish  that  purpose";  but  this  definition  cannot  be  regarded  as 
exhaustive,  for  the  term  promoter  is  frequently  applied  to  persons  whose 
acts  of  promotion  are  by  no  means  so  unmistakable  or  extensive.  See 
also  Ross  V.  Estates  Investment  Co.,  3  Eq.  122 ;  3  Ch,  G82 ;  and  Great 
Wheal  Polyooth  Co.,  49  L.  T.  20  ;   WhaJey  Bridye  Co.,  5  Q.  B.  D.  109. 

It  may,  however,  be  said  with  some  confidence  that  the  following  are 
promoters  : — 

A  person  who  causes  a  company  to  be  registered  either  on  his  own 
l3ehalf  or  on  behalf  of  himself  and  others. 

A  person  who  enters  into  an  agreement  with  some  other  person  or 
persons  (e.y.,  a  vendor)  to  form  a  company,  and  in  pursuance  of  such 
agreement  procures  the  registration  of  the  company.  Probably  in  such 
case  all  parties  to  the  agreement  are  promoters. 

A  person  who  on  behalf  of  an  intended  company  negotiates  or  enters 
into  an  agreement  for  the  purchase  of  property.  At  any  rate  such  a 
person  is  in  a  fiduciary  position  towards  the  company. 

A  person  who  procures  the  services  of  directors  for  an  intended 
company. 


238  PROSPECTUSES. 

A  person  who  allows  himself  to  be  named  in  the  prospectus  as  being- 
ready  to  answer  any  inquiries  relating  to  the  property  of  a  newly-formed 
company.     Emma  Mining  Co.  v.  Leiois,  4  C.  P.  D.  396. 

A  person  who  becomes  a  member  of  any  committee,  provisional  board, 
syndicate,  or  association  formed  for  the  purpose  of  forming  or  floating  a 
company. 

A  person  who  agrees  to  contrilxite  to  the  expenses  of  forming  or 
floating  a  company. 

A  person  who  undertakes  to  place  the  shares  or  issue  the  prospectus 
of  a  new  comi^any. 

Where  a  company  is  formed  to  acquire  and  work  a  particular  property, 
the  vendor — if  he  merely  deals  with  the  promoters,  or  some  person  put 
forward  by  them,  or  with  the  company,  and  does  not  stipulate  for  or 
take  any  part  in  the  formation  or  floating  of  the  company — is  not,  it  is 
conceived,  a  promoter. 

The  solicitor  of  the  promoters  is  not  a  promoter  if  he  confines  himself 
to  purely  professional  business  upon  the  usual  terms ;  but  if  he  goes 
beyond  this — e.  g.,  undertakes  to  push  the  company,  or  is  to  receive 
special  fees  or  benefits  dependent  on  its  being  successfully  floated,  or 
agrees  to  look  to  the  company  for  payment  — he  is  probably  a  promoter. 
8ee  Grrat  Wheal  Polgooth  Co.,  49  L.  T.  20. 

Those,  however,  who  take  part  in  the  formation  or  floating  of  a  com- 
pany merely  as  the  agents  or  servants  of  promoters,  and  without  any 
special  personal  interest  in  the  formation  or  floating  of  the  company, 
are  not,  it  is  conceived,  promoters.  Thus,  the  solicitor's  clerk  who 
tenders  the  memorandum  of  association  for  registration  is  not  a  pro- 
moter ;  nor  is  the  printer  who  prints  the  prospectus ;  nor  the  advertising- 
agent  who  procures  the  insertion  of  the  prospectus  in  the  newspapers. 
But  even  these  persons,  it  is  conceived,  may  become  promoters — e.g.,  if 
in  consideration  of  a  commission  to  be  paid  by  a  promoter  they  under- 
take to  push  the  company,  or  agree  to  act  for  remuneration  altogether 
or  in  part  coutingent  on  the  floating  of  the  company. 

A  person  is  not  the  less  a  promoter  because  he  keeps  his  own  name  in 
the  background  and  puts  others  forward  as  the  ostensible  promoters. 
Phosphate  Sewage  Co.  v.  Hartmont,  5  .C  Div.  452  ;  Bagnall  v.  Carlton,. 
r.  C.  Div.  371. 

A  person  may  become  a  promoter  either  before  or  after  the  formation 
of  the  company.     Emma  Silver  Milling  Co.  v.  Leiuis,  4  C.  P.  D.  407. 

Generally  there  is  very  little  difficulty  in  determining  whether  a  person 
is  or  is  not  a  promoter,  for  i)i  most  cases  a  person  who  takes  part  in  the 
formation  or  floating  of  a  (company  does  not  confine  himself  to  some 
isolated  act  of  promotion,  but  does  a  great  many  things  which  leave 
little  room  for  doubt. 

The  question  whether  a  person  is  or  is  not  a  promoter  is  a  question  of 
fact  fox  the  jury  or  the  judge  sitting  as  a  jury.  Emma  Silver  Mining  Co. 
V.  Lewis,  4  C.  P.  D.  396  ;  Same  Co.  v.  Grant,  11  C.  D.  91  ;  and  Twy- 
cross  v.  Grant,  2  C.  P.  Div.  469. 


INTRODUCTOEY    NOTES.  239 

111  many  cases  the  prospectus  is  issued  by  the  promoters,  or  some  of  When  pro- 
them,  and  in  other  cases,  though  nominally  issued  by  the  directors,  it  ™ye?or'^^°°' 
may  be  considered  as  constructively  issued  by  the  promoters.     Thus,  in  prospectus. 
2\'eir  Somhrcro  Co.  v.  Erlangcr,  5  C.  Div,  111,  Jessel,  M.  R.,  said,  "Now, 
this  prospectus  was  issued,  in  my  view  of  the  case,  by  the  promoters.     It 
was  actually  prepared  by  them,  and  was  brought  ready  printed  to  the 
meeting.     It  was  nominally  adopted  by  the  directors  ;  but,  as  I  before 
said,  I  look  upon  two  out  of  three  directors  as  merely  agents  of  the 
])romotei'S,  and  their  adoption  would  not  make  it  more  or  less  the  act  of 
the  promoters.     It  was,  in  fact,  the  prospectus  of  the  promoters." 

AYhenever  the  prospectus  can  l)y  possibility  be  deemed  the  prospectus  Interest  of 
of  the  promoters,  it  should  be  seen  in  then-  interests —  promoters, 

(a.)  That  it  is  free  from  misrepresentation,  othenvise  the  promoters 
will  be  liable  to  be  sued  in  the  same  way  as  directors  are 
liable.  Siqrra,  p.  23o. 
(J.)  That  it  complies  with  s.  38  of  the  Act  of  1S67,  infra,  p.  242, 
otherwise  the  promoters  will  be  liable  to  proceedings  as  below 
mentioned. 

^Moreover,  it  must  be  borne  in  mind  that  a  promoter  stands  in  a  fidu-  Fiduciary 
ciary  position  towards  the  company  he  promotes,  and  accordingly  is  not  P°^'*i"°- 
permitted  to  make  any  profit  out  of  his  position  without  the  fullest  dis- 
closure to  the  com])any. 

If,  in  defiance  of  this  rule,  a  promoter  makes  a  secret  profit — e.  g.,  by 
accepting  a  commission  in  cash  or  shares  from  a  person  who  sells  pro- 
perty to  the  company — he  is  accountable  to  the  company,  and  can  be 
compelled  to  surrender  the  profit.  Phosjihate  Sewage  Co.  v.  Hartmont, 
5  C.  D.  394  ;  Neiv  Somlrero  Co.  \\Erlanger,  3  App.  Cas.  1218  ;  Bagnall 
V.  Carlton,  6  C.  Div.  371  ;  Emma  Silver  Mining  Co.  v.  Grant,  11  C.  D. 
1)18  ;  Emma  Silver  Mining  Co.  v.  Lewis,  4  C.  P.  Div.  39G  ;  Wialeg 
Bridge  Co.  v.  Green,  5  Q.  B.  D.  109. 

Nor,  having  regard  to ,  s.  49  of  the  Bankruptcy  Act,  18G9,  will 
bankruptcy  or  hquidation  in  aU  cases  relieve  him.  Thus  in  Emma 
Mining  Co.  v.  Grant,  the  defendant,  who  Avas  a  promoter  of  the  plaintiff 
company,  and  had  accepted  a  secret  commission  from  the  vendor,  was 
ordered  personally  to  pay  the  amount  of  his  profit  although  he  had 
taken  proceedings  for  the  liquidation  of  his  affairs  and  had  obtained  his 
discharge.  17  C.  D.  122  ;  Ross  v.  Guttericlge,  48  L.  T.  117.  See  also 
Ex  parte  Hemming,  13  C.  D.  1G3. 

As  to  the  period  of  limitation.  It  has  not  been  settled  how  far  it  Limitations. 
applies  where  promoters  have  made  illegitimate  profits.  The  Judicature 
Act,  1873,  s.  25  (2),  enacted  that  "no  claim  of  a  cestui  qne  trust  against 
his  trustee  for  any  property  held  on  an  express  trust,  or  in  respect  of  any 
breach  of  such  trust,  shall  be  held  to  be  barred  by  any  Statute  of 
Limitations." 

And  in  Sands  v.  Thompson,  Fry,  J.,  said  :  "  My  notion  of  an  express 
trust  is  that  it  is  a  trust  which  has  been  expressed,  either  in  writing  or 
by  v/ord  of  mouth,  and  that  it  does  not  include  a  trust  which  arises  from 


240 


PEOSPECTUSES. 


Criminal 
liability. 


the  acts  of  the  parties.  The  term  docs  not  apply,  in  my  judgment,  to 
a  resulting  trust,  to  an  implied  trust,  or  to  a  constructive  trust."  22  C. 
D.  G17  ;  and  see  Petre  v.  Petre,  1  Drew.  3D 3. 

Now  a  promoter  in  most  cases  is  only  a  constructive  trustee  of  his 
profits,  and  before  the  Judicature  Act  it  was  well  settled  that  although 
no  time  barred  a  direct  trust,  that  rule  did  not  apply  to  a  constructive 
trust,  and  that  equity  would  apply  the  statutory  period  of  limitation  l)y 
analogy.  Beclcford  v.  Wade,  17  Ves.  1)7,  and  other  cases  collected  in 
Lewin,  735.  Accordingly,  in  most  cases,  a  claim  against  a  promoter 
would  appear  to  be  barred  six  years  after  discovery  of  the  fraud.  See 
Mefroj>oUlan  BanJc  v.  Heiron,  5  Ex.  Div.  325  ;  Emma  Co.  v.  Grant, 
iM supra;  FJifcroft's  Case,  21  C.  Div.  519  ;  lure  Cross,  20  C.  Div.  109. 

As  to  an  action  of  damages  for  conspiracy  against  promoters,  see 
Emma  Co.  v.  Leans,  4G  L.  T.  1(;8. 

Promoters  may  also  render  themselves  liable  to  criminal  proceedings — 
e.g.,  for  conspiracy  to  defraud.  The  Queen  v.  AsplnaU,  2  Q.  B.  Div.  48  ; 
I/i  re  Gold  Co.,  11  C.  Div.  723.     And  see  supra,  p.  23G. 


As   TO   THE    IXTEEESTS   OF    THE   VENDOR. 


Interests  of 
vendor. 


As  already  observed  {supra,  p.  1),  a  company  is  generally  formed  to 
purchase  some  particular  property  or  right.  In  many  cases  the  vendor 
is  a  promoter  of  the  company,  and  where  this  is  so,  the  observations 
above  (p.  237  et  seq.)  apply. 
Special  points.  But  in  settling  the  prospectus  in  the  interests  of  the  vendor,  the  fol- 
lowing matters  should,  in  particular,  be  borne  in  mind  : — 

(a.)  "\^^lere  a  company  is  promoted  by  a  person  or  persons  whose 
property  the  company  is  intended  to  purchase,  the  real  owner- 
ship of  the  property  should  be  disclosed  to  the  company  Ijy 
the  contract,  prospectus,  or  otherwise. 
(b.)  Where  a  person,  having  recently  acquired  a  property,  is  about  to 
sell  it  to  a  company  which  he  promotes,  it  may  be  necessary, 
at  any  rate  in  some  cases  {e.g.,  where  the  difference  in  price  is 
great),  to  disclose  to  the  company  the  price  at  which  he  pur- 
cliased. 
(r.)  Where  a  vendor  (whether  a  promoter  or  not)  is  to  give  a  commis- 
sion or  benefit  to  any  promoter,   director,   or   other   person 
standing  in  a  fiduciary  position  to  the  company,  the  fact  should 
be  disclosed  to  the  company. 
(d.)  Where  a  vendor  is  in  any  way  a  party  to  the  issue  of  the  pro- 
spectus, it  should  be  seen  that  the  prospectus  is  free  from  mis- 
representation, and  makes  due  disclosure  of  all  material  facts. 
Unless  the  above  rules  are  observed,  the  company  may  be  entitled  to 
have  the  contract  with  the  vendor  set  aside,  and  to  recover  any  purchase- 
money  paid  to  him.     Neiv  Sombrero  Co.  v.  ErJanger,  3  App.  Cas.  123C  ; 
BagnaJl  v.  Carlton,  G  C.  Div.  371  ;  Lindsay  Petroleum  Co.  v.  Hard,  L.  R. 
5  P.  C.  243  ;  In  re  Hereford  and  S.  Wales  Co.,  2  C.  Div.  621  ;  Panama 


INTEODUCTOEY    NOTES.  241 

Co.  V.  India  Paibler  Co.,  lo  Ch.  515  ;  S//iifh  v.  Sorhij,  3  Q.  B.  D.  552,  n. 
And  see  "  Orders,"  infra. 

Moreover,  if  the  vendor  is  a  party  to  the  issue  of  tlie  prospectus, 
it  should  be  seen  in  his  interest  that  section  38  of  the  Act  of  1HG7 
is  complied  with  as  helow  mentioned. 

The  mode  in  which  disclosure  should  be  made  by  promoters,  directors.  How  discIoi?ure 
and  others  to  the  company  and  to  applicants  for  shares  therein,  must  of  ^'^^^''^  ^^ 
course  depend  on  the  circumstances  of  the  case,  but  it  will  be  borne  in 
mind  : — - 

1.  That  the  prospectus,  though  purporting  to  be  issued  by  the  com- 
pany may,  it  appears,  be  regarded  as  a  notice  to  the  company  of  anything 
stated  in  it.  "  The  prospectus  conveyed  to  those  who  became  share- 
holders ill  the  company,  and  conveyed,  therefore,  to  the  company,  notice 
of  some  facts  with  regard  to  this  contract  which  appear  to  hie  to  be  of 
great  importance.  The  company  was  informed  .  .  .  ."  Per  Lord 
Cairns,  L.C.,  Erlanger  v.  Neir  Sombrero  Co.,  3  App.  Cas.  1239. 

2.  That  every  member  of  a  company  is  deemed  to  have  notice  of  the 
contents  of  the  memorandum  and  articles  of  association,  and  of  any  con- 
tracts therein  set  out  or  referred  to.  Central  Rij.  Co.  v.  Kisch,  L.  R.  2 
E.  &  I.  Ap.  123  ;  Ernest  v.  NicTioIls,  fi  H.  L.  Cas.  401  ;  Ex  parte  Wil- 
liams, 2  Erj.  218  ;  Bank  of  Turlcey  v.  Ottoman  Co.,  2  Eq.  369  ;  PeeVs 
case,  2  Ch.  G74  ;  Griffith  v.  Paget,  G  C.  D.  517. 

But  this  rule  clearly  does  not  apply  where  there  is  fraud,  for,  "  the 
statute  only  meant  to  l)iiid  those  who  had  actually  become  members. 
Any  one  who  had  without  fraud  taken  shares  could  not  allege  ignorance 
of  anything  contained  in  the  memorandum  of  association,  or  the  articles 
of  association,  merely  because  he  had  not  signed  and  sealed  them  ;  but  if 
he  never  actually  signed  and  sealed  them,  the  statute  cannot  be  taken  to 
impute  to  him  knowledge  of  their  contents  so  as  to  protect  those  who  by 
a  fraud  had  induced  him  to  do  that  Avliich,  in  the  absence  of  fraud, 
would  have  precluded  him  from  saying  he  was  ignorant  of  their  con- 
tents." Per  Lord  Cranworth,  Central  Ry.  Co.  v.  Kisch,  L.  R.  2  E.  & 
L  Ap.  123.  In  that  case  \_sii/pra,  p.  230]  the  prospectus  contained  mis- 
representations, but  it  must  not  therefore  be  assumed  that  the  rule  will 
always  apply  in  the  absence  of  misrepresentation,  for  where  there  is  a 
duty  to  disclose  it  would  seem  that  non-disclosm"e  may  be  deemed  fraud. 
See  Lord  Blackburn's  judgment  in  Broivnlie  v.  Cam2)l)eU,  5  Ap.  Cas. 
950.  And  the  rule  would  not  be  applied  where  the  Court  or  a  jury  was 
satisfied  that  the  intention  was  fraudulent. 

3.  That  every  person  who  takes  shares  on  the  footing  of  a  particular 
prospectus  is  deemed  to  have  notice  of  the  contents  of  any  contract  or 
other  document  thereby  offered  for  inspection — at  any  rate,  so  far  as  is  not 
inconsistent  with  the  facts  stated  or  implied  by  the  prospectus.  Neif 
Sombrero  Phosphate  Co.  v.  Erlanger,  5  C.  Div.  Ill  ;  S.  C.  3  App.  Cas. 
12G2  ;  Anderson's  case,  7  C.  D.  102  ;  ffallo/rs  v.  Fernie,  3  Ch.  477. 

Thus,  where  the  prospectus  offered  a  contract  for  inspection,  Jessel, 

E 


212  PEOSPECTUSES. 

M.  R.,  said,  "  If  the  shareholders  had  t>-ouc  to  see  it  (and  I  think  in  a 
Court  of  Justice  they  cannot  complain  that  they  did  not  see  it,  but  must 
be  treated  as  having-  notice  of  its  contents)  they  would  have  found  a 
recital  of  the  contract  from  C.  to  E.  omitting  the  price.  .  .  ."  Neiu 
i^omhrcro  Co.  v.  Erlauger,  5  C.  Div.  111. 

But  when  there  is  misrepresentation,  this  rule  does  not  apply,  "  for 
when  men  issue  a  prospectus  in  which  they  make  false  statements  of  the 
contracts  made  before  the  formation  of  a  company,  and  then  say  that  the 
contracts  themselves  may  be  inspected  at  the  offices  of  the  solicitors,  it 
has  always  been  held  that  those  who  accepted  those  false  statements  as 
true  were  not  deprived  of  their  remedy  merely  because  they  neglected  to 
go  and  look  at  the  contracts."  Per  Jessel,  M.  E.,  Redgrave  v.  Hurd,  20 
C.  Div.  14.  And  at  any  rate,  where  fraudulent  intent  is  established,  it 
would  seem  that  offering  a  contract  for  inspection  does  not  amount  to. 
notice. 
Trocedure.  Accordingly,  when  i^romoters  intend  to  obtain  a  profit,  or  there  are 

other  facts  which  ought  to  be  disclosed,  it  is  expedient  to  disclose  them 
by  the  prospectus  and  also  by  the  articles.  If  it  is  impossible  to  state 
them  fiilly  in  the  prospectus,  they  should  be  disclosed  in  the  articles,  or  at 
any  rate  in  some  contract  therein  referred  to  and  offered  by  the  prospectus 
for  inspection.  And  it  may  also  be  expedient,  both  in  the  prospectus  and 
articles,  to  state  that  applicants  are  to  be  deemed  to  have  notice  of  the 
contents  of  the  contract.  But  each  case  must  be  separately  considered, 
and  regard  ])eing  had  to  the  manifold  dangers  of  non-disclosures  it  is 
well  to  be  on  the  safe  side. 

Sect.  .38  of  the      As  to  s.  38  of  the  Companies  Act,  ISO?  :  The  section  is  as  follows: — 
Act  of  1867. 

Every  prospectus  of  a  company,  and  every  notice  inviting  persons  to  subscribe 

for  shares  in  any  joint-stock  company,  shall  specify  the  dates  and  the  names  of 
the  parties  to  any  contract  entered  into  by  the  company,  or  the  promoters, 
directors,  or  trustees  thereof,  before  the  issue  of  such  prospectus  or  notice, 
whether  subject  to  adoption  by  the  directors,  or  the  company,  or  otherwise, 
and  any  prospectus  or  notice  not  specifying  the  same  shall  be  deemed  fraudu- 
lent on  the  part  of  the  promoters,  directors  and  officers  of  the  company  know- 
ingly issiiing  the  same,  as  regards  any  person  taking  shares  in  the  company  on 
the  faith  of  such  prosj^ectus  unless  he  shall  have  had  notice  of  such  contract. 

Construction.  Much  difference  of  oj^'nion  exists  as  to  what  contracts,  regard  being- 
had  to  this  enactment,  must  be  specified  in  the  prospectus  ;  but  the 
balance  of  authority  is  in  favour  of  a  construction  which  would  render 
it  necessary  to  specify  every  contract  by  a  promoter,  director,  or  trustee, 
which  might  reasonably  be  expected  to  influence  persons  reading  the 
prospectus  in  making  up  their  minds  whether  or  not  they  will  apply  for 
shares  ;  and  further  that  the  contracts  must  be  specified,  whether  made 
before  or  after  the  person  becomes  a  j^romotcr,  director,  or  trustee,  and 
whether  they  relate  directly  or  indirectly  to  the  affairs  of  the  company. 
Remedy  of  The  remedy  of  a  person  who  has  taken  shares  on  the  faith  of  a  pro- 

party  deceived,  j^pgcti^s  offending  against  this  section,  is  to  sue  the  promoters,  directors, 
or  officers  issuing  the  same  for  the  damages  he  has  sustained.     Govefs 


INTEODUCTOEY    NOTES.  243 

case,  1  C.  Div.  182  ;  Twycross  v.  Grant,  2  C.  P.  Div.  503  ;  Sullivan  v. 
iVitmlfe,  5  C.  P.  Div.  455. 

Accordingly  iu  preparing  a  prospectus  it  is  essential  to  bear  this  Application  of 
section  in  mind,  and  to  ascertain  what  contracts  have  been  made,  and  to  ^^'^*'^''"^- 
consider  carefully  which  of  them  ought  to  be  specified.  In  many  cases 
there  is  little  or  no  dilficulty  in  deciding  the  matter,  but  occasionally 
questions  of  great  nicety  arise.  It  has  not  yet  been  settled  whether  a 
verbal  contract  is  withm  the  section,  and  many  persons  have  acted  on 
the  assumption  that  it  is  not  necessary  to  specify  such  a  contract.  But 
there  is  nothing  in  the  section  to  exclude  a  verbal  contract,  and  it  seems 
more  than  probable  that  this  assumption  is  not  warranted.  See  Ark- 
tvriijht  V.  Ncwhold,  17  C.  Div.  301  ;  28  W.  R.  829. 

As  to  the  meaning  of  the  word  "  promoter,"  see  supra,  p.  237,  et  seq. 

The  words  "  knowingly  issue,"  in  s.  38,  mean  neither  more  nor  less 
than  issuing  Avith  a  knowledge  of  the  existence  of  contracts  within  the 
section,  and  the  intentional  omission  of  them  from  the  prospectus.  Per 
Cockburn,  C.  J.,  Twycross  v.  Grant,  2  C.  P.  Div.  542.  This  being  so,  a 
grave  responsibility  is  cast  on  those  who  have  to  advise  on  the  section. 

As  to  the  measure  of  damages  iu  such  an  action,  see  Twycross  v. 
Grant,  uht  supra ;  Arlcu:riyJtt  v.  NewhoJd,  uM  supra. 

Occasionally,  e.g.,  where  a  company  has  been  in  existence  for  some  Waiving 

time  and  has  entered  into  manv  contracts  or  where  doubt  exists  as  to  beneftuttie 

section. 
whether  some  contracts  that  have  been  made  are  or  are  not  within  the 

section,  it  is  deemed  expedient  to  insert  in  the  prospectus  a  clause  pro- 
viding for  a  more  or  less  qualified  waiver  of  the  benefit  of  s.  38,  e.g. — 

"  The  directors  are  advised  [and  believe]  that  the  above  are  the  only  con- 
tracts the  dates  of  and  parties  to  which  are  required  by  section  38  of  the  Com- 
panies Act,  1867,  to  be  specified,  but  in  oi-der  to  i^revent  any  question,  api^licants 
for  shares  shall  be  deemed  to  waive  any  further  compliance  with  that  enact- 
ment."    Or, 

"  Other  contracts  have  been  made,  but  as  the  above  is  the  only  contract  to 
which  the  company  is  a  party,  applicants  shall  be  deemed  to  waive  the  publica- 
tion in  accordance  with  section  38  of  the  Comj)anies  Act,  18G7,  of  any  fvirther 
particulars  as  to  such  contracts." 

Where  this  is  done  the  form  of  application  for  shares  should  specifi- 
cally refer  to  the  prospectus,  and  the  application  should  be  for  shares  on 
the  terms  thereof,  or  it  may  Vje  deemed  expedient  to  embody  the  waiver 
in  the  application.  There  seems  no  reason  to  doubt  the  validity  of  such 
a  waiver,  and  it  appears  probable  that,  in  the  absence  of  fraud,  it 
protects  the  directors. 

It  may  here  be  mentioned  that  s.  38  is  applicable  for  the  protection  of  S.  38  only 
shareholders  only.     Accordingly  it  is  not  apphcable  in  the  case  of  a  ghardi'oMers. 
bondholder.     Cornell  v.  Hay,  L.  Pi.  8  C.  P.  228.     Nor  does  it  enable  the 
company  to  sue.     New  Sombrero   Co.  v.  Ertanger,  3  App.  Cas.  1218. 
Nor  does  it  confer  the  right  on  a  shareholder  to  repudiate  his  shares. 
Governs  case,  1  C.  Div.  182. 

The  fact  that  s.  38  does  not  apply  to  bondholders  and  the  like  somo- 

K  2 


244 


PEOSPECTUSES. 


.times  induces  the  promoters  of  a  company,  Avhcre  it  is  desired  to  apply 
to  the  pubHc  for  capital  but  difficulties  are  apprehended  in  regard  to 
s.  38,  to  raise  the  capital  on  debentures.  In  such  case  there  may 
perhaps  be  no  shares  taken  up  except  by  the  subscribers  of  the  memor- 
andum of  association  and  any  issued  as  paid  up  to  the  vendor.  Ander- 
son''s  case,  3  C.  Div.  75.  Sometimes,  however,  bonus  shares  are  issued 
to  the  debenture  holders.  See  Finnsione's  case,  20  Eq.  524  ;  Uruguay, 
<&c.,  Ry.  Co.,  11  C.  D.  372,  and  supra,  p.  39,  but  it  may  be  doubted 
whether  a  prospectus  offering  debentures  for  subscriptions,  with  a  right 
to  bonus  shares  attached,  is  not  "  a  prospectus  inviting  persons  to  sub- 
scribe for  shares  "  within  the  meaning  of  s.  38. 


Care  requisite 
in  framing 
prosx^ectus. 


Opinion  of 
promoters. 


As  to  statinj 
source  of 
information. 


Wrongful 
advertisement 
of  persons  as 
directors. 


From  what  has  been  said  the  extreme  importance  of  framing  the. 
prospectus  with  the  utmost  care,  sufficiently  appears.  Some  high 
colouring  may  be  used  \_svpra,  p.  230],  but  if  a  scheme  or  undertak- 
ing is  promising,  a  moderate  tone  is  generally  found  to  be  the  most 
attractive. 

The  prospectus  may  state  the  oi^inion  of  those  who  issue  it,  e.g.,  as 
to  the  value  of  the  company's  property,  and  if  those  persons  are  of 
character  and  position  their  opinion  may  carry  great  weight,  but  care 
should  be  taken  that  they  have  reasonable  grounds  for  the  opinion. 

Where  a  prospectus  is  to  contain  statements  which  the  directors 
believe  to  be  true  but  cannot  verify,  they  should  refer  to  the  source  of 
their  information,  e.g.,  "  M.  A.  has  examined  the  property  and  reports, 
&c.  M.  A.'s  report  lies  for  inspection,  &c."  Thus  in  SmifJi's  case, 
2  Ch.  604,  the  prospectus  falsely  stated  that  the  mines  were  valuable  and 
in  operation.  The  directors  had  issued  the  prospectus  on  the  faith  of 
representations  made  by  the  vendor  and  without  knowledge  of  their 
untruth,  and  it  was  held  that  Smith  was  entitled  to  have  his  contract  to 
take  shares  rescinded.  Turner,  L.  J.,  said  that  "if  a  company  will  take 
upon  itself  to  assume  the  authenticity  of,  and  give  credit  to,  the  reports 
Avhich  are  made  to  it,  and  represent  as  facts  the  matters  stated  in  those 
reports,  it  must  take  the  consequences.  If  the  company  had  confined 
themselves  to  saying,  '  We  have  received  reports  fi'om  which  we  believe, 
and  have  reason  to  believe,  that  these  mines  are  in  full  operation,  and 
are  making  daily  large  returns,'  it  might,  and  no  doubt  would  have  been 
very  difficult  for  Mr.  Smith  to  be  relieved  from  the  contract ;  but  the 
company,  instead  of  thus  referring  to  the  information  received,  stated 
the  circumstances  as  facts." 

Care  should  of  course  be  taken  not  to  advertise  in  the  prospectus  the 
name  of  any  person  as  a  director  or  officer  of  the  company  unless  he  has 
been  duly  appointed  and  has  consented  to  accept  office.  A  person 
whose  name  is  advertised  without  authority  may  obtain  an  injunction  to 
restrain  the  company  from  advertising  his  name.  Routh  v.  Webster, 
10  Beav.  563.  And  a  mis-statement  as  to  the  directors  may  enable  an 
allottee  to  repudiate  his  shares.    Ilunster^s  case,  14  W.  K.  957  ;  BlaMs 


FORMS. 


245 


case,  34  Bear.  CP)9  ;  Anderson's  case,  17  C.  D.  ."01  ;  Scottish  Petrolevm 
Co.,  23  C.  Div.  413. 

Where  the  prospectus  is  issued  before  the  company  has  been  regis-  Statement  of 
tered,  great  care  should  Ije  taken  in  stating  the  objects  of  the  proposed  °  -"^^  *^" 
company ;  for  if  the  objects  of  the  comj)any  when  registered  exceed  or 
differ  materially  from  those  stated  in  the  prospectus,  applicants  may  be 
able  to  refuse  an  allotment  or  to  repudiate  their  shares  after  allotment, 
l)rovided  they  are  not  guilty  of  undue  delay.  Doivnes  \.  SJiip,  L.  R. 
3  H.  L.  343  ;  PeeVscase,  2  Ch.  674,  G84  ;  Lawrence's  case,  2  Ch.  412. 

In  order  to  avoid  any  risk  of  this,  the  objects  should  be  finally 
settled  before  the  prospectus  is  issued,  and  applicants  should  be  given  an 
opportunity  of  inspecting  the  draft  memorandum  of  association.  But, 
as  already  mentioned  [^supra,  p.  228],  the  present  practice  is  to  issue  the 
jirospectus  after  the  formation  of  the  company. 

"Where  the  prospectus  is  not  issued  until  after  the  formation  of  the 
company,  the  risk  above  mentioned  docs  not  exist,  for  applicants  arc 
bound  to  look  at  the  memorandum  and  articles  of  the  company  before 
applying  for  shares.  PeeVs  case,  2  Ch.  074,  approved  in  Oalces  v. 
Turquand,  L.  R.  2  H.  L.  352. 

The  prospectus  should  state  where  copies  of  the  memorandum  and  Inspection  of 
articles  of  association  and  of  any  contracts  and  other  documents  [sujnri,  ^^ocuments. 
p.  241],  mentioned  in  the  prospectus  can  be  insj)ected. 

Where  it  is  intended  to  apply  to  the  Stock  Exchange  for  a  settlement  As  to  Stock 
and  quotation  of  the  shares  offered  for  subscription  in  the  prospectus,  it  Exchange  rules. 
is  necessaiy  to  include  in  the  prospectus  a  co})y  of  the  memorandum  of 
association  of  the  co.  It  is  usually  printed  within  the  fold  of  the  pro- 
spectus, but  without  the  association  clause  or  the  names  of  the  sub- 
scribers. For  extract  from  the  Rules  of  the  Stock  Exchange,  see  infra, 
p.  247. 


FORMS. 

The  following  is  the  outline  of  a  prospectus  : 

The Co,  Limtd.  Form  208. 


Incorporated  under  the  Companies  Acts,  18G2  to  1883  [whereby  the  liability  Skeleton  i>io- 
of  a  shareholder  is  limited  to  the  amount  of  his  shares] .  spectus. 

The  words  in  Vjrackets  are  very  commonly  inserted. 

Capital  100,000/.  divided  into  1 0,000  shares  of  10/.  each.     Payable 

as  follows  :  1/.  on  applicon,  2/.  on  allotmt,  and  2/.  on  the of , 

and  the  balance  when  called  for. 

Directors. 

[Names,  addresses,  and  descriptions.] 


246  PROSPECTUSES. 

Form  208.  Bankers. 

Solicitors. 

Auditors. 

Secretary. 

Office. 

This  CO  has  been  formed  for  the  jipose,  &c. 

\_Herc  will  follow  a  statement  of  the  ohjects  and  ]irosj)cds  of  the  company. _^ 

Applicons  for  shares  should  be  made  upon  the  accompanying,-  form, 
and  forwarded  to  the  bankers  of  the  co,  together  with  the  amount 
payable  on  applicon.  If  no  allotmt  is  made,  the  deposit  will  be 
returned  without  deduction,  and  where  the  number  of  shares  allotted  is 
less  than  the  number  applied  for,  the  surplus  will  be  credited  in  reduction 
of  the  amount  payable  on  allotmt. 

The  following-  contracts  have  been  made,  namely  : — 

(1.)  A  contract  dated between  A.  B.  and  the  co. 

(:?.)  A  contract,  &c. 

Forms  of  applicon  for  shares  may  be  obtained  from  the  co's  secretary 
and  bankers. 

Copies  of  the  memorandum  and  articles  of  association  of  the  co,  and 
of  the  contracts  above-mentioned,  may  be  inspected  at  the  office  of  the 
go's  solors. 

Dated of . 

The  form  of  application  for  shares  is  usually  annexed  to  the  prospectus.  It 
.may  be  as  follows : — 

Form  of  Application  for  Shares. 
Form  209.  To  the  Directors  of  The Co,  Limtd. 

Application  for  GENTLEMEN, 

Having  pd  to  the  co's  bankers,  Messrs. ,  the  sum  of  .£ , 

being  a  deposit  of  £ per  share  on shares  in  the  above-named 

CO,  I  request  you  to  allot  me  that  number  of  shares  upon  tlie  terms  of 

the  co's  prospectus  dated  the of  — — -,  and  I  hby  agree  to  accept 

the  same  or  any  smaller  numlicr  that  may  be  allotted  to  me,  and  to 

pay  the  balance  of  £ per  share  on  allotmt  as  pro\-ided  by  the  sd 

prospectus,  and  I  authorise  you  to  register  me  as  the  holder  of  the  sd 
shares. 

Name  in  full. 

Address. 

Description. 

Date. 

Signature. 

As  to  conditional  applications^  see  Ellcington's  case,  2  Ch.  511 ;  Pellatt's  case, 
2  Ch.  527  ;  Simpson's  case,  4  Ch.  184;  Buckley,  GO. 


1  Jankers' 
receipt. 


FORMS.  217 

Annexed  to  the  form  of  application  will  be  a  form  of  receipt  as  follows : — 

The Co,  Limtd.  Form  210. 

Bankers'  Receipt  {to  he  retained  hij  the  applicant). 

Received  this day  of of  ]\Ir. ,  the  sum  of  £ ,  being 

a  deposit  of  £— — ■  per  sliarc  upon shares  in  the  above  named  co. 

For  the Bank. 

To  l)e  signed  by  the  bankers  or  secretary,  and  retained  by  tlie  ap- 
plicant. 

An  applicant  for  shares  is  bound  from  the  time  when  notice  of  allotment  is 
g-iven  or  posted.  Houseliold  Fire  Insurance  Co.,  i  Ex.  Div.  216.  Until  notice 
of  allotment  is  given  or  posted  there  is  no  contract,  and  the  applicant  may 
-withdraw.  Pellatt's  case,  2  Ch.  527.  But  an  unstamped  allotment  letter  may 
be  sufficient.  In  re  Whitley  Partners,  Steel's  case,  49  L.  J.  Ch.  176  ;  42  L.  T.  11. 
,  And  if  the  withdrawal  of  his  application  does  not  reach  the  company  until 
after  the  notice  of  allotment  has  been  posted,  it  is  ineffectual.  Harris's  case,  7 
Ch.  587 ;  Stevenson  v.  McLean,  5  Q.  B.  D.  357. 

Where  notice  of  allotment  is  duly  posted  the  applicant  is  bound,  even  though 
the  notice  never  reaches  him.     Household  Fire,  c^'c,  Co,  v.  Grant,  ubi  supra. 

If  no  allotment  is  made  the  company  is  bound  to  repay  the  deposit,  but  the 
deposit  is  not  a  trust  fund.  Moseley  v.  Cresseij's  London  Co.,  1  Eq.  405 ;  14 
W.  E.  246. 

Where  A.  applies  on  behalf  of  B.  but  without  authority,  and  B.  repudiates 
the  allotment,  A.  is  liable  in  damages  to  the  company,  and  the  measure  may  be 
the  par  value  of  the  shares.    Re  National  Coffee  Pal.,  32  W.  E.  236  (Aug.  1883). 


RULES  OF  LONDON  STOCK  EXCHANGE. 

A  company  desiring  a  special  settling  day  and  quotation  of  its  shares  in  the 
official  list,  must  bear  in  mind  the  following  rules  of  the  committee  of  the 
London  Stock  Exchange : 

129.  The  committee  will  appoint  a  special  settling  day  for  transactions  in  the  Special  settling 
shares  of  a  new  company,  provided  that  no  allegation  of  fraud  be  substantiated ;  days. 

•that  there  has  been  no  misrepresentation  or  suppression  of  material  facts;  that 
■sufficient  scrip  or  shares  are  ready  for  delivery  ;  and  that  no  impediment  exists 
to  the  settlement  of  the  account. 

130.  The  secretary  of  the  share  and  loan  department  shall  give  one  week's  Documents 
notice  to  the  Stock  Exchange  of  any  application  for  a  special  settling  day  for  required, 
transactions  in  the  shares  of  a  new  company,  previously  to  such  application 

being  submitted  to  the  committee,  and  shall  require  the  production  of  the  fol- 
lowing documents,  viz.: — 

The  prospectus,  the  Act  of  Parliament,  the  articles  of  association,  or  a  cer- 
tificate that  the  company  is  constituted  upon  the  cost-book  system,  under  the 
Stannary  laws. 

The  original  applications  for  shares,  the  allotment-book,  signed  by  the  chair- 
man and  secretary  to  the  company,  and  a  certificate  verified  by  the  statutory 
declaration  of  the  chairman  and  the  secretary,  stating  the  number  of  shares 
applied  for  and  unconditionally  allotted  to  the  public,  the  amount  of  deposits 
paid  thereon,  and  that  such  de]DOsits  are  absolutely  free  from  any  lien. 


us 


PEOSPECTUSES. 


Quotations  of 
shares  of  a 
new  company. 


Issue  oE  new 
shares  within 
12  months  of 
special  settling. 

Caution  to 
Jjrokers  of  new 
companies. 


[Formerly  the  preceding  paragraph  was  as  follows  : — 

"  The  orio-inal  applications  for  shares,  together  with  the  allotment-hook, 
signed  by  the  chairman  and  secretary  to  the  company,  and  a  certificate  signed 
in  like  manner,  stating  the  ntimber  of  shares  applied  for  and  nnconditionally 
allotted,  and  the  amount  of  deposits  paid  thereon."  It  has  been  altered  Avith 
a  view  to  preventing  such  frauds  as  were  practised  by  the  promoters  of  the 
Eupion  Gas  Company,  Limited,  The  Queen  v.  Asinnall,  2  Q.  B.  Div.  48.  See 
Eeport  of  the  Select  Committee  on  Loans  to  foreign  States,  1875  :  Evidence  of 
Mr.  Scott,  p.  19,  Question  403.] 

The  banker's  pass-book,  and  a  certificate  from  the  bankers,  stating  the  amount 
of  deposits  received. 

131.  The  committee  will  order  the  quotation  of  a  new  company  in  the  ofiicial 
list,  provided  that  the  company  is  of  bomX  fide  character,  and  of  sufficient  mag- 
nitude and  importance  ;  and  that  the  requirements  of  Rule  130  have  been  com- 
plied with,  and  that  the  prospectus  has  been  pul^licly  advertised,  and  agrees 
substantially  with  the  Act  of  Parliament  or  the  articles  of  association,  and  iu 
the  case  of  limited  companies  contains  the  memorandum  of  association  ;  that  it . 
provides  for  the  issue  of  not  less  than  one-half  of  the  nominal  capital,  and  for 
the  payment  of  10  per  cent,  iipon  the  amount  subscribed,  and  sets  forth  the 
arrangements  for  raising  the  capital,  whether  by  shares  fully  or  partly  paid  up, 
with  the  amounts  of  each  respectively,  and  also  states  the  amount  paid  or  to  be 
paid,  in  money  or  otherwise,  to  concessionaires,  owners  of  property,  or  others 
on  the  formation  of  the  company,  or  to  contractors  for  works  to  be  executed, 
and  the  number  of  shares  (if  any)  proposed  to  be  conditionally  allotted ;  that 
two-thirds  of  the  whole  nominal  capital  proposed  to  be  issued  have  been  applied 
for  and  unconditionally  allotted  to  the  public  (shares  reserved  or  granted  in 
lieu  of  money  payments  to  concessionaires,  owners  of  property,  or  others,  not 
being  considered  to  form  part  of  such  public  allotment)  ;  that  the  articles  of 
association  restrain  the  directors  from  employing  the  funds  of  the  company  in 
the  purchase  of  its  own  shares,  and  that  a  member  of  the  Stock  Exchange  is 
authorised  by  the  company  to  give  full  information  as  to  the  formation  of  the 
undertaking,  and  be  able  to  furnish  the  committee  with  all  particulars  they  . 
may  require. 

In  cases  where  fully  paid  shares  have  been  granted  in  lieu  of  money  pay- 
ments, an  official  certificate  will  be  required  that  the  contract  providing  for  the 
issue  of  such  shares  has  been  filed  with  the  registrar  of  joint-stock  companies, 
as  prescribed  by  the  25th  Section  of  "  The  Companies  Act,  1867." 

132.  A  company  issuing,  or  promising  to  issue,  new  shares  within  twelve 
months  after  the  first  settling-day  appointed  by  the  committee,  unless  under 
special  circumstances,  shall  be  liable  to  exclusion  from  the  official  list. 

133.  The  committee  particularly  caution  brokers  against  giving  the  sanction 
of  their  names  to  the  bringing  out  of  any  company  without  due  inquiry  as  to 
the  bona  fides  of  its  objects,  the  character  of  its  promoters,  directors,  and  con- 
cessionaires, and  of  the  other  persons  connected  therewith.  Members  disre- 
garding this  caution  are  liable  to  be  dealt  with  in  such  manner  as  the  case  may 
require. 


DEBENTUKES. 


INTRODUCTOEY  NOTES. 

COMPAXiES  formed  imder  or  subject  to  the  Act  of  1SG2  very  com- issue  of  deben- 
monly  issue  debentures  :  *"^"®^  common. 

1.  For  the  purpose  of  securing-  the  repayment  of  money  borrowed. 

2.  In  payment  for  proj^erty  purchased,  or  services  rendered,  or  money 
due. 

Formerly  a  debenture  -was  g'enerally   framed   as   a  covenaut  by  the  As  to  deben- 

corapany  with  the  person  to  whom  it  was  issued  to  pay  to  him,  his  ^^^'^  operating 
i-      -'  1  J^    •'  '  as  a  covenant, 

executors,  administrators,  or  assigns,  the  principal  money  therein  men- 
tioned with  interest,  and  Avas  expressed  to  be  given  under  the  common 
seal. 

The  right  to  sue  for  the  recovery  of  money  secured  by  an  instrument  chose  in 
so  framed,  being-  a  chose  in  action,  was  only  assignable  subject  to  the  ''^'^ti""- 
rules  which  prevailed  as  to  the  assignment  of  a  chose  in  action.      But  Objections  to 
instruments  so  circumstanced  were  obviously  not  capable  of  l:»eing  readily  ^"^h  mstm- 

■^  ^  o  J  ments. 

and  safely  dealt  with.  However  good  the  credit  of  the  company  issuing 
them  might  be,  dealings  could  not  safely  take  place  without  investigation 
of  title,  inquiries,  assignments,  notices,  and  legal  advice. 

The  inconveniences  of  such  a  form  having  been  felt,  and  serious  loss  Improvements. 
having  been  incurred  by  investors  ;  Athencmm  Life  Assurance  Sodeiij  \. 
Pooley,  1  GifF.  102 ;  3  De  G.  &  J.  294 ;  In  re  Naial  Invesiment  Co.,  ?> 
Ch.  355  ;  efforts  were  made  to  improve  the  form,  and  these  efforts  have 
been  so  far  successful,  that  debentures  can  now  be  framed  in  a  manner 
that  facilitates  investment  by  affording  a  convenient  and  attractive 
security  easily  and  safely  dealt  with.  In  the  result,  many  millions  are 
now  invested  in  such  debentures,  and  companies  that  have  obtained  on 
easy  terms  a  debenture  loan  of  from  10,000?.  and  uj^wards,  are  to  be 
numbered  by  hundreds. 

The  following  are  the  principal  kinds  of  debentures  now  generally  Tbe  several 
used  :  1.  Debentures  to  bearer.     2.  Registered  debentures.     3.  Debeu-  ^o™^/"^ 

.  .  .  debentures, 

tures  to  bearer  capable  of  registration.     4.  Registered  debentures  with 

coupons  to  bearer. 

And  debentures  of  each  kind  may  be  framed  as  : — 

(a.)  Mortgage  debentures,  i.e.,  debentures  secured   hy  mortgage  or 

■charge  ;  or  {h.)  Unsecured  debentures,  i.e.,  debentures  not  secured  b\- 

mortgage  or  charge. 


250  DEBENTURES. 

And  also  as  (f.),  determinable  debentures  ;  or  (d.),  perpetual  delien- 
tures. 
"To  bearer."        In  framing  a  debenture  to  bearer  the  object  is,  as  far  as  possible,  to 
endow  it  with  the  characteristics  of  a  negotiable  instrument,  and  in 
particular — 

1.  To  make  it  transferable,  free  from  equities,  between  the  company 
and  the  person  to  whom  it  is  issued. 

2.  To  avoid  the  necessity  for  any  written  assignment. 

;5.  To  render  the  delivery  of  the  debenture  and  any  interest  coupon  a 
good  discharge  to  the  company. 

4.  To  enable  the  bearer  to  sue  the  company  in  his  own  name. 

5.  To  ensm'e  a  good  title  to  any  person  who  ac(|uires  the  debenture 
Tjomlfide  for  valuable  consideration,  notwithstanding  any  defect  in  the 
title  of  the  person  from  whom  he  acquires  the  debenture. 

Rights  of  The  bearer  of  a  debenture  may  acquire  rights  against  the  company. 

^^*"*  A.  As  assignee  of  the  original  contract. 

B.  By  virtue  of  an  independent  contract  between  himself  and 

the  company. 

C.  By  estoppel. 

As  assignee.  As  to  A.     Prima  facie  the  bearer  of  a  debenture,  expressed  to  be 

payable  to  bearer,  is  (if  he  be  not  the  original  holder  of  the  debenture) 
regarded  as  the  equitable  assignee  of  the  contract  contained  in  it.  Li  re 
BlaMij  Co.,  3  Ch.  154;  Re  Agra  and  Masicrman's  Co.,  2  Ch.  395. 
Accordingly,  as  such  assignee,  he  is  entitled  to  the  benefit  of  any 
valid  stipulations  in  that  contract.  Xow  the  following  points  are  well 
settled — 

{a.)  A  stipulation  that  a  debenture  shall  be  transferable  free  from 
equities  is  valid. 

"  I  am  of  opinion  that  there  is  nothing  inequitable  in  allowing  the 
debtor  in  an  obligation  to  contract  with  his  creditor  that  he  will  not 
avail  himself  of  such  equities."  Per  Rolt,  L.  J.,  In  re  Blakely  Ordnance 
Co.,  3  Ch.  159.     And,  again — 

"  Generally  speaking,  a  chose  in  action  assignable  only  in  equity  must 
be  assigned  subject  to  the  equities  existing  between  the  original  parties 
to  the  contract ;  but  this  is  a  rule  -which  must  yield  when  it  appears 
from  the  nature  or  terms  of  the  contract  that  it  must  have  been  intended 
to  be  assignable  fi*ee  from  and  unaffected  by  such  equities."  Per  Cairns, 
Ij.  J.,  P/i  re  Agra  and  Master  man's  Bank,  ex  j^arte  Asiatic  Banhing  Cor- 
foraiion,  2  Ch.  397. 

And  it  appears  that  such  stipulation  will  probably  be  implied  fi'om  the 
mere  feet  that  the  del)enture  is  "to  bearer."  See  In  re  Blalrcty  Ordnance 
Co.,  ubi  si'pra,  and  Natal  Investment  Co.,  3  C.  301.  But  in  such  case 
the  debenture  should  be  simply  "  to  bearer,"  not  "  to  A.,  his  executors, 
administrators,  or  assigns,  or  to  the  bearer  "  ;  for  the  additional  words 
may  be  held  to  neutralise  the  force  of  the  words  "to  bearer."  Natal 
Investment  Co.,  3  Ch.  355.  See  In  re  Imperial  Land  Co.  of  Marseilles, 
ex  parte  Colhorne  and  Strawhridge,  11  Eq.  487. 


INTEODUCTOEY    NOTES.  251 

(/;.)  A  stipulation  tliat  company  will  pay  the  beaver  without  requiring 
him  to  produce  any  assignment  in  writing  is  Talid. 

"  I  am  of  opinion  tliat  there  is  nothing  inequitable  in  allowing  the 
ilebtor,  in  an  obligation,  to  contract  with  his  creditor  that  he  will  .... 
pay  the  amount  due  on  the  obligation  to  the  assignee  of  the  creditor 
(whether  he  be  such  assignee  by  instrument  in  wi'iting,  or  by  mere 
delivery  of  the  obligation)  .  .  .  ."  Per  Rolt,  L.  J.,  In  re  BlaJcehj 
Ordnance  Co.,  ?>  C.  ISO.  And  see  In  re  Natal  Investment  Co.,  3  Ch.  355. 
Lord  Cairns  said,  '•  As  I  understand  these  words  ['  or  to  the  holder,  for 
the  time  being,  of  this  debenture  '],  they  do  nothing  more  than  this  :  in 
order  to  save  the  troul)le  and  expense  of  assignments  by  deed,  they  pro- 
vide that  the  com]^any  will  recognise  any  person  who  holds  the  debenture 
to  be  in  as  good  a  position  as  if  he  had  become  the  assignee  by  deed, 
and  will  not  insist  upon  his  proving  his  title  by  producing  a  formal 
assigmnent,  &c."     And  Hvjgs  v.  Assam  Tea  Co.,  L.  R.  4  Ex.  394. 

■  (c.)  A  stipulation  that  the  delivery  of  the  debentnre  or  any  interest 
coupon  shall  be  a  good  discharge  to  the  company  is  valid.  Crouch  v. 
Credit  Fouier,  L.  R.  8  Q.  B.  385  ;  Re  Katal  Investment  Co.,  3  Ch.  355, 
The  maxim  "  Qui  sentit  commodum  sentire  debet  et  onus'"  applies. 
Macdoiiald  v.  Law  Union  Co.,  L.  R.  9  Q.  B.  328.  It  must,  however,  be 
borne  in  mind  i\vAi i^Timd facie  such  a  stipulation  "is  not  a  proviso  for 
the  benefit  of  either  the  assignee  or  the  holder  of  the  debenture  :  it  is  a 
proviso  for  the  benefit  of  the  company  itself,  in  order  to  absolve  the 
company  from  the  burden  of  having  to  look  into  the  title  of  any  person 
who  might  present  the  delienture  to  them  for  pajinent.  It  does  not 
oblige  them  to  pay  to  the  person  who  presents  the  debenture,  it  merely 
absolves  them  from  subsequent  lialnlity  if  they  do,  in  point  of  fact,  pay 
to  the  person  who  presents  the  debenture."  Per  Lord  Cairns,  L.  C,  In 
re  Natal  Investment  Co.,  uM  supra. 

■  (cl.)  That  the  bearer,  as  equitable  assignee  of  the  contract,  can  sue  in 
his  own  name.  Re  Blakcly  Ordnance  Co. ;  Re  Natal  Investment  Co. ; 
and  Re  Agra  and  Masternmn's  Bank,  uM  sujjra. 

(e.)  It  is  not  competent  to  the  parties  to  the  original  contract  by  any 
stipulation  l3etween  them  contained  therein  to  ensure  the  title  of  a  bona 
fide  holder  for  value  who  claims  through  a  person  whose  title  is  defective. 
Crouch  V.  Credit  Fonder,  L.  R.  8  Q.  B.  375.  Nevertheless,  as  appears 
below,  this  advantage  can  be  secured  to  the  holder  by  independent 
contract. 

•  As  to  B.  It  appears  that  a  debenture  holder  may  acquire  rights  independent 
against  the  company  by  virtue  of  an  independent  contract,  which  will  conti-act. 
-arise  upon  his  acting  on  the  faith  of  the  representations  contained  in  the 
debentm-e.  For,  where  a  party  makes  a  representation  to  all  the  world 
that  he  will  do  or  aljstain  from  doing  something,  with  the  intention 
that  such  representations  shall  be  acted  on,  there  will  be  a  binding 
contract  between  such  party  aud  any  person  who  acts  accordingly.  See 
In  re  Agra  and  3[aster7nan' s  Bank,  2  Ch.  397  ;  In  re  Imperial  Land  Co., 
11  Eq.  487.;  General  Estates  Co.,  3  Ch.  7C2  ;  Re  Merchants''  Banking 


9^0 


DEBENTURES. 


Estoppel. 


Goodwin  v. 
Jiobarts. 


Co.,  5  C  D.  21G.  And  it  appears  from  these  cases  that  a  debenture 
expressed  to  be  payable  to  bearer  probably  amounts  to  such  a  representa- 
tion, and  affords  evidence  of  the  company's  intention  that  the  repre- 
sentation shall  be  acted  on.  But  see  Crouch  v.  Credit  Fonder,  L.  R. 
8  Q.  B.  o74-,  where  this  point  was  not  taken.  Having  regard  to  the 
case  last  mentioned,  and  in  order  to  preclude  doubt,  it  is  usual  to  insert 
some  further  words  in  a  debenture  expressly  addressed  to  all  the  world ; 
e.g.,  "all  persons  may  act  accordingly."     See  infra,  p.  2G7. 

As  to  the  addition  of  these  words,  see  Re  Agra  and  Masferinan's  Banlc, 
vM  supra,  where  [A.]  had  addressed  a  letter  of  credit  to  [B.],  which 
contained  the  words,  "  parties  negotiating  bills  under  it  are  requested 
to  indorse  particulars  on  the  back  hereof ;"  and  it  was  considered  these 
words  w'ere  obviously  addressed  to  the  persons  negotiating  bills,  that 
they  were  "  intended  by  the  writers  to  be  used  as  an  inducement  to 
make  persons  take  those  bills,"  that  it  amounted  to  "  a  general  invita- 
tion by  [A.]  to  all  persons  to  whom  the  letters  may  be  shown  to  take 
bills  drawn  by  [B.]  or  [A.]  with  reference  to  the  letter,  and  to  alter, 
their  position  by  paying  for  such  bills,  with  an  assurance  that  if  they  or 
any  of  them  will  do  so,  [A.]  will  accept  such  bills  on  presentation. 
If  it  be  necessary  to  determine  the  question  of  the  legal  liability  of  [A.] 
I  [Cairns,  L.  J.]  am  of  opinion  that  upon  the  offer  in  this  letter  being 
accepted  and  acted  upon  by  [C],  there  was  constituted  a  valid  and 
binding  legal  contract  against  [A.]  in  favour  of  [C].  The  cases  as  to 
the  offer  of  rewards,  of  which  the  case  of  Wi/Iianis  v.  Carwardine, 
(4  B.  &  Ad.  ()21),  is  an  example  ....  appear  to  me  to  be  sufficient 
authority  to  show  that  there  may  be  privity  of  contract  in  such  case." 
Per  Cairns,  L.  J. 

Of  course  if  an  independent  contract  exists,  the  bearer  is  entitled  to 
the  full  benefit  thereof;  and  it  appears  from  the  extract  from  Lord 
Cairns's  judgment,  in  Goodwin  v.  Robarts,  below  given,  that  his  title 
may  be  good,  even  against  a  former  holder,  from  whom  the  instrument 
has  been  stolen. 

As  to  C,  viz.,  Estoppel.  It  is  well  settled  that  a  person  making  a 
representation  with  .the  intention  that  it  shall  be  acted  upon  is  estopped 
fi'om  denying  its  truth  as  against  any  person  acting  on  it.  The  leading- 
cases  in  point  are  Piclcard  v.  Sears,  0  Adol.  &  El.  4(59  ;  Freeman  v. 
Coolce.,  2  Ex.  (;54  ;  18  L.  J.  Ex.  114  ;  In  re  Bahia  cj-  San  Francisco  Ry. 
Co.,  L.  R.  ?,  Q.  B.  r)!)4  ;  Wehhx.  Heme  Bag  Corns.,  L.  R.  5  Q.  B.  G42  ; 
In  re  Agra  and  Mastermcuis  Bank,  2  Ch.  39G  ;  Goodwin  v.  Roharfs,  1  App. 
Cas.  47G. 

In  the  case  last  mentioned,  scrip  of  a  Russian  loan  had  been  pur- 
chased by  the  plaiiitiff,  and  left  in  the  hands  of  his  broker,  who  had 
wrongfully  pledged  the  same  to  the  defendants.  The  defendants  had 
sold  it,  and  the  plaintiff  brought  his  action  for  the  proceeds.  The  scrip 
was,  so  far  as  material,  as  follows  :  "  Received  the  sum  of  20/.,  being 
the  tirst  instalment  of  20  per  cent,  upon  lOOl.  stock,  and  on  payment  of 
the  remaining  instalments  the  bearer  will  be  entitled  to  rqceive  a  defi- 


IXTRODUCTOEY    NOTES.  253 

iiitive  boud  for  100/."  The  defence  was  that  the  scrip  was  uegotiablc 
by  mercantile  usage,  and  that  the  defendants  had  taken  it  lond  fide  for 
Tahiable  consideration.  Judgment  was  given  for  the  defendant  by  the 
Exchequer  Chamber,  L.  E,.  10  Ex.  337  (affirming  the  judgment  of  the 
Court  of  Exchequer),  on  the  ground  that  the  scrip  had  in  fact  become 
negotiable  by  mercantile  usage  and  custom  :  and  the  House  of  Lords 
affirmed  this  decision.  Lord  Cairns's  judgment  in  the  House  of  Lords 
contained  the  following  passage  :  — 

"  The  question  argued  in  the  courts  below  was  the  negotiahility  of  the  scrip  Jiulgment  of 
of  a  foreign  loan,  like  that  in  the  jjresent  case  ;  but  there  ap^jears  to  me  to  be  a  •^°'"'^^  tau-ns. 
prior  consideration  as  to  the  title  of  the  plaintiff  which  would  alone  be  suffi- 
cient to  disj)Ose  of  his  claim.  The  plaintiff  bought  in  the  market  scrip  which, 
from  the  form  in  which  it  was  prepared,  virtually  represented  that  the  paper 
■would  pass  from  hand  to  hand  by  delivery  only,  and  that  any  one  who  became 
hondjide  the  holder  might  claim  for  his  own  benefit  the  fulfilment  of  its  terms 
from  the  for.eign  government.  The  appellant  might  have  kept  this  scrip  in  his 
own  possession,  and  if  he  had  done  so,  no  question  like  the  present  could  have 
arisen.  He  preferred,  however,  to  place  it  in  the  possession,  and  under  the 
control,  of  his  broker  or  agent,  and  although  it  is  stated  that  it  remained  in 
the  agent's  hands  for  disposal  or  to  be  exchanged  for  Vjonds  when  issued,  as  the 
ai^pellant  should  direct,  those  into  whose  hands  the  scrip  would  come  would 
know  nothing  of  the  title  of  the  appellant,  or  of  any  private  instructions  he 
might  have  given  to  his  agent.  The  scrip  itself  would  be  a  representation  to 
any  one  taking  it — a  representation  which  the  appellant  must  be  taken  to  have 
laade,  or  to  have  been  a  party  to — that,  if  this  scrip  were  taken  in  good  faith, 
and  for  value,  the  person  taking  it  would  stand  to  all  intents  and  purposes  in 
the  place  of  the  previous  holder.  Let  it  be  assumed  for  the  moment  that  the 
instriunent  was  not  negotiable,  that  no  right  of  action  was  transferred  by  the 
delivery  ;  and  that  no  legal  claim  could  be  made  by  the  taker  in  his  own  name 
against  the  foreign  government ;  still  the  appellant  is  in  the  position  of  a  per- 
son who  had  made  a  representation  in  the  face  of  his  scrip,  that  it  would  pass 
■with  a  good  title  to  any  one  taking  it  in  good  faith  and  for  value,  and  who  had 
put  it  in  the  power  of  his  agent  to  hand  over  the  scrip  with  this  representation 
to  those  who  are  induced  to  alter  their  position  on  the  faith  of  the  representa- 
tions so  made.  My  Lords,  I  am  of  opinion  that,  on  doctrines  well  established, 
of  which  Pickard  v.  Sears  [6  Ad.  &  E.  469,  p.  471]  might  be  taken  as  an 
example,  the  appellant  cannot  be  allowed  to  defeat  the  title  which  the  respon- 
dents have  thus  acquired.  .  .  ." 

The  doctrine  of  estoppel  was  referred  to  by  Lord  Selborne,  in 
Burkinslicm'  v.  Nicliolh,  3  App.  Cas.  102G. 

"  Now  sometimes  there  is  a  degree  of  odivim  throwai  upon  the  doctrine  of 
estoppel  because  the  same  word  is  used  occasionally  in  a  very  technical  sense, 
and  the  doctrine  of  estoppel  in  pais  has  even  been  thought  to  deserve  some  of 
the  odium  of  the  more  technical  classes  of  homologation.  But  the  moment  the 
doctrine  is  looked  at  in  its  true  light  it  will  be  found  to  be  a  most  equitable 
one,  and  one  without  which,  in  fact,  the  law  of  the  country  could  not  be  satis- 
factorily administered.  When  a  person  makes  to  another  the  representation, 
'  I  take  upon  myself  to  say  such  and  s\ich  things  do  exist,  and  you  may  act 
■upon  the  basis  that  they  do  exist,'  and  the  other  man  does  really  act  upon  that 
basis,  it  seems  to  me  it  is  of  the  very  essence  of  jiistice  that  between  those  two 
parties  their  rights  should  be  regulated,  not  by  the  real  state  of  the  facts,  but 
by  that  conventional  state  of  facts  which  the  two  parties  agree  to  make  the 
basis  of  their  action,  and  that  is  what  I  apprehend  is  meant  by  estoppel  in  pais. 


254 


DEBENTUEES. 


01"  homologation.  But  whether  the  term  be  used  in  its  more  or  less  technical 
sense,  I  take  it  that  one  common  idea  runs  thi'ough  the  whole,  namely,  that 
your  rights  as  between  yourselves  must  be  regulated  upon  the  basis  that  that 
is  accurate  which  you  induced  the  other  side  to  take  as  the  basis  upon  which  he 
was  to  act." 

It  appears,  however,  that  the  doctrine  of  estoppel  only  applies  to  a 
representation  of  an  existing  fact,  and  is  not  apjolicable  to  representa- 
tions of  intention,  which,  however,  may  amount  to  a  contract.  Alderson 
V.  Maildison,  5  Ex.  D.  203  ;  8  App.  Gas.  4G7.  Accordingly,  it  cannot 
in  general  be  made  much  use  of  in  a  debenture. 

But  a  statement  in  a  debenture  that  it  is  transferable,  free  fi'om 
equities,  is  a  statement  of  fact.  Romford  Canal,  24  C.  D.  85.  And  it 
would  seem  that  a  statement  that  "this  del)enture  is  transferable  by 
delivery,"  is  a  statement  of  fact,  although,  no  doubt,  it  involves  a  con- 
clusion of  law  ;  for  "  when  you  state  that  as  a  fact,  which  no  doubt 
involves,  as  most  facts  do,  a  conclusion  of  law,  that  is  still  a  statement 
of  fact,  and  not  a  statement  of  law."  Per  Jessel,  M.  R.  ;  EngJefieJd  v. 
Marquis  of  Londondemj,  4  C.  1).  698. 

It  wih  be  borne  in  mind  that  a  representation  may  be  sufficient  to 
give  rise  to  an  estoppel,  though  not  express.  See  Goodwin  v.  RoharfSy 
uhi  stipra  ;  and  the  cases  collected  in  Smith,  L.  C,  vol.  ii.,  869. 

AVhen  a  company  issues  a  debenture  which  represents,  expressly  or 
impliedly,  that  it  is  transferable  free  from  equities,  any  person  Avho  acts 
on  that  representation  is  entitled  to  the  full  benefit  of  the  estoppel,  e.g.^ 
a  person  who  buys  or  advances  money  on  deposit  of  the  debenture 
can  prove  for  the  full  amount  irrespective  of  what  he  paid  or  advanced. 
See  In  re  Imperial  Land  Co.,  11  Eq.  487.  Query  whether  Romford 
Canal  Co.,  24  C.  D.  85,  can  on  this  point  be  supported.  Surely,  if  there 
be  an  estoppel,  it  is  wholly  immaterial  that  the  party  entitled  to  rely 
thereon  has  acquired  only  an  equitable  interest. 


Whether 
debentnre  to 
bearer  may 
not  be  held 
negotiable  by 
law  merchant. 


From  ^vhat  has  been  said  it  appears  that  a  debenture  under  seal  can 
l)c  so  framed  that  many  of  the  most  valuable  incidents  of  a  negotiable 
instrument  will  be  annexed  to  it. 

As  to  whether  a  debenture  to  bearer,  under  seal  or  otherwise,  may  not 
be  held  to  ha\'e  become  a  negotiable  instrument  by  the  law  merchant, 
see  Goodwin  v.  Robarfs,  L.  R.  10  Ex.  337  ;  S.  C.  1  App.  Cas.  476  ; 
Rumhall  v.  Mei ropoliian  Rank,  2  Q.  B.  D.  124  ;  Merchant  Hanluuj  Co. 
V.  Plmnix  Co.,  5  C.  D.  205.  It  is  a  matter  of  notoriety  that  debentures 
expressed  to  be  payable  to  bearer,  are  now  generally  treated  as  negotiable, 
and  that  they  are  every  day  bought  and  sold  as  such  on  the  various  stock 
exchanges,  and  this  being  so,  the  day  may  be  at  hand  when  their 
negotiability  will  be  settled  by  judicial  decision.  In  the  meantime  the 
usual  clauses,  infra,  p.  266,  should  be  inserted,  for  although,  if  the 
instrument  is  in  fact  negotial)le,  these  clauses  may  be  implied  by  law, 
their  presence  will  not  prevent  the  instrument  from  being  held  negotiable, 
since  e.ipressio  coriim  qim  iacite  insvnf  nihil  opieratur. 


IXTRODLTTOEY   NOTES.  255 

In  some  cases  it  is  deemed  expedient  to  make  dcbcntm-es  payable  to  "Registered 
the  registered  holder  [^infra,  p.  272].     One  reason  for  adopting  this  form   ^'''"  '^'^®^' 
is  that  trustees  are  more  likely  to  invest  in   such  securities  than  in 
debentures  to  bearer.     Moreover,  there  are  many  investors  who  do  not 
like  to  hold  secm-ities  to  bearer  lest  they  should  be  lost  or  stolen. 

It  has  quite  recently  become   usual  to  issue  debentures   to   bearer  Debentures 
capable  of  l)eing  registered  at  any  time.     See  Form  211,  infra.  capable  of 

The  advantages  of  such  a  form  of  debenture  are  considerable,  for  registration, 
whilst  those  who  want  a  security  transferable  by  delivery  have  it,  those 
like  trustees  or  others  who  do  not  like  such  a  security  can  register,  and 
thereby  obtain  full  protection. 

In  framing  a  debenture  ]iayable  to  the  registered  holder  it  is  usual  to  Usual  clauses, 
insert  various  provisions  for  the  benefit  of  the  company  and  of  the 
holder,  and  in  particular  to  provide  that  the  holder  shall  be  entitled  free 
from  equities,  between  the  company  and  any  f(jrmer  holder,  that  his 
receipt  shall  be  a  good  discharge  to  the  company,  that  a  register  shall  be 
kept,  that  all  transfers  must  be  registered,  that  no  trusts  shall  be  entered 
in  the  register,  and  that  the  company  shall  not  be  bound  to  take  notice 
of  equities. 

The  chief  object  of  these  provisions  is  (ji.)  to  render  the  debenture 
transferable  by  a  simj^le  and  convenient  i^rocess,  {!).)  to  enable  persons  to 
deal  with  the  debenture  without  going  behind  the  register,  and  without 
fear  of  equities  being  subsequently  set  up  by  the  company,  (r.)  to  enable 
the  company  to  look  to  the  register  alone,  without  being  obliged  (in  the 
absence  of  legal  proceedings)  to  attend  to  notice  of  assignment  and 
claims  by  outsiders. 

Sometimes  debentures  are  so  framed  that  the  principal  monies  shall  Registered 
be  payable  to  the  registered  holder,  while  the  interest  is  payable  to  the  ^vith^coupons 
bearer  of  coupons  annexed.  The  chief  reason  for  using  this  form  is, 
that  many  persons  who  are  unwilling  to  invest  in  a  secui'ity  payable  to 
bearers  have  no  objection,  or  prefer  to  have  the  interest  made  payal^le 
by  coupon  to  bearer.  Such  an  arrangement  facilitates  the  payment  and 
collection  of  the  interest,  and  at  the  same  time  does  not  expose  the 
debenture  holder  to  any  material  risk.  But  debentures  to  bearer  capal)le 
of  registration  with  coupons  annexed  are  becoming  the  favourite  security. 

There  are  three  kinds  of  mortgage  debentures  in  general  use  :  .Mortgage 

1.  Mortgage  debentures  secured  by  a  trust  deed.     See  p.  2GS.  debentures. 

2.  Mortgage  _de})eutures  -  secured  l)y  a  charge  therein  contained. 
See  p.  2U. 

3.  Mortgage  debentures  secured  in  part  by  a  trust  deed,  and  in  part 
l)y  a  charge  in  the  debentures  contained.     See  p.  2(jr). 

The  trust  or  covering  deed  above  referred  to  usually  contains  a  con-  Trust  deed, 
veyance  or  assignment  to  trustees  of  all  or  some  part  of  the  company's 
property  upon  trust  to  permit  the  company  to  carry  on  its  business 
therewith  until  default  is  made  in  payment  of  some  principal  or  interest 
due  to  a  del^enture  holder,  and  then  to  enter  and  sell  the  property, 
and  out  of  the  net  proceeds  to  pay  off  the  debentures  and  hold  the 


256 


DEBENTUEES. 


Advantages 
trust  deed. 


of 


SJiips. 


Patents. 

Foreign 
l)ropert3^ 


surplus,  if  any,  iu  trust  for  the  company.  The  deed  generally  contains 
power  for  the  trustees,  after  entry  and  till  sale,  to  carry  on  the  business 
of  the  company  and  divers  other  powers  and  provisions  for  the  benefit 
of  the  debenture  holders.     Bee  infra,  Form  227. 

Debentures  secured  by  such  a  trust  deed  have  some  advantages  over 
those  not  so  secured  ;  for,  of  course,  the  trustees  having  the  legal  title 
to  the  property  can  in  case  of  default  enter  and  sell,  &c.,  without  seeking 
the  aid  of  the  Court,  whereas  the  only  mode  of  enforcing  the  charge 
contained  in  a  delieiiture  not  secured  by  a  trust  deed  is  Ijy  action. 
Since  the  Bills  of  Sale  Act,  1882,  mortgage  debentures  of  Class  3  have 
l)ecome  very  common. 

When  ships  are  to  be  charged,  a  trust  deed  is  sometimes  considered 
necessary.  In  such  case  the  ships  can  be  transferred  to  the  trustees 
absolutely  under  section  hb  of  the  IMerchant  Shipping  Act,  ISoi  (17  & 
18  Vict.  c.  104),  or  they  can  be  mortgaged  to  the  trustees  under  the 
same  Act.  In  either  case  the  instruments  of  transfer  or  mortgage  must 
be  in  the  statutory  forms  duly  registered,  and  the  trusts  will  be  declared 
by  a  separate  deed.  It  must  be  borne  in  mind  that,  if  the  ships  are 
transferred  to  the  trustees,  they  incur  the  serious  responsibilities 
attaching  to  ownership.  See  supra,  p.  loi.  To  obviate  this  objection 
it  may  sometimes  be  deemed  expedient  to  form  a  small  company  to  act 
as  trustee.  But  a  valid  equitable  charge  on  ships  can  be  eflFected 
without  any  registered  security.  In  re  Panama  Co.,  5  Ch.  318,  infra, 
p.  259.  And  accordingly  the  trust  deed  may,  if  thought  fit,  be  framed 
as  a  covenant  that  the  ships  shall  stand  charged,  or  a  trust  deed  can  be 
dispensed  with,  and  the  charge  can  be  inserted  in  the  debentures  {infra, 
Form  204).  If  either  of  these  plans  is  adopted,  the  company  can  give  a 
good  title  to  a  purchaser  or  mortgagee,  notwithstanding  notice  of  the 
debentures.  This,  however,  is  sometimes  not  considered  objectionable, 
it  being  intended  that  the  debentures  shall  be  a  floating  security. 

A  trust  deed  may  be  desirable  where  debentures  are  to  be  charged  on 
letters  patent.  And  a  trust  deed  is  sometimes  deemed  necessary  where 
debentures  are  to  be  charged  upon  real  property  situate  abroad,  for  the 
right  to  the  possession  of  land  must  be  determined  by  the  lex  situs. 
Whether  the  property  should  be  actually  vested  in  the  trustees  or  not, 
must  depend  on  the  circumstances.  In  some  countries  trusts  are  not 
recognised,  and  accordingly  difficulties  arise  if  land  is  vested  in  trustees, 
e.g.,  taxes  in  the  nature  of  succession  duty  may  become  payable  ;  more- 
over, in  some  countries,  aliens  are  not  permitted  to  hold  land,  and  yet 
objection  is  felt  to  appointing  foreign  trustees  for  debenture  holders. 
Sometimes  it  is  deemed  expedient  to  get  the  company  or  its  nominee 
registered  as  the  proprietor  of  the  land,  and  then  to  take  a  registered 
charge  to  trustees  for  a  sum  sufficient  to  secure  the  debentures  ;  or, 
when  the  local  laws  permit,  to  register  a  deed  charging  the  land  with 
the  payment  of  the  debentures. 

However,  land  situate  abroad,  but  belonging  to  a  company  registered 
here,  can  in  most  cases  be  eflectually  charged  in  favour  of  debenture 


INTRODUCTOEY  NOTES. 

holders  or  their  trustees,  Avithout  regard  to  the  formalities  required  by  the 
local  law  in  relation  to  transfers  or  mortgages.  For  it  was  settled  long 
since  that  the  Court  of  Chancery,  by  virtue  of  its  jurisdiction  in  personam, 
would,  as  between  persons  resident  here,  enforce  equities  in  regard  to 
foreign  land.  Penn  v.  Lord  Baltimore,  Tudor,  L.  C.  Eq.  92G,  Westlake 
(1880),  183. 

Moreover,  in  determining  Avhether  there  was  an  equity  subsisting 
between  the  parties,  the  Court  regarded  English  law  exclusively  ;  and  if 
according  to  that  law  there  was  an  equity,  the  Court  would  enforce  it 
although  the  equity  was  not  recognised  by  the  lex  situs.  Thus  in  e.v 
parte  Fotlard,  4  Deac.  27,  a  contract  for  security  on  land  in  Scotland,  in 
terms  which,  according  to  English  law,  created  an  equitable  charge 
thereon,  was  enforced  here  as  against  the  debtor's  assignees  in  bank- 
ruptcy, as  representing  his  person,  although  by  Scotch  law  the  contract 
created  no  lien  or  charge  on  the  land.  In  that  case  Lord  Cottenham,  C, 
said  that  :  "  If  indeed  the  law  of  the  country  Avhere  the  land  is  situate 
should  not  permit,  or  not  enable,  the  defendant  to  do  what  the  Court 
here  might  think  it  ought  to  decree,  it  would  be  useless  and  mijust  to 
direct  him  to  do  the  act ;  but  when  there  is  no  such  impediment,  the 
Courts  of  this  country,  in  the  exercise  of  their  jurisdiction  over  contracts 
made  here,  or  in  administering  equities  between  parties  residing  here, 
act  upon  their  own  rules,  and  are  not  influenced  by  any  consideration  of 
what  the  eflect  of  such  contracts  might  be  in  the  country  where  the 
lands  are  situate,  or  of  the  manner  in  which  the  Courts  of  such  coun- 
tries might  deal  with  such  equities."  See  also  ex p)arte  HoltJtausen,  9  Ch. 
722  ;  and  the  cases  cited  in  Westlake  (1880),  p.  183  ;  and  Coote  v.  Jechs, 
13  Eq.  597,  as  to  chattels. 

The  jurisdiction  of  the  Court  of  Chancery  is  now  vested  in  the  High 
Court,  and  it  therefore  seems  clear  that  if  a  company  registered  here 
covenants  or  puiq^orts  to  convey  foreign  land  to  trustees  for  debenture 
holders,  or  purports  to  charge  it  by  the  debentures  or  otherwise,  or 
covenants  that  it  shall  stand  charged  in  favour  of  debenture  holders,  the 
Court  will,  if  occasion  arises,  enforce  the  equity  just  as  if  the  land  were 
in  England  ;  and  consequently,  unless  the  local  law  forbids,  will  compel 
the  company  to  convey  the  land  so  as  to  give  effect  to  the  relief 
decreed.     See  Holroyd  v.  Marshall,  10  H.  L.  C.  191. 

And  in  accordance  with  the  principles  above  referred  to  relief  has  in 
several  cases  been  granted  here  to  the  holders  of  debentures  charged  on 
foreign  land.     See  "  Orders,"  infra. 

It  must,  however,  be  borne  in  mind  that  if  land  situate  abroad  is 
charged  with  debentures  otherwise  than  in  accordance  with  the  lex  situs, 
the  debenture  holders  may  find  their  charge  postponed  or  ousted  by  a 
purchaser  or  mortgagee  who  has  complied  with  the  lex  situs.  In  re 
Florence  Land  Co.,  10  0.  Div.  530. 

But  this  is  a  risk  which  in  many  cases  the  parties  are  contented  to 
run  ;  the  principal  object  being  to  give  the  debenture  holders  a  prefer- 

s 


257 


258 


DEBENTUEES. 


Special  care  for 
trust  deed. 


Determinable 
and  perpetual 
debentures. 


Pari  passu 
clause. 


Floating 
security. 


ence  over  the  general  creditors  of  the  company,  and  iiot  to  fetter 
the  company  in  dealing  with  its  property. 

A  trust  deed  of  some  kind  {infra,  p.  283]  may  also  be  requisite  where 
debenture  holders  are  to  have  the  option  of  exchanging  their  debentures 
{e.g.,  debentures  to  bearer  for  registered  debentures,  and  vice  versa), 
see  infra,  Form  212.  And  also  where  it  is  desired  to  give  power  to  call 
meetings  of  debenture  holders.     See  infra.  Form  227,  Schedule  5, 

A  trust  deed  is  not  open  to  objection  on  the  ground  that  it  comprises 
the  whole  of  the  company's  property.     See  Form  349,  infra. 

Most  debentures  are  made  payable  at  the  expiration  of  a  term  of  years, 
or  after  being  drawn  for  redemption,  or  after  notice  to  pay  off ;  but  of 
late  it  has  become  very  common  to  issue  what  are  called  "  perpetual  de- 
bentures." These  debentures  are  usually  made  payable  only  in  the  event 
of  winding-up  or  default  by  the  company  in  paying  the  interest.  See 
infra,  p.  273.  Clear  expressions  must  be  used,  in  order  so  to  limit  the 
right  of  repayment,  for  as  was  said  by  Giffard,  V.-C,  in  Hoplcins  v. 
Worcester  Canal,  G  Eq.  445,  "  in  every  loan  transaction  in  some  shape  or 
other,  unless  a  contract  has  been  come  to  the  other  way,  there  must  be 
an  implied  right  to  be  repaid.  That  is  the  meaning  of  a  loan  .  .  . 
I  take  it  that  Tsdiere  a  person  lends  his  money,  if  he  is  not  ever  to  have 
his  principal  paid  back,  you  must  have  something  very  definite  and  clear, 
showing  that  that  is  a  condition  of  the  contract." 

It  is  usual  to  provide  that  the  mortgage  debentures  shall  all  rank 
2KLri  passu  in  point  of  charge.  A  declaration  to  this  effect  is  inserted  in 
the  debentures,  and  any  trust  deed  will  be  framed  accordingly. 

The  object  of  the  declaration  is  to  place  all  the  debenture  holders  on  a 
level.  In  its  absence  they  would  rank  according  to  date  of  issue,  which 
might  give  rise  to  serious  disputes  and  complications.  In  re  Florence 
Land  Co.,  10  C.  Div.  530  ;  Neiv  Clydach  Co.,  G  Eq.  514. 

When  "all  the  property"  or  "all  the  property  present  and  future "  is 
charged  by  the  debentures  the  Court  will  endeavour  to  construe  the 
instruments  as  creating  a  floating  security.  Re  Florence  Land  Co.,  10 
C.  Div.  530  ;  Re  Colonial  Trusts,  15  C.  D.  473.  A  floating  security 
constitutes  a  valid  equitable  charge  on  the  property  for  the  time  being 
of  the  company,  and  attaches  finally  on  the  appointment  of  a  receiver  or 
a  winding  up,  the  company  in  the  meantime  being  at  liberty  to  deal  with 
its  assets  by  way  of  sale,  lease,  or  otherwise,  as  may  seem  expedient  in 
the  ordinary  course  of  its  lousiness.  See  the  above  cases,  and  Hodson  v. 
Tea  Co.,  10  C.  D.  859  ;  Hamilton  s  Windsor  Ironworks,  12  C.  D.  707  ; 
Moor  V.  Anglo-Italian  Banlc,  10  C.  D.  G81  ;  and  Form  332,  ct  seq.,  infra. 

And  it  is  no  objection  that  the  charge  Avill  affect  the  debenture 
monies.  Re  Florence  Land  Co.,  uM  supra;  HauxiveU  v.  Hemingrosy, 
23  C.  Div.  G2G.  It  was  formerly  the  custom  where  debentures  were 
made  a  charge  on  the  assets  for  the  time  being  expressly  to  declare  that 
the  charge  was  not  to  prevent  the  company  from  dealing  with  its  pro- 
perty in  the  ordinary  course  of  its  business  until  default  or  winding  up, 
but  the  Court  very  readily  implies  the  power,  and  accordingly  it  is  now 


INTRODUCTOEY  NOTES.  ■  259 

usual  merely  to  say  that  the  charge  is  to  be  a  "  floating  security "  or 
charge.  This  clearly  implies  pou'er  to  deal  with  the  assets,  and  even  to 
make  specific  charges  thereon,  for  "  it  would  be  a  monstrous  thing  to 
hold  that  the  floating  security  prevented  the  making  of  specific  cliarges 
or  specific  alienations  of  property,  l)ecause  it  would  destroy  the  very 
object  for  which  the  money  was  borrowed,  namely,  the  carrying  on  of 
the  business  of  the  company."  Per  Jessel,  ]\L  R.,  Re  Colonial  Trusts, 
15  C.  D.  472.  See  also  the  above  cases,  and  compare  with  National  Bank 
V.  Hamijson,  5  Q.  B.  Div.  177  ;  Taylor  v.  McKeand,  5  C.  P.  Div.  358. 

The  validity  in  equity  of  a  general  charge  on  all  a  company's  pro-  Validity  of 
perty,  present  and  future,  is  now  settled  beyond  dispute  by  a  long  series  ^^^^^^  '^  ^^se- 
of  cases.  See  Panama  Co.,  5  Ch.  318  ;  Florence  Land  Co.,  10  C.  Div. 
530  ;  Colonial  Trusts,  15  C.  D.473  ;  General  South  Ameriraii  Co.,  2  C. 
D.  337  ;  and  Forms  349,  et  seq.,  and  562,  503,  infra.  Accordhigly  it  is 
clear  that  such  a  charge  must  be  sufficiently  specific  within  the  meaning 
of  Holroyd  v.  Marsliall,  10  H.  L.  C.  191,  for  otherwise  it  would  be  in- 
operative as  regards  after-acquired  chattels.  And  this  is  in  accordance 
with  the  cases  in  equity  in  which  specific  performance  of  covenants  to 
settle  all  after-acquired  property  of  the  settlor  has  been  enforced.  Lewis 
V.  Maddoclcs,  8  Ves.  150  ;  S.  C,  17  Yes.  48  ;  Hardy  v.  Green,  12  Beav. 
182.  Belding  v.  Read,  3  H.  &  C.  955  ;  34  L.  J.  Ch.  212  ;  13  W.  R. 
8G7,  a  common  law  case,  in  which  it  was  held  that  an  assignment  by 
way  of  mortgage  of  all  the  assignor's  furniture  and  effects  present  and 
future  upon  certain  premises  "  or  elsewhere  in  the  kingdom  of  Great 
Britain  "  was  not  operative  in  equity,  must  be  taken  to  be  overruled,  and 
query  whether  In  re  Count  D'Epineuil,  20  C.  D.  758,  which  followed 
that  case  (none  of  the  other  authorities  being  cited),  can  be  supported. 
See  also  Grcenhirt  v.  Smee,  35  L.  T.  108,  and  Clements  v.  Matthews, 
11  Q.  B.  Div.  808. 

As  TO  THE  Power  to  issue  Debentures  : 

First,  as  to  the  power  of  a  company.  Company's 

This  must  depend  upon  whether  the  company  has  power  (1)  to  borrow  vo'^^t^  to  issue 
and,  if  it  is  proposed  to  issue  mortgage  debentm-es,  (2)  to  mortgage. 

With  regard  to  the  power  to  borrow,  the  memorandum  very  commonly 
contains  express  power,  and,  if  so,  no  doubt  can  exist ;  but,  even  where 
this  is  not  the  case,  the  nature  of  the  business  of  the  company,  and  the 
general  words  contained  in  the  memorandum  are  usually  sufficient  to 
imply  a  power  as  to  this.     See  further,  supra,  p.  83. 

A  power  to  mortgage  its  property  is  also  very  commonly  inserted  in 
the  memorandum,  but  this  too  may  arise  by  implication.  Thus  In  re 
Patent  File  Co.,  6  C.  85,  Mellish,  L.  J.,  said :  "  It  was  argued  that  no 
company  can  mortgage  unless  expressly  authorised  to  do  so.  Now  the 
company  has  property  which  it  is  authorised  to  deal  with,  and  I  should 
say  that  the  true  rule  is  just  the  contrary  :  namely,  that  a  company  can 
mortgage  unless  expressly  prohibited  from  doing  so.    The  43rd  section. 

s  2 


280  DEBENTUEES. 

of  the  Act  appears  to  recognise  the  creation  of  mortgages  as  an  ordinary- 
incident  to  a  company."     See  further  as  to  this  sujrra,  p.  132. 

If  the  debentures  are  to  be  to  bearer,  the  further  question  arises, 
whether  the  company  has  power  to  issue  negotiable  or  qi/asi  negotiable 
instruments,  for  the  Companies  Act,  18G2,  does  not  confer  on  all  com- 
panies registered  under  it  a  power  of  issuing  negotiable  instruments. 
Such  a  power  only  exists  where,  upon  a  fair  construction  of  the  memo- 
randum of  association  it  was  intended  to  be  given.  See  further  as  to 
this,  snjjra,  p.  86. 
Power  of  Next  with  regard  to  the  power  of  the  directors  to  issue  debentures  on 

behalf  of  the  company.  This  must  of  course  depend  on  the  articles  of 
the  company.  Express  powers  are  generally  given  to  them  [supra,  p. 
132],  but  general  powers  are  sufficient,  siqjra,  p.  151. 

A  power  to  raise  money  upon  all  or  any  part  of  the  property  of  the  com-  . 
pany  or  upon  debentures,  notwithstanding  the  alternative  form,  warrants 
the  issue  of  mortgage  debentures.    In  re  Panama,  ^-e.,  Co.,  5  C.  322. 

In  some  cases  the  directors  only  have  power  to  issue  debentures  with 
the  sanction  of  a  special  resolution  or  of  the  company  in  general  meet- 
ing ;  and  in  such  cases  the  necessary  sanction  ought  of  course  to  be 
obtained,  but  it  does  not  follow  that  debentures  irregularly  issued  will  be 
void.  Royal  British  Banh  v.  Tvrquand,  6  E.  &  B.  327  ;  Irvine  v. 
Union  Banh  of  Australia,  2  App.  Cas.  oGG  ;  infra,  p.  186. 

It  was  doubted  by  Eolt,  L.  J.,  In  re  BlaTcely  Ordnance  Co.,  3  C.  159, 
whether  the  mere  power  of  issuing  debentures  would  authorise  the 
directors  of  a  company  to  issue  debentures  to  be  transferable  free  from 
equities.  He  held  however  that  the  articles  in  that  case  did  give  such 
an  authority,  for  they  expressly  authorised  the  directors  to  carry  into 
effect  an  agreement  which  provided  for  the  issue  by  the  company  of 
debentures  payable  to  bearer. 

If  therefore  the  articles  empowered  the  directors  to  issue  debentures 
payable  to  bearer,  it  would  seem  that  no  question  can  arise.  But  even 
if  there  be  no  such  power  given  to  the  directors,  provided  that  they  are 
empowered  to  issue  debenture  bills  and  notes  on  behalf  of  the  company, 
it  will  not  be  considered  ultra  vires  on  their  part  to  issue  debentures  to 
bearer.  In  re  Imperial  Land  Co.  of  Marseilles,  11  Eq.  478.  See  also 
In  re  General  Estates  Co.,  3  C.  758  ;  In  re  Marine  Mansions,  4  Eq.  609  ; 
Inns  of  Court  Hotel  Co.,  6  Eq.  82. 

And  at  any  rate  if  the  company  has  power  to  issue  debentures,  it  can 
by  special  resolution  empower  the  directors  to  issue  debentm"es  trans- 
ferable free  from  equities.     This  seems  to  follow  from  the  decision  in 
the  BlaMij,  &c.,  Co.,  3  C.  154. 
As  to  charging      If  mortgage  debentures  are  to  be  charged  upon  the  uncalled  capital 
imcalled  ^^  j.j^g  company,  it  must  be  seen  that  the  directors  have  power  to  do 

this.  Generally  speaking,  calls  are  to  be  made  at  the  discretion  of  the 
directors  ;  and  unless  they  are  expressly  \_svpra,  p.  132],  or  l)y  necessary 
implication,  empowered  to  mortgage  the  future  calls,  it  will  be  'ultra 
vires  to  do  so. 


INTEODUCTOEY  NOTES.  OQl 

A  power  to  directors  to  borrow  on  the  security  of  the  "  funds  or  pro- 
perty "  of  the  company  is  not  sufficient.  Stanleifs  case,  A  Be  G,  &  S. 
'407  ;  33  L.  J.  N.  S.,  C,  585.  Nor  is  a  power  "to  pledge  mortgages  or 
charge  the  works,  hereditaments,  plant,  property,  and  effects  of  the 
company."  tSankey  Brook  Coal  Co.,  No.  2,  10  Eq.  381  ;  nor  a  powder 
"  to  mortgage  or  charge  the  property  of  the  company."  Bank  of  South 
Australia  v.  Abrahams,  6  P.  C.  562.  See  also  King  v.  Marshall, 
33  Beav.  5G5  ;  Lishmaii's  case,  23  L.  T.  N.  S.  750,  it  seems  is  not  law. 
See  also  Bank  of  South  Australia  v.  Abrahams,  6  P.  C.  5G2. 

But  where  the  articles  contained  power  to  secure  monies  borrowed  What  sufficient 
*'  by  mortgaging  (inter  alia)  all  or  any  future  calls  to  be  made  on  all  or  ^^^   °"  ^' 
any  part  of  the  shares  of  the  company,"  it  was  held  by  Jessel,  M.R., 
that  a  mortgage  by  the  directors  of  future  calls  was   valid.     Fhcmi£ 
Bessemer  Go's  case, 44  L.  J.  N.  S.  G83. 

What  property  a  debenture  purports  to  charge,  is  of  com'se  a  question 
of  construction.  In  re  Colonial  Trusts  Corjwration,  15  C.  D.  4G5  ; 
Norton  y.  Florence  Land  Co.,  7  C  D.  332  ;  Anderson  v.  Butler's  Wharf 
Co.,  W.  K,  1879,  163. 

The  company's  books  will  not  pass  by  general  words,  and  queiy 
whether  they  can  be  mortgaged.    Clym  Tin  Works,  47  L.  T.  439. 

Debentures  may  be  issued  at  a  discount,  where  the  directors  have  the  Debentures 
general  powers  of  the  company.     See  In  re  Anrjlo-Danubian,  &c.,  Co.,  "i^f  dTscmmt! 
20  Eq.   339  ;    In  re  Regent's  Canal  Ironworks   Co.,  S   C.    Div.  43  ; 
Campbell's  case,  4  C.  Div.  470.     See  also  supra,  p.  152. 

And  they  may  in  most  cases  be  issued  and  deposited  as  security  for  Deposit, 
a  loan,  with  power  for  the  depositee  to  sell.     Begenfs  Canal  Ironworks, 
ubi supra ;  Re  Strand  Music  Hall,  3  De  G.  J.  &  S.  147. 

A  debenture  purporting  to  charge  personal  chattels,  as  defined  l>y  Bills  of  Sale 
the  Bills  of  Sale  Act,  1878  (41  &  42  Vict.  c.  31),  is  a  bill  of  sale  within  ^<=t«- 
the  meaning  of  that  Act ;  but  it  has  not  been,  and  is  not  customary 
to  register  such  a  document  as  a  bill  of  sale.  The  effect  of  a  non- 
registration is  to  avoid  the  security  on  personal  chattels  as  against 
execution  creditors  (s.  4),  and  also  as  against  persons  claiming  under 
duly  registered  bills  of  sale,  even  though  subsequently  given  (s.  10). 
Connellg  v.  Steer,  7  Q.  B.  Div.  520.  But  non-registration  or  non- 
compliance with  the  provisions  of  the  Act  does  not  invalidate  the 
instrument  as  against  the  company.  Davies  v.  Goodman,  5  C.  P.  Div. 
128  ;  nor  as  against  the  liquidator.  Marine  Mansions  Co.,  4  Eq.  GUI  ; 
Asphaltic  Wood  Co.,  49  L.  T.  159.  Nor  has  section  10  of  the  Judicature 
Act  rendered  the  bankruptcy  rules  as  to  order  and  disposition  applicable. 
Crumlin  Viaduct  Co.,  11  C.  D.  755. 

And  the  Bills  of  Sale  Act,  1882,  does  not  apply  to  such  debentures  ; 
for  it  expressly  provides  (s.  17),  that  "Nothing  in  this  Act  shall  apply 
to  any  debentures  issued  by  any  mortgage,  loan,  or  other  incorporated 
company,  and  secured  upon  the  capital  stock,  or  goods,  chattels,  and 
effects  of  such  company." 

Having  regard  to  this  section,  there  seems  no  ground  to  contend 


262 


DEBENTURES. 


Eegister  of 
mortgages. 


that  debeutuves  by  virtue  of  the  repeal  contained  in  section  15  of  the 
same  Act,  are  liberated  from  the  operation  of  section  8  of  the  Act  of 
1878. 

And  unless  a  very  liberal  interpretation  should  be  placed  on  this 
section,  it  would  seem  that  the  Act  of  1882  does  apply  to  a  debenture 
trust  deed,  comprising-  chattels  ;  and  accordingly,  that  if  the  deed 
comprise  "  personal  chattels,"  it  must  be  framed  in  the  statutory  form, 
and  duly  registered,  or  else  it  will  ])e  void  so  far  as  regards  such 
chattels.  It  would  not,  however,  be  convenient  so  to  frame  or  register 
the  deed  ;  and,  accordingly,  it  has  become  the  practice  since  the  Act 
of  1882  not  to  rely  on  a  trust  deed  as  regards  "personal  chattels," 
but  to  insert  an  independent  charge  in  the  debentures.  This  plan 
effectually  secures  to  the  debenture  holders  a  floating  charge,  subject 
only  to  the  intervention  of  execution  creditors,  and  enables  the  com- 
pany to  state  that  they  are  a  [first]  charge  on  the  whole  of  its  assets, 
present  and  future. 

By  section  48  of  the  Companies  Act,  18G2,  it  is  provided  that  : — 

"  Every  limited  company  under  this  Act  shall  keep  a  register  of  all  mort- 
gages and  charges  specifically  affecting  property  of  the  company,  and  shall 
enter  in  such  register,  in  respect  of  each  mortgage  or  charge,  a  short  descrip- 
tion of  the  property  mortgaged  or  charged,  the  amount  of  charge  created,  and 
the  names  of  the  mortgagees  or  persons  entitled  to  such  charge.  If  any  pro- 
perty of  the  company  is  mortgaged  or  charged  without  such  entry  as  aforesaid 
being  made,  every  director,  manager,  or  other  officer  of  the  company,  who 
knowingly  or  wilfully  authorises  or  permits  the  omission  of  such  entry,  shall 
incur  a  penalty  not  exceeding  fifty  pounds." 


"When  un- 
registered 
mortgage  de- 
bentures void. 


Directors  may 
lend, 

and  so  may 
membei-s. 


Hence  it  is  necessary  where  mortgage  debentures,  secured  by  a  mort- 
gage to  trustees,  are  issued,  duly  to  register  the  mortgage,  and  if  there 
is  not  a  mortgage  to  trustees,  each  mortgage  debenture  ought  to  be  duly 
registered. 

If  a  mortgage  debenture  not  duly  registered  is  issued  to  a  director  or 
other  officer  of  the  company,  it  will  be  invalid  as  against  the  creditors 
of  the  company  in  the  winding  up.  Native  Iron  Ore  Co.,  2  C.  Div.  345. 
This  disability  does  not  apply  to  members.  General  Souih  American  Co.y 
2  C.  Div.  337.  And  there  are  cases  in  which  the  rule  will  not  be  applied. 
See  Re  BorowjU  of  Hachney  Co.,  (!  C.  Div.  557  ;  Re  TnternaUonal,  &c., 
Co.,  G  C.  Div.  557  ;  Re  South  Durham  Co.,  11  C.  Div.  579.  In  the 
case  last  mentioned  the  mortgage  was  made  to  partners,  one  only  of 
whom  was  a  director. 

Directors  of  a  company  are  not  under  any  disability  to  lend  to  their 
company.     See  cases,  supra,  p.  131. 

Xor  are  the  members  of  a  company  under  any  such  disability.  Thus 
In  re  General  South  American  Co.,  2  C.  Div.  314,  72,000?.  was  raised 
on  mortgage  debentures  at  18  j^er  cent,  per  annum  interest  all  but 
4000?.  being  advanced  by  members  of  the  company.  They  were  held 
valid  in  the  winding  up,  and  to  give  the  holders  a  charge  upon  all  the 
property  of  the  company,  in  priority  to  the  general  creditors. 


INTEODUCTORY  NOTES.  268 

"Where  there  is  to  be  a  trust  deed  to  secure  debentures,  the  company's  Solicitor's  lien. 
solicitor  very  commonly  acts  for  the  trustees  as  well  as  the  company. 
In  such  case  the  solicitor  waives  his  lien  on  any  deeds  in  his  jDossessiou 
relating  to  the  mortgaged  property  unless  it  is  expressly  reserved.     In 
re  Snell,  G  C.  D.  105 ;  In  re  Mason  v.  Taylor,  W.  E.  1878,  245. 

It  has  for  some  time  past  been  usual  to  make  the  interest  on  deben-  Coupons, 
tures  payable  on  presentation  of  coupons  annexed  thereto.     When  the 
period  for  jjayment  approaches  a  coupon  is  detached,  and  is  commonly 
forwarded  for  collection  through  a  banker.     By  this  means  the  pay- 
ment of  the  interest  is  facilitated  ;  for,  however  the  coupon  be  framed, 
it  is  generally  assumed  that  the  bearer  is  well  entitled  to  the  interest 
therein   specified.     There  is  another  convenience   in   having  coupons  Convenience 
attached  to  a  debenture,  namely,  that  the  holder  can,  if  in  want  of  cash,  °^- 
cut  off  and  sell  the  coupons,  or  any  of  them,  or  procure  the  same  to  be 
discounted. 

If  thought  fit  the  name  of  the  executing  director  can  be  signed  by  As  to  stamp- 
means  of  a  stamp.     "  I  see  no  distinction  between  using  a  pen  or  a  "^s  signature. 
pencil  and  using  a  stamp,  Avhere  the  impression  is  put  upon  the  paper 
by  the  proper  hand  of  the  party  signing."     Per  Bovill,  C.  J.,  Bennett  v. 
Brumfitt,  L.  R.  3  C.  P.  31.     The  law  in  the  United  States  is  the  same. 
Fennington  v.  Bachr,  48  Cal.  5G5. 

The  Stamp  Act,  1870  (see  Schedule)  imposes  the  following  duties  on  stamps. 
a  mortgage,  bond,  (Jehenture,  or  covenant : —  Debenture. 

(1.)  Being  the  only,  or  principal,  or  primary  security  for  the  pay-  £,  s.  d. 
ment  or  repayment  of  money  not  exceeding  25L  .  .  .  .  .008 
Exceeding  '2i>l.  and  not  exceeding  oQl.        ,         .         .         .         .         ..013 

„           50J.                 „                 lOOJ 0     2     G 

IDOL                 „                 150? 0     3     9 

150L                 „                 200J 0     5     0 

200L                 „                 250? 0     G     3 

250L                „                300? 0     7     G 

300? . 

For  every  100?.  and  also  any  fractional  part  of  100?.  of  stich  amount  0     2     G 
(2.)  Being  a  collateral,  or  auxiliary,  or  additional,  or  substituted 
security,  or  by  way  of  further  assurance  for  the  above-mentioned  pur- 
pose where  the  principal  or  primary  security  is  duly  stamped  : 

For  every  lOOJ.  and  also  for  any  fractional  part  of   100?.  of  the 

amount  secured OOG 

Accordingly  a  debenture,  where  there  is  not  any  trust  deed,  should  be 
stamped  as  above.  An  instrument  Avhich  is  called  a  debenture  will  be 
chargeable  as  such,  although  it  may  operate  as  a  promissory  note.  Re 
British  India  Steam  Co.,  7  Q.  B.  D.  165. 

A  coupon  or  warrant  for  interest  attached  to  or  issued  with  any  coupons, 
security  is  excni]-)ted  from  stamp  duty  by  the  Stamp  Act,  1870.  See 
Schedule,  under  title,  "  Bill  of  Exchange,"  Exemptions.  And  see  also 
Enthoven  v.  Hoyle,  13  C.  B.  373,  from  which  it  appears  that,  apart  from 
the  above  exemption,  a  coupon  in  the  usual  form  being  a  mere  token, 
would  require  no  stamp. 


DEBENTUEES. 


The 


Co,  Limtd. 


Form   211.     [Sometimes  flic  Jieading  states  tlic  ccqntat,  hernlcers,  and  registered  office.'] 
Debentures  to        Issue  of  2000  debentures  of  £100  each,  carrying  interest  at  the  rate 
bearer,  kc.        of  G  p.  C.  p.  a. 


Debenture.  £100. 

Co,  Limtd  (hereinafter  called  the  co),  "O'ill,  on  the 


No.—. 

1.  The  - 

day  of \_if  any  condition  for  acceleration,  add :  or  on  such  earlier  day 

as  the  principal  monies  hhy  secured  become  payable  in  accordance 
with  the  conditions  indorsed  hereon],  pay  to  the  bearer  [//  debenture  to 
de  ccqmdie  of  registration,  add:  or  when  registered  to  the  registered 
holder]  on  presentation  of  this  debenture  the  sum  of  £100. 

2.  The  CO  will  in  the  meantime  pay  interest  thereon  at  the  rate  of 

p.  c.  p.  a.  by  equal  half-yearly  paymts  on  every day  of  — —  and 

• day  of [ifcoiqwns  to  he  annexed,  add :  in  accordance  with  the 

coupons  annexed  hto]  ;  [//"  the  delenture  is  to  contain  a  charge,  add  : 

3.  The  CO  hby  charges  with  such,  paymts  all  its  ppty,  whatsoever  and 
wheresoever,  both  present  and  future,  including  its  uncalled  capital  for 
the  time  being]. 

4.  This  debenture  is  issued  subject  to  the  conditions  indorsed  hereon. 
Given  under  the  common  seal  of  the  co  this day  of . 


The  common  seal  of  the  co  was  affixed  hereto  in  the 
presence  of — 


Directors, 


Form  211a. 


The 


Debenture  No. 


Co,  Limtd. 
Interest  coupon  No. 


day  of ,  and 


Coupon.  For  three  pounds.     Half-year's  interest  due  the  - 

payable  at  the Bank  [address'],  or  at  the  registered  office  of  the  co 

(less  income  tax). 

SI.  ,  Secretaiy. 


As  to  Form  211  : — 

Heading. — Very  commonly  a  heading  as  above  is  used, 
of  incorporation  and  other  particulars  are  stated. 


Sometimes  the  date 


FOEMS.  265 

Consideration. — It  is  not  essential  to  express  the  consideration  in  a  deben-  Form  211a. 

ture,  but  if  in  any  case  it  is  deemed  desirable  to  do  so,  the  instrument  'vvill  com- 

mence  as  follows : — "  In  consideration  of  the  sum  of  lOOL  to  the  above-named 
company  (or  to  The Company,  Limited),  paid  by ,  of ,  the  said  com- 
pany will,  &c.,"  or  "  The  Company,  Limited,  in  consideration  of  7. 

paid  to  it  by ,  of ,  will,  &c.,"  or  "  For  valuable  consideration  already 

received  The Company  will,  &c." 

Will  Pay. — Instead  of  "will  pay,"  the  words  "undertakes,"  "promises," 
or  "  binds  itself  "  to  pay  are  sometimes  used.  Ex  parte  City  Bank,  3  Ch.  153  ; 
Crouch  V.  Credit  Fancier,  L.  E.  8  Q.  B.  37-i;  Norton  v.  Florence  Public  Works  Co., 
7  C.  Div.  332. 

Interest. — If  the  bearer  should  not  present  the  debenture  for  payment  at 
maturity,  interest  would  not  be  subsequently  payable.  Interest  would  however 
be  payable  if  the  company  made  default,  but  not,  in  the  absence  of  express 
contract,  at  a,  higher  rate  than  5  per  cent,  per  annum.  In  re  Roberts,  Goodchap 
V.  Roberts,  14  C.  Div.  49  ;  28  W.  E.  870 ;  In  re  European  Central  Co.,  4  C.  Div. 
33  ;  25  W.  E.  92. 

Bearer. — Sometimes  debentures  are  made  payable  "  to  A.  or  to  the  bearer 
hereof."     As  to  the  validity  of  a  security  to  bearer,  see  suj>ro,  p.  250,  et  seq. 

Order. — See  Form  218,  infra,  for  debentures  to  order. 

Registration. — Power  to  register  is  now  very  commonly  given,  in  order  to 
meet  the  views  of  trustees  and  others.     See  supra,  p.  250. 

Coupons  are  now  commonly  issued.     See  condition  2  as  to  presentation. 

Stamps. — See  supra,  p.  263. 

Cliarge. — Some  persons  prefer  to  enumerate  some  of  the  items  charged,  e.g., 
"all  the  collici'ies,  mining  rights,  i^lant,  machinery,  book-debts,  credits  and 
monies  of  the  company,  and  all  other,"  &c.  Sometimes  only  part  of  the  assets 
are  charged,  e.g.,  "all  the  property  of  the  company  present  and  future  except 
what  is  effectually  charged  by  the  indenture  mentioned  in  the  conditions 
indorsed  hereon,"  and  in  that  case  a  clause  will  be  inserted  in  the  conditions 
referring  to  the  trust  deed.  See  infra,  p.  268.  This  plan  is  sometimes  adopted 
where  it  is  desired  to  charge  personal  chattels  in  England,  inasmuch  as  the  Bills 
of  Sale  Act  interferes  with  a  charge  in  the  deed.  See  supra.,  p.  262,  but  not 
uncommonly  in  such  case  the  debentures  purport  to  charge  all  the  property. 
As  to  a  charge  of  uncalled  capital,  see  supra,  p.  260. 

Language. — Where  a  company  is  likely  to  find  a  foreign  market  for  its  deben- 
tures, or  a  vendor  so  stipulates,  the  debentures  are  printed  in  several  lan- 
giiages  on  the  same  sheet. 

Conditions. — If  thought  fit  the  debenture  can  refer  to  the  conditions  as  sub- 
joined, or  they  may  be  set  out  in  the  body  of  the  debenture. 

The  conditions  within  referred  to. 

1.  This  debeutm-e  is  one  of  a  series  of  debentures,   each   for  Form  211b. 


securing  the  principal  sum  of  1.,  issued  or  about  to  be  issued  by  the  Conditions. 

CO.  \_If  the  dehentures  contain  a  charge,  add:  The  debentures  of  the  sd 
series  are  all  to  rank  pari  imssu  as  a  [first  charge]  on  the  ppty  hby 
charged  without  any  preference  or  priority  one  over  another,  and  such 
charge  is  to  be  a  floating  security,  [if  desired,  add^  but  so  that  the  co  is 
not  to  be  at  libty  to  create  any  mtge  or  charge  [on  its  freehold  and 
leasehold  land]  in  priority  to  the  sd  debentures]. 

It  was  formerly  customary  to  insert  words  in  explanation  of  the  expression 
floating  security,  e.  g.,  "  and  so  that  the  company  in  the  course  of  its  business, 
and  for  the  purpose  of  carrying  on  the  same,  may  sell,  lease,  exchange,  or 
otherwise  deal  with  its  property  for  the  time  being  as  may  seem  expedient," 


266  DEBENTUEES. 

Porm  211b.  but  as  the  meaning  of  a  floating  charge  or  security  is  now  Avell  settled  [^supra, 
' p.  258]  these  words  are  generally  omitted. 

A  floating  security  leaves  the  comi^any  at  liberty  to  create  specific  mortgages, 
and  when  it  is  desired  to  limit  that  power,  words  should  be  inserted  as  above. 
Whether  they  are  operative  has  not  been  settled.  Sometimes  the  debentures 
are  to  be  of  various  amounts,  e.g.,  "This  debenture  is  one  of  a  series  of  like 
debentures  for  securing  principal  sums  not  exceeding  £  :  each  debenture  to 
be  for  such  amount  and  to  be  payable  at  such  date  as  may  be  agreed." 

Where  so  arranged,  the  conditions  will  provide  that  "  the  debentures  of  the 
above  issue  (including  this  debenture)  and  the  debentures  of  any  subsequent 
issue  containing  a  similar  charge,  are  all  to  rank  2}o,>'i  pass\i  as  a  floating  charge 
on  property  charged  thereby,  but  so  that  the  aggregate  amount  of  the  principal 
moneys  thereby  secured  shall  not  at  any  one  time  exceed  £,  \^or  exceed  the 
amount  of  the  uncalled  [or  of  the  paid-up]  capital  for  the  time  being]  of  the 
company."  Or,  as  in  Form  220.  If  the  debentui-es  are  to  be  a  first  charge, 
the  words  "  and  by  way  of  first  chai-ge  in  such  property  "  can  be  used,  and  the 
debentures  can  be  called  First  Mortgage  Debentures.  Eeferenco  is  sometimes 
made  to  an  existing  prior  charge,  e.  g.,  "  The  debentures  are  to  rank  j^^ri  passu 
as  a  second  charge  on  the  property,  namely,  held  after  such  of  the  mortgage 

debentures  issued  by  the  company  in  the  year as  shall  for  the  time  being 

be  outstanding."  See  Gartside  v.  Silhstone  Co.,  21  C.  D.  762,  as  to  priority 
between  two  classes  bearing  same  date. 

2.  Annexed  to  this  debenture  are coupons,  each  providing  for  the 

paymt  of  a  half-year's  interest,  and  such  interest  will  be  payable  only  on 
presentation  [and  delivery]  of  the  coupon  referring  thereto. 

As  to  coupons,  see  supra,  p.  263. 

Presentation  includes  delivery.  Bartlett  v.  Holmes,  13  C.  B.  630 ;  22  L.  J. 
C.  P.  182. 

3.  The  principal  monies  and  interest  hby  secured  will  be  pd  without 
regard  to  any  equities  between  the  co  and  the  original  or  any  interme- 
diate holder  hereof. 

This  condition  is  probably  implied  by  the  debenture  being  "  to  bearer." 
{Supra,  p.  250)  and  is  very  commonly  omitted  in  the  case  of  a  debenture  to 
bearer. 

4.  If  the  principal  monies  hby  secured  shall  become  payable  before 

the day  of ,  the  person  presenting  this  debenture  for  paymt 

must  surrender  therewith  the  coupons  representing  subsequent  interest ; 
the  CO,  nevertheless,  paying  the  interest  for  the  fraction  of  the  current 
half-year. 

5.  The  delivery  to  the  co  of  this  debenture  and  of  each  of  the  sd 
coupons,  shall  be  a  good  discharge  for  the  principal  monies  and  interest 
therein  respively  specified,  [and  the  co  shall  not  be  bound  to  inquire  into 
the  title  of  the  resjsive  bearers  of  such  instrumts,  or  to  take  notice  of 
any  trust  affecting  such  monies,  or  be  affected  by  express  notice  of  the 
right,  title,  or  claim  of  any  other  person  to  such  monies  or  instrumts.] 

[//"  there  is  iiower  to  register,  add .-  Nevertheless,  when  registered  the 
receipt  of  the  registered  holder,  his  exors  or  adniors,  shall  alone  be  a 
good  discharge  for  such  principal  monies.] 

It  is  more  convenient  to  make  the  delivery  of  the  instrument,  rather  than 


FOEMS.  367 

the  receipt  of  the  bearer,  a  good  discharge.    Such  a  condition  is  unquestionably  Form  211b. 
valid.     See  sitjjj-a,  p.  251.     The  words  in  brackets  are  sometimes  omitted. 

G.  The  CO  may  at  any  time  give  notice  by  advertisemt  in  the  I'imes 
and  one  other  London  daily  newspaper,  of  its  intention  to  pay  off  this 
debenture,  and  upon  the  expiration  of  six  calendar  months  from  such 
notice  being  given,  the  principal  monies  hliy  secured  shall  become  pay- 
able. 

If  desired,  the  words  " day  of  ,  or  day  of ,  which  shall 

next  hai^pen  after  the  "  can  be  inserted  before  the  word  "  expiration,"  so  that 
the  principal  moneys  may  become  payable  on  one  of  the  days  fixed  for  payment 
of  interest.  In  the  absence  of  express  power,  a  mortgagee  cannot  be  compelled 
to  accept  payment  before  maturity.     Browne  v.  Cole,  14  Sim.  427. 

7.  The  principal  monies  hby  secured  shall  immediately  become  pay- 
able {a).  If  the  CO  makes  default  for  a  period  of  six  calendar  months  in 
the  payment  of  any  interest  hby  secured,  and  the  bearer  [or  registered 
holder]  hereof,  before  such  interest  is  pd,  l)y  notice  in  writing  to  the  co, 
calls  in  such  principal  monies  ;  or  {h).  If  an  order  is  made,  or  an  effective 
resolution  is  passed  for  the  winding  up  of  the  co. 

It  is  now  usual  to  provide  that  if  default  is  made  in  paying  the  interest  for 
say  six  months,  the  principal  moneys  shall  become  due,  or  may  (as  above)  be 
called  in  by  the  debenture  holder,  and  the  propriety  of  inserting  some  such 
provision  is  obvious.  There  seems  no  reason  why  the  holder  of  a  debenture, 
especially  if  it  is  not  secured  by  mortgage  or  charge,  should  be  placed  in  a 
worse  position  than  an  ordinary  mortgagee  who  has  agreed  not  to  call  in  his 
loan  for  a  definite  period,  in  which  case  the  agreement  is  always  made  condi- 
tional on  the  punctual  payment  of  the  interest.  The  above  form  is  better  than 
making  the  principal  payable  on  default,  because  it  allows  the  debenture  holder, 
if  he  thinks  fit,  to  give  the  company  further  time.  Sometimes  less  than  six 
months  is  specified.  As  regards  making  the  principal  payable  in  the  event  of 
a  winding  up  :  such  a  provision  is  now  very  common,  and  while  it  can  do  the 
company  no  harm,  may  prevent  disputes  as  to  the  rights  of  the  debenture 
holder.  Accoi'ding  to  a  recent  decision,  it  only  expresses  that  which  the  law 
implies.  Hodson  v.  The  Tea  Co.,  14  C.  D.  859  ;  28  W.  E.  458.  It  may  here  be 
mentioned  that  a  provision  for  accelerating  the  time  for  payment  of  the  prin- 
cipal moneys  is  not  a  penalty  against  which  eqiiity  can  relieve.  Thompson  v. 
Hudson,  L.  E.  4.  H.  L.  1  ;  Wallingford  v.  Mutual  Society,  5  App.  Cas.  GS5. 

8.  This  debenture  is  transferable  by  delivery,  [or  if  the  debenture  is  Transfer. 
to  be  capahJe  of  regisiraUon :   Except  Avhen  registered  this  debenture  is 
transferable  by  delivery,  but  the  co  will  at  any  time  upon  the  request  of 

the  bearer  (whilst  unregistered)  register  him  or  his  nominee  in  the 
register  below  mentd  as  the  holder  of  this  debenture,  and  indorse  a 
note  of  such  registration  hereon,  and  the  co  will  also  at  any  time  upon  the 
request  of  the  registered  holder,  his  exors  or  admors,  cancel  the  registra- 
tion and  the  note  thereof  indorsed  thereon,  and  thereupon  this  debenture 
will  again  become  transferable  by  deli^■ery,  A  fee  of  2s.  Gd.  shall  be  pd 
to  the  CO  uj)on  every  such  registration  or  cancellation.  If  this  clause  is 
inserted,  insert  also  clauses  2,  3,  4,  5,  G  of  Form  210a]. 

9.  The  bearer  for  the  time  being  is  entled  to  the  full  benefit  of  this 
debenture,  and  all  persons  may  act  accordingly  and  shall  be  deemed  to 
adopt  this  condition. 


268 


DEBENTURES. 


Form  211b.       -^  condition  as  above  is  very  commonly  inserted  in  order  to  obtain  if  i^ossible 
the  benefit  of  the  decisions  above  referred  to,  pp.  251,  253.     If  the  debenture 

is  to  be  capable  of  registration,  insert  the  words  "  or  registered  holder  "  after 

"bearer." 

\If  there  is  to  be  a  trust  deed,  add : — 

10.  The  holders  of  the  debentures  of  the  al)Ove  issue  are  and  will  be 
GJithd  pari  2}(^issu  to  the  benefit  of  and  subject  to  the  provisions  contd  in 

an  indi'e  dated  the  • day  of ,  and  made  between  the  co  of  the 

one  pt,  and  A.,  B.,  and  C.  of  the  other  pt  [whereby  certain  ppty  of  the 

S  CO  was  vested  in  trustees  for  securing  the  paymt  of  the  principal  monies 
,'  and  interest  payable  in  respect  of  the  sd  debentures]. 

See  supra,  p.  255,  as  to  trust  deeds. 

The  words  in  brackets  will  be  varied  according  to  circumstances.  Sometimes 
they  are  omitted  altogether.    Sometimes  the  nature  of  the  property  is  stated. 

11.  The  principal  monies  and  interest  hby  secured  will  be  pd  at 
The Bank,  Limtd,  No.  — , Street,  London,  or  at  the  regis- 
tered office  of  the  co. 


Form  212. 

Power  to  call 
for  registered 
debenture 
instead  of 
debenture 
to  bearer. 


Upon  the  request  in  writing  of  the  1  nearer  hereof  the  co  will  issue  to  him 
a  debenture  in  either  of  the  forms  set  forth  in  the  second  and  third  schedules 
to  the  indre  below  mcntd.  8uch  debenture  shall  provide  for  the  paymt 
of  the  principal  monies  and  interest  hby  secured  and  then  remaining 
unpaid,  at  the  times  hby  fixed  for  the  paymt  thereof  rcspively.  Upon 
or  before  such  issue  this  debenture  must  be  surrendered  to  the  co,  and 
the  person  making  such  request  must  pay  the  expense  of  stamping  the 
new  debenture,  and  such  sum,  not  exceeding  ten  shillings,  for  the 
expense  of  issuing  the  same  as  the  co  shall  prescribe. 

It  is  not  at  all  uncommon  now,  where  debentures  are  secured  by  a  trust  deed, 
besides  giving  subsci'ibers  the  option  of  taking  their  debentures  in  one  of  several 
forms  [^supra,  p.  258],  to  set  out  the  forms  in  schedules  to  the  trust  deed,  and 
insert  on  each  debenture  a  clause  as  above.  That  clause  is  intended  for  use 
where  three  forms  are  given. 


Form  213. 

Temporary 
cancellation. 


The  l)earer  of  this  debenture  may  at  any  time  deposit  the  same  at  the 

co's  office  at in  the  county  of and  thereupon  the  co  will  cancel 

the  same  and  will  issue  to  the  depositor  a  certificate  recording  the  deposit 
and  cancellation,  and  the  name  of  the  depositor  and  some  other  person, 
and  on  presentation  of  such  certificate  at  the  co's  office  in  London  the 
CO  will  issue  to  the  person  named  in  the  certificate  or  his  nominee  a  new 
debenture,  similar  to  that  so  deposited,  but  the  stamp  duty  and  the 
expenses  incidental  to  such  issue  must  be  pd  by  the  person  to  whom  the 
new  debenture  is  issued. 

Occasionally  a  clause  as  above  is  inserted  in  debentures  in  order  to  avoid  the 
dangers  incident  to  transmission  from  one  part  of  the  world  to  another.  Some- 
times instead  of  providing  for  the  cancellation  of  the  debenture,  the  condition 
provides  for  an  indorsement  by  the  company's  local  agent  to  the  effect  that  the 
debenture  is  registered  to  A.  B.,  and  declares  that  its  negociability  shall  be 
suspended  until  the  person  specified  in  the  indorsement  attends  at  the  company's 
office  and  in  the  presenee  of  a  director  signs  his  name  below  the  indorsement. 


FOEMS.  269 

The  uncalled  capital  hby  charged  shall  he  deemed  to  be  exclusively  Form  213a. 
applicable  to  the  redemption  of  the  debentures  of  the  above  issue,  and  Uucalled 
whenever  any  pt  thereof  shall  ])e  called  and  pd  up  the  same  shall  be  capital. 
carried  to  the  credit  of  the  redemption  fund  and  applied  in  redeeming 
debentures  as  hereinafter  provided. 

The  bearer  or  registered  holder  hereof  may  at  any  time  before  the  Form  214. 


principal  monies  hby  secured  have  been  pd  off  direct  the  co  to  issue  to  power  to 
him  fully  pd  up  shares  in  the  capital  of  the  co  equal  in  nominal  amount  exchange  for 
to  such  principal  monies,  and  in  satisfon  and  discharge  thereof,  and 
the  co  shall,  upon  the  surrender  of  this  debenture,  comply  with  such 
direction. 


At  any  time  before  the day  of (if  and  so  long  as  a  sufficient  Form  214a. 

number  of  the  preference  shares  of  the  co  remain  unissued)  the  co  will,  Power  to 
upon  the  request  in  writing  of  the  registered  holder  hereof  and  upon  the  exchange 

•  clfiCGUtlirGS 

surrender  of  this  debenture,  issue  to  him of  the  sd  preference  shares  f^^.  gij.^j.g 


tares. 


credited  as  fully  pd  up,  and  will  pay  to  him  the  interest  for  the  fraction 
(if  any)  of  the  current  half-year  up  to  the  day  of  surrender. 

Sometimes  it  is  desired  to  give  debenture  holders  power  to  convert  their 
debentures  into  shares  as  above.  On  conversion^  a  contract  would  have  to  be 
registered  under  s.  25  of  the  Act  of  18G7.     See  supra,  pp.  13,  37. 


This  is  to  certify  that  the  paymt  of  the  principal  monies  and  interest  Form  215. 
secured  by  this   debenture   in   accordance   with   the   tenor   thereof   is  W   .    +    i 
guaranteed  by  The Co,  Linitd.  debenture. 

Given,  &c. 

Sometimes  a  company  which  desires  to  raise  money  by  the  issue  of  deben- 
tures procures  some  other  company  to  guarantee  the  principal  and  interest  or 
the  interest  thereby  secured.  The  guaranteeing  comi)any  usually  receives  a 
commission  for  so  doing,  and  takes  a  mortgage  or  charge  by  way  of  counter 
security.  It  must  of  course  be  seen  that  the  transaction  is  intra  vires  the  com- 
pany. The  best  mode  of  giving  the  guarantee  is  by  a  trust  deed,  by  which  the 
guaranteeing  company  covenants  with  a  trustee  for  the  debenture  holders. 
The  guarantee  should  be  confined  to  debentures  upon  which  a  certificate  under 
the  seal  of  the  guaranteeing  company  is  jilaced. 


This  is  to  certify  that  the  above  debenture  is  one  of  the  3,000  like  Form  216. 

debentures  numbered  to  inclusive,   secured  by  the   indre  Trustee's 

therein  referred  to.  certificate. 

>  Trustees. 


Occasionally  where  there  is  a  trust  deed  the  trustees  indorse  a  certificate  on 
the  debentures,  as  above,  but  this  practice  is  more  common  in  America  than 
here.     See  the  Eailway  Companies  Securities  Act,  18G6. 


270 


DEBENTUEES. 


Form  217. 

Debenture 
to  bearer. 

Drawinsrs. 


The  clebentiire  and  coupon  will  be  in  the  same  terms  as  Form  211. 
ditions  will  be  as  follows  : — 


The  con- 


The  conditions  within  referred  to,  &c. 

1.  This  debenture  is  one  of  a  series,  &c.  [Form  211?^,  Clause  1.  Aiid  if 
ilic  tvords  in  Iraclcets  are  used,  insert  after  the  word  "  another  "  the  words 
"  save  as  hereinafter  provided."] 

2.  One  hundred  of  the  sd  debentures  will  be  redeemed  by  the  sd  co 

on  the day  of  — — ,  1 S — ,  and  on  each  succeeding day  of , 

and day  of ,  until  the  whole  of  the  sd  debentures  have  been 

redeemed  or  pd  ofi". 

The  days  fixed  for  redemption  are  usually  the  same  as  those  fixed  for  pay- 
ment of  interest. 

3.  The  parlar  debentures  to  be  redeemed  on  each  occasion  will  be 
determined  l)y  half-yearly  drawings,  which  the  sd  co  will  cause  to  be 
made  at  its  registered  office  for  the  time  being. 

4.  Such  drawings  will  be  made  in  the  presence  of  a  notary  public  of 
Loudon  not  less  than  twenty-one  or  more  than  sixty  days  before  the 
respive  half-yearly  days  on  which  the  debentures  are  to  be  redeemed. 

And  the  principal  monies  hby  secured  shall  become  payable  on  the 

day  of  ,  or day  of ,  which  shall  first  happen  after  this 

debenture  shall  have  been  drawn  for  redemption. 

5.  Public  notice  of  the  day  and  time  fixed  for  each  drawing  will  be 
given  by  the  co  at  least  ten  days  previously,  by  advertisemt  in  a  London 
daily  newspaper,  and  the  bearer  of  this  debenture  will  be  entled  to  attend 
at  any  such  drawing, 

6.  Forthwith  after  each  drawing,  notice  will  be  given  by  advertisemt 
in  a  London  daily  newspaper  of  the  numbers  of  the  debentures  drawn 
for  redemption. 

7.  The  numbers  of  the  debentures  from  time  to  time  drawn  will  be 
recorded  in  a  book  to  be  kept  for  that  ppose  by  the  co,  and  to  be  open 
for  the  inspection  of  the  bearer  of  this  debenture. 

8.  If  the  bearer  of  this  debenture  shall  so  require,  the  notary  public 
present  at  any  such  drawing  as  afsd  shall  make  a  statutory  declon  as  to 
the  result  thereof. 

\_Add  other  conditions  as  in  Form  21 1&,  inserting  in  Ctause  7  the  words 
"  (c)  for  if  the  co  commits  a  breach  of  any  of  these  conditions."] 

Since  the  observations  of  the  Master  of  the  Rolls  in  Syhes  v.  Beadon,  11  C.  D. 
170,  doubts  have  been  felt  whether  such  a  scheme  of  redemption  is  not  open  to 
objection  as  amounting  to  a  lottery.  But  the  general  opinion  appears  to  be 
that  it  is  not,  even  where  the  debentures  are  issued  at  a  discount  and  made 
redeemable  at  par,  and  accordingly  the  practice  of  providing  for  redemption  in 
accordance  with  the  result  of  periodical  drawings  continues.  And  see  the 
observations  in  Wallingford  v.  Mutual  Society,  5  App.  Cas.  658.  However,  it 
may  be  that  a  scheme  of  redemption  which  provided  for  the  payment  of  a  pre- 
mium to  the  holders  of  drawn  debentures  is  open  to  objection,  although  even 
in  that  case  it  might  be  contended  that  the  premium  was  only  a  fair  compensa- 
tion for  the  prospective  loss  of  interest  at  a  high  rate. 

If  it  is  desired  in  any  case  to  make  the  redemption  of  debentures  contingent 


FOEMS.  271 

on  the  profits  of  tlie  company,  the  following  clauses  can  be  introduced  into  tlie    Form  217. 
conditions,  which  will  require  to  be  slightly  modified. 

1.  The  said  company  will,  on  the  1st  day  of  November,  1884,  and  on  every 
succeeding  1st  day  of  November,  until  the  whole  of  the  said  debentures  shall 
have  been  redeemed  or  paid  off,  apply  a  sum  equal  to  one  moiety  of  the  net 
profits  of  the  said  company,  for  the  year  ending  on  the  30th  day  of  June,  imme- 
diately preceding  such  1st  day  of  November,  in  the  redemption  at  par  of  so 
many  of  the  said  debentures  as  such  sum  shall  be  sufficient  to  redeem. 

2.  Nevertheless,  if,  in  any  such  year,  the  net  profits  shall  be  less  than L 

there  shall  not  be  any  drawing  or  redemption  in  respect  of  such  year. 

3.  The  certificate  in  writing  of  the  auditor  or  auditors  for  the  time  being  of 
the  company  shall  as  against  the  bearer  hereof  be  conclusive  evidence  as  to  the 
amount  of  the  net  profits  of  the  company  in  any  year,  or  of  there  being  none. 

Such  a  debenture  will  be  in  the  same  terms  as  Form  211,  omitting  all  refer-    Form  218. 
ence  to  registration,  and  substituting  the  words  "to  [A.  of ],  or  order,"  for 

"  the  bearer."  JiJe?*"'"'  ^'^ 

The  conditions  to  be  as  follows  : 

1  &  -2.  [As  in  Form  21 1&.] 

3.  This  debenture  is  (save  as  herein  otherwise  provided)  to  be  deemed 
as  regards  transfer,  transmission,  and  in  all  other  respects,  to  possess  the 
incidents  of  a  promissory  note  originally  made  payable  to  the  person  or 
persons  within  named,  or  order,  and  all  persons  may  act  accordingly. 

4.  The  CO  is  to  be  entled  to  assume  that  every  indorsemt  on  this 
debenture  is  authentic,  and  that  where  any  indorsemt  purports  to  be 
made  by  some  person  in  a  representative  character,  such  person  sustained 
such  character  when  the  indorsemt  was  made  and  was  duly  authorised  to 
make  the  same. 

5.  The  indorsemt  hereof  is  not  to  impose  any  lialiility  on  the  person 
indorsing  the  same. 

G.  The  CO  will  recognise  the  person  who,  having  regard  to  these  con- 
ditions, for  the  time  being  appears  to  be  entled  to  this  debenture,  as  the 
absolute  owner  thereof  and  of  the  principal  moneys  thereby  secured,  and 
the  receipt  of  such  person  shall  be  a  good  discharge  to  the  co  for  such 
principal  moneys,  and  all  persons  may  act  accordingly. 

7,  H,  9,  10,  11.  [As  in  Form  211?>,  and  Clauses  3,  4,  G,  7,  and  11, 
snhsiitiding  in  7  '' Jioldcr'"  for  "  icarcr^^ 

Sometimes  debentures  are  made  payable  to  order,  as  above.  See  In  re  General 
Estates  Co.,  Ex  parte  City  Bank,  3  Ch.  760  ;  Enthoven  v.  Hoyle,  21  L.  J.  C.  P. 
100  ;  13  C.  B.  373. 

Prior  to  the  Bills  of  Exchange  Act,  1882,  there  was  grave  doubt  whether  an 
instrument  under  a  company's  seal  could  operate  as  a  promissory  note,  but  that 
Act  provides,  in  effect  (s.  91),  that  a  company's  promissory  note  may  be  under 
the  common  seal. 

Accordingly  a  debenture  containing  an  unconditional  contract  to  pay  "  to  the 
bearer,"  or,  "  to  A.,  or  order,"  might  be  held  to  be  a  promissory  note,  and  to 
be  negotiable  accordingly.  Nevertheless  there  seems  to  be  little  probability  of 
such  a  determination.  See  British  India  Steam  Co.  v.  Commissioners  of  Inland 
Revenue,  7  Q.  B.  D.  165,  where  a  "  debenture  "  payable  to  order,  though  not 
under  seal,  was  held  to  be  chargeable  with  duty  as  a  debenture,  and  not  as  a 
promissory  note.  In  these  circumstances  it  is  commonly  deemed  desirable  to 
insert  in  a  debenture  "to  order"  clauses  as  above,  so  as  to  show  the  intention, 
and  protect  the  company. 


272  DEBENTUEES. 

Form  219.        1.  The Co,  Limtd  (hereinafter  called  the  co),  will,  on  the ■ 

Registered        ^^Y  of [oi"  on  such  earlier  day  as  the  princii^al  monies  hhy  secured 

debenture.        become  payable  in  accordance  with  the  conditions  indorsed  hereon],  pay 

to of  or  other  the  registered  holder  [_suj)ra,  p.  255]  for  the 

time  being  hereof,  the  sum  of        I. 

2.  The  CO  will  in  the  meantime  pay  to  such  registered  holder  interest 

thereon  at  the  rate  of p.  c.  p.  a.,  by  half-yearly  payments  on  the 

— —  day  of ,  and  — —  day  of ,  in  each  year,  the  first  of  such 

half-yearly  paymts  to  be  made  on  the day  of ,  next. 

\_If  there  is  io  he  a  charge  insert  it  here.] 

3.  This  debenture  is  issued  subject  to  the  conditions  indorsed  hereon. 
Given,  &c. 

Form  219a.      The  conditions  within  referred  to  : 

Conditions.  1-  This  debenture  is  one  of  a  series  of  200  like  debentures  issued  or 

about  to  be  issued  by  the  co. 

2.  A  register  of  the  debentures  will  be  kept  at  the  co's  registered  office, 
wherein  there  will  be  entered  the  names,  addresses,  and  descriptions  of  the 
[i)i  incorporaiing  this  clause  in  Form  21 1&  insert  here  the  word  "regis- 
tered "]  holders,  and  parlars  of  the  debentures  held  by  them  respively  [and 
such  register  will  at  all  reasonable  times  during  business  hours  be  open 
to  the  inspection  of  the  registered  holder  hereof  and  his  leg.  per.  reps., 
and  any  person  authorised  in  writing  by  him  or  them]. 

The  words  in  brackets  are  sometimes  omitted. 

3.  The  registered  holder  will  be  regarded  as  exclusively  entled  to  the 
benefit  of  this  debenture  and  all  persons  may  act  accordingly,  and  the 
CO  shall  not  be  bound  to  enter  in  the  register  notice  of  any  trust  or  to 
recognise  any  right  in  any  other  person  save  as  herein  provided. 

There  seems  no  need  to  provide  for  the  somewhat  remote  contingency  of 
lunacy  nor  for  bankruptcy,  since  the  trustee  may  exercise  the  right  to  transfer 
to  the  same  extent  as  the  bankrupt  but  for  his  bankruptcy.  Section  50  of  the 
Bankruptcy  Act,  1883. 

Apart  from  express  stijiulations  a  co,  by  registering  a  transferee,  may  be 
estopped  from  questioning  his  title.  Higgs  v.  Northern  Assam  Tea  Co.,  L.  E.  4 
Ex.  387  ;  Webb  v.  Commissioners  of  Heme  Bay,  L.  E.  5  Q.  B.  642  j  Romford  Canal 
Co.,  24  C.  D.  85. 

4.  Every  transfer  of  this  debenture  [i/i  incorporating  this  in  Form  21 1& 
insert  here  the  words  "when  registered"]  must  be  in  writing  under  the 
hand  of  the  registered  holder  or  his  leg.  per.  rep.  The  transfer  must  be 
delivered  at  the  registered  office  of  the  co  with  a  fee  of  2s.  Qd.,  and  such 
evidence  of  identity  or  title  as  the  co  may  reasonably  require,  and  there- 
upon the  transfer  will  be  registered. 

Sometimes  the  last  i^aragraph  of  this  clause  is  omitted  and  the  following- 
inserted  : — 

"  The  transfer  shall  be  made  only  in  the  register  and  shall  be  signed  by  the 
transferor — or,  if  he  is  absent,  by  liis  attorney  thereunto  duly  authorised,  and 


FORMS.  273 

upon  every  transfer  a  fee  of  2s.  6(L  shall  be  paid  to  the  company,  and  such  Form  219a. 
evidence  of  identity  or  title  as  the  company  may  reasonably  require,  must  be  -  ' 

adduced." 

5.  In  the  case  of  joint  registered  holders  the  principal  monies  and 
interest  hby  secured  shall  be  deemed  to  be  owing-  to  them  upon  a  joint 
account. 

Having  regard  to  section  Gl  of  the  Conveyancing  and  Law  of  Property  Act, 
1881,  this  clause  is  probably  unnecessary. 

6.  Xo  transfer  will  be  registered  during  the  seven  days  immediately 
preceding  the  days  by  this  debenture  fixed  for  payment  of  interest. 

7.  The  principal  monies  [as  in  Form  211h,  condition  3]  and  the 
receipt  of  the  registered  holder  for  such  principal  monies  and  interest 
•shall  be  a  good  discharge  to  the  co. 

8.  The  CO  may  at  any  time  give  notice  in  wnriting  to  the  registered 
holder  hereof,  his  exs  or  ads,  of  its  intention  [_Same  as  Clause  G,  siqmt. 
Form  211b]. 

If  thought  desirable  this  can  be  omitted  or  the  following  substituted  : — 

"  At  any  time  after  the day  of  next,  (1)  the  registered  holder  of 

this  debenture  may  give  the  company  notice  in  writing  to  pay  off  the  principal 
moneys  hereby  secured,  and  (2)  the  company  may  give  the  registered  holder 
hereof  notice  in  writing  of  its  intention  to  pay  off  such  principal  moneys.    And 

at  \_or  on  the day  of ,  which  shall  first  happen  after]  the  expiration  of 

six  calendar  months  from  any  such  notice  being  given,  the  principal  moneys 
hereby  secured  shall  become  payable." 

Sometimes  it  is  desired  to  give  the  debentiu-e  holder  power  to  call  in  the 
moneys  at  stated  intervals,  thus  : — "  The  registered  holder  for  the  time  being 
hereof,  may,  upon  giving  not  less  than  six  calendar  months'  previous  notice  in 
writing  to  the  company,  require  payment  of  the  principal  moneys  hereby  se- 
ciu-ed  on  the  1st  day  of  July  in  any  of  the  following  years,  namely,  1885,  1890, 
and  1895,  and  such  principal  moneys  shall  become  payable  accordingly." 

1).  [Same  as  Clause  7,  sujira,  Form  211b,  substituting  "registered 
holder  "  for  "  bearer."] 

10.  [Same  as  Clause  11,  sup-a,  Form  211&.] 

11.  A  notice  may  be  served  by  the  co  upon  the  holder  of  this  deben- 
ture by  sending  it  through  the  post  in  a  prepaid  letter  addressed  to  such 
person  at  his  registered  address. 

12.  Any  notice  served  by  post  shall  be  deemed  to  have  been  served  at 
the  expiration  of  24  hours  after  it  is  posted,  and  in  proving  such 
service  it  shall  be  sufficient  to  prove  that  the  letter  containing  the  notice 
was  properly  addressed  and  put  into  the  post-office. 

The Co,  Limtd.  Form  220. 

No. .  Perpetual  Debenture.  /.     Perpetual 

1.  The  Co,  Limtd  (hereinafter  called  the  co),  will,  when  the  -iebentures. 

principal  monies  hby  secured  become  payable,  in  accordance  with  the 
conditions  indorsed  hereon,  pay  to  the  bearer,  or  when  registered  to  the 

registered  holder  of  this  debenture  the  sum  of 1. 

T 


274  DEBENTURES. 

Form  220.       Another  form  sometimes  iised  is  : — "  The Company,  Limited,  being  in- 

debted  to  the  person  to  whom  this  debenture  is  issued,  in  the  svim  of  &     upon  the 

terms  that  such  sum  is  to  be  repayable  only  in  the  events  and  subject  as  here- 
inafter expressed,  will  when,  &c." 

2.  The  CO  [interest  as  in  Form  211,  adding  the,  nwds :']  and  any 
further  coupons  issued  in  respect  of  such  interest. 

3.  The  CO  hby  charges  [Form  211]. 

4.  This  debenture  is  issued  [Form  211]. 
Given,  &c. 

[Add  conpo7is  and  conditions  as  follows']  : — 

1.  This  debenture  is  one  of  a  series  of  debentures,  all  bearing- 
even  date.  The  del)eutures  of  the  sd  series,  aud  the  debentures  of  any 
subse(iuent  series  containing  a  similar  charge,  are  all  to  rank  pari  passu 
in  point  of  charge  as  a  floating  security  on  the  ppty  charged  thereby  [if 
any  limit,  provide  accordingly,  sii2)ra,  'note  to  Condition  1  of  Fonn  211]. 

2.  Annexed  to  this  debenture  are coupons,  each  providing  for  a 

half-year's  interest  [and  if  so,  and  also  a  voucher  for  fi'esh  coupons],  and 
such  interest  will  be  payable  only  on  presentation  of  the  coupon  referring 
thereto.  After  the day  of [10  years  after  date'],  and  every  suc- 
ceeding period  of  10  years  the  bearer,  or  if  registered  the  registered 
holder,  on  production  of  this  debenture  for  indorsemt,  [or,  the  bearer  of 
the  appropriate  voucher  will,  on  presentation  thereof]  will  be  entled 
to  the  issue  of  fresh  coupons  for  a  further  period  of  10  years. 

The  voucher  will  be  as  follows  : — "  The Company,  Limited.     Debenture 

No.  — .     Voucher  for  fresh  coupons  to  be  presented  at  the  office  of  the  company 

[^situation^  on  or  at  any  time  after  the of  ,"  and  it  will  be  printed  so 

that  it  can  be  detached  immediately  after  the  last  coupon  of  the  series. 

o.  The  principal  monies  hhj  secured  will  only  become  payable  [as 
in  Form  211b.,  Condition  7]. 

[Add  clauses,  et  seq.,  of  Form  211b,  modified  so  as  to  suit  a  debenture  to 
hearer  callable  of  Imng  registered.] 

Companies  freqviently  experience  inconvenience  in  providing  for  the  renewal 
of  terminable  debentiires,  e.g.,  the  money  market  or  the  affairs  of  the  comjjany 
may  happen  to  be  temporarily  depressed  just  when  a  loan  to  pay  off  debentures 
is  required.  Moreover  a  lai'ge  class  of  investors  require  a  permanent  security, 
and  for  that  reason  dislike  terminable  debentures.  Accordingly  a  considerable 
number  of  companies  in  good  credit  have  taken  to  issuing  perpetual  debentures 
[and  perpetual  debenture  stock,  infra ,  p.  279,]  and  the  ijublic  have  invested 
largely  therein. 

Although  called  "perpetual"  the  debentui-es  are  made  payable  in  certain, 
events  (see  condition  3)  but  the  meaning  is  that  they  may  hapj^en  to  continue 
for  an  unlimited  period.  Some  companies  which  issiie  perpetual  debentures 
modify  condition  3  by  adding  the  words  "or  (c)  if  the  company  gives  six 
months' notice  by  advertisement  in  the  Times  of  its  intention  to  pay  off  this 
debenture,  but  so  that  in  such  case  a  bonus  of  .£10  shall  be  paid  along  with 
such  principal  moneys."  And  in  some  cases  it  is  desii-able  so  to  provide,  e.g., 
where  the  issue  is  to  l)e  limited  in  amovmt,  for  the  company  might  otherwise 
find  its  operations  inconveniently  fettered.  In  the  absence  of  a  jjower  to  pay 
off  it  might  be  necessary  to  reconstruct. 

Sec  further,  supra,  p.  258.  as  to  perpetual  debentures. 


POEMS.  275 

As  in  Form  211  omittin<j  the  charge  but  adding  the  following  conditions  to    Form  221. 
211  ^-  =  Profit  or 

1.  The  principal  monies  and  interest  hby  secured  are  to  be  payable  income  deben- 
ouly  out  of  the  profits  of  the  co  in  manner  hereinafter  provided, 

2.  The  CO  is  to  apply  the  net  profits  made  during  the  financial  year 
or  other  periods  comprised  in  the  accounts,  submitted  to  the  ordinary 
general  meeting  of  the  members  of  the  co  in  each  year  as  follows  : — 

First  :  In  paying  to  the  debenture  holders  of  this  series  ^wr/  2'^^^^'' 
all  interest  then  due  and  payable  to  them  respively  in  respect  of  such 
debentures  : 

Secondly  :  Of  the  surplus  one  half  may  be  applied  in  paying 
dividends  on  the  share  capital  of  the  co  or  otherwise  in  such  manner  as 
the  CO  in  general  meeting  shall  from  time  to  time  determine. 

Thirdly  :  The  other  half  shall  be  carried  to  the  credit  of  the  redemp- 
tion fund  to  be  established  as  hereinafter  provided. 

3.  The  CO  will  establish  a  redemption  fund  and  all  monies  carried  to 
the  credit  thereof  will  be  invested  in  such  iuvestmts  as  the  directors 
think  fit,  with  full  power  fi'om  time  to  time  to  vary  and  to  realise  the 
same  as  occasion   may  require.     And  whenever  the  redemption  fund 

amounts  to /.,  the  co  will  apply  the  same  in  the  redemption  at  par 

of  so  many  of  the  debentures  as  it  shall  be  competent  to  redeem.     The 
certificate  \_sce  note  to  Form  217]. 

4.  The  parlars,  debentures,  &c.  \_add  p-ovisions  for  drawings,  &c.,  as 
in  Form  217]. 

It  is  not  by  any  means  uncommon  to  issue  debentures  paya-ble  out  of  profits 
only,  e.  jr.,  to  shareholders  or  iinsecured  creditors  upon  the  reconstruction  of 
an  insolvent  company,  and  upon  a  scheme  of  arrangement  in  bankruptcy 
whereby  the  assets  are  made  over  to  a  company.     See  supra,  Form  25. 

And  sometimes  a  vendor  agrees  to  accept  such  debentures  in  part  satisfaction 
of  his  purchase-money.  If  desired  the  interest  is  made  non-cumulative  so  that 
if  the  profits  of  any  one  year  are  insufficient  to  pay  the  interest,  there  will  be 
no  claim  on  subsequent  profits  for  the  deficiency.  Occasionally  the  interest 
only,  and  not  the  principal,  is  made  payable  out  of  profits,  e.g.,  sometimes 
instead  of  providing  for  redemption  by  means  of  drawings,  provision  is  made 
for  the  payment  of  dividends  thereout  to  the  debenture  holders  pari  passu  on 
account  of  principal. 

The  interest  payable  out  to  debentures  of  the  above  issue  is  to  be  payable 
only  out  of  the  net  profits  from  time  to  time  made  by  the  company,  and  is  to 
be  a  first  charge  on  such  profits,  and  the  company  will  not  at  any  time  di- 
vide any  profits  among  its  members  without  first  paying  all  interest  then 
due  on  the  debentures,  and  providing  for  the  payment  of  all  interest  to  become 
due  thereon  at  any  time  within  six  calendar  months  after  such  division. 

Sometimes  when  the  assets  of  a  company  or  bankrupt  are  taken  over  by  a 
new  company  debentures  are  issued  to  the  creditors  or  others  for  the  amount 
of  their  claims,  but  charged  only  on  the  assets  so  taken  over,  subject  to  any 
prior  increase,  and  without  any  personal  liability  being  imposed  on  the  new 
comj)any.  In  such  case  the  debentures  (or  a  trust  deed)  provide  for  the 
realization  of  the  assets  by  the  new  company  [e.  g.,  see  clauses  in  Form 
713,  infra'],  and  for  the  division  from  time  to  time  of  the  net  proceeds, 
less  a  commission  to  the  new  company,  among  the  debenture  holders,  j^ari 
passu.  Such  a  scheme  is  often  found  attractive,  because  the  creditors  get  a 
tangible  security  of  lai'ge  nominal  amount. 

T  2 


176 


DEBENTUEES. 


Form  221.         -^  similar  sclieme  is   sometimes  adopted  where  it  is  desired  to  acquire  the 

securities  of  a  foreign  company  or  government,  with  a  view  to  some  compromise 

or  arrangement. 


Form  222. 

Prospectus 
of  issue  of 
debentures. 


The  following  skeleton  prospectus  may  be  found  of  some  use  by  way  of 
reminder. 

The Co,  Limtd. 

Issue  of  100,000?.  six  p.  c.  debentures  of  50/.  each,  to  be  paid  oft" 
1st  February,  180G. 

[Here  f/ie  names  of  the  directors  and  other  officers  of  the  com^pany  are 
nsnalJy  yiven.'] 

Subscriptions  [or  applicons]  are  invited  for  100,000/.  in  six  p.  c. 
debentures  of  50/.  each.  These  debentures  are  issued  in  order  to  provide 
funds  for,  &c. 

The  Co  [position  and  jJrosjmcts']. 

The  debentures  will  be  issued  at  par  for  sums  of  50/.  each,  made  pay- 
able "  to  bearer "  [with  power  to  register  at  any  time],  and  carrying 

interest  from  the day  of ,  at  the  rate  of  six  p.  c.  p.  a.,  payable 

half-yearly,  on  the  — th  of and  — th  of ,  at  the  bankers  of  the 

CO,  upon  presentation  of  coupons  annexed  to  the  debentures. 

The  terms  of  subscription  for  each  debenture  are  as  follows  : — 

.  On  applicon 10/. 

Onallotmt 10/. 

On  the  — th  June,  18— 10/. 

On  the"— th  July,  18— 10/. 

On  the  — th  July,  18— 10/. 

Provisional  certificates  will  be  issued  on  paymt  of  the  amount  due  on 
allotmt,  and  exchanged  for  definitive  debentures  on  completion  of  the 
paymts. 

[For  form  of  certificate,  see  vfrct,  p.  277.] 

Instalmts  may  be  pd  in  advance,  on  allotmt,  or  on  any  of  the  above 

dates,  under  discount  at  the  rate  of p.  c.  p.  a.     Where  no  allotmt 

is  made  the  deposit  will  be  returned  in  full. 

In  case  a  less  number  of  debentures  is  allotted  than  is  applied  for,  the 
excess  of  the  deposit  will  be  applied  in  or  towards  paymt  of  the  future 
instalmts  due  upon  such  number  as  may  be  allotted.  Failure  to  pay  any 
instalmt  when  due,  will  render  the  allotmt  liable  to  cancellation,  and  the 
previous  paymts  to  forfeiture. 

Apphcons  in  the  annexed  form  should  be  filled  up  and  sent  to  the  co's 

l)ankers,  Messrs.  ,  accompanied  by  a  deposit  of  10/.  upon  each 

debenture  applied  for. 

The  form  of  debenture  can  be  seen  at  the  office  of  the  co. 

By  order  of  the  Board  of  Directors. 


No. 


Street,  London,  B.C.,  January  1st,  1884. 


Secretary. 


[Form  of  letters  of  application  to  be  subjoined  to  prospectus.] 


FORMS.  277 

No. Form  222. 

The  A.  Co,  Limtd. 

Issue  of  10,000/.  six  p.  c,  debeutures. 

To  the  dh-ectors  of  the  A.  Co,  Limtd. 

Gentlemen, 

I  beg  to  apply  for  debentures  of  the  above  issue  in  the  terms 

of  the  prospectus  issued  by  you,  dated,  &c.,  on  which  I  have  pd  the 
required  deposit  of  10/.  per  debenture  ;  and  I  undertake  to  accept  the 
same  or  any  less  number  you  may  allot  to  me,  and  to  make  the  remain- 
ing paymts  in  respect  thereof*  at  the  dates  specified  in  thesd  prospectus. 

Your  obedient  servant, 

Names 

Address 


Occupation 

Date 

*  If  you  desire  to  pay  in  full  on  allotment,  the  wox-ds  "the  dates  specified  in 
the  said  prospectus  "  should  be  strvick  out,  and  the  words  "  on  allotment  under 
discount  "  substituted. 


The  following  is  a  provisional  certificate  in  the  ordinary  form.  It  is  pro- 
bably a  negotiable  instrument  by  the  law  merchant.  Rumball  v.  Metroiwlitan 
Bank,  2  Q.  B.  Div.  19J.. 

The Co,  Limtd.  Form  223. 

Capital /.  Provisional 

Bankers certificate  of 

title  to  deoeD- 
Offices tures. 

Issue  of  10,000/.  six  p.  c.  debentures  of  50/.  each. 


Provisional  Certificate. 

No. 

For debentures  to  be  numbered to inclusive. 

This  is  to  certify  that  the  above-named  co  have  received  the  sum 

of  20/.  upon  each  of   the  sd debentures,  and  that  on  paymt  of  the 

remaining  instalmts  as  below  mentd,  the  bearer  will  be  entled  to 
receive debentures  of  the  sd  issue,  each  for  50/. 

The  remaining  instalmts  on  each  debenture  are  to  be  pd  at  the 
bankers  of  the  co  as  follows  : — 

On  the  — th  June  next  10/.  per  debenture. 

On  the  — th  July  next  10/.  per  debentm-e. 

On  the  — th  July  next  10/.  per  debenture. 

Failure  to  pay  any  instalmt  when  due  will  render  the  previous  paymts 
liable  to  forfeiture. 


278 
Form  223. 


of 


DEBENTURES. 

The  remaining  iiistalmts  may  be  pd  in  full  under  discount  at  the  rate 
•  p.  c.  p.  a.  on  any  day  on  which  an  instalmt  falls  due. 

For  the  co, 

,  Secretary. 

London, 

,  Street,  E.G.,  1st ,  1877. 

Annexed  to  the  above  certificate,  will  be  receipts  for  future  instalments,  as 
follows  : 


Eeceivkd   on   account   of    The   ^^^  ""■        '^^^^  Company,  Li- 
Company,  Limited,  the  sum  of  £, ,  5^^^  %  mited.    Amount  payable  in 

being  the  instalment  due  in  respect  of  c^!S>  5    respect  of debentures 

the  debentures  above-mentioned  upon  ^^^^  s  specified     in     Provisional 

the th  June,  18—,  J^^  "^  Certificate,  No. 


For  the 


London,  — th ,  1883. 


-  Bank. 
-,  Cashier. 


Paid  the th   June, 

1883. 


Form  224. 

Prospectus  of 
debenture 
stock  tenders. 


The 


Co,  Limtd,  Four  P.  C.  Mtge  Debenture  Stock. 


The  directors  invite  tenders  for  the  unissued  balance,  about /.  of 

the  co's  debenture  stock.     This  stock  bears  interest  at  the  rate  of  —  p. 

c.  p.  a.,  payable  half  yearly  on  the of ,  and  ■ of ,  in 

each  year.     The  pchase  money  for  the  stock  will  be  payable  on  the 

of ,  1884,  and  the  interest  will  commence  on  the of . 

The  stock  \_show  2^ositioii  and  security']. 

The  stock  will  be  allotted  in  amounts  of  not  less  than  100/.  to  the 
highest  bidders  (but  no  less  price  than  9G?.  for  each  100?.  stock  will  be 
accepted),  and  the  stock  will  be  registered  in  the  names  of  the  applicants 
or  their  nominees  free  of  expense. 

Tenders  sealed  up  and  marked  "  Tender  for  Debenture  Stock,"  must 

be  sent  to  the  undersigned  at  this  oi!ice  not  later  than  10  a.m.  on 

the of ,  and  may  be  made  in  the  following  form,  or  if  desired, 

printed  forms  of  tender  may  be  obtained  on  applicon. 

Form  of  Tender. 

I  hby  tender  for /.  4  p.  c.  debenture  stock  of  the co,  at  the 

price  of  — I.  for  each  100/.  stock,  and  I  undertake  to  accept  the  sd  stock 
or  any  less  amount  that  may  be  allotted  to  me,  and  to  pay  the  pchase 

money  to  the  co's  bankers  on  or  before  the day  of next. 

(Name,  address,  and  description  in  full.) 

Note. — Letters  of  allotmt  of  stock  will  be  sent  by  post  on  or  before 

,  the of ,  to  applicants  whose  offers  are  accepted. 

By  order, ,  Secretary. 

Secretary's  Offices, , 

,  1884. 


FOEMS.  279 

The Co,  Limtd.    No. .     100,000/.  Mtge  Debenture  Stock,      Form  225. 


1883. 


Debenture 


This  is  to  certify  that of is  the  registered  [or,  the  bearer  g^te. 

of  this  certificate  is  the]  hokler  of /.  of  the  above  mentd  stock.    The 

redemption  of  the  sd  stock  and  the  paymt  of  the  interest  thereon  is  secured 
by  an  indre  dated,  &c.,  and  made,  &c. 

The  stock  is  issued  subject  to  the  conditions  specified  in  the  sd  indi'e 
given,  &c. 

Within  the  List  few  years  a  good  many  companies,  registered  under  the 
Act  of  1862,  have  taken  to  raising  money  by  the  issue  of  debenture  stock. 
The  stock  is  sometimes  issued  on  the  terms  that  it  is  to  be  redeemed  at  a 
fixed  date,  but  is  more  commonly  [sMj3?-a,  p.  258]  made  and  called  "  perpetual." 
It  is  usually  secured  by  a  trust  deed,  whereby  the  company  covenants  to 
redeem  the  stock  in  due  course,  and  to  pay  the  interest,  and  generally  to 
observe  the  conditions  on  which  the  stock  is  issued.  And  in  most  cases  the 
deed  makes  the  company's  property,  or  some  part  of  it,  a  security  for  the 
payment  of  the  stock. 

Prior  to  the  Bills  of  Sale  Act,  1882,  the  deed  could  be  so  framed  as  to  make 
the  stock  a  charge  by  way  of  floating  security  on  the  whole  assets  of  the 
company,  present  and  future,  including  personal  [chattels,  without  any  necessity 
for  registration  as  a  bill  of  sale  ;  but  since  that  Act  came  into  operation,  this 
can  no  longer  be  done,  when  the  company  is  possessed  of  personal  chattels, 
subject  to  the  above  Act.     [See  supra,  p.  261.] 

Nor  can  the  difficvilty  be  met,  as  in  the  case  of  debentures,  by  inserting  a 
charge  in  the  certificate  ;  for  the  certificate  is  not  a  debenture  within  the 
meaning  of  s.  17  [supra,  p.  261]  of  the  Act. 

Accordingly,  where  it  is  desired  to  raise  money  on  the  security  of  a  floating 
charge  on  the  assets,  and  those  assets  consist,  and  are  likely  to  consist  to  any 
great  extent  of  personal  chattels  subject  to  the  Act,  debentures  (perpetual  or 
terminable),  seem  preferable  to  debenture  stock. 

If,  however,  in  any  such  case  it  should  be  considered  that  a  secxu-ity,  called 
*'debentui-e  stock,"  would  be  more;  attractive  than  debentui-es,  there  would 
not  seem  to  be  any  objection  to  creating  a  so-called  debentiu'e  stock,  to  be 
represented  by  debentures  instead  of  certificates  ;  for  in  the  case  of  a  company 
registered  under  the  Act  of  1862  "  debenture  stock  "  has  no  technical  meaning  ; 
and,  accordingly,  if  a  company  likes  to  create  what  it  chooses  to  call  a  deben- 
ture stock,  and  to  declare  that  it  shall  be  represented  by  debentui-es,  there 
can  be  no  objection  to  such  a  course. 

Where  this  course  is  adopted,  the  debentures  will  be  headed — 

"  No. .  Debenture         .  1. 

Forming  pt  of  an  issue  of  100,000/.  First  Mtge  Debenture  Stock." 

or  otherwise  as  the  circumstances  may  require,  and  the  resokitions  authorising 
the  issue  of  the  debentures,  will  purport  to  create  a  debenture  stock,  of  the 
nominal  amount  of  [100,000L],  to  be  represented  by  debentures  in  the  form 
which  has  already  been  proposed,  and  is  identified  ;  and  the  adoption  of  this 
com-se  removes  the  difficiilty  as  to  the  Bills  of  Sale  Act,  1882,  for  a  charge 
can  be  insisted  on  the  debentures  by  way  of  fioating  security.    Supra,  p.  262. 

For  resolutions  as  to  the  creation  of  debenture  stock,  see  swpra,  p.  202. 

Where  debenture  stock,  represented  by  certificates  (not  debentures),  is  to 
be  issued,  the  following  conditions  can  be  adopted,  with  such  modifications  as 
the  circumstances  require  : — 


280 


DEBENTUEES. 


Conditions  as  to  the  Issue  of  Debentuke  Stock. 


Form  226. 


Redemption. 


Interest. 


Ordinary 
certificates. 

Fees. 

Registered 
liokler  to  be 
deemed  abso- 
lute owner. 


Sui-vivorship. 


Transfer. 


The  following  are  the  conditions  upon  which  the  mtge  debenture  stock  of 

-  the  nominal  amount  of    100,000L,  created  by  special  resolution   of   The  

Co,  Limtd,  passed  and  confirmed  at  general  meetings  thereof  held  respively  on. 
the  day  of  and  the         day  of         ,  will  be  issued  : — 

1.  The  stock  will  be  redeemed  at  par  on  the  day  of  ,  1890,  upon 
which  day  the  co  will,  subject  to  these  conditions,  pay  to  the  several  holders  of 
the  stock,  the  full  nominal  amount  of  their  respive  shares  therein.  Such 
paymts  will  be  made  at  the  registered  office  of  the  co. 

2.  In  the  meantime  the  co  will,  as  from  the  day  of  ,  18     ,  pay  to 
the  holders  of  the  stock,  intei'est  on  their  respive  shares  therein,  at  the  rate  of 
8  p.  c.  p.  a.     Such  interest  will   be  i^aid  half-yearly,  on   the  day  of 
and          day  of          .     The  first  half-yccirly  paymt  will  be  niade  on  the 
day  of 

3.  Every  holder  of  a  share  in  the  stock  will  be  entled  to  a  certificate  under 
the  seal  of  the  co,  stating  the  amount  of  the  stock  held  by  him. 

4.  There  shall  be  pd  to  the  co  for  every  such  certificate  the  sum  of  Is. 

5.  The  co  will  recognise  the  registered  holder  of  any  share  of  regis- 
tered stock  as  the  absolute  owner  thereof,  and  shall  not  be  bound  to  take  notice 
or  see  to  the  execution  of  any  trust,  whether  exj)ress,  implied,  or  constructive, 
to  which  such  share  of  stock  may  be  subject ;  and  the  receipt  of  such  person 
for  the  interest  from  time  to  time  accruing  due  in  respect  thereof,  and  for  any 
monies  payable  upon  the  redemption  of  the  same  shall  be  a  good  discharge  to 
the  CO,  notwithstanding  any  notice  it  may  have,  whether  express  or  other- 
wise, of  the  right,  title,  interest,  or  claim  of  any  other  person  to  or  in  such 
share  of  stock  or  monies. 

G.  In  case  of  the  death  of  any  one  of  the  joint  holders  of  any  registered  stock 
the  survivor  will  be  the  only  jjerson  recognised  by  the  co  as  having  any  title  to 
or  interest  in  such  stock.  The  dissolution  of  a  body  corporate  shall,  for  the 
ppose  of  this  clause,  be  treated  as  its  death. 

7.  Every  holder  of  registered  stock  will  be  entled  to  transfer  the  same  or  any 
pt  thereof  by  an  instrumt  in  wi-iting  in  the  form  following,  and  as  near  thereto 
as  the  circes  will  admit. 


The Co.,  Limtd. 

I,         ,  of         ,  in  conson  of  the  sum  of         pd  to  me  by         ,  of         ,  do  hby 

transfer  to  the  sd         (hereinafter  called  the  transferee)  1.,  of  the  mtge 

debenture  stock  of  the  above-named  co  standing  {_or,  pt  of  the  stock  standing] 
in  my  name  in  books  of  the  sd  co,  to  hold  the  same  unto  the  transferee,  subject 
to  the  several  conditions  on  which  I  held  the  same  immediately  before  the  exe 
cution  hereof.  And  I,  the  transferee,  do  hby  agree  to  take  the  sd  stock,  sub- 
ject to  the  same  conditions. 

As  witness  our  hands  this         day  of 

Witness 


Execution  of 
transfer. 


Transfer  to  be 
left  at  office, 
A:c. 


And  will  1)0 
retained. 

Fees  on 
transfer. 


8.  Every  such  instrumt  must  be  executed,  both  by  the  transferor  and 
transferee,  and  the  transferor  shall  be  deemed  to  remain  owner  of  such  stock 
until  the  name  of  the  transferee  is  entered  in  the  register  (hereinafter  mentd) 
in  respect  thereof. 

9.  Every  instrumt  of  transfer  must  be  left  at  the  registered  office  of  the  co 
for  registration,  accompanied  by  the  certificate  of  the  stock  to  be  transferred, 
and  such  other  evidence  as  the  directors  may  require  to  jjrove  the  title  of  the 
transferor  or  his  right  to  transfer  the  stock. 

10.  All  instrumts  of  ti'ansfer  which  shall  be  registered  will  be  retained  by 
the  CO. 

11.  A  fee  not  exceeding  2s.  Gd.  Avill  be  charged  for  the  registration  of  each 


FORMS. 


281 


transfer,  and  must,  if  required  by  the  directors,  be  pd  before  the  registration    Form  226. 
of  the  transfer. 

12.  No  transfer  will  be  registered  during  the  fourteen  days  immediately  pre-  ^'o*i"y  register 
ceding  the  sd         day  of         and         day  of         in  each  year. 

13.  The  exs  or  ads  of  a  deceased  holder  of  registered  stock  (not  being  one  of  Transmissions. 
the  several  joint  holders)  shall  be  the  only  persons  recognised  by  the  co  as 

having  any  title  to  such  stock. 

14.  Any  committee  of  a  lunatic  holder  of  registered   stock,  or  any  person  Riahts  of 
becoming  entled  to  registered  stock  in  consequence  of  the  death  of  any  holder  parents,  &c. 
of  such  stock,  upon  pi-oducing  such  evidence  that  he  sustains  the  character  in 

respect  of  which  he  jDroposes  to  act  under  this  condition,  or  of  his  title,  as  the 
directors  shall  think  sufficient,  may,  subject  to  the  preceding  conditions  as  to 
transfer,  transfer  such  stock. 

15.  The  directors  shall  be  at  liberty  to  retain  the  interest  payable  upon  any  When  interest 
share  of  registered  stock,  in  respect  of  which  any  person  under  condition  1  !■  is  may  be  witli- 
entled  to  transfer,  until  such  person  shall  duly  transfer  the  same.  held. 

16.  Upon  the  applicon  of  the  holder  of  a  share  of  registered  stock  the  co  will  Certificates 
issue  to  him  a  certificate  to  bearer  specifying  the  share  of  such  stock  held  by  to  bearers. 
him.     Every  holder  of  registered  stock  will  be  entled  at  his  discretion  to  seve- 
ral such  certificates,  each  for  a  pt  of  his  registered  stock. 

17.  A  certificate  to   bearer  will  not   be   issued,  except   upon  a   request   in  Request  to 
writing,  signed  by  the  person  for  the  time  being  entered  in  the  register,  herein-  issue, 
after  mentd,  as  the  holder  of  the  stock  in  respect  of  which  the  certificate  to 

bearer  is  to  be  issued. 

18.  The  request  made  must  be  in'^uch  form,  and  authenticated  in  such  man-  Form  of. 
ner  as  the  directors  shall  from  time  to  time  require,  and  must  be  lodged  at  the 

office  of  the  co  ;  and  the  certificates  then  outstanding  in  resjject  of  the  stock 
intended  to  be  included  in  the  certificate  to  bearer  must,  at  the  same  time,  be 
delivered  up  to  the  sd  directors  to  be  cancelled.     There  shall  be  pd  to  the  co.  Fee. 
for  every  certificate  to  bearer,  the  sum  of  Is. 

19.  If  the  bearer,  for  the  time  being,  of  a  certificate  to  bearer,  shall  sur-  New  certifi- 
render  the   same,  together   with  the  coupons  for  future    interest   belonging  cates. 
thereto,  to  the  directors  to  be  cancelled,  the  directors  will  issue  to  him  a  new 
certificate  to  bearer  for  the  stock  specified  in  the  certificate  so  delivered  up,  or 

any  pt  thereof. 

20.  If  the  bearer  of  a  certificate  to  bearer  shall  suri-ender  the  same,  together  Re-entry  on 
with  the  coupons  for  future  interest  belonging  thereto,  to  the  directors,  to  be  register. 
cancelled  ;  and  shall  therewith  lodge  at  the  office  of  the  co  a  declon  in  wi-iting 

signed  by  him,  and  in  such  form  as  the  directors  shall  from  time  to  time  direct, 
requesting  that  his  name  may  be  entered  in  the  register,  hereinafter  mentd,  as 
the  holder  of  the  stock  specified  in  the  same  certificate,  or  any  pt  thereof ;  and 
stating  in  such  declon  his  name,  and  condition  or  occupation,  and  address,  his 
name  will  be  entered  in  the  sd  register  in  respect  of  the  stock  specified  in  the 
sd  certificate. 

21.  The  CO  will  recognise  the  bearer  of  a  certificate  to  bearer  as  the  absolute  Benrer  of 
owner  of  the  share  of  the  stock  therein  specified,  and  shall  not  be  bound  to  take  certiticate 
notice  or  see  to  the  execution  of  any  trust,  whether  express,  implied,  or  con-  :^'jsolute 
structive,  to  which  such  share  of  stock  may  be  subject;  and  the  receipt  of  such  '^^^^^^^• 
person  for  any  monies  payable  upon  the  redemi^tion  of  the  same  share  of  stock 

shall  be  a  good  discharge  to  the  co,  notwithstanding  any  notice  it  may  have, 
whether  express  or  otherwise,  of  the  right,  title,  interest,  or  claim  of  any  other 
person  to  or  in  such  share  of  stock  or  monies. 

22.  With  every  certificate  to  bearer  there  will  be  issued  coupons  providing  Coupons. 
for  the  interest  thereafter  to  accrue  due  in  respect  of  the  share  of  the  stock 
therein  specified  up  to  the  time  fixed  for  the  redemption  of  the  same. 

23.  The  CO  will  recognise  the  bearer  of  this  coupon  as  the  absolute  owner  of 
the  interest  monies  therein  specified,  and  shall  not  be  bound  to  take  notice  or 
see  to  the  execution  of  any  trust,  whether  express,  implied,  or  constructive,  to 


282 


DEBENTURES. 


Form  226. 


Interest  bow 
to  be  paid. 


Receipt  of 
one  of  joint 
holders. 


Loss. 


Kegister. 


How  to  be 
altered  on 
issue  of  cer- 
tificate to 
bearer. 


Inspection. 


No  notice  of 
trusts. 

Interpretation, 


which  sucli  monies  may  be  subject ;  and  the  receipt  of  such  person  for  the  same 
monies  shall  be  a  good  discharge  to  the  co,  notwithstanding  any  notice  it  may 
have,  whether  express  or  otherwise,  of  the  right,  title,  interest,  or  claim  of  any 
other  jjerson  to  or  in  such  monies. 

24.  The  interest  upon  the  registered  stock  will  be  pd,  at  the  registered 
office  of  the  co,  to  the  holders  thereof,  upon,  or  at  any  time  after,  the  day 
appointed  by  these  conditions  for  the  paymt  thereof.  The  interest  upon  the 
stock  represented  by  certificates  to  bearer,  will  be  pd  in  accordance  with  the 
terms  of  the  coupons  issued  with  such  certificates. 

25.  If  several  persons  are  entered  in  the  register  as  joint  holders  of  any  share 
of  registered  stock,  the  receipt  of  any  of  such  persons  for  the  interest  from  time 
to  time  payable  in  respect  of  such  share  shall  be  as  effectual  a  discharge  to  the 
CO  as  if  the  person  signing  the  same  receipt  were  the  sole  registered  holder  of 
such  share  of  stock. 

26.  If  any  certificate  or  coupon  issued  pursuant  to  these  conditions  be  worn 
out  or  defaced,  then,  upon  jjroduction  thereof  to  the  directors,  they  will  cancel 
the  same,  and  will  issue  a  new  certificate  in  lieu  thereof  ;  and  if  any  such  cer- 
tificate or  coupon  be  lost  or  destroyed,  then,  upon  proof  thereof  to  the  satisfon 
of  the  directors,  or,  in  default  of  proof,  on  such  indemnity  as  the  directors 
deem  adequate  being  given,  a  new  certificate  in  lieu  thereof  will  be  given  to 
the  person  entled  to  such  lost  or  destroyed  instrumt.  An  entry  as  to  the 
issue  of  the  new  certificate  or  coupon  and  indemnity  (if  any),  will  be  made  in 
the  register  hereinafter  mentd. 

27.  A  register  of  the  stock  will  be  kept  by  the  co  in  one  or  more  books,  and 
there  shall  be  entered  in  such  register : —    j^ 

(1.)  The  names  and  addresses  and  descriptions  of  the  holders  for  the  time 

being  of  the  stock. 
(2.)  The  amount  of  stock  held  by  every  such  person. 
(3.)  The  date  at  which  the  name  of  every  such  person  was  entered  in  respect 

of  the  stock  standing  in  his  name  and  every  pt  thereof. 

28.  On  the  issue  of  a  certificate  to  bearer  the  co  shall  strike  out  of  the  sd 
register  the  name  of  the  person  then  entered  as  the  holder  of  the  stock  specified 
in  such  certificate,  and  shall  enter  the  following  parlars  : — 

(1.)  The  fact  of  the  issue  of  the  certificate  to  bearer. 

(2.)  A  statemt  of  the  amount  of  the  stock  included  in  siich  certificate. 

(3.)  The  date  of  the  issue  of  the  certificate  to  bearer. 

29.  The  trustees  or  trustee  and  any  holder  of  a  share  in  registered  stock,  or 
bearer  of  a  certificate  to  bearer,  will,  upon  paymt  of  such  fee  (not  exceeding 
Is.)  as  the  directors  shall  from  time  to  time  fix,  be  entled  at  all  reasonable  times 
to  inspect  the  sd  register. 

30.  No  notice  of  any  trust,  express,  implied,  or  constructive,  shall  be  entered 
on  the  register  in  respect  of  any  share  in  the  debenture  stock. 

31.  In  these  conditions,  unless  there  be  something  in  the  subject  or  context 
inconsistent  therewith — 

"  The  CO  "  means  The Co,  Limtd. 

"  The  directors"  means  the  director's  for  the  time  being  of  the  co. 

"  The  stock  "  means  the  sd  mtge  debenture  stock,  created  as  above  mentd. 

•' Eegistered  stock  "  means  so  much  of  the  stock  as  shall  not  for  the  time 
being  be  represented  by  certificates  to  bearer. 

Words  importing  the  singular  number  only,  include  the  plural. 

Words  importing  the  plural  number  only,  include  the  singular. 

Words  importing  persons,  include  corporations. 

Note. — If  the  stock  is  to  be  secured  by  a  trust  deed,  the  following  Form  can 
readily  be  adapted,  substituting  "  the  stock  "  for  "  the  debentiu-es." 


FOBMS.  283 

Trust  DEEoybr  Securing  Mtge  Debextures  Issued  ly  a  Colliery   Form  227. 
Co.      The    Debentures    to    be    Redee.med    h//    Half-yearly  Trust  deed. 
Drawings.     Special  Provisions. 

The  following  precedent  can  be  readily  adapted  to  secure  the  payment  of  de- 
bentures not  redeemable  by  drawings.     In  such  case  the  fourth  recital  will  be 

that  "  the  directors  have  determined  to  raise  the  sum  of 1,  by  the  issue  of 

debentiu-es  to  that  amount^,  bearing  interest  at  the  rate  of  — L  per  cent,  per  annum, 
and  to  secure  the  principal  and  interest  for  the  time  being  payable  on  such 
debentiu-es,  and  on  any  debentures  which  may  be  issued  in  substitution  for 
any  of  the  said  debentures  (all  which  debentures,  as  well  original  as  substituted, 
are  hereinafter  referred  to  as  the  debentures)  in  manner  hereinafter  appear- 
ing." The  form  of  the  debenture  may  be  given  in  a  schedule,  or  not,  at  the 
discretion  of  the  draftsman.     It  is  very  common  to  give  it. 

The  provisions  of  the  following  precedent  are  more  elaborate  than  in  many 
eases  is  requisite,  but  the  draftsman  can  readily  expunge  the  clauses  not 
required  in  any  particular  case. 

THIS  IXDRE  made  the of between  The Co,  Limtd,  Parties. 

(hereinafter  called  the  co,)  of  the  one  pt,  and  A.,  of ,  and  B.,  of 

(hereinafter  called  the  present  trustees),  of  the  other  pt. 

Whas  the  CO  is  seised  of  the  freehold  hereds  the  short  parlars  of  Recitals, 
which  are  specified  in  the  first  schedule  hereunder  written,  for  an  estate 
of  inheritance  in  fee  simple  in  possession,  free  from  incumbrances  ;  and 
is  possessed  of  the  several  leasehold  hereds,  the  short  parlars  of  which 
are  specified  in  the  third  column  of  the  second  schedule  hereunder 
written,  for  the  several  terms  of  years  specified  in  the  second  column  of 
the  same  schedule,  and  granted  by  the  several  indres  of  lease,  the  dates 
whereof  and  parties  whereto  are  specified  in  the  first  column  of  the  same 
schedule,  at  the  rents  and  royalties,  and  subject  to  the  covenants  and 
conditions  in  the  sd  several  leases  respively  reserved  and  contd,  but 
otherwise  free  from  incumbrances  :  And  whas  the  co  is  entled  to  the 
full  benefit  and  advantage  of  certain  agreemts,  the  dates  whereof  and 
parties  whereto,  and  the  short  parlars  of  which  are  specified  in  the  first 
and  second  cohimns  respively  of  the  third  schedule  hereunder  written, 
at  the  several  rents  (if  any)  and  subject  to  the  terms  and  conditions  in 
the  sd  agi-eemts  respively  reserved  and  contd,  but  otherwise  free  from 
incumbrances  :  And  whas  the  co  is  possessed  of  other  personal  ppty  of 
considerable  value  ;  namely,  of  plant,  machinery,  stock-in-trade,  debts, 
and  other  choses  in  action,  monies,  chattels  and  effects  :  And  whas  the 
directors  of  the  co  in  exercise  of  the  powers  vested  in  them  by  the  regula- 
tions of  the  CO  have  determined  to  boiTow  for  the  pposes  of  the  co  the 
sum  of  100,0007.  by  the  issue  of  1,000  mtge  debentures  for  1007.  each, 
bearing  interest  at  the  rate  of  six  p.  c.  p.  a.  payable  half-yearly  on  the 
1st  day  of  November  and  1st  day  of  May  in  each  year,  according  to  the 
coupons  annexed  thereto  (such  debentures  and  coupons  respively  to  be 
in  the  form  set  forth  in  the  fourth  schedule  liereunder  written),  and  to 
further  secure  the  principal  monies  and  interest  for  the  time  being  pay- 
able according  to  the  tenor  of  the  sd  debentures  (hereinafter  called  the 
debentures),  and   the   performance  of  the  stipulations  and   conditioiLs 


284 


DEBENTUEES. 


Form  227. 

Testatum  1. 

Grant  of 
freeholds. 


Habendum. 


Testatum  2 

Demise  of 
leaseholds. 


Habendxxm. 


Testatum  o. 

Assignment  of 
benefit  of 
agreements 
for  leases,  ^:c. 


Habendum. 


Covenant  by 
company  to 
obtain  leases. 


And  vest  in 
trustees. 


tlK'vein  contd  in  mamier  hereinafter  appearing:  NOW  THIS  IXDRE 
AVITXE8SETH  AND  DECLARES  as  follows  :  1.  The  co,  as  benefi- 
cial owner,  hby  grants  unto  the  present  trustees,  All  and  singular  the 
lands  and  hercds,  mines,  strata,  veins,  or  seams  of  coal,  culm,  and  other 
minerals,  powers,  and  privileges,  respively  specified  or  referred  to  in  the 
first  schedule  hto,  To  hold  the  same  unto  and  to  the  use  of  the  present 
trustees,  but  upon  and  for  the  trusts  and  pposes  hereinafter  expressed 
concerning  the  same.  2.  The  co,  as  beneficial  owner,  hby  demises  unto 
the  present  trustees,  All  and  singular,  the  lands,  hereds,  copper-works, 
brick-works,  patent-fuel-works,  mines,  veins,  seams,  beds,  and  strata  of 
coal,  culm,  and  other  minerals,  powers  and  privileges  specified  or  referred 
to  in  the  second  schedule  hto  :  To  hold  the  same  unto  the  present 
trustees  for  all  the  respive  residues  now  unexpired  of  the  sd  seA'eral  terms 
for  which  the  same  premes  were  respively  granted  by  the  several  indres. 
of  lease  mentd  in  the  first  column  of  the  sd  schedule,  except  the  last  day 
of  each  of  the  sd  terms,  but  upon  and  for  the  trusts  and  imposes  herein- 
after expressed  of  and  concerning  the  same.  3.  The  co,  as  lieneficial 
owner,  hby  assigns  unto  the  present  trustees.  All  and  singidar,  the  full 
benefits  and  advantages  of  the  several  agreemts  specified  or  referred  to 
in  the  third  schedule  hereunder  written,  and  the  rights,  easemts,  liber- 
ties, and  privileges  thereby  respively  conferred  or  agreed  to  be  granted  : 
AxD  ALL  other  ppty  whatsoever  and  wheresoever  situate,  of  or  to 
which  the  co  now  is  or  during  the  continuance  of  this  security  shall 
become  possessed  or  entled,  except  the  last  day  of  each  term  of  years. 
To  hold  the  same  unto  the  present  trustees  as  to  the  premes  com- 
prised in  the  third  schedule  hto,  subject  to  the  terms  and  conditions 
contd  in  the  sd  several  agreemts,  and  as  to  all  the  sd  premes  hinbefore 
expressed  to  be  hby  assigned  upon  and  for  the  trusts  and  pposes  hei'e- 
inafter  expressed  and  declared  concerning  the  same. 

4.  The  co  hby  covenants  with  the  present  trustees  that  the  co  will 
forthwith,  at  its  own  cost,  do  and  perform  all  acts  and  things  which  may 
be  necessary  to  entle  it  to  have  granted  to  it  the  respive  leases  for  which 
it  has  entered  into  the  several  agreemts  specified  in  the  first  pt  of  the 
third  schedule  hereunder  written,  of  the  premes  therein  comprised 
respively,  and  will,  at  own  cost,  procure  such  respive  leases  to  be  granted 
accordingly,  and  if,  when  the  sd  leases  shall  have  been  respively  granted, 
any  principal  money  or  interest  shall  remain  on  the  security  of  the 
debentures  or  of  these  presents  will,  if  necessary,  use  its  best  endeavours 
to  obtain,  at  its  own  cost,  proper  licenses  for  the  ppose,  and  will  immedi- 
ately after  such  licenses  respively,  if  necessary,  shall  have  been  obtained, 
or  if  such  licenses  res})ively  shall  l)e  unnecessary,  then  inunediately  after 
the  sd  intended  leases  respively  shall  have  been  granted,  at  its  own  cost, 
well  and  effectually  assign,  or  demise,  or  procure  to  be  assigned  or 
demised,  the  premes  to  he  comprised  in  such  leases  respively  unto  the 
trustees  or  trustee  for  the  time  being  hereof,  for  the  whole,  or,  at  the 
option  of  the  sd  trustees  or  trustee,  any  pt  of  the  then  respive  residues 
of  the  terms  of  vears  to  be  granted  by  the  sd  intended  leases  respively 


FOEMS.  085 

and  Avith  such  covenants  for  title  and  otherwise,  as  are  usual  in  mtges   Form  227. 
by  assignnit  or  demise,  as  the  case  may  be,  or  may  be  reasonably  re-  ^ 

quired,  and  upon  the  trusts  and  for  the  pposes  hereinafter  expressed  con- 
cerning the  same. 

6.  The  sd  premes  hinbefore  expressed  to  be  hl)y  granted,  demised,  and  Trusts  of  tlie 
assigned  and  covenanted  to  be  assigned  or  demised  respively  (hereinafter  premfses!^ 
called    the    mtged   premes),  shall  be   held  by   the   trustees  or  trustee 
(which  expression  in  these  presents  means  the  present  trustees  or  the 
survivor  of  them  or  other  the  trustees  or  trustee  for  the  time  being 
hereof)  upon  trust  that  they  or  he  shall  permit  the  co  and  its  assigns  to  To  permit 
hold  and  enjoy  all  the  same  premes  and  to  carry  on  therein  and  there-  retalnpa^ses- 
with  the  Ijusiness  or  any  of  the  businesses  authorised  by  memorandum  of  sion  until 
association  of  the  co,  until  default  shall  be  made   in  paymt  of   some '  ^  '^^^  '  '■^' 
l^rincipal  monies  secured  by  the  debentures,  or  any  of  them,  or  in  the 
paymt  of  some  interest  on  the  same  for  the  period  of  one  calendar  month 
after  such  jn-incipal  monies  and  interest   respively  shall   become   due 
according  to  the  tenor  of  the  same  debentures  and  of  the  covenant  in 
that  behalf  hereinafter  contd,  or  until  an  order  shall  be  made,  or  an 
effective  resolution  of  the  co  be  duly  passed  for  the  winding  up  of  the 
CO  or  until  a  distress  or  execution  be  respively  levied  or  sued  out  upon  or 
against  any  of  the  chattels  or  ppty  of  the  co,  or  until  a  breach  of  some 
covenant  by  the  co  hereinafter  contd,  shall  have  been  committed,  and 
fi'om  and  after  such  default,  or  the  making  of  any  such  order,  or  the 
passing  of  any  such  resolution,  or  the  levying  or  issue  of  any  such  distress 
or  execution,  or  the  commission  of  any  such  breach  of  covenant  as  afsd, 
and  in  the  last-mentd  case,  notwithstanding  the  waiver  of  any  prior 
breach  of  covenant  upon  trust  (subject  to  Clause  4  hereof)  that  the  Upon  default, 
trustees  or  trustee  may,  in  their  or  his  discretion,  without  any  such  f*-'-' ^''"***^^'* 
request   as   next  hereinafter   mentd,  and   shall    upon    the    recjuest    in 
writing  of  the  holder  or  holders  of    one-half  of   the  debentures  or  of 
the  holder  or  holders  of  [oO]  at  least  of  the  debentures,  (but  in  either 
case  without  any  further  consent  on  the  pt  of  the  co  or  its  assigns,)  enter 
upon  and  take  possession  of  the  mtged  premes,  and  may,  at  their  or  his 
discretion,  and  shall  upon  the  like  request,  sell,  call  in,  collect,  and  con-  'Wlieu  sale  to 
vert  into  money  the  same  or  any  pt  thereof  [with  full  power  to  sell  any  ^^  "^'"^^  ^' 
of  the  same  premes,  either  together  or  in  jjarcels,  and  either  by  public  And  how. 
auction  or  private  contract,  and  with  full  power  upon  every  such  sale  to 
make  any  special  or  other  stipulations  as  to  title,  or  evidence,  or  com- 
mencemt  of  title  or  otherwise  which  the  trustees  or  trustee  shall  deem 
proper,  and  with  full  power  to  buy  in,  or  rescind,  or  vary  any  contract 
for  sale  of  the  sd  premes  or  any  pt  thereof,  and  to  resell  the  same,  with- 
out being  responsible  for  any  loss  which  may  be  occasioned  thereby,  and 
with  full  power  to  compromise  and  effect  compositions,  and  for  the  pposes 
afsd  or  any  of  tliem,  to  execute  and  do  all  such  assurances  and  things  as 
they  or  he  shall  think  fit]. 

Sometimes  the  entry  is  to  be  "  upon  the  request  in  wT-iting  of  any  holder  of 
a  debenture  or  debentures  of  the  company  ;  "  but  it  is  very  usual  to  provide  as 


286 


DEBENTUEES. 


Form  227. 


Trust  of  last 
ilay  of  terms 
OD  sale. 


What  notice 
to  be  given 
liefore  sale,  &c, 


Provision  for 
protection  of 
IHirchasers,  &c, 


above,  so  that  an  insignificant  minority  of  the  debenture  holders  may  not  be  able 
to  insist  on  that  being  done  vv^hich  the  majority  do  not  desire.  Sometimes  the 
sanction  of  a  genei-al  meeting  of  the  debenture  holders  is  required. 

The  words  in  brackets  can  generally  be  omitted  in  reliance  on  ss.  35  and  37 
of  the  Conveyancing  and  Law  of  Property  Act,  1881,  but  if  the  company's 
undertaking  is  abroad  they  should  remain. 

G.  After  any  sale  or  sales,  under  the  afsd  trust  for  sale,  of  any  of  the 
sd  premes  hinbefore  expressed  to  be  hby  demised,  or  which  shall  be 
demised  in  psuance  of  the  covenant  in  that  behalf  hinbefore  contd  or 
otherwise,  the  co  or  its  assigns  shall  stand  possessed  of  the  last  day  or 
other  the  residue,  remaining  in  the  co  or  its  assigns,  of  the  sd  respire 
terms  or  term  for  which  the  premes  sold  were  or  shall  be  so  demised  to 
the  CO  as  afsd  upon  trust  for  the  pchaser  or  pchasers  of  the  same  premes, 
and  to  assign  and  dispose  of  the  same  as  such  pchaser  or  pchasers  shall 
direct. 

7.  Befoee  making  any  such  entry  as  afsd,  or  any  sale,  calling  in,  col- 
lection, or  conversion  under  the  afsd  trust  in  that  behalf  (hereinafter 
referred  to  as  the  primary  trust  for  conversion,)  the  trustees  or  trustee 
shall,  except  in  the  case  of  such  order  or  resolution  as  afsd  having  been 
made  or  passed,  give  written  notice  of  their  or  his  intention  to  the  co, 
and  shall  not  enter  upon  the  mtged  premes  or  execute  the  primary  trust 
for  conversion,  if  in  the  case  of  such  trust  arising  by  reason  of  any 
default  in  paymt  of  any  principal  money  or  interest,  the  directors  shall 
prove  to  the  trustees  or  trustee  paymt  of  the  principal  or  interest  so  in 
arrear  within  three  calendar  months  next  after  such  notice  shall  have 
been  given  to  them,  or  if  in  the  case  of  such  trust  arising  by  reason  of 
any  such  distress,  execution,  or  breach  of  covenant  as  afsd,  the  co  shall 
forthwith,  upon  such  distress  or  execution  being  le^•ied  or  sued  out,  or 
upon  such  notice  as  afsd  being  given,  remove,  discharge,  or  payout  sucl) 
distress  or  execution,  or  fully  perform  the  covenant  so  brokeu,  if  capable 
of  then  being  performed,  or  make  good  the  breach  thereof  to  the  satisfou 
of  the  trustees  or  trustee. 

8.  Provided  always,  that  upon  any  sale,  calling  in,  collection  or 
conversion  purporting  to  be  made  in  psuance  of  the  primary  trust  for 
conversion,  the  pchaser  or  pchasers,  or  debtor  or  debtors,  as  the  case  may 
be,  shall  not  be  bound  to  see  or  inquire  whether  any  such  notice  has 
been  given,  or  whether  any  default  has  been  made  by  the  co'in  paymt  of 
any  principal  monies  or  interest  secured  by  any  of  the  sd  debentures,  or 
Avhether  any  such  order,  resolution,  distress,  execution,  or  breach  of 
covenant  as  afsd,  has  respively  been  made,  passed,  levied,  issued  or  com- 
mitted, or  whether  any  money  remains  on  the  security  of  these  presents, 
or  as  to  the  necessity  or  expediency  of  the  stipulations  and  conditions 
subject  to  which  any  such  sale  shall  have  been  made,  or  otherwise  as  to 
the  propriety  or  regularity  of  such  sale,  calling  in,  collection  or  conver- 
sion, and  notwithstanding  any  impropriety  or  irregularity  whatsoeA'er  in 
any  such  sale,  calling  in,  collection  or  conversion,  the  same  shall,  (so  far 
as  regards  the  safety  and  protection  of  the  pchaser  or  pchasers,  debtor  or 
debtors,  as  the  case  may  be,)  be  deemed  to  be  within  the  primary  trust 


FORMS. 


287 


for  conversion  and  be  valid  and  effectual  accordingly,  and  the  remedy  of   Form  227. 
the  CO  and  its  assigns  in  respect  of  any  impropriety  or  irregularity  what- 
soever  in  the  execution  of  the  primary  trust  for  conversion  shall  be  in 
damages  only. 

9.  Upon  any  such  sale,  calling  in,  collection  or  conversion  as  afsd,  the  Trusteef;' 
receipt  of  the  trustees  or  trustee  for  the  pchase  money  of  the  premes 

sold,  and  for  any  other  monies  pd  to  them  or  him,  shall  eifectually  dis- 
charge the  pchaser  or  pchasers,  or  other  person  or  persons  paying  the 
same  therefrom,  and  from  being  concerned  to  see  to  the  applicon  or 
being  answerable  for  the  loss  or  misapplicou  thereof. 

This  may  generally  be  omitted  in  reliance  on  section  35  of  the  Conveyancing- 
and  Law  of  Property  Act,  1881. 

10.  The  trustees  or  trustee  shall  hold  the  monies  to  arise  from  any  Trusts  of  pro- 
sale,  calling  in,  collection,  or  conversion  under  the  primary  trust  for  *^^iiin °^in^&c 
conversion  upon  trust,  that  they  or  he  shall  thereout,  in  the  first  place, 

pay  or  retain  the  costs  and  expenses  incurred  in  or  about  the  execution 
of  such  trust  or  otherwise  in  relation  to  these  presents,  and  shall  apply 
the  residue  of  the  sd  monies.  First,  in  or  towards  pajant  to  the 
holders  of  the  debentures,  jjari passu  in  proportion  to  the  amount  due  to 
them  respively,  and  Avithout  any  preference  or  priority  wliatsoever,  of  all 
arrears  of  interest  remaining  unpd  on  such  debentures  ;  Secondly,  in 
or  towards  paymt  to  the  holders  of  the  debentures,  jiari jmssu  in  propor- 
tion to  the  amount  due  to  them  respively,  and  without  any  preference  or 
priority  either  on  account  of  priority  of  issue,  or  of  any  debenture 
having  been  drawn  for  redemption  or  otherwise  howsoever,  of  all  prin- 
cipal monies  due  on  such  debentures,  and  that  whether  the  same  prin- 
cipal monies  shall  or  shall  not  then  be  payable  according  to  the  tenor  of 
the  sd  debentures  ;.  and,  Thirdly,  shall  pay  the  surplus  (if  any)  of  such 
monies  to  the  co  or  its  assigns. 

11.  Peovided  always,  that  if  the  amount  of  the  monies  at  any  time  Power  to  with- 
apportionable  under  Clause  10  hereof,  shall  be  less  than  lOZ.  per  deben-  unttuutt^dent 
ture,  the  trustees  or  trustee  may,  at  their  or  his  discretion,  invest  such  fund  to  pay 
monies  upon  some  or  one  of  the  investmts  hereinafter  authorised,  with  '^^l  ^f ' 

^        _  _  '  debenture. 

power  from  time  to  time  at  the  like  discretion  to  vary  such  investmts, 
and  such  investmts,  with  the  resulting  income  thereof,  may  be  accumu- 
lated until  the  accumulations,  together  with  any  other  funds  for  the  time 
being  under  the  control  of  the  trustees  or  trustee,  and  applicable  for  the 
ppose,  shall  amount  to  a  sum  sufiicient  to  pay  lOZ.  per  debenture  upon 
such  of  the  sd  debentures  as  shall  be  outstanding,  and  then  such  accumu- 
lations and  funds  shall  be  applied  in  manner  afsd. 

12.  The  trustees  or  trustee  shall  give  not  less  than  seven  days  notice  Notice  of 

by  advertisemt  in  the  Times,  and  at  least  one  other  daily  London  news-  ^Ppo^tion- 

"^  ''  ments  to  be 

paper,  of  the  day  fixed  for  any  paymt  to  tlie  holders  of  debentures  under  given. 

Clauses  10  or  11  hereof,  and  after  the  day  so  fixed  and  advertised  the 

holder  of  each  outstanding  debenture  shall  be  entled  to  interest  on  the 

balance  only  (\i  any)  of  the  principal  monies  due  on  such  debenture  after 


288  DEBENTURES. 

Form  227.  deducting  the  amount  (if  any)  payable  in  respect  thereof  on  tlie  day  so 

fixed. 
Receipt  of  13.  The  receipt  of  the  holder  of  each  of  the  debentures  for  the  prin- 

debentures  "^^P^^  nionies  and  interest  intended  to  be  thereby  secured,  sliall  be  a  good 
or  coupon  to      discharge  to  the  trustees  or  trustee. 

^r  \°°°^^  ^"^-  Upon  any  paymt  under  Clauses  7  and  8  hereof  respively,  to  the 

Indorsement  holder  of  a  debenture  on  account  of  the  principal  monies  or  interest 
to  be  made  on  thereby  secured,  the  debenture  shall  be  produced  to  the  trustees  or 
iipon\)arr  trustee,  who  shall  cause  a  memorandum  of  the  amount  and  date  of  paymt 
payment.  to  1)6  indorsed  thereon. 

Power  for  15.  At  any  time  before  the  trustees   or   trustee   shall  have  entered 

trust^for  L\e^  ^^^*^°  posscssion  of  the  mtged  premes  or  any  pt  thereof  in  psuance  of 
arises  to  sur-  the  trust  afsd,  the  trustees  or  trustee  may,  upon  the  applicon  and  at  the 
ren  er  eases.  ^^^^  ^^  ^.j^^  ^^^  acquire  or  concur  in  acquiring  a  new  or  renewed  lease,  or 
new  or  rencAved  leases,  of  all  or  any  of  the  sd  premes  hinbefore  expressed 
to  be  liby  demised  or  covenanted  to  be  demised  respively,  for  such  term 
or  respive  terms,  not  being  less  than  the  then  respive  residues  of  the  sd 
now  existing  terms,  or  the  terms  to  be  created  as  afsd,  in  the  same  hereds 
respively,  and  at  such  rents  and  royalties,  and  subject  to  such  covenants 
and  conditions,  as  they  or  he  shall  think  fit ;  And  for  that  ppose  may 
surrender  or  concur  in  surrendering  the  then  existing  lease  or  leases  of 
the  same  hereds  resjjively  and  the  terms  therein  as  afsd  ;  And  any  such 
new  or  renewed  lease  may  be  granted  either  to  the  trustees  or  trustee,  or 
to  any  nominee  or  nominees  of  the  co,  but  so  that  in  the  latter  case  the 
lessees  or  lessee  do  execute  a  declon  of  trust  for  the  co,  subject  to  the 
provisions  of  these  presents  ;  And  every  such  new  or  renewed  lease  and 
the  premes  comprised  therein  and  the  term  thereby  granted  shall  become 
and  be  in  all  respects  subject  to  the  trusts  and  provisions  herein  contd, 
as  though  the  interest  of  the  co  therein  had  been  hby  assured  to  the 
trustees. 
And  to  concur  K).  At  any  time  before  the  trustees  or  trustee  shall  have  made  such 
i»  fee  irg.  entry  as  afsd,  the  trustees  or  trustee  may  upon  the  like  applicon  and  at 
the  cost  of  the  co  sell,  call  in,  and  convert,  or  concur  in  selling,  calling 
in,  or  converting,  all  or  any  of  the  mtged  premes  in  the  same  manner  as 
they  or  he  could  do  if  the  primary  trust  for  conversion  had  then  arisen, 
and  shall  hold  the  net  proceeds  to  arise  from  any  sale,  calling  in  and 
conversion  under  the  poA\'er  in  that  behalf  in  this  clause  contd,  upon 
trust  to  lay  out  the  same  or  any  pt  thereof  if  they  or  he  shall  think  fit 
in  the  construction,  erection,  or  imjirovemt  of  any  railways,  tramways, 
How  proceeds  buildings,  works,  or  erections  of  a  fixed  or  permanent  nature,  suitable 
to  e  em-  ^^^,  ^^^^  pposes  of  the  CO,  and  so  as  to  constitute  a  permanent  improvemt 
of  the  remaining  ppty  of  the  co,  or  in  the  pchasc  of  other  hereds  suit- 
able to  be  held  in  connection  with  such  other  ppty,  or  in  the  pchase  of 
machinery,  chattels,  or  effects  necessary  or  convenient  for  the  pposes  of 
the  CO,  or  otherwise  to  apply  the  same  in  such  manner  as  the  trustees  or 
trustee  may  think  calculated  to  promote  the  interests  of  the  co,  and  so 
that  the  site  of  any  such  railways,  tramways,  buildings,  works,  or  erec- 


FORMS.  289 

tions,  if  not  already  comprised  in  these  presents,  and  any  hereds  so   Form  227. 
pchased  shall  be  conveyed  or  assured  in  such  manner  as  the  trustees  or  ~~ 

trastee  shall  require,  so  as  to  become  subject  to  all  the  trusts,  powers, 
and  provisions  herein  contd  ;  And  until  any  such  investmt  as  afsd  the  Interim  invest- 
tmstees  or  trustee  shall  invest  the  same  net  proceeds  upon  some  or  one  of  ™^^  ^* 
the  investmts  hereinafter  authorised  with  power  from  time  to  time  at 
their  or  his  discretion  to  vary  such  investmts,  and  with  power  (until 
the  primaiy  trust  for  conversion  shall  arise)  to  resort  to  any  such  last 
mentd  investmts  for  any  of  the  pposes  for  which  such  proceeds  are  firat 
hinbefore  authorised  to  be  expended  ;  And  subject  as  afsd  the  trustees  Trusts  of  in- 
or  trustee  shall  stand  possessed  of  the  sd  investmts  upon  trust,  until 
the  primary  trust  for  conversion  shall  arise,  to  pay  the  income  thereof 
to  the  CO  or  its  assigns,  and  after  the  primaiy  trust  for  conversion 
shall  have  arisen  shall  hold  the  sd  investmts  and  the  income  thereof 
respively  upon  and  for  the  trusts  and  pposes  hinbefore  expressed 
concerning  the  monies  to  arise  from  any  sale  calling-  in,  and  conver- 
sion, under  the  primary  trust  for  conversion.  Provided  always  that 
in  default  of  such  trust  for  conversion  arising  and  after  paymt  and 
satisfon  of  all  monies  intended  to  l)c  secured  by  these  presents  the 
sd  investmts  and  the  income  thereof  shall  be  held  in  trust  for  the  co  or 
its  assigns.  Po^er  for 

17.  After  the  trustees  or  trustee  shall  have  made  such  entry  as  afsd  g^ti-y  ^g  carry 
and  until  the  whole  of  the  mtged  prenies  shall  be  sold,  called  in,  col-  o^  business, 
lected,  and  converted  under  the  primary  trust  for  conversion,  the  trustees 
or  trustee  may  if  they  or  he  shall  think  fit  so  to  do,  but  not  othenvise,  ,^'^^1  ^^"7  °'^ 

DUSlllGSS, 

carry  on  the  business  of  the  co  in  and  with  the  mtged  premes  or  any  of 
them,  and  may  manage  and  conduct  the  same  as  they  or  he  shall  in 
their  or  his  discretion  think  fit,  and  for  the  pposes  of  the  sd  business 
may  employ  such  agents,  managers,  recei\'ers,  accountants,  servants,  and 
workmen  upon  such  terms  as  to  remuneration  and  otherwise  as  they  or 
he  shall  think  proper,  and  may  renew  such  of  the  sd  plant,  machinery, 
and  effects  as  shall  be  worn  out  or  lost,  or  otherwise  become  unservice- 
able, and  generally  may  do  or  cause  to  be  done  all  such  acts  and  things, 
and  may  enter  into  such  arrangemts  respecting  the  sd  premes  or  the 
working  of  the  same  or  any  pt  thereof  as  they  or  he  could  do  if  they  or 
he  were  absolutely  entled  thereto,  and  without  being  responsible  for  any  And  to  let  on 
loss  or  damage  which  may  arise  or  be  occasioned  thereby  ;  Axd  may  °'^^'^" 
also,  at  their  or  his  discretion,  demise  or  let  the  mtged  premes,  or  any  ^^  ^^  applied, 
pt  thereof,  upon  such  terms  and  subject  to  such  stipulations  as  the 
trustees  or  trustee  shall  think  fit.  Provided  always  that  the  trustees 
or  trustee  shall,  by  and  out  of  the  rents  and  profits  and  income 
of  the  same  premes,  and  the  monies  to  be  made  by  them  or  him  in 
carrying  on  the  sd  business,  pay  and  discharge  the  expenses  incurred  in 
and  about  such  managemt,  or  in  the  exercise  of  any  of  the  powers  afsd 
or  other^vise  in  respect  of  the  premes,  and  all  outgoings  which  they  or 
he  shall  think  fit  to  pay,  and  shall  pay  and  apply  the  residue  of  the  sd 
rents,  profits,  and  monies  in  the  same  manner  as  is  hinbefore  provided 

U 


290 


DEBENTUEES. 


Investment 
clause. 


Form  227.  with  respect  to  the  monies  to  arise  from  any  sale,  calling  in,  and  con- 
version  under  the  primary  trust  for  conversion. 

18.  Any  monies  which,  under  the  trusts  herein  contd,  ought  to  be 
invested,  may  be  invested  in  the  names  or  name  or  under  the  legal 
control  of  the  trustees  or  trustee  in  any  of  the  public  stocks,  or  funds, 
or  Government  securities  of  the  United  Kingdom,  or  in  the  stock  of  the 
Bank  of  England  [or  may  be  placed  on  deposit  in  the  names  or  name  of 
the  trustees  or  trustee  in  such  bank  or  banks  as  they  or  he  may  think 
fit]. 
Special  powers       19-  The  trustees  or  trustee  may  raise  and  borrow  money  on  the  secu- 
where  prior  in-  i-jty  of  the  mtgcd  prcuies,  or  any  pt  thereof,  for  the  ppose,  but  for  the 
exist.  ppose  only,  of  paying  off  or  discharging  any  mtge  or  charge  for  the  time 

being  charged  on  the  mtged  premes  or  any  pt  thereof  in  priority  to 
these  presents,  or  for  the  ppose  of  defraying  any  costs,  charges,  losses, 
and  expenses  which  shall  be  incurred  by  the  trustees  or  trustee,  or  any 
of  them,  in  relation  to  these  presents  :  And  the  trustees  or  trustee  may 
raise  and  bori'ow  such  monies  as  afsd  at  such  rate  of  interest,  and  gene- 
rally on  such  terms  and  conditions  as  the  trustees  or  trustee  shall  think 
fit,  and  may  secure  the  repaymt  of  the  monies  so  raised  or  borrowed, 
with  interest  for  the  same,  by  mortgaging  or  otherwise  charging  the 
mtged  premes  or  any  pt  thereof,  in  such  manner  and  form  as  the  trustees 
or  trustee  shall  think  fit.  The  trustees  or  trustee  may  also  concur  in 
the  transfer  of  any  mtge  or  charge  for  the  time  being  charged  on  the 
mtged  premes,  or  any  pt  thereof,  in  priority  to  these  presents,  and  may 
redeem  or  concur  in  redeeming  the  mtge  premes,  or  any  pt  thereof,  from 
any  such  mtge  or  charge  and  for  the  pposes  afsd  may  execute  and  do  all 
such  assurances  and  things  as  they  or  he  shall  think  fit. 

The  above  clause  will  only  he  inserted  in  cases  where  the  circumstances 
I'equire  it. 


Covenants  by- 
company  : — 

1 .  For  re- 
demption of 
debentures  by 
half-yearly 
drawings. 

2.  Debentures 
to  be  a  first 
charge,  and 

to  rank  2Mri 
2xi.ssi(i 


20.  The  co  doth  hby  covenant  with  the  sd  A.  and  B.,  their  exs,  ads, 
and  assigns,  as  follows  : — First,  that  the  co  will  pay  the  principal 
monies  and  interest  secured  by  the  debentures  in  accordance  with 
the  tenor  thereof  respively,  and  will  observe  and  perform  the  several 
conditions  indorsed  thereon  respively  ;  Secondly,  that  the  principal 
monies  and  interest  intended  to  be  secured  by  the  debentures  shall  be 
a  first  charge  on  the  mtged  premes,  and  that  the  sd  principal  monies 
and  interest  shall  take  precedence  over  all  monies  which  may  here- 
after be  raised  by  the  co  by  any  means  whatsoever  ;  and  that  as 
between  the  several  holders  thereof  (except  as  herein  otherwise  pro- 
vided) the  debentures  shall  rank  pari  jmssic  without  any  preference  or 
priority  by  reason  of  date  of  issue  or  otherwise ;  And  further,  that  the  co 
or  its  assigns  will  at  all  times  keep  an  accurate  register  of  the  debentures 
showing  the  number  and  amount  of  each  debenture  and  the  date  of 
issue ;  and  that  the  trustees  or  trustee  and  the  holders  of  the  debentures, 
or  any  of  them,  shall  be  at  libty  at  all  reasonable  times  to  inspect  the 
sd  register,  and  to  take  copies  of,  or  extracts  from  the  same,  or  any  pt 


rOEMS.  291 

thereof :  Thirdly,  that  tlie  co  will,  during  the  continuance  of  this   Form  227. 

security,  cany  on  and  conduct  the  business  of  the  co  to  the  greatest  3   Business 

possible  advantage  ;  Axd  will  keep  proper  books  of  account,  and  therein  of  company 

make  true  and  perfect  entries  of  all  dealings  and  transactions  of  or  in  ^^  effectually. 

relation  to  the  sd  lousiness  ;  and  that  the  sd  books  of  account  and  all  Accounts  to 

other  documts  relating  to  the  affairs  of  the  co  shall  lie  kept  at  the  ^^^  ^®P* ' 

registered  office  of  the  co,  or  other  place  or  places  where  the  sd  books  of 

account  and  documts  of  a  similar  nature  have  heretofore  been  kept,  and 

that  the  same  shall  at  all  reasonable  times  be  open  for  the  inspection,  of 

the  trustees  or  trustee,  and  such  person  or  persons  as  they  or  he  shall 

from  time  to  time  in  ^\•riting  for  that  ppose  appoint ;   And  that  the  co  and  to  be  open 

will  at  all  times  during  the  continuance  of  this  security  give  to  the  °^  ''^"^ 

trustees  or  trustee,  or  to  such  person  or  persons  as  afsd,  such  information 

as  they,  or  he,  or  any  of  them  shall  require  as  to  all  matters  relating  to 

the   sd  business   or  any  after   acquired  ppty  of  the  co,  or  otherwise 

relating  to  the  affairs  thereof;  Axd  will  not  pull  down  or  remove  any  Buildings,  &c. , 

dwelling-houses,   store-houses,   stations,  engine-houses,  buildings,  erec-  °°*  ^'^  ^^ 

*  '  '  f  pulled  down. 

tions,  furnaces,  forges,  foundries,  gins,  railways,  tramways,  wharfs,  on 
the  hereditamts  for  the   time   being   subject  to  this  security,  nor  the 
fixed  engines,  steam-engines,  plant,   machinery,   fixtures,   and   fittings 
finnexed  to  the  same  respively,  or  any  of  them,  without  the  previous  con- 
sent in  writing  of  the  trustees  or  trustee,  except  in  any  case  where  such 
pulling  down  or  removal  shall  be  rendered  necessary  by  any  of  the  last- 
mentioned  premes  being   worn  out  or  injured,  and  in  such  cases  will 
replace  the  premes  so  worn  out  or  injured  by  others  of  a  similar  nature 
and  of  at  least  equal  value  ;  Axd  will,  when  necessary,  renew  and  Renewal  of 
replace  all  moveal^le  engines,  plant,  machinery,  tools,  implemts,  utensils,  ™^    ^ 
and  other  effects  of  a  like  nature  now  used  or  hereafter  to  be  used  for 
the  ppose  of  or  in  connection  with  the  business  of  the  co,  when  and  as 
the  same  shall  be  worn  out  or  destroyed  ;  Axd  will  keep  the  sd  hcredita-  Premises  to 
mts  and  all  plant,  machinery,  works,  fixtures,  fittings,  implemts,  utensils,  j^Lak  • 
and  other  effects  therein  or  upon  the  same  respively,  and  used  for  the 
ppose  of  or  in  connection  with  the  sd  business  and  every  pt  thereof  in  a 
good  state  of  repair  and  in  perfect  working  order  and  condition  ;  Axd 
will  permit  the  trustees  or  trustee,  and  such  persons  as  they  or  he  shall 
from  time  to  time  in  WTiting  for  that  ppose  appoint  to  enter  into  and 
upon  the  same  hereds  respively  to  view  the  state  and  condition  thereof, 
and  of  all  plant,  machinery,  works,  fixtures,  fittings,  implemts,  utensils, 
and  other  effects  then  in  or  upon  the  same  respively,  and  used  for  the 
ppose  of  or  in  connection  with  the  sd  business ;  Axd  also  will  insure  and  and  insured, 
keep  insm-ed  such  of  the  mtged  premes  as  are  of  an  insurable  nature 
against  loss  or  damage  by  fire  in  their  full  value,  in  such  office  as  the 
trustees  or  trustee    shall  for  that  ppose  appoint,   and  will   duly  pay 
the  premiums  and  other  sums  of  money  payable  for  that  ppose,  and  im- 
mediately after  every  such  paymt  deliver  (if  required)  to  the  trustees  or 
trustee  the  receipt  for  the  same  ;  and  will  apply  all  monies  to  be  received 
by  virtue  of  any  such  policy  in  making  good  any  loss  or  damage  which. 

u  2 


DEBENTURES. 


Power  in 
default  for 
trustees  to 
repair  and 
insure ; 


Form  227.  may  so  arise  to  tlie  sd  premcs  or  any  of  them  ;  And  that  if  default  shall 
be  made  in  kec})!!!"-  the  sd  premes  iu  a  good  state  of  repair,  and  in  per- 
fect working  order  and  condition,  or  so  insured  as  afsd,  or  iu  delivering- 
any  such  receipt  as  afsd,  the  trustees  or  trustee  may  repair  the  sd  premes 
or  such  of  them  as  shall  in  their  opinion  require  reparation,  and  may 
insure  and  keep  insured  the  sd  premes  or  such  of  them  as  they  may 
deem  fit,  and  that  the  co  will  on  demand  repay  to  the  trustees  or  trustee 
every  sum  of  money  expended  for  the  above  pposes  or  any  of  them,  by 
them  or  him,  with  interest  at  the  rate  of  10  p.  c.  p.  a.,  from  the  time  of 
the  same  respively  having  l)een  expended,  and  that  until  such  repaymt 
the  same  shall  be  a  charge  upon  the  mtged  premes. 

Occasionally  an  attornment  clause  is  inserted,  but  it  is  not  usual  where  the 
debentures  are  secured  on  the  whole  assets.  See  form  in  Brown,  Bayley  4'- 
Bixon,  45  L.  T.  347.  The  effect  of  the  Bills  of  Sale  Act,  1882,  must  be  borne  in. 
mind. 


— for  payment 
of  salary  to 
trustees ; 


— special 
indemnity 
to  trustees. 


Power  for 
trustees  to 
retain  salary 
and  outgoings. 


21.  And  the  co  hby  covenants  with  the  present  trustees  that  the  co 
will,  in  each  and  every  year  during  the  continuance  of  this  security,  pay 
to  each  of  the  trustees  fur  tlic  time  being  of  these  presents,  as  and  by 
way  of  remuneration  for  his  services  as  trustee,  the  sum  of  [100?.} 

by  equal  half-yearly  paymts,  on  the  day  of  June  and  day 

of  December  in  each  such  year,  in  addition  to  all  travelling  and  other 
costs,  charges,  and  expenses  which  he  may  incur  in  relation  to  the 
execution  of  the  trusts  hl)y  in  him  reposed,  and  also  (in  addition  to  the- 
ordinary  right  to  indemnify  by  law  given  to  trustees)  will  at  all  times- 
hereafter  keep  indemnified  the  sd  trustees  and  each  of  them,  and  their 
and  his  heirs,  exs,  and  ads,  estates,  and  effects,  from  and  against 
all  actions,  proceedings,  costs,  charges,  claims,  and  demands  whatsoever, 
which  may  arise  or  be  brought  or  made  against  them  or  him  in  respect 
of  the  execution  of  the  trusts  hereof,  or  iu  respect  of  any  matter  or  thing- 
done  or  omitted  (without  their  or  his  own  wilful  default)  with  respect  or 
relating  to  the  premes  ;  Pro^dded  always  that  the  trustees  or  trustee 
may  retain  or  pay  to  themselves  or  himself,  out  of  any  monies  in  their 
or  his  hands  upon  the  trusts  of  these  presents,  the  amount  of  any  such 
remuneration  as  for  the  time  being  may  be  due  to  them  or  him,  or 
of  any  such  monies,  costs,  charges,  and  expenses,  claims  or  demands,  as 
afsd. 

22.  The  provisions  contd  in  the  fifth  schedule  hto  shall  have  effect  in 
the  same  manner  as  if  such  provisions  were  herein  set  forth. 

This  clause  and  the  fifth  schedule  can  be  omitted  if  thought  fit;,  but  see  no  te- 
at foot  of  that  schedule. 


23.  The  trustees  or  trustee  may  from  time  to  time  and  at  any  time 
waive,  on  such  terms  and  conditions  as  to  them  or  him  shall  seem 
expedient,  any  breach  by  the  co  of  any  of  the  covenants  in  these  presents 
contd. 

24.  The  trustees  or  trustee  may  delegate  to  any  person  or  persons  all 


FORMS.  293 

or  any  of  the  trusts,  powers  and  discretions  vested  in  them  by  these   Form  227. 
presents,  and  any  such  delegation  may  be  made  upon  such  terms  and 
conditions,  and  subject  to  such  regulations  (including  power  to  sub- 
delegate)  as  the  trustees  or  trustee  may  think  fit. 

A  clause  as  above  is  useful,  especially  where  a  trust  deed  includes  or  affects 
foreign  property. 

2,5.  AVhenever  there  shall  be  more  than  two  trustees  hereof,  the 
majority  of  such  trustees  shall  be  competent  to  execute  and  exercise 
all  the  trusts,  powers,  and  discretions,  hby  vested  in  the  trustees 
generally. 

The  above  clause  is  sometimes  found  useful. 

2G.  These  presents  are  not  intended  to  be  registered  as  a  l»ill  of  sale,  Deeds  not  to  be 
and  it  shall  not  be  incumbent  on  the  trustees  or  trustee  to  give  notice  to  registered. 
any  person  or  persons  of  the  assignmt  hinbefore  contd  of  choses  in  action  assi^n^ment 
belonging  to  the  co  unless  and  until  the  primary  trust  for  conversion  of  cLoses  in 
shall  have  arisen,  and  the  trustees  or  trustee  shall  have  determined  to  uot  be'^'^lven. 
execute  the  same,  and  they  or  he  shall  not  be  deemed  to  commit  a  breach 
of  trust  or  incur  any  lialtility  whatsoever  l)y  neglecting  or  omitting  so 
to  do. 

27.  Upon  proof  l^eing  given  to  the  reasonable  satisfon  of  the  trustees  Reconveyance 
or  trustee  that  all  the  debentures  entled  to  the  benefit  of  trusts  herein 

contd  and  for  the  time  being  issued,  have  been  pd  off  or  satisfied,  and 
upon  paymt  of  all  costs,  charges,  and  expenses  incurred  by  the  trustees 
vv  trustee  in  relation  to  these  presents,  the  trustees  or  trustee  shall  at 
the  request  of  the  co  reconvey  to  the  co  tlie  nitged  premes  or  such  part 
riiereof  as  may  remain  ^■ested  in  them  or  him,  fi'ced  and  discharged 
from  the  trusts  herein  contd. 

28.  The  statutory  power  to  appoint  a  new  trustee  or  new  trustees 
hereof  shall  be  vested  in  the  co. 

Sometimes  a  full  power  to  appoint  new  trustees  is  inserted.  Occasionally  the 
power  is  vested  in  the  company,  and  sometimes  in  the  debenture  holders.  In 
the  latter  case,  the  power  is  usually  made  exercisable  by  the  debenture  holders 
in  general  meeting.  Sometimes  express  power  to  resign  without  liability  for 
expense  is  conferred. 

Ix  Witness,  &c. 

THE    SCHEDULES   ABOVE   REFERRED   TO. 

First  Schedule. 
[  Par Uculars  offreelio  Ids .  ] 

Second  Schedule. 
\^Par  tic  alar  s  of  leaseholds.'] 

Third  Schedule. 
\_Particidars  of  a{/reemenf.'\ 


294  DEBENTURES. 

Form  227. 

Fourth  Schedule. 


[Here  insert  the  form  of  debenture.  It  may  be  framed  in  accordance  with 
Form  211,  and  will  purport  to  charge  all  the  company's  property  or  all  the  pro- 
perty not  comi^rised  in  the  indenture.  The  conditions  will  be  as  in  Form  2116, 
with  the  addition  of  the  provisions  as  to  drawings,  &c.,  in  Form  217.] 

Fifth  Schedule. 

1.  The  trustees  or  trustee  or  the  co  may  respively  at  any  time  convene  a 
meeting  of  the  debenture  holders.  [Sometimes  provision  is  made  for  convening 
a  meeting  pui-suant  to  a  requisition  by  debenture  holders.] 

2.  Seven  days  notice  at  the  least,  specifying  the  place,  day,  and  hour  of  meet- 
ing, shall  be  given  previously  to  any  meeting  of  the  debenture  holders.  Such 
notice  shall  be  given  by  advertising  the  same  twice  in  the  Times  newspaper, 
and  once  in  the  London  Gazette.  It  shall  not  be  necessary  to  specify  in  any 
such  notice  the  nature  of  the  business  to  be  transacted  at  the  meeting  thereby . 
convened. 

3.  At  any  such  meeting  persons  holding  one-fifth  of  the  nominal  amount  of 
the  debentures  for  the  time  being  outstanding  shall  form  a  quorum  for  the 
transaction  of  business ;  and  no  business  shall  be  transacted  at  any  meeting- 
unless  the  requisite  quorum  be  present  at  the  commencemt  of  business. 

4.  Some  person  nominated  by  the  trustees  or  trustee  shall  be  entled  to  take 
the  chair  at  every  such  meeting  ;  and  if  no  such  person  is  nominated,  or  if  at 
any  meeting  the  person  nominated  shall  not  be  jn-esent  within  fifteen  minutes 
after  the  time  appointed  for  holding  the  meeting,  the  debenture  holders  present 
shall  choose  one  of  their  number  to  be  chairman. 

5.  If  within  half-an-hour  from  the  time  appointed  for  any  meeting  of  the 
debenture  holders  a  quorum  is  not  present,  the  meeting  shall  stand  adjourned 
to  the  same  day  in  the  next  week  at  the  same  time  and  place  ;  and  if  at  such 
adjourned  meeting  a  quorum  is  not  present,  the  debenture  holders  present 
shall  form  a  quorum,  and  may  transact  any  business  which  a  meeting  of  the 
debenture  holders  is  competent  to  transact. 

6.  Every  question  submitted  to  a  meeting  of  the  debenture  holders  shall  be 
decided  in  the  first  instance  by  a  show  of  hands  ;  and  in  case  of  an  equality  of 
votes  the  chairman  shall,  both  on  the  show  of  hands  and  at  the  poll,  have  a 
casting  vote  in  addition  to  the  vote  or  votes  (if  any)  to  which  he  may  be  entled 
as  a  debenture  holder. 

7.  At  any  general  meeting  of  the  debenture  holders,  unless  a  poll  is  demanded 
by  at  least  three  debenture  holders,  a  declon  by  the  chairman  that  a  resolution 
has  been  carried,  or  carried  by  any  jjarlar  majority  or  lost,  or  not  carried  by  a 
parlar  majority,  shall  be  conclusive  evidence  of  the  fact. 

8.  If  at  any  such  meeting  a  poll  is  demanded  by  three  or  more  debenture 
holders,  it  shall  be  taken  in  such  manner,  and  either  at  once  or  after  an  ad- 
journmt  as  the  chairman  directs,  and  the  result  of  such  poll  shall  be  deemed 
to  be  the  resolution  of  the  meeting  at  which  the  poll  was  demanded. 

9.  The  chairman  may,  with  the  consent  of  any  such  meeting,  adjourn  the 
same  from  time  to  time. 

10.  Any  poll  demanded  at  any  such  meeting  on  the  election  of  a  chairman 
or  on  any  question  of  adjournmt,  shall  be  taken  at  the  meeting  without  ad- 
journmt. 

11.  At  any  such  meeting  as  afsd  the  resj^ive  bearers  of  the  debentui-es  and 
no  other  person  or  jjersons,  shall  Ije  recognised  and  treated  as  the  legal  holders 
thereof,  whether  the  same  be  payable  to  l^carer  or  to  the  registered  holder,  and 
accordingly  shall  he  entled  to  vote  in  respect  thereof. 

12.  At  every  such  meeting  each  debenture  holder  shall  be  entled  to  one  vote 
in  respect  of  every  principal  sum  of  501.  secured  by  the  debentures  of  which  he 
shall  be  the  holder. 


FOUMS.  295 

[Sometimes  as  regards  i*egistered  debentures  it  is  considered  expedient  to   Form  227. 
allow  voting  by  proxy.] 

13.  Where  the  trustees  or  trustee  shall  have  made  such  entry  as  afsd,  they  or 
he,  with  the  authority  of  a  special  resolution,  may,  at  any  time  afterwards,  give 
up  possession  of  the  premes  to  the  co  either  unconditionally  or  vipon  any  condi- 
tions that  may  be  arranged  between  the  co  and  the  trustees  or  trustee,  with  the 
sanction  of  a  special  resolution. 

14.  A  general  meeting  of  the  debenture  holders  shall,  in  addition  to  the 
power  hinbefore  given,  have  the  following  powers  exercisable  by  special  resolu- 
tion, namely: — 

(1.)  Power  to  sanction  the  release  of  any  of  the  mtged  premes. 

(2.)  Power  to  sanction  any  modification  or  compromise  of  the  rights  of  the 
debenture  holders  against  the  co  or  against  its  ppty,  whether  such  rights 
shall  arise  under  the  debentures  or  under  these  presents,  or  otherwise. 

15.  A  special  resolution  passed  at  a  general  meeting  of  the  debenture  holders, 
duly  convened  and  held  in  accordance  with  these  presents,  shall  be  binding 
upon  all  the  debenture  holders,  whether  present  or  not  present  at  such  meeting, 
and  each  of  the  debenture  holders  shall  be  bound  to  give  effect  thereto  accord- 
ingly. 

IG.  The  expression  "  special  resolution,"  when  used  in  this  schedule,  means 
a  resolution  passed  at  a  meeting  of  the  debenture  holders,  duly  convened  and 
held  in  accordance  with  the  provisions  herein  contd  by  a  majority  consisting  of 
not  less  than  three-fovirths  of  the  persons  entled  to  vote  thereat.  Provided 
that,  in  comjiuting  the  majority,  when  a  poll  is  demanded,  reference  shall  be 
had  to  the  number  of  votes  to  which  every  such  person  is  entled  under  these 
presents. 

17.  Minutes  of  all  resolutions  and  proceedings  at  every  such  meeting  as 
afsd  shall  be  made  and  duly  entered  in  books,  to  be  from  time  to  time  pro- 
vided for  that  ppose  by  the  trustees  or  trustee,  at  the  expense  of  the  co  ; 
and  any  such  minutes  as  afsd,  if  purporting  to  be  signed  by  the  chairman 
of  the  meeting  at  which  such  resolutions  were  passed,  or  proceedings  had,  or  by 
the  chairman  of  the  next  succeeding  meeting  of  the  debenture  holders,  shall 
be  conclusive  evidence  of  the  matters  therein  stated  ;  and  until  the  contrary  is 
proved,  every  such  meeting  in  respect  of  the  proceedings  of  which  minutes 
have  been  made,  shall  be  deemed  to  have  been  duly  held  and  convened,  and 
all  resolutions  passed  thereat  or  proceedings  had,  to  have  been  duly  passed 
and  had. 

[It  is  by  no  means  uncommon  now  to  insert  provisions  (as  above)  in  a  deben- 
ture trust  deed,  enabling  the  majority  to  bind  the  minority  in  respect  of  various 
matters.  The  Joint  Stock  Comi^anies  Ari-angement  Act,  1870,  gives  such  a 
power,  but  it  only  applies  when  the  company  is  in  liquidation.  Now  it  some- 
times happens  that  a  company  which  has  raised  a  large  sum  on  debentures  falls 
into  temporary  difficulties,  and,  though  a  large  majority  of  its  debenture 
holders  may  be  willing  to  give  time  or  make  some  reasonable  arrangement,  a 
minority  decline  to  concur,  and,  in  the  result,  the  company  is  forced  into  liquida- 
tion. The  insertion  of  provisions  as  above  meets  this  inconvenience,  and  may 
save  the  majority  from  the  tyranny  of  the  minority.] 

Note. — Sometimes  the  trust  deed  does  not  purport  to  convey  the  mortgaged 
premises  to  the  trustees,  but  contains  a  covenant  to  convey,  with  a  proviso  that 
the  covenant  shall  not  be  enforced  till  the  occurrence  of  certain  events. 


POLICIES. 


Notwithstanding  the  extent  of  the  insurauce  business  transacted  in 
the  United  Kingdom,  very  few  forms  of  pohcies  are  to  he  found  in  the 
hooks  of  precedents.  To  give  a  full  collection  would  require  more  space 
than  can  he  spared  in  this  work,  hut  tlie  following  forms  will  it  is  hoped 
in  some  degree  supply  what  the  draftsman  requires. 


PRECEDENTS. 

Form  228.       AViias   (hereinafter  called   the   assured)   desires   to   effect   an 

Skeleton  assurance  with  (hereinafter  called  the  co),  upon (1)  in  the 

policy.  sum  of  pounds,  (hereinafter  called  the  principal  sum  assured),  to 

be  payable  as  hereinafter   provided   [and   has  delivered   to   the   co   a 

proposal  and  declon  in  writing  dated  the day  of which  is  hhy 

declared  to  be  the  basis  of  the  contract  herein  contd]. 

Most  companies  provide  as  above  that  the  pi-oposal  and  declaration  shall  be 
the  basis  of  the  contract,  but  there  can  be  no  doubt  that  condition  1,  infra, 
p.  301,  affords  ample  protection  to  the  company  without  such  provision. 

And    Whas  the   assured    has   paid    to    the   co   the    sum    of  


pounds shilliugs  and pence  as  a  premium  in  respect  of  such 

assurance  until  the day  of . 

Xow  This  Policy  AVitnesseth  and  declares  that  if  • •  (2)  shall 

■  die  before  the day  of ,  or  if (3)  shall  live  beyond  that  day 

and  the  assured  shall  on  the day  of next  and  on  each  succeeding 

• day  of (4)  during  the  continuance  of  this  assurance,  pay  or 

cause  to  be  pd  to  the  co  the  premium  of pounds shillings 

and pence  or  such  reduced  premiums  as  may  from  time  to  time  be 

payable  in  respect  of  this  assurance,  Then    and  in  such  case  the  co 

shall  pay  to (5)  at  the  expiration  of  one  calendar  month  after  proof 

ghall  have  been  given  to  the  satisfon  of  the  co  of (6)  the  principal 

Bum  assured. 

A  few  companies  frame  their  policies  so  that  the  sum  assured  shall  be 
payable  upon  proof  being  given,  &c.,  without  providing  for  an  interval  and  a 
good  many  companies  whose  policies  allow  an  interval,  pay  at  once.  Three 
months  is  the  usual  interval  expressed  in  the  i^olicy. 


PRECEDENTS.  097 

This  policy entled  to  participate  in  profits  in  accordance  with  Form  228. 

the  co's  regulations. 

The  blank  in  the  above  clause  will  be  filled  up  with  the  -words  "  is,"  or  "  is 
not"  as  arranged.  This  plan  saves  needless  multiplication  of  policy  forms. 
But  a  great  many  offices  in  lieu  of  this  clause  add  to  the  preceding  clause  in 
the  ease  of  participating  policies  the  words  "  Together  with  such  sum  or 
sums,  if  any,  as  under  the  provisions  of  the  company's  regulations  shall  have 
been  appropriated  by  way  of  bonus,  and  added  to  the  principal  sum  assui-ed." 

This  policy  is  suhject  to  the  conditions,  [see  infrci.  p.  :^>01.  d  soq.'] 
indorsed  hereon  ^vllicll  are  to  l)e  deemed  pt  of  it, 

\_T)i  the  case  of  an  v /limited  Company  insert  the  ^^roviso  as  in  Form 

239,  and  in  case  of  a  Company  having  several  de2Kirfments  insert  Form 

240,  or  sonif  other  appropriate  form. '\ 

It  is  not  usual  to  make  policies  a  charge  on  the  assets,  and  accordingly,  if  a 
company  is  wound  up,  the  policy-holders  rank  jpai-t  passu  with  general  creditors. 
However  there  are  two  or  three  companies  who  give  a  charge,  e.g.  one  leading 
company  by  its  policy  declares  that  "the  capital  stock  and  funds  of  the  Co. 
shall  stand  charged  and  be  liable  to  pay,"  and  another  provides  that  "the 
insurance  shall  take  effect  only  as  a  charge  u^on  the  funds  by  the  constitution  , 
of  the  company  appropriated,"  &:c.  Now  that  the  validity  of  a  iloating  charge 
has  been  established  [supra,  p.  258]  it  would  seem  desirable  to  give  policy- 
holders a  pari  passu  charge.  They  seem  at  least  as  much  entitled  to  protection 
as  debentvire-holders.  -Re  Great  Britain  Mutual,  19  C.  Div.  39,  is  suggestive  on 
this  point :  there  the  company  was  insolvent  and  the  Court  made  an  order 
reducing  contracts,  but  held  that  all  overdue  poKcies  must  be  paid  in  full :  if 
there  had  been  a  charge,  a  winding-up  order  might  have  been  taken  and  a 
scheme  effected  under  the  Act  of  1870,  and  in  that  case  the  overdue  policy- 
holders would  have  been  compelled  to  abate  rateably  with  the  other  poKcies. 

Some  companies  have  a  large  number  of  different  printed  forms  of  policies : 
e.g.  (1)  own  life  with  profits;  (2)  ovra  life  without  profits;  (3)  own  life  for 
terms  of  years,  and  so  forth,  the  object  being  to  save  time  and  trouble  in 
issuing  policies.  Others  only  have  one  general  form  [e.g.  as  aljove ]  or  a  very 
limited  number  of  general  forms.  Form  228  can  be  used  as  a  general  form 
to  be  filled  up  as  occasion  requires  in  accordance  with  Forms  229  to  238,  infra, 
or  a  number  of  Forms  can  be  prepared  from  Form  228  and  the  Forms  last 
mentioned,  leaving  blanks  merely  for  dates,  names,  and  amounts. 

Ix  "Witness  whereof  the  co  hath  caused  its  commou  seal  to  be 
hereunto  affixed  this day  of . 

Note. — The  co's  principal  place  of  husiness  at  which  notices  of 
assignmfc  may  be  given  in  psuance  of  the  Policies  of  Assurance  Act, 
18G7,  is  at  [Xo. Street  in  the  City  of  London.] 

By  S.  4,  of  the  Act  of  1867,  (30  &  31  Vict.  c.  144)  above  mentioned,  an 
assurance  company  is  required  to  specify  on  every  policy  issued,  their  principal 
place  or  principal  places  of  biisiness  at  which  notices  of  assignment  may  be 
given  in  pursuance  of  the  Act. 

As  in  Form  228,  filling  in  the  numljered  l)lanks  as  follows  :  Q )  his  or  Form  229. 
her  own  life  ;  (2)  the  assured  :  (oj  he  or  she  ;  (5)  the  assured  ;  (0)  the  Ordinary  own 
death  of  the  assured.  ^'^^• 

As  in  Form  228,  filling  in  the  numbered  blanks  as  follows  :  (1)  his  [or  Form  230. 
her]  own  life  ;  (2)  the  assured  ;  (;■>)  he  [or  she]  ;  (b)  the  assured ;  (G)  the  oT~i-f  f„ 
death  of  the  assured  within  the  term  of years  from  the  date  hereof,  term  of  years. 


298 


POLICIES. 


Form  231.  As  in  Form  228,  filling-  in  the  numbered  Wanks  as  follows  :  (1)  his 
:r~r7 [or  herl  own  life  ;  (2)  the  assured  ;  (3)  he  [or  she]  ;  (4)  until  the 

Own  lite  pre-      <-  J  '\/  _  -,-,.. v,t  i/r.Ni^iij.i 

mium  for  term  day  of [i.e.  the  last  preninnn  day]  ;  (o)  the  assured  ;  (G)  the  death 

of  years.  ^^  ^.j^^  assured. 

Form  232.       As  in  Form  228,  filHng  in  the  numl)ered  l)lanks  as  follows  :  (1)  the 

^T^^ life  of  [B.]  ;  (2)  the  sd  [B.]  ;  (3)  he  [or  she]  ;  (.5)  the  assured  ;  (G)  the 

another.  death  of  the  sd  [B.]. 

Form  233.        As  in  Form  228,  filling  in  the  numhered  blanks  as  follows  :  (1)  his 
Endowment      ^wn  life  ;  (2)  the  assured  ;  (3)  he  [or  she]  ;  (5)  the  assured,  his  exs, 
own  life.          ads,  or  assig-ns  ;  (G)  the  death  of  the  assured,  or  of  his  [or  her]  having; 
attained  the  age  of years,  whichever  event  first  happens. 

Form  234.  As  in  Form  228,  filling  in  the  numbered  blanks  as  follows  :  (1)  the  life 
Endowment'  of  [B.]  ;  (2)  the  sd  [B.]  ;  (3)  he  [or  she]  :  (5)  the  assured  ;  («)  the  death 

life  of  another,  of  the  sd  [B.],  or  his  [or  her]  ha\-ing  attained  the  age  of years, 

whichever  event  first  happens. 

Form  235.  As  in  Form  228,  filling  in  the  numbered  blanks  as  follows  :  (1)  the 
^^  ^jg^^j^  ^j  ■  lives  of  B.  and  C.  ;  (2.)  the  assured  ;  (3)  he  [or  she]  ;  (5)  the 
survivor.  assured  ;  ((i)  the  death  of  the  survivor  of  the  sd  B.  and  C. 

Form  236.       As  in  Form  228,  filling  in  the  numbered  blanks  as  follows  :  (1)  their 
Joint  lives        joint  lives  ;  (2)  the  assured  ;  (3)  they  or  either  of  them;  (5)  the  survivor 
of  the  assured  ;  (G)  the  death  of  either  of  them. 

Form  237.  As  in  Form  228,  filling  in  the  blanks  as  follows  :  (1)  the  life  of  [B.]  ; 

Death  of  B  (")  ^^^^  assured  ;  (3)  he  [or  she]  ;  (."))  the  assured  ;  (G)  the  death  of 

provided  C.  B.  in  the  lifetime  of  C. 
then  living. 

Form  238.       As  in  Form  228,  filling  in  the  blanks  as  follows  :  (1)  his  own  life,  for 

Trr.f       I  the  benefit  of  his  wife  and  children,  pursuant  to  the  Married  Women's 

cJiiidren.  Property  Act,   1882 ;  (2)  the  assured  ;  (3)  to  the  trustee  or  trustees 

appointed,  pursuant  to  the  sd  Act,  or  in  default  of  notice  of  any  such 

appointmt  to  the  exs  or  ads  of  the  assured  the  principal  sum  assured  ; 

(G)  the  death  of  the  assured.     And  insert  also  the  following  : — 

This  policy  is  effected  for  the  benefit  of ,  the  wife  of  the  assured 

and  his  children  by  her,  and  the  policy  and  the  monies  payable  there- 
under, are  to  be  held  by  the  trustee  or  trustees  (which  expression  in 
this  policy  means  the  trustees  or  trustee  for  the  time  being  of  this 
policy,  or  the  monies  payable  thereunder,  including  the  assured,  whilst 
he  remains  a  trustee)  upon  the  trusts  following,  that  is  to  say,  upon 
such  trusts  in  favour  of  the  sd  wife  and  children  of  the  assured  as  the 
assured  shall  by  deed,  with  or  without  power  of  revocation,  or  by  will 
or  codicil  appoint,  and  subject  to  or  in  default  of  any  such  appointmt 


PRECEDENTS.  299 

upon  trust  to  invest  such  monies  in  or  upon  any  investmts  for  the  time  Form  238. 
being  iiuthorised  by  law  as  an  investmt  for  trustees,  with  full  dis- 
cretionary power  of  variation,  and  to  pay  the  income  of  the  sd  monies 
and  the  investmts  thereof  for  the  time  being  to  the  sd  wife  during  her 
life,  without  power  of  anticipation,  and  after  her  death  to  hold  the 
trust  premes  in  trust  for  all  or  any  such  one  or  more  of  the  children  of 
the  assured,  and  in  such  shares,  and  subject  to  such  conditions,  and  in 
such  manner  as  the  sd  wife  shall  from  time  to  time  by  deed,  with  or 
without  power  of  revocation,  or  by  will  or  codicil  appoint,  and  in 
default  of  and  subject  to  any  such  appointmt  as  last  afsd,  in  trust  for 
all  the  children,  or  any  the  child  of  the  assured,  who  being  male,  attain 
the  age  of  twenty-one  years,  or  being  female,  attain  that  age,  or  marry  : 
Provided  always,  that  no  cliild  who  takes  any  pt  of  the  trust  premes 
under  any  such  appointmt  as  last  afsd,  shall  be  entled  to  any  share  in 
the  unappointed  pt  without  bringing  the  pt  so  appointed  to  him  or  her 
into  hotch-pot :  Provided  also,  that  the  trustee  or  trustees  may  upon 
the  request  in  writing  of  the  sd  wife  during  her  life,  and  afterwards  at 
his  or  their  discretion  raise  any  pt  or  pts  not  exceeding  in  the  whole 
one-half  of  the  then  expectant  presumptive  or  vested  share  of  any  child 
of  the  assured  under  the  trusts  afsd,  and  apply  the  same  for  his  or  her 
advancemt  or  benefit. 

The  statutory  power  of  maintenance  and  education  is  to  be  applicable. 

Subject,  and  without  prejudice  to  the  trusts  afsd,  the  trust  premes 
are  to  be  deemed  pt  of  the  estate  of  the  assured. 

The  trustee  or  trustees  shall  have  al)solute  discretionary  power  at  any 
time — • 

(1)  To  assent  to  any  reduction  of  the  principal  sum  assured,  or  other 
modification  of  the  policy,  with  a  view  to  the  diminution  or  extinction 
of  subsequent  premiums. 

(2)  To  assent  to  the  applicon  of  any  bonus  with  the  like  view. 

The  trustee  or  trustees  shall  not  be  under  any  obligation  to  keep  the 
policy  on  foot,  or  be  responsible  for  any  loss  occasioned  by  its  becoming- 
void  by  any  means. 

As  provided  by  the  sd  Act  the  assured  may  by  any  memorandum 
under  his  hand  appoint  a  trustee  or  trustees  of  the  monies  payable  under 
the  policy,  and  from  time  to  time  appoint  a  new  trustee  or  new  trustees 
thereof. 

Sect.  11  of  The  Married  Women's  Property  Act,  1882  (15  &  46  Vict.,  c.  7o}, 
provides  as  follows  : — 

11.  "A  married  -woman  may  by  virtue  of  the  power  of  making  contracts 
hereinbefore  contained  effect  a  policy  upon  her  own  life  or  the  life  of  her 
husband  for  her  separate  use ;  and  the  same  and  all  benefit  thereof  shall  enure 
accordingly. 

"A  policy  of  assurance  effected  by  any  man  on  his  o^vn  life,  and  exin-essod 
to  be  for  the  benefit  of  his  wife,  or  of  his  children,  or  of  his  wife  and  children, 
or  any  of  them,  or  by  any  woman  on  her  own  life,  and  expressed  to  be  for  tlie 
benefit  of  her  husband,  or  of  her  children,  or  of  her  husband  and  children,  or 
any  of  them,  shall  create  a  trust  in  favour  of  the  objects  therein  named,  and 
the  monies  payable  under  any  such  policy  shall  not,  so  long  as  any  object  of 


300 


POLICIES. 


Form  238.    I^he  trust  remains  unperformed,  form  part  of  the  estate  of  tlie  insured,  or  be 

" subject  to  his  or  her  debts :  Provided,  that  if  it  shall  be  proved  that  the  policy  was 

effected  and  the  premiums  paid  with  the  intent  to  defraud  the  creditors  of  the 
insured,  they  shall  be  entitled  to  receive,  out  of  the  moneys  payable  under  the 
policy,  a  sum  equal  to  the  premiums  so  paid.  The  insured  may  by  the  policy,  or 
Ytj  any  memorandum  under  his  or  her  hand,  appoint  a  trustee  or  trustees  of  the 
monies  payable  under  the  poKcy,  and  from  time  to  time  appoint  a  new  trustee  or 
new  trustees  thereof,  and  may  make  provision  for  the  appointment  of  a  new 
trustee  or  new  trustees  thereof,  and  for  the  investment  of  the  monies  payable  under 
any  such  policy.  In  default'of  any  such  appointment  of  a  trvistee,  such  policy, 
immediately  on  its  being  effected,  shall  vest  in  the  insured  and  his  or  her  legal 
l^ersonal  rej^resentatives,  in  trust  for  the  purj^oses  aforesaid.  If,  at  the  time  of 
the  death  of  the  insured,  or  at  any  time  afterwards,  there  shall  be  no  trustee, 
or  it  shall  be  expedient  to  apijoint  a  new  trustee  or  new  trustees,  a  trustee  or 
trustees  or  a  new  trustee  or  new  trustees  may  ])e  appointed  by  any  court  having 
jurisdiction  under  the  provisions  of  the  Trustee  Act,  iSoO,  or  the  Acts  amending 
and  extending  the  same.  The  receipt  of  a  trustee  or  trustees  duly  appointed, 
or,  in  default  of  any  such  aiJiiointment,  or  in  default  of  notice  to  the  insurance 
office,  the  receipt  of  the  legal  personal  representative  of  the  insured  shall  be  a 
discharge  to  the  office  for  the  sum  secured  by  the  policy,  or  for  the  value 
thereof,  in  whole  or  in  part." 

The  forms  used  for  the  purposes  of  this  section  vary  considerably  :  those  of 
some  companies  being  well  expressed,  and  those  of  others  the  reverse.  The 
above  [Form  238]  can  readily  be  altered  to  any  form  authorised  by  this 
section. 

It  will  be  observed  that  the  section  jjrovides  that  the  policy  shall  create  a 
trust  in  favour  of  the  objects  therein  named,  and  some  companies  act  on  the 
footing  that  these  words  render  it  necessary  to  give  the  proper  names  of  the 
objects  ;  but  there  seems  no  foundation  for  this  notion. 

In  Be  Adams  Policy  Trusts,  23  C.  D.  525,  a  policy  was  effected  under  the 
Married  Women's  Property  Act,  1870,  for  the  benefit  of  the  assured's  "wife  A. 
and  the  children  of  their  marriage  ;"  and  it  was  held,  not  without  some 
difficulty,  that  the  proper  construction  was  that  the  wife  was  to  take  for  life, 
with  remainder  to  the  children  as  joint  tenants. 


Torm  239. 

Policy  of 
unlimited 
"ComxJany. 


Whas,  proposal,  &c.,  \_siiji)ya,  Form  228.] 
And  Whas,  paymt  of  premium,  &c.  \_supra,  Form  228.] 
NOW   THIS    POLICY   WITNESSETH  and  declares  that  if,  &c. 
lAs  ill  Form  228.] 

Then,  and  in  such  case,  the  funds  and  ppty  of  the  co  shall,  according- 
to  the  provisions  of  the  eo's  [deed  of  settlemt]  be  subject  and  liable  to 
])ay  and  satisfy  to  the  exs,  &c, 

[Another  form  is  "  Then,  and  in  such  case,  the  co  will,  out  of  its 
funds  and  ppty,  pay,"  &c.,  as  in  Form  228.] 

Provided  always  that  the  funds  and  ppty  of  the  co  shall  alone  be 
liable  to  answer  and  make  g-ood  all  claims  and  demands  under  or  by 
virtue  of  this  policy,  and  that  no  shareholder  in  the  co  shall  in  any  case 
be  liable  to  contribute  to  the  funds  of  the  co  more  than  the  unpaid 
pt,  if  any  of  his  or  her  share  or  shares  in  the  capital  thereof  [and  that 
after  the  transfer  of  any  share  has  been  duly  registered  in  accordance 
with  the  provisions  of  the  sd  deed  of  settlemt,  the  transferee  shall  be 
answerable  for  the  unpaid  pt  of  any  such  share  in  exoneration  of  the 
transferor,] 


PRECEDENTS.  301 

It   is   well   settled  that    a  policy  framed  as    above  effectually   limits  tlie   Form  239. 

liability  of  the  shareholders.     Hallett  v.  Doiodall,  18  Q.  B.  2 ;    Lethbridge  v. 

Adams,  13  Eq.  5-17  ;  Host's  case,  1  C.  Div.  307;  Lindley,  378.  In  Mclver's  case, 
ubi  supra,  Giffard,  L.J.,  was  of  opinion  that  the  provision  that  the  funds  shall 
be  liable  to  pay  effectually  limited  the  liability,  and  that  the  proviso  did  not 
carry  the  matter  any  further,  i.  e.,  was  superfluous. 

It  is  also  settled  that  a  policy  so  framed  creates  no  lien  or  charge  on  the 
property  of  the  company,  and  accordingly  that  policy  holders  have  no  jiriority 
over  general  ci-editors,  or  inter  se.  State  Fire  Insurance  Co.,  1  De  G.  J.  &  S. 
634;  Be  International  Society,  Mclver's  claim,  5  Ch.  421. 

This  policy  is  issued  out  of  the  life  deiiartint  of  the  co,  and  the  funds  Form  240. 
and  ppty  of  the  co  for  the  time  being  appropriated  to  the  satisfon  of  ciau.se  where 
claims  upon  life  policies,  as  specified  in  clause        of  the  co's  articles  of  several 
association,  shall  alone  he  liable  to  pay  and  make  o-ood  all  claims  under 
or  by  virtue  of  this  policy. 

Where  a  company  has  several  branches,  e.g.,  fire,  life,  and  marine,  the 
i*egulations  generally  provide  for  keeping  the  funds  of  each  branch  separate ; 
and  in  such  case  the  policies  should  be  framed  accordingly. 


CON'DITIONS 

For  Use  in  connection  iviiJi  tlic  above  Policies, 

According  to  present  practice  the  following  are  faii-ly  liberal  conditions ;   Form  241. 

biit  there  is  a  general  tendency  to  increased  liberality.     That  the  conditions      . 

bind  the    assured,  see   Macdonald    v.   T/ie    Law  Union,  L.    E.    9  Q.   B.    ;528 ;  ^.^^^'^^^^''f^®'^*^" 
A    J  TTx  7  J    1  Ti    T    /-I    ^oi  '  tion  and  non- 

Anderson  v.  Fitzgerald,  4  H.  L.  C.  484.  disclosure 

1.  If  the  proposal  and  declon,  on  the  l)asis  of  which  a  policy  is  effected, 
contains  any  untrue  statcmt,  or  fails  to  disclose  any  material  fiict,  the 
policy  shall  l)e  void. 

The  policies  of  almost  all  the  British  companies  refer  to  a  jjroposal,  or  some 
other  preliminary  document,  and  make  it  the  basis  of  the  contract,  and  also 
insert  a  condition  as  above.  A  policy  so  framed  is  voidable,  if  the  declara- 
tion or  proposal  contain  a  single  misstatement,  whether  material  or  not,  and 
whether  made  fraudulently  or  innocently. 

But  of  late  years  a  good  many  companies  have  adopted  qualifying  con- 
ditions, as  below  (2),  which  relax  to  some  extent  the  extreme  severity  of  the 
foregoing  condition  ;  and  this  relaxation  is  gradually  extending. 

2.  Nevertheless,  where  a  policy  has  endured  for  five  years,  it  shall  1)0  When  policy 
indisputable  and  unchallengeable  on  any  ground  connected  with  such  ^^'^  ^"^^^      ^' 
proposal  and  declon,  any  error  in  age  being  dealt  with  in  accordance  with 
condition  3. 

Such  a  condition  as  the  above  adds  considerably  to  the  value  of  a  policy, 
whether  regarded  as  an  investment,  security  for  money,  or  settlement :  and 
with  more  or  less  modification  it  is  adopted  by  a  good  many  companies.  Some, 
however,  add  the  words,  "  except  in  case  of  fraud  ;"  but  the  addition  goes  far 
to  render  the  protection  ostensibly  conferred  by  the  clause  illusory ;  for 
persons  dealing  with  the  policy  can  never  be  certain  that  it  does  not  suffer 
from  some  latent  flaw. 

A  few  companies  protect  as  from  the  date  of  the  policy  the  interests  of  third 


,302  POLICIES. 

Form  241.  parties  ;  and  the  value  of  this  jDrotection  cannot  be  overrated.  The  following' 
is  an  example  : — 

"  Notwithstanding  the  first  condition,  all  policies  shall  so  far  as  regards  the 
beneficial  interests  of  third  persons  be  indisputable  and  unchallengeable ; 
and  all  policies  whatsoever  which  shall  have  been  in  force  for  five  years  shall 
be  in  like  manner  indisputable  and  unchallengeable :  Provided,  &c."  [as  to 
error  in  age] . 

Several  companies  use  a  condition  to  the  effect  that — "  This  policy  is  in- 
disputable on  the  ground  of  any  error  in  the  proposal,  any  error  in  age  being 

allowed  for  in  the  manner  stated  in  the th  condition."     Such  a  condition 

is  better  than  none  ;  but  "  error  "  could  scarcely  be  held  to  cover  fraud  ;  and 
accordingly  the  policy  cannot  be  relied  on  as  indisputable. 

Some  companies  make  the  policy  indisputable  as  above,  where  it  has  endured 
for  five  years,  and  the  age  of  the  life  assured  thereby  has  been  admitted.  This 
condition  is  used  where  the  jDolicy  contains  no  provision  as  to  error  in  age, 
similar  to  condition  3. 


Error  as  to  g,  jf  the  age  of  a  person  wliose  life  is  assured  exceeds  that  stated  in 

the  proposal,  the  policy  will  not  on  that  account  be  void,  but  such  a  sum 
will  be  payable  thereunder  as  would  have  been  assured  for  the  premium 
actually  pd  if  the  age  had  been  correctly  stated. 

This  condition  is  adopted  by  several  companies  :  some  add  the  words  "  ex- 
cept m  case  of  fi-aud,"  but  the  addition  is  open  to  the  objection  referred  to  in 
the  note  to  condition  2.  A  few  companies  so  frame  the  condition  that  it  only 
operates  when  the  directors  think  fit,  but  such  a  provision  is  objectionable. 

^^V^^-  4.  A  policy  will  become  void  where  a  premium  is  not  pd  within  one 

calendar  month  after  it  becomes  due  ;  but  should  the  person  whose  life 
is  assured  die  within  such  calendar  month,  the  ijremium,  if  unpaid,  will 
be  deducted  from  the  sum  assured  on  settlemt  of  the  claim. 

Thirty  days  of  grace  is  usual. 

As  to  the  circumstances  in  which  a  person  paying  the  premium  may  obtain 
a  lien  on  the  policy,  see  Leslie  v.  French,  23  C.  D.  552. 

Eenewal.  5,  A  policy  which  has  become  void  for  non-paymt  of  premium  may 

be  renewed  at  any  time  within  twelve  calendar  months  after  it  becomes 
void  upon  paymt  of  the  premium  in  arrear  with  interest  thereon  at 
the  rate  of  5  p.  c.  j)cr  month  [and  upon  proof  being  given  to  the  satisfon 
of  the  CO  of  the  unimpaired  health  of  the  person  whose  life  is  assured]. 

The  conditions  as  to  the  revival  of  a  lapsed  policy  vary  much.  In  many 
cases  the  condition  as  above  allows  of  the  revival  of  a  policy  within  a  specified 
period  on  payment  of  the  premium  in  arrear  with  a  fine,  and  on  proof  of  the 
unimpaired  health  of  the  life.  The  period  is  usually  three,  six,  or  more  com- 
monly, twelve  months  from  the  lapse,  and  the  fine  is  usually  10s.  and  sometimes 
5s.,  or  20s.  per  cent,  on  the  sum  assured.  Some  companies  are  more  liberal,  and 
instead  of  a  per  centage  on  the  sum  assured,  charge  interest  (e.g.,  five  per  cent, 
per  annum,  or  five  per  cent,  per  month)  on  the  premium  in  arrear.  A  few 
companies  do  not  require  any  proof  of  health  on  revival,  but  most  do.  Some 
dispense  with  the  proof  upon  the  revival  of  a  policy  which  has  lapsed  after 
being  in  force  for  more  than  five  years. 

One  important  company  allows  a  policy  which  has  lapsed  after  being  in  force 
for  more  than^re  years  to  be  revived  within  twelve  months  on  payment  of  the 


PEECEDENTS.  303 

overdue  premium  Avith  interest  at  five  per  cent,  per  month  thereon,  hut  only    Form  241. 
allows  the  revival  of    other  policies  upon  payment  of  the  overdue  premium 
with  a  fine  of  10s.  per  cent,  on  the  sum  assured. 

A  few  companies  use  conditions  which  prevent  forfeiture  without  application 
on  the  part  of  the  assiu-ed. 

Thus  one  office  declares  that  non-payment  of  a  premium  within  the  days  of 
grace  is  not  to  void  a  policy  "  provided  its  surrender- value  after  deduction  of 
all  debts  in  respect  of  unpaid  premiums  or  otherwise  (if  any)  is  sufficient  to  pay 
the  premium  in  arrear,  in  which  case  the  premiums  shall  be  held  to  be  a  debt 
upon  the  policy  bearing  interest  at  five  per  cent,  per  annum  until  paid.  If, 
however,  the  surrender-value  subject  to  deduction  as  aforesaid  be  not  sufficient 
to  pay  the  premium,  [power  to  renew  within  thirteen  months.] 

Several  offices  provide,  in  the  event  of  lapse,  for  the  issue  of  a  paid-up  policy 
for  the  equivalent  of  the  surrender-value  or  for  some  other  amount.  Thus  one 
office  provides  that  "  if  after  the  payment  of  five  years'  ordinary  premium  the 
assured  shall  be  unable  to  continue  the  assurance  he  may  receive  a  free  policy 
for  the  full  amount  of  the  ordinary  premiums  paid,  provided  the  application 
for  such  free  policy  be  made  within  thirty  days  from  the  time  of  the  premium 
(which  he  is  unable  to  pay)  becoming  due." 

The  following  is  another  form  : 

"  In  case  of  a  lapsed  policy  the  surrender-value  at  the  time  of  lapse  will 
he  allowed  to  the  legal  holder  at  any  time  within  five  years  from  the  date  of 
lapse,  the  option  being  given,  subject  to  the  production  of  satisfactory  proof  of 
the  life  being  in  good  health,  of  receiving  a  paid-up  policy  in  lieu  of  the  sur- 
rendei'-vakie."  A  good  many  offices  now  publish  tables  of  surrender-value. 
It  is  singular  how  much  they  differ. 

G.  Where  an  assurance  is  fur  the  whole  term  of  life  by  a  limtcT  Non-forfeiture 
number  of  premiums,  or  is  made  payable  on  the  attainmt  of  a  yiven  age,  °i  endowments, 
or  at  death  if  previous,  then,  if  at  any  time  after  the  assurance  has  been 
in  force  for  three  years  a  premium  is  not  pd  within  thirty  days  from  the 
day  on  -which  it  becomes  due,  and  the  person  whose  life  is  assured  is 
then  li\dng,  the  policy  shall  not  become  wholly  void,  but  shall  remain  in 
force  for  a  reduced  amount,  bearing  such  proportion  to  the  principal  sum 
assured  as  the  number  of  full  years'  premiums  actually  pd  shall  bear  to 
the  nmnber  of  full  years'  premiums  originally  made  payable,  and  thence- 
forth the  same  shall  Ijc  exempt  from  premiums,  and  in  the  event  of  any 
such  reduction  all  additions  by  way  of  reversionary  bonus  (if  any)  in 
respect  of  the  policy  shall  be  reduced  in  like  proportion.  This  condition 
is  without  prejudice  to  Condition  5. 

A  considerable  number  of  companies  act  on  the  rule  laid  down  in  the  above 
condition  and  frame  their  policies  or  conditions  accordingly.  And  the  condi- 
tion is  so  obviously  fair  that  it  seems  likely  to  be  generally  adopted.  It  is  an 
importation  from  Amei'ica. 

7.  A  premium  will  not  be  considered  as  jDd,  unless  a  printed  official  Receipts, 
receipt  signed  by  a  director  and  countersigned  by  the  secretary  or  by  one 

of  the  agents  of  the  co  shall  have  been  given  for  the  same. 

A  condition  as  above  is  very  commonly  used. 

8.  A  jjerson  whose  life  is  assured  may  reside  in  any  pt  of  Europe,  Kesidences  and 
Madeira,  the  North-American  colonies,  the  Australian  colonies,  Tasmania,  *'"^"^'6^- 

New  Zealand,  the  South  African  colonies,  and  any  pt  of   the  world 


304. 


POLICIES. 


Form  241.  (except  Asia)  north  of  33°  N.  lat.  and  south  of  32°  S.  lat.,  and  may 
travel  l)y  sea  or  land  within  these  limits,  and  also,  if  not  of  seafaring- 
occupation,  may  pass  in  first-class  steam  or  sailing  vessels  from  any 
place  within  the  northern  limits  to  any  place  within  the  southern  limits, 
and  vice  versa.  But  a  policy  shall  be  void  if  a  person  whose  life  i.s 
assured  thereby  shall  (without  previously  obtaining  the  licence  of  the 
co)  go  beyond  the  afsd  limits,  except  for  the  ppose  of  passing  as  above 
mentioned.  Permission  will  be  granted  on  paymt  of  such  additional 
premium  as  the  co  may  require. 

The  limits  for  residence  and  travel  vary  considerably.  Some  companies  use 
very  strict  conditions,  but  most  companies  are  much  more  liberal. 

As  regards  residence : 

Within  33°  of  the  equator  is  a  common  limit.  Some  comj^anies  give  liberty 
to  visit  and  reside  in  any  part  of  the  world  (Asia  excepted)  situate  to  the  north 
of  35°[or,  33"]  N.  Lat.,  and  south  of  30°  \_or,  31"]  S.  Lat.,  and  to  travel  by  sea  ' 
or  land  within  those  limits.  Other  companies  permit  the  assured,  not  toeing"  a 
seafaring  person,  during  peace  to  proceed  to  and  reside  in  any  part  of  Europe, 
the  Mediterranean,  the  Canary  Islands,  the  Azores,  and  North  America  north 
of  33°  N.  Lat. 

Some  companies  permit  the  life  assured  to  proceed  to  and  reside  in  any  part 
of  Europe,  Madeira,  the  Azores,  the  Canary  Islands,  the  Islands  of  the  Medi- 
terranean, Egypt,  north  of  25°  N.  Lat.,  the  Holy  Land,  Australia,  New  Zealand. 
Cape  Colony,  Natal,  and  America,  north  of  35°  N.  Lat.,  without  extra  in-emium. 

One  company,  which  does  a  considerable  business,  permits  the  life  to  proceed, 
without  extra  jjremium,  and  reside  in,  any  part  of  Europe,  with  the  exception 
of  such  parts  as  are  included  within  a  right  angle  formed  Vjy  two  lines  sxipjiosed 
to  be  drawn  from  Eagusa,  in  Dalmatia,  the  one  due  south,  and  the  other  due 
east.     This  is  singularly  strict. 

Another  important  office  jjermits  all  persons  not  seafaring  by  occupation 
diiring  peace  to  go  to  reside  in  or  return  from  any  part  of  the  woi'ld  north  of 
33°  N.  Lat.,  or  south  of  30°  S.  Lat.,  or  any  place  on  the  African  coast  of 
the  Meditei-ranean,  Egypt,  the  Holy  Land,  Madeira,  the  Canary  Islands,  the 
British  Possessions  in  South  Africa,  except  Mauritius,  and  the  Australian 
Colonies,  without  extra  premium. 

As  to  travel : 

Most  companies  permit  travelling  within  the  prescribed  limits  free.  A  few 
allow  travelling  in  any  part  of  the  world.  Some  so  frame  their  conditions 
that,  although  residence  abroad  is  permitted  a  licence  must  be  obtained  for  the 
journey  there.  But  the  conditions  of  a  good  many  of  the  best  offices  permit 
the  journey  from  the  northern  to  the  southern  limits  without  licence  or  extra 
premium.  Occasionally,  however,  it  is  provided  that  the  life  must  not  remain 
in  any  particular  country  within  the  prohibited  limits  for  a  longer  time  than 
one  calendar  month.     See  further  the  note  to  condition  2. 

Occupation.  9,  A  policy  will  be  void  if  the  person  whose  life  is  assured  shall  with- 

out the  permission  of  the  directors  first  obtained,  voluntarily  and  know- 
ingly go  within  the  limits  of  actual  military  operations  or  occupation 
in  time  of  war  or  foreign  insurrection  (his  previous  usual  place  of  resi- 
dence not  having  been  within  such  limits). 
Occasionally  a  condition  as  above  is  inserted. 


10.  A  policy  shall  be  void  if  a  person  whose  life  is  assured  thereby 


Military  and 

proceedings.      shall  engage  in  any  military  or  naval  sei-vice  (except  the  volunteer  or 


POEMS.  30f 

militia  service),  or  being  a  military  or  naval  person  shall  be  engaged  or  Form  241. 
employed  in  any  military  or  naval  capacity  daring  actual  war,  or  being  a 
seafaring  person  shall  go  upon  the  sea  in  the  course  of  his  occupation, 
unless  the  permission  of  the  co  shall  have  been  previously  obtained. 
Such  permission  will  be  granted  on  the  paymt  of  such  additional  pre- 
mium as  shall  be  required  by  the  co. 

The  above  condition  is  generally  used  with  more  or  less  modification. 

As  regards  military  and  naval  service,  the  following  are  some  of  the  alterna- 
tive forms  in  use  by  different  comi^anies  ; — 

(a.)  Shall  be  engaged  or  emi^loyed  on  actual  service  in  any  military  or  naval 
capacity. 

(b.)  Shall  be  engaged  in  any  military,  naval,  coastguard  or  preventive  ser- 
vice out  of  the  United  Kingdom. 

(c.)  Shall  die  in  consequence  [this  seems  fair^  of  having  been  engaged  or 
employed  in  actual  service  in  any  military  or  naval  capacity. 

(cl.)  If  the  life,  being  or  becoming  a  military  man,  shall  at  any  time  enter 
into  active  military  service  out  of  the  United  Kingdom. 

(e.)  Shall  die  in  or  in  consequence  of  any  actual  naval  or  military  service 
(service  in  local  militia  or  volunteer  corps  within  the  United  Kingdom 
excepted). 

Formerly  the  policies  of  a  good  many  companies  contained  provisions  in 
regard  to  other  hazardous  occupations  besides  naval  and  military,  but  they  are 
noAv  rarely  found.  However,  one  company  avoids  its  jjolicies  if  the  life  "  en- 
gages in  any  occupation  involving  any  unusual  risk  to  life  or  health,"  and 
another  avoids  its  policies  if  the  life  "  engages  in  any  hazardous  occupation, 
such  as  that  of  miner,  engine-driver,  railway  guard,  or  publican,  unless  with 
the  previovis  permission,"  &c.  And  the  leading  American  companies  which  do 
business  here  insert  in  their  policies  a  long  list  of  hazardous  occupations. 

11.  So  for  as  regards  the  beneficial  interests  of  third  parties  a  policy  Protection  of 
shall  not  become  void  under  the  8th,  *.)th,  or  10th  condition,  provided  *^'"'^  parties. 
such  additional  premium  as  the  directors  require  be  pd  ^vithin  fourteen 

days  after  the  fact  which,  l)ut  for  this  condition,  would  have  caused  the 
forfeiture  of  the  policy  comes  to  the  knowledge  of  such  parties,  and  this 
jirovision  shall  hold  good  notwithstanding  the  death  of  the  person  whose 
life  is  assured  before  such  notice  shall  have  been  given. 

This  very  desirable  condition  is  occasionally  found,  but  the  great  majority  of 
the  companies  either  leave  conditions  8,  9  and  10  unqualified,  or  adopt  a  condi- 
tion as  follows  : — 

12.  After  a  policy  has  remained  in  force  for  [five]  years  of  the  jierson  Further  pro- 
Avhose  life  is  assured  (not  being  of  a  military  or  seafaring  occupation)  *|'*:*'i|'"  ^'^ 
has  attained  the  age  of  [thirty],  it  shall  thenceforth  be  free  from  all 
restrictions  as  to  residence,  travel,  or  occupation,  provided  extra  pre- 
miums have  not  been  incurred  during  the  preceding  period. 

A  condition  as  above  is  now  very  commonly  adopted.  Some  companies  go 
even  further,  and  free  a  policy  at  any  time  from  all  conditions  as  to  residence 
and  travel  in  consideration  of  a  single  extra  jiremium  of  small  amount  {e.g., 
10s.  or  5s.  per  cent,  on  the  sum  assured)  and  on  evidence  being  adduced  that 
there  is  no  prospect  of  the  life  going  beyond  the  limits.  And  other  companies 
free  the  policy  in  like  manner,  upon  such  evidence  being  adduced,  without 
requiring  an  extra  premium. 

X 


306 
Form  241. 


POLICIES. 

One  leading  office  inserts  in  all  its  ordinary  policies  a  provision  that  "  The 
person  whose  life  is  assured  by  this  policy  may,  without  payment  of  any  extra 
premium,  proceed  to  and  reside  in  any  part  of  the  world,  or  engage  in  any 
trade,  occupation  or  profession,"  and  only  inserts  limits  of  travel,  &c.,  in  special 
circvimstances. 


Suicide,  jg_    \  policy  will  become  void  if  the  person  whose  life  is  assured  shall 

"'      '     die  by  duelling,  or  by  his  own  hands,  or  by  the  hands  of  justice,  within 

thirteen  calendar  months  from  the  date  thereof,  except  to  the  extent  of 

any  &o?k^//^/(?  interest  which  any  other  person  may  have  acquired  therein. 

Most  companies  adopt  a  condition  in  reference  to  death,  as  above.  A  few 
omit  any  reference  to  duelling  as  obsolete.  The  limit  of  time  fixed  by  some 
companies  is  six  months :  thirteen  months  is  a  common  limit,  but  five  years  is 
adopted  by  several  companies.  A  few  companies  place  no  limit  as  to  time,  but 
protect  third  pai'ties.  The  words  "die  by  his  own  hands,"  and  "commit  sui- 
cide," extend  to  all  cases  of  voluntary  self-destruction,  except,  perhaps,  where 
the  life  is  incapable,  by  reason  of  insanity  or  otherwise,  of  understanding  the 
consequences  of  his  act.  Borradaile  v.  Hunter,  5  M.  &  G.  639 ;  Glift  v.  Schwahe, 
3  C.  B.  437  ;  17  L.  J.  C.  8.  Some  companies  add  the  words  "sane  or  insane" 
after  the  words  "  by  his  own  hands."  These  words  seem  to  cover  every  case  of 
self  destruction. 

Any  legal  or  equitable  charge  or  assignmentwould  constitute  a  6o7i«/cle  interest. 
White  V.  British  Empire  Co.,  7  Eq.  394..  And  the  exception  operates  even  where 
the  estate  of  the  life  assured  benefits  thereby,  and  as  regards  an  interest  vested 
in  the  company,  e.g.,  as  mortgagee.  See  the  above  case,  and  Solors.  Gen.  Soc. 
V.  Lamb,  2  De  G.  J.  &  S.  251. 

Having  regard  to  these  cases  some  companies  provide  that  in  the  event  of 
suicide  the  policy  shall  be  void  so  far  as  any  money  is  payable  thereunder  to  or 
for  the  benefit  of  the  estate  of  the  person  so  committing  suicide,  but  give  pro- 
tection to  bond  fide  interest  of  other  persons.  At  least  one  company  provides 
that  in  the  event  of  the  policy  Ijecoming  void  under  a  condition  as  above,  the 
company  will  return  to  the  assured  the  gross  amount  of  the  premiums  paid. 

The  conditions  adopted  by  several  companies  only  preserve  the  interests  of 
third  parties  where  they  have  been  acquired  for  valuable  consideration.  This 
seems  reasonable  enough,  but  some  companies  require  that  notice  of  the  exist- 
ence of  the  interest  shall  be  given  to  the  company  before  the  death:  this 
seems  objectionable. 

Instalments.  14.  Where  the  premium  is  payable  by  quarterly  or  half-yearly  instal- 

mts  and  the  person  whose  life  is  assured  dies  before  the  paymt  of  all 
the  instalmts  for  the  current  year  of  assurance  have  become  due  and 
been  pd,  the  unpd  instalmt  or  instalmts  shall  be  deducted  from  the  sum 
assured. 

A  condition  as  above  is  very  commonly  used.  It  does  not  prevent  forfeiture 
where  an  instalment  is  not  duly  paid.  Phcenix  Co.  v.  Sheridan,  8  H.  L.  745. 
Query,  whether  it  would  not  be  fairer  to  provide  that  for  the  purposes  of 
conditions  4,  5,  and  7,  each  instalment  shall  be  deemed  a  premium. 


Proof  of  death, 

iiC. 


15.  On  the  occuiTence  of  the  event  on  which  the  sum  assured  is  to 
become  payable,  such  evidence  must  be  produced  as  the  directors  require 
to  establish  the  claim,  and  unless  the  age  of  the  person  whose  life  is 
assured  shall  have  been  previously  admitted,  proof  thereof  must  be 
furnished 


FOEMS. 


307 


This  means  such  evidence  as  may  reasonably  be  required.     Braunstein  v.   Form  241. 
Accidental  Death  Co.,  1  B.  &  S.  782  ;  Moore  v.  Woolsey,  4  El.  &  Bl.  254. 

16.  AMiere  a  policy  is  subject  to  any  trust,  or  shall  have  l)een  assigned  Trustees 
by  way  of  mtge   or   other-nise,  the   receipt  of  the  trustee,  mtgee,  or  ^'^^^^^'^^ 
assignee  for  the  money  which  may  become  payable  in  respect  of  such 
policy  shall  be  an  eft'cctual  discharge  to  the  co. 

A  condition  as  above  is  very  commonly  inserted,  but  it  seems  wholly 
unnecessary.  Sections  22  and  3G  of  the  Conveyancing  Act,  1881,  appear  to  give 
the  requisite  powers  to  trustees  and  mortgagees  ;  and  see  also  the  Policies  of 
Assurance  Act,  1SG7  (30  &  31  Vict.  c.  144) ;  and  the  Judicature  Act,  1873, 
s.  25  (G). 

The  following  condition  is  more  practically  useful : — 

"  Where  a  policy  is  held  in  trust,  the  trustees  or  trustee  in  order  to  prevent 
or  diminish  loss  by  forfeiture,  or  apprehended  forfeiture,  may  deal  with  it  in 
such  manner  as  they  or  he  think  best  in  the  interests  of  the  beneficiaries,  and 
in  particular  may  surrender  it,  or  may  accept  a  paid-up  policy  in  substitution,  or 
may  assent  to  a  reduction  of  the  sum  assured,  or  other  modification  of  the 
policy,  with  a  view  to  the  reduction  or  extinction  of  subsequent  premiums." 

17.  Where  a  policy  becomes  void  all  premiums   and   other  monies  Forfeitm-e  of 
which  shall  have  been  pd  to  the  co  in  respect  thereof  shall  be  forfeited  P^''^'^^'^'^^- 
to  the  CO,  and  all  claims  in  respect  of  the  policy  shall  determine  except 

as  otherwise  herein  provided. 

This  is'a  usual  condition,  and  would  seem  to  be  effectual.  Wilson  v.Duchett, 
3  Burr.  1361 ;  but  the  Court  might  impose  terms  where  the  company  sues  to 
have  the  policy  set  aside.  Whittingham  v.  Thornborough,  2  Vex-n.  206  ;  Da  Costa  v. 
Scandret,  28  W.  170. 

18.  If  the  CO  shall  be  advised  that  there  is  any  doubt  or  difficulty  as  Trustee  Relief 
to  the  title  of  any  person  clamiing  paymt  of  the  monies  assured  by  a  '^^*- 
I^olicy  or  as  to  the  discharge  to  be  given  for  the  same  the  co  shall  be  at 

liberty  to  declare  that  it  holds  such  monies  in  trust  for  the  person  or 
persons  entled  thereto,  to  the  intent  that  the  co  may  thereupon  have  the 
remedies  and  benefits  pro\'ided  by  the  Trustee  Relief  Act. 

Several  companies  use  a  condition  as  above,  and  it  may  sometimes  be  useful. 
In  the  absence  of  such  a  condition,  a  company  can  only  pay  into  Court  under 
the  Trustee  Belief  Act,  where  there  is  some  trust  affecting  the  sum  assured,  or 
where  sub-sect.  G  of  s.  25  of  the  Judicat\u-e  Act,  1873,  applies.  Sutton's  Ti-vMs, 
12  C.  D.  175  ;  Re  Haycock's  Policy,  1  C.  D.  611 ;  Matthews  v.  Northern  Assurance 
Co.,  9  C.  D.  80. 


Miscellaneous  Coxditioxs. 

Such  bonuses  or  proportions  of  profit  as  shall  from  time  to  time  be  As  to  appli- 
appropriated  to  this  policy  may  at  the  option  of  the  assured  be  applied,  ^'^*"'"  °^ 
(a),  as  a  bonus  added  to  the  sum  hby  assured  and  payable  therewith 
upon  the  death  of  the  person  whose  life  is  assured  ;  or  (h),  to  the  reduc- 
tion of  the  premiums  payable  hereunder  ;  or  (c),  in  making  the  amount 
hereby  assured  payable  during  the  lifetime  of  the  person  whose  life  is 

X  2 


308 
Form  241. 


Anotlier. 


Limitation. 


POLICIES. 

assured  on  his  attaining  a  given  age  (such  age  to  be  fixed  by  the  actuary  for 
the  time  being  of  the  co),  nevertheless  all  bonuses  appropriated  to  this 
policy  will  be  applied  in  the  last-mentd  manner,  unless  notice  in  writing 
selecting  one  of  the  other  modes  of  apjilicon  of  such  bonus  be  sent  to  the 
CO  within  three  calendar  months  fi"om  the  declon  of  the  bonus. 

Most  companies  give  the  options  referred  to  in  the  above  condition,  and  a 
few  insert  conditions  to  that  effect.  The  following  is  another  form,  which 
is  occasionally  used. 

All  bonuses  or  proportions  of  profit  declared  upon  any  policy  will  be 
applied  in  such  a  manner  that  the  amount  assured  will  become  payable 
during  the  lifetime  of  the  person  whose  life  is  assured,  on  his  or  her 
attaining  a  given  age,  unless  notice  in  writing  selecting  some  other  mode 
of  applicon  be  given  to  them  within  three  calendar  months  from  the 
declon  of  the  bonus. 

The  monies  assured  by  a  policy  shall  not  carry  interest  as  against  the 
CO,  and  the  co  shall  cease  to  be  liable  for  such  monies  if  the  same  be  not 
claimed  by  or  on  behalf  of  the  person  or  persons  entled  thereto  within 
six  years  next  after  the  death  or  other  event  on  proof  of  which  the  same 
were  to  be  pd. 

A  condition  as  above  is  occasionally  used.  As  regards  interest,  it  is  unne- 
cessary, for  no  interest  is  payable,  unless  the  money  is  wrongfully  withheld. 
Webster  v.  British  Empire,  15  C.  D.  169.  As  regards  the  six  years'  limit,  it 
seems  a  reasonable  provision ;  for  in  the  absence  thereof  the  Statute  of 
Limitations  would  apparently  not  begin  to  run  until  proof  of  death  has  been 
admitted,  and  the  limit  would  be  twenty  years. 

Surrender  of         The  policy  must  be  given  up  to  the  co  upon  paymt  of  the  amount 
pohcy  and  loss.  ^^^^  thereon,  but  in  case  of  its  loss  or  destruction,  such  evidence  thereof 

and  such  indemnity  shall  (in  lieu  of  production  or  delivery),  Ije  given  as 

shall  be  satisfactory  to  the  directors. 

The  above  condition  is  used  by  a  few  companies,  but  it  appears  only  to  express 
what  the  law  implies.  Where  the  policy  has  been  lost,  the  monies  are  paid 
by  the  order  of  the  Court,  the  company  is  :iot  entitled  to  any  indemnity. 
England  v.  Lord  Tredegar,  1  Eq.  314. 


Surrender 
value. 


Holders  of  policies  of  assurance  for  the  whole  term  of  life  by  equal 
annual  pajmits,  or  of  policies  payable  on  the  attainmt  of  a  given 
age  or  death,  if  previous,  who  may  wish  to  surrender  after  paymt  of 
three  full  years  premiums  are  guaranteed  a  return  of  not  less  than  two- 
fifths  of  the  ordinary  premiums  pd  if  the  assurance  be  "with  profits,'* 
and  l)onus  has  not  been  guaranteed  and  one-third  of  the  ordinary  pre- 
miums pd  if  the  assurance  be  "without  profits,"  provided  applicon 
for  such  returns  be  made  before  the  expiration  of  three  calendar  months 
fi'om  the  date  on  which  a  premium  has  fallen  due.  This  guarantee  does 
not  extend  to  a  return  of  extra  premiums  of  any  kind. 

Very  few  companies  use  any  such  condition  as  the  above  ;  Init  a  good  many 
have  taken  of  late  to  publishing  tables  of  surrender  values. 


FOEMS.  309 

The Co,  Limtd.  Form  242. 


THIS    POLICY     OF     INSURANCE    WITNESSETH     that     Fire  insurance. 

(hereinafter  called  the  insured)  having  pd  to  the Co,  Limtd  (here- 
inafter caUed  the  co),  the  sum  of for  insuring  against  loss  or  damage 

by  fire  as  hereinafter  mentd,  the  ppty  hereinafter  described  in  the  several 
sums  following,  namely  : — 

\_Here  insert  jmrtkulars.'] 

The  CO  agrees  with  the  insured  (but  subject  to  the  conditions  at  the 
back  of  this  policy  which  are  to  be  taken  as  pt  of  this  policy)  that  if 
the   ppty   herein   described,  or  any  pt   thereof,   shall  be  destroyed  or 

damaged  by  fire  at  any  time  between  the day  of and  the 

day  of  both  inclusive  or  at  any  time  after^^■ards,  so  long  as  the 

insured,  or  his,  or  her,  or  their  representatives  in  interest  shall  pay  to  the 
CO,  and  it  shall  accept  the  sum  required  for  the  renewal  of  this  policy, 

on  or  before  the day  of in  each  succeeding  year,  the  co  will 

pay  or  make  good  all  such  loss  or  damage  to  any  amount  not  exceeding 
in  respect  of  the  several  matters  herein  specified  the  sum  set  opposite 

thereto  respively,  and  not  exceeding  in  the  whole  the  sum  of /. 

\_If  iiccessary,  Insert  proviso  timitimj  liatjUitij  as  at  p.  300.] 

In  Witness,  &c. 

A  policy  of  fire  insurance  is  a  contract  of  indemnity.  See  ColUngridge  v. 
Royal  Insurance  Co.,  L.  R.  3  Q.  B.  173;  Daniell  v.  Tihbitts,  5  Q.  B.  D.  560; 
Reynolds  v.  Arnold,  10  Ch.  386.  As  to  the  company's  right  of  subrogation,  see 
Castellan  v.  Preston,  11  Q.  B.  Div.  380;  49  L.  T.  29^  and  cases  there  cited. 

The  conditions  within  referred  to. 
The  following  are  the  conditions  in  general  use  : — 

1.  Any  material  mis-description  of  any  of  the  ppty  proposed  to  be  hby  Fire  iiwurance 
insured,  or  of  any  building  or  place  in  which  ppty  to  be  so  insured  is  ^"'^  ^  ^*'"''' 
contd,  or  any  mis-statemt  of  or  omission  to  state  any  fact  material  to  be 

known  for  estimating  the  risk  renders  this  policy  void  as  to  the  ppty 
affected  by  such  mis-description,  mis-statemt,  or  omission  respively. 

See  Universal  Iron  Tariff  Co.,  19  Eq.  494,  and  cases  there  cited. 

2.  If,  after  the  risk  has  been  undertaken  by  the  co,  anything  whereby 
the  risk  is  increased  be  done  to  ppty  hby  insured,  or  to,  upon,  or  in,  any 
building  hby  insured,  or  any  building  or  place  in  which  ppty  hby 
insured  is  contd,  or  if  any  ppty  hby  insured  be  removed  fi'om  the 
building  or  place  in  which  it  is  herein  described  as  being  contd,  without, 
in  each  and  every  of  such  cases,  the  assent  or  sanction  of  the  co  signified 
by  endorsemt  hereon,  the  insurance  as  to  the  ppty  affected  thereby  ceases 
to  attach. 

See  stokes  v.  Cox,  1  H.  &  M.  533;  Barrett  v.  Jermy,  3  Ex.  535,  as  to  the 
construction  of  the  earlier  part  of  this  condition. 

The  condition  may  be  waived  by  accepting  a  premium  after  notice  of  breach. 
Wing  V.  Harvey,  5  De  G.  M.  &  G.  205. 


310  POLICIES. 

Form  242.  3.  This  policy  does  not  cover  ppty  held  in  trust  or  on  commission 
unless  expressly  described  as  such ;  nor  china,  glass,  looking  glasses, 
jewels,  clocks,  watches,  trinkets,  medals,  curiosities,  manuscripts, 
governmt  stamps,  prints,  paintings,  drawings,  sculptures,  musical, 
mathematical,  or  philosophical  instrumts,  patterns,  models,  or  moulds, 
unless  specially  mentd  in  the  policy;  nor  deeds,  bonds,  bills  of 
exchange,  promissory  notes,  money,  securities  for  money,  or  books  of 
account ;  nor  gunpowder ;  nor  loss  or  damage  by  fire  to  ppty  occasioned 
by  or  happening  through  its  own  spontaneous  fermentation  or  heating, 
or  by  or  through  iuTasion,  foreign  enemy,  riot,  or  civil  commotion  ;  nor 
loss  or  damage  by  explosion,  except  loss  or  damage  by  explosion  of  gas  in 
a  building  not  forming  part  of  any  gas  works  ;  or  of  explosion  of 
domestic  boilers,  and  domestic  heating  apparatuses. 

See  Waters  v.  Monarch  Co.,  5  E.  &  B.  S/O,  for  case  of  policy  on  goods  in  trust 
or  on  commission ;  and  see  North  British  Co.  v.  Moffatt,  L.  E.  7  C.  P.  25,  for 
case  of  insurance  on  goods  "  in  trust  or  on  commission,  for  which  the  assured 
is  responsible."  It  was  there  held  that  after  sale  the  goods  being  at  the  risk 
of  the  purchasers,  were  no  longer  covered.  Se.e  also  North  British  v.  London 
Liverpool  Co.,  5  C.  Div.  5G9.  As  to  gas  explosions,  see  Stanley  v.  Western  Co., 
L.  R.  3  Ex.  71. 

4.  This  policy  ceases  to  be  in  force  as  to  any  ppty  hby  insured  which 
shall  i^ass  from  the  insured  to  any  other  i:)erson  otherwise  than  by  will  or 
ojjeration  of  law,  unless  such  policy  be  assigned  or  transferred  in  con- 
formity with  the  regulations  for  the  time  being  of  the  co. 

As  the  contract  is  one  of  indemnity  the  insured  cannot  recover  for  loss  sus- 
tained after  he  ceases  to  be  interested.  But  an  unpaid  vendor  can  recover 
and  is  not  liable  to  account  to  the  purchaser.  Poole  v.  Adams,  12  W.  E..  683  ; 
Bayner  v.  Preston,  18  C.  Div.  10.  But  if  the  office  pays  the  amount  and  the 
sale  is  carried  out  the  oifice  can  recover  from  the  vendor.  Castellan  v.  Preston, 
49  L.  T.  29. 

f).  On  the  happening  of  any  loss  or  damage  by  fire  to  any  of  the  ppty 
hby  insured,  the  insured  is  forthwith  to  give  notice  in  writing  thereof  to 
the  CO,  and  within  fifteen  days  at  latest  to  deliver  to  the  co  as  parlar  an 
account  as  may  Ije  reasonably  practical)le  of  the  several  articles  or 
matters  damaged  or  destroyed  by  fire,  with  the  estimated  value  of  each 
of  them  respively,  having  regard  to  their  several  values  at  the  time  of 
fire,  and  in  support  thereof  to  give  all  such  vouchers,  proofs,  and  ex- 
planations as  may  be  reasonably  required,  together  with,  if  required,  a 
statutory  declon  of  the  truth  of  the  account  ;  and  in  default  thereof  no 
claim  in  respect  of  suc^h  loss  or  damage  shall  be  payable  until  such 
notice,  accounts,  proofs,  and  explanations  respively  are  gi^■en  and  pro- 
duced, and  such  statutory  declon,  if  required,  is  made. 

See  Goulstone  v.  The  Royal  Insurance  Co.,  1  F.  &  P.  27G ;  Strong  v.  Harvey,  3 
Burg.  301.. 

0.  If  the  claim  be  in  any  respect  fraudulent,  or  if  any  false  statutory 
declon  ])e  made   in  support   thereof,  or  if    tlie  fire  was  occasioned  by 


FOEMS.  311 

or  tlirongli  the  procuremt  or  connivance  of  the  insured,  all  benefit  under  Form  212. 
this  poHcy  is  forfeited.  — —  • 

Cha2miaii  v.  Pole,  22  L.  T.  N.  S.  306 ;  Haigh  v.  De  la  Cour,  3  Camp.  319.  The 
policy  covers  loss  resulting  from  the  negligence  of  the  inaui-ed  if  there  is  no 
fraud.  Dixon  v.  Sadler,  5  M.  &  W.  405 ;  Jameson  v.  Boyal  Insurance  Co.,  L.  E. 
7  Ir.  C.  L.  12G. 

7.  The  CO  may,  if  it  think  fit,  reinstate  or  replace  ppty  damaged  or 
destroyed  instead  of  paying  the  amount  of  the  loss  or  damage,  and  may 
join  with  any  other  co  or  insurers  in  so  doing  in  cases  where  the  ppty  is 
also  insured  elsewhere. 

Sec.  l-i  Geo.  III.  c.  78,  whereby  any  person  interested  may  insist  on  having 
the  policy  money  applied  in  reinstating  the  property.  The  Act  is  general;  Ex 
parte  Gorely,  1  D.  J.  &  S.  -177. 

.s.  On  the  happening  of  any  loss  or  damage  by  fire  to  any  ppty  in 
respect  of  which  a  claim  is  or  may  be  made  under  this  policy,  the  co, 
without  being  deemed  a  Avrong  doer,  may  by  its  authorised  officer  and 
servants  enter  into  the  building  or  place  in  which  such  loss  or  damage 
has  happened,  and  for  a  reasonable  time  remain  in  possession  thereof 
and  of  any  ppty  hby  insured  which  is  contd  therein,  for  all  reasonable 
pposes  relating  to  or  in  connection  with  the  insurance  hby  effected,  and 
this  policy  shall  be  evidence  of  leave  and  license  for  that  ppose. 

This  condition  does  not  authorise  a  forcible  entry.  Eswick  v.  Hawlces,  18 
C.  D. 199. 

9.  If  at  the  time  of  any  loss  or  damage  l:)y  fire  happening  to  any  ppty 
hby  insured  there  be  any  other  subsisting  iiisurance  or  insurances, 
whether  effected  by  the  insured  or  by  any  other  person,  covering  the 
same  ppty,  this  co  shall  not  be  lial)le  to  pay  or  contribute  more  than  its 
rateable  proportion  of  such  loss  or  damage. 

The  meaning  of  this  condition  is  far  from  clear.  In  North  British  Co.  v. 
London  Liverpool  Co.,  5  Ch.  577,  Jessel,  M.  K.,  said  that  the  word  "property  "in 
the  conditions  means  the  interest  of  the  assured,  and  was  of  opinion  that  the 
condition  "  never  could  have  been  meant  to  apply  for  example  to  the  cases  of  a 
tenant  for  life  and  remainderman,  or  a  first  mortgagee  and  second  mortgagee, 
both  insuring  the  same  goods.  You  must  read  the  condition  in  a  sensible 
way  and  not  assume  that  these  great  companies  intended  to  entrap  their  policy 
holders  and  to  destroy  the  value  of  the  contract  of  indemnity  by  reason  of 
the  accidental  contract  of  somebody  else."  See'  also  Castellan  v.  Preston,  11 
Q.  B.  Div.  380 ;  49  L.  T.  29  ;  Reynard  v.  Arnold,  10  Ch.  386. 

10.  In  all  cases  where  any  other  subsisting  insurance  or  insurances, 
whether  effected  by  the  insured  or  by  any  other  person,  co\'ering  any 
ppty  hby  insured,  either  exclusively  or  together  with  any  other  ppty  in 
and  subject  to  the  same  risk  only,  sliall  be  subject  to  average,  the 
insurance  on  such  ppty  under  this  policy  shall  be  subject  to  average  in 
like  manner. 

See  infra,  p.  312,  the  conditions  of  average.  North  British  Co.  v.  London- 
Liverpool  Co.,  ubi  supra. 


312 


POLICIES. 


Form  242.  11.  If  any  difference  sliall  at  any  time  arise  between  the  co  and  the 
insured  or  any  claimant  under  this  policy,  as  to  the  amount  of  any  loss 
or  damage  by  fire,  or  as  to  the  fulfilmt  or  non-fulfilmt  of  any  of  the 
conditions  herein  set  forth,  or  as  to  any  question,  matter,  or  thing  con- 
cerning or  arising  out  of  this  msurance,  every  such  diflFerence,  as  and 
when  the  same  arises,  shall  be  referred  to  the  arbitration  and  decision  of 
two  indifferent  persons,  one  to  be  chosen  by  the  pty  claiming  and  the 
other  by  the  co,  or,  in  case  of  disagreemt  between  them,  then  of  an 
umpire  to  be  chosen  by  the  arbitrators  before  entering  vn  the  reference ; 
and  the  costs  of  the  reference  shall  be  in  the  discretion  of  the  arbitrators 
or  umpire,  as  the  case  may  be  vrho  may  ascei"tain,  &c.  [_see  supra,  p.  21], 
and  the  obtaining  of  such  award  shall  be  a  condition  precedent  to  the 
commencemt  of  any  action  or  other  proceeding  upon  this  policy,  and  the 
co  shall  only  be  lial)le  for  the  amount  awarded. 

Arbitration  clauses  are  commonly  inserted  in  fire  policies. 

12.  In  all  cases  where  this  policy  is  void  or  has  ceased  to  be  in  force 
under  any  of  the  foregoing  conditions,  or  the  regulations  for  the  time 
being  of  the  co,  all  monies  pd  to  the  co  in  respect  thereof  will  be 
forfeited. 


The  following  are  the  conditions  of  average  commonly  used  : — 

Average  1.  It  is  hby  agreed  and  declared  that  whenever  a  sum  insured  is 

declared  to  be  subject  to  the  conditions  of  average  if  the  ppty  so  covered 
shall,  at  the  breaking  out  of  any  fire,  be  collectively  of  a  greater  value 
than  the  sum  insured  thereon,  then  this  co  shall  pay  or  make  good  such 
a  porportion  only  of  the  loss  or  damage  as  the  sum  so  insured  shall  bear 
to  the  whole  value  of  the  sd  ppty,  at  the  time  when  such  fire  shall  first 
happen. 

2.  But  it  is  at  the  same  time  declared  and  agreed  that  if  any  pjoty  in- 
cluded in  such  average  shall,  at  the  breaking  out  of  any  fire,  be  insured 
by  any  other  policy  in  this  or  any  other  office,  whether  subject  to  average 
or  not,  Avhich  shall  apply  to  pt  only  of  the  buildings  or  places,  or  of  the 
ppty  to  which  such  average  extends,  then  this  policy  shall  not  cover  the 
same,  except  only  as  regards  any  excess  of  value  beyond  the  amount  of 
such  more  specific  insurance,  which  sd  excess  is  declared  ti)  be  under  the 
protection  of  this  policy  and  subject  to  average  as  afsd. 

3.  And  it  is  further  declared  and  agreed  that  if  the  assured  shall 
claim  under  this  policy  for  loss  or  damage  to  ppty,  embraced  in  the  terms 
of  any  average  i)olicy,  extending  as  well  to  other  buildings,  or  places,  or 
to  other  j^pty  not  included  in  the  terms  of  this  insurance,  and  if  at  the 
breaking  out  of  any  fire,  there  shall  not  be  any  ppty  in  such  other 
l)uildings  or  places,  or  any  such  other  ppty  actually  at  risk  to  be  j^ro- 
tected  by  such  policy,  then,  so  far  as  regards  the  settlemt  of  any  clann 
under  this  policy,  the  terms  and  liability  thereof  shall  Ije  held  to  be 
concuiTent  in  all  respects  with  those  of  such  other  policy. 


conditions. 


FORMS.  313 

The  following  condition  is  generally  used  as  regards  agricultural  produce  : —   Form  242- 


If  the  sum  insured  on  agricultural  produce,  either  separately  or  in  one 
amount  with  other  ppty,  shall,  at  the  breaking  out  of  a  fire,  be  less 
than  three-fourths  of  the  value  of  all  the  ppty  insured  in  that  amount, 
then  the  insured  shall  be  considered  as  his  own  insurer  for  the  difference 
between  the  sum  insured  and  the  fall  value  of  the  ppty  insured  at 
the  time  of  the  lire,  and  shall  bear  a  rateal)le  proportion  of  tlie  loss 
accordingly. 

Besides  the  abov^e,  policies  on  agricultural  produce  generally  contain  certain 
special  conditions. 

The  following  condition  is  sometimes  used : — 

No  insurance  proposed  to  the  co  is  to  be  considered  in  force  until  the 
premium  is  actuaUy  pd.  No  receipt  for  any  premium  of  insurance  shall 
be  valid  if  available  for  any  ppose  whatever,  unless  it  be  upon  the 
printed  office  form  and  signed  by  one  of  the  clerks  or  agents  of  the  co  ; 
and  any  condition  or  proviso  contd  in  or  indorsed  upon,  or  refcri'cd  to 
in  any  such  receipt,  shall  Ije  taken  as  j^t  of  this  policy. 

Whas ,  liei'cinafter  called  the  insured,  desires  to  effect  an  insur-    Form  243. 

ance  with  the Co,  limtd  (hereinafter  called  the  co),  as  hereinafter  ex-  ^^cident 

pressed,  and  has  pd  to  the  co  the  sum  of premimn  for  such  insurance 

uutil  the day  of . 

NOW,  THEREFORE,  THIS  POLICY  WITNESSETH  and  declares 
that  if  at  any  time  within  one  year  from  the  date  hereof  or  at  any  time 
afterwards,  so  long  as  the  insured  shall  pay  and  the  co  shall  accept  the 
sum  required  for  the  renewal  of  this  policy,  on  or  before  each  succeeding 

• day  of ,  the  insured  shall  sustain  any  personal  injury  caused 

by  accident,  and  the  direct  effect  of  which  injury  shall  either  cause  the 
death  or  the  permanent  total  disablemt  (as  defined  on  the  back  hereof) 
of  the  insured,  then  the  co  shall  pay  to  the  insured,  or  to  his  leg.  per. 

reps.,  the  full  sum  of within  one  calendar  month  after  satisfactory 

jiroof  of  such  death  or  disablemt  shall  have  been  furnished  to  the  co  : 
Provided  that  such  death  or  disablemt  takes  place  Avithin  three  calendar 
months  from  the  date  of  the  accident  occasioning  the  same  :  Or,  if  the 
insured  shall  sustain  any  personal  injury,  caused  as  afsd,  which  shall 
occasion  permanent  partial  disablemt  (as  defined  on  the  back  hereof), 

then  the  co  shall  pay  to  him  the  sum  of within  one  calendar  month 

after  satisfactory  ])roof  of  such  disablemt  shall  have  been  furnished  to 
the  CO,  and  if  such  injury  does  not  entitle  the  insured  to  the  compensa- 
tion for  permanent,  total,  or  partial  disablemt,  as  above  provided,  but 
shall,  independently  of  all  other  causes,  immediately  and  totally  disable 
and  prevent  him  from  attending  to  business  of  any  kind,  then  com- 

jiensatiou  shall  l)e  pd  to  him  at  the  rate  of per  week  for  the  period 

of  such  continuous  total  disablemt  as  shall  immediately  follow  the  sd 

accident  and  injury  :   Or,  at  the  rate  of ,  so  long  as  he  shall  be 

thereby  rendered  partially  unable  to  attend  to  business  :  Put  the  period 


314 


POLICIES. 


Form  243.  during  wliicli  conipensatiou  for  total  or  partial  temporary  disablcmt  oi 
l)otli  is  to  be  pd  shall  uot,  for  any  single  accident,  exceed  t\Yenty-six 
consecutive  weeks  from  the  date  thereof. 

This  policy  shall  be  subject  to  the  conditions  indorsed  hereon,  which 
are  to  be  considered  pt  of  it. 

In  witness,  &c. 

The  following  are  the  principal  schemes  of  general  accident  which  prevail  in 
the  United  Kingdom  :  (a)  as  above  a  lump  sum  at  death  or  permanent  disable- 
ment [infra,  p.  317],  and  a  weekly  allowance  for  partial  disablement ;  (6)  a  lump 
sum  at  death,  a  lump  (loss)  sum  for  permanent  disablement,  and  a  weekly- 
allowance  for  temporary  disablement ;  (c)  a  lump  sum  for  death,  and  a  weekly 
allowance  for  disablement  whether  total  or  partial. 

In  the  case  (c)  "  total  disablement "  is  declared  to  mean  "  an  injury  i^revent- 
ing  the  claimant  from  attending  to  or  superintending  any  portion  of  his  busi- 
ness," and  "  partial  disablement"  is  declared  to  mean  "when  the  claimant  is 
so  injured  or  has  so  far  recovex'ed  as  to  be  able  to  transact  some  portion  of  his 
business  but  not  the  whole." 

Besides  insuring  as  above  accident  companies  commonly  issue  policies  insuring 
(a)  against  fatal  accidents  only,  (b)  against  non-fatal  accidents  only,  (c)  against 
railway  accidents  only  [m/Va,  p.  317],  (d)  against  marine  risk  [infra,  i:>.  317], 
(o)  for  a  journey,  for  a  term  of  years,  for  a  short  period.  The  above  form  can 
be  readily  altered  so  as  to  suit  their  various  cases. 


Form  244. 

Notice  of 
change  of 
Address. 
Payment  of 
premium. 


"When  liolicy 
void. 


The  conditions  within  referred  to— 

1.  Due  notice  shall  be  given  by  the  insured  to  the  co  at  its  chief 
office  of  any  cliange  during  the  continuance  of  this  policy  of  his  name, 
residence,  and  occupation. 

2.  The  premium  for  the  renewal  of  tliis  policy  must  be  paid  within 
fourteen  days  from  the  expiration  of  each  year  of  insurance,  otherwise 
the  policy  will  be  void  ;  but  should  any  accident  occur  within  such 
fourteen  days,  compensation  will  be  payable  as  if  the  accident  had 
occurred  within  such  year,  unless  notice  of  discontinuance  shall  have 
been  given  by  the  co  or  the  insured  jorior  to  the  accident. 

3.  This  policy  shall  be  void  (a)  if  the  declon,  upon  the  basis  of  which 
this  pohcy  has  been  granted,  contains  any  untrue  statemt,  or  foils  to 
disclose  any  material  fact ;  or  (b)  if  this  policy  or  any  renewal  thereof 
has  been  obtained  through  misrepresentation  or  concealmt  by  the  in- 
sured  ;  or  (r)  if  in  any  statemt  or  declon  made  in  support  of  any  claim  for 
compensation,  or  in  the  information  given  in  respect  thereof,  there  shall  be 
any  false  statemt,  suppression,  or  concealmt  ;  or  (d)  if  the  assured  shall 
become  of  intemperate  habits,  or  at  any  time  engage  in  any  occupation 
other  than  that  specified  in  the  afsd  declon,  and  thereby  in  the  opinion 
of  the  directors  of  the  co  increase  the  risk  insured  under  this  policy,  and 
if  such  increased  risk  be  not  accepted  and  is  insured  by  the  co  ;  or  (e) 
if  the  insured  shall  not  use  all  due  diligence  for  his  personal  safety  ;  or  if 
(/)  the  iusui'ed  shall  travel  and  be  l)eyond  the  limits  of  Europe,  or  shall 
embark  in  any  vessel  with  the  intention  of  going  beyond  such  limits  : 
And  if  the  policy  becomes  void  under  this  condition,  all  premiums  in 
respect  thereof  shall  be  forfeited  to  the  co. 

Some  companies  give  liberty  to  travel  for  an  extra  premium. 


FOE^IS.  315 

4.  No  claim  shall  be  made  mider  this  policy  for  any  injury  from  any  Form  244. 
accident  unless  such  injury  shall  be  caused  by  some  outward  and  visible  Concluded 
means  of  -which  proof  satisfactory  to  the  co  can  be  furnished  ;  and  this  accidents. 
insurance  shall  not  extend  to  death  by  suicide,  whether  felonious  or 
otherwise,  or  to  any  injury,  whether  fatal  or  otherwise,  caused  ])y  or 

arising  from  natural  disease,  or  happening  whilst  the  insured  is  inca- 
pacitated ])y  disease  or  weakness,  or  exhaustion  consequent  upon 
disease,  or  to  any  injury,  whether  fatal  or  otherwise,  caused  by  any 
medical  or  surgical  treatmt  or  operation  rendered  necessary  by 
disease,  or  to  any  death  or  disablcmt  arising  from  disease,  although 
such  disease  may  have  been  brought  on  or  accelerated  by  accident, 
or  to  any  injury,  Avhether  fatal  or  otherwise,  caused  by  duelling  or 
figliting  or  any  other  Ijreach  of  the  laws  on  the  pt  of  the  insured,  or  liy 
l^oison  or  intentional  self-injury,  or  by  war  or  invasion,  or  by  civil  or 
seditious  or  popular  riot,  or  attack  or  l)y  assault,  or  to  any  injury, 
whether  fatal  or  otherwise,  happening  while  the  insured  is  under  the 
influence  of  intoxicating  liquor  or  drug,  or  in  a  state  of  insanity,  tem- 
porary or  otherwise,  or  occasioned  to  the  insured  by  his  tra^■elling  l)y 
railway  in  a  carriage  diflFerent  from  those  provided  for  the  conveyance  of 
passengers,  or  by  his  entering  or  leaving  a  carriage  of  a  train  in  motion 
or  attempting  so  to  do,  or  otherwise  by  his  acting  in  violation  of  the  bye- 
laws  of  any  railway  co,  or  whilst  riding  races  or  steeple  chases  or  generally 
l)y  his  voluntarily  exposing  himself  to  any  unnecessary  danger  or  peril. 

•  As  to  what  is  "  an  accident/'  see  Sinclair  v.  Maritime  Passenger  Co.,  30  L.  J. 
Q.  B.  77. 

As  to  "  eijileptic  or  otherfits  "  sometimes  mentioned,  see  Shilling  v.  Accidental 
Death  Co.,  1  F.  &  F.  IIG.  As  to  "wilful  exposm-e  to  unnecessary  danger,"  see 
Mair  v.  Railway  Passengers  Co.,  39  L.  T.  3.'3(3.  As  to  "  intoxication,"  see  the 
case  last-mentioned.  As  to  words  "  wholly  disabled  from  attending  to  his  usual 
biisiness,"  see  Hooper  v.  Accidental  Death  Co.,  5  H.  &  N.  54G  ;  Sutton  v.  Acci- 
dental Death  Co.,  17  C.  B.  N.  S.  122;  31  L.  J.  C.  S.  28  (rupture);  Trew  v. 
Railway  Passengers  Co.,  G  H.  &  N.  839;  andEei/noZds  v.  Accidental  Death  Co.,  22 
L.  T.  N.  S.  820  (drowning).  See  also  Lawrence  v.  Accidental  Death  Co.,  7  Q.  B.  D. 
20G,  that  the  Court  will  look  to  the  immediate  cause  ;  and  Smith  v.  Accident  I n- 
surance  Co.,  L.  R.  5  Ex.  307;  Wiiispear  v.  Accident  Co.,  G  Q.  B.  Div.  12. 

5.  In  the  event  of  any  accident  witliiii  the  meaning  of  this  policy  Notice  of 
(Avhether  fatal  or  not)  occurring  to  the  insured,  it  is  a  condition  prece- 
dent to  any  claim  that  notice  thereof  in  "UTiting  must  be  received  by  tlie 
CO  at  its  chief  office  within  seven  days  after  the  occurrence  of  the 
accident,  stating  the  nature  and  date  of  the  injuries,  the  place  where 
and  the  manner  in  which  they  were  received  with  the  name,  address,  and 
occupation  of  the  person  injured.  And  in  case  the  accident  shall  not 
prove  fatal  but  shall  injure  the  insured,  he  shall,  in  addition,  when  called 
upon  to  do  so,  furnish  to  the  co  a  full  written  report  by  a  registered 
medical  practitioner,  setting  forth  the  facts  of  the  case  and  the  injuries 
he  has  received,  and  further  shall,  when  required  by  the  co,  submit 
himself  to  be  examined  by  the  medical  or  other  officer  of  the  co,  and 
shall  at  all  times  o-ive  them  all  such  further  evidence  and  information 


accident. 


316 


POLICIES. 


Form  244.  by  certificates,  declons,  or  otherwise,  as  they  may  from  time  to  time 
require,  or  as  may  be  necessary  or  proper  in  order  to  ascertain  and  prove 
the  nature  and  extent  of  such  injury,  and  in  case  of  death  there  must  be 
delivered  to  the  co,  at  its  chief  office,  a  certificate  from  tlie  medical 
attendant  of  the  insured,  stating  as  fully  as  possible  the  nature,  extent, 
and  duration  of  the  injuries  and  the  cause  of  death,  and  all  such  other 
information  and  csadencc  as  the  co  may  require  or  consider  necessary  to 
elucidate  the  case.  In  all  the  above-mentioned  cases  the  certificates, 
information,  and  evidence  to  be  given  shall  be  at  the  expense  of  the 
insured,  and  shall  be  in  such  form  and  of  such  nature  as  the  co  may 
prescribe  and  the  co  shall  not  be  liable  in  nor  bound  to  pay  any  sum 
whatever  until  the  entire  amount  of  cojuiiensation  due  shall  have  been 
ascertained  and  proved  to  the  satisfon  of  the  co. 

The  notice  must  be  given  within  the  time  limited  even  though  the  insured 
alone  knows  of  the  policy.  Taylor  v.  Caldivell,  3  B.  &  S.  826  ;  Gamble  v.  Acci- 
dent Insurance  Co.,  L.  K.  -i  Ch.  201. 


Arbitration. 


£1000  Hmit. 


Disclosure 
before  renewal. 


How  notices  to 
be  L'iven. 


No  notice  of 
premium  due. 


Receipts. 


0.  If  any  dispute  arise  respecting  the  liability  of  the  co  under  this 
policy  to  make  compensatiim  f(»r  any  injiuy  whether  fatal  or  otherwise, 
<»r  as  to  the  amount  of  compensation  payable,  the  dispute  shall,  if  required 
by  the  co,  be  referred  to  the  arbitration  of  two  disinterested  persons, 
one  to  be  appointed  by  the  co  and  the  other  by  the  insured  or  his  leg. 
per.  rep.,  and  the  costs,  &c.  \_supra,  p.  312]. 

7.  In  the  absence  of  special  agreemt  1000/.  is  the  limit  to  any  sum 
insured  by  the  co  on  any  one  life,  and  no  further  insurance  in  excess  of 
that  amount  effected  in  any  way  with  the  co,  whether  through  an  agent 
or  other  einj)lo)je,  or  direct  with  the  co  and  accepted  by  the  co  in  over- 
sight, shall  hold  good  against  the  co  without  such  agreemt. 

8.  The  insured  shall,  before  the  renewal  of  this  polic}',  give  notice  in 
writing  to  the  co  at  their  chief  office  of  any  disease  or  physical  defect  or 
infirmity  of  which  he  has  l)ecome  cognisant  or  affected  during  the  pre- 
ceding year. 

1).  In  all  cases  in  which  under  this  policy  it  is  conditioned  and  agreed 
u})on  that  any  declon,  notice,  or  other  information  shall  be  made  or 
given  to  the  co  by  or  in  behalf  of  the  insured,  it  shall  not  be  a  sufficient 
compliance  with  the  terms  and  conditions  hereof  in  regard  thereto, 
or  amount  to  such  declon,  notice,  or  information  as  shall  bind  or  aff'ecc 
the  CO  that  the  same  has  been  made  or  given  to  or  brought  to  the  know- 
ledge of  any  local  agent  of  the  co,  and  that  notwithstanding  the  subse- 
quent acceptance  by  the  co  of  any  premium. 

10.  The  CO  shall  not  be  bound  to  send  any  notice  of  the  renewal 
])reniium  becoming  due,  and  shall  be  at  liberty  to  decline  to  renew  the 
])ohcy  at  the  end  of  any  year. 

See  Simpson  v.  Accidental  Death  Co.,  2  C.  B.  N.  S.  257. 

11.  No  renewal  receipt  is  valid  unless  it  is  in  the  i^rinted  office  form 
and  issued  by  the  manager,  and  no  paymt  of  money  to  any  person  shall 


FOEMS.  317 

he  lield  to  keep  this  policy  in  force  unless  such  person  shall  forthwith   Form  244. 
give   to   the   insured  the  manager's   official  printed  ]"eceipt   for   such 
liremiuni,  and  no  special  or  other  indorsemt  will  be  held  valid  unless 
the  same  is  recognised  and  countersigned  at  the  chief  office. 

12.  In  this  policy  "permanent  total  disablemt  "  implies  the  loss  of  Definitions, 
both  hands  or  of  l)oth  feet  or  the  loss  of  a  hand  and  a  f  )()t  ;  and  "])er- 
manent  partial  disablemt  "  implies  the  loss  of  one  hand,  the  loss  of  one 
foot,  or  the  complete  or  irrecoverable  loss  of  sight. 

lo.  This  policy  shall  not  be  assignable,  and  the  co  shall  in  no  case  No  trusts 
be  bound  to  recognise  or  take  notice  of  any  trust  or  equitaljle  charge  or  ^^'^°°^^ 
lieu  sought  to  be  hnposed  on  this  policy,  or  any  monies  payable  there- 
under, and  the  receipt  of  the  insured  or  his  leg.  per.  reps,  shall  in  all 
cases  l)e  a  good  discharge  to  the  co. 

Recital  as  in  Form  2 4 3. 

Now,  &c,,  that  if  at  any  time,  &c.,  the  insured  sliall,  whilst  travelling  by  Form  245. 

a  passenger  train  on  any  line  of  railway  in  Great  Britain  or  Ireland  [or  r"T ' 

on  the  continent  of  Europe]  in  any  carriage  intended  for  passengers  of  accident  policy. 
whatever  class,  sustain  any  personal  injury  caused  by  an  accident  to  such 
ti'ain,  then,  &c.  \_as  in  Form  243]. 

\_Conclitions,  see  siqira,  p.  314,  et  scri.'] 

See  Theobald  v.  Railway  Passengers  Co.,  10  Exch.  45.  The  above  can  readily 
be  altered  to  an  insurance  against  fatal  injury. 

Recitals  as  in  Form  243. 

Now,  &c.,  that  if,  &c.,  the  insured  shall  whilst  at  sea  be  drowned,  or  Marine 
Avhdst  at  sea  shall  sustain  any  personal  injury  caused  by  accidentar^'"^        '■'^    ■* * 
violence,  whereof  the  direct  effect  shall  cause  the  death  of  the  insured, 

then  the  ■  Co  shall  pay  to  his  leg.  per.  reps,  the  full  sum  of /. 

within  a  mouth  after  satisfactory  proof  of  such  death  shall  have  been 
furnished  to  the  directors  of  the  co  :  Provided  that  such  death  takes 
place  within  three  calendar  mouths  from  the  date  of  the  accident 
occasioning  the  same,  &c.  [_as  in  Form  313]. 

The  conditions  above,  p.  315,  can  readily  be  adopted.  But  a  condition  as  fol- 
lows will  be  inserted  : — 

"  The  company  shall  only  be  liable  and  the  policy  shall  only  extend  to  and 
cover  accidental  death  from  drowning  or  any  other  cause  which  hapjjens  while 
the  insured  is  actually  at  sea  in  the  employment  of  ships  siDecified  in  the 
schedule  hereto,  or  is  embarking  or  disembarking  therefrom,  or  while  he  is  in 
any  boat,  raft,  or  vessel  in  which  he  may  have  been  compelled  to  leave  the  said 
ship  in  consequence  of  its  being  wrecked  or  in  a  state  of  danger,  provided  the 
said  ship  shall  sail  or  be  navigated  in  some  of  the  usual  ascertained  tracks." 
The  time  for  giving  notice,  supra,  p.  315,  condition  5,  is  generally  increased, 
e.g.,  to  three  months.     The  above  form  can  readily  be  altered  to  a  voyage  policy. 

Whas (hereinafter  called  the  employer),  desires  to  effect  an  in-   Form  246. 

surance    with    (hereinafter    called   the   co)    as    hereinafter   ex- ;; — ; \ 

TTii,,!  ,1  n  71  '      J^mployers 

pressed,  and  has  pd  to  the  co  the  sum  ot /.  as  the  premuun  for  such  liability. 


318 
Form  246.  insurance  for 


rOLICIES. 


calendar  months  from  the 


day  of 


1«8 


Notice  of 
accident. 


Company  may 
.settle  claim. 


State  of 
works. 


Notice  on 
renewal. 

IIow  notice  to 
lis  given. 

]\Ii.s-iitatemcnt 


XOW  THIS  POLICY  WITNESSETH  and  declares  that  the  co,  so 
far  as  regards  injuries  caused  during  the  period  covered  l)y  the  premium 
BO  pd  as  afsd,  or  any  farther  period  in  respect  of  which  the  co  shall 
accept  a  premium  or  premiums,  shall  pay  to  the  employer  all  sums 
which  such  employer  shall  become  liable  for  under  or  l)y  virtue  of  the 
Employers'  Liability  Act,  1880,  as  and  for  compensation  for  personal 
injury  caused  to  any  workman  in  [his]  service  while  engaged  in  per- 
forming the  employer's  work  in  any  of  the  occupations  and  at  any  of 
the  places  nientd  in  the  schedule  hto,  such  paymt  to  be  made  within 
one  calendar  month  after  satisfactory  proof  of  such  liability  shall  have 
been  furnished  to  the  co. 

This  policy,  &c.,  siqna,  p.  314. 

In  witness,  &c. 

The  conditions  within  referred  to  are  as  follows  : — 

1.  Upon  the  occurrence  of  any  accident  notice  thereof  shall  within  seven 
days  of  its  occurrence  be  given  to  the  company  with  such  further  information 
as  to  the  time  at  and  the  circumstances  under  which  the  injury  was  caused 
and  the  nature  and  extent  thereof,  and  the  name  and  occupation  of  the  claimant 
and  such  other  information  as  the  company  may  by  their  rules  or  otherwise  re- 
qiiire ;  and  if  the  company  shall  so  require  such  information  shall  be  given 
upon  forms  supplied  by  the  company  for  the  purpose,  and  be  certified  by  the 
employer  or  his  principal  manager.  The  employer  on  receiving  notice  of  a 
claim  shall  within  seven  days  send  on  the  same  or  a  certified  copy  thereof  to 
the  company,  and  he  shall  cause  to  be  supplied  to  the  company  siich  further 
information  as  to  and  such  evidence  of  the  circumstances  connected  with  siich 
claim  as  the  company  may  from  time  to  time  apply  for. 

2.  On  receiving  from  the  employer  notice  of  any  claim  the  company  may 
take  upon  themselves  the  settlement  of  the  same,  and,  in  that  case,  the  em- 
ployer shall  give  them  all  necessary  information  and  assistance  for  the  piirpose. 
The  employer  shall  not,  except  at  his  own  cost,  pay  or  settle  any  claim  without 
the  consent  of  the  company,  but  if  any  proceedings  be  taken  to  enforce  any 
claim  in  respect  of  which  such  notice  shall  be  given,  the  company  shall  have  the 
entire  conduct  and  control  of  the  same  throughout  in  the  name  and  on  behalf 
of  the  employer,  and  shall  in  any  event  indemnify  the  employer  against  all 
costs  and  expenses  of  and  incident  upon  any  such  proceedings,  and  the  employer 
shall  at  the  cost  of  the  company  render  them  every  assistance  in  his  power  to  en- 
able them  to  resist  any  claim  wholly  or  in  part  or  to  defend  any  such  proceedings. 

3.  The  employer  shall  and  will  at  all  times  use  all  reasonable  diligence  in 
keeping  himself  acciuaiuted  with  the  state  of  the  ways,  works,  macliinery  and 
plant  connected  with  or  used  in  his  business  upon  or  in  the  use  of  which  the 
said  workmen  shall  be  employed,  and  in  keeping  the  same  in  a  proper  state  of 
repair,  and  if  any  defect  shall  be  discovered  rendering  the  occupation  of  any 
workman  more  than  usually  hazardous  shall  cause  the  said  defect  to  be  made 
good,  and  shall  in  the  meantime  cause  such  additional  precautions  as  circum- 
stances may  require  to  be  taken. 

4.  The  employer  shall,  at  every  renewal  of  the  policy,  give  to  the  company 
notice  of  any  circumstance  rendering  the  occupation  of  workmen  more  hazardous 
than  at  the  time  of  the  payment  of  the  last  previous  premium. 

5.  Every  notice  and  communication  to  be  given  or  made  hereunder  to  or  with 
the  company  shall  be  sent  to  the  chief  offices  of  the  company  in 

G.  If  there  shall  be  any  mis-statement  in  or  intentional  omission  of  a  material 
fact  from  the  proposal  upon  the  basis  of  which  this  insurance  is  granted,  or  if 
the  third  condition  be  not  complied  with,  this  policy  shall  be  void. 


FORMS. 


319 


Limit  of 
liability. 


7.  The  premium  has  been  fixed  on  the  assumption  that  only  the  amount  of    Form  246. 
wages  mentioned  in  the  schedule  hereto  will  be  paid  to  woi'kmen  engaged  in 
each  occupation  there  mentioned.     If  upon  any  claim  arising  it  shall  be  found 
by  reference  to  the  wages  book  that  a  larger  amount  of  wages  is  being  paid  to 
men  in  the  occiipation  in  which  the  injury  occurs  the  comi^any  will  only  jiay  in 

respect  of  such  injury  such  a  proportion  of  the  amount  they  would  otherwise 
have  to  pay  as  shall  Ije  borne  by  the  amount  of  wages  mentioned  in  the  schedule 
under  the  particular  occupation  to  the  amount  of  wages  actually  being  paid  in 
that  occupation  at  the  time  of  such  claim  arising,  and  the  said  wages  book  shall 
at  all  reasonable  times  be  open  to  the  inspection  of  the  company  or  whomsoever 
they  may  appoint. 

8.  In  the  case  of  the  death  or  retirement  of  any  member  of  or  the  addition  of  New  partners, 
a  new  member  to  any  firm  hereby  insured  this  policy  shall  enure  for  the  benefit 

of  the  remaining  or  continuing  and  new  members  of  such  firm. 

9.  The  expression  "workman  "  shall  have  the  same  meaning  throughout  this  "  Workmen." 
policy,  and  in  these  conditions,  as  in  the  Employers'  Liability  Act,  1880,  pro- 
vided that  this  policy  shall  not  insure  against  the  result  of  any  accident  caused 

by  or  happening  to  any  c"iild,  young  person,  or  woman  subject  to  the  provisions 
of  the  Factory  Acts,  the  Mines  Eegulation  Acts,  or  any  Act  relating  to  the 
employment  of  labour,  while  employed  contrary  to  such  provisions. 

10.  If  a  dispute  shall  arise  respecting  the  amount  to  be  paid  to  the  em^Dloyer  ArLitratiou. 
or  whether  these  conditions  have  been  complied  with  or  otherwise  as  to  any- 
thing  herein   contained,  the  matter   shall,  if  required  by    the    company,   be 
referred  to,  &c.,  supra,  p.  312. 

11.  The  directors  shall  not  be  bound  to  send  anj-  notice  of  the  renewal  pre-  Determination, 
mium  becoming  due,  and  shall  be  at  liberty  should  they  see  fit  at  any  time  by 

giving  notice  in  writing  to  the  insured  to  determine  this  policy  as  from  the 
receipt  of  such  notice  without  prejudice  to  the  rights  of  the  insured  in  respect 
of  prior  accident,  and  in  that  case  the  company  shall  return  on  demand  to 
the  insured  the  premium  paid  hj  him  less  a  pro  rata  part  thereof  for  the  pro- 
13ortion   of  the  year  the  policy  has  been  in  force,  and    such   notice  shall  be 

deemed  sufficiently  given  if  posted  in ,  addresseci  to  the    insured  at  the 

within-mentioned  adcU"ess,  and  shall  in  such  case  be  deemed  to  have  been  re- 
ceived by  him  at  the  expiration  of  twenty-foiir  hours  after  it  is  posted. 

12.  No  renewal  receipts  are  valid  unless  they  are  in  the  printed  office  form 
and  issued  by  the  chief  office,  and  no  payment  of  money  to  any  jierson  shall 
be  held  to  keep  this  policy  in  force  unless  such  person  shall  forthwith  give  to 
the  insured  the  official  printed  receijot  for  such  premium,  and  no  special  or 
other  endorsement  will  be  held  valid  unless  the  same  is  recognised  and  coun- 
tersigned at  the  chief  office. 


Schedule. 


Description  of  occu]iation. 

Wages  paid  to  workmen  in  the 
occuiiation. 

Place  at  whioli  workmen 

to  wlioni  wages  paid 

are  employed. 

330 


POLICIES. 


Form  246        '^'^e  aLove  merely  deals  with  liability  imposed  ])y  the  Act,  but  some  com- 

'-  panics  issue  policies  insuring  the  employer  against  claims  in  respect  of  any 

accident  to  workmen  and  sometimes  secures  specified  compensation  to  injured 
workmen.  In  some  cases  the  policy  is  to  cover  weekly  wages  of  a  specified 
amount,  and  in  others  is  to  cover  the  employer  until  a  specified  sum  has  been 
expended  in  wages. 


Form  247. 

Live  stock 
insurance. 


Limit. 


Kenewal. 


Exceptions. 


Compulsory 
slaughter. 


Salvage. 


Variation  of 
policy. 


Rcciial  as  in  Form  243. 

NOAY  THIS  POLICY  WITNESSETH  and  declares  that  if  at  any 
time  [cjr.,  as  in  Form  24o]  durini;-  the  period  covered  by  the  premium 
so  pd  as  afsd,  or  any  further  period  in  respect  of  which  the  co  shall 
accept  a  premium,  any  animal  specified  in  the  schedule  hto  shall  die 
from  any  accident  or  disease,  then  in  every  such  case  the  co  will  pay  or 
make  good  all  the  damage  and  loss  which  the  insured  shall  sustain  by 
the  death  of  the  animal,  not  exceeding  in  each  case  the  anu)unt  set 
opposite  the  parlars  of  such  animal  in  the  sd  schedule. 

This  policy,  &c.  \_see  p.  314.] 

In  witness,  &c. 

The  schedule  will  be  divided  into  columns,  and  will  show  the  colour,  species 
[name],  age,  market  value,  insured  value,  premium,  &c. 

The  above  form,  and  the  conditions  following,  can  readily  be  altered  to  suit 
the  case  of  insurance  against  accidents  only. 

1.  The  company  will  cover  the  risk  on  each  animal  to  the  extent  of  not  more 
than  two-thirds  its  fair  market  value,  with  the  exception  of  stock  for  fattening, 
which  may  be  insured  up  to  the  full  market  value  at  the  time  of  proposal. 

2.  Every  application  for  the  renewal  of  this  policy  shall  be  made  to  the  com- 
pany at  least  seven  days  before  the  expiration  of  the  time  for  which  the  policy 
may  be  in  force,  and  shall  be  accompanied  by  a  deposit  of  20  per  cent,  of  the 
amount  of  premium  to  be  paid. 

3.  This  policy  does  not  insure  against  the  death  of  any  animal  resulting  from 
improper  use  or  unskilful  treatment,  or  wilful  neglect,  nor  against  death  result- 
inp-  from  rot,  or  liver-fluke,  nor  from  injuries  maliciously  inflicted,  nor  from 
malicious  slaughtering  or  poisoning,  nor  from  death  resulting  from  fire,  or 
occurrino-  during  transport  by  sea  or  land,  except  from  one  farm  of  the  insured 
to  another  in  the  same  or  adjoining  parishes,  nor,  in  the  case  of  sheep,  from 
rot  or  small-pox,  nor,  in  the  case  of  horses,  from  death  from  foaling,  or  the 
operation  of  castration,  or  from  glanders  and  farcy,  unless  at  an  additional 
premium. 

1..  When  any  animal  hereby  insured  is  desti'oyed  under  the  Contagious 
Diseases  (Animals)  Act,  or  under  any  Order  of  the  Privy  Council,  or  by  the 
instructions  of  any  government  or  local  inspector,  acting  under  the  authority 
of  such  Act  or  Order,  the  company  shall  be  liable  for  the  ditference  only 
between  the  amount  payable  to  the  owner  under  the  above-named  Act  and  the 
amount  of  insurance  on  such  animal  covered  by  this  policy. 

5.  One  third  of  the  salvage  on  cattle,  sheep,  or  pigs,  will  belong  to  the 
assured,  and  the  remaining  two-thirds,  as  also  the  whole  of  the  salvage  on 
horses,  will  belong  to  the  company,  but  in  no  case  will  less  than  25s.  for  horses 
in  laro-e  towns,  15s.  for  horses  in  the  country  and  small  towns,  IDs.  for  neat 
cattle  exceeding  18  months  old,  5s.  for  young  stock,  3s.  for  sheei)  and  pigs,  be 
deducted  by  the  company  from  the  amount  of  claims. 

G.  Subject  to  the  payment  of  such  premium  as  the  company  may  require,  the 
said  schedule  hereto  may,  with  the  consent  of  the  company,  be  varied  from 
time  to  time  by  the  entering  thereon,  or  on  a  separate  form,  of  other  animals 
either  in  addition  to  or  in  substitution  of  those  for  the  time  being  therein  com- 
prised.    Every  such  variation  shall  be  authenticated  by  the  signature  of  the 


FOEMS.  321 

secretary,  and  the  risk  of  the  company  in  respect  of  the  animals  added  shall   Form  247. 
commence  from  such  date  as  may  be  specified,  and  be  in  every  resjDect  subject 
to  the  terms  and  conditions  of  this  policy. 

[It  is  said  that  where  an  alteration  is  required  in  a  policy  it  may  be  made 
by  indorsement  if  it  is  such  as  is  provided  for  by  the  conditions  of  tlie  jDolicy  ; 
but  if  not,  and  the  contract  becomes  a  new  one,  a  new  policy  should  be  issued, 
or  the  indorsement  should  have  an  adhesive  stamp  attached  at  the  time  of 
execution.  Bunyan,  Fire  Insur.  61.  This  proposition  seems  consistent  with 
reason,  and  is  generally  acted  on.  Hence  the  introduction  of  a  clause  as 
above.] 

7.  All  stock  of  a  class  on  a  farm  or  premises  must  be  insured,  and  newly-  Separation  of 
purchased  stock  must  be  kept  separate  and  apart  from  other  insured  stock  on  stock. 

the  premises,  as  far  as  possible,  until  examined  and  passed  by  the  company's 
inspector. 

8.  Under  no  circumstances  will  the  company  be  liable  whilst  any  part  of  the  Premiiun 
premium  in  respect  of  the  original  insurance,  or  any  renewal,  addition  or  sub-  unpaid, 
stitution,  shall  be  unpaid.     Every  animal  must  be  in  perfect  health,  and  free 

from  any  injury,  at  the  time  of  such  payment,  and  so  continue  for  twenty-one 
days  after  the  date  of  any  proposal  paper. 

9.  The  insured  shall  give  notice  of  the  illness  of  or  of  any  accident  to  any  Notice  of 
stock  hereby  insured  to  the  secretary  at  the  head  oifice,  and  to  the  local  agent  illness, 
or  inspector  of  the  company,  within  twenty-four   hoiu-s  from  the  commence- 
ment of  such  illness,  or  occurrence  of  such  accident,  and  shall  comply  with  all 

such  directions  as  the  inspector  may  give.  When  the  carcase  is  fit  for  human 
food  the  assured  must  cause  it  to  be  dressed  and  disposed  of  to  the  best  advan- 
tage. 

10.  No  compensation  will  be  allowed  for  any  cattle,  sheep  or  pigs  slaughtered  When  no 
without  expi'ess   permission  from  the  inspector  of  the  company,  nor  for  any  compensation, 
horse  slaughtered  (except  in  cases  of  fractured  bones,  where  humanity  renders 

it  necessary),  without  authority  in  writing  under  the  hand  of  the  secretary  of 
the  company. 

11.  The  assured  shall  not  introduce,  or  permit  to  be  introduced,  a  diseased  Diseased  stock 
or  infected  animal  among  any  insured  stock,  or  upon  any  part  of  his  premises,  pot  to  be 

or  suffer  the  insured  stock  to  mix  with  diseased  or  infected  animals,  or  permit  i^trotluced. 
them  to  go  into  tainted  sheds  or  buildings,  or  any  other  place  where  diseased 
animals  have  been,  but  shall  cause  any  animal  attacked  with  any  con- 
tagious disease  to  be  completely  sepai-ated  and  isolated  from  the  remainder 
of  his  stock  immediately  upon  the  discovery  of  the  attack,  and  shall  not 
permit  any  communication  by  his  servants,  utensils,  or  otherwise,  be- 
tween diseased  and  healthy  animals,  and  shall  use  all  necessary  and 
proper  precautions  to  protect  his  healthy  stock  from  any  chance  of 
infection. 

12.  On  the  death  of  any  animal  hereby  insured  the  insured  shall  immedi-  Notice  on 
^tely  give  notice  thereof  to  the  secretary  at  the  head  ofiice,  and  to  the  local  ileatb. 
inspector  or  agent  of  the  company,  and  shall,  within  twenty-one  days  thereof, 
fiu'nish  to  the  company,  at  its  head  office  in  London,  on  the  printed  form  of  the 
company,  such  information,  accompanied  by  such  certificates  and  reasonable 

proof  as  to  the  death,  identity  and  value  of  the  animal,  and  the  observance  of 
these  conditions,  as  the  directors  may  require. 

13.  The  insui'ed  shall  permit  the  directors,  or  their  officers,  at  all  times  to  Inspection, 
inspect  the  animals  hereby  insured,  and  premises  of  the  assui'ed,  and  shall 
furnish  any  information  which  they  may  require,  and  shall  comply  with  all 
reasonable  regulations  and  directions  from  time  to  time  made  and  given  by  the 
company. 

14.  No  animal  hereby  insured  shall,  without  the  permission  of  the  company,  Eniploj-rajnt  of 
be  employed  for  any  other  purpose  than  that  specified  in  the  proposal,  nor  be  aniiua  s. 
removed  for  the  purpose  of  being  kept  on  any  other  farm  or  premises  than 

those  mentioned  in  the  proposal,  nor  be  insured  in  or  protected  by  any  other 

Y 


322 


POLICIES. 


Food 


Misrepre- 
sentation. 


Form  247.    office,  club  or  association,  without  previous  permission  in  writing  under  tlio 
hand  of  the  secretary  of  the  company. 

15.  The  insured  shall,  during  the  continuance  of  this  policy,  cause  every 
animal  from  time  to  time  hereby  insured  to  have  sufficient  and  proper  food, 
water,  and  shelter,  and  will  cause  them  to  be  propex-ly  treated  by  veterinary 
surgeons  while  suffering  from  disease  or  accident,  and  will  not  suffer  any  such 
animal  to  be  watered  at  any  stagnant  or  unwholesome  pond,  or  with  water  con- 
taminated by  manure  or  other  drainage,  but  will  keep  all  fences,  yards,  sheds 
and  stablings  where  any  animals  hereby  insured  shall  be  secure,  and  shall  at 
all  times,  and  to  the  best  of  his  knowledge  and  ability,  use  and  exercise  every 
due  and  proper  precaution  and  safeguard  against  loss,  or  danger  of  loss,  under 
this  policy. 

16.  If  there  shall  be  any  untrue  or  incorrect  statement  in  the  declaration 
upon  the  basis  of  which  this  insurance  is  granted,  or  if  the  insured  shall  have 
misstated,  or  omitted  to  state  any  material  fact  or  circumstance  at  the  time  of 
proposal,  or  shall  do  so  between  the  date  of  the  proposal  and  the  date  of  the 
commencement  of  the  risk  hereunder,  or  afterwards,  at  any  renewal,  alteration 
or  extension  of  this  policy,  or  on  the  making  of  any  claim  hereunder,  or  shall 
advance  any  false  or  fraudulent  claim,  or  shall  fail  in  any  particular  to  observe 
and  perform  the  terms  and  conditions  hereof,  this  policy  shall  be  void,  and  all 
premiums  paid  hereon  shall  be  forfeited  to  the  company. 

17.  No  agent  or  inspector  has  any  aiithority  to  dispense  with  the  express 
performance  of  any  of  the  above  conditions  ;  and  no  alteration  of  this  policy, 
or  any  indorsement  thereof,  will  be  valid,  unless  the  same  be  recognised  and 
countersigned  by  the  secretary  of  the  comjjany. 

18.  The  company  shall  not  be  bound  to  send  any  notice  of  the  renewal  premium 
becoming  due,  and  shall  be  at  liberty  to  decline  to  renew  the  policy  at  the 
end  of  the  year,  or  other  period  of  insurance.  [Sometimes  power  to  determine 
the  insurance  is  taken,  as  in  Form  24G,  Clause  11.] 

19.  If  any  difference,  &c. 


Authority  of 
agents. 


Deternaination. 


Arbitration. 


Horse 
insurance. 


Form  248.       Recitals  as  in  Form  243. 

Now,  &c.,  that  if,  &c.  [Form  213],  any  horse  or  horses  specified  in 
the  schedule  hto  shall  be  injured  by  accidental  external  violence  within 
the  meaning  of  this  policy,  and  shall  die  from  or  be  necessarily  slaughtered 
in  consequence  of  the  effects  of  such  injury,  Then,  &c.,  as  in  Form  247, 
mutatis  mutandis. 


Hiir;^cnn  to 
examine. 


The  above  form  can  readily  be  adapted  to  cover  a   specific  accident  to  a 
particular  animal ;  and  a  condition  can  be  added,  declaring,  "  This  insurance 

being  against  the  risk  of  only,  the  above  conditions  shall  only  ajjply  so 

far  as  they  are  applicable  accordingly." 

1 .  This  policy  does  not  insure  against  death  or  slaughter  caused  or  occasioned 
by  any  disease  or  comp>laint,  or  by  unskilful  treatment  or  neglect  before  or  at 
the  time,  or  following  any  accident,  or  by  castration  or  other  surgical  opera- 
tion performed  without  the  consent  of  the  company  in  writing,  or  by  anything 
administered  or  taken,  or  any  injury  maliciously  inflicted,  or  caused,  or  occa- 
sioned by  any  accident  arising  from  the  breach  or  non-observance  by  the 
insured  or  his  servants  of  any  of  these  conditions,  as  from  the  use  of  imperfect 
gear,  known  by  the  insured  or  his  servants  to  be  so,  or  from  strain  from  over- 
loading, or  from  accidents  occurring  while  foaling,  or  during  transit  by  railway, 
steam-vessel,  or  other  conveyance,  or  from  fire,  war,  tumult,  or  invasion,  or 
from  the  wilful  or  negligent  exposure  by  the  insured  or  his  servants  of  any 
animal  hereby  assured  to  unnecessary  danger. 

2.  In  case  of  an  accident  to  any  horse  hereby  assured,  it  shall  be  imperative 
upon  the  insured  immediately  to  call  in  a  duly  qualified  veterinary  surgeon  to- 


FOEMS.  323 

attend  the  animal,  and  the  insured  must  send  a  certificate  from  such  veterinary   Form  248. 
surgeon  with  full  particulars  of  the  injuries,  and  how  they  were  occasioned,  to 

the  secretary  of  the  company,  at  its  head  offices.  No. ,  within  twenty-four 

hours  of  the  accident,  and  shall,  at  the  request  of  the  company,  furnish  to  such 
head  office  on  their  printed  form  such  information,  accompanied  by  such  cer- 
tificate and  reasonable  proof  of  the  death,  or  accident,  or  any  circumstance 
relating-  thereto,  and  the  identity  and  value  of  the  animal,  and  of  the  observance 
of  these  conditions  prior  and  subsequent  to  the  accident,  as  the  directors  may 
require. 

3.  No  horse  may  be  slaughtered  (except  in  the  case  of  a  severe  fracture  of  Slaughter, 
the  bones,  certified  to  by  a  duly  qualified  veterinary  surgeon),  without  an 
authority  in  writing,  under  the  hand  of  the  secretary  of  the  company,  or  other 
officer  appointed  by  the  directors.  The  insured  must  dispose  of  the  carcase  of 
any  horse  when  dead  to  the  best  advantage,  and  the  whole  amount  realised 
shall  belong  to  the  company. 

•i.  Subject  to  the  payment  of  such,  &e.  [Form  247,  Clause  G]. 

5.  Uuder  no  circumstances,  &c.  [Form  217,  Clause  8]. 

6.  The  insured  shall  permit,  &c.  [Form  217,  Claiise  13]. 

7.  No  animal  insured  shall  without,  &c.  [Form  247,  Clause  14]. 

8.  The  insured  shall  during  the  continuance,  &c.  [Form  247,  Clause  15]. 

9.  If,  &c.  [Form  247,  Clause  16]. 

THIS    POLICY   OF    INSURANCE    WITNESSETH    that    Form  249. 


(hereinafter  called  the  insured)  having  pd  to (hereinafter  called  Transit. 

the  CO)  the  premium  of ,  the  co  hby  agrees  with  the  insured  that  if 

any  animal  specified  in  the  schedule  hto  shall  be  injured  from  accidental 
external  violence  within  the  meaning  of  this  poHcy  whilst  travelling 
between  the  points  of  departure  and  destination  respively  mentd  in  the 
same  schedule  by  the  modes  of  conveyance  therein  described,  and  shall 
within  fourteen  days  after  the  occurrence  of  such  accident  die  fi-om  or  be 
necessarily  slaughtered  in  consequence  of  the  effects  of  such  injury, 
Then,  &c.  [Form  247]. 

1.  This  policy  does  not  insure  against  general  average,  nor  against  death  or  Exceptions, 
slaughter,  caused  or  occasioned  by  any  accident  occurring  in  consequence  of 
unseaworthiness,  or  of  fire  on  board  of  any  vessel,  or  in  the  loading  of  any 

animal  at  the  point  of  departure,  the  company's  risk  commencing  when  the 
loading  of  such  animal  is  complete,  and  terminating  on  the  arrival  of  the 
vessel  or  train  in  which  the  animal  is  carried  at  the  port  or  station  at  which 
such  animal  should  be  landed  or  unloaded. 

2.  In  case  of  an  accident  to  any  horse,  the  insured  shall  where  possible  im- 
mediately call  in  a  duly  qualified  veterinary  surgeon  to  attend  it,  and  shall 
furnish  to  the  company  a  certificate  from  such  veterinary  surgeon  as  to  the 
cause  of  death,  or  natvire  of  injuries  ;  and  in  the  case  of  an  accident  to  any 
animal  whatsoever,  the  insured  shall  immediately  forward  to  the  company,  at 
their  head  office  in  London,  full  particulars  of  the  injui-ies,  and  how  they  were 
occasioned,  within  twenty-four  hours  of  the  accident,  or  of  the  same  coming  to 
the  knowledge  of  the  insured,  and  shall,  at  the  request  of  the  company,  furnish 
to  their  head  office  in  London,  on  their  printed  form,  such  information,  &c. 
[Form  248,  Clause  2]. 

3.  No  horse,  &c.  [Form  248,  Clause  3]. 

4.  The  insured  or  his  agents  shall,  so  far  as  possible,  see  that  every  animal 
hereby  insured  is  properly  loaded  and  secured,  and  shall  permit,  &c.  [Form  247, 
Clause  13]. 

5.  No  agent  or  inspector  has  any  authority,  &c.  [Form  247,  Clause  17]. 
G.  If  any  difference  [reference  to  arbitration].  / 

Y  2 


324 


POLICIES. 


Damage  by 
liorses  aud 
vehicles. 


Alteration  of 
risk. 

Certain  risks 
excepted. 


Form  250.       Recitals  as  in  Form  243. 

Now,  &c.,  that  if  at  any  time,  &c.  \_as  in  Form  24:3],  any  damao-e  or 
injury  shall  be  directly  caused  by  or  by  means  of  the  animals  or  vehicles 
of  the  insured  specified  in  the  schedule  endorsed  hereon,  or  any  of  them, 
to  any  person  or  persons  or  ppty  whilst  the  sd  animals  and  vehicles,  or 
any  of  them,  are  or  is  being  ridden  or  driven  on  the  road,  or  in  the 
street,  by  the  insured  or  his  pd  servant  or  servants,  Then  and  in  every 
such  case  the  co  will  pay  or  make  good  any  sum  or  sums  in  respect  of 
such  loss  or  damage  which  the  insured  maybe  honCt  Jidp  compelled  to  pay 
to  any  other  person  or  persons,  such  amount  not  to  exceed  in  each  case 
the  sum  insm'ed  hiereon,  as  specified  in  the  sd  schedule. 

This  policy,  &c.  [see  Form  243]. 

In  witness,  &c. 

The  schedule  will  be  endorsed  and  the  conditions  will  be  printed  below. 

1.  After  the  risk  has  been  undertaken  by  the  company,  nothing  shall  be  done 
whereby  such  risk  shall  be  altered  or  increased  without  the  written  consent  of 
the  company. 

2.  This  policy  does  not  cover  any  loss  or  damage  resiilting  from  the  intoxication 
of  any  rider  or  driver,  nor  any  loss  or  damage  arising  from  the  bites  or  kicks  of 
horses,  or  happening  through  any  invasion,  foreign  eneiuy,  insurrection,  civil 
commotion,  riot,  or  any  military  or  visurped  jjower  whatsoever,  or  by  or  through 
any  person  or  persons  engaged  or  concerned  in  notorious  resistance  to  the  au- 
thority of  magistrates  or  to  any  other  lawful  authority,  nor  any  loss  or  damage 
arising  either  directly  or  indirectly  from  fire  or  the  consequences  thereof, 
nor  from  wilful  injiu-y  by  any  person,  nor  from  the  negligence,  carelessness, 
mismanagement,  neglect,  or  wrong-doing  of  the  insured  or  any  of  his  servants, 
employes  or  agents. 

3.  All  proi^er,  reasonable  and  skilful  care  shall  at  all  times  be  taken  and  ex- 
ercised in  the  driving  of  the  vehicles  specified  in  the  said  schedule,  and  every 
of  them,  and  the  same  shall  only  be  entrusted  to  proper,  careful  and  experienced 
servants,  and  shall  be  drawn  by  fit  and  proper  animals,  without  vice  and  c^uiet 
and  steady  in  harness. 

4.  This  policy  does  not  cover  any  loss  or  damage  which  may  be  caused  by  any 
of  the  animals  or  vehicles  specified  in  the  said  schedule  whilst  out  of  the  United 
Kingdom. 

5.  This  policy  does  not  cover  any  loss  or  damage  which  the  insured  may  have 
to  pay  to  any  person  or  persons  in  his  own  employ,  or  to  any  person  or  persons 
riding,  driving  or  being  carried  on  any  animal  or  on  or  in  any  vehicle  of  the 
insured. 

6.  Whenever  any  loss  or  damage  shall  be  directly  caused  by  or  by  means  of 
the  animals  or  vehicles  specified  in  the  said  schedule,  or  any  of  them,  within 
the  meaning  and  terms  of  this  policy,  and  the  same  shall  happen  by  reason  of 
the  negligence,  carelessness,  mismanagement,  neglect,  or  wrong-doing  of  any 
person  other  than  the  insured,  his  servants,  employes,  or  agents,  it  shall  be 
lawful  for  the  company  to  sue  in  the  name  of  the  insured,  and  recover  compen- 
Bation  from  the  person  or  jjersons  causing  such  damage,  and  any  moneys  or 
other  compensation  which  shall  be  recovered  shall  belong  to  the  company. 

7.  The  Association  shall  be  at  full  liberty  to  defend,  settle,  compromise,  and 
otherwise  manage,  deal  with  and  regulate  any  actions,  suits,  or  other  jiroceed- 
ings  or  claims  which  may  be  brought,  instituted,  or  made  against  the  insured, 
his  servants,  employes  or  agents,  or  any  of  them  for  or  in  respect  of  any  loss  or 
damage  caused  or  alleged  to  be  caused  by  or  by  means  of  the  animals  or  vehicles 
specified  in  the  said  schedule,  or  any  of  them,  and  the  insured,  his  servants, 
employes  and  agents,  shall  in  this  respect  give  the  company  every  assistance  in 
his  or  their  power. 


C;u-e  to  he 
taken. 


Xo  foreign 
risk. 

Damage  to 

employes 

incliuled. 


Subrojration. 


PrneeedinL 


FOEMS. 


32[ 


8.  Immediately  upon  the  happening  of  any  accident  hereby  insured  against.   Form  250. 
the  insured  shall  give  notice  thereof  in  writing  to  the  company  at  their  regis- 


tered  office,  si^ecifying  as  far  as  possible  the  time  and  place  when  and  whex-e  ■^^°''^^^' 
such  accident  happened,  by  which  particular  animal  or  animals,  vehicle  or 
vehicles  the  same  was  occasioned,  the  name  or  names  of  the  driver  or  drivers, 
rider  or  riders,  and  the  names  and  addresses  of  every  person  to  whom  or  to 
whose  property  any  damage  has  been  or  has  been  alleged  to  have  been  done, 
and  the  nature  and  extent  of  such  damage,  and  any  other  particulars  that  may 
be  reasonably  practicable,  to  enable  the  association  to  ascertain  the  exact  cause 
and  nature  of  the  accident,  and  the  extent  of  the  damage  done. 

9.  Tlie  company  shall  be  at  liberty  to  undertake  the  settlement  of  all  claims  Settlement  of 
on  behalf  of  the  insured,  and  the  insured  shall  not  in  any  way  intermeddle  claims, 
therewith,  or  settle  or  compromise,  or  attempt  to  settle  or  compromise,  any 

claim  that  may  be  made  against  him  for  damages  or  compensation  in  respect  of 
any  accident  within  the  terms  of  this  policy  without  the  written  consent  of  the 
company. 

10.  The  insm-ed  shall,  in  support  of  any  claim  which  he  may  make  upon  the  Insured  to 
company,  give  all  such  proofs  and  explanations  as  shall  be  reasonably  required,  support, 
together  with,  if  required,  a  statutory  declaration  of  the  truth  thereof.     No 

claim  in  respect  of  any  loss  or  damage  shall  be  payable  until  all  the  require- 
ments of  this  condition  have  been  fulfilled. 

11.  The  company,  its  directors,  officers,  insjiectors,  and  agents  shall  have  at  Inspection. 
all  reasonable  times,  during  the  continuance  of  tliis  policy,  access  to  the  animals 

and  vehicles  specified  in  the  said  schedule,  to  inspect  and  examine  the  same, 
and  full  right  of  admission  to  any  coach-house  or  other  place  where  they  or 
any  of  them  may  be  for  the  time  being. 

12.  If  at  the  time  of  any  claim  being  made  for  loss  or  damage  under  or  by  Average. 
virtue  of  this  policy,  there  be  any  other  subsisting  insurance,  &c.,  as  in  Form 

242,  cl.  9. 

13.  Subject  supra,  p.  320,  cl.  6. 

14.  The  Slim  or  sums  to  be  paid  by  the  company  in  respect  of  any  loss  or  Limit  of 
damage,  shall  in  no  case  exceed  the  sum  hereby  insured,  and  all  sums  which  liability. 
may  from  time  to  time  be  paid  under  or  by  virtue  of  this  policy  in  any  one 

year,  shall  be  counted  in  diminution  of  the  said  sum  hereby  insured,  so  that  in 
case  of  subsequent  loss  during  the  same  year  the  total  amount  payable  by  the 
company  shall  not  exceed  the  said  sum  hereby  insured. 

15.  If  there  shall  be  [Form  247,  supra,  p.  322,  cl.  16.]  Avoidance. 

16.  [Arbitration.] 

Whas  {_recitcd  as  in  Form  243].  Form  251. 

NOW  THIS  POLICY  WITNESSETH  and  declares,  that  if  at  any  ^^^_ 

time,  &c.  \_as  In  Form  24o  ilotcii  io  daij  of ],  any  damage  or  injury 

shall  be  occasioned  Ijy  the  explosion  of  the  steam  boiler  specified  in  the 
schedule  hto,  or  the  collapse  of  the  flue  tubes  of  such  boiler,  or  any  or 
either  of  them,  'whether  to  the  boiler  itself,  or  to  the  engine,  machinery, 
or  apparatus  with  which  it  may  be  connected,  or  to  any  other  ppty 
whatsoever  of  the  insured  (except  destruction  or  damage  by  fire  origi- 
nating from  such  explosion,  and  loss  sustained  through  stoppage  of  work 
or  other  indirect  damage),  Then  and  in  every  such  case  the  co  shall  pay 
or  make  good  to  the  insured  all  such  damage,  Provided  that  the  total 
amount  to  be  recoveral)le  by  virtue  of  this  policy  in  any  one  year  shall 
not  exceed /. 

This  policy,  &c.  \_as  in  Form  243]. 

Ix  Witness,  &c.     iAdd  Srhcdidc'] 


326 


POLICIES. 


Inspection. 
Reparation 


Conditions. 

Form  251.  l.  The  inspectors  of  the  comijany  shall  at  all  reasonable  times  be  iDermitted 
to  inspect  and  examine  any  boiler  insured  tinder  this  jjolicy,  and  in  case  per- 
mission be  at  any  such  time  refused  by  the  insured  or  any  person  acting  on  his 
behalf  the  company  may  declare  this  policy  void. 

2.  The  insux-ed  shall,  at  his  own  expense  and  with  all  practical  expedition, 
and  if  so  directed  or  required  by  any  inspector  of  the  company  before  any  fur- 
ther use  of  the  boiler,  amend  or  remedy  any  defect  or  want  of  reparation  in  any 
insured  boiler  or  the  apparatus  connected  with  it  wliich  may  have  been  notified 
to  him  by  any  such  insjjector  of  the  company,  and  in  other  respects  act  under 
the  advice  and  upon  the  suggestions  of  any  such  inspector  in  relation  to  such 
boiler  and  apparatus  (and  particiilarly  in  relation  to  the  maximum  pressure  or 
load  to  be  placed  upon  the  safety  valves),  provided  that  such  notification,  advice 
or  suggestions  respectively  shall  be  in  wi-iting  under  the  hand  of  such  inspector ; 
and,  if  the  insured  fail  to  comply  therewith,  this  policy  shall  be  void  as  regards 
the  boiler  or  boilers  referred  to  in  such  notice.  The  inspection  by  the  com- 
pany's inspector  is  intended  to  be  made  for  the  sole  purpose  of  affording  in- 
formation to  the  company,  and  no  duty  or  obligation  shall  be  cast  upon  the 
company  to  make  any  such  inspection. 
Notice.  3.  In  case  of  any  explosion  or  damage  by  exi^losion  or  collapse  of  flue  tubes 

or  injury  to  or  distortion  of  such  tubes  insured  against  by  this  policy,  the 
insured  or  some  person  acting  on  his  behalf  shall  forthwith  give  notice  thereof 
by  telegram  if  practicable  and  also  in  writing  to  the  company  at  its  chief  office 

in  N ,  and  to  the  chief  inspector  of  the  district  in  which  the  boiler  is  situated, 

and  thereupon  the  company  will  inspect  such  damage  and  cause  it  to  be  made 
good  or  authorize  the  insured  to  do  so,  and  in  such  case  the  insured  shall  as 

soon  as  possible  thereafter  deliver  at  the  said  office  of  the  company  in  N a 

detailed  and  true  account  of  the  sum  claimed  for  such  damage,  and  shall  furnish 
such  particulars  and  further  information  (if  any)  as  the  comjDany  may  require, 
and  the  company  will  Avithin  one  month  after  the  receipt  of  such  account,  par- 
ticulars and  information,  and  so  far  as  the  claim  or  demand  may  be  found  cor- 
rect, pay  the  amount  thereof.  The  company  will  not  be  liable  for  any  repairs 
executed  previous  to  such  inspection  or  without  written  authority,  nor  for  any 
damage  covered  by  this  policy  if  the  insured  does  not  give  notice  to  the  com- 
pany and  to  the  chief  inspector  as  before  described  within  forty-eight  hours  of 
its  occurrence. 
Alteration,  4.  In  case  of  removal  or  alteration  of  any  boiler  insured  by  this  policy  notice 

in  wi-iting  shall  be  given  to  the  chief  inspector  of  the  district  in  which  it  is 
situated  or  at  the  chief  office  of  the  comi:)any  previous  to  such  removal  or  altera- 
tion, otherwise  this  j^olicy  shall  be  void  as  regards  such  boiler. 
Explosion.  5.  The  term  "  explosion  "  herein  used  shall  mean  violent  tearing  asunder  of 

a  boiler  through  internal  pressure.  The  term  "  collapse "  shall  mean  the 
crushing  either  partially  or  entii'ely  of  any  internal  flue  of  a  boiler  by  force  of 
the  pressure  on  the  external  surface  of  the  flue,  and  whether  attended  with 
rupture  of  the  flue  or  otherwise. 
Excepted  risks,  6.  The  company  shall  not  be  liable  to  keep  in  repair  any  boiler  within  referred 
to,  nor  shall  the  company  be  liable  in  respect  of  any  i-epairs  rendered  requisite 
through  fracture,  blistering,  or  corrosion  of  any  of  the  flues  or  parts  of  the 
boiler,  or  for  any  other  defects  caused  by  wear  and  tear,  or  for  damage  to  any 
flues,  seams,  or  other  parts  from  any  matter  from  or  mixed  with  the  feed  water 
or  through  the  accumulation  of  deposit  thereon  from  any  cause  whatever. 
Average,  7.  If  at  the  time  <5f  damage  happening  to  any  boiler  or  boilers  or  proi^erty 

insured  by  this  policy  there  shall  exist  any  other  insurance  qr  insurances  against 
such  damage,  there  shall  only  be  payable  under  this  policy  such  a  iDrojportion  of 
the  said  damage  as  the  amount  insured  by  this  policy  shall  bear  to  the  gross 
amount  of  insurances  on  the  boiler  or  boilers  and  proj^erty  so  damaged. 


FORMS.  307 

8.  In  case  any  difference  [Form  312,  Clause  llj.  Form  251 

[Add  clauses  IG,  17,  18  of  Form  217]. 


12.  No  receipts  for  jjreminms  are  to  be  binding  on  the  company  except  such  as  Receipts. 

may  be  printed  and  issued  from  the  office  in ,  nor  unless  they  be  signed  by 

the  secretary. 

As  to  boiler  insi)ection,  see  45  &  4G  Vict.  c.  22. 

Sometimes  the  policy  is  framed  so  as  to  indemnify  the  insured  against  claims 
for  workmen  damaged  by  any  explosion. 

Whas  [recital  as  in  Form  243].     jSTow,  &c.  [as  in  Form  243],  any  Form  252. 

damao'e  shall  happen  to  the  o-lass  specified  in  the  schedule  hto,  the  co  ^,77     ; 

.„    *  ,   ^^       -         ,      °  ^  '  Plate  glass, 

will  pay  or  maJve  good  such  damage. 

This  policy,  &c.  [Form  243.] 

In  witness,  &c.  [Add  Schedule.'] 

See  Marsden  v.  City  ^-  County  Co.,  1  C.P.  232,  for  an  action  on  such  a  policy. 

Conditions. 

1.  In   the  event  of  a  loss  all  glass  is   considered  plain,   unless   otherwise  Plain  glass, 
described  on  the  policy. 

2.  In  the  event  of  the  breakage  of  any  glass  hereby  insured  the  company  shall  Breakage. 
iiave  the  option  of  paying  the  value  of  the  glass  so  broken  less  the  value  of  the 
salvage  (if  any),  or  of  rej)lacing  the  same  with  glass  of  a  similar  quality. 

3.  If  the  insured  shall  be  entitled  to  recover  from  any  other  person  compen-  Subrogation, 
sation  for  any  damage  done  to  any  glass  hereby  insui-ed,  he  shall  be  bound  to 

assign  his  right  to  sue  for  such  compensation  to  the  company  on  their  settling 
any  claim  which  he  may  be  entitled  to  make  under  this  policy. 

4.  In  case  of  damage  notice  thereof  must  be  given  to  the  company  within  Notice, 
seven  days  after  the  occurrence,  and  the  claimant  must  furnish  full  particulars 

of  the  damage  and  how  and  by  what  means  the  same  was  caused,  and  such 
particulars  must,  if  required  by  the  comj^any,  be  verified  by  statiitory  declaration. 

5.  This  policy  does  not  insure  against  loss  by  breakage  caused  by  or  resulting  Excepted  risks, 
from  or  in  consequence  of  fire.  Queen's  enemies,  civil  or  political  commotion, 

breakage  during  removal,  alteration,  repair  of  premises,  or  exj^losions. 

6.  In   the  event  of  any  portion  of  the  glass  insm-ed  by  this  policy  being  Cesser  of 
broken,  this  policy  shall  not  cover  any  glass  substitiited  for  such  broken  glass,  liability, 
unless  such  additional  premium  is  i^aid  in  respect  thereof  as  the  comi^any  may 
require. 

7.  In  no  case  will  the  company  be  held  liable  for  interruption  or  delay  of  Excepted 
business  or  damage  of  any  kind  during  the  time  intervening  between  the  occur-  damage, 
rence  of  a  breakage  and  the  replacement. 

8.  Frames  of  every  description  are  to  be  at  the  risk  of  the  insured.     Window  Frames, 
fittings  or  other  obstructions  to  replacement  must  be  removed  by  the  insured, 

■and  all  salvage  mvist  be  preserved,  the  same  being  the  property  of  the  company. 

9.  This  policy  of  insurance  will  be  vitiated  if  any  alteration  is  made  in  the  Alterations 
within-mentioned  glass  or  any  alteration  in  the  building,  trade,  or  occupancy, 

imless  notice  is  given  to  the  company  of  said  alterations  and  the  assent  and 
sanction  of  the  company  recorded  by  the  endorsement  hereon. 

10.  If,  &c.  [Form  247,  Clause  16. J  Avoidance. 

11.  Subject,  &c.  [Form  247,  Claiise  G  altered.] 

12.  Arbitration. 

Whas,  etc. 

Now",  &c.  [Form  243],  tliat  if,  &c.,  any  damage  by  hail  shall  happen  to  ^OJ^m  253 
the  corn  seed  or  green  crops  specified  in  the  schedule  hto  the  co  will  pay  Hail. 


328 


POLICIES. 


Form  253.  or  make  good  to  the  insured  all  such  damage  [to  au  amount  not  exceed- 

iug  in  the  whole Z.] 

This  policy,  &c.  [^sujn'a,  Form  243]. 
In  witness,  &c.     [Add  scJtedide.'] 


Double 
insurance. 


Notice  of 
claim. 

Valuer. 


Separation  of 
damaged  crop. 

Avoidauce. 
Variations. 
Rate  of 
compensation. 


Prior  damage 
excepted. 


Conditions  to  be  Endorsed. 

1.  Wherever  the  jsroperty  hereby  insured  is  insured  against  hail  elsewhere, 
notice  of  the  fact  must  be  given  to  the  company,  and  in  case  of  damage  the 
company  shall  be  liable  only  for  a  rateable  proportion  thereof,  and  unless  such 
notice  be  given  before  the  damage  is  sustained  the  company  shall  not  be  liable 
for  such  damage. 

2.  The  insured  must  within  four  days  after  any  damage  has  been  done  give 
notice  thereof,  &c. 

3.  After  the  requisite  notice  of  damage  is  received  the  company  will  send  a 
valuer  to  assess  the  same,  and  if  the  valuer  and  the  insured  cannot  agree  the 
difference,  &c.  [arbitration]. 

±.  The  insui-ed  shall,  if  so  required  by  the  company,  keep  separate  and  apart 
any  crop  which  shall  have  been  damaged,  and  when  thrashed  (which  must  be 
■\vithin  three  months  after  harvesting)  declare  the  produce  thereof  per  acre. 

5.  If,  &c.  [Form  247,  Clause  16]. 

6.  Subject,  &c.  [as  in  Form  2i7,  Condition  14>]. 

7.  Compensation  for  loss  will  be  made  at  the  imperial  averages  for  wheat, 
bai'ley,  oats,  peas,  beans,  and  rye  in  the  London  Gazette  the  week  before  the 
occurrence  of  tire  loss,  and  for  all  other  crops  and  seeds  at  the  ordinary  price  in 
the  neighboui'hood.  Garden  peas  and  beans  will  only  be  paid  for  at  the  average 
price  of  ordinary  farming  produce. 

8.  The  company  is  not  to  be  liable  if  the  crojjs  insured  have  sustained  any 
injury  from  hail  before  the  proposal  for  the  insiu-ance  was  delivered. 


Guarantee  of 
honesty. 


Form  254.       Whas (hereinafter  called  the  employed)  is  in  or  is  about  to  be 

taken  into  the  employmt  of  (hereinafter  called  the  employer)  in 

the  capacity  set  forth  in  the  proposal  and  declon  hereinafter  mentd : 
And   whas  a   proposal  and  declon,  signed  by  the  employed  and  the 

employer,  has  been  delivered  to  the  (hereinafter  called  the  co),. 

which  proposal  and  declon  is  hby  declared  to  be  the  basis  of  the  con- 
tract contd  in  this  policy  :  And  whas  paymt  of  premium]  :  N"OW 
THIS  POLICY  WITNESSETH  that  tlie  co  hby  agrees  with  the  em- 
ployer that  if  at  any  time,  &c.  {_Form  243,  doini  to  day  of ]  and 

the  employed  shall  remain  in  the  uninterrupted  employmt  of  the  em- 
ployer in  this  capacity  and  in  the  manner  set  forth  in  the  sd  proposal 
and  declon,  the  employer  shall  sustain  any  loss  by  reason  or  in  conse- 
(|uence  of  any  fraud  or  dishonesty  of  the  employed,  the  co  shall  pay  or 
make  good  to  the  employer  the  full  amount  of  such  loss  not  exceeding 

/.  :  And  in  conson  of  the  premes  the  employed  hby  agrees  with  the 

co  to  indemnify  it  from  all  claims  and  demands  by  the  employer  under 
this  policy,  and  aU  actions,  costs,  damages  and  expenses  in  relation  thereto. 

This  policy,  &c.  [a.s  in  Form  243]. 

In  witness,  &c. 

[A  considerable  number  of  guarantee  forms  are  in  use,  e.  g.,  guarantee  in 
favour  of  A.,  who  has  been  surety  for  B.,  to  secure  the  honesty  of  poor-law 
MLsrepresenta-  '^®'^^''^'  receivers,  liquidators,  &c.     See  another  form,  infra,  "  Winding  up."] 
tion.  ' '      1.  If.  &c.  [Form  211,  Clause  1]. 


FOEMS.  329 

2.  This  policy  shall  remain  in  force  only  so  long  as  the  precautions  and  checks   Form  254. 

for  seciu-ing  accuracy  of  account,  and  liinitiny:  the  amount  of  moneys  entrusted 

to,  or  left  in  the  hands  of  the  employed  at  any  one  time,  shall  be  faithfully  saieguanis. 
and  duly  observed  and  put  in  practice  on  the  part  of  the  employer,  in  sub- 
stantial accordance  ^vith   the  representations  made  in  the  said  proposal  and 
declaration. 

The  employer  shall  give  notice  in  writing  to  the  company  of  any  fraudulent  Notice. 
or  dishonest  act  committed  by  the  employed  within  ten  days  after  the  employer 
becomes  cognisant  thereof,  and  upon  his  becoming  cognisant  of  any  such  act, 
the  company  shall,  ipso  facto,  and  without  any  notice  whatever,  be  relieved 
from  all  liability  under  this  policy,  so  far  as  regards  the  subsequent  acts  of  the 
employed. 

When   any  loss  which  may  be  sustained  or   inciu-red  as  aforesaid  by  the  Surrender  of 
employer  shall  have  been  made  good  and  satisfied  by  the  company,  this  policy  policy, 
shall  be  g-iven  up  to  the  company. 

The  employer,  if  required  by  the  company,  shall  at  the  expense  of  the  com-  Subrogation, 
pany  assign  to  the   company   all  claims  and   rights  of  action  vested  in  the 
employer  against  the  employed  in  respect  of  any  loss  in  respect  of  which  the 
company  shall  admit  its  liability  hereunder. 

3.  In  the  event  of  any  loss  or  damage  accruing  to  the  employer,  in  respect  of  Notice  of 
which  a  claim  may  be  made  under  this  policy,  the  employer  shall,  within  ten  claim, 
days  after  such  loss  or  damage  is  discovered,  give  notice  of  such  claim,  with 

the  particulars  thereof  so  far  as  then  ascertained,  to  the  head  office  of  the 
company,  and  shall  also  cause  to  be  delivered  as  soon  thereafter  as  the  cir- 
crunstances  will  permit  a  statement  in  wi-iting,  setting  forth  fully  the  amount 
and  particulars  of  such  loss  or  damage,  and  of  the  acts  and  defaults  by  which 
such  loss  or  damage  is  alleged  to  have  been  occasioned,  together  with  proper 
vouchers  in  support  thereof ;  and  in  case  such  statement  and  vouchers  shall 
not  be  lodged  with  the  company  within  three  months  after  the  date  of  notice 
of  said  claim,  such  claim  will  be  held  to  be  withdra^vn,  and  the  company  shall 
not  be  liable  therefor,  or  for  any  future  claim  or  demand  in  respect  of  such 
alleged  loss  or  damage. 

4.  The  employer  shall  also,  if  so  required  by  the  company,  cause  to  be  made  Statutory 
and  delivered  at,  or  transmitted  to  the  said  office  a  statutory  declaration,  by  declaration, 
or  on  behalf  of  the  employer,  of  the  truth  of  the  statement  above  mentioned, 

and  setting  forth  that  the  precautions  and  checks  ^vithin  referred  to  have  been 
faithfully  and  duly  observed  and  put  in  practice  in  substantial  accordance  with 
the  representations  made  on  behalf  of  the  employer  in  the  said  proposal,  and 
in  default  thereof  the  company  will  not  be  liable  to  make  good  the  particular 
loss  or  damage  so  claimed. 

5.  The  employer  shall  also  cause  to  be    afforded  to  the  company  all    such  Information, 
information  and  assistance  as  may  be  reasonably  required  for  prosecuting  or 
bringing  to  justice  the  employed  for  any  criminal  oifence  committed  by  him 

in  his  said  emploj'ment,  by  reason  or  in  consequence  of  which  the  comj)any 
shall  become  chargeable  under  this  policy,  or  for  maintaining  any  action  against 
the  employed,  his  executors,  or  administrators,  for  reimbursing  to  the  com- 
pany any  moneys  which  they  may  pay,  or  become  liable  to  pay,  under  this 
policy. 

6.  Subject  to  the  performance  of  the  four  preceding  conditions,  payment  of  When  paj-ment 
a  claim  will  be  made  within  three  calendar  months  from  the  time  of  the  delivery  t°  "^  made. 

of  the  statement  above  mentioned,  or  the  verification  thereof,  if  required. 

7.  Any  salary  or  commission  which  but  for  the  default  on  the  part  of  the  Salary  to  be 
employed  on  which  the  claim  shall  be  founded  would  have  become  payable  by  deducted, 
the  employer  to  the  employed,  or  any  other  money  which  shall  be  due  to  the 
employed  from  the  employer,  shall  be  deducted   from  the    amount  payable 

tmder  this  policy. 

8.  The  right  to  make  a  claim  imder  the  wdthin    policy   will  cease  at  the  Death  of 
expiration  of  tlu-ee  calendar  months  after  the  death  of  the  emijloyed.  employed. 


330  rOLICIES. 


Limit  of  time. 


Form  254.  9.  The  ri^ht  to  make  a  claim  iinder  the  within  policy  in  respect  of  any  loss 
will  cease  at  the  expiration  of  six  calendar  months  after  the  act  or  default 
occasioning  such  loss,  and  no  claim  shall  be  made  under  the  policy  after  the 
expiration  of  three  calendar  months  from  the  time  when  the  employed  shall 
leave  the  service  of  the  employer. 

Receipts.  10.  No  receipts  for  the  renewal  premium  on  this  policy  are  valid  hut  the 

official  receipts  signed  by  the  manager  or  secretary  of  the  company. 
11.  If  any  difference  [refei'ence  to  arbitration]. 

Average.  12.  This  policy  is  granted  upon  the  exj^ress  understanding  or  agreement  that 

if  the  employed  is  or  shall  hereafter  be  guaranteed  by  any  other  person,  society, 
or  company  against  svich  loss  as  within  mentioned,  this  company  shall  only 
be  liable  to  pay  to  the  employer  rateably  with  such  person,  society,  or 
company. 

See  the  following  cases  : — Phillips  v.  Foxall,  L.  E.  7  Q.  B.  667,  employer 
concealing  dishonesty  of  employed ;  and  London  Guarantee  Co.  v.  Fearnley, 
5  Ap.  Cas.  911,  as  to  construction  of  guarantee  policy. 

Form  255.  The Marine  Insurauce  Co,  Limtd. 

Policy  on  ship.      (ci)  Whas [has]  represented  to  the  above-named  co  (hereinafter 

called  the  co)  that  [he  is]  interested  in  or  duly  authorised  as  owner, 
agent  or  otherwise  to  make  the  insurance  hereinafter  mentd  and  described 
with  the  CO,  and  [has]  promised  to  pay  forthwith  for  the  use  of  the  co, 

at  the  office  of  the  co,  the  sum  of 1,  as  a  premium  or  conson  at  and 

after  the  rate  of p.  c.  for  such  insurance. 

(b)  NOW  THIS  POLICY  OF  INSURANCE  WITNESSETH  that 

in  conson  of  the  premes  and  of  the  sd  sum  of /.  the  co  hby  promises 

and  agrees  with  the  sd [liis]  exs,  ads  and  assigns  that  the  co  will 

pay  and  make  good  all  such  losses  and  damages  hereinafter  expressed  as 
may  happen  to  the  subject  matter  of  this  policy,  and  may  attach  to  this 

policy  in  respect  to  the  sum  of /.  hby  insured,  which  insurance  is 

hby  declared  to  be  upon  the  ship  or  vessel  called  the ,  whereof 

is  at  present  master,  or  whoever  shall  go  for  master  of  the  sd  ship 

or  vessel  lost  or  not  lost  at  and  from . 


(c)  And  the  co  promises  and  agrees  that  the  insurance  afsd  shall  com- 
mence upon  the  sd  shijJ  as  above,  and  shall  continue  until  she  hath 
moored  at  anchor  for  twenty-four  hours  in  good  safety  at  her  place  of 
destination. 

UI)  And  that  it  shall  be  lawful  for  the  sd  ship  or  vessel  to  proceed  and 
sail  to  and  touch  and  stay  at  any  ports  or  places  whatsoever  in  the  course 
of  her  sd  voyage  [for  all  necessary  pposes  without  prejudice  to  this 
insurance]. 

(e)  And  touching  the  adventures  and  perils  which  the  sd  co  is  made 
liable  unto,  or  is  intended  to  be  made  liable  unto,  by  this  insurance,  they 
are  of  the  seas,  men  of  war,  iire,  enemies,  pirates,  rovers,  thieves,  jetti- 
sons, letters  of  mart  and  counter-mart,  surprisals,  takings  at  sea,  arrests, 
restraints  and  detainmts  of  all  kings,  princes,  and  people  of  what  nation, 
condition  or  quality  soe^•er,  l)an'atry  of  the  master  and  mariners,  and  of 
all  other  perils,  losses,  and  misfortunes  that  have  or  shall  come  to  the 
hurt,  detrimt  or  damage  of  the;  afsd  sul)ject  matter  of  this  insurance,  or 
any  pt  thereof. 


POEMS. 


331 


(/)  And  in  case  of  any  loss  or  misfortune  it  shall  be  lawful  to  the  Form  255. 
insured,  their  factors,  servants  and  assigns,  to  sue,  labour'  and  travel  for, 
in  and  about  the  defence,  safegaiard  and  recovery  of  the  afsd  subject 
matter  of  this  insurance  or  any  pt  thereof,  without  prejudice  to  this 
insurance,  the  charges  whereof  the  co  will  bear  in  jDroportion  to  the  sum 
hby  insured  :  And  it  is  expressly  declared  and  agreed  that  no  acts  of  the 
insurer  or  insured  in  recovering,  saving  or  preserving  the  ppty  insured 
shall  be  considered  as  a  waiver  or  acceptance  of  abandomnt. 

{g)  And  it  is  further  agreed  that  if  the  ship  hby  insured  shall  come 
into  collision  with  any  other  ship  or  vessel,  and  the  insured  shall  in 
consequence  thereof  become  liable  to  pay  and  shall  pay  to  the  persons 
interested  in  such  other  ship  or  vessel,  or  in  the  freight  thereof,  or  in  the 
goods  or  effects  on  board  thereof,  any  sum  or  sums  of  money  not  ex- 
ceeding the  value  of  the  ship  hby  assured,  calculated  at  the  rate  of  8?. 
per  ton  on  her  registered  tonnage,  the  co  will  pay  the  insured  such  pro- 
portion of  three-fourths  of  the  smn  so  paid  as  the  sum  hby  insured  bears 
to  the  value  of  the  sd  ship,  and  in  cases  where  the  liability  of  the  ship 
has  been  contested  with  the  consent  in  writing  of  the  co,  the  co  will 
also  pay  a  like  proportion  of  three  fourth  pts  of  the  costs  thereby 
incurred  or  pd,  provided  also  that  this  clause  shall  in  no  case  extend  to 
any  sum  which  the  insured  may  become  liable  to  pay  or  shall  pay  in 
respect  of  loss  of  life  or  personal  injury  to  individuals  from  any  cause 
whatsoever. 

{]{)  And  it  is  declared  and  agreed  that  corn,  fish,  flour,  salt,  fruit,  and 
seeds  shall  be  and  are  warranted  free  from  average  miless  general,  or  the 
ship  be  stranded,  and  that  sugar,  rum,  hides,  skins,  hemp,  flax,  and 
tobacco  shall  be  and  are  warranted  free  fi'om  average  under  five  pounds 
p.  c.  :  that  all  other  goods,  also  the  ship  and  freight,  shall  be  and  are 
warranted  free  from  average  under  three  pounds  p.  c,  unless  general,  or 
the  ship  be  stranded,  sunk,  or  l)urnt. 

(i)  Waeranted  free  from  capture,  seizure,  and  detention,  and  aU  the 
consequences  thereof,  or  any  attempt  thereat,  and  all  other  consequences 
of  hostilities. 

jST.B.  The  usual  deduction  of  one-third  of  the  amount  of  repairs  is 
not  made  by  this  co  in  the  case  of  ships  built  within  the  limits  of  the 
United  Kingdom,  until  after  eighteen  months  from  the  date  of  the 
original  register. 

In  witness,  &c. 

The  above  and  the  following  are  respectively  taken  from  policies  used  by- 
one  of  the  leading  London  companies  ;  but  the  clauses  in  iise  vary  consi- 
derably. See  "  Owen's  Marine  Insurance  Notes  and  Clauses/'  published  by 
Sampson  Low  &  Co.,  1883. 

The Marine  Insurance  Co,  Limtd. 

AVhas,  &c.  [as  in  Form  255].  Form  256. 

NOW  THIS  POLICY  OF  INSUEANCE  WITNESSETH  that  in  Poiicyon^rgo. 
conson  of  the  premes  and  of  the  sd  sum  of /.,  the  co  hby  promises 


3:3:^  POLICIES. 

Form  256.   and  ugrees  with  the  sd ,  his  exs,  ads,  and  assigns  that  the  co  will 

pay  and  make  good  aU  snch  losses  and  damages  hereinafter  expressed  as 
may  happen  to  the  snbject-matter  hby  insured,  which  insurance  is  hby 

declared  to  be  upon in  the  ship  or  vessel  called  the ,  whereof 

is  at  present  master,  or  whoever  shall  go  for  master,  of  the  sd  ship 

or  vessel,  lost  or  not  lost,  at  and  from ,  including  risk  of  craft  to 

and  from  the  shii?. 

And  the  sd  co  promises  and  agrees  that  the  insurance  afsd  shall 
connnence  upon  the  freight  and  goods  or  merchandise  afsd  from  the 
loading  of  the  sd  goods  or  merchandise  on  board  the  sd  ship  or  vessel  at  [as 
above],  and  continue  until  the  sd  goods  or  merchandise  be  discharged 
and  safely  landed  at  [as  above]. 

\_Add  iJarcKjraphs  (d),  (e),  (/),  (//),  (md  (i)  of  Form  255.] 

IX  WITNESS,  &c. 

The  following  arc  some  of  the  additional  clauses  commonly  inserted  in 
marine  policies  : — 

1.  It  is  agreed  to  hold  tte  assured  covered  in  case  of  deviation,  at  a  premium, 
to  be  mutually  arranged,  i^rovided  notice  of  such  deviation  be  given  to  the 
company  on  receipt  of  advices. 

2.  To  pay  general  average  as  per  foreign  custom,  or  per  York- Antwerp  rules, 
if  in  accordance  with  the  contract  of  affreightment. 

3.  Warranted  free  from  particular  average,  unless  the  ship  be  stranded, 
sunk,  burnt,  or  in  collision,  the  collision  to  be  of  such  a  nature  as  may  rea- 
sonably be  supposed  to  have  caused  or  led  to  damage  to  cargo,  but  this  warranty 
not  to  exonerate  the  underwriters  from  the  liability  to  pay  any  special  charges 
for  warehousing,  forwarding  or  otherwise,  if  incurred,  as  well  as  partial  loss 
arising  from  transhipment. 

4.  Including  all  liberties  as  per  bill  of  lading. 

5.  It  is  agreed  that  the  vessel  grounding  between  Port  Said  and  Suez  shall 
not  cancel  the  warranty  of  F.  P.  A. 

6.  It  is  hereby  agreed  and  declared  that  in  case  of  any  dispute  concerning 
this  policy,  or  the  company's  liability  thereunder,  the  same  shall  be  decided 
according  to  English  law. 

7.  The  risk  not  to  commence  before  the  expiration  of  the  previous  policies. 

8.  Warranted  free  from  particular  average  below  the  water,  unless  caused 
by  injury  to  the  stern,  or  stern-post,  or  by  fire,  grounding,  or  contact  with  some 
substance  other  than  water. 

9.  With  leave  to  dock,  undock,  and  go  in  and  out  of  graving  dock,  and  on  to 
gridiron,  as  often  as  requix-ed,  without  prejudice  to  this  insurance. 

10.  Sliould  the  above  vessel  be  at  sea  on  the  exj^iration  of  this  policy,  it  is 
agreed  to  hold  her  covered  till  arrival  at  jjort  of  destination  (provided  that 
before  the  expiration  the  assured  shall  have  given  notice  of  intention  to  so  con- 
tinue), at  a  pro  rata  monthly  premium. 

11.  In  the  event  of  particular  average,  the  claim  to  be  adjusted  as  if  the 
vessel  were  insured  separately  for  each  voyage  out  and  home. 

12.  Warranted  not  to  be  in  the  Baltic  Sea,  Black  Sea,  or  White  Sea,  between 
1st  October  and  1st  April ;  and  not  to  sail  to  any  port  in  British  North  America 
before  the  1st  April,  nor  from  any  port  there  after  1st  October ;  nor  to  be 
employed  in  the  West  Indies,  or  Gulf  of  Mexico,  between  1st  of  August  and 
12th  January  ;  and  not  to  trade  to  the  Azores. 

13.  Say  for  and  during  the  space  of calendar  months  commencing , 

and  ending (beginning  and  ending  with  Greenwich  mean  time),  as  employ- 
ment may  offer,  in  port  or  at  sea,  in  docks  or  graving  docks,  and  on  ways,  grid- 


rOEMS. 


333 


irons  and  iiontoons,  at  all  times  and  in  all  places,  and  on  all  occasions,  services   Form  256. 

and  trades  whatsoever  and  wheresoever,  under  steam  or  sail ;  with  leave  to  sail ~ 

Avith  or  without  pilots,  to  tow  and  assist  vessels  or  craft  in  all  situations,  and 
to  be  towed,  and  to  go  on  trial  trips. 

14.  With  liberty  to  discharge,  exchange,  and  take  on  board,  goods,  specie, 
passengers  and  stores  wheresoever  the  vessel  may  call  at  or  proceed  to,  without 
its  being  deemed  a  deviation,  and  with  liberty  to  carry  goods,  live  cattle,  &c., 
on  deck  or  otherwise,  but  warranted  free  from  any  claim  in  respect  of  jettison 
of  cattle  or  goods  carried  on  deck. 

14'a.  To  return per  cent,  for  every consecutive  days  the  vessel  may 

be  in  port  or  in  dock  during  such  period,  the  vessel  being  at  the  risk  of  the 

company,  and per  cent,  for  every unexpired  days  should  the  policy 

be  cancelled  on  arrival. 


PEIVATE    COMPANIES. 


Meaning  of 
' '  private 
company." 


Inducements 
formation. 


To  wliiit 
concern  not 
vested  in  a 
company  is 
liable. 


INTRODUCTORY   NOTES. 

In  this  section  the  term  "  private  company  "  is  nsed  in  its  popular 
sense  as  denoting  a  company  registered  under  the  Act  of  1862,  but 
intended  to  be  carried  on  without  any  appeal  to  the  public  for  capital. 
The  meaning  of  the  term  is  now  well  recognised,  even  in  the  courts  of 
law  :  thus,  in  a  recent  case  before  the  Court  of  Appeal,  Lord  Justice 
Cotton  said,  "  But  here  it  is  an  established  fact  that  when  the  company 
was  formed,  it  was  intended  to  be  a  iwivate  company,  that  is,  it  was 
intended  to  carry  it  on  without  calling  in  the  public  or  issuing  any 
shares,  except  to  the  then  existing  shareholders  ;..,."  Re  British 
Seamless  Paper  Box  Co.,  Lim.,  17  C.  Div.  467. 
to  The  following  are  some  of  the  principal  reasons  which  induce  persons 
to  form  private  companies  : — 

1.  Because  by  means  of  a  private  company  a  trade  or  undertaking, 
or  transaction,  can  be  carried  on  with  limited  liability,  and  without 
exposiug  the  meml^ers,  in  the  event  of  failure,  to  the  harsh  provisions  of 
the  Bankruptcy  law. 

2.  Because  a  company  has  much  greater  facilities  for  borrowing  money 
than  an  ordinary  trader,  e.g.,  it  can  raise  money  on  debentures,  or 
debenture  stock,  or  by  the  issue  of  preference  shares. 

3.  Because  in  the  case  of  a  registered  company  the  j)0wers  of  the 
directors  or  managers  can  be  effectually  limited  and  restricted  by  the 
regulations,  whereas  in  the  case  of  an  ordinary  partnership  this  cannot 
be  done  as  against  outsiders. 

4.  Because  the  shares  in  a  company  can  be  readily  dealt  with  by  way 
of  sale,  mortgage,  settlement,  and  otherwise,  whereas  in  a  partnership 
such  transactions  involve  serious  difficulties  and  complications. 

5.  Because  arrangements,  e.g.,  as  to  disposition  by  will,  subdivision  of 
interests,  partial  withdrawal  of  capital,  optional  retirement,  compulsory 
retirements,  &c.,  can  readily  be  expressed  in  and  secured  by  the  regu- 
lations of  a  company,  which  if  embodied  in  an  ordinary  deed  of  partner- 
ship are  necessarily  complicated,  and  by  no  means  certain  to  work 
effectually. 

6.  Because  by  conversion  into  a  company  a  concern  is  placed  on  a 
pennanent  footing,  free  from  tlie  liability  to  dislocation  and  even 
destruction,  which  dcatli  of  partners,  withdrawal  of  capital,  refusal  of 


INTRODUCTORY  NOTES.  335 

executors  to  carry  on  the  concern  on  account  of  the  unlimited  Hahility, 
bankruptcy,  lunacy,  and  other  contiugencies  may  involve. 

7.  Because  the  members  of  a  company  can  lend  money  to  it  and 
accept  security,  and  otherwise  deal  with  the  company  just  as  if  they 
Avere  strangers,  whereas  in  the  case  of  an  ordinary  partnership  such 
dealings  stand  on  a  very  different  footing." 

Private  companies  are  of  two  classes — (1)  those  formed  to  start  some  The  two 
new  undertaking ;    (2)  those   formed   to   acquire  and   carry  on   some  *^''^*'*^^- 
existing  undertaking. 

As  to  class  (1). — Where  a  few  persons  are  about  to  concur  in  some  N"ew  concerns, 
joint  business  or  undertaking,  e.g.,  to  develop  a  patent  ;  to  purchase 
and  develop  a  building  estate  ;  to  undertake  and  carry  out  a  contract 
for  the  construction  of  buildings  or  works  at  home  or  abroad  ;  to  acquire 
a  concession  or  mine  with  a  view  to  selling  at  a  profit  to  a  public 
company  or  otherwise ;  to  print  and  publish  a  newspaper  ;  to  acquire 
and  work  a  vessel ;  to  lend  money  to  a  trader  in  consideration  of  a 
share  of  profits ;  or  to  start  any  business  which  can  conveniently  ])e 
carried  on  by  a  company  ;  it  is  now  very  commonly  deemed  expedient 
to  form  a  private  company  for  the  purpose.  If  the  founders  are  not 
seven  in  number,  they  get  a  few  friends  to  hold  a  share  apiece,  in  order 
to  make  up  the  requisite  number. 

See  fm-ther  as  to  single  ship  companies,  siqira.  Form  lo-i. 

As  to  class  (2). — A  considerable  proportion  of  the  private  companies  Conversion  of 

formed  within  the  last  few  years  belong  to  this  class.     The  formation  of  ^-'^''**'''^o 

•'  ^  _  concerns. 

the  company,  and  the  acquisition  by  it  of  the  business,  is  commonly 
called  the  conversion  of  the  business  into  a  private  company,  and  such 
conversions  are  now  of  frequent  occurrence.     There  are  two  plans  of 
conversion  commonly  adopted — (1)  the  first  jilan  ;  according  to  this,  a  Tlie  first  plan 
company  consisting  of  the  fomiders,  and,  if  necessary,  a  few  friends,  is  °  ^°^^^'^i°"- 
formed  under  Part  I.  of  the  Act  of  18G2  {i.  e.,  by  registration  of  a  memo- 
randum and  articles  of  association),  and  the  concern  is  sold  and  trans- 
ferred to  such  company  when  formed  in  consideration  of  shares  to  be 
allotted  to  the  vendors  ;  and  (2)  the  second  plan  ;  under  this  the  founders  The  second 
execute  a  deed  constituting  themselves  an  unincorporated  joint-stock  com-  P     • 
pany,  into  the  joint-stock  of  which  they  undertake  to  bring  the  assets  of 
the  concern,  a  few  shares  are  then  transferred  to  friends  or  otherwise,  so 
as  to  make  up  the  number  to  seven,  a  resolution  is  passed  to  register 
under  Part  VII.  of  the  Act  as  a  company  limited  by  shares,  and  the 
company  in  due  course  is  registered  accordingly. 

The  first  plan  is  generally  adopted  where  the  assets  consist  for  the 
most  part  of  chattels  and  effects  capable  of  manual  delivery,  and  the 
second  plan  is  generally  reserved  for  cases  in  which  the  assets  comprise 
a  large  amount  of  land  or  other  property  not  cajjable  of  manual  delivery. 
The  principal  object  of  the  second  plan  is  to  avoid  the  heavy  ad  valorem 

*  See  further,  as  to  the  formation  of  such  companies,  the  author's  pamphlet 
intituled  "  Private  Companies :  their  Formation  and  Advantages."  Stevens 
&  Sons,  5th  edition,  1884. 


336  PEIVxVTE  COMPANIES. 

stamp  duty  (10  per  cent.),  which,  if  the  couvevsion  be  carried  out  under 
the  first  plan,  may  become  payable  on  the  conveyance  to  tlie  company 
of  assets  not  capable  of  manual  delivery,  for  under  the  first  plan 
the  conveyance  is  a  "  conveyance  on  sale,"  and  chargeable  accord- 
ingly. It  is  generally  regarded  as  a  great  hardship  that  where  seven 
persons  register  themselves  as  a  company,  and  then,  in  considera- 
tion of  shares  or  otherwise,  convey  their  business  or  property  to  the 
company  so .  formed,  the  transaction  should  be  regarded  as  a  sale,  since 
in  substance  (though  not  in  law)  the  same  persons  are  both  vendors  and 
purchasers.  However,  there  can  be  no  question  that  the  law  does 
regard  the  company  as  a  person  wholly  distinct  from  its  members.  As 
was  said  by  Lindley,  J.,  in  Ri/hope  Colliery  Co.  v.  Foyer,  7  Q.  B.  D. 
485  ;  45  L.  T.  410  ;  30  W.  R.  DO,  "  A  company  incorporated  under  the 
Act  of  18G2  is  for  no  legal  purpose  the  same  as  the  persons  Avho  have 
liecomc  a  corporation  with  distinct  rights  and  distinct  liabilities,  and 
whether  the  shares  are  bought  l)y  those  who  form  it,  seems  to  me,  for 
that  purpose,  utterly  immaterial."  Where,  therefore,  the  ad  valorem 
duty  on  a  conversion  in  accordance  with  tlie  first  plan  would  amount  to 
a  considerable  sum,  it  seems  best  to  adopt  the  second  plan,  if  the  cir- 
cumstances permit.  The  reasons  why,  under  the  second  plan,  no  ad 
valorem  duty  is  payable,  are  as  follows  :— The  deed  constituting  the 
unincorporated  company  is,  in  law,  merely  a  partnership  agrcemeut,  and 
therefore  only  requires  a  10s.  stamp  ;  when,  subsequently,  the  property 
is  conveyed  to  the  unincorporated  company,  or  to  a  trustee  for  the  com- 
pany, it  is  conveyed  pursuant  to  the  partnership  agreement ;  and  as 
the  conveyance  is  not  a  conveyance  "on  sale  of  any  property,"  it  is 
chargeable  as  a  "  conveyance  or  transfer  of  any  kind  not  hereinbefore 
described,  10s."  See  schedule  to  Stamp  Act,  1870.  When  the  company 
is  subsequently  registered  under  Part  VII.  of  the  Act,  the  property 
passes,  by  virtue  of  the  Act  (s.  193),  to  the  incorporated  company  for  all 
the  estate  and  interest  of  the  unincorporated  company.  Hence  no 
conveyance  chargeable  with  the  ad  valorem  duty  is  ever  executed. 

Very  commonly  the  legal  estate  is  left  outstanding  in  one  of  the 
partners  or  some  other  person  until  after  the  registration,  and  is  sub- 
sequently conveyed  to  the  incorporated  company,  but  this  does  not 
make  any  diflerence  as  regards  duty,  for  the  Act  vests  the  equitable 
interest  of  the  unincorporated  company  in  the  incorporated  company, 
and  the  subsequent  conveyance  to  it  of  the  legal  estate  is  not  a  convey- 
ance on  sale,  and  therefore  only  requires  the  10s.  stamp. 
New  plan  A  considerable  number  of  companies  have  within  the  last  few  years 

been  formed  and  registered  in  accordance  with  the  second  jilan,  and 
although  at  first  some  doubt  was  raised  whether  such  companies  prior  to 
registration  were  "duly  constituted  by  law"  within  the  meaning  of 
section  180  of  the  Act  of  18(12,  so  as  to  be  capable  of  registration,  that 
doubt  has  long  since  then  been  set  at  rest. 

It  is  clear  (1)  that  at  common  law  a  joint  stock  company  can  be  duly 
constituted  by  deed  ;  (2)  that  the  Act  of  18G2  only  prohibits  the  forma- 


mucli  iise(' 


INTEODUCTOEY  NOTES.  337 

tion  of  unregistered  companies  when  the  number  of  members  exceeds 
twenty  ;  (3)  that  the  Act  of  18G2  permits  the  registration  of  companies 
consisting  of  more  than  seven  and  less  than  twenty  members,  constituted 
by  deed  of  settlement  or  other\\ise  since  the  commencement  of  the  Act. 

It  may  here  be  mentioned  that  it  is  now  by  no  means  uncommon  for  Partnership 
partners  or  intending  partners  who  recognise  the  fact  that  it  may  be  accordance 
desirable  at  some  future  time  to  convert  their  business  into  a  private  with  new  plan, 
company,  to  adopt  a  deed  of  partnership  framed  in  accordance  with  the 
second  plan.     This  can  be   done  without  introducing  any  additional 
partners,  for,  as  already  mentioned,  a  common  law  joint  stock  company 
may  consist  of  less  than  seven  members. 

The  advantage  of  this  scheme  is  that  if  at  any  time  it  becomes 
desirable  to  convert  the  concern  into  a  private  registered  company, 
the  conversion  can  be  effected  with  the  gi-eatest  facility.  For  no  new 
deed  of  settlement  or  memorandum  and  articles  are  required,  no 
valuations  or  accounts  with  a  view  to  conversion  need  be  made  or  taken, 
and  no  disturbance  of  rights  or  liabiHties  will  be  occasioned.  The 
parties  have  merely  to  pass  a  resolution  to  register,  and  proceed  in  the 
manner  above  stated  [p.  20(5],  and  in  due  com'se  the  certificate  of 
incorporation  [p.  227]  will  be  issued.  But  of  course  before  registration, 
the  nimiber  of  the  shareholders  must  be  made  up  to  seven,  this  will  be 
effected  by  transferring  a  share  apiece  to  some  relations  or  clerks  of  the 
members  of  the  firm.  Until  registration,  the  partners  can  carry  on  the 
concern  just  as  if  it  was  an  ordinary  partnership.  Occasionally  com- 
j)anies  so  formed  register  in  the  first  instance  as  unlimited  companies, 
with  a  view  to  subsequent  re-registration  under  the  Companies  Act, 
1879. 

Below  will  lie  found  a  few  forms  relating  to  private  companies.     They  Tlie  fonn 
are  given  by  way  of  suggestion  only,  for  the  regulations  of  a  private 
company  are  generally  much  more  special  than  those  of  a  public  com- 
pany.    In  the  case  of  conversions,  the  documents  are  sometuues  con- 
sidered by  the  parties  with  infinite  care. 

Some  persons,  in  order  still  further  to  preclude  any  contention  that  Occasional 
the  arrangement  emljodied  in  the  deed  of  settlement  savours  of  a  sale,  v^^^'^^^io^- 
consider  it  expedient  to  appropriate  the  whole  of  the  shares  in  the 
original  capital  to  the  persons  who  bring  the  assets  in,  so  that  the  trans- 
ferors and  transferees  shall  be  the  same  persons.  There  is  no  objection 
to  the  adoption  of  these  precautions,  and  where  it  is  desired  to  increase 
the  number  of  the  original  shareholders,  it  is  very  easy,  before  the 
execution  of  the  deed,  to  give  the  proposed  shareholders  an  interest  in 
the  assets  equivalent  to  the  shares  which  it  is  desired  to  appropriate 
to  them.  But  of  course  there  is  no  need  to  start  with  more  than  two  or 
three  members,  for  the  number  can  be  increased  to  seven  hy  transfer  of 
a  share  apiece  to  a  few  outsiders  whenever  it  becomes  desirable. 


PEIVATE    COMPANIES. 


Agi'eement  for 
sale  of 
bufsiness. 


Preliminary  Agrecnmi  f. 

Torm  257.       AN  AGREEMT  made  the day  of ,  between  A.,  B.,  aud  C, 

all   of  (hereinafter    called    the    vendors),   of    the   one    pt,   and 

A.  B.  &  Co.,  Linitd  (hereinafter  called  the  co),  of  the  other  pt  :  Whas 

the  vendors  have  for  some  time  past  carried  on  the  business  of , 

at ,  in  the  Comity  of :  And  wiias  the  vendors  recently  deter- 
mined to  transfer  the  sd  business  to  a  co,  and  with  a  xiew  thereto  they 
have  caused  the  co  to  be  registered.  And  whas  the  capital  of  the  co 
is  100,000?.,  divided  into  10,(»00  shares  of  10/.  each  : 

NOAY  THESE  PRESENTS  WITNESS  and  declare  as  follows : 

1.  The  vendors  siiall  sell  and  the  co  shall  pchase  the  goodwill  of  the 
sd  business,  and  all  other  the  ppty  of  the  vendors  specified  in  the  schedule 
hto. 

2.  As  pt  of  the  conson  for  the  sd  sale  the  co  shall  allot  to  the  vendors 
9,750  10/.  shares  in  the  co,  which  shall  be  considered  for  all  pposes  fully 

pd  up,  and  shall  be  numbered to inclusive,  and  such  shares 

shall  be  allotted  as  follows,  viz.  :  to  the  sd  A.  5,000,  to  the  sd  B.  4,000, 
and  to  the  sd  C.  750. 


Sale. 


Consideration. 


Liabilities, 


Completion. 


Sometimes  it  is  desired  that  the  vendor  shall  subscribe  the  memorandum  of 
association  for  the  shares  [^supra,  p.  13,]  and  in  such  case  the  agreement  should 
recite  that  "  the  vendors  have  respectively  subscribed  the  company's  memoran- 
dum of  association  for  the  shares  following,  viz.,  the  said  A.  for shares,  the 

said  B.  for shares,  and  the  said  C.  for shares,"  and  clause  2  will  pro- 
vide that  "  as  part  of  the  consideration  for  the  said  sale  the  shares  subscribed 
for  as  aforesaid  shall  be  deemed  for  all  purposes  to  be  fully  paid  up,  and  shall 
be  numbered,  &c."  See  supra,  p.  11.  Sometimes  the  consideration  consists  in 
part  of  debentures  or  debenture  stock  or  preference  shares,  and  sometimes  in 
part  of  cash  to  be  paid  out  by  instalments  or  otherwise. 

3.  As  the  residue  of  the  conson  for  the  sd  sale,  the  co  shall  undertake, 
pay,  satisfy,  and  discharge  all  the  debts  and  liabilities  of  the  vendors  in 
relation  to  the  sd  business,  and  shall  indemnify  the  vendors  and  their 
respivc  heirs,  exs,  and  ads,  estates  aud  effects,  against  all  actious,  claim>s, 
and  demands  in  respect  thereof. 

4.  The  sale  shall  be  completed  on  the day  of next,  when 

the  sd  shares  shall  be  issued  to  the  \eudors.  And  upon,  &c.  [si/pra,  p.  8, 
Clause  6]. 


for:n[s. 


339 


5.  The  sd  business  shall  be  deemed  to  have  beeu  carried  on  as  from  Form  257. 

the  day  of  last   on   the  co's  behalf,   and  accordingly   the  Retrospective 

vendors  shall  be  allowed  all  paymts  made  and  expenses  incurred,  and  provision. 
shall  account  for  all  moneys  and  other  benefits  received  by  them  respively 
in  relation  to  such  business  as  from  that  day. 

Sometimes  it  is  provided  that  the  sale  shall  take  effect  as  from  some  future 
day. 

G.  Until  the  completion  of  the  pchase  the  vendors  shall  carry  on  the  Interim 
business  in  trust  for  the  co.  provision. 

7.  Each  of  the  vendors  shall  for  a  period  of  ten  years  retain  and  hold  ^'endors  not 
in  his  o\yn  name  at  least  one-half  of  the  shares  to  be  issued  to  him  as  shares. 
afsd. 

Occasionally  some  such  provision  as  the  above  is  made. 

8.  The  CO  shall  not  at  any  time  alter  or  attempt  to  alter  Clauses       of  No  alteration 
its  articles  of  association  as  originally  framed,  or  do  or  suffer  anything     '^^^"^  "^"^ 
to  be  done  in  contravention  of  the  provisions  contd  in  those  clauses 
respively. 

Where  the  articles  contain  special  jirovisions  in  favour  of  the  vendors,  e.  g., 
that  they  shall  be  entitled  to  retain  office,  it  is  occasionally  deemed  expedient 
to  fortify  their  position  by  inserting  in  the  agreement  a  clause  as  above,  so 
that  if  necessary  application  may  be  made  for  an  injunction.  Where  there 
is  a  negative  provision  in  a  contract  the  court  is  bound  to  enforce  it.  Allman 
V.  Doherty,  3  App.  Cas.  720 ;  Donnell  v.  Bennett,  22  C.  D.  83G. 

9.  The  CO  shall  accept  without  investigation  such  title  as  the  vendors  Title  accepted. 
have  to  the  ppty  hby  agreed  to  be  sold. 

This  clause  is  usiially  inserted  in  the  case  of  a  private  company. 

10.  This   agi-eemt   shall  be  filed  A\itli  the  Eegistrar   of  Joint-Stock  Agreement  to 
Cos  before  the  sd  shares  are  issued.  be  fa  e  . 

In  Witness  whereof  the  vendors  have  hereunto  set  their  hands,  and 
the  CO  hath  caused  its  seal  to  be  affixed  hereunto,  the day,  &c. 

The  Schedule  above  eeferred  to. 
[See  mfra,  p.  3.5G,  mutatis  mvtavdis.'] 

See  Form  32.  Memorandum 

of  association. 

The  memorandum  of  association  of  a  private  company  does  not  differ  from 
that  of  a  public  company,  but  where  the  company  is  to  be  formed  for  the 
purpose  of  converting  an  existing  business,  the  acquisition  of  that  business  is 
usually  specified  as  the  first  object.     See  supra.  Form  50. 

Articles  of  Association. 

[See  Form  117,  snpra.1  ^A^icies  of 

Form  117  will  serve  as  the  basis  for  the  articles  of  a  private  company.    Forms  ^^^"'^^^  ^°°' 
257  to  279,  infra,  with  the  notes  thereto,  will  show  the  modifications  commonly 

z  2 


340  PEIYATE  COMPANIES. 

Form  257.    required.     Sometimes  it  is  considered  expedient  where  an  established  business 

' is  converted  into  a  company,  to  insert  an  introduction  in  the  articles,  stating 

briefly  the  circumstances  in  which  the  comjiany  is  formed. 

Miscellaneous  Clauses. 

Form  258.       i.  The  shares  taken  by  the   subscribers    to  the  Memorandum  of 
Restriction  on  Association  and  those  to  be  allotted  pursuant  to  the  preliminary  agreemt, 
issue  of  shares  g|;^rj]i  ]^q  (\^^ij  iggued  by  the  directors,  but  no  further  shares  shall  be  issued 
^yithout  the  authority  of  the  co  in  general  meeting. 

2.  Subject  to  any  direction  to  the  contrary  that  may  be  given  by  the 
meeting  that  authorises  the  issue  of  further  shares,  all  further  shares 
authorised  to  be  issued  shall  be  offered  to  the  members  in  proportion  to 
the  existing  shares  held  by  them,  and  such  offer  shall  be  made  by  notice 
specifyiug  the  number  of  the  shares  to  which  the  member  is  cntled,  and 
limiting  a  time  within  which  the  offer  if  not  accepted  will  be  deemed  to 
be  declined,  and  after  the  expiration  of  sacli  time,  or  on  the  receipt  of  an 
intimation  from  the  member  to  whom  such  notice  is  given  that  he 
declines  to  accept  the  shares  offered,  the  directors  may  allot  or  otherwise 
dispose  of  the  same  to  such  persons  and  upon  such  terms  as  they 
think  fit. 

A  clause  as  above,  or  like  the  following,  is  not  uncommonly  inserted,  in  order 
to  give  the  existing  members  the  option  of  taking  up  the  shares.  It  will  be 
seen  that  the  above  clause  does,  but  the  following  does  not,  confine  the  option  to 
a  member's  proportion.  Sometimes  the  option  is  only  given  to  the  principal 
shareholders,  e.g.,  those  holding  more  than  5001.  capital. 

Form  259.       After  the  issue  of shares  in  the  co's  capital,  any  further  issue  of 

Another  form  shares  shall  be  made  on  such  terms  and  conditions,  and  cither  at  a 
premium,  discount,  or  otherwise  as  shall  be  determined  by  extraordinary 
resolution,  and  unless  otherwise  determined  by  extraordinary  resolution, 
all  further  shares  authorised  to  be  issued  must  in  the  first  instance  be 
offered  to  all  the  existing  members  for  the  time  being.  Such  offer  shall 
be  made  by  notice  specifying  the  number  of  shares  authorised  to  be 
issued,  and  the  terms  of  issue,  and  stating  that  the  members  are  at 
libty  to  tender  for  the  same  during  a  period  to  be  specified  in  the 
notice,  and  not  being  less  than  seven  days  from  the  date  thereof.  Each 
member  shall  be  at  libty  to  make  a  tender  in  writing,  delivered  at  the 
office  within  the  period  afsd,  for  such  shares  or  any  of  them  on  the  terms 
specified,  and  the  directors  shall  allot  the  shares  to  the  members  who  so 
tender,  and  in  the  event  of  more  shares  being  tendered  for  than  are 
authorised  to  be  issued,  the  shares  shall  (as  nearly  as  may)  be  allotted  to 
the  tendering  members  in  iirojioition  to  the  capital  already  held  by  them 
respively.  The  directors  shall  decide  by  lot  or  otherwise  any  difficulty 
as  to  such  allotmt.    . 


FOEMS. 


Transfer  and  Transmission. 


341 


Occasionally  the  right  of  transfer  is  left  unfettered,  but  in  most  cases  it  is 
considered  desirable  to  insert  special  provisions  so  as  to  prevent  the  introduc- 
tion of  objectionable  members,  and  to  secure  to  existing  members  a  right  of 
preemption  when  a  member  desires  to  retire,  e.g. : — 

1.  No  share  shall,  save  as  provided  by  Clause  8  hereof,  be  transferred  Form  260. 

to  a  person  who  is  not  a  member  so  long  as  any  member  is  willing  to  Restricted 

pchase  the  same  at  the  fair  value.  right  of 

transfer. 

Sometimes  it  is  provided  that  these  restrictive  clauses  shall  not  apply  to 
certain  shareholders,  e.g.,  the  founders  of  the  concern,  or  to  part  only  of  the 
shares  held  by  them^  or  only  to  a  certain  class  of  shares,  e.g.,  those  which  are 
to  be  issued  to  the  employes. 

2.  In  order  to  ascertain  whether  any  meml3er  is  willing  to  pchase  a  Notice, 
share,  the  person,  whether  a  member  of  the  co  or  not,  proposing  to 
transfer  the  same  (hereinafter  called  the  retiring  member),  shall  give 
notice  in  writing  (hereinafter  called  the  transfer  notice)  to  the  co  that  he 
desires  to  transfer  the  same.     Such  notice  shall  specify  the  sum  he  fixes 

as  the  fair  value,  and  shall  constitute  the  co  his  agent  for  the  sale  of  the 
share  to  any  member  of  the  co  at  the  fair  value.  The  transfer  notice 
may  include  several  shares,  and  in  such  case  shall  operate  as  if  it  were  a 
separate  notice  in  respect  of  each.  The  transfer  notice  shall  not  be 
revocable  except  Avith  the  sanction  of  the  directors. 

The  words  "  whether  a  member  of  the  company  or  not,"  are  inserted  in  order 
to  cover  the  case  of  executors  and  other  persons  taking  by  transmission.  Some- 
times, instead  of  providing  as  above,  it  is  provided  that  a  member  who  desires 
to  transfer  to  a  stranger  must  send  in  the  name  and  address  of  the  proposed 
transferee,  and  that  the  directors  may  approve  or  disapprove,  and,  if  they  dis- 
approve, the  member  may  require  them  to  find  a  piu-chaser. 

3.  If  the  CO  shall,  within  the  space  of  twenty-eiglit  days  after  being  Company'^ 
served  with  such  notice,  find  a  member  willing  to  pchase  the   share  P°^'"'- 
(hereinafter  called  the  purchasing  member),  and  shall  gi^'e  notice  thereof 

to  the  retiring  member,  he  shall  be  bomid,  upon  paymt  of  the  fair  ^'alne, 
to  transfer  the  share  to  the  purchasing  member. 

Sometimes  it  is  desired  to  provide  that  the  company  shall  j^urchase  the  share, 
but  there  is  grave  doubt  whether  such  a  provision  is  valid  in  the  case  of  a  com- 
pany limited  by  shares.  See  supra,  p.  88.  Sometimes  the  foregoing  provisions 
are  modified  thus  : — 

"  A  person,  whether  a  member  of  the  company  or  not  (hereinafter  called  the 
retiring  member),  who  desires  to  transfer  any  share  to  a  person  who  is  not  a 
member  of  the  company,  must  serve  the  company  with  notice  in  ^vriting  (here- 
inafter called  the  transfer  notice)  that  he  desires  to  make  such  transfer.  The 
transfer  notice  must  specify  the  name  and  address  of  the  proposed  transferee, 
and  the  sum  at  which  the  retiring  member  fixes  the  fair  value  of  the  shares, 
and  within  fourteen  days  after  the  service  of  such  notice  the  directors  shall 
give  the  retiring  member  notice  of  their  approval  or  disapproval  of  the  trans- 
fer, and,  if  they  approve,  the  proposed  transfer  may  be  forthwith  carried  out 
(subject  only  to  clauses  hereof).     But  if  they  disapprove    the  transfer 


342 


PRIVATE  COMPANIES. 


Form  260.    'lotice  shall  be  deemed  to  constitute  the  company  the  agent  of  the  retiring 
—  member  for  the  sale  of  the  share  to  any  member  of  the  company,  at  the  fair 

value,  and  such  authority  shall  not  be  revocable,  and,  if  the  company  shall, 

within  the  space  of  twenty-eight  days,  &.C. 

Arbitration.  4.  Ill  casG  any  difference  arises  between  the  retiring  member  and  the 

purchasing  member  as  to  the  fair  value  of  a  share,  the  diflPerence  shall  be 
referred  to  arbitration  in  manner  hereinafter  proyided  [but  so  that  the 
amount  awarded  shall  not  in  any  case  exceed  by  more  than  [10]  p.  c. 
the  capital  pd  up  on  the  shares]. 

The  words  in  brackets  are  occasionally  inserted. 

Sometimes  it  is  provided  that  "the  fair  value,"  or  "the  current  transfer 
price,"  shall  be  a  sum  equal  to  the  amount  paid  up  on  the  share,  or  a  sum  to  be 
fixed  by  the  auditor,  or  a  sum  to  be  fixed  at  the  ordinary  general  meeting  in 
each  year,  e.g. : — 

"  At  the  ordinary  general  meeting  in  each  year  the  company  shall,  by  resolu- 
tion, declare  what  is  the  fair  value  of  a  share,  and,  upon  any  sale  pursuant  to 
CI.  hereof,  the  amount  so  declared,  with  the  addition  thereto  of  5  per  cent, 
per  annum  from  the  date  of  the  meeting  to  the  date  of  tlie  completion  of  such 
sale  (less  any  dividend  in  the  meantime  paid),  shall  be  deemed  to  be  the  fair 
value  for  the  purpose  of  CI.  hereof." 

Sometimes  CI.  4  is  omitted,  and,  instead  of  giving,  by  CI.  6,  free  right  to 
transfer  at  any  price,  it  is  provided  that  the  party  may  sell  and  transfer  to  any 
person,  but  so  that  the  price  shall  not  be  less  than  the  sum  specified  in  the 
transfer  notice,  with  provisions  for  statutory  declarations  by  vendor  and  pur- 
chaser as  to  the  price,  &c.  Sometimes  it  is  provided  that,  in  case  of  difference, 
the  auditor  shall  fix  the  fair  value. 


Default  by 

retiring 

member. 


Default  by  co. 


How  shares 
to  be  offered 
to  members. 


.5.  If  in  any  case  the  retiring  member,  after  having  become  bound  as 
afsd,  makes  default  in  transferring  the  share,  the  co  may  receive  the 
pchase-money,  and  shall  thereupon  cause  the  name  of  the  purchasing 
member  to  be  entered  in  the  register  as  the  holder  of  the  share,  and  shall 
hold  the  pchase-money  in  trust  for  the  retiring  member.  The  receipt  of 
the  CO  for  the  pcliase-money  shall  be  a  good  discharge  to  the  purchasing 
member,  and  after  his  name  has  been  entered  in  the  register  in  purported 
exercise  of  the  afsd  power,  the  validity  of  the  proceedings  shall  not  be 
questioned  by  any  person. 

T).  If  tlie  CO  shall  not,  within  the  space  of  twenty-eight  days  after 
being  served  with  the  transfer  notice,  find  a  member  willing  to  pchase 
the  shares,  and  give  notice  in  manner  afsd,  the  retiring  member  shall  at 
any  time  within  three  calendar  months  afterwards  be  at  libty,  subject 
to  Clause  9  hereof,  to  sell  and  transfer  the  shares  (or  those  not  placed) 
to  any  person  and  at  any  price. 

7.  The  CO  in  general  meeting  may  make  and  from  time  to  time  vary 
rules  as  to  the  mode  in  which  any  shares  specified  in  any  notice  served 
on  the  CO  pursuant  to  clause  2  hereof  shall  be  oifered  to  the  members, 
and  as  to  their  rights  in  regard  to  the  pchase  thereof,  and  in  parlar  may 
give  any  member  or  class  of  meml)crs  a  preferential  right  to  pchase  the 
same.  Until  otherwise  determined,  every  such  share  shall  be  offered  to 
the  members  in  such  order  as  shall  be  determined  by  lota  drawn  in 


FOEMS. 


843 


regard  thereto,  and  the  lots  shall  be  drawn   in  such   manner  as   the  Form  260. 
directors  think  fit.  ' 

Sometimes  it  is  provided  that  the  shares  shall  be  offered,  (a),  as  in  Form 
259,  or,  (6),  to  the  shareholders  successively,  according  to  the  number  of 
shares  held  by  them,  or,  (c),  to  some  particular  shareholder,  e.g.,  the  founder, 
or,  (d),  to  the  members  whose  names  are  entered  in  a  register  of  applicants  in 
rotation. 

8.  Any  share  may  be  transferred  by  a  member  to  any  son  or  daughter,  Eight  to 

or  son-in-law,  or  mfe  or  husband  of  such  member,  and  any  share  of  ti''^"^^^'^'  *<* 

■^  sou,  &c. 

a  deceased  member  may  be  transferred  by  his  exs  or  ads  to  any  son  or 

daughter,  or  son-in-law,  ^^•idow,  (u-  widower  of  such  deceased  member, 

and  Clause  1  hereof  shall  not  apply  to  any  such  transfer. 

Sometimes  power  is  also  given  to  transfer,  with  the  approval  of  tlae  board,  to 
the  trustees  of  any  settlement  made  by  a  member,  or  to  any  person  who  has 
been  appointed  or  elected  a  director. 


'J.  The  directors  may  refuse  to  register  any  transfer  of  a  share,  («),  General  power 

to  refuse 
transfer. 


where  the  co  has  a  lien  on  the  share ;  (h),  where  it  is  not  proved  to  their  *°  '^'*^^'^'*^ 


satisfon  that  the  proposed  transferee  is  a  responsible  person ;  (c) 
.where  the  directors  are  of  an  opinion  that  the  proposed  transferee  is  not 
a  desirable  person  to  admit  to  membership.  But  paragraphs  (J)  and  ic) 
of  this  clause  shall  not  apply  where  the  proposed  transferee  is  already  a 
member  [holding  more  than shares],  nor  to  a  transfer  made  pur- 
suant to  Clause  8  hereof. 

Sometimes  the  words  in  brackets  are  inserted  so  as  to  exclude  small  share- 
holders from  the  benefit  of  tlie  exception. 


Traxsmission. 

The  transmission  clauses  are  usually  framed  as  above,  p.  117,  and,  where  the 
right  of  transfer  to  strangers  is  restricted,  as  in  Form  2G0,  the  executors  and 
others  claiming  by  transmission  will  be  bound  thereby.  Sometimes  it  is 
desired,  in  the  event  of  death,  to  provide  for  paying  out  part  of  the  capital  of 
the  deceased.  This  cannot  be  effectually  provided  for  in  the  case  of  a  limited 
company,  since  it  would  amount  to  a  reduction  of  capital.  To  meet  this  diffi- 
culty it  is  not  uncommon,  where  a  business  is  converted  into  a  company,  to 
provide  that  the  vendors  shall  take  part  of  the  consideration  in  debentures, 
which  can,  if  desired,  be  framed  so  that  the  interest  shall  only  be  payable  out 
of  profits  [sv.'pra,  p.  275],  and  so  that  the  principal  shall  not  be  called  in  till 
the  death  of  the  person  to  whom  they  are  issued.     See  Form  220,  supra. 


CoiMPULSORY  Retirement. 

Provisions  for  compulsory  retirement  are  becoming  very  common.  The 
power  to  enforce  retirement  in  certain  si^ecified  cases  (e.g.,  where  a  member 
ceases  to  be  employed  by  the  company),  is  commonly  vested  in  the  directors. 
See  Form  261  et  seq.  But  it  is  frequently  deemed  desirable  to  enable  a  large 
majority  of  the  shareholders  (e.g.,  nine-tenths  in  value)  to  exercise  the  power 
without  assigning  any  reason.  Such  a  power  seems  peculiarly  desirable  where 
the  great  mass  of  the  capital  is  likely  to  be  vested  in  a  few  persons. 


314 


TEIVATE  COMPANIES. 


Porm  260.        Suppose,  for  example,  that  a  shareholder  who  has  been  brought  into  a  coni- 

pany  merely  to  keep  the  number  up  to  seven,  or  because  he  appeared  to  be  a 

deserving  employe,  is  found  to  be  objectionable,  he  cannot,  in  the  absence  of 
such  a  power,  be  got  rid  of  against  his  will,  except  by  winding  uj}  the  com2:)any. 
Sometimes  the  power  is  vested  in  the  original  owner  of  the  company's  busi- 
ness and  his  executors,  so  long  as  a  specified  number  of  shares  stand  in  his 
name,  and  is  so  framed  that  he  or  they  may  take  the  shares  at  the  fair  value, 
or  at  a  specified  price,  e.g.,  par. 


Form  261. 

Retirement  of 

dismissed 

employe. 


Whenever  any  member  of  the  co  [holdinf;;  less  than shares]  who 

is  employed  by  the  co  in  any  capacity,  is  dismissed  from  such  employmt 
[for  breach  of  faith,  misconduct,  or  other  offence  which]  the  directors 
[deem  prejudicial  to  the  interests  of  the  co  they]  may  at  any  time 

within days  after  his  dismissal,  resolve  that  such  member  do  retire, 

and  thereupon  he  shall  be  deemed  to  have  served  the  co  with  notice  pur- 
suant to  Clause  hereof,  and  to  have  specified  therein  the  amount 

pd  up  on  his  shares  as  the  fair  value.  Notice  of  the  passing  of  any 
such  resolution  shall  1)e  given  to  the  member  affected  thereby. 


Form  262.       AVhenever  any  holder  of  any  C  shares  ceases  to  be  employed  by  the  co 
Another.  ^^^^  directors  may  at  any  time  within days  afterwards  resolve  co,  &c. 

Sometimes  the  power  is  not  confined  as  in  Form  261  to  dismissal,  but  is 
framed  as  above  or  is  exercisable  only  as  regards  a  particular  class  of  shares. 
Occasionally  the  holder  is  given  a  limited  time  to  retire,  and  only  in  default  is 
deemed  to  have  given  the  notice. 

Form  263.  The  holders  for  the  time  being  of  nine-tenths  of  the  issued  capital  may 
at  any  time  serve  the  co  with  a  requisition  to  enforce  the  transfer  of  any 
parlar  shares  not  held  by  the  requisitionists.  The  co  shall  forthwith 
give  to  the  holder  of  such  shares  notice  in  writing  of  the  requisition 
(with  a  copy  of  this  clause  subjoined),  and  unless  within  14  days  after- 
wards the  holder  shall  give  to  the  co  notice  of  his  desire  to  transfer  the 
same,  he  shall  be  deemed  at  the  expiration  of  that  period  to  have  given 

such  notice  in  accordance  with  Clause hereof,  and  to  have  specified 

therein  the  amount  pd  up  on  the  shares  as  the  sum  he  fixes  as  the  fair 
value.  For  the  imposes  of  this  clause  any  person  entled  to  transfer 
a  sliare  under  the  transmission  clause  shall  l)c  deemed  the  holder  of  such 
share. 


Compulsory 
retirement. 


Form  264. 

Compulsory 
retirement. 


See  note  above  as  to  compulsory  retirement.  This  foi"m  can  be  used  where 
the  regulations  contain  provisions  as  in  Form  200,  but  where  those  provisions 
are  not  used  a  more  elaborate  form  is  requisite,  as,  for  example,  the  following : 

1.  The  registered  holders  for  the  time  being  of  not  less  than  nine- 
tenths  of  the  issued  shares  may  at  any  time  serve  the  co  with  a  requisi- 
tion in  writing  requiring  the  co  to  enforce  the  transfer  of  any  parlar 
shares  not  held  by  the  requisitionists. 

2.  When  any  such  requisition  has  been  served  the  co  shall  give  notice 
in  writing  thereof  to  the  owner  of  the  shares  (hereinafter  called  the 


POEMS.  34; 

owner),  and  he  shall  thenceforth  hold  the  same  snl:)ject  to  the  following  Form  264. 
provisions  : — 

3.  At  any  time  within  28  days  after  the  service  of  such  requisi- 
tion tlie  CO  may  on  behalf  of  the  o\nier  contract  with  auy  member 
or  members  of  the  co  for  the  sale  to  him  or  them  at  the  fair  value  of  the 
shares  or  auy  pt  thereof,  and  upon  any  such  contract  being  made  shall 
forthwith  give  notice  thereof  to  the  owner. 

Sometimes  the  member  is  given  the  option  of  finding  a  purchaser  himself, 
thus : — "  At  the  expiration  of  fourteen  days  after  the  service  of  such  notice 
(unless  the  owner  shall  in  the  interval  transfer  the  shares  with  the  approval  of 
the  directors)  the  company  may  at  any  time  within  twenty-eight  days,  to  be 
computed,  &c. 

4.  The  fair  value  of  the  shares  contracted  to  be  sold  as  afsd  shall  be 
ascertained  as  follo^^'s,  that  is  to  say  : — when  any  such  contract  has  been 
made,  the  person  with  whom  the  same  is  made  (hereinafter  called  the 
purchasing  member)  must  within  seven  days  after  the  date  of  the 
contract  give  to  the  owner  notice  ill  A\Titiug,  stating  the  sum  at  which 
he  estimates  the  fair  value  of  the  shares,  and  the  sum  so  stated  shall  be 
deemed  to  be  the  fair  value  if  it  is  not  less  than  the  amount  of  the 
capital  pd  up  on  the  shares,  plus  ten  p.  c.  If  it  is  less  than  that  amount 
the  owner  may  within  seven  days  after  Ijeing  served  with  such  notice 
serve  purchasing  members  with  a  notice  in  writing,  stating  that  he 
disputes  the  estimate  contd  in  the  first  notice,  and  specifying  the 
sum  he  is  willing  to  accept  as  the  fair  value.  If  the  co,  within  seven 
days,  assents  and  notifies  to  the  owner  such  assent,  such  last-mentd 
sum  shall  be  deemed  the  fair  value,  and  if  the  purchasing  member  does 
not  assent  within  such  seven  days,  he  shall  be  deemed  to  dissent,  and  the 
difference  as  to  the  fair  value  shall  be  referred  to  arbitration  [but  so 
that  the  sum  awarded  as  the  fair  value  shall  not  exceed  the  amount  of 
the  capital  pd  up  on  the  shares  by  more  than /.  p.  c.]. 

5.  When  the  fair  value  has  been  ascertained  as  afsd  the  pchase  shall 
be  completed  at  such  time  and  place  as  the  purchasing  member  shall 
notify  to  the  owner,  and  thereupon  the  owner  shall  transfer  the  shares 
to  the  purchasing  member  [or  his  nominee,  approved  by  the  co],  and  the 
purchasing  member  shall  pay  the  fair  value  thereof  to  the  owner. 

G.  At  any  time  before  the  fair  value  has  been  ascertained,  the  pm-- 
chasing  member  may  deposit  in  some  [London]  bank  in  the  name  of  two 
trustees  nominated  by  the  co  a  sum  equal  to  the  capital  pd  upon  the  shares 
contracted  to  be  sold  to  him,  j^lus  twenty  p.  c,  to  be  held  by  them  as  a 
secm'ity  for  the  paymt  to  the  owner  of  the  fair  value  of  such  shares, 
when  ascertained,  and  thereupon  the  owner  shall,  at  the  request  of  the 
purchasing  member,  transfer  the  shares  to  him  or  his  nominee,  provided 
such  nominee  is  approved  by  the  co. 

7.  If  in  any  case  the  owner  makes  default  in  transferring  the  shares, 
as  hinbefore  provided,  the  co  may  remove  his  name  from  the  register  in 
respect  of  such  shares,  and  may  enter  the  name  of  the  purchasing 
member,  or  his  nominee   afsd,  as  to  holders,  and  the  validity  of  the 


346  PEIVATJ3  COMPANIES. 

Form  264.  iDroceedings  shall  not  subsequently  be  inipeaclied  by  any  person.  But 
the  CO  shall  not  act  under  this  clause  unless  and  until  the  fair  value 
lias  been  ascertained  and  pd  to  the  co  in  trust  for  the  owner  or  the 
amount  mentd  in  the  last  preceding  clause  hereof  has  been  duly  deposited 
as  thereby  provided. 

8.  If  l;)y  reason  oi  default  on  the  pt  of  the  purchasing  member  the 
pchase  is  not  completed  within  fourteen  days  after  the  fiiir  value  of  the 
shares  lias  been  ascertained,  the  owner  may,  by  notice  in  wi'iting  to  the 
purchasing  mend)er,  annul  the  contract  for  sale. 

!).  In  the  seven  last  preceding  clauses  hereof  "the  owner"  means  the 
registered  holder  of  the  shares  and  the  exs  or  ads  of  a  registered  holder 
whilst  any  shares  or  stock  remain  standing  in  the  name  of  such  registered 
holder. 

10.  Any  such  reference  as  afsd  shall  be  made  to  two  persons,  one  to 
l)e  appointed  by  each  of  the  parties  in  difference,  and  the  cost  of  and 
incident  to  the  reference  and  award  shall  be  in  the  discretion  of  the 
arbitrators  or  umpire  who  may  determine  the  amount  thereof,  or  du'ect 
the  same  to  be  taxed  as  between  solor  and  client,  or  otherwise,  and 
may  award  by  whom  and  to  whom  and  in  what  manner  the  same  shall 
be  borne  and  pd,  and  the  submission  may  be  made  an  order  of  the  High 
Court  of  Justice  on  the  applicon  ex  parte  of  either  party  and  the  death 
of  any  party  shall  not  operate  as  a  revocation. 

If  the  regulations  contain  provisions  for  arbitration,  this  clause  will  not  be 
requisite. 

11.  The  CO  in  general  meeting  may  fi'om  time  to  time  determine  the 
order  or  manner  in  ^\'hich  the  members  shall  be  at  libty  to  tender  for 
the  shares  to  be  taken,  pursuant  to  any  such  requisition  as  afsd,  and 
generally  as  to  their  rights  or  privileges  in  regard  thereto  :  And  until 
otherwise  determined,  the  co,  as  soon  as  conveniently  may  be  after  the 
service  of  the  requisition,  shall  give  notice  in  writing  to  each  member 
specifying  the  share,  and  stating  that  he  is  at  libty  within  a  time  to  be 
limtd  therein,  to  tender  for  the  pchase  of  the  whole  or  any  pt  thereof  at 
the  ftiir  value  as  provided  by  the  co's  articles  of  association,  and  each 
member  shall  be  at  libty  to  make  a  tender  in  writing,  delivered  at  the 
office  within  the  time  so  limtd  for  such  shares,  or  any  pt  thereof,  and  the 
CO,  on  behalf  of  the  owner,  shall  accej)t  the  tenders  so  made,  if  sufficient 
shares  be  available,  and  if  the  shares  tendered  for  exceed  the  amount 
available,  the  tenders  shaU  rank  for  acceptance  in  such  order  as  shall  be 
settled  by  lot,  and  the  directors  may  cause  lots  to  be  drawn  accordingly, 
and  no  director  shall  l)e  precluded  from  tendering,  and  any  difficulty 
as  to  apportionmeiit  shall  be  settled  by  the  directors. 

Forfeit  lire. 

Occasionally  in  a  private  company  the  provisions  for  forfeiture  may  be 
omitted,  it  being  considered  that  the  pi'ovisions  for  lien  are  sufficient 


FORMS.  347 

PtESTRICTIOXS   OX   MEMBER?^. 

A  member  of  the  co  shall  not  [without  the  co's  consent]  either  s(jlely    Form  265. 
or  jointly  with,  or  as  manager  or  agent  for  any  other  person,  directly  or  Forfeiture 
indirectly  carry  on  or  be  engaged  or  concerned  or  interested  as  a  share-  "^^'^1'^^.^.^^  j^^ 
holder  or  otherwise  in  any  business  which  the  co  is  authorised  to  carry  rival  concern. 
on,  and  the  directors  may  by  resolution  forfeit  the  shares  of  any  member 
who  acts  in  contravention  (if  this  jirovision,  and  Clause  30  [see  siqira, 
p.  123]  shall  apply. 

In  a  private  company  a  clause  as  above  is  not  unusual.     Sometimes  it  is 

confined  to  directors,  and  occasionally  provision  is  made  for  notice  before 

forfeiture,   and   sometimes  provision   for    lic^uidated   damages   for   breach   is 
inserted.     See  supra,  p.  9. 

A  person  wIkj  ceases  to  be  a  member  of  the  co  shall  not  at  any  time   Form  266. 
within  five  years,  to  be  computed  from  the  time  when  he  so  ceases  to  be  jjgt;,!j^^ 

a  member,  either  solely,  &c.   [Form  205]  in  the  business  of  a  membernot 

within  100  miles  of  the  City  of .  *°  '°™P"*"- 

Provisions  as  above  are  very  common.  Sometimes  they  are  restricted  to  the 
l^ersons  who  have  held  a  particular  class  of  shares  intended  for  employes. 

Conversion  of  Sliares  into  StocJc. 

These  clauses  are  eommonly  omitted  ;  in  the  case  of  a  pi-ivate  company  they 
are  of  little  practical  use. 

Increase  and  Redaction  of  Capital. 

See  Form  117.  Where  the  issue  of  shares  is  restricted  as  in  Forms  258  or 
259,  supra,  the  new  shares  are  usually  made  subject  to  the  like  restrictions. 

Proceedings  at  Gene  rat  Meetings. 

Sometimes  it  is  provided  that  a  poll  may  be  demanded  by  any  member,  and 
that  every  poll  shall  be  taken  at  the  meeting  without  adjournment,  and  occa- 
sionally that  the  chairman  shall  not  have  a  casting  vote. 

Directors. 

A.,  B.,  and  C.  shall  be  the  first  directors  and  each  of  them  shall  be   Form  267. 
entled  to  continue  in  office  so  long  as  he  holds  capital  of  the  nominal  Directors, 
amount  of 1.  at  the  least. 

In  the  case  of  a  private  company  it  is  not  unusual  to  provide  that  some 
person  or  persons,  e.  g.,  the  founder  or  founders,  shall  be  entitled  to  hold  office 
for  a  term  of  years  or  for  life,  provided  he  or  they  continue  to  hold  a  certain 
number  of  shares,  and  sometimes  a  founder  is  empowered  at  any  time  and  from 
time  to  time  to  appoint  and  remove  directors  or  some  of  the  directors.  Occa- 
sionally a  founder  is  empowered  to  authorise  his  executors  or  trustees  whilst 
holding  a  certain  number  of  shares  to  appoint  directors,  and  sometimes  it  is 
provided  that  the  executors  or  administrators  or  trustees  of  the  will  of  a 
founder,  so  long  as  a  certain  number  of  shares  remain  standing  in  his  name  or 


318 


PRIVATE  COMPANIES. 


Form  267.  in  the  name  of  the  trustees  of  his  will,  may  appoint  directors.  Occasionally 
~  any  shareholder  entitled  to  a  specified  proportion  of  the  capital  is  authorised 
to  appoint  one  or  more  directors  or  a  specified  proportion  of  the  board.  Where 
the  founder  or  founders  hold  office  on  special  terms  in  conjunction  with  other 
directors  appointed  by  themselves  or  otherwise,  they  are  generally  described  in 
the  articles  as  "■  the  governing  directors,"  or  "the  permanent  directors,"  or 
"  the  life  directors,"  Avhilst  the  other  directors  are  called  the  ordinary  directors. 
Sometimes,  however,  it  is  provided  that  all  or  some  of  the  directors  shall  retire 
each  year,  and  very  connnonly  Form  275,  infra,  is  used.  Occasionally,  e.  g., 
in  the  case  of  single-ship  companies  Isiq^ra,  p.  103,]  the  original  owners  or 
some  of  them,  or  some  firm  in  which  they  are  interested,  are  appointed 
"managers"  upon  special  terms,  and  subject  to  the  control  of  the  company  in 
general  meeting.  Where  this  is  done  the  articles  generally  provide  that  the 
company  may  at  any  time  or  in  certain  events  appoint  directors  and  determine 
their  rotation,  qualification,  remuneration,  &c. 


Permanent 
directors. 


Form  268.       A.,  B.,  and  C.  shall  be  the  first  directors,  and  each  of  them  shall  be 
entled,  subject  to  Clauses        ,  and  hereof  to  retain  office  so  long  as  he 

holds  not  less  than of  the  shares  specified  [or  to  be  allotted  to  him 

piu'suant  to  the  agreemt  referred  to]  in  Clause  hereof,  and  whilst 
holding  office  by  virtue  of  this  jirovision  shall  be  called  a  permanent 
director,  and  if  by  resignation  he  ceases  to  be  a  permanent  director,  he 
shall,  if  qualified,  be  deemed  to  have  been  thereupon  elected  to  be  an 
ordinary  director. 

Sometimes  the  following  words  are  added  : — "  And  shall  be  entitled  to  hold 
office  as  such  so  long  as  he  lives  [or  until  the  second  ordinary  meeting  next 
following  the  date  when  he  ceases  to  be  a  permanent  directoi-]." 


Form  269. 


Managing 
director. 


Vacancy  by 
death. 


Subsequent 
vacancies. 


Special 
arrangement. 


1.  The  sd  A.  shall  be  the  first  managing  director,  and  shall,  subject 
only  to  Clauses  hereof,  be  entled  to  hold  the  office  for  life,  but 

may  resign  at  any  time. 

'2.  If  the  sd  A.  vacates  office  by  resignation,  he  may  fill  up  the 
vacancy  by  appointing  some  competent  person  to  the  office,  provided 
such  appointmt  be  made  by  writing  under  the  hand  of  the  sd  A.  within 
fourteen  days  after  he  so  vacates  office. 

3.  If  the  sd  A.  vacates  office  by  death,  and  at  the  time  of  his  death 
he  is  entled  to  not  less  than  one-third  of  the  issued  capital,  such  person 
shall  succeed  him  as  managing  director  as  shall  be  appointed  by  his  will, 
or  any  codicil  thereto,  or,  in  default  of  any  such  appointmt,  as  shall  be 
appointed  by  his  exs  or  ads,  within  six  weeks  after  his  death. 

4.  Subject  to  Clauses  2  and  3  hereof,  any  vacancy  in  the  office  of 
managing  director  may  be  filled  up  by  an  extraordinary  general  meeting, 
and  any  extraordinary  general  meeting  may,  at  any  time,  subject  to  any 
arrangemt  made  pursuant  to  thei  next  following  clause  hereof,  remove 
any  general  manager  except  the  sd  A.  from  office.  For  the  pposes  of 
exercising  any  of  the  powers  conferred  on  a  general  meeting  by  this 
clause,  any  member  or  members  holding  not  less  than  shares  may 
convene  an  extraordinary  general  meeting. 

5.  Any  managing  director  as  afsd  may  be  appointed  for  a  fixed  tenn 


FOEMS.  319 

or  otherwise,  and  upon  such  terms  as  to  remiiiieratioii,  and  in  all  other    Form  269. 
respects  as  may,  with  tlie  sanction  of  the  co  in  general  meeting,  be 
arranged. 

1.  The  firm  of  A.  B.  &  Co.,  which  now  consists  of  the  first  four  sub-   Form  270. 
scribers  hto,  and  their  successors,  shall  be  the  managers  of  the  co,  so  Firm  appointed 
long  as  they  are  able  and  willing  to  act  as  such,  and  any  firm  which,  by  mauagers. 
deatli  or  retiremt  of  any  partner,  or  by  the  admission  of  any  new  partner, 

or  otherwise,  shall  from  time  to  time,  and  at  any  time  hereafter,  succeed 
to  the  business  heretofore  carried  on  by  the  sd  existing  firm,  shall,  for 
the  pposes  (if  this  clause,  be  deemed  the  successors  of  the  sd  existing 
firm  [provided  that  some  meml)er  of  the  sd  existing  firm  is  a  member  of 
such  succeeding  firm],  and  the  co  shall  accordingly  enter  into  an  agreemt 
with  the  existing  firm  in  the  terms  of  the  draft,  a  copy  of  which  is  set 
forth  in  the  3rd  schedule  to  the  draft  agreemt  mentd  in  Clause  3  hereof. 

2.  The  qualification  of  the  managers  shall  Ije  the  holding  by  them,  or 
some  one  of  them,  of  capital  of  the  co  of  the  nominal  value  of  /. 
The  managers  may  act  before  acquiring  their  qualification,  but  shall 
vacate  office  if  they  do  not  acquire  it  within  three  months  after  becoming 
managers. 

3.  The  managers  may  regulate  their  proceedings  in  such  manner  as 
they  from  time  to  time  think  fit,  and  they  shall  be  under  no  obligation 
to  hold  board  meetings  ;  and,  unless  otherwise  arranged  among  them- 
selves, each  member  of  the  firm  which  shall  for  the  time  being  be 
manager  may  exercise  all  the  powers,  authorities,  and  discretions  hby 
vested  in  or  assigned  to  the  managers. 

4.  If  the  finn  for  the  time  being  entled  under  Clause  1  hereof  to  be 
managers  shall  become  disqualified,  or  shall  decline  to  act  as  managers, 
the  conmiittee  shall,  until  otherwise  determined  by  the  co  in  general 
meeting,  be  entled  to  exercise  all  the  powers,  authorities,  and  discretions, 
and  shall  perform  all  the  duties  hby  vested  in  or  assigned  to  the 
managers. 

The  above  was  used  in  the  case  of  a  ship  company.  The  articles  appointed  a 
consultative  committee  with  limited  powers.  The  general  powers  both  external 
and  interna]  were  vested  in  the  managers. 

The  permanent  directors   or  permanent  director  for  the  time  being   Form  271. 
may  at  any  time,  and  from  time  to  time,  by  iustrumt  in  writing,  appoint  p  ^^  ^, 
any  persons  to  be  ordinary  directors,  and  may  remove  any  persons  so  appoint  other 
appointed.     Every  such  appointmt  or  removal  shall  be  recorded  in  the  '^"'■'^ctors. 
co's  minute  book. 

The  CO,  in  general  meeting,  may  at  any  time  appoint  a  managing  Form  271a. 
director  to  conduct  the  business  of  the  co,  and  may  make  such  appointmt  ;r      ~r 

''     .  ^  ^  Power  for 

on  such  terms,  and  may  from  time  to  time  vest  m  or  assign  to  any  meeting  to 
managing  director  such  powers,  discretions,  and  duties,  and  may  impose  ^rpomt 


350 


PEIYATE  COMPANIES. 


managiii; 
director. 


Form  271a.  on  him  sncli  regulations  as  may  seem  expedient,  and  may  remove  any 
"  managing  director  so  appointed,  and  may  fill  up  any  vacancy  in  the 
office  of  managing  director,  and,  for  the  impose  of  exercising  any  of  the 
powers  conferred  by  this  clause,  any  managing  director,  and  any  member 
or  members  holding  not  less  than  shares,  may  convene  a  meeting. 

Sometimes  no  directors  are  appointed  by  the  articles,  but  a  clause  as  above 
is  inserted.  In  such  case  the  clause  as  to  directors  will  be  conditionally 
shortened,  and  the  word  "manager"  will  be  substituted  throughout  for 
"  directors." 

Form  272.       The  directors  shall  be  pd  for  their  services  out  of  the  funds  of  the  co 

;;  v.  "  the  remuneration  following,  that  is  to  say,  the  sd  A.  and  B.  each  5007. 

Kemuneration  ■  i         ^     '       ^ 

of  directors,      p.  a.,  and  the  sd  C.  300/.  p.  a.,  and  each  of  the  other  dn-cctors  such  sum 

as  the  CO  in  general  meeting  [or  the  permanent  director]  shall  from  time 

to  time  determine. 

The  provisions  as  to  remuneration  of  directors  vary  considerably.  In  some 
cases  the  principal  directors  take  no  remuneration  but  have  power  to  remu- 
nerate the  ordinary  directors.     In  others  they  take  a  fixed  salary  as  above. 

Sometimes  it  is  desired  to  provide,  as  in  an  ordinary  partnership,  that  a 
member  shall  be  at  liberty  to  draw  out  a  fixed  allowance  with  the  obligation  to 
recoup  if  at  the  end  of  the  year  it  appears  that  his  share  of  profits  do  not 
amount  to  what  he  has  drawn,  but  in  a  company  there  is  grave  difficulty  in 
makino-  any  such  provision  inasmuch  as  dividends  can  only  be  jiaid  out  of 
profits.  However,  the  diificulty  is  sometimes  met,  where  the  member  is  a 
director,  by  giving  him  the  fixed  allowance  as  remuneration  for  his  services  as 
director  with  liability  to  recoup  as  aforesaid. 

Form  273.       Each  of  them,  the  sd  A.  B.  and  C,  whilst  he  remains  a  j)ermanent 
J  .      7  director,  shall  be  entled,  without  charge,  to  have  his  son,  or  any  one  of 

son.  his  sons,  instructed  at  the  co's  works  in  the  business  or  businesses  for 

the  time  being  carried  on  by  the  co. 

This  clause  varies  a  good  deal  in  form.  Sometimes  power  is  given  to  nomi- 
nate by  will  a  son  for  instruction.  Sometimes  any  holder  of  a  specified  number 
of  the  shares  is  given  the  power. 


Attention. 

Form  274.  Each  of  the  ordinary  directors  shall  devote  the  whole  of  his  time  and 
attention  to  the  business  of  the  co,  Imt  the  sd  A.  and  B.  shall  not  l)e 
bound  to  devote  more  time  and  attention  to  the  co  than  they  rcspively 
may  think  fit. 

Some  sl^ch  provision  as  above  is  not  uncommon. 


What  time 
directors  to 
L'ive. 


EOTATIOX. 

Form  275        Until  otherwise  determined  by  extraordinary  resolution,  the  directors 
■  for  the  time  being  shall  continue  to  hold  office,  subject  only  to  Clauses 

Continuance  of  .       '  .  ,  ,  -i  i  /•       ' 

directors  in       [ds  to  ilisquahficaiion  and  jmiucr  to  remove}  hereof. 


office. 


In  a  private  company  a  clause  as  above  is  very  common,  the  intention  being 
that  the  directors  shall  not  retire  by  rotation  but  shall  remain  in  office  until 


FOEMS.  351 

they  become  disqualified  by  bankrujitcy,  &c.,  or  are  removed.     When  such  a    Form  275. 

clause  is  inserted  the  usual  rotation  clause  will  be  omitted.     When  rotation 

clauses  are  inserted  it  is  usually  provided  that  they  shall  not  apjoly  to  the 
governing  directors. 

PiiocEEDixfis  OF  Directors. 

It  is  sometimes  provided  that  (as  in  an  ordinary  partnershii) )  each  director 
may  do  various  things  without  a  board  meeting,  and  not  uncommonly  it  is 
provided  as  follows : — 

At  any  meeting  of  the  dii-ectors  a  director  shall  have  one  vote  for   Form  276. 
every  share  held  by  him,  and  votes  may  be  given  either  personally  or  by  y   .  ^  " 

proxy,  but  a  proxy  must  be  one  of  the  directors,  and  must  be  appointed  directOTs' 
in  writing  under  the  hand  of  the  appointor. 


meetings. 


Sometimes  it  is  i^rovided  that  no  resolution  shall  be  valid  if  a  particular 
director  dissents,  or  that  certain  business  shall  only  be  transacted  with  the 
concurrence  of  a  particular  director. 

Power  of  Directoks. 

Sometimes  the  powers  of  directors  are  limited  as  i-egards  certain  things,  e.g., 
borrowing  money,  entering  into  contracts  beyond  a  certain  value,  increasing- 
capital,  &c. 

Dividends. 

See  Form  117. 

Occasionally  it  is  provided  that  dividends  shall  be  applied  as  in  Form  277. 
Where  there  are  preference  shares  provision  will  be  made  accordingly.  See 
Form  12G. 

So  long  as  any  [C]  share  is  not  fully  pd  up,  the  holder  shall  only  be    Form  277. 
pd  out  of  the  dividends  fi'om  time  to  time  declared  thereon  such  a  sum  77      7 

J-  Interest  on 

as  with  the  amount  (if  anything)  previously  pd  to  the  holder  of  such  unpaid  shares. 
share  pursuant  to  this  clause  shall  be  equal  to  interest  at  the  rate  of 
5  p.  c.  p.  a.  on  the  capital  pd  up  thereon  computed  from  the  time  when 
such  capital  was  pd  up,  and  the  excess  shall  be  retained  by  the  directors 
and  applied  in  paying  up  such  share. 

Not  uncommonly  it  is  confined  to  shares  issued  to  employes.  Sometimes  the 
retention  is  only  to  operate  until  the  share  is  paid  up  to  the  extent  of  80  per  cent. 


Accounts. 

These  are  generally  in  common  form.      See  Form  117.     But  sometimes  a 
clause  as  follows  is  inserted  : — 

A  copy  of  such  balance-sheet  and  report  shall,  for  seven  days  pre-   Form  278. 
viously  to  the  meeting,  be  kept  at  the  office  open  for  the  inspection  of 
members,  but  the  same  shall  not  be  circulated,  and  no  copy  of,  or  extract 
from,  the  same  shall  be  taken  or  made. 


Balance  sheet. 


The  object  in  some  cases  is  to  avoid  the  expense,  and  in  others  to  avoid  dis- 
closure of  facts  which  might  lead  to  the  establishment  of  rival  undertakings. 


35a 


PEIVATE  COMPANIES. 


Form  279.       The  accoimts  relating  to  the  co's  afRiirs  shall  be  audited  in  such 
manner  as  the  co  in  Q;eneral  meeting  shall  from  time  to  time  determine. 


Audit, 


The  above  is  sometimes  inserted  instead  of  the  usual  provision. 


Deeds  of  Settlement. 

Where  a  conversion  is  to  be  effected  in  accordance  with  the  new  plan  (s)tj)r<x, 
p.  335),  the  iinincorporated  company  is  usually  constituted  by  deed.  Sometimes 
the  deed  commences  "  This  indenture  made,  &c.,"  and  is  called  the  deed  of 
settlement ;  and  sometimes  it  commences  "  Articles  of  Association  made,  &c." 
The  object  of  framing  it  in  the  manner  last  mentioned  is  to  enable  the  parties 
to  describe  the  regulations  after  incorporation  as  the  Ai-ticles  of  Association, 
since  that  term  is  more  familiar  than  deed  of  settlement. 

Porm  280.       ARTICLES  OF  ASSOCIATION  [or,  THIS  INDRE]  made  the 

Deed  of  ^ttle-  ^laj  of ,  betNvecn  A.  B.  and  C,  of ,  of  the  first  pt,  D.,  of , 

lueut.  of  the  second  pt,  and  The  several  other  persons  who  [have  signed 

their  names  and  affixed  their  seals,  and]  shall  [hereafter]  sign  their 
names  and  affix  their  seals  to  these  presents,  of  the  third  pt  : 
WITNESSETH  that  each  of  the  several  persons  pties  hto  of  the  first 
and  third  pts  respively,  so  far  as  relates  to  the  acts  and  deeds  of  himself 
and  herself  respively,  and  his  and  her  resjnve  heirs,  exs,  and  ads  doth 
hl)y  covenant  with  the  sd  I),  (as  trustee  for  or  on  behalf  of  the  others  of 
them),  and  also  as  a  separate  covenant  with  each  of  the  others  of  them, 
that  the  several  persons  pties  hto  of  the  first  and  third  pts  respively, 
and  the  several  other  persons  who  shah  become  members  of  the -co  in 
manner  hereinafter  mentd,  shall,  whilst  h(.)Iding  shares  in  the  capital 
of  the  CO,  be  and  continue  (until  dissolved  under  the  provisions  in  that 
behalf  hereinafter  contd)  a  joint-stock  co  under  the  name  hereinafter 
specified,  and  that  such  co  and  the  members  thereof  shall  be  subject  to 
the  regulations  following  (that  is  to  say)  : — 
Interpretation.  1.  lu  these  presents,  unless  there  be  something  in  the  subject  or 
context  inconsistent  therewith — 

"  The  co  "  means  the  co  hby  constituted. 

"  The  members  "  means  the  holders  for  the  time  being  of  shares  in 
the  capital  of  the  co. 

"  The  registration  of  the  co  "  means  the  registration  of  the  co  pur- 
suant to  Pt.  A^II.  of  the  Companies  Act,  18G2. 

'•  The  office  "  means,  prior  to  the  registration  of  the  co,  the  princiijal 
place  of  business  of  the  co,  and,  after  the  registration  of  the  co,  means 
the  registered  office  for  the  time  being  of  the  co. 

''  The  register  "  means  the  register  of  members  to  be  kej^t  as  herein- 
after provided. 

"  Mduth  "  means  calendar  month. 

"Special  resolution"  and  "  extraordinary  resohition  "  respively  have 
the  meanings  assigned  thereto  by  the  Companies  Act,  1862. 

"  The  directors  "  means  the  directors  for  the  time  being. 

"  The  articles  of  association  "  means  these  presents. 


FORMS.  .  353 

'•  In  writiug"  means  written  or  printed,  or  partly  written  or  partly   Form  280. 
printed. 

AVords  importing  the  singular  shall  include  the  plural  nmnber,  and 
vice  versa.  Words  importing  the  mascuUne  shall  include  the  feminine 
gender.  Words  importing  persons  shall  include  coiporations,  mp faffs 
mufamUs. 

'2.  The  name  of  the  co  shall  be  A.  B.  and  Co.     The  name  may  at  any  Name, 
time  before  the  registration  of  the  co  be  changed  or  modified  by  a 
general  meeting. 

3.  Until  after  the  registration  of  the  co  there  shall  not  at  any  time  be  Numher  of 
more  than  twenty  members,  siqyra,  p.  91.  U^ed'^ 

4.  The  office  shall  be  situate  in  England.  Office. 

5.  The  objects  for  which  the  co  is  established  are  : —  Objects. 
(«.)  To  acquire  the  goodwill  of  the  business  of  a ,  now  carried  on 

by  the  sd  A.,  B.,  and  C.  in  partnership  together,  under  the  firm  or  style 

of  A.  B.  &  Co.,  at  ,  and  elsewhere,  and  to  acquire  and  undertake 

the  whole  or  any  pt  of  the  assets  and  liabilities  of  the  si  A.,  B.,  and  C, 
in  connection  with  such  Ixisiness.  [^Hcre  /rill  follow  fhe  fvrfher  objecfs, 
see  supra,  Form  (V.),  cf  spq.'] 

6.  The  capital  of  the  co  shall  be  1(10,000/.,  divided  into  10.000  shares  Capital. 
of  10?.  each. 

7.  Of  the   sd   lO.OoO  shares  the   sd   A.   shall  be   eutled   to   .5,000,  Specific 

numbered to  inclusive,  the  sd  B.  shall  be  entled  to  4,000,  of  shares!  ^°° 

numbered to ,  inclusive,  the  sd  C.  shall  be  entled  to  750,  num- 
bered — —  to ,  inclusive,  and  each  of  the  several  other  persons 

parties  hto  of  the  third  pt  shall  be  entled  to  the  number  of  shares  in  the 
capital  of  the  co  set  opposite  his  signature  hto. 

/     8.  The  assets  specified  in  the  schedule  hto  shall  be  brought  into  the  Assets  to  be 
joint  stock  by  the  sd  A.,  B.,  and  C,  and,  having  regard  to  the  obhga-        ° 
tions  imposed  on  the  co  by  Clause  10  hereof,  shall  be  taken  to  be  of  the 
value  of  97,500/.,  and  the  shares  to  which  the  sd  A.,  B.,  and  C.  ai"e  to  be 
entled  as  afsd  shall  be  deemed  to  be  fully  pd  up  by  means  of  the  assets  so 
brought  in. 

If  desired  insert  after  the  word  '  afsd '  the  words  "  and  also  the  [4]  shares  to 
which  E.,  F.,  G.,  and  H.  are  to  be  entitled."  In  such  case  A.,  B.,  and  C.  will 
take  [4]  shares  less. 

Sometimes  the  founders  desire  to  take  part  of  the  value  of  their  interest  in 
the  concern  in  debentures  or  debenture  stock  [si?|3ra,  pp.  273,  279].  In  such 
case  this  clal^se  will  declare  that  the  assets  are  brought  in  subject  to  a  lien  in 
favour  of  the  founders  for  the  sum  specified,  and  clause  10  will  provide  that 
the  company  shall  satisfy  such  lien.  After  registration  the  lien  can  be  satisfied 
hy  the  issue  of  debentures  or  otherwise. 

9.  The  sd  A..  B.,  and  C.  shall  convey  to  the  co  the  assets  mentd  in  Conveyance. 
the  sd  schedule  hto,  subject  to  the  liabilities  affecting  the  same  respively, 

but  free  from  all  claims  by  him,  and  in  the  meantime  shall  hold  the 
same  assets  in  trust  for  the  co. 

10.  The  CO  shall  undertake,  pay,  observe,  satisfy,  perform,  and  fulfil  Obligations 

A  A 


354 


PRIVATE    COMPANIES. 


Form  280.  all  the  liabilities  of  the  sd  A.,  B.,  and  C.  in  relation  to  the  sd  business, 
imposed  on  and  shall  indemnify  the  sd  A.,  B.,  and  C.  and  their  respive  heirs,  exs, 
company.  ^^^g^   estates,   and   effects   from   and   against  all   actions,   proceedings, 

damages,  claims,  and  demands  in  respect  thereof. 

Sometimes  this  clause  is  less  general,  e.g.,  "  all  such  of  the  liabilities  of  the 
said  A.,  B.,  and  C,  in  relation  to  the  said  business  as  are  specified  in  the  book 
marked  A  referred  to  in  the  schediile  hereto  and  shall,  &c." 

From  what  11.  The  sd  business  shall  be  deemed  to  have  been  carried  on  as  from 

time  agreement  ^.j^g  gjgj.  ^      of  December,  1883,  on  the  co's  behalf,  and  accordingly  the 
to  nave  eflect.  -^  '  '  "  "^ 

sd  A.,  B.,  and  C.  shall  be  allowed   all   paymts   made   and   expenses 

incurred,  and  shall  account  for  all  moneys  and  other  benefits  received 

by  them  respively  in  relation  to  such  lousiness  as  from  that  day. 

This,  of  course,  is  a  matter  of  arrangement. 


Numbering 
shares  and 
register. 


Limitation  of 
liability. 


12.  Each  share  in  the  capital  shall  be  distinguished  by  its  appropriate 
number,  and  the  co  shall  cause  to  be  kept  in  one  or  more  books  a 
register  of  its  members,  and  there  shall  be  entered  therein  the  parlars 
mentioned  in  section  25  of  the  Companies  Act,  18G2. 

13  &  14.  [See  Clauses  8  and  10  of  Form  117.] 

15.  As  between  the  members  for  the  time  being  of  the  co,  no 
member  shall  be  liable  to  pay  calls  or  to  contribute  to  an  extent  exceed- 
ing the  amount  for  the  time  being  unpaid,  or  not  credited  as  pd  up  on 
the  shares  held  by  him. 

This  limit  of  liability  is,  of  course,  valid  as  between  the  members,  but  until 
the  company  registers  as  a  limited  company  it  remains  inoperative  as  against 
outsiders.     Greenwood's  case,  3  D.  G.  M.  &  G.  459. 


Shareholders,         10.  The  couduct  of  the  co's  business  is  to  be  exclusively  vested  in  the 
no  power  to      directors,  as  hereinafter  provided,  and  accordingly  no  member  of  the  co 
as  such  shall  have  any  power  to  use  the  name  of  the  co,  or  make  any  con- 
tract, or  otherwise  act  on  the  co's  behalf. 

It  is  not  uncommon  to  insert  a  clause  as  above.  And  although  in  the  case 
of  an  ordinary  partnership  such  astipulation  is  inoperative  as  regards  outsiders, 
without  notice  a  different  rule  prevails  in  the  case  of  a  joint  stock  company. 
Thus  in  Burnes  v.  Pennell,2  H.  L.  Cas.  497,  Lord  Campbell,  L.  C,  said  that  "No 
one  will  contend  that  a  joint  stock  company  would  be  liable  on  a  bill  of  exchange 
drawn,  accepted,  or  indorsed  by  any  one  shareholder.  Why  ?  Because  it  is 
known  that  the  power  of  carrying  on  the  business  of  the  company  and  of  draw- 
ing, accepting,  and  indorsing  bills  of  exchange  is  vested  excliisively  in  the 
directors.  This  shows  that,  although  a  joint  stock  company  is  a  partnership, 
it  is  a  partnership  of  a  different  descrij^tion,  and  attended  with  different  inci- 
dents and  liabilities  from  a  jiartnership  constituted  between  a  few  individuals 
who  carry  on  business  jointly  with  equal  powers  and  without  transferable 
shares.  All  who  have  dealings  Avith  a  joint  stock  company  know  that  the 
authority  to  manage  the  business  is  conferred  upon  the  directors,  and  that  a 
shareholder  as  such  has  no  power  to  contract  for  the  company.  For  this  i^uv- 
pose  it  is  wholly  immaterial  whether  the  comijany  is  incorporated  or  unincor- 
porated." And  in  Hallett  v.  Doiudall,  21  L.  J.  N.  S.  Q.  B.  and  18  Q.  B.  2,  Piatt, 
B.,  said,  "  There  is  every  difference  between  a  joint  stock  company  and  an  ordi- 


FORMS. 


35; 


nary  partnership.    It  has  been  decided  over  and  over  again  that  when  there  are    Form  280. 

directors  the  common  law  power  of  one  partner  to  bind  the  other  ceases  ; "  and  — 

Anderson,  B.,  said,  "  Notice  that  there  are  directors  is  notice  to  a  party  that  he 
is  not  dealing  with  an  ordinary  partnership." 

So  in  Greenwood's  case,  3  D.  M.  G.  &  G.  477,  Lord  Cranworth,  L.  C,  said  that 
companies  "  certainly  differed  in  this,  that  whereas,  according  to  the  ordinary 
laws  of  i^artnership,  any  one  partner  acting  within  the  scope  of  the  partnership 
might  bind  all  the  other  partners,  it  was  not  so  with  a  joint  stock  company." 

TliG  transfer  of  a  share  made  before  the  registration  of  the  co  shall,  as  Effect  of 
nearly  as  may  be,  have  the  same  effect  and  consequences  as  between  the  ^''^nsfer  before 
transferor  and  the  transferee  and  co  respively  as  a  transfer  of  shares 
made  after  the  registration  of  the  co. 

This  provision  is  probably  implied  by  reason  of  the  shares  being  made 
transferable.  Cape's  case,  2  De  G.  M.  &  G.  562  ;  Mayheiv's  case,  5  De  Gr.  M.  &  Gr. 
837;  Baird's  case,  5  Ch.  735. 

Every  person  who  after  the  date  hereof,  and  before  the  registration  of  Execution  of 

the  CO,  becomes  the  registered  holder  of  any  shares  in  the  capital  shall  as  ^i"*^^^^'^  p^ 

.  ^  association. 

from  the  time  his  name  is  entered  in  the  register  of  members  be  con- 
sidered a  member  of  the  co  in  respect  of  such  shares,  and  be  bound  l)y 
the  articles  of  association  accordingly,  and  (if  not  at  the  time  of  such 
entry  already  a  member)  shall  within  one  month  afterwards  at  the  request 
of  the  CO  execute  the  articles  of  association  or  a  deed  of  covenant  to  abide 
by  the  regulations  of  the  co  as  regards  every  such  share.  And  if  any 
person  shall  fail  to  comply  with  such  request  all  his  rights  in  regard  to 
the  CO  shall  be  suspended  so  long  as  he  remains  in  default. 

This  clause  is  iisually  inserted. 


Other   Provisiox^^. 

The  rest  of  the  deed  will  be  based  on  Form  117  with  modifications  suital)le  to 
a  private  company,  e.g.,  introduce  any  of  the  Forms  258  et  seq.  Power  to 
issue  share  warrants  should  be  omitted.  Power  to  convert  shares  into  stock 
is  very  commonly  omitted.  And  where  the  power  is  taken  it  may  be  well  to 
commence  the  clause  with  the  words  "After  the  registration  of  the  company," 
although  the  better  opinion  is  that  an  unincorporated  company  may  have  a 
common  stock.  Lindley,  192.  Any  reference  to  the  common  seal  should  be 
omitted  or  qualified,  e.g.,  in  clause  11,  omit  the  words  "issued  luider  the  seal 
of  the  company,"  and  add  at  end  of  clause  the  words .-  "  And  after  the 
registration  of  the  comiiany  shall  be  under  the  seal,"  and  in  clause  115,  if  inserted, 
say  "  After  the  registration  of  the  company  the  common  seal,  &c."  The  two 
following  clauses  are  usually  inserted  : 

Any  notice  or  other  documt  required  to  he  served  upon  the  co  may  be  Notice  to 
served  by  leaving  the  same  or  sending  it  in  a  prepaid  letter  addressed  to  ^°°'i^''^"y- 
the  CO  at  the  office.     And  any  notice  requiring  authentication  by  the  co 
may  be  in  writing,  signed  by  any  director,  secretary,  or  otlier  authorised 
officer  of  the  co. 

The  CO  may  at  any  time  before  its  registration  be  dissolved  by  special  Dissolution, 
resolution,  and  where  such  a  resolution  is  passed  the  affairs  of  the  co 

A   A  2 


356 


PEIVATE  COMPANIES. 


Division  in 
specie. 


Alteration  of 
regulations. 


Form  280.  sliall  be  wound  np  by  the  directors  or  otherwise  as  by  the  special  resohi- 
tion  directed. 

If  the  CO  shall  be  wound  up  the  liqs,  whether  voluntary  or  official,  or 
other  persons  having  the  conduct  of  the  winding  up,  [&c.,  Form  117, 
Clause  153]. 

The  CO  may  from  time  to  time  and  at  aiiy  time  by  special  resolution 
alter  all  or  any  of  the  regulations  of  the  co  for  the  time  being  [v/so  except 
Clauses  hereof],  and  make  new  regulations,  to  the  exclusion  of  or 

in  addition  to  all  or  any  of  the  regulations  for  the  time  being  of  the  co, 
and  the  regulations  so  made  and  for  the  time  being  in  force  shall  be 
deemed  to  be  regulations  of  the  co  of  the  same  validity  as  if  they  had 
been  originally  contd  in  these  presents,  and  shall  be  subject  in  like  manner 
to  be  altered  or  modified  by  any  subsequent  special  resolution. 
The  deed  will  conclude. 

In  "\titness  whereof  the  parties  to  these  presents  have  hereunto  set 
their  hands  and  seals  [omit  the  ii'orih  "  tlir  day  and  //mr,"  r{r.]. 


The  Schedule  above  referred  to. 

The  goodwill  of  the  sd  business  heretofore  carried  on  Ijy  the  sd 
A.,  B.,  and  C.  at  the and  elsewhere. 

All  and  singular  the  freehold  and  leasehold  liereds,  trade  marks, 
licences,  copyright,  plant,  machinery,  stock-in-trade,  furniture,  implemts, 
utensils,  bills,  notes,  books  of  account,  and  fire  insurance  policies,  tO' 
which  the  sd  A.,  B.,  and  C.  are  entled  in  connection  with  the  sd  business. 
All  del)ts  owing  to  the  sd  A.,  B.,  and  C.  in  connection  with  the  sd 
business,  and  the  full  benefit  of  all  securities  for  the  same. 

The  full  benefit  of  all  contracts  and  engagemts  in  connection  with  the 
sd  business. 

All  other  ppty  whatsoever  and  wheresoever  to  which  the  sd  A.,  B., 
and  C.  are  entled  in  connection  with  the  sd  business. 

The  above  mentd  assets  are  now  parly  specified  in  the  statemt 
thereof,  which  has  been  entered  in  a  book  marked  "A,"  and  for  the 
ppose  of  identification  su])scribed  by  th«  parties  hto  of  the  first  and 
second  pts  respively. 

Signed,  sealed,  and  delivered  by  A. 

the  said  A.,  B.,  C,  and  D.  in  the  B. 

presence  of  C. 

D. 


Signature  of 
attesting  witness. 

Signature,  &c.,  of  parties 
hereto  of  the  tliirrl  part. 

Seals. 

Number  of  shares  taken 
by  eacl). 

( 

FOEMS.  357 

Where  it  is  desired  to  register  a  company  constituted  by  deed  as  above  the  Foritl  280. 
number  of  the  members  must  if  necessary  be  increased  to  seven  ;  the  ^jrincipal 
shareholder  or  shareholders  can  effect  this  by  transferring  a  share  apiece  to  a 
few  friends.  Then  let  a  general  meeting  be  duly  convened  "  for  the  pui-pose  of 
considering,  and  if  thought  fit  passing  a  resolution  to  register  the  company  as 
a  company  limited  by  shares,"  and  let  a  resolution  be  passed  as  in  Form  173.  A 
proper  form  of  application  must  then  be  made,  see  Form  174,  supra,  and  in  due 
course  the  registrar  will  issue  his  certificate,  supra.  Form  207.  As  to  the  effect 
thereof,  see  sections  192— 19G  of  the  Act  of  1862. 


Note  as  to  the  Application  of  s.  25  of  the  Act  of  18G7. 

When  a  conversion  in  accordance  with  the  new  plan  (supra,  p.  335)  is  con- 
templated, the  question  is  sometimes  raised  whether  after  the  company  has 
been  registered  under  Part  VII.  of  the  Act  of  1862,  s.  25  of  the  Act  of  1867 
(supra,  p.  10)  will  apjDly  so  as  to  impose  any  liability  on  the  holders  of  shares, 
which  by  the  deed  of  settlement  are  to  be  deemed  fully  or  i^artly  paid  up 
by  means  of  land  or  other  assets  brought  into  the  joint  stock.  It  seems  clear 
that  section  25  will  not  apply  to  such  shares,  and  accordingly  the  question 
must  be  answered  in  the  negative. 

The  following  are  the  grounds  for  this  conclusion  : — 

It  is  clear  that  apart  from  these  Acts  the  contract  contained  in  the  deed  of 
settlement,  that  in  consideration  of  certain  assets  brought  into  the  joint  stock 
by  some  person,  his  shares  shall  be  deemed  to  be  fiilly  or  partly  paid  wp,  is 
perfectly  valid.     It  is  an  every-day  partnership  arrangement. 

It  is  also  clear  that  so  long  as  the  company  constituted  by  the  deed  of  set- 
tlement remains  unregistered,  s.  25  does  not  affect  or  invalidate  this  contract, 
for  that  section  no  more  applies  to  a  company  so  constituted  than  it  does  to  a 
railway  company.  Indeed,  s.  201  of  the  Act  of  1862  expressly  declares  that 
an  unregistered  company  shall  not  except  as  therein  mentioned  be  deemed  to 
be  a  company  under  this  Act.  And  by  the  Act  of  1867,  it  is  pi-ovided  that  in 
the  Act  of  1862  the  expression  "  this  Act "  is  to  mean  the  Act  of  1862,  as 
amended  by  the  Act  1867. 

The  question  remains  whether,  when  the  company  x*egisters  under  Part  VII. • 
the  Act  invalidates  this  contract,  which  in  its  inception  was  perfectly  valid  ? 
Now  it  is  a  well-settled  rule  that  all  statutes  are  to  be  construed  to  operate 
prospectively,  unless  from  the  language  a  retrospective  effect  is  clearly  intended. 
Novo,  const Hutio  futuris  formani  imponere  debet  nori  prceteritis.  And  "  it  is  where 
the  enactment  would  prejudicially  affect  vested  rights,  or  the  legal  cha- 
racter of  past  acts,  that  the  presumption  against  a  retrospective  operation  is 
strongest."  (Maxw^ell,  p.  192.)  As  was  laid  do\^Ti  by  Erie,  C.J.,  in  The  Midland 
Railway  Co.  v.  Pye,  10  C.  B.  N.  S.  191,  an  act  is  not  to  be  given  a  retrospective 
operation,  "iinless  the  intention  of  the  Legislature  that  it  should  be  so  con- 
strued is  expressed  in  clear,  plain,  and  unambiguous  language,  because  it  mani- 
festly shocks  one's  sense  of  justice  that  an  act  legal  at  the  time  ©f  doing  it 
should  be  made  unlawful  by  some  new  enactment."  The  rule  was  refei-red  to 
by  Bai'on  Parke,  in  Moon  v.  Burden,  2  Ex.  22,  as  ''one  of  such  obvious  con- 
venience and  justice,  that  it  must  always  be  adhered  to  in  the  construction  of 
statutes,  unless  in  cases  where  there  is  something  on  the  face  of  the  enactment, 
putting  it  beyond  doubt  that  the  Legislature  meant  it  to  oi)ei"ate  retrospec- 
tively." So  also  in  Hiclcson  v.  Barlow,  23  C.  Div.  693,  Fry,  J.,  said,  "Now  it  is 
a  well-known  principle  of  law  on  the  construction  of  Acts  of  Parliament,  and 
especially  where  the  rights  and  liabilities  of  persons  are  altered  thereby,  that 
they  are  not  to  have  a  retrospective  operation  unless  it  is  expressly  so  stated." 
And  as  appears  from  the  case  of  The  Midland  Railway  Co.  v.  Pye,  ubi  su,pra, 
and  the  case  last  mentioned,  the  rule  is  applied  not  merely  in  favour  of  things 
done  before  the  passing  of  an  Act,  but  also  in  favour  of  things  done  after  the 


358'  PRIVATE    COMPANIES. 

Form  280.    passing,  but  before  the  application  of  the  Act,  where  the  provisions  of  an  Act 

are   only   to   have  effect  on    a   particular    subject   matter  in  certain  events. 

Applying  the  rule  to  the  construction  of  the  Acts  of  1862  and  1867,  in  refer- 
ence to  a  company  registering  under  Part  VII.,  there  is  certainly  no  clear 
expression  of  an  intention  that  s.  25  of  the  Act  of  1807  shall  operate  retrospec- 
tively. 

The  following  must  be  the  argument  in  favour  of  a  retrospective  con- 
struction : — 

"  The  Act  of  1862  provides  (s.  196),  that  when  a  company  is  i-egistered  under 
Part  VII.,  all  the  provisions  of  '  this  Act '  shall  apply  to  such  a  comj^any, 
and  the  members,  and  contributors,  and  creditors  thereof  in  the  same  manner 
in  all  respects  as  if  it  had  been  formed  under  this  Act.  By  virtue  of  the  Act 
of  1807,  'this  Act,'  in  s.  196,  includes  the  Act  of  1867  ;  therefore  s.  196  makes 
s.  25  of  the  Act  of  1867  applicable  to  a  company  registering  under  Part  VII. 
not  only  as  regards  shai-es  issued  after,  but  as  regards  shares  issued  before  the 
registration." 

But  such  a  conclusion  is  not  warranted  by  the  jjremises  ;  for  though  s.  25 
is  to  apply  after  registration,  there  is  no  clear  and  unambiguous  declaration 
that  it  is  to  apply  to  shares  issued  before  registration ;  and  in  the  absence  of 
stich  a  declaration  the  well-settled  rule  above  referred  to,  excludes  a  retro- 
spective construction. 

Moreover,  to  apply  such  a  construction  would  involve  the  injustice  and 
absurdity  that  the  parties  were  to  lose  the  benefit  of  a  contract,  valid  in  its 
inception,  becaiise  they  did  not  before  the  issue  of  their  shares  do  that  which 
the  law  did  not  then  permit,  viz.,  file  the  contract  with  the  Eegistrar  of  Joint 
Stock  Companies. 

Lastly,  such  a  construction  is  inadmissible,  because  s.  194  of  the  Act  of  1862 
expressly  provides  that  the  registration  "  shall  not  affect  or  jirejudice  the 
liability  of  such  company  to  have  enforced  against  it  ...  .  any  contract 
entered  into,  by,  or  with,  or  on  behalf  of  such  company  previously  to  the 
registration."  This  section  would  seem  clearly  to  include  a  contract  as  to 
paid-up  shares  contained  in  a  company's  deed  of  settlement ;  for  the  members 
of  the  company  constitute  the  company;  and  they  have  all  covenanted  that 
the  shares  shall  be  deemed  paid  up,  i.  e.,  a  contract  has  been  made  hy  or  on 
behalf  of  the  company  to  that  effect. 


Form  281.       I  authorise  my  trustees  or  trustee  at  any  time  within  [twelve  calendar 


Power  for  moiiths]  after  my  death,  to  conyert  my  business  into  a  co,  limtd  by 
trustees  of  will  shares  upon  such  terms  and  in  such  manner  as  my  trustees  or  trustee  in 
testator's  their  or  his  uncontrolled  discretion  shall  think  fit,  and  without  limiting^ 

business  into  's,ViQ\\  general  authority,  I  cxjjressly  declare  that  my  trustees  or  trustee 
(«)  may  accept  fully  or  partially  pd  up  shares  or  debentures,  or  any 
other  interests  in  or  securities  of  any  such  co  as  the  conson  or  pt  of 
the  conson  for  the  transfer  of  the  sd  business  ;  (t*)  may  effect  the  con- 
version by  the  formation  of  a  co  limtd  by  shares  and  a  sale  to  such  co 
of  the  business,  or  by  the  formation  of  an  unregistered  co,  into  the  joint 
stock  whereof  my  trustees  or  trustee  may  bring  the  sd  business  or  any  pt 
tliereof,  and  the  subsequent  registration  of  such  co  under  Sect.  7  of  tlie 
Companies  Act  of  18(!2  as  a  co  limtd  by  shares  ;  {c)  may  settle  the  terms 
of  any  memorandum  and  articles  of  association,  deed  of  settlemt,  or  otlier 
documts  for  use  in  relation  to  such  conversion,  and  may  sign  or  execaite 
the  same  ;  {(I)  may  act  as  directors  or  director  of  such  co,  and  either  alone 
or    in    conjunction   witli    otliers   without    being   accountable   for   any 


FOEMS.  359 

remuneration  payable  to  them  as  such  ;  (o)  may  procure  the  appointmt    Form  281. 

of  any  other  persons  to  he  directors,  either  alone  or  otherwise  ;  (/)  for  ' 

the  ppose  of  forming  or  preserving  the  limtd  liability  of  the  members 

after  registrati(m,  my  trustees  or  trustee  may  vest  any  of  the  shares  in 

the  sd  CO  constituting  pt  of  my  estate  in  such  persons  and  upon  such 

trusts  as  they  or  he  think  fit  ;  (//)  may  lend  money  forming  pt  of  my 

residuary  estate  to  any  such  co  upon  such  terms  as  they  or  he  may  think 

lit,  and  may  concur  in  winding  up,  reconstructing  and  amalgamating 

any  such  co,  or  in  the  modification  of  any  of  the<'fegulations  thereof,  and 

may  exercise  any  powers  which  by  the  regulations  of  such  co  shall  be 

vested  in  my  trustees  as  members  or  directors  thereof  or  otherwise,  and 

generally  may  act  in  relation  to  any  such  co  in  such  manner  as  they 

think  best  calculated  to  benefit  my  estate  :  And  I  declare  that  all  shares 

debentures,  or  other  interests  in  or  securities  of  any  such  co  acquired 

by  my  trustees  or  trustee  shall  be  deemed  to  be  authorised  as  investmts 

by  clause       hereof,  and  to  have  been  pchased  by  my  trustees  out  of 

monies  arising  from  a  sale  under  clause       hereof:  And  I  declare  that 

for   the   pjjose   of   this   clause   the   expression,  my  business,    shall   be 

deemed  to  include  the  goodwill  of  the  business  of  a ,  carried  on  by 

me  at ,  and  the  ■whole  of  my  ppty  and  rights  in  connection  with 

such  business. 

It  is  becoming  very  connuon  now  for  a  testator  who  is  possessed  of  a  business 
which  he  desires  to  have  carried  on  after  his  death,  or  a  share  in  a  business,  to 
make  provision  for  the  conversion  of  the  concern  into  a  private  company. 
Sometimes  persons  who  are  solicited  to  act  as  trustees  of  an  intended  will  or 
settlement  urge  the  insertion  of  such  a  iirovision  in  the  will  or  settlement.  In 
other  cases  the  testator  or  settlor  is  advised  to  convert  his  business  into  a 
private  company  before  his  death. 

Prima  facie,  trustees  or  executors  have  no  power  to  convert,  or  concur  in  con- 
verting, a  concern  into  a  company.  But  sometimes  a  conversion  may  be 
supported  as  a  compromise  under  s.  37  of  the  Conv.  Act,  1S81.  See  West  of  Eng- 
land Bank  v.  March,  23  C.  D.  13S,  whei'e  a  sale  of  a  testator's  share  in  a  busi- 
ness, in  consideration  of  cash,  and  of  shares  and  debentures  in  a  company,  was 
held  valid  on  the  groimd  that  the  vendor,  who  was  the  executrix,  was  enabled 
thereby  to  make  an  ai-rangement  with  the  testator's  creditors,  and,  accordingly, 
that  the  transaction  amovinted  to  a  compromise  within  the  meaning  of  s.  30  of 
23  &  24.  Vict.  c.  145. 

In  Land  v.  Land,  4-3  L.  J.  N.  S.  Ch.  311,  Jessel,  M.E.,  hold  that  the  Court 
had  no  jvirisdiction  in  the  case  of  an  intestacy,  there  being  infants,  to  authorise 
the  administrator  to  carry  on  the  intestate's  business  ;  and  it  would  seem 
that  there  is  no  jurisdiction  in  such  case  to  authorise  a  conversion  of  the 
business  into  a  company.  But  where  an  estate  is  insolvent  it  can  be  ad- 
ministered in  bankrviptcy  under  s.  125  of  the  Bankruptcy  Act,  1883,  and  a 
scheme  effected  under  s.  23  of  that  Act.     See  sujpra,  p.  50. 


WRITS    OF    SUMMONS. 


Form  282. 

Common  form 
writ. 


In  the  High  Court  of  Justice. 

Chanceiy  Division. 
Mr.  Justice 

[The  — 

Victoria,  by  the  grace  of  God,  &c. 
To  [The Co,  Limtd,  of  — 


Bet^Yeen  [A.], 

and 
Co,  Limtd,  B.,  C,  &  D.], 


B.,  of 


C,  of 


Pit., 


Deft. 


and 


D.,of ]. 

We  command  you  that  within  eight  days  after  the  service  of  this  writ 
on  you  inclusive  of  the  day  of  such  service  you  do  cause  au  appearance 
to  he  entered  for  you  in  an  action  at  the  suit  of  A.,  and  take  notice  that 
in  default  of  your  so  doing  the  pit  may  proceed  therein  and  j  udgmt  may 
be  given  in  your  absence. 

Witness,  Roundell,  Earl  of  Selborne,  Lord  High  Chancellor  of  Great 

Britain,  the day  of  in  the  year  of  our  Lord  one  thousand 

eight  huntked  and 

N.B. — This  writ  is  to  be  served  within  twelve  calendar  months  from 
the  date  thereof,  or  if  renew^ed  within  six  calendar  montlis  from  the  date 
of  the  last  renewal  including  the  day  of  such  date  and  not  afterwards. 

The  deft  [or  defts]  may  appear  hereto  by  entering  an  appearance  [or 
appearances]  either  personally  or  l^y  solicitor  at  the  Central  Cffice,  Koyal 
Courts  of  Justice,  London. 

Indorsemts  to  be  made  on  the  writ  before  issue  thereof. 

The  pit's  claim  is  for,  &c, 

[See  Forms  283,  ci  seq.,  infra.'] 

This  w^'it  Avas  issued  by  the  sd  pit  w'ho  resides  at ,  or  this  was 

issued  by  E.  F.,  of ,  wiiose  address  for  service  is ,  solicitor  for  the 

sd  pit,  who  resides  at ;  or  this  writ  was  issued  by  C,  H.,  of , 

whose  address  for  service  is ,  agent  for of ,  solicitor  for  the 

sd  pit,  who  resides  at [mention  the  city,  town,  or  parish,  and  also 

the  name  of  the  street  and  number  of  the  house  of  the  pit's  residence,  if 
any]. 


FORMS.  301 

Indorseint  to  be  made  on  the  writ  after  service  thereof  :  Form  282. 

This  writ  was  served  by  me  at on  the  deft  on the day 

of ,  18—. 

Indorsed  the day  uf ,  18 — . 

(Signed) 

(Address) 

See  Eules  of  Sup.  Ct.  of  1883,  Appendix  A.     Eule  228  provides  that — 

"  Whenevei-  a  statement  of  claim  is  delivered  the  plaintiff  may  therein  alter, 

modify  or  extend  his  claim  without  any  amendment  of  the  indorsement  of  the 

■vvTit."     The  following  are  some  of  the  indorsements  commonly  used  : 


Indorsements. 

[Pit,  A.  ;  deft,  Tlie Co,  Limtd.] 

The  pit  claims . 

1.  A  declou  that  he  was  induced  to  take  100  shares  in  the  deft  co  by  Form  283. 
misrepresentation  and  non-disclosure  of  material  facts.  iiescission  of 

2.  Rescission  of  the  contract  to  take  such  shares  and  rectification  of  contract  to 
the  register  of  members  of  the  deft  CO  by  removing  hi?:  name. 

3.  liepaymt  of  the  amounts  pd  by  him  on  the  sd  shares  with  interest. 

4.  An  injunction  to  restrain  the  deft  co  from  making  or  attem})ting 
to  enforce  by  action  or  otherwise  any  call  in  respect  of  the  sd  shares. 

The  above  Form  can  be  used  where  there  is  no  case  of  fraudulent  misrepre- 
sentation, and  the  plaintiif  claims  relief  merely  on  the  ground  of  non-dis- 
closui-e  or  innocent  misrepresentation.     See  supra,  p.  230. 

Sometimes  in  such  circumstances  there  may  be  a  case  against  the  directors 
under  s.  38  of  the  Companies  Act,  1867.  See  supra,  p.  242,  and,  if  so,  the 
directors  can  be  made  defendants  along  with  the  company,  and  the  following- 
claim  can  be  added  : — 

b.  Or  in  the   alternative  as  against  the  defts, , ,  and , 


for  a  declon  that  the  prospectus  of  the  deft  co  upon  the  faitli  of  which 
the  pit  took  such  shares  was  fraudulent  on  the  pt  of  the  sd  defts  within 
the  meaning  of  Sect.  88  of  the  Companies  Act,  18(i7,  and  for  damages 
for  the  loss  occasioned  to  the  pit  Ijy  the  fraud  of  the  defts  in  publishing 
and  issuing  such  prospectus,  and  for  indemnity  against  all  lialjility  in 
respect  of  such  shares. 

The  following  is  another  form  sometimes  used  instead  of  Clauses  1  and  2  Form  283a. 
above : —  

1.  To   have  the  contract,  by  virtue  of   which   he   becomes   entled   to  

shares  in  the  capital  of  the  deft  co,  set  aside  on  the  ground  that  he  was 
induced  to  enter  into  that  contract  by  misrepresentation  and  non-disclosure 
of  material  facts,  and  to  have  the  register  of  members  of  the  co  rectified  by 
.striking  out  his  name  as  the  holder  of  such  shares. 

[Pit,  A.  ;  defts,  the  co,  and  A.,  B.,  and  C,  directors.] 

The  pit  claims .  ^^^^^  ^^^ 

1.  A  declon  that  he  was  induced  to  take  200  shares  in  the  deft  co         !_ 

Rescission  and 
damages  : 
fi-aud. 


by  the  fraudulent  misrepresentations  of  the  defts. 


362  WEITS    OF    SUMMONS. 

Form  284.       i>.  Rescission  as  in  Form  283  (2). 

o.  Damages  for  the  loss  occasioned  to  him  l\v  such  fi-audulent 
misrepresentations. 

4.  An  injnnction,  Form  283  (4). 

5.  Or  in  the  alternative  as  against  the  defts, , ,  and , 

damages  for  the  loss  occasioned  to  the  pit  hy  such  fraudulent  misrepre- 
sentations, and  indemnity  against  all  liability  in  respect  of  such  shares. 

The  above  Form  can  be  used  where  the  plaintiff  sues  the  company  and  the 
directors  for  rescission  and  damages.  It  miist  be  borne  in  mind  that  a  director 
cannot  be  made  liable  in  such  an  action  unless  it  can  be  proved  that  he  made 
the  misrepresentations,  knowing  them  to  be  false,  or  i-ecklessly.  See  suijra, 
p.  234.  And  that  one  director  cannot,  in  general,  be  made  responsible  for  the 
fraud  of  another.  Car  gill  v.  Bower,  10  C.  D.  502.  If  the  plaintiff"  has  lost  his 
right  to  rescind  the  contract  (e.g.,  by  winding  up,  acquiescence  or  otherwise, 
supra,  p.  232),  he  cannot  sue  the  company  for  damages  (supra,  p.  233),  and 
Form  285  should  be  adopted.  The  alternative  claim  is  added  so  as  to  provide 
for  the  failure'or  abandonment  of  the  claim  for  rescission.  Indemnity  is  only 
required  where  the  contract  is  not  to  be  rescinded.     Cargill  v.  Bower,  ubi  supra. 

Some  persons,  instead  of  claiming  damages  (3),  claim  "To  have  judgment 
against  the  defendants  jointly  and  severally  for  the  repayment  of  the  amounts 
paid  by  the  plaintiff  upon  the  said  shares,  with  interest ;  "  but  of  course  this 
may  not  cover  the  damages  sustained.  See  Mathias  v.  Getts,  46  L.  T.  497,  where 
a  contract  was  rescinded,  and  damages  awarded.  In  Redgrave  v.  Hurd,  20  C. 
Div.  l,a  contract  was  rescinded,  but  the  claim  for  damages  failed  because  there 
was  no  allegation  that  the  defendant  made  the  misrejiresentations  complained 
of,  knowing  them  to  be  false. 


Form  285. 


[Pit,  A.  ;  clefts,  A.,  B.,  and  C] 

The  pit's  claim  is  for  damages  for  loss  occasioned  to  him  by  the  fraud 

Damages  for      of  the  defts,  whereby  the  pit  was  induced  to  take  100  shares  in  the 

Co,  Limtd,  and  for  indemnity  against  all  liability  in  resjiect  of  the  sd 
shares. 

This  Form  is  for  use  where  the  plaintiff  sues  only  the  directors,  or  other  jjer- 
sons  who,  by  issuing  a  fraudulent  prospectus,  induced  him  to  take  shares,  and 
does  not  seek  rescission  either  because  he  has  lost  the  right,  or  prefers  to  keep 
the  shares,  sujira,  p.  235.  The  form  is  available  both  in  the  case  of  common 
law  fraud,  and  also  fraiid  under  s.  38  of  the  Act  of  1867,  and,  if  necessary,  the 
statement  of  claim  can  allege  an  alternative  case.     See  supra,  p.  236. 

[Pit,  the  CO  ;  defts.  A.,  B.,  C,  D.,  and  E.] 
Form  286.       1.  A  declon  that  an  agreemt,  dated,  &c.,  and  made  between  the  deft. 

Rescission  of     -^•'  "^  ^^^  ^^^^  P*"'  ^^^^  ^^^^  V^^   ^"'  *^*^  ^^^^  other  pt,  and  an  indi-e  of 
contract  for      assignmt,  dated,  &c.,  made  between  the  sd  deft  of  the  one  pt,  and  the 
to  coinpany.      P^*^  ^^  ^'^  ^^^^  other  pt,  are  res})ively  fraudulent  and  are  voidable  at  the 
option  of  the  pit  co. 

2.  A  declon  that  the  defts  are  jointly  and  severally  liable  to  make 
good  to  the  Jilt  CO  all  profits  derived  by  the  defts  or  any  of  them  in 
respect  of  the  sale  the  subject  to  the  sd  agreemt  and  indre. 

3.  In  case  the  pit  co  shall  elect  to  avoid  the  sd  agreemt  and 
assignmt,  judgmt  that  the  sd  agreemt  and  assignmt  be  respively  set 
aside  and  delivered  up  to  l)e  cancelled,  the  pit  co  offering  to  account  for 


FORMS.  3G3 

all  (if  any)  the  profits  derived  by  the  pit  co  in  working  the  mines,  the  Form  286. 
subject  of  the  sd  sale.     And  in  any  ease — 

4.  Judgmt  against  the  defts  jointly  and  severally  for  the  surrender  to 
the  pit  CO  of  so  many  of  the  .50,000  fully  pd  up  shares  of  1/.  each  in  the 
pit  CO,  issued  as  the  consideration  for  the  sd  sale  as  are  still  held  ])y  the 
defts,  or  any  of  them,  or  in  lieu  of  such  surrender  and  at  the  option  of 
the  pit  C(),  judgmt  for  paymt  of  the  maximum  value  of  any  of  the  sd 
shares  since  the  date  of  the  incorporation  of  the  pit  co,  with  interest. 

r>.  .Judgmt  against  the  defts  jointly  and  severally  for  the  amount  of 
all  money  and  other  profits  received  or  derived  by  the  defts  or  any  of  them 
in  respect  of  such  of  thesd  ."iOjOOo  shares  as  have  been  sold  or  disposed 
of  or  otherwise  received  in  respect  of  the  sd  sale  with  interest,  l)ut  in 
case  the  pit  co  shall  elect  to  retain  the  ppty  sold  giving  credit  to  the 
defts  for  ;-3,r)00/.,  the  amount  pd  by  them,  with  interest  at  4  p.  c.  from 
January,  1880. 

<;.  10,000/.  damages  for  the  loss  occasioned  to  the  pit  co  by  the  fraud 
and  collusion  of  defts. 

The  above  is  an  example  of  the  indorseiuent  iised  in  a  case  somewhat  resem- 
bling Neiv  Sombrero  Co.  v.  Erlanger,  o  C.  Div.  Ill;  .3  Ap.  Cas.  1218.  The  defen- 
dants having  purchased  a  property  for  :i,oOOl.,  promoted  the  plaintiff  company, 
and  sold  the  property  to  it  for  oO.OOOL,  without  disclosing  their  jirofit  or  posi- 
tion, and  made  misrepresentations. 

[Pit,  the  CO.     Defts,  A.,  B.,  and  C] 

1.  A  declon  that  the  defts  are  jointly  and  severally  liable  to  pay  to  Form  287. 
the  pit  CO  the  maxinuim  value  with  interest  of  700  shares  in  the  capital  ^^.-^^^^  ^^ 

of  the  pit  CO,  which  shares  were  issued  to  B.  as  pt  of  the  conson  for  ppty  directors. 
sold  l)y  him  to  the  pit  co  and  were  by  him  gratuitously  transferred  to 
the  defts,  who  were  directors  of  the  pit  co. 

2.  Judgmt  against  the  sd  defts  jointly  and  severally  for  the  paymt 
of  such  maximum  value  with  interest. 

There  have  been  a  good  many  cases  in  which  directors  have  been  held  liable 
for  paid-up  shares  privately  given  them  by  the  vendor  or  promoters.  See 
supra,  p.  237.  And  it  has  been  held  that  in  such  case  they  are  liable  for  the 
maximum  value.  Nant-y-Glo  Co.  v.  Grove,  12  C.  D.  738  ;  and  see  infra,  Form 
322.  See  also  Carling's  case,  1  C.  Div.  115  ;  McKay's  case,  2  C.  Div.  1  ;  De 
Ruvigne's  case,  5  C.  Div.  .300;  Pearson's  case,  4  C.  Div.  222;  5  C.  Div.  330; 
Weston's  case,  10  C.  Div.  579 ;  Mitcalfe's  case,  13  C.  Div.  169. 

[Pit,  the  CO.     Deft,  A.] 

1.  A  declon  that  the  deft  is  liable  to  pay  to  the  pit  co  the  sum  of  Form  288. 
10,00<t?.,  being  the  difference  between  the  amount  pd  by  him  for  the  Promoter's 
__ —  Colliery  and  the  amount  pd  him  by  the  pit  co  for  such  colliery,  secret  profit. 
and  all  other  profits,  if  any,  made  by  the  deft  when  promoter  or  director 

of  the  pit  CO,  without  its  knowledge  and  consent,  with  mterest  ;  and 

2.  Judgmt  against  the  deft  for  paymt  accordingly. 

See  supra,  p.  239. 


804  WRITS    OF    SUMMONS. 

Form  289.       [Plfc,  A.  (on  behalf  of  himself  and  all  other  holders  of  mtge  de- 
Debenture        beutures  in  the  deft  co").     Deft,  the  co.] 
foreclosure.  The  pit  claims  as  a  debenture-holder  of  the  deft  co— 

1.  A  declon  that  the  mtge  debentures  issued  by  the  deft  co,  and 
now  outstanding,  constitute  a  first  charge  upon  all  the  ppty  of  the  co. 

2.  To  have  an  account  taken  of  what  is  due  and  owing  to  the  pit  and 
to  the  other  holders  of  the  sd  debentures  for  principal  interest  and  costs. 

3.  To  have  the  sd  debentures  enforced  by  foreclosure  or  sale. 

4.  To  have  a  receiver  and  manager  of  the  go's  ppty  appointed. 

The  above  is  for  use  in  a  simple  case.  In  actions  by  one  on  behalf  care  should 
lie  taken  that  the  plaintiff  has  personally  a  good  cause  of  action,  otherwise  the 
action  may  fail,  e.g.,  where  the  company  has  a  set-off.  Burt  v.  British  Nation 
Life  Association,  4De  G.  &  J.  158,  17-1 ;  Huggons  v.  Tweed,  10  C.  Div.  359.  And 
it  should  be  seen  that  the  plaintiff"  is  a  jDroper  representative.  Daniel  Pr.  231 ; 
Wilson  V.  Church,  9  C.  D.  552.  Where  there  are  inconsistent  interests  or  sub- 
sequent incumbrances  the  necessary  defendants  should  be  added,  and  if  neces- 
sary a  representation  order  should  be  obtained.  Fraser  v.  Cooper,  Hall  4'  Co., 
21  C.  D.  718.  See  infra.  Form  351.  As  to  a^jpeal  by  one  of  a  class  represented 
by  the  plaintiff,  see  Watson  v.  Cave,  17  C.  D.  19. 

In  an  action  by  one  on  behalf  the  plaintiff  is  dominus  litis,  and  before  judg- 
ment can  compromise  or  abandon  the  action  as  he  thinks  fit.  And  the  company 
before  judgment  may  pay  the  plaintiff  and  get  rid  of  the  action.  Pemberton  v. 
Topham,  1  Beav.  312 ;  Huggins  v.  Tweed,  10  C.  Div.  359. 

[Pit,  A.  (on  behalf  of  himself  and  all  other  tlie  holders  of  debentures 

entled  to  the  benefit  of  the  indre  mentioned  in  the  indorsemt  on  the 

writ  in  this  action).     Deft,  the  co.] 

Form  290.       '^^^^"  plt  claims  as  a  debenture-holder  of  the  dft  co — 

T.  ,".  1.  To  have  an  account  taken  of  what  is  due  from  the  deft  co  to  the 

Delienture 

trust  deed.  pit  and  the  other  holders  of  debentures  entled  to  the  benefit  of  an  indre 
dated,  etc.,  and  made,  &c. 

'2.  To  have  the  trusts  of  the  sd  indre  carried  into  execution  under 
tlie  order  of  the  Ct. 

3.  To  have  a  receiver  and  manager  of  the  ppty  comprised  in  the  sd 
indre  appointed. 

'J'he  defts and are  sued  as  trustees  of  the  sd  indre. 

As  to  actions  on  behalf,  see  note  to  Form  289. 

Form  291.       [I^lt,  A.  (on  behalf  of  himself  and  all  other  shareholders  in  the  deft 
IJlti-iTvires       "^^N  ^'-"^ccpt  thosc  who  are  defts).     ])efts,  the  co  and  the  directors.] 
.'igreement.  The  pit's  claim  is  for  a  declon  that  an  agreemt  dated,  &c.,  and  made, 

&c.,  is  idtra  vires  the  deft  co  and  for  an  injunction  to  restrain  the  defts 

from  carrying  the  sd  agreemt  into  effect. 

See  Russell  v.  Wakefield  Waterworks,  20  Erj.  ■t71,  as  to  parties  in  such  actions. 

Form  292.       [Pit,  A.  (on  behalf  of  himself  and  all  other  holders  of  B.  Shares  in 
Uitr-^  vires     '  *^^^^   ^^^^  <^o,   cxccpt   those   wlio   are   defts).     Defts,    the   co   and   the 

resolution.        dii'cctors.] 


FORMS.  ;305 

1.  A   declon   that   the  special  resohition  of  the  co,   passed   at   the  Form  292. 
general  meetinii'  held  on  the day  of is  ultra  vires  and  illegal. 

2.  An  injunction  to  restrain  the  defts  from  acting  on  the  sd  resolu- 
tion or  applying  the  profits  of  the  co  otherwise  than  in  accordance  with 
the  special  resolutidii  of  the  co  passed  the dny  of- . 

This  form  was  adopted  when  a  resolution  was  i)assed  purporting  to  alter  the 
rights  of  different  classes  of  shareholders  as  defined  by  a  former  special  resolution. 

[Pit  and  defts  as  in  Form  21)2.] 

The  pit  claims  as  a  shareholder  in  the  deft  co — 

1.  A   decl(jn    that    the    resolution    passed   at  the   ordinary  general  Form  293. 


meeting  of  the  co  on  the day  of ,  declaring  a  dividend  on  the  Dividend  in 

ordinary  shares  is  ultra  rircs  and  illegal  as  against  the  holders  of  pre-  prejudice  of 

prcfcrGiiCG 

ference  shares  in  the  deft  c<t.  sbaras. 

2.  An  injunction  to  restrain  the  paymt  of  the  dividend  so  declared, 
and  to  restrain  the  declon  or  paymt  of  any  other  dividends  on  the  ordinary 
shares  in  prejudice  of  tlie  rights  of  the  holders  of  preference  shares  in 
the  deft  co. 

[Pit,  A.  (on  hehalf),  and  defts,  the  co  and  the  directors.] 

1.  A  declon  that  the  resolution  declaringj  a'  dividend,  passed  at  the  Form  294. 
ordinary  meeting  of  the  deft  co  held  on,  &c.,  is  tdtra  vires  and  illegal.      Dividend  out 

2.  An  injunction  to  restrain  the  defts  from  acting  or  further  acting  of  capital. 
on  the  sd  resolution,  and  from  paying  such  dividend  or  any  dividend  out 

of  the  capital  of  the  deft  co. 

3.  A  declon  that  the  defts  other  than  the  deft  co  are  jointly  and 
severally  liable  to  make  good  to  the  deft  co  all  monies  (if  any)  pd  l)y 
them  out  of  the  deft  co's  assets  on  account  or  in  respect  of  the  dividend 
so  sanctioned  and  judgmt  against  them  j<jintly  and  severally  foi" 
repaymt  of  such  monies  accordingly. 

As  a  general  rule  the  company  ought  to  sue  for  the  recovery  of  any  assets 
misapplied.  Gray  v.  Leicis,  8  Ch.  1036.  But  in  a  case  as  above  the  Coui-t 
would  have  jtu-isdiction.     Russell  v.  Wakefield  Watencorks,  20  Eq.  481. 

[Pit,  the  CO.     Defts,  the  directors.] 

1.  A  declon  that  the  dividends  pd  to  the  shareholders  in  the  pit  co  Form  295. 
since  its  formation  have  all  been  pd  out  of  the  pit  co's  capital,  and  that  Recovery  of 
the  defts  are  jointly  and  severally  liable  to  make  good  the  amount  of  the  dividends 
dividends  so  pd  with  interest.  mid!"^^^^  '^ 

2.  Judgmt  against  the  defendants  accordingly. 

As  regards  misapplication  of  the  monies  of  a  company  it  must  be  borne  in 
mind  that  "the  money  of  the  company  is  a  trust  fund,  because  it  is  applicable 
only  to  the  special  purposes  of  the  company  in  the  hands  of  the  agent  of  the 
company^  and  it  is  in  that  sense  a  trust  fund  applicable  by  them  to  those  special 
purposes ;  and  a  person  taking  it  from  them  with  notice  that  it  is  being  ai)plied 
to  other  purposes  cannot  in  this  Court  say  that  he  is  not  a  constructive  trustee." 
Per  Jesseb  M.  E.,  Russell  v.  Wakefield  Waterworks  Co.,  20  Eq.  479.     And  in  case 


3G6 


WEITS    OF    SUMMONS. 


Form  295.    of  fraud  or  breach  of  trust  the  parties  are  jointly  and  severally  liable.     See 
• Forms  321;,  339,  infra,  and  Wye  Valley  Baihvay  Co.  v.  Hawes,  16  C.  Div.  ISQ. 


[Pit,  the  CO  and  A.,  on  behalf,  &c.     Defts,  the  directors.] 
Form  296.       An  injunction  to  restrain  the  defts  from  acting-  in  contravention  to  a 
resolution  to  the  effect  that,  &c.,  passed  at  a  general  meeting  of  the  co, 
held  on,  &c. 


To  enforce 
resolution  of 
company. 


In  the  above  case  it  is  assumed  that  A.,  makes  the  company  a  co-plaintiff,  in 
order  to  escape  the  rule  in  Foss  v.  Harhottlc,  infra,  p.  367.  See  Pender  v.  Lush- 
ington,  G  C.  D.  70;  Harben  v.  Phillips,  23  C.  Div.  14. 


Form  297. 

Exclusion  of 
director. 


Form  298. 

To  restrain  dc 
fiicf.o  directors 
from  actin" 


[A.,  pit.     The  CO.,  B.,  C,  D.,  defts.] 
The  pit's  claim  is  : — 

1.  An  injunction  to  restrain  the  defts,  other  than  the  deft  co,  from 
preventing  or  hindering  in  any  way  the  pit  from  acting  as  a  director  of 
the  deft  co,  and  from  excluding  the  pit  from  meetings  of  the  directors  of 
the  deft  co. 

2.  Damages  in  respect  of  the  matters  atsd. 

See  PulhrooJc  v.  Richmond  Mining  Co.,  9  C.  D.  610. 

[Pits,  the  CO  and  A.,  B.,  and  C.  Defts,  D.,  E.,  and  F.] 
The  pits'  claim  is  for  an  injunction  to  restrain  the  defts,  D.,  E., 
and  F.,  from  acting  as  directors  of,  or  dealing  with  the  funds  of,  or 
using  the  seal  of,  or  otherwise  interfering  in  the  managemt  of  the 
pit  CO,  and  to  restrain  the  deft  D.  from  acting  as  a  director  of,  or  dealing 
with  the  funds  of  the  co,  or  using  the  seal  of,  or  otherwise  interfering  in 
the  managemt  of  the  pit  co,  otherwise  than  as  a  member  of  the  Board  of 

Directors  of  the  pit  co,  elected  on  the ,  1883  (which  Board  consists 

of  the  pits  A.,  B.,  and  C,  and  the  deft  D.),  and  to  restrain  the  defts 
from  representing  that  the  four  persons  who  first  subscribed  their  names 
to  the  memorandum  of  association  of  the  pit  co  continued  after  May, 
1883,  or  now  continue  or  are  directors  of  the  pit  co,  or  that  either  of  the 
defts  E.  and  F.  after  tliat  date  continued  or  now  continues  or  is  a 
director  of  the  pit  co,  and  from  preventing  or  hindering  the  pits  A.  and 
B.  or  either  of  them  from  acting  as  directors  of,  or  taking  pt  in  the 
managemt  of  the  pit  co,  or  excluding  them  or  either  of  them  from  the 
Board  meetings  of  the  pit  co. 

2.  Damages  in  respect  of  the  matters  afsd. 

In  this  case  the  plaintiff,  as  in  Pender  v.  Lushington,  G  C.  D.  70,  makes  the 
company  a  co-plaintiff,  inasmuch  as  the  company  can  alone  complain  of  persons 
not  duly  api^ointed  acting  as  directors.  Macdotigal  v.  Gardiner,  1  C.  Div.  15  ; 
Harben  v.  Phillips,  23  C.  Div.  14. 

See  further  cases  in  regard  to  directors  not  duly  appointed.  Imperial  Hydro- 
pathic Co.,  23  C.  Div.  1 ;  Harben  v.  Phillips,  Ibid.  41 ;  Munster  v.  Cammell  Co., 
21  C.  D.  183. 


FOEMS.  307 

Form  298. 

Rule  in  Foss  v.  Harbottle. 

It  may  be  convenient  here  to  refer  to  the  rule  in  Foss  v.  Harbottle,  2  Ha.  461, 
and  Mozley  v.  Alston,  1  Ph.  790,  namely,  that  the  company  can  alone  sue  in 
respect  of  wrongs  done  to  the  company. 

I  think  that  it  is  of  the  utmost  imjaortance  to  maintain  the  rule  laid  down  in 
Mozley  v.  Alston,  and  Foss  v.  Harbottle,  to  which,  as  I  understand,  the  only  ex- 
ception is  where  the  corporate  body  has  got  into  the  hands  of  the  directors  and 
of  the  majority,  which  dii-ectors  and  majority  are  using  their  power  for  the 
purpose  of  doing  something  fraudulent  against  the  minority.  Pe>' James,  L.  J., 
Gray  v.  Lewis,  8  Ch.  lO'.iG. 

"  I  think  it  is  of  the  utmost  importance  to  all  these  companies  that  the  rule 
which  is  well  known  in  this  Court  as  the  rule  in  Mozley  v.  Alston,  .  .  .  and  Foss 
V.  Harbottle,  should  always  be  adhered  to;  that  is  to  say,  that  nothing  connected 
with  the  internal  disputes  between  the  shareholders  is  to  be  made  the  subject  of 
a  bill  by  some  one  shareholder  on  behalf  of  himself  and  others,  unless  there  be 
something  illegal,  oj^pressive,  or  fraudulent,  unless  there  be  something  ultra 
■vires  on  the  part  of  the  comjjany,  qua  company,  or  on  the  part  of  the  majority  of 
the  company,  so  that  they  are  not  fit  persons  to  determine  it ;  but  that  every 
litigation  must  be  in  the  name  of  the  company,  if  the  company  really  desire  it." 
Per  James,  L.  J.,  Macdougall  v.  Gardiner,  1  C.  Div.  13. 

Accordingly  the  Court  refused  to  interfere  at  the  suit  of  a  shareholder  suing 
on  behalf  of  himself  and  others  in  Foss  v.  Harbottle,  ubi  supra.  Suit  to  compel 
directors  to  make  good  funds  of  company  improperly  expended. 

Mozley  v.  Alston,  ubi  supra,  and  Hattersley  v.  Shelburne,  10  W.  E.  881.  Where 
directors  were  acting  who  had  not  been  duly  appointed.  Gray  v.  Lewis,  ubi 
supra.  To  recover  property  alleged  to  belong  to  the  company.  See  also 
Russell  V.  Wakefield  Waterworks,  20  Eq.  474. 

Macdougall  v.  Gardiner,  1  C.  Div.  13,  where  it  was  alleged  that  chairman  had 
improperly  refused  to  take  a  poll. 

Diickett  V.  Gover,  G  C.  D.  82.  Action  against  company's  solicitor  and  vendor 
to  set  aside  an  agreement  alleged  to  have  been  a  fraud  on  the  company,  and  to 
recover  money  of  the  company.  For  further  proceedings  in  this  case,  25  W.  E.  554. 

The  only  exceptions  to  the  rule  are  the  following — 

(a)  Where  the  act  complained  of  is  ultra  vires  the  company.     Simpson  v. 

Westminster  Palace  Hotel  Co.,  8  H.  L.  Cas.  712. 

(b)  W^here  the  act  complained  of  is  a  fraud  on  the  minority. 

(c)  Where  there  is  an  absolute  necessity  to  waive  the  rule  in  order  that  jus- 

tice may  be  done.  See  observations  of  M.  E.  in  Pender  v.  Lushington, 
6  C.  D.  70;  Russell  v.  Wakefield  Waterivorks,  20  Eq.  474;  Harben  v. 
Phillips,  23  C.  Div.  14. 

Accordingly  the  Court  has  interfered  at  the  suit  of  one  or  more  suing  as 
aho've,  in  Clinch  v.  Fiyiancial  Corporation,  5Eq.  450;  4  Ch.  117.  Ultra  vires 
agreement.  See  Form  332,  infra.  Holmes  v.  Neivcastle  Co.,  1  C.  D.  682.  Ultra 
vires  return  of  capital. 

Hope  V.  International  Financial  Society,  4  C.  Div.  327.  Ultra  vires  piu'chase 
of  shares.     See  Form  338,  infra. 

Macdougall  Y.Jersey  Hotel  Co.,  2  H.  &  M.  528.  Payment  of  dividends  out  of 
capital.     See  Forms  336  &  337,  infra. 

Menier  v.  Hooper's  Telegraph  Works,  9  Ch.  350.  Majority  proposing  to  benefit 
themselves  at  the  expense  of  the  minority. 

Mason  v.  Harris,  11  C.  Div.  97.  Action  to  set  aside  fraudulent  sale  to  com- 
pany, the  vendor  holding  the  majority  of  the  shares. 

Where  a  shareholder  desires  to  complain  of  a  wrong  done  to  the  company, 
and  the  case  does  not  fall  within  the  above  exceptions,  and  the  directors  decline 
to  proceed,  the  shareholder  can  sue  in  the  company's  name.  But  if  it  is  shown 
that  the  majority  do  not  support  the  action,  the  company's  name  will  be  struck 


;68 


AVEITS    OF    SUMMONS. 


Forin  298     °"^'  ^^^  ^^  there  is  a  dispute  as  to  the  views  of  the  majority,  the  Court  will 

take  means  to  ascertain  them,  e.g.,  by  giving  liberty  to  convene  a  meeting. 

Exeter  ^  Crediton  Ry.  Co.  v.  Buller,  5  Rail.  Cas.  211  ;  11  Jur.  527  ;  Pender  v. 
LusMngton,Q  C.  D.  70 ;  Duckett  v.  Gover,  ibid.  82  ;  Harben  v.  Phillips,  23  C.  Div.  14. 
But  the  fact  that  the  approval  of  the  iiiajority  has  not  been  obtained  before 
the  writ  is  issued,  does  not  jjrevent  the  Coui't  from  giving  interlocutory  relief 
by  injunction  or  otherwise.  Peiuler  v.  Lvshington,  iibi  siipra.  See  further, 
Lindley,  89G  ;  Seton,  2G6  ;  Buckley,  39G. 

The  rule  above  referred  to  does  not  prevent  a  member  from  suing  in  respect 
of  an  individual  wrong.  Pender  v.  Lushington,  ubi  svjira,  and  see  Forms  331, 
et  seq.,  infra. 


\ 


PETITIONS. 


Reductiox  of  CaPITAIj. 

In  the  High  Court  of  Justice.  Form  299. 

Chancery  Division,  Petition  to 

Mr.  Justice ,"°°*^7  '^'^'''': 

tion  or  capital 

In  the  matter  of  the  Companies  Act,  1867.  under  Act  of 

And  in  the  matter  of  the Co.  ^^^''• 

Limtd  and  Reduced. 

To  Her  Majesty's  High  Ct  of  Justice  : 

The  humble  peton  of  the Co,  Limtd  and  Reduced  : 

Showeth  as  follows  : 

1.  Your  petr,  the  above-named  co  (hereinafter  called  the  co),  was  in- 
corporated in  the  year ,  under  the  Cos  Acts,  1802  and  1867,  as  a 

CO  limtd  by  shares. 

2.  The  registered  office  of  the  co  is  situated  at . 

3.  The  objects  for  which  the  co  was  established  are  [the  working  of  coal 
mines]  and  other  objects  set  forth  in  the  memorandum  of  association 
thereof. 

4.  The  capital  of  the  co  is  100,000/.  divided  into  5,000  shares  of  20/. 
each. 

5.  Shortly  after  the  incorporation  of  the  co  it  commenced  and  has 
since  carried  on  business. 

6.  The  CO  has  issued  4,200  of  its  shares,  and  no  more,  and  the  smn 
of  10/.  per  share  has  been  pd  up  thereon. 

7.  By  Clause  37  of  the  articles  of  association  of  the  co  it  is  pro^dded 
that  the  co  may  fi"om  time  to  time  by  special  resolution  reduce  its 
capital. 

8.  By  a  special  resolution  of  the  co  duly  passed  and  confirmed,  in 
accordance  with    Section  51   of  the  Cos   Act,   1862,  at   extraordinary 

general  meetings  of  the  co  held  respively  on  the day  of and 

day  of ,  it  was  resolved  as  follows,  namely  :  "  That  the  capital 

of  the  CO  be  reduced  from  100,000/.  divided  into  5,000  shares  of  20/. 
each  to  75,000/.  divided  into  5,000  shares  of  15/.  each  by  reducing  the 
liability  ou  each  share  to  the  extent  of  5/." 

9.  The  form  of  minute  proposed  to  be  registered  is  as  follows  : 

"  Minute  approved  by  the  Ct.     The  capital  of  the Co,  Limtd, 

is  75,000/.  divided  into  5,000  shares  of  15/.  each.  At  the  time  of  the 
registration  of  this  minute  the  sum  of  10/.  has  been  and  is  to  be  deemed 
pd  up  on  each  of  the  sd  shares." 

B  B 


370  PETITIONS. 

Form  299.       it  is  convenient  to  state  tlie  proposed  minute  in  tlie  petition,  especially  where 

■ it  is  a  long  one.    Counsel  can  thus,  in  indorsing  his  brief,  refer  to  the  minute  in 

the  petition  instead  of  setting  it  out,  or  referring  to  a  separate  document. 

Your  petr  the  co  therefore  humbly  prays  : 

(1.)  That  the  sd  special  resolutiou  passed  aud  confiiTQed  as  afed  may 

be  confirmed. 
(2.)  That  to  tliis  end  all  inquiries  aud  directions  necessary  and  proper 

may  be  made  and  given,  aud  that  a  day  may  be  fixed  on  aud 

after  which  the  co  shall  be  at  libty  to  discontinue  the  addition 

to  its  name  of  the  words  "  aud  reduced." 
(3.)  Or  that  such  other  order  may  be  made  in  the  premes  as  to  the 

Ct  shall  seem  meet. 
And  your  petr  will  ever  pray,  &c. 
Note. — It  is  not  intended  to  serve  this  peton  upon  any  person. 

Form  300.  In  the  High  Ct  of  Justice. 
Petition  to  Chancery  Division. 

confirm  reduc-  [_Name  of  JlldfJC.'] 

under  Acts  of  ^^  the  matter  of  the  Companies  Acts,  1867  and  1877. 


1867  and  1877. 


[This  is  the  proper  title.     Socie'te  Franraise,  L.  T.  4107.] 

And  in  the  matter  of  the Co,  Limtd. 

To  Her  Majesty's  High  Ct  of  Justice  : 

The  humble  peton  of  the Co,  Limtd,  showeth  as  follows  : 

1  to  7  [as  in  Form  290]. 

8.  By  special  resolution,  &c.,  it  was  resolved  : 

"  That  the  capital  of  the  co  which  now  consists  of  10,000/.  divided 
into  1,000  shares  of  10/.  each  fully  pd  up  be  reduced  to  5,000/.  divided 
into  1,000  shares  of  5/.  each,  and  that  such  reduction  be  effected  by 
cancelling  pd  up  capital  [which  has  been  lost  or  is  unrepresented  by 
available  assets]  to  the  extent  of  5/.  per  share." 

9.  Previously  to  the  passing  of  such  special  resolution,  pd  up  capital 
of  the  CO  to  the  extent  of  .5,000/.  and  upwards  had  been  lost. 

10.  The  reduction  of  capital  afsd  does  not  involve  either  the  diminu- 
tion of  any  liability  in  respect  of  unpaid  capital  or  the  paymt  to  any 
shareholder  of  any  pd  up  capital. 

11.  The  form  of  the  minute  proposed  to  be  registered  is  as  follows  : 
\_set  it  ouf]. 

Your  petr  the  co  therefore  humbly  prays  : 

(1.)  That  the  sd  special  resolutiou  passed  and  confirmed  as  afsd  may 

be  confirmed  by  the  Ct. 
(2.)  That  the  addition  of  the  words  "  and  reduced  "  to  the  go's  name 

may  be  dispensed  with  altogether. 
(3.)  Or  that  [«.s  in  Form  299]. 
And  yom-  petrs  will  ever  pray,  &c. 
Note.— [Jls  in  Form  299]. 


FORMS.  371 

Reduction  of  Capital.  Form.  300. 


Except  so  far  as  the  capital  may  be  reduced  by  forfeiture  or  sun-ender  of 
shares  (supra,  pp.  121,  153),  or  by  cancellation,  under  section  5  of  the  Act  of 
1877,  of  shares  which  "  have  not  been  taken  or  agreed  to  be  taken,"  no  i-educ- 
tion  of  cajjital  can  be  legally  effected  without  a  special  resolution,  confirmed  by 
the  Coui-t  in  accordance  with  the  Acts  of  18G7  and  1877. 

Thei-e  are  five  kinds  of  reduction,  commonly  carried  out  in  this  way : 

1.  Reducing  the  liabilities  of  shareholders,  as  in  the  resolution  in  Form  299. 

2.  Paying  off  capital  not  wanted,  e.  g.,  where  the  shares  are  lOL  fully  paid, 
reduce  them  to  ol.  and  pay  back  ol.  per  share.     See  the  Act  of  1877. 

3.  Paying  off  capital  upon  the  footing  that  it  may  be  called  up  again.  See 
Form  1G2,  Act  of  1877. 

4.  Cancelling  shares  unissued  or  siuTendered.  Shares  which  have  not  been 
taken  or  agreed  to  be  taken,  can  be  cancelled  by  special  resolution  under  section 
5  of  the  Act  of  1877,  but  the  sanction  of  the  Court  is  requisite  to  the  cancellation 
of  surrendered  shares.     See  I'orms  166,  166a. 

5.  Cancelling  capital  which  has  been  lost  or  is  unrepresented  by  available  assets. 
This  is  effected  under  the  Act  of  1877,  and  the  object  of  such  a  reduction  is 

to  enable  the  company  to  pay  dividends,  for  where  capital  has  been  lost,  no 
dividend  can  be  paid  until  the  loss  has  been  made  good  or  cancelled.  Supra,-p.  170. 

For  resolutions  reducing  capital  see  supra,  p.  199  et  seq. 

Sometimes  a  scheme  of  reduction  involves  several  of  the  above  operations. 
Where  the  articles  of  association  of  the  company  contain  a  power  for  the  com- 
jDany  to  reduce  its  capital,  the  first  step  with  a  view  to  reduction  is  to  pass  a 
special  resolution  to  reduce.  But  if  the  articles  do  not  contain  the  necessary 
power,  a  special  resolution  must  first  be  passed  altering  them,  by  introducing 
a  clause  that  "  the  company  may  from  time  to  time  reduce  its  capital ; "  and 
subsequently  a  second  special  resolution  will  be  passed  to  effect  the  reduction. 
See  section  9  of  the  Act  of  1867  and  West  India  Co.,  9  Ch.  11  n. 

The  subsequent  procedure  differs  according  to  the  nature  of  the  reduction : 

1.  S.  4  of  the  Act  of  1877  provides  "that  where  the  reduction  does  not  in- 
volve either  the  diminution  of  any  liability  in  respect  of  unpaid  capital  or  the 
payment  to  any  shareholder  of  any  paid  up  capital  (e.  g.,  where  it  merely  pro- 
vides for  the  cancellation  of  lost  capital,  or  of  surrendered  shares),  (i.)  The 
creditors  of  the  company  shall  not,  unless  the  Coru-t  otherwise  directs,  be 
entitled  to  object,  or  required  to  consent  to  the  reduction  ;  and  (ii.)  It  shall 
not  be  necessary  before  the  presentation  of  the  petition  to  add,  and  the  Court 
may  disi^ense  altogether  with  the  addition  of  the  woi'ds  '  and  reduced,'  as  re- 
quired by  section  10  of  the  Act  of  1877." 

Accordingly,  in  such  cases  a  petition  should  be  jorepared  as  in  Form  300, 
supra,  and  immediately  before  or  after  presentation  an  application  should  be 
made  by  motion  ex  parte  to  the  Judge  to  whom  the  petition  is  going  to  be  or 
has  been  assigned,  for  an  order  dispensing  with  the  words  "and  reduced  "  until 
the  hearing  of  th6  petition.  An  order  on  such  an  application  is  generally  ob- 
tained without  difficulty,  and  the  following  are  instances:  In  re  Langdale 
Chemical  Manure  Co.,  26  W.  R.  434  ;  Llynvi  Co.,  26  W.  E.  55 ;  In  re  Neiv  Civil 
Service  Co-operation,  Limited,  Hall,  V.-C,  5  Nov.  1879,  B.  2222  ;  In  re  Positive 
Government  Security  Life  Assurance  Co.,  Limited,  Hall,  V.-C,  23  July,  1880.  See 
infra.  Form  303. 

The  petition  should  then  be  presented,  and  the  secretary  should  be  requested 
to  have  it  answered  for  the  next  petition  day.  No  difficulty  is  now  made  about 
so  answering  a  petition,  where  it  appears  that  the  case  falls  within  section  4  of 
the  Act  of  1877.  In  an  early  case  under  this  section,  the  course  adopted  was 
first  to  present  the  petition,  and  then  upon  an  ex  parte  motion  an  order  was 
made  dispensing  with  the  words  "  and  reduced,"  and  directing  the  petition  to 
be  on  the  paper  without  the  chief  clerk's  certificate.  But  this  is  not  the  coiu'se 
now  usually  adopted.  The  petition  then  comes  on  for  hearing  without  any 
notice  or  advertisement. 

B    B    2 


872 


PETITIONS. 


Form  300.        The  order  is  generally  prefaced  by  a  statement  that  "  the  Court  not  requiring- 

any  notice  to  creditors,  or  advertisement  of  any  notice,  that  the  petition  was 

appointed  to  be  heard  this  day  ; "  and  it  usually  dispenses  with  the  use  of  the 
words  "  and  reduced  "  altogether.  Under  section  4  of  the  Act  of  1877,  the 
Court  may  require  the  company  to  publish  the  reasons  for  reduction,  but  this 
power  is  not  exercised,  the  company  being  merely  required  to  give  notice  of  the 
registration  of  the  order  in  certain  newspapers.     (See  Llynvi  Co.,  26  W.  E.  55). 

As  to  advertising  the  order,  see  Form  30-i,  infra. 

See  Be  Plaskynaston  Tube  Co.,  23  C.  D.,  where  shares  having  been  issued  at  a 
discount  of  eighty  per  cent.,  Chitty,  J.,  required  the  consent  of  creditors,  not 
being  satisfied  that  a  proposed  cancellation  of  capital  would  not  diminish  the 
liabilities  of  members.  Upon  evidence  that  all  the  creditors  had  been  paid  off 
except  one  who  consented,  the  order  was  made. 

2.  In  all  other  cases,  immediately  after  the  passing  of  the  special  resolution, 
the  words  "and  reduced"  must  be  added  to  the  company's  name.  See  s.  10 
of  the  Act  of  1867.  A  petition  should  then  be  presented  as  in  Form  299,  and 
the  subsequent  procedure  will  be  found  set  out  in  great  detail  in  the  Order  of 
Court  of  21  March,  1868,  Buckley,  482.  In  these  cases  it  generally  takes  from 
six  months  to  a  year  to  comi^lete  the  reduction.  When  the  order  is  made 
confirming  the  reduction,  it  generally  provides  that  the  company  shall  con- 
tinue the  words  "  and  reduced  "  for  a  fortnight  or  a  month. 

Every  creditor  must  consent  or  be  secured.  In  Re  Credit  Fonder,  11  Eq.  356, 
it  was  held  that  creditors  who  did  not  dissent  must  be  deemed  to  assent ;  but 
in  Re  Patent  Ventilating  Co.,  12  C.  D.  254,  Fry,  J.,  declined  to  follow  that  case, 
and  Kay,  J.,  has  repeatedly  declined  to  follow  it.  Section  11  makes  evidence 
of  the  consent,  security,  or  discharge  of  every  creditor  a  condition  precedent. 

In  either  case  the  petition  should  be  supported  by  an  affidavit  (usually  made 
by  the  chairman  of  the  directors),  deposing  to  the  facts  stated.  A  copy  of  the 
memorandum  and  articles,  and  the  minute  book  of  the  proceedings  of  general 
meetings,  should  be  made  exhibits. 

Under  s.  15  of  the  Act  of  1867,  a  minute  has  to  be  approved  by  the  Coux't, 
and  filed  with  the  Eegisti-ar  of  Joint  Stock  Companies.  The  minute  must  show, 
with  respect  to  the  capital  as  altered,  the  amount,  the  number  of  shares,  the 
amount  of  each  shai-e,  and  (under  s.  4  of  the  Act  of  1877)  the  amount  per  share 
deemed  to  be  paid  up.  The  following  are  examples  of  minutes  which  have 
been  approved : — 

"Tlie  capital  of  The  Hydraulic  Engineering  Co.,  Limited,  is  80,000Z.,  divided 
into  20,000  shares  of  -il.  each.  At  the  time  of  the  registration  of  this  minute, 
2,500  of  the  said  shares  are  deemed  fully  paid  up,  and  9,493  of  the  said 
shares  are  deemed  to  have  31.  per  share  paid  up  thereon,  and  the  remaining 
8,007  shares  have  never  been  issued.  By  order  of  M.  E.,  6  July,  1878,  A. 
1332." 

"  The  capital  of  the  General  Mining  Association,  Limited,  is  219,752L,  divided 
into  27,469  shares  of  8L  each,  fully  paid  up.     Malins,  V.-C,  17  Jan.  1880." 

"  The  capital  of  the  company  is  1,000,200L  sterling,  in  50,000  A.  or  ordinary 
shares  of  lOL  each,  on  which  the  sum  of  101.  per  share  has  been,  and  is  to 
be  deemed  to  have  been  paid  up,  and  25,000  B.  or  preference  shares  of  201. 
each,  on  22,861  of  which  the  siun  of  20L  per  share  has  been  and  is  to  be  deemed 
to  have  been  paid  up,  and  on  the  remaining  2,136  (which  have  not  yet  been 
issued)  no  sum  per  share  has  been,  or  is  to  be  deemed  to  have  been  paid  up, 
and  200  shares  of  If.  each,  on  which  the  sum  of  If.  per  share  has  been,  and  is  to 
be  deemed  to  have  been  paid  up.    Railway  Share  Trust  Co.,  M.  E.,  4  Aug.,  1879." 

"The  capital  of  the  Higginshaw,  dfc,  Co.,  Limited,  is  90,000Z.,  divided  into 
18,000  shares  of  51.  each.  At  the  time  of  the  registration  of  this  minute  14,257 
shares  only  have  been  issued  and  allotted,  upon  each  of  which  the  sum  of  il.  10s. 
has  been  and  is  to  be  deemed  to  be  jDaid  uj),  but  in  respect  of  each  of  the  said 
shares  the  comi^any  is  empowered  to  pay  off  or  return  20  jier  cent,  of  the 
iimount  so  paid  up,  upon  this  footing,  that  the  amount  paid  off  or  returned,  or 


FOEMS.  373 

any  part  thereof,  may  be  called  up  again." — Lane.  Pal.  Ct.  Order,  Ctli  Yeh.,   Form  300. 

1884.  

In  all  cases,  the  order  having  been  obtained,  an  office  copy  should  be  filed 
with  the  Eegistrar  of  Joint  Stock  Companies,  who  will  thereupon  give  his 
certificate  in  accordance  with  s.  15  of  the  Act  of  1867. 

Upon  the  peton,  &c. :  Let  the  s^^ecial  resokitioii  passed  at  an  extra-  Form  301. 

ordinary  meeting  of  the  sd  co,  held  the day  of ,  and  confirmed  o7der  to 

at  an  extraordinary  meeting  of  the  sd  co,  hekl  the day  of ,  and  leduce  capital. 

which  resohition  was  in  the  words  and  figures  fohowing :  "  That,  &c." — 
be,  and  the  same  is  hby  confirmed :  And  let  an  office  copy  of  this  order 
be  delivered  to  the  Registrar  of  J.  S.  Cos,  together  with  a  minute 
in  the  words  or  to  the  effect  set  forth  in  the  schedule  hto  :  And  notice 
of  the  registration  of  this  order  and  of  the  sd  minute  be  advertised  as 
follows,  that  is  to  say,  once  in  the  Times  newspaper,  &c. :  And  let  the  sd 

CO  be  at  Hbty  forthwith  [or  after  the  day  of  ]  to  discontinue 

the  addition  to  its  name  of  the  words  "  and  reduced."  \_Sdic(lide  con- 
taining minute.'] 

Upon  the  peton  of  the Co,  Limtd,  on  20th  July,  1880,  preferred  Form  302. 


unto  this  Ct,  and  upon  hearing  counsel  for  the  petrs,  and  upon  read-  Order  to 
ing  the  sd  peton,  an  order  dated  the  19th  July,  1880,  on  affidavit  of  B.,  reduce  by 
filed  22nd  Jidy,  1880,  and  the  exhiljits  A.  and  B.  therein  referred  to  :  capital.  ° 
This  Ct,  not  requiring  any  notice  to  creditors  or  advertisemt  of  any 
notice  that  the  peton  was  appointed  to  be  heard  this  day,  doth  order  that 
the  special  resolution  passed  at  the  extraordinary  general  meeting  of  the 
CO,  held  on  the  12th  June,  1880,  and  confkmed  at  an  extraordinary 
general  meeting  of  the  co.,  held  on  the  5th  Jidy,  1880,  which  resolution 
was  in  the  words  and  figures  following,  that  is  to  say,  "  That  the  capital, 
&c."  [see  the  resolution,  supra,  Form  163]  be  confirmed  :  And  let  this 
order  be  produced  to  the  Registrar  of  J.  S.  Cos  :  And  let  an  ofl&ce 
copy  of  this  order  be  delivered  to  him,  together  with  a  minute  in  the 
words  or  to  the  effect  set  forth  in  the  schedule  hto  :  And  it  is  ordered 
that  notice  of  the  registration  of  the  sd  order  and  of  the  sd  minute  be 
published  once  in  each  of  the  following  newspapers,  that  is  to  say,  the 
Times,  the  Standard,  the  Daily  Telegraph,  and  the  Daily  Nea:s :  And 
let  the  addition  of  the  words  "  and  reduced  "  to  the  name  of  the  co  be 
dispensed  with  altogether.  Tlie  Positive  Government  Security  Life  Assur- 
ance Co.,  Limited,  Hall,  Y.-C,  2;3rd  July,  1880,  B.  1527.  Re  Portland 
Cement  Co.,  Kay,  J.,  15th  Dec,  1882, 

See  fiu-ther,  supra,  note  to  Form  300,  and  Seton,  1462. 

For  order  confirming  reduction  where  the  company's  capital  consisted  in  part 
of  stock,  see  North  British  Aiistralian  Co.,  M.  E..,  8  May,  1879,  B.  570. 

Upon  motion  this  day  made  unto  this  Court  by  counsel  for  the  above-  Form  303. 
named  co  :  Let  the  addition  to  the  co's  name,  of  the  words  "  and  re-  j^ntc-im  order 
duced,"  be  dispensed  with  until  the  hearing  of  the  peton  for  reducing  dispensing 
capital  on  the  5th  day  of  Nov.,  1879,  preferred  by  the  said  co.   Netv  Civil  words"^s°nd 
Service  Co.,  Hall,  Y.-C,  5tli  Nov.,  1879,  B.  22:>2.  reduced." 

In  the  matter  of  the  Co,  Limtd,  [and  Reduced],  and  in  the  Form  304. 

matter  of  the  Companies  Acts,  18G7  and  1877.     Xotice  is  hby  given  Advertisement 


874.  PETITIONS. 

Porm  304.   that  the  order  of  the  High  Ct  of  Justice  (Chancery  Division)  dated,  &c., 
of  order  reduc-  (confirming  the  reduction  of  the  capital  of  the  above-named  co  from 

iug  capital.       /.  to  1.,  and  the  minute  (api^roved  by  the  Ct)  showing  with 

respect  to  the  capital  of  the  co  as  altered  the  several  parlars  required  by 
the  above  statutes,  were  registered  by  the   Registrar  of  Joint  Stock 

Cos,   on   the   day   of   .     And  further   take  notice  that  the 

sd  minute  is  in  the  words  and  figures  following  :  "  The  capital,  &c." 

Dated  the day  of . 

• of , 

Solors  for  the  Co. 

Section  15  of  the  Act  of  1867  provides  for  the  registration  of  the  order  and 
minute  with  the  Registrar  of  Joint  Stock  Companies,  and  requii-es  notice  of 
sixch  registration  to  be  published  in  such  manner  as  tlie  Court  may  direct. 
The  Court  cannot  dispense  with  this  publication:  so  held  by  Chitty,  J.j  in 
Thames  and  Channel  Steamship  Co.,  31  W.  E.  781  ;  W.  N.  1883,  123. 

Transfer  of  Business  of  Life  Assurance  Co. 

The  Life  Assurance  Companies  Act,  1870,  33  &  3J.  Vict.  c.  61,  provides  that 
no  company  [i.e.,  life  assurance  company],  shall  amalgamate  with  another,  or 
transfer  its  business  to  another,  iinless  such  amalgamation  or  transfer  is  con- 
firmed by  the  Court  as  therein  mentioned.  In  the  first  edition  of  this  woi'k  a 
copy  was  given  [p.  566]  of  the  petition  used  upon  a  transfer  which  was  carried 
out  under  the  Act ;  bvit  proceedings  under  the  Act  are  so  rare,  that  it  does  not 
seem  worth  while  to  repeat  the  form  in  this  edition.  However,  an  outline  of 
the  form  referred  to  is  subjoined  : — 

The  petition  was  intituled.  In  the  matter  of  the  Act  of  1862  [the  company 
being  in  liquidation],  and  of  the  Act  of  1870,  and  of  the  company,  and  was 
presented  by  the  directors  and  liquidators  of  the  company.     It  stated : — • 

Porm  305.       1.  Formation  of  co,  registered  office,  objects.     2.  Capital.     3.  Change 
Petition.  ^^  name.     4.  As  to  the  policies  and  annuities  issued  or  granted.     5, 

Net  liability  on  31st  January,  1874.  G.  Certain  further  policies  issued. 
7  and  8.  Formation  of  the  jDurchasing  association  under  Friendly  So- 
cieties Acts,  rules,  objects,  «fec.  9  and  10.  Trustees  of  association.  11. 
Actuarial  investigation  of  affairs  of  co  had  been  made  which  showed 
that  some  arrangemt  was  necessary.  12.  Condititional  agreemt  for 
transfer  of  liabihties  of  co  to  association  set  out  in  full.  13.  Resolution 
of  CO  passed  approving  of  the  agreemt  and  for  voluntary  winding  up. 
14.  Supervision  order  made.  15.  Approval  of  the  agreemt  l)y  the 
association  in  general  meeting.  1(5.  Statemts  showing  that  the  statu- 
tory requisitions  have  been  complied  with.  See  s.  14  of  the  Act  of 
1870.  17.  Position  of  association.  18.  Statemt  that  the  arrangemb 
was  equitable  and  would  be  beneficial,  &c.  Prayer  :  That  the  con- 
ditional agreemt  and  the  arrangemt  intended  to  be  effected  thereby 
might  be  sanctioned  and  confirmed  by  the  Ct,  and  carried  into  effect. 
Respondents  :  The  association  and  its  trustees. 

There  have  been  very  few  proceedings  for  amalgamation  or  transfer  since 
the  Act  of  1870.  The  writer  only  knows  of  the  following  : — Citizen  Assurance 
to  Provident   Chibs,  1874;    London  and  Southwarh  to  London  and  Lancashire 


FORMS. 


S 


10 


1880.     See  28  W.  E.  5C5;  42  L.  T.'217;  Colonial  Assurance  to  London,  Edin-   Form  305. 

burgh,  and  Glasgow,  1881  ;  Great  Britain  Mutual  to  National,  1882.     See  su^jva, 

p.  53,  Form  of  Agreement. 

Eeduction  of  Conteacts. 

The  Life  Assurance  Companies  Act,  1870,  s.  22,  empowers  the  Court,  in  the 
case  of  an  insolvent  company,  to  reduce  the  amount  of  its  contracts  in  the 
place  of  making  a  winding-up  order.  This  power  has  only  been  exercised  in 
one  case — The  Great  Britain  Mutual  Society.  There  a  winding-up  order  was 
made  by  Hall,  V.-C,  but  the  Court  of  Appeal  (November,  1880)  discharged  it, 
and  directed  a  meeting  of  policy-holders  to  be  held  for  the  purpose  of  ascer- 
taining whether  they  desired  the  contracts  to  be  reduced,  16  C.  D.  24G. 
Hall,  V.-C,  then  referred  it  to  an  eminent  accountant  "  to  inquire  and  report 
upon  what  terms,  and  subject  to  what  conditions,  the  contracts  of  the  society 
should  be  reduced  in  place  of  making  a  winding-up  order,  and  to  settle  a 
scheme  for  reducing  such  contracts,  for  the  approval  of  the  Court."  Questions 
of  importance  having  arisen,  the  referee  stated  a  special  case,  and  the  opinion 
of  the  Court  was  taken  thereon.  Re  Great  Britain  Mutual,  19  C.  D.  39  ;  20  C. 
D.  351. 

The  Coiirt  held  (1),  that  the  date  of  the  jiresentation  of  the  petition  was  the 
one  at  which  the  calculation  should  be  made  for  settling  the  scheme  ;  (2),  that 
the  claims  of  policy-holders  and  annuitants  which  had  matured  before  the  date 
of  the  presentation  of  the  petition  must  be  paid  in  full ;  (3),  that  annuities 
payable  after  that  date  must  be  reduced ;  (4),  that  participating  and  non- 
participating  policy-holders  current  must  be  Tednced 2^ ari  passu;  (5),  that  all 
payments  in  arrear  of  premiums,  including  half  premixims  left  as  a  charge  on 
the  policies,  must  be  paid  in  full. 

The  scheme  was  then  settled,  and  in  due  course  it  was  confirmed  by  the 
Court,  6  May,  1882.  Shortly  afterwards  an  agreement  was  made  with  another 
company  under  which  that  company  undertook  to  receive  the  premiums,  and, 
in  consideration  of  a  commission,  apply  them  in  paying  tlie  claims  as  they 
matured,  and  this  agreement  was  sanctioned  by  the  Court. 

The  above  case  shows  that  the  pov/er  to  reduce  contracts,  conferred  by  the 
Act  of  1870,  is  defective,  inasmuch  as  it  leaves  untouched  claims  which  happen 
to  have  matured  before  the  presentation  of  the  petition.  Where  such  claims 
amount  to  a  considerable  sum  it  would  seem  better  to  take  a  winding-up  order, 
and  then  adopt  a  scheme  under  the  Joint  Stock  Companies  Arrangement  Act, 
1870,  either  by  sale  to  a  new  company,  or  by  a  subsequent  stay  of  proceedings. 
A  difficulty  which  arose  in  regard  to  a  scheme  in  Be  Albert  Life  Assurance  Co., 
6  Ch.  381,  would  seem  no  longer  to  exist,  since  the  mode  of  valuing  policies  and 
annuities  has  been  settled  by  the  Life  Ass.  Act,  1872.  Upon  such  a  scheme, 
the  matured  claims  would  not  be  entitled  to  preferential  payment. 


Windiiig-vp  Petitions. 

In  the  High  Cfc  of  Justice.  Form  306. 

Chancery  Division.  Petition  of 

Mr.  Justice  • .  judgraent 

In  the  matter  of  the  Companies  Acts,  18G2  and  18C7. 

And  in  the  matter  of  The Co,  Limtd. 

To  Her  Majesty's  High  Ct  of  Justice. 

See  s.  81  of  the  Act  of  1862,  and  ss.  16  and  31  of  the  Judicature  Act,  1873. 


creditor. 


The  huml}le  petition  of ,  of ,  showefeh  as  follows  : — • 

1.  The Co,  Limtd  (hereinafter  called  the  co),  ^Yas  in  the  month 


3-f.  TETITIONS. 

Form  306    of ,  1872,  incorporated  under  the  Cos  Acts,  18G2  and  18G7,  as  a  co 

■  limtd  by  slir.res. 

2.  The  registered  office  of  the  co  is  at . 

3.  The  objects  for  which  the  co  was  established  are  as  follows  : — 
(a)  To,  &c. 

Here  the  objects  will  be  set  out,  or  the  paragraph  may  be  framed  as  in  Form 
299. 

4.  The  nominal  capital  of  the  co  is  20,000/.,  divided  into  2,00()  shares 
of  101.  each.     The  Avhole  of  the  sd  shares  have  been  issued. 

5.  Your  petr  is  the  holder  for  valuable  conson  of  a  bill  of  exchange, 

dated  the  day  of ,  for  250/.,  payable  six  months  after  date, 

drawn  by upon  and  accepted  by  the  co  and  indorsed  by  divers 

persons.     The  sd  bill  was  not  met  at  maturity. 

G.  On  or  about  the  day  of ,  your  petr  duly  commenced 

and  prosecuted  an  action  in  the  Queen's  Bench  Division  of  this  Honour- 
able Ct  against  the  co  for  the  recovery  of  the  amount  of  the  sd  bill  and 
interest. 

7.  The  CO  failed  to  appear  to  the  writ  in  the  sd  action,  and  your 

petr  on  the  day  of ,  signed  and  recovered  judgmt  in  the 

sd  action  against  the  co  for  the  sum  of  251/.  5s.  and  costs,  which  costs 
were  afterwards  taxed  and  certified  to  amount  to  4/.  Gs.,  making  together 
with  the  sd  sum  of  251/.  5s.  the  sum  of  255/.  lis.  recovered  by  the  sd 
judgmt. 

8.  Your   petr   on   the   day  of sued  out  a   writ  of  Jieri 

facias  under  the  sd  judgmt  ;  but  on  the day  of the  sheriff  of 

the  county  of ,  to  whom  the  sd  writ  was  directed,  returned  the 

same  wholly  unsatisfied,  the  co  ha^dng  no  goods  or  chattels  within  his 
bailiwick,  upon  which  execution  could  be  levied. 

See  s.  80  of  the  Act,  sub-s.  (2).     In  re  Tate  Collieries,  W.  N.  1883,  171,  where 
no  execution  issued. 

9.  The  sd  judgmt  is  wliolly  unpaid  and  unsatisfied,  and  the  amount 
thereof  is  justly  due  and  owing  to  your  petr. 

10.  The  CO  is  unable  to  pay  its  debts. 

See  s.  79  of  the  Act,  sub-s.  (4).     Re  Flagstaff  Co.,  20  Eq.  268  ;  In  re  Glolc  Co., 
20  Eq.  337  ;  Re  Alliance  Co.,  W.  N.  1867,  218. 

11.  Under  the  circes  it  is  just  and  equitable  that  the  co  should  be 
wound  up. 

Your  petr  therefore  humbly  prays  as  follows  :  — 

(1.)  That  The Co,  Limtd,  may  be  wound  up  by  the  Ct  under 

the  provisions  of  the  Cos  Acts,  18G2  and  18G7  [and  that  a 
prov.  off.  liq.  may  be  forthwith  appointed],  and  that  for  such 
ppose  all  necessary  and  proper  directions  may  be  given. 
(2.)  Or  that  such  other  order  may  l)e  made  in  the  premes  as  to  the  Ct 
shall  seem  meet. 

And  your  petr  Avill  ever  pray,  &c. 
Note. — It  is  intended  to  serve  this  petition  on  The Co,  Limtd. 


POEMS.  377 

As  to  the  Court  to  which  a  ■n-iuding-up  petition  should  be  presented,  see  s.  81    Fonn  306. 
of  the  Act,  and  Buckley,  196. 

As  to  who  may  petition,  see  s.  82  of  the  Act,  and  Buckley,  198. 

As  to  when  a  winding-iip  order  will  be  made,  see  ss.  79,  80,  of  the  Act,  and 
Buckley,  p.  184,  et  seq. 

With  regard  to  paragraph  11  of  the  above  petition,  it  must  be  remembered 
that  a  mere  allegation  to  the  effect  therein  expressed  is  not  sufficient.  The 
facts  which  render  it  just  and  equitable  must  be  stated,  so  that  the  order  may 
be  secundum  allegata  et  probata.  In  re  Wear  Engine  Works  Co.,  10  Ch.  191  ; 
Patent  Cocoa  Fibre  Co.,  W.  N.  1876,  60  ;  In  re  Rica  Gold  Co.,  11  C.  D.  41. 

See  further  as  to  the  proceedings,  infra,  "  winding  up." 

It  may  sometimes  be  deemed  expedient  to  allege  that  the  appointment  of  a 
provisional  liquidator  is  desirable,  see  Form  308,  infra,  and  to  pray,  inter  alia, 
"  that  a  provisional  official  liquidator  may  be  forthwith  appointed."  But  the 
Court  can  appoint  without  notice  to  any  person.  Gen.  O.  1862,  r.  15.  However, 
by  so  framing  the  petition,  the  necessity  for  a  notice  of  motion  may  sometimes 
be  avoided. 

Formal  par  is  :  see  Form  30  G. 

1.  Youi"  petr  is  the  widow  aud  executrix  of  A.  B.,  late  of  X ,  Form  307. 

in  the  county  of ,  who  died  on  the day  of ,  1875.     Your  petition  of 

petr  has  proved  his  will.  executrix 

2.  The  above-named  co  (hereinafter  called  the  co)  was  incorporated  ^lolder.^^ 
under  the  Cos  Act,  1802,  as  a  co  limtd  by  shares,  for  the  ppose  of 
carrying  on  the  l)usiness  of  a  life  assurance  co.     Its  registered  office  is 

in  London. 

.3.  On  the  28th  day  of  May,  1873,  the  sd  A.  B.  effected  a  policy  of 
assui-ance  on  his  own  life  with  the  co  for  the  sum  of  400/.  at  the  annual 
premium  of  137.  2s.  which  was  regularly  pd.  It  is  provided  by  the  sd 
pohcy  that  the  funds  and  ppty  of  the  co  shall  be  hable  to  pay  the  sd 
sum  of  4007.  to  the  assured  within  three  calendar  months  after  satisfac- 
tory proof  shall  have  been  given  to  the  directors  of  the  co  of  his  death 
and  identity. 

4.  Xotice  of  the  death  of  the  sd  A.  B.  having  been  given  to  the 
CO  the  directors  thereof  made  such  inquiries  as  they  thought  fit, 
and  satisfactory  proof  was  given  to  them  of  such  death  and  of  the 
identity  of  the  sd  A.  B.  On  the  8th  day  of  Januaiy,  1870,  the  secretary 
of  the  CO,  by  the  instructions  of  the  directors  thereof,  wrote  and  sent  to 
your  petr's  solor  a  letter  of  that  date,  informing  him  that  the  inquiries 
were  finished  and  that  the  4007.  would  be  pd  in  accordance  with  the 
terms  of  the  policy  within  three  months  from  the  date. 

5.  Your  petr  was  desirous  that  the  sd  sum  of  4007.  should  be  pd 

to  Mr.  D ,  the  London  agent  of  her  solor  on  her  behalf,  and  inquiry 

was  therefore  made  at  the  office  of  the  co  on  what  conditions  the  paymt 
would  be  so  made.  The  answer  given  on  behalf  of  the  co  was  that  upon 
production  of  a  receipt  for  the  4007.,  signed  Ijy  your  petr,  and  of  her 

authority  in  writing  for  the  paymt  to  Mr.  D. ,  the  money  would 

be  pd. 

0.  On  the day  of ,  1870,  Mr.  D attended  at  the  office 

of  the  CO  and  produced  a  proper  receipt  for  the  4007.  signed  by  your 


378 


PETITIONS. 


Form  307.  petr,  and  also   a    sufficient   authority  in   writing   signed  by   her  for 

^  the  payint  of  the  money  to  J\Ir.  D ,  who  demanded  paymt  to  him 

accordingly.     The  money  was  not,  however,  pd,  nor  was  any  assurance 

given  that  it  would  be  pd.     The  manager  of  the  co  stated  to  Mr.  D 

that  he  would  bring  the  claim  to  the  attention  of  the  board  of  directors 

at  their  meeting  on  the day  of and  that  it  would  then  be 

decided,  when  a  cheque  for  the  400/.  would  be  pd. 

7.  The  CO  has  for  some  time  past  been  in  embarrassed  circes,  and  it  is 
unable  to  pay  its  debts. 

8.  Your  petr  submits  that  she  is  entled  to  a  winding-up  order. 

As  to  winding  up  an  insurance  company  upon  the  ground  of  insolvency,  see 
s.  21  of  the  Life  Assurance  Companies  Act,  1870,  33  &  34  Vict.  c.  61  ;  Buckley, 
540.  Tests  of  insolvency  considered,  London  and  Manchester  Assoc,  1  C.  D.  4G6. 
A  voluntary  winding  up  may  be  ^ji-i'mki  facie  evidence  of  insolvency,  British 
Alliance  Corp.,  9  C.  D.  G35.  Where  the  petitioner  seeks  for  an  order  under  the 
Act  of  1870,  the  petition  should  be  intituled  "  In  the  matter  of  the  Life  Assur- 
ance Companies  Acts,  1870  and  1872,"  as  well  as  in  the  Acts  of  1862  and  1867. 

Where  the  application  is  imder  those  Acts  the  fiat  will  be  special,  and  pur- 
suant thereto  the  chief  clerk  will,  in  due  course,  certify  as  follows  : — 

"  In  pursuance  of  the  directions  given  to  me  by  his  Lordship,  Mr.  Justice , 

I  certify  that  a  p7-iwi,((/o ere  case  that  the  within-named  company  is  insolvent 
has  been  established  to  the  satisfaction  of  the  judge,  and  security  for  costs  has 
been  given  to  the  amount  of  [IDOL].  The  evidence  produced  consists  of  the  fol- 
lowing affidavits  of  the  following  persons  [specif ij  them].  Eeceipt  of  cashier  of 
the  Bank  of  England  [10]  Nov.  [1880]  for  lOOL  deposited  in  the  matter  of,  &c., 
under  Kule,  &c." 


Form  308.       1-  The 


Formal  pari s  :  see  supra,  Form  306. 
Co,  Limtd,  hereinafter  called  the  co,  was  incoi^porated. 


Petition  of 
debenture 
holder. 


as  a  CO  limtd  l)y  shares,  under  the  Cos  Acts,  18G2  and  1867,  in  the 

month  of ,  1873,  for  the  ppose  of  acquiring  and  working  certain 

patents  for  the  manufacture  of from ,  and  for  other  pposes  set 

forth  in  the  memorandum  of  association  thereof.  The  registered  office 
of  the  CO  is  situate  at . 

2.  The  nominal  capital  of  the  co  was  stated  in  the  memorandum  of 
association  thereof  to  be  100,000/.,  divided  into  10,000  shares  of  10/. 
each. 

3.  Shortly  after  the  incorporation  thereof,  the  co  commenced  and  has 
since  carried  on  Inisiness.  Upwards  of  4,700  of  its  shares  have  been 
issued. 

4.  The  CO  has  raised  money  by  the  issue  of  debentures.  By  such 
debentures  the  co  promised  to  pay  the  sums  therein  respively  mentioned 

on  the day  of ,  and  interest  thereon  in  the  meantime  at  the 

rate  of  7  p.  c.  p.  a.,  on  presentation  of  the  coupons  attached  thereto  on 
the  days  named  in  such  coupons  respively,  and  the  co  thereby  charged 
all  its  ppty  with  the  paymt  of  the  sd  principal  sums  and  interest. 

5.  The  coupons  attached  to  the  sd  debentm'es  were  for  interest  on  the 
principal  sums  in  the  debentures  mentd,  at  the  rate  afsd,  and  purport  to 
be  payable  on  the  Oth  April  and  r)th  October  in  every  year. 


FORMS. 


379 


G.  Your  petr  advanced  2,000?.  to  the  co  on  the  security  of  20  sucli  Form  308. 
debentures  as  afsd,  and  these  debentures  are  stiU  held  by  him. 

7.  On  the day  of last  your  j)etr  applied  to  the  co  for  pajint 

of  the  interest  which  accrued  due  on  your  petr's  sd  debentures  on  the 
5th  day  of  April,  lS7(i.  The  co  has  not  pd  such  interest  and  there  now 
remains  due  and  owing  to  your  petr  in  respect  thereof  the  sum  of 
74/.  O.s.  M. 

8.  The  CO  is  indebted  to  other  debenture  liolders  in  respect  of  the 
interest  on  debentures  issued  Ijy  it,  and  also  to  divers  other  persons,  and 
it  is  unable  to  pay  its  deljts. 

9.  Some  of  the  assets  of  the  co  are  pledged  l)y  way  of  security,  to 
certain  creditors  thereof,  and  the  entire  assets  are  insufficient  to  meet 
the  liabilities. 

10.  Several  actions,  brought  by  creditors  against  the  co  are  now 
pending,  and  unless  such  actions  are  restrained  the  co  will  shortly  1)0 
liable  to  have  judgmt  entered  and  execution  issued  against  it. 

11.  Having  regard  to  all  the  circes,  it  is  just  and  equitable  that  the 
CO  should  be  wound  up  by  the  Ct. 

12.  It  is  important  and  in  the  interest  of  the  creditors  and  meml^ers 

of  the  CO  that  the  ppty  thereof,  and  in  parlar  certain  banx'ls  of , 

should  be  taken  possession  of  by  some  person  appointed  by  the  Ct. 

Your  petr  therefore  humbly  prays  : — &c. 

A  debenture  holder  who  cannot  get  paid  may  present  a  winding-up  petition. 
But  he  is  not  entitled  to  an  order  against  the  wishes  of  the  majority  of  the  cre- 
ditors. Western  of  Canada  Co.,  17  Eq.  1  ;  St.  Thomas'  Dock  Co.,  2  C.  D.  117  ; 
West  Hartlepool  Iron  Works  Co.,  10  Ch.  618;  Uruguay  Central  Co.,  C.  D.  372; 
Chapel  House  Co.,  24  C.  D.  259 ;  31  W.  E.  933  ;  49  L.  T.  575.  The  holder  of  a 
mortgage  debenture  can  apjjly  for  and  obtain  a  winding-up  order  without  giving 
up  or  affecting  his  secvirity.     Moor  v.  Anglo-Italian  Bank,  10  C.  D.  681. 

1.  Incorporation.     2.  Registered  office.     3.  Objects.     4.  Capital.         Form  309. 

5.  The  CO  is  indebted  to  your  petr  in  the  sum  of J.  for  procu-  petition  of 

ring  the  insertion  and  publication  of  the  co's  jirospectus  in  divers  news-  simple  contract 
papers  pursuant  to  orders  given  to  your  petr  by  the  authority  and  on 
behalf  of  the  co. 

6.  Full  parlars  of  your  petr's  charge  for  procuring  the  insertion  of 
the  sd  prospectus  in  the  newsixxpers  afsd  are  contd  in  an  account 
which  was  long  since  furnished  by  your  petr  to  the  co.  Such  charges  are 
fair  and  reasonable. 

7.  Your  petr  has  made  repeated  and  m-gent  aj^plicons  to  the  co  fur 

paymt  of  the  sd  sum  of L,  but  the  co  has  neglected  to  pay  or  satisfy 

the  same. 

8.  The  CO  is  [insolvent  and]  unal)le  to  pay  its  debts. 
0.  [Just  and  equitable.] 

A  creditor  for  less  than  501.  may  petition.  So  held  by  Bacon,  V.-C,  in 
Scovell's  Hamble  Fisheries  Co.,  16th  Feb.,  1884,  where  petitioner's  debt  was  20?. 
undisputed.  At  the  hearing  the  company  offered  to  pay  the  amoimt,  but  with- 
out costs.     Bacon,  V.-C,  ordered  them  to  i^ay  the  costs. 


creditor. 


380 


PETITIONS. 


Form  310.       I.  to  C.  \_Siate  pctr'' s  case  for  ii'indhi<j  up.'] 

Petition  where       "•  ^^^i  the day  of ,  A.,  of ,  presented  a  peton  to  this 

prior  petitioner  Honourable  Ct  intituled  in  the  above  matters,  and  alleo-ina:  amons:  other 

thing's  that  the  co  was  indebted  to  him  in  the  sum  of /.,  and  that 

repeated  apjjlicons  had  been  made  for  the  paymt  thereof,  and  that  the  co 
was  unable  to  pay  its  debts,  and  praying  to  the  effect  hereinafter  prayed: 
But  the  CO  is  about  to  pay  off  the  amount  due  from  it  to  the  sd  A.,  or  to 
make  some  other  arrangemt  with  a  view  to  the  withdrawal  of  the  sd 
peton,  and  the  sd  peton  is  not  being  liondfide  prosecuted. 

Where  two  or  more  petitions  have  been  presented  and  the  subseqiient  peti- 
tioners had  not  notice  of  the  presentation  of  the  first,  the  usual  course  is  to 
make  one  order  onalb  as  above.  Owen's  Patent  Wheel  Co.,  22  W.  E.  151  ;  W.  N. 
1873,  226.  But  each  petition  will  be  looked  at  separately  on  its  own  merits, 
and  if  no  case  is  made  must  (unless  in  an  exceptional  case)  be  dismissed  with 
costs.     In  re  European  Banking  Co.,  2  Eq.  521. 

The  presentation  of  a  subsequent  petition  may  be  justifiable,  e.g.,  where  there 
is  reason  to  believe  that  the  first  petition  is  collusive.  In  re  Humber  Iron  Works 
Co.,  2  Eq.  15  ;  United  Service  Co.,  7  Eq.  76.  "Where  a  second  petition  is  pre- 
sented, the  second  petitioner  must  allege  and  be  prepared  to  make  out  an  objec- 
tion to  the  prior  petition,  e.g.,  collusion.  In  re  Norton  Iron  Co.,  26  W.  E.  92. 
As  to  transfer  of  concurrent  petitions,  see  m//-a.  Form  408.  As  to  costs  of  second 
petition  incurred  after  notice  of  first.  General  Fin.  Bk.,  20  C.  D.  276. 


Form  311. 

Petition  by 
company  un- 
able to  pay 
its  debts. 


Formal  penis :  see  Form  30G. 

The  liumble  peton  of  The Co,  Limtd,  showeth  as  follows  : — 

1  to  4.  Your  petr,  the  above-named  co  (hereinafter  called  the  co), 
was,  &c.,  [incorporafion  and  office,  odjecfs  and  cajjital,  commenccmt  of 
husinpss']. 

0.  In  the  course  of  its  business  the  co  has  accepted  bills  of  exchange 
to  the  extent  of  5,300/.  and  upwards.     Two  of  these  bills,  for  700/.  and 

500/.  respively,  l^ecame  due  on  the  day  of ,  but  the  co  was 

unable  to  meet  tliem.     They  still  remain  unpaid. 

G.  The  remainder  of  the  sd  bills  will  arrive  at  maturity  in  the  course 

of  the  month  of ,  1880,  and  the  co  has  no  funds  with  Avhich  to  meet 

them. 

7.  The  assets  of  the  co  are  valuable.     They  consist  in  pt  of  a  colliery 

which  was  purchased  in  the  year at  a  cost  of /.,  of  machinery 

and  plant,  of  book  debts  amounting  to  upwards  of /.,  and  of  uncalled 

capital  to  the  extent  of /.     There  are  divers  incumbrances  affecting 

the  co's  ppty,  and  the  co  cannot  obtain  any  further  advance  upon  the 
security  thereof. 

8.  The  co\s  account  at  its  l)ankers  has  l)cen  overdrawn  to  the  extent 

of  /.  or  thereabouts,  and  tlie  bankers  refuse  to  allow  any  further 

overdraw. 

y.  The  go's  colliery  is  in  full  working  order,  and  upwards  of  

men  are  employed  in  or  al)out  the  same.  It  is  worked  at  a  considerable 
profit. 

10.  The  assets  of  the  co  if  realised  would  l)e  far  more  than  suflBcient 
to  pay  and  satisfy  all  the  debts  and  liabilities  of  the  co. 


FOEMS.  381 

11.  The  CO  is  unaljle  to  pay  its  debts,  and  in  the  circes  afsd  it  is  just    Form  311. 
and  equitable  that  the  co  should  be  wound  np. 

Your  petr  the  co  therefore  humbly  prays  : 
[As  in  Form  21);).] 

Note. — It  is  not  intended  to  serve  this  pctoii  on  any  person. 

Where  a  company  wants  to  be  wound  ui)  the  usual  course  is  to  get  a  friendly- 
creditor  to  petition. 

On  the day  of your  petr  served  on  the  co,  by  leaving  the  Statement  of 

same  at  the  registered  office  thereof,  a  demand  under  his  hand  requiring  service  of 

'^  J.  o  statutory 

the  CO  to  pay  the  sd  sum  of 1.,  and  the  co  has  neglected  to  jjay  such  demand. 

sum  or  to  secure  or  compound  for  the  same  to  the  reasonable  satisfon  of 
your  petr. 

Where  a  jjetitioning  creditor  has  served  a  statutory  demand,  pursuant  to 
section  80  of  the  Act,  a  paragraph  should  be  inserted  in  the  j^etition  as  above. 
But  it  must  be  borne  in  mind  that  omission  to  pay  is  not "  neglect  "  within  the 
meaning  of  the  section  if  the  debt  is  bond  fide  disputed  by  the  company.  Lon- 
don ^  Paris  Banking  Co.,  19  Eq.  444.  The  petition  should  not  be  presented 
until  after  the  expiration  of  twenty-one  days  from  the  service  of  the  demand. 
Catholic  Co.,  33  L.  J.  Ch.  325  ;  2  D.  J.  &  S.  116.  But  it  need  not  be  presented 
immediately  afterwards.  Imperial  Hydro.  Co.,  49  L.  T.  147.  As  to  restraining 
the  presentation  of  a  winding-up  petition,  where  debt  disputed,  see  Form  345, 
infra. 

1.  &c.  [Slate  pefitioner's  case,  e.g.,  maliliiy  io  i)ay  doMsJ]  Form  312. 

12.  The  assets  of  the  co  are  of  considerable  value,  and  if  prudently  p^tj^ionby 
realised  will  be  sufficient  not  only  to  pay  and  satisfy  the  co's  debts  and  fully  paid  up 
liabilities,  but  to  pay  a  suljstantial  dividend  to  the  members.  siaieio  tei. 

A  fully  paid-up  shareholder  must  allege  and  show  that  he  has  a  tangible  in- 
terest in  the  assets.  jRe  Uica  Gold  Co.,  11  C.  D.  43 ;  Diamond  Fuel  Co.,  13  C.  D.  400. 

Title,  &c.,  see  supra,  Form  3i»(i. 

The  humble  peton  of  B.  of ,  showcth  as  follows  :  Form  313. 

1.   Incorporation  of   co.     2.   Office,      'd.   Objects.     4.  Capital.     5.  Petition  for 
Business  conmienced.  supervision 

.  order. 

6.  The  CO  is  indebted  to  your  petr  m  the  siun  of  ■ /.  for  money 

lent  to  the  co  on  the  security  of  a  promissory  note  dated ,  whereby 

the  CO  promised,  &c. 

7.  At  an  extraordinary  general  meeting  of  the  co  duly  convened  and 

held  at on  the of ,  an  extraordinary  resolution  was  passed 

as  follows  : 

That  it  has  been  proved  [wind'nuj-v})  rpsolidiou']. 

And  at  the  sd  meeting  C.  of was  duly  appointed  liq  for  the 

pposes  of  the  sd  winding  up. 

8.  Since  the  i3assing  of  the  sd  resolution  your  petr  has  made  several 
applicons  to  the  co  and  the  sd  liq  forpaymt  of  the  })rincipal  moneys  and 
interest  secured  by  the  sd  promissory  note.  The  sd  liq  has  admitted 
that  such  principal  moneys  and  interest  are  justly  due  from  the  co  to 
your  petr,  but  he  has  not  pd  the  same. 

9.  The  assets  of  the  co  consist  (1)  of  uncalled  capital  to  the  extent  of 


383  PETITIONS. 

Form  313.    G,000/.  or  thereabouts,  (2)  of  a  freeliold  coUieiy,  and  (o)  of  other  items 
of  inconsiderable  value. 

10.  No  call  has  been  made  by  the  sd  liq  upon  the  members  of  the  co, 
and  the  co's  colliery  has  not  been  sold. 

11.  A  pchaser  of  the  sd  colliery  could  readily  be  found,  but  your  petr 
is  informed  and  believes  that  the  sd  liq  intends  to  retain  the  colliery 
mitil  a  revival  in  trade  shall  render  it  more  valuable  than  at  present.  He 
recently  refused  an  offer  of 1,  for  the  colliery. 

12.  Your  petr  has  on  several  occasions  urged  the  sd  liq  to  provide  the 
f  uuds  to  pay  off"  the  co's  creditors,  either  by  sale  of  the  co's  ppty  or  by 
calling  up  the  uncalled  capital,  but  without  success. 

13.  The  debts  of  the  co  amount  to /.  or  thereabouts,  and  the  co 

is  unable  to  pay  the  same. 

14.  The  majority  of  the  co's  creditors  desire  that  an  order  should  be 
made  for  continuiug  the  voluntary  winding  up  under  the  supervision  of 
the  Ct,  and  unless  such  an  order  is  made  the  interests  of  the  co's  creditors 
will  be  seriously  prejudiced  by  the  voluntary  winding  up  of  the  co. 

Your  petr  therefore  humbly  prays  : 

1.  That  an  order  may  l)e  made  for  the  continuance  of  the  voluntary 
winding  up  of  the  co,  Init  subject  to  the  supervision  of  the  Ct. 

2.  Or  that  such  other  order  may  be  made  in  the  premes  as  to  this 
Honourable  Ct  shall  seem  meet. 

And  your  petr  will  ever  pray,  &c. 

It  is  intended  to  serve  this  peton  on  the  above-named  co,  and  on  B. 
the  liq  thereof. 

It  is  not  in  general  expedient  for  the  company  to  present  a  petition. 

The  power  to  make  a  supervision  order  is  given  by  section  147  of  the  Act  of 
18G2.  S.  82  of  the  Act  applies^,  and  accordingly  the  order  may  be  made  on  the 
petition  of  the  company,  a  creditor,  or  a  contributory.  Pen-y-Van  Co.,  G  C.  D. 
4/7.  The  liquidator  can,  under  sections  133  and  95,  present  a  petition  in  the 
company's  name.  Hooker's  Cream  Milk  Co.,  M.  E.  23  S.  J.  231.  Where  a  super- 
vision order  is  desired  it  will  generally  be  found  best  to  apjjly  for  a  compulsory 
order,  or  for  a  compulsory  order  and  in  the  alternative  for  a  supervision  order. 
As  to  the  circumstances  in  which  a  supervision  order  will  be  made,  see  Buckley, 
301.  S.  149  provides  that  the  wishes  of  the  creditors  and  contributories  are  to 
be  regarded. 

A  great  many  suj^ervision  orders  are  made  every  year,  but  the  majority  are 
made  on  petitions  for  compulsory  orders.  Thus,  where  a  comjDany  gets  into 
difficulties,  the  directors  very  commonly  present  a  petition  in  the  company's 
name,  or  get  a  friendly  creditor  to  present  a  petition,  for  a  compulsory  order, 
and  at  the  same  time  convene  a  meeting  to  pass  an  extraordinary  or  special 
resolution  to  wind  up.  Upon  the  pi;esentation  of  the  petition,  actions  and  pro- 
ceedings can  be  restrained  or  stayed  under  section  85,  and  a  provisional  liqui- 
dator appointed.  If  the  winding-up  resolution  is  passed,  before  the  hearing  of 
the  petition,  evidence  of  the  fact  is  adduced,  and  the  Court  is  asked  to  make  a 
supervision  order.  If  the  resolution  has  not  been  jDassed  before  the  hearing, 
the  Court  is  sometimes  asked  to  allow  the  petition  to  stand  over  for  a  week  or 
so,  in  order  that  the  resolution  may  be  passed. 

Again,  where  a  petition  for  a  compulsory  order  is  presented  by  a  creditor,  it 
is  not  uncommon  forthwith  to  pass  resolutions  to  wind  iip  voluntarily  ;  and  then 
at  the  hearing,  with  the  support  if  possible  of  some  other  creditors,  to  resist  a 


FOEMS. 


383 


compulsory  order,  but  to  offer  to  submit  to  a  supervision  order.  Although  as  Form  313, 
between  the  company  and  an  unpaid  creditor  he  is  entitled  to  a  compulsory 
order,  yet  as  between  such  creditor  and  the  company's  other  creditors  the 
-wishes  of  the  majority  will  be  consulted  by  the  Coui-t,  and  accordingly  if  they 
wish  for  a  supervision  order  the  Court  will  make  one.  In  re  West  Hartlejyool 
Ironworks  Co.,  10  Ch.  Ap.  G18. 

So,  too,  where  a  voluntary  Avinding  up  has  commenced,  and  a  petition  for  a 
compulsory  order  is  presented  by  a  creditor  or  contributory  who  would  seem 
likely  to  get  an  order,  it  is  sometimes  arranged  by  way  of  compromise  at  or 
before  the  hearing,  that  a  supervision  order  shall  be  made. 

See  further  as  to  the  proceedings,  infra,  "  Winding-up." 


Ill  the  Chancery  of  the  County  Pahitine  of  Lancaster. 
[Manchester]  district. 

In  the  matter  of  the  Companies  Acts,  1862  and  18G7  : 

And  in  the  matter  of  The Co,  Linitd  : 

And  in  the  matter  of  the  Ct  of  Chancery  of  Lancaster  Acts, 
1850  and  1854. 
To  the  Right  Honourable  the  ChanceUor  of  the  Ducliy  and  County 
Palatine  of  Lancaster, 

The  humble  peton  of of . 

Here  set  out  the  facts  as  in  a  petition  to  the  High  Coiu-t. 

Your  petr  therefore  huml)ly  prays  : 

1.  That  [as  in  Form  300.] 

2.  Or  that  such  other  order  may  be  made  in  the  premes  as  to  your 
lordship  shall  seem  meet. 

And  your  petr  -\nll  ever  pray,  &c. 
XoTE.— [As  in  Fonn  30G  or  311.] 

As  to  proceedings  in  the  Palatine  Coiu-t,  see  13  &  14  Vict.  c.  43  and  17  &  18 
Vict.  c.  82.  Winding-iip  orders  are  frequently  made  by  that  Covu-t  in  the  case 
of  companies  having  their  registered  offices  within  the  jurisdiction.  As  to  en- 
forcing orders  of  the  Palatine  Court,  see  the  above-mentioned  Acts ;  In  re 
Longdendale  Cotton  Co.,  8  C.  D.  150  ;  Dan.  Forms,  p.  772  ;  Snow  &  Winstanley's 
Chancery  Practice,  Lancaster.  As  to  appeals,  see  Re  Manchester  Economic,  32 
W.  R.  325. 

Ill  the  Ct  of  the  Vice-Warden  of  the  Stannaries. 
Stannaries  of  [Devon.] 

In  the  matter  of  the  Companies  Acts,  1802  and  1807  : 

And  in  the  matter  of  the Co,  Limtd. 

To  the  Vice-Warden  of  the  Stannaries. 

The  hmnble  peton  of  • of showeth  to  his  honour  as  follows  : 

\^Here  set  out  flic  facts  as  in  any  of  the  ahove  forms,  and  conclude  as  in 
Form  300.] 

Where  a  company  is  or  has  been  engaged  in  working  a  mine  within  the  juris- 
diction of  the  Stannax'ies,  the  Court  of  the  Vice- Warden  is  the  Court  within  the 
meaning  of  s.  81  of  the  Act  of  1862,  and  accordingly  that  Court  has  exclusive 
jurisdiction,  unless  a  certificate  is  obtained  as  mentioned  in  the  section.  See 
Silver  Valley  Mine,  18  C.  D.  472 ;  Penhale  S,"  Lomax  Co.,  2  Ch.  398.  As  to  ap- 
peals from  the  Stannaries,  see  Buckley,  27G,  277,  281.     Where  the  registered 


Form  314. 

Petition  to 
Lancaster 
Palatine  Court. 


Form  315, 

Petition  in 

Stannaries. 


384 
Form  315. 


PETITIONS. 

office  is  situate  in  London  the  Vice-Warden  very  commonly  hears  the  petition 
at  the  Law  Institution.  See  32  &  33  Vict.  c.  19,  s.  38,  as  to  his  power  to  hear 
out  of  the  jurisdiction,  Buckley,  205.  See  Book  on  Procedure  in  Stannaries, 
published  by  Sweet,  Chancery  Lane. 


Petitions  under  the  Joint  Stock  Com2Mnies  Arrangement  Act,  1870. 
[For  ovitlines  of  several  such  petitions,  see  infra,  "  Arrangements."] 

Staying  luinding-u^  proceedings. 

By  section  89  of  the  Act  it  is  provided  as  follows  : — 

"  The  Court  may  at  any  time  after  an  order  has  been  made  for  winding  up  a 
company,  upon  the  application  by  motion  of  any  creditor  or  contributory  of  the 
company,  and  upon  proof  to  the  satisfaction  of  the  Court  that  all  jiroceedings 
in  relation  to  such  winding  up  ought  to  be  stayed,  make  an  order  staying  the 
same,  either  altogether  or  for  a  limited  time,  on  such  terms  and  subject  to  such 
conditions  as  it  deems  fit." 

The  power  given  by  this  section  has  been  exercised  in  a  considerable  number 
of  cases. 

In  the  South  Barrule  Co.,  8  Eq.  G88,  a  supervision  order  had  been  made  and 
all  the  debts  having  been  paid,  and  there  being  a  balance  in  the  liquidator's 
hands  sufficient  to  meet  arrears  of  current  expenses,  the  great  majority  of  the 
members  were  desirous  that  an  arrangement  should  be  sanctioned  for  the  re- 
sumption of  business  by  the  company,  and  that  the  winding  up  shovild  be 
stayed.  A  petition,  of  which  a  note  is  given  below,  was  thereupon  presented 
to  the  Court  praying  for  an  order  to  stay  ftu'ther  proceedings.  It  was  opjDosed 
by  one  shareholder  only,  and  under  the  circumstances,  James,  V.-C,  made  the 
ordei",  the  value  of  the  dissentient's  interest  to  be  ascertained  and  paid  to  him. 
See  order  in  Pemberton,  1st  ed.,  671. 

Section  89  only  ai^i^lies  to  a  winding  up  by  or  under  the  supervision  of  the 
Court,  but  by  the  joint  effect  of  section  138,  infra,  and  that  section,  an  order  to 
stay  can  be  made  in  a  voluntary  winding  up.  The  power  to  stay  in  a  voluntary 
"vvinding-up  was  exercised  by  Hall,  V.-C,  in  the  Bog  Mining  Co.,  L.  J.,  Notes  of 
Cases,  1875,  48 ;  and  by  Malins,  V.-C,  in  the  case  of  the  Woollen  Trade  Asso- 
ciation, 12  Nov.  1875. 

As  to  staying  the  winding  iip  where  the  petitioner's  debt  is  disputed,  or 
pending  an  appeal  from  a  winding-up  order,  see  infra. 

In  the  first  edition  of  this  work  (p.  618),  a  coj^y  of  the  petition  iised  in  the 
case  of  the  South  Barrule  Co.,  was  given.     The  following  is  an  outline  of  it — 


Petition  to 
.stay  wind- 
ing iq.. 


Form  316.        Petition  by  W.,  chairman  of  directors  and  a  contributory  of  company  : — 

1.  Formatiou  of  CO.  2.  Particulars  of  memoraudmn.  3.  No  articles. 
4.  What  shares  issued.  5.  Petr's  shares.  G.  Eesolutions  to  wind  up 
and  appoiiitiug  liqs.  7.  Supervision  order  made.  8.  List  of  contribs 
settled.  9.  All  debts  pd.  10.  Certain  compromises  with  contribs 
sanctioned.  11.  Who  present  contribs.  12.  .Notice  concerning  meeting- 
of  contribs  to  consider  jiosition  and  decide  Avhether  a  stay  expedient. 
13.  Meeting  held  and  resolution  passed  appro'sdug  accounts  and  in 
favour  of  resimiption  of  business.  14.  Circes  which  led  to  the  winding- 
up.  IT).  Resolutions  in  favour  of  paying  out  dissentients.  IG.  Notice 
of  jiroposed  arrangemt  sent  to  contriljs.  17  and  18.  Large  majority  in 
favour  and  resolution  approving  scheme.  19.  Proposed  order  for  benefit 
of  all  parties. 


FOEMS.  385 

Prayer  :  1.  That  pursuant  to  aud  by  virtue  of  the  powers  conferred  upon  Form  316. 
the  Ct  by  the  89th  and  138th  Sections  of  the  Companies  Act, 
1862,  and  of  all  other  powers  the  Ct  hereunto  enabling,  all  further 
proceedings  in  relation  to  the  sd  winding  up  may  be  ordered  to 
be  stayed.  2.  That  the  sd  liqs  may  ])e  ordered  out  of  the  assets 
of  the  CO  in  their  power  to  pay  the  costs  of  this  peton,  and  to 
pay  and  transfer  to  the  directors  of  the  sd  co  all  the  monies, 
ppty,  aud  effects  of  the  sd  co  in  their  possession  or  power,  and 
tliat  they  may  thereupon  be  discharged  from  all  further  liability. 

3.  Or  fm-ther  or  other  order. 

Respondents  :  The  co  and  the  liqs. 


C  C 


JUDGMENTS    AND    OEDERS. 


Rescission  of 
contract  to 
take  shares 
misrepre- 
sented. 


Form  317.  Declare  that  the  pit  was  indnced  to  apply  for  the  2,000  shares  in  the 
deft  CO  as  iu  pleadings  mentd  by  the  frand  and  misrepresentation  of  the 
dcfts.  Order  and  adjndge  that  the  contract  made  between  the  pit  and 
the  deft  co  in  the  pleadings  mentd  to  take  the  sd  2,000  shares  be 
rescinded,  and  that  the  register  of  the  members  of  the  deft  co  be  forth- 
with rectified  by  striking  out  the  name  of  the  pit  iu  respect  of  the  sd 
2,000  shares.  And  let  the  defts,  within  seveu  days  after  service  of  this 
judgmt,  pay  to  the  j)lt  the  sum  of  250/.  pd  by  the  pit  as  a  deposit 
upon  the  appHcon  for  the  sd  shares,  together  with  interest  thereon  at 
the  rate  of  5  p.  c.  p.  a.  from  7  Jan.,  1881,  to  the  day  of  paymt.  And 
let  the  l,2r)0/.  money  on  deposit  in  Ct  to  the  credit  of  this  action,  Gihh, 
&c.,  and  any  interest  to  be  credited  in  respect  of  the  sd  money  on  deposit, 
be  pd  to  the  pit,  such  sum  of  money  on  deposit  l^eing  the  total  of  the 
750/.  and  500/.  pd  into  Ct  by  the  pit  pursuant  to  the  sd  order  of  27  April,. 
1881,  and  the  interest  on  the  sd  money  on  deposit  to  be  applied  by  the 
pit  in  pt  paymt  of  the  costs  hereinafter  mentd.  And  let  the  defts  also, 
Avithin  seven  days  after  service  of  this  judgmt,  pay  to  the  pit  interest  on 
the  sd  sum  of  1,250/.  at  the  rate  of  5  p.  c.  p.  a.  fi-om  14  May,  1881  (the 
date  when  the  sd  sums  were  pd  into  Ct  to  the  day  of  paymt).  Stay  all 
further  proceedings  in  the  action  of  the  Co.  v.  W.  G.,  1881,  G.  457 
\_acHon  against  pit  for  calls'].  Tax  the  pit's  costs  of  this  action,  and  of 
the  sd  action  of  Gibb  v.,  &c..  and  of  the  sd  counterclaim,  and  in 
such  taxation  the  costs  of  the  first  mentd  action  and  the  second  mentd 
action,  and  of  the  sd  counterclaim,  are  to  be  distinguished,  and  the  sd 
interest  on  the  sd  money  on  deposit  is  to  be  deducted  from  the  sd  costs  of 
the  sd  first  mentd  action,  and  the  balance  certified.  And  let  the  defts  pay 
to  the  pit  the  balance  of  his  sd  costs  of  the  sd  first  mentd  action.  And 
let  the  deft  co  pay  to  the  pit  his  costs  of  the  sd  second  mentd  action, 
and  of  the  sd  counterclaim.  Gibb  v.  Grraf  SovtJiern  Mysore  Gold  Co. 
and  others  [the  directors'].     Manisty,  J.,  for  Kay,  J.,  10  Feb.,  1882. 


The  decision  in  the  above  case  was  affirmed  on  appeal,  22  May,  1S82,  and  as 
the  case  has  not  been  reported,  it  may  be  convenient  here  to  give  a  copy  of  the 
Judgment  of  Jessel,  M.  R.,  which  is  of  considerable  interest : 

"  This  ease  is  one  of  those  of  which  we  have  had  too  many  of  late  years,  in 


FORMS.  387 

Avhicli  a  prospectus  has  been  issued  to  get  people  to  subscribe  to  a  speculative    Fomi  317. 

concern.     In  this  case  it  is  alleged  to  be  some  valuable  mining  rights  of  the ~ 

Soiithern  Mysore  Estates  in  the  Province  of  Mysore,  Southern  India,  it  states 
that,  '  The  directors  will  at  once  after  allotment  make  ax-rangements  for  the 
erection  of  all  necessary  machinery  for  the  energetic  working  of  the  mines  to 
secure  an  early  return  of  profit ;  in  the  meantime  a  sum  of  5,250L  has  been 
deposited  with  the  bankers  of  the  company,  in  the  names  of  the  trustees,  which 
amount  will  guarantee  a  dividend  of  seven  per  cent,  ujwn  the  whole  capital  of 
the  company  for  the  first  year  after  allotment,  before  the  exijiration  of  which 
time  the  directors  hope  to  be  in  a  position  to  jjay  handsome  dividends  out  of  the 
profits  of  working  the  mines.  The  price  to  be  paid  on  the  acquisition  of  the 
property  is  45,000L,of  which  32,000L  in  shares  divisible  according  to  the  terms 
of  the  purchase  agreement.  The  capital  of  the  comi^any  has  been  fixed  at 
75,000/.,  and  after  payment  for  the  property  of  45,000L  in  cash  and  shares, 
30,000?.  in  cash  will  remain  for  machinery  and  working  capital,  a  sum 
amply  sufficient  for  the  thorough  development  and  working  of  the  mines. 
Besides  the  guaranteed  dividend  of  seven  per  cent,  for  the  first  year  upon  the 
capital  of  the  company,  all  the  expenses  of  the  formation  and  advertising  iip 
to  the  date  of  allotment  are  provided  for  under  the  agreement  for  the  acquisi- 
tion of  the  property.'  Then  it  states:  'The  only  agreement  entered  into  is 
one  dated  7th  December,  1880,  and  made  between  certain  persons  therein  named 
and  the  trustee  on  behalf  of  the  company,'  which  it  is  said  may  be  seen  at  the 
offices  of  the  company.  The  plaintiff  siibscribed  for  2,000  shares,  relying  on 
that  prospectus,  and  he  was  very  much  surprised  to  get  an  allotment  of  the 
whole  number.  He  directed  some  enquiries  to  be  made,  and  the  i-esult  of  those 
enquiries  by  his  solicitor  was  that  the  solicitor  went  to  look  at  the  agreement 
in  question,  and  it  turned  out  the  arrangement  was  this,  the  sellers  or  vendors 
who  had  acquired,  or  professed  to  have  acqiiired,  certain  rights  in  this  gold 
mine,  were  parties  to  an  arrangement  with  one  Henry  Dyer,  who  is  what  is 
commonly  called  a  promoter,  and  there  is  a  nominal  trustee  for  the  intended 
company  ;  having  arranged  for  the  75,000?.  capital,  the  way  they  deal  with  the 
money  is  this  :  32,000?.  is  to  be  paid  to  the  vendors,  13,000?.  is  to  be  paid  tO' 
Dyer,  and  Dyer  is  to  guarantee  the  expenses.  The  form  is  that  he  is  to  deposit 
or  procure  to  be  deposited  5,000?.  of  this  guarantee  fund,  but  I  have  no  doubt  in 
fact  that  he  was  to  borrow  it  or  get  it  for  a  few  days  only,  for  I  see  the  13,000?. 
is  to  be  paid  in  this  way,  '  5,000?.  part  thereof  within  ten  days  from  the  day  of 
the  first  allotment  of  shares'  (that  is,  all  the  deposit  money  except  250J.)  'and 
the  balance  thereof  by  three  equal  instalments  to  be  paid  respectively  at  the 
expiration  of  one  month,  two  months,  and  three  months  respectively  from  the 
day  of  first  allotment  aforesaid.'  So  that,  though  not  in  form,  in  substance  the 
5,250?.  is  provided  out  of  the  13,000?.  promotion  money ;  in  other  words,  the 
whole  of  the  sum  for  guarantee,  besides  something  like  8,000?.,  is  to  be  paid 
over  and  above  the  32,000?.,  the  real  price  paid  to  the  comiDany.  I  do  not  say 
that  there  is  not  some  kind  of  criticism  on  the  words  of  this  jirospectus,  and 
that  if  you  impoi-t  the  doctrines  of  political  economy,  it  might  not  be  possible 
to  say  that  when  you  give  a  guarantee  some  part  of  the  consideration  is  to  be 
paid  for  the  guarantee,  biit  the  question  is  what  do  the  words  mean  in  their 
primary  sense,  and  what  do  the  people  who  issue  the  prospectus  intend  the 
public  to  believe  ?  I  have  no  hesitation  in  saying  that  they  mean,  read  by  the 
ordinary  run  of  mankind,  and  by  anybody  not  an  etymologist  or  a  political 
economist,  that  45,000?.  is  to  be  jjaid  as  the  price  of  the  property,  and  that  the 
guax'antee  fund  is  found  by  the  vendors  or  on  their  behalf.  That  is  the  mean- 
ing of  it,  and  that  is  what  the  people  who  read  it  would  understand.  The 
plaintiff  so  understood  it,  Mr.  Justice  Manisty  so  xinderstood  it,  I  so  xxnderstaxxd 
it,  and  my  learned  colleagxxes  so  xxndex'stand  it,  axid  I  have  no  doixbt  that  is  the 
fair  xneaning  of  it.  What  are  we  to  say  to  people  who  issxxe  such  a  prospectus 
when  they  start  sixch  an  undertaking  as  this  'i  Coxisideriixg  the  course  which 
has  been  taken  >iy  Mr.  Higgins  on  the  part  of  the  directors,  I  will  say  no  more, 

c  c  2 


388 


JUDGMENTS  AND  OEDEES. 


Form  317.     ^J^^t  as  it  was  argued  fully  on  belialf  of  the  company,  all  I  will  say  is  that  I 

think  with  Mr.  Justice  Manisty  that  it  is  a  very  clear  case,  and  I  go  further 

and  say  a  very  gross  case,  and  that  the  only  way  to  deal  with  it  is  to  dismiss 
the  appeal  with  costs/' 

Sir  James  Hannen.—"  I  entirely  agree." 

Lord  Justice  Lindley. — "  I  also  agree  ;  the  less  said  the  soonest  mended." 
For  other  cases  of  rescission,  see  -Ross  v.  Estates  Invest.  Co.,  B.  2120,  3  Eq. 
122,  as  varied  on  appeal,  L.  C,  22  July,  1868,  B.  2350,  8  Ch.  G82  ;  Seton,  1355  ; 
Henderson  v.  Lacon,  A.  27SS,  5  Eq.  249.     And  see  supra,  pp.  231,  361. 


Another. 
Accounts 
directed. 


Form  318.  Let  the  register  of  memljers  of  co  be  rectified  by  omitting  name  of  pit 
as  a  shareholder.  Injunction  to  restrain  proceedings  for  calls.  Deft  co 
to  take  all  necessary  ste])s  to  vacate  jndgmt  already  entered  np.  And 
let  the  following  accounts  ])e  taken  :  I.  An  account  of  all  sums  pd  by 
the  pit  to  the  deft  co,  or  to  the  late  deft  T.  and  the  defts  P.,  &c.,  or 
either  of  them,  or  any  person  or  persons  on  behalf  of  or  for  the  use  of 
the  deft  co,  with  interest  at  5  p.  c.  p.  a.  on  such  sums  from  the  respi^-e 
days  when  the  same  were  so  pd.  2.  An  account  of  all  smns  pd  by  the  deft 
CO  to  the  pit,  with  interest  at  5  p.  c.  p.  a.  on  such  last-mentd  sums,  from 
the  respive  days  when  the  same  were  so  pd.  Let  the  deft  co  and  P.,  &c., 
and  M.  T.,  the  executrix  of  the  late  T.,  wdthin  one  month  after  the  date 
of  the  chief  clerk's  certificate,  pay  to  the  pit  the  amount  certified  to  be 
due  to  him  upon  the  balance  of  the  sd  accounts.  Defts  to  pay  pit's 
costs  of  suit.  And  hi  case  deft  M.  T.  shall  not  admit  assets  of  late  deft 
T.  deceased,  for  the  ppse  of  this  decree  [account  of  jjcrsonal  estate  to  Ic 
iali:c)i\.  And  let  pit  be  at  libty  to  prove  under  the  windmg-up  of  co  for 
W'hat  shall  be  certified  to  be  due  to  him  from  deft  co  upon  the  balance  of 
sd  account,  and  also  for  such  costs  as  afsd,  and  to  apply  at  chambei's  as 
to  any  such  costs.  Xotice  of  decree  to  be  given  to  registrar.  Lil)ty  to 
apply.  Kont  v.  Freehold  Land  Co.,  Wood,  V.-C,  8rd  Aug.,  18(;7.  A. 
1>239,  h  Eq.  588  ;  3  Ch.  493. 

In  the  above  case  the  bill  was  not  filed  until  after  the  presentation  of  a  wind- 
ing-up petition,  upon  which  an  order  Avas  subsequently  made,  and  accordingly 
on  appeal,  following  Oakes  v.  Turquand,  L.  E.  2  H.  L.  325,  the  bill  was  dis- 
missed on  the  ground  that  it  was  filed  too  late,  but  the  order  was  to  be  withoiit 
prejudice  to  any  claim  by  the  plaintiff  against  the  directors  in  some  other  pro- 
ceeding.    See  s«jjra,  p.  232. 


Form  319. 

Judgment 
setting  aside 
.sale  of  conce.s- 
sion  and 
ordering 
repayment. 


Declare  that  the  sale  to  tlie  })lt  co  of  the  concession  of  8  May,  18G9, 
in  the  pleadings  mentd  was  fraudulent,  and  ought  to  be  set  aside,  and 
order  and  decree  the  same  accordingly.  Declare  that  H.  and  the 
estates  in  liquidon  and  sequestration  of  the  defts  B.  and  P.  L.  &  Son 
as  a  CO,  and  C.  L,,  &c.,  the  only  partners  of  the  sd  co  as  individuals 
in  the  pleadings  mentd,  are  jointly  and  severally  lia])le  to  make  good 
to  the  pit  CO  the  sum  of  65,000/.  so  pd  for  the  pchase  of  the  sd  conces- 
sion, together  with  interest  thereon  at  the  rate  of  4  p.  c.  p.  a.  from 
31  May,  1871,  and  the  costs  of  this  suit.  Declare  that  the  defts  E.  and 
K.  are  jointly  and  severally  lial)le  to  make  good  to  the  pit  co  the  sd 
pchase   money   to   the   extent   of    15,000/.    improperly   pd   to   the   sd 


FOEMS.  3S0 

(lefts  as  in  the  pleadings  lueutcl,  together  with  interest  on  the  sd  sum  of  Form  319. 
15,000/.  at  rate  afsd  from  31  May,  1871,  and  the  costs  of  this  suit. 
And  deft  H.  not  electing  to  take  an  account  of  the  profits  (if  any)  made 
by  the  pit  CO  from  the  working  of  the  Island  of  A.  V.  since  31  May, 
1871  ;  let  deft  H.  on  or  before  1  June,  1876,  pay  to  the  pit  co 
05,000/.,  together  with  interest  at  4  p.  c.  p.  a.  from  31  May,  1871,  to 
the  time  of  paymt.  Libty  for  co  to  prove  against  estates  of  the  deft 
B.  under  the  liquidon  proceedings  initiated  by  him,  and  also  under 
the  sequestrated  estates  of  P.  L.  &  Son  as  a  co,  and  C.  L.,  &c.,  as  indi- 
viduals, for  the  said  G5,000/.  and  interest  at  4  p.  c.  p.  a.  from  31  May, 
1871,  up  to  the  dates  of  the  liquidon  and  sequestration  respectively,  and 
for  the  costs  of  this  suit.  And  let  defts  E.  and  K.  on  or  Ijcfore  1  June, 
187G,  pay  to  the  pit  co  sd  sum  of  15,000/.  with  interest,  &c.,  to  the  day 
of  paymt.  Declare  that  the  persons  paying  the  said  G5,00u/.  and  interest 
and  pit's  costs  of  suit  as  afsd  shall  be  entled  to  the  benefit  of  the  letters 
l^atcnt  granted,  &c.,  and  of  the  documt  or  concession,  &c.  And  pit  co 
shall  at  the  expense  of  such  persons  paying  as  afsd  deal  with  sd  letters 
patent  and  concession  as  sd  persons  shall  reasonably  require,  or,  in  case 
of  difference,  as  the  Ct  shall  direct.  And  declare  that  any  sum  which 
shall  be  pd  to  the  pit  co  by  the  defts  E.  and  K.  or  either  of  them  on 
accouut  of  the  15,000/.  and  interest  shall  be  taken  in  satisfon  j^ro  tanto 
of  the  65,000/.  and  interest  payable  by  the  deft  H.,  and  provable,  &c., 
and  that  any  sum  or  sums  over  and  above  50,000/.  with  interest,  &c., 
Avhich  shall  be  pd  to  pit  co  by  deft  H.,  and  the  estates  of,  kc,  shall  be 
taken  in  satisfon  ])ro  tanto  of  the  15,00(>/.  and  interest.  Defts  to  pay 
costs  of  suit.  Dismiss  bill  as  against  L.  without  costs.  And  pit  co 
ha-sing  arranged  to  pay  the  deft  R,  15(J/.  for  the  costs  of  suit,  dismiss 
l)ill  as  against  him.  Libty  to  apply.  Pliospliatc  Scicage  Co.  v.  Hart- 
mont,  Malins,  V.-C,  22  Mar.,  1876.     B.  481. 

In  the  above  case,  the  promoters  had  fonned  the  company  and  sold  to  it  a 
concession  which  they  knew  was  voidable  ;  the  real  owTiership  was  concealed  ; 
the  persons  who  agreed  to  buy  on  the  company's  behalf  received  a  secret  bonus 
of  15,000?. ;  the  directors  were  nominees  of  the  promoters,  and  the  prospectus 
contained  serious  misrepresentations.  Upon  discovery  of  the  facts,  a  bill  was 
filed  by  the  company  against  the  promoters,  including  the  owners  of  the  con- 
cession, the  members  of  a  provisional  committee,  the  solicitors,  secretary,  and 
others,  and  a  decree  was  made  as  above.  The  decree  was  aifinned  on  appeal. 
See  report  in  5  C.  Div.  394. 

In  the  Neiv  Sombrero  Phosphate  Co.  v.  Erlanger,  5  C.  Div.  73  ;  3  App.  Cas. 
1218,  the  promoters  sold  a  proi^erty  to  the  company  without  disclosing  the  fact 
that  they  were  getting  double  what  they  had  paid,  and  without  disclosing  the 
real  ownership ;  the  directors  were  nominees  of  the  promoters,  and  the  pro- 
spectus contained  misrepresentations.  Upon  discovering  the  facts  a  bill  was 
filed,  and  on  appeal  a  decree  was  made  as  below  mentioned.  An  appeal  to  the 
House  of  Lords  was  dismissed  with  costs. 

The  decree  of  the  Court  of  Appeal  declared  that  the  contract  ought  to  be  set 
aside,  and  decreed  the  same ;  declared  that  the  defendants  were  liable  to  repay 
the  piu-chase  money,  and  were  liable  for  the  shares  issued  in  part  payment ; 
ordered  them  to  pay  the  purchase  money  with  interest ;  gave  liberty  to  prove 
for  amount  against  estates  of  bankrupt  defendants  ;  directed  inquiries  as  to 


390 


JUDGMENTS  AND  OEDEES. 


Form  319.  Avliieh  of  the  shares  still  belonged  to  defendants,  and  of  proceeds  of  sale  of 
those  sold ;  directed  a  transfer  of  the  former,  and  payment  of  such  proceeds ; 
gave  liberty  to  prove  against  estates  of  bankrupt  defendants  for  such  proceeds ; 
declared  that  company  entitled  to  be  paid  the  purchase  money  and  said  pro- 
ceeds out  of  estate  of  deceased  defendant ;  declared  defendants  and  estates  of 
bankrupt  and  deceased  liable  for  costs  of  suit,  and  directed  payment,  &c. ; 
directed  account  of  profits,  if  any,  made  by  company  in  working  the  island  ; 
ordered  company  upon  payment  of  the  purchase  money,  &c.,  to  deliver  iip 
island,  and  pay  over  such  profits,  if  any ;  directed  inquiries  as  to  estate  of 
deceased  defendant ;  adjourned  further  consideration :  dismissed  bill  with  costs 
as  against  D.  &  W.  Seton,  1358,  where  the  decree  will  be  found  more  fully  set 
out. 


Contract  for 
sale  of  mine 

set  aside. 


Form  320.  This  action  coming  on  for  trial  against  the  defts  W.  M.  and  M.  on 
the  25t]i  and  2fitli  April,  1882,  &c.,  and  counsel  for  the  pits  tliis  day 
also  moving  for  jndgmt  on  the  default  of  the  defts  S.  and  G.  in  deliver- 
ing a  defence  and  upon  hearing  the  pleadings,  &c.,  order  that  the 
contract  dated  2  April,  1879,  in  the  pleadiugs  mentd  be  set  aside,  and 
declare  that  all  shares  received  by  any  of  the  defts,  other  than  the  deft  S., 
as  pt  of  the  conson  for  the  sale  agreed  upon  by  the  sd  contract  which 
have  not  been  sold,  but  have  been  retained  by  them  or  any  of  them,  or 
by  any  persons  in  trust  for  them  or  any  of  them,  ought  to  be  surren- 
dered to  the  CO,  and  order  and  adjudge  the  same  accordingly.  And 
declare  that  the  defts,  other  than  the  deft  S.,  are  jointly  and  severally 
liable  to  pay  to  the  jjlt  co  the  amount  of  the  pchase-money  -pd  by  them 
under  the  contract,  together  Avitli  interest  at  the  rate  of  4  p.  c.  p.  a. 
fiom  the  date  of  the  respive  paynits,  and  also  to  pay  to  the  pits  the 
nominal  value  of  all  shares  which  were  allotted  to  the  sd  defts  or  any  of 
them  under  the  sd  contract,  and  which  they  have  sold,  together  with 
interest  thereon  at  i  p.  c.  ]x  a.  from  the  dates  when  such  shares  were 
sold.  And  let  an  account  be  taken  of  what  is  due  from  the  defts,  other 
than  the  deft  S.,  to  the  pits,  having  regard  to  the  afsd  declons.  And 
order  the  defts  W.  M.,  G.,  and  M.,  within  one  month  after  the  date  of  the 
chief  clerk's  certificate,  to  pay  to  the  pit  co  what  shall  be  certified  to  be 
due  to  them  on  such  account.  And  order  them  to  pay  to  the  pit  co 
their  costs  of  this  action  to  be  taxed.  And  declare  that  pit  co  are  entled 
to  a  lien  on  aU  the  interest  of  the  defts  iu  the  i)pty,  comprised  iu  such 
contract  for  the  princii)al  moneys  and  interest  payable  under  this 
jndgmt  and  order,  and  for  the  costs  of  this  action.  Libty  to  pits  to 
apply  to  enforce  such  lien  as  they  may  be  advised.  Fhjmpion  Miniufi 
Co.  V.  WWcin^  and  olhns.     Kay,  ,1.,  27  April,  1882.     B.  942. 

In  the  above  case  a  mine  had  been  purchased  from  the  liquidator  of  a  com- 
pany for  1,000L  and  resold  shortly  afterwards  to  a  new  comiDany,  i^romoted  by 
the  purchasers,  for  4,500L,  payable  part  in  cash,  and  part  in  shares.  Due  dis- 
closure was  not  made,  and  the  directors  Avere  not  independent.  Kay,  J.,  was 
of  opinion  that  the  defendants,  except  S.,  the  nominal  jivirchaser,  against  whom 
no  relief  was  claimed,  were  promoters  and  partners  in  carrying  out  an  inequit- 
able, and,  therefore,  fraudulent  scheme  ;  that  the  directors,  who  were  mere 
nominees  of  the  defendants,  had  no  opportunity  of  forming  a  separate  judg- 
ment as  to  the  i^opriety  of  cr.rrying  out  the  contract  entered  into  by  the  defen- 


POEMS.  391 

vlants  ;  that  the  defendants,  as  promoters,  stood  in  a  fiduciary  position  to  the   Form  320. 

company  ;  that  the  increased  price  was  exorbitant ;  that  the  plaintiff  company 

was  not  disentitled  on  the  ground  of  delay,  because  the  knowledge  of  the  trans- 
action complained  of  was  improperly  kejit  back ;  and,  accordingly,  judgment  as 
above  was  entered.     See  W.  N.  1882,  6G. 

As  to  lien  where  contract  rescinded,  see  Ahemman  Ironv:orJ:s  v.    Wickens, 
4  Ch.  101 ;  Mycock  v.  Beatson,  13  C.  D.  385. 


See  supra,  pp.  239,  3(33.  That  a  claim  against  a  person  iu  a  fiduciary  position 
may  be  lost  if  proceedings  are  not  taken  within  six  years  of  discovery,  see 
supra,  p.  239. 

Declare  that  the  defts  C.  and  G.  are  ]<:)intly  and  severally  liable  to   Form  321. 
pay  to  pit  CO  the  85,000?.  in  the  pleadings  mentd,  together  with  interest 


Judgment 
at  4  p.  0.  p.  a.  fi-om  2G  Ap.,  1873,  till  paymt.     And  declare  that  the  against 

deft  K.  is  also  liable  to  pay  to  the  pit  co  10,000?.  (pt  of  the  85,000?.)  P™moters  to 

with  interest  [«s  al)Ove\.     And  declare  that  the  deft  J.  N",  is  also  liable  profit. 

to  pay  to  the  pit  co  500?.  (further  pt,  &c.),  with  interest,  &c,  from 

9  July,  1873,  till  paymt.     Declare  that  defts  E.  N.  and  J.  X.,  as  the 

leg.  per.  reps,  of  W.  S.  N.  deceased,  if  they  shall  admit  assets  of  the  sd 

W.  S.  X.  sufficient  to  answer  the  sd  sum  and  interest  hereinafter  mentd, 

are   also   liable   to   pay   to   the   pit   co   500?.   (fiu-ther  j^t,   &c.)   with 

interest,  &c.,  from  9  July,  1873,  until  paymt.     And  declare  that  the 

liability  of  the  sd  several  defts,  C,  &c.,  to  pay  the  85,000?.  and  interest 

on  the  several  proportions  of  sd  sum  and  interest  for  Avhich  they  ai"a 

hinbefore  declared  liable,  or  any  pt  or  pts  thereof  respively,  may  be 

discharged  pro  ianto  by  such  defts  respively  transferring  to  the  pit  co 

debentures  of  the  pit  co  which  the  sd  defts  respively  may  have  originally 

received  in  respect  of  the  sd  85,000?.  or  the  pt  or  pts  thereof  which  they 

are  hinbefore  declared  to  be  liable  to  pay  respively,  and  accounting  to 

the  pit  CO  for  the  interest  which  may  have  been  received  by  such  defts 

resjiively  on  such  debentm'es.     And  declare  and  adjudge  that  defts  C. 

and  Gr.  do  jointly  and  severally  on  or  before  25  July,  1877,  pay  to  pit 

CO  sd  smn  of  85,000?.  together  with  interest  at  -4  13.  o.  p.  a.  from  2G  Ap., 

1873,  until  paymt.     (Jrder  against  E.  as  to  the  10,000?.  and  against 

J.   X.   as   to   the  500?.  with  interest.      Order   that   defts  E.  X.    and 

J.  X.  as  the  leg.  per.  reps,  of  W.   S.  X.  deceased,  if  they  admit  such 

assets  as  afsd,  do,  on  or  before  25  July,  1877,  pay  to  pit  co  the  500?. 

(further  pt,  &c.)  together  Avith  interest,  etc.,  from  9  July,  1873,  until 

paymt.     And  in  case  defts  E.  X.  and  J.  X.  do  not  admit  assets  of  the 

estate  of  W.  8.  X.  sufficient  for  that  ppose  or  for  the  ppose  of  the  paymt 

of  the  costs  hereinafter  dii'ected  to  be  pd,  let  [usual  account  of  personal 

ostaie  of  W.  S.  N.'].     And  order  C.  G.,  &q.,  and  the  sd  J.  X.  and  E.  X., 

as  such  leg.  per.  reps,  as  afsd  of  the  sd  W.  S.  X.  deceased,  if  they  admit 

assets  of  his  estate  to  answer  the  sd  costs,  pay  to  the  pit  co  the  costs  of 

this  suit  up  to  and  including  this  trial,  and  also  the  costs  of  the  motion 

for  injunction   of  21   Dec,    1875.      To  1}e   taxed.      Libty   to   apply. 

Bacjnall  v.  Carlton,  Bacon,  A'.-C,  25  Ap.,  1877,  A.  869. 


392 


JUDGMENTS  AND  ORDEES. 


Form  321.        -^^^  ^^^  above  case,  tlie  promoters,  K.  C.  &  G.,  formed  the  company  and  effected 

a  sale  to  it  of  a  colliery  belonging  to  B.  and  others.     The  promoters  received 

secret  payments  of  large  amoimt  from  the  vendors.  The  prospectus  contained 
misrepresentations.  Upon  discovering  the  facts,  the  company  sued  the  vendors, 
the  promoters,  and  the  vendors'  solicitors,  who  became  solicitors  to  the  com- 
pany, praying  rescission  and  repayment.  Before  the  suit  came  to  a  hearing,  it 
was  compromised  as  regards  the  vendors  ujjon  their  paying  31,0001.,  and  rescis- 
sion was  abandoned.  At  the  hearing  the  promoters  were  held  liable  for  the 
secret  profits  they  had  made,  and  all  the  defendants  were  held  liable  for  the 
costs  of  the  suit.  On  appeal,  the  decree  Avas  varied  by  allowing  the  promoters 
certain  deductions,  and  dismissing  the  bill  with  costs  as  against  the  solicitors. 
See  Form  199.     See  this  report  in  6  C.  Div.  371. 


Order  on 
appeal. 


Upon  inotion  l^y  way  of  appeal,  &c.,  and  it  appearing  by  the  e\ddeuce 
that  sums  amounting  to  G,2507.  were  pd  by  the  defts  C,  G.,  and  E,., 
some  or  one  of  them,  in  respect  of  charges  and  expenses  connected  with 
tlie  formation  of  the  pit  co,  and  the  pits  by  their  bill  ha\dng  submitted 
to  have  deducted  from  the  sum  claimed  by  them  fi'om  the  same  defts 
a  reasonable  sum  by  way  of  commission  for  their  services  in  the  forma- 
tion of  the  CO,  and  also  a  reasonable  sum  in  respect  of  the  sd  charges 
and  expenses,  and  the  pits'  counsel  not  objecting  to  amount  of  such 
charges  and  expenses  being  fixed  at  G,250/.  :  And  the  Ct  being  of 
opinion  that  9,000/.  is  a  reasonable  amount  to  be  allowed  to  same  defts 
for  such  conunission  :  And  defts  G.  and  E.  not  claiming  any  j)art  of 
sd  commission  nor  any  repaymt  in  respect  of  sd  6,250/. :  And  pits  elect- 
ing to  take  and  the  defts  C,  G.,  and  R.  respively,  consenting  that  the 
l)lts  shall  take  several  judgmts  against  the  same  defts  for  the  sums 
hereinafter  mentd.  Order,  that  judgmt  of  25  Ap.,  1877,  be  varied  as 
follows,  namely.  Deft.  C,  within  fourteen  days  after  service  of  order  to 
pay  to  pit  CO  12,000/.,  with  interest  at  4  p.  c.  p.  a.  from  26  Ap.  1873. 
And  \_Wce  order  on  R.  for  1,0001.  and  on  G.  for  57,750/.]  being  the  sd 
sum  of  85,000/.,  which  by  the  sd  order  the  sd  defts  C,  G.,  and  E.,  were 
jointly  and  severally  ordered  to  pay  less,  &c.  And  in  case  G.  shall  duly 
and  fully  pay  sd  57,750/.  and  interest,  sd  deft  is  to  be  at  libty  to 
deduct  therefrom  9,000/.  in  respect  of  such  commission  as  afsd.  But 
[o])tmi  to  G.  to  have  inquiry  in  chambers  as  to  exjjenses  of  forminr/  co, 
and  if  amovni  found  more  or  Jess  than  6,250/.,  direction  for  j^nymt  of 
difference  hj  liim  ar  the  co,  as  the  case  may  I)e'].  Defts  not  to  l)e  preju- 
diced in  respect  of  appeal  by  anything  in  the  judgint.  Variation  of 
order  of  V.-C.  as  to  costs.  Bar/nail  v.  Carlton,  Ct.  of  App.,  8  Aug.,  1877, 
A.  1742. 

See  also  Emma  Mining  Co.  v.  Grant,  M.  E.,  2G  Feb.  1879,  A.  921 ;  11  C.  I). 
941  ;  17  C.  D.  122. 


Form  322.  .Miimte  of  judgmt :  This  Ct  doth  order  aud  adjudge  that  the  deft 
John  Grove  do,  within  one  calendar  month  after  service  of  this  order, 
pay  to  the  pits,  the  Nant-y-Glo,  &c.,  Co,  the  sum  of  4,000/.,  being  80/. 
per  share  on  each  of  the  50  shares  so  transferred  to  him  as  in  the  plead- 
ings mentd,  together  witli  interest  thereon  at  the  rate  of  4  p.  c.  p.  a. 


Director 
ordered  to 
pay  value 
of  share.s. 


FOBMS.  393 

from  8  Sept.,  1871,  the  date  of  such  trausfer.     Deft  J.  Grove  to  pay  Form  322. 
the  costs  of  the  action.     Nant-y-Glo  and  Blaina  Iron  Works  Co.  v.  Grove, 
Bacon,  Y.-C,  March  19,  1878  ;  Reg.  Lib.,  1878,  B.  573.     See  Eeport, 
12  C.  D.  738,  and  supra,  p.  363. 

In  this  case  the  defendant  G.  became  a  director  at  the  request  of  the  pro- 
moters, and  he  accepted  from  them  a  present  of  50  fully  paid-up  shares  of  100?. 
each.  It  was  admitted  that  at  the  time  they  were  transferred  to  liim,  or 
shortly  afterwards,  they  were  worth  SOL  per  share.  They  subsequently  fell 
to  IL  per  share.  The  company  claimed  a  declaration  that  Gr.  was  a  trustee 
for  the  company  of  the  shares  or  of  the  value  thereof ^  at  the  election  of  the 
company,  and  judgment  was  given  as  above. 

See  also  orders  against  directors  under  s.  1G5  of  the  Companies  Act,  1SG2, 
infra.     Fonns  G34,  et  acq. 

Let  the  deft  S.  on  or  before  the  15  Nov.,  1870,  pay  to  the  pit  co  Form  323. 
8,800Z.,  being-  pt  of  the  10,000/.  profits  made  by  him  on  the  sale  of  the  p^^^^^.  ^  ^■^' 
South  Durham  Iron  Works  to  the  pit  co  as  in  the  pleadings  mentd  :  director 
And  declare  that  the  sd  deft  be  charged   with  interest  upon  the  sd  ""^^  ^''*^;^  ^^  ^ 
10,000/.  profit  (or  on  so  much  thereof  as  he  received  from  time  to  time) 
at  5  p.  c.  p.  a.  during  such  tune  as  the  sd  deft  received  interest  on  the 
sd  sum  or  any  pt  thereof,  and  that  the  sd  deft  be  charged  with  interest 
on  the  sd  8,800/.  at  4  p.  c.  p.  a.  from  the  date  when  he  received  the  sd 
sum  of  10,000/.  profit  or  any  pt  thereof  until  paymt  :  And  let  following 
inquiry  ))e  made  : — 

1.  An  inquiry  what  (if  any)  sum  or  sums  of  money  was  or  were 
received  by  the  sd  deft  from  the  co  in  respect  of  interest  on  the  sd 
10,000/.  or  any  pt  thereof  :  And  let  interest  on  the  sd  8,800/.  be 
computed  at  4  p.  c.  p.  a.  from  the  date  of  the  receipt  by  the  sd  deft 
of  the  sd  sum  of  10,000/.  profit  until  paymt  of  the  amount  thereof  to 
be  certified  :  And  let  the  sd  deft,  within  fourteen  days  after  the  date 
of  chief  clerk's  certificate,  pay  the  amount  thereby  certified  to  be  due  to 
the  pit  CO. 

Deft  8.  to  pay  to  the  pit  co  their  costs  of  action,  to  be  taxed,  &c.,  and 
to  include  the  costs  of  the  copies  of  the  correspondence,  minutes  of 
shareholders'  and  directors'  meetings,  short-hand  notes  of  the  witnesses' 
depositions,  and  certain  other  documts  supplied  for  the  use  of  the  judge  : 
And  let  H.  and  B.  take  all  necessary  steps  and  sign  all  necessary  documts 
for  the  ppose  of  procm-ing  paymt  out  to  the  pit  co  of  the  sum  of  200/. 

deposited  m  their  joint  names  in  the Bank  as  security  for  costs 

pursuant  to  the  sd  order,  dated  the  1  ilarch,  1879  \_infra,  Form 
348]  :  And  any  of  the  parties  are  to  be  at  libty  to  apply.  Soidh  Durliam 
Iron  WorTcs  Go.  v.  SMw,  Hall,  V.-C,  29  July,  1879. 

In  this  case  the  defendant  S.  purchased  tlie  iron  works,  and  resold  them  to 
tlie  company,  of  which  he  was  a  promoter  and  director,  making  a  secret  profit 
of  10,000?..     He  was  lield  liable  as  above.     See  W.  N.  1879,  159. 

Upon  the  applicon  of  S.  and  M,,  the  ofi".  hqs.,  &c.     Let  the  applicants  Form  324. 
as  such  oflp.  liqs.  be  at  libty  to  commence  and  prosecute  an  action  in  Libertyto take 


394. 


JUDGMENTS  AND  ORDEES. 


Form  324.  the  name  of  the  above  co,  against  the  former  directors  of  co,  and  against 
the  personal  representatives  of  such  former  directors  as  may  have  died 
since  the  order  to  mnd  up,  for  and  in  respect  of  certain  promotion 
monies  and  qualification  shares  divided  among  them  ;  but  the  applicants 
are  to  apply  for  the  directions  of  the  Judge  as  to  the  further  conduct  of 
the  action  when  and  so  soon  as  the  deffcs  have  delivered  their  respive 
statemtsjof  defence.  Anvcrgne  Biiioninous  Rock  Co.,  Malins,  V.-C,  l.^> 
Nov.,  1879,  A.  2117. 


proceedings 
against  direc- 
tors to  recover 
iwomotion 

money. 


Form  325. 

Order  not 
to  pi'oceed 
against 
promoters. 


Upon  the  applicon  of  the  oflP.  liqs.  Order  that  the  sanction  of  the  Ct 
be  accorded  to  the  oflP.  liqs.  refraining  from  taking  legal  proceedings  against 
the  promoters  of  the  co,  and  the  companies  amalgamated  :  costs  to  be 
costs  in  winding  up.  C(q)e  Breton  Co.,  Malins,  Y.-C,  12  June,  187D, 
A.  1288. 


Form  326.       Upon  the  applicon  of  the  pits,  &c.     Let  upon  the  deft  Lord ,  L. 

Comprcmiise      P^J^^S'  *^o  ^-  ^^^^  ofi".  liq.  of  CO  within  fourteen  days  from  the  entry  of 

of  action.  this  order,  1,000/.  in  satisfon  and  complete  discharge  of  all  clauns  and 

demands  of  the  co  in  respect  of  the  matters  in  question  in  this  action, 

and  also  in  satisfon  and  complete  dicharge  of  all  claims  by  the  sd  oil". 

liq.  of  the  co,  in  respect  of  the  sum  of  1,000/.  and  taxed  costs  amounting 

to  ■ /.,  directed  to  be  j)d  by  the  sd  deft  pursuant  to  an  order  of  ;>() 

Xov.,  1870,  this  action  stand  dismissed  as  against  the  sd  deft  without  costs, 
but  without  prejudice  in  any  way  to  the  rights  or  claims  of  the  pit  co 
against  the  remaining  defts  and  all  other  persons  in  respect  of  the 
matters  in  question  in  this  action.  Lk'ooii  Steam  Tramways  v.  Grant, 
Malins,  V.-C,  20  June,  1878,  B.  1200. 


Form  327. 

Injunction 
restraining 
forfeiture  of 
.shares. 


Undertaking  as  to  damages.  Let  an  injunction  Ijc  awarded  to  restrain 
deft  CO,  and  the  defts  C,  M.,  and  J.,  the  directors  thereof,  ft"om  striking- 
out  or  erasing  the  name  of  the  pit  from  the  register  of  the  members  of 
the  deft  co,  and  fi'om  selling,  re-allotting,  or  otherwise  disposing  of  the 
pit's  shares  therein  nmnbered,  &c.,  inclusive,  which,  by  a  resolution  of 

the  directors  of  the  deft  co  of  the  day  of ,  are  purported  to  be 

forfeited,  or  any  of  them,  or  othei'wise  acting  upon  the  afsd  resolution 
until  judgmt  in  this  action,  or  until  further  order.  Goulton  v.  London, 
ci-c,  Co.,  Malins,  V.-C,  7  June,  1877,  A.  1180  ;  Seton,  1650.  See  report 
of  case,  W.  N.,  1880,  141.  See  also  Johnson  v.  Lijttte's  Iron  Agency,  28 
Mar.  1877,  A.  09 1,  5  C.  Div.  087,  sin)ra,  p.  121. 


Form  328. 

.Judgment 
granting  per- 
petual injunc- 
tion against 
forfeiture. 


Upon  motion  for  judgmt,  ^c,  l)y  cuunsel  for  the  pit  for  such  order 
as  upon  the  admissions  of  fact  in  the  statemt  of  defence,  he  is  entled  to, 
and  upon  hearing  counsel  for  tlie  defts,  and  u}ion  the  reading  the  plead- 
ings in  this  action.  Declare  that  the  resolution  of  the  board  of  directors 
of  the  deft  co  of  the  2(;th   Feb.,  1877,  in  the  statemt  of  claims  parly 


rOEMS.  ;]95 

meucd,  which  declares,  or  purports  to  declare  the  share  of  the  pit  in  the  Form  328. 
sd  CO  to  be  forfeited,  is  invalid  and  void.  And  let  a  perpetual  injunc- 
tion be  awarded  against  the  deft  co,  restraining  the  sd  co,  and  the  directors 
and  officers  and  agents  thereof,  fi'om  removing  the  name  of  the  pit  from 
the  register  of  members  of  the  deft  co,  and  fi-om  selling;  re-allotting,  or 
otherwise  disposing  of  the  sd  shares  which  the  sd  resolution  purports  to 
forfeit  as  afsd,  or  any  of  them,  or  otherwise  acting  upon  the  sd  resolu- 
tion ;  Let  deft  co  pay  to  pit  his  costs  of  the  action,  to  be  taxed,  &c.,  in 
case  the  parties  differ  :  and  the  Ct  not  requiring  any  trial  of  this  action 
other  than  the  sd  motion.  Libty  to  apply.  Goidton  v.  London  ArcM- 
teciurcd  Brick  Co.,  and  C.  N.  and  J.,  1877,  G.  89  :  Malins,  Y.-C,  5  July, 
1877,  A.  UU. 

Upon  motion  for  an  injunction,  &c.     This  Ct  doth  order  and  adjudge  Form  329. 
that  a  pei-petual  injunction  be  awarded  against  the  def ts,  except  the  7~.     TT    ~ ' 
deft  CO,  and  E.  P.  to  restrain  them  from  restraining  or  in  any  way  inter-  restrain  exclu- 
fering  with  the  pit  acting  or  attending  as  a  director  of  the  deft  co  :  and  ^^^^'^  '  "'^'^  ^^' 
let  the  defts  M.  and  S.  pay  to  the  pit  his  costs  of  this  action,  including 
his  costs  of  this  motion,  such  costs  to  be  taxed,  &c.  ;  and  let  all  farther 
proceedings  in  this  action,  except  for  the  ppose  of  carrjing  out   this 
order,  be  stayed.     FuIbrooJc  v.  Rklimond,  &c.,   Co.,  and  its  directors, 
M.  Pt.,  6  August,  1878,  B.  1834.     See  9  C.  D.  GIO. 

It  will  be  observed,  that  the  company  was  not  restrained,  and  accordingly  the 
plaintiff  was  subsequently  removed  from  oflfice  by  a  general  meeting.  See  also 
Munster  x.  Cammell  Co.,  21  C.  Div.  183 ;  Harben  v.  Phillips,  23  C.  Div.  15. 
Compare  The  Queen  v.  Government  Stork  Co.,  3  Q.  B.  D.,  with  Evans  v.  Hearts  of 
OaJc  Society,  12  Jur.  N.  S.  163. 

Usual  undertaking.     Let  the  defts,  Elworthy  Brothers  &  Co.,  Linitd    Form  330. 
and  their  secretary  and  agents,  be  restrained  from  holdinu',  or  allowing  to  „^^ 

1      ,11,  ,  ,  •  n     1       ,    r-  ",  ,  ^  Order  restraiu- 

be  held,  the  annual  general  meetmg  oi  the  deit  co  on  the day  or  m^  directors 

■ ,  and  from  summoning,  or  allowing  to  be  summoned  or  held,  any  fiom  holdmg 

meeting  of  the  deft  co  until  after  the day  of ,  or  until  further  improper 

order.     Cannon  v.  Trench-,  Bacon,  Y.-C,  29  July,  1875,  A.  1440  ;  Seton,  r^i-wd. 
2GG  ;  20  Eq.  CAV.). 


Upon  motion  i'ur  an  injunction,  &c.,by  counsel  for  the  pits,  and  upon  Form  331. 

the  applicon  of  co,  by  Messrs.  U.,  adjourned  from  Chambers,  &c.     Let  _        .  . 

an  injunction  be  awarded  to  restrain  the  deits  until  the  hearing  of  the  directors  from 

action,  or  further  order,  from  entering  or  causing  to  be  entered,  or  suffer-  improperly  re- 

1-1  •  ,1  11J.  T  I-,      jectiug  votes, 

mg  to  remain  entered  m  the  minute  book  or  books  of  proceedings  of  the 

pit  CO,  or  otherwise  to  be  or  remain  recorded  in  any  book  of  the  sd  co, 

any  entry  that  or  to  the  effect  that  the  amendmt  in  the  indorsemt  on  the 

writ  of  summons  in  this  action  mentd  was  carried,  or  that  the  second 

resolution  in  the  sd  indorsemt  mentd  was  not  carried,  and  from  acting 

contrary  to  or  in  any  manner  inconsistent  with  the  instructions  contd 


396  JUDGMENTS  AND  OEDEES. 

Form  331.  iu  this  sd  second  resolution,  until  some  other  resolution  to  the  contrary 
shall  be  duly  passed  by  a  general  meeting  of  the  pit  co :  and  order  that 
the  defts,  or  any  of  them  who  shall,  at  the  further  or  any  other  ad- 
journmt  of  the  meeting  in  the  sd  indorsemt  mentd,  or  at  any  other 
meeting  of  the  pit  co  j)reside  as  chairman,  be  restrained  in  like  manner 
fL'oni  disregarding  or  neglecting  the  votes  of  any  duly  registered  member 
of  the  sd  CO  otherwise  duly  qualified  to  vote  on  the  ground  that  such 
registered  member  is  a  trustee  for  or  nominee  of  another  member,  and 
generally,  from  rejecting  the  votes  or  any  of  the  votes  which  any  regis- 
tered member  is  entled  to  give  under  the  articles  of  association  of  the 
pit  CO  :  and  let  the  sd  applicon  so  adjourned  from  Chambers  as  afsd 
stand  over  until  the  trial  of  the  action  or  until  further  order.  Pender  \. 
Liishingfon,  M.  E.,  -2  March,  1877,  B.  357. 

In  tlie  above  action,  the  plaintiff  sued  "  on  behalf  of  liimself  and  all  other 
the  shareholders  of  the  Direct,  &c.,  Co.,  -vvho  voted  against  the  amendment  to 
the  first  I'esolution,  and  in  favour  of  the  second  resolution  in  the  indorsement 
on  the  writ  of  summons  in  this  action  respectively  mentioned."  The  case  is 
i-eported  in  G  C.  D.  70.     See  also  Harben  v.  Phillips,  23  C.  Div.  15. 

Form  332.       Declare  that  the  arrano'emt  in  the  bill  mentd  come  to  between  the 


Amalgamation  directors  of  CO  and  the  directors  of  Bank,  for  an  amalgamation  of  the 
declared  vjfm  two  COS  on  the  terms  in  bill  mentd  was  beyond  the  power  of  the  direc- 
restrained  '^^'I's  of  the  CO  and  was  not  authorised  by  the  articles  of  association 
thereof,  and  that  such  arrangemt  is  not  binding  on  the  pit  nor  on  any 
of  the  members  of  the  co.  Declare  that  the  resolutions  of  12  Ap.,  18G5, 
in  the  bill  mentd,  were  not  within  the  powers  of  a  general  or  any  other 
meeting  of  co,  aiul  were  not  authorised  by  the  memorandum  or  articles 
of  association  of  co,  nor  by  the  Companies  Act,  18G2,  and  that  the  same 
are  not  binding  on  the  pit  or  on  any  other  dissentient  members  of  the  sd 
CO,  and  decree  the  same  accordingly.  Let  an  injunction  be  awarded  to 
resti-ain  the  deft  co  and  the  defts  Gr.  &c.,  the  directors,  and  the  deft  E., 
the  oflp.  liq.  of  co,  and  the  deft  Bank  and  B.  &c.,  the  directors  thereof 
from  carrying  the  sd  proposed  arrangemt  into  effect.  An  injunction  to 
restrain  off.  liq.  from  handing  over  to  Bank  the  assets  of  co  or  any  pt 
thereof  in  psuance  of  sd  arrangemt  or  of  any  other  arrangemt  to  the 
same  or  similar  effect.  Declare  that  deft  Bank  are  to  stand  as  creditors 
against  the  estate  of  the  co  in  respect  of  any  advances  or  paymts  whicli 
they  have  made  in  liquidon  of  any  debts  or  liabilities  of  the  co,  and 
to  a  lien  upon  all  the  assets  of  co  comprised  in  schedules  A.,  B.,  and  C. 
of  the  deed  of  covenant,  dated,  &c.  in  bill  mentd  for  the  amount  of  such 
advances  with  interest  on  such  of  them  as  bear  interest.  Libty  to 
Bank  to  go  in  under  the  winding-up  order  of  co,  and  prove  for  any 
claim  they  can  establish  against  the  assets  of  co  under  sd  last  mentd 
declon :  [and  declon  omitted  on  appeal]  taxation  and  paymt  of  costs. 
Libty  to  apply.  Cli7ich  v.  Financial  Corporation,  Wood,  V.-C,  SSFeb., 
18G8,  A.  649,  5  Eq.  450  ;  4  Ch.  11 7. 

For  some  particulars  of  this  case,  sec  infra,  "  Amalgamation." 


FOEMS.  .307 

Dcclavc  tliat  the  sd  agreemt,  dated,  cVc,  is  invalid,  and  the  resolution  Form  333. 

for  earryino-  the  same  into  effect  iu  the  [bill]  mentd  arc  vitrei  vires  and  Sale  of  assets 

illei'-al.     Let  the  defts  T.  8.,  &c.  (the  directors),  repay  to  the  deft  A.  'icciared  «?<r,, 
n  7  \  /7      1    ^  vires  and 

the  snm  of /.  pd  to  thein  as  iu  the  [bdl]  mentd  mider  the  sd  restrained. 

agrcemt,  Ixit  without  interest.  And  let  an  injunction  be  aAvarded  to 
restrain  the  deftco,  T.  S.,  <tc..  from  carrying  the  sd  agreemt,  dated,  &c., 
into  effect,  and  to  restrain  the  defts  from  assigning  the  patent,  ppty,  and 
assets  of  the  co  (as  in  the  bill  mentd),  or  any  of  them,  to  the  deft  A.,  or 
to  any  other  person  on  his  behalf.  Defts  T.  S.,  &c.,  to  pay  pit  his  costs 
of  suit,  to  be  taxed,  &c.  Bird  y.  BircVs  Patent  Deodorising,  &c.,  Co., 
Bacon,  V.-C,  28  Jan.,  1874,  A.  2i>2  ;  affirmed,  7  Mar.,  1874,  A.  (;21. 
See  n  Ch.  ,3r)8  ;  Seton,  200. 

I)e(;lare  that  it  is  idtra  vires  of  the  defts.  the  Arfjentine  Trcmuccnjs  Form  334. 
Co,  Linitd,  to  issue  new  preferred  shares  to  rank  in  priority  to  or  erjually  orjer  issue  of 
with  the  orignal  preferred  shares  of  the  co  either  in  exchange  for  de-  preference 
ferred  shares  or  otherwise.     Let  an  injunction  be  awarded  against  the  restrained, 
defts.  Lord  A.  P.,  &c.,  the  directors  of  the  sd  co,  to  restrain  the  defts 
from  issuing  any  such  new  preferred  shares  in  the  co,  either  in  exchange 
for  deferred  shares  or  otherwise.     And  let  the  defts  pay  to  the  pit  his 
costs  of  this  action,  including  therein  his  costs  of  the  sd  motion,  such 
costs  to  be  taxed  l)y  the  taxing-master.     Harper  v.  Parjct,  iL  R.,  1 G  iMar,, 
187G,  A.  r)9t). 

See  as  to  this  case^,  supra,  p.  197  ;  and  for  further  proceedings  of  the  company, 
see  GrlSith  v.  Parjet,  5  C.  D.  891- ;  G  C.  D.  511. 

Declare  that  the  pits  respiA'ely  and  the  other  holders  of  preference  stock  Form  335. 
in  the  co  on  whose  l)ehalf  they  respively  sue,  are  entled  to  be  pd  di\idends  jtights^f 
out  of  the  profits  realised  by  the  co  on  the  preference  stock  held  by  them  preference 
respively,  from  .30  June,  185C,  according  to  the  amount  of  the  dividends  declared  and 
which  the  several  classes  of  preference  stock  respively  carry,  before  any  infringements 
paymt  in  respect  of  dividends  or  otherwise  is  made  to  any  of  the  holders 
of  original  ordinary  stock,  A  stock,  and  B  stock,  in  the  sd  co,  or  any  of 
such  stocks  out  of  such  profits.    And  let  a  perpetual  injunction  be  awarded 
to  restrain  the  deft  co  from  declaring  any  dividend  on  the  original  ordi- 
nary stock,  A  stock,  and  B  stock,  in  the  sd  co,  or  any  of  stich  stocks  or 
any  pt  thereof  respively,  without  regard  to  the  rights  of  the  pits  re- 
spively, and  the  other  holders  of  preference  stock  on  whose  behalf  they 
respively  sue,  to  be  paid  in  prioiity  the  fidl  amouiit  of  the  dividends 
payable  upon  or  in  respect  of  the  preference  stock  held  Iiy  them  respively, 
to  be  computed  from  30  .June,  IS.jG.and  from  making,  or  causing  to  be 
made,  any  paymt  for  dividend  or  otherwise  to  any  of  the  holders  of  the 
original  ordinary  stock,  A  stock,  and  B  stock,  in  the  sd  co,  or  any  of 
such  stocks  without  first  paying  or  providing  for  the  paymt  to  the  pits 
respively,  and  those  on  v\hose  behalf  they  sue,  of  the  full  amount  of  the 
■dividends  payalile  upon  or  in  respect  of  the  preference  stock  held  l)y 


398 


JUDGMENTS  AND  OEDEES. 


Form  335,  tliem  respively,  to  be  computed  from  30  June',  185G.  Henry  v.  Grmi 
Northern  Ry.  Co.,  Wood,  V.-C,  24  Aug.,  1857,  A.  1602.  Affirmed  on 
appeal. 

As  to  preference  shares,  see  su-pra,  pp.  181,  195. 


Form  336.  Upon  motion,  &c.,  for  the  pits,  &c.,  let  an  injunction  lie  awarded 
to  restrain  the  defts,  the  directors  of  deft  co,  from  paying  interest 
upon  any  amounts  pd  up  upon  any  of  the  shares  in  the  sd  co,  or  any 
money  by  way  of  interest  or  dividend  upon  or  in  respect  of  any  such 
shares  until  the  sd  co  has  received  profits  legall}'  ap2>licable  to  the 
I)aymt  of  such  interest  or  dividends  until  the  hearing  or  further  order. 
MacdovgaU  v.  Jersey,  dr.,  Co.,  Wood,  Y.-C,  25  July,  1864,  B.  2045. 
See  sui>ra,  p.  IGO. 


Payment  of 
dividend  out 
of  capital 
restrained. 


Form  337. 

Payment  of 
dividends  out 
of  capital. 


Upon  motion,  &c.,  by  counsel  for  the  pit,  and  upon  hearing  counsel 
for  the  defts,  and  upon  reading  the  writ,  &c.,  and  [iisual  inideriaking']  : 
Let  an  injunction  be  awarded  to  restrain  the  defts  G.,  &c.,  [the  directors'] 
and  the  deft  co,  until  judgmt  in  this  action,  or  until  further  order, 
from  making  any  paymt  by  Avay  of  dividends  on  the  ordinary  shares 
of  the  deft  co.  And  defts  to  be  at  libty  to  apply  to  dissolve  the  sd 
injunction  as  they  may  be  advised.  Davison  v.  Gillies,  M.  E.,  14  Mar.. 
1879,  A.  1118. 

See  supra,  p.  168,  and  Form  365,  infra. 

In  the  above  case,  the  plaintiff  sned  on  behalf  of  himself  and  all  other  the 
shareholders  of  the  London  Tramways  Co.,  Limited.  See  a  note  of  the  ease  in 
16  C.  D.  347. 


Form  338.  Upon  motion,  &c.  Let  an  injunction  be  awarded  to  restrain  the 
Order  restrain-  deft  society,  H.,  &c.  [the  directors'],  fi'om  carrying  into  effect  the  resolu- 
mg  company     f^f^j^  meutd  In  the  statemt  of  claim  for  purchasing  with  money  belong- 

Irom  purclitis-  j.  o  •/  o 

ing  its  own       big  to  the  deft  society  any  shares  of  the  deft  society,  or  fi-om  purchasing 
share?.  q^.  taking  any  steps  for  purchasing  any  such  shares  with  money  belong- 

ing to  the  defc  society,  until  the  hearing  of  this  cause  or  until  further 
order.  JIojm  v.  Internationcd  Financial  Society,  Bacon,  V.-C,  1)  Nov., 
1876,  A.  1820.     Sec  report  of  this  case  in  4  C.  Div.  327. 


Directors 
ordered  to 
make  good 
breach  of 
trust. 


Form  339.  Declare  that  the  applicon  of  the  sums  in  the  ))ills  mentd,  namely, 
2,000?.,  1,733^.  lis.  od.,  and  5/.  8s.  9d,  amounting  to  3,739/.,  in  the 
pchase  of  shares  of  the  sd  co  constituted  a  l)reach  of  trust  and 
misapplication  of  the  monies  of  the  sd  co,  and  that  the  defts,  Lord  F.  \_and' 
others],  are  jointly  and  severally  lial)le  to  make  good  and  repay  to  the- 
sd  CO  such  simis  of  2,000?.  and  1,733?.  lis.  Sd.,  and  that  the  deft  Finch 
is  separately  and  also  jointly  with  the  other  defts  liable  to  make  good 
and  repay  to  the  sd  co  the  sd  sum  of  2,000/.,  and  that  deft  Finch 
is  also  separately  liable  to  make  good  and  repay  sd  sum  of  5/.  Ss.  9d.  to 
sd  CO.     And  order  that  sd  Lord  F.,   &c,,  do  on  or  before  30  June 


FOEMS.  399 

next  pay  sd  several    sums   for  which   they  arc  respively  jointly  and  Form  339. 

severally  liable  as  afsd,  and  interest  thereon  at  the  rate  of   4  p.   c. 

]).  a.  fi'om  the  date  of  this  decree  up  to  the  time  of  paymt  to  the  sd 

CO  accordingly.     Defts  to  pay  pit's  costs  of  suit.     Land  Credit  Co.  \. 

Lord  Fermoy.  Romilly,  M.  R.,  24  Mar.,  1869,  B.  1232.     See  the  repoit 

8  Eq.  7  ;  ">  Ch.  703.     The  decree  was  varied  as  to  one  of  the  directors  on 

appeal. 

Directors  are  responsible  for  loss  resulting  fx'om  an  improper  application 
of  the  assets  of  the  company.  See  Forms  63 i,  ct  seq.  But  they  are  not 
liable  if  acting  witliin  the  limits  of  their  authority,  and  in  good  faith,  for  loss 
resulting  from  an  error  of  judgment,  Turqvand  v.  Marshall,  i  Ch.  376 ; 
Overend,  Gurney  4"  Go.  v.  Gibh,  L.  K.  5  H.  L.  480.  See  further  Lindley,  594  ; 
Buckley,  404.  As  to  the  liability  of  directors  inter  se  in  respect  of  breach  of 
trust,  and  their  rights  in  regard  to  contribution,  see  Ashurst  v.  Mason,  20  Eq. 
225.     Seton,  1184. 

As  to  how  far  directors  trustees,  see  Wilson  v.  Lord  Bury,  5  Q.  B.  Div.  519; 
In  re  British  Seamless  Co.,  17  C.  Div.  471 ;  Russell  v.  Wakefield  WateruorJcs  Co., 
20  Eq.  473,  and  cases,  sujira,  p.  168. 

Dismiss  the  Ijill  as  against  the  deft  Gr.,  without  costs.  Declare  chat  Form  340. 
the  directors  of  the  pit  co  had  no  power  or  authority  to  take  or  accept  Another^  " 
the  3,000  and  the  500  shares  in  Barned's  Banking  Co.  in  the  pleadings 
mentd  on  l)ehalf  of  the  pit  co,  or  to  give  to  the  defts  "W.,  H.,  M.,  H., 
H.,  and  W.,  and  the  late  deft  ^Y.,  or  any  of  them,  such  or  any  of 
such  letters  of  guarantee  or  indemnity  in  respect  of  the  afsd  shares,  or 
any  of  them,  as  are  in  the  pleadings  mentd. 

Declare  that  the  pit  co  is  not  under  any  liability  upon  the  afsd 
letters  of  guarantee  or  indemnity,  or  by  reason  of  the  undertakings 
contd  therein  respively.  Declare  that  the  appropriation  and  paymt 
out  of  the  funds  of  the  pit  co  of  the  three  several  sums  of  10,000/.. 
5,000/.,  and  1 5,000/.  (specifying  the  dates),  in  respect  of  the  afsd  shares, 
was  a  Ijreach  of  trust ;  and  that  the  defts  B.,  H.,  etc.,  and  the  late  defts 
D.  the  younger,  and  White,  and  R.,  now  a  banki'upt,  became  jointly  and 
severally  liable  to  make  good  such  l)reach  of  trust  by  refunding  to  the 
jAt  co  the  total  amount  of  the  afsd  principal  monies  respively,  with 
interest  thereon  respively  at  the  rate  of  4  p.  c.  p.  a.  Declare  that  the 
defts  B.,  &c.,  and  the  several  estates  of  the  deceased  defts,  D.  the 
younger  and  White,  and  the  estate  in  bankruptcy  of  R.,  are  jointly  and 
severally  liable  to  refund  to  the  pit  co  the  sd  amount  of  principal  and 
interest,  and  the  costs  of  the  suit  ;  but  as  to  the  estates  of  the  deceased 
defts.  Dent  the  younger,  and  White,  only  in  a  just  course  of  administra- 
tion ;  and  as  to  the  estate  of  the  bankrupt  R.,  only  by  way  of  proof 

under  his  banki'uptcy.     Order  on  defts  B.,  &c.,  for  paymt  of  /, 

(being  the  computed  amount  of  principal  and  interest,  less  the  sum  of 
875/.,  being  the  amount  which,  by  the  pleadings,  appears  to  have  been 
carried  in  the  books  of  the  co  on  the  27th  Feb.  and  1st  Mar.,  186G,  to 
the  credit  of  interest  on  the  creditor  investmt  account,  as  having  arisen 
from  dividends  on  the  afsd  shares)  to  the  off",  liq.  within  fourteen  days 


J  00  JUDGMENTS  AND  OEDEES. 

Form  340.  after  service  of  the  decree,  and  of  the  sd  sum  of  SlbJ.  into  Ct  to  tlie 
credit  of  the  cause,  "Tlie  Share  Account."  Libty  to  apply  as  to  such 
fund.  Defts  B.,  &c.,  to  pay  pits'  costs.  Leave  to  pits  to  apply  in  the 
administrations  and  bankruptcy.  Libty  to  apply.  Joinf  Stoch  Discount 
Co.  V.  Brown,  James,  Y.-C,  5  July,  1860,  8  Eq.  f,76. 

Eectific'Ation  of  Register  of  Members. 

The  jurisdiction  is  conferred  by  s.  35  of  the  Act  of  1SG2,  and  is  exerciseahle 
in  two  cases  : — 

1.  When  the  name  of  a  person  is  without  sufficient  cause  entered  in  or 
omitted  from  the  register. 

2.  Where  default  is  made,  or  unnecessary  delay  takes  place,  in  entering  in 
the  register  the  fact  of  any  person  having  ceased  to  he  a  member  of  the 
company. 

The  following  are  some  of  the  cases  in  which  orders  have  been  made : — 

1.  Where  the  applicant  was  induced  to  take  the  shares  by  misrepresentation 
in  the  prospectus.  Stewart's  case,  1  Ch.  574  ;  Smith's  case,  2  Ch.  604-.  See  also 
Ex  parte  Kintrea,  5  Ch.  95  ;  Re  London  arid  Staffordshire  Co.,  24  C.  D.  149  ; 
Anderson's  case,  17  C.  D.  373. 

2.  Where  the  company  improperly  neglected,  or  refused  to  register,  a 
transfer.     Stranton  Iron  Worlcs,  16  Eq.  559. 

3.  Where  shares  had  been  issued  under  a  contract  to  issue  fully  paid-up 
shares,  and  the  contract  had  not  been  filed.  See  supra,  p.  14,  and  Forms  343 
and  344,  infra. 

Where  shares  have  been  improperly  forfeited.    See  Form  342. 
5.  Where  a  transfer  in  favoiu-  of  a  niortgagee  had  been  registered  by  mistake. 
See  Pulbrookv.  Richmond  Co.,  9  C.  D.  GIG. 

6.  Where  the  company,  acting  on  a  forged  transfer,  removed  a  name. 
jJahia  and  San  Francisco  Railway  Co.,  L.  E.  3  Q.  B.  584. 

7.  Where  there  was  a  dispute  between  a  vendor  and  purchaser  of  shares. 
Ex  parte  Shaiu,  2  Q.  B.  Div.  463. 

There  is  a  difference  of  ojiinion  as  to  the  extent  of  the  jurisdiction  conferred 
by  s.  35.  See  Ex  imrte  Sargent,  17  Eq.  273  ;  and  Ex  parte  Shaw,  %i.hl  supra. 
But  there  is  no  doubt  that  the  exercise  of  the  jurisdiction  is  discretionary,  at 
any  rate  to  some  extent.  Ward  and  Henry's  case,  2  Ch.  431;  Askcw's  case 
9  Ch.  664;  Ste%vart's  case,  1  Ch.  575. 

However,  as  between  a  member  and  the  company,  the  Court  will  not  readily 
decline  to  act  under  the  section.  Ex  parte  Parser,  2  Ch.  685  ;  Ex  parte  Denny, 
8  Ch.  446  ;  Stranton  Iron  Co.,  16  Eq.  559. 

Whether  in  any  particular  case  it  is  desiraltle  to  apply  under  this  section,  or 
to  bring  an  action,  must  depend  on  the  circumstances.  In  a  simple  case,  where 
an  immediate  rectification  is  essential,  it  may  be  desirable  to  apply  under  the 
section  ;  but  if  the  case  is  at  all  complicated,  and  a  little  delay  will  not  much 
matter,  an  action  is  preferable. 

Under  the  present  practice,  a  question  can  be  tried  in  a  much  more  satisfactory 
manner  in  an  action  than  upon  a  motion  or  summons. 

An  application  vmder  s.  35  should  be  intituled  in  the  matter  of  the  Act  of 
1862,  and  of  the  company. 

The  register  should  be  rectified  in  the  case  of  a  removal,  by  striking  through 
the  name  with  pen  and  ink,  and  adding,  "  By  order  of  the  High  Court  of 
Justice,  dated,  &c.,  this  name  has  been  erased."  Iron  Shiphuilding  Co., 
31.  Beav.  597. 

Form  341.       Upon  motion,  &c.,  for  L.,  itc,  let  the  register  of  shareholders  of  the 
Usual  ord  r      ^^  ^^  rectified  by  striking  out  tlic  name  of  the  sd  li.  as  a  shareholder 

to  rectify. 


FOEMS.  .XOl 

of  the  CO,  and  let  tlie  co  pay  to  the  scl  L.  his  costs  of  this  appHcon,    Form  341. 

to  be  taxed  by   the   taxing   master  :  And  let  notice  of  this  order  be 

given  to  the  registrar  of  Joint  Stock  Cos  by  serving  a  copy  of  this 

order  n])on  the  sd  registrar  or  leaving  the  same  with  a  clerk  at  the 

office  of  the  sd  registrar,  and  at  the  same  time  producing  this  order, 

duly  passed  and  entered.     Bnjn  AJijii,  &c.,  Co.,  M.  R.,  2b  Jan.,  1878, 

A.  18G. 

Upon  the  applicon  of  II.  11.  E.  and  S.,  shareholders  of  co,  which,  &c.  Form  342. 
\_(ulJournmt  into  (Y],  and  upon  hearing,  &c.,  and  reading,  &c.,  let  the  j^gp^jj^^j^tjon 
register  of  members  of  sd  co  be  rectified  by  inserting  the  names  of  the  ^^'lere  invalid 
applicants  as  shareholders  in  the  sd  co  for  the  number  of  shares  and  with 
the  several  amounts  pd  up  thereon  specified  in  the  schedule  hto,  such 
shares  having  been  wrongfully  dealt  with  by  the  sd  co  as  having  been 
forfeited  :  and  let  co  pay  to  the  applicants  the  costs  of  the  applicon,  and 
consequent  thereon,  to  be  taxed,  &c.,  and  let  notice  of  this  order  be 
given  to  the  registrar  of  Joint  Stock  Cos. 

The  Schedule  above  referred  to. 

1.  R.,  as  the  holder  of  twenty  shares,  eight  of  which  are  fully  pd  up 

and  the  remaining  twelve  of  which,  numbered to inclusive, 

are  pd  up  to  the  extent  of  17s.  C>d.  per  share. 

2.  H.  as  the  holder  of  five  shares,  numbered,  &c.,  pd  up  to  the  extent 
of  \s.  C,d.  per  share. 

3.  E.  as,  &c.     4.  S.  as.  &c. 

Hexham  Mining  Co.,  Hall,  Y.-C,  -t  March,  187G,  A.  024. 

Upon  the  applicon  of  W.,  &c.,  and  the  co  by  their  secretary  consent-  striking  out 
ing  :  Let  the  sd  register  of  members  be  rectified  Ijy  striking  out  or  ^'^'"^  °*  ™''^"^" 
otherwise  cancelling  the  entry  therein  of  the  name  of  the  sd  W.  as  the 

holder  of  the  sd  GOO  shares  numbered as  mortgagee  of  such  shares 

or  otherwise.     And  notice  to  registrar.     London  Pianoforte  Co.,  ]\Iulins, 
V.-C,  27  June,  1877,  B.  124;). 

Upon  motion  for  T.  B.  [cunl  others^,  let  the  register  of  members  of  Form  343. 
CO  be  rectified  by  striking  out  the  names  of  the  sd  T.  B.,  &c.,  as  holders  wiiere  contract 
of  the  following  shares  of  class  B  in  the  sd  co,  that  is  to  say,  the  sd  T.  B.  "°*  *^'*^'^- 
in  respect  of  88  B  shares,  numbered,  &c.,  &c.     And  order  that  the 
agi-eemt  of  14  Ap.,  1871,  under  which  the  sd  B  shares  Avere  issued,  be 
filed  with  the  registrar  of  Joint  Stock  Cos,  and  that  upon  or  after  such 
agreemt  shall  have  been  filed  the  sd  co  do  allot  or  issue  to  the  sd  T.  B.,  &c., 
shares  of  the  class  B  fully  pd  up  of  the  same  number  and  value  as  they 
now  respively  hold  as  afsd  in  exchange  for  the  certificates  of  the  like 
shares  now  held  by  him.     And  co  to  pay  to  appHcants  their  costs  of  this 
applicon,  to  be  taxed,  &c.,  in  case  the  parties  differ.     And  notice  of 
order  to  be  given  to  registrar  of  Joint  Stock  Cos.     Aherdare,  RJiondJla, 
A:c.,  Co.,  MaUns,  V.-C,  27  May,  1875,  A.  849.     See  siqmt,  p.  14. 

D  D 


40^ 


JUDGMENTS  AND  OEDEES. 


Form  344.       Upon  motion,  &c.,  for  J\I.,  of ,  and  AV.,  the  trustee  in  liquidation 

Another.  of  M.,  &c.  \_Rectifi/ing  register  hij  cancelling  M.'s  mmie'].     And  let  an 

agreenit  be  forthwith  drawn  w.\)  and  executed,  embodying  the  agi'eemfc 
in  relation  to  the  pchase  of  the  business  of  sd  IVI.  contd  in  the  original 
resolutions,  dated  31  Oct.,  1872,  in  accordance  with  Avhich  the  sd  co 
was  formed ;  and  let  the  agreenit  when  so  executed  be  forthwith  filed 
with  the  registrar  of  Joiiit  Stock  Cos,  and  let  new  [.s/p]  shares  of  the 
sd  CO  be  then  forthwith  issued  in  the  name  of  the  sd  i\I.  l)y  the  sd  co  in 
psuance  of  the  sd  agreemt,  and  delivered  [s/c]  to  the  sd  W.  Give 
notice  to  registrar,  No  order  as  to  costs.  Union  Maniifachmng  Co., 
M.  E.,  1!)  June,  1878,  B.  1280.     See  siqmi,  p.  15. 

For  order  to  rectify  register,  notice  to  be  given  to  i-egistrar,  company  to  pay 
costs  of  application,  inquiry  to  be  made  what  damages  the  applicant  has  in- 
curred by  reason  of  his  name  having  been  put  upon  such  register  beyond  the 
costs  before  directed  to  be  taxed ;  company  to  pay  to  applicant  what  shall  be 
certified  to  be  due  in  respect  of  such  damages,  see  IVeiy  Quebrada  Co.,  Pontifex's 
case,  15  W.  E.  955  ;  Pemberton,  059. 

Form  345.       Upon  motion  by  counsel  for  the  pits,  &c.,  let  an  injunction  be  awarded 

Order  restrain-  ^^  I'estrain  the  deft  K.  and  his  agents  from  p)rcsenting  any  petition 

ing  presenta-     under  the  Cos  Acts,  18G2  and  1807,  to  wind  up  the  pit  co  or  taking  any 

ii\rpe\ltionr°'  ^^^^^^'  pi'oceedings  to  obtain  a  Avinding-up  order  thereof  until  the  trial  of 

this  action  or  until  further  order.    JoJui  Brown  J;  Co.,  Limtd.  v.  Keehle, 

Malins,  V.-G.,  13  Nov.,  1871),  A.  2119  :    Circle  Resiaurant  v.  Laveng, 

18  G.  D.  557. 

If  a  creditor  of  a  company,  whose  debt  is  hand  fide  disputed,  attempts  to 
enforce  payment  by  threatening  to  present  a  winding-up  petition,  he  will  be 
restrained  at  the  suit  of  the  company,  as  in  the  above  case.  See  also  Cadiz 
Waterworks  Co.  v.  Barnett,  19  Eq.  182 ;  Niger  Merchants  v.  Copjier  (M.  E.),  25 
W.  E.  365.  In  the  case  last  naentioned,  the  writ  was  indorsed  with  a  claim 
"  For  an  account  of  the  defendant's  transactions  as  agent  of  the  plaintiil  com- 
pany under  an  agreement  dated,  &c.,  and  for  an  injiinction  to  restrain  the 
defendant  from  presenting  a  winding-up  petition." 

Where  a  petition  has  already  been  presented  to  the  High  Court  by  the  credi- 
tor, there  is  no  jurisdiction  now  to  restrain.  S.  24  (5)  of  the  Judi.  Act,  1873. 
But  application  can  under  that  section  be  made  in  the  winding  up  by  motion  to 
dismiss  the  petition.  Re  Gold  Hill,  23  C.  Div.  210.  Compare  In  re  Sewell,  28 
W.  E.  286.  Not  only  can  proceedings  here  be  restrained,  but  proceedings 
abroad,  as  in  the  following  order  : 


Form  346.  Upon  motion,  &c.  :  Let  the  defts  Lord  Monson  [and  others']  be  re- 
Order  restrain- strained  from  taking,  prosecuting,  or  proceeding  with  any  proceedings 
ing  bankruptcy  j^Q^y  pending  iu  France  for  the  ppose  of  making  or  declaring  the  pit  co 
against  com-  bankrupt,  or  any  other  action,  suit,  or  proceeding  in  France  or  else- 
pany  in  where,  to  make  the  co  bankrupt  or  to  have  it  declared  judicially  in- 

solvent,  and  from  taking  proceedings  to  recover  any  judgmt  agaiusfc  the 
pit  co  or  from  taking  any  other  proceedings  whatever  against  the  ])lt  co 
in  respect  of  the  debts  claimed  against  the  sd  co  in  respect  of  which  the 
sum  of  7,720/.,  has  been  pd  into  Gt  as  mentd  in  the  afft  filed  in  su]iport 
of  the  applicon  on  which  the  sd  order  of  19  June,  1877,  was  made,  until 


FOEMS. 


403 


Friday,  22  Juuc,  1S77.     Residue  of  motion  to  stand  over  till  2H  June,  Form  346. 
1S77.     Paris  Skaiiufj  Rink  Co.  v.  Lord  Jlonson,  Bacon,  Y.-C,  21  June, 
1877,  B.  1110. 

The  order  of  19  June  was  an  interim  injunction  to  the  like  effect  over 
Friday,  22  June,  the  plaintiffs  paying  money  into  Court,  "  And  this  order 
being  urgent  is  to  be  acted  on  without  being  printed."  Bacon,  V.-C,  19  June, 
1877, B.  1073. 

Upon  motion  by  way  of  appeal,  &c.,  order  that  tlie  pits,  the co,  Form  347. 

do  procure  some  sufficient  person  on  their  behalf  to  give  security  accord-  Z^,  \ 
ing  to  the  course  of  the  Ct  by  bond  [to  the  Clerk  of  Records  and  AYrits]  plaintirt' com- 
in  the  i^enalty  of  150/.,  conditioned  to  answer  costs  in  case  any  costs  P'"^"-^' .*"  ^'^^® 

SGcuntv* 

shall  be  awarded  to  be  pd  by  the  pits,  and  in  the  meantime  the  pits  are 
not  as  against  the  defts  to  take  any  further  proceedings  in  this  action. 
And  pits  to  pay  defts'  costs  of  and  occasioned  by  this  motion,  to  be 
taxed,  &c.  And  costs  of  applicon  in  Ct  below  to  be  costs  in  the  action. 
And  deft  co  to  be  at  liberty  to  apply  hereafter  for  further  security,  as 
deft  CO  may  be  advised.  Nortliamjiion  Coal,  (|-c.,  Co.  v.  Midland  Wagon 
Co.,  Ct  of  Appeal,  IG  Jan.,  1878,  B.  78.     See  the  report,  7  C.  Div.  500. 

Where  a  limited  company  is  plaintiff  in  any  action  or  other  legal  proceedino-, 
it  may,  if  it  appears  by  any  credible  testimony  that  there  is  reason  to  believe 
that  if  the  defendant  is  successful  the  assets  of  the  comjiany  will  be  insufficient 
to  pay  his  costs,  be  required  to  give  security  for  costs.  S.  69  of  the  Act  of 
1862.  For  cases  in  this  section  see  Moscoiu  Gas  Co.  v.  International  Financial 
Soc,  7  Ch.  225  ;  Freehold  Land  Co.  v.  Spargo,  W.  N.  1868,  9i ;  Lydney  Co.  v. 
Bird,  2.3  C.  D.  358  ;  and  Forms,  iti/ra. 

In  the  above  case  the  plaintiff'  company  was  in  voluntary  liquidation,  and 
Jessel,  M.  E.,  in  the  Court  of  Appeal,  was  of  opinion  that  the  fact  afforded 
prima  facie  evidence  that  the  assets  would  be  insufficient.  See  Eules  of  1883, 
981,  982. 

In  Re  Photographic  Co.,  23  C.  Div.,  a  company  appealing  from  a  winding-up 
order  was  required  to  give  security  for  costs. 

Upon  the  applicon  of  the  deft,  &c.     By  consent,  order  that  the  pits  Form  348. 
do,  on  or  before  24  Mar.,  1879,  pay  into  the  Union  Bank  of  London,  AiK)tiier. 
Chancery  Lane  Branch,  in  the  joint  names  of  K.  and  B.  [^soJors  of  iM  p.^,^^  ^^  j^g 
and  deff]  the  sum  of  200/.,  as  security  for  the  costs  of  the  deft  in  this  paiJ  into  a 
action  in  case  any  should  be  awarded  to  him.   And  order  that  in  default  *'^"^' 
of  the  pits  making  such  paymt  within  the  time  afsd  this  action  do  stand 
dismissed  out  of  this  Ct  without  further  order,  with  costs  to  be  taxed  l)y 
the  taxing-master  and  pd  by  the  pits  to  the  deft  S.     And  costs  of 
applicon  to  be  costs  in  action.     South  Durham  Co.  v.  Shaw,  Hall,  V.-C, 
1  Mar.,  1879,  B.  374. 


Debexture  AcTIOxVS. 

"  Upon  motion  for  judgmt,  &c.,  and  upon  hearing  counsel  for  the  Form  349. 
defts,  and  upon  reading  the  pit's  statemt  of  claim  and  a  deed  of  cove-  Declaration. 

D  D  2 


404 


JUDGMENTS  AND  OEDERS. 


Form  349.  nant,  dated,  &c.  Declare  that  the  pit  and  the  other  holders  of  mtge 
Accounts.  debeutui'es  of  the  above-named  co  issued  under  and  in  psuance  of  the  sd 
Sale.  deed,  are  entled  to  a  charge  on  all  the  real  and  personal  ppty  of  the  co,  for 

securing  the  repaymt  of  the  principal  monies  and  interest  in  the  sd  nitge 
debentures  mentd.  And  let  the  following  account  lie  taken,  namely,  an 
account  of  what  is  due  to  the  pit  and  the  other  holders  of  mtge  deben- 
tures of  the  CO  on  the  security  of  the  sd  debentures  and  the  sd  deed. 
And  let  the  real  and  personal  ppty  comprised  in  the  sd  deed  and  the 
business  of  the  co  lie  sold  as  a  going  concern  with  the  approbation  of 
the  judge.  And  let  the  money  to  arise  by  such  sale  be  pd  into  bank 
to  the  credit  of  this  action  of  Ferry,  tj-c,  187G,  P.  18!).  And  receiver  and 
injunction  continued,  and  [furl/icr  consideration  adjoitrncd^."  Perry  \on 
hehalf,  rCr.]  v.  Ghdton  Coal  Co.,  Limid  and  others  \_Uie  trustees'],  Mahns, 
V.-C,  July  7,  187C,  B.  1231. 

In  this  case  it  will  be  observed  that  the  debentures  affected  the  whole  pro- 
perty.    See  supra,  p.  258,  and  Forms  562,  5G3,  infra. 


Form  350. 

Order  for 
accounts  and 
inquiries. 


"Upon  motion,  &c.,  for  the  pits,  and  upon  hearing  counsel  for  the 
defts,  and  upon  reading  the  pits'  statemt  of  claim,  and  the  statemt  of 
defence,  and  an  order  dated  the  29th  August,  1876  [/or  receiver  and 
manager  lij  consenf].  Let  the  following  accounts  and  incpiiries  be  taken 
and  made,  that  is  to  say  : 

1.  An  account  of  what  is  due  for  principal  and  interest  to  the  pits,  and 

the  other  holders  of  debentures  issued  l)y  the  deft  co,  distinguish- 
ing the  holders  of  the  A  and  B  debentures  in  the  pleadings  re- 
ferred to. 

2.  An  incpiiry  of  what  the  ppty  comprised  in  and  charged  by  the  A 

and  B  del)entures,  respively,  consists,  and  in  whom  the  same  is 
vested. 

3.  An  inquiry  what  steps  ought  to  be  taken  for  getting  in  such  pts 

(if  any)  of  the  sd  jipty  as  may  be  outstanding. 

4.  An  inquiry  in  what  way  the  ppty  comprised  in  or  charged  Ity  the 

sd  respive  securities  can  best  l)e  realised  for  the  ])enefit  of  the 
pits  and  the  other  debenture  holders,  and  whether  a  sale  or 
mtge,  or  sales  or  mtges,  of  any  and  what  portions  of  the  same  is 
or  are  necessary  or  desirable  for  that  ppose. 

5.  An  inquiry  whether  any  and  what  contracts  have  been  entered 

into,  and  what  steps  ought  to  l)e  taken  in  respect  thereof. 

''And  receiver  and  manager  continued. 

"  And  further  hearing  adjourned  without  requiring  the  action  to  be 
brought  on  for  trial. 

"  And  any  of  the  parties,  including  the  holders  of  any  of  the  sd 
debentures  issued  by  the  deft  co,  are  to  be  at  liberty  to  apply  to  the 
Ct  or  to  the  judge  as  they  may  be  advised."  Dawson  v.  Owen,  IMalins, 
V.-C,  11  Nov.,  187(;,  A.  1778. 


FOEMS.  405 

Upon  motion   for  jiulgmt   this  day  made   l)y  conuscl  for  pit,  and  Form  351. 
upon  hearing  counsel  for  pit  and  for  off.  liq.,  and  u\)on  reading  writ  of  jutirrment 
summons,  dated,  &c.,  and  the  judge  giving  the  sd  off.  liq.  leave  to  defend  where  some 
this  action  in  the  name  of  co,  order  and  adjudge  the  following  inquiries  non-re"istra- 
and  accounts  : —  ■  tion,  official 

1.  An  inquiry  what  nitge  del)entures  have  been  issued  by  the  deft  co,  appointed 
and  to  whom  and  for  what  conson,  and  when  the  same  rcspively  were  receiver  with- 

1  out  furtlicr 

ISSSUeiL  security. 

'J.  An  inquiry  wliicli  of  sd  delicntures  are  still  unpaid  or  subsisting, 
and  who  are  the  present  holders  of  the  same  respively. 

y.  An  inquiry  whether  as  to  any  and  which  of  such  debentures  as  are 
still  unpaid,  the  parlars  required  by  s.  4;-)  of  the  Cos  Act,  1.SG2,  were  not 
duly  entered  in  the  co's  register  of  mtges  as  required  by  the  sd  Act,  and 
if  so,  then  as  to  such  of  sd  del)entures  the  parlars  as  to  which  were  not 
so  entered,  whether  the  holders  thereof  held,  or  at  any  time  and  when 
held,  any  and  what  office  as  a  director,  manager,  or  other  officer  of  co. 

4.  An  account  of  the  principal  monies  and  interest  secured  by  and  due 
under  or  in  respect  of  the  said  mtge  debentures  respively,  and  to  whom 
the  same  are  respively  due. 

5.  An  inquiry  what  was  at  the  date  of  the  winding  up  of  co,  and  what 
ppty  is  now,  comprised  in  such  debentures,  and  whether  the  same  is  now 
subject  to  any  and  what  interest  having  priority  over  the  sd  debentures. 

Order  that  A.  B.,  the  off,  li(p  of  deft  co,  without  gi\dng  further 
security  (he  ha^'ing  given  security  as  off,  liq.),  be  appointed  receiver  on 
behalf  of  the  pit  and  all  other  the  sd  debenture  holders  of  all  the  p})ty  of 
CO  comprised  in  sd  debentures.  Usual  directions.  Liability  to  apply. 
Restall  [_o)i  l)i'halj"\  v.  Citij  of  Lomluii  Co-ojvndirf  Assori'ifioii  Limfd, 
Hall,  y.-C,  7  May,  1881,  B.  1:353. 

It  is  by  no  means  uncommon  to  find  that  s.  4.3  [^swpra,  p.  262]  has  not  been 
duly  observed.  Where  there  is  an  official  liquidator  who  has  given  adequate 
security,  he  is  usually  appointed  receiver  without  further  security. 

Upon  motion  for  judgmt,  &c.,  declare  that  the  i)lt  and  the  other  Form  352. 
holders  of  the  mtge  debentures  of  the  1st  scries  issued  by  the  deft  co.  Declaration. 
are  entled  to  a  first  charge  upon  the  undertaking,  monies,  and  ppty  of  A  and  V> 
the  deft  co  :  and  declare  that  the  holders  of  the  mtge  debeutm-es  of  the  "^^  "^"  "^^'^ 
2nd  series  issued  by  the  deft  co  are  entled  to  a  second  charge  upon  the 
undertaking,  monies,  and  ppty  of  the  deft  co.     Let  an  account  be  taken 
of  what  is  due  from  the  deft  co  to  the  holders  of  the  sd  del^entures  of  the 
1st  and  2nd  series  respively,  for  principal  and  interest  on  their  respive 
debentures.     And  let  the  undertaking,  ppty,  and  effects  of  the  deft  co 
be  sold,  with  the  approbation  of  the  judge,  and  let  the  proceeds  of  sale 
be  pd  into  Ct  to  the  credit  of  Barry,  &c.     And  receivers  and  managers 

be  continued  until  further  order  ;  and  order  that  Messrs. &  , 

and  any  other  members  of  the  committee  of  the  debenture  holders  of  the 

1st  series,  and  JMessrs. & ,  or  any  other  mem])crs  of  the  com- 

n.ittce  of  the  debenture  holders  of  the  2ud  series,  be  at  liberty  to  attend 


406  JUDGMENTS  AND  ORDEES. 

Form  352.  the  proceedings  in  these  actions  (tlieir  costs  as  l^etween  solor  and  ch'ent, 
as  from  the  dates  of  their  respive  appointmts,  heing  costs  in  tliese 
actions),  and  that  the  sd  S.  S.  and  P.  debenture  holders  of  the  1st  series 
be  at  Hbty  to  attend  the  proceedings  at  their  own  expense :  and  order 
that  the  first  al)ove-mentd  action  be  dismissed  as  against  the  defendant 
Bower  with  costs,  to  be  taxed  as  hereinafter  mentd  ;  and  order  that  the 
costs  of  the  respive  pits  and  of  the  above-mentd  respive  committees  of 
Foreign  pro-  debentarc  holders,  and  of  the  sd  deft  Bower,  up  to  and  including 
perty  sale.  judgmt,  be  taxed  by  the  taxing  master  as  between  solor  and  client,  and 
the  taxing-master  is  to  include  in  such  taxation  the  costs  of  the  said 
S.  S.  and  P.  of  the  motion  upon  which  the  order  of  20  Ap.,  1877,  was 
made  :  and  declare  that  all  the  afsd  costs  are  payable  out  of  the  proceeds 
of  the  afsd  sale  ;  but  no  pt  of  the  difference  between  party  and  party 
costs  and  solor  and  client  costs  is  to  be  pd  out  of  the  surplus  monies  (if 
any)  which  would  otherwise  be  payable  to  the  deft  co  out  of  the  pro- 
ceeds of  such  sale.  Adjourn  farther  conson.  Libty  to  apply.  Barri/ 
[o;i  hehalf,  tfcc]  v.  Sao  Pedro  Brazil  Gas  Co.,  and  Upward,  cDr.,  v.  tSamc 
Co.,  M.  K,  20  Ap.,  1877,  A.  855. 

In  this  case  the  property  consisted  almost  entirely  of  land,  with  gasworks 
thereon,  situate  in  South  America.  There  was  no  trust  deed ;  the  debentures 
were  to  bearer,  and  purported  to  charge  the  undertaking,  monies,  and  property 
of  the  company.  See  supra,  pp.  256,  258.  See  also  Forms  241  et  seq.,  and  267, 
supra. 

For  order  of  M.  K.,  declaring  that  debentures  formed  a  first  charge  on  the 
whole  of  the  real  and  personal  property  and  undertaking  of  the  company, 
except  uncalled  capital,  directing  inquiries,  appointing  receiver,  and  ordering 
sale,  see  Bower  v.  Foreign  and  Colonial  Gas  Co.,  13  Nov.,  1877,  A.  2064.  Case 
reported  in  W.  N.  1877,  222.  So,  too,  in  Statham  v.  London  and  Jagersfontein 
Mining  Co.,  Chitty,  J.,  declared  the  debentiires  [no  trust  deed]  a  first  charge 
on  the  company's  mines  [situate  in  South  Africa]  and  other  property.  28  July, 
1883. 

Form  363.  Trusts  of  deed  to  be  carried  into  execution.  Appoint  E.  recei^'er  of 
Z~.  TTT  .  ppty  in  MauiUa.  Libty  to  expend  not  exceeding  400/.  in  preserving- 
sell,  liberty  ppty  :  Order  that  if  necessary  a  proper  instrumt  be  executed  ))y  AV.,  the 
to  debenture  jj^  ^^  ^^  ^q  ^^  j)_  f^^.  q^^  above  pposes,  to  be  settled  by  judge,  pass 
accounts,  &c.  Order  the  ppty  of  co  at  Manilla,  and  all  other  the  real 
and  personal  ppty  of  co  respively  comprised  in  the  first  and  second 
deljentures,  to  be  sold  with  apjiroval  of  judge.  AV.  to  have  conduct  of 
such  sale,  with  libty  to  the  pits  and  all  other  delienturc  holders  and 
other  parties  to  the  action  to  bid  at  sd  sale.  Order  that  the  money  to 
arise  from  the  sale  be  pd  to  sd  W.,  and  that  he  do,  within  fourteen  days 
after  receipt  thereof,  pay  same  (tlic  amount  and  date  of  receipt  to  be 
verified  by  afft)  into  Ct  to  credit  of  action,  "  Proceeds  of  sale  of  mtged 
ppty."  Tax  costs  of  pits  and  defts  as  between  pty  and  pty,  and  as 
between  solor  and  client,  and  tax  the  costs  of  sd  liq  of  and  incidental  to 
sd  sale  to  the  completion  thereof.  Account  of  what  due  to  first  dcl»en- 
ture  holders  and  same  as  to  second  debenture  holders.  Adjourn  further 
conson.  Libty  to  apply.  Smith,  Ward,  &  Co.  (on  behalf  of  themselves 
and  all  other  the  first  mtge  debenture  holders  of  Eastern  Sugar  Co., 


FOEMS.  407 

Limtd),  pits  and  Ihe  co,  and  M.  tt-  Co.  (on  behalf  of  themselves  and  all  Form  353. 
other  second  mtge  debenture  holders  of  sd  co),  defts.     M.  E.  2  Ap. 
1881,  B.  1079. 

In  the  above  case  the  conduct  of  the  sale  was  given  to  the  official  liquidator 
in  order  that  all  parties  might  be  given  liberty  to  bid. 

Upon  the  applicon  of  the  pit,  and  upon  hearing  the  solors  for  the  Form  354. 

applicant  and  for  the  defts,  and  upon  reading  an  afft  of :  Order  Liberty  to  sue 

that  the  applicant  be  at  \\Uj  to  sue  the  above  named  deft,  J.  B.  S.,  on  jj^j^^'jj'^''*  ""^ 
behalf  of  himself  and  the  other  holders  of  the  second  mtge  debentm'es 
of  the  deft  co,  for  the  ppose  of  obtaining  the  judgnit  of  this  Ct  upon  the 
questions  referred  to  in  the  indorsemt  of  the  writ  in  this  action. 

"Where  there  is  a  class  having  adverse  interests  to  the  plaintiff,  an  order  as 
above  should  be  obtained.     See  Fraser  v.  Cooper,  Hall  (^'  Co.,  21  C.  D.  718. 

Upon  motion  for  judgmt,  &c.     Declare  that  the  trusts  of  the  indre  Form  355. 


of  2  March,  1874,  in  the  statemt  of  claim  mentd,  ought  to  be  performed  ry^^^^^  jgj,,|_ 
and  carried  into  execution,  and  order  and  adjudge  the  same  accordingly :  Accouuts. 
and  let,  &c. : 

1.  An  account  of  the  trust  estate  and  effects  comjjrised  in  the  sd 
indre,  come  to  the  hands  of  the  defts  F.  and  R.  or  either  of  them,  or  any 
other  person  or  persons  by  the  order,  or  for  the  use  of  the  sd  defts  or 
either  of  them. 

2.  An  account  of  what  is  due  to  the  pits  and  all  other  holders  of 
debentures  of  deft  co,  dated,  &c.,  for  principal  and  interest  in  respect  of 
their  sd  debentures,  distinguishing  such  of  the  sd  debentm'es  as  are 
overdue  from  such  as  are  outstanding. 

3.  An  account  of  all  monies  supplied  by  the  pits  in  psuance  of  their 
midertaking  contd  in  the  sd  order  of  the  25th  of  May,  187G.  Receivers 
continued.  Any  of  the  parties  to  be  at  libty  to  apply  in  Chambers  as  to  the 
sale  of  the  ppty  comprised  in  the  indre.  Adjom-n,  &c.  Libty  to  appl}^ 
Rodeicald  and  others  [o/i  hcltalf]  v.  Wayne's,  ^c,  Co.,  Limtd,  and  others, 
Mahns,  V.-C,  23  Mar.,  1877,  B.  591. 

For  subseqiient  order  in  the  above  action,  and  in  winding  up  for  sale  of  the 
assets,  subject  to  the  debentures,  for  45,0001.,  with  provisions  as  to  distribution 
•of  the  purchase  money,  costs,  &c.,  and  receivers  to  be  paid  and  dischai'ged 
"  without  passing  their  accounts,"  see  B.  412,  8  March,  1878. 

The  advertisement  for  claims  in  the  above  action  was  at  follows : 

PuRSUA]!«'T  to  a  judgmt  of  the  Chancery  Division  of  the  High  Ct  of  Form  356. 
Justice  made  in  an  action  of  R.  and  others  against  Wayne's,  &c.,  Co,  Advertisement 
Limtd,  and  others,  187G,   R.   91,  the   Holders   of  Debentures  in  for  claims. 
Wayne's,  &c.,  Co,  Limtd,  dated  the  2nd  of  March,  1874,  are,  on  or 

before  the  11th  day  of  June,  1877,  to  send  by  post  prepd  to  U.  of , 

in  the  city  of  London,  the  solor  of  R.  and  R.,  the  trustees  of  a  certain 
indre  dated  the  2ud  March,  1874,  their  Christian  and  surnames, 
addresses,  and  descriptions,  and  the  fuU  parlars  of  the  debentmx'S  held 


408 


JUDGMENTS  AND  OEDEES. 


Form  356.  I^y  them  and  the  sums  claimed  in  respect  thereof,  Or  in  default  thereof 
_  they  will  be  peremptorily  excluded  from  the  benefit  of  the  sd  judgmt. 

Every  person  holding  any  debenture  is  to  produce  the  same  before  the 
Vice-Chancehor  Sir  E.  M.,  at  his  chambers,  situate,  &c.,  on  Tuesday,  the 
19th  day  of  June,  1877,  at  12  o'clock  at  noon,  being  the  time  appointed 
for  adjudicating  on  the  claims. 

Dated  this day  of ,  1S77. 

\_Signed  ly  Cliiof  Clcvl:  and  PMntiffy  Soliciiors.'] 

Advei'tisements  framed  as  above  have  beeu  issued  in  many  cases,  altliougli  it 
seems  doubtful  whether  the  form  is  qviite  reguhir.  See  Kules  of  1883,  809.  In 
some  cases  the  advertisement  has  been  framed  as  follows  : 

"  Pursuant  to  an  Order  of  the  Chancery  Division  of  the  High  Court  of  Jus- 
tice, made  in  an  action  Mowatt  v.  The  London  Co-ojierative  Laundry  Comiiany, 
Limited,  1882,  No.  2118,  the  holders  of  mortgage  debentures  issued  by  the 
defendant  company  under  and  in  pursuance  of  an  indenture  dated  the  11th  day 
of  Aiigust,  1880,  made  between  the  said  company  of  the  one  part,  and  the 
defendants  Sir  A.  F.  and  H.  W.  of  the  other  part,  are  required,  on  or  before 
the  11th  day  of  January,  1883,  to  send  their  names  and  addresses  in  full,  and 
the  amount  claimed  by  them  as  such  debenture  holders  for  principal  and 
interest,  and  the  names  and  addresses  of  their  solicitors,  if  any,  to  J.  W.  S.,  of 

Street,  London,  E.C.,  chartered  accountant,  the  receiver  and  manager 

apjjointed  in  the  said  action,  and  are  to  prodvice  their  debentures  at  the  cham- 
bers of  Vice-Chancellor  Sir  James  Bacon,  in  the  Eoyal  Courts  of  Justice, 
Strand,  in  the  county  of  Middlesex,  on  Friday,  the  19th  day  of  January,  1883, 
at  12  o'clock  noon.     Dated  this  12th  day  of  December,  1882." 


Keceiver  and 
manaffer. 


rorm  357.  Upon  motion,  &c.  Order  that  a  proper  person  l)e  appointed  receiver 
and  manager  on  behalf  of  the  jDlt  and  the  other  above-named  debenture 
holders  until  judgmt  in  this  action  or  until  further  order  of  all  the  ppty 
and  assets  of  the  deft  co  comprised  in  or  subject  to  the  securities  or 
charges  created  by  the  mtge  debentures  issued  by  the  deft  co  to  the  pit 
and  the  sd  other  debentm-e  holders,  and  also  to  manage  and  Avork  the 
mines  and  generally  to  carry  on  the  business  of  the  co  comprised  in  the 
sd  securities.  And  let  such  receiver  and  manager  fi'om  time  to  time 
pass  his  account  as  such  receiver  and  pay  the  balances  which  shall  be 
certified  to  be  due  from  him  or  so  much  thereof  as  shall  be  certified  to 
l)e  proper  to  be  so  pd  into  Ct  to  the  credit  of  this  action,  SiafJtam  v. 
London  Jagersfoniein  Diamond  Mining  Conqmng,  Liniid,  1883,  S.  2604. 
Chitty,  J.,  2  June,  1883. 

In  this  case  the  mines  were  situate  in  South  Africa. 

In  actions  to  enforce  mortgage  debentiires  an  early  application  is  commonly 
made  for  a  receiver,  or  where  there  is  a  business  to  be  carried  on,  for  a  receiver 
and  manager,  and  if  the  company  has  made  default  in  the  payment  of  principal 
or  interest  there  is  generally  but  little  difficulty  in  obtaining  the  appointment. 
See  Hojjkins  v.  Worcester  ^'  Bir.  Canal,  G  Eq.  437  ;  Perry  v.  Oriental  Hotels  Co., 
5  C.  420;  Peek  v.  Trimsaran  Co.,  2  C.  D.  115  ;  Boyle  v.  Bettws  Colliery  Co.,  2  C. 
D.  726 ;  and  infra,  Forms  358  et  sc^. 

Where  a  company  is  being  wound  up  by  the  Court  it  is  generally  considered 
desirable,  if  there  is  to  be  a  receiver  of  any  part  of  the  assets,  that  the  same 
person  should  be  both  receiver  and  liquidator.  Accordingly,  if  when  the  apjili- 
cation  for  a  receiver  is  made,  a  liquidator  has  already  been  appointed,  tlie  liqui- 
dator is  generally  appointed  receiver ;  and  where  a  receiver  has  been  appointed 


FORMS. 


409 


in  the  action  before  the  winding  up,  he  is  sometimes  appointed  liquidator  ^)J   rorm  357. 

the  Court.     If  after  the  appointment  of  a  receiver  a  winding-ui)  order  is  made,  ■ 

the  receiver  (unless  he  is  appointed  liquidator)  is  usually  discharged,  and  the 
liquidator  appointed  in  his  place. 

Thus,  in  Louth  v.  The  Western  of  Canada  Co.  (incidentally  mentioned  in 
17  Eq.  1),  a  receiver  and  manager  was  appointed  (Malins,  V.-C,  31  July,  1873, 
B.  2170),  and  the  same  person  was  subsequently  appointed  official  liquidator. 
The  same  coiu'se  was  adopted  in  Peek  v.  Trimsaran  Co.,  M.  E..,  12  May,  187(J. 
In  D'Oyley  v.  British  Chemical  Co.,  the  provisional  liquidator  was  appointed 
receiver.  Bacon,  V.-C,  29  June,  1876,  A.  1G57.  In  Brown  v.  Wedgwood  Co., 
the  same  person  was  by  a  single  order  appointed  to  both  offices.  Malins,  V.-C, 
2  Aug.,  1875,  B.  2.57.  In  Perry  v.  Oriental  Hotels  Co.,  5  Ch.  120,  the  liquidator 
was  appointed  receiver.  The  same  thing  was  done  in  Wethered.  v.  Yniscediuyn 
Co.,  M.  E..,  Jan.,  1877,  and  in  Slater,  on  behalf,  cfc.,  v.  Darlaston  Steel  Co.,  M.  R.,  ■ 
2  June,  1877,  B.  1396  ;  M.  E.,  Jan.,  1877.  In  Camybell  v.  Compagnie  Generate 
de  Bellegarde,  2  C  D.  181,  an  order  was  made  discharging  the  receiver  and 
appointing  the  liquidator  receiver.  Bacon,  V.-C  And  see  Tottenham  v. 
Swansea  Co.,  W.  N.  188 1-,  p.  ok 

But  where  the  winding  up  is  voluntary  the  practice  is  not  always  followed  ; 
and,  in  any  case,  special  circumstances  as  to  the  presentation  of  the  property 
will  be  taken  into  consideration.     Boyle  v.  Bettws  Colliery  Co.,  2  C  D.  726. 

Moreover,  in  Elkins  v.  Capital  Guarantee  Soc,  where  Chitty,  J.,  had,  after  a 
supervision,  appointed  a  person  who  was  not  the  liquidator  to  be  receiver,  the 
Court  of  AjDpeal  (Cotton  and  Fry,  LL.  J.)  refused  to  disturb  the  appointment, 
being  of  opinion  that  the  judge  had  a  discretion,  and  that  Perry  v.  Oriental 
Hotels  Co.,  ubi  supra,  had  not  established  any  general  pi-inciple. 

"  Upon  motion,  &c.  :  Order  tliat  a  proper  person  be,  upon  his  ii,"ivini;-  Form  358, 
security,  appointed  to  receive  the  rents  and  profits  of  the  defts'  real  ^eceiT^^  T 
estate  (inckide  leaseholds),  and  to  manage  the  defts'  colliery  business,  manager. 
and  get  in  the  outstanding  del)ts  and  effects  l)elonging  to  the  defts. 
And  let  the  defts  deliver  over  to  such  receiver  all  the  stock,  jilant,  ma- 
chinery, and  effects  of  the  defts,  and  all  securities  in  their  hands  for  such 
outstanding  debts  and  effects,  with  all  l)ooks  and  papers  relating  thereto, 
and  in  case  it  shall  be  necessary  to  put  any  of  the  debts  in  suit  for  the 
recovery  thereof,  the  same  to  l)e  done  with  the  approval  of  the  judge, 
and  the  person  so  to  be  appointed  is  to  be  at  liberty  to  make  use  of  the 
names  of  the  pits  and  defts  who  are  to  be  indemnified  therein  out  of  the 
jDremes  comprised  in  the  security  of  the  pits  in  the  sd  afift davit  mcntd, 
and  out  of  the  sd  stock,  plant,  machinery,  and  effects.  And  order  that 
the  i^erson  so  to  l)e  appointed  do  from  time  to  time  pass  his  accounts, 
and  after  retaining  in  his  hands  such  sums  as  shall  be  deemed  sufficient 
to  carry  on  the  sd  collieries,  pay  the  balances  which  shall  be  certified  to 
be  due  from  him,  in  Ct  to  the  credit  of  this  cause  of,  &c.,  and  \_inv('>>t 
and  accumulate^.''  Poelix.  Trimsaran  Co.,  M.  R.,  10  Feb.,  187G,  B,  240  ; 
2  C.  Div.  ]  15.     For  the  subsequent  order  see  B.  GJo. 

For  order  by  consent  appointing  receivers  and  managers  without  security, 
plaintiffs  undertaking  to  supply  funds  not  exceeding  15,000J.  to  carry  on  the 
business,  see  Rodeieald  v.  Wayne's,  ^'c.  Iron  Works,  Malins,  V.-C,  25  May,  1876 ; 
B.  1521.     The  order  is  given  in  Seton,  p.  418. 

Upon  motion,  &c.  :  Appoint  C.  the  prov.  licp  of  the  deft  co  receiver  Form  359. 
and  manager  on  behalf  of  the  pit  and  all  other  the  debenture  holders  of  provi.sional 


410  JUDGMENTS  AND  OEDEES. 

Form  359.  the  deft  co  of  all  the  ppty  and  assets  of  the  deft  co  comprised  in  or  snh- 
Hqiiidatorto "  J^'*-'*^  ^*^  ^^^  Securities  and  charge  created  by  the  debentures  issued  by  the 
lie  receiver.       cleft  CO  to  the  pit  and  the  other  deljenture  holders  as  in  the  sd  affidavit 

mentd  :    And  \^j)ass  accounts,  pay   halances.   Invest  and  accuimiJate}. 

T/OyJcij  V.  British  Chemical  Co.,  Bacon,  Y.-C,  29  June,  187G,  A.  1G57. 

As  to  appointing  liquidator  to  be  receiver",  see  supra,  p.  409. 

Form  360.       Upon  motion,  &c.  :  Appoint  H.,  of ,  the  managing  clerk  of  the 

Clerk  of  com-  deft  CO  without  his  being  required  to  give  security,  and  at  his  present 
pany  to  lie  salary  of  -It.  5.S.  per  week  to  manage  the  real  and  personal  jipty  and 
manager  with-  business  of  the  deft  CO  comprised  in  the  indre  dated,  &c.,  in  the  ^^Tlt  m 
out  security.  tjj]g  actiou  mentd,  and  to  receive  the  rents  and  profits  and  produce  of 
tlic  sd  jDpty  and  business  until  further  order  of  this  Ct  :  And  order  that 

the  defts  The Co,  T.,  and  CI.,  deliver  over  to  the  sd  H.,  as  such 

receiver,  all  securities  in  the  hands  of  them  or  any  of  them,  together 
with  all  books  and  papers  relating  to  the  real  and  personl  ppty  and  busi- 
ness of  the  CO.  \_Ac.counts.  Payment.  Investment.  Accumulation.'] 
Perry  [^on  hehalfof,,<kc.']  v.  Ctutton  Hall  Coal  Co.,  Malins,  V.-C,  22  June, 
187G,  B.  1(;98.     See  Form  349. 

Form  361.  Upon  motion,  &c. :  Let  all  the  hereds  and  premes  comprised  in  the 
Sale  on  motion,  iudres  dated,  &c.,  and  all  the  chattels  and  things  upon  or  connected 
with  such  hereds  and  premes,  and  contd  in  the  sd  indre,  be  sold,  with 
the  approl)ation  of  the  judge  :  And  let  the  proceeds  of  such  sale  be  pd 
into  Ct  to  the  credit  of  this  action,  ttc,  or  otherwise  as  the  judge 
shall  direct  :  And  the  pit  by  his  counsel  adopting  the  agreenit  herein- 
after mentd,  Let  the  agreemt  dated  31  Oct.,  1877,  and  made,  &c.,  for 
the  sale  of  the  sd  hereds  known  as  the  Cwm  estate,  at  the  price  of 
1(1,000/.,  be  carried  into  effect,  and.  Let  the  monies  to  arise  from  the 
sale  of  the  last-mentd  hereds  be  jxl  into  Ct  to  the  credit  of  this  action, 
&c.,  or  otherwise  as  the  judge  shall  direct.  Davis  v.  Ash  win,  Hall, 
V.-C,  27  Nov.,  1877,  A.  3552.  See  also  the  rejiort  in  2C>  W.  E. 
139. 

Under  s.  25  of  the  Conv.  and  Law  of  Property  Act,  1881,  property  can  be  sold 
in  a  foreclosiu'e  action  ujion  an  interlocutox-y  apjilication.  Woolley  v.  Colman, 
21  C.  D.  173. 

Form  362.  Upon  the  applicon  of  the  pits,  and  upon  hearing  the  solors  for  the 
Sale  in  action  aii[)licauts  and  for  the  defts  :  By  consent  order  that  the  lands,  water- 
aud  winding  works,  and  other  ^vorks  of  the  sd  co  situate  in  and  about  the  city  of 
Cadiz,  in  Spain,  or  elsewhere,  with  the  benefit  of  the  concessions  granted 
to  or  for  the  sd  co,  and  the  engines,  plant,  and  machinery  belonging 
thereto,  and  all  other  the  premes  which  by  the  four  indres  all  made 
between  the  sd  co  of  the  one  pt  and  the  pits  of  the  other  pt,  were  granted 
and  assigned  to  the  pits  upon  trusts  for  sale  as  therein  mentd,  together 
with  the  goodwill  of  the  business  and  the  undertaking  of  the  sd  co,  and 


up 


FOEMS.  411 

the  stores  and  materials  belonging  to  the  sd  co  now  in  the  possession  of  Form  362. 
the  pits  at  Cadiz  or  elsewlicre  in  Spain,  be  sold  with  the  apjn'oljation  of 
the  judge  :  And  let  the  monies  to  arise  from  such  sale  be  pd  into  Ct  to 
the  credit  of  this  action  of,  &c,,  as  regards  so  much  of  the  same  as  shall 
arise  from  a  sale  of  the  premes  comprised  in  the  sd  indres  to  an  account 
intituled  "  Debenture  Fund,"  and  as  regards  so  much  of  the  same  as 
shall  arise  from  the  sd  goodwill,  stores,  and  materials,  and  any  other 
parts  of  the  premes  sold  not  comprised  in  the  sd  indres,  to  an  account 
to  be  intituled  "(ieneral  xVssets  :''  and  in  the  event  of  all  the  premes 
being  sold  together  at  one  price,  order  that  the  proportion  of  the  pchase 
monies  to  be  carried  to  such  separate  accounts  be  determined  as  the  judge 
in  chambers  shall  direct,  and  the  def  ts  and  their  solors  Messrs.  B.  under- 
taking to  give  all  proper  facilities  for  completion  within  12  months 
from  the  date  of  this  order,  Declare  that  all  the  costs  now  due  and 
owing  from  the  deft  co  and  the  pits  respively  to  the  sd  Messrs.  B.  both 
fis  solors  for  the  deft  co  and  as  solors  for  the  pits,  are  to  be  treated  as  a 
charge  upon  the  afsd  proceeds  of  the  sale  by  this  order  directed.  And 
order  that  the  same  may  Ije  taxed  by  the  taxing-master  as  between  solor 
and  client,  and,  after  paymt  of  the  costs  of  all  parties  of  and  incident 
to  the  sd  sale,  be  pd  in  pri(jrity  to  all  other  charges  and  jiaymts  out  of 
the  first  monies  Avhich  shall  arise  fi'om  the  sale  hliy  directed,  l)ut  so  that 
the  fund  comprehended  in  the  account  "General  Assets"  be  first  applied 
for  that  purpose.  Chkliohn  v.  Cadiz  WafericorJcs,  Malins,  V.-C,  11  Xov.» 
A.  2102. 

Upon  the  applicon  of  the  jtlt,  &c.  :  Let  the  conditional  contract  dated  Form.  363. 


2  Mar.,  1878,  made  between  the  deft  co  of  the  1st  part,  E.  (tlie  receiver  Approval  of 
and  manager  of  the  ])pty  of  the  sd  co)  of  the  second  pt,  and  the  defts  conditional 
G.  B.  and  J.  E.  of  the  third  pt,  and  the  Blshwell  Coal  d:  Coke  Co.,  g^jg/ 
Limtd,  of  the  4tli  pt,  for  the  sale  to  the  last  mentd  co  at  the  sum  of 
15,000/.  of  the  premes  therein  described,  being  the  leasehold  colleriesof' 
the  deft  co,  together  with  the  fixtures,  fittings,  and  plant,  machinery, 
and  implemts,  and  effects  used  in  connection  with  the  sd  colliery,  directed 
to  be  sold  by  the  judgmt  dated  l.j  June,  1877,  be  carried  into  effect ; 
such   sum    of   15,<)00/.   to   Ijc   pd    and  satisfied    in    the   manner   set 
forth  in  the  sd  contract.     Lee  [_on    livlialf,  cCr.]  v.  Bower,  E.,  and  ihe 
BishweJl  CoUcries,  Limtd,  1877,  L.  lul:.     Mahns,  V.-C,  22  Mar.  1878, 
B.  615. 

Upon  the  apphcon  of  K.  and  B.,  the  trustees  for  the  mtge  debenture  Form  364. 
holders  of  the  above  named  co,  and  upon  hearing    the  solors  for  the  Approval  of 
applicants,  and  for  the  off.  liq,  of  the  sd  co,  and  upon  reading  an  order  contract  for 
dated  2G  June,  1875  [/rindi/it/  ?//;],  an  affidavit,  &c.  :  Let  the  applicants 
be  at  lil)ty  to  carry  out  the  conditional  contract  dated  the  8th  of  May, 
1876,  made  between  the  applicants  of  the  one  pt,  and  the  S.  Co  of  the 
other  pt,  for  the  lease  to  the  sd  S.  Co  of  the  premes  therein  mentd  and 
comprised.     And  let  the  off.  liq.  have  14  days  from  the  date  of  this  order 


412  JUDGMENTS  AND  OEDERS. 

Form  364.  to  remove  all  jipty  from  the  premes  belonging-  to  the  above  named  co 
not  comiM'ised  in  the  mtge  by  the  sd  co  to  the  applicants.  The  Glolic 
New  Patent,  <Cr.,  Cu.,  24  March,  1870.  And  see  Forms  482  ct  seq.y 
infra. 


Form  365. 

Receiver  to 
borrow  2000?. 


U})on  the  applicon  of  the  pit,  and  upon  hearing  the  solors  for  the 
applicant  and  for  the  defts,  and  npou  reading  orders  of  17  May,  1877, 
and  of  18  May,  1877  \_siq)ervision  order'\.  Order  that  the  receivers 
and  managers  of  the  colliery  and  effects  of  the  deft  co  be  at  libty  to 
borrow  a  snm  of  money  not  exceeding  2000/.  at  interest,  at  a  rate  not 
exceeding  8  p.  c.  p.  a.,  to  be  repayable  Avithin  six  years,  as  a  first  charge, 
out  of  the  monies  to  be  realised  by  sale  of  the  ppty  of  tlie  sd  co,  pur- 
suant to  the  sd  order  dated  15  June,  1877,  and  meantime  to  be  a  first 
charge  on  the  sd  ppty  and  effects  of  the  deft  co.  Lee  v.  Bower,  Malins, 
V.-C,  .■)  July,  1877,  V>.  1280. 


Liberty  to 
borrow  from 
debenture 
holders. 


Form  366.  Upon  the  api)licon  of  the  pits,  and  uj)on  hearing,  &c.  Order  that  the 
applicants  be  at  libty,  in  accordance  with  the  resolutions  r.nanimously 
passed  at  a  meeting  of  the  1st  l)ondholders  held  on  the  18th  March,  1878, 
to  liorrow  from  such  of  the  Ist  bondholders  as  may  be  wiUing  to 
subscribe  thereto,  a  sum  of  2(i00/.  or  any  smaller  sum,  for  the  ppose  of 
enabling  the  pits  to  maintain  the  co's  waterworks  at  Cadiz  in  efficiency 
until  the  sale  ordered  by  the  Ct  can  be  carried  out,  subject  however 
to  the  order  made  in  this  action  on  the  12th  Xov.,  1877.  C/rishotm  v. 
Cadiz  Watertrorks,  Malins,  V.-C,  G  Ap.,  1878,  A.  770. 

Compare  these  with  the  orders  in  winding  up,  giving  liberty  to  borrow.  Fornii 
409,  et  seq. 

Form  367.        'L^pon  the  applicon  of  the  })lt,  &c.     Let  D.  the  receiver  and  manager 
^:, be  at  liberty  to  raise  a  sum  not  exceeding  GOdO/.  upon  the  security  of  the 

Liberty  to  •  it,-  ,  ,  .  ^ 

raise  money  to  ppty  and  Undertaking  of  the  co,  for  the  ppose  ot  paying  off  the  j^refe- 


jjay  oft"  prior 
incumbrances. 


rential  claims  of  creditors  in  Germany,  and  of  discharging  the  claims 
of  creditors  who  have  obtained  orders  of  sequestration  of  the  ppty  of 
the  sd  co,  but  the  interest  to  be  pd  on  the  sum  borrowed  is  not  to  exceed 
7  p.  c.  p.  a.  (rordon  [_on  Icliatf,  tfr.]  v.  Cassel  Tramways  Co.,\  Bacon,, 
Y.-C.,  8  July,  187'J,  A.  148G. 

In  accordance  with  the  practice  mentioned  above,  p.  409,  D.  was  by  an  order- 
of  15  July,  1879  [A.  1558],  appointed  official  lic|uidator  of  the  company. 


Form  368. 

Liberty  for 
receiver  to 
appoint 
attorney- 


Upon  the  applicon  of  the  pits  in  the  first  above-named  action,  &c.  Let 
the  sd  S.  and  R.  [^tJie  receivers']  be  at  libty  to  execute  and  send  out  to 
S.  It.  their  agent  at  llio  (jraiide,  in  the  empire  of  Brazil,  the  power  of 
attorney  to  act  for  the  sd  receivers  in  carrying  out  the  arrangemts  for 
the  sale  of  the  ppty  in  the  pleadings  mentd  to  C.  T.  P.,  which  power 
of  attorney  has  been  settled  by  the  judge  as  a  jiropcr  power  of  attorney 
for  that   iJiinse,  and  is  identified  by  the  signature  of  the  chief  clerk  in 


FORMS.  413 

the  margin  thereof,  and  costs  of  applicou  to  be  costs  in  action.     Jkirnj  Form  368. 
V.  Sao  Pedro,  dtc,  Co.,  10  Oct.,  1877,  A.  1770. 

Upon  the  applicon  of  tlic  j^lt  and  ^l.  the  liq.  of  the  co,  receiver  and  Form  369. 

manager  [in  flic  (frfio//].     Let  C.  of in  the  Empire  of  Russia  be  Liberty  to  ap- 

-.ippointed  attorney  and  agent  of  thesd  M.  as  such  receiver,  nianager,  and  ['"'"^r^oii"*^'''' 
b(|.,  as  afsd,  as  from  30  June,  1879,  to  manage  the  business  now  carried  business  in 
on  liy  the  co  in  Russia,  and  to  superintend  and  direct  all  matters  relating  ^"^^i^)  ^^^ 
to  the  ppty  and  assets  of  the  co  situate  there,  and  to  negotiate  for  and 

eflFect  the  sale  of  the works  upon  the  follo^^'iug  terms,  &c. ;  and  let 

M.  as  such,  &c.,  and  the  deft?  B.  and  L.  as  trustees  of  the  deed,  &c., 
execute  a  power  of  attorney  to  the  sd  C.  for  the  pposes  afsd,  which  power 
of  attorney  has  been  settled  and  approved  by  the  judge  as  a  proper  power 
of  atttorney,  as  appears  by  the  memorandum  signed,  &c.  Bell  [o»  hehalf, 
<fr.]  V.  Russui  Copper  Co.,  :sl.  R.,  24  Mar.,  1870,  A.  Ui'j  ;  and  sul)se- 
queut  order,  '>  Nov.,  187'.),  A.  218i». 

V.\)o\\  motion,  &c.     Let  the  receivers  and  managers  continued  in  the  Form  370^ 
consolidated  action  be  at  libty  to  send  such  telegram  as  in  the  loth  Liberty  to 
paragraph  of  the  sd  affidavit  of  H.  mentd,  with  the  variation,  &c. :  and  ^e'"l  telegram, 
costs   of  all   parties   of  this  applicon  to  be  costs  in  the  consolidated 
action.     Barry  v.  Sao  Pedro  Co.,  M.  R.,  l.j  jMar.,  1877,  A.  .j08. 

Upon  the  applicon  of  T.,  &c.     Order  that,  without  prejudice  to  any    Form  371. 
rights  which  the  parties  may  have  against  each  other,  S.  and  \V.,  the  Liberty  to 
receivers,  do  surrender  to  the  appHcant  T.  the  indre  of  lease,  dated,  &c.,  surrender 
and  that  the  sd  receivers  do  deliver  up  possession  to  the  apphcant  T.  of 

premes  comprised  in   the  sd  lease,  and  of  the  cottage  situate  at , 

afsd,  held  by  the  sd  co  as  yearly  tenants  to  the  applicant,  and  costs  of 
pits,  defts,  and  receivers  of  this  applicon  to  Ijo  costs  in  this  action. 
Dawson  \_oa  helialf,  tjv.]  v.  Oiren,  7  Feb.,  1878,  A.  G02. 

Upon  the  applicon  of  the  defts,  &c.     Let  the  defts  0.  J.  S.,  and  the  Form  372. 
deft  CO  be  at  liberty  to  convene  a  meeting  of  the  debenture  holders  of  Meeting  of 
the  deft  co  to  be  held  on  Thursdav  the  8th  Fel).  next,  at  the Hotel,  debenture 

,  ,      -    .       ,         „  ,.      "  1  r>  ,    •    •         ,  1     •         -1        liolders  to  be 

at  2  0  clock  m  the  afternoon,  for  the  ppose  of  ascertannng  then-  wishes  convened. 
with  regard  to  the  sale,  or  otherwise,  of  the  ppty  of  the  sd  co,  and  let 
the  costs  of  this  appHcon  and  incident  thereto  be  costs  in  the  action. 
Dawson  v.  Owen,  22  Jan.,  1877,  A.  83. 

For  order  on  application  to  confirm  conditional  agreement  for  sale  of  assets 
directing  the  application  to  stand  over,  meeting  of  tlie  debenture  holders  to  be 
convened  and  result  stated,  see  Vickerman  v.  Bonvilles  Co.,  Hall,  V.-C,  2  Aug. 
1878,  B.  1602. 

For  order  at  trial  of  action,  whereby  after  reciting,  inter  alia,  that  meeting 
of  debenture  holders  had  been  held,  and  approved  the  scheme  of  compromise  as 
follows,  &c.,  it  was  ordered  that  the  compromise  should  be  carried  into  effect, 
and  that  all  proceedings  in  the  action,  except  such  as  should  be  necessary  for 


414 


JUDGMENTS  AND  OEDEES. 


Form  372.    enforcing  the  order  and  carrying  out  the  compi-omise,  should  be  stayed,  see 

jjQQpg^.  y_  j^gy,  Town  Manure  Co.,  13  Ap.,  1878,  A.  806. 

See  also  "  Arrangements/'  infra. 


Advertisement 
convening 
meeting  of 
del)enture 
holders. 


The  following  are  examples  convening  meetings  : — 

Form  373.  I^'  the  High  Ct  of  Justicp]  : — Chancery  Division.  Vickerman 
r.  The  Boxvilles,  &c'.,  Co,  Li:mtd,  and  others,  and  in  the  matter  of 
the  Cos  Acts,  18G2  and  18G7,  and  in  the  matter  of  The  Bonvilles, 
&('.,  Co,  Lbitd. 

Xotice  is  hhy  given  that  pursuant  to  an  order  of  this  honourable  Ct, 
made  the  2nd  day  of  August,  1878,  a  meeting  of  the  debenture 
HOLDERS  of  the  above  co  will  be  held  at  the  Inns  of  Court  Hotel,  Hol- 
born,  London,  on  Thursday  the  IDtli  day  of  Sept.  instant, at  one  o'clock 
in  the  afternoon,  for  the  ppose  of  considering,  and  (if  approved)  to 
sanction  the  acceptance  of  a  conditional  agreemt,  dated  the  11th  of  July 
last,  for  the  pchase  of  the  works  and  ppty  of  the  co  comprised  in  the 
parlars  of  sale  dated  the  17th  of  May  last,  when  the  works  were  offered 
for  sale  by  auction,  and  subject  to  the  conditions  attached  to  the  parlars 
of  sale. 

Dated  the  10th  Sept.,  187G. 

H.  B.,  Receiver,  Manager,  and  Liq. 


Form  374.       In  the  High  Ct,  &c. 

Another.  ^^1  persons  holding  debentures  of   the  Industrial  Coal  &  Iron  Co, 

Limtd,  either  of  class  A  or  class  B,  are  hby  specially  invited  to  attend 
a  3IEETING  convened  l)y  the  trustees  for  the  debenture  holders,  with 
the  sanction  of  his  lordship  the  V.-C.  Sir  R.  M.,  in  the  above  action, 
dated  the  22nd  of  Jan.  instant,  to  be  held  at  the  Cannon  Street  Hotel, 
Cannon  Street,  in  the  city  of  London,  on  Thursday,  the  8th  of  Felx, 
1877,  at  2  o'clock  in  the  afternoon,  precise  time,  in  order  to  consider  and 
decide  upon  the  scheme  and  plan  to  be  submitted  to  the  Judge  for  dealing- 
with  realisation  and  disposal  of  the  co's  ppty,  as  directed  l;)y  the  decree  in 
the  above  action. 

Dated  the  24th  Jan.,  1877. 

P.  &  H.,  of ,  Solors  for  the  sd  Trustees. 


Form  375. 

ConsoUdation 
order. 


In  the  High  Ct  of  .Justice  : — Chancery  Division.  Mr.  Justice 
F.  In  the  matter  of  the  Companies  Acts  1802  &  18(i7,  and  in  the 
matter  of  The  Canadian  Oil  Works  Corroration,  Limtd,  Taylor  \.  The 
Canadian  Oil  Worls  Corporation,  Limtd.  Notice  is  hby  given  that  the 
Honourable  Mr.  Justice  Fry  has  directed  a  :meeting  of  the  creditors 
and  DEiiENTURE  HOLDERS  in  the  above  named  co,  who  have  proved  their 
debts  in  the  winding  up  thereof  or  tlieir  del)enturcs  in  the  above  mentd 
suit,  to  be  sunnnoned  pursuant  to  the  al)ove  statute  for  the  ppose  of 
ascertaining  their  wishes  as  to  certain  matters  relating  to  the  winding 
up  of  the  sd  CO,  and  that  such  meeting  will  be  held  on  Tuesday  the  17th 
January,  1882,  at  three  o'clock  in  the  afternoon  precisely,  at  the  London 


FORMS. 


415 


Tavern,  No.  ')4-,  Fenchurch  Street,  in  the  City  of  London,  at  -whieh  time  Form  375- 
and  place  all  the  above  mentd  creditors  and  debenture  holders  of  the  sd 
CO  are  requested  to  attend.  The  sd  judge  has  appointed  Mr.  Samuel 
Lowell  Price,  of  Xo.  44,  Gresham  Street,  in  the  City  of  London,  char- 
tered accountant,  off.  liq.  of  tlie  sd  co,  to  act  as  chairman  of  such  meeting. 
Dated  this  23rd  of  Deeenil)er,  18.S1. 

,  Off.  Li(i. 

,  Solors  for  the  Off".  Liq. 


In  pm-suance,  Arc,  I  hby  certify  that  the  result  of  the  account  and  Form  376. 
inquiry  which  has  been  taken  and  made  in  psuance  of  the  judgmt  certificate  of 
herein,  dated  4  March,  1881,  is  as  follows  : —  amount  due 

The  pits  and  defts  have  attended  me  by  their  respective  solors.  holders'^  "^^ 

1.  In  the  ;>rd  column  of  the  schedule  hto  are  set  forth  the  parlars  of 
the  principal  and  interest  monies  respively  secured  by  and  due  under  or 

in  respect  of  the debentures  of  KM)/,  each,  issued  l:)y  the  deft  co  in 

the  sd  judgmt  mentd. 

'2.  The  present  bearers  of  sd  debentures  are  the  several  persons  or  firms 
whose  names  and  descriptions  are  set  forth  in  the  2nd  column  of 
schedule. 

The  evidence  produced  consists  of  the  screral  aff'ts  of,  &c.,  and  the  sd 
several  debentures. 

Schedule. 


Amount  of  princiiiid 

Number  of 

Sei-JMl 

Xaiiies  ami  rtescriptinns  of  present  bearers 

and  interest  seciu'ed 

debentiu'es  j        Total 

Xcl. 

of  debentures. 

and  due  untier 

and  tlieir    'amount  due. 

debentures. 

munbers. 
20 

'     1 

To  the  plaintiff  0.  of ,  nici-cliant. 

£2000 

numljered, 

Intei'est  at  C  jier  rent.   i>er  annum, 

&c. 

from  Lst  Julv,  1879,  to  12th  April. 

1881,  the  date  of  certificate,  less 

£      s.  if. 

income  tax. 

202  17     9 

2202  17   9 

&c. 

&c. 

&c. 

&c. 

&c. 

1 

Op2)enJmm  v.  ^Vrech  Recovcru  Co. 


Upon  the  applicon  of  the  receiver  in  this  action,  and  liq  in  the  Form  377. 
winding  up,  and,  &c.     Order  that  the  applicant  l)e  at  libty  to  pay  to  j)},^^^^^^^ 
each  liolder  of  debentures  whose  name  is  stated  in  the  2nd  column  of  tlebenture 
the  1st  pt  of  the  schedule  to  the  chief  clerk's  certificate  a  dividend  of  r,/.  ^°^'^^'"-'*- 
in  respect  of  each  lOo/.  del)enture  held  by  him,  out  of  the  monies  in  his 
hands  as  such  recei^Tr  and  liq.     Limlcrt  \_on  heJmlf,  <Scc.']  v.  Mineral 
Hill,  ci-c,  Co.,  27  :Mar.,  1877,  B.  CA\H. 

Upon  the  peton  of  L.  of ,  the  above-named  pit,  on  the  17  Dec,  Form  378. 

1878,  preferred  unto  this  Ct,  and  upon,  &c.     Order  that  notwithstaud-  Distribution 
ing  the  sd  order  of  the  6  August,  1878,  the  sd  H.  be  at  libty  to  apply  of  cash. 


416  JUDGMENTS  AND  OEDEES. 

Form  378-  tlie  sum  of  4557/.  14.9.  9^/.  now  on  deposit  in  the  Royal  Bank  of  Scot- 
land, and  any  interest  which  may  have  accrued  thereon,  in  the  manner 
provided  l^y  the  resolutions  j)assed  at  a  meeting-  of  the  debenture-holders 
of  the  sd  CO  on  the  2nd  of  October,  1878,  iu  the  peton  mentd  :  And  let 
all  further  proceedings  in  this  action  be  staj'-ed :  And  let  the  receiver  be 
discharged.  L' Amy  [on  hclialf,  (j-c]  v.  Impcrud  Chomkal  Co.,  2o  Bee, 
1.S78,  B.  2205. 

Form  379.  Upon  the  applicon  of  the  pit,  and  upon  hearing  the  solors  for  the  ap- 
Dividend  to  plicant,  and  for  E.,  the  pchaser  of  the  ppty  of  the  co  sold  in  this  suit 
holdeil"^^  and  npon  reading,  &c.  Let,  out  of  the  sum  of  5G72/.  lis.  (kl.,  cash  in 
Ct  to  the  credit  of  this  cause,  &o.,  the  several  sums  mentd  in  the  3rd 
column  of  the  schedule,  making  together  2G05/.  10s.  Gd.,  be  pd  to  the 
several  persons  whose  names  are  set  opposite  the  same  in  the  1st  colmnu 
thereof.  Schedule  showing  payees,  nature  of  paymt,  and  sums.  MilUgan 
lun  hchalf]  v.  HdUn  SuJjjhur  Co.,  M.  Pt.,  8  May,  1877,  B.  1272. 

Form  380.  Further  conson.  Order  that  snl)sequent  interest  be  computed  on  the 
Order  to  pay  several  j^rincipal  sums  in  the  Srd  column  of  schedule  to  chief  clerk's 
(e  euiues.  Q(-.^.j;ifj(-.rj|-g  mentd  to  be  secured  by  and  due  under  the  del)entures  in 
same  schedule  mentd  at  the  rate  of  G  p.  c.  p.  a.  fi-om  13  April,  1881,  the 
date  of  sd  certificate,  to  tlie  day  of  paymt  to  be  ascertained  by  aflft. 
Order  that  the  amounts  of  such  subsequent  interest,  and  the  total 
amounts  due  to  the  several  bearers  of  debentures  in  sd  schedule  mentd 
for  principal  and  interest  in  respect  of  such  del)entures,  be  verified  by 
aff't.  Order  that  out  of  the  4500/.  casli  in  Ct  to  the  credit  of,  &c.,  the 
several  amounts  which  shall  by  such  afft  appear  to  be  due  to  the  several 
bearers  of  debentures  named  in  the  2nd  column  of  schedule  to  sd  certi- 
ficate for  jirincipal  and  interest  be  pd  to  such  bearers  of  debentures 
respively.  Tax  the  costs  of  the  pit  and  defts  of  this  action,  including  in 
the  costs  of  pit  his  costs  of  and  relating  to  a])plicou  for  libty  to 
commence  this  action.     Order  that  out  of  the  residue  of  sd  cash  after 

paymts  afsd  sucli  costs  be  pd  as  follows,  viz.,  the  costs  of  pit  to  W. 

and  the  costs  of  deft  co  to .     Order  that  the  ultimate  residue  of  sd 

cash  1)0  pd  to  E.,  the  receiver  in  the  action.  Discharge  the  sd  R.  Order 
him  to  pass  final  account  and  retain  balance  that  shall  be  certified  due 
from  him  as  off.  liq.  of  co,  and  thereupon  vacate  recognisance.  Libty  to 
a]iply.  Oppcnltohn  \_oii  he]ialf'\  v.  Wreclc  Recovery  Co.  Fry,  J.,  20  April, 
1881,  B.  120G. 

For  order  on  further  consideration  for  the  payment  of  amount  due  to  bearers 
of  debentures,  and  for  delivery  uj)  of  debentures  with  receipts,  see  Barry  v. 
fiao  Pedro  Co.,  M.  E.,  1  Aug.,  1878,  A.  2787,  Ptd. 


WINDING-UP. 


Compulsory  winding-up 
Preliminary  forms . 
Provisional  liquidators 
Miscellaneous  foi-ms 
Appointment  of  official  liq. 
Seciu'ity  of  official  liquidator 
Accounts  of  official  liquidator 
Remuneration   of   official    liqi 

dator         .... 
Removal  of  official  liquidator 
Delivery  of  books    . 
Carrying  on  the  biisiness     . 
Borrowing        .         .         .         , 
Sales  of  property 
Miscellaneous      authorities 

official  liquidator 
Contributories 
Creditors      .... 
Sectu'ed  creditors     . 
Attending  proceedings 


PAGE 

PAOB 

.       417 

Service     ...         .         .         .     . 

485 

.    417 

BUls 

488 

.     428 

Restraining  and  staying  actions 

.     431 

and  proceedings  .         .         .     . 

489 

.     432 

Transfer 

493 

.     434 

Liberty  to  bring  actions  . 

494 

.     439 

Discovery    and     inspection     of 

Lui- 

documents        .... 

498 

.     441 

Cross-examination            .         .     . 

501 

.     447 

Special  examiners 

501 

.     448 

Examination  under  section  115  . 

504 

.     449 

Proceedings  under  section  165    . 

507 

.     .     451 

Compromise 

510 

.     452 

Meetings      ..... 

515 

to 

Official  liquidator's  costs          .     . 

516 

.     456 

Appeals 

519 

.     461 

Staying  winding-uj)         .         .     . 

522 

.     468 

Dissolution  ..... 

542 

.     .     479 

Voluntary  winding-iip    .         .     . 

527 

.     4S3 

Winding  up  imder  supervision  . 

546 

INTRODUCTORY  NOTE. 

Between  fifty  and  sixty  useful  forms  relating  to  winding-up  are 
given  in  the  Schedule  to  the  General  Order  of  11  Nov.  18G2  ;  hut  in 
the  winding-up  of  a  company  numerous  other  forms  are  frequently  re- 
quired, and  accordingly  the  following  collection  of  orders,  summonses, 
affidavits,  and  other  forms  is  submitted  by  way  of  supplement. 


FORMS. 

In  this  division  of  the  work  the  rules  contained  in  the  General  Order  of  11  Nov. 
1862  have  been  referred  to  thus — "  Rule  5 ;  "  and.  the  forms  given  in  the  schedule 
to  such  order  have  been  referred  to  thus — "  Form  6  in  schedule  to  Rules."  The 
Rules  of  the  Sui^reme  Court,  1883,  are  referred  to  as  the  "Rules  of  1883,"  or  thus, 
"  Order         ,  r. 

Common  Forms. 
In  the  High  Ct  of  Justice. 
Chancery  Division. 

Mr.  Justice . 

In  the  matter  of  the  Cos  Acts,  1862  and  1867. 

And  in  the  matter  of  The Co,  Limtd. 

Let  all  parties  concerned  attend  the  Judge  in  chambers  on day 

the day  of ,  188 — ,  at  o'clock  in  the  noon,  on  the 

E   E 


Form  381. 

Fomial  parts 
of  ordinary 
summons. 


418 


WINDING-UP. 


Form  381.  hearing  of  an  applicon  on  the  pt  of  [state  on  whose  lehalf  the  appli- 
-^  con  is  made ;  e.g.,  " the  petr  in  these  matters'''  or  " tJte  off.  liq.  of  the 

ahove-named  co"  or  ".4.  /.'.,  a  creditor  of  the  ahore-namcd  ro "], 
that  \_.state  the  nature  of  the  ajiplicon'],  and  \_as  to  costs,  c.cj.,  "  tliat  the 
costs  of  this  opplicon  may  lie  costs  in  the  ivinding-iip,''  or  "  that  the  off.  licp 
may  he  ordered  to  pay  the  costs  of  and  incidental  to  this  applicon  "]. 

Dated  this day  of ,  188—. 

This  summons  was  taken  out  by  A.,  of ,  in  the  county  of  Middle- 
sex, solor  for  the  apphcant. 

To  [insert  the  names  of  the  soJors  or  ^^crsons  {if  any)  to  le  served 
with  the  summons;  e.g.,  ''the  off.  liq.  of  the  ahove-7iamed  co  and  Mr. 
,  his  so/o?'"]. 

As  to  this  form  see  Eules  of  1883,  rule  743.  As  to  the  right  a  party  has  to 
have  the  summons  adjourned  to  be  heard  by  the  Judge,  see  Ui:>ton  v.  Brovm,  20 
C.  D.  731 ;  Smith  v.  Wells,  22  C.  Div.  5. 


Formal  parts 
of  notice  of 
motion. 


Form  382.       In  the  High  Ct  of  Justice. 
Chancery  Division. 
[Name  of  Judge.'] 

In  tlie  matter  [as  in  Form  381]. 
Take   notice   that  the  Ct  will  be   moved  before   his  lordship,    Mr. 

Justice ,  on day,  the day  of ,  188 — . 

[If  the  motion  is  to  he  heard  at  a  specially  appointed  hour,  state  the 
fact ;  as :]  at  eleven  of  the  clock  in  the  forenoon  of  that  day,  or  so  soon 
thereafter  as  counsel  can  be  heard, 

[Here  state  on  whose  hehalf  the  motion  is  to  he  made ;  as .-]  by  Mr.  A. 
as  counsel  on  the  pt  of  the  oft",  liq.  of  the  above-named  co,  that  [here 
state  the  ohject  of  the  motion']. 

[If  special  leave  has  heen  ohtained  to  give  the  notice  for  a  non-motion 
day  or  for  a  motion  day  short  of  the  ordinary  two  clear  days  after  service, 
or  for  a  special  hour  and  place,  state  the  fact ;  as  .-]  And  take  also  notice 
that  special  leave  [see,  as  to  necessity  of  mentioning  this,  Dawson  v. 
Beeson,  22  C.  Div.  504]  to  give  this  notice  for  the  day  (and  hour  and 

place)  afsd  has  been  obtained  from  his  lordship  Mr.  Justice [or  as 

the  case  may  hc']. 

Dated  this day  of ,  188—. 

B.  C,  of , 

Solor  for  the  oft",  liq.  of  the  above-named  co  [or  as 
the  case  may  he]. 
To  [insert  names  of  solicitors  or  parties  to  whom  the  notice  is  to  he 
given:].     8ec  Rules  of  1883,  App.  B.,  No.  18. 


Form  383. 

Formal  parts 
of  affidavit. 


In  the  High  Ct  of  Justice, 
Chancery  Division. 

In  the  matter,  &c.  [As  in  Form  381]. 


ADVEETISING    PETITION.  419 

I,  A.  B.,  of  [Jiere  insert  pJacr,  residence,  and  description  or  addition']     Form  383. 
make  oath  and  say  as  follows  : — 

1.  On  the day  of ,  I,  &c. 

\^Here  set  out  the  statemts.'] 

Sworn,  &e. 

This  afft  is  filed  on  the  pt  and  behalf  f»f  tlie  ofP.  li<i.  of  the  above- 
named  CO  [or  as  the  case  maij  he]. 

Eule  523  requires  that  affidavits  shall  be  confined  to  such  facts  as  the  witness 
is  able  of  his  own  knowledge  to  prove,  except  on  interlocutory  motions  [appli- 
cations. Re,  New  Callao,  W.  N.  1882,  60 ;  30  W.  E.  647  ;  47  L.  T.  175]  on  which 
statements  as  to  his  belief  with  the  grounds  thereof  may  be  admitted.  An 
affidavit  of  facts  to  the  best  of  the  defendant's  knowledge,  information,  and 
belief,  without  stating  the  grounds,  is  worthless.  Quartz  Hill  Co.,  20  C.  Div. 
508.  Evidence  on  information  and  belief  is  not  admissible  on  applications 
which  finally  settle  the  rights  of  the  parties.     Gilbert  v.  Endecni,  9  C.  D.  259. 


In  the  High  Ct  of  Justice. — Chancery  Di^•ision.  Form  384. 


In  the  matter  of  the  Cos  Acts,  18G2  and  18()7.     And  in  the  matter  Advertisement 

of  the  Co,  Limtd.  of  presentatioa 

Xotice  is  hby  given  that  a  peton  for  the  winding-up  of  the  above- 
named  CO  by  [_or,  subject  to  the  supervision  of]  Her  Majesty's  High  Ct 

of  Justice,  Chancery  Division,  was,  on  the  ,  presented  to  the  High 

Ct  of  Justice  by  the  sd  co  [or  by  A.  B.,  of  ,  a  creditor,  or,  con- 

triby  of  the  sd  co,  or,  as  the  case  may  he].  And  that  the  sd  peton 
is  directed  to  be  heard  before  His  Lordship  the  Honourable  Mr.  Justice 

,  on  [Friday,]  the •  day  of  ,  18 — ;   and  any   creditor  or 

contriby  of  the  sd  co  desirous  to  oppose  the  making  of  an  order  for  the 
winding-up  of  the  sd  co  under  the  above  Acts  should  appear  at  the  time 
of  hearing  by  himself  or  his  counsel  for  that  ppose ;  and  a  copy  of  the 
peton  will  be  furnished  to  any  creditor  or  contriby  of  the  sd  co  requiring 
the  same  by  the  undersigned  on  paymt  of  the  regulated  charge  for  the 

same.     Dated  this day  of . 

C.  &  D.,  of [agents  for  E.  &  F.,  of  ], 

Solors  for  the  petr. 

For  insertion  in  the  Gazette  the  advertisement  must  be  signed  by  the  solicitor 
for  the  petitioner  and  witnessed,  and  the  petition  with  the  fiat  of  the  Court 
must  be  produced. 

The  appearance  of  the  advertisement  gives  priority.  Trades  Bank,  W.  N. 
1877,  268  ;  see  Storforth  Lane  Colliery  Co.,  10  C.  D.  ±87,  as  to  priority  between 
petitions  advertised  in  same  Gazette. 

Where  the  petition  is  to  be  heard  in  vacation  the  advertisement  will  state  "  that 
by  special  leave  granted  by  [name  ofjudge~\,  the  said  petition  is  directed  to  be 

heard  before  Mr.  Justice ,  or  such  other  judge  as  may  be  sitting  as  Vacation 

Judge. 

See  Rule  2,  as  to  advertising  a  winding-up  petition. 

The  iitmost  care  should  be  taken  that  the  advertisement  is  correctly  expressed 
and  duly  advertised. 

Any  error  in  the  title,  name,  day,  or  place  for  hearing,  may  render  the  adver- 
tisement useless.     In  re  City  and  County  Bank,  2  Ch.  477  ;  Marezzo  Marble  Co., 


420 


WINDING-UP. 


Form  384.    W.  N.  1874,  9 ;  22  W.  E.  248  ;  Manure  Co.,  W.  N.  1876,  234.     As  to  restraining 

—  advertisements,  see  siqwa.  Form  345,  and  ivfra.  Form  656. 

For  advertisement  of  winding-up  order,  see  infra.  Form  423. 


Form  385. 

Affidavit  in 
support  of 
petition. 


I,  A.  B.,  &c.,  make  oath  and  say,  that  such  of  the  statemts  in  the 
peton  now  produced  and  shown  to  me,  and  marked  with  the  letter  A., 
as  relate  to  my  own  acts  and  deeds,  are  true,  and  such  of  the  sd  statemts 
as  relate  to  the  acts  and  deeds  of  any  other  person  or  persons,  I  believe 
to  be  true. 

Sworn,  &c. 

See  Eule  4  as  to  this  affidavit,  and  Cases,  suina,  p.  419. 

Where  there  is  likely  to  be  opposition  to  the  petition,  it  is  generally  desirable 
to  file  further  evidence  supporting  the  case  made  by  the  petition  and  meeting 
any  affidavits  filed  in  oj^position.  Where  the  petition  is  not  by  the  company  an 
affidavit  of  service  may  be  desirable.  See  Form  387.  But  if  the  company  does 
not  appear  the  order  is  sometimes  made  subject  to  the  production  of  an  affidavit 
as  to  service  to  the  registrar. 

As  to  cross-examining  witnesses  on  their  affidavits,  see  infra.  Form  620. 

As  to  evidence  in  opposition  : 

Evidence  should  be  filed  contradicting,  if  possible,  the  petitioner's  evidence,, 
or  showing  that  an  order  ought  not  to  be  made,  e.g.,  because  the  majority  of  the 
creditors  or  members  desire  the  adoption  of  some  other  course.  If  necessary, 
the  petitioner  and  others  making  affidavits  should  be  cross-examined  thereon. 

Form  386.       Upon  motion,  &c.,  for  A.,  who  alleged  that  the  sd  A.,  on  1  Ap.,  187G, 

" '  presented  his  peton  in  these  matters  to  this  Ct,  but  omitted  to  file  his 

iDg  time  to  file  afft  in  support  of  such  peton  within  the  time  limtd  in  that  behalf  by 

affidavit.  j^j^g  general  order  of  this  Ct,  and  upon  reading  an  aflft  of  E.  L.,  filed  the 

11  Oct.,  1876,  let  the  sd  A.  be  at  libty  to  file  his  afft  in  support  of  the 

sd  peton  notwithstanding  the  time  limtd  for  that  ppose  has  expired. 

Civil,  d'C,  Supply  Association,  M.  E.,  11  Ap.,  187G.    A.  723. 

Eule  4  provides  that  every  petition  for  the  ^vinding-up  of  any  company  l)y 
the  Coui-t,  or  subject  to  the  supervision  of  the  Court,  shall  be  verified  by  an 
affidavit  as  above.  Such  affidavit  is  to  be  made  by  the  petitioner,  or  by  one  of  the 
petitioners,  if  more  than  one,  or,  in  case  the  petition  is  presented  by  the  com- 
pany, by  some  director,  secretary,  or  other  principal  officer  thereof;  and  is  to  be 
sworn  after  and  filed  within  four  days  after  the  petition  is  presented,  and  such 
affidavit  is  to  be  sufficient  lyrimd  facie  evidence  of  the  statements  in  the  petition. 

The  four  days  limited  by  the  above  Eule  for  filing  the  affidavit  verifying  the 
petition  may,  under  Eule  73,  be  extended  by  the  Court.  Re  Patent  Screived  Boot 
and  Shoe  Co.,  32  Beav.  142  ;  Be  Western  Benefit  Sac.,  33  Beav.  368 ;  32  L.  J.  Ch. 
179  ;  Re  Fortune  Copi:)er,  10  Eq.  390. 

The  order  is  commonly  obtained  on  motion  ex  j^arte  before  the  hearing,  and 
very  commonly  without  any  sworn  evidence  being  required.  The  order  need 
not  now  be  drawn  up,  but  notice  must  be  given  to  the  respondents.  See  Order 
LII.,  r.  14. 


Form  387.       1.  On  the 


Affidavit  of 
service. 


day  of  I  served  the  above-named  co  with  a 

-  of to  this  Honourable 

with  the  order  thereon  of  this  Ct,  dated  the  day  of  , 


peton  preferred  in  these  matters  by 
Ct 


whereby  it  was  ordered  that  all  parties  concerned  should  attend  thereon 

on  the day  of ,  and  that  notice  thereof  should  be  given  forth- 

Avith,  by  delivering  a  true  copy  of  the  sd  petition  and  order  to  A.  B.,  the 


SERVICE    OF    PETITION.  421 

secretary  of  the.sd  co,  at  the  registered  office  of  the  sd  co,  situate  Form  387. 

jit ,  and  at  the  same  time  producing  and  showing  to  the  sd  A.  B. 

the  sd  original  jieton  with  the  sd  order  thereon. 
Sworn,  &c. 

Where  a  special  order  as  to  service  liaif  been  made  [in/r«,  Forms  388,  et  seq.'], 
the  form  of  affidavit  must  be  varied  accordingly. 

As  to  service  of  winding-up  petition,  see  Eule  3.  Where  the  petition  cannot 
be  served  as  thereby  provided,  apjslication  for  an  order  as  to  service  should  be 
made  to  the  Court  by  motion  ex  parte,  supported  by  an  afiidavit  as  to  the  facts. 
See  Re  London  and  Westminster  Co.,  12  W.  K.  6 ;  In  re  National  Credit,  S^c,  Co., 
11  W.  E,  IGl  ;  Fortune  Co.,  10  Eq.  390  ;  In  re  Manchester  Co.,  Ibid.  9  Eq.  644  ; 
Vron  Slate  Co.,  W.  N.  1878,  70. 

The  following  are  some  exami>les  of  orders  as  to  service  of  winding-up 
petitions. 

Upon  motion,  &c.,  for  H.,  who  alleged  that  the  sd  H.  on  23  May,  Form  388. 
1878,  preferred  his  peton  in  these  matters  to  this  Ct  for  the  winding  office  closed.  ~ 
up  the  above-named  co,  and  that  the  registered  office  of  the  sd  co  was 
closed  as  by  a  joint  afft  of  B.  &  P.,  filed,  &c.,  appears,  and  upon  reading 
the  sd  afft,  &c.  Let  service  of  a  copy  of  the  sd  peton  having  this  Ct's 
order  thereon  that  all  parties  concerned  should  attend  this  Ct  on  the  sd 
peton  on  7  June,  1878,  together  with  a  copy  of  this  order  on  S.  and 
B.,  two  of  the  directors  of  the  sd  co,  be  deemed  good  service  of  the  sd 
peton  on  the  sd  co.  Star  RoUing  Mills  Co.,  ZmW.,  Malins,  V.-C, 
30  May,  1878,  917  B. 

The  above  is  the  Form  in  which  the  order  is  very  commonly  made,  but  ac- 
cording to  the  form  given  in  Seton,  p.  162 1,  it  should  run  : — "  That  service  of 
the  said  petition  having,  &c.,  by  delivering  a  copy  thereof,  together  with  a  copy 
of  this  order  to of at be  deemed,  &c." 

Upon  motion,  &c.,  and  it  appearing  that  the  registered  office  of  co.  Form  389. 


which  was  situate  at,  &c.,  has  been  pulled  down.     Let  service  of  the  sd  office  de- 
peton  on  the  sd  co  by  serving  a  cojjy  of  the  same  together  with  a  copy  molished. 

of  this  order  on  B.,  the  secretary  of  the  sd  co  at ,  and  on  one  of  the 

firm  of  ^lessrs.  M.  &  ]\L  of  the  same  place,  the  solors  of  the  sd  co,  l-)e 
deemed  good  service  of  the  sd  peton.  Vroii  State  Co.,  M.  E,.,  27  Feb., 
1878,  B.  341  ;  W.  K  1878,  70. 

Upon  motion,  &c.  Let  service  of  the  sd  peton  be  effected  by  leaving  Form  390. 
a  copy  thereof  at  the  last  registered  office  of  co,  and  if  such  office  be  ^^^ 
closed,  then  by  advertising  the  same  in  the  London  Gazette,  and  two 
London  daily  morning  newspapers,  as  provided  by  the  general  order  of 
11  Nov.,  18G2,  made  in  psuance  of  the  Cos  Act,  1862,  be  deemed  good 
service  of  the  sd  peton  on  the  sd  co.  Investors^  Trust  Co.,  Lopes,  J., 
for  M.  R.,  IG  August,  1877.     A.  173.5. 

On  the  pt  of  the  above-named  co  that  tlie  petr,  who  is  resident  at   Form  391. 


-,  in  the  kingdom  of ,  out  of  the  jurisdiction  of  the  Ct,  may  Summons  for 


422 
Form  391.  be  ordered  within 


security  for 
costs. 


WINDING-UP. 

-  days  to  give  security  in  the  sum  of 1.  to 

answer  costs  in  these  matters,  and  that  in  the  meantime  all  proceedings 
in  these  matters  may  be  stayed. 

Where  the  petitioner  is  resident  out  of  the  jurisdiction,  application  may  be 
made  for  security  for  costs ;  East  Llamgynog  Lead  Co.,  W.  N.  1875,  81.  The 
amount  is  in  the  discretion  of  the  Court.  Rules  of  Sup.  Court,  Order  LV.,  r.  2. 
See  also  supra.  Form  3-17. 


Form  392.       l^pon  motion,  &c.     Let  the  petr  be  at  libty  to  amend  the  sd  peton  as 

~,      7~.         he  may  be  advised  :  And  order  that  the  sd  petr  do  have  four  days  from 
Order  givmg  •'  x  ,j 

liberty  to         the  date  of  this  order  within  which  to  file  his  afi't  verifying  the  statemts 
amend.  ^^^  ^^ie  amended  peton.     Home  v.  Foreign  Gas  Co.,  M.  E.,  4  July,  1877. 

A.  1297. 


Form  393.  Upon  the  peton  of  L.,  &c.  Let  the  peton  stand  over  until  the  17  May, 
1878,  and  let  the  petr  be  at  libty  to  amend  the  sd  peton  generally  as  he 
may  be  advised.  General  Meat,  dx.,  Co.,  Malins,  V.-C,  10  May,  1878. 
A.  940. 


Another. 


Under  Ord.  XXVII.,  rule  6,  the  Court  may  give  liberty  to  amend  any  plead- 
ing- (which  inchides  a  petition,  Judicature  Act,  1873,  s.  100). 

And  where  any  trifling  slip  has  been  made,  amendment  is  permitted  as  of 
course,  but  liberty  to  amend  is  sometimes  given,  even  where  the  petition  is 
demurrable.  See  Buckley,  202 ;  Rica  Gold  Co.,  11  C.  Div.  42 ;  White  Star  Co.y 
48  L.  T.  815.     No  need  to  draw  up  order  now.     Order  LII.,  r.  14. 


Order  to  stand 
over. 


Form  394.  The  peton  of  G.  N.,  claiming  to  be  a  creditor  of  co,  on  IG  Dec, 
1875,  preferred  unto  this  Ct,  coming  on  this  day  to  be  heard  before  this 
Ct,  and  upon  hearing  counsel  for  the  petr  and  for  sd  co  and  for  G.  S. 
and  other  debenture  holders  opposing  the  sd  peton,  and  the  co  by  their 
counsel  undertaking  not  to  consent  to  a  winding-up  order  on  any  other 
peton,  and  not  to  wind  up  voluntarily,  and  to  give  notice  to  the  petr  of 
any  other  peton  for  winding  up  co  which  may  be  served  upon  them, 
and  in  the  event  of  any  such  other  peton  being  served  upon  them  to 
consent  to  the  peton  being  restored  to  the  paper,  and  that  the  applicon 
for  a  winding-up  order  by  it  may  be  renewed  in  the  same  manner  as  if 
the  peton  had  not  been  ordered  to  stand  over.  Let  the  peton  stand  over 
until  the  first  peton  day  in  Michaelmas  sittings  now  next.  North- 
western of  Montevideo,  l^-c.,  Co.,  Hall,  V.-G.,  28  Ap.,  187G,  B.  1377.  And 
see  In  re  Great  Western  Coal  Co.,  21  C.  D.  7 09. 

The  Court  frequently  directs  (under  section  86  of  the  Act,  infra,  p.  424), 
winding-up  petitions  to  stand  over.  Such  orders  are  commonly  made  when  one 
of  the  parties  has  not  had  time  to  answer  the  aiRdavits  of  the  others,  or  where 
it  is  desired  to  cross-examine  persons  who  have  made  affidavits,  and  occasionally 
Avhere  proceedings  for  resolving  on  a  voluntary  winding-up  are  being  taken. 
See  sujjra,  p.  299. 

Sometimes  a  petition  is  ordered  to  stand  over  for  several  months,  e.g.,  where 
the  majority  of  tlie  creditors  desire  it.     (S7.  Thomas  Dock  Co.,  2  C.  D.  116.     In 


WITHDRAWAL    OF    TETITIOX. 


423 


such  cases  the  order  is  generall}"-  made  on  special  terms^  as  in  Form  391.     See    Porm  394 

further,  Buckley,  ISO.  '- 

See,  however.  Chapel  House  Colliery  Co.,  2-1  C.  Div.  257,  as  to  dismissing-  peti- 
tion where  majority  of  creditors  oppose. 

Upon  the  peton  of ,  iH'eferred  unto  this  Cfc,  praying  that  co  Form  395. 

mio-ht  be  wound  ui)  under  the  provisions  of  the  above-mentd  Acts,  and  r~;      7~. 

,  .  1  .  1       •  1       1  T  Order  giving 

the  petrs  not  wishnig"  to  proceed  with  the  sd  peton,  and  the  co  waiving  liberty  to 
all  costs  :    This  Ct  doth  order  that  the  petrs  be  at  libty  to  withdi-aw  ^^'tli^l™^'- 
the  sd  peton.  [Langliam  Skathig  Rinlc  Co.,  Limtd,  Bacon,  V.-C,  4  Xov., 
187G.     B.  1817. 

Where  a  winding-up  petition  has  been  presented  the  petitioner,  imtil  a  wind- 
ing-up order  has  been  made,  is  dominus  litis,  and  therefore  can  submit  to  an 
order  dismissing  or  obtain  liberty  to  withdraw  his  petition.  In  re  Home  Assu- 
rance Assoc,  12  Eq.  59  ;  Be  Times  Life  Assurance  Co.,  9  Eq.  382.  Accordingly 
the  company  very  commonly  comes  to  terms  with  the  petitioner,  e.g.,  that  his 
debt  shall  be  paid  or  secured,  and  that  he  shall  Avithdraw  the  petition.  In 
such  case  the  company  usually  agrees  to  pay  the  costs,  and  where  the  jjetitioner 
was  justified  in  presenting  the  petition,  he  is  entitled  to  require  payment 
thereof.  Iti  re  Alliance  Co.,  W.  N.  1SG7,  218 ;  Re  Flagstaff  Co.,  20  Eq.  268,  and 
supra,  p.  379. 

Where  a  petition  is  withdrawn  or  dismissed  by  consent,  creditors  and  mem- 
bers appearing  and  opposing  are  entitled  to  one  set  of  costs  ajDiece  from  the 
petitioner.  In  re  Patent  Cocoa  Fibre  Co.,  1  C.  D.  617;  In  re  London  and 
Suburban  Bank,  19  W.  R.  88.  Unless  such  appearance  is  unjustifiable.  Walk- 
ham  United  Mines,  W.  N.  1882,  134.  But  supporters  not  entitled  to  costs.  Be 
Jahlochkoff  Co.,  W.  N.,1883,  189  ;  28  S.  J.  70;  Union  Trust,  78  L.  T.  227. 

Accordingly,  where  a  petitioner  agi-ees  to  withdraw,  he  should  insist  on  being- 
indemnified  by  the  company  against  these  costs.     See  further  Buckley,  200. 

In  arranging  terms  of  withdrawal,  a  petitioner  should  take  care  that  his  costs 
are  paid  down  or  secured,  and  should  not  submit  to  an  order  merely  dismissing 
the  petition  and  directing  the  company  to  pay  the  costs,  for  in  such  case,  if  the 
company  goes  into  liquidation  before  the  costs  are  jjaid,  the  petitioner  will  have 
to  go  in  and  prove  for  them,  ranking  as  an  unseciired  creditor. 

Upon  the  peton  of  B.,  of,  &G.[windi/iff-i/j)  pctilioti]  :  And  it  appearing  Form  396. 
that  the  debt  of  the  petr  has  been  provided  for.  Let  by  consent  the  orfeTby        ^ 
peton  be  dismissed,  And  Let  the  petr's  costs  of  and  incident  to  the  sd  consent  dis- 
peton  be  taxed  by,  &c.,  as  between  solor  and  client,  and  be  pd  by  the  co  °^^^®^°^'- 
to  the  petr,  and  if  such  costs  when  taxed  do  not  amount  to  100/.  the 
23etr  by  his  counsel  undertaking  to  apply  the  excess  of  the  100?.  already 
pd  to  the  petr  towards  satisfon  of  the  first  of  the  three  promissory  notes 
given  by  the  sd  co  to  the  petr  which  shall  become  payable  after  the 
taxing-master's  certificate  shall  have  been  filed,  And  if  such  costs  when 
taxed  shall  exceed  the  sd  sum  of  100/.  the  balance  of  such  costs  is  to  be 
pd  by  the  sd  co  to  the  petr  on  the  15th  of  December  instant.     Govern- 
ment Securitij  Fire  Insurance  Co.,  22  June,  1877.     A.  1218. 

Upon  the  peton  of  M.   [for  compulsory  order^,  and  upon  hearing  Form  397. 
counsel  for  the  petr  and  for  the  sd  co,  and  the  petr  by  his   counsel  Order  that 
admitting  that  the  claim  of  the  petr  against  the  sd  co  has  since  the  sd  compani-  pay 

i  a  costs,  debts 

peton  was  preferred  been  satisfied  :  This  Ct  doth  not  think  fit  to  make  paid  before 

hearing. 


424  WINDING-UP. 

Form  397.  any  order  on  the  sd  petou,  but  doth  order  that  the  sd  co  do  pay  to  tlie 
petr  his  costs  of  the  sd  petou,  aud  such  costs  to  be  taxed,  &c.  British 
Alliame  Corporation,  Mahns,  V.-C,  17  May,  1878.     A.  2124. 

Where  the  petitioner's  debt  is  paid  before  the  hearing,  but  the  company  mil 
not  pay  his  costs,  he  should  apply  for  his  costs  at  the  hearing,  and  an  order 
will  be  made  as  follows.  In  re  Alliance  Co.,  W.  N.  1S67,  218  ;  Re  Flagstaff  Co., 
20  Eq.  268. 

Form  398.  Upon  the  petou,  &c.,  and  the  petrs  by  then-  counsel  admitting  that 
Anoth  r  wiier  ^^^^  debts  and  costs  of  execution  due  from  the  sd  co  to  the  petrs  had 
creditors  since  been  pd  :  This  Ct  doth  not  think  fit  to  make  any  order  on  the 

oppose.  g^i  peton,  but  doth  order  that  the  sd  co  do  pay  to  the  petrs  and  to 

and creditors  their  costs  of  and  occasionecl  by  the  sd  peton  :  such 

costs  to  be  taxed  by  the  taxing-master,  who  is  to  allow  to  the  sd  creditors 
such  costs  only  as  would  properly  have  been  incurred  by  such  creditors 
respively  if  all  such  creditors  had  been  represented  by  the  same  counsel 
and  solors.  Association  of  Land  Financiers,  Malins,  Y.-C,  25  June, 
1878.     B.  1408. 

For  order  discharging  winding-uiD  order  except  as  to  payment  of  costs  see 
Towcaster  S(  Co.,  M.  E.,  30  May,  1878,  B.  1195.  The  order  recited  the  winding- 
up  order,  that  petitioner  since  paid,  that  order  not  advertised,  that  other 
creditors  who  appeared  consented.  Query  ultra  vires.  See  Aston  Co.,  45  L.  T. 
Ij7G,  where  winding-up  order  discharged. 

Form  399.  Upon  the  peton,  &c.,  Let  the  sd  peton  stand  dismissed,  with  costs  to 
Order  be  taxed  by  the  taxing-master  and  pd  by  tlie  petrs  P.  to  the  co  and  to 
dismissing        and  2Q  others  appearing  as  afsd,  and  to and ,  Ijut  only 

one  set  of  costs  is  to  be  allowed  to  the  sd  shareholders.     Malpaso  Gold 

Co.,  Hall,  Y.-C,  17  Jan.,  1879.    B.  122. 

See  section  8G  of  the  Act  of  1862,  as  to  dismissing. 
Form  400.       Upon  the  peton,  &c.     Let  the  sd  petou  stand  dismissed.     And  order 


Order  dis-  that  the  sd  order  \_a2)pointing  prov.  liq.']  of  18  September,  1876,  be 
missing  where  dissliarged.  And  order  that  notwithstanding  the  sd  order,  the  chief 
liqiiiilator.        clcrk  of  the  judge  and  the  sd  prov.  off.  liq.  be'  at  libty  to  sign  a  cheque 

in  favour  of  the  sd  co,  or  of  j\Ir. ,  their  solor,  for  any  balance 

standing  to  the  credit  afsd.     Milan  Tramway  Co.,  Li  mid,  Field,  J.  (for 
Hall,  Y.-C),  17  October,  187G.     B.  1717. 

Where  the  petition  is  dismissed  the  petitioner  is  usually  ordei'ed  to  paj-  the 
costs  of  the  company  and  one  set  of  costs  apiece  to  the  shareholders  and 
creditors  opposing.  In  re  European  Banking  Co.,  2  Eq.  521 ;  Diamond  Fuel, 
W.  N.  1878,  11. 

But  sometimes  a  different  oi'der  is  made.  Re  Anglo-Egypfian  Co.,  8  Eq.  880 ; 
New  Gas  Co.,  5  C.  D.  703. 

Form  401.  Upon  motion,  itc,  by  counsel  for  W.  &  F.,  the  exs  of  the  will  of 
Revivor  on  C  F.,  deceased,  who  alleged  that  on  the  24th  of  Dec,  1874,  the  sd 
application  of   Q_  Y.  presented  his  peton  for  the  winding  up_of  the  sd  co  under,  Szc. 


ORDER    TO    WIND    UP.  405 

and  that  the  sd  petr  died  on  the  11th  of  May,  187G,  having  by  his  hist  Eorm  401. 
will  and  testamt  appointed  the  sd  W.  &  F.  exs  thereof,  who  duly  proved  petitiouers' 
the  same  on  the  3rd  of  June,  ISTC.     Let  the  sd  peton  and  the  pro-  executors, 
ceedings  thereunder  be  carried  on  and  prosecuted  by  the  sd  W.  &  F.  in 
like  manner  as  the  same  might  have  been  carried  on  by  the  sd  F.  in  ease 
he  had  not  died.     Tecoma  Silver  Mininfj  Co.,  Hall,  V.-C,  2G  July,  1877. 
B.  U7;J. 

See  also  Dijnevor  Collieries  Co.,  W.  N.  1878,  199,  where  a  similar  order  was 
made,  the  i^etitioner  having  died  before  the  hearing  of  the  petition.  And  see 
Ee  Roice,  27  S.  J.  104. 

Orders  for  GompuJsorij  Winding-up. 

The  following  is  the  usual  form  of  order  : 

Upon  the  peton  of  A.  [or,  of  the  above-named  co]  a  creditor  \_or,  a   Form  402. 

contriby  of  the  above-named  co]  on  the day  of  preferred  winding-up 

unto  Her  Majesty's  High  Ct  of  Justice,  and  upon  hearing  counsel  for  order, 
the  23etr  and  for  the  respondents,  the  above-named  co,  and  for  B.,  a 
creditor  of  the  sd  co,  and  upon  reading  the  sd  petn,  an  aflFt  of  A.,  filed 

the day  of ,  verifying  the  sd  peton,  an  aflFt  of,  &c.,  the  London 

Gasette,  of  the day  of  ,  the  Times  newspaper,  of  the day 

of [enter  any  other  neivspapers],  each  containing  an  advertisemt  of 

the  sd  peton.     Let  the  above-named  Co,  Limtd,  be  wound  up 

by  this  Ct  imder  the  provisions  of  the  Cos  Acts  1862  and  18G7. 
And  let  the  petr  and  the  sd  co  and  the  sd  B.  be  allowed  their  costs  of 
and  relating  to  the  peton  out  of  the  assets  of  the  sd  co,  such  costs  to  be 
taxed  by  the  taxing-master. 

If  several  creditors  and  contribiitories  appear  and  support  the  petition,  the 
order  as  to  costs  will  be  as  follows  : 

And  let  the  sd  A.,  and  the  sd  co,  and  the  sd  B.,  C,  D.,  and  E.,  be  Form  403. 
allowed  their  costs  of  and  relating  to  the  peton  out  of  the  assets  of  the  " 

sd  CO,  such  costs  to  be  taxed  by  the  taxing-master,  who  is  to  allow  only 

one  set  of  costs  between  the  sd and  [ihe  creditors'],  and  only 

one  set  of  costs  between  the  sd and [tlte  contribs']. 

The  usual  order  as  to  costs  where  a  winding-ui^  order  is  made,  gives  the 
petitioner  and  the  company,  the  contributories  and  creditors  suj^ijorting  the 
petition,  their  costs,  but  only  one  set  among  the  contributories  and  one  among 
the  creditors.  In  re  Humber  Iron  Works  Co.,  2  Eq.  15  ;  In  re  European  Banking 
Co.,  2  Eq.  521.     See  further  Buckley,  221. 

Where  a  provisional  official  liquidator  has  been  appointed  before  the  hearing 
the  order  sometimes  provides  as  follows : 

And  it  is  ordered  that  Mr.  ,  the  prov.  off.  liq.,  be  continued  as  Form  404. 

such  prov.  off.  liq.,  until  the  appointmt  of  an  off.  liq.  "  ' 

But  there  can  be  little  doubt  that  such  provision  is  in  general  unnecessary. 
It  is  now  settled  that  a  receiver  who  has  been  appointed  as  a  "  full  receiver" 


436  WINDING-UP. 

Form  404.    — that  is,  not  as  an  "  interim  receiver,"  remains  receiver  until  discharged. 

' Seton,  412  ;  Cruse  v.  Smith,  24  Sol.  J.  121.     And  the  same  principle  seems  to 

apply  in  the  case  of  a  provisional  liquidator.     For  orders  discharging  provi- 
sional liquidators,  see  infra.  Form  418,  et  seq. 

Where  a  provisional  liquidator  has  been  appointed  upon  the  application  of 
the  petitioner,  the  winding-up  order  generally  provides  for  the  "  costs  of  and 
relating  to  the  said  petition  (including  the  costs  of  and  conseq\ient  upon  the 
appointment  of  the  said as  svich  ijrovisional  liquidator." 


Form  405. 

Order  on  two 
petitions. 


Very  commonly  the  order  is  made  on  two  ^Jetitions  thus  : 

JJ-pon  the  petoii  of  E.  W.  S.,  of ,  a  creditor  of  the  above-named 

CO,  on  the  3rd  day  of  April,  187G,  preferred  unto  this  Ct,  and  upon  the 

peton  of  E,  P.,  of ,  another  creditor  of  the  above-named  co  on  the 

I2th  day  of  April,  187G,  preferred  unto  this  Ct,  and  upon  hearing 
counsel  for  the  respive  petrs  for  the  above-named  co,  and  for  L.  C.  A.,  a 
creditor,  and  uj)on  reading  the  sd  petons  respively,  an  aflFt  of  the  sd 
R.  W.  S.  filed  the  6th  of  April,  1876,  verifying  the  first-mentd  peton, 
and  an  aflFt  of  the  sd  A .  P.,  verifying  the  secondly -mentd  peton,  the 
London  Gazette,  the  Times  newspaper,  and  the  Standard  newspaper,  all 
of  the  l()th  day  of  April,  1876,  each  containing  an  advertisemt  of  the 
first-mentd  peton,  and  the  London  Gazette,  &c.,  each  containing  an 
advertisemt  of  the  secondly-mentd  peton,  an  aflFt  of  Pt.  W.  S.,  filed  the 
24:th  day  of  April,  1876,  an  afft,  &c.,  a  joint  att't  of  A.  A.  R.  and 
J.  C.  W.,  filed,  &c.,  and  two  several  affts  of  the  sd  L.  C.  A.,  filed 
respively,  &c.  Let  the  B.,  &c.,  Co,  Limtd,  be  Avound  up  by  this  Ct 
under  the  provisions  of  the  Cos  Act,  1862  and  1867,  and  let  the 
petrs  respively,  and  the  sd  co,  and  the  sd  L,  C.  A.  be  allowed  their  costs 
of  or  relating  to  the  sd  petons  respively,  out  of  the  assets  of  the  sd  co, 
such  costs  to  be  taxed  by  the  taxing-master.  British  Guardian  Life 
Assurance  Co.,  Hall,  V.-C,  2nd  May,  1876.    A.  951. 


Form  406.  Upon  the  peton  of  FT.  &  M.  on  the  31st  Jan.,  1879,  preferred 
Order  allowing  [windintj-up  petonj,  and  upon  hearing  counsel  for  the  petrs,  and  for  S., 
costs  of  second  ^  creditor,  and  upon  reading  the  sd  peton,  and  it  being  alleged  that  an 
order  dated  10  Feb.,  1879,  has  been  made  for  the  compulsory  winding 
up  of  the  sd  CO,  and  upon  reading  the  sd  order  :  This  Ct  doth  not  think 
fit  to  make  any  order  on  this  peton,  but  doth  order  that  the  costs  of  the 
sd  petrs,  and  of  the  sd  S.  of  this  applicon  be  costs  in  the  winding- 
up  of  the  sd  CO.  Medium  for  sales  and  exchanges,  Hall,  V.-C,  14th 
Feb.,  1879.    B.  427. 

As  to  costs  of  concurrent  jjetitions,  see  supra.  In  some  cases  where  a  wind- 
ing-up order  has  been  made  on  one  petition,  the  costs  of  a  second  petition  sub- 
sequently coming  on  will  be  allowed  as  in  the  above  case,  and  in  Re  British  and 
Foreign  Gas  Co.,  13  W.  E.  649 ;  and  Re  Marron  Bank  Co.,  88  L.  T.  141 ;  W.  N". 
1878,  12. 

But  see  as  to  costs  incurred  by  second  petitions  after  notice  of  first.  Re 
General  Fin.  Bank,  20  C.  D.  276. 


TEAXSFEE    OF    PETITIOX.  437 

Upon  the  petoii  of  H.  this  day  preferred  unto  this  C't,  and  the  solors  Form  407. 

for   the    above-named  co,   parties    having-   subscri])ed    the   sd    peton,  Order  trans- 

siffnifyinj?  their  consent  to  the  praver  thereof.      Let  the  above-mentd  fen-ing  peti- 
°     "^     °  ^     *  tion  by  con- 

matters  marked  for  the  Master  of  the  RoUs  be  transferred  to  the  V  ice-  sent. 

Chancellor  Sir  Charles  Hall,  and  let  the  same  when  so  transferred  be 

hereafter  considered  as  matters  originally  marked  for  the  Vice-Chancellor 

8ir  Charles  Hall,  provided  that  no  order  made  by  the  Master  of  the 

Rolls  be  varied  or  reversed,  otherwise  than  liy  the  Ct  of  Appeal.     British 

Guardian  Life  Assurance  Co.,  Limfd,  Lord  Chancellor,  11th  May,  187<;. 

A.  83G.     See  also  Seton  on  Decrees,  318. 

AVhen  a  petition  to  wind  up  a  company  has  been  presented,  another  petition 
for  the  same  jrarpose  subsequently  presented  and  marked  for  some  other  judge 
-will  be  ordered  to  be  transferred  to  the  judge  with  whose  name  the  first  petition 
is  marked.  In  re  West  Hartlepool  Ironv-orlcs  Co.,  10  Ch.  629.  In  this  case  (it 
was  before  the  Jiidieature  Act)  the  transfer  was  ordered  by  the  L.JJ.  on  motion 
for  the  first  petitioner. 

Since  the  Judicature  Act,  the  Court  of  Appeal  has  no  jiirisdiction  to  order  a 
transfer.  In  re  Boyd's  Trusts,  1  C.  Div.  12.  Transfers  are  now  made  under 
O  rule  1,  by  the  Lord  Chancellor.     See  Memorandiini  in  1  C.  Div.  41, 

as  to  the  practice. 

Where  all  parties  consent,  the  application  can  be  made  by  petition  subscribed 
by  all  and  delivered  to  the  secretary  of  the  L.  C. ;  but  "if  all  parties  will  not 
consent,  the  application  must  be  by  motion  to  the  L.  C."  The  secretary  will 
inform  the  party  desirous  of  moving  where  and  when  he  can  move,  and  the 
notice  of  motion  will  be  framed  accordingly. 


The  notice  of  motion  will  be  as  follows 

Take  notice  that  the  Lord  High  Chancellor  of  Great  Britain  will  be  Form  408. 

moved  on day,  the day  of at ,  or  so  soon  thereafter  ^^^^^^^  ^f 

as  counsel  can  be  heard,  by  Mr. ,  as  counsel  for  the  petrs  in  these  motion  for 

matters,  [or  as  fl/e  case  may  5e]  that  these  matters  may  be  transferred  ^^^^  ^^' 
to  his  Lordship,  Mr.  Justice ,  and  when  so  transferred  may  be  con- 
sidered as  matters  originally  marked  for  his  Lordship,  Mr.  Justice . 

Dated,  &c. 

As  to  transfer  of  actions  after  a  winding-up  order  see  infra.  Form  GOO. 


Upon,  &c.  \_Hsual  wincliag-vp  order']  :     And    it  is  ordered  that  all  Form  409. 
further  proceedings  in  the  Avinding-up  of  the  sd  co  he  cai'ried  on  in  the  Reference  to 
County  Ct  of   Suffolk,  hulden  at  Ipswich.     Ijmcich  Public  Hcdl  Co.,  County  Court. 
Jessel,  M.  R.,  1 G  Jan.,  1875.     B.  59. 

By  section  41  of  the  Companies  Act,  1SG7,  the  Chancery  Division  may,  upon 
making  an  order  for  winding  up  a  company,  direct  all  subsequent  proceedings 
to  be  had  in  a  County  Court ;  and  by  section  42  may  transfer  the  winding-up 
from  one  County  Court  to  another. 

The  reference  to  the  County  Court  is  sometimes  made  at  the  same  time  as  the 
order  to  wind  up,  and  sometimes  upon  an  application  subseqiiently  made  at 
Chambers.  London  and  Westminster,  Sfc,  Co..  17  L.  T.,  N.  S.  oo9.  The  former 
is  the  usual  course  now. 


428 
Form  410. 

Another. 


Form  411. 

Notice  of 
motion  or 
summons  for 
the  appoint- 
ment of  a 
provisional 
liquidator. 


WINDING-UP. 

Upon  the  pcton,  &c.  \_icinding-U2)  order']  :  And  costs  to  be  taxed  and 
pd  out  of  the  assets  of  the  sd  co,  and  let  all  subsequent  proceedings 
herein  other  titan  .such  taxation  of  costs  be  had  in  the  County  Gt  of 
Crlamorganshire  holden  at  Swansea.  3Iorriston's  Patent,  dr.,  Co.,  M.  E,., 
27  Jan.,  1877.      189  B. 

On  the  pt  of  A.,  the  petr  in  these  matters  [or,  of  the  above-named 

co],  that  B.,  of  ,  or  some  other  person  may  be  appointed  prov.  off'. 

liq.  of  the  above-named  \_or  sd]  co. 

The  Court  is  empowered  at  any  time  after  the  presentation  of  the  petition, 
and  before  the  fii'st  appointment  of  liquidators,  to  appoint  provisionally  an 
ofificial  liquidator.     Section  85  of  the  Act. 

The  appointment  may  be  made  on  application  by  summons.     See  Rule  15. 

But  the  application  is  veiy  commonly  made  by  motion,  especially  (a)  where 
the  company  is  petitioner  or  assents,  in  which  case  the  application  can  be  made 
ex  parte,  and  (6)  where  the  assets  are  in  danger,  or  the  matter  is  for  some  other 
reason  j^ressing. 

It  is  usual  to  apply  for  the  appointment  of  some  person  by  name,  and  the 
application,  whether  by  motion  or  summons,  should  be  supported  by  an  affi- 
davit as  to  the  circumstances  which  render  the  appointment  desirable,  and  as 
to  the  fitness  of  the  proposed  liquidator. 

In  a  pressing  case  the  order  will  be  made  subject  to  the  production  of  an 
affidavit  of  fitness  to  the  registrar. 

If  the  comxDany  makes,  consents  to,  or  is  shown  not  to  oppose,  the  application, 
the  appointment  is  almost  a  matter  of  course,  but  if  the  company  opposes, 
special  circumstances  must  be  shown,  e.g.,  insolvency,  or  danger  to  assets. 
Clifoden  Benefit  Building  Society,  3  Ch.  462;  Emmerson's  case,  2  Eq.  231  ;  Mar- 
seilles Extension  Co.,  W.  N.  1867,  68 ;  Hammersmith  Town  Hall  Co.,  6  C.  D.  112. 

The  order  usually  directs  the  liquidator  to  give  security  by  a  certain  day, 
but  sometimes  an  undertaking  is  given  by  the  proposed  liquidator,  or  by  the 
petitioner  or  his  solicitor,  that  the  liquidator  shall  give  security  forthwith,  or 
within  say  fourteen  days.  Pearson,  J.,  upon  api)ointing  a  provisional  official 
liquidator  adjourns  the  matter  to  chambers  with  a  view  to  his  giving  security. 
See  Order  L.,r.  17  ;  Be  Hoyland  Co.,  28  S.  J.  152.  Where  the  application  is  not 
made  by  or  with  the  approval  of  the  company,  notice  of  motion  or  summons 
should  be  served  on  the  company.  If  the  matter  is  urgent,  liberty  to  serve 
short  notice  of  motion  can  be  obtained.  Occasionally  the  provisional  liquidator 
is  appointed  without  being  required  to  give  security.  This  is  allowed  by  Rule 
15.  Sometimes  the  appointment  is  made  at  the  same  time  as  the  winding-up 
order.  The  Court  may,  by  the  order  appointing  a  provisional  official  liquidator, 
limit  and  restrict  his  powers.  Section  96  of  the  Act  of  1862.  This  power  is 
g'enerally  exei'cised.     See  Forms  413  et  seq.,  infra. 

If  the  provisional  liquidator  is  to  carry  on  the  company's  business,  evidence 
should  be  forthcoming  to  show  that  it  is  desirable  so  to  do.  The  fact  that 
there  are  contracts  on  hand,  or  that  the  company's  difficulties  are  only  tem- 
porary, and  that  serious  loss  would  be  caused  by  stopping  the  business,  or  that 
the  goodwill  is  valuable,  and  would  be  lost  by  stopping,  afford  ground  for 
authorising  the  liquidator  to  carry  on  the  business,  at  any  rate  to  some  extent. 
If  the  provisional  liquidator  is  authorised  to  carry  on  the  business,  it  may 
be  desirable  to  obtain  liberty  to  open  an  account  with  a  loc  1  bank  where  the 
business  is  in  the  country.     See  Form  414,  infra. 

The  rules  as  to  official  liquidators  contained  in  the  General  Order  of  11  Nov., 
1862,  apply  to  provisional  liquidators.     Rule  59. 

Accordingly  as  to  giving  security,  see  infra.  Form  431  et  seq. ;  as  to  accounts, 
see  infra.  Form  412  et  seq.,  and  440  et  seq.;  as  to  remuneration,  see  infra. 
Form  453  et  seq.;  as  to  discharge,  see  infra.  Form  418  et  seq. 


APPOINTMENT    OF    PEO VISIONAL    LIQUIDATOE.  409 

Provisional  liquidators  frequently  make  applications  to  the  Court,  e.  g.,  to   Form  411. 
authorise  sales,  to  restrain  actions  or  proceedings  against  the  company  or  its 
assets,  to  authorise  the  borrowing  of  money  to  carry  on  the  business,  &c. 

Upon  the  applicon  of  and ,  both  of  ,  creditors  of  the   Form  412. 

above-named  co,  the  petvs  in  the  peton  presented  in  these  matters  on  Order  on 
1  Sept.,  1876,  by  summons  dated  the  8  Sept.,  187G,  and  upon  hearing  summoiis 

the   solors,  &c.      Let  M.,  of    ,  public   accountant,  be   appointed  p^'q°(°jq°j^ 

provisionally  otf.  liq.  of  the  above-named  co.  And  Let  the  sd  M.,  on  or  liquidator. 
before  9  Xov.,  1876,  give  security,  to  be  approved  by  the  judge.  And 
Let  the  sd  M.,  on  2  May,  and  2  Xov.,  1877,  and  the  same  days  in 
each  succeeding  year,  leave  his  accounts  at  the  chambers  of  the  judge. 
And  Let  all  monies  to  be  received  by  the  sd  M.  be  pd  Ijy  him  into  the 
Bank  of  England  to  the  credit  of  the  account  of  the  prov.  off.  liq.  of 
sd  CO  within  seven  days  after  the  receipt  thereof.  Jlila/i  Tramicay  Co., 
Limid,  Hall,  V.-C,  1.5  Sept.,  1876.     B.  1611. 

Order  to  give  security  "  forthwith  "  is  now  not  unusual  where  scciu'ity  not 
to  be  given  before  order  drawn  up. 

\_A2)2)ointnit  of  prov.  off.  liq.^     And  this  Ct  doth  hby  limit  and  restrict   Form  413 


the  powers  of  the  sd  J.  C.  to  the  following  acts  (that  is  to  say)  to  taking  Oi-der  restrict- 
X)OSsession  of  and  protecting  the  assets  of  the  sd  co  until  further  order,    ^^s  powers. 

The   above   is  the  form   not   uncommonly  used  in  the   absence  of   special 
circumstances . 

Appoint 2)rov.  off.  liq.,  Limit,  &c. —  Form  414. 


1.  To  taking  possession  of  and  protecting  the  assets  of  the  co.  Liberty  to 

2.  To  carrying  on  the  business  of  the  co  until  further  order.  ^"^I'^y  "^'^ 

AIT         •  T         T-         1-n  T  1  •  business:. 

3.  And  to  drawing  and  endorsing  l)ills,  and  to  advancing  money  to 

customers,  and  to  do  such  other  things  as  may  Ije  necessary  for  canying 
on  the  business,  without  the  sanction  of  the  judge. 

Order  that  the  sd  N.,  as  such  prov.  oflF.  Hq.  be  at  libty  to  open  an 
account  at  the Bank,  for  the  pposes  of  the  co. 

And  order  that  all  monies  which  may  be  received  by  him  as  such 
prov.  off.  liq.  be  pd  into  such  account,  and  that  he  be  at  libty  to  draw 
on  such  account  for  aU  monies  required  for  carrying  on  the  sd  business. 

And  order  that  if  and  whenever  the  balance  at  the  sd  Bank  exceeds 
500?.,  the  excess  shaU  forthwith  be  pd  by  the  sd  X.  into  the  Bank  of 
England  to  the  credit  of  the  prov.  off.  Hq.  of  the  co.  South  Eastern 
Warehouse  Co.,  Chitty,  J.,  7  Aug.,  1882.     See  infra,  p.  449. 

Where  liberty  to  carry  on  the  business  is  given,  it  is  generally  desirable  to 
give  liberty  to  open  a  local  banking  account. 

Sometimes  this  is  forgotten  when  the  order  is  obtained,  and  a  further 
order  becomes  necessary.     The  following  is  an  example  : — 

"Order  that  notwithstanding  the  order  of  2  July,  the  provisional  official 
liquidator  be  at  liberty  to  continue  the  account  ah-eady  opened  by  him  -natli 

Messrs. bank  at  Derby  for  the  purpose  of  paying  wages  and  carrying  on 

the  business  of  the  company  in  accordance  with  the  said  order,  but  so  that 
whenever  the  balance  to  the  credit  of  such  account  shall  exceed  by  more 
than  30?.  the  sum  of  250?.,  the  excess  shall  forthwith  bo  paid  into  the  Bank  of 


430 


"WINDING-UP. 


Form  414.    Eng-land  to  the  credit  of  the  provisional  official  liquidator  of  the  company." 
—        Derbyshire  Wagon  Co.,  M.  E.,  12  July,  1879.     And  see  infra,  p.  449. 


Form  415.        Upon  motion  for 


the  petrs,  &c.     Appoint  W.  prov.  off.  liq. 


Liberty  for 
provisional 
liquidator  to 
cajTy  on 
business  and 
advance 
money. 


Form  416. 

Provisional 
liquidator  to 
«arry  on 
appeal. 


[usual  directions'],  And  Limit  and  restrict  the  powers  of  the  sd  W.  as 
such  prov.  off',  hq.  to  the  following  acts,  namely,  to  carry  on  and  continue 
the  business  of  co  so  far  as  may  be  necessary  for  carrying  out  and  com- 
pleting existing  contracts,  and  keeping  the  co's  furnaces  in  blast,  and 
for  that  ppose  to  raise  a  sum  not  exceeding  iOOOl.  per  week  at  a  rate 
not  exceeding  5  p.  c.  p.  a.  with  the  usual  bankers'  commission,  by  the 
sale  of  or  upon  the  security  of  the  co's  assets,  and  to  make  such  advances 
himself:  And  order  that  for  any  advances  so  made  the  sd  ^Y,  do  have 
a  first  charge  upon  the  undertaking  of  the  co,  subject  to  the  incum- 
brances now  existing  thereon.  Hopkins,  Gillies,  &  Co.,  M.  R.,  15  May, 
]fi79.     A.  953. 

As  to  the  position  of  a  receiver  and  manager  who  advances  without  order, 
see  Ux  parte  Izard,  23  C.  Div.  75. 

Upon  the  peton,  &c.  [ust/al  vinding-iq)  order'].  And  appoint  G. 
the  secretary  of  the  sd  co  prov.  oflP.  liq.  of  the  sd  co  for  the  ppose  only 
of  carrying  on  the  appeal  by  the  sd  co  against  an  order  of  Mr.  .Justice 
]\[anisty  in  the  action  of  Gihh  v.  \_the  co]  which  is  now  pending,  but  the 
sd  Gr.  is  not  to  do  any  act  without  the  leave  of  the  Judge  in  Chambers 
first  obtained.     Great  Soutlieni  Mijsore  Co.     Chitty,  J.,  3  April,  1882. 

For  order  appointing  provisional  official  liquidator  to  i-eceive  costs  due  to  the 
company  in  respect  of  a  petition  which  was  dismissed,  see  Langham's  Skating 
Rink,  G  C.  D.  102.     M.  E.  18  June,  1877.     B.  1150. 


Form  417. 

Order  directing 
provisional 
official  liqui- 
dators to  leave 
account  and 
for  taxation 
and  i5ayinent 
of  costs. 


Upon  the  applicon  of  B.  &  L.  the  off',  liqs.,  etc.  ;  Let  L.,  H.,  and  B., 
who  by  the  sd  order  of  5  Feb.,  1877,  were  appointed  prov.  off.  liqs.  of 
the  sd  CO  without  security,  on  or  before  30  June,  1877,  or  subsequently 
within  4  days  after  the  service  of  this  order  on  them,  leave  in  the 
chambers  of  the  judge  their  account  as  such  prov.  off.  liqs..  And  Let 
the  costs,  charges,  and  expenses  of  the  sd  L.,  H.,  and  B.  as  such  prov. 
off.  liqs.  properly  incurred  be  taxed  and  the  amount  thereof  be  pd  out  of 
the  assets  of  the  sd  co  as  and  when  the  judge  shall  direct,  but  in  taxing 
such  costs  the  taxing  master  is  to  have  regard  to  any  sum  or  sums  of 
money  which  may  have  been  received  in  respect  of  costs  of  compromises 
come  to  with  any  contribs  or  otherwise,  And  Let  the  sd  L.,  H.,  and  B. 
pass  their  said  account,  and  pay  the  balance,  if  any,  proved  due  from 
them  into  the  Bank  of  England  to  the  credit  of  the  off.  liq.  of  the  sd  co 
within  7  days  after  the  date  of  the  chief  clerk's  certificate  of  j^assing 
such  account,  and  thereupon  let  them  be  discharged  as  such  prov.  off. 
liqs.,  And  in  the  event  of  a  balance  being  found  due  to  the  sd  L.,  11., 
and  B.  on  taxing  the  sd  account,  let  the  same  be  pd  to  them  out  of  the 
assets  of  the  sd  co  as  and  when  the  judge  shall  direct.  Hooper's  Telegrapli 
WorU,  M.  R.,  31  May,  1877.     A.  1037. 


APPOIXT:\rEXT    OF    PE0VI8I0XAL    LTQUIDATOE. 


431 


Upon  the  applicou  of  H.  the  prov.  off.  liq.  <fec.,  Let  the  sd  H.  be  dis-   Form  418. 
charged  from  the  office  of  prov.  off.  liq.  of  the  sd  co,  and  let  the  sd  bond,  order  dis^ 

dated,  &c.,  entered  into  by  him,  together  with  The Co,  Limtd,  as  charging 

his  sm-eties,  be  vacated,  And  Let  it  be  referred  to  the  taxing  master  to  j"  u\'i^to|! 
tax  the  costs  of  the  sd  prov.  off.  liq.,  and  let  him  be  at  libty  to  apjDly  for 
paymt  thereof  when  any  fnnds  are  available  for  that  ppose.     General 
Machinerij  Purcluisc  Co.,  4  June,  1877.     A,  1034. 

For  order  appointing  provisional  official  liquidator  to  Le  official  liquidator, 
and  directing  him  to  i^ass  his  accounts  as  provisional  official  liquidator,  and 
then  that  recognisance  be  vacated,  see  British  Farmers,  ^'c,  Co.,  8  May,  187G. 
A.  803. 


Upon  the  apphcon  of  C,  the  prov.  off.  liq.  of  the  aljove-named  co,   Form  419. 
and  upon  hearing  the  solors  for  the  ai^plicant  and  for  the  off.  liq.  of  sd  Order  dis- 
CO,  and  upon  reading  an  order,  &c.,  an  afft  of  the  applicant  filed,  &c.,  charging 
whereby  it  appears  that  the  applicant  has  not  received  or  pd  any  sum  or  liquidator 
sums  of  money  as  such  pro^'.  off.  liq.,  Let  the  applicant  be  discharged  ^^'^°  has 
as  such  prov.  off.  liq.,  and  let  the  recognisance,  &c.,  be  vacated.     Tax  the  received  nor 
costs,  charges,  aud  expenses  of  the  applicant  as  prov.  off.  lirj.  properly  v^^'^  money, 
incurred  fi'oni  the  date  of  his  appointmt  up  to  and  including  this  order, 
and  also  the  costs  of  the  petr  of  the  applicon  to  appoint  the  sd  prov. 
off.  liq.  and  consequent  thereon,  And  let  such  costs,  charges,  and  expenses 
be  pd  out  of  the  assets  of  the  sd  co  as  and  when  the  judge  shall  direct. 
National  Funds  Ass.  Co.,  Bacon,  V.-C,  21  April,  1877.     B.  1)28. 


Upon  the  applicon  of  W.,  late  prov.  off.  liq.  of  co,  and  upon  hearing  Form  420. 
the  solors  for  the  applicant  and  for  C,  the  liq.  of  the  sd  co,  and  upon  Order  for 
reading  the  order  dated  5  June,  1877,  the  office  copy  of  the  recognisance  payment  to 
hereinafter  mentd,  the  chief  clerk's  certificate,  dated  8  August,  1877,  ^^gionai" 
Let  the  sd  C,  the  liq.  of  the  sd  co,  out  of  the  assets  of  the  sd  co  pay  to  liquidator  of 
the  sd  W.  the  smn  of  53/.  19.s.  Id.  the  balance  by  the  sd  certificate  j'J!^\^'„gg 
certified  to  be  due  to  him  as  prov.  off.  liq.  of  the  sd  co.  And  Let  the 
recognisances  dated,  &c.,  and  entered  into  by,  &c.,  be  vacated.     LjjtfJes 
Iron  Aiiency,  Limfd,  0  August,  1877.     B.  1488. 

In  the  above  case  a  supervision  order  had  been  made  after  the  appointment 
of  a  provisional  liquidator. 

On  the  pt  of  A.  the  petr  in  the  order  in  these  matters  dated  the Form  421. 

day  of named,  to  proceed  with  the  winding  up  of  the  aljove-named  Summons  to 

co  under  the  sd  order.  proceed. 

Under  Eule  7,  a  copy  of  the  winding-up  order,  certified  to  be  a  true  copy 
thereof  as  passed  and  entered,  is  to  be  left  by  the  petitioner  at  the  chambers 
of  the  judge,  within  ten  days  after  the  same  has  been  passed  and  entered. 
And  upon  such  copy  being  left,  a  summons  as  above  is  to  be  taken  out  and 
served  upon  all  parties  who  may  have  appeared  upon  the  hearing  of  the  petition. 
The  certificate  should  be  written  at  the  foot  of  the  copy  order  thus  : — 


432 


'WINDING-UP. 


Form  422. 

Certificate 
that  copy 
order  true. 


Form  423. 


"We  [or,  I]  cerfcify,  that  the  above  is  a  true  copy  of  the  original  order 

as  j)assecl  and  entered.     Dated  this day  of  — — ,  18 — . 

A.  &  B.,  of , 

Solors  for  the  petr. 

As  to  what  may  be  done  upon  the  return  of  the  summons,  see  Rule  7  above 
mentioned.  Upon  the  return  the  chief  clerk  usually  fixes  a  day  for  the 
appointment  of  the  official  liquidator,  and  directs  notice  thereof,  and  also  of 
the  winding-up  order  to  be  advertised,  and  settles  and  signs  the  forms  of 
advertisement,  and  the  proceedings  are  then  adjourned. 

In  the  High  Ct  of  Justice.    Chancery  Division.     In  the  matter  of  the 

Go's  Acts,  1862  and  1867.     And  in  the  matter  of  the Co,  Limtd. 

By  an  order  made  in  the  above  matters  by  Mr.  Justice ,  dated 

the day  of ,  on  the  peton  of of  ■ ,  it  was  ordered  [Jiere 

set  out  the  ivhole  of  the  order  in  the  past  tense'].     Dated  this day 

of . 

N".  G.,  15, Street,  in  the  City  of  London, 

Solor  for  the  petr. 

Under  Rule  6,  every  order  for  winding  iip  by  the  Court,  or  subject  to  supervi- 
sion, is  within  tv/elve  days  after  the  date  thereof,  to  be  advertised  by  the 
petitioner  once  in  the  London  Gazette,  and  is  to  be  served  iipon  such  jjersons 
(if  any),  and  in  such  manner  as  the  Court  may  direct.  The  signature  of  the 
solicitors  must  be  attested,  and  the  original  order  or  an  office  copy  has  to  be 
produced  at  the  Loudon  Gazette  office.  The  advertisement  must  be  ■m.-itten  on 
stamped  forms. 

As  to  staying  advertisements  pending  an  appeal,  see  Form  660. 

Form  424.  Upon  motion  &c.,  for  C,  the  petr  named  in  the  order  made  on  the 
6th  May,  1876,  for  the  Trinding  up  of  the  above-named  co,  and  upon 
reading  the  said  order,  This  C*t  doth  order  that  the  time  limtd  for  the 
advertisemt  of  the  said  order,  dated  the  6th  May,  1876,  in  the  London 
Gazette,  pursuant  to  the  general  order  of  this  Ct,  be  extended  to  the 
10th  of  May,  1876.  Percy,  cj-c,  Co.,  Limtd,  Bacon,  Y.-C,  17  May,  1876. 
B.  880. 

Sometimes  by  accident  or  otherwise  the  advertisement  is  not  inserted  within 
the  twelve  days.  In  such  case  an  order  as  above  can  be  obtained  on  ex  i^arte 
motion  or  summons.  The  order  need  not  be  drawn  up.  Order  LII.,  r.  14.  An 
affidavit  explaining  the  omission  is  occasionally  required.  But  according  to 
present  practice  the  registrar  without  any  application  to  the  Court  by  consent 
inserts,  if  requisite^  in  the  draft  order,  a  paragraph  extending  the  time. 

Another  plan  commonly  adojjted  where  the  order  has  not  been  comi^leted  is 
to  apply  for  liberty  to  post-date  the  winding-up  order.  Borcase's  Society, 
11  W.  R.  459  ;  Wasland  Co.,  W.  N.,  1876,  279. 


Order 

extending 

time  for 

advertising 

winding-up 

order. 


Form  425. 

Advertiseiuent 
of  time  fixed 
for  appointing. 


In  the  matter,  &c. 

Notice   is  hby  given,   that  Mr.    Justice   has   fixed day, 

the  —  day  of [188   ]  at  —  o'clock  in  the  noon,  at  his 


Chambers,  in  the  Eoyal  Cts  of  Justice,  Strand,  London  [or  as  the  case 
may  6e]  as  the  time  and  place  for  the  appointmt  of  an  off.  liq.  of  the 

above-named  co.     Dated  this  — th  day  of . 

A.  B.,  Chief  Cleric. 


ArPOINTING    OFFICIAL    LIQUIDATOR.  433 

See  s.  92  of  the  Act,  and  Eules  8  and  9.     The  original  advertisement  signed   Form  425. 
by  the  chief  clerk  must  be  sent  to  the  London  Gazette  office.  • 

It  is  not  regular  to  appoint  an  official  liqiiidator  on  the  hearing  of  the  petition. 
General  Financial  Bank,  20  C.  Div.  276. 

The  usual  course  is  to  appoint  the  liquidator  in  chambers  after  advertise- 
ment, as  above.  G-enerally  the  time  for  appointment  is  fixed,  and  the  notice 
signed  by  the  chief  clerk,  upon  the  return  of  the  summons  to  proceed.  See 
supra.  Form  421. 

At  the  time  fixed  the  parties  attend,  and  if  only  one  person  is  proposed,  he 
will,  if  a  proper  person,  be  ajDpointed  ;  if  more  persons  than  one  are  proposed 
the  preference  is  generally  given  to  the  nominee  of  the  petitioner,  but  Peai'son,  J. 
does  not  follow  this  rule.  Hoyland  Co.,  W.  N.  ISSi,  13.  See  fui-ther  Buckley, 
211.  For  form  of  proposal,  see  Form  No.  7  in  Schedule  to  Eules  :  this  form  can 
easily  be  altered  so  as  to  suit  the  case  of  creditors. 

Evidence  must  be  provided  as  to  the  fitness  of  the  proposed  liquidator,  and 
the  following  affidavits  will  serve  as  examples.  It  is  generally  desirable  to 
have  more  than  one  affidavit  of  fitness. 

Where  a  pi-oper  person  has  been  chosen  in  chambers,  an  order  can  be  made 
appointing  him  official  liquidator,  and  directing  him  to  give  security  within  a 
time  limited,  or  the  appointment  may  be  postponed  until  after  he  has  given 
security.  The  last-mentioned  i^lan  is  that  most  commonly  ado]Dted.  See 
further,  infra,  note  to  Form  427. 


1.  I  have  for  more  than  [15  years]  last  past  known  as  being  well  Form  426. 

acquainted  with  W.,  of ,  public  accountant,  the  person  proposed  to  Affidavit  of 

be  appointed  off.  liq.  of  the  above-named  co.  fitness. 

2.  The  sd  W.  is  a  member  of  the  finn  of ,  public  accountants, 

and  has  been  a  member  of  such  firm  for  the  whole  period  dm'ing  which 
I  have  been  acquainted  with  him. 

3.  The  sd  W.  is  a  person  of  respectability  and  integrity  and  of  good 
credit,  and  in  my  judgm.t  he  is  a  fit  and  proper  person  to  be  appointed 
off.  liq.  of  the  co. 

Upon  the  applicou,  &c.,  and  upon  reading,  &c.,  the  judge  doth  hby  Form  427. 


appoint  R.,  of,  &c.,  off.  liq.  of  the  above-named  co.     \_If  security  1ms  not  Order  appoint- 

heen  nivm  add,  and  it  is  ordered  that  the  sd  R.  do  (forthwith,  or),  on  or  jps  ?fficial 
,     „,                  ,  .  -,1  -,     !>  ^      L^     liquidator, 

before  the day  of next,  give  security  to  be  approved  of  by  the 

judge.]     And  it  is  ordered  that  the  sd  R.  do,  on  the day  of ,  and 

day  of ,  18 — ,  and  on  the  same  days  in  each  succeeding  year, 

leave  his  accounts  at  the  chambers  of  the  judge.  And  it  is  ordered  that  all 

monies  to  be  received  by  the  sd  R.  l^e  pd  by  him  into  the  Bank  of  England 

to  the  credit  of  the  account  of  the  off",  liq.  of  the  sd  co  within  seven  days 

after  the  receipt  thereof.     [//^  case  t/co  or  more  off.  liqs.  are  appoinicd 

add,  and  the  judge  doth  declare  that  the  following  acts  required   or 

authorised  by  the  above  statutes  to  be  done  by  the  oft',  liq.,  may  be  done 

by  either  [or,  any  one,  or,  two]  of  the  off",  liqs.  hby  appointed,  that  is  to 

say,  [describe  the  acts']  ;  and  that  all  other  acts  so  required  or  authorised 

to  be  done,  be  done  by  both  [or,  all]  the  off.  liqs.  hby  appointed.] 

The  above  is  the  form  of  order  appointing  an  official  liquidator  given  in  the 
third  Schedule  to  Eules.     According  to  present  practice  the  official  liquidator 

F    F 


434 


WINDING-UP. 


Form  427.   usually  gives  security  before  the  order  is  drawn  up,  as  in  the  case  of  a  receiver 

(see  Order  L.,  rr.  IG,  17,  and  Re  Hoyland  Co.,  28  S.  J.  152,  123,  and  Form  428, 

infra),  or  is  ordered  to  give  security  "  forthwith." 

The  order  usually  provides  for  half-yearly  accounts,  but  orders  providing  for 
yearly  caccounts  are  not  uncommon.  See  Association  of  Land  Financiers,  Malins, 
V.-C,  26  Nov.,  1878.  2132.  Care  should  be  taken  as  soon  as  the  order  is  entered 
to  open  an  account  at  the  Bank  of  England.  This  is  done  by  notice  signed  by 
the  three  chief  clerks  of  judge  and  by  official  liquidator.  See  Form  li  in 
Schedule  to  Rules,  and  Rules  11,  32,  36 — 14.  Office  copy  of  order  to  be  left  at 
Bank,  Rule  11. 

Form  428.  Upon  the  applicon  of  S.,  &c.,  and  upon  reading  the  aflFt,  &c.,  and  the 
Appointment  rccognisance  dated  the  9th  of  Feb.,  1878,  entered  into  by  AV.  and  A.  and 
where  .security  M.  as  his  Sureties,  wliich  recognisance  has  been  approved  by  the  jndgc 
and  duly  enrolled.  Let  the  sd  W.  be  appointed  off.  liq.  of  the  above- 
named  CO,  and  \_usual  directions'].  River  Plate,  <tc.,  61?.,  Malins,  V.-C. 
13th  Feb.,  1878.     2.357,  B. 


already  given. 


Appointment 
where  com- 
pany is  surety 


Form  429.       Upon,  &c.,  and  upon  reading  the  several  aflFts,  &c.,  the  recognisance 
dated  3rd  Nov.,  1878,  acknowledged  by  B.  and  W.,  and  a  bond  dated 

27th  Nov.,  1878,  by  the  same  parties  and  The Association,  Limtd, 

duly  enrolled  on  the  4th  of  December,  1878,  appoint  B.  and  W.  joint 
off.  liqs.  of  the  above-named  co.  And  [accounts,  and  payments  into 
BanJc],     The  Tea  Co.,  Hall,  V.-C,  6th  Dec,  1878.     2108,  B. 

Form  430.  Titte.-  svpra,  Form  381. 

Advertisement       N'otice  is  hby  given  that  Mr.  Justice has,  by  an  order  dated  the 

of  appoint-       — th  day  of ,  appointed of ,  to  be  off.  liq.  of  the  al)ove- 

^^^  '  named  co.     Dated  this of . 

A.  B.,  Chief  Clcrh. 

Rule  14  of  the  General  Orders  of  1862  provides  that  every  appointment  of  an 
official  liquidator  shall  be  advertised  in  such  manner  as  the  judge  shall  direct, 
immediately  after  he  has  been  appointed  and  given  security.  The  original 
advertisement  must  be  written  on  stamped  form,  and  sent  to  office  of  London 
Gazette. 

Appointment  Section  97  of  the  Act  of  18G2  enables  the  liquidator,  with  the  sanction  of  the 

of  solicitor.         Court,  to  appoint  a  solicitor.    The  form  of  appointment  is  given  in  the  Schedule 

to  Rules,  No.  12.    The  sanction  is  obtained  on  summons.    Where  there  are  several 

lic(uidators  they  must  concur  in  the  appointment  of  a  solicitor  ;   see  note  to 

Form  717.     As  to  duties  of  the  solicitor,  see  Rule  68. 


Form  431.  Let,  kc,  on  the  pt  of  the  off.  Uq.  of  the  above-named  co  to  settle  the 
Summons  to  Security  to  be  given  by  him  pursuant  to  the  order  in  these  matters  made 
settle  security,  the  - 


•  day  of . 

See  as  to  the  security  to  be  given  by  official  liquidators  s.  92  of  the  Act  of 
1862,  and  Rules  10,  11,  and  12,  and  Rules  of  1883,  672—679.  The  above 
summons  is  only  used  where  the  order  appointing  the  liquidator  directs  him 
to  give  security.  See  Form  427.  But  in  many  cases  security  is  given  before 
the  order  of  appointment.  The  chief  clerk  determines  the  amount  and 
nature  of  the  security  to  be  given,  and  evidence  as  to  the  assets  should  be 
forthcoming. 


SECURITY    OF    OFFICIAL   LIQUIDATOR.  4,35 

Where  ordinary  securities  are  to  be  proposed,  an  affidavit  as  to  means  must    Form  431. 


be  provided.    See  Form  10  in  Schedule  to  Rules.     And  they  will  enter  into  a  -; 

recognisance  for  the  amount  fixed.     For  form  of  recognisance,  see  Form  9  in     "'^ran  ee 
Schedule  to  Rules. 

But  in  many  cases  the  bond  of  a  guai-antee  company  is  accepted  instead  of 
the  recognisance  of  ordinary  sureties.  The  following  are  the  cbief  London 
companies  doing  such  business,  viz.  :  The  Guarantee  Society — The  Provident 
Clerks  and  General  Accident  Insurance  Company  Limited — The  National 
Guarantee  and  Suretyship  Association  Limited — The  London  Guarantee  and 
Accident  Company  Limited.    The  premium  is  usually  10s.  per  cent,  per  annum. 

Where  a  person  desires  to  have  one  of  these  companies  for  his  sureties,  he 
should  apply  for  form  of  jiroposal. 

The  proposal  generally  requires  a  reference  to  a  banker  and  solicitor,  and  if 
the  reference  is  satisfactory,  the  proposal  is  accepted ,  and  the  applicant's  solicitor 
will  be  furnished  with  a  printed  form  of  bond  and  affidavit  as  to  the  comj^any's 
means,  to  be  submitted  to  the  chief  clerk  for  approval.  The  liquidator  has  to 
enter  into  a  counter  agreement  with  the  guaranteeing  company.  See  Krehl  v. 
Great  Central  Co.,  L.  R.  5  Ex.  289. 

The  following  is  the  form  of  bond  usually  adopted  : — 

Know  all  men  l)y  these  Presents,  That  I,  C. ,  of ,  and  We,  Form  432 

The Co.  Limtd  [or  Society]  are  jointly  and  severally  held  arid  Bond  where 

firmly  bomid  nnto  \^A.  and  B.,  two  senior  chief  clerics']  of  the  High  Ct  of  guarantee 

Jnstice,  in  the  smn  of 1,  of  lawful  money  of  the  United  Kingdom  of  sul-etfe's^ 

Oreat  Britain  and  Ireland,  to  be  pd  imto  the  sd  A.  and  B.,  or  one  of 
them,  or  the  exs  or  ads  of  them,  or  one  of  them.  For  which  paymt  well 
•and  truly  to  be  made  I,  the  sd  C,  for  myself,  my  heirs,  exs,  and  ads,  and 
every  of  them,  and  We,  the  sd  co  \_or  society],  for  om-selves  and  our 
successors,  do  bind  and  oblige  ourselves  for  the  whole  firmly  by  these 
presents. 

Sealed  with  the  seal  of  the  sd  C,  and  also  with  the  seal  of  the  sd 

CO  \_or  society].     Dated  the day  of  ,  in  the  year  of  om-  Lord 

188—. 
Whereas  in  the  matter  of  the  Cos  Acts,  18G2  and  1867,  and  in  tlie 

.  matter  of  The Co,  Limtd,  the  judge  to  whose  ct  the  winding  up  of 

the  sd  CO  is  attached,  has  by  an  order  dated  the  day  of  

•appointed  the  sd  C.  off.  liq.  of  the  sd  co,  and  has  thereby  directed  him 
to  give  security  to  be  approved  of  by  the  sd  judge  [or,  in  case  the 
•security  precedes  the  order  appointing,  has  approved  of  the  sd  C.  as  a 
proper  person  to  be  appointed  off.  liq.  of  the  sd  co,  upon  his  giving 

security].    And  Whereas  the  sd  judge  has  approved  of  The Co, 

Limtd,  above  named,  to  l)e  sm-eties  for  the  sd  C.  for  the  sd  sum  of 

1.,  and  has  also  approved  of  the  above  bond,  with  the  underm-itteu 

condition,  together  with  the  recognisance  of  the  sd  C.  in  the  penal  sum 

of /.,  bearing  even  date  herewith,  as  a  proper  security  to  be  entered 

into  by  the  sd  C.  and  the  sd  co  pursuant  to  the  sd  order  and  the  general 

•order  of  the  ct  in  that  behalf,  and  in  testimony  of  such  approbation  the 
chief  clerk  of  the  sd  judge  hath  signed  an  allowance  in  the  margin  hereof 

■and  of  the  sd  recognisance  respectively. 

Now  the  condition  of  the  above-written  bond  or  obhgation  is  such 

F  F  2 


436  WINDING-Ur. 

Form  432.  that  if  the  ahove-homideii  C,  his  exs  or  ads,  or  some  or  one  of  them  do 
and  sliall  duly  account  for  what  he  the  sd  C.  shall  receive  or  shall  become 
liable  to  pay  as  such  off.  liq.  of  the  sd  co  as  afsd  at  such  period  and  in 
such  manner  as  the  High  Ct  of  Justice  or  the  judge  thereof  to  whose  ct 
the  winding-up  of  the  sd  co  shall  for  the  time  being  be  attached  shall 
apjjoint,  and  do  and  shall  pay  the  same  as  such  ct  or  judge  hath 
directed  or  shall  hereafter  direct,  then  the  above-written  bond  or  obliga- 
tion shall  be  void  or  else  shall,  subject  to  the  provisions  hereafter  contd, 
be  and  remain  in  full  force  and  virtue,  Provided  always  that  if 
default  shall  be  made  by  the  sd  C.  in  paying  to  the  sd  co  [or  society], 

on  or  before  the  ■ day  of ,  in  any  year  of  guarantee,  the  annual 

2")i-emium  or  sum  of /.,  then  the  sd  co  [or  society]  shall,  at  any  time 

after  such  default  in  paymt  be  at  libty  to  apply  by  summons  to  the 
judge  at  chambers  to  whose  ct  the  winding-up  of  the  sd  co  shall  for  the 
time  being  be  attached  to  he  relieved  from  all  further  lialn'lity  as  such 
sureties  as  afsd  from  the  final  hearing  of  such  summons  ;  such  sunnnons. 
having  been  served  upon  such  persons  as  the  judge  shall  direct,  and 
being  finally  heard  all  further  liability  of  the  sd  co  [o7'  society]  as  such 
sureties  as  afsd  shall  from  and  after  such  final  hearing  of  such  summons 
or  from  and  after  such  other  time  as  the  judge  shall  direct,  cease,  and 
determine,  save  and  except  in  respect  of  any  loss  or  damage  occasioned 
by  any  act  or  default  of  the  sd  G.  in  relation  to  his  duties  as  such  off. 
liq.  as  afsd  previously  to  such  cesser  and  determination  of  liability  : 
Provided  always  and  it  is  hby  agreed  and  declared  that  this  bond  is. 
entered  into  by  the  sd  co  [_or  society]  on  the  condition  that  the  capital 
stock  and  funds  according  to  the  articles  of  association  of  the  sd  ca 
[^or  the  deed  of  settlemt  of  the  sd  society]  shall  alone  be  liable  ta 
answer  and  make  good  all  claims  in  respect  of  this  bond,  and  that  no 
director  or  proprietor  of  the  sd  society  [or  co]  shall  in  any  manner  be 
personally  liable  or  subject  to  any  claims  or  demands  by  reason  of  such 
bond  beyond  the  amount  unpaid  of  his  or  her  share  or  shares  of  such 
capital  stock  or  funds  \_fhc  pt'ecficlmg  jyroviso  is  not  norosmry  in  the  case  of 
a  Jim  Id  ro]  :  Provided  always  that  a  certificate  or  certificates  under  the 
hand  of  the  chief  clerk  for  the  time  being  of  the  judge  to  whose  ct  the 
winding-up  of  the  sd  co  shall  for  the  time  being  be  attached  of  the  amount 
which  the  sd  C.  as  such  off.  liq.  as  afsd  is  liable  to  pay  and  has  not  pd, 
shall  be  sufficient  and  conclusive  evidence  against  the  sd  C,  his  heirs, 
exs,  and  ads,  and  against  the  sd  co  [_o)-  society],  and  also  as  between  the 
sd  CO  [o}'  society]  and  the  sd  A.  and  B.,  of  the  truth  of  the  contents  of 
the  sd  certificate  or  certificates,  and  that  this  l)ond  has  become  forfeited 
thereby  to  the  amount  of  the  sum  stated  in  such  certificate  or  certifi- 
cates, and  shall  form  a  valid  ami  binding  charge  and  claim  not  only 

against  the  sd his  heirs,  exs,  and  ads,  but  also  against  the  sd  ca 

[or  society]  and  the  funds  and  ppty  thereof  without  its  being  necessary 
for  the  sd  A.  and  B.,  or  either  of  them,  their  or  either  of  their  exs  or 
ads  first  to  take  legal  or  other  proceedings  against  the  sd  C,  his  heirs^ 
exs,  or  ads,  for  the  recovery  thereof,  and  without  any  further  or  other 


SECUEITY  OF    OFFICIAL   LIQUIDATOR.  437 

proof  being  given  either  by  or  on  the  pt  of  the  sd  A.  and  B.,  or  either  Form  432. 
of  them,  their  or  either  of  their  exs  or  ads  in  any  action,  suit,  or  proceed- 
ing,  to  enforce  this  bond  against  tlie  sd  co  [_or  society],  or  against  tlie 
sd  C,  his  heirs,  exs,  or  ads,  or  by  or  on  the  pt  of  the  sd  co  [or  society], 
in  any  action  or  proceeding  against  the  sd  C,  his  heirs,  exs,  or  ads,  of 
the  amount  of  sucli  damage  or  loss,  or  that  the  same  has  been  sustained, 
incurred,  or  occasioned  by  and  tln-ough  the  act  or  default  of  the  sd  0. 
while  in  office  :  Provided  always,  and  it  is  f m'ther  agreed  between  the  sd 
C.  and  the  sd  co  [<w-  society],  that  the  sd  C.  shall  and  will  on  being  dis- 
charged from  his  office  of  or  ceasing  to  act  as  such  ofiF.  liq.  as  afsd, 
forthwith  give  notice  thereof  in  writing,  and  also  furnish  to  the  sd 
CO  [or  society],  free  of  charge,  an  office  copy  of  the  order  of  the  court  or 
judge  discharging  him  from  his  office  as  such  off.  liq.  as  afsd  :  And 
further,  that  he  the  sd  C,  his  heirs,  exs,  and  ads,  shall  and  will  from 
time  to  time  and  at  all  times  save,  defend,  and  keep  harmless  the  sd 
CO  [or  society]  and  their  successors  and  the  ppty  and  funds  of  the  sd  co 
[or  society]  from  and  against  all  loss  and  damage,  costs,  and  expenses 
which  the  sd  co  [or  society],  or  the  funds  or  ppty  thereof,  shall  or  may 
or  otherwise  might  at  any  time  sustain  or  be  put  unto  or  for  or  l^y  reason 
or  in  consequence  of  the  sd  co  [or  society]  ha^ing  entered  into  the 
above-wi'itten  bond  for  and  at  the  reipiest  of  the  sd  C. 

Ix  wiTXESS  whereof  the  sd  • •  hath  hereunto  set  his  hand  and  seal, 

and  the  sd  co  [or  society]  have  hereunto  caused  their  conunon  seal  to  be 
affixed  the  day  and  year  first  above  written. 

The  bond  requires  a  10s.  stamp.     The  recognisance  does  not  require  a  stamp. 
As  to  reopening  accounts  after  chief  clerk's  certificate  of  liability  to  pay,  see 
Birmingham  Breicery  Co.,  48  L.  T.  032;  31  W.  E.  415. 

Upon  the  applicon  of  the  oflp.  liq.,  &c.,  Let  the  time  by  the  sd  order  Form  433. 
dated  23  January,  1878,  within  which  the  off.  liq.  was  directed  to  give  o^^^7~         ~ 
secm-ity,  be  enlarged  to  the  2Uth  Feb.,  1878.     Plionjjliate  Sewage  Co.,  extending 
MaHns,  V.-C,  G  Feb.,  1878.     B.  203.  !Sur%.'""' 

Sometimes  secimty  cannot  be  given  within  the  time  limited,  and  in  such  case 
a,  summons  to  extend  the  time  should  be  taken  out,  or  if  desirable  application 
<;an  be  made  to  the  Court  by  motion  ex  'parte. 

In  psuance  of  the  directions  given  to  me  by  the  V.-C,  Sir  ,  Form  434. 

I  hby  certify  that  in  psuance  of  the  order,  in  these  matters  dated,  &c.,  chief  clerk's 

,  X.  of  ,  who  is  by  the  sd  order  appointed  off.  liq.  of  the  certificate  of 

above-named  co,  and  who  is  thereby  ordered  on  or  before  the day  ^^'^^^  ^  given. 

-of ,  to  give  security  to  be  approved  of  by  the  sd  judge  has  given 

secm-ity  pm-suant  to  the  General  Orders  and  Rules  of  Ct,  and  has  entered 
into  his  own  recognisance  and  into  a  bond  together  with  the  [guarantee 
society  of,  &c.],  or  his  sureties,   which   recognisance   and  bond,  and 

dated  respively  the  —      day  of ,  and  have  respively  been  approved 

by  the  judge  [or  by  entering  into  a  recognisance  together  with and 

,  his  sm-eties,  dated  the day  of ,  which  has  been  approved 


438 


WINDING-Ur. 


rorm  434.  of  by  the  sd  judge,]  in  testimony  whereof  I  have  signed  an  allowance  in 
"~  the  margin  thereof  [respively]. 

The  evidence  adduced  consists  of  the  affidavit  of  the  sd  N.  filed.  &c. 

When  security  has  been  given  pui-suant  to  an  order,  the  chief  clerk  will 
certify  as  above.  Where  the  liquidator  gives  security  before  appointment 
(Form  427)  the  necessity  for  this  certificate  is  avoided. 

Form  435.       On  the  pt  of  the  off.  liq.  of  the  above-named  co  that  the  security 

Summons  to~  given  by  him  and  his  sureties,  J.  &  K.,  in  these  matters  by  the  recog- 

reduce  nisance  entered  into  by  them  for  3000/'.,  and  dated,  &c.,  may  be  reduced 

security.  ^^  ^j^^  ^^^^  ^^   ^^^^^ 

Where  in  the  course  of  a  winding  up,  by  reason  of  the  distribution  of  assets, 
or  otherwise,  it  is  considered  that  the  security  given  by  the  official  liquidator 
is  excessive,  he  usually  applies  by  summons  for  an  order  reducing  the  same. 
The  summons  should  be  supported  by  an  affidavit  as  to  the  facts. 

Form  436.       Upon  the   ipplicon  of  M.,  the  off.  hq.,  &c.,  Let  the  secm-ity  given  by 
Order  reducing  the  sd  off.     q.  iu  thesc  matters  be  reduced  as  fi-om  the  date  of  this  order 

security.  to  the  sum  of  2oO/.,  and  let  the  sd  bond  of  the  sd  M.  and  The Co, 

Limtd,  as  from  the  date  of  this  order,  stand  as  a  security  for  the  sum  of 
200/.  only,  instead  of  the  sum  of  1000/.,  in  respect  of  any  sum  or  smns. 
of  money  to  be  received  by  the  sd  off.  liq.  after  the  date  of  this  order, 
but  subject  and  without  prejudice  to  the  liability  of  the  sd  M.  and  the 
sd  CO  or  either  of  them  under  the  sd  bond  in  respect  of  any  smn  or  smn& 
of  money  received  by  the  sd  M.,  or  otherwise,  prior  to  the  date  of  this, 
order.  Thermo  Electric  Generator  Co.,  Limtd,  M.  R.,  TJ  July,  1878. 
1548  B. 

For  order  reducing  the  security  by  bond  given  by  official  liquidator  and 
receiver  [in  action]  for  debenture  holders  from  10,000?.  to  500L,  see  Western  of 
Canada  Oil,  <Sfc.,  Co.,  Limtd.,  M.  E.,  24  July,  1878.     1559  B. 

Form  437.        Upon  the  applicon  of  the  off.  liq.,  &c.,  It  is  ordered  that  the  security 

^j^Q^j^gj.  given  by  the  sd  off.  liq.  by  bond,  together  with  The Co,  Limtd,  as. 

his  sureties,  dated  the  23rd  Jan.,  1877,  be  and  the  same  is  hby  reduced 
fi'om  the  sum  of  10, 000/.,  the  amount  named  in  the  sd  bond,  to  the  sum 
of  2000/.,  and  that  the  sd  l)ond  do.  as  from  the  date  hereof,  stand  as  a 
security  for  the  sum  of  2()0(»/.  and  no  more,  And  it  is  ordered  that  the 
liability  of  the  sd  co  in  respect  of  the  matters  mentd  in  the  sd  bond, 
shall  after  the  date  hereof  l)e  limtd  to  the  sum  of  2000/.  Britannia  Iron 
Works,  M.  Ft..  7  Mar.,  1878.     A.  480. 

Form  438.       Upon  the  applicon  of  B.,  the  oft",  liq.,  &c.,  and  upon  reading  the 

Order  on  orders,  &c.,  and  the  chief  clerk's  certificate,  dated,  &c.,  an  office  coipy  of 

retirement  of     the  recognisance  entered  into  by  the  sd  B.  together  with  W.  &  1).  as. 

sureties.  j^^^  sureties,  dated,  &c.,  and  the  sd  W.  &  T>.  being  desirous  of  retiring 

from  such  suretyship,  and  the  sd  off.  liq.  having  given  fresh  security 

approved  l)y  the  judge,  such  fi'esh  security  consisting  of  a  recognisance. 


ACCOUNTS    OF    OFFICIAL    LIQUIDATOR.  439 

&c.,  which  scl  last-nicntd  rccog-nisance  has  been  duly  eiiroUed,  Let  the  sd  Form  438. 
recognisance  entered  into  by  the  sd  B.,  together  with  the  sd  ^Y.  &,  D.,  as  ' 

his  sureties,  dated,  &c.,  be  vacated.     South  Devon,   dx.,  Association, 
M.  R.,  18  April,  1878.     845  B. 

Special  circumstances  must  be  shown  to  induce  the  Court  to  allow  a  surety 
to  retire.     See  further  Seton  444  et  seq. 

On  the  pt  of  the  off.  liq.  of  the  above-named  co,  that  he  may  be  at  Form  439. 
libty  to  put  in  suit  the  recognisance  dated,  &c.,  entered  into  by  A.,  the  ^  t 

''         r  o  '  '  J        >  bummons  lor 

late  off.  liq.  of  the  sd  co,  together  with & ,  his  sureties.  liberty  to  put 


Dan.  Forms  p.  906  ;  Seton  444. 

For  order  enforcing  recognisance  against   surety  see   Moorwood  Moo) 
Malins,  V.-C,  7  Aug.  1877.     B.  1483. 

Compare  with  order  in  Seton,  p.  443,  and  see  Dan.  Forms,  p.  90G. 


recognisance  in 
suit. 


Co., 


Where  an  official  or  provisional  liquidator  is  discharged,  whether  upon  a  Vacatin", 
dissolution  order  being  made  or   otherwise,  an  order   is  made  vacating  any 
recognisance  or  bond  entex-ed  into  or  given  by  him  or  his  sureties.     See  Forms 
418  and  401  et  seq. 


On  the  pt  of  the  off.  liq.  to  proceed  on  his  first  [or  as  the  case  may  Form  440 
he']  account  herein. 


Summons  to 

As  to  the  accounts  see  Eules  11,  13,  and  19,  and  Rules  of  1883,  G74 — 679.  proceed  on 

At  the  time  appointed  by  the  order  [Form  427]  the  account  should  be  left,  account, 
duly  verified  as  below  mentioned,  and  a  summons  taken  out  as  above.     Where 
the  provisional  liquidator  has  been  appointed  official  liquidator,  he  will  have  to 
bring  in  separate  accounts  and  a  separate  summons  to  proceed  on  each  must  be 
issued. 
The  following  will  show  the  form  of  account : 


In  the  High  Ct  of  Justice. 
Chancery  Division. 
Mr.  Justice . 


Title. 


Form  441. 


Form  of 
account. 


The  first  [or  as  the  case  maij  he']  account  of  A.,  the  off.  liq.  of  the 

above-named  co,  appointed  l)y  the  order  dated  the day  of ,  of 

his  receipts,  and  paymts,  and  allowances  as  such  off.  liq.,  from  the 

day  of to  the day  of . 


Receipts. 

No.  of 
Item. 

Date 

when 

received. 

Names  of 

persons 

from  wh(jni 

received. 

On  what 
aceount 
received. 

Amount 
received. 

£    y.    d. 

Payments  and  Allowances. 

No.  of 
Item. 

Date 

when 

paid  or 

allowed. 

Names  of 
persons 

to  whom 
paid  or 

allowed. 

For  what 
purpose 
paid  or 
allowed. 

Amount 
paid  or 
allowed. 

&   .--.    d. 

440 


"WINDING-UP. 


Form  441. 


Simiinary. 
Total  amount  received  ou  this  account.         .         .         .     £ 
Total    amount    of   paymts    and    allowances    on   this 
account  .        . £ 


Balance  due  from  the  off.  liq.  and  now  in  the 
Bank  of  England  to  the  credit  of  the  oflF.  liq. 
The  summary  must  of  course  vary  according  to  circumstances. 
The  following  is  another  example  : 

Summary. 

Total  amount  received  on  this  account 

Balance  due  from  the  off.  liq.  ou  his  [Istj  account,  and 

in  the  Bank  of  England  on  the  day  of 

[foot  of  last  accounf] 


Total  Receipts £ 

Total  amount  of    paymts    and    allowances,  including 

/.  invested  in  the  pchase  of  — /.  Consolidated 

Three  p.  c.  Annuities  in  the  name  of  the  off.  liq.       .     £ 


Balance  due  from  the  off.  liq.  and  now  in  tlie 

Bank  of  England  to  the  credit  of  the  off.  liq.     £      :       : 
In  addition  to  such  cash  balance  of  £     :     :     there  is  standing  in  the 
name  of  the  off.  liq.,  on  account  of  the  sd  co.,  the  sd  sum  of /.  Con- 
solidated Three  p.  c.  Annuities. 

At  the  hearing  of  the  summons  [Form  440]  the  liquidator  will  attend  and 
vouch  the  account,  and  the  summons  will  be  adjourned  frona  time  to  time  as 
may  be  necessary.  Under  the  Eviles  of  1883  (Order  50,  rr.  20,  23),  the  account 
must  be  verified  by  the  liquidator's  affidavit  before  it  is  left  at  Chambers.  The 
affidavit  is  to  be  as  follows  (Order  L.,  r.  20),  but  see  note  infra  : — 


Form  442.       I,  C.  of 


Affidavit  veri- 
fying account. 


— ,  accountant,  the  off.  li({.  of  tlie  above-named  co,  make 
oath  and  say  as  follows  : — 

1.  The  account  contd  from  page  to  page ,  ])oth  inclusive, 

in  each  of  the  two  several  l)ooks  marked  with  the  several  letters  A.  and 
B.  i)roduced  and  shown  to  me  at  the  time  of  swearing  this  my  aft't,  and 
purporting  to  be  an  account  of  the  receipts  and  paymts  by  me  as  such 
off.  liq.  from  the  7th  day  of  January,  1884,  to  the  Gth  day  of  July,  1884, 
both  inclusive,  contains  a  true  account  of  all  and  every  sum  or  sums  of 
money,  [and  of  all  interest,  discount,  and  accretions  in  respect  thereof] 
received  by  me  or  [allowed  to  me  or  received  by  or  allowed  to]  any  other 
jDcrson  or  persons  by  my  order  or  to  my  knowledge  or  belief  for  my  use 
on  account  or  in  respect  of  the  sd  co  :  except  what  is  included  as  received 
in  the  former  account  [or  accounts]  sworn  by  me. 

2.  The  several  sums  of  money  mentd  in  the  sd  account  hby  verified  to 
have  been  pd  and  allowed,  have  been  actually  and  truly  so  i)d  and 
allowed  for  the  several  pposes  in  the  sd  account  mentd. 

■J.  The  sd  account  is  just  and  true  in  all  and  every  the  items  and  par- 
lars  therein  contd  according  to  the  best  of  my  knowledge  and  belief. 


ACCOUNTS    OF    OFFICIAL    LIQUIDATOR.  44I 

4.  AV.  and  T.,  the  sureties  named  in  tlie  recognisance  dated,  &c.,  are  Form  442. 
both  aHve  [and  resident  in  Great  Britain],  and  neither  of  them  has 
become  banki-upt  or  insolvent. 

The  words  in  brackets  were  formerly  used  but  they  do  not  appear  in  Form  22, 
App.  L.  to  the  Eules  of  1S83. 

It  is  eminently  inconvenient  to  enter  the  account  in  the  books  before  it  has 
been  vouched  and  passed,  and  accordingly  in  some  of  the  chambers  directions 
have  been  given  to  verify  the  account  when  left  by  affidavit  without  reference 
to  the  books,  and  when  passed  to  enter  it  in  the  books  and  verify  by  affidavit 
as  above. 

If  a  company  is  surety  Clause  4  must  be  modified  accordingly,  e.g. : —  Wliere 

The Company,  Limited,  who  became  and  are  sureties  for  me  as  official  guai';>ntee  com- 

liquidator  of  the  said  company,  are  solvent  and  able  to  pay  their  liabilities,  to  •'^ '    ^  '^       •'' 
the  best  of  my  knowledge,  information,  and  belief. 

The  affidavit  must  refer  to  the  books  as  exhibits,  and  the  memorandum  of  Exhibits, 
identity  will  state  that :    "  This  and  the  preceding   [10]   pages  contain  the 
account  entered  in  the  book  marked  A.  mentioned  and  referred  to  in  the  affi- 
davit of sworn  in  these  matters  before  me  by  the  said this day 

of ." 

The  affidavit  having  been  sworn  and  filed,  an  office  copy  is  left  at  chambers, 
together  with  the  two  books,  and  when  the  account  has  been  vouched  the  chief 
clerk  makes  a  certificate  of  allowance  as  follows  [Form  -143]  and  also  signs  at 
the  foot  of  the  accounts  a  note  stating  that : 

"  This  is  the  account  mentioned  in  my  certificate  dated  the day  of . 

,  Chief  Clerk." 

In  psuance  of  the  directions  given  to  me  by  The  Honom-able  Mr.  Form  443. 

Justice ,  I  hbj  certify  that  in  psuance  of  the  order  made  in  these  chief  clerk's 

matters  dated  the day  of ,  A.,  the  person  appointed  off.  liq.  '■ertificate. 

of  the  above-named  co,  has  rendered  his  [1st]  account  as  such  off".  Hq. 
of  his  receipts  and  paymts  and  allowances  in  respect  of  the  sd  co  from 

the  time  of  his  appointmt  [or  as  from]  the  — —  day  of to  the 

day  of ,  and  such  account  has  been  passed  and  duly  entered 

pm'suant  to  the  general  orders,  and  is  verified  by  the  afft  of  the  sd  off. 

liq.  filed  the  day  of .     The  sd  receipts  amount  altogether  to 

the  sum  of  316/.  Is.  dd.,  and  the  sd  paymts  and  allowances  to  the  smn 
of  47/.  12s.  Od.,  and  there  is  due  from  the  sd  off.  liq.,  as  the  balance  of 
liis  1st  account,  the  sum  of  2681.  9s.  0^/.,  which  sum  the  sd  off.  liq.  is  to 
account  for  in  his  next  account. 

There  was,  on  the  1st  day  of  IMay,  1883,  standing  in  the  Bank  of 
England  to  the  credit  of  the  account  of  off.  liq.  the  sum  of  2661.  5s.  Gd., 
as  appears  by  the  deputy  cashier's  certificate  dated  the  -ith  day  of  May, 
1883,  and  the  sd  off.  liq.  has  in  his  hands  the  smn  of  21.  -Is.  Sd. 

In  psuance,  &c.,  the  sd  receipts  amount  altogether  to  the  sum  of  3110/.,  Form  444. 
which  being  added  to  the  sum  of  170(.»/.  the  balance  due  from  the  sd  "^    7^  " 

^  Another 

off.  liq.  on  his  last  account,  and  standing  to  the  credit  of  the  sd  off.  liq.  certificate. 
at  the  Bank  of  England,  they  make  together  the  smn  of        .         2000/. 

The  sd  jjaymts  and  allowances  amount  to  the  sum  of  .  -±00/. 

And  there  is  due  from  the  sd  off.  liq.  as  the  balance  of  such 

account  the  sum  of        ......         .         1600/. 

Which  sum  of  1600/.  was  standing,  &c. 


443 


WINDING-UP. 


Form  445.       In  psuance,  &c.,  the  sd  off.  liq.  has  not  received  anything  from  the 

foot  of  his  third  account  up  to  and  inchiding  the of  .     The 

sd  paymts  amount,  &c. 


Another 
certificate 
where  no 
receipts. 

Form  446 


Certificate  on 
passing  final 
account. 


In  psuance,  &c. 

The  sd  receipts  amount  altogether  to  the  sum  of 
To  which  being  added  the  l)alance  due  from  the  sd  off. 
Hq.  on  passing  his  3rd  account  amounting  to  the 
sum  of  ........         . 

They  make  together  the  sum  of  .... 

The  paymts  and  allowances  also  amount  to  the  like 
sum  of  ........         . 

And  there  is  not  anything  remaining  due  to  or  from  the  sd  oif.  liq.  on 
the  balance  of  such  4th  and  final  account. 

The  paymts  allowed  in  the  sd  account  include  the  sum  of /.  to 

the  said  H.  in  respect  of  his  remuneration  as  such  off.  liq.  as  afsd. 
The  paymts  allowed  in  the  sd  account  also  include  the  sum  of 


9/.  75.  10^. 


225/.  6s.  lOd. 
234/.  14s.  Sd. 

234?.  14s.  8d. 


being  the  amount  of  dividends  unclaimed  and  pd  into  Ct  to  the  credit 
of  these  matters  pursuant  to  [Kule  25  of  the  Chancery  Funds  Consoli- 
dated Rules,  1874].  And  I  hby  certify  that  the  affairs  of  the  sd  co 
have  been  completely  wound  up. 


Form  447.       I. 


Summons  to 
extend  time 
to  leave 
account. 


-  of  ,  the  off.  liq.  of  the  above-named  co,  make  oath  and 

Affidavit  of       say  as  follows  : — I  have  not,  nor  hath  nor  have  any  person  or  persons 
no  receipts  or    lyy  ^w  order  or  to  my  knowledge  or  belief,  for  my  use  as  such  off",  liq.  as 

payments  since     n  t  ■       ^  ^      n  •    ,  ,      t  , 

last  account,  ^^'^f^  receivetl  any  sum  or  sums  of  money,  nor  any  interest,  discount,  or 
accretion  iu  respect  thereof,  or  made  any  payrat  or  paymts  whatsoever 

on  account  or  in  respect  of  the  above-named  co  since  the of , 

the  date  of  the  closing  of  my  Ath  account  herein.     2.  [As  to  sureties.] 

Form  448.  On  the  pt  of  A.,  the  off.  liq.  of  the  aliove-named  co,  that  he  may  have 
14  days  further  time  to  leave  in  my  chambers  his  (first)  account  as  such 
off.  liq.  pursuant  to  the  order  dated,  &c. 

On  the  pt  of  B.  of ,  a  creditor  of  the  above-named  co,  that  A.,  the 

off.  liq.  of  the  sd  co,  may  be  ordered  within  7  days  after  service  to  leave  in 
my  chambers  his  [third']  accounc  as  such  off",  liq.  pursuant  to  the  order 
dated,  &c.,  and  that  the  sd  A.  may  be  ordered  to  jjay  the  costs  of  this 
applicon. 

If  the  liquidator  makes  default  in  bringing  in  his  account,  any  party- 
interested  can  apply  as  above.  See  Wright's  case,  5  Ch.  443.  And  see  Orders 
of  188.3,  r.  G71.     And  if  necessary  an  order  for  attachment  can  be  obtained. 

For  orders  directing  provisional  liquidators  to  bring  their  accounts,  see  supra. 
Forms  417  et  seq. 

Where  the  liquidator  dies  an  order  may  be  made  as  follows  :  See  Dan.  Forms, 
p.  905  ;  Seton,  452. 

Form  450.  Upon  the  applicon  of  L.,  the  exor  of  tlic  will  of  C,  deceased,  late  the 
off.  liq.  of  the  above-named  co,  and  upon  hearing  the  solors  of  the  ap- 
plicant and  of  S.,  the  j^reseut  off.  liq.  of  the  sd  co,  and  upon  reading 


Form  449. 

Summons  to 
compel  official 
liquidator  to 
bring  iu  his 
account. 


Order  givin 
liberty  to 
execntor  of 


EEMUNEEATION    OF    OFFICIAL    LIQUIDATOE.  443 

probate  of  the  will  of  the  sd  C,  deceased,  Let  the  sd  L.  he  at  libtv  to  Form  450. 
carry  in  and  pass  the  final  acconnt  of  the  sd  C,  deceased,  as  such  off.  deceased 
liq.  from  the  foot  of  the  last  account  to  the  time  of  his  decease.     And  liquidator  to 
Let  the  sd  L.  pay  the  balance  (if  any)    which  may  be  certified  to  be   ""  ' 
due  from  the  estate  of  the  sd  C,  deceased,  into  the  Bank  of  England  to 
the  credit  of  the  account  of  the  off.  liq.  of  the  sd  co.     And  upon  such 
paymt  or  if  it  shall  be  certified  that  there  is  not  any  balance  due  let  the 
recognisance  dated,  &c.,  be  vacated :  And  let  the  costs  of  the  sd  L.  of 
this  applicon  and  consequent  thereon  as  between  solor  and   client  Ije  pd 
by  the  sd  S.,  and  allowed  to  him  on  passing  his  accounts.     Ottoman  Co., 
Limtcl,  Bacon,  Y-C,  15  Ap.  1878.     828  B. 

Let,  &c.,  on  the  pt  of  X.,  one  of  the  sureties  for  A.,  the  off.  Hq.  of  Form  451. 


the  above-named  co,  that  the  sd  N.  may  be  at  libty  to  attend  at  his  own  Summons  by 
expense  the  passing  of  the  accounts  of  the  sd  A.  as  such  off.  liq.  ^^^^  ^T 

In  special  cases,  e.g.,  where  the  liquidator  has  become  bankrupt,  his  surety  attend  passing 
may  obtain  liberty  to  attend  as  above  :  See  Dan.  Pr.  IGOG ;  Seton,  446.     And  °^  account, 
see  Birmingham  Brewery  Co.,  48  L.  T.  362. 

Ujion  the  applicon  of  W.  of ,  a  creditor  of  the  above-named  co,  Form  452. 

and  \\\)0\\  hearing  the  solors  for  the  applicant  and  for  the  off.  liq.  of  co.  Liberty  to 
and  upon  reading  the  order  dated  29  Jan.,  1878,  and  the  afft  of  S.  filed  issue  an 
28  Mar.,  1878,  of  service  of  the  sd  order  upon  the  sd  H.,  Let  the  ap-  aaainst  official 
plicaut  be  at  libty  to  issue  an  attachmt  against  the  sd  H.  for  breach  liquidator. 
of  the  sd  order  of  29  Jan.,  1878.     Norman  Patent  Setving  Machine  Co., 
Hall,  V.-C,  10  Ap.,  1878.     B.  535. 

On  the  pt  of  the  off.  liq.  of  the  above-named  co,  that  he  may  be  at  Form  453. 
libty  to  retain  and  pay  himself  out  of  the  assets  of  the  co  the  sum  of  Summons  bv 

1,  on  account  of  his  remuneration  as  such  off',  liq.  official  liqui- 
dator for 
Section  93  of  the  Act  of  1862  provides  that  there  shall  be  paid  to  the  official  liberty  to 
liquidator  such  salai-y  or  remuneration,  by  way  of  percentage  or  otherwise,  as  retain  money 
the  Coiirt  may  direct ;  and  if  more  liquidators  than  one  are  ajipointed,  such  °"  accoun   0 
remuneration  shall  be  distributed  among  them  in  such  projDortions  as  the  Court 
directs.     See  also  Eule  18  of  the  G-en.  Order  of  Nov.  1862. 

The  following  regulation  as  to  renumeration  has  been  made,  and  is 
acted  on  : 

EEGULATION 

AS  TO  THE  MODE  OF 

EEMUNEEATINa  OFFICIAL  LIQUIDATOES 

Adopted  by  the  Master  of  the  Rolls  and  the  V ice-Chancellors,  and  sanctioned  and 
approved  by  the  Lord  Chancellor. 


Evert  application  by  an  official  liquidator  for  remuneration  must  be  supported 
by  an  affidavit  showing-  the  number  of  hours  devoted  by  him  and  his  clerks 
respectively  to  the  business  of  the  liquidation. 


444  WINDING-UP. 

Form  453.       I^  fixing  the  amount  of  the  remuneration,  the  judge  will,  Bubject  as  herein- 
after  mentioned,  be  guided  by  the  following  scale  : — 


Liquidators.  Per  day  of 

Group  A.  eight  liours. 

Class  1.  Where  the  assets  divisible  among  the  unsecured  oredi-  £,           £ 

tors  shall  not  amount  to             ...          ...          ...          ...  500           1 

„      2.  Where  they  shall  amount  to                   .£500  and  not  to  2,000           2 

„      3.             „                 „                 „                     2,000           „  5,000           3 

Group  B. 
Class  4.  „  „  „  5,000  „  10,000  4 

„      5.  „  „  „  10,000  „  50,000  6 

Group  C. 

Class  G.  „  „  „                  50,000          „  100,000  8 

„      7.  „  ,,  „  100,000          „  500,000         10 

„      S.  „  „  „  500,000  and  over  12 

Clerks. 

First  class.  Second  class.  Third  class. 

Group  A.  2s.  ...         Is.  6d.  ...  Is.  per  hour. 

B.  3s.  ...         2s.  GcL  ...  Is. 

C.  3s.  6d.  ...         2s.  Gel.  ...  Is. 

If  in  the  special  circumstances  of  any  liquidation  it  shall  at  any  time,  or 
from  time  to  time,  appear  to  the  judge  that  it  is  proper  to  jjlace  it  on  a  higher 
or  lower  class,  he  \vi\l  so  place  it  accordingly. 

If  it  shall  appear  to  the  judge  that  in  the  special  circumstances  of  any  liqui- 
dation it  is  proper  to  add  to  or  deduct  from  the  amount  of  remuneration  pro- 
vided by  the  scale,  he  will  make  such  addition  or  deduction  accordingly. 

If  during  the  progress  of  a  liquidation  it  shall  appear  to  the  judge  expedient 
so  to  do,  he  will  sanction  payments  to  the  liquidator  on  account  of  his  remune- 
ration. 

For  this  purpose  the  judge  will  estimate  the  amount  of  such  remuneration  as 
well  as  circumstances  will  admit,  and  will  pay  to  the  liquidator  either  the  whole 
of  such  estimated  remuneration  or  such  part  thereof  as  to  the  judge  shall  seem 
reasonable. 

This  regulation  is  given  in  L.  E.  3  Ch.  Ixiv. 


Priority  of  Remuneration. 

An  official  liquidator  should  bear  in  mind  that  he  is  not  entitled  to  receive 
anything  out  of  the  assets  of  the  company  by  way  of  remuneration  until  all  the 
costs  of  the  winding  up  (including  the  costs  of  any  provisional  liquidator  and 
the  bill  of  costs  of  the  solicitor  employed  by  the  official  liquidator)  have  been 
paid  in  full.  In  re  Massey,  9  Eq.  3G7  ;  Dronfield  Co.,  23  C.  Div.  511.  See,  how- 
ever. Re  Dominion  of  Canada  Co.,  32  W.  R.  425  ;  W.  N.  1884,38.  But  this  does 
not  prevent  payments  being  made  to  him  on  account  of  remuneration  where  the 
assets  will  clearly  or  probably  be  sufficient  to  cover  the  above  costs. 

Moreover,  whei-e  the  assets  are  encumbered,  e.gf.,by  mortgages  or  debentures, 
the  remuneration  of  the  liquidator  ranks  after  the  rights  of  the  incumbrancers. 
In  re  Oriental  Hotels  Co.,  12  Eq.  12G  ;  In  re  Regent's  Canal  Iron  Works  Co.,  3  C. 
Div.  411.  And  see  Davy  v.  Price,  W.  N.  1883,  22G.  But  the  remuneration  of 
the  liquidator  ranks  before  the  claims  of  unsecured  creditors. 

In  passing  his  accounts,  a  liquidator  is  very  commonly  allowed  a  sum  on 
account  of  remuneration.  And  in  many  cases  he  applies  for  jjayment  as  above. 
Form  453. 

Very  commonly  no  order  is  drawn  up  on  such  a  summons,  but  the  chief  clerk 
indorses  a  note  of  liberty  given  on  the  summons,  and  the  liquidator  is  allowed 


EEMUNERATION    OF    OFFICIAL    LIQUIDATOR.  445 

the  amount  upon  passing  his  next  account.     Sometimes  the  order  is  drawn  up.    Form  453. 
See  Form  i58.  

An  application  for  remuneration  should  be  supported  by  an  affidavit  showing 
the  time  occupied,  and  if  the  liquidator  contends  that  he  ought  to  receive 
higher  remuneration  than  the  regulation  prescribes  the  special  circumstances 
ought  to  be  stated. 

As  to  liquidator's  costs,  see  infra.  Form  G53. 


Formal  parts :  see  supra,  Form  3si. 

1.  By  ail  order  in  these  matters  of  His  Lordship  Mr.  Justice ,  Form  454. 

made  the  day  of  ,  I  Avas  appointed  off.  liq.  of  the  aljove- 


Affidavit  of 
named  CO.  official  liqui- 

2.  To  the  best  of  my  knowledo-e,  information,  and  belief,  the  assets  of  ^^^^°^'  ^^  *f. 

.  "^  1  remuneratiou. 

the  sd  CO  divisible  among  the  unsecured  creditors  thereof  will  amount 

to  a  sum  exceeding  2000?.,  but  not  exceeding  ,5000/. 

3.  That  since  the  — —  of up  to  and  including  the of , 

the  time  occupied  l:)y  myself  and  my  clerks  in  the  liquidon  of  the  sd  co 
was  as  follows,  namely  : 

By  myself,  448  hours  ;  l)y  first-class  clerks,  787  hours  ;  by  second- 
class  clerks,  200  hours  ;  and  by  third-class  clerks,  125  hours. 

4.  The  time  so  occupied  was  properly,  necessarily,  and  exclusively 
occupied  by  myself  and  my  sd  clerks  respively  in  the  winding-up  of  the 
sd  CO. 

5.  According  to  the  regulation  and  scale  of  charges  of  this  Honour- 
able Ct  as  to  the  remuneration  to  be  allowed  to  off.  liqs.  the  remunera- 
tion to  be  pd  or  allowed  to  me  for  the  time  occupied  by  myself  personally 
as  afsd,  namely  448  hours  at  37.  per  day  of  8  hours,  amounts  to  the  sum 
of  108/. ;  for  that  occupied  by  my  first-class  clerks,  namely  787  hom-s  at 
2s.  per  hour,  amounts  to  the  sum  of  78/.  14s.  ;  for  that  occupied  by  my 
second-class  clerks  as  afsd,  namely  200  hours  at  l.s.  Gd.  per  hour,  amounts 
to  the  sum  of  15/.  ;  and,  that  occupied  by  my  third-class  clerks  as  afsd, 
namely  125  hours  at  Is.  per  hour,  amounts  to  C/.  5^. 

6.  I  have  calculated  my  remuneration  as  afsd  upon  the  footing  that 
the  liquidon  of  the  above-named  co  falls  within  Class  2  of  Group  A.  of 
the  scale  contd  in  the  regulation  afsd. 

This  affidavit  is  for  use  in  a  case  where  the  winding  up  has  not  proceeded 
far,  and  accordingly  the  deponent  is  unable  to  speak  jjositively  as  to  the  assets 
divisible.  But  in  some  cases,  e.g.,  where  dividends  have  actually  been  paid,  the 
position  of  the  company  is  clearer  and  the  affidavit  is  varied  accordingly.  When 
in  the  course  of  the  winding  up  the  liquidator  finds  that  he  has  been  remune- 
rated on  a  lower  scale  than  that  given  in  the  regulation,  he  will  ajjply  for 
further  remuneration  showing  the  facts  and  the  amounts  he  has  received  on 
account. 

Some  provision  as  to  the  remuneration  of  the  official  liquidator  is  not  uncom- 
monly made  in  orders  for  dissolution,  see  Forms  infra. 

A  provisional  liquidator  is  remunerated  in  the  same  way  as  other  liquidators, 
unless  the  order  appointing  him  otherwise  provides,  e.g.,  he  is  sometimes 
appointed  "  without  salary  "  or  at  " 1,  per  week." 


446 


WINDING-UP. 


Form  455. 

Affidavit  by 
official  liqui- 
dator's clerk. 


The  following-  forms  are  also  in  use  : 

I, ,  of ,  make  oath  and  say  as  follows  : — 

1.  It  has  been  and  is  the  rule  and  practice  in  the  office  of  the  sd  off. 
liq.  for  all  persons  engaged  upon  the  affairs  of  the  sd  co  (including  the 
sd  off.  liq.  himself)  to  enter  into  diaries  the  parlars  of  all  work  done  by 
them  in  respect  of  the  co,  and  the  time  occupied  in  doing  the  work,  and 
for  such  entries  to  be  made  on  the  day  the  work  is  done  or  on  the  day 
following,  and    the    paper    writing   noAV  produced  'and   shown  to  me 

marked ,  contains  to  the  best  of  my  belief,  a  true  statemt  of  the 

time  devoted  l)y  the  sd  off.  liq.  and  his  clerks  to  the  affairs  of  the  sd  co, 
between  the  1st  day  of  November,  1882,  and  the  13th  day  of  April,  1883  ; 
in  such  statemt  tlic  days  on  wliich  work  was  done  in  respect  of  the  co, 
are  set  forth  in  the  1st  column,  and  (opposite  to  the  date)  the  parlars  of 
the  time  occupied  in  doing  the  work  are  set  forth  in  the  remaining 
columns.  As  to  the  time  of  the  off.  liq.  in  the  2nd  cohnnn,  as  to  the 
time  of  the  1st  class  clerks  in  the  ord  column,  as  to  the  time  of  the  2nd 
class  clerks  in  the  -Atli  column,  as  to  the  time  of  the  3rd  class  clerks  in 
the  5th  column.  The  sd  statemt  is  divided  into  two  pts,  pt  one  com- 
prised time  employed  in  attending  in  ct  or  at  the  judge's  chaml)ers, 
pt  two  comprises  all  other  time,  l)ut  does  not  comprise  any  time  in 
attending  in  ct  or  at  the  judge's  chambers. 

2.  I  say  that  the  sd  statemt  corresponds  in  all  its  parlars  Avitli  the 
entries  made  by  the  sd  off.  liq.  and  his  clerks  in  their  diaries,  according 
to  the  rule  and  practice  hinbefore  mentd,  as  I  know  from  having  com- 
pared the  statemt  Avith  the  sd  diaries. 


Form  456.       I, 


of ,  make  oath  and  say 


Affidavit  by 
official  liqui- 
dator in 
siqiport. 


Form  457. 


Eemuneration 
to  be  assessed 
and  paid. 


I  have  read  the  afft  of  A.,  sworn  the  4th  day  of  June,  1883,  and  I  say 
that  the  statemts  contd  in  such  afft  as  to  the  rule  and  practice  in  my 
office  are  true. 

The  paper  writing  marked  L  1  now  produced  and  shown  to  me  (being 
the  exhibit  referred  to  in  the  sd  afft),  contains  a  true  and  correct  statemt 
of  the  time  devoted  by  me  and  my  clerks  to  the  affairs  of  the  abo^'c- 
named  co,  between  the  1st  day  of  November,  1882,  and  the  30th  day  of 
April,  1883.  The  whole  of  such  time  has  been  necessarily  and  diligently 
employed  solely  upon  the  affiiirs  of  the  co,  and  no  pt  of  the  same  has 
been  or  will  be  charged  to  any  other  co  or  person. 

The  whole  of  the  time  appearing  by  the  sd  statemt  to  have  been 
devoted  by  me  personally  to  the  affairs  of  the  co,  Avas  employed  on 
matters  proper  to  engage  my  attention,  and  which  could  not  properly  be 
entrusted  to  clerks,  and  the  whole  of  the  time  appearing  to  have  been 
devoted  by  each  class  of  clerks,  was  employed  upon  matters  proper  to 
receive  the  attention  of  such  clerks,  and  which  ought  not  to  have  been 
entrusted  to  clerks  of  any  other  class. 

Upon  the  applicon  of  M.,  the  off.  liq.,  &c.,  Let  the  remuneration  of 
the  sd  M.  as  prov.  off.  liq.  and  off.  liq.  of  co  be  assessed  and  [iisiml 


EEMOV^U.    AND    RESIGNATION    OF    OFFICIAL    LIQUIDATOR.  44,7 

order  for  ta.rafion  of  off.  lajs.  costs,  cir.^     And  let  the  sd.  ]\I.  be  at  libty  Form  457. 
to  deduct  such  remuneration  and  pay  the  sd  costs  when  so  taxed,  and  be 
allowed  such  paymts  respively  on  his  accounts.     Gweudraetlt  Colliery, 
Fry,  J.,  7  Ap.  1879.     A.  82:!. 

Upon  the  applicon  of  the  off.  liqs.,  &o.,  and  upon  reading  {inter  alia  Form  458. 
the  order  to  carry  on  the  works).  Let  the  appHeant  J.  until  further  order  Allowance  on 
be  allowed  80/.  per  calendar  montli,  on  account  of  his  remuneration  as  account  of 
one  of  the  off.  liqs.  of  co,  the  same  to  be  accounted  for  by  him  when 
such  remuneration  shall  be  ultimately  fixed.     TJios.  IF.  Booker  &  Co., 
Fry,  J.,  20  Feb.,  1879.     B.  301. 

Upon  the  applicon  of  J.  the  oif.  liq.,  &c.,  Let  out  of  the  sum  of -112/.  Form  459. 


standing  in  the  books  of  the  Bank  of  England  to  the  credit  of  the  off.  Order  for  pay- 
liq.  of  the  sd  co  the  sum  of  83/.,  being  the  ascertained  amount  of  the  "^*^"*  °^  "p'^^-^^ 
sd  off.  liq.'s  remuneration,  be  pd  to  tlie  sd  J.  as  such  off.  liq.     And  lemuuemtion. 
[/a.r  liq.'s  costs'].       The  Cardiff  d:.   Merthyr,  t£r.,  Co.,  Hall,  V.-C,   10 
Mar.  IS 77.     A.  021. 

Upon  the  applicon  of  -B.  and  S.,  creditors  of  the  above-named   co,  to  Form  460. 
remove  T.  from  the  office  of  ofi".  liq.  of  sd  co  and  to  appoint  H.  in  his  Removal  of 
place  and  stead,  &c.,  Let  T.,  the  off.  liq.  of  sd  co,  be  removed  from  his  official  liqui- 
office  as  such  off.  liq.  as  afsd,  and  let  in  his  place  and  stead  the  sd  H.  be  ""'^  °^' 
appointed  oflF.  liq.  of  the  sd  co.     And  \_iisimJ  directions'].     And  [costs]. 
Moorivood  Moor,  tir.,  Co.,  Mahns,  V.-C,  -l-l  Nov.,  1870.     B.  19-1:0. 

Under  section  93  of  the  Act  of  1862,  an  official  liquidator  may  resign  or  be 
removed  by  the  Court  on  due  cause  shown.  As  to  the  meaning  of  the  words  in 
italics,  see  In  re  Sir  John.  Moore  Gold  Mining  Co.,  12  C.  D.  325  ;  28  W.  E.  203  ; 
Ex  parte  Sheard,  16  C.  D.  107  ;  Buckley,  239,  291- ;  and  Oxford  Building  Society, 
49  L.  T.  495.     See  also  Eule  16. 

The  application  for  removal  is  usually  by  summons,  but  occasionally  it  is 
made  by  motion  or  petition. 

Sometimes  a  new  liquidator  is  appointed  by  the  order  removing  the  old  one, 
and  sometimes  by  a  subsequent  order. 

In  the  case  of  the  Association  of  Land  Financiers,  10  C.  D.  269,  the  official 
liquidator  was  removed  on  motion  made  onbehalf  of  large  majority  of  unsecured 
creditors,  and  two  creditors  who  were  willing  to  act  gratis  were  ap23ointed  in 
his  place.     For  the  order,  see  Reg.  Lib.  5  Dec.  1878.     A.  2177. 

A  contributory  who  has  not  paid  a  call  cannot  apj^ly  for  removal  of  liijuidator. 
Norwich  Provident,  W.  N.  1879,  216. 

Upon  the  applicon  of,  &c.,  and  upon  hearing  the  solors  for  the  ap-   porm  461 
plicant  and  F.  the  off.  liq.  of  sd  co,  &c.,  and  the  sd  F.  by  his  S(jlor 

•  Order  on 

desiring  to  retire  from  the  office  of  off.  liq.  of  the  sd  co  :  the  judge  doth  resignation. 

hby  appoint  M.,  of off.  liq.  of  the  sd  co  in  the  place  of  the  sd  F. 

And  [accounts  1st  June  in  each  year,  money  to  be  pd  into  Bank]  : 
And  let  the  sd  F.  on  or  before  the  10  Dec,  1878,  leave  his  final  account 
as  such  off.  liq.  at  the  chambers  of  the  judge  and  pass  the  same  and 
within  14  days  from  the  date  of  the  chief  clerk's  certificate  pay  the 
balance  (if  any)  which  shall  be  certified  to  be  due  from  him  into  the  Bank 


448 


WINDING-UP. 


Form  461.   <>f  Eiiglaiicl  to  the  account  of  the  oflf.  liq.  of  sd  co :    And  let  upon  such 
~  paymt  by  the  sd  F.,  or  upon  its  being  certified  that  there  is  no  bahance 

due  fi'om  him,  the  sd  recognisances  dated,  &c.,  be  vacated.  Alexandra 
Palace  Co.,  Limtd,  Mahns.  V.-C,  4  Dec,  1878.     2151  A. 

For  order  on  application  of  K.  the  liquidator  of  C.  Company,  creditors  of  B. 
Company,  discharging  M.  from  being  ofScial  liquidator  of  B.  Company,  and  ap- 
pointing K.  in  his  place  ;  M.  on  or  before  22  June,  to  leave  in  chambers  his 
account  as  official  liquidator,  and  to  pay  the  certified  balance  to  K.,  costs  of 
applicants  of  application  to  be  ascertained  in  chambers,  and  paid  by  said  M.  to 
them,  bvit  M.  to  be  at  liberty  to  set-off  the  amount  of  such  costs  against  the 
amount  (if  any)  due  to  him  for  remuneration  as  such  official  liquidator  as  afore- 
said, and  mt^ovl  such  payments  being  made  recognisance  and  bond  to  be  vacated  ; 
see  Bryhinalt  'Colleries,  M.  E.,  26  May,  1879.     A.  1250. 

For  order  directing  liquidator  to  pay  out  of  the  company's  assets  the  costs  of 
a  person  on  whose  application  a  former  liquidator  was  removed,  but  without 
prejudice  to  company's  right  to  recover  the  amount  from  the  removed  liqui- 
dator, see  Commercial  Banh  Limited,  Hall,  V.-C,  G  May,  1878.     A.  2152. 

Form  462.       ^^^^  ^^^^  P^  ^^  ^^^^  ^^-  ^^^h  ^^  ^^^^  above-named  co,  that  Messrs. ,  the 

Summons  to  former  solors  of  the  sd  co,  may  be  ordered  upon  oath,  if  necessary,  to 
compel  delivery  deliver  up  to  the  apphcaut  all  deeds,  books,  papers,  and  writings  in  their 
books^and"^^  possession,  custody,  or  power,  belonging  to  the  above-named  co  without 
papers.  prejudice  to  any  lien  which  they  may  have  thereon. 

See  section  100  of  the  Act.  Orders  for  the  delivery  to  the  official  liquidator 
of  property  of  the  company  are  frequently  made  under  that  section. 

The  application  is  tisually  made  by  summons  served  on  the  parties  against 
whom  the  order  is  sought.     See  Buckley,  225. 

For  order  giving  liberty  to  serve  otit  of  the  jurisdiction  summons  under  this 
section,  see  International  Patent  Pulxi  Co.,  IS  June,  1877,  1142.  As  to  enfon-cing 
order  by  attachment,  see  In  re  Anglo-French  Co-op.  Society,  14.  C.  D.  533. 

Form  463.       Upon  the  applicon  of  the  off.  liq.  of  co,  and  upon  hearing  the  solors 

Order  against    for  the  applicant  and  for  ]\Iessrs.  C.  &  S..  solors  of,  &c.  appearing  in 

the  compan.v's  person,  and  upon  reading  2  orders  dated,  &c..  Let  the  sd  Messrs.  C.  &  S. 

within  fourteen  days  after  service  of  this  order  deliver  into  the  hands  of 

B.,  the  sd  off.   liq.,  at  his  office,  Xo.  ,  all  deeds,  books,  papers, 

letters,  and  other  documts  now  being  in  the  possession  or  power  of  the 
sd  Messrs.  C.  &  S.,  and  to  which  tlic  co  is  fvima  facie  entled,  And  order 
that  such  delivery  shall  be  without  prejudice  to  the  lien  of  the  sd  Messrs. 
C.  &  S.  on  the  sd  deeds,  books,  papers,  letters,  and  other  documts,  which 
lien  ought  to  be  pd  out  of  the  first  monies  coming  to  the  hands  of  the  sd 
off.  hq.  after  providing  for  the  costs  and  expenses  of  the  winding-up  of 
the  sd  CO,  but  this  order  is  not  to  prejudice  any  security  or  charge  that 
may  l)c  held  by  the  sd  Messrs.  (•.  &  S.  as  against  the  sd  co,  Langham 
Skaiinrj  Rwl  Co.,  j\L  R.,  l?>  Dec,  1877.     B.  20G3. 

^Qe  also  Indian  Mammoth  Gold  JUmes,  M.  E.,  8  July,  1881.  A.  2028  la  four 
days'  order  as  above'].  But  see  now  Re  Capital  Fire,  24  C.  Div.  408;  32  W.  E. 
2G0  ;  49  L.  T.  G97. 

For  order  against  a  liquidator,  see  In  re  Horbury  Bridge  Co.,  11  C.  D.  109. 

General  words  in  a  mortgage  will  not  affect  the  company's  books,  jRe  Clyne 
Tin  Co.,  47  L.  T.  '139. 


CAEEYING    ON    CO^JiPAXYS    BUSINESS.  449 

Upon  tlie  applicou  of  the  off.  liq.,  &c.,  let  the  sd  off.  hq.  be  at  libtv  to  Form  464. 
cany  on  the  Ijiisiuess  of  the  sd  co,  and  coutinne  the  working  of  its  Onier  giving 
collieries  and  the  sale  and  pchase  of  coal,  and  for  that  ppose  to  pay  ont  liberty  to  auTy 

^  nil-  J  °ii  business. 

of  the  monies  from  time  to  time  in  his  hands  the  salaries,  wages,  and 
remiuieration  of  the  persons  employed  in  the  sd  bnsiness  and  collieries 
as  fi'om  the  Itlth  of  July,  1878,  and  also  all  such  rents,  royalties,  taxes, 
and  other  outgoings  as  may  from  time  to  time  become  due  and  payable 
in  respect  of  the  collieries  and  premes  now  in  the  occupation  of  the  sd 
CO  :  Also  for  the  ppose  of  can-yiug  on  the  sd  business  and  working  the 
sd  collieries,  to  make  such  pchases  as  may  be  proper  in  the  ordinary 
com^e  of  business,  for  cash  or  otherwise,  of  goods,  and  to  pay  the 
pchase  money  out  of  such  monies  as  afsd,  and  from  time  to  time  for  the 
same  ppose  to  make  such  sales  of  the  effects  of  the  sd  co  as  may  be 
necessaiy  or  proper  in  the  ordinary  com'se  of  business  :  And  let,  not- 
withstanding the  order  of  the  l!)th  of  July,  1878,  the  sd  oft',  liq.  lie  at 

libty  to  continue  an  account  with  the Bank  at  Wrexham  and  the 

L.  J.  S.  Bank  in  London,  for  the  ppose  of  paying  Avages  and  keeping 
the  business  a  going  concern  :  the  excess  over  l,00(i/.  at  both  lianks  to 
be  pd  into  tlie  Bank  of  England.  Pauibon  Coal  Co.,  Limid,  Malins, 
Y.-C,  27  July,  IS 78.     l.-)30  B. 

See  also  Form  4-66,  ui/Va,  and  note  to  Form  408,  infra. 

Let  the  applicants  as  such  off.  liqs.  continue  without  further  order  to  Form  465. 
carry  on  the  works  and  business  of  the  co  for  the  space  of  six  calendar  Order  to  carry^ 
months  from  the  date  of  the  order  :    And  order  that  for  the  ppose  of  on  business 
can-yiug  on  such  business  the  applicants  be  at  libty  to  pay  the  salaries  ^oj^y^f 
of  worlcmen,  and  the  rents  and  royalties  in  respect  of  the  mines  respively  accounts, 
payable  by  the  co,  and  any  other  necessary  expenses   in  order  to  the 
carrying  on  the  sd  business  :     And  order  that  the  applicants  do  until 
further  order  render  their  accounts  of  the  sd  business  so  to  be  cai'ried 
on  by  them  as  afsd  once  a  month  ;    the  first  account  to  be  rendered 
on  the  27th  Mar.,  and  to  embrace  the  period  from  10  Feb.,  1879,  up 
to  the  date  of  this  order,  as  well  as  subsequent  thereto,  and  the  sul)- 
sequent  accounts  up  to  27th  of  each  subsequent  month.     'Thomas  W. 
Boohr  &  Co.,  Fry,  J.,  25  Feb.,  1879.     B.  3C2. 

Upon  the  applicon  of  the  off.  liqs.,  &e.,  Let  the  applicants  be  at  libty,  Form  466. 
in  addition  to  the  account  at  the  Bank  of  England  to  l)e  opened  by  them  Liberty  to  open 
pursuant  to  the  order  of  17  Jan..  1879,  to  open  a  banking  account  at  local  banking 

the  Cardiff  Branch  of  the Bank  :    And  let  the  account  so  to  be 

opened  be  called  "The  Works'  Account,"  and  let  the  applicants  be  at 
libty  to  pay  into  such  account  all  monies  which  may  arise  from  the 
carrying  on  of  the  business  of  the  co  as  carried  on  under  the  order  of 
25  Feb.,  1879  \_See  Form  357].  Aud  let  the  apphcants  be  at  libty  to 
draw  against  the  sd  Works'  Account  for  all  monies  required  by  them 
for  carrying  on  the  business,  and  also  for  the  smn  of  8n/.  per  month, 

G  G 


450  WINDING-UP. 

Porm  466.  authorised  to  be  pel  hy  the  order  of  26  Feb.,  1879  [see  Form  350]  with- 
out  the  necessity  for  the  counter  signature  of  the  chief  clerk  :  And 
order  that  if  and  whenever  the  balance  at  the  sd  Cardiff"  Branch  shall 
exceed  5,0()()Z.  the  amount  thereof  shall  foithwich  be  transferred  by  the 
applicants  into  the  account  at  the  Bank  of  England.  T/ws .  W.  Boolccr 
&  Co.,  Fry,  J.,  27  Feb.,  1870.     A.  :5G2. 

Form  467.       Upon  the  applicon  of  W.,  the  off",  liq.,  c^-c,  Let  W.,  the  off",  liq.  of  sd 

Liberty  to         CO,  be  at  libty  to  cany  on  the  railway  chair  foundry  of  the  sd  co, 

carry  on  unless  the  same  shall  be  sold  in  the  meantime,  for  a  period  not  exceeding 

business. 

four  months,  so  far  as  may  be  necessary  to  complete  orders  already 

accepted  by  the  sd  co  for  the  supply  of  chairs,  and  to  undertake  further 
contracts  for  the  manufacture  of  chairs  to  an  extent  not  exceeding  what 
is  necessary  for  the  purpose  of  using  the  stock  of  iron  in  the  co's  pos- 
session, and  provided  such  further  contracts  are  profitalile.  And  [^rosts 
to  he  costs  in  ivinduuj-vp'].  Norton  Iron  Co,  Limtd.,  ]M.  R.,  !?>  Dec. 
1878,  213G  B. 

Form  468.       Upon  the  applicon  of  K.,  the  off.  liq.,  and  upon  hearing  counsel  for 
Another.  the  applicants  and  for  \_ccrtain  sMrelioJders  and  creditors'].  Let  the  off. 

liq.  be  at  libty  to  carry  on  the  business  of  the  sd  co  and  generally  to 
manage  the  same  until  11  Jan.,  1880,  or  until  further  order,  and  for 
that  ppose  to  retain  in  his  hands  such  sum  or  sums  of  money  as  may  be 
necessary,  with  power  to  draw,  accept,  make,  and  endorse  any  necessary 
bills  of  exchange  or  promissory  notes  in  the  name  and  on  behalf  of  the 
sd  CO,  and  generally  to  execute  and  do  all  such  other  things  as  may  be 
necessary  or  incidental  to  the  carrying  on  the  sd  business  without  the 
sanction  or  intervention  of  the  judge.  Anrjlo-American  Leather  Cloth 
Co.     Hall,  V.-C,  5  Nov.,  1879.     A.  2008. 

With  the  sanction  of  the  Court,  the  official  liquidator  has  power  "  to  carry  on 
the  business  of  the  company  so  far  as  may  be  necessary  for  the  beneficial  wind- 
ing-up of  the  same."  See  section  95  of  the  Act  of  1862 ;  In  re  Wreck  Recovery 
Co.,  15  C.  D.  353  ;  W.  E.  1880,  133.  Conf.  Ex  parte  Emmanuel,  17  C.  D.  35  ; 
Ex  parte  Cocks,  21  C.  D.  397. 

In  order  to  obtain  such  sanction,  siJeeial  circumstances  must  be  shown,  e.g., 
that  goodwill  is  valuable  and  wovild  be  lost  by  stopping  ;  that  company's  lease- 
hold property  liable  to  forfeiture  if  works  stopped  ;  that  company  has  materials 
worth  little  imless  used  in  the  business  ;  that  there  are  pending  contracts  which 
it  is  desirable  to  complete  ;  that  the  company's  difficulties  are  only  temporary. 

Where  liberty  to  carry  on  the  business  is  given,  it  is  sometimes  limited  as  to 
time,  and  the  time  can  then  be  extended.  Sometimes  the  question  whether  the 
business  shall  be  carried  on  is  submitted  to  a  meeting  of  contributories  or  cre- 
ditors, according  as  the  company  is  solvent  or  insolvent. 

Liberty  to  carry  on  the  business  is  much  more  commonly  given  to  provisional 
than  to  official  li([uidators. 

Not  uncommonly  liberty  to  carry  on  the  lousiness  is  given  by  the  order  ap- 
pointing a  provisional  liquidator.     See  Forms  ill,  et  seq. 

Form  469.       U])on  the  applicon  of  8.  &  B.,  the  prov.  off.  liqs,  of  the  above-named 
Onier  "ivin-.'     <^<-S  '^'C-,  Let  the  sd  prov.  off.  li(|s.  1)0  at  li))erty  to  raise  a  sum  of  300/., 


OFFICIAL   LIQUID ATOK    BOEROWING.  451 

bearing  interest  at  the  rate  of  5  p.  c.  p.  a.  npon  the  security  of  the  Form  469. 
monies  to  be  obtained  from  the  sale  of  the  coal  to  be  raised  from  the  nbertvto 
collieries  of  sd  co  after  the  date  of  the  raising  of  the  sd  money,  and  ijonow. 
which  simi  is  to  be  repaid  by  the  prov.  off.  liqs.  out  of  such  monies  as 
soon  as  they  are  sufficient  for  that  ppose  ;  And  order  that  for  the  ppose 
of  securing  the  paymt  of  such  sum  as  afsd  and  interest  the  prov.  off.  liqs. 
shall  have  power  to  sign  and  issue  any  document  or  deed  which  may  be 
necessary  or  proper  for  such  ppose.     And  [costs  of  applicon  to  be  costs 
in  winding  up].     Ivy  House  and  Northicood  ColUerij,  M.  E.,  31  May, 
1878.     A.  1015. 

Section  95  of  the  Act  of  18G2  enables  the  official  liquidator,  with  the  sanction 
of  the  Court,  to  raise  upon  the  security  of  the  assets  of  the  company  from  time 
to  time  any  requisite  sum  or  sums  of  money,  and  this  power  is  frequently 
exercised,  especially  where  a  provisional  official  liquidator  is  appointed  with 
liberty  to  carry  on  the  business  ;  but  the  Court  cannot  create  a  charge  in 
favour  of  the  lender,  in  priority  to  the  company's  mortgagees,  except  with  their 
consent. 

Sometimes  liberty  to  raise  money  is  given  by  the  order  appointing  the 
provisional  liquidator.     See  sujpra.  Forms  -llo,  et  seq. 

Liberty  to  borrow  is  frequently  given  for  the  purpose  of  paying  off  a  secured 
creditor,  but  it  must  be  sho^vn  that  the  seciu'ity  is  worth  more  than  the  debt. 

Sometimes  the  sanction  of  the  Court  is  given  to  an  agreement  for  a  present 
loan  and  further  advances.     Regent's  Canal  Iron  Works,  3  C.  Div.  411. 

Upon  the  applicon  of  C.  of  ,  the  prov.  off.  liq.,  Order  that  the  Form  470. 

applicant  be  at  liberty  to  borrow  a  sum  not  exceeding  300/'.  at  a  rate  of  ^^^^^^j^^^^ 
interest  not  exceeding  Gl.  p.  c.  p.  a.,  for  the  ppose  of  paying  the  rent 

now  due  in  respect  of  the  premes  of  the  sd  co  in  L ,  and  a  sum  of 

173/.  175.  2d.  being  the  taxed  costs  of  the  defts  in  an  action  brought  by 
the  sd  CO  against  H.,  and  that  such  sum  be  repayable  out  of  the  first 
assets  of  the  sd  co  and  meanwhile  shall  be  a  first  charge  on  the  ppty  and 
assets  of  the  same.     American  Boivling  Co.,  28  May,  1877.     A.  1552. 

Let  the  applicant  as  such  prov.  off.  liq.  be  at  liberty  to  borrow  for  the   Form  471. 
ppose  of  enabling  him  to  do  all  acts  necessary  for  carrying  on  the  liberty  to 
business  of  the  sd  co  the  sum  of  2,000/.,  the  rate  of  interest  for  the  same  borrow  for 
not  to  exceed  5  p.  c.  p.  a.,  And  let  such  sum  of  2,000/.  and  interest  be  a  ^u^^ess  °^^ 
first  charge  on  the  assets  of  the  sd  co.     Darlaston,  dc,  Co.,  M.  E,.,  1  May, 
1877.     A.  828. 

For  order  giving  liberty  to  official  liquidator  to  raise  500L  at  6f  J.  per  cent, 
interest,  and  further  sums  up  to  5,000L  for  carrying  on  the  company's  biisiness, 
and  to  charge  same  by  deed  on  company's  assets,  such  deed  to  be  settled  by 
the  judge  in  chambers,  see  Original  Hartlejjool  Collieries,  26  Ap.,  1877. 
B.  704. 

Upon  the  apphcou  of  the  off.  liq.,  &c.,  let  the  sd  off.  liq.  be  at  liberty  Form  472. 
to  pay  into  the  Bank  of  England  to  the  credit  of  the  account  of  the  off.  Liberty  to  ^ 
liq.  of  the  sd  co  300/.  of  his  own  monies  to  meet  urgent  paymts  in  hquidator  to 

<>  a  2  ^"""" 


452  WINDING-UP. 

Form  472.  coiinecfcioii  with  the  attempted  sale  of  the  co's  ppty  under  the  sd  order 
dated,  &c.,  and  parly  to  pay  Messrs.  H.  for  advertising-  the  co's  ppty, 
and  that  the  sd  off",  liq.  shall  have  priority  over  the  sd  debenture  holders 
and  R.  &  E,.  as  the  trustees  of  the  sd  indre  and  over  the  monies  thereby 
secured  as  well  as  the  monies  advanced  by  the  pits  in  the  sd  action 
under  the  sd  order,  &c.,  or  otherwise  to  the  extent  of  300Z.,  and  for 
interest  upon  the  sd  sum  of  300/.  at  the  rate  of  5/.  p,  c.  p.  a.  from  the 
date  of  such  advance  until  repaymt,  and  for  his  costs  of  this  applicon, 
such  costs  to  be  taxed,  &c.,  And  order  that  the  sd  principal  sum  and 
interest  and  the  costs  of  this  applicon  shall  be  a  charge  upon  the  co's 
assets.  Wayne's  3Ierthijr  Slcam  Coal  Co.,  and  in  action.  1  June,  1877. 
B.  HOG. 

Order  giving  official  liquidators  power  to  advance  money  for  payment  of 
rates  on  company's  property  in  Nova  Scotia ;  to  be  repaid  with  interest  at 
5  per  cent,  per  annum,  out  of  first  sale  monies.  Cape  Breton  Co.,  Malins,  V.-C, 
29  June,  1878.    A.  1513. 

Form  473.       Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  the  rights  and  interests  of 

Common  order  the  sd  CO  in  its  mineral  ppty,  situate  at ,  and  also  the  co's  machinery, 

for  sale,  plant,  implemts,  materials,  and  other  effects  tliereiu  and  thereon  be  sold 

with  the  approbation  of  the  judge.  And  let  the  money  to  arise  by  such 

sale  be  pd  into  ct  to  the  credit  of  the  account  of  the  off.  liq.  of  the  Gr.  W. 

Van  Co.,  Limtd.,  subject  to  further  order.     Grpat  Wesi.  Van  Co.,  M.  E,., 

8  July,  1878.     A.  1474. 

As  to  sales  of  propei'ty  in  a  winding-up,  see  s.  95  of  the  Act  of  18G2,  and 
Rule  32.  Where  the  property  to  be  sold  is  of  substantial  vakxe,  it  is  usually 
directed  to  be  sold  with  the  approbation  of  tlie  judge,  and  the  subsequent 
proceedings  are  conducted  as  upon  a  sale  in  an  action.  See  Dan.  Forms,  p.  59G 
et  seq. ;  Seton,  1391  et  seq. 

Sometimes,  however,  liberty  is  given  to  the  official  liquidator  to  sell  subject 
to  certain  conditions  or  contracts  approved  by  the  judge  :  And  in  regard  to 
chattels  and  property  of  no  great  value,  liberty  is  usually  given  to  sell  out  of 
Coui't  upon  such  terms  as  the  liquidator  thinks  fit. 

Application  for  an  order  for  sale,  or  for  liberty  to  sell,  is  usually  made  by 
summons  on  the  part  of  the  liquidator  supported  by  evidence  showing  the 
expediency  of  the  sale.  Not  uncommonly  the  liquidator  enters  into  a  pro- 
visional agreement  for  sale,  and  then  applies  by  summons  for  the  confirmation 
thereof. 

Occasionally  before  a  sale  can  be  made,  inquiries  as  in  Form  i7G,  490,  are 
requisite.  Sometimes  before  taking  an  order  for  sale,  the  liquidator  applies 
to  have  inquiries  made  as  to  incumbrances,  priorities,  &c.  See  Forms  366 
ct  seq.;  In  re  Hamilton's  Windsor  Iron  Works  Co.,  12  C.  D.  707;  27  W.  E.  827. 

Form  474.  Upon  the  applicon  of  the  off.  liq.  of  the  above-named  co,  &c.,  order 
Order  for  sale,  that  of  the  ppty  of  the  CO  in  Nova  Scotia  the  following  be  sold  with  the 
approbation  of  the  judge,  namely,  (1)  The,  &c.,  (2)  The,  &c.,  (3)  &  (4). 
And  let  the  money  to  arise  by  such  sale  be  pd  into  the  Bank  of  England 
to  the  credit  of  the  off.  liq.  to  an  account  to  be  entitled  "  Proceeds  of 
sale  of  ppty  sold  in  the  year  1878."  Cape  Breton,  dr.,  Co.  Malins, 
V.-C,  24  July,  1878.     A.  1583. 


SALES    BY    OFFICIAL    LiaUIDATOE.  453 

For  order  on  the  application  of  official  liquidator,  approving  of  a  conveyance   Form  474. 
of  property  of  the  company  situate  in  Australia,  to  L.,  there  resident,  in  trust  ~  " 

for  sale,  see  Fortune  Copper  Mining  Co.,  7  Dec,  1875.    A.  1825. 

Upon  the  applicon  of  'M  &,  H.,  the  off.  liqs.  &c.,  Let  the  applicants  as  Form  475. 
such  off.  liqs.  be  at  lil)erty  to  sell  by  public  auction  the  real  and  personal  (ieneral  liberty 
estate  of  the  co,  comprised  in  the  following  parlars,  that  is  to  say —  to  sell. 
1.  All  that,  &c.,  2.  All  those,  &c.,  &c.,  free  from  the  incumbrances  of 
such  of  the  incumbrancers  thereon  as  shall  consent  to  such  sale,  and 
subject  to  the  incumbrances  of  such  of  them  as  shall  not  consent :  And 
let  off.  liqs,  be  at  liberty   to  sell  the  remaining  real  and  personal  ppty  of 
CO  in  England  at  such  time  and  upon  such  terms,  and  either  by  public 
auction  or  private  contract  as  they  shall  from  time  to  time  think  ex- 
pedient :  And  let  the  money  to  arise  by  sale  of  any  of  the  above-mentd 
properties  be  pd  into  Bank  of  England,  Manchester  branch,  to  account 
of  off.  liqs.     Costs  of  applicon  and  of  all  proceedings  relating  thereto,  to 
be  costs  in  liquidon.     Beverley  Iron  and  Wen/on  Co.,  Hall,  Y,-C.,  9  April, 
1879.     A.  705. 

Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  the  following  inquiry  and  Jorm  476. 
accounts  be  taken  and  made  :  Order  for  in- 

1,  An  inquiry  whether  any  and  what  incumbrances  affect  the  real  and  ^vhereTucum-^ 
leasehold  estate  of  the  sd  co  situate  at ,  and  the  chattels  and  effects  brances. 

of  the  CO  thereon,  or  any  and  what  pts  thereof,  and  the  priorities  of  such 
incumbrances. 

2.  An  account  of  what  is  due  to  such  incumbrancers  as  shall  consent 
to  the  sale  hereinafter  directed  in  respect  of  their  incumbrances.  And 
Let  the  real  and  leasehold  estate,  chattels  and  effects  of  the  sd  co,  con- 
sisting of  the  A.  Palace  buildings  and  grounds,  and  their  contents,  be 
sold  with  the  approbation  of  the  judge,  free  from  the  incmnbrances  (if 
any)  of  such  of  the  incumbrancers  as  shall  consent  to  the  sale  and  subject 
to  the  incumbrances  of  such  of  them  as  shall  not  consent,  and  let 
the  money  to  arise  by  such  sale  be  pd  into  the  Bank  of  England  to  the 
credit  of  the  account  of  the  off.  liq.  of  the  sd  co ;  and  if  any  such  money 
or  any  pt  thereof  shall  arise  fi"om  ppty  sold  with  the  consent  of  incum- 
brancers the  same  is  to  be  applied  in  the  first  place  in  paymt  of  what 
shall  appear  to  be  due  to  such  incmnbrancers  accordiug  to  their  priorities, 
and  any  party  interested  is  to  be  at  libty  to  apjily  at  chambers  as  he  may 
be  advised.     Alexandra  Palace,  Malins,  Y.-C,  15  Dec,  187G. 

See  s.  25  of  the  Conveyancing  and  Law  of  Property  Act,  1881,  as  to  sales  in 
actions. 

Upon  the  applicon  of  the  off",  liq.  of  co,  &c.,  Let  the  sd  off.  liq.  of  sd  Form  477. 
CO  be  at  libty  to  sell  the  ppty  of  the  sd  co  situate  in  the  Island  of  order  for  sale 

Jamaica,  and  contracted  to  be  purchased  from by  the  sd  agreemt  subject  to 

dated,  &c.,  but  such  sale  is  to  be  subject  to  the  condons  of  sale  which  tions.' 
have  been  approved  l)y  the  judge  and  are  identified  by  the  signature  of 
the  chief  clerk  of  the  judge  to  a  memorandum  in  the  margin  thereof. 
Jamaica  Fibre  Co.,  Hall,  V.-C,  13  July,  1878.    A.  1159. 


454 


WINDING-UP. 


Form  478.       Upon  the  applicon  of  D.,  the  off',  liq.  of  the  co,  &c.     Let  the  scl  off. 

Liberty  to  sell  lifl-  ^6  at  hbty  to  sell  to  H.,  of  ,  the  plant  and  stock  of  the  scT  co 

chattels.  set  out  and  described  in  the  inventory  signed  by  the  sd  H.  (being  the 

exhibit  to  the  afft  of  the  sd  D.  above  referred  to),  at  and  for  the  sum  of 
315Z.     Hcliotyije  Co.,  Bacon,  V.-C,  2  May,  1877.     A.  789. 

Form  479.       Upon  the  applicon  of  the  off*,  liqs.,  &c.     Let  the  off.  liqs.  be  at  libty 

Liberty  to  sell   ^^  offer  for  sale  by  public  auction  without  reserve  (but  subject  to  the 

stip-  conditions  of  sale  already  approved  by  the  judge),  at  B.,  the  barque 

called,  &c.,  which  prior  to  the  suspension  of  the  Bank  was  mtged  by  C. 

to  the  Bank  for  the  ppose  of  secimng,  &c.     Costs  of  applicon  to  be  costs 

in  winding  up.    West  of  Enrjland  Banic,  Fry,  J.,  5  July,  1879.    B.  1422. 

For  order  giving  official  liberty  to  carry  ovit  contract  for  the  sale  of  the  book 
debts  owing  to  the  company  by  persons  residing  in  India,  see  James  Anderson  Sf 
Co.,  Hall,  V.-C,  1  May,  1879.    A.  920. 


Form  480. 

Approval  of 
conditional 
contract  for 
sale. 


Upon  the  applicon  of  (x.,  the  liq.,  &c.,  Order  that  the  conditional  con- 
tract entered  into  between  the  sd  liq  and  B.,  of ,  for  the  sale  of,  &c., 

be  carried  into  eff'ect.  And  the  sd  B.,  declaring  himself  content  with  the 
title  to  the  premes,  order  that  the  sd  B.  pay  into  C*t  to  the  credit  of  the 
R.  Co.,  Limtd.,  the  account  of  the  liq  of  the  sd  co,  the  sum  of  2,.^)00/., 
being  the  pchase  money  as  agreed  for  the  co's  rights  and  interests  in  the 
sd  mines,  and  that  upon  such  paymt  being  made  the  sd  B.  may  he  let 
into  immediate  possession  of  the  sd  rights  and  interests,  And  order  that 
upon  such  paymt  being  made  the  sd  liq  do  join  in  and  execute  a  proper 
assignmt  under  the  seal  of  the  sd  co  of  such  rights  and  interests  to  the 
sd  B.,  his  exs  or  ads,  such  assignmt  to  be  settled  by  the  judge  in  case 
the  parties  differ  about  the  same.  Rams(jiU  Mining  Co.,  Hall,  Y.-C, 
2G  May,  1877.     B.  94G. 


Aj)proval  of 
conveyances. 


Form  481.  Upon  the  applicon  of  the  off.  liq.,  &c.,  and  the  judge  being  of  opinion 
that  the  four  several  indres  hereinafter  mentd  are  fit  and  i)roper  deeds 
to  be  executed  by  the  applicant,  and  that  it  is  fit  and  proper  that  the 
seal  of  the  co  should  be  affixed  thereto.  It  is  ordered  that  the  applicant 
be  at  libty  to  execute  such  indres  accordingly,  and  also  to  affix  the  seal 
of  the  sd  CO  to  the  same.  Several  four  indres  being  made  between  the 
several  persons  as  parties  thereto  hereinafter  mentd,  that  is  to  say, 

1.  The  conveyance  of  the  Alexandra  Palace  Estate  made  between,  &c. 

2.  The  conveyance  of  the  land  at,  &c.,  made  between,  &c. 

3.  The  conveyance,  &c. 

4.  The  assignmt,  &c.     Alexandra  Palace  Co.,  Malins,  V.-C,  3  Aug., 
1877.     A.  ir).")G. 


Form  482.        Upon  the  applicon  of  the  liq,  &c.,  and  upon  hearing  the  solors  for  the 

applicant  and  for and trustees  for  the  debenture  holders,  and 

upon  reading,  &c.     Let  the  api»licant  be  at  libty  to  concur  in  the  sale 


Liberty  for 
official  liqui- 
dator to  concur 


SALES    IN    WINDING-UP. 


455 


of  the  ppty  directed  by  an  order  made  in  the  action  of  VkJcerman  v.  Thr  Form  482. 
Bonville  Court  Coal  Co.,  1877,  v.  31),  and  dated  7t]i  February,  1878  ;  And  ;,."  ,,o     i    ^ 

'  '  '  •'  '  '  111  sale  OKiereu 

let  the  ppty  of  the  sd  co  other  than  the  ppty  mentd  in  the  sd  indre  be  in  action  by 
sold  at  the  same  time  and  place  as  the  ppty  directed  to  be  sold  by  the  iloid^l'^^^iui 
sd  order  ;  And  let  the  monies  to  arise  by  such  sale  be  pd  into  the  Ct  to  direction  that 

the  credit  of  the  sd  action  of ,  And  let  so  much  of  the  pchase-  cSelTto  be 

money  to  l)e  pd  into  Ct  to  the  credit  of  the  sd  action  as  is  attributable  to  put  up  for  sale 
the  ppty  sold  under  this  order,  and  not  included  in  the  sd  order  of  the  '^^  ^^^^  ^^^^^- 
7th  February,   1878,  be  distinguished  from  the  pchase-money  arising 
from  the  ppty  sold  under  the  sd  last-mentd  order.    BonviUe's  Courf  Coal, 
il-c,  Co.,  Hall,  Y.-C,  22  Feb.,  1878.     A.  440. 

Upon  the  applicon  of  B.,  G.  and  C,  the  trustees  for  the  debenture  Form  483. 
holders  of  CO  and  mtgees  of  the  L.  Collieries  under  a  certain  indre,  Dh^tion  to    ^ 
dated,  &c.,  and  upon  hearing  the  solors  for  the  applicants  and  for  the  liq>"ilator  to 
liqs  of  the  sd  co,  &c..  Let  the  contract  dated  4  Dec,  1877,  for  the  sale  by"tnlsteerfor 
of  the  j)pty  comprised  in  the  sd  contract,  forming  pt  of  the  ppty  of  the  tlebenture 
sd  CO  be  confirmed,  And  I^et  all  necessary  and  proper  i^arties  join  in  and 
execute  all  deeds  necessary  to  give  effect  to  the  same,  to  be  settled  by 
the  judge  in  case  the  parties  differ,  And  Let  the  ajiplicants  pay  to  the  sd 
C.  &  L.,  as  the  sd  liqs,  their  costs  of  and  occasioned  by  this  applcon 
and  consequent  thereon,  and  of  executing  the  necessary  deeds  assigning 
the  ppty  to  the  pchaser,  to  be  taxed  by  the  taxing  master  in  case  the 
parties  differ  about  the  same,  Llanganneck  Collieries  Co.,  M.  R,.,  13  Dec. 
1877.     B.  2002.     See  Form  249. 

Upon  the  applicon  of  K.  &  B.,  the  trustees  for  the  debenture  holders  Form  484. 
of  the  above-named  co,  and  upon  hearing,  &c..  Order  that  the  off.  liq.  of  Liij^rty^ 
CO  do  concur  in  the  assignmt  or  assignmts  to  the  pchaser  or  pchasers  assign  last 
from  the  applicants  of  the  ppty  included  in  their  mtge,  dated  T)  Feb.,    ^^^ "     ^™"^' 
1875,  in  the  sd  order  of  3  Ap.,  187(;,  mentd,  or  any  pt  or  pts  thereof, 
for  the  ppse  of  vesting  in  such  pchaser  or  pchasers  the  last  days  of  the 
respive  terms  created  ])y  the  leases  of  the  same  ppty,  and  the  options  of 
pchasing  the  fi-eehold  of  such  ppty  contd  in  such  leases  respively,  and 
that  the  sd  off.  licj.  do  convey,  assign,  demise,  and  assure,  or  join  in  con- 
veying, assigning,  demising,  and  assuring  the  ppty  included  in  the  sd 
mtge  in  such  manner  as  the  applicants  may  direct.    Globe,  4'C.,  Co.,  M. 
R.   4  May,  1877.     A.  OOG. 

Upon  the  applicon  of  J.  &  T.,  two  of  the  liqs.  of  the  above-named  co.  Form  485. 

and  upon  hearing  the  solors  for  the  applicants  and  for & ,  the  Order  giving~ 

committee  of  creditors  of  the  sd  co,  and  upon  reading  the  orders  dated  liquidators 
respively  the  16th  of  Feb.,  1877,  and  the  1st  of  March,  1877  :  It  is  tender  for 
ordered  that  the  applicants  Ije  at  libty,  either  jointly  or  severally,  to  purchase  of 
tender  for  the  pchase  of  the  ppties  directed  to  be  sold  by  the  sd  order,  pr^Jerty.*^ 
dated  1  March,  1877,  Brynmaivr  Coal  Co.,  Hall,  V.-C,  13  Ap.  1877.   A. 
656. 


456 


WINDING-UP. 


Miscellaneous  Avthorities  to  Official  Liquidator. 


(1  ,  the  prov.  off.  liqs.  of  co,  &c.» 


Form  486.       Uijou  the  ajiplicon  of  an 

Liberty  to  give  Order  that  the  scT  liqs.  be  at  hl)ty  on  or  l)efore  the  24th  March,  1877,  to 

lip  company's    give  up  possession  of  the  offices  of  the  scl  co,  at  Xo.  ,  Lombard 

auo'tiier  *'^  ^  street,  in  the  City  of  London,  and  that  they  be  at  Hbty  to  take  other 
offices  for  the  pposes  of  the  winding'-np,  at  a  rent  not  exceeding  150^. 
p.  a.,  and  that  they  be  at  Hbty  to  sell  so  much  of  the  furniture  and 
fittings  at  i^resent  in  use  at  the  sd  offices  in  Lombard  Street  as  they 
may  deem  proper  or  necessary.  Hooper's  Telegraph  ^\'orl:s,  M.  K.,  21 
March,  1877.     A.  523. 


Liberty  to 

continue 

manager. 


Form  487.  Upon  the  applicon  of  the  off,  liqs.,  &c.,  Let  the  applicants  be  at  libty 
to  continue  the  employmt  of  the  sd  H.  as  manager  of  the  works  l)elonging- 
to  the  sd  CO  at  a  salary  of  400/.  p.  a.  during  the  carrying  on  of  the 
sd  works,  or  until  further  order  :  such  employmt  to  be  determinable 
upon  a  week's  notice  in  the  event  of  the  co  no  longer  having  need 
thereof.  And  it  appearing  that  the  sd  off.  liqs.  continued  the  employmt 
of  Mr.  W.,  the  late  secretary  of  the  sd  co  up  to  the  16th  May,  1877,  at 
a  salary  of  325/.  ji.  a.,  the  judge  doth  approve  of  the  same.  Hooper's 
Telegraph  Worlcs,  M.  E.,  5  June,  1877.     A.  1037. 


Form  488. 

Liberty  to 

appoint 

manager. 


Upon  the  applicon  of  the  off.  liqs.,  &c.,  Let  the  sd  off.  liqs.  be  at  libty, 
subject  to  his  giving  to  their  respivc  satisfon  security  to  the-  amount  of 
not  less  than  200/.,  to  appoint  S.,  now  residing  at  Cape  Breton,  Nova 
Scotia,  in  the  Dominion  of  Canada,  local  manager  of  the  works  and  ppty 
of  the  sd  CO,  at  Cape  Breton  afsd,  sul)ject  to  one  month's  written  notice 
to  (juit  on  either  side,  at  a  salary  of  150/.  p.  a.,  to  commence  from 
the  1st  June,  1878,  in  the  place  of  N.,  who  has  resigned  his  appointmt 
as  manager  of  the  sd  works  and  ppty.  Ca2)e  Breton  Co.,  Malins,  Y.-C, 
23  May,  1878.     A.  083. 


Form  489. 


Liberty  to 
official  liqui- 
dators to 
employ 
secretary  to 
Ijrepare 
accounts. 

Form  490. 


Appointment 
of  surveyor  to 
ilistinguisli 
tlxtures  from 
cliattels. 


Let  the  off.  liqs.  of  co  lie  at  lil)ty  to  employ  C,  the  late  secretary  of 
CO,  to  i^repare  and  investigate  certain  accounts  and  other  papers  for  the 
use  of  counsel  :  And  let  the  remuneration  to  l)e  pd  to  the  sd  C.  be  fixed 
in  chaml^ers.     Anvergne,  <£y.,  Co.,  Fry,  J.,  7  Ap.,  1870,  A.  601, 

Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  Mr.  L.,  of  the  firm  of 
-,  auctioneers  and  surveyors,  be  appointed  as  a  person  to  report  to 


the  judge  which,  if  any,  of  the  valuables  included  in  the  parlars  A. 
referred  to  in  the  contract  for  sale  dated,  &c.,  to  the  L.  F.  Association, 
are  comprised  as  fixtures  or  otherwise  in  the  mtge  dated,  &c.,  and  which 
of  the  other  valuables  belong  to  the  sd  off",  liq.,  distinguishing  those  of 
them  which  are  subject  and  those  (if  any)  of  them  which  are  not  sub- 
ject to  the  distress  of  the  sd  mtgees  :  And  let  the  question  by  whom  and 
out  of  wliat  fund  the  fees  and  disbinsemts  of  the  sd  L.  and  the  costs  of 


MISCELLANEOUS    AUTHOEITIES    TO    OFFICIAL    LIQUID ATOE.  457 

this  applicon  are  to  be  borne  and  pd  l)c  reserved.    Alexandra  PaJaci'  ( '0.,   Form  490. 
Malms,V.-C.,  If)  March,  ]  877.     A.  430.  • 

Upon  the  appb'con  of  the  liq,  etc.,  and  upon  reading  [supervision  Form  491. 

order,  &c.],  Let  Mr.  F.,  of ,  be  and  he  is  hby  appointed  to  deter-  Another  fonn 

mine  what  chattels  situate  upon  the  ppty  comprised  in  the  mtgage  to 
B.  and  others  dated,  &c.,  are  and  what  are  not  fixtures  :  And  let  the 
costs  of  the  sd  B.  and  others  the  mtgees  be  ascertained  in  chambers  and 
added  to  their  secmities,  but  in  such  costs  the  attendance  of  counsel  is 
not  to  be  allowed.  Fovcsi  of  Dean  Coal  Co.,  j\L  R.,  20  July,  1877.  A. 
1500. 

Upon  the  applicon  of  the  prov.  off.  Kq.,  &c.,  Let  the  sd  prov.  off.  liq.  Form  492. 

be  at  libty  to  employ  Messrs. ,  to  make  an  inventory  and  valuation  i^-^^^^^.^  ^^ 

of  all  the  stores  and  loose  gear  and  other  moveable  ppty  in  or  al)ont  the  have  inventory 
wharf  premes  of  the  sd  co,  and  not  being  fixtures,  and  let  the  costs  of  ^^'^Y'''y^^i'|tioii 
such  inventory  and  valuation  be  costs   in  the  Avindiug-up.     Butler's  made. 
Wharf  Co.,  22  Oct.,  1878,  Hall,  V.-C.     A.  1881. 

Upon,  &c.,  Let  the  sd  B.,  as  such  prov.  off.  liq.  be  at  liljty  to  take  Form  493. 
such  proceedings  against  the  persons  being  debtors  of  the  sd  co  named  7-7~.+   .^^ 
in  the  schedule  hto,  as  he  may  be  advised,  to  recover  paymt  of  the  debts  debtors  and 
due  from  them  to  the  sd  co  :  And  let  the  sd  B.  as  such  liq  as  afsd  be  at  tl^^df  °''''""'" 
libty  to    sell    the   stock-in-trade  of   the    sd   co,  or  such  pt  thereof  as 
he  may  think  it  advisable  to  sell.     Tea  Co.,  Hall,  V.-C,  1  Mar.  1878. 
B.  531. 

Let  the  applicauts,  as  such  off.  liqs.,  be  at  libty,  in  all  cases  in  which  Form  494. 
they  are  jointly  of  opinion  that  the  estate  of  the  bank  will  be  benefited  (General  liberty 
by  the  proceedings,  to  issue  at  their  discretion  fi-om  time  to  time  the  to  sue  on  bills 
necessary  legal  process  against  the  parties  to  overdue  or  returned  bills  of  °  ^^^  ^^^s^- 
exchange  held  by  the  bank  :  And  let  no  action  be  commenced  pursuant 
to  this  order  unless  there  is  a  reasonable  prospect  of  at  least  the  costs 
thereof  being  recovered  against  the  persons  sued  :  And  no  action  is  to 
be  brought  to  trial  without  the  sanction  of  the  judge  in  chambers  first 
obtained.    West  of  Enf/Jand,  dx.,  BanJr,  Malins,  Y.-C,  7  Jan.,  1870,  A.  34. 

For  order  giving  official  liquidators  liberty  "  to  make  the  usual  proof  in  bank-  Form  495. 
ruptcy  against  any  person  or  persons  indebted  to  the  bank  who  is  already  or  is 
or  are  or  shall  be  adjudicated  bankrupt,  and  either  of  the  applicants  to  be  at 
liberty  to  swear  the  necessary  affidavit  or  affidavits  in  proof  of  any  debt  or 
debts  due  to  the  bank  from  any  bankrupt  estate,"  see  West  of  England,  S^c, 
Bank,  Malins,  V.-C,  10  Jan.,  1879.  B.  57.  The  Court  will  only  give  liberty  to 
go  in  and  prove.  Emma  Co.  v.  Grant,  17  C.  D.  122;  Barter  v.  Dubeux,  7  Q.  B. 
Div.  413  ;  Hale  v.  Boustead,  8  Q.  B.  D.  4o5.     See  Form  524,  infra. 

Upon  the  applicon  of  the  off.  Hq.  of  co,  &c.,  Let  the  sd  off.  liq.  be  at  Form  496. 
libty  to    institute    an    action    in    the  High  Ct  of  Justice  against  R.  Liberty  to 
for    G    months'  rent    of  the   co's  j^remes  and  plant,  and  to  prosecute  /or  ^nt. 


Liberty  to 
prove. 


458 


WINDING-UP. 


Form  496.  such  action  up  to  giving  notice  of  trial ;  but  after  such  notice  shall 
liave  been  gixmi  no  further  steps  are  to  l)e  taken  in  the  action  without 
further  leave  of  the  judge.  Taurim  Co,  Limfd,  M.  R.,  15  Nov.,  187G. 
B.  1760. 


Liberty  to 
Jefeiul. 


Form  497.  Upon  the  applicon  of  B.  and  L.,  the  off.  liqs.,  &c.,  and  upon  hearing 
&c.,  and  upon  reading  an  order  dated,  &c.,  and  the  writ  of  smnnions 
issued  on  the  10th  of  May,  1877,  in  an  action  commenced  in  the 
Chancery  Division  of  the  High  Ct  of  Justice,  wherein,  &c.,  Order 
that  the  applicants  be  at  libty  on  behalf  of  the  sd  co  to  take  all 
necessary  and  proper  proceedings  as  they  may  be  advised  by  way  of 
defence  in  the  sd  action.  Huoper's  Telegraph  Worlis,  M.  R.,  1,">  May, 
1877.     A.  904. 


Order  con- 
firming 
contract  to 
grant  lease. 


Form  498.  Upon  the  applicon  of  C,  the  off.  liq.,  &c.,  Let  the  conditional  con- 
tract, dated,  &c.,  and  made,  &c.,  being  the  exhibit  to  the  afft  of  the  sd 
C.  for  a  lease  to  the  sd  M.  &  AV.  of  a  portion  of  the  leasehold  shop  and 

premes  situate  at Street,  Liverpool,  in  the  county  of  L.,  at  the  rent 

of  35/.  2^.  a.,  be  carried  into  eflPect.     American  Bowline),  ^c,   Co.,  30 
July,  1878.     A.  1478. 

For  order  giving  official  liquidator  liberty  to  gi-ant  an  imderlease  of  part  of 
company's  property,  see  Economic  Benefit  Soc,  Fry,  J.,  16  July,  1879.     A.  1553. 

A  lease  of  a  company's  undertaking  can  be  sanctioned  as  an  arrangement 
under  the  Joint  Stock  Companies  Arrangement  Act,  1870.  In  re  Dynevor 
Dyffryn,  ^'c.,  Co.,  11  C.  D.  005. 

Upon  the  applicon  of  the  off.  liq.,  &c..  Order  that  the  sd  off.  liq.  be  at 
libty  to  execute  the  power  of  attorney- to  M.  marked  F.  verified  by  the 
aflFt  of  J.  filed,  &c.,  and  identified  by  the  chief  clerk's  signature  in  the 
margin  thereof  for  the  ppose  of  recovering  fi'om  the  estate  of  N.,  of 
Belgium,  Banker,  such  sums  of  money  as  may  be  due  from  the  estate 
of  the  sd  N.  to  the  sd  co.  Ottoman  Co.,  Limtd,  Bacon,  V.-C,  '2(j  April, 
1878.     821  B. 

For  order  giving  official  liquidator  liberty  to  appoint  attorney  to  prosecute 
any  actions  which  official  liquidator  may  bring  in  Spain,  see  Madrid  Markets 
Co.,  Hall,  V.-C,  10  Ap.,  1879.     B.  691. 


Form  499. 

Liberty  to 
execute  power 
of  attorney. 


Another  form. 


Form  500.  Upon  tlie  applicon  of  C,  the  sole  liq  of  co,  and  upon  hearing,  &c., 
and  upon  reading,  &c.,  and  the  order  dated  12  Jan.,  1878,  whereby  the 
sd  liq  was  to  be  at  lil)ty  to  constitute  N.,  of  Lima,  in  Peru,  his  attorney 
for  the  ppose  of  realising  and  getting  in  such  of  the  assets  of  the  co 
there  as  he  should  be  instructed  by  the  sd  liq  to  realise  and  get  in  subject 

to  his  giving  security  for  10,000/.  by  bond  of  the Bank  for  that 

amount  in  the  form  approved  by  the  chief  clerk  of  the  judge  within 
three  months  from  the  date  of  the  last-mentd  order,  and  upon  reading 
an  afFt  of  the  sd  C,  filed,  &c.,  Order  that  the  sd  liq  be  at  libty  to  accept, 
in  lieu  of  the  security  mentd  in  the  last-mentd  order,  the  bond  of  the 


MISCELLANEOUS    AUTHOEITIES    TO    OFFICIAL    LIQUIDATOE.  459 
Bank  in  the  form  approTed  by  tlic  sd  chief  clerk  for  the  siun  of  Form  500. 


5,000/.  :  And  order  that  the  time  within  whicii  the  secm'ity  is  to  be 
given  by  the  sd  X.  pursuant  to  the  sd  order  of  tlie  12th  of  Jan.,  1878, 
be  enlarged  until  the  12th  of  June,  1878.  General  SoutJt  Ameriran  Co., 
Limtd,  Malius,  V.-C,  11  April,  1878.     A.  823. 

Upon  the  applicon  of  B.  and  Y.,  the  liqs  of  co,  and  upon  hearing  the  Form  501. 


solors  for  the  applicants,  and  upon  reading  an  order  dated,  &c.,  an  aift  Libertj'  to 
filed,  &c.,  being  respively  the  balance  order  against  P.  and  the  afft  of  f^^ploy  ^gent 
service  thereof  through  the  post  office,  a  joint  aff't,  <fec.,  Order  that  the  sd 
B.  and  Y.,  as  such  liqs  as  afsd,  be  at  libty  to  employ  E.,  of  Lima,  in  the 
Kepublic  of  Peru,  as  agent  of  the  sd  B.  and  Y.,  for  them  and  on  their 
behalf  as  such  liqs  as  afsd,  and  in  their  name  or  otherwise,  to  ask, 
demand,  sue  for,  recover,  and  receive  of  and  from  the  sd  R.  mentd  in  the 
sd  order  of  4  July,  1876,  or  from  any  person  or  persons  on  his  behalf, 
the  sum  of  20,522/.  lis.  11^/.  for  and  in  respect  of  calls  upon  shares  in 
the  sd  CO  held  by  the  sd  R.,  together  with  interest  ow  the  sd  sum  fi"om 
20  Mar.,  187G,  until  paymt  at  5  p.  c.  p.  a.,  and  to  compound,  com- 
promise, and  accept  \)l  in  lieu  and  in  satisfon  of  the  whole  of  the  sd  debt 
or  sum  of  20,'y22I.   lis.  lid.  and  interest  as  afsd,  And  upon  paymt 

of  the  sd  sum  and  interest,  or  any  pt  thereof,  into  the  Bank  at 

Lima  in  the  names  of  the  sd  liqs  B.  and  Y.,  to  give  a  good  and  effectual 
discharge  and  receipt  for  the  sd  sum  or  such  pt  thereof  as  may  be  pd  as 
afed,  And  order  that  the  sd  B.  and  Y.  be  at  libty  to  allow  and  pay  to 
such  attorney  or  agent  out  of  such  smn  as  by  him  or  through  his  inter- 
vention shall  be  recovered  and  so  pd  in  as  afsd,  a  commission  not 
exceeding  in  amount  one-third  of  the  sum  so  recovered  and  pd  in  as 
afsd.     Bristol  and  jSoufh  American,  dx.,  Co.,  31  May,  1877.     A.  1259. 

For  liberty  to  employ  detective  as  regards  contributories,  see  Form  520. 

Upon  the  applicon  of  H.  the  liq  of  the  above-named  co,  and  upon  Form  502. 
hearing  the  solors  for  the  applicant,  and  upon  reading  the  afft  of  the  sd  Order  giving 
liq  and  an  originating  summons  taken  out  by  the  sd  liq  on  the  18tli  July,  ^^\^^'^y  t°    . 
1877,  m  the  Chancery  Division  of  this  Ct,  Order  that  the  sd  liq  be  at  tration. 
libty  to  refer  all  matters  in  difference  between  the  sd  co  and  W.  in 

reference  to  the  erection  of  certain  buildings  at  ,    according  to 

certain  specifications  and  terms  mentd  in  the  afft  of  the  sd  liq  and  in 
relation  thereto,  and  all  matters  and  questions  arising  thereout,  in  such 
manner  and  upon  such  terms  and  conditions  as  the  sd  liq  may  think  fit, 
and  for  the  pposes  afsd  to  enter  into  and  to  execute  any  agreemt  or 
agreemts  as  he  may  be  advised,  but  so  that  any  proceedmgs,  rules,  or 
orders,  to  be  had,  taken,  or  made  in  regard  to  such  reference  shall  be 
had,  taken,  or  made  in  and  by  this  ct,  And  order  that  the  costs  of  the 
sd  liq,  of  and  incident  to  this  applicon,  shall  lie  pd  out  of  the  assets  of 
the  sd  CO.  Drawee's  Patent  Concrete  Co.,  Malins,  V.-C,  28  July,  1877. 
A.  1474. 


460 


WINDING-UP. 


Liberty  to  go 
abi-oad. 


Form  503.  Upon  the  applicou  of  the  oJEF.  liqs.,  &c.,  that  the  applicant  K.,  one 
of  the  sd  off.  liqs.,  be  at  libty  during  the  month  of  Sept.,  1877,  to 
proceed  to  Xova  Scotia,  arriving  there  previously  to  the  2nd  Oct.,  1<S77, 
and  to  remain  there  for  such  time,  not  exceeding  one  calendar  month, 
as  may  ho  necessary  for  further  assisting  in  the  defence  of  the  sd  co 
to  the  action  Ijronglit  In'  CI.  against  the  sd  co  in  S.,  and  for  prosecuting 
the  equity  suit  brought  in  the  Ct  of  Xova  Scotia  in  the  name  of  the  sd 
CO  against  G.  in  H.  in  relation  to  the  affairs  of  the  sd  co,  And  order  that 
the  expenses  of  the  sd  K.,  of  and  relating  to  tlie  sd  journey,  not  exceed- 
ing the  sum  of  100/.,  be  pd  out  of  the  assets  of  the  sd  co.  Cape  Breton 
Co.,  Malins,  V.-C,  9  xiugust,  1877.     A.  1873. 


Form  504.       Upon  the  applicou  of  ^Y.,  the  off.  liq.,  &c.,  and  upon  reading,  &c. 
Liiierty  to  "ive  ^^^  '^^^  order  made  in  the  action  of  the  Lisbon,  (&c.,  Co.  v.  Grant,  1877, 


security  for 
costs. 


L.  145,  U23on  the  ajjplicou  of  C,  one  of  the  defts  in  such  action  :  Let 
the  applicant  be  at  libty  out  of  the  assets  of  the  sd  co  to  pay  the  sum  of 

100?.  into  Ct  to  the  credit  of  the  sd  action, v. ,  to  an  account 

intituled  "  Security  for  costs  of  the  deft  C,"  pursuant  to  the  sd  order  in 
the  sd  action,  and  dated  1  Feb.,  1878.  Lislon  Steam  Tramways  Co., 
Mahns,  Y.-C,  28  Feb.,  1878.     B.  448.     See  Form  232. 


Form  505.  Upon  the  applicou  of  T.  and  C,  the  prov.  off.  li(is.  of  Bank,  &c.,  Let 
Liberty  to  ^^®  api^licants,  as  such  prov,  off.  liqs.  as  afsd,  be  at  libty,  in  the 
return  cveut  of  any  jDerson  or  persons  demanding  the  return  or  delivery  up  to 

deposited  with  ^^^^^^  *^^  them  of  any  deed,  security,  or  other  valuable  deposited  with  the 
bank  for  safe  sd  bank  for  safe  custody,  to  deliver  up  to  him  or  them  such  deeds, 
*^"^  °  ^'  securities,  or  valuables  respively,  notwithstanding  the  person  or  persons 

demanding  the  return  of  the  same,  is  or  are  a  shareholder  or  share- 
holders in  the  sd  bank  :  And  costs  of  the  applicants  of  and  incident  to 
this  applicou  to  be  costs  in  the  winding-up.  West  of  England,  i.yc.,  Bank, 
Malins,  V.-C,  20  Dec,  1878.     2118  B. 


Liberty  to 

discount  bill 


Form  506-  Upon,  &c..  It  is  ordered  that  the  off.  liq.  of  the  co  be  at  libty  to 
discount  the  bill  for  710/.  125.  2f7.  in  his  hands,  and  out  of  the  proceeds 
to  pay  the  wages  of  the  workmen  of  the  sd  co,  which  will  become  due 
on  the  19  May,  18G{),  and  for  carriage  of  the  goods  and  for  the  pchase 
of  coal  to  carry  on  the  works  of  the  sd  co  mentd  in  the  sd  afift  of  P.,  not 
exceeding  in  the  whole  the  sum  of  550/.,  JS^ortlifietd  Iron  Co.,  M.  E., 
18  May,  18GG. 


Form  507.  Upon  the  applicou  of  H.,  the  off.  liq.,  of,  &c.,  Order  that  the  sd 
H.  be  at  libty  to  repay  to  the  policy-holders  of  the  sd  co  Avhose  names 
are  set  forth  in  the  second  column  of  the  schedule  to  the  sd  aflft  and 

numbered  respively to  inclusi\-e  in  the  first  column  of  the 

same  schedule,  the  amounts  set  opposite  to  their  respive  names  in  the 
seventh  column  of  the  sd  schedule,  being  premiums  pd  by  the  sd  policy- 
holders to  the  sd  liq  since  the  date  of  the  order  to  wind  up  the  sd  co, 


Liberty  to 
repay  pre- 
miums paid 
by  mistake. 


CONTPJBUTORIES.  *  ,  461 

and  which  premiums  had  not  accrued  due  at  the  date  of  tlie  sd  order,  Form  507. 
And  order  tliat  in  taxing-  the  costs  of  the  sd  H.  as  the  prov.  and  off.  liq. 
of  the  sd  CO  all  premiums  received  by  him  from  policy-holders  be 
distinguished  from  his  rccei])ts  fi-om  otlier  sources,  and  that  the  date  at 
which  such  premiums  respively  become  due  be  stated  in  the  certificate, 
and  that  his  paymts  in  respect  of  such  premiums  l)e  also  distinguished, 
And  costs  of  and  incident  to  a]iplicon  to  be  costs  in  winding-up.  British 
Imperial  Ijisim/ncr  Co.,  Hall,  V.-C,  IG  July,  1877,  A,  1445. 

For  order  authorising  official  liquidators  to  enter  into  contract  for  completion 
of  company's  railway  and  pier,  see  Cape  Breton  Co.,  Malins,  V.-C,  2  May,  1877. 
A.  818. 

For  order  confirming  contract  on  behalf  of  company  in  liquidation  to  lay  the 
permanent  way  of  a  i-ailway  over  bridges,  see  Hamilton's  Windsor  Ironworks, 
Fry,  J.,  29  Mar.,  1879.     A.  (i51. 

Conirilndories. 

As  to  settling  the  list  of  contributories,  see  ss.  98  &  99  of  the  Act  and  Eules 
29,  30,  31,  03,  and  04,  and  Forms  in  Schedule  to  Eules,  Nos.  24  to  43. 

As  to  the  liability  of  the  contributories,  see  s.  38  of  the  Act. 

S.  98  of  the  Act  provides  that  the  Coiu-t  shall  settle  a  list  of  contributories. 
The  list  is  to  be  prepared  by  the  official  liquidator,  and  to  be  verified  by 
affidavit.  Rule  29.  The  list  is  to  be  left  at  the  chambers  of  the  judge,  and  an 
appointment  for  settlement  obtained,  and  notice  is  to  be  given  :  Rule  30.  Before 
leaving  the  list  the  schedule.  Form  28,  should  be  examined  with  a  view  to  the 
affidavit.  Form  27,  paragraph  1.  The  result  of  the  settlement  is  to  be  certified 
by  the  chief  clerk.  The  following  forms  will  be  found  in  the  schedule  to  the 
rules.  25.  List  of  contributories.-  24.  Affidavit  of  official  liquidator  in  support- 
20.  Notice  to  contributories  of  ai^pointment  to  settle  list.  27.  Affidavit  of  service 
of  notice.  30.  Supplemental  list  of  contributories.  29.  Affidavit  in  support. 
31.  Certificate  of  chief  clerk  of  settlement  of  list.  32.  Order  to  vary  list.  At 
the  meeting  to  settle  the  list  the  affidavit  of  service  of  the  notices  and  the 
London  Gazette  and  other  papers  containing  the  advertisement  (if  directed)  must 
be  produced,  and  the  settlement  is  then  proceeded  with. 

Before  or  immediately  after  the  list  is  left,  the  off.  liq.  should  make  and  file 
an  affidavit  identifying  the  company's  books,  so  that  they  may  be  in  evidence. 

Usually  all  unopposed  cases  are  taken  first,  and  then  the  op]30sed.  As  regards 
the  latter,  the  official  liquidator  produces  his  evidence  to  fix  the  alleged  con- 
tributory, and  then  the  alleged  contributory  produces  his  evidence  in  ojiposition. 

The  evidence  is  usually  by  affidavit,  and  when  the  chief  clerk  has  gone  into 
it  he  gives  his  decision.  If  either  of  the  parties  think  fit,  the  matter  can  there- 
XTjoon  be  referred  to  the  judge,  or  he  can  wait  until  the  certificate  has  been  filed, 
and  within  8  days  afterwards  take  out  a  summons  to  vary  or  discharge  the  cer- 
tificate.    Orders  of  1883,  70.     As  to  discovery,  infra,  498. 

However,  in  most  cases,  if  an  alleged  contributory  is  dissatisfied  with  the 
chief  clex'k's  decision,  he  takes  out  a  summons  at  once  to  strike  his  name  oft'  the 
list,  and  if  necessary,  this  summons  is  adjourned  into  Court. 

The  costs  of  a  person  unsuccessfully  disputing  his  liability  as  a  contributory 
must,  as  a  rule,  be  paid  by  the  contributory.  Goioer's  case,  G  Eq.  77  ;  Andrew's 
case,  3  Ch.  161. 

If  the  alleged  contributory  successfully  dis^Dute  his  liability,  he  will  get  his 
costs.  Nation's  case,  3  Eq.  77,  and  Forms  511  and  514,  infra.  And  if  costs  are 
given  him,  they  will  be  payable  out  of  the  assets  in  priority  to  the  liquidator's 
costs.  Home  Investment  Co.,  14  C.  D.  167  ;  Re  Dominion  of  Canada  Co.,  W.  N. 
1884,  38;  Re  North  Buckley  Co.,  24  S.  J.  835.    But  see  Re  Dronfield,  23  C.  D.  511. 


462 


WINDING-UP. 


Porm  508-       On  the  pt  of  A.  of 


Summons,  to 
strike  name 
off  list. 


-,  that  the  name  of  the  applicant  may  be 
struck  off  tlie  list  of  contribs  of  the  above-named  co,  and  that  the  ofi". 
liq.  of  the  sd  co  may  be  ordered  to  pay  the  costs  of  this  applicon. 


Summons 
to  vary 
certificate 


Porm  509,  On  the  pt  of  F,  P..  one  of  the  persons  settled  on  the  list  of  contribs  of 
the  above-named  co,  by  my  chief  clerk,  that  the  certificate  of  my  chief 
clerk  dated,  &c,,  of  the  result  of  the  settlemt  of  the  list  of  contribs  of  the 
above-named  co  may  be  altered  or  varied  as  follows,  namely,  by  excluding 
the  name  of  the  applicant  fi'om  the  first  pt  of  the  schedule  to  such  certi- 
ficate, and  that  such  consequential  directions  may  be  given  and  correc- 
tions and  alterations  made  in  the  sd  certificate  as  may  be  necessary. 


Form  510. 


Another. 


That  so  much  of  the  sd  certificate  of  my  chief  clerk  dated,  &c,,  as 
certifies,  that  A.  is  the  holder  of  500  shares  in  the  above-named  co, 
and  as  such  has  been  placed  on  the  list  of  contribs  of  the  sd  co  may  be 
^•aried  by  inserting  in  the  sd  certificate  as  the  holder  of  100  of  the  sd 

shares  the  name  of  B.  of ,  in  the  place  and  stead  of  the  sd  A.,  and 

that  such  consequential  directions,  &c. 


Form  511.        Upon  the  applicon  of  the  oflP.  liq.  of  co  to  settle  the  list  of  contribs 
Order  to  strike  made  out  by  him  and  left  at  the  chambers  of  the  M.  E.,  wherein  the 

name  off  list,     ^.^n^e  ^f  E.  of  has  been  included  as  a  member  holding  24  shares 

to  fix  the  name  of  the  sd  E.  upon  such  list,  and  upon  reading,  &o..  Let 
the  name  of  the  sd  E.  be  struck  oif  the  list  of  contribs  for  unpd  shares  : 
And  order  that  the  sd  oflF.  liq.  do  pay  to  the  sd  E.  the  sum  of 
14?.  lOs.  Gd.,  being  the  ascertained  amount  of  his  costs  of  this  applicon. 
SoutJisea  Floral  Hall  Co,  M.  R.,  25th  June,  1877.     B.  1453. 


Order  to  place 
name  in  list. 


Form  512.  Upon  the  applicon  of  T.  to  review  the  list  of  contribs  of  co  in  respect 
of  the  inclusion  of  the  sd  T.  therein  as  an  unpd  shareholder,  and  that 
his  name  might  be  struck  out  or  entered  as  a  fully  pd-up  shareholder, 
and  upon  hearing  the  solors  for  the  applicant  and  for  the  off.  liq.,  &c. 
[adj.  into  C'Q,  Let  the  name  of  the  applicant  be  placed  in  the  sd 
list  for  150  pd-up  shares  only,  And  let  the  costs  of  the  applicant  and  the 
sd  oflF.  liq.  be  taxed,  &c.,  and  pd  out  of  assets  of  co.  Eiqnon  Fuel  and 
Gas  Co.,  Malins,  V.-C,  17  Mar.  1877.     A.  507. 


Form  513.       Upon  the  applicon  of  the  oflf.  liq.,  &c.,  Let  the  sd  W.  S.  &  S.  be  and  they 
Order  to  settle  ^^^  ^^^^1  settled  upon  the  list  of  contribs  of  the  sd  society  as  the  exs  of 
executors  in      the  sd  S.  deceased,  in  respect  of  50  shares  held  by  him  in  the  sd  co. 
Croioi  Co-operative  Soc,  M.  11.,  20  Jan.  1877.     A.  4;>7. 


Form  514.       Upon  motion  by  way  of  appeal  this  day  made  unto  this  Ct  by  A.  in 
oTde7on  pcrsou,  and  upon  hearing  counsel  for  the  liq  of  co,  and  upon  reading 

appeal  re-         the  ordcr  dated  15  July,  1870  :  Order  that  the  sd  order,  w-hereby  it  was 
appealed 'from,  ordered  that  the  name  of  the  sd  A.  should  be  placed  upon  the  list  of 


CONTRIBUTORIES.  453 

contribs  of  the  sd  co  in  respect  of  di'r20  shares  therein  npon  which   Form  514. 

nothing-  has  been  pel,  l)e  discharged,  And  declare  that  the  sd  A.  held 

and  holds  the  sd  shares  as  fnlly  pd-up,  and  order  (he  so  desiring)  that 

his  name  l)e  not  placed  on  the  list  of  contribs  of  the  sd  co  in  respect  of 

the  sd  shares  or  any  of  them,  And  order  that  the  liq   of  sd  co  do  pay  to 

the  sd  A.  his  costs  of  and  occasioned  by  the  sd  order,  including  his  costs 

of  this  api)lic(jn.  such  costs  to  be  taxed  by  the  taxing  master.     Wedfj- 

v'ood  Coal,  dr.,  Co.,  Anderson'. s  case,  Ct  of  Appeal,  14  Nov.  1877,  B. 

2021.     Sec  also  report  in  7  t'.  Div.  75. 

Upon  the  applicon  of  the  oft",  liq.,  &c.,  that  so  much  of  the  chief  Form  515. 
clerk's  certificate  dated,  &c.,  as  certifies  that  H,,  N".,  and  J.,  the  several  Order  refusing 
persons  whose  names  are  set  forth  in  the  2nd  schedule  thereto  as  ha^dng  ^.pphcation  to 

Vtirv  CGrtincito 

been  excluded  fi'om  the  list  of  contribs  might  be  varied  by  striking  out 
the  sd  2nd  schedule,  and  placing  the  names  of  the  sd  several  persons 
therein  named  in  the  1st  schedule  to  the  sd  certificate,  and  that  such 
consequential  alterations  and  corrections  as  might  be  necessary  might  be 
made  in  the  sd  certificate,  and  upon  hearing  the  solor  for  the  applicant 
and  for  the  respondents  H.,  N.,  and  J.,  and  upon  reading  the  sd  chief 
clerk's  certificate.  Let  the  sd  applicon  be  dismissed.  London  and  Pro- 
vhickd,  lie,  Co.,  11  April,  1877.     B.  G18. 

Upon  the  applicon  of  8.,  &c..  Let  the  sd  chief  clerk's  certificate  be   Form  516. 
varied  by  excluding  the  name  of  the  applicant  as  a  contrib  of  the  sd  co.  Order  varjdng 
And  let  the  name  of  the  sd  8.  be  removed  from  the  list  of  contribs  certificate. 
of  the  sd  CO,  no  order  as  to  costs  of  applicon,  except  that  the  costs  of  the 
sd  off.  liq.  be  pd  out  of  the  assets  of  the  sd  co  as  and  when  the  judge 
shall  direct.     National  Funds  Assurance  Co.,  M.  R.,  25  June,  1877.    B. 
1169. 

Upon  the  applicon  of  the  L.  F.  Association,  contribs  of  the  above-   Form  517. ' 


named  co,  and  hearing  the  solors  for  the  applicants  and  for  the  ott".  liq.  Order  giving 
of  the  sd  CO,  Let  the  applicants  have  further  time  to  file  their  evidence  *^^'f  ^'^  ^^^ 
in  answer  to  the  aflfts  of  the  off.  liq.  of  the  sd  co,  and  J),  respively  filed 
in  these  matters  on  the  Kith  and  17th  May,  1878,  until  the  18th  June, 
1878,  Alexandra  Palace  Co.,  Malins,  V.-C,  27  May,  1878.     A.  977. 

Upon  the  applicon  of  S.  the  off.  liq.  of  co,  and  upon  hearing  the   Form  518. 


solors  for  the  applicants,  &c..  Let  the  time  within  which  the  applicant  is  Another. 
to  file  his  evidence  in  chief  in  support  of  the  summons  issued  in  the  above 
matters  on  the  Kith  of  June,  1870,  be  further  extended  until  the  7th  of 
Nov.,  1876,  and  let  the  time  within  which  the  respondents  are  to  be 
at  libty  to  file  affts  \\\  answer  be  extended  to  the  28th  day  of  Nov.,  187G, 
and  let  the  time  within  which  the  applicant  is  to  be  at  libty  to  file  affts 
in  reply  be  extended  to  the  4th  of  Dec,  187G.  Wedfjicood  Coal,  &c.,  Co., 
Malins,  Y.-C.  2(;  Oct.,  187G.     B.  1617. 


-164  WINDING-UP. 

Form  519.  Ui^on,  &c.,  Let  the  applicant  have  14  days  further  time  to  file  his 
Another.  evideucc  ill  support  of  his   summons  to  be  removed  from  the  list  of 

coutribs  in  reply  to  the  evidence  filed  by  the  sd  li(j.  London  and 
Provincial,  &c.,  Co.,  18  Ap.  1877.     B.  825. 

Form  520.  Upon  the  applicon  of  the  off.  liq.  of  co,  and  upon  hearing  the  solor  for 
Liberty  to  ^'^^^  applicant,  and  upon  reading  an  aflft  of  the  sd  off.  liq.,  filed,  &c.,  Let 
employ  the  sd  off.  liq.  be  at  libty  to  pay  out  of  the  assets  of  the  sd  co  to  E.  P. 

or  to  such  person  or  persons  as  may  give  information  enabling  him  to 
recover  calls  from  the  contribs  of  the  sd  co  who  have  not  yet  satisfied  their 
liability,  a  commission  of  15  p.  c.  upon  all  sums  not  exceeding  400/.,  and 
a  commission  of  1(»  p.  c.  upon  all  sums  exceeding  400/.  which  may  be 
recovered  iw  consequence  thereof,  And  let  such  paymts  lie  allowed  to 
the  sd  off.  liq.  on  passing  his  accounts.  Estates  Investment  Co.,  M.  R., 
12  Jan,  1878.     A.  50. 

_^orm_521.       Upon  the  applicon  of  L.,  the  off.  liq.,  &c.,  Let  the  applicant  be  at 
Auotliev.  libty  to  employ  AY.  P.  to  find  out  the  whereabouts  of  the  contribs  meutd 

in  the  schedule  hto,  And  let  the  sd  P.  be  allowed  a  conmiission  of  20 
p.  c.  on  all  amounts  up  to  loO/.  recovered  from  the  sd  contribs,  and  15 
p.  c.  between  100?.  and  500/.,  and  10  p.  c.  on  all  amounts  recovered 
beyond  500/.     National  Funds  Co.,  M.  R.,  28  Feb.,  1878.     B.  •415. 

For  similar  order  by  Fry,  J.,  see  St.  Nazaire  Co.,  7  Ap.  1879.     B.  685. 

For  order  of  M.  E.,  authorising  the  employment  of  P.  at  a  commission  to  dis- 
cover whereabouts  of  contributories,  and  approving  of  the  agreement  which 
had  been  prepared^  see  Barned's  Banking  Co.,  M.  E.,  9  May,  1879.     A.  1-190. 


Calls. 

As  to  calls,  see  ss.  102,  103,  105,  and  100  of  the  Act. 

The  proceedings  in  regard  to  calls  are  regiilated  by  Rules  33,  34  and  35,  63 
and  01.  The  following  forms  will  be  found  in  the  schedule  to  rules  :  33.  Affi- 
davit of  official  liquidator  in  svipport  of  proposal  for  call.  34..  Summons  for 
intended  call.  35.  Advertisement  of  intended  call.  30.  General  order  for  a 
call.  37.  Notice  to  be  served  with  general  order  for  call.  38.  Affidavit  in  sup- 
port of  application  for  balance  order  against  contribiitories  who  have  not  paid 
pursuant  to  the  general  order.  39.  Order  for  payment  accordingly.  40.  Notice 
to  be  indorsed  on  every  order,  directing  payment  into  Bank  of  England. 
41.  Certificate  of  payment  of  money  into  Bank  of  England.  42.  Affidavit  of 
service  of  order  [39]  for  payment  of  call.  43.  Affidavit  of  non-payment  of 
money  by  order  directed  to  be  paid  into  Bank  of  England. 

These  forms  are  so  complete  that  it  scarcely  seems  necessary  to  add  to  them ; 
however,  the  following  are  given : — 

Form  522.        Upon  tlie  ai)plicon  of  the  off.  liq.,  Sm.,  Order  that  a  call  to  the  amount 

CairtofulT      ^^  ^^^^  ^^^^^  amount  remaining  unpaid  be  made  on  all  the  contribs  of  the 

amount.  sd  CO  whose  names  arc  set  out  in  the  schedule  to  the  sd  chief  clerk's 

ceitificate  in  respect  of  the  shares  held  by  them  in  the  sd  co.     And 


CALT.S.  4G5 

[order  for  paymt  into  Bank].     Sovcreiijn  &  Belgian  Stores  Coal  Co.,  Form  522. 
15  July,  1877.     B.  1480. 

Upon  the  applicon  of  the  off.  liq.,  &c.,  It  is  ordered  that  the  several  Form  523. 
persons  named  in  the  first  column  of  the  schedule  to  this  order  being- Jjr(jp^.fo^.p_^ 
respively  contribs  of  the  sd  syndicate  do  within  four  days  after  service  of  ment  of  calls 

this  order  upon  them  respively  pay  to the  off.  licj.  of  the  sd  syndi-  x^nrJ^istered."^ 

eate  at  his  office,  No. in  the  City  of  London,  tlie  several  sums  of 

money  set  opposite  to  their  respive  names  in  the  fourth  column  of  the 
sd  schedule,  being  the  amounts  due  from  the  sd  se^•eral  persons  respively 
in  respect  of  the  calls  of  50  p.  c.  50  p.c.  and  00  p.  c.  on  the  amounts  respively 
originally  subscribed  by  each  contriby  made  by  the  orders  dated  respively 
the  1st  of  August,  1874,  the  0th  of  April,  1875,  and  the  1st  of  June, 
187G,  or  some  or  one  of  such  calls.  Royal  Victoria  Palace,  Theatre 
Syndicate,  5  April,  1878.     B.  808. 

For  order  to  pay  calls  made  before  winding  uj),  see  infra,  Form  529. 

Upon  the  applicon  of  W.  the  off.  liq.,  &c.,  and  upon  hearing  the  solor  Form  524. 
for  the  applicant,  and  reading  the  chief  clerk's  certificate,  &c.,    Order  Li^ert^^to       ^ 
that  the  sd  off",  liq.  be  at  libty  to  take  proceedings  in  bankruptcy  against  take  pro- 
S.  C.  &  W.  respively  contril)s  of  the  sd  co  to  recover  the  amoimts  due  ij,ankruptcv 
from  them  in  respect  of  the  call  of  5/.  per  share  made  pursuant  to  the 
order  in  these  matters,  dated  15  Feb..  1877.     Heaton's  Steel  and  Iron 
Co.,  2  June,  1877,  A.  1219.     See  also  si/pra.  Form  404. 

A  balance  order  would  appear  to  be  a  "  final  judgment"  within  the  meaning  Adiuiiiistra- 
of  paragraph  (g)  of  s.  4  of  the  Bankrui^tcy  Act,  1883.     Consider  Re  Chinery,  28  tion  proceed- 
S.  J.  327.     See  Re  Hodges,  8  Ch.  204,  as  to  proceedings  by  going  company  in  ''^S«- 
bankruptcy. 

If  any  person  made  a  contributory  as  personal  rejiresentatiVe  of  a  deceased 
contributory  makes  default  in  paying  any  sum  ordered  to  be  paid  by  him,  the 
oiEcial  liquidator  can  take  proceedings  to  administer  his  estate.     S.  105  of  the 

Act.     The  official  liquidator  may  siie  thus:  "A.  B.  official  liquidator  of  the 

CO.  limited  (on  behalf  of  the  said  company^  and  all  other  the  creditors  of  CD. 
deceased)."  See  Turquand  v.  Kvrby,  i  Eq.  123  ;  and  he  might  see  Re  Hodges,  8 
Ch.  20 i. 


Upon  the  applicon  of  T.  "\V.  the  off.  liq.,  &c.,  and  ujion  hearing  the  Form  525. 
solors  for  the  applicant  and  for  J.  B.  a  contriby  of  the  sd  co  appearing  Liberty  to  pay 
in  person,  and  upon  reading,  &o.,  and  it  appearing  that  the  only  con-  dividend  to 
tribs  of  the  sd  co  holding  fully  pd-up  shares  are  those  mentd  in  ti^g  ^o"^  "^"  °"^^- 
second  colmnn  of  the  schedule  hto,  Let  the  sd  off.  liq.  be  at  libty,  out 
of  the  assets  of  the  sd  co  to  pay  the  several  sums  mentd  in  the  8th 
column  of  such  schedule  to  the  sd  persons  mentd  in  the  2nd  column 
thereof  being  a  return  of  ll5.  Gd.  per  share  to  such  persons  as  contribs 
of  the  sd  CO  after  deducting  the  several  smns  due  from  them  to  the  sd 
CO  mentd  in  the  7th  column  of  the  same  schedule. 

H  H 


466 
Form  525. 


WINDING-UP. 

Schedule. 
Contributories  holding  paid-up  shares. 


No.  on 
List. 

Name. 

AddresB. 

Descrip- 
tion. 

No.  of 

Shares. 

Amount  of 

return  .at 

lis.  6d.  per 

share. 

Amount  of 
Indebted- 
ness. 

Amount  to 
be  paid. 

41 
42 
13 

&c. 

A.  B. 

CD. 
E.  F. 

1 
15 
50 
&c. 

£     S.      d. 
0  11     G 

8  12     6 

28  15     0 

&c. 

.£    s.     cL 
13     6     8 

7  15  10 
&c. 

£    s.     d. 

0  16     8 

28  15     0 

&c. 

Hollylush  Collier  If,  itr.,  ('o,\Q  May,  1877,  A.  1018. 

The  surplus  assets,  if  any,  will  be  divided  among  the  contributories  accord- 
ing to  their  rights  and  interests.  [See  supra,  p.  1G6.]  An  order  for  liberty  to- 
pay  a  dividend  will  be  made  on  the  application  of  the  ofBcial  liquidator.  There 
should  be  an  .affidavit  showing  the  position  of  affairs. 


Form  526.       Upon  the  appHcon  of  Vi.  the  off.  liq.,  &c..  Let  the  applicant  as  sueli 
Another.  ^^^-  ^^*^1-  ^^^  ^^  ^^^  assets  of  the  sd  co  pay  to  the  several  contribs  of  the 

sd  CO  who  have  pd  all  the'  calls  made  on  them  respively  and  l)eing  the 
several  persons  whose  names  are  mentd  in  the  second  column  of  the 
exhibit  to  the  afsd  afft  of  tlie  sd  applicant  filed,  ifec,  the  several  sums  set 
opposite  to  their  respive  iiaraes  in  the  oth  column  of  the  sd  exhibit, 
being  the  amount  of  a  return  of  1/.  per  share  to  which  the  sd  several 
persons  as  contribs  of  the  sd  co  are  entled.  London  &  Hamburg  Bank 
Limtd.,  M.  R.,  30  July,  1878,  B.  144.5. 


Form  527.  Upon  the  applicon  of  8.  &  F.,  liqs  of  the  co  (which  is  in  voluntary 
Division  in  liquidon),  &c.,  Let  the  applicants  be  at  libty,  subject  to  the  paymt  of 
specie.  the  costs  of  all  parties  of  and  relating  to  this  applicon  and  the  paymt  of 

the  remuneration  of  the  sd  applicants  as  such  liqs,  to  di\'ide  the  cash 
balance  of  170/.  remaining  in  their  hands,  and  a  sum  of  about  100/.  due 
to  them  from  the  V.  Co,  and  to  divide  and  cause  to  be  transferred  the 
:52,813  fully  pd-up  shares  of  21.  each  in  the  V.  Co,  which  cash  sum  and 
shares  are  the  only  remaining  assets  of  the  St.  J.  C.  Co  among  the  pre- 
ference shareholders  of  the  sd  co  in  proportion  to  the  number  of  pre- 
ference shares  held  by  them  :  Tax  costs  of  all  parties  of  and  relating  to 
applicon,  liqs  to  retain  and  pay  same  out  of  co's  assets.  ^Saint  Josepli- 
herg  Copper  Co.,  M.  H.,  10  May,  1879,  B.  908. 

In  the  above  case,  the  articles  of  the  company  did  not  contain  any  power  to 
divide  in  specie,  as  at  p.  IGG,  supra;  and  accordingly  the  order  is  valuable  as 
showing  that  in  a  proper  case  the  Court  will  authorise  such  a  division. 


ENFOECING    CALLS. 


467 


Formal  paris :  see  supra,  Form  381. 


Form  528. 


On  the  pt  of  the  off.  hq.  of  the  above-named  co  that  the  several  ^X^rAy- 
persons  named  in  the  second  cohmm  of  the  schedule  hereunder  written,  meat  of  calls 
being  respively  contril)s  of  the  above-named  co,  may  be  ordered,  within  "^j^j^^j^^  °p* 
4  days  after  service  of  the  order  to  be  made  hereon,  to  pay  to  A.,  the 

off.  liq.  of  the  sd  co,  at  his  office,  Xo. Street,  in  the  city  of  London, 

the  several  sums  of  money  set  opposite  to  their  respive  names  in  the 
()th  column  of  the  sd  schedule,  such  sums  being  respively  the  amounts 
due  from  the  ed  several  persons  respively  in  respect  of  calls  made  by  the 
sd  CO  prior  to  the  order  to  wind  up  the  same. 

The  summons  will  be  addressed :  "  To  the  several  persons  respectively  named 
ill  the  second  column  of  the  schedule  hereinunder  vn-itteii,"  and  the  schedule 
Tvill  be  as  follows  : 

The  schedule  above  referred  to. 


No.  on 

list. 

Name. 

A.Mres.s. 

Description. 

In  wliat  character 
included. 

Amount  due. 
£,    s.    d. 

Proceedings  against  contributories  are  frequently  taken  tinder  s.  101. 

The  summons  should  be  served  on  the  contributories  against  whom  the  order 
is  soiTght,  and  an  affidavit  of  service  should  be  made.  Form  27  in  Schedule  to 
liules  can  easily  be  altered  for  this  purpose. 

Sometimes  the  application  applies  to  calls  made  before  the  winding  up,  and 
also  to  calls  made  by  the  liquidator. 

Generally  the  application  is  made  against  several  persons,  but,  if  necessary, 
it  can  be  made  against  an  individual. 

A  contributory  in  a  limited  company,  cannot  set  off  against  money  due  from 
liim  to  the  company  a  debt  due  to  him  from  the  company.  Grissell's  case,  1  Ch. 
528;  West  of  England  Bank,  12  C.  D.  823  :  Gill's  case,  12  C.  D.  755.  But  see 
Campbell's  case,  4  C.  D.  470,  and  Mersey  Co.  v.  Naylor,  9  Q.  B.  Div.  648. 

Upon  the  applicon  of  S.,  the  off.  liq.,  &c.,  Order  that  the  several  Form  529. 
persons  named  in  the  2nd  column  of  the  schedule  hto,  being  respively  order  to  pay 
contribs  of  the  sd  co,  do  on  or  before  9  January,  1878,  or  subsequently  calls  made 

■  ■,  ■  1  n  ■  n  ,^  ■  ^  ]     l^  i    c(  \      w  before  wiudnig 

Within  4  days  after  service  of  this  order,  pay  to  the  sd  o.,  as  sucn  on.  ^^^^_ 

liq.,  at  his  office.  No. ,  Chcapside,  in  the  city  of  London,  the  several 

sums  of  money  set  opposite  to  their  respive  names  in  the  7th  column  of 
the  sd  schedule,  such  suras  being  the  amounts  due  from  the  sd  several 
persons  respively  in  respect  of  arrears  of  calls  on  the  shares  in  the  sd  co 

H    H   2 


468  WINDING-UP. 

Form  529.  held  by  them  respively,  And  that  tlie  sd  several  persons  do  also  pay  to 
~~  the  sd  S.  at  the  same  time  and  place  interest  at  the  rate  of  5/.  p.  c.  p.  a. 
on  the  respive  amounts  specified  in  the  sd  7th  column  of  the  sd  schedule 
from  the  time  when  each  of  such  calls  l)ecame  due  as  mentd  in  the  6th 
column  of  the  sd  schedule  until  paymt,  and  that  tlie  sd  several  j^ersons 
do  also  pay  to  the  sd  S.  at  the  same  time  and  place  the  costs  of  this 
applicon  mentd  in  the  8th  column  of  the  sd  schedule. 

Schedule. 


No.  on 
list. 

Name. 

Address. 

Descriji- 
tiiiu. 

In  what 
character. 

Date  when 

the  respective 

calls  became 

due. 

Amount 
due  ex- 
clusive of 
interest. 

Amount 
due  for 
costs. 

Commercial  Clothing  Co.,  IMahns,  Y.-C,  3  Dec,  1877,  A.  2123. 


Creditors. 
Advertisements. 

As  to  the  publication  of  advertisements,  see  Eules  7  and  20.  Directions  in 
regard  thereto  are  usually  given,  and  the  form  of  notice  settled  by  the  chief 
clerk  upon  the  appointment  of  the  official  liquidator^  or  uj^on  a  summons  for 
directions  taken  out  by  him.  Six  weeks  is  the  time  generally  limited  for  credi- 
tors to  send  in  their  claims.  For  form  of  notice,  see  No.  lU  in  the  Schedule  to 
the  Rules.  The  original  form,  signed  by  tife  chief  clerk,  must  be  sent  to  the 
London  Gazette  office  for  insertion. 

List  of  claims  and  affidavit. 

The  offi  jial  liqviidator  is  to  make  out  a  list  of  the  debts  and  claims,  and  leave 
it  at  the  chambers  of  the  judge.  See  Rule  22  and  Form  No.  18  in  Schedule  to- 
Rules.  And  before  the  time  appointed  for  adjudication,  he  is  to  file  an  affidavit 
as  in  Form  17  in  Schedule  to  Rules. 


Debts  and  claims  x>rova,hle. 

As  to  what  debts  and  claims  can  be  proved,  see  s.  158  of  the  Act  of  1862,  and 
the  decisions  cited  in  Buckley,  302,  et  seq. 

By  s.  10  of  the  Judicature  Act,  1875,  it  is  provided  (inter  alia)  that  in  the 
winding  up  of  any  company  whose  assets  may  prove  to  be  insiifficient  for  the 
payment  of  its  debts  and  liabilities  and  the  costs  of  winding  up,  the  same  rules 
are  to  prevail  and  be  observed  as  to  the  respective  rights  of  secured  and  imse- 
ctired  creditors,  and  as  to  debts  and  liabilities  jirovable,  and  as  to  the  valuation 
of  annuities  and  future  and  contingent  liabilities  respectively,  as  may  be  iu 


CEEDITORS.  ■  109 

force  for  the  time  beiny  under  the  law  of  bauki-uptcy  with  respect  to  the  estates   Form  529 

of  persons  adjudged  bankrupt;  and  that  all  persons  ■who  in  any  such  case  would 

be  entitled  to  prove  for  and  receive  dividends  out  of  the  assets  of  any  such 

company,  may  come  in  under  the  winding  up  of  such  company,  and  make  such 

claims  against  the  same  as  they  might  respectively  be  entitled  to  by  virtue  of 

the  Act.     This  section  is  not  retrospective  :  it  only  applies  where  the  winding 

up  commenced  after  Nov.  1,  1875.     Suche  (Sf  Co.,  1  C.  D.  -±8. 

As  to  its  construction,  see  Withernsea  Co.,  16  C.  Div.  337  ;  Kit  Hill  Tunnel, 
16  C.  Div.  590;  Mersey  Steel  Co.  v.  Naylor,  9  Q.  B.  Div.  648,  which  case  shows 
that  it  introduces  the  bankruptcy  mutual  credit  clause.  See  also  Milan  Tram- 
ways, 22  C.  D.  122 ;  W.  N.  1884,  12 ;  Williams  v.  Hopkins,  18  C.  Div.  370 ;  Re 
Maggi,  20  C.  D.  545.  As  to  the  priority  accorded  to  wages  of  clerks,  servants 
and  labourers,  see  the  Companies  Act,  1883  (46  &  47  Vic.  c.  28), 

As  to  interest  on  debts. 

In  the  case  of  an  insolvent  company  which  is  being  woimd  up  by  or  under 
the  supervision  of  the  Court,  creditors  whose  debts  carry  interest  are  entitled 
to  dividends  only  upon  what  was  due  for  principal  and  interest  at  the  com- 
mencement of  the  winding  up,  and  it  is  only  in  the  event  of  there  being  a 
surplus  that  they  ax'e  entitled  to  subsequent  interest.  Warrant  Finance  Com- 
pany's case,  4  Ch.  Ap.  643. 

Allowance. 

In  many  cases  debts  and  claims  are  allowed  upon  the  official  liquidator's 
affidavit  (filed  pursuant  to  Eule  22)  that,  in  his  opinion,  they  are  justly  due 
and  proper  to  be  allowed  without  further  evidence.  In  case  of  any  such  allow- 
ance, notice  thereof  is  to  be  given  to  the  creditor.  Kule  23  and  Form  No.  19 
in  Schedule  to  Rules. 

Proof  of  debts. 

Rule  24  provides  that  "  the  official  liquidator  shall  give  notice  to  the  credi- 
tors whose  debts  or  claims  have  not  been  allowed  upon  his  affidavit,  that  they 
are  required  to  come  in  and  i^rove  the  same  by  a  day  to  be  therein  named, 
being  not  less  than  four  days  after  such  notice,  and  to  attend  at  a  time  to  be 
therein  named,  being  the  time  aj^pointed  by  the  advertisement,  or  by  adjourn- 
ment (as  the  case  may  be)  for  adjudicating  upon  such  debts  and  claims."  For 
form  of  notice,  see  No.  20  in  Schedule  to  Rules.  Such  creditors  as  come  in  and 
prove  their  deVjts  or  claims  pursuant  to  notice  from  the  official  liquidator,  are 
to  be  allowed  their  costs  of  proof,  in  the  same  manner  as  in  the  case  of  debts 
proved  in  a  cause  (Rule  27),  i.e.,  the  costs  of  proof  will  be  added  to  the  debt. 
Lombard  Bank,  45  L.  T.  346  ;  50  L.  J.  Ch.  749  ;  Buckley,  575. 

A  creditor  to  whom  notice  to  come  in  and  prove  has  been  given  will  before 
the  day  mentioned  in  the  notice  file  his  affidavit  and  give  notice  thereof  to  the 
official  liquidator.  For  forms  of  affidavits,  see  Form  21  in  Schedule  to  Rules, 
and  Foi-ms  530,  et  seq.  infra.  As  to  extending  time  to  file  evidence,  see  Form 
540,  infra.     Re  Marseilles  Extension  Co.,  26  S.  J.  296. 

As  to  discovery,  see  infra,  p.  498. 

As  to  cross-examining  on  affidavits,  see  infra.  Form  620,  et  seq. 

As  to  obtaining  the  evidence  of  witnesses,  see  infra,  after  Form  626. 

Form  530. 


1.  The  above-named  co  was  ou  the day  uf  ,  the  date  of  the 

winding-up  order  herein,  and  still  is  justly  and  truly  indebted  to  me  in  Affidavit  to 
the  sum  of  1.  for  principal  money  due  on  a  bill  of  excliange  dated  due\nbi]lof 


exchange. 


470  WINDING-UP. 

Form  530.   the ,  188 — ,  drawn  l)y  me  upou,  and  accepted  by  the  sd  co  for  the 

paymt  of  lOuZ.  to  nie  — —  months  after  the  date  thereof,  together  with 

interest  for  the  sd  sum  at  the  rate  of  ;"»/.  p.  c.  p.  a.  from  the day  of 

,  188 — ,  and  which  sd  bill  of  exchange  is  now  produced  and  shown 

to  me,  and  is  marked  A.     The  consou  for  the  sd  bill  was,  &c. 

2.  And  I,  speaking  positively  for  myself,  and  to  the  best  of  my  know- 
ledge and  belief  as  to  other  persons,  say  that  I  have  not  nor  hath  nor 
have  any  other  person  or  persons,  by  my  order,  or  for  my  use,  received 

tlie  sd  sum  of  1.,  or  any  pt  thereof,  or  any  security  or  satisfon  for 

the  same  or  any  pt  thereof,  except  the  sd  bill  of  exchange. 

Porm  531.       I,  A.,  of ,  in  the  city  of  London,  carrying  on  Imsiness  there  in 

Affidavit  Ly      partnership  Avith  B,  &  C.  under  the  style  or  firm  of  A.,  B.  &  8on,  make 

partner i)rovi]ig  oath  and  Say  as  follows  : — 

£j.j^_^  1.  The  above-named  co  was,  at  the    date  of  the  Avinding-up  order 

made  in  these  matters,  and  still  is  justly  and  truly  indebted  to  me  and 

to  the  sd  B.  &  C.  in  the  sum  of /.  for  principal  money  due  to  my  sd 

firm  as  the  indorsees  of  a  lull  of  exchange  dated  the day  of , 

drawn  l)y upon,  and  accepted  by  the  sd  co  for  the  sum  of  5(»0?. 

payable  to  the  order  of  K.  six  months  after  the  date  thereof,  and  for 

interest  thereon  at  the  rate  of  5  p.  c.  p.  a.  from  the  day  of  , 

Avhen  the  sd  bill  became  due.     The  conson  for  the  sd  bill  Avas,  &c. 

2.  The  sd  bill  of  exchange  is  now  j^roduced  and  shoAA'u  to  me  and 
marked  X. 

3.  I  haA'e  not  nor  hath  my  sd  firm,  nor  hath  nor  have  any  person  or 
persons,  &c. 

Form  532.       1-  I  ^m  the    secretary  of  The  B.  Co,  Limtd,  of    afsd,  and 

\ttidavit  of       authorised  to  make  this  proof  of  debt  by  the  sd  co. 

i^eeretary  of  a        2.  The  X.  Co  abovc-uamcd  Avas,  at  the  date  of  the  winding-up  order, 

in^ISt  (Fur*  ^it-rein,  and  is  still  indebted  to  the  B.  Co  in  the  principal  sum  of /., 

Lis  company,     upon  and  liy  virtue  of  the  several  bills  of  exchange  mentd  and  set  forth 
in  the  schedule  hto. 

3.  The  conson  for  the  sd  bills  of  exchange  in  the  hands  of  the  B.  Co 
Avas  money  to  the  full  amount  thereof  less  discount  thereon  adA'anced 
and  pd  by  the  B.  Co  to  the  holder  or  holders  thereof. 

4.  It  is  within  my  knoAvledge  as  such  secretary  as  afsd  that  such  debt 
was  incurred  as  and  for  the  conson  above  stated,  and  the  same  to  the 
best  of  my  knoAvledge  and  belief  still  remains  unpaid  and  unsatisfied, 

5.  The  sd  B,  Co  hath  not  nor  have  I  nor  hath  nor  iiave  any  other 
person  on  its  behalf  or  by  its  order,  or  to  my  knowledge  or  belief  for  its 
use,  had  or  recei\'ed  any  security  or  satisfon  Avhatever  for  the  sd  sum  of 

/.  or  any  pt  thereof,  save  and  except  the  sd  several  bihs  of  exchange 

specified  in  the  schedule  hto  ;  but  the  Avhole  of  the  sd  sum  of /., 

together  \Aith  interest  on  the  respive  amounts  of  the  sd  several  bills  of 
exchange   froiu    the  days    on  Avhich    they  respi\-ely  became    due,  still 


CREDITORS. 


471 


remains  justly  due  and  owing  to  the  sd  B.  Co  from  tlie  sd  N.  Co,  upon  Form  532. 
and  by  virtue  of  the  sd  several  bills  of  exchange  hinbefore  meutd. 

The  Schedule  referred  to  in  the  above  Affidavit. 


Note 
or 
Bill. 

Date. 

Drawer. 

Accejitor. 

Sum. 

Payable  to. 

When  and 

how- 
payable. 

Indorsees. 

■ 

As  to  companies  authorised  to  sue  by  public  officer,  see  Ex  parte  Torkington, 
9  Ch.  298  ;  Ex  parte  Lowenthal,  9  Cli.  324. 

I,  J.  C,  of  — ■ — ,  accountant,  the  off.  liq.  of  the  M.  Co,  liimtd,  make  Form  533. 
oath  and  say  as  follows  :  AffidavirbT" 

1.  By  an  order  of  the  M.  R.,  dated,  &c.,  the  M.  Co  was  ordered  to  be  official  liqui- 
wound  up  under  the  provisions  of  The  Cos  Acts  18(12  and  18(i7.  debtVu^t!:^" 

2.  By  an  order  dated,  &c.,  I  was  a])pointed  off.  liq.  of  the  sd  M.  C^o.     liis  company. 

3.  It  appears  from  the  books  and  papers  of  the  sd  M.  Co  which  came 
to  my  hands  as  off",  liq.  thereof  that  the  sd  C  Co  wns,  at  the  date  of  the 
■winding-up  order  herein  and  still  is  justly  and  truly  indelited  to  the  M, 
Co  in  the  sum  of J.,  for,  &c. 

4.  The  M.  Co.  hath  not,  &c. 

1.  By  a  debenture  dated  the day  of,  and  under  the  common  seal  Form  534. 

of  the  above-named  co  the  sd  co  for  the  couson  therein  expressed  promised  Affidavit  to 

to  pay  me  on  the  day  of the  sum  of  100/.,  And  the  sd  co  prove  debt  due 

thereby  promised  to  pay  me  interest  on  the  sd  sum  in  the  meantime  at  °"  <^ejeutuie. 
the  rate  of  10/.  p.  c.  p.  a.  by  equal  half-yearly  paymts  on  the day 

of and day  of in  each  year.     The  sd  debenture  is  now 

produced  and  shown  to  me,  and  is  marked  A. 

2.  The  sd  co  was,  at  the  date  of  the  winding-up  order  made  herein, 
and  still  is  justly  and  truly  indebted  to  me  in  the  sum  of  100/.,  with 

interest  thereon  at  the  rate  of  10  p.  c.  p.  a.  from  the day  of , 

upon  and  by  virtue  of  the  sd  debenture. 

3.  And  I,  speaking  positively,  &c. 

1.  The  above-named  co  was,  at  the  date  of  the  order  for  winding  up  Form  535. 
the  same,  and  still  is  justly  and  truly  indebted  to  me  in  the  sum  of 


-/. 


Affidavit 


for  work  done  and  professional  services  rendered  to  the  sd  co  at  its  proving  debt 
request,  the  parlars  whereof  are  set  forth  in  the  paper  writing   now  a^ountant. 
produced  and  shown  to  me  marked  with  the  letter  A. 


472 


WINDING-UP. 


clue  to  solicitor. 


Form  635.       2.  The  charges  in  the  sd  paper  writinjj^  are  fair  and  reasonable  and 
such  as  are  usual  and  customary  in  the  profession  of  an  accountant  :  as 

I  know  from  having  practised  such  profession  for years  last  past. 

3.  And  I,  speaking-,  &c. 

Form  536.       i.  The  sd  co  was,  at  the  date  of  the  winding-up  order  herein,  and 
Aiiidavit  stUl  Is  justly  and  truly  indebted  to  me  in  the  sum  of  lO-A/.  7s.  id.,  l)eing 

proving  debt     j-j^g  remuneration  payable  to  me  under  and  by  virtue  of  the  articles  of 

due  to  director  ..  „_  -,  „  .  ^ 

for  fees.  assocuitiou  of  the  sd  co  for  services  rendered  by  me  as  a  director  of  the 

sd  CO  between  the of  — —  and  the of . 

2.  And  I,  speaking,  &c. 

Form  537.  1.  The  above-named  co  was,  at  the  date  of  the  order  for  winding  up 
the  same,  and  still  is  justly  and  truly  indebted  to  me  and  to  my  partner 
H.  in  the  sum  of  105/.  for  law  charges  -and  paymts  made  on  behalf  of 
the  sd  CO  in  the  matter  of  the  con^'eyance  and  mtge  of  certain  laud  at 

■ and  for  professional  advice  and  work  done  for  the  sd  co  as  appears 

by  the  account  now  produced  and  shown  to  me  marked  with  the  letter  X. 

2.  The  charges  in  the  sd  account  are  reasonable  and  such  as  are  usual 
])etweeii  solors  and  clients,  as  I  know,  &c. 

3.  I  have  not  nor,  &c. 

The  practice  is  for  the  Chief  Clerk  to  sign  a  request  to  the  taxing-  master  to 
tax  the  solicitor's  bill.  After  the  bill  is  taxed  the  parties  come  again  before  the 
Chief  Clerk  and  the  claim  is  supported  by  the  taxing  master's  original  cer- 
tificate, which  is  not  filed. 

Form  538.       i.  The  above-named  co,  &c.,  for  goods  sold  and  delivered  l^y  me  to 

Affidavit  tlie  sd  CO  at  their  request. 

proving  debt         2.  The  full  parlai's,  &c. 

and^delivered.  •^-  The  prices  charged  in  the  sd  paper  A\Titing  marked  A.  are  fair  and 
reasonable  and  such  as  are  usual  and  customary  in  the  trade  or  business 
of  an  [iron  merchant],  as  I  know  from  having  carried  on  the  sd  trade  or 
business  for years  last  past. 

4.  And  I,  speaking,  &c. 

Form  539.  1 .  By  an  indenture  dated,  &c.,  now  produced  and  shown  to  me  and 
Affidavit  to  marked  A.  and  made  between  the  above-named  co  of  the  one  pt  and 
prove  mort-      mysclf  of  the  othcr  pt,  the  sd  co  granted  certain  freehold  hereds,  situate, 

Valuation  of     '-^^•'  ^^^^^^  ^^^  ^'^  ^^^^  ^^^  ^^  ™^^'  '^^^  ^^civ&  and  assigus  :  subject  to  a 

security.  proviso  therein  contd  for  the  redemption  of  the  sd  premes  upon  paymt  by 

the  sd  CO  unto  me  of  the  sum  of  1(M»0/.  with  interest  for  the  same  at  the 

rate  of  .5/.  p.  c.  p.  a.  on  the day  of :  And  hj  the  sd  indenture 

the  sd  CO  covenanted  to  pay  me  the  sd  principal  sum  of  1000/.  and 

interest  on  the  sd  day  of ,  and,  in  case  the  sd  principal  sum 

should  not  be  i)d  on  that  day,  then  to  jiay  me  intei'cst  on  the  same  sum 

after  the  rate  afsd  by  equal  half-yearly  paymts  on  the  ■ of and 

of in  every  year. 

2.  The  sd  co  was,  &c. 

3.  And  I,  speaking  positively,  &c. 

4.  I  estimate  the  value  of  my  sd  security  at  the  sum  of  000/.,  and  I 


C'EEDITORS.  473 

claim  to  be  eutled  to  prove  in  the  windiug  np  of  the  sd  co  for  the  sum  Form  539. 

of /,,  being  the  balance  of  the  sd  smn  of  1000/.  and  the  interest 

thereon  after  deducting  the  sd  sum  of  GOO/. 

As  to  valuing  security,  see  infra,  p.  480 ;  and  Moor  v.  Anglo-Italiati  Bank, 
10  C.  D.  G81 ;  Re  Western  District  Bank,  23  S.  J.  880 ;  Kit  Hill  Tiumel,  16  C.  Div. 
590 ;  Williams  v.  Hopkins,  18  C.  Div.  370.  Kejection  of  secured  creditor's  proof 
remits  him  to  his  rights  as  mortgagee ;  S.  C.  31  W.  E.  495  ;  48  L.  T.  513. 

Upon  the  applicon  of  R.  of,  &c.,  and  hearing  the  solors  for  the  ap-  Form  540. 
plicant  and  for  the  above-named  co,  liet  the  time  within  which  the  ap-  Order  giving 
plicant  may  file  afits  in  reply  to  the  affts  filed  by  the  off.  liq.  of  sd  co  in  t™e  to  file 
opposition  to  the  claim  of  the  applicant  be  extended  to  23  July,  1877. 
Coal  Consumers'  Association,  M.  R.,  \?>  July,  1877.     A.  1327. 

Where  a  creditor  has  been  required  to  come  in  and  prove  his  debt,  he  some- 
times applies  for  further  time  to  tile  his  evidence,  and  if  at  the  time  fixed  for 
adjudicating  on  the  claim  the  evidence  on  either  side  is  not  complete,  the 
matter  is  usually  adjourned,  but  in  such  case  the  chief  clerk  generally  fixes  a 
time  for  closing  the  evidence.  However,  where  this  has  been  done,  aiiplica- 
tions  to  extend  the  time  may  subsequently  be  made,  and  will  be  granted  if 
reasonable  grounds  are  shown. 

Upon  the  applicon  of  the  off.  liq.,  itc,  and  upon  hearing  the  solors  Form  541. 
for  the  applicant  and  for  T.  H.,  Let  the  time  for  the  applicant  to  file  Another 
evidence  in  answer  to  the  evidence  in  support  of  the  claim  of  the  sd 
T.  H.  be  extended  to  the  25th  of  October  next.      Orrcll  ( 'oUiery  Co., 
Limtd.,  ]\r.  R.,  3  August,  1878.     15-1:8  B. 

Upon  the  applicon  of  the  aljove-named  co  and  upon  hearing  the  solors  Form  542. 
for  the  applicants  and  for  the  sd  S.,  Let  the  sd  8.  within  7  days  after  r~r    ^ 

.   ^  .  .  .  -^  ( Irder  tor 

the  service  of  this  order  deliver  to  the  applicant  further  and  better  ijetter  par- 

parlars  with  dates  and  items  of  the  claim  of  the  sd  S,  in  these  matters  ;  tj'^li'l'ii's  o^ 

....  .  ,  .  claim. 

And  order  that  the  time  within  which  the  applicants  are  to  file  evidence 

in  opposition  to  such  claim  be  extended  to  21  days  after  the  delivery  of 

the  afsd  parlars  ;  And  that  the  time  within  which  the  sd  S.  is  to  file 

evidence  in  reply  be  extended  for  7  days  after  the  evidence  in  opi)o- 

sition  has  been  filed  ;  And  order  that  the  costs  of  this  applicon  l)e  costs 

in  the  matter  of  the  sd  claim.     Retford  Waggon  Co.,  Luntd.,  M.  R. 

18  May,  1878.     1020  B. 

This  order  was  made  in  a  voluntary  winding-up,  but  similar  orders  are 
sometimes  made  in  compulsory  liquidation. 

Summons  to  admit. 

Sometimes  if  there  appears  to  be  unnecessary  delay  in  admitting  a  claim, 
or  if  a  claimant  desires  to  bring  matters  to  a  speedy  issue,  it  is  considered 
desirable  to  take  out  a  summons  as  follows  : 

Formal  parts:  see  supra,  Form  381. 

On  the  pt  of  X.  of  that  the  off.  liq.  of  the  above-named  co  Form  543. 

may  be  ordered  forthwith  to  admit  the  applicant  as  a  creditor  of  the  sd  .Summons to 

CO  for  [         /.].  admit. 


474 


WINDING-UP. 


Form  543.        [Or,  for  such  an  amount  as  shall  be  ascertained  to  be  the  damages  sustained 
hy  the  applicant  by  reason  of  the  non-delivery,  &c.,  and  that  all  necessary 
inquiries  for  the  purpose  of  ascertaining  such  damages  may  be  directed.] 
See  Ebhiv  Vale  Co.'s  claim,  8  Eq.  14. 

The  following  order  was  made  on  such  a  summons  : 

Porm  544.       Upon  the  upplicon  of  Messrs.  ^Y.  H.  Smith  &  Son,  &c.,  Order  that 
Order  to  admit.  ^^^'^  d^ini  of  thc  sd  W.  H.  Smith  &  Son  be  allowed  at  the  sum  of  250/. 
together  with  10/.  105.  Gd.,  the  ascertained  costs  of  proving  the  same. 
South  WctJps  Attantic,  <ir.,  Co.,  M.  R.,  i>4  Jan.  1878.     B.  171. 

Form  545.  The  applicon  of  the  Bank  of  L.,  &c.,  adjourned  into  Ct  and  now 
Another  orde7  coming  on,  &c.,  Order  that  the  applicants  be  allowed  as  creditors  of  the 
to  admit.  sd  CO  for  the  sd  sum  of  2409/.  lis.  Gd.,  And  let  the  costs  of  the  Bank  of 

L.  of  this  applicon  and  of  the  adjournmt  thereof  into  Ct  be  allowed  out 
of  the  assets  of  the  sd  co,  such  costs  to  be  taxed,  »fec.,  in  case  the  parties 
differ.  General  South  American  Co.,  Malins,  Y.-C,  24  Xov.  1877.  A. 
:>22:>.     See  7  C.  1)."G37. 


Form  546. 

Order  to  vary 
certificate. 


Certificate  of  Debts  and  Claims. 

Eule  28  jirovides  that  the  result  of  the  adjudication  upon  debts  and  claims 
is  to  be  stated  in  a  certificate  to  be  made  by  the  chief  clerk,  and  that  certificates 
as  to  any  of  such  debts  and  claims  may  be  made  from  time  to  time. 

For  form  of  certificate,  see.  No.  22  in  Schedule  to  Rules. 

A  claimant  whose  claim  is  disallowed,  can  appeal  without  waiting  for  the 
certificate.     Re  Clagett,  20  C.  Div.  134. 

Until  certificate  a  secured  creditor  has  a  locus  2>oenit entice.  Williams  v. 
Hopkins,  18  C.  Div.  370. 

Upon  the  applicon  of  W.  to  vary  the  chief  clerk's  certificate,  filed,  &c., 
Jjet  the  chief  clerk's  sd  certificate  be  varied  by  striking  out  of  the  4tli 
column  of  the  1st  schedule  thereto  the  figures  I'oGt.  bs.  Od.,  as  the 
amount  of  the  debt  of  the  applicant,  and  inserting  the  sum  of 
290/.  5cs-.  Gd.  in  lieu  thereof,  and  l)y  striking  out,  c^'c,  And  let  the  sd  off. 
liq.  be  allowed  his  costs  of  this  applicon  and  of  the  adjournmt  thereof  into 
Vt  out  of  the  assets  of  the  sd  co.  Hocicte//  Bail  Collieries  Co.,  Malins, 
Y.-C,  8  Dec.  1877,  A.  218;-). 

Form  547.       Upon    the   applicon  of  the   off.  liq.,  &c.,  Let  the   debt  or  sum  of 
Another.  40.-)/.  12-9.  lOd.  claimed  l)y  the  sd  L.  and  allowed  by  the  sd  certificate  be 

e.\])unged  from  the  sd  certificate  and  disallowed  on  the  ground  that  the 
sd  L.  has  received  monies  of  the  co  more  than  equal  to  the  amount  of 
the  sd  debt,  And  let  the  off",  liq.  be  at  liljty  to  prove  agaiust  the  estate  of 
the  sd  L.  for  the  balance  of  the  sd  sum  of  1000/.  received  by  him  with 
interest  at  4  p.  c.  p.  a.  from  21  April,  187;^,  after  deducting  the  sd  sum 
of  405/.  12.9.  \0d.,  And  costs  of  off.  liq.  of  applicon  to  be  costs  in  the 
winding-up.     Air  Gas,  <)V.,  Co.,  Hall,  Y.-C,  11  March,  1878.     A.  475. 

Form  548.       T^jton  the  applicon  of  M.,  F.  &  "W.,  persons  named  in  the  list  of  con- 
Order  giving     ^^""'^  '"  these  matters,  and  upon  reading,  &c.,  Order  that  the  applicants 


CEEDITOES.  475 

be  at  libty  to  give  notice  of  motion  in  these  matters  that  so  much  of  the  Form  548. 
sd  certificate  of  the  chief  clerk,  dated  the  loth  and  filed  the  22nd  of  contributories 

Feb.,  1877,  as  certifies  the  allowaiice  of  a  debt  of  C.  of ,  solor,  may  liberty  to  move 

be  varied  by  disallowing-  the  sd  debt,  iVnd  that  the  costs  of  this  applicon  certificate. 
be  dealt  with  on  the  sd  motion.     Severn  Junction  Railwcnj  Co.,  22  June, 
1877.     B.  1140. 

On  the  pt  of  A.  of that  notwithstanding  the  time  limtd  for  Form  549. 

makiuQ-  claims  has  expired  he  may  be  at  libty  to  make  and  estal)lish  his  "^  ' 

°  .  ^  ''  ''  iMiiDiiions  lor 

claim  as  a  creditor  of  the  sd  co  for  the  sum  of /.  liberty  to  prove 

after  time 
A  creditor  or  claimant  who  does  not  conie  in  at  the  proper  time  must  explain  expired. 

his  conduct,  e.  g.,  by  showing  that  he  did  not  see  the  advertisements,  or  know 

of  the  winding-up  ;  but  if  he  can  give  some  reasonable  explanation,  the  Court 

will  allow  him  to  come  in  and  take  a  dividend  out  of  the  undivided  assets.    See 

as  to  the  practice  in   such  cases  in  administration   actions,    Dan.  Pr.   1096  ; 

Morgan,  140.     In  re  Mitcalfe,  13  C.  Div.  236.     Re  Kit  Hill  Tunnel,  16  C.  D.  590. 

The  application  should  be  supported  by  affidavit. 

Upon  the  applicon  of  ^Y.,  that  notwitlistanding  the  chief  clerk's  cer-  Form  550. 
tificate  as  to  debts  and  claims  in  these  matters  has  been  made,  the  del)t  Order  givini; 
or  claim  of  the  sd  W.  against  the  co  be  ]iow  allowed  at  the  sum  of  ^''"^^'t.v  to  i'i'"^'e 

.  .  -,  1         ■  after  time 

86/.  13^.  -id.  as  a  debt  not  carrying  interest,  and  upon  hearing  the  expired, 
solors  for  the  apjilicant  and  for  N.  the  off.  liq.  of  co,  and  upon  reading, 
etc.,  Order  that  notwithstanding  the  sd  chief  clerk's  certificate  the  appli- 
cant be  allowed  to  stand  as  a  creditor  of  the  sd  co  for  the  sum  of  80/.,  a 
debt  owing  to  him  by  the  sd  co  not  carrying  interest,  but  in  any  further 
distribution  of  the  assets  of  the  sd  co  among  the  creditors  and  before  any 
paymt  is  to  be  made  to  the  applicant  in  respect  of  the  debt  allowed  as 
afsd,  regard  is  to  be  had  to  the  fact  that  the  applicant  is  noAV  subject  to 
liability  as  a  contrib  of  the  sd  co,  And  let  the  applicant  pay  to  the  sd  X. 
as  such  oflF.  liq.  the  sum  of  21.  2s.  Od.  for  his  costs  of  the  appHcon. 
Monte  Loreto  Gold,  q-c,  Co.,  Hall,  Y.-C,  8  May,  1877.  B.  1049.  And 
see  A7/  Hill  Co.,  Ex  parte  Williams,  10  C.  D.  51)0. 

On  the  pt  of  the  oflF.  liq.  of  tlic  above-named  co  that  he  may  be  at   Form  551. 
libty  to  pay,  &c.  [as  in  Forms  552,  el  seq.  infra].  Summons  for" 

When  the  chief  clerk's  certificate  has  been  filed,  and  the  time  for  applying  to  ,'.  ^.\-^   "  P^'^y 

.  .       .  1 1   .7      o        dividend  to 

vary  the  same  has  passed,  the  official  liquidator  will,  if  and  when  he  has  sufficient  creditors 
funds  in  hand,  apply  for  liberty  to  pay  a  dividend  to  the  creditors. 

The  application  should  be  supported  by  the  official  liquidator's  affidavit, 
which  should  show  that  the  assets  are  more  than  sufficient  to  pay  the  proposed 
dividend,  and  to  provide  for  the  costs  of  the  winding-up. 

Liberty  to  pay  a  dividend  is  sometimes  given  where  some  claims  still  remain 
in  dispute,  but  in  such  case  the  liquidator  must  show  that  the  assets  retained 
will  be  more  than  sufficient  to  pay  the  dividend  on  the  disputed  claims  as  well 
as  the  costs  of  winding-up.  It  would  seem  that  if  a  secured  creditor  does  not 
abandon  his  security  or  value  it  [see  infra,  p.  480],  and  come  in  and  prove  for 
the  balance,  the  official  liquidator  is  not  bound  to  make  a  reserve  to  meet  any 
claim  that  may  subsequently  be  made  by  him.  Ex  -parte  Good,  In  re  Lee, 
14  C.  Div.  82;  Kit  Hill  Tunnel,  16  C.  Div.  590. 


47() 


WINDING-UP. 


Form   551.        Separate  cheques  for  sums  under  20s.  will  not  be  signed,  but  one  cheque  will 

be  drawn  in  favour  of  the  liquidator  for  the  amount  j  he  undertaking  to  pay. 

Sometimes  leave  to  pay  in  full  debts  under  20s.  is  given. 


Form  552. 

Order  giving 
lU>erty  to  pay 
dividend. 


Upon  the  api)licoii  of  tlie  off.  liq.  of  co,  and  upon  hearing  the  solors 
for  the  apphcant,  and  upon  reading  an  order,  &c.,  the  chief  clerk's  cer- 
tificate dated,  &c.,  an  afFt  of  the  off.  liq.  filed,  &c.,  and  the  exhibit  A. 
therein  referred  to,  Let  the  off.  lici.,  out  of  the  assets  of  the  sd  co,  pay  to 
the  several  persons  named  in  the  1st  column  of  the  schedule  hto,  being- 
creditors  of  the  sd  CO  named  in  the  sd  chief  clerk's  certificate,  filed  the 

of ,  the  several  sums  of  money  set  opposite   their   respivo 

names  in  the  4th  column  of  the  sd  schedule  :  such  sums  being  a  divi- 
dend of  10s.  and  five-eighths  of  a  j^euny  in  the  pound  upon  the  amount 
of  the  debts  due  to  such  respive  creditors  as  mentd  in  the  3rd  column 
of  the  sd  schedule.  [Add  srJieduh  shoiving  (1),  No.  in  cldef  cleric' s  ccr- 
iijkaie ;  (2),  name  of  creililor ;  (o),  amount  certified  to  he  due;  (-4), 
amount  of  dividend.']  Briijhtun  Ctarendon  Hotel  Co.,  M.  R.,  5  Aug. 
1878.     A.  157U. 

Form  553.  Upon  the  applicon  of  C,  the  off.  liq.,  &c.,  Let  the  applicant,  out  of 
'  the  assets  of  the  sd  co,  pay  a  dividend  of  Is.  in  the  pound  to  the  several 
creditors  named  in  the  1st  and  2nd  pts  of  the  1st  schedue  to  the  chief 
clerk's  certificate  dated,  &c.,  upon  the  amounts  of  their  respive  debts 
therein  mentd.  General  Sewaije  4'  Manure  Co.,  J\I.  R.,  7  May,  1878. 
A.  931. 


Another. 


Form  554. 

Another. 


Upon  the  applicon  of  the  off",  liq.,  &c.,  Let  the  sd  oft",  liq.  pay  to  the 
several  creditors  named  in  the  chief  clerk's  certificate  dated  15  Feb. 
187C,  and  in  the  schedule  hto,  out  of  the  assets  of  the  sd  co,  the  sums 
set  opposite  to  their  respive  names  in  the  sd  schedule  in  the  7th  column 
thereof,  being  the  amount  of  the  final  dividend  and  interest  due  to  them 
in  respect  of  their  sd  debts. 

Schedule. 


No. 

Names  of 
creditors. 

Total  due 
15  Feb.  1876. 

Dividend  of 
15s.  ill  the  £ 
on  account. 

Balance 
due. 

Interest  up  to 
10   Jiaie,  1877. 

Total. 

Holywell  Level  Sih'er  Co.,  Malius,  V.-C,  G  June,  1877.     A.  1124. 
Form  555.       Upon  the  applicon  of  A.,  the  off.  liq.  of  tlie  above-named  co,  and 


DIVIDENDS  TO  CREDITOES.  477 

upon  reading  an  afft  of  the  sd  A.,  filed  the  20  July,  1881,  an   order  Form  555. 

dated  30  July,  1881,  the  chief  clerk's  certificate  dated  the  30  July,  1881, 

And  upon  hearing  the  solors  for  the  applicant  it  is  ordered  that  the  sd 

oif.  liq.  be  at  lil)ty  to  declare  and  pay  out  of  the  assets  of  the  co  an 

interim  dividend  of  4.s'.  in  the  pound  to  all  the  creditors  of  the  co  whose 

debts  have  been  allowed  by  the  sd  chief  clerk's  certificate,  dated  30 

July,  l.ssi,  except  Count  j\Iokrouoski. 

Upon  the  applicon  of  ^Y.,  the  liq,  and  upon  hearing  counsel  for  the  Form  556. 
liq  and  for  B.  &  C.  the  pits  in  an  action  of,  &c,,  Order  that  notwith-  Liberty  to  pay 
standing  the  claim  of  the  pits  in  the  sd  action  against  the  co,  the  liq  I)e  at  divideiul 
libty  to  declare  and  pay  a  first  dividend  not  exceeding  8^.  in  the  pound  f^^  disputed 
upon  the  debts  aiul  claims  against  the  co  which  have  been  allowed  by  claims, 
him  at  the  date  of  this  order,  amonnting  to  C>7,'.)-J}I.  l(;.s\  9^/.  :  Provided 
that  the  applicant  do  reserve  out  of  the  assets  of  the  co  a  sum  sufficient 
foi'  the  paymt  of  a  like  dividend  upon  the  snm  of  37,714/.  referred  to  in 

his  sd  afft  and  upon  the  sum  of ■?.  in  respect  of  the  claim  of  the  sd 

B.,  Liq  to  be  at  libty  to  retain  his  costs  out  of  assets  ;  Costs  of  B.  and 
pits  to  be  reserved  until  further  order.  HopJcins,  GilJces,  d'  Co.,  M.  E., 
10  Dec,  1879.     A.  2415. 

1.  I  have  been  requested  l)y  Messrs.  D.  to  pay  them  the  snm  of /.  Form  557. 

in  respect  of  services  rendered  by  them  to  the  sd  co  whilst  in  liquidon.  Affidavit         ^ 
the  parlars  of  which  are  set  forth  in  the  paper  ^mting  now  produced  ^y  official 
and  shown  to  me  and  marked  A. 

2.  I  have  examined  the  al)ove  claim,  and  to  the  best  of  my  judgmt  it 
is  just  and  ought  to  be  pd  in  full  out  of  the  assets  of  the  sd  co. 

In  the  course  of  a  winding-up,  debts  are  from  time  to  time  incvirred  which 
ought  to  be  paid  in  full,  e.  3.,  valuations,  i-epairs,  rent,  materials  supplied,  costs, 
&c.,  and  where  no  general  order  has  been  made  giving  the  requisite  authority, 
the  liquidator  must  from  time  to  time  apply  for  liberty  to  pay  such  debts.  In 
many  cases  no  order  is  drawn  u})  on  such  applications,  but  the  summons  is 
indorsed  with  a  note  that  the  liquidator  may  pay,  and  is  to  be  allowed  the 
amount  in  his  next  account. 

As  to  payment  in  full  of  creditors  entitled  to  levy  execution  or  distrain,  see 
infra.  Forms  608,  610.  Sometimes,  instead  of  directing  payment,  such  persons 
are  permitted  to  issue  execution  or  distrain.     Ibid. 

Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  the  sd  off.  liq.  out  of  the  Form  558. 
assets  of  the  sd  co  ])ay  to  the  sd  Y.  the  sum  of  1,029/.  4s.  Sd.,  the  7^,    ~ 

'^    •'  '  '  Liberty  to  jxay 

amount  of  rent  and  royalties  due  to  him  on  the  31st  March,  1877,  in  rent, 
respect  of  ppty  leased  to  the  sd  co  situate  at,  &c.    Darlaston  Steel  &  Iron 
Co.,  M.  R.,  IG  June,  1577.     A.  1127. 

For  order  giving  official  liquidators  liberty  to  pay  the  salaries  of  the  clerks 

employed  at  the  different  branches  of  the  company  for  the  purposes  of  the 

winding-up,  see   West  of  England,  S{c.,  Bank,  Fz-y,  J.,   7  July,  1879.     B.  1421  ; 

and  see  supra,  p.  469. 

Form  559. 

Upon  the  applicon  of  F.  the  liq  of  co  by  summons  dated  30   July,  Liberty  to 

pay  rates. 


478 


WINDING-UP. 


Form  559.  1^77,  and  upon  hearing  the  solors  for  the  applicant  and  for  the  overseers 
of  DarUngton,  and  upon  reading  an  order  in  these  matters  dated  7  July, 
1877,  Let  the  sd  hq  1)e  at  libty  out  of  the  assets  of  the  sd  co  to  pay  to 
the  overseers  of  DarUngton  the  sum  of  2127.  7s.  2hd.,  being  the  amount 
of  the  poor-rate  made  and  allowed  on  the  1st  of  May,  1877,  in  respect 
of  the  go's  premes  (retained  in  beneficial  occupation  of  the  liq),  and  that 
the  sd  liq  ])e  allowed  the  same  in  his  accounts  of  receipts  and  paymts, 
And  let  the  sd  liq  pay  the  sum  of  2?.  25.  to  L.  the  solors  of  the  sd  over- 
seers of  D.,  l)eing  the  amount  of  their  ascertained  costs  of  this  applicon. 
South  Durliam  Iron  Co,  Hall,  Y.-C,  3  Aug.,  1877.     B.  1476. 

See  Watson,  Kipling  'Sf  Co.,  23  C.  D.  500. 

No  apportioument.     Wearmouth  Co.,  19  C.  D.  640. 

As  to  demand  of  poor-rate,  see  31  »t  32  Vict,  c,  122,  s.  40. 

Form  560.       Upon  the  applicon  of  G.,  the  off.  liq..  &c.,  Let  the  sd  G.  as  such  off,  liq. 
Liberty  to         ^^'^  ^^  libty  to  pay  out  of  the  assets  of  sd  oo  to  the  several  ^jersons  named  in 
pay  costs,  &c.    the  1st  colmmi  of  the  schedule  to  this  order  the  several  sums  set  opposite 
to  their  respive  names  in  the  third  column  of  the  same  schedule. 

Schedule. 


Names  of  creditors. 

Particulars  of  claim. 

Amount  of  debt.  1 

1 

M.  of,  &c.      .     .     . 

Eent  and  royalties  of,  &c.    . 

£,       s.     d. 
1687  18     9 

M.T.&Co.,of 

solicitors. 

Costs  of  petitioners,  by  the  said  order 
of  7  Aug.  1877,  directed  to  be  taxed 

72  13     2 

B.  B.&Co.,of 

solicitors. 

Costs  of  J.  D.,  by  the  same  order  di- 
rected to  be  taxed     .... 

15     6     0 

Governor  and  Co  of  Copper  Miners,  Hall,  V.-G.,  20  Dec,  1877,  A.  2295. 

See  supra,  Note  to  Form  411. 

In  practice  an  order  is  rarely  necessary  for  payment  of  costs  alone :  an 
appointment  before  the  Cliief  Clerk  is  obtained  :  the  taxing  master's  certificate 
is  produced,  and  directions  are  given  for  the  preparation  of  the  cheque. 

Paijment  of  Preferential  Dehts. 

Form  561.  Upon  the  applicon  of  T.  &  C.,  the  prov.  off.  liq.  of  the  above-named 
Bank,  and  upon  hearing  the  solors  for  the  applicants  and  for  the  sd 
Bank  and  for  Her  Majesty's  Postmaster-General,  and  upon  reading,  &c., 
Let  the  applicants  as  such  prov.  liqs.  forthwith  out  of  any  assets  in 
their  hands  pay  to  Her  Majesty  the  Queen  or  her  duly  authorised  agents 
the  sum  of  3097.  Ihs.  Od.  :  such  sum  having  been  in  the  hands  or  con- 
trol of  the  sd  Bank  at  the  date  of  its  suspension  and  in  respect  of  which 
writs  of  immediate  extent  have  been  issued,  and  which  sum  is  made  up 
as  follows  : — 

1007.  05.  Od.,  Being  20  bl.  notes  of  the  West  of  England,  &c.  Bank 
held  by  H.  M.'s  P.  M.  Gen.  when  the  sd  Bank 
stopped  paymt. 


Order  to  pay 
crown  debt. 


SECURED   CREDITORS.  479 

200/.  Os.  Od.,  Being  for  tliree  bills  of  the  sd  Bank  for  120?.,  rm.,  and   Form  561. 
80/.  respively,  held  by  H.  M's.  P.  M.  Gen.  -when  the 
sd  Bank  stopped  paymt. 
G!)/.  lbs.  0(L  other  monies  of  Her  Majesty.     And  order  that  the  costs 
of  the  sd  proT.  liqs.  and  of  the  sd  Bank  of  this  applicon  and  incident 
thereto  be  costs  in  the  winding-np.     Wesl  of  England,  &r.,  Banlc,  Malius, 
Y.-C,  20  Dec,  1878,  B.  2118. 

For  order  directing  payment  to  Her  Majestyof  County  Court  monies  deposited 
in  same  bank,  see  Ihid. 

The  Crown  not  being  expressly  mentioned  in  the  Act  of  18G2,  'is  entitled  to 
be  paid  out  of  the  assets  in  priority  to  all  other  creditors.  Henley  Sf  Co.,  9  C. 
Div.  469 ;  26  W.  E.  885  ;    In  re  Bonham,  10  C.  Div.  595. 

For  orders  directing  preferential  payment  to  be  made  to  holders  of  mortgage 
debentures,  and  other  seciu-ed  creditors,  see  infra,  Form  562  et  seq. 

As  to  servants  and  others,  see  supra,  p.  469. 

Notkc  to  CrodUor  to  attend  and  receive  debt. 

See  Form  23  in  Schedue  to  Eules.  The  form  can  readily  be  altered  so  as  to 
siiit  the  case  of  part  payment. 

Miscellaneous. 

Staying  actions  by  creditors,  see  infra.  Form  585  et  seq. 
Transfer  of  actions,  see  Form  600  et  seq. 

Liberty  to  creditors  to  proceed  against  company.  Form  603  et  seq. 
Liberty  to  attend.  Form  568  et  seq. 

Secured  Creditors. 

"  Upon  the  applicon  of  A.  B.,  &c.,  &c.,  being  together  the  holders  of  Form  562. 
all  the  nitge  debentures  of  and  issued  by  the  above-named  co,  for  the  Declaration 
amounts  set  forth  in  the  schedule  hto  opposite  the  respive  names  of  the  of  rights  of 
sd  applicants,  and  all  hereinafter  referred  to  as  the  del^enture  holders,  ^dlenture 
which,  upon  hearing  the  solors  for  the  applicants,  and  for  the  off.  liq.  of  holders,  and 
the  above-named  co,  and  for,  ifec,  was  adjourned  to  l)e  heard  in  Ct,  °^*^^'^  *°  ^^^* 
coming  on  the  2Gtli  day  of  February,  1S7C,  and  this  day  to  be  heard 
accordingly,  and  upon  hearing,  &c.,  This  Ct  l)eing  of  opinion  that  the 
ppty,  book-debts,  credits,  assets,  monies,  and  other  effects,  of  or  to  which 
the  above-named  co  was  possessed  or  entled  at  the  commencemt  of  the 
winding-up  of  the  sd  co,  are  sul)ject  to  the  del)enture  securities  and 
charges  thereby  created  in  favour  of  the  applicants,  and  ought  to  be 
applied  in  the  first  instance  to  satisfy  or  provide  for,  pro  tanto,  the 
respive  amounts    due  to  the  applicants   for  principal  and  interest  in 
respect  of  their  nitge  debentures,  rateably,  in  proportion  to    the    sd 
respive  amounts  of  such  mtge  debentm-es,  in  priority  to  the  general  or 
unsecured  creditors  of  the  co.     Order  the  liqs  of  co,  out  of  the  assets  of 
the  sd  CO,  to  pay  and  satisfy  the  sd  principal  monies  due  to  the  sd 
debenture  holders,  with  interest  thereon  at  the  rate  of  IS  p.  c.  p.  a,, 
down  to  the  day  of  paymt  ;  and  also  to  pay  to  the  sd  debenture  holders 
their  costs  of  and  occasioned  by  this  applicon,  to  be  tased  by  the  taxing 
master,  as  between  solor  and  client,  in  case  the  parties  differ,  including 


480  WINDING-UP. 

Form  562.  tlic  costs  of  the  summons  on  18  day  of  June,  1875,  taken  out  by  the  sd 
liqs,  and  all  other  the  costs  of  the  sd  debenture  holders  (if  any),  properly 
incuiTcd  as  mtgees,  all  such  paymts  to  ])e  made  in  priority  to  the  paymfc 
of  the  costs  hereinafter  mentd  and  of  the  costs  of  the  liqs  of  this  apphcon 
and  also  previously  to  any  paymt  to  the  general  and  unsecured  creditors 
of  the  CO.  And  order  the  liqs  out  of  the  assets  of  the  co  to  retain  their 
own  costs,  and  pay  the  sd,  &c.,  their  costs  of  this  applicon  and  of  the  sd 
summons,  such  costs  to  be  taxed  hy  the  taxing  masters,  as  between  solor 
and  client,  in  case  tlie  parties  differ."  \_Schedide.']  In  re  General  South 
Amfricaii  Co.,  Malins,  V.-C,  14  March,  1876.    A.  459.    See  2  C.  Div.  337. 

As  to  the  validity  of  a  general  charge,  see  supra,  p.  258. 

As  to  actions  by  debenture  holders,  see  further  sujira,  Form  349  et  seq. 

In  the  case  of  a  solvent  company  a  secured  creditor  may  prove  for  the  full 
amount  of  his  debt,  retaining  his  security  till  payment.  And  in  the  case  of  an 
insolvent  company,  where  the  winding-up  commenced  before  the  passing  of  the 
Judicature  Act,  viz.,  1  Nov.,  1875,  the  rule  in  Kellock's  case,  3  Ch.  769,  applies, 
and  accordingly  a  secured  creditor  may  prove  for  the  amount  due  when  his 
claim  is  sent  in,  without  regard  to  securities  which  have  been  realised  by  him 
between  the  sending  in  of  his  claim  and  its  adjudication. 

But  when  the  winding-up  commenced  after  1  Nov.,  1875,  and  the  company  is 
insolvent,  s.  10  of  the  Judicature  Act,  1875,  renders  the  bankruptcy  rules 
applicable,  and  accordingly  a  secured  creditor  may  prove  for  the  whole  amount 
due  to  him  provided  he  gives  up  his  security,  or  he  may  set  a  value  on  his 
security  [see  Form  539],  and  prove  for  the  balance :  in  the  latter  case  the 
liquidator  will  have  the  option,  at  any  time  before  realisation,  of  taking  over 
the  security  at  such  value  for  the  benefit  of  the  general  creditors  ;  and  if  the 
creditor  subsequently  to  his  proof  realises  the  security,  and  receives  more  than 
the  estimated  value,  he  will  be  bound  to  pay  the  surplus  to  the  liquidator. 
See  Bankruptcy  Act,  1883,  and  Eules  9  et  seq.  Where  a  security  is  so  valued, 
the  liquidator  may  redeem  it  at  the  assessed  value,  or  if  dissatisfied  with  value, 
may  insist  on  sale.  And  the  creditor  may  require  a  liqviidator  to  elect  whether 
he  will  redeem  ;  and  after  six  months'  default  the  equity  of  redemption  will 
vest  in  the  creditor.     See  further  the  above  mentioned  rules. 

Instead  of  i)roving  as  above,  a  secured  creditor,  whether  of  a  solvent  or 
insolvent  company,  (a)  may  realise  his  security  if  he  has  the  necessary  power 
and  prove  for  the  balance  (Re  Kit  Hill  Co.,  IG  C.  D.  590),  or  (b)  may,  in  some 
cases,  obtain  leave  in  the  winding-up  to  sue  the  company  for  the  enforcement 
of  his  security,  e.  g.,  by  foreclosure,  and  proceed  accordingly,  or  (c)  may  have 
his  security  realised  in  the  winding-up,  and  prove  for  the  balance  due. 

The  expression,  a  secured  creditor,  in  s.  10  of  the  Jiidicature  Act,  1875, 
means  a  creditor  holding  any  mortgage  charge  or  lien  on  the  company's  pro- 
perty or  any  part  thereof  as  security  for  a  debt  due  to  him,  and  includes  not 
only  creditors  secured  by  contract,  but  also  creditors  who  have  obtained  a 
security  by  execution  levied  before  the  commencement  of  the  winding-up  or 
othei-wise.  See  s.  168  of  the  Bankruptcy  Act,  1883.  The  charge  must  arise 
before  the  commencement  of  the  winding  up.  See  s.  163  of  the  Act  of  1862. 
Ex  jiarte  Williams,  7  Ch.  314  (fi.  fa.,  seizure  essential) ;  Re  Stanhope  Silkstone  Co., 
11  C.  Div.  160  (garnishee  order  nisi,  service  essential) ;  Haly  v.  Barry,  3  Ch. 
452  (charging  order  on  shares,  service  essential). 

As  to  the  limited  operation  of  s.  10  of  the  Judicature  Act,  1875,  see  Withernsea 
Co.,  IG  C.  Div.  337  (s.  45  of  Bankruptcy  Act,  1883,  not  ap2)licable) ;  Crumlin 
Viadi(,ct,  11  C.  D.  755,  order  and  disposition  not  applicable.  But  see  Mersey 
Steel  V.  Naylor,  9  Q.  B.  Div.  61'8  (mutual  credit  clause  applicable),  and  Re 
lIopHns,  18  C.  Div.  380.  See  also  Re  Hopkins,  31  W.  R.  498  ;  48  L.  T.  513  ;  In 
re  Maggi,  20  C.  D.  545. 


SECURED    CEEDITOES.  ^^i 

For  affidavit  of  proof  by  secured  creditor  of  insolvent  company,  see  p.  472.         Form  562. 

In  the  case  of  a  mortf^agee  or  mortgage  debenture  holder  of  a  company,  it 

is  very  common  to  apply  to  the  Court  for  liberty  to  bring  or  proceed  with  an 
action  to  foreclose  or  realise  the  security,  and  a  mortgagee  has  a prim'h  facie 
right  to  such  an  order.  Lloyd  v.  Lloyd  S(  Co.,  6  C.  D.  339;  Jones  v.  Swansea 
Building  Society, 29W.  R.  382;  In  re  Hamilton's  Windsor  Ironworks  Co. ,27  W.  E. 
827  ;  see  Forms  G03  et  seq. 

In  other  cases  the  mortgagee  sells,  with  or  without  the  concurrence  of 
the  liquidator,  in  exercise  of  a  power  of  sale  vested  in  him  by  the  mortgage. 

And  very  commonly  a  secured  creditor  applies  in  the  winding-up  for  a 
declaration  of  his  rights,  and  a  direction  to  the  liquidators  to  realise  the  security, 
and  pay  him.     See  Forms  563  et  seq. 

In  such  cases  the  secured  creditor  is  entitled  to  be  paid  out  of  the  proceeds 
his  princiijal,  interest,  and  costs,  subject  only  to  the  costs  of  the  realisation. 
Ill  re  Marine  Mansions  Co.,  4  Eq.  601.  See  also  Oriental  Hotels  Co.,  12  Eq.  126  ; 
In  re  Regent's  Canal  Co.,  3  C.  Div.  411. 

Not  uncommonly  an  order  for  sale  is  made  on  the  application  of  the  liquidator, 
and  the  mortgagee  concurs  and  obtains  payment  out  of  the  proceeds. 

Where  a  creditor  has  obtained  security  by  execution  levied  before  the  Avind- 
ing-ui3,  and  a  winding-up  commences  before  sale,  it  is  not  uncommon  for  the 
creditor  to  aj^ply  for  an  order  for  sale  by  the  liquidator  as  in  Form  COS. 

Upon  the  applicon  of  B.  [a/id  others]  :  Declare  that  the  applicants  Form  563. 
and  all  other  holders  of  debentures  in  the  same  form  as  those  held  by  Declaration  of 
the  applicants  of  the  eo  are  by  ^drtue  of  such  debentures  entled  pari  ^s^^s  in 
passu  to  a  charge  by  Avay  of  a  floating  se'curity  [_supra,  p.  229]  on  all  debenture 
the  real  and  personal  estate  of  the  co  as  the  same  existed  on  9  Oct.,  holders. 
1878  (the  date  of  the  appointmt  of  the  sd  K.  prov.  off.  liq.)  subject  to 
any  charges  on  specific  pts  thereof  created  previously  to  that  date  and 
then  subsisting  :  And  declare  that  sucii  real  and  personal  estate  does  not 
include  then  uncalled  capital  of  the  co  :  And  let  the  following  inquiries 
be  made  : — 

1.  An  inquiry  who  are  the  holders  of  the  debentures  of  the  sd  co  and 
what  is  due  to  them  for  principal  and  interest. 

2.  An  inquiry  >Yhat  ppty  is  comprised  in  the  charge  having  regard  to 
the  above  declons  :  Applicants'  costs  of  the  applicon  to  be  taxed  and  pd 
out  of  the  ppty  comprised  in  sd  charge  :  Liq  to  be  at  libty  to  retain  his 
costs  of  the  applicon  and  consequent  thereon  out  of  the  general  estate  of 
the  CO  in  his  hands  :  And  the  order  to  be  without  prejudice  to  the 
applicants'  right  to  prove  for  the  balance  of  the  amount  due  to  them  by 
virtue  of  the  sd  charge  against  the  general  estate  of  co.  Libty  for 
applicants  to  attend  proceedings  at  their  own  expense.  Colonial  Trusts 
Corporation,  M.  R.,  13  Dec,  1879.     A.  257G.     15  C.  D.  405. 

See  reference  to  the  above  order  in  Hodson  v  Tea  Company,  14  C.  D.  Soft,  and 
supra,  p.  218. 

For  order  with  consent  of  P.,  the  mortgagee,  that  certain  leaseholds  and 
plant  be  sold  by  auction  by  the  official  liqiiidator  out  of  Court,  proceeds  to  be 
applied  in  payment  of  expenses  and  next  in  payment  to  P.  of  5,0001.  and  interest 
and  costs  as  mortgagee,  residue  to  be  paid  into  Bank  to  account  of  official 
liquidator ;  if  pi'oceeds  insufficient  to  pay  P.  expenses  first  to  be  paid,  and 
balance  to  P.,  liberty  for  P.  to  bid  at  the  sale,  order  to  be  without  prejudice  to 
rights  of  P.  if  sale  not  effected,  and  if  sale  not  effected,  P.  to  pay  to  official 
liquidator  the  costs  of  the  attempt,  and  add  amount  to  his  security,  costs  of 

I    I 


482 


WINDING-UP. 


Form  563.    application  reserved,   costs   and  expenses   before   directed  to   be  paid  to  Vje 

taxed  in  case  the  parties  differ,  see  Crumlin  Viaduct  Co.,  M.  E,.,  1  Au^^.,  1878. 

A. 1601. 

Form  564.  Upon  the  applicon  of  AY.  the  liq.  of  co,  &c.,  Let  an  inquiry  be  made 
Inquiiy  as  to  ^^  to  what  securities  have  from  time  to  time  been  given  by  the  sd  co,  and 
what  seciirities  when  and  to  whom  and  for  what  amounts  and  how  much  remained  due 
upon  each  of  the  sd  securities  for  principal  and  interest  up  to  17  Sept., 
1878,  and  any  party  is  to  be  at  libty  to  apply  in  chambers  as  he  may  be 
advised,  as  soon  as  the  chief  clerk  shall  have  made  his  certificate,  on  tlie 
question  of  priorities  and  the  respive  rights  of  the  secured  creditor  to 
be  found  and  certified  as  afsd.  Hamiltoiis  Windsor  Iromrorks  Co., 
Limtd,  Malins,  V.-C,  21  Dec,  1878.    A.  2340.    See  also,  27  W.  11.  827. 


given. 


Form  565.       Upon  the  applicon  of  the  liq,  and  upon  hearing  the  solors  for  tlie 

Liberty  to  pay  applicant  and  for  F.  M.  the  creditors'  representative  appointed  l)y  order 

off  mortgage      dated,  &c.,  and  for  W.  and  S.  the  mtgees  of  the  co's  stock,  and  upon 

of  sale.  reading,  &c.,  Let  the  liq  be  at  libty  to  pay  to  the  sd  S.  out  of  the  proceeds 

of  the  ppty  in  mtge  to  him  the  sum  of  432C/.  S.s.,  due  to  him  for  principal, 

interest,  and  commission,  upon  mtge  dated,  &c.,  given  by  the  sd  co  to 

the  sd  A.,  And  let  the  liq  pay  to  the  sd  S.  the  sum  of  48/.   14.s.  at 

which  the  costs  of  the  sd  S.  t'^^ve  been  agreed,  such  costs  including  the 

costs  of  this  applicon.     JaimncM  Curtains  Co.,  Malins,  V.-C,  2u  ^lay, 

1878. 


Form  566. 

■Order  for  pay- 
ment of 
mortgagees. 


Upon  the  applicon  of  D.  the  off.  li(i.,  &c..  Let  the  sd  D.  out  of  ;>;;i.")/. 
and  other  sums  of  money  which  may  l)e  payable  to  him  in  respect  of  tlie 

sale  of  the Tavern,  pay  to  Messrs.  W.  &  Co.  the  sum  of  183")/., 

being  the  amount  due  to  them  for  principal,  and  secured  by  a  certain 
indre,  &c.,  together  with  12G/.  2s.  4-d.,  the  amount  of  interest  thereon  at 
.J  p.  c.  p.  a.  to  15  May,  1878,  and  also  the  sum  of  10/.  I!).*;.  3c/.  for  goods 
supplied  by  them  to  the  sd  co  and  1/.  IGs.  for  insurance  of  the  prenies 
belonging  to  the  sd  co,  together  witli  the  sum  of  27/.  5.s.  10^7.  tlie  ascer- 
tained costs  of  the  sd  Messrs.  W.,  making  together  the  sum  of  2( »()!/.  4s.: 
And  let  \_similar  order  as  to  two  suhscquont  incumhrttncers.']  And  let 
the  sd  liq  thereout  also  pay  to  Messrs.  C.  F.  &  C.  the  former  solors  of  the 
sd  CO  the  sum  of  IKt/.  in  full  satisfon  of  their  costs,  charges  and  exj^enses 
against  the  sd  co  amounting  to  the  sum  of  189/.  Gs.  8d.,  &c.,  And  let 

the  sd   Messrs. and  forthwith   cause   satisfon  to  be 

entered  upon  the  ]Middlcsex  Register  of  the  amount  of  their  respive 
mtges.     Hammersmith  Town  Hall  Co.,  ^L  \\.,  7  May,  1878.     A.  809. 

Form  567.  Upon  the  applicon  of  S.,  .T.,  and  E.,  as  trustees  under  an  indre 
Liberty  to  give  dated,  &c.,  for  and  on  behalf  of  the  debenture  holders  of  the  sd  co,  and 
possession  of  upon  hearing  the  solors  for  the  applicants  and  for  F.-  AY.,  the  liq  of 
trustees  for  ^0,  &c..  Let  the  Said  liq  be  at  libty  to  give  to  the  applicants  possession 
debenture  of  the  leasehold  lands  and  premes  known  as,  &c.,  whereon  the  sd  co 
caii'ied  on  its  business,  together  with  all  the  plant,  machinery,  tools, 


LIBERTY    TO    ATTEND. 


483 


stock  and  eifects  tlierein.     ,/.  and  A.  Bhjth,  LiinfiL,  Hall,  V.-C.  80  Mav.,   Form  567. 
1878.    A.  G31.  " 


Lihfji  fo  aHond. 

See  rules  GO,  61,  and  62,  of  the  General  Order  of  Nov.,  1802. 

Upon  the  applicon  of  B.  &  S.,  trading,  &c.,  of  ,  who  have  been  Form  568. 

admitted  as  creditors  of  the  above-named  co,  and  upon  hearing  the  Liberty  to 
solors  for  the  applicants  and  for  the  liq  of  sd  co,  and  upon  reading  '^^^'^'t'^'"**  to 
an  order  dated  1  July,  1874,  and  an  order  dated  2  August,  1877,  Let 
the  sd  B.  &  S.  be  at  libty  at  their  own  expense  to  attend  the  proceedings 
before  the  judge  under  the  sd  order  dated  1  July,  1874,  and  upon  the 
terms  and  conditions  mentd  in  the.Gdth  Rule  of  the  Order  of  Com't 
dated  11  Xov.,  18(52,  And  order  the  sd  B.  &  S.  to  pay  to  the  sd  A.  the 
liq  one  guinea  for  the  costs  of  this  applic(jn.  Konvkli  Prurident  Co., 
Bacon,  V.-C,  21  May,  1878.     B.  1241. 

Althoiigh  it  is  not  unusual  to  make  an  order  as  above,  it  would  seem  that  no 
order  is  necessary.  Rule  GO  gives  liberty  to  attend,  subject  to  the  j^rovisions  of 
Eule  62,  and  accordingly  some  of  the  Cliief  Clerks  decline  to  make  orders  as 
•above.  It  seems  that  the  examination  under  s.  115  of  the  Act  of  1862  is  not 
to  be  considered  a  proceeding  within  the  meaning  of  the  rule.  Grey's  Brewery 
Co.,  25  C.  D.  400  ;  32  W.  E.  381 ;  50  L.  T.  14.. 

For  order  in  favour  of  a  person  claiming  to  be  a  creditor,  see  Ha  nvich  Harbour 
Co.,  Hall,  V.-C,  G  May,  1878.    A.  867. 

Upon  the  applicon  of  AV.  of  ,  a  contriby,  &c.,  Jjct  the  sd  AV.  Form  569. 

be  at  lil)ty  at  his  own  expense  to  attend  the  proceedings  before  the  Liberty  to       ' 
judge  in  these  matters,  And  Let  the  sd  W.  upon  paymt  of  the  costs  contributory 
occasioned  thereby  have  notice  of  all  such  proceedings  as  he  shall  by 
written  request  desire  to  ha^e  notice  of.    '' 'aj)c  Brcfon  ( 'o.,  ]\Ialins.  V.-C, 
t)  Mar.,  187.S.     A.  423, 

As  to  rights  of  pei'sons  entitled  to  attend,  see  Brampton  Railway  Co,  11  Eq. 
428,  in  which  case  Bacon,  V.-C,  said,  "  Having  under  'the  rule  the  right  to 
attend  the  proceedings,  they  have,  as  I  read  it,  equal  rights  with  those  which 
a  party  to  a  suit  would  have,  and  those  rights  would  include  the  right  to  cross- 
examine." 

LTpon  the  applicon  of  W.  L.  and  B.  L.  respively,  as  holders  of  A  Form  570. 

ilebentures  of  the  above-named  co,  &c.,  Let  the  applicants  be  at  libty  to  LibertTto 
attend  all  proceedings  in  the  winding  up  of  the  sd  co  relating  to  the  sale  ^lebenture 
and  disposition  of  the  assets  of  the  sd  co  compn'sed  in  the  indre  of 
14  Dec,  1875,  and  all  proceedings  relating  to  the  paymt  or  other 
dealing  with  the  proceeds  thereof.  And  Let  the  costs  of  such  attendances, 
including  the  costs  of  both  the  sd  a])plic<)ns,  be  added  to  the  applicants' 
securities,  and  the  principal  and  interest  due  on  their  debentures,  And 
Let,  notwithstanding  the  sd  order  of  17  Ap.,  1877,  the  pchase-nioney  be 
pd  into  the  Bank  of  England  to  the  credit  of  the  off.  liqs.  of  sd  co  to  an 
account  to  be  intituled  "  The  Mtge  Trust  Account,"  And  let  no  pt  of  such 

I  I  2 


484 


WINDING-UP. 


Porm  570.  inouey  be  pd  out  witliont  notice  to  the  sd  ^X.  H.  &  B.  L.     Hooper  s 
' Telegraph  WorJcs,  M.  R.,  14  June,  1877.     A.  1171. 

For  order  giving  executors  of  will  of  creditor  liberty  to  attend  proceedings 
relating  to  sale  of  assets,  see  Central  American  File  Co.,  Hall,  V.-C,  21  May, 
1878.  A.  1854.  As  to  impropriety  of  giving  debenture  holders  liberty  to  attend 
at  company's  expense,  see  Hamilton's  Windsor  Ironworks,  27  W.  E.  827. 


Form  571. 

Appointment 
of  committee 
to  attend. 


Upon  the  applicon  of  i\I.  &  H.,  contribs  of  the  above  society  whose 
names  are  comprised  in  schedule  A.  in  the  printed  statemt  of  the  oflF.  hq., 
being  the  exhibit  A  to  the  afFt  of  snch  oflF.  hq.  filed  22  April,  1 873,  in 
support  of  his  proposal  for  a  call  of  25/.  per  share,  that  the  sd  J\I.  or  some 
other  contriby  named  in  the  sd  schedule  might  be  aj)pointed  to  represent 
the  class  of  contribs  contained  in  the  sd  schedule  in  all  further  proceed- 
ings relating  to  the  winding  up  o£  the  co  at  the  expense  of  the  estate, 
and  upon  hearing  the  solors  for  tlic  api)licants  and  for  the  sd  off.  li(|. 

and  for  the  Co  having  libty  to  attend   proceedings,  and  upon 

reading  the  order,  &c..  Let  (1.  and  the  applicant  M.  l)e  a])pointed  to 
represent  before  the  judge  at  the  expense  of  the  sd  society  the  contribs 
of  the  sd  society  upon  any  question  as  to  a  compromise  witli  any  of  the 
contribs  or  creditors  of  the  sd  society  or  in  or  about  any  other  proceed- 
ings relating  to  the  winding  up  of  the  sd  society.  And  Let  the  sd  (J.  and 
M.  unite  in  employing  the  same  solor  to  represent  them  as  afsd.  I/ifer- 
md'ional  Life  Assimmce  Society,  Malins,  V.-C,  29  Xov.,  187o.  A.  2!)83. 
See  Rule  01. 

Form  572.  Upon  the  ap})licon  of  T.  and  H.,  the  liqs  of  co,  and  upon  hearing  the- 
solors  for  the  applicants  and  for  (1.  and  K.  the  members  of  the  com- 
mittee of  supervision  in  the  winding-up  of  co,  Let  liqs  out  of  the  monies 
in  their  hands  belonging  to  co  pay  100/.  to  sd  Gr.  and  K.  respively  as  a 
remuneration  for  their  services  as  members  of  such  committee  of  super- 
vision from  31  Dec,  1875,  to  31  Dec.  1870.  Overend  ch  Gurney  Co.y 
18  Ap.,  1877.     705  B. 


Remuneration 
of  committee. 


Committee  of 
contributories. 


Form  573.  Upon  the  applicon  of  C.  and  0.,  &c.,  Let  the  sd  C,  G.,  and  I),  be 
appointed  at  the  expense  of  the  co  to  represent  the  holders  of  fully  pd- 
up  shares  in  the  sd  co  in  and  about  the  applicon  in  the  al)ove  matters, 
that  the  off.  liq.  might  be  directed  to  l)ring  in  a  supplemental  list  of 
contribs  comprising  the  holders  of  fully  pd-up  shares  in  the  sd  co,  in 
order  that  a  call  might  be  made  to  adjust  the  rights  of  contribs  among 
themselves  and  in,  about,  or  concerning  all  iiroceedings  and  matters, 
incident  to  the  sd  applicon  and  consequent  thereon,  And  costs  of  appli- 
cants of  and  incident  to  the  applicon  to  be  pd  by  off.  hq.  out  of  assets 
of  CO.     Copper  2iiners  Co.,  Malins,  Y.-C,  15  Mar.,  1875.     A.  2078. 

Form  574.  Upon  the  applicon  of  the  exs  of  L.,  deceased,  &c.,  Let  Mr.  H.  V.  of, 

A     intm  ut  *-^°-'  ^olor,  be  appointed  creditors'  representative  in  the  above  matters 

of  creaitor.s'  ft)r  thc  pposc  of  attending  the  taxation  of  the  costs  both  of  the  prov. 

representative  ^^^^    ij-  n     -^^  ^j^g  above  matters  other  than  the  costs  of  such  off.  hq. 

lor  limited  -i  .       .  '■ 

purpose.  relating  to  the  conservation  and  realisation  of  the  jipty  of  the  said  ca 


SERVICE    OF    SUMMONSES,  &c.  485 

situate  iu  the  county  of  C,  And  l^et  the  costs,  charges,  and  expenses  of  Form  574. 
the  sd  H.  V.  of  and  incident  to  such  taxation  and  of  this  apphcon  be 
taxed,  and  when  so  taxed  be  pd  by  the  sd  off.  hq.  out  of  such  assets  of  the 
sd  CO  (if  any)  as  may  be  available  for  that  ppose,  And  Let  the  costs  of  the 
applicants  of  this  applicon  be  pd  by  the  off.  liq.  and  be  included  and 
allowed  in  his  owu  costs,  And  let  the  costs  of  the  off,  liq.  of  this  applicon 
be  costs  in  the  winding-up.  Cornish  Consolidated,  ^-c.,  Corporation, 
Malins,  Y.-C,  11  April,  1878.    A.  724. 

Formerly  a  creditors'  representative  was  very  commonly  appointed,  but  now 
such  an  appointment  is  rarely  made  except  for  some  limited  purpose.  See 
Maclver's  claim,  5  Ch.  424. 

Sen' ice  of  Summonses,  tCr. 

Service  within  the  Jurisdiction. 

Rules  63  and  G4  provide  for  the  service  upon  creditors  and  contributories  of 
any  notice  summons  or  order  by  post.     See  further,  Buckley,  5SG. 
As  to  service  of  winding-up  petition,  see  supra,  Form  38S  et  seq. 

Service  out  of  Jurisdiction. 

Upon  the  applicon  of .  the  liq  of  co,  &c.,  Order  that  service  of  Form  575. 

any  summons,  order,  notice  or  other  proceeding  in  these  matters,  not  (-gneral^rder^ 
requiring  personal  service,  upon  such  of  the  contribs  or  creditors  of  the  for  service  out 
sd  CO  wliose  usual  or  last-known  place  of  abode  is  situate  in  Ireland,  °^  J""sdiction. 
tScotland,  the  Isle  of  Man.  or  elsewhere  out  of  the  jmisdiction  of  tliis 
Honom-able  Ct,  and  on  whose  behalf  no  appearance  has  been  entered  in 
psuauce  of  the  General  Eules  and  Orders  of  11  Xov.,  18G2,  be  effected 
by  enclosing  a  true  copy  of  the  smnmons,  order,  notice  or  other  pro- 
ceeding together  with  a  copy  of  this  order  in  an  envelope  duly  addi-essed 
to  such  persons  respively  to  their  several  last-known  address  or  place  of 
abode  and  putting  the  same  with  the  proper  stamps  affixed  thereto  as 
prepaid  letters  into  a  post-office  receiving-house  in  the  city  of  London. 
Government  Security  Fire  Insurance  Co.,  Limtd.,  Hall,  V.-C,  5  June, 
1878.     A.  ll;JO. 

For  similar  orders,  see  Milan  Tramways  Co.,  17  Ap.  1877,  B.  831,  and  iTcu/ioo r 
Fisheries  Co.,  9  July,  1877.     A.  1G23. 

Eule  63  above  mentioned  does  not  make  any  provision  as  to  service  out  of 
the  jurisdiction  ;  and  Order  XI.  of  the  Eules  of  the  Supreme  Court,  1883,  does 
not  appear  to  apply.  But  the  Court  has  inherent  jurisdiction  to  permit  service 
out  of  the  jurisdiction.  British  Imperial  Corporation,  5  C.  D.  749;  Household 
Insurance  Co.,  W.  N.,  1878,  26  ;  In  re  Morant's  Trusts,  W.  N.,  1879, 144.  See  also 
Buckley,  493  ;  Seton,  1625.     Order  XI. 

Where  there  are  many  creditors  and  contributories  out  of  the  jurisdiction,  a 
general  order  as  above  is  iisually  obtained ;  in  other  cases  orders  as  below  are 
obtained. 

Upon  the  applicon  of  and ,  the  liqs  of  co  under  the  super-  Form  576. 

vision  of  this  Ct,  and  upon  reading,  &c.,  Let  the  sd  liqs  be  at  libty  to  Libert^to       ^ 
serve  a  copy  of  the  summons  dated,  &c.,  issued  in  these  matters  from  serve  summons 


WINDING-UP. 


Porm  576.  find  under  the  seal  of  the  chainl)ers  of  the  judge  at  the  instance  of  the 

out  of  iurisdic-  ^^^  applicants,  together  with  a  copy  of  this  order  upon  ^X.  of  Bomhay,  in 

tion.  the  Empire  of  India,  at  Bombay  or  elsewhere  in  the  Empire  of  India. 

Ovomid,  Gurm'i/,  A-  Co.,  Limtcl,  Malins,  V.-C,  22  August,  1878.    1502  B. 


Liberty  to 
serve  out  of 
jurisdiction. 


Form  577.  Upon  the  applicon  of  the  oflP.  liqs.,  tfec,  Let  the  applicants  be  at  libty 
to  serve  all  summonses,  orders,  notices,  and  jiroceedings  in  these  matters, 
not  requiring  personal  service,  upon  the  several  persons  named  in  the 
2nd  colimm  of  the  schedule  hto,  being  respively  contribs  of  the  sd  co,  by 
sending  copies  of  this  order  and  of  such  summonses,  orders,  notices,  and 
proceedings  in  this  matter  through  the  general  post-office,  addressed  to 
such  persons  respively  at  the  places  set  opposite  to  their  resjjive  names 
in  the  3rd  column  of  the  sd  schedule,  and  l^eing  respively  places  in  the 
kingdom  of  Holland,  out  of  the  jurisdiction  of  this  Ct,  until  the  appli- 
cants receive  proper  notice  of  any  change  of  residence  of  such  contribs, 
And  Let  14  days  from  the  date  of  such  service  be  the  time  for  the  sd 
persons  to  appear  or  do  any  act  referred  to  in  such  summonses,  &C.,. 
respively. 

The  Schedule  above  eefeeeed  to. 


Serial  Xo. 

Niiiue. 

Address. 

Thomas  W.  Boolccr  cj-  Co.,  Fry.  J..  20  Ma,r.,  1H79.     B.  5(i2. 


Form  578. 

Liberty  to 
serve  out  of 
jurisdiction. 


Upon  the  applicon,  &c..  Order  that  the  sd  off.  liq.  be  at  libty  to  serve- 
the  notice  to  settle  the  list  of  contribs  of  the  sd  co  made  out  and  left  by 
him  at  the  chambers  of  the  sd  judge  through  the  post  in  prepaid  letters 

addressed  to  A.  of ,  B.  of ,  C.  of ,  I),  of ,  and  that  such 

service  be  deemed  good  service  upon  the  sd  A.,  B.,  C,  and  D.,  And  let  the 
sd  ofl".  liq.  be  at  libty  to  serve  all  other  notices  and  copies  of  summonses, 
orders,  and  other  proceedings  in  this  matter  not  requiring  personal 
service,  in  manner  prescribed  by  the  63rd  rule  of  the  general  order  of 
this  Ct  made  the  11th  November,  18G2,  And  let  such  notice  or  notices, 
copy  smnmonses,  or  orders,  or  other  proceeding  be  considered  as  duly 
served  at  the  time  at  which  the  same  would  in  due  course  be  delivered 
through  the  general  post-office,  and  notwithstanding  that  the  same  may 
be  returned.  And  order  that  a  copy  of  this  order  be  served  on  the  sd 
A.,  B.,  C,  and  D.,  in  like  manner,  and  that  the  costs  of  this  applicon 
be  costs  in  the  winding-up.  OnUinjn  tj-  DuJais  Co.,  Hall,  Y.-C,  7  Jan,. 
1882. 

Tliis  form  has  been  used  in  many  cases,  but  it  is  not  well  framed. 

Form  579. 

— Upon  the  applicon  of  the  liqs  of  co,  Let  the  sd  liqs  be  at  libty  to  serve 

serve  creditors  ^^^  several  persons  wliose  names  arc  set  forth  in  the  2nd  column  of  the 


SEEVICE    OF    SUMMONSES,   &c. 


487 


schedule  hto  who  respivelj  claim  to  be  creditors  of  the  sd  co,  and  who   Form  579. 
reside  out  of  the  jurisdiction  of  this  Ct,  with  notices  to  prove  their  out  of  jurisdio- 
respive  claims  or  the  unadmitted  pts  thereof  respively  against  the  sd  co,  tio°  ^"th 
and  to  file  their  afiFts  in  support  thereof,  and  to  give  notice  thereof  to  notke^o"'^^ 

Messrs. ,  the  solors  for  the  liqs  of  the  sd  co,  on  or  before  2  May,  prove. 

1877,  and  to  attend  at  the  chambers  of  the  M,  R.  in  the  Rolls  Yard, 
Chancery  Lane,  in  the  County  of  Middlesex,  England,  on  Saturday, 
T)  May,  1877,  at  ll.oO  of  the  clock  in  the  forenoon,  being  the  time  ap- 
pointed for  hearing  and  adjudicating  on  the  sd  claims  respively,  by 
sending  such  notices  together  \^'ith  a  copy  of  this  order  by  post  in  a  pre- 
paid letter  addressed  to  the  sd  several  persons  respively,  according  to 
their  respive  addresses  as  appearing  opposite  their  names  respively  in 
the  ;^rd  column  of  the  sd  schedule,  such  notice  to  be  posted  on  or  before 
the  20  April,  1877  :  And  order  that  such  service  be  deemed  good  service 
upon  such  i^ersons  respively. 


Xo.  OH  list  of  claims. 

Name  of  creditor. 

Address  aud  description. 

2 
5 

&c. 

1 
A.  B.                     Augsburg,  Germany. 

C.  D.                     No.  — ,  Eue  &c.,  Paris. 

&c.                                      &c. 

Swiss  Times  Co.,  IG  Ap.,  1877.     B.  G49.     And  see  similar  order, 
Oriental  Telegram  Agency,  M.  E.,  22  June,  1877,  1118  B. 


Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  the  applicant  be  at  libty  to  Form  580, 
serve  by  post  out  of  the  jurisdiction  of  this  Honourable  Ct  the  several  "  7^ 
persons  mentd  in  the  schedule  hto  Avith  notice  that  unless  they  do 
respively  produce  to  the  applicant  or  to  this  Ct  the  securities  on  which 
they  claim  to  be  creditors  of  the  sd  co,  their  claims  respively  will  be  dis- 
allowed, and  they  will  be  excluded  from  all  dividends  declared  or  to  be 
declared,  and  the  assets  of  the  co  will  be  forthwith  distributed  without 
further  notice,  And  order  that  a  copy  of  this  order  be  also  served  in  like 
manner  upon  the  sd  claimants  named  in  the  schedule  with  the  sd  notice. 


Schedule. 


Name.                      \                      Addre-!S. 

Amount  claimed. 

Berlin  Great  Market,  &c.,  Co.,  M.  R.,  2  June,  1877.    A.  1063. 

For  order  giving  liberty  to  serve,  out  of  the  jurisdiction,  summons  for  deliver- 
ing up  to  liquidator  of  messuage  situate  in  Dublin,  see  International  Patent  Pulp 
Co.,  18  June,  1877,  1142. 


488  WINDING-UP. 

Form  580-        ^o^'  order  giving  liberty  to  serve  summons  for  call  in  Guernsey  and  Ireland, 

■ see  Teignmouth,  Sfc,  Co.,  M.  E.  21  June,  1878.     B.  1207. 

For  order  giving  liberty  to  serve  all  summonses,  orders,  &;c.,  on  two  con- 
tributories  resident  in  Belgium  and  Scotland,  see  Tinfoil  Decorative  Co., 
Bacon,  V.-C,  12  June,  1877.     B.  1122. 


Order  for 
substituted 
service  of 
summons. 


tSiibstituted  Service. 
Form  581.       As  to  substituted  service,  see  Order  G7,  r.  G  ;  Seton,  loGO. 

Upon  the  applicon  of  the  liqs,  &c.,  Let  service  of  this  order  and  of  a 
copy  of  the  summons  issued  in  these  matters  dated  the  17th  April,  1878, 

by  leaving  a  coj^y  of  such  summons  and  of  this  order  at  the hotel, 

situate, ,  and  at  the hotel,  situate ,  addressed  to  J.  in  the 

sd  summons  named,  be  good  and  sufficient  service  of  the  sd  summons 
upon  the  sd  J.     Forest  of  Dean,  ^-c,  Co.,  M.  IL,  30  Ap.,  1878.     A.  7G3. 

Form  582.  Upon  motion  this  day  made  unto  this  Ct  by  counsel  for  K.  who  alleged 
that  on  the  4  Dec,  1878,  the  sd  K.  presented  a  peton  unto  this  Ct  pray- 
ing that  J.  might  be  removed  from  his  office  of  oft",  liq.  of  co,  and  might 
be  ordered  to  deliver  up  all  the  ppty,  cash,  books  of  accounts,  and  papers 
in  his  possession  or  control  belonging  to  the  sd  co,  and  file  proper 
accounts  forthwith,  and  that  a  liq  might  be  a-iipointed  in  the  place  of 
the  sd  J.,  and  that  all  necessary  and  proper  directions  might  be  given 
for  that  purpose,  or  that  such  further  or  other  order  might  be  made  as 
the  nature  of  tlie  case  might  require,  And  that  the  sd  petrs  ha^'e  been 
unable  to  serve  the  sd  peton  on  the  sd  J.  as  by  an  aft't  of  the  sd  petrs 
tiled  C  Dec,  1878,  appears,  and  upon  reading  the  sd  peton  and  afft,  Let 
service  of  a  copy  of  the  sd  peton,  (having  this  Ct's  indorsemt  that  all 
parties  do  attend  hereon  on  13  Dec,  1878)  together  with  a  copy  of  this 
order  upon  F.  of  Manchester,  be  deemed  good  service  of  the  sd  peton 
upon  the  sd  J.  Main  Printing,  S,-c.,  ('o..  Hall,  Y.-C,  C  Dec,  1878. 
B.  2011. 


Order  for 

substituted 
service  of 
petition. 


as  to  bill  of 
exchaufre. 


Bills  and  Notes. 
Form  583.  In  the  matter,  kc. 

Memorandum"  ^MEMORANDUM. 

The  off.  liq.  attended  this  day  and  applied  that  lie  might  be  at  libty 
to  accept  the  following  bills  of  exchange,  namely, 

R.  and  H 178/.    3.9.  2d. 

T.  R 81/.  18.S'.  Id. 

the  same  being  drawn  in  discharge  of  the  monthly  accounts  for  carrying 
on  the  works  of  the  co.  After  hearing  the  sd  off.  liq.,  and  reading  the 
respive  orders  of  this  Ct  dated,  &c.,  leave  was  given  to  the  sd  off.  liq.  to 
accept  on  behalf  of  the  co  the  above-mentd  bills  of  exchange. 

,  ('itiof  CJerl: 

When  the  sanction  of  the  judge  to  the  drawing,  accepting,  making,  and 
indorsing  bills  of  exchange  and  promissory  notes  is  given,  a  memorandum  as 
above  is  generally  made. 

See  Rule  48  as  to  memorandum  to  be  indorsed  on  bills,  &c.  Where  power  is 
given  to  carry  on  the  company's  business,  &c.,  he  is  sometimes  given  an  express 


EESTRAINIXG    PEOCEEDINGS.  489 

or  implied  powei*  to  accept  and  indorse  bills  -vvitliout  a  memoraudnm,  signed  by   Form  583. 
the  chief  clerk,  being  indorsed  pursuant  to  Rule  18. 

The  lueuioraudum  where  requisite  runs  thus  : — 

In  the  matter,  &c.  Form  584. 

The  Master  of  the  Eolls  [or  Y.-C. 1  has  sanctioned  the  [acceptance]  of  ,.  ,   "  " 

,.,.,,„        ,  ,        1  .   T         ,.11  T  -Memorandum 

this  bill  of  exchange  by  the  on.  liq.  ot  the  above-named  co.  ^£  sanction  to 

,  Chief  Clc rh.  ,,g  ■  J^^iorsed  on 


bUl. 


Restrain iny  Procrcdinfjs. 

S.  85  of  the  Act  of  1862  provides  that,  "The  Court  may  at  anytime  after 
the  presentation  of  a  petition  for  winding  up  a  comj^any  under  this  Act,  and 
before  making  an  order  for  winding  up  the  comi^any  upon  the  apjilication  of 
the  company,  or  of  any  creditor  or  contributory  of  the  company,  restrain 
fiu'ther  proceedings  in  any  action,  suit,  or  proceeding  against  the  company 
upon  such  terms  as  the  Court  thinks  fit." 

S.  87  of  the  Act  of  18G2  i^rovides  that,  "  When  an  order  has  been  made  for 
winding  up  a  company  under  this  Act,  no  suit,  action,  or  other  jiroceeding 
shall  be  proceeded  with  or  commenced  against  the  comj^any,  except  with  the 
leave  of  the  Court,  and  subject  to  such  terms  as  the  Court  may  imjiose." 

S.  163  of  the  Act  of  1862  provides  that,  "  When  any  company  is  being  wound 
up  by  the  Court,  or  subject  to  the  supervision  of  the  Court,  any  attachment, 
sequestration,  distress  or  execution  put  in  force  against  the  estate  or  effects  of 
the  company  after  the  commencement  of  the  winding  up,  shall  be  void  to  all 
intents."  See  also  Jud.  Act,  1873,  s.  25  (8),  empowering  the  Court  to  grant  an 
injunction  where  just  or  convenient. 

But  s.  21,  sub-s.  (5)  of  the  Judicature  Act,  1875,  provides  as  follows  : 

(5.)  No  cause  or  proceeding  at  any  time  pending  in  the  High  Court  of  Jus- 
tice, or  before  the  Court  of  Appeal,  shall  be  restrained  by  prohibition  or  injunc- 
tion, but  every  matter  of  equity  on  which  an  injunction  against  the  j)rosecution 
of  any  such  cause  or  proceeding  might  have  been  obtained,  if  this  Act  had  not 
passed,  either  unconditionally  or  on  any  terms  or  conditions,  may  be  relied  on 
by  way  of  defence  thereto :  Provided  always,  that  nothing  in  this  Act  contained 
shall  disable  either  of  the  said  Coui-ts  from  directing  a  stay  of  proceedings  in 
.any  cause  or  matter  pending  before  it  if  it  shall  think  fit ;  and  any  person, 
whether  a  party  or  not  to  any  such  cause  or  matter,  who  would  have  been 
•entitled,  if  this  Act  had  not  passed,  to  apply  to  any  Court  to  restrain  the  prose- 
cution thereof,  or  who  may  be  entitled  to  enforce,  by  attachment,  or  otherwise, 
any  judgment,  decree,  rule,  or  order,  contrary  to  which  all  or  any  part  of  the 
proceedings  in  such  cause  or  matter  may  have  been  taken,  shall  be  at  liberty  to 
apply  to  the  said  Coiirts  respectively  by  motion  in  a  summary  way  for  a  stay  of 
proceedings  in  such  cause  or  matter,  either  generally  or  so  far  as  may  be  neces- 
sary for  the  purpose  of  justice ;  and  the  Court  shall  thereupon  make  such  order 
as  shall  be  just. 

Before  the  Judicature  Act  it  was  the  practice  where  a  winding-up  petition 
had  been  j^resented  to  apply  to  the  judge  to  whom  it  was  assigned  to  restrain 
[under  s.  85  above]  any  actions  or  proceedings  against  the  comijany  whereso- 
ever pending. 

The  application  was  made  by  motion  ex  parte  on  behalf  of  the  company,  or  of 
a  creditor  or  contributory,  and  it  was  well  settled  that  upon  such  an  applica- 
tion an  injunction  would  be  granted  until  the  hearing  of  the  petition.  Re  Lon- 
don and  Suburban  Banl',  19  W.  R.  950. 

But  since  the  Jud.  Act  this  practice  has  been  modified  in  accordance  with 
s.  24.  above.  Re  Artistic  Colour  Co.,  1-1  C.  D.  502.  Where,  therefore,  it  is 
desired  to  stop  any  action,  execution,  sale  under  an  execution,  or  other  pro- 
ceeding pending  in  the  High  Coiu-t,  the  proper  course  is  to  apply  by  motion  ex 
parte  to  the  Division  in  which  the  action  or  proceeding  is  pending,  and  the 
Court,  following  the  practice  settled  in  Re  The  London  and  Suburban  Bank,  ubi 


4dO 


WINDING-UP. 


Form  584.  supra,  will,  upon  the  usual  undertaking  as  to  damages  being  given,  stay  further 
proceedings  until  the  hearing  of  the  petition  or  further  order.  Masbach  v. 
Anderson,  20  W.  E.  100,  W.  N.  1877,  252  ;  Rose  cf  Co.  v.  Gardden  Lodge  Coal  Co., 
3  Q.  B.  D.  235 ;  Lindley,  Add.  1275.  The  application  in  the  Q.  B.  D.  is  usually 
made  to  the  judge  at  chambers.  Where  there  are  several  actions  pending  in 
the  Q.  B.  D.  a  single  order  to  stay  all  can  be  obtained.  Where  execution  has 
been  issued  on  a  judgment  signed  in  a  district  the  application  to  stay  must  be 
made  to  a  judge  at  Chambers. 

In  all  other  cases,  e.g.,  in  cases  of  actions  in  foreign  courts,  or  in  the  inferior 
courts,  or  of  distress  or  sales,  application  should  (under  s.  85  above)  be  made 
by  motion  ex  parte  to  the  judge  to  whom  the  petition  is  assigned,  for  an  injunc- 
tion to  restrain  the  proceeding  until  the  hearing  of  the  petition.  See  Forms 
585,  et  seq.,  infra. 

The  application  to  stay  or  restrain  (as  the  case  may  be)  should  be  supported 
by  an  affidavit  as  to  the  facts,  and  if  the  application  is  made  in  the  name  of 
the  company  some  responsible  person  must  give  the  usual  undertaking  as  to 
damages.     Westminster  Assoc,  v.  TJpivard,  2i  Sol.  J.  G90. 

S.  85  only  applies  prior  to  the  winding-up  order,  but  after  the  order  has  been 
made  actions  and  jwoceedings  (other  than  actions  and  proceedings  in  the  High 
Court)  commenced  or  taken  in  violation  of  s.  87  of  the  Act  of  18G2  [see  above], 
will  be  restrained  upon  the  application  of  the  official  liquidator  or  some  other 
person  interested.  And  as  to  actions  and  ju-oceedings  in  the  High  Court,  appli- 
cation can  be  made  therein  to  stay  pi'oceedings,  or  an  order  for  transfer  can  be 
obtained  under  Order  XLIX.,  rule  5  \jinfra.  Form  600,  et  seq.'],  and  application 
may  then  be  made  to  stay  j^roceedings  or  otherwise  as  may  be  thought  fit.  As 
to  when  leave  to  proceed  will  be  given  under  s.  87,  see  infra,  Form  G02,  et  seq. 

So  also,  under  s.  25  of  the  Jud.  Act  above  referred  to,  the  Court  will  inter- 
fere by  injunction  to  protect  the  assets  of  the  company,  regard  being  had  to 
s.  163.     See  Forms  585,  infra  ;  Ex  parte  Fell,  29  W.  E.  885  ;  W.  N.  1881,  125. 

A  person  who  is  improperly  restrained  should  apply  to  discharge  the  injunc- 
tion, or  he  may  lose  his  security.  Thome  v.  Patent  Lionite,  17  C.  Div.  257,  Mi/ra^, 
Form  599,  but  consider  Ex  parte  Rocke,  6  Ch.  795. 

Form  585.  Upon  motion,  Szc,  by  couusel,  for  above-named  co,  the  petrs,  &c.,  and 
Order  restrain-  foi"  H.,  pi'ov.  off",  liq.,  &c.,  and  the  sd  S.  by  his  counsel  midertakin<>-  to 
abide  l)y  any  order  this  Ct  may  make  as  to  damages  in  case  the  Ct 
shall  hereafter  be  of  opinion  that  the  N.  Co  has  sustained  any  by  reason 
of  this  order  which  the  sd  petrs  ought  to  pay:  Let  the  N.  Co  be 
restrained  until  the  hearing  of  the  sd  peton  or  the  further  order  of 
this  Ct  from  taking  any  further  proceedings  in  the  action  by  them 
against  the  sd  petrs  in  the  County  Ct  of  Lancashire,  holden  at  Oldham, 
in  the  county  of  L.     Derby sliire  Wagon  Co.,  M.  R.,  12  July,  1870. 


inji  County 
Court  action. 


(Jounty  Court 

execution 

restrained. 


Form  586.  Upon  motion,  &c.,  for  the  liq.  of  co,  &c.,  Order  that  the  high  bailiff"  of 
the  County  Ct  of  Yorkshire,  holden  at  K.,  do  forthwith  withdraw  from 
the  premes  of  the  co  entered  upon  by  him  pursuant  to  a  warrant  of 
execution  directed  to  him  and  issuing  out  of  the  Shoreditch  County  Ct, 

of  IMiddlescx,  holden  at,  i*cc.,  under  a  judgment  obtained  by  B.  of > 

in  an  action  commenced  by  him  against  the  sd  co  as  in  the  sd  afft  of  C. 
mentd  :  And  order  that  the  sd  high  bailiff"  do  deliver  uj)  the  possession 
of  the  sd  premes  to  the  sd  liq. :  And  order  that  the  sd  action  be  trans- 
ferred fi'om  the  sd  Shoreditch  County  Ct,  &c.,  to  the  sd  V.-C.  Hull 
Cr/ifn/l  bmprry  Co.,  Hall,  A'.-C,  5  Ap.  187i).     A.  8GG. 


Form  587. 

Order  restrain- 


Upon  motion  this  day  made  unto  this  Ct  by  R.,  claiming  to  be  a 


EESTEAINlNa    PROCEEDINGS. 


491 


creditor  of  the  above-uamed  co,  the  jietr  named  in  a  certain  peton  on  the  Form  587. 
16th  May,  1870,  preferred  unto  this  Ct  to  wind  up  the  sd  co,  and  upon  ing  actions  by 
readino-    &c.,  and  the  sd  R.  by  his  counsel  undertaking,  &c.,  should  reference  to 

•  sc1i6(.Iii1g. 

this  Ct  hereafter  be  of  opinion  that  the  persons  named  in  the  schedule  to 
this  order  shall  have  sustained  any  dama<>-e  by  reason  of  this  order,  which 
the  sd  R.  ought  to  pay.  This  Ct  doth  order  that  the  persons  named  in  the 
schedule  to  this  ord.er  be  restrained  from  further  prosecuting  the  several 
actions  in  the  same  schedule  nientd  commenced  by  them  against  the  sd 
CO,  until,  &c. 

The  Schedule  above  referred  to. 


1 

N.  V.  The  Yorkshire  &c.  Company,  Limited.     Common 
Pleas  Division. 

For  goods          ....... 

£ 

s. 

d. 

Go 

0 

0 

[Here  follow  the  particulars  of  seven  other  actions.^ 

1 

9 

—  V.  The  &c.  Company,  Limited,  Leeds  County  Court. 
For  goods 

18 

0 

»i 

The  YorJcsMre  Civil  Service  Stqijjli/  Associafiun,  Limtd,  Malins,  V.-C, 
17  May,  1876.     B.  800. 

So  far  as  the  above  order  purported  to  restrain  actions  in  the  High  Court  it 
was  ultra  vires.  For  ex  j)arte  order  restraining  actions  in  Mayor's  Court,  see  Re 
Knights  4'  Co.,  Bacon,  V.-C,  16  Jan.,  1881. 

Upon  hearing  counsel  for  the  D.,  &c.,  Co.,  ijimtd,  and  for  S,,  the  Form  588. 
l^rov.  liq.,  and  upon  reading  the  affts  of  G.,  and  the  sd  liq.  by  his  conn-  Q^igTof 
sel  undertaking  to  abide  by  any  order  this  Ct  may  make  as  to  damages  judge  of  Q.  B. 
in  case  the  Ct  or  a  judge  should  hereafter  be  of  opinion  that  the  pit  in  proceLmj^^s^ 
this  action  shall  have  sustained  any  by  reason  of  this  order  which  the  sd 
S.  ought  to  pay,  Let  all  further  proceedings  in  this  action  be  stayed 
until  tlie  hearing  of  the  sd  peton.     Oshorn  v.  Derhysliire,  (|f.,  Co.,  Q.  B. 
I)iv.  Order  at  Chambers,  by  Field,  J.,  4:  July,  187!). 

Upon  the  applicon  of  off.  liq.,  &g.,  Let  C.  be  restrained  from  further  Form  589. 
proceeding  against  the  off.  liq.  in  the  commercial  Ct  of  the  island  of  Qj^jgj.pggtj.j^j„. 
Malta  with  reference  to  a  sum  of  lOOO/'.  deposited,  &c..  Costs  of  sd  pro-  ing  proceeding 
ceeding  in  Malta  and  of  applicon  to  be  reserved.     General  ]Vor]cs  Co.,  gQ^^.^   ° 
Bacon,  V.-C,  2o  Nov.  1871).     A.  2177. 


Upon  motion  this  day  made  unto  this  Ct  by  counsel  for  ^\ .  who  Form  590. 
claims  to  be  a  creditor  of  the  above-named  co,  and  upon  reading  the  onkTi-estraiu^- 
peton  of  the  sd  W.  on  the  29th  June,  1877,  preferred  unco  this  Ct,  ing  issue  of 
praying  that  the  sd  co  may  be  wound  up,  &c.,  and  an  afft  of  L.  filed,  &c.  execution. 
whereby  it   appears  that  an  action   has  been  commenced   by  N.,  the 


492 


WINDING-UP. 


Form  590.  registered  officer  of  the Bank,  to  recover  the  sum  of  llfiL  l'.)s.  Sd. 

~~~       ~  upon  a  bill  of  exchange  drawn  by  the  sd  bank  and  accepted  by  the 

CO,  and  by  the  sd  P.  M.  Co  indorsed  to  the  sd  bank,  And  the  sd  W. 
[iisual  muUrtahmj  as  to  damages'] :  Order  that  the  sd  bank  be  restrained 
from  issuing  execution  on  any  judgmt  to  be  obtained  by  them  in  the  sd 
action  commenced  l)y  the  sd  N.  as  in  the  sd  afft  of  the  sd  L.  mentd, 
until  the  hearing  of  the  sd  peton,  or  until  further  order.  Fcncrley 
Mining  Co.,  M.  R.,  2  .July,  1877.     B.  11G2. 

According  to  the  present  practice,  an  order  to  stay  proceedings  is  the  proper 
order  to  take  when  it  is  desired  to  stop  the  issue  of  execution. 

Form  591.       Upon  motion,  Arc,  for  W.,  a  contrib  of  the  above-named  co,  who 

alleged  tliat  a  judgmt  had  been  obtained  against  the  sd  co  by  the  

Bank,  and  that  an  action  is  now  pending  against  the  sd  co  at  the  suit  of 


llestraiuing 
sheriff  from 
selhiig. 


Form  592. 

Restraining 
removal  of 

goods. 


It.,  that  a  peton  for  the  v/in  ding-up  of  the  sd  co  was,  on  the  1  Gth  April, 
1878,  preferred  unto  this  Ct  by  the  sd  W.,  and  upon  reading  the  sd 
peton,  &c.,  and  the  petr  \imdpr talcing  as  io  damages'],  This  Ct  doth 
order  that  tlic  Sheriff  of  Middlesex  be  restrained  until  the  hearing  of  the 
sd  peton,  or  until  further  order,  from  selling  any  goods  of  the  sd  co 
seized  or  to  be  seized  ))y  him  undei'  the  execution  issued  on  the  sd  judgmt 
or  under  any  other  execution  to  be  issued  under  any  judgmt  to  be  ob- 
tained in  the  sd  action  by  R.  Croirn  Match  Co.,  M.  R.,  17  April,  1878. 
A.  G8(». 

Upon  motion,  &c.,  by  counsel  for  the  G.  C,  Limtd,  the  petrs 
named  in  the  peton  preferred  unto  this  Ct  the  1st  of  Nov.  1878,  &c. 
{imdertaking  as  to  damages].  Let  the  Sheriff  of  the  Co.  of  Derby  and 
the  pchaser  of  the  plant,  engines,  and  other  ppty  of  the  sd  co  and  their 
respive  agents  be  respively  restrained  until  after  the  hearing  of  the  sd 
peton  or  until  further  order  of  this  Ct  from  removing  the  plant,  engines, 
and  other  ppty  of  the  sd  co  sold  on  the  2nd  of  Nov.  1878,  by  the  sd 
Sheriff  under  an  execution  in  an  action  instituted  by  R.  against  the  sd 
CO  in  the  Exch.  Div.  of  the  High  Ct  of  .Justice.  UeJjfer  Laiuid  CoUiery 
Co.,  Malins,  V.-C,  G  Nov.  1878.     A.  1885. 

Form  593.       Upon  motion,  &c.  for .  of  — — ,  the  prov.  off.  liq.  of  co,  and  upon 

reading,  &c.,  and  \_undertalbig  as  to  damages].  Let  R.,  of ,  his  ser- 
vants and  agents,  be  restrained  until  over  the  18th  day  of  May,  187G,  or 
initil  further  order  of  this  Ct,  from  removing  or  selling  the  goods  now 
on  the  premes  situate  at  No.  17,  Garrick  Street,  &c.,  in  the  afft  mentd  ; 

And  let  the  sd  pro^'.  off.  liq.  be  at  libty  to  give  the  sd notice  of 

motion  for  an  injunction  for  the  18th  day  of  May,  187G.  British 
Guardian  Life  Assurance  Co.,  Limtd,  Hall,  V.-C,  15  ^May,  1S7G.  A. 
878. 


llestraiuing 
i-emoval  or 
sale  of  goods. 


Form  594.  Uj)on  inotion  \_cx  parte  on  liehatf  of  pctr — usual  uiidertalnng].  Let  B. 
&  P.  Idc  restrained  until  after  the  hearing  of  the  sd  peton  or  further 
order  from  selling  or  removing  any  of  the  plant,  machinery,  or  other 


Restraining 
sale. 


TRANSFER  OF    ACTIONS. 


49.' 


chattels  of  the Co  in  or  al)ont  the  sd  co's  works.     Paragon  Co.,  Form  594. 

Chitty,  J.,  2.")  May,  188:3.  ~~~'  ' 

In  the  above  case  B.  and  P.  had  issued  an  elegit  after  the  presentation  of  the 
petition,  and  obtained  delivery,  and  threatened  to  sell. 

Upon  motion,  &c.,  for  H.,  the  petr,  vtc.  Let  Messrs.  F.,  P.,  and  F.  Form  595. 
be  restrained  until  the  hearing  of  the  sd  peton  from  parting  with  the  Restraining 
proceeds  of  the  sale  of  the  fiirnitnre  and  effects  in  the  order  dated  the  i'^'"^?"^  f™™ 

1      -v-r  ,  T  partmg  witli 

15th    JSovcnil)er,   1870,  nientd,  except  by  paying  the  same   into   Ct.  monies. 
Baysiratcr  Ch/h,  dr.,  Co.,  Limtd,  Hall,  T.-C,  at  chambers,  24  Nov., 
187(1.     A.  I.sl'.t. 

Upon  motion,  &c.  \_iisiial  inuJrrfak/))//^,  Let  the  sd c^- be  Form  596. 

restrained  until  the  hearing  of  the  sd  peton  or  until  further  order  from  Restraining" 
selling  the  articles,  machinery  and  things  in    the  sd  afft  referred  to,  ^^'^*^"^**'*  ^^'^^ 
which  have  been  seized  under  the  sd  distress.     JlrijnJcinalt  Collieries, 
M.  R..  4  Ap.  187S.     A.  r,G7. 

Upon  motion,  &c.,  for  and ,  the  li(is  of  the  above-named  Form  597. 

CO.  and  ttpon  reading  the  peton  of  T.  B.,  on,  <kc,  prcfeiTcd  unto  this  Ct,  Order  restraiu- 
and  two  affts,  &c.,  and  [iisiud  unilertalcinfj'],  T^et  the  corporation  of  the  ^"°  'hstress  for 
Borough  of  Hanley,  their  solors  and  agents,  be  restrained  until  after  the 
hearing  of  the  sd  peton  from  proceeding  to  laxy  a  distress  oit  the  goods 

of  the  sd  CO  in  respect  of  the  rate  or  sum  of  /.  in  the  sd  afft  of  the 

sd  — • —  mcntd.     Hanlpij  Hotel  Co.,  LimUl,  M.  li.,  2;;  ]\[ay.  187i;.     A. 
881. 

Upon  motion  by  prov.  off.  liq.  &c.,  Eestrain  the  South  Staffordshire  Form  598. 
Mines  Commissioners  from  selling  any  goods  of  the  co  distrained  by  Another, 
them  or  otherwise  proceeding  with  the  distress  levied  ])y  them  on  the 
goods  of  the  co  until,  &c.     Oaldiam  Collieries  Co.,  [M.  R..  lit  July,  1880. 

On  the  pt  of of ,  that  the  order  dated,  &c.,  made  in  these  Form  599. 

matters  on   the  applicon  of  ,    whereby  it  was   ordered  that    the  Notice  of 

applicant  should  be  restrained,  &c.,  may  l)e  discharged,  and  that  an  in-  motion  to 
quiry  may  l)c  made  whether  the  applicant  has  sustained  any,  and  if  any  restrainln'^ 

what  damages  Iw  reason  of  the  sd  order,  and  which  the  sd ought  to  order. 

pay  according  to  his  undertaking  in  the  same  order,  and  that  the  sd 

may  be    ordered  to    pay  to  the  applicant  the  amount  of    such 

damages  and  the  costs  of  the  sd  inquiry  and  of  this  applicon  and  con- 
sequent thereon. 

Application  fur  inquiry  as  to  damages  must  l)e  made  -n-ithin  a  reasonable 
time.     Ex  2>arte  Hall,  23  C.  D.  Gil. 

Transfer  of  Actions. 

Upon  motion,  &c.,  by  counsel  for  the  above-named  co  and  ftr  the  jirov.  Form  600. 
liqs.  thereof,  and  upon  reading  an  order  dated  1  Feb.,  1878,  whereby  it  Order  trans- 
Avas  ordered  that  the  sd  co  should  be  wound  np,  and  upon  reading  an  herring  actions. 


4.9'1 


WINDING-UP. 


Form  600.  aift  of  T.  B.  filed  2  Feb.,  1S7S  :  Let  iu  psuance  of  Order  [tioivlO,  Rule  5], 
"  ~  of  the  Rules  of  the  Supreme  Ct,  that  the  following  actions,  that  is  to  say, 

(l)Tai/JorY.  The  Railwaij  Stci'l,  &c.,  Co., Limtil,  1877, T. ]Sro.45,  commenced 
in  the  Q.  R.  Div.  of  this  Ct :  (2)  Williams  v.  d.V,,  commenced  in  the 
Exch.  Div.  of  this  Ct  :  (:>)  Bishop  v.  &(\  :  (4)  ffillier  v.  tJic,  l)c 
respively  transferred  to  this  Division  of  this  Ct  and  assigned  to  the 
V.-C,  8ir  Charles  Hall.  Raihcay  Sleel,  i£r.,  Co.,  Hall,  V.-C,  2  Feb., 
1878,  IG.j  B.     See  8  C.  D.  ]83. 

Eule  5  of  Order  XLIX.  of  the  Rules  of  the  Supreme  Court,  188.3,  provides  that 
when  an  order  has  been  made  for  the  winding  up  of  any  company,  the  jvidge 
in  whose  Court  siich  winding-u})  is  pending,  shall  have  jjower  without  further 
consent,  to  order  the  transfer  to  him  of  any  action  i^ending  in  any  other  Court 
or  Division,  brought  or  continued  by  or  against  the  company. 

The  application  may  be  made  ex  parte  as  in  the  above  order  or  on  summons. 
See  also  Field  v.  Field,  W.  N.  1877,  98;  Whitaker  v.  Robinson,  W.  K.  1877,  201  ; 
United  Kingdom  Electric,  29  W.  E.  332.  In  Re  Sharpe,  W.  N.  188i,  28.  See  Re 
Thames  'Steam  Ferry,  27  W.  E.  503,  where  transfer  was  refused.  As  to  transfer 
of  petitions,  see  supra,  Form  107. 

The  words  "  Court  or"  are  new,  and  enable  a  transfer  order  in  regard  to  an 
action  pending  in  the  same  division.  Re  Sharpe,  ubi  supra,  and  see  Re  Madras 
Co.,  Id  C.  D.  702,  as  to  the  old  rule. 

"Form  601.       Upon  the  api)licon  of  the  off',  liq.,  and  upon  hearing  the  solors  for  the 

■Order  for         applicant  aud  for  the  pits  in  the  action  hereinafter  mentd,  and  upon 

transfer.  reading  \^iviiidinrj-iq)  ovder^  :  Let  pursuant  to  Order  [51,  Rule  2«]  of  the 

Rules  of  the  Sup.  Ct.  this  action  now  pending  in  the  E.\.  Div.  of  this 

Ct,  1879,  P.  7i)2,  in  which  action  are  pits  and  the  B.  Co  defts,  be 

transferred  to  the  Chan.  Div.  of  the  High  Ct  of  Justice,  and  attached  to 
the  V.-C,  Sir  C.  Hall.  Costs  of  applicon  to  be  costs  in  the  11(].  Beverley 
Iron  Co.,  Hall,  Y.-C,  1.')  Xov.,  187'.).     A.  2212. 


Form  602. 

Order  setting 
aside  judgment 
obtained  in 
Common 
Pleas  Division 
in  action 
subsequently 
transferred  to 
Chanceiy 
^Division. 


Upon  motion,  &c.,  by  counsel  for  the  off.  liq.  of  co,  and  upon  hearing 
&c. :  Let  the  judgmt  signed  by  the  sd  W.,  the  pit  in  the  sd  action  in 
the  Exch.  Div.  of  this  Ct  for  L")2(;/.  l.js.  4^7.  on  the  23rd  July,  1878,  be 
set  aside  :  l)ut  this  order  is  to  be  without  prejudice  to  the  right  of  the 
sd  AV.  to  C(;me  in  as  a  creditor  in  the  winding  up  of  the  sd  co.  :  And  Let 
the  off.  liq's.  costs  of  this  applicon  be  taxed  by  the  taxing  master  and 
allowed  out  of  the  assets  of  co.  Eailicay  Sleel,  <i;c.,  Co.,  Williams  v.  same 
Co.,  Hall,  Y.-C,  18  Feb.,  1878.     B.  430.     And  sec  8  C  D.  183. 

After  transfer,  the  Court  obtains  control  over  the  action,  and  can  stop 
execution,  or  set  aside  judgment  wlien  proper. 


Liberty  to  briny  a/id  jirorecd  with  actions,  dr.     Sec.  87. 

Section  87  of  the  Act  of  18G2  provides  that  "  when  an  order  has  been  made 
for  winding  up  a  company  under  this  Act,  no  suit,  action,  or  other  proceeding 
shall  be  proceeded  with  or  commenced  against  the  company  except  with  the 
leave  of  the  Court,  and  subject  to  such  terms  as  the  Court  may  impose." 

And  s.  1G3  is  as  follows : — 

1G3.  "Where  any  company  is  being  wound  up  by  the  Court,  or  subject  to  the 
Bupervision  ot'  the  Court,  any  attachment,  sequestration,  distress  or  execution 


LIBERTY    TO    PROCEED    WITH    ACTIONS,   &c,  495 

put  in  force  against  the  estate  and  affects  of  the  company  after  the  commence-   Form  602. 
ment  of  the  winding-u}),  shall  be  void  to  all  intents." 

Orders  are  frequently  made  under  section  S7.  See  Forms  003,  et  seq.,  infra. 
The  application  should  not  be  ex  i^at-te :  Western  Brazilian  Co.,  W.  N.  1880, 
lis  ;    i2  L.  T.  821. 

It  has  been  held  that  under  s.  87  the  Court  has  a  discretionary  power  to 
permit  a  creditor  to  i^roceed  with  executions,  &c.,  declared  void  by  s.  103.  But 
see  now  Re  Vron  Co.,  20  C.  Div.  112. 

Upon  the  a]iplic(iii  of  IT.,  ;i  debeiituro  holder  of  the  sd  co,  by  summons  Form  603. 
dated  the   11th  Dec.,  1 870.  and  upon  hearing  the  solors  for  Jipph cant.  Liberty  to 

for  the  off.  hq.  of  the  sd  co,  and  for  and  ,  trustees  for  the  debenture 

debenture  liolders  of  the  sd  co,  and  upon  reading,  &c. :  Let  the  sd  H.,  bi'i|,f/actioD 
as  such  alleged  holder  of  eight  debentures  of  oo/.  each  in  the  sd  co,  be 
at  libty  to  take  all  such  proceedings  in  this  Ct  against  the  sd  co  and 
other  parties  as  the  applicant  may  l)e  advised.     JVctv  Toivii  Manure  Go.., 
M.  R.  12  Dec,  187(5.     B.  1S7.S. 

A  mortgagee  or  mortgage  debenture  holder  will  be  given  liberty  as  of  course 
to  enforce  his  security.  Lloyd  v.  Lloyd  ^  Co.,  G  C.  Div.  339  ;  Hamilton's 
Windsor  Ironworlcs,  27  W.  R.  827  ;  Jones  v.  Swarisea  Soc.,  29  W.  E.  382. 

Let  the  applicant  be  at  libty  to  commence  and  prosecute  an  action  Form  604. 
against  the  above-named  co  in  this  Ct  and  Division  for  the  recovery  of  ^,jQ^i,gi. 
20<)0l.,  the  amount  of  twenty  debentures  of  lOO/.  each,  of  the  sd  co, 
numbered,  &c.,  of  which  he  is  the  holder  ;  such  del)entnres  purporting 
to  form  a  charge  upon  the  nndertaking,  and  all  the  land  [4'''-Ji  of  the  co. 
.But  such  action  is  not  to  l)e  prosecuted  beyond  giving  notice  of  trial 
therein,  without  further  leave  of  the  judge  first  obtained.  Ynisccdivtjii 
Co.,  M.  R.,  5  Dec,  187(5.     B.  11)17. 

For  order  giving  vendor  liberty  to  bring  action  against  company  for  sj^ecific   Form  606. 

pei'formance  of  agreement  to  purchase  land,  and  to  enforce   lien  for  iinpaid  .  .  ^ 

purchase-money,    or  in  the  alternative  for  a  rescission  of  the  contract  and  "^l'^"  *^ 

i)Grioriii<iiiCGS 
for  other  relief,  see  Industrial  Coalcf  Iron  Co.,  M.  R.,  li  June,  1877.    A.  1553. 

Liberty  to   trustees  for  debenture  holders   to  bring  action  to   have  trusts  Administra- 
carried  into  execution  notwithstanding  supervision  order.     Cadiz  Waterworks,  tions. 
Malins,  V.-C,  8  May,  1877.     A.  882. 

Upon  the  applicon  of  S.,  on  l)ehalf  of  himself  and  other  the  holders  of  Form  606. 
mtge  debentures  having  a  charge  upon  the  nndertaking,  ppty  and  effects  Liberty  to 
■of  the  above-named  co,  and  who  are  fo  rank  pari  juissu  A\ith  the  ai^pli-  rroceed  with 
cant  in  respect  of  the  sd  charge,  and   upon  hearing  the  solor  for  the  debentuie 
api)licant,  &c.,  Let  the  sd  S.  Ijc  at  lil)t}'  to  i)roceed  with  and  prosecute  ^^°l^'®'"^- 
an  action  now  pending  in  the  sd  Ch.  Div.  of  the  High  Ct  of  Justice, 
before  his  lordship  the  V.-C.  Sir  James  Bacon,  wherein  the  sd  S.  on 
behalf  of  himself  and  the  sd  liolders  of  mtge  debentures  is  ])lt  and  the 
above-named  co  deft,  1877.     S.  No.  270.     Scillu  Islands  Telegraph  Co. 
L'imfd,  M.  R.,  9  August,  1878.     151)4  B. 

Upon  the  applicon  of  B.,  the  ])lt  in  a  certain  action  of  JJ/ale  v.  T/w  Form  607. 
Alhion  tf'c,  to  show  cause  why  the  sd  action  now  [)ending  in  the  High  t -v^TT 
Ct  of  Justice,  Com.  Pleas  Div.,  should  not  be  proceeded  with  notwith-  proceed  with 


496 


WINDING-UP. 


action  in 
C.  P.  Di 


Form  607.  standing  an  order  has  been  made  for  the  winding  up  of  the  sd  co,  and 
upon  reading  an  afft,  &c.,  and  npon  hearing  the  respive  solors  for  the  sd 
B,  and  for  the  off.  liq.  of  the  sd  co,  Let  the  apphcant  be  at  libty  to  pro- 
ceed witli  the  sd  action,  he  undertaking  not  to  take  any  steps  to  enforce 
any  judgnit  he  may  obtain  without  leave  of  the  Ct  or  a  judge,  And  let 
the  costs  of  the  applicant  relating  to  this  appHcon  l)e  costs  in  the  sd 
action,  and  let  the  costs  of  the  sd  off.  \U[.  of  such  applicon  be  costs  in  the 
winding  up.     Albion  Life  Ass.  Co.,  Malins,  Y.-C,  4  Mar.,  1878.  A.  50i>. 

For  order  giving-  liberty  to  proceed  with  .an  action  in  which  the  company  was 
a  co-defendant.  "Costs  reserved,"  see  Vogt  v.  Knights  tf  Co.  Pearson,  J.,  21 
Feb.,  18«  k 

As  to  liberty  to  proceed  in  Admiralty  Division  to  enforce  maritime  lien 
against  ship,  see  Re  Rio  Grand  Co.,  5  C.  Div.  282. 


Form  608. 

Execution 
creditor  given 
first  charge. 


Declare  that  the  ct  is  of  opinion  tliat  Mr.  Taylor  is  entled  to  the  same 
charge  on  the  assets  of  the  co  in  the  hands  of  the  sheriff  as  if  such  assets 
had  been  sold  by  the  sheriff  under  the  writ  of  fi.  fa.  before  the  peton  for 
winding  up  the  co  was  presented ;  and  let  the  sheriff  go  out  of  possession 
and  deliver  the  assets  in  his  possession  to  the  liqs  ;  and  order  the  liqs  to 
sell  forthwith  sufficient  assets  to  raise  the  amount  due  to  Mr.  Taylor  in 
respect  of  the  three  bills  for  5()0<»/.,  and  interest  at  4  p.  c,  and  costs, 
and  out  of  tlie  proceeds  of  such  sale  pay  Mr.  Taylor  the  amount  of  his 
jndgmt  debt  and  interest  at  4  p.  c.  thereon  from  the  signing  of  the 
jndgmt,  and  costs,  and  the  costs  of  both  motions,  and  pay  the  costs  of 
the  sheriff.  Libty  to  Mr.  Taylor  to  apply  in  case  the  liqs  do  not  sell 
forthwith.  Taylor  v.  Raihvaij  Steel  and  Plan!  Co.,  Hall,  V.-C,  18  Feb., 
1878,  8  C.  D.  18C.     Buckley,  210. 

The  above  order  was  made  after  the  order  for  transfer  [Form  GOO,  suin-ci]  had 
been  made.  The  creditor  Avas  thus  dealt  with  because  he  had  been  unfairly 
delayed  by  the  comimny.  See  similar  orders.  Hill  Pottery  Co.,  I  Eq.  Gi9 ;  Plas 
Yn-Mhowys  Co.,  i  Eq.  G89  ;  and  see  -Be  Richards,  11  C.  D.  67G.  But  the  authority 
of  these  cases  is  doubtful.    See  T^-o>i  Colliery  Co.,  20  C.  Div.  442. 


Form  609. 


Liberty  to 
proceed  with 
;irl)itration. 


Upon  the  applicon  of  S.,  &c.,  Order  that  notwithstanding  the  order  of 
18  January,  1877,  to  continue  the  A'oluntary  winding  up  of  the  sd  co 
under  the  supervision  of  the  Ct,  the  sd  S.  be  at  libty  to  proceed  with  the 
arbitration  in  the  action  of,  &c.,  meiitd  in  the  att"t  of  H.  filed,  &c.,  but 
no  execution  under  any  award  that  may  be  made  in  sd  arbitration  is  to 
be  issued  without  the  consent  of  the  Ct  in  these  matters  being  first 
obtained.  And  let  the  costs  of  the  sd  S.  of  this  api^hcon  and  of  the 
applicon  to  dissohe  the  interim  order  of  the  12th  January,  1877,  be  costs 
to  be  dealt  with  in  the  sd  arbitration.  Joi/il  Slock  Coal  Co.,  LimUh, 
j\r.  E.,  IG  January,  1877.     4G  A. 


Form  610.       Upon  tlie  applicon  of  L.  of ,  and  upon  hearing  the  respive  solors 

Liberty  to^       foi'  the  applicant,  the  joint  off",  liqs.,  the  debenture-holders,  and  Messrs. 

distrain.  Bower,  the  vendors  to  the  co,  and  upon  reading,  &c.,  Let  applicant  be  at 

libty  to  distrain  upon  the  goods  and  chattels  of  the  co  for  the  sum  of 


LIBEETY  TO  LANDLORD  TO  DISTEAIX. 


497 


4327/.  55.   lOd.,  being  the  net  arrears  of  rent  due  to  the  applicant,  Form  610. 
accrued  since  the  11th  of  May,  1878,  the  date  of  the  order  for  winding 
up  the  sd  CO  after  deducting  income  tax,  in  respect  of  the  following  ppty, 
leases,  and  agrcemts  and  in  the  following  sums  (that  is  to  say)  : — 


In  respect  of  the  X  coal  seam  under  a  lease,  dated,  &c. 
Half-year's  rent  due  1st  July,  1878    .         .         .         . 


In  respect,  &c. 
&c. 


&c. 


^2025     0     0 
980     0     0 
&c. 


Boicer  AlUrton  CoUieries,  Limfd.,  ]\I.  R.,  3(J  July,  1878.     A.  1597. 

Where  a  company  retains  for  the  convenience  of  the  winding-up  leasehold 
property,  the  landlord  will  be  o-iven  liberty  to  distrain  for  rent  accrued  after 
the  winding-up  order,  see  Forms  611,  et  seq.;  or,  what  amounts  to  the  same 
thing,  the  liquidator  will  be  ordered  to  pay  the  rent  out  of  the  assets,  see 
Form  558.  In  re  North  Yorkshire  Iron  Co.,  7  C.  D.  661 ;  Re  Oak  Pits  Colliery 
Co.,  21  C.  Div.  322  ;  30  W.  R.  751  ;  47  L.  T.  7 ;  Re  Carriage  Co-operative  Co.,  23 
C.  D.  154 ;  Buckley,  212.  For  rent  accrued  before  the  winding-up  the  landlord 
must  prove. 

Upon  the  applicon  of  A.  of ,  and  upon  hearing  the  solor  for  the   Form  611. 


apjilicant  and  for  S.  the  liq,  and  for  W.  and  F.,  the  mtgees  of  the  sd  co,  AnotherT 
and  on  reading  the  order  dated  the  0th  of  Feb.,  1877,  for  winding  up  the 
sd  CO,  an  afft,  &c.,  Let  the  applicant  be  at  libty  within  14  days  from  the 
date  of  this  order  to  distrain  upon  the  stock,  goods,  chattels,  and  effects 
of  the  sd  CO  for  the  sum  of  50<)/.,  such  sum  being  an  apportioned  amount 
of  G  months'  rent  between  5  Jan.,  1877,  the  date  when  the  winding  up 
of  the  CO  commenced,  and  the  13th  May,  1877,  of  the  T.  Colliery  and 
other  hereds  situate,  &c.,  due  on  the  13th  May,  1877,  from  the  sd 
CO  to  the  applicant  under  and  by  virtue  of  the  indi'e  of  lease  of  the 
sd  colliery  and  other  hereds  dated,  &c.,  this  order  to  be  without  pre- 
judice to  any  question  of  apportionmt  between  the  dates  afsd  of  the 
rent  or  rents  reserved  by  the  sd  lease  or  to  any  other  question  which  may 
hereafter  be  raised  :  And  Let  the  sum  of  11?.  13s.  0^.,  the  ascertained 
costs  of  the  sd  A.  of  and  incident  to  this  applicon,  be  pd  by  the  sd  co  to 
the  applicant.     Original  HartUjwol  Colliery  Co.,  25  July,  1877.    B.  148G. 

For  order  on  application  of  official  liquidator  for  liberty  to  sell  leaseholds  and 
chattels,  and  on  application  of  landlord  for  libei-ty  to  distrain,  and  official 
liquidator  undertaking  to  pay  him  500?.  on  account,  applications  to  stand  over 
till  second  Saturday  in  Michaelmas  sittings,  and  meantime  official  liquidator  to 
be  at  liberty  to  sell,  but  not  for  less  than  amount  due  to  landlord  :  value  to  be 
set  on  chattels  before  sale.     North  Yorkshire  Co.,  M.  E.,  21  June,  1877.    1502  B. 

As  to  giving  liberty  to  mortgagee.  Re  Broken,  Bayley  ^'  Co.,  IS  C.  D.  G49. 


Upon  the  applicon  of  H.  of ,  Let  applicant  be  at  libty,  notwith-  Form  612. 

standing  the  sd  order  dated  18  May,  1878,  to  proceed  with  the  distress  Another 
put  in  by  him  upon  the  premes  in  the  occupation  of  the  sd  co,  and  to 
sell  the  goods  and  chattels  upon  the  sd  premes  for  the  ppose  of  realising 

K   K 


40S  WINDING-UP. 

Form  612.  the  sum  of  102G?.  C,s.  dd.,  due  to  him  for  rent  and  royalties  as  of  the  sd 
colUery,  And  Let  the  afsd  li(]S  out  of  the  assets  of  the  sd  co  pay  to  the 
applicant  the  siun  of  45Z.  4s.  Id.  for  his  costs  of  and  incident  to  such 
distress  and  of  this  applicon  as  between  solor  and  client.  Ivy  House  and 
Northwood  ColUerij  Co.,  M.  R.,  10  July,  1878.     A.  1494. 

Where  arrears  are  not  paid,  and  landlord  determines  to  re-enter,  he  can  apply 
to  the  Court  for  an  order  against  the  official  liquidator  to  give  up  possession  „ 
Ee  General  Share  Trust,  20  C.  Div.  2G0. 


Discovery  and  Inspection  of  Documents. 
Form  613.       On  the  pt  of  the  off.  liq.  of  the  above-named  co  that  A.  B.,^vho  clainm 


Summons  for    ^0  be  a  Creditor  [or  C.  D.,  a  contriby]  of  the  sd  co  may  be  ordered  within 
affidavit  of       (seveu)  davs  after  service,  to  make  and  file  a  full  and  sufficient  afft . 

documents  and     ,    ,.  t  ".i        i      ,  i        i      n   ■      i  •  •  -a  -e 

inspection.  Stating  whether  he  has  or  has  had  m  his  possession  or  power  any,  and  it 
any,  what,  documts  relating  to  the  matters  in  question  in  the  summons 
in  these  matters  dated,  &c.,  and  accounting  for  the  same  ;  And  that  the 
sd  A.  B.  \_or  as  the  case  may  le']  may  be  ordered  at  all  reasonable  times^ 

upou  reasonable  notice,  to  produce  at  the  office  of  Mr.  ,  his  solor, 

situate  at,  &c.,  the  documts  which  by  such  afft  shall  appear  to  be  in 
his  possession  or  power,  except  such  of  the  same  (if  any)  as  he  may  by 
such  afft  object  to  produce  ;  and  that  the  applicant,  his  solors  and 
agents,  may  be  at  libty  to  inspect  and  peruse  the  documts  so  produced^ 
and  to  take  copies  and  abstracts  thereof,  and  extracts  therefrom,  as  the 
applicant  shall  l)e  advised,  at  his  expense  ;  and  that  the  sd  documts  may 
be  produced  upon  any  examination  of  witnesses  in  these  matters  and  at 
the  hearing  of  the  sd  summons  as  the  applicant  shall  require  ;  And  that 
the  applicant  may  be  at  libty  to  make  such  further  aj)plicon  as  to  all  or 
any  of  the  documts  meiitd  in  such  afft  as  he  may  be  advised. 

Where  proceedings  are  pending  in  the  winding-up  between  the  official 
liquidator,  and  any  alleged  contributory  or  debtor  or  any  claimant,  discovery 
and  inspection  of  documents  is  usually  ordered  on  the  application  of  either 
party.  To  obtain  discovery  and  inspection  a  siimmons  should  be  taken  out  as 
above.  See  further  as  to  the  practice  :  Seton,  147  ;  Morgan,  519  ;  Daniel  Pr. 
1674,  et  seq. ;  Daniel,  Forms,  p.  919,  et  seq. ;  Buckley,  216,  280.  See  also 
15  &  16  Vict.  c.  86,  ss.  18,  20,  and  Order  XXXI.,  Eules  of  1883.  An  affidavit 
in  support  of  the  summons  is  not  generally  requisite.  The  order  follows  the 
terms  of  the  summons.     See  Seton,  133,  and  infra. 

For  affidavit  as  to  documents,  see  Form  8  in  Appendix  B.  to  Eules  of  1883. 

As  to  deposit  before  application  for  discovery,  see  Eules  of  1883,  368. 

Form  614.  Upon  the  applicon  of  A.,  B.,  and  V.,  respively,  coutribs  of  the  above- 
named  CO,  and  upon  hearing  the  solors  for  the  applicimts  and  for  the  off. 
liq.  of  CO,  Order  that  S.,  the  off.  liq.  of  sd  co,  do  within  7  days  after  service 
of  this  order  make  and  file  a  full  and  sufficient  afft  stating  whether  he 
has  or  has  had  in  his  possession  or  power  any,  and  if  any,  what  documts 
relating  to  the  matters  in  question  in  these  matters,  so  far  as  regards  the 
summons  dated  4  June,  1878,  and  the  relief  thereby  sought  against  the 


DISCOVERY  AND  INSPECTION. 


499 


Another. 


applicants  and  accounting  for  the  same ;  And  [production,  inspection,  il-c]  Form  614. 
J)lae)iCackm  Co.,  ^l.Ii.,lo  Ju\j,187S.     A.  1504. 

The  following  are  other  examples :  "  Relating  to  the  matters  in  question  in 
the  summons  issued  by  the  said  liquidator  against  the  said  A.  and  others  on 

the and  retiu'nable  on  the of 1880,"  and  "relating  to  the  two 

pending  summonses  issued  by  the  said  official  liquidator,  and  another  against 
the  directors  of  the  company,  dated  respectively,  &c." 

As  to  discovery  from  official  liquidator,  see  Ex  parte  Contract  Corporation, 
2  Ch.  350  ;  Gooch's  case,  7  Ch.  207  ;  Re  Mutual  Society,  22  C.  Div.  711 ;  31  W.  E. 
872  ;  48  L.  T.  G51.  It  appears  from  the  case  last  mentioned  that  the  official 
liquidator  will  only  be  ordered  to  make  an  affidavit  of  documents  in  very  special 
circumstances  :  he  will  be  ordered  to  permit  insi^ection.     See  Form  G18,  infra. 

U\)on  the  applicon  of  the  oft'.  li(i.,  &c.,  and  upon  hearing  the  solors  for  Form  615. 
tlie  applicant  and  for  il.  hereinafter  named,  Order  that  M.,  an  alleged 
contriby  of  the  sd  co,  do  within  7  days  after  service  of  this  order  make 
and  file  a  fall  and  sufficient  aff't  stating  whether  he  has  or  has  had  in  his 
custody  or  power  any  and  (if  any)  what  documts  relating  to  the  matters 
in  question  in  this  matter  and  his  liability  to  be  placed  on  the  list  of 
contribs  and  accounting  for  the  same,  And  [usual  order  for  production 
and  insjtcction  and  also  for  produdmi]  upon  any  examination  of  witnesses 
in  these  matters  and  at  the  hearing  of  the  applicon  to  place  the  sd  M.  on 
the  list  of  contribs  of  the  sd  co  as  the  applicant  shall  require,  iV:c.  British 
Fire  Office,  M.  E.,  2  Aug.,  1878.     A.  1864 

Cpon  the  applicon  of  CI.  the  oft",  liq.,  &c.,  by  smmnons  dated  3  Aug.,  Form  616. 
1877,  and  upon  hearing  the  solors  for  the  applicant  and  for  A.,  B.,  C,  q^^^^  ^„  ■  j.^ 
D.,  and  E.  respively,  respondents  to  a  summons  on  behalf  of  the  sd  G.  several  ° 
as  such  oflF.  li(|.  of  sd  co  dated  2  February,  1877,  and  upon  reading,  &c.,  respondents. 
Order  that  the  sd  A.,  B.,  C,  D.,  and  E.  respively  do  on  or  before  the 
:>Oth  August  instant,  make  and  file  a  full  and  sufficient  alft  or  full  and 
sufficient  aff'ts  stating  whether  they  have  or  have  had  iu  the  possession 
or  power  of  them  or  any  of  them  any,  and  if  any,  what  documts  relating 
to  the  matters  iu  question  in  the  sd  summons  and  accounting  for  the 
same,  And  order  that  the  sd  respondents  do  at  all  reasonable  times  and 
upon  reasonable  notice  produce  at  the  office  of  their  respive  solors  as 
follows,  namely,  the  respondents  A.,  B.,  and  C,  at  the  office  of  Messrs. 

,  situate,  &c.,  the  respondent  D.  at  the  office  of,  &c.,  the  respondent 

E.  (who  appears  iu  person)  at,  &c.,  the  documts  which  by  such  afft  or 
aflFcs  shall  appear  to  be  in  their  or  his  possession,  custody,  or  jiower, 
except  such  of  the  same  (if  any),  as  they  or  any  of  them  may  by  such 
afFt  or  aflfts  refuse  to  produce  ;  And,  &c.  [Jihty  to  faJcr  copies,  prodv.ction 
at  hearing,  libf/j  to  maJce  further  a2)jilicon~\.  Basijc  Consolidated  Silver 
Mining  Co.,  9  August,  1877.     A.  1(;22. 

Inspection  under  s.  156  of  the  Act. 

Orders  are  frequently  made  under  the  above  section  for  the  inspection  of 
books  and  papers  of  the  company  by  contributoriesand  creditors,  see  Credit  Co., 
11  C.  D.  256;  Contract  Corporation,  7  Ch.  207;  Yorkshire  Fibre  Co.,  9  Eq.  950; 
Imperial  Land  Co.,  W.  N.  1882,  173. 

K    K    2 


iOO 


WINDING-UP. 


Form  617. 

Order  for 
inspection 
under  s.  156. 


Upon  the  apitlicon  of  H.  a  contriby  of  the  above-named  co,  and  upon 
hearing  the  solors  for  A.  the  liq.  of  sd  co  and  for  the  applicant,  and 
npon  reading  an  order  dated  21  March,  1877,  Let  the  sd  H.,  his  solor  or 
agent  be  at  hbty  at  all  reasonable  times  npon  giving  reasonable  notice 

to  inspect  and  peruse  at  the  office  of  the  sd  A.,  situate  at ,  the 

several  books,  deeds,  and  ^vl'itings  of  the  sd  co  and  the  depositions  of 
witnesses  taken  in  these  matters,  in  the  possession,  custody,  or  power  of 
the  sd  W.  as  liq  of  the  sd  co  or  his  solors  or  agents.  And  let  the  sd  H., 
his  solors  or  agents,  be  at  liljty  to  take  notes  therefrom  or  abstracts 
thereof  or  extracts  therefrom  as  he  may  be  advised  at  his  own  expense, 
And  let  the  sd  W.  upon  reasonable  notice  produce  the  sd  books,  deeds, 
writings  and  depositions  on  the  examination  at  the  applicant's  instance 
of  any  witnesses  in  these  matters  and  at  any  hearing  before  the  Ct  in 
these  matters  at  the  instance  of  the  applicant  as  the  sd  applicant . 
shall  require,  And  let  the  costs  of  the  production  by  the  sd  liq  of  the 
sd  books,  &c.,  in  psuance  of  this  order  be  reserved.  Planet,  &c.,  Co., 
Malins,  V.-C,  27  June,  1878.     128(5  B. 


Form  618. 

Order  for 
insj)ection. 


Upon  the  applicou  of  F.  a  contriby  and  creditor  of  co,  and  upon  hear- 
ing the  solors  for  the  applicant  and  for  the  off.  liqs.  of  the  sd  co  and  for 
R.  a  contriby  and  creditor  of  the  sd  co,  and  upon  reading  an  order,  &c.. 
And  it  being  admitted  that  the  applicant  is  a  contriby  and  creditor  of 
the  sd  CO,  Order  that  the  applicant  be  at  libty  after  the  completion  of 
his  pending  examination  before  the  examiner  of  this  Ct  by  the  sd  off. 
liqs.  in  these  matters,  by  himself,  his  solors  or  agents  to  inspect  the  books 
and  documts  in  the  possession  of  the  sd  off.  liqs.  and  also  of  the 
several  cos  amalgamated  therewith.  And  order  that  the  applicant  do  give 
to  the  sd  off.  liqs.  one  clear  day's  notice  of  any  appointmt  he  may  make 
for  such  inspection,  And  order  that  the  applicant  do  pay  to  the  sd  off. 
liqs.  25.  Qd.  for  every  hour  or  pt  of  an  hour  (being  the  remuneration 
payable  to  a  2nd  class  clerk  of  the  off.  liq.)  occupied  by  such  inspection, 
And  Icosfs  of  off.  liqs.  to  he  costs  in  ■winding-up'].  Cape  Breton  Co., 
Malins,  V.-C,  3  Aug.,  1877.  A.  1573.  This  order  was  subsequently 
modified,  Reg.  Lib.  35.     A.  1878.     See  Jlutual  Society,  22  C.  Div.  714. 


Order  for 
inspection  in 
voluntary 
winding-up. 


Form  619.       Upon  the  applicou  of  li.,  of ,  a  contriby  of  co,  and  upon  hearing 

the  solors  for  the  applicant  and  for  A.  tlie  liq  of  sd  co,  and  upon  reading 
the  London  Gazette  dated  13  Sep.,  1878,  containing  an  advertisemt  of 
the  resolution  to  wind  up  the  sd  co  voluntarily,  the  afft  of  P.  filed,  &c.. 
Order  that  the  sd  A.  do  within  7  days  from  the  date  of  the  service  of 
this  order  produce  for  the  inspection  of  the  sd  L.,  his  accountants,  solors 

and  agents,  at  the  office  of  tlie  sd  A.,  situate  at or  elsewhere,  all 

books,  papers  and  other  documts  of  the  sd  co  in  his  possession  or  jiower 
as  such  liq  as  afsd,  except  business  books  after  the  sale  of  the  sd  assets 
to  S.,  And  it  is  ordered  that  the  sd  L.  and  his  accountants,  solors  and 
agents  shall  be  at  libty  to  take  copies  of  any  of  the  sd  books,  &c.,  and 


SPECIAL  EXAMINERS.  501 

extracts  therefrom  at  the  expense  of  the  apph'cant.     SUbor  Liglit  Co.,  Form  619. 
Mah'us,  V.-C,  13  Dec,  187S.     B.  2247. 


Formal  parts :  see  supra,  Form  ;l^2. 

Take  notice  that  the  off.  hq.  of  the  above-nauied  co  [or  as  the  case  Porm  620. 
mai/  Je]  intends  to  cross-examine  the   several   deponents  named  and  Notice  to  pro^ 


described  in  the  schedule  hto  upon  their  aflfts  therein  specified,  And  that  duce  deponent 

for  cross- 
examination. 


I  have  obtained  an  appointmt  for  such  cross-examination  before  A.  B..  °^ '^^°^^' 


one  of  the  examiners  of  the  Ct  [or  before  C.  D.,  the  s})ecial  examiner 
appointed  on  these  matters,  or  before  E.  F.,  the  chief  clerk  to  his  lurdshi}) 

Mr.  Justice  ]  for  day  the day  of ,  at of  the 

clock  in  the noon  at  [state  w/iere']. 

And  take  also  notice,  that  you  are  hby  required  to  produce  the  sd 
deponent  at  the  time  and  place  afsd  for  cross-examination  before  the  sd 
examiner  [or  as  the  case  may  he~\  accordingly.  Add  schedule  showing- 
(1)  name  of  deponent,  (2)  description,  (3)  date  of  filing  affidavit. 

Under  s.  40  of  15  &  16  Vict.  c.  86,  andEiile  502  of  the  Kules  of  1883,  any  party 
or  witness  having  made  an  affidavit,  is  bound  on  being  served  with  a  subpoena 
to  attend  before  the  examiner,  or  a  sjiecial  examiner,  for  cross-examination. 
Eule  19  of  General  Order  of  5  Feb.,  1861,  imposed  on  the  party  who  filed  the 
affidavitthe  onus  of  producing  the  deponent  for  cross-examination,  butreqviired 
notice  [as  above]  of  the  intention  to  cross-examine  to  be  given  within  fourteen 
days  after  the  filing  of  the  affidavit,  and  forty-eight  hours'  notice  to  produce  ; 
but  this  rule  does  not  appear  in  the  Eules  of  1883.  Eule  518  does  not  appear 
to  apply  in  winding  tip,  and  accordingly  it  would  seem  that  the  fourteen  days' 
limit  no  longer  applies,  unless  it  should  be  held  that  i>erhaps  Order  LXXII., 
r.  2,  preserves  the  practice  in  this  respect. 

As  to  subpoena,  see  Raymond  v.  Tapson,  22  C.  Div.  13  I  :  and  as  to  old  practice. 
In  re  KnigM,  25  C.  D.  297. 

As  to  expenses  of  witness.  Working  Men's  Mutual  Society,  21  C.  D.  831.  An 
affidavit  once  filed  cannot  be  withdra-vvn  so  as  to  avoid  cross-examination. 
Quartz  Hill  Co.,  21  C.  Div.  613. 

Under  the  new  practice  an  oi-der  must  be  obtained  referring  it  to  the  ex- 
aminer in  rotation  to  take  the  cross-examination  [or  appointing  a  special 
examiner],  and  the  attendance  of  the  witness  must  be  enforced  by  subpoena, 
under  r.  487. 

Special  Rraminers. 

Upon  the  applicon  of  P.  of,  &c.,  the  petr  in  the  above  matters,  and  ^^^.^j^  q2i 
uDon  hearing  the  solors  for  the  applicant  and  for  the  above-named  co, -- 

1-1  t.\      r,-i.v.      f  Apponitment 

and  upon  reading  the  peton  presented  in  these  matters  on  the  JDtn  oi  ^j,^  winding-up 
October,  1878,  and  the  afft  hereinafter  mentd,  Let  T.  esq.,  barrister-at-  petition, 
law,  be  appointed  special  examiner  in  the  above  matters  for  the  ppose  of 
taking  the  cross-examination  and  re-examination  of  II.  upon  the  afft 
filed  in  these  matters  the  13th  of  November,  1878,  and  the  cross-exami- 
nation of  any  other  pei-sons  who  may  make  any  affts  to  be  used  at  the 
hearing  of  the  sd  peton.  And  Let  the  si  depositions  authenticated  by 
the  signature  of  the  sd  examiner  when  taken  l)e  transmitted  by  him  to 


502  WINDING-UP. 

Form  621.   the    [Record  and  Writ  Clerks'   Office  of  this  Ct]   there  to  Ijb   filed. 
MaJahar  aold  Washing  Co.,  Hall,  V.-C,  20  Nov.,  1878.     B.  l>o08. 

Where  it  is  desired  to  cross-examine  parties  who  have  made  affidavits  uiwn 
a  petition^  a  special  examiner  used  generally  to  be  appointed.  See  now  Rules 
of  1SS3,  487,  et  seq.  But  now  the  cross-examination  generally  takes  place 
before  one  of  the  examiners  of  the  Court  under  Order  XXXVII.,  rr.  39 — 50  (4th 
February,  1881),  and  accordingly  an  order  is  made  referring  it  to  the  examiner 
in  rotation,  and  the  petition  is  directed  to  stand  over.  Sometimes  a  petition  is 
dii'ected  to  be  heard  with  witnesses. 

It  seems  that  a  petitioner  has  only  a  qualified  right  to  cross-examine  the 
.  company's  witnesses.  London  Fish  Market,  27  S.  J.  600.  And  see  Re  Hoover 
Hill  Co.,  27  S.  J.  431,  as  to  petitioner's  right  to  discovery. 

Form  622.       Uioon  the  applicon  of  the  otf.  liq.  of  co,  and  upon  hearing  the  solors 

Appointment"  ^^r  the  applicant  and  for  B.,  and  upon  reading,  &c.,  Let  N.  of  -^ , 

to  take  cross-    barrister-at-law,  be  and  he  is  hby  appointed  special  examiner  to  take  the 

examination  of  •,•  i  •      i.-  x-j-i  i  t>  i-iim.ri 

claimant  cross-examiuation  and  re-exami nation  oi  the  sd  B.  upon  his  sd  aiit  [and 

also  to  take  the  examination,  cross-examination,  and  re-examination  of 
all  other  witnesses  to  be  examined  in  relation  to  the  claim  of  the  sd  B. 
against  the  co  and  to  the  claim  of  the  applicant  against  the  sd  B.  by 
summons  dated,  &c.],  And  let,  &c. 

Special  examiners  used  frequently  to  be  appointed  in  winding-up  proceedings, 
especially  where  for  any  reason  exjjedition  was  necessary.  But  see  now  the 
rules  of  4th  February,  1884,  above  mentioned. 

The  application  for  the  appointment  of  a  special  examiner  is  usually  made 
by  summons,  and  should  be  supported  by  an  affidavit  as  to  the  circumstances, 
and  that  the  proi^osed  examiner  is  a  fit  person,  and  has  no  interest  in  the 
matters  in  question.  See  further  as  to  the  practice,  Buckley,  272  ;  Dan.  Forms, 
p.  342,  et  seq.;  Rules  of  1883,  riile  487,  et  seq. 

Form  623.       Upon  the  applicon  of  L.,  the  oflF.  liq.  of  the  co,  for  a  special  examiner 
: to  be  apijointed  to  take  the  evidence  of  witnesses  in  these  matters,  and 

Appointment  ^^ 

in  general         upon  hearing  the  solor  tor  the  applicant,  and  upon  reading,  &c.,  Let  Y, 
terms.  ^g^^^^^  barristcr-at-law,  (he  consenting)  be  appointed  special  examiner  for 

the  purpose  of  taking  the  evidence  of  witnesses  in  these  matters,  And 
Let  the  depositions,  &c.     Saium,  4-c.,  Co.,  12  j\Iay,  1877.     B.  8;);!. 

Form  624.       Upon  the  peton  of  R.  of ,  a  creditor  and  member  of  co,  on  the 

; — : —  '       ?,0  May,  1877,  preferred  into  this  Ct,  praying  that  P.  and  K.,  the  present 

Appomtment  ■',         -,.,1  i  t  li     l  -i  ■     t  -, 

on  petition  to    liqs  of  the  sd  CO  might  be  removed,  and  that  some  proper  and  independent 

remove  person  or  persons  might  be  aiipointed  oif.  liqs.  of  the  sd  co  in  their  stead, 

hquidators.         -^     ,  ,         .  1  ,.       , ,         i      /».  1  •  ^  -,- 

and  upon  hearing  counsel  tor  the  sd  on.  liqs.,  and  upon  reading  the  sd 

peton  :  Order  (at  the  request  of  counsel  for  petrs)  that  Mr.  M.  of , 

barrister-at-law,  be  appointed  special  examiner  for  the  ppose  of  taking 
the  examination  of  witnesses,  the  petr  by  his  counsel  undertaking  to  pay 
the  expenses  of  and  incident  to  such  examination  without  prejudice  to 
the  question  how  such  expenses  should  ultimately  be  borne :  And  let 
the  fm-ther  hearing  of  the  sd  peton  be  adjourned  until  the  30th  July, 
J  877.     Caj^e  Breton  Co.,  MaHns,  V.-C,  G  July,  1877.     A.  13G5. 

Form  625.       Upon  the  applicon  of  the  off.  liq.  of  the  co,  &c..  Let  A.  of  • ,  be 

Appointment     ajipointed  examiner  for  ppose  of  taking  the  cross-examination  of  sd  P. 


WITNESSES.  503 

on  his  sd  cafffc,  tiled,  <^-c.,  and  tlic  examination  and  cross-examination  of  Form  625. 
other  witnesses  in  these  matters  :  And  Let  the  sd  off.  liq.  be  at  Kbty  to  with  provision 

employ  J.  of ,  interpreter  and  translator  of  the  Portuguese,  French,  ^^  t"  i'lter- 

and  other  languages,  to  act  as  interpreter  and  translator  into  English  of 
the  vmt  voce  evidence  to  be  given  in  the  French  language  by  the  sd  P. 
before  the  sd  examiner  :  And  let  the  translation  of  such  evidence  which 
is  to  be  made  by  the  sd  J.  be  ndopted  and  filed  as  truly  representing  the 
vivd  voce  examination  or  deposition  of  the  sd  P.  Portuguese  Contract  Co., 
10  June,  1870.     Malins,  V.-C. 

Upon  the  applicon  of  the  off.  liq.,  &c.,  Let  Gr.,  B.,  and  C.  attend  before  Form  626. 
S,  H.,  esq.,  barrister-at-la\v,  the  special  examiner  appointed  in  the  above  order  for 

matters  by  an  order  dated  IG  April,  1878,  at  his  chambers,  No. — , attendance  of 

Court,  Temple,  in  the  city  of  London,  for  the  ppose  of  being  examined 
on  behalf  of  the  sd  off.  liq.  with  reference  to  the  claim  against  the  sd  co 
made  by  the  sd  Cx.  Milan  Tramivaijs,  Hall,  V.-C,  9  July,  1878.  B. 
1902. 

If  a  witness  does  not  attend  before  the  examiner,  an  order  can  be  obtained 
requiring  him  to  attend.  See  Dan.  Pr.  803.  Lisbon  Steam  Tramways,  2  C.  D. 
575.     And  default  is  contempt  of  Coui't.     Eules  of  1883,  490. 

Evidence  of  Witnesses. 

In  the  -windiug-tii)  of  a  company,  occasion  very  commonly  arises  for  obtain- 
ing the  oral  evidence  of  witnesses. 

In  cases  where  s.  115  of  the  Act  applies  [infra,  p.  504],  the  evidence  may  be 
obtained  under  that  section ;  but  in  other  cases  the  witness  will  either  make  an 
affidavit,  or  if  he  will  not  do  this,  the  party  requiring  his  evidence  can  examine 
him  before  the  examiner,  or  before  a  special  examiner,  and  make  use  of  the 
deposition  so  obtained.  An  order  referring  it  to  the  examiner  must  be  obtained. 
The  attendance  of  the  witness  can  be  prociu-ed  by  wi-it  of  subpoena,  ad  testifi- 
candum or  duces  tecum.  See  s.  40  of  15  it  IG  Vict.  c.  86,  and  Eules  of  1883,  487, 
ct  seq.  For  forms  of  subpoena,  see  Eules  of  1883,  App.  J.,  Forms  1  to  7.  For 
orders  to  attend,  see  Forms  618,  632. 

Notices  to  2)roduce  and  admit  documents. 
In  the  matter,  &c. 

Take  notice  that  you  are  hby  recfuired  to  produce  to  the  Ct,  at  the  Form  627. 
hearing  of  the  peton  in  these  matters,  all  books,  papers,  copies  of  letters,  N~tic~~to 
and  other  writings  and  documts  in  your  custody,  possession,  or  power  produce  at 
containing  any  entry,  memorandum,  or  minute  relating  to  the  matters  ^|*^x-V"°  °^ 
in  question   in  these   matters   or   any  of  them,  and   particularly,  &c. 
Dated,  &c. 

P.  Q.,  solor  to  the  above-named  co 
[or  as  the  case  mcuj  be^ 

To  Mr. and  Messrs. his  solors 

{or  as  the  case  may  le']. 

Notice  to  produce  is  generally  given  by  either  side  in  the  case  of  a  winding- 
up  petition.  Dan.  Pr.  774.  As  to  notice  to  produce  documents  referred  to  in 
pleadings  or  affidavits,  see  Order  XXXI.  r.  15,  et  seq.,  and  Credit  Co.,  11  C.  D. 
256 ;  National  Funds  Assur.  Co.,  W.  N.  1876,  192. 


504  WINDING-UP. 

Porm  628.       In  the  matter,  &c. 

Notice  to  Take  notice  that  you  are  hby  recjuired  [in  psuance  of  the  order  [see 

produce  before  Fomi  633,  et  seg.']  made  in  these  matters,  dated,  &c.,]  to  produce  [state 

examiner.         u'Jiere ;  CIS  :]  before the  special  examhier  appointed  herein,  at  his 

chambers,  No. ,  on  the  ■ day  of ,  1880,  at o'clock  in 

the  forenoon,  all  books,  &c.  [as  ahove^,  relating  to  the  matters  ii;  ques- 
tion in  these  matters  [here  specif i/  the  parlccrs ;  as :  so  far  as  regards  the 

summons  issued  the of and  the  claim  of  A.  B.  herein],  and  in 

parlar  the  following,  that  is  to  say  [//ei-e  sjiccify  thcm'\. 

Notice  to  produce  dociiments  at  the  hearing  of  a  motion  or  summons,  or  at 
examination  of  witnesses,  is  frequently  given.  See  Dan.  Forms,  p.  931  et  seq. ; 
and  Eules  of  1883,  Order  XXXI. 

As  to  notices  to  admit,  see  Eule  51 ;  Dan.  Forms,  p.  325 ;  Eules  of  1883, 
Order  XXXII. 

As  to  enforcing  production  of  documents  referred  to  in  affidavit  or  pleading, 
see  Eules  357,  359,  360,  and  Quilter  v.  Heatley,  23  C.  Div.  49 ;  31  W.  E.  331. 

As  to  subpoena  duces  tecum,  see  Eule  502. 

Examinaticju  and  iliscovenj  under  s.  115  of  the  Act. 

S.  115  of  the  Act  provides  that,  "the  Court  may,  after  it  has  made  an  order 
for  winding-up  a  company,  summon  before  it  any  officer  of  the  company  or  per- 
son known  or  suspected  to  have  in  his  possession  any  of  the  estate  or  effects  of 
the  company,  or  supposed  to  be  indebted  to  the  company,  or  any  person  whom 
the  Covu-t  may  deem  capable  of  giving  information  concerning  the  trade,  deal- 
ings, estate,  or  effects  of  the  company ;  and  the  Court  may  require  any  such 
officer  or  person  to  produce  any  books,  papers,  deeds,  writings,  or  other  docu- 
ments in  his  custody  or  power,  relating  to  the  company  ;  and  if  any  person  so 
summoned,  after  being  tendered  a  reasonable  sum  for  his  expenses,  refuses  to 
come  before  the  Court  at  the  time  appointed,  having  no  lawful  impediment 
(made  known  to  the  Court  at  the  time  of  its  sitting,  and  allowed  by  it),  the 
Court  may  cause  such  person  to  be  apprehended,  and  brought  before  the  Court 
for  examination  ;  nevertheless,  in  cases  where  any  person  claims  any  lien  on 
any  papers,  deeds,  or  writings  or  documents  produced  by  him,  such  production 
shall  be  without  prejudice  to  such  lien,  and  the  Court  shall  have  jurisdiction  in 
the  winding-up,  to  determine  all  questions  relating  to  such  lien."     See  also  s.  117. 

The  powers  conferred  by  the  above  section  are  fi-equently  exercised,  e.g. 
(1),  where  the  liquidator,  from  an  examination  of  the  books  and  papers  of  the 
company,  or  otherwise,  has  reason  to  suspect  that  there  may  be  some  claim 
under  s.  165  {infra,  p.  507)  ;  or,  (2),  where  he  thinks  there  may  be  ground  for 
taking  proceedings  for  an  action  against  promoters  or  others;  or,  (3),  where 
proceedings  are  pending  against  the  company,  and  he  desires  to  ascertain 
whether  he  can  i^rudently  proceed  with  or  defend  an  action.  Massey  v.  Allen, 
9  C.  D.  165  ;  Bateman's  case,  15  W.  E.  245  ;  15  L.  T.  495. 

It  is  not  necessary  to  make  out  a  prim''  facie  case  before  the  summons  will  be 
issued  ;  a  case  of  suspicion  may  be  enough.     Be  Gold  Co.,  12  C.  Div.  77. 

For  cases  of  examination,  see  English  Joint  Stock  Bank,  3  Eq.  203  ;  Swan's 
case,  10  Eq.  675  ;  Fricker's  case,  13  Eq.  178  ;  Financial  Insurance  Co.,  36  L.  J. 
Ch.  687 ;  Trowen  and  Lawson's  case,  11  Eq.  8 ;  Clement's  case,  13  Eq.  179 ;  Be 
Cathcart,  5  Ch.  703  ;  Buckley,  267.  As  to  interrogatories,  see  Alexandra  Co., 
1(!  C.  D.  58.  As  to  api^eal  by  witness,  Silkstone  Co.,  19  C.  Div.  118;  Heiron's 
case,  15  C.  Div.  139. 

In  order  to  obtain  a  summons  the  licjuidator  need  not  file  an  affidavit ;  he 
makes  a  written  statement.  Be  Gold  Co.,  12  C.  Div.  77;  Carter's  case,  19  W.  E. 
55  ;  23  L.  T.  446.  Prima  facie  the  examinations  will  be  entrusted  to  the  liqui- 
dator, but,  if  he  refuses  to  act,  the  Court  may  authorise  some  creditor  or  cou- 


EXAMINATIONS  UNDEE  S.    115.  505 

tributory.     Silkstone   Co.,  19  C.  Div.  118.     As  to  who  may  attend,  see  Grey's   Form  628. 
Brewery,  25  C.  D.   iOO  ;  32  W.  E.  381  ;  50  L.  T.  14.     Supra,  p.  483. 

Formal  payis  .-  src  sujira,  Fomi  3H1. 

A.  B.,  of,  ifcc,  and  E.  F.,  of,  etc.,  are  hl)y  severally  snininoiietl  to  Form  629. 
attend  at  the  chambers  of  the  Master  of  the  Rolls  [(xr  A'ice-Chancellor  Summons  to 

],  in  the  Rolls  Yard,  Chancery  Lane  [_or  No. ,  Lincoln's  Inn],  attend  for 

in  the  Comity  of  Middlesex,  on day  of ,  1  s— ,  at of  the  sfn!'!!^  ^°"' 

clock  in  the noon,  to  he  examined  on  the  i)t  of  the  off',  liq.  \_or  of 

W.  1).,  of,  &c.]  f(jr  the  ppose  of  proceeding's  directed  by  the  Master  oi 
the  Rolls  [_or  the  sd  Vice-ChancellorJ,  to  be  taken  before  me  in  the 
abo\e  matter.  [And  the  sd  A.  B.  is  hby  required  to  bring  with  him  and 
produce,  at  the  time  and  place  afsd,  a  certain  indre  [describe  don /nits'], 
and  all  other  books,  papers,  deeds,  ^vritings  and  other  documts  in  liis 
custody  or  power  in  anywise  relating  to  the  above-named  co]. 

Dated  this day  of ,  IH— .  C.  H.,  C7ti'ef  Clerk: 

This  smnmons  -was  taken  out  by  Messrs.  C.  &  I).,  of  ,  in  the 

county  of ,  solors  for  the  off.  liq.  [or  for  the  sd  AV.  D.]. 

The  attendance  of  a  "witness  for  examination  under  s.  115  of  the  Act,  should 
he  secured  by  chief  clerk's  summons  as  above  (which  is  copied  from  Form  54 
in  Schedule  to  Rules),  and  not  by  suVjpcena.  Re  English  Joint  Steele  Co.,  3  Eq. 
203.  In  order  to  procure  the  issue  of  the  summons  an  appointment  should 
be  obtained,  and  if  the  circumstances  stated  to  the  chief  clerk  justify,  he  will 
issue  the  summons.  See  as  to  the  practice.  In  re  Gold  Co.,  12  C.  Div.  82  ;  and 
Buckley,  268  et  seq. 

If  the  person  summoned  does  not  attend,  the  Court  will  make  an  oi'der 
requiring  him  to  attend.     Lisbon  Steam  Tramu-ays  Co.,  2  C.  D.  575,  infra,  p.  500. 

The  power  given  by  this  section  is  frequently  exercised  especially  with  a  view 
to  proceedings  under  s.  1G5  of  the  Act.     See  In  re  Gold  Co.,  ubi  siqyra. 

The  witness  is  entitled  to  counsel,  and  to  re-examination.  Cambrian  Co., 
20  C.  D.  370. 

As  to  what  the  witness  must  disclose,  see  Silkstone  Co.,  19  C.  Div.  118; 
Buckley,  271. 

Upon  the  applicon  of  the  off.  Hq.,  itc,  by  summons  dated  21  April,  Form  630. 
1877,  and  upon  hearing  the  solors  for  the  applicant,  and  upon  reading  onler^ivin"^ 
the  orders  in  these  matters  dated  res])ively  7  July,  187G,  and  4  August,  Hherty  to 
187t),  and  the  afft  of  B.  of  service  of  the  sd  summons  on  the  persons  ''"™™°"' 
hereinafter  named,  filed  :'>  .May,  1877  :  The  judge  doth  hby  appoint  M. 

of  ,  esquire,  barrister-at-law,  special  examiner  for  the   impose   of 

taking  the  evidence  of  witnesses  in  these  matters  ;  And  let  the  sd  off. 
liq.  be  at  libty  to  summon  before  the  sd  special  examiner  the  following 
persons  for  the  ppose  of  their  being  examined  respecting  the  affairs  of 
the  sd  CO,  that  is  to  say,  H.  L.,  R.  L.,  F.,  S.,  B.  &  G.  3/endq)  Hematile, 
dr.,  Co.,  Malins,  V.-C,  3  May,  1877.     B.  808. 

Formerly  an  order  as  above  was  not  uncommon,  biit  since  the  new  rules  as  to 
examiners  the  appointment  of  a  special  examiner  will  probably  be  less  common. 
See  supra,  p.  502. 

In  the  margin  of  the  summons  it  is  usual  to  write  the  follow.ing  note :  "  Take 
notice  that  on  the  return  of  this  summons  it  will  be  forthwith  adjourned  to 
.  esq.,  the  examiner  appointed  in  this  matter,  before  whom  you  will  be 


506 


WINDING-UP. 


Form  630.    iii^mediately  refiiiirtd  to  attend,  in  order  tliat  your  examination  may  be  pro- 
—   copded  with."     And  on  the  return  the  Chief  Clerk  indorses  the  summons. 


Another  form 
providing  for 
shortliand 
notes. 


Form  631.  U])()ii  tlic  applicou  of  P.  &  AV.,  tlic  off.  liqs.  of  the  co,  &;c.,  Let  J.  be 
appointed  s]3ecial  examiner  to  take  the  examination,  cross-examination, 
!ind  re-examination  of  the  sd  B.  and  others  in  reference  to  the  affairs, 
l)pty  and  effects  of  the  above-named  co  and  the  other  cos  amalgamated 
tlierewith,  And  let  by  consent  such  examination,  cross-examination,  and 
re-examination  be  taken  do\Yn  by  a  short-hand  Amter,  and  when  taken. 
let  the  depositions,  authenticated  by  the  signature  of  the  sd  examiner,  be 
transmitted  by  him  to  the  [Record  &  Writ  Clerks'  Office  of  the  Ch.  Div. 
of  this  C't],  there  to  be  filed  :  And  order  that  such  depositions  may  be 
read  in  evidence  in  the  course  of  any  proceedings  taken  in  the  above 
matters  with  the  authority  of  the  judge  to  Avhose  Ct  the  same  may  for 
the  time  being  be  attached.  (Jape  Breton  Co.,  Limld,  Malins,  V.-C,  11 
May,  1878.     A.  849. 

It  is  very  common  to  employ  a  shorthand  writer  in  such  cases.  When  the 
shorthand  notes  have  been  transcribed,  they  must  be  read  over  to  the  witness, 
and  he  must  be  called  on  to  sign  the  deposition.  In  re  Sir  John  Moore  Mining 
Co.,  W.  N.  1878,  87. 

Form  632.       Upon  the  api)licon  of  J.,  the  off.  liq.,  <S:c.,  that  A.  &  H.  niight  be 
Another.  ordered,  upon  receiving  due  and  reasonable  notice,  to  attend  at  their 

own  expense  before  ,  esquire,  the  special  examiner  appointed  in 

these  matters,  at  his  chambers,  No. ,  New  Square,  Lincoln's  Inn, 

and  be  examined  pursuant  to  the  Chief  Clerk's  summons  dated  25  May, 
1878,  and  that  the  sd  A.  &  H.  might  be  ordered  to  pay  the  costs  of  the 
adjournrat  ])efore  the  judge  in  chambers  on  the  5th  of  June,  1878,  and 
the  costs  of  and  consequent  upon  the  sd  ajDplicon  which  upon  [ad- 
journed into  Ct],  and  upon  hearing,  &c.,  and  upon  reading,  &c..  Order 
that  the  sd  A.  &  H.  do  at  such  time  and  place  as  the  sd  examiner  shall 
'Ppoiut  attend  and  be  sworn  and  examined  as  witnesses  in  these  matters. 
And  order  that  the  costs  to  be  taxed  by  the  taxing  master  of  the  ajipli- 
cant  of  the  sd  applicou  in  chambers  and  occasioned  by  the  adjournmt 
thereof  into  Ct,  including  the  costs  of  the  Chief  Clerk's  summons  dated 
•2'')  May,  1878,  be  allowed  out  of  the  assets  of  the  sd  co.  InternaUonal 
( 'unlnirl  Co.,  Hall,  V.-C,  29  June,  1878.     A.  1.330. 

Form  633.       Upon  the  ajiplicou  of  the  off.  liq.  of  co  to  examine  S.  of  as  a 

Another.  witness  in  these  matters,  and  upon  hearing  the  solor  for  the  sd  off.  liq. 

and  tlic  solor  for  the  sd  8.,  ajid  upon  reading  an  order,  &c.,  Order  that 
the  sd  S.  do,  upon  paymt  of  his  i)roper  expenses,  attend  before  Y.  of 

,  barrister-at-law,  the  special  examiner  appointed  in  the  above  matters 

on  the  20th  of  June,  1877,  at  11  o'clock  in  the  forenoon,  to  be  examined 
on  the  pt  of  the  sd  off.  liq.  foi-  the  ]ipose  of  proceedings  directed  to  be 
taken  l)y  the  judge  \n  the  above  matters,  x\nd  the  sd  S.  is  hby  required 
to  bring  with  him  and  produce  at  the  time  and  place  afsd  all  books, 
deeds,  writings,  and  other  docuints  in  his  custody  or  power  in  anywise 
relating  to  the  sd  co.    ^Saturn  Silcer  Mining  ( 'o.,  18  June,  1877.    B,  1045. 


MISFEASANCE  AND  BREACH  OF  TRUST.  507 


Examination  of  Peesons  in  Scotland. 

S.  127  of  the  Act  of  1862  empowers  the  Court  to  direct  the  examination  in 
Scotland  of  any  person  for  the  time  being  in  Scotland,  whether  a  contributory 
of  the  company  or  not,  in  regard  to  the  estate,  dealings,  or  affairs  of  any  com- 
pany in  the  course  of  being  wound  wp,  or  in  regard  to  the  estate,  dealings,  or 
affairs  of  any  jierson  being  a  contributory  of  the  company,  so  far  as  the  coni- 
13any  may  be  interested  therein  by  reason  of  his  being  such  contributory,  and 
contains  provisions  as  to  the  mode  in  which  the  examination  is  to  be  effected. 

For  order,  see  Contract  Corporation,  M.  E.,  20  Nov.,  1877.     A.  ll'.il. 


Misfeasance  and  hreacli  of  trust :  s.  105  of  the  Act. 

S.  165  provides  that,  "  Where  in  the  course  of  the  winding  up  of  any  com- 
pany under  this  Act,  it  appears  that  any  past  or  present  director,  manager, 
official  or  other  liquidator,  or  other  oificer  of  such  company,  has  misapplied  or 
retained  in  his  own  hands  or  become  liable  or  accountable  for  any  monies  of 
the  company,  or  been  guilty  of  any  misfeasance  or  breach  of  trust  in  relation 
to  the  company,  the  Court  may,  on  the  apj^lication  of  any  liquidator,  or  of  any 
creditor  or  contributory  of  the  company,  notwithstanding  that  the  offence  is 
one  for  which  the  offender  is  criminally  responsible,  examine  into  the  conduct 
of  such  director,  manager,  or  other  officer,  and  compel  him  to  repay  any  monies 
so  misapplied  or  retained,  or  for  which  he  has  become  liable  or  accountable, 
together  with  interest  after  such  rate  as  the  Court  thinks  just,  or  to  contribute 
such  sums  of  money  to  the  assets  of  the  company  by  way  of  compensation  in 
respect  of  such  misapplication,  retainer,  misfeasance,  or  breach  of  trust,  as  the 
Court  thinks  just." 

Orders  are  frequently  made  under  the  above  section.  The  application  is 
usually  made  by  the  official  liquidator  by  summons,  supjjorted  by  the  requisite 
evidence.  In  many  cases,  before  taking  proceedings,  the  official  liquidator 
obtains  the  appointment  of  a  special  examiner  under  s.  115  [supra,  p.  502,  et 
.seq.']  and  examines  before  him  the  supposed  delinquent  and  other  persons 
capable  of  throwing  light  on  the  transaction  in  question.  The  following  are 
some  of  the  cases  in  which  orders  have  been  made  under  this  section.  Stringer's 
•case,  4  Ch.  475 :  Director  ordered  to  rej)ay  dividend  declared  and  paid  to  him 
under  fx-audulent  and  delusive  balance  sheet.  Ranee's  case,  6  Ch.  104  :  Director 
ordered  to  rei)ay  bonus  improperly  paid  to  him.  National  Funds  Assurance  Co., 
10  C.  D.  118:  Directors  ordered  to  repay  dividends  improperly  paid  to  share- 
holders out  of  capital.  Alexandra  Palace  Co.,  21  C.  D.  149  ;  Fliteroft's  case,  21 
C.  Div.  519  ;  31  W.  R.  174 ;  British  Imperial  Assurance  Corp.  :  Similar  orders 
against  dix-ectors.  [See  Form  637,  infra.^  McKay's  case,  2  C.  Div.  1 :  Secre- 
tary ordered  to  pay  full  nominal  value  of  paid-up  shares  given  him  by  vendor. 
De  Riivigne's  case,  5  C.  Div.  306  ;  and  Pearson's  case,  o  C.  Div.  336  :  Similar 
orders  against  directors  whose  qualiiication  shares  had  been  given  them.  Mit- 
calfe's  case,  13  C.  Div.  169 :  Similar  order  against  director  who  had  accepted 
shares  from  promoter.  [See  Form  544.]  National  Fuiids  Assurance  Co.  -.  Direc- 
tors ordered  to  make  good  amount  which  ought  to  have  been  invested  in  Govern- 
ment Securities,  viz.,  half  the  premiimis  paid  by  policy  holders.  [See  Form 
C36, infra.]  Similar  order  against  directors  in  British  Guardian  Life  Assurance 
Co.,  14  C.  D.  335  ;  28  W.  E.  945.  Englefield  Co.,  8  C.  Div.  388,  and  Form  634, 
infra  ;  Directors  ordered  to  make  good  a  sum  paid  to  a  promoter  "  for  prelimi- 
nary expenses,"  out  of  which  the  directors'  qualifications  were  provided.  Rail- 
way, ^c,  Co.,  Marzetti's  case,  28  W.  E.  541  ;  42  L.  T.  206:  Director  ordered  to 
repay  sums  paid  nominally  for  preliminary  expenses,  but  really  for  rigging  the 
market.     In  re  Public  Su2:>ply  Association,  W.  N.  1880,  106  :  De  facto  director 


50H  WINDING-UP. 

ordered  to  pay  nominal  value  of  shares  taken  and  paid  for  by  him,  with  fees 
improperly  paid  him  by  the  board. 

S.  165  does  not  create  any  new  liability  or  right,  but  only  provides  a  more 
convenient  means  of  enforcing  rights  and  remedies  which  would  have  been 
enforceable  by  action  if  there  had  been  no  winding  up.  Canadian  Land,  S(c., 
Co.,  Coventry  cj'  Dixon's  case,  14  C.  Div.  66G  ;  28  W.  E.  775.  In  this  case 
Jessel,  M.  E.,  had  ordered  directors  who  had  acted  without  the  requisite  quali- 
fication shares  to  pay  to  the  liquidator  the  amount  which  they  would  have  had 
to  pay  therefor,  but  the  order  was  reversed  on  appeal.  See  also  Forest  of  Dean 
Co.,  10  C.  D.  450  ;  27  W.  E.  594;  and  Re  Cape  Breton,  W.  N.  1884,  54. 

An  order  under  s.  105  cannot  be  made  against  the  executors  of  a  deceased 
director.  In  re  British  Guardian,  Sfc.,  Co.,  ubi  supra.  But  they  may  in  some 
cases  be  made  liable  in  an  action,  see  s^lJ)ra,  p.  389,  and  Form  340. 

As  to  delay  barring  a  claim,  see  Metropolitan  Bank  v.  Heiron,  5  Ex.  Div.  319, 
and  Flitcroft's  case,  21  C.  Div.  519  ;  Re  Alexandra  Palace  Co.,  21  C.  D.  150,  and 
supra,  p.  239 ;  Buckley,  367. 

Where  a  director  was  ordered,  under  s.  165,  to  pay  the  full  nominal  value  of 
the  shares,  it  was  held  that  he  was  not  "a  trustee  or  person  acting  in  a  fiduciary 
capacity,"  within  the  third  exception  to  s.  4  of  the  Debtors  Act,  1869,  and 
accordingly  could  not  be  committed  to  prison  for  default  in  paying.  Diamond 
Fuel  Co.  (2),  13  C.  D.  815  ;  28  W.  E.  435. 

The  summons  usually  seeks  a  declaration  of  liability.  See  the  orders  below, 
and  British  Seamless  Co.,  17  C.  Div.  470;  Alexa7idra  Pal.  Co.,  21  C.  D.  150  ;  Re 
Great  Wheal  Polgarth  Co.,  49  L.  T.  20. 

Prima  facie  the  company's  solicitor  is  not  an  officer  within  this  section.  Re 
Great  Wheal  Polgarth  Co.,  49  L.  T.  20. 

Non-feasance  is  not  misfeasance  within  this  section.  Forest  of  Dean,  10  C.  D. 
450 ;  Wedgwood  Co.,  47  L.  T.  612  ;  31  W.  E.  181. 

No  set-off  is  allowed  upon  a  proceeding  under  this  section.  Flitcroft's  case, 
21  C.  Div.  519;  A7iglo-French  Soc,  21  C.  D.  492;  Milan  Tramways,  22  C.  D. 
122  ;  31  W.  E.  107,  and  Addenda. 

A  claim  under  s.  165  is  a  chose  in  action,  which  may  be  sold  and  assigned 
under  s.  95.  Park  Gate  Co.,  17  C.  Div.  234.  Accordingly,  parties  who  are 
liable  to  proceedings  under  that  section  sometimes  find  it  worth  while  to  buy 
the  whole  assets,  paying  a  composition  to  creditors,  and  the  costs  of  the  wind- 
ing up. 

Torm  634.       Upon  the  applicon  of ,  the  off.  liq.,  &c.,  Declare  that  the  sd  C, 

'~'     .  H.,  P.,  S.,  and  W.,  directors  named  in  the  prospectus  of  the  sd  co,  are 

repayment  of  jointly  and  Severally  liable  to  pay  the  sum  of  3000/.,  being  the  balance 

money  after  ffivino'  credit  for  the  sum  of  500/.  already  received  by  the  sd  off. 

improperly  o         o  j  j 

paid  for  Hq.  of  the  sum  of  3r)00/.,  the  amount  pd  to  S.  in  respect  of  preliminary 

«v!i™lT'^^  expenses  and  retained  or  applied  by  the  sd  S.  for  pposes  other  than  pre- 
liminary expenses  properly  payable,  together  with  interest  at  the  rate  of 
;')  p.  c.  p.  a.  on  the  sd  3500/.  from  the  I'espive  dates  of  the  paymt  of  the 
cheques  to  the  sd  S.  as  shown  by  the  sd  afft  of,  &c.,  as  follows,  namely, 
1200/.  on,  &c.  [and  so  fortK],  And  order  that  the  sd  C,  &c.,  do  within 
14  days  from  the  date  of  this  order,  or  within  4  days  after  service  of 
this  order,  jointly  and  severally  pay  the  amount  of  the  sd  sum  of  3000/. 
and  such  interest  as  afsd  to  the  sd  S.,  the  off.  liq.  of  the  sd  co.  And 
order  that  the  sd  C,  &c.,  do  pay  to  the  sd  off.  liq.  the  costs  of  and 
incident  to  this  applicon  and  consequent  thereon,  such  costs  to  1)C  ta.xed, 
&c.  bJmilefidd  Colliery  Co.,  LimlJ,  ^lalins,  Y.-C,  28  July,  1877.  A. 
1720.     8  r.  Div.  288. 


expenses. 


MISFEASANCE  AND  BEEACH  OF  TRUST.  599 

Upon  the  applicon  of  B.,  the  liq  of  the  above-named  co,  Sec,  and  Form  635. 
the  Ct  being  of  opinion  that  the  persons  named  in  the  schedule  hto  are  ^j  , 
jointly  and  severally  liable  to  refund  the  sum  of  000/.  in  respect  of  directors  to 
monies  of  the  sd  co  improperly  retained  by  them  while  directors  for  the  \^^^  monies 
ppose  of  paying  up  the  20  shares  held  by  each  of  them  therein,  and  retained  to 
interest  thereon  as  hereinafter  mentd  :  Order  that  the  sd  several  persons  i^|^y  i^^''^"^'-*- 
named  in  the  schedule  hto  pay  to  the  sd  B.,  the  liq  of  Vie  sd  co,  at  his 

office,  Xo. , Street,  &c.,  Avithin  4  days  after  the  service  of  this 

order  on  each  of  them  respively,  the  sum  of  1053Z.  135.  7d.,  being  the  sd 
sura  of  900/.  so  retained  by  them,  as  directors  with  the  sum  of 
153/.  13s.  7d.  for  interest,  less  income-tax,  due  to  the  date  of  this  order 
at  the  rate  of  5  p.  c.  p.  a.  from  the  date  when  the  sd  monies  making  up 
the  sd  sum  of  1)00/.  were  respively  retained  after  deducting  income-tax, 
And  order  that  the  sd  several  persons  named  in  the  sd  schedule  do  also 
pay  to  the  sd  B.  interest  at  the  rate  afsd  on  the  sd  '.)()()l.  from  the  date 
of  this  order  until  paymt.  Paf/'/if  Cocoa  Fibre  Co.,  Bacon,  Y.-C,  1878. 
B.  G4.5. 

Upon  the  applicon  of  the  off.  liq.  and  of,  &c..  Declare  that  each  of  the  Form  636. 
sd  directors  of  the  co  is  jointly  and  severally  liable  to  the  extent  of  half  order  on 
the  premiums  received  by  them  respively  dming  the  respive  periods  directors  to 
when  they  were  such  directors  after  deducting  the  amount  of  death  \diicrou^Air'' 
claims  pd  under  policies  and  any  sums  pd  for  surrender  value  of  jwlicies,  *«  l'"^«  '^^en 
And  let  the  j^ersons  named  in  the  first  column  of  the  schedule  hto  (being 
the  sd  directors)  on  or  before  17  Dec,  1877,  or  subsequently  within  -4 
days  after  service  of  this  order,  pay  into  Ct  to  the  credit  of  this  matter, 
*'  In  the  matter,  ttc,"  to  an  account  to  be  intituled  "  Policy  Guarantee 
Account,"  the  sums  in  the  second  column  of  the  sd  schedule  set  opposite 
the    names   of    such   persons    respively   amounting   in   the    whole   to 
028/.  ISs.  bd..  And  let  C,  &c.,  pay  to  the  apphcants  their  costs  of  the 
applicon  in  chambers  and  of  and  incident  to  this  order,  to  be  taxed,  &c. 
National  Funds  Co.,  Isl.  R.,  17  Nov.,  1877.     B.  3675.     This  order  is 
referred  to  in  Pie  British  Guardian  Co.,  1-1  C.  D.  335. 

Upon  the  ap})licon  of  H.,  the  off.  liq.,  &c..  Declare  that  all  persons  Form  637. 
being  directors  of  the  co,  who  in  any  manner  authorised,  sanctioned,  or  ^7^  ^  ^j   j 
participated  in  the  paymt  to  shareholders  of  interest  on  their  respive  ing  liability  of 
shares  out  of  the  caj)ital  of  the  sd  co  are  jointly  and  severally  liable  to  l-efu^^ii'^iyi. 
repay  to  the  off.  liq.  of  sd  co  the  amount  so  pd  M-ithout  prejudice  to  the  dends  jaid  out 
rights  of  the  directors  so  liable  after  they  shall  have  pd  to  the  off.  liq.  ?^  'JJ^^'J^  '"*'' 
the  amounts  due  from  them  respi\'ely  to  recover  the  same  from  the 
shareholders  who  received  such  paymts  ;  And  let  the  following  inquiries 
be  made  :    1.  An  inquiry  what  were  the  amounts  of  the  A"arious  paymts 
so  made  respively,  and  when  aiul  to  whom  the  same  were  respively  made. 
2.  An  inquiry  what  persons  were   directors  of  the  sd  co  at  the  respive 
times  when  such  paymts  were  made  and  which  of  them  in  any  way 
authorised,  sanctioned,  or  participated  in  the  making  of  such  paymts  ; 


510 


WINDING-UP. 


Form  637.  And  costs  of  oft",  liq.  of  applicon  to  be  taxed  and  allowed  out  of  assets  of 
CO.  Briiisli  TmperiuJ  Insurance  Corporation,  lldk\\,\.-Q.,  4:  Aug..  187t». 
A.  2173. 


Form  638. 

Order  against 
directors  after 
inquiry. 


See  Flitci-oft's  case,  21  C.  Div.  510  ;  Re  Alexandra  Palace,  21  C.  D.  150. 

Upon  the  applicon  of  off.  li(|.  of  co  and  of  B.,  a  whole  life  policy 
holder  of  co,  to  further  proceed  with  the  summons  in  these  matters  issued 
2(1  May,  187!>,  and  upon  hearing,  &c.,  Order  that  jDursuant  to  the  sd 
order  of  15  Mar.,  1880,  and  the  chief  clerk's  certificate  dated  27  July, 
]  880,  the  .several  persons  named  in  the  1st  column  of  schedule  hto,  being- 
some  of  the  directors  of  co.,  do  on  or  l^efore  31  Mar.,  1881,  or  sub- 
sequently within  14  days  after  service  of  this  order,  pay  to  ott".  licp  at  his 
office,  situate,  &c.,  the  respive  sums  set  opposite  their  respive  names  in 
the  2nd  column  of  schedule,  being  the  sums  for  which  such  persons 
respively  are  liable  in  respect  of  uninvested  premiums  on  whole  life 
policies  of  sd  co,  and  [resjjondenfs  to  imy  costs  of  ajypIico7is'].  Schedule 
showing  bonus  and  amounts.  British  Guardian  Life  Assurance  Co.y 
Hall,  V.-C,  17  Mar.  1881.     A.  643. 


secujity. 


Form  639.       Upon  the  applicon  of  W.  &  B.  by  summons  dated  21  Feb.,  1877,  that 
Order  on  ^'  ^^®  ^^"  ^^^'  ^^  ^^'  ^^  ^^®  ^^  ^°  might  be  ordered  within  7  days  to  give 

application  Ly  security  for  the  costs  of  the  applicants  of  certain  proceedings  instituted 
secuHtv^"*'^''  ^'y  ^^^^  ^^  ^-  ^^  such  off.  liq.  for  the  recoveiy  of  the  sum  of  5V),000/.  from 
tlie  late  directors  of  the  sd  co,  and  that  in  the  meantime  such  pro- 
ceedings might  be  stayed  as  against  the  applicants,  and  upon  hearing 
('(junsel,  &c.,  and  upon  reading,  &c.,  and  the  sd  G.  undertaking  per- 
sonally to  pay  any  costs  to  which  the  applicants,  being  the  respondents 
to  the  sd  applicon  made  by  him,  may  be  held  to  be  entled  and  ]iaymt 
whereof  they  shall  not  obtain  from  the  sd  co,  The  Judge  doth  not  think 
tit  to  make  any  order  upon  the  sd  summons  except  that  the  costs  of  the 
applicon  be  costs  in  the  sd  proceedings  taken  by  the  sd  off.  liq.  against 
such  respondents.  Baseije  Consolidated  Silver  Co.,  Hall,  Y.-C,  16  Ap., 
1877.     A.  811. 

For  orders  in  actions  against  directors,  see  "  Orders,"  supra. 


Compromises. 

S.  KiU  of  the  Act  provides  as  follows  : 

"  IGO.  The  liquidators  may,  with  the  sanction  of  the  Court,  whei'e  the  com- 
pany is  being  wound  iip  by  the  Court  or  subject  to  the  supervision  of  the  Court, 
and  with  the  sanction  of  an  extraordinary  resolution  of  the  company  where  the 
company  is  being  wound  up  altogether  voluntarily,  compromise  all  calls  and 
liabilities  to  calls,  debts,  and  liabilities  capable  of  resulting  in  debts,  and  all 
claims,  whether  present  or  future,  certain  or  contingent,  ascertained  ox  sound- 
ing only  in  damages,  subsisting  or  supposed  to  subsist  between  the  company 
and  any  contributory  or  alleged  contributory,  or  other  debtor  or  person  appre- 
hending liability  to  the  company,  and  all  questions  in  any  way  relating  to  or 
affecting  the  assets  of  the  company  or  the  winding  up  of  the  company,  upon 
the  receipt  of  such  sums,  payable  at  such  times,  and  generally  upon  such  terms 


rOMPEOMlSES.  511 

as  may  be  agreed  upon,  with  power  for  the  liquidators  to  take  any  security  for   Form  640. 
the  discharge  of  such  debts  or  liabilities,  and  to  give  complete  discharges  in         '         ~      ' 
respect  of  all  or  any  such  calls,  debts,  or  liabilities." 

The  Court  has  no  jurisdiction  to  compel  a  liquidator  to  compromise.  Pear- 
son's case,  7  Ch.  309.  In  sanctioning  a  compromise,  the  Court  is  exercising  a 
judicial  discretion,  and  accordingly  evidence  of  the  propriety  of  the  compro- 
mise must  be  forthcoming.  Ex  pte.  Totty,  1  Dr.  &  Sm.  273  ;  G  Jur.  N.  S.  849. 
But  the  sanction  of  the  chief  clerk  is  sufficient,  though,  of  course,  any  of  the 
parties  can  require  the  matter  to  be  heard  Vjy  the  judge.  Ex  pte.  Garstin,  10 
W.  E.  457.     See  further  Buckley,  313. 

A  contributory  who  is  unable  to  pay  the  calls  made  on  him  generally  endea- 
vours to  effect  a  compromise.  In  such  case  he  is  very  commonly  required  to 
make  an  affidavit  as  to  his  means,  and  if  it  seems  desirable  he  can  be  cross- 
examined  thereon.  If  the  official  liquidator  is  satisfied,  he  will  enter  into  a 
provisional  agreement  with  the  contributory  embodying  the  terms  of  compro- 
mise, and  will  then  apjjly  for  the  sanction  of  the  Court.  See  Rule  49  and  Form 
50  in  Schedule  to  Eules.     See  also  Buckley,  317  et  seq. 

The  following  are  some  examples  of  affidavits  made  by  contributories  with 
view  to  compromise. 

1.  I  am  the  holder  of  100  sliares  in  the  above-named  co,  and  I  am  Form  640. 
unable  to  pay  the  two  last  calls  of  5/.  per  share  lately  made  npon  me  in  Affidavit  of     ^ 
respect  of  the  sd  shares.  contributoiy 

2.  The  paper  writing  now  shown  to  me  and  marked  witii  tlie  letter  A  compromise. 
contains  a  full  and  true  account  of  all  the  ppty  and  effects,  real  and 
personal,  which  I  possessed,  or  in  which  I  had  any  share  or  interest  in 
possession,  reversion,  or  expectancy  at  the  time  of  the  stoppage  of  tlie 

sd  CO  on  the of ,  and  also  of  all  such  pts  of  my  sd  ppty  as 

have  since  been  sold  or  contracted  to  be  sold,  and  the  jjrice  at  which 
such  sales  or  contracts  have  been  made,  and  as  nearly  as  I  can  ascertain 
the  full  and  true  value  of  all  such  pts  thereof  as  still  remain  to  l)e  sold. 

0.  I  have  no  ppty  whatsoever,  real  or  pei'sonal,  of  any  description, 
nor  am  I  eutled  either  in  possession  or  reversion  to  any  share  or  interest 
in  any  ppty  whatsoever  which  is  not  included  in  the  sd  statemt. 

4.  I  have  not  made  away  with,  incumbered,  or  charged,  settled,  or  in 
any  manner  parted  with  any  pt  of  my  ppty  or  effects,  real  or  personal, 
since  the  failure  of  the  sd  co  on  the  IGth  of  October,  187G,  save  as 
appears  by  the  sd  account. 

5.  The  paper  WTiting  now  produced  and  shown  to  me  marked  B  con- 
tains a  true  and  just  account  of  all  sums  of  money  received  and  pd  l)y 
me  since  the  16th  of  October,  187G,  down  to  the  6th  of  July  instant. 

G.  My  income  is  derived  from  a  salary  of  IGOI.  p.  a.,  which  I  receive 
from  my  employers  Messrs.  D.  &  C,  and  such  income  has  not  for  the 
last  two  years  exceeded  the  sum  of  IGO?.  p.  a. 

1.  I  am  settled  on  the  list  of  contribs  of  the  aliove-named  co  in  respect  Form  641. 
of  30  shares  in  the  sd  co.  Another! 

2.  The  sd  shares  were  pchased  and  held  by  me  in  my  own  right  and 
not  as  trustee  on  behalf  of  any  other  person  whomsoever. 


512 


WINDING-UP. 


Form  641. 


Form  642. 

Summons  to 
sanction  agree- 
ment for 
compromise. 


r>.  The  paper  writing  noAV  produced  and  shown  to  me  marked  A  con- 
tains a  fall  and  true  statemt  of  all  the  ppty  and  effects,  real  and  personal, 
which  I  possessed  or  in  which  I  had  any  share  or  interest  in  possession, 
reversion,  or  expectancy  at  the  time  of  the  commencemt  of  the  winding- 
up  of  the  sd  CO  on  the of ,  and  of  all  such  pts  of  my  sd  ppty 

as  have  since  been  sold  or  contracted  to  Ijc  sold,  and  the  price  at  which 
such  sales  or  contracts  have  been  made. 

4.  I  have  no  ppty,  &c.     I  have  not  made  away,  &c. 

5.  My  income  is  derived  from  my  occupation  as  a  commercial  tra- 
veller, and  amounts  to  the  sum  of  400/.  p.  a.  and  no  more,  which  sum  it 
has  not  exceeded  for  two  years  last  ]iast.  Out  of  the  sd  sum  I  have  to 
apply  the  sum  of  50/.  p.  a.  in  paying  tlie  premium  on  a  policy  for  1,000/. 
effected  on  my  life  in  the  year . 

C.  My  sd  income  is  barely  sufficient  for  the  support  of  myself  and  my 
family,  consisting  of  my  wife  and  three  children,  and  I  have  no  other 
means  of  support,  and  have  no  ppty  in  possession,  reversion,  remainder, 
or  expectancy,  or  any  prospect  of  coming  into  any  money  or  income 
from  the  death  of  friends  or  otherwise  other  than  that  mentd  in  the  sd 
paper  writing  marked  A. 

7.  I  owe  for  money  borro\^•ed  some  years  ago  500/.  and  have  no 
means  of  paying  the  same. 

On  the  pt  of  the  off.  liq.  of  the  above-named  co  that  an  agreemt  of 
compromise  dated,  &c.,  and- made  between  the  sd  off.  liq.  of  the  one  pt 
.  and  X.  one  of  the  contribs  of  the  co  of  the  other  pt  may  be  sanctioned. 

The  following  form  is  an  example  of  an  affidavit  of  a  liquidator  in  support. 
See  supra,  p.  511.  Where  the  agreements  are  numerous  the  liquidator  and  the 
contributory  should  make  a  joint  affidavit  to  save  expense. 


Form  643. 

Affidavit  of 
official  Hqui- 
dator  as  to 
]iroposed 
comiiromise. 


Formal  parts  :  see  supra,  Form  383. 

1_  H.  of has  been  settled  on  the  list  of  contribs  of  the  above- 
named  CO  in  respect  of  • •  shares  therein,  and  by  an  order  in  these 

matters  dated,  &c.,  a  call  of  20/.  per  share  has  been  made  on  him  in 
respect  thereof,  amounting  to  200/. 

2.  The  sd  H.  has  applied  to  me  to  accept  a  compromise  of  50/.  to  be 
pd  as  follows,  &c.,  and  five  guineas  towards  the  costs  of  the  agreemt  for 
the  sd  compromise  in  full  discharge  of  his  liability  in  respect  of  the  sd 
call  of  20/.  per  share,  and  all  liability  as  a  coutriby  of  the  sd  co. 

3.  I  have  investigated  the  affairs  of  the  sd  H.,  who  has  made  an  afft 

as  to  his  means,  filed  the day  of ,  and  have  caused  him  to  be 

cross-examined  on  such  afft  before  the  examiner  of  this  Ct,  and  as  the 
result  of  such  investigation  and  cross-examination  it  appears  that  the  sd 
H.  cannot  pay  the  sd  call,  and  I  believe  that  if  I  cause  him  to  be  made 
a  bankrupt  I  shall  not  ol)tain  from  his  estate  as  much  as  I  shall  by  the 
sd  compromise.  I  believe  that  it  will  be  beneficial  to  the  sd  co  that  the 
sd  compromise  shall  be  accepted. 


COMPROMISES.  513 

Form  644. 

Form  of  A(jrcehieni.  

A  form  of  agreement  between  the  official  liquidator  and  a  contributory  is 
given  in  the  schedule  to  the  Gen.  Order  of  Nov.  18G2,  No.  50,  and  that  form  is 
generally  followed  as  closely  as  may  be,  but  sometimes  the  contributory  agrees 
to  pay  a  sum  by  instalments,  and  the  following  clause  is  always  required  to  be 
inserted. 

C.  Provided  always  that  nothing  iierein  contd  sliall  prejudice  or  affect 
the  rights  of  the  sd  co,  or  of  tlie  sd  off.  liq.  or  of  the  ereditors  of  the  co 
against  any  contribs  of  the  sd  co,  whether  as  present  or  past  members 
thereof  or  otherwise,  and  that  the  liabiUty  of  such  )ncmbers  to  contribute 
to  the  assets  <if  the  co  shall  remain  the  same  as  if  this  agreemt  of  com- 
promise had  not  been  made,  exce])t  only  to  the  extent  of  tlie  sd  sum  of 
/.  so  to  be  pd  as  afsd. 

Upon  the  appliconof  theoflP.  liq.,  &c.,  Let  the  agreemt  for  compromise  < >i-dcr  sanction- 
^  ^  ^  1  '"?  agrecmeut 

dated,  itc,  and  made,  &c.,  be  sanctioned.  for  com- 

promise. 

Upon  the  applicon,  &c.,  Let  the  off.  liq.  of  the  sd  Bank  be  at  libty  to  Form  645. 
accept  from  the  applicant  the  smn  of  100/.  together  with  10/.  lO.s-.  0^/.  Order sanction- 
for  costs,  in  the  whole  110/.  10s.  Or/,  in  discharge  of  the  apphcant's  "^? ''"'^P™- 

'  Oil  mise. 

liability  as  a  contriby  of  the  sd  Bank  and  otherwise,  and  in  discharge  of 
all  claims  of  the  sd  Bank  against  him.  London  and  Sahurhan  Banlr 
Limid,  Hah,  V.-C, !)  :\ray,  187S.     S04  B. 

In  some  cases  in  order  to  avoid  the  expense  of  an  agreement,  the  liquidator 
applies  for  liberty  to  compromise,  as  in  the  above  case. 

Upon  the  applicon  of  AV.,  the  liq  of  co,  and  upon  hearing  the  solor  for  Form  646. 
the  sd  liq,  and  upon  reading  an  afft  of  M.  filed,  &c.,  Let  the  sd  liq  be  at  Another.  ~ 
libty  to  compromise  with  the  sd  j\L  in  respect  of  his  liability  for  calls 
due  to  the  sd  co  by  accepting  the  sum  of  20/.,  together  with  the  costs  of 
this  applicon,  such  costs  not  to  exceed  tlie  sum  of  5/.  bs.  Od.  in  full 
^satisfon  and  discharge  thereof.  Welsh  Sfeam  Coal,  19  Sep.,  1870. 
B.  IGO;). 

Comp'oniises  rcith  creditors  and  others. 

Upon  the  applicon  of  the  oflF.  liq.,  &g.,  Let  the  sdoflP.  liq.  be  at  libty  to  Form  647. 
compromise  the  action  commenced  by  tlie  above-named  co  (with  the  LiVertvto 
sanction  of  the  Ct)  against  i\[.  upon  the  terms  embodied  in  the  exhibit  official  liquidii- 
B.  to  the  aflft  of  the  sd  off.  li(|.  being  the  proposed  minutes  of  judgmt  in  i^ic^eaction!!'^' 
thesd  action  signed  by  the  solors  for  the  respive  defts.     MemUp  Hematite 
Co.,  Malins,  V.-C,  U  Jan.  1878.     B.  570. 

For  order   in  winding  up  giving  official   liquidator  liberty  to  compromise 
action  of  comjiany  against  Grant  and  others,  as  regards  two  of  the  defendants 
upon  payment  of  l.OOOL  a-piece,  see  Lisbon  Steam  Tramways,  Malins,  V.-C. 
13  June,  1878.     B.  1221.     And  see  Form  32G. 

L  L 


514  WINDING-UP. 

Form  647.  For  order  on  motion  giving  official  liquidator  liberty  to  compromise  landlord's 
claim,  2,000L  to  be  paid  Ijy  company,  and  certain  leaseholds  and  chattels  to  be 
given  tip  to  company,  see  Victoria  ^'  Fentov  Co.,  Bacon,  V.-C,  21  Jan.  1878. 
B.  429. 

For  order  giving  official  liqviidator  liberty  to  release  equity  of  redemi^tion  in 
patents,  see  Metal  Tube  Co.,  Hall,  V.-C,  17  Mar.  1878.  B.  478.  As  to  the  juris- 
diction, see  General  Share  Co.,  20  C.  Div.  2G0. 


Liberty  to 
compromise 
with  debtor 


Form  648.       Uijon  the  applicon  of  the  off.  hqs.,  TiCt  the  applicants  upon  W.  of 

paying  to  them  the  costs  of  and  incident  to  this  aj^plicon,  such  costs  to 
be  taxed  in  case  tlie  parties  diffei',  l)e  at  libty  to  accept  from  W.  hj  the 
instahuts  mentd  in  the  sd  afft  the  sum  of  ')7L  IGcV.  ^jd.  in  full  discharge 
of  a  debt  of  152?.  12s.  lid.  due  from  the  sd  ^X.  to  Bank  prior  to  its 
suspension,  such  delit  being  in  respect,  &c.,  Libty  to  off.  liqs.  to  apply 
as  to  costs  of  applicon  if  ^Y.  docs  not  pay.  West  of  Englaiul,  dr.,  BanlCy 
Fry,  J.,  7  July,  1K7D.     B.  1421. 


Compromise 

with 

mortgagee. 


Form  649.  Upon  the  applicon  of  S.  by  summons,  &c.,  and  the  sd  C  as  such  off' 
liq.  as  afsd  by  his  solors  admitting  that  the  sum  of  7G,300?.  is  now  due 
from  the  sd  co  to  the  sd  S.  for  principal  on  the  indres  of  mtge  and  bill 
of  sale  in  the  summons  and  afft  mentd,  and  the  sum  of  37t)()/.  for  interest 
thereon  up  to  this  day,  making  together  80,090/'.,  and  the  sd  C.  as  such 
off.  liq.  admitting  that  the  amount  due  to  the  sd  H.  largely  exceeds  the 
value  of  the  mtged  ppty,  And  tlie  sd  C\  as  sucli  off.  liq.  claiming  that 
sundry  chattels  now  on  or  about  the  works  and  land  comprised  in  the  sd 
mtge  are  not  suliject  to  the  sd  mtge  and  l)ill  of  sale  or  either  of  them  r 
And  the  sd  S.  without  admitting  such  claim  agreeing  to  pchase  all  the 
interest  (if  any)  of  the  sd  co  or  the  sd  off.  liq.  thereof  in  the  sd  chattels 
for  the  sum  of  200/. :  It  is  by  consent  ordered  that  the  sd  co  as  from 
the  date  hereof  staiid  absolutely  debarred  and  foreclosed  of  and  from  all 
right,  title,  interest  and  equity  of  redenqition  of  aud  in  the  sd  mtged 
ppty  :  And  let  the  sd  co  and  the  sd  off.  liq.,  u[)on  paymt  by  the  sd  S.  tO' 
the  sd  off.  liq.  of  the  sum  of  200/.  and  upon  l)eing  required  so  to  do,, 
release  and  convey  the  sd  equity  of  redemption  and  all  right,  title  and 
interest  to  and  in  the  sd  chattels  to  the  sd  S.  or  as  he  shall  direct  at  his 
expense,  and  either  party  is  to  be  at  liljty  to  apply  as  he  or  they  may  be 
advised.     Britannia  Iron  W()rki<.  s  Auu\  1877.     A.  lool. 


Form  650. 

Order  giving 
liberty  to 
compromise. 


Upon  the  appbcon  of  W,  P.  &  L.  the  liqs  of  the  above-named  co,  and 
upon  hearing  the  solors  for  the  ai)})licants,  and  upon  reading  the  London 
Gazette,  of  the  15th  June,  1875,  containing  a  notice  of  resolution  to 
wind  up  the  sd  co  voluntarily  and  of  the  appointmt  of  liqs,  and  upon 
reading  an  afft  of  W.  P.  &  L.  filed  1  Aug.  1877  :  Order  that  the  sd  liqs 
be  at  libty  to  compromise  the  cross  claims  made  in  the  proceedings  for 
winding  up  by  the  sd  co  on  the  one  hand  against  Messrs.  T.  W.  &  Sons,^ 

of ,  and  the  sd  Messrs.  T.  W.  &  8ons  against  the  sd  co  on  the  other 

hand,  upon  the  terms  of  the  sd  co  and  the  sd  Messrs.  T.  "W.  &  Sons. 


MEETINGS    IN    WINDING-UP.  515 

mutually  foregoing  and  releasing  the  sd  claims  against  one  another.  Form  650. 
Hum2)hreys  &  Pearson,  ]\[alins,  Y.-C,  (J  Ang.  1877.     A.  1032. 

Although  the  above  and  the  following  orders  were  made  in  a  voluntary 
winding-up,  they  are  of  course  equally  useful  as  precedents  in  a  compulsory 
"winding-up. 

For  order  giving  liberty  to  refer  to  arbiti'ation,  see  supra.  Form  502. 


Upon  the  applicon  of  "W.  the  off.  liq.  of  the  ahove-uanied  co,  by  smii-  Form  651. 
mons,  dated,  &c.,  for  leave  to  take  proceedings  to  enforce  ])aymt  of  the  Compromise, 
amount  due  by  T.  :  Order  that  the  agreemt  dated  the  20  Oct.,  1883, 
made  between  W.  the  off.  liq.  of  the  one  pt,  and  T.  of  the  other  pt,  to 
compromise  the  debt  of  2,100/.  due  from  the  sd  T.  as  a  contriby  of  the 
sd  CO,  by  accepting  the  sum  of  200/.  in  discharge  thereof  by  the  paymt 
of  lOOZ.  in  cash,  and  two  promissory  notes  of  50/.  each  respively,  paya])le 
on,  &c.,  the  sd  T.  waiving  his  claim  of  1,181/.  2^.  8d.,  certified  to  l)e 
due  to  him  by  the  sd  co  by  the  chief  clerk's  certificate,  dated  IGth  day  of 
March,  1883,  be  coniirmed  and  carried  into  effect.  And  order  that  the 
monies  to  be  recei\'ed  by  the  sd  off.  liq.  under  the  sd  compromise  be 
accounted  for  by  him  in  his  account  as  such  off.  liq.  Doivlms  Iron  Co., 
Kay,  J.,  Dec,  1883. 

In  the  matter,  &c.  Form  652. 


Memorandum.  ^  Memorandum 

The  ]\Iaster  of  the  Eolls  has  directed  a  meeting  of  the  creditors  of  the  of  direction  for 
above-named  co  to  ho.  summoned  pursuant  to  the  al)Ove  statute  for  the  °' 

ppose  of  ascertaining  their  wishes  as  to  continuing  to  carry  on  the  works 
with  the  view  of  effecting  a  sale  thereof  as  a  going  concern,  and  that 

such  meeting  shall  be  held  on,  &c.,  at  the  office  of  the  off.  liq.,  No. , 

Old  Jewry,  in  the  City  of  London.     The  judge  has  appointed  G.  the  sd 
off.  liq,  to  act  as  chairman  at  such  meeting. 

Meetings  of  creditors  or  contributories  are  frequently  directed  pursuant  to 
s.  91  of  the  Act  of  1862  for  the  purpose  of  ascertaining  their  wishes  in  regard 
to  matters  connected  with  the  winding-up.  See  as  to  such  meetings  Eu.les  45, 
46,  and  47,  and  I'orms  45,  46,  47,  48,  and  49  in  Schedule  to  the  Eules.  The 
meeting  is  very  commonly  called  pursuant  to  a  memorandum  as  above,  but 
sometimes  an  order  is  made. 

A  meeting  may  be  called  to  consider  whether  a  winding-up  order  shall  or 
shall  not  be  made.  Thus  in  the  case  of  The  Emma  Silver  Mining  Co.,  a  petition 
having  been  presented,  Malins,  Y.-C,  dii-ected  a  meeting  of  members  to  be 
convened  "  for  the  purpose  of  ascertaining  their  wishes  as  to  certain  matters 
relating  to  the  winding  up  of  the  company." 

At  the  foot  of  the  notice  was  a  statement  as  follows  : — 

The  following  resolutions  have  been  suggested  by  his  [Honoui*]  the  Vice- 
Chancellor,  as  embodying  the  points  upon  which  he  desires  to  be  informed  of 
the  wishes  of  the  above  members  : — 1.  "  That  it  is  the  opinion  of  this  meeting 
that  the  operations  of  the  company  can  be  carried  on  with  a  reasonaljle 
prospect  of  success,  and  that  the  Vice-Chancellor,  Sir  E.  Malins,  be  requested 
not  to  make  any  order  for  the  winding  up  of  the  company."  If  such  motion 
be  negatived,  the  following  to  be  moved  as  a  substantive  motion: — 2.  "That 

L  L  2 


516 


WINDING-UP. 


Form  652.  it  is  the  opinion  of  this  meeting  that  this  company  be  wound  up  compulsorily 
by  the  Court  under  the  petition  of  Mr.  A.,  now  pending." 

And  a  meeting  is  sometimes  called  to  consider  in  what  way  the  company 
shall  be  wound  up.     City  ^-  County  Bank,  10  Ch.  470. 

For  order  on  application  of  liquidator  for  liberty  to  call  meeting  of  creditors 
and  members  to  ascertain  whether  they  desii-ed  vendor's  lien  of  10,000L  to  be 
paid  out  of  the  assets,  and  if  so,  liquidator  to  pay  same  off,  but  the  payment 
not  to  affect  rights  of  secured  and  unsecured  creditors,  inter  se.  South  Durham 
Iron  Co.,  Hall,  V.-C,  1  Aug.,  1877.     B.  147G. 

As  to  meetings  under  the  Joint  Stock  Companies  Arrangement  Act,  1870, 
see  ittfra,  '"Arrangements." 

Costs. 

As  to  the  costs  of  the  parties  to  the  winding-up  petition,  see  supra,  p.  423, 
et  seq. 

The  petitioner's  costs  where  a  winding-up  order  is  made  are  a  first  charge 
on  the  assets.  Audley  Hall  Cotton  Co.,  6  Eq.  245 ;  and  he  is  entitled  to  them 
free  of  set-off.     General  Exchange  Bank,  4  Eq.  138. 

Accordingly  it  is  not  uncommon  to  pay  them  early  in  the  winding  up.  See 
Form  5G0. 

As  to  costs  directed  to  be  paid  by  the  company  in  liquidation,  or  by  official 
liquidator  :  such  costs  are  to  be  paid  in  full  out  of  the  assets,  and  not  merely 
proved  for.  Madrid  Bank  v.  Pelly,  7  Eq.  442;  Ex  parte  Levick,  5  Eq.  69;  Ex 
pa  rte  Smith,  3  Ch.  130 ;  Ferrao's  case,  9  Ch.  355.  And  such  costs  do  not  take 
priority  over  the  official  liquidator's  costs.  Bronfield  Co.,  23  C.  D.  511  ;  and 
compare  with  In  re  Home  Investment  Society,  14  C.  D.  167.  Dominion  of  Canada 
Co.,  W.  N.  1884,  38  ;  32  W.  E.  425. 

As  to  the  official  liquidator's  costs,  i.  e.,  the  costs  of  the  winding  up : — 
As  a  general  riile  he  is  entitled  to  his  costs  of  all  proceedings  iwoperly  taken. 
Silver  Valley  Co.,  21  C.  Div.  381. 

If  the  assets  are  deficient,  the  Court  can  give  the  costs  incurred  in  winding 
up  the  company  priority,  s.  110  of  the  Act.  In  such  case  they  will  rank  next 
after  the  petitioner's  costs,  and  befor*  the  official  liquidator's  remuneration. 
In  re  Massey,  9  Eq.  367 ;  In  re  Trueman's  Estate,  14  Eq.  278 ;  Webb  v.  Whiffin, 
L.  K.  5  H.  L.  735.  But  they  only  rank,  pai-i  passu,  with  costs  ordered  to  be 
paid.     Dronfield  Co.,  and  other  cases,  uhi  supra. 

Where  there  are  incumbrances  such  as  mortgage  debentures,  and  the  mort- 
gaged property  is  realised  in  the  winding  up,  the  liquidator's  costs,  charges, 
and  expenses  of  the  realisation  are  the  first  charge,  the  incumbrances  rank  next, 
and  the  general  costs  of  the  winding  up  are  payable  only  out  of  the  surplus, 
if  any.     Oriental  Hotels  Co.,  12  Eq.  126;  Regent's  Canal  Co.,  3  C.  Div.  411. 

The  solicitor  of  the  official  liquidator  has  no  claim  for  the  costs  of  the  wind- 
ing up  against  the  official  liquidator  personally,  Anglo-Moravian  Co.,  1  C.  D. 
130  ;  Dominion  of  Canada  Co.,  ubi  supra ;  nor  has  he  any  lien  on  the  file  of 
proceedings  for  such  costs.     Ex  parte  Pullbrook,  4  Ch.  627. 

For  orders  to  tax  costs  of  provisional  liqiiidator,  see  supra.  Forms  411, 
et  seq. 

The  official  liquidator  applies  periodically  by  summons  to  have  his  costs, 
charges,  and  expenses  taxed.  The  following  is  the  visual  ordei*,  and  the 
summons  can  readily  be  framed  from  it. 

As  to  official  liquidator's  position,  see  Silver  Valley  Mines,  21  C.  Div.  381. 

Form  653.       Upon  the  applicon  of  the  off.  hq.  of  the  al)Ove-named  co,  and  upon 

Usual  order  to  hearing  the  solors  fur  the  applicant,  and  upon  reading  an  order,  &c., 

tax.  Refer  it  to  the  taxing-master  to  tax  the  costs,  charges,  and  exi)enses  of 

the  appHcant  as  such  off.  hq.  as  between  solor  and  cHent  from  the  time 

of  his  appointmt  [or  from  the day  of last,  the  foot  of  the  last 


T.iXATION    OF    COSTS.  5I7 

taxation]  up  to  and  including  this  order  ;  [And  in  taxing  such  costs  Form  653. 
the  taxing-master  is  to  have  regard  to  any  sums  of  money  received  on 
account  or  in  respect  of  costs  of  compromise  with  any  cuntribs  or  other- 
wise ;]  And  it  is  ordered  that  such  costs,  charges,  and  expenses  when 
taxed  be  pd  out  of  the  assets  of  the  sd  co  as  and  Avhen  the  judge  shall 
give  directions  for  that  ppose. 

Sometimes  the  paragraph  between  brackets  is  not  inserted  in  the  summons, 
but  it  is  almost  always  inserted  in  the  order.  Where  the  liquidator  is 
engaged  in  legal  proceedings  on  the  company's  behalf,  the  application  and 
order  generally  make  special  provision  for  the  taxation  thereof.  See  Forms  641 
et  seq.  And  special  directions  are  often  given  as  to  including  costs  inciu-red  on 
appeal,  &c. 

The  order  to  pay  is  usually  obtained  on  a  subsequent  application.  See 
Forms  602  and  663.  Sometimes,  however,  the  liquidator,  with  the  sanction  of 
the  chief  clerk,  pays  the  costs  when  taxed  without  any  order,  and  is  allowed 
them  in  his  next  account. 

Tax,  etc.,  including,  tK:c.,  and  including  the  pit's  costs  of  the  action  Form  654. 
brought  by  the  above-named  co  against  G.  and  others  now  pending  in  TajTcosts 
this  Ct,  the  distincti^'e  mark  to  such  action  being,  &-c.,  as  between  solor  inchuling  costs 
and  client,  but  in   taxing  such  costs,  charges,  and  expenses,  and  costs  ° 
respively  the  taxing-master  is  to  have  regard  to  any  sums  of  money 
received  in  respect  of  costs  of  compromise  with  any  contribs  or  otherwise, 
And  costs,  (Sic,  when  so  taxed  to  be  pd  by  apphcants  out  of  assets  of  ct» 
as  and  when  judge  gives  directions  for  that  ppose.    Lisbon  Steam  Tram- 
tvays  Co.,  Limtd.,  ^lalins,  Y.-C,  15  June,  1878.    1158  B. 

Tax,  &c.,  and  also  including  the  costs  of  and  relating  to  the  appeal  in  Form  655. 


the  case  of  P.  W.  and  J.  and  H.,  contribs  of  the  sd  co,  And  Let  such  Order  to  tax 
costs,  &c.     Wwcltam  Shij)  dr.,  Co.,  Bacon,  Y.-C,  3  June,  1878.    1085  B.  inchuling  costs 
See  Silver  Valleij  Mines,  21  C.  Div.  381.  ""^  '''^'^''''''' 

Tax,  &c.,  and  Let  the  sd  costs  when  taxed  be  pd  l)y  the  applicant  out  Form  656. 
of  the  assets  of  the  sd  association,  and  be  allowed  him  in  his  account  as  Tax  and  pav. 
such   off',  liq.     Universities    Cor])oration,   Hall,    Y.-C,   20   May,   1882. 
B.  947. 

Upon  the  a[iplicon  of  ^lessrs.  M.  k  M.  the  late  solors  fur  W.  tire  off".  Form  657. 
liq.  of  CO,  and  ujjon  hearing  the  applicants  and  the  now  solors  for  the  sd  Order  wliere 
off.,  liq.,  and  upon  reading  the  order  dated,  &c.,  Refer  it,  &c.,  to  tax  the  change  of 
costs,  charges,  and  expenses  of  the  sd  AY.  as  such  off.  liq.  as  afsd  during 
the  time  when  the  sd  applicants  were  his  solors  from  the  17th  June,  1876, 
down  to  the  14th  June,  1877,  when  the  now  solors  of  the  sd  off.  liq. 
were  api)ointed,  including  therein  the  costs  of  the  applicon  and  of  this 
order,  and  in  taxing  such  costs  {^regard  compromise^  \\vX  Let  the  amount 
of  such  costs,  charges,  and  expenses  when  so  taxed  be  pd  by  the  sd  off", 
liq.  out  of  the  assets  of  the  sd  co.     Lisbon  Steam  Tramiraijs,  ^lalins. 
V.-C,  20  June,  1877.     B.  1127. 


518 


WINDING-UP. 


Form  657.       Where  the  official  liquidatox"  changes  his  solicitors  and  the  assets  are  not 

sufficient  to  pay  the  whole  of  the  costs  of  the  successive  solicitors,  the  solicitors 

will,  as  a  general  rule,  be  paid  rateably  so  far  as  the  assets  will  extend.     In  re 
Aiulley  Hall,  cfc,  Co.,  6  Eq.  245. 

Form  658.       We,  each  sjicaking  positively  for  himself,  and  to  the  best  of  his  kuow- 

Affidavit  as  t     ^^^§"®  ^^^^  belief  as  to  other  persons,  say  :  that  we  haA'e  not,  nor  have 

costs  received    nor  has  either  of  us,  nor  have  nor  has  any  other  persons  or  person  by 

in  respect  of     ^^^^.  ^^,  gjj^j-^gj.  ^f  q^^.  Q^jjer,  or  for  our  or  either  of  our  use,  received  any 
compromise.s,  '  '  •' 

&c.  sum  or  sums  of  money  in  respect  of  the  costs  of  the  off.  liq.  of  the  above- 

named  CO.  [save  and  except  the  sums  mentd  in  the  first  schedule  hto.] 

2.  And  we,  each  sjDeaking,  &c.,  any  sum  or  sums  of  money  in  respect 
of  the  costs  of  compromises  with  any  contribs  of  the  sd  co  or  otherwise 
[save  the  sums  mentd  in  the  second  schedule  hto]. 

An  affidavit  by  the  official  liquidator  and  his  solicitor,  as  above,  is  requisite 
on  taxation. 


Form  659. 


Taxing 

Master's 

certificate. 


In  pursuance  of  the  order  in  these  nmtters  bearing  date  the of 

— ,  I  have  been  attended  by  the  solor  for  the  off.  liq.  of  the  above- 


named  CO,  aud  in  his  presence  I  have  taxed  the  costs,  charges,  and 
expenses  of  the  sd  off.  liq.  therel)y  directed  to  be  taxed  at  the  sum  of 
400?.,  and  I  find  that  the  sum  of  130/.  has  ))een  received  in  respect  of 
compromises  with  contribs  or  otherwise,  which  being  deducted  from  the 
sd  sum  of  400/.  there  remains  the  sum  of  271/.  which  is  due  in  respect 
of  such  costs  :  All  which  I  humbly  certify  to  this  Houourable  Ct. 


Form  660. 

Another. 


In  pursuance  of  an  order  in  these  matters  dated  &c.,  I  have  been 
attended  by  the  solors  for  the  off.  liq.  of  the  sd  co,  and  I  have  taxed  the 
costs,  charges,  aud  expenses  of  the  sd  off.  liq.  l)y  the  sd  order  directed 

to  be  taxed  at  the  sum  of  — /.,  and  I  find  l)y  the  afft  of  S.  filed  this 

of that  not  any  sums  of  money  whatever  have  been  received  in 


respect  of  compromises  with  contribs  or  otherwise, 
certify  to  this  Honourable  Ct. 


All  Avhich  I  humbly 


Form  661.       On  the  pt  of  the  off.  liq.  of  the  above-named  co  that  he  may  l)e  at 

Summons-^for"  ^^^^J  to  pay  /.  on  uccount  of  costs  to  'Sir.  B.,  his  solor  in  these 

liberty  to  pay    matters. 


costs. 


Order  giving 
liberty  to  pay 
costs. 


Form  662.  Upon  the  applicon  of  C,  the  off.  liq.,  &c.,  and  upon  hearing  the  solors 
for  the  applicant,  and  upon  reading  an  order,  &c.,  the  afft,  &c.,  and  the 
certificate  of  the  fund  in  the  Bank  of  England  :  Let  the  sd  off.  liq.  be 
at  libty  to  retain  and  pay  to  his  solors,  Messrs.  S.  &  C,  the  sum  of 
167/.  12s.  (Jd.,  behig  the  amount  of  their  costs,  charges,  and  expenses  as 
taxed  pursuant  to  the  sd  order  dated,  &c.  :  And  Let  the  sd  off.  liq. 
be  at  libty  to  retain  out  of  such  assets  tlie  sum  of  200/.  on  account 
of  his  remuneration  as  such  off.  liq.  of  the  sd  co  :  And  Let  the  sd  off". 


APPEALS. 


519 


liq.  be  allowed  the  sd  sums  of  1G7/.  12s.  M.  and  200?.  on  passing  his  Form  662. 
accounts  :  And  Let  the  costs  of  this  applicon  be  costs  in  the  winding-  up.  ~^ 

Anglo-Continental  Ship  Co.,  Hall.,  V.-C,  25  May,  1878.     A.  981. 

See  also  Form  G53  siqira. 

Very  commonly  where  liberty  to  pay  is  !,'iven,  no  order  is  drawn  up,  but  the 
chief  clerk  makes  a  note  (Order  oo,  v.  835)  that  liberty  has  been  given  and  that 
the  amount  jjaid  is  to  be  allowed  in  next  account. 


Another, 


Upon  the  applicon  of  C.  tlie  oft',  liq.,  itc.  :  Let  the  sd  sum  of  Form  663. 
03/.  15s.  '3d.  [in  bank]  be  pd  to  the  sd  C.  as  such  off.  liq.  as  afsd  in 
discharge  of  his  costs  taxed  under  the  sd  order  of  1  May,  1878,  he 
undertaking  thereout  to  satisfy  the  claim  (if  any)  of  K.,  solor,  in  respect 
of  charges  relating  to  the  appointmt  of  tlic  applicant  iis  off.  liq.  of  the  sd 
CO:  And  [dissolution  order  :  vacate  recognisance].  IsU  of  WiijJit  Ferry 
Co.,  9  August,  1878.     A.  1882.     See  also  Forms  075  et  mi. 

That  it  may  be  referred  to  the  proper  taxing-master  to  tax  as  between  Form  664. 
solors  and  clients  the  costs,  charges,  and  expenses  of  the  applicant  as  gammons  to 
such  oft",  liq.  from  the  foot  of  the  last  taxation  up  to  and  inchiding  the  tax  costs,  &c., 
costs  of  the  order  to  be  made  hereon,  and  also  that  the  taxing-master  J^^^j^l^^g^^^ 
do  tax  the  anticipated  costs  of  tlie  sd  applicant  from  the  date  of  such  costs  of 
last  mentd  order  to  the  final  winding-up  of  the  sd  co,  including  therein  co^l^Qy^ 
the  costs  of  vacating  the  recognisance  entered  into  by  the  applicant  and 
his  sureties. 

Where  a  company  is  about  to  be  dissolved,  it  is  not  uncommon  to  apply  to 
have  the  costs  of  dissolution  taxed  by  anticipation  as  above. 


Apj)eah. 
Chancery  Division,  Form  665. 

In  the  Court  of  Appeal.  jTT^      . 

In  the  matter,  &c.  appeal  motion. 

Take   notice   that   the  Ct   will   l)c   moved   on   day  the   

day  of  188 — ,  or  so  soon    thereafter  as  counsel  can  be  heard, 

by  Mr.  A.  as  counsel  for  and  on  behalf  of  [B.  and  C.  creditors  of  the 
named  co,  or  as  the  case  maij  he']  that  \_keie  state  the  nature  of  the  appli- 
con, as :  the  order  made  by  His  Lordshi]i  the  Vice-Chancellor  Sir 

in  the  above  matters  on  the day  of may  be  discharged 


or  varied,  or  that  such  order  may  l)e  made  as  to  this  Honourable  Ct  shall 
seem  fit.] 

Dated  this day  of ,  188—. 

\_Add  solars  name  as  in  Form  314:.] 

To  [na))ie  of  respondent,  as:  B.  the  ott'hq.  of  the  above-named  co,  and 
to  Mr. ,  his  solor.] 

The  time  for  appealing  from  any  order  or  decision  in  a  winding  up  is  21  days, 
to  be  computed  in  the  case  of  an  affirmative  order  from  the  time  when  the  order 


520 


wiNDiNG-rr. 


Porm  665,    is  signed,  entered,  or  otherwise  perfected,  and  in  the  case  of  a  refusal,  from  the 

date  of  refusal.     Order  LYIII.  r.  9.     See  Risca  Coal  Co.,  4  D.  F.  &  J.  45G;  31 

L.  J.  Ch.  429.  The  rule  applies  to  the  winding-up  oi'der  itself.  In  re  National 
Funds  Co.,  4  C.  D.  305.  As  to  extending  time,  see  Manchester  Economic,  24 
C.  Div.  488 ;  South  African  Syndicate,  28  S.  J.  152. 

Where  the  order  appealed  from  is  in  the  nature  of  an  interlocutory  judgment 
finally  settling  the  rights  of  the  ijarties,  the  notice  of  api^eal  must  be  a  14  days' 
notice  :  h\  other  cases  a  4  days'  notice  is  suiEcient.  In  re  Stockton  Iron  Co.,  10 
C.  D.  349.     Order  LYIII.  rr.  2,  9. 

An  appeal  is  brought  by  notice  of  motion  as  above,  which  must  be  served 
within  the  time  limited.  The  appeal  must  be  entered  with  the  proper  officer  of 
the  Court  of  Appeal  before  the  day  named  in  the  notice  to  appeal  for  the  hear- 
ing.    Order  LVIII.  r.  8.     In  re  National  Funds  Co.,  ubi  supra. 

Where  an  ex  parte  application  has  been  refused  by  the  Court  below,  it  can  be 
renewed  in  the  Court  of  Appeal  within  4  days  from  the  date  of  refusal,  or 
within  such  enlarged  time  as  a  judge  of  the  Court  below  or  of  the  Appeal  Court 
may  allow.     Order  LVIII.  r.  10. 

An  appeal  does  not  operate  as  a  stay  of  proceedings,  except  so  far  as  the 
judge  or  the  Court  of  Appeal  order.     Order  LVIII.  r.  IG. 

If,  therefore,  it  is  desired  to  stay  proceedings,  application  should  l^e  made 
accordingly.  The  application  to  stay  must  be  to  the  Court  below  in  the  first 
instance,  and,  in  case  of  refusal,  to  the  Court  of  Appeal.  The  21  days'  limit 
does  not  apply  in  such  case.     Cropper  v.  Smith,  24  C.  Div.  305. 

Where  it  is  desired  to  appeal  from  the  order  of  a  judge  at  chambers,  applica- 
tion must  first  be  made  by  motion  in  Court  to  the  judge  to  discharge  the  order, 
or  else  special  leave  to  appeal  must  be  obtained  from  him  or  from  the  Court  of 
Appeal.  Judicature  Act,  1873,  s.  50.  Holloway  v.  Cheston,  19  C.  D.  516.  But 
see  Butler's  Wharf,  21  C.  D.  131 ;  Manchester  Val  de  Travers  v.  Stagg,  47  L.  T.  556. 

The  application  to  the  judge  should  be  made  within  the  21  days'  limit.  Dick- 
son V.  Harrison,  9  C.  D.  213  ;  Heatley  v.  Newton,  19  C.  D.  334.  The  Court  of 
Appeal  will  give  leave  where  the  jixdge  certifies  that  he  does  not  wish  the  case 
to  be  reheard,  or  where  the  Court  is  otherwise  satisfied  that  the  case  has  been 
deliberately  decided  by  the  judge.  Thomas  v.  Elsom,  G  C.  D.  310  ;  Northampton 
Coal  Co.  V.  Midland,  7  C.  Div.  500. 

The  official  liquidator  or  any  creditor  or  contributory  can  apijeal.  As  regards 
the  winding-up  order,  the  company  can  also  appeal,  but  in  such  case  the  Court 
of  Appeal  will  readily  entertain  an  application  for  security  for  costs.  7/i-  re 
D)amo7id  Fuel  Co.,  13  C.  D.  400,  28  W.  E.  309. 

Where  the  liquidator  in  a  winding-ui^  by  or  under  the  supervision  of  the 
Court  desires  to  apj^eal,  he  should  apply  to  the  judge  for  liberty  so  to  do.  In 
re  City  cf  County  Co.,  13  C.  D.483  ;  Silver  Valley  Mines,  21  C.  D.381.     Form  416. 

The  Court  of  ApjDcal  will  not  give  the  liquidator  his  costs  out  of  the  estate, 
but  will  leave  him  to  apply  in  the  winding  up,  Wescomb's  case,  9  Ch.  553  ;  In  re 
City  cj'  County  Co.,  13  C.  D.  483,  and  where  the  apjieal  is  dismissed  with  costs, 
the  liquidator  will  be  ordered  to  pay  them  personally,  the  intention  being  that 
he  is  to  pay  whether  he  gets  them  out  of  the  estate  or  not.  Ferrao's  rase,  9  Ch. 
355.  In  either  case  the  liquidator  can  apjily  to  the  judge  in  the  winding  up  to 
be  allowed  the  costs.     See  Form  G57. 


Order  on 
appeal  dis- 
charging order 


Form  666.  Upon  motion  I)}-  way  of  appeal  this  day  made  unto  this  Ct  l)y  counsel 
for  C.  and  B.  the  surviving  liqs  of  the  al)Ove-named  co,  and  ujjon  read- 
ing the  order  dated  13  Mar.,  1(S7S,  made  upon  motion,  &c.,  whereby  it 
was  ordered,  &c.,  Let  the  sd  order  dated  the  I'd  Mar.,  li^TH,  be  dis- 
cliarged.  And  let  the  sd  R.,  &e.,  pay  to  the  sd  C.  and  B.  their  costs  of 
the  sd  motion  upon  Avhich  the  sd  order  was  made,  and  of  the  sd  order  and 
of  this  appeal,  including  the  costs  of  the  shorthand  notes  of  the  jndgmt 


APPEALS. 


531 


of  the  V.-C.  Malins,  such  costs  to  be  taxed,  &c.     Devousliirc  Silkstone  Form  666. 
Co.,  Ct  of  Appeal,  8  July,  187<s.     A.  U.")!. 

Upou  motion  by  way  of  appeal,  &c.,  by  counsel  for  P.  and  B.  that  the  Form  667. 
order  dated  2r)th  ^larch,  1878,  made  upon  the  summons  of  the  off.  liq.  ^^.^^  ^. 
issued  in  the  above  matters  against  the  appellants  and  dated  2G  October,  appeal 
1877,  miffht  be  rescinded,  and  that  the  same  might  be  dismissed  with  ^^^^^^^s 

'        '^  '  °  order  appealeil 

costs  to  be  taxed  and  pd  by  the  oflF.  liq.  to  the  appellants,  and  upon  from. 

hearing  counsel  for  the  oft',  liqs.,  itc,  the  deposition  of  the  sd taken 

upou  his  cross-examiiu^tioii  filed  ilthof  May,  187S,  Let  the  sd  order  dated 
the  25  March,  1 878,  be  affirmed,  and  let  the  sd  P.  and  B.  jjay  to  the  off", 
liq.  his  costs  of  this  appeal,  such  costs  to  be  taxed,  &c.  British  Farmers, 
Cfc,  Co.,  Ct  of  Ap])eal,  ].'»  May,  J878.     A.  1)35. 

AVhas  B.  E.  M.  and  J.  the  petrs  in  the  order  made  in  these  matters  Form  668. 
dated  the  1st  of  June,  187<s,  named,  did  on  the  1st  of  July,  1878,  serve  Order  refusiiF'- 
the  above-named  co  with  notice  that  this  Ct  would  on  the  15th  of  July  f^peal. 
be  moved  by  counsel  for  the  sd  B.  E.  M.  and  J.  by  way  of  appeal  fi'om 
the  sd  order  that  the  sd  order  might  be  discharged  and  that  in  lien 
thereof  it  might  l)e  ordered  that  the  sd  co  be  wouud  up  by  the  Chancery 
Division  of  the  High  Ct  of  Justice,  with  all  proper  directions  for  that 
ppose  including  a  direction  for  paymt  of  the  applicants'  costs  in  reference 
to  the  sd  order  and  the  application,  or  that  such  other  order  might  be 
made  as  to  Her  Majesty's  Ct  of  Appeal  might  seem  fit,  and  counsel  for 
the  sd  B.  E.  M.  and  J.  this  day  moving  this  Ct  that  the  above-named  co 
by  their  secretary  might  be  ordered  within  7  days  after  service  to  make 
and  file  a  full  aud  sufficient  afft  stating  whether  they  have  and  have  had 
in  their  possession  aud  power  any  and  if  any  what  documts  relating  to 
the  subject-matter  of  the  sd  peton,  and  accounting  for  the  same,  with 
the  usual  directions  for  production  and  inspection  thereof.  And  in  case 
this  Ct  should  be  of  opinion  that  the  notice  of  appeal  given  by  the  ap- 
plicants on  the  1st  of  July,  1878,  was  not  within  the  time  limtd  for  that 
ppose,  then  that  the  applicants  might  l^e  at  libty  to  prosecute  such  appeal 
notwithstanding,  aud  upon  hearing  counsel  for  the  sd  co  and  reading 
the  sd  order  dated  the  1  June,  187'S,  an  aS"t,  &c..  This  Ct  doth  not 
think  fit  to  make  any  order  on  the  sd  motion,  and  doth  order  that  the 
sd  appeal  motion  be  dismissed,  and  that  the  sd  B.  E.  ]\I.  and  J.  do  pay 
to  the  sd  CO  their  costs  of  the  sd  motion,  and  also  their  costs  occasioned 
by  their  having  been  served  with  the  sd  notice  of  motion  of  the  1st  of 
July,  1878,  such  costs  to  be  taxed  by  the  taxing-master.  Brick  and 
Stone  Co.,  Limtd.,  Ct  of  Appeal,  18  Dec,  1878.     A.  2381). 

As  to  ordering  production  of  documents  on  appeal,  see  National  Funds  Assur- 
ance Co.,  2t  W.  R.  771  ;  W.  N.  1876,  192,  and  supra,  p.  502. 

Upon  motion,  etc.,  for  J.  of [cind  otiier  shareholders^  aud  upou  Form  669. 

hearing  counsel  for  V.  and  Y.  creditors  of  the  co  upon  whose  peton  an  Order 

order  was  made  18  ^lay,  1877,  to  wind  up  the  co.  And  it  appearins:  bv  restraining 

'   advertisement 


pending 
appeal. 


',0  0  WINDIXG-Ur. 

Form  669.  the  receipt  of  one  of  the  cashiers  of  the  hank  dated  23  May,  1877,  that 
~  F.  the  sulor  of  the  sd  shareholders  has  lodged  at  the  Ijank  to  the  credit 
of  a  Chancery  Suspense  account  the  sum  of  UK)/.  :)s.  \)tl,  Let  the 
advertiscmts  of  the  sd  order  dated  18  May,  1877,  to  wind  up  the 
sd  CO  be  postponed  until  the  hearing  of  the  appeal  from  the  sd  order. 
And  Let  the  sd  shareholders  on  or  before  28  May,  1877,  do  all  necessary 
acts  pursuant  to  the  31st  Chancery  Funds  Rules,  187-1-,  for  the  ppose  of 
having  tlie  sd  sum  transferred  by  them  into  Ct  to  the  credit  of  these 
matters.  Re  ilie  Paris  Blmiing  Rbilc  Co.,  Limftl,  Li  the  matter  of  the 
Cos  Acts  18G2  and  18G7,  Hall,  V.-C,  23  May,  1877.  840  B.  See 
5  Chancery  Division,  950,  and  si/jjra,  Form  34:0. 

Where  there  is  an  appeal,  the  advertisement  can  be  restrained  as  above. 


Form  670.  Upon  the  applicon  of  B.  and  Y.  the  oflF.  liqs.,  &c.,  Let  the  sd  appli- 
Liberty  to  cants  be  at  libty  to  take  all  necessary  and  proper  proceedings  by  way  of 
appeal.  appeal  from  the  order  dated,  &c.,  made  in  the  matter  of  an  appeal  from 

the  High  Ct  of  Justice,  Common  Pleas  Division,  in  a  cause  of pit. 

and  the  sd  co  deft.     Hoojier's  Teleijraplt,  Worhs,  M.  R.,  14  June,  1877. 

A.  1311. 

For  order  giving  liberty  to  a  cx-editor  to  appeal  against  an  order  made  in  an 
action  against  the  company  in  Ireland,  and  to  use  the  name  of  the  company,  he 
undertaking  to  indemnify  the  company  against  all  costs  and  to  pay  120L  into 
Court  by  way  of  secxu-ity,  see  International  Patent  Pulp,  ^'c,  Co.,  M.  E.,  IG  Mar. 
1877.     A.  519. 

Form  671.       Upon  the  applicon  of  the  liq  of  co  and  upon  reading,  etc.,  and  an 
Order  allowin''  order  made  in  the  suit  of,  &c.,  Avhereby  it  was  ordered  that,  &c.  \_btU 
liquidator's       dismissed],  and  it  was  fm-ther  ordered  that  such  order  should  be  without 
appea.  p^.gj^j^Upy  ^.^  ^.^-^^  applicon  the  liq  of  the  sd  co  might  make  to  the  judge 
at  chambers  for  the  allowance  of  the  costs  of  the  sd  co  in  the  sd  suit  of 
out  of  the  assets  of  the  sd  co,  Order  that  the  costs  of  the  above- 
named  co  in  the  sd  suit,  &c.,  and  of  this  applicon  and  consequent  thereon 
be  allowed  as  costs  in  the  winding  up  of  the  above-named  co.     General 
South  American  Co.,  Malins,  A\-C.,  '.»  Mar.,  1878.     A.  421.     See  also 
Form  50G, 


Order  stayin 
winding  np. 


Siaijiiiij  Uw  WirnJimj  Up. 

Form  672.  AVhas  by  an  order  dated  3  Feb.,  1877,  made  upon  the  peton  of  J.  P.  a 
creditor  of  co.  It  was  ordered  that  the  sd  co  should  be  wound  up  by  the 
Ct  under  the  provisions  of  the  Cos  Acts  18G2  and  18G7,  Now  upon 
motion  this  day  made  unto  this  Ct  by  counsel  for  li.  [_anil  others]  contribs 
of  the  sd  CO,  This  Ct  doth  order  that  upon  the  sd  Pt.  paying  to  the 
creditors  of  the  sd  co  other  than  Messrs.  P.  within  10  days  from  the  date 
of  this  order  or  within  such  further  time  as  the  3  largest  creditors  nuiy 
consent  to,  lo-s'.  in  the  /.  on  the  amount  of  their  debts  and  to  Messi's.  P. 


UNCLAIMED    DIVIDENDS.  533 

the  amount  of  tlicir  debt  in  full,  and  the  costs  in  these  matters  as  Form  672. 
between  solor  and  client,  such  costs  to  be  taxed,  &c.,  in  case  the  parties  ^ 

differ,  all  further  proceedings  under  the  sd  order  of  3  Feb.,  1877,  be 
stayed.  ]V//ifea.'<h  Paper  Co.,  17  Mnj,  1S77.  B.  1083.  See  further  as 
to  staying  the  winding-up,  "  Petitions"  and  "Arrangements." 


Undaimcd  Dicidends. 

Upon  the  applicon  of  H.,  the  off"  manager  of  the  above-named  l)auk,  Form  673. 
and  upon  hearing  the  solors  for  the  applicant,  and  for  the  official  as-  Oj.^|g\.  ^^  p,^ 
siguee  in  bankruptcy,  and  for  the  creditor's  representative,  and  upon  into  court. 
reading  an  order  dated  8  April,  1878,  Order  that  the  sd  H.  be  at  libty 
on  or  before  the  30th  of  jMay,  1878,  to  pay  into  Ct  to  the  credit  of  Ex 
imrte  the  Royal  British  Bank  to  an  account  to  be  intituled  "  unclaimed 
dividends,"  the  sum  of  303?.  Zs.  -id.,  the  amount  of  unclaimed  dividends 
in  these  matters,  And  order  that  the  sd  sum  of  303?.  Q)S.  id.  when  pd  in 
be  pd  in  the  sums  mentd  in  the  third  column  of  the  schedule  hto  to  the 
persons  whose  names  and  addresses  are  set  opposite  such  sums  in  the 
first  column  of  the  sd  schedule,  such  sums  being  the  amount  of  dividends 
declared  upon  their  respive  debts  proved  in  these  matters.     Schedule 
giving  names,  addresses,  and  amounts. 

Roijal  British  Banlc,  Malins,  V.-C,  3  April,  1878.     B.  1120. 

Where  a  company  is  about  to  be  dissolved,  it  is  very  commonly  found  that 
certain  creditors  or  contributories,  in  whose  favour  dividends  have  been 
declared,  have  not  claimed  the  same. 

The  right  of  such  persons  is  not  affected  by  the  non-claim,  so  as  to  enable 
the  Court  to  divide  the  fund  among  the  other  persons  interested,  or  otherwise 
to  deal  with  the  same  in  derogation  of  the  rights  conferred  by  the  order 
declaring  the  dividend.     Ashley  v.  Ashley,  i  C.  D.  757. 

Accordingly,  the  proper  course  is  to  pay  the  amount  into  Coui-t.  See  the 
Supreme  Court  Rules,  1884,  as  to  the  new  practice  on  payment  into  Court. 
The  money  should  be  paid  in  to  the  credit  of  "  In  the  matter  of  the  Com- 
panies Acts,  18G2  and  1867,  and  in  the  matter  of  The Company  Limited. 

Unclaimed  dividends."  The  paymaster-general  will  give  a  receipt  for  the 
j)ayment,  and  the  application  of  the  fund  will  be  provided  for  by  the  dissolution 
order.     See  Form  GSO. 

See  Australian  United  Co.,  W.  N.  1877,  37,  where  upon  a  reconstruction  there 
were  unclaimed  shares,  and  liberty  was  given  to  bring  them  into  Court. 


Upon  the  applicon  of  B.,  the  off.  liq.,  &c..  Let  the  sd  B.  be  at  libty  on  Form  674. 
or  before  10  Mar.,  1871),  to  pay  into  Ct  to  the  credit  of  "  In  the  matter  Order  to  pay 
of  the  L.  C.  C,  Limtd.,"  3.j/.  18s.  9d.,  being  the  amount  due  to  the  unclaimed 
creditors  of  co  named  in  the  schedule  hto  in  respect  of  unclaimed  divi-  j^tQ  court, 
dends.     And  let  out  of  the  sd  sum  the  sums  mentd  in  the  fourth  column 
of  sd  schedule  be  pd  to  the  persons  and  cos  whose  names  are  set  opposite 


524  WINDING-UP. 

Form  674.  to  tlie  same  in  the  second  column  of  the  same  schedule.  And  usual 
order  to  tax  off.  liq.'s  costs,  charges,  and  expenses.  London  Co-oinratire 
Commissariat,  LimUl,  M.  E.,  21  Jan.,  187;j.     B.  374. 

DissoUiiion  Orders. 

S.  Ill  of  the  Act  of  1862  provides  that  when  the  affairs  of  the  company  have 
been  completely  wound  up,  the  Court  is  to  make  an  order  that  the  company  be 
dissolved  from  the  date  of  siich  order,  and  the  company  is  to  be  dissolved 
accordingly. 

And  s.  112  i^rovides  that  any  order  so  made  shall  be  reported  by  the  official 
liquidator  to  the  registrar  [of  joint  stock  companies],  who  is  to  make  a  minute 
accox'dingly  in  his  books  of  the  dissolution  of  the  company.  If  the  official  liqui- 
dator makes  default  in  so  reporting,  he  becomes  liable  to  a  penalty  of  5L  a  day. 
S.  113  of  the  Act. 

Where  a  company  is  about  to  be  dissolved,  the  Court  may  determine  in  what 
manner  the  books,  accounts  and  documents  are  to  be  disposed  of.  See  s.  155  of 
the  Act.  The  file  of  proceedings  and  the  official  liquidator's  book  of  account 
must  Vje  sent  to  the  Eecord  and  Writ  Department.  Gen.  Ord.  1862,  r.  67.  The 
other  documents  are  generally  directed  to  be  torn  up  or  burnt. 

See  Rules  (jo  &.  66  as  to  terminating  the  winding  up.  According  to  the  latter 
of  these  rules,  a  dissolution  order  should  not  be  made  iintil  the  chief  clerk  has 
certified  that  the  winding  up  is  complete  ;  but  in  px'actice  the  chief  clerk  very 
commonly  certifies  that  the  affairs  of  the  company  have  been  comi^letely  wound 
up,  except  as  to  the  application  of  a  specific  sum  in  bank  or  in  the  official  liqui- 
dator's hands,  and  then  iipon  the  aiii^lication  of  the  official  liquidator,  an  order 
is  made  as  to  the  application  of  this  siim,  vacating  the  recognisances,  dis- 
charging the  liquidator,  oi'dering  the  destruction  of  the  books,  and  dissolving 
the  company. 

An  application  to  dissolve  should  be  by  summons,  supi^orted  by  an  affidavit 
of  the  official  liquidator  showing  that  the  winding  up  has  been  comjjleted  and 
that  he  has  passed  his  final  account,  and  stating  that  in  his  opinion  it  is  desir- 
able that  the  books  should  be  destroyed  and  the  company  dissolved.  A  great 
many  dissolution  orders  are  made  every  year. 

Form  675.       Upon  the  applicon  of  the  off.  liq.  of  the  ahove-named  co,  and  upon 
j^.  hearing  the  solor  for  the  applicant,  and  upon  reading  the  orders,  &c., 

order.  and  the  chief  clerk's  certificate,  dated  28th  January,  1878,  wherehy  it 

appears  that,  except  as  to  the  applicon  of  the  sum  of  'M)l.  IG.s-.  6^7. 
standing  to  the  credit  of  the  sd  off.  liq.  at  the  Bank  of  England,  the 
affairs  of  the  sd  co  have  been  completely  wound  up,  and  an  office  copy 
of  the  recognisance  entered  into,  &c.,  a  certificate  of  the  chief  clerk  of 
the  Bank  of  England,  dated,  A;c.  It  i,s  by  consent  of  the  solor  of  the 
applicant  oiii)Ei!i;i)  that  the  sd  sum  of  oO/.  HI.s,  i!)d.  be  pd  to  the  sd  off. 
liq.  in  full  discharge  of  the  amount  of  his  taxed  costs  and  the  amount 
due  to  him  for  remuneration.  And  it  is  ordered  that  the  books  and 
papers  of  the  sd  co,  other  than  the  file  of  proceedings,  be  destroyed  by 
bcuig  torn  up  and  cut  in  such  a  manner  as  to  be  incapal)le  of  being  used 
as  a  means  of  information  :  And  thereupon  it  is  ordered  that  the  sd  off. 
liq.  be  discharged,   and  that  the  sd  recognisance  dated,   itc,    entered 


DISSOLUTION    ORDERS.  kok 

into  liy  tlie  sd  off.  liq.  together  Avith  and  liis  sureties  be  Form  675. 

vacated  :  And   that  the  sd  co    Ijc   dissolved   as  tiv^m    the  Sth  day   of  " 

August,  1878.     OnccJl  Oi/ster  Fislicnj,  Limtd.,  M.  E.,  8  August,  1878. 
141)8  P,. 

A  form  of  dissolution  order  is  given  in  the  schedule  to  tlie  Uen.  Order  of 
Nov.  18G2,  No.  50. 

The  following-  are  a  few  examples  of  dissolution  orders  :  8t.  George's  Advance 
Co.,  18  July,  1877.  B.  1J.25  ;  Oporto  Mining  Co.,  20  July,  1877.  B.  1187  ;  South 
of  France  Lime  Co.,  (j  Aug.  1877.  B.  1179  ;  London  cf'  County,  Sfc,  Co.,  9  Aug. 
1877.  B.  1480  ;  Oriental  Island  Steam  Co.,  9  Aug.  1877.  B.  1489  ;  North  Hafod 
Co.,  20  Dec.  1877.  B.  2178  ;  Erimiis  Iron,  25  May,  1878.  91.  B. ;  Ballycammish 
Co.,  18  July,  1878.  A.  1573 ;  Tavarone  Mining  Co.,  31  July,  1878.  B.  1531 ;  and 
see  also  Forms  infra. 


Upon  the  applioon  of  J.  S.,  the  off.  liq.,  etc..  Let  [booJr.s  and  papers  of  Form  676. 
CO  to  he  dpsiroijed'\  and  order  that  out  of  the  sum  of  oS/.  8.s,  ()d.   by  'Ynother         ^ 
the  chief  clerk's  certificate  certified  to  be  due  from  the  sd  ott".  li(i.  and 
forming  part  of  (YM.  Os.  '2d.  cash  in  the  bauk  to  credit  of  these  matters 
the  sum  of  'Si.  7s.  Od.  the  agreed  amount  of  the  costs  of  co  under  the  sd 

order  dated,  &c.,  l)e  pd  to  ^Messrs. ,  tlieir  solors  in  full  discharge  of 

the  costs  undei'  the  sd  order,  and  the  sum  of  33/.  6s.  lOd.  further  pt 

thereof  be  pd  to and ,  the  solors  of  the  sd  off.  liq.,  or  one 

of  them,  in  full  discharge  of  their  costs,  charges,  and  expenses  as  solors 
for  the  sd  off.  liq.,  or  otherwise  in  reference  to  the  winding  up  of  the  sd 
CO  :  And  order  that  the  sum  of  101.  13s.  bd.,  the  balance  of  the  sd  sum 
of  58/.  8.s\  (kh,  and  also  the  proceeds  to  be  received  from  the  sd  books 
and  papers  of  the  sd  co  when  so  cut  and  torn  into  fragments  as  hinbefore 
directed  be  retained  and  pd  to  the  sd  off.  liq.  in  full  discharge  of  all 
claims  by  him  foi-  remuneration  or  otherwise  as  off.  liq.  of  co  :  And 
thereupon  order  tliat  the  sd  off.  liq.  be  discharged,  and  that  the  sd 
recognisance  and  the  sd  bond  dated  1.5th  December,  1874,  entered  into 

l)y  the  sd  J.  8.  together  Avith  The Guarantee  Association,  Limtd., 

as  his  sureties  be  vacated  :  And  thereupon  order  that  the  sd  co  be  dis- 
solved as  from  the  28th  June,  1878.  Peojyle's  Coal,  ijr.,  Co.,  Limtd., 
M.  R.,  2.5  June,  187X.     1533  B. 

Upon,  &c.  [order  for  dlssoUdioti  of  co'],  And  Let  the  books,  papers,  Form  677. 
and  documts  of  the  sd  co,  other  than  the  file  of  proceedings,  be  forth-  ^^^.^  books. 
with  destroyed  l)y  fire.     Llanrwst  Slate  Co.,  ^L  R.,   10  ]Mar.,   1878. 
B.  605. 


Upon  the  applicon  of  the  off.  liq.,  and  upon  reading  an  order  dated.  Form  678. 
&c.,  and  the  chief  clerk's  certificate  dated,  &c.,  and  an  afft  of  the  sd  off.  Dhsgolutioo 
liq.  filed,  &c.,  and  an  office  copy  of  the  recognisance,  and  an  office  copy  where 
of  the  joint  and  several  bond  hereinafter  respively  referred  to,  and  it  ap-  comp^ny^is 
pearing  that  the  affairs  of  the  sd  co  have  been  completely  wound  up,  It  surety. 


526 
Form  678. 


Form  679. 

Order  for 
distribution 
of  assets  and 
dissohition. 


AVIXDING-UP. 

is  oi'derecl  that  the  sd  co  be  dissolved  as  from  the  2r)fch  of  May,  1878, 
and  that  the  recognisance  entered  into  by  J.  Y.  as  the  oft".  Hq.  of  sd  co, 

and  the  joint  and  several  bond  of  the  sd  J.  Y.  and  The ■  Guarantee 

Co,  Limtd,  dated  respively  the  15th  of  October,  1875,  and  enrolled  on 
the  22nd  October,  1875,  be  vacated.  Rio  Grande,  tjr.,  Co.,  Limtd., 
Bacon,  Y.-C,  25  May,  1878.     1113  ?>. 

Upon  the  applicon  of  the  off.  liq.,  &c.,  And  it  appearing  by  the  sd 
afft  of  the  sd  oft",  liq.  that  the  whole  of  the  assets  received  is  the  sum  of 
21;!/'.  lis.  ?)d.,  that  there  is  not  any  outstanding  estate,  effects,  or  ppty 
of  the  sd  CO,  that  all  the  shares  subscribed  for  or  taken  have  been  fully 
l)d-up,  and  that  there  is  not  any  sum  of  money  available  for  distribution 
among  the  creditors  or  persons  claiming  to  be  creditors  of  the  sd  co,  It 
is  ordered  that  the  sd  oft".  li(|.  do  out  of  the  sd  sum  of  213/.  lis.  M.  pay 
the  sum  of  45/.  18-s-.  0^.,  being  the  amount  of  the  petr's  taxed  costs 
under  the  sd  order  dated  G  ]\Iar.,  1877,  to  ]\Iessrs.  \.  &  V.,  the  solors  of 
the  sd  petrs,  And  it  is  ordered  that  the  sd  off.  liq.  do  also  pay  to  the  sd 
Messrs.  Y.  &  Y.,  his  solors,  the  sum  of  122/.  135.  3^/.  in  satisfon  and 
discharge  of  their  costs  in  the  winding  up  of  the  sd  co  fi'om  the  date  of 
the  appointmt  of  the  sd  off.  liq.  to  the  dissolution  of  the  sd  co  as 
certified  at  the  sum  of  128/,  3s.  Of/.,  and  be  at  libty  to  retain  the  sum  of 
45/.,  balance  of  the  sd  sum  of  213/.  lis.  3d.,  after  paying  the  sd  sum  of 
45/.  1H.V.  and  122/.  I'ds.  Sd.  in  discharge  and  satisfon  of  his  charges 
and  expenses  in  the  winding  up  of  the  sd  co,  and  thereupon  It  is  ordered 
that  the  sd  co  be  dissolved  as  from  the  10th  of  July,  1877,  and  that  the 
sd  recognizance  be  vacated.  Banwifs  Patent  Asjduilie  Pavimj  Co., 
Bacon,  \.-Q.,  in  July,  1877. 

Such  orders  are  very  common.     See  another,  Von  United  Mining  Co.,  25  May 
1878.     A.  1049. 


Form  680. 

Dissohition 
order,  and 
directions  as 
to  unclaimed 
dividends. 


Updii  the  applicon  of  H.,  the  off',  liq.  of  co,  and  upon  hearing  the 
solors  of  the  sd  off.  liq.,  and  for  W.  F.,  the  creditors'  representative 
and  upon  reading  the  order  dated,  &c.,  the  Chancery  Pay  Office  receipt 
dated  15  Ap.,  187G,  for  the  sum  of  31/.  13.s.  hereinafter  mentd,  the 
afft,  &c.,  and  the  chief  clerk's  certificate  dated  the  18th  July,  1877, 
whereby  it  appears  that  the  sd  off.  liq.  has  passed  his  final  account,  and 
that  there  was  no  balance  due  to  or  from  him,  and  that  the  affiiirs  of  the 
sd  CO  haA'e  been  completely  wound  up,  and  the  certificate  of  the  fund  : 
It  is  ordered  [dissolve  co.,  liJ)tij  to  destroy  booJcs,  ^-c].  And  it  is  ordered 
that  the  sd  sum  of  31/.  Ids.  on  deposit  in  Ct  to  the  credit  of  '"  In  the 
matter  of  the  Cos  Act,  18G2,  and  in  the  matter  of  the  N.  Co.,  Limtd, 
unclaimed  diA'idL'nds''  hv  pd  in  the  several  amounts  mentd  in  the  sixth 
column  of  the  schedule  hto  to  tlie  se\eral  persons  mentd  in  the  second 
colunm  of  such  schedule  in  satisfon  of  the  unclaimed  dividends  due  to 
them  as  creditors  of  the  sd  co.  Northjleld  Iron  and  Slerl  Co.,  M.  \l.,  28 
Julv,  1877.     B.  2700. 


VOLUNTARY.  527 

Upon  the  peton  of  co,  &c.,  Order  that  co's  name  be  restored  to  the  Form  680a. 

register  of  Joint  Stock  Companies,  and  that  this  co  be  deemed  to  have  con-  Order  to 

tinned  in  existence  as  if  its  name  had  never  been  struck  ott" ;  and  let  restore  com- 

pany  s  name 
notice  of  this  order  ])e  advertised  once  m  the  London  (rasctto ;  and  let  to  register 

off.  Hq.  pay  the  Iicgistrar  of  Joint  Stock  Companies  his  costs  of  the  ""j|^'' ■'^c* ''^ 

applicon,  to  be  taxed  ;   and  let  costs  of  petrs,  including  costs  pd  to 

Eegistrar,  be  taxed  and  pd  out  of  co's  assets.     Estates  Invesfmenf  Co., 

Chitty,  J.,  2:5  June,  188:3. 

As  to  strikiiij>"  names  of  defunct  companies  off  tlie  register,  and  their  restora- 
tion, see  the  C'omi>anies  Act,  ISSO.  Re  Financial  Corporation,  27  S.  J.  199  ;  Re 
Estates  Investment  Co.,  27  S.  J.  585. 


VOLUNTARY    WINDING-UP. 


The Co,  Linitd.  Form  681. 

Notice  is  hljy  gi\en  that  an  extraordinary  general  meeting  of  The  Notice  of  first 

Co,  Limtd,  Anil  be  held  at ,  on day  the day  of ,  meeting  to  pass 

at o'clock  in  the  [afler]noon,  for  the  ppose  of  considering,  and  if  tfon°to  ^\iiiV' 

thought  fit,  [lassing  the  following  resolution,  that  is  to  say  :  "That  the  up. 
CO  be  wouiul  up  voluntarily  under  the  provisions  of  the  Cos  Acts,  18G2 

and  LsCT,  [and  that  A.  of be  and  he  is  hby  appointed  liq  for  the 

pposes  of  such  winding  up]." 

Dated,  e^-c. 

By  order  of  the  Board, 

No. St..  &c.  ,  Secretary. 

Section  129  of  the  Act  of  lfS(j2,  provides  as  follows  : — 

"  129.  A  company  under  this  Act  may  be  wound  up  voluntarily, 

1.  Whenever  the  period,  if  any,  fixed  for  the  duration  of  the  company  by  the 

Articles  of  Association  expires,  or  whenever  the  event,  if  any,  occurs, 
upon  the  occurrence  of  which  it  is  provided  by  the  Articles  of  Associa- 
tion that  the  company  is  to  be  dissolved,  and  the  company  in  general 
meeting  has  passed  a  resolution  requiring  the  company  to  be  wound  up 
voluntarily : 

2.  Whenever  the  company  has  passed  a   special   resolution  requiring   the 

company  to  be  wound  up  voluntarily : 

3.  Whenever  the  company  has  passed  an  extraordinary   resolution  to  the 

effect  that  it  has  been  proved  to  theii*  satisfaction  that  the  comijany 
cannot  hv  reason  of  its  liabilities  continue  its  business,  and  that  it  is 
advisaljle  to  wind  up  the  same. 
For  the  piu-poses  of  this  Act,  any  resolution  shall  be  deemed  to  be  extra- 
ordinary wliich  is  passed  in  such  manner  as  would,  if  it  had  been  confirmed 
by  a  subseqvient  meeting,  have  constituted  a  special  resolution  as  hereinbefore 
defined." 

Companies  are  i-arelj-  or  never  wound  up  in  pursuance  of  paragraph  1  of  the 


528 


WINDING-Ur. 


Form  681.  above  section,  and  accordingly  voluntary  winding-  up  is  usually  determined  on 
by  special  or  extraordinary  resolution.  Where  a  company  is  in  difficulties,  and 
pressed  by  its  creditors,  an  extraordinary  resolution  to  wind  up  is  generally 
passed,  for  that  is  the  quickest  mode  of  bringing  about  a  voluntary  winding  up  : 
in  other  cases  a  special  resolution  [^swpra,  p.  193]  is  usually  passed. 

Although  this  enactment  apjDears  to  contemplate  the  ap]3ointment  of  the 
liquidators  after  the  passing  of  the  special  or  extraordinary  resolution  for 
winding  up,  there  is  no  objection,  in  the  case  of  a  special  resolution,  to  an 
appointment  of  the  liquidators  (as  in  the  above  form)  at  the  first  meeting, 
followed  by  a  confirmation  of  the  resolution  at  the  second  meeting.  London  Sf 
Australian  Agency,  W.  N.  1873,  198  ;  2:i  W.  R.  15  ;  Petersburg  Gas  Co.,  33  L.  T. 
637.  And  this  course  is  freqiiently  adopted.  Where,  however,  the  resolution 
passed  at  the  first  meeting  does  not  purport  to  apjDoint  liqxiidators,  they  are 
usually  appointed  at  the  second  meeting  immediately  after  the  confirmation  of 
the  special  resolution.  Liquidators  may  be  appointed  at  the  second  meeting, 
in  the  case  of  a  special  resolution,  and  at  the  only  meeting,  in  the  case  of  an 
extraordinary  resolution,  without  notice  having  been  given  of  the  intention 
to  propose  a  resolution  for  their  appointment.  Oohes  v.  Turqnand,  L.  E.  2  H. 
L.  325. 

But  it  is  usual  to  mention  the  matter  in  the  notice ;  and  very  commonly 
the  notice  states  the  names  of  the  persons  to  be  proposed  for  appointment. 
Sometimes,  in  the  case  of  a  special  resolution,  nothing  is  said  about  liquidators 
in  the  notice  convening  the  first  meeting,  but  the  notice  convening  the  second 
meeting  contains  a  statement  as  to  their  appointment,  as  in  Form  G82. 

Where  there  is  a  special  resolution  an  appointment  at  the  first  meeting  is 
ineffectual  unless  confirmed  at  second.     Re  Indian  Zoedone,  W.  N.  188-1,  50. 

Sometimes  both  meetings  are  convened  by  one  notice.     See  supra,  p.  213. 


Form  682.       The 


Co,  Liintd. 


Notice,  &c.  [«s  i?i  Form  G81  to 
L  which 
day  of 


noon '"],  ^vheii  the  subjoined 

'  meeting  of  the  co,  held 

confinnation  as  a  special 


Notice  of 

.second  meeting  resolution  wliich  was  passed  at  the  extraordinary  meeting  of  the  co,  held 

%::!^Zoln.  the day  of ,  will  he  submitted  f  >r 

tion  to  wind     resolution  :  "That,"  &c.  [set  out  fJ/p  rpmhdion']. 
lip. 

If  the  resolution  does  not  purpoi-t  to  ajjpoint  liquidators,  add  : 

Should  the  resolution  be  confirmed  a  further  resolution  will  l)e  pro- 
posed at  the  same  meeting  for  the  appointmt  of  a  liq  or  liqs  \_or  for  the 
appointmt  of  A.  and  B.  to  be  liqs]  for  the  ]iposes  of  such  winding  up 
[and  fixing  his  or  their  remuneration]. 

Dated,  &c. 

By  order  of  the  Board, 

No.  —  St.,  &c.  ,  Srrrotari/. 

In  most  cases  the  remuneration  of  the  liquidators  is  not  determined  at  the 
time  of  their  appointment,  but  it  is  by  no  means  uncommon  to  determine  it 
then.     See  infra.  Form  700. 


Form  683.       Tl^e 


(U^,  Limtd. 


Notice,  &c.   [as  in  Form  081  down  la 


noon  "],  for  the  ppose 


Notice  of  meet- 
ing to  pass        of  considering,  and  if  deemed  expedient  passing,  the  following  extra- 


VOLUNTARY.  529 

ordinary  resolution,  that  is  to  say  :  "That  it  has  been  proved  to  the  Form  683. 
satisfon  of  this  meeting  that  the  co  cannot  by  reason  of  its  Habilities  extraordinary 
continue  its  business,  and  that  it  is  ad^dsable  to  wind  up  the  same,  and  resolution  to 
accordingly  that  the  co  be  wound  up  voluntarily." 

Should  the  resolution,  &c.  [as  in  Form  578]. 

Dated,  &c. 

By  order  of  the  Board, 

No. St.,  &c.  ,  Secretary. 

It  ia  essential  to  the  validity  of  an  extraordinary  resolution  for  winding  up 
that  the  notice  convening  the  meeting  should  give  the  members  notice,  ex- 
pressly or  impliedly,  that  the  resolution  will  take  effect  under  s.  129,  sub-sect.  3, 
and  consequently  will  not  require  confirmation  at  a  second  meeting.  In  re 
Bridport  Co.,  2  Ch.  194  ;  In  re  Silkstone  Co.,  1  C.  D.  38.  Accordingly,  some 
persons  insert  in  the  notice  a  statement  that  "  the  above  resolution  is  intended 
to  take  effect  under  sub-sect.  3  of  section  129  of  the  Companies  Act,  1862,"  or 
other  words  to  that  effect.  But  a  notice  framed  as  in  Form  579  is  sufficient. 
Stone  V.  City  4"  County  Banlc,  3  C.  P.  D.  282.  More  companies  are  wound  up 
by  extraordinary  than  by  special  resolution :  it  is  speedier. 


In  the  matter,  &c.  Form  684. 


At  an  extraordinary  general  meeting  of  the  above-named  co,  duly  con-  Notice  for 
vened  and  held  at ,  on  the day  of ,  the  following  special  Gc-cffr  of 

.  ''  T  1  special  resolu- 

resolution  was  duly  passed,  and  at  a  subsequent  extraordinary  general  tion  to  wind 
meeting  of  the  members  of  the  sd  co  also  duly  convened  and  held  at  the  ^P- 
same  place,  on,  &c.,  the  following  resolution  was  duly  confii*med,  viz.  : — 
That,  &c.  [set  'it  ont~\. 

\_If  tlie  rcsotution  does  not  ^wrjwrf  to  appoint  liqs,  add  .'I  And  at  such 

last-mentd  meeting of was  appointed  liq  for  the  pposes  of  the 

winding  up. 

Dated,  &c. 

,  Chairman. 


Notice  of  any  special  or  extraordinary  resolution  for  winding  up  must  be 
given  in  the  London  Gazette  as  respects  companies  registered  in  England. 
&.  132  of  the  Act. 

Note : — As  a  general  rule  where  the  witness  to  a  signature  is  a  solicitor 
whose  name  appears  in  the  current  Law  List,  no  further  evidence  or  insertion 
is  required  ;  but  the  Gazette  officials  reserve  the  right  of  calling  for  a  declaration 
in  any  case  where  they  may  deem  it  necessary. 


In  the  case  of  an  extraordinary  resolution,  the  notice  for  the  Gazette  will  be 
as  follows : — 

In  the  matter,  &c.  Form  685 

At  an  extraordinary  general  meeting  of  the  members  of  the  above- 


111  111,1  1  1  Notice  for 

named  co,  duly  convened  and  held  at  ,  on  the day  ot  . ,  Ga~cUc  of 

the  following  extraordinary  resolution  was  duly  passed  : —  extraordmary 

M  M 


530  WINDING-UP. 

Form  685.       That  it  has  been  proved,  &c.,  and  at  the  same  meeting of 

was  appointed  liq  for  the  pposes  of  such  winding  up. 


resolution  to 
wind  up. 


Dated  this 


day  of 


Chairman. 


The  notice  for  insertion  in  the  Gazette  must  be  signed  by  the  chairman  of 
the  meeting  at  which  the  special  resolution  was  confirmed,  or  at  which  the 
extraordinary  resolution  was  passed,  as  the  case  may  be.  His  signature  must 
be  attested  by  a  witness  [see  note  p.  529] ,  and  there  must  be  a  duplicate  attested 
and  verified  by  the  statutory  declaration  of  a  director,  secretary,  or  member 
of  the  company  who  was  present  at  the  meetings  or  meeting,  as  the  case 
may  be. 

As  regards  a  special  resolution,  the   declaration  should  run  as  follows : — 

I  )  of  ,  do   solemnly   and   sincerely  declare   as   follows  : — (1.)    That 

extraordinary  general  meetings  of  the Company,  Limited,  were  duly  held 

on  the day  of ,  and day  of ,  at ;  (2.)  That  the  resolu- 
tion mentioned  in  the  annexed  notice  marked  A.  was  duly  passed  at  the  first . 

of  such  meetings,  and  confirmed  at  the  second  meeting;  (3.)  That was 

duly  appointed  chairman  of  the  second  meeting ;  (4.)  That  I  was  present, 
and  saw  the  said sign  the  said  notice  hereto  annexed,  and  that  the  signa- 
ture, set  and  subscribed  to  the  said  notice,  is  of  his  proper  handwriting.  And  I 
make  this  solemn  declaration  conscientiously  believing  the  same  to  be  true, 
and  by  virtue  of  the  provisions  of  the  Statutory  Declarations  Act,  1835. 

(Signed) 

Declared  and  subscribed  this 1 

day  of .     Before  me,  &c.        J 

As  regards  an  extraordinary  resolution,   the  declaration  should  state:  (1) 

That  an  extraordinary  general  meeting  of  the  company  was  held  on  the 

day  of at ;  (2)  That  the  resolution  mentioned  in  the  annexed  notice 

marked  A.  was  duly  passed  at  such  meeting  ;  (3)  That was  duly  appointed 

chairman  of  the  said  meeting  ;  (4)  As  in  the  preceding  case. 


Form  686.       The 


Co,  Limtd. 


\_iSee  supra,  p.  21G.] 


Notice  to 
Registrar  of 

special  resolu-        Notice  of  the  passing  of  a  special  resolution  to  wind-up  must  also  be  given  to 

^,p  the  Registrar  of  Joint   Stock  Companies,  by  filing  with  him  a  printed  copy. 

See  swpra,  p.  21G.     And  it  is  desirable  to  send  him  a  copy  of  any  extraordinary 


resolution  for  windint 


up. 


Form  687. 

Notice  to 
contributories. 


Contrihs. 

In  the  matter  of  the  Cos  Act,  I8G2. 

And  in  tlie  matter  of  The Co,  Limtd. 

Take  notice  that  A.  B.,  the  liq  of  the  above-named  co,  has  appointed 

the day  of ,  at o'clock  in  the  [forejnoon  at  his  office, 

[No. Street,  in  the  City  of  London]  to  settle  the  list  of  contribu- 
tories of  the  above-named  co  which  has  already  been  made  out  by  him, 
and  that  you  are  included  in  such  list  in  the  character  and  for  the 
number  of  shares  stated  below  ;  and  that  if  no  sufficient  cause  is  shown 


VOLUNTAEY.  531 

by  you  to  the  contrary  at  the  time  and  place  afsd,  the  list  will  l)e  settled  Form  687. 
by  the  sd  liq  including  yon  therein. 

Dated  the day  of . 

A. ,  Liquidalor. 

To  Mr. . 

The  Schedule  [rts  in  Form  20  in  Sdiedule  to  Rules']. 

Under  s.  133  of  the  Act  the  liqiiidator  has  power  to  settle  the  list  of  con- 
tributories;  and  any  list  so  settled  is  to  be  prhna  facie  evidence  of  the  liability 
of  the  persons  named  therein  to  be  contributories.  The  form  of  the  list  should 
be  similar  to  that  used  in  a  compulsory  winding  up.  See  Form  25  in  Schedule 
to  Rules.  It  can  be  intituled,  "  In  the  matter,  &c.  [as  above],  list  of  con- 
tributories of  the  above-named  company."  It  is  usual  to  fix  a  day  for  settling 
the  list,  and  to  give  notice  thereof  to  the  contribxitories,  as  in  Form  687  ;  but 
it  is  not  essential  so  to  do.  Brighton  Arcade  Co.  v.  Dowling,  L.  K.  3  C  P.  175, 
187  ;  London  Bank  of  Scotland,  W.  N.  1867,  114). 

At  the  time  fixed  by  the  notice,  the  liquidator  will  proceed  to  settle  the  list, 
taking  notice  of  any  objections  then  or  theretofore  made.  Any  doubtfvil  cases 
can  be  adjourned  for  fviither  consideration.  As  to  who  should  be  on  the  list, 
see  s.  38  of  the  Act,  and  Buckley,  128  et  seq. ;  Lindley,  1327  et  seq.  When 
the  list  has  been  settled  altogether  or  in  part,  the  liquidator  very  commonly 
signs  a  certificate,  following  as  nearly  as  may  be  Form  31  in  the  Schedule  to 
Kules. 

A  contributory  who  objects  to  his  name  being  placed  on  the  list  can  apply 
to  the  Court  to  rectify  the  register  of  members,  or  the  list  of  contributories, 
or  both,  or  he  may  wait  till  a  call  is  made  on  him,  and  proceedings  taken  to 
enforce  the  same,  and  then  resist. 

If  there  are  many  disputed  cases,  the  liquidator  sometimes  applies  to  the 
Coiu't  to  settle  the  list,  or  applies  as  regards  the  cases  in  dispute.  In  the 
former  case  the  liquidator  takes  out  a  summons  that  the  list  of  contributories 
of  the  company  may  be  settled  by  the  Court,  and  that  all  proper  inquiries  may 
lie  made,  and  directions  given  for  that  purpose,  and  the  subsequent  proceedings 
will  be  similar  to  those  in  a  compulsory  winding  up,  srqrra.  Form  494-,  et  seq. 

If  the  dispute  is  only  as  to  a  single  person  or  a  few  persons,  the  summons 
will  be  "that  it  may  be  determined  whether  A.  B.  is  or  is  not  a  contributory," 
or  "  that  it  may  be  declared  that  the  liquidator  of  the  above-named  company 

is  entitled  to  settle  A.  B.  of upon  the  list  of  contributories  of  the  company 

in  respect  of shares  of 1,  each,  nvmibered to both  inclusive, 

and  upon  each  of  which  shares  the  sum  of 1,  and  no  more  has  been  paid 

tip." 

However,  in  most  cases,  the  liquidator  settles  the  person  disputing  on  the 
list,  and  leaves  him  to  litigate  the  matter  by  applying  to  the  Court,  or  by 
resisting  proceedings  to  enforce  a  call. 

Applications  by  contributories  to  have  their  names  removed  from  the  list  are 
common  ;  they  are  usually  made  by  motion  or  summons. 


Call. 


Ill  the  matter,  &c.  ^^^^  ggg 

I,  the  undersigned of ,  the  liq  of  the  above-named  co,  do 

liby  make  a  call  of  I.  per  share  upon  all  the  contribs  of  the  sd 

CO  [or  upon  the  several  persons  named  in  the  second  column  of  the 
schedule  hto,  being  respively  contribs  of  the  sd  co  in  respect  of  the 
number  of  shares  set  opposite  their  names  respively  in  the  same  schedule 
Dated,  &c.     Schedule  as  in  Form  687. 

M    M    2 


532 


WINDING-UP. 


Form  688.        The  list  of  contriTmtories  having  been  settled  wholly  or  in  part,  the  liquidator 

' — ~ "  will  from  time  to  time  make  calls  on  the  contributories  under  sub-sect.  9  of 

s.  133  of  the  Act.  It  is  not  necessary  to  give  any  notice  of  the  intention  to 
make  a  call,  though  it  is  sometimes  done.  The  liquidator  should  make  the 
call  by  an  instrument  in  writing,  which  can  be  as  in  Form  689. 

The  call  having  been  made,  the  liquidator  will  give  notice  thereof  to  the 
contributories.     Such  notice  may  be  as  follows  : — 


Form  689. 

Notice  of  call. 


I/i  fJtr  matter  of,  &c. 

Take  notice  that  on  the day  of ,  I,  the  nndersigned y 

of ,  the  liq  of  the  above-named  co,  make  a  call  of 1,  per  share 

upon  all  the  contribs  of  the  above-named  co  [or  as  the  case  may  be]^ 
and  that  the  amount  due  from  you  in  respect  of  the  call  so  made  is 

the  sum  of /.,  which  sum  you  are  hby  required  to  pay  to  me  at 

my  office  situate,  &c.,  on  or  ])efore  the  day  of next.      In 

default  of  paymt,  interest  at  the  rate  of  —  p.  c.  p.  a.  will  be  charged 
upon  the  amount  unpaid. 

Dated,  &c. 

A.  B.,  Liq. 

To  W. ,  of 


Summons  or 
notice  of 
motion  to 
enforce  calls 


If  the  call  is  not  duly  paid,  the  liquidator  will,  if  necessary,  take  proceedings 
to  enforce  payment. 

Form  690.  Upon  the  hearing-  of  an  applicon  on  the  pt  of  A.  B.,  the  hq  of  the 
above-named  co,  that  the  several  persons  named  in  the  second  column 
of  the  schedule  hto,  being  respively  contribs  of  the  sd  co,  may 
be  ordered  to  pay  to  the  sd  A.  B.  as  such  liq  as  afsd  at  his  office 

situate  at ,  within  four  days  after  service  upon  them  respively  of 

the  order  to  l)e  made  hereon,  the  several  sums  of  money  set  opposite 
to  their  respive  names  in  the  seventh  column  of  the  schedule  hto,  being 
the  amounts  due  from  the  sd  several  persons  respively  in  respect  of  a 

call  of  1,  per  share  made  by  the  sd  A.  B.  as  such  liq  as  afsd  on 

the day  of ,  And  that  the  sd  several  persons  may  be  ordered 

to  pay  the  costs  of  this  applicon.     \_ScJic(h(le,  see  Form  G74.] 

Calls  made  in  a  voluntary  winding-up  can  be  enforced  by  action  brought  by 
the  liquidator,  in  the  name  of  the  company,  against  the  contributories,  or  by 
proceeding  under  s.  138  of  the  Act  of  1862.  The  latter  is  the  best  course,  and 
is  generally  adopted.     In  re  Whitehouse  4"  Co.,  9  C.  D.  595. 

The  application  should  be  by  motion  or  summons.    See  infra.  Forms  693,694. 


Form  691.  Ui)()n  the  applicon  of  E.,  the  liq  of  co,  by  summons  dated  2  June, 
Order  enforcing  1877,  and  upon  reading,  &c.,  Lot  the  several  persons  named  in  the 
call  matie  hy  second  column  of  the  schedule  to  this  order,  being  contril)S  of 
sd  CO,  on  or  before  20  July,  1877,  or  within  four  days  after  ser-sice  of 
this  order,  pay  to  E.  the  liq  of  sd  co,  at  his  office,  No.  — ,  &c.,  the 
several  sums  set  opposite  their  respive  names  in  the  sixth  column  of 
the  sd  schedule  hto  :   such  sums  being  the  amounts  due  from  the  sd 


liquiilator. 


VOLUNTAEY. 


533 


several  persons  respively  in  respect  of  a  call  of  21.  10s.  0^.  per  share  Form  691. 
made  by  tlie  scl  liq.     And  also  let  the  sd and ,  respively  each 


pay  to  the  sd  E.  the  sum  of  one  guinea  costs. 
(592.]     Sheffield  Purchasers  Co.,  Malins,  V.C.,  2 
See  also  Forms  (;02  and  G93  infra. 


[Schedule  as  in  Form 
July,  1877.     B.  1185. 


Orders  under  S.  101. 

Orders  are  frequently  made  under  s.  101  [siq^ra,  p.  467],  on  the  application 
of  the  liquidator  for  the  payment  of  monies  due  in  respect  of  calls  made  prior 
to  the  Avinding  up,  or  other  monies  owing  by  the  contributories.  Not  uncom- 
monly the  order  includes  calls  made  before  and  after  the  commencement  of  the 
winding  up.  See  Form  093.  As  to  set-off,  see  Whitehouse  ^  Co.,  9  C.  D.  595  j 
Gill's  case,  12  C.  D.  755 ;  Colorado  Mines,  75  L.  T.  145. 


Upon  the  applicon  of   B.    the  liq  of  the  above-named  co,  and  no  Form  692. 


one  appearing  for  the  several  persons  nientd  in  the  2nd  column  of  Order  to  pay 
the  schedule  hto  although  duly  summoned  as  appears  by  the  aff't  of  '^^^^'^  '"'^^^.« 
P.  filed  IG  Jan.,  1877,  and  upon  reading,  &c..  Let  the  several  persons  up. 
named  in  the  1st  column  of  the  sd  schedule  being  respively  contribs 
of  the  sd  CO,  within  four  days  after  ser^•ice  of  this  order  on  them 
respively,  pay  to  the  sd  B.,  the  liq  of  the  sd  co,  at  the  office  of  jMessrs. 
W.  &  Co.,  situate,  &c.,  the  sums  of  money  set  opposite  their  respive 
names  in  the  8th  column  of  the  sd  schedule,  such  simis  beino;  the 
amounts  due  from  the  sd  several  persons  respively  in  respect  of  the  calls 
of  (js.  per  share  made  on  ]0  July,  187o,  and  of  4.s.  per  share  made  on 
31  October,  1876,  as  meutd  in  the  5th  and  Gtli  columns  of  the  sd 
schedule,  together  with  interest  thereon  at  the  rate  of  5  p.  c.  p.  a.  in 
respect  of  the  1st  call  fi-om  10  July,  1873,  and  in  respect  of  tlie  2nd 
call  from  31  Oct.,  187G,  respively  to  the  day  of  paymt,  and  for  the  costs 
of  this  applicon  and  consequent  thereon  (which  have  l)ecu  ascertained  in 
chambers)  as  mentd  in  the  7th  column  of  the  sd  schedule. 


The  Schedule  above  referred  to. 


Amount  due 

Amount  due 

Amount  of 

for  call 

for  call 

costs  of 

Total 
amount 
liayable. 

Xo.  on 
list. 

Kaiiu;. 

Adilress. 

Xo  (if 

shares. 

payal)le  10 
July,  1S73, 

]iayable 
31  Oct.  1876, 

application 
as  ascer- 

at tis.  per 

at  4s.  ijer 

tained  in 

share. 

share. 

chambers. 

£         8.      (1. 

£      ..    </. 

£     ,>;.    (/. 

£      s.    d. 

1 

A.  B. 

— 

10 

3     0     0 

2     0     0 

0     1  10 

5     4  10 

37 

C.  D. 

— 

50 

15     0     0 

10     0     0 

14     5 

26    4    5 

53 

E.  F. 

- 

150 

•45     0     0 

30     0     0 

3  10     2 

78  10     2 

&c. 

&c. 

&c. 

&c. 

&c. 

&c. 

&c. 

&c. 

British  Marine  Insurance  Co.,  Malins,  V.-C,  17  Jan.  1877.      A.  105. 


584 


WIXDING-UP. 


Another. 


Form  693.       Upon  the  applicon  of  L.,  the  liq  appointed  in  the  vohmtaiy  wincling- 
~  up  of  the  above  co,  and  upon  liearing  the  solors  for  the  appUcant  and 

for  J.  H.  and  T.  F.,  and  upon  reading  an  afft,  &c.,  and  an  aift  of  , 

tiled  7  Dec.  1878,  of  service  of  notice  of  this  applicon  :  Let  the  several 
persons  named  in  the  2nd  column  of  the  schedule  to  this  order,  being- 
respively  coutribs  of  the  sd  co,  pay  to  the  sd  L,  as  such  liq  as  afsd,  at 

the  office  of  Mr. his  solor  at ,  on  or  before  the  23rd  day  of 

Dec.  1878,  or  subsequently  within  4  days  after  service  upon  them 
respi^'ely  of  this  order  the  several  sums  of  money  set  opposite  to  their 
respive  names  in  the  8th  column  of  the  schedule  hto,  such  sums  being- 
the  amounts  due  from  the  sd  several  persons  named  in  the  2nd  column  of 
the  sd  schedule  in  respect  of  calls  made  uiwn  the  members  of  the  sd  co 
previously  to  the  commencement  of  the  •\vinding-up  thereof,  and  of  a  call 
of  OcS.  per  share  made  by  the  sd'L.,  as  such  liq  as  afsd,  on  the  2Gth  of 
April,  1878  :  And  it  is  ordered  that  each  of  the  sd  several  persons  do 
also  i^ay  to  the  sd  L.,  as  such  liq  as  afsd,  at  the  time  and  place  afsd,  a 
further  sum  of  8s.  Sd.  for  his  or  her  proportion  of  the  costs  of  this 
applicon. 

Schedule. 


Serial 

No.  on 

list. 

Name. 

Address. 

Description. 

In  wliat 
cliaracter 
included. 

No.  of 
shares. 

Amount  of 

(•nil  made  l.y 

li(luiil:itor 

on  L'T  Aiiril, 

LSTJS. 

Amount 
due  in 

resjieet  of 
calls  made 
lireviou.sly 
to  winding 

Total 

amount 

due. 

Wedneshury  Newsjiajm-  Co.,  M.  R.,  1)  Dec.  1878.     22r)5  B. 


Rosfraiiving  and  siaying  actions,  Ac. 

Formal  parts :  see  infra,  Form  707. 

—  of ,  the  liq  acting  in  the  voluntary  winding-up 

of  the  above-named  co,  that of may  be  restrained  from  further 


Form  694.       ^>ii  the  j^t  of 


Notice  of 

motion  to  re-    proceeding  with  tlie  distress  levied  l)y  him  on  the  goods  of  the  sd  co,  and 

.strain  distress,  f^.^^j^^  levying  any  other  distress  on  the  goods  of  the  sd  co  in  respect  of 

any  rent  whicli  accrued  due  to  him  from  the  sd  co  before  the day 

of :  And  tliat  the  sd may  l)e  ordered  to  pay  the  costs  of  this 

applicon. 

Where  a  compulsory  or  siipervision  order  has  been  made,  no  action  or  pro- 
ceeding can  be  proceeded  with  or  commenced  against  the  company  except  with 


VOLUNTARY. 


5:35 


the  leave  of  the  court.     See  section  87  of  the  Act,  supra,  Form  49^.     But  this   Form  694. 
section  does  not  Jipply  to  a  purely  voluntary  winding  up. ■ 

However,  it  was  well  settled  before  the  Judicatux-e  Act,  1873,  that  where  a 
voluntary  winding-  up  was  in  progress  the  court  would  in  general,  under  sec- 
tions 138  and  85  of  the  Act  of  18G2,  restrain  actions  and  proceedings  against 
the  company,  the  plaintiff  being  permitted  to  add  his  costs  to  his  debt  and 
jjrove  for  the  amount.     In  re  Poole  Firehriclc  Co.,  17  Eq.  2G8 ;  Buckley,  21G. 

And  the  Judicature  Act  has  not  altered  the  practice  except  that  Avhere  the 
action  is  pending  in  the  High  Court,  the  application  must  be  to  stay  further 
proceedings,  and  should  be  made  to  the  Division  in  which  the  action  or  pro- 
ceeding is  pending.  See  supra,  p.  489.  Walker  v.  Banagher  Distillery  Co.,  1 
Q.  B.  D.  129;  Rose  v.  Gardden  Lodge  Co.,  3  Q.  B.  D.  235  ;  In  re  Artistic  Colour 
Co.,  14  C.  D.  502.  AVith  the  exception  aforesaid  the  ajiplication  to  restrain 
should  be  made  to  the  Chancery  Division  by  motion  on  notice,  see  infra.  Form 
707. 

Where  the  plaintiff  has  notice  of  the  voluntary  winding  up,  and  after  an 
offer  to  allow  him  to  prove  for  his  debt  and  costs,  proceeds,  the  court  in  staying 
the  action  may  decline  to  allow  him  to  add  to  his  debt  the  costs  of  appearing 
upon  the  application  to  stay.     Rose  v.  Gardden  Lodge  Co.,  3  Q.  B.  D.  235. 

And  where  the  action  is  brought  after  notice  of  the  winding-up,  the  plaintiff, 
except  in  special  circumstances,  will  not  be  allowed  to  add  the  costs  to  his  debt, 
and  may  be  ordered  to  pay  the  costs  of  the  action  and  of  the  application  to 
restrain  or  stay.     East  Kent  Shipping  Co.,  W.  L.  T.  748  ;  Buckley,  192. 

In  a  voluntary  as  in  a  compvilsory  winding  up  certain  actions  and  proceedings 
(e.  g.,  a  foreclosure  action)  will  be  allowed  to  go  on,  see  suprra,  p.  195. 

Title  :  sec  svpra,  Form  G74.  Form  695. 

Notice  is  hby  given  that  the  creditors  of  the  above-named  co  arc  re-  Notice  to 

quired,  on  or  before  the  day  of  ,  to  send  their  names  and  creditors. 

addresses,  and  the  parlars  of  their  debts  or  claims,  and  tlie  names  and 

addresses  of  their  solors,  if  any,  to  A.  of  ■ ,  the  hq  of  the  sd  co,  and, 

if  so  required,  by  notice  in  writing  from  the  sd  liq,  are  l)y  their  solors  to 
come  in  and  prove  their  sd  debts  or  claims  at  such  time  and  place  as 
shall  be  specified  in  such  notice,  or  in  default  thereof  they  will  be  ex- 
cluded from  the  benefit  of  any  distributi(ju  made  Iiefore  such  debts  are 
proved. 

Dated  this  day  of . 

B.  of . 

iSoJor  to  the  above-named  liq. 

Immediately  after  his  appointment  the  liquidator  should  advertise  for  credi- 
tors as  above.  Sometimes  the  notice  is  signed  Vjy  the  liquidator  instead  of  his 
solicitor,  and  in  such  case  the  word  "undersigned"  will  be  inserted  in  the 
notice  before  the  name  of  the  liquidator,  and  the  signature  modified  accord- 
ingly. The  notice  should  be  advertised  two  or  three  times  in  newspapers 
circulating  in  the  district  where  the  company's  oflBce  is  sitviate,  and  in  the  Gazette. 

The  court  generally  allows  about  six  weeks,  and  a  voluntary  liquidator 
should  allow  the  same.  As  regards  creditors  abroad,  a  longer  period  is  some- 
times allowed.     See  1  C.  P.  D.  2iG. 

The  liquidator  will  investigate  the  claims  sent  in,  and  ascertain  so  far  as  he 
is  able  which  of  the  debts  and  claims  are  justly  due  from  the  company.  If  he 
is  not  satisfied  as  to  any  claim,  he  should  either  endeavour  to  effect  a  compro- 
mise and  get  it  properly  sanctioned  [^supra,  p.  510],  or  he  can  leave  the  claimant 
to  bring  an  action,  or  he  can  apply  to  the  court  to  adjudicate  on  the  claim. 


536 


WINDING-UP. 


Form  695.    The  last-mentioned  is  the  course  very  commonly  adopted,  and  sometimes  one 
ai^plication  is  made  as  to  several  claims. 


Form  696. 


iSuinmons  for 
adjudication 
of  disputed 
claims. 


On  the  pt  of  A.  of ,  the  liq  of  the  above-named  co,  that  it  may- 
be determined  whether  the  claim  against  the  sd  co  of  B,  of  — —  [or  of 
the  several  persons  whose  names  and  addresses  are  set  forth  in  the  2nd 
and  JJrd  columns  of  the  schedule  hereto]  ought  or  ought  not  to  be 
allowed  by  the  applicant. 

The  proceeding  on  the  summons  will  be  similar  to  that  upon  a  disputed  claim 
in  a  compulsory  winding  up. 


Order  for 
inquiry  as  to 
creditors  of 
company. 


Form  697.  Upon  the  applicon  of  liqs  of  the  above-named  co  hj  summons,  dated 
19th  March,  1873,  and  upon  hearing  the  solor  for  the  liqs  and  reading 
the  afft  of  C,  jfiled,  &c, :  Let  an  inquiry  be  made  what  are  the  debts  of 
the  sd  CO,  and  the  sd  judge  doth  hby  fix  the  1st  of  September,  1873,  as 
the  day  on  or  before  which  the  creditors  of  the  sd  co  are  to  send  their 
names  and  addresses  and  the  parlars  of  their  debts  or  claims  and  the 

names  and  addresses  of  their  solors  (if  any)  to  Mr.  8.  of  ,  London, 

the  solor  for  the  sd  liqs  of  the  sd  co,  and  let  such  creditors,  if  so  re- 
quired by  notice  in  writing  from  the  sd  liqs  by  their  solors,  come  in  and 
prove  their  sd  debts  or  claims  at  the  chambers  of  the  sd  judge  at  such 
time  as  shall  be  specified  in  such  notice  ;  and  order  that  in  default 
thereof  such  creditors  be  excluded  from  the  benefit  of  any  distribu- 
tion made  before  such  debts  are  proved  :  And  order  that  for  the  ppose 
of  carrying  out  this  order  such  advertisemts  be  forthwith  issued  in  such 
newspapers  as  the  judge  shall  direct.  Edij)se  Gold  Milling  Co.,  Limtd, 
Malins,  V.-C,  27  Mar.  1873.     3038  A. 

In  some  cases,  e.  g.,  where  there  is  likely  to  be  a  large  number  of  disputed 
claims,  it  is  considered  desirable  to  obtain  an  order  as  above.  See  also  Forms 
693  and  691. 

By  this  means  the  liquidator  is  relieved  from  much  responsibility,  and  the 
winding  up  may  be  expedited.  The  proceedings  on  such  an  order  will  be 
similar  to  those  in  a  compulsory  winding  up,  and  when  the  chief  clerk  has  made 
his  certificate,  the  liquidator  can  declare  and  pay  dividends  and  proceed  with, 
the  winding  up  either  with  or  without  further  aj^plication  to  the  court. 


Form  698.       In  the  matter,  <tr. 

DeclarationTof^      I,  of  ,  the  liq  of  the  above-named  co,  do  hby  declare  a 

dividend.          dividend  at  the  rate  of shillings  in  the  pound  upon  the  amount  of 

the  respive  debts  of  the  creditors  of  the  sd  co  whose  names  and  the 
amount  of  whose  debts  are  set  forth  in  the  schedule  hto. 

Dated,  &c.  ,  Li(j. 

Schedule. 

When  the  liquidator  has  in  hand  sufficient  funds,  and  the  list  of  debts  and 
claims  has  been  settled  or  nearly  settled,  he  will  declare  a  dividend  to  be  paid 
to  the  creditors  whose  claims  have  been  allowed.  In  determining  the  amount, 
he  will  see  that  he  retains  funds  or  assets  sufficient  to  cover  all  probable  costs 
and  expenses  of  the  winding  up,  and  to  pay  a  like  dividend  on  all  outstanding 


freeholds. 


VOLUNTAEY.  537 

claims.     The  liquidator  will  declare  the  dividend  by  instrument  in  writing,    Form  698. 
which  may  be  as  above. 

Sometimes  the  liquidator  obtains  the  sanction  of  the  court  to  his  declaring  a 
dividend. 

A  dividend  having  been  declared,  notice  will  be  given  to  the  creditors  and 
payment  made  accordingly. 

Sales  hy  Liquidator. 

The  liquidator  has  power,  under  section  133  (7)  and  section  95  of  the  Act,  to 
sell  the  property  of  the  company.  Great  care  should  be  taken  in  preparing  the 
conditions  of  sale,  and  a  reserved  price  should  be  fixed.  Applications  to  the 
couit  to  sanction  sales  are  not  uncommon. 

If  thought  desirable  in  any  case,  an  order  can  be  obtained  for  sale,  with  the 
appi'oval  of  the  judge,  in  which  case  the  sale  will  be  carried  out  by  the  court. 
See  supra,  p.  451. 

Conveyances  hy  Liqaidatur. 

THIS  INDEE  made  the  day  of ,  18.so,  between  The  A.  rorm  699. 

Co,  Limtd  (hereinafter  called  the  co)  of  the  first  pt,  B.,  the  liq  of  the  Conveyance  of 

CO,  of  the  second  pt,  and  C.  of  ,  of  the  third  pt.     Whas  by  special 

resokition  of  the  co  duly  passed  and  confirmed  at  exti'aordinary  general 

meetings  of  the  members  thereof  held  respi^'ely  on.  the day  of 

and  the day  of ,  it  was  resolved  that  the  co  should  be  wound 

up  voluntarily,  and  that  that  the  sd  B.  should  be  and  he  was  thereby 
appointed  liq  for  the  pposes  of  such  winding-up  ;  Axd  whas  the  co  is 
seised  of  the  hereds  hereinafter  described  and  intended  to  be  hby  assured 
for  an  estate  of  inheritance  in  fee  simple  in  possession  fi'ee  from  incum- 
brances ;  AxD  WHAS  the  sd  B.,  as  such  liq  as  afsd,  hath  agreed  with 
the  sd  C.  for  the  sale  to  him  of  the  sd  hereds  at  the  price  of /. : 

NOW  THIS  INDEE  WITNESSETH  that  in  psuance    of   the    sd 

agreemt,  and  in  conson  of  the  sum  of 1,  upon  the  execution  hereof 

pd  by  the  sd  C.  to  the  sd  B.  as  such  liq  as  afsd  (the  receipt  whereof  the 
sd  B.,  as  such  liq,  doth  hby  acknowledge),  the  co,  by  the  direction  of  the 
sd  B.  as  such  liq,  doth  hby  grant  unto  the  sd  C,  his  heirs  and  assigns ; 
All  and  singular  [  parcels^  :  To  Hold  the  same  unto  and  to  the  use  of 
the  sd  C,  his  heirs  and  assigns ;  And  the  sd  B.  doth  hby  [usi'al  covenant 
against  incumbrances^ . 

In  witness  whereof  the  sd  B.,  as  such  liq  as  afsd,  hath  caused  the 
common  seal  of  the  co  to  be  hereunto  affixed,  and  the  other  parties  hto 
have  hereunto  set  their  hands  and  seals  the  day  and  year  first  above 
written. 

The  common  seal  of  the  A.  Company,  Limited,  was  affixed 

hereto  by  C,  Kquidator.  (L.S.) 


Signed,  sealed,  and  delivered  by  the  said  B.,  in  the  pre- 
sence of 


B. () 

C. () 


Signed,  sealed,  and  delivered  by  the  said  C,  in  the  pre- 
sence of 


538  tvt:nding-up. 

Porm  699.        Tho  company's  property  does  not  vest  in  the  liquidator,  and  according-ly'as- 

surances  should  be  made  in  the  company's  name.    See  section  133  (7)  and  section 

95  of  the  Act.  Some  persons  make  the  company  grant  or  assign,  and  the  liqui- 
dator "  confirm/'  but  there  is  no  need  to  do  this.  The  liquidator  usually  cove- 
nants against  incumbrances. 

It  is  not  usual  for  a  company  which  is  being  wound  up  to  give  covenants  for 
title,  and  conditions  of  sale  generally  stipulate  that  no  covenant  shall  be  re- 
quired except  the  liquidator's  covenant  against  incumbrances. 

Compromises. 

Section  IGO  of  the  Act  empowers  the  liquidator,  with  the  sanction  of  an  ex- 
traordinary resolution,  \_supra.  Form  G30]  to  make  compromises.  And  he  can 
call  the  requisite  meeting  under  section  139  of  the  Act.  But  in  many 
cases  it  is  considered  preferable  to  apply  for  the  sanction  of  the  court,  under 
sections  138,  IGO,  especially  where  it  is  desired  to  compromise  with  a  contribu- 
tory. Where  a  compromise  is  proposed,  the  liqviidator  sometimes  (1)  makes  a 
provisional  agreement  for  compromise,  and  then  calls  a  meeting  or  applies  to 
the  court  to  sanction  the  same  ;  or  (2)  calls  a  meeting  or  applies  to  the  court 
to  sanction  a  compromise  upon  terms  specified  or  referred  to  in  the  notice  or 
summons,  and  after  obtaining  the  requisite  sanction  enters  into  the  agreement. 
If  the  court  is  asked  to  sanction  a  compromise,  evidence  that  the  compromise  is 
beneficial  must  be  forthcoming.     Supra,  Form  G30,  et  seq. 

In  the  case  of  a  compromise  with  a  contributory,  the  liquidator,  after  taking 
out  the  summons  for  liberty  to  compromise,  generally  requires  the  contributory 
to  make  an  affidavit  as  to  his  means  {sujira.  Form  628),  and  if  necessary  cross- 
examines  him  on  it.     Form  631. 


Resolutions. 


Remimeration  of  Liquidator. 

Form  700.       That  the  remuneration  of  the  sd  Kq  for  his  services  in  the  winding-up 
be  fixed  at  the  sum  of  [lUO]/. 

Or  at  the  sum  of /.  per  annum,  or  at  the  sum  of  [two]  guineas 

per  day  of  eight  hours  for  his  own  time  and  one  guinea  per  day  of  eight 
liours  for  his  clerk's  time,  or  at  a  sum  equal  to  two  p.  c.  of  the  amount 
of  the  assets  divided  among  the  unsecured  creditors  and  members  of 
the  CO. 

That  the  remuneration  of  the  sd  Hqs  be  pd  at  two  guineas  each  for 
every  day  occupied  by  them  in  the  winding  up,  together  with  all  costs, 
cliarges,  and  expenses  incurred  by  them  in  and  about  such  winding  up. 


Form  701.  That  the  liq  shall  be  remunerated  for  the  service  of  himself  and  liis 
clerks  in  accordance  with  the  scale  usually  adopted  by  the  High  Ct  of 
Justice  in  fixing  the  remuneration  of  off.  liqs. 

By  sub-s.  (3)  of  s.  133  of  the  Act  of  1862,  the  company,  in  general  meeting, 
is  empowered  to  fix  the  remuneration  of  the  liquidators.  See  also  s.  141,  infra, 
note  to  Form  703,  as  to  the  priority  given  thereto. 

Sometimes,  as  already  mentioned  \_supra.  Form  GG9],  the  remuneration  is 
fixed  at  the  meeting  at  which  the  liquidators  are  appointed,  and  the  above  are 
examples  of  resolutions  so  passed.  But  in  many  cases  the  remuneration  is  not 
fixed  until  some  subsequent  period,  ejj.,  at  one  of  the  annual  meetings  or  at  the 
final  meetinsj. 


YOLUNTAEY.  539 

There  are  advantages  in  fixing  the  remuneration  upon  the  appointment  of  Form  701. 
the  liquidators,  because  the  rights  of  the  liquidators  are  thereby  clearly  deter- 
mined,  but  it  must  be  borne  in  mind  that  if  a  high  rate  is  fixed  in  the  case  of 
an  insolvent  company,  creditors  will  have  cause  to  complain. 

By  the  joint  effect  of  ss.  138  and  93  of  the  Act,  the  Court,  if  ajiplied  to,  can  fix 
the  remuneration  of  the  liquidator,  and  applications  for  this  purpose  are  not 
uncommonly  made.  All  questions  as  to  the  propriety  of  the  amount  are  thereby 
avoided,  and  in  the  case  of  an  insolvent  company  this  course  seems  peciiliarly 
desirable. 

The  following  is  an  example  of  an  order : 

Upon  the  peton  of  H.  of,  &o.,  and  J.  of,  &c.,  preferred  unto  this  Ct  Form  702. 
and  upon  hearing  counsel  for  the  petrs  and  for  the  respondents  and  Order  as  to 
upon  reading  the  sd  peton,  By  consent  order  that,  without  prejudice  to  remuneration 
any  question,  it  be  refeiTed  to  chaml^ers  to  tix  the  amount  of  remunera- 
tion proper  to  he  allowed  and  jjd  to  S.,  C,  and  H.  the  present  liqs  of  the 
sd  CO,  And  order  that  it  be  referred  to  the  taxing  master  to  tax  the  bill 
of  costs  of  ^lessrs.  L.  &  L.  the  solors  of  the  respondents,  delivered  to  the 
sd  liqs  of  and  relating  to  the  Avinding  up  of  the  sd  co,  And  order  that 
the  rest  of  the  sd  peton  do  stand  over.     Londoii  Pa2)er,  t£r,  Co.,  Malins, 
V.-C,  1  Feb.,  1878.     B.  311. 

Formal j^mrts :  see  infra,  Form  7(t8. 

On  the  pt  of the  liq  of  the  above-named  co  that  it  may  be  Form  703. 

referred  to  tlie  proper  taxing-master  to  tax  as  between  solor  and  client  Smjimons  to 
the  costs,  charges,  and  expenses  of  the  applicant  as  voluntary  liq  of  the  tax  costs. 

above-named  co  since  his  appointmt  on  the of up  to  the 

of . 

S.  lU  of  the  Act  of  18G2  pi-ovides  that  "All  the  costs,  charges,  and  expenses 
properly  incurred  in  the  voluntary  winding  uj)  of  a  company,  including  the 
remuneration  of  the  liquidators,  shall  be  payaVjle  out  of  the  assets  of  the  com- 
pany in  priority  to  all  other  claims." 

But  this  section  does  not  give  priority  over  mortgagees  and  others  having 
specific  security  on  the  assets  at  the  commencement  of  the  winding  up.  except 
so  far  as  the  liquidator's  costs  are  costs  of  preservation  or  realisation,  of  which 
the  mortgagees  have  had  the  benefit.  Regent's  Canal  Ironivorks  Co.,  ex  parte 
Grissell,  3  C.  D.  -±11. 

As  the  costs  of  winding  up  form  a  first  charge,  the  liquidator  can  from  time 
to  time  make  i>ayments  on  account.  In  most  cases  the  liquidator  pays  the 
solicitor's  bill  without  taxation,  but  he  should  remember  that  he  may  at  any 
time  be  called  on  to  bring  in  his  account,  and  if  he  has  overpaid  the  solicitor, 
may  be  held  responsible  for  the  difference.  Accordingly,  in  some  cases,  the 
solicitor  gives  the  liquidator  an  undertaking  that  if  he  should  at  any  time  be 
disallowed  any  part  of  the  bill,  the  amount  shall  be  refunded.  Occasionally 
the  parties  think  it  more  prudent  to  get  the  bill  taxed  before  payment.  In 
order  to  obtain  taxation,  a  summons  should  be  taken  out  under  s.  138  of  the 
Act  as  above.  The  liquidator  is  not  personally  responsible  to  his  solicitor  for 
the  costs  of  the  winding  up.  Trueman's  Estate,  14  Eq.  278  ;  In  re  Massey,  9  Eq. 
307,  SKirra,  p.  510. 

Upon  the  applicon  of  M.  the  off.  liq.,  etc.,  and  upon  hearing  the  solors  Form  704. 
for  the  ptrs  and  for  the  sd  ofi*.  liq.  and  for  H.  the  late  voluntary  liq  of  Order  to  bring" 


540 


WINDING-UP. 


Form  704.  tlie  sd  co  and  the  sd  H.  hby  sul)initting  to  tlie  jurisdiction,  and  upon 
in  account  of  reading  an  order  dated  2")  July,  187G  ;  It  is  by  consent  of  the  sd  H. 
liquidator.        ordered  that  the  sd  H.  do  forthwith  or  Avithin  7  days  after  service  upon 

him  of  this  order,  lodge  in  the  chambers  of  the  judge  his  account  of 

receipts  and  disbursemts  on  behalf  of  the  sd  co  as  such  voluntary  liq. 

3Ianor  Silkstonc  Coal  Co.,  IMahns,  V.-C,  19  March,  1877.     B.  G23.    See 

also  Form  lid, post. 

The  above  order  was  made  in  a  case  where  a  voluntary  Avinding-up  was  super- 
seded by  a  compulsory  order,  but  the  Court  can  at  any  time,  upon  an  applica- 
tion under  s.  138  of  the  Act,  order  the  liquidator  to  bring  in  and  vouch  his 
account.  The  proceedings  upon  the  order  are  like  those  in  a  compulsory  wind- 
ing-up, supra,  p.  539.  However,  such  orders  are  only  made  in  sj^ecial  circum- 
stances, e.g.,  upon  the  liquidator's  application,  or  where  improper  conduct  is 
shown. 

Under  s.  139  of  the  Act,  the  liquidator  is  to  convene  a  meeting  of  contribu- 
tories  every  year,  and  submit  an  account  thereto.  This  applies  even  when  a 
supervision  order  has  been  made.  Wright's  case,  5  Ch.  137.  Re  Northern 
Counties  Bank,  Chitty,  J.,  at  chambers,  18  Dec,  1883.  See  also  s.  112  as  to  the 
final  account. 

Form  705.       Upon  the  peton  of  K.  of preferred,  &c.,  and  upon  reading,  &c., 

Order removino-  ^^^^  ^^  appearing  from  the  afft  of  the  sd  K.  that  J.  the  liq  of  the  sd  co  is 
liquidator.  out  of  the  jurisdiction  and  this  Ct  dispensing  with  service  of  the  sd 
joeton  upon  the  sd  co,  Let  the  sd  J.  the  liq  of  the  sd  co  be  removed  fi'om 
his  office  of  liq  of  the  sd  co,  And  appoint  the  petr  K.  to  he  liq  of  the 
sd  CO  in  the  place  of  the  sd  J.,  And  Let  the  sd  J.  deliver  up  to  the  sd  K. 
all  the  ppty,  cash,  books  of  account,  and  papers  in  his  possession  belong- 
ing to  the  sd  CO.  J/ai/i  Pri/ifim/,  dc,  Co.,  Hall,  V.-C,  13  Dec,  1878. 
B.  2171. 

Form  706.  Upon  motion,  &c..  Let  C.  and  B.  be  respively  removed  from  being 
Another.  ^^*^1^  "^^  ^'^^  ^^  *^*^'  ^^^^^  ^^^  some  proper  person  or  jiersons  be  appointed 

to  act  in  their  stead  as  liqs  in  the  winding  up  of  the  sd  co,  And  order 
that  the  sd  C.  and  B.  do  render  their  final  account  as  such  liqs  and  do 
deliver  over  to  such  new  liq  or  liqs  all  ppty,  books,  and  documts  of  the 
sd  CO  in  their  custody,  possession,  or  j^ower.  And  let  the  costs  of  the 

applicants and  of  this  motion  be  taxed  and  pd  out  of  the 

assets  of  the  sd  co.  And  Let  the  sd  C.  and  B.  bear  their  own  costs  of  the 
sd  motion.  Devonshire  Silkstom  Coal  Co.,  Malins,  V.-C,  13  Mar.,  1878. 
A.  575.     This  order  was  reversed  on  appeal,  W.  N.  1878,  173. 

As  to  removal  of  liquidators,  see  s.  141  of  the  Act  of  1862  ;  Buckley,  201 ;  Sir 
John  Moore  Co.,  12  C.  D.  32G  ;  Oxford  Bldg.  Soc,  19  L.  T.  495  ;  and  Form  454. 


JleetiilffS. 

Meetings.  S.  139  of  the  Act  empowers  the  liquidators  to  summon  general  meetings  for 

the  purpose  of  obtaining  the  sanction  of  the  company  by  special  or  extraordi- 
nary resolution,  or  for  any  other  purposes  they  think  fit,  and  also  requires 
annual  meetings  to  be  held.  The  meetings  should  be  convened  by  notice,  in 
accordance  with  the  regulations  of  the  company. 


VOLUNTARY. 


541 


AppUcalions  to  the  Ct  undor  s.  138. 

Tu  the  High  Cfc  of  Justice. 
Chancery  Division. 

]Mi".  Justice . 

In  the  matter  of  the  Cos  Act,  lHfi2. 

And  in  the  matter  of  the Co,  Limtd. 

Take  notice  \_as  in  Form  382,  svpra,  p.  418.] 

Dated  this day  of . 

Yours,  etc. 
To,  &c.  A.  B.,  Solorfor  the  ai)}_tlicant. 


Form  707. 

Notice  of 
motion. 


In  the  High  C*t  of  Justice. 

Chancery  Division. 
Mr.  Justice . 


188- 


B.    No.—. 


Form  708. 

Formal  parts 
of  summons 
under  3.  138. 


In  the  matter  of  the  Cos  Act,  1SG2. 

And  in  the  matter  of  the  B.  Co,  Limtd. 

Let {.^-(J-,  C,  of ,  the  liq  of  the  above-named  co]  attend  at 

the  chambers  of  Mr.  Justice at  the  Eoyal  Courts  of  Justice  at  the 

time  specified  in  the  margin  [or,  at  the  foot]  upon  the  applicon  of 


[D.,  who  claims  to  be  a  contriby  of  the  above-named  co]  that  {state  nature 
of  applicoji^. 

This  summons  was  taken  out  l)y  of  ,  solors  to  the  above- 
named  D. 

The  foUowiiKj  note  k  to  he  added  to  the,  orhjlnal  swnmovs,  and  vhen 
tJie  time  is  altered  ii/  indori^emf  the  indorsemt  to  be  referred  to  as  detoi/j  : 

Note. — If  you  do  not  attend  either  in  person  or  by  your  solor  at  the 
time  and  place  al)Ove-meutd  {or  at  the  time  mcntd  in  the  indorsemt 
hereon],  such  order  will  be  made  and  proceedings  taken  as  the  judge 
may  think  just  and  expedient.     [Sec  Order  TiY.  r.  20.] 

S.  138  of  the  Act  is  as  follows  : 

Where  a  company  is  being  wound  up  voluntarily,  the  liquidators  or  any  con- 
tributory of  the  company  may  apply  to  the  Court  in  England,  Ireland,  or  Scot- 
land, or  to  the  Lord  Ordinary  on  the  Bills  in  Scotland  in  time  of  vacation  ;  to 
determine  any  question  arising  in  the  matter  of  such  winding  up,  or  to  exercise 
all  or  any  of  the  powers  which  the  Court  might  exercise  if  the  company  were 
being  wound  up  by  the  Court,  and  the  Court  or  Lord  Ordinary  in  the  case  afore- 
said, if  satisfied  that  the  determination  of  such  question,  or  the  required  exer- 
cise of  power,  will  be  just  and  beneficial,  may  accede  wholly  or  partially  to  such 
application,  on  such  terms,  and  subject  to  such  conditions  as  the  Court  thinks 
fit,  or  it  may  make  siich  other  order,  interlocutor  or  decree  on  such  application 
as  the  Court  thinks  just. 

This  section  is  frequently  made  use  of  in  a  voluntary  winding-up.  It  will  be 
observed  that  only  the  liquidator  or  a  contributory  can  apply  :  a  creditor  can- 
not. See  Poole  Firebrick  Co.,  17  Eq.  2GS,  Buckley,  193.  Applications  under 
this  section  are  to  be  by  petition  or  motion,  or,  if  the  judge  shall  ao  direct,  by 
summons  at  chambers.     Rule  51. 

Applications  are  occasionally  made  by  petition.    See  In  re  Anglesea  Co.,  2  Eq. 


542  WINDING-UP. 

Form  708.  370;  Re  Australian  Co.,  W.  N.  1877,  37;  Form  70(3,  supra,  ^.  5iO.  But  they 
'  are  generally  made  by  motion  or  summons.     In  the  following  recent  cases  the 

application  was  by  motion  :  In  re  Horbury,  iSfc,  Co.,  11  C.  D.  109  ;  In  re  Gold 
Co.,  12  C.  D.  77  ;  Re  Union  Bank  of  Kingston-upon-Hull,  13  C.  D.  808. 

In  the  following  case  the  application  was  by  summons  :  In  re  Whitehonsc,  9 
C.  D.  595,  and  see  Forms  527,  559,  G19,  050. 

The  summons  must  be  an  originating  summons,  and  must  accordingly  be  filed 
in  the  writ  department  of  the  central  office.     See  further  Order  LV.  r.  20  et  seq. 

As  to  obtaining  order  giving  general  liberty  to  apply  in  a  voluntary  winding- 
up,  see  note  to  Form  709,  infra. 

Tlie  following  are  some  of  the  matters  in  regard  to  which  applications  are 
from  time  to  time  made  under  s.  138. 

Actions  and  proceedings  :  The  liquidator  can  take  and  defend  legal  proceed- 
ings in  the  name  of  the  company  under  ss.  133  (7)  and  95  of  the  Act,  but  occasion- 
ally, e.g.,  where  the  matter  involved  is  considerable,  he  applies  for  the  sanction 
of  the  Court.  Sometimes  a  contributory  applies  for  liberty  to  take  proceedings 
in  the  company's  name. 

Carrying  on  business  :  The  liquidator  can  carry  on  the  business  of  the  com- 
pany, so  far  as  may  be  necessary  for  the  beneficial  winding  up  of  the  same 
without  the  sanction  of  the  Court,  ss.  133  (7)  and  95  of  the  Act.  But  occasionally, 
in  important  cases,  he  applies  for  such  sanction. 

Borrowing  :  The  liquidator  can  raise  money  vipon  the  security  of  the  assets, 
ss.  133  (7),  95,  and  the  power  is  not  uncommonly  exercised,  e.g.,  in  order  to  pay 
off  seciu-ed  creditors,  to  provide  funds  to  carry  on  the  business,  &c.  Occasion- 
ally application  is  made  to  sanction  the  proceeding,  as  in  a  compulsory  winding- 
iijD.      See  supra,  j).  451  et  seq. 

Delivery  of  books,  papers,  and  property  :  Where  a  liquidator  is  unable  to  get 
possession  of  the  books,  papers,  or  other  property  of  the  comjoany,  he  not  uncom- 
monly applies  vmder  ss.  100,  138,  for  an  order  for  delivery.  See  supra.  Form 
462  et  seq.     In  re  Horhury  Bridge  Co.,  11  C.  D.  109. 

Eestraining  actions  and  proceedings.     See  Form  585  et  seq. 

Settling  the  list  of  contributories.     See  Form  GS7. 

Eectifying  the  list  of  contributories.     See  supra,  p.  462,  Form  511. 

Making  and  enforcing  calls.     See  Form  691. 

Enfoi'cing  payment  of  debts  due  fi'om  contributories.     See  Form  692. 

Liberty  to  declare  and  pay  dividends  to  creditors  and  contributories.  See 
Form  525. 

Adjudication  of  disputed  claims.     See  Form  696. 

Compromises.     See  note  preceding  Form  647. 

Service.  Applications  are  sometimes  made  as  to  service  out  of  the  jurisdic- 
tion or  siibstituted  service.     See  Form  575  et  seq. 

Examination  and  discovery  under  s.  115.  Such  applications  are  not  uncom- 
mon ;  they  are  usually  made  by  the  liqiiidator,  especially  with  a  view  to  pro- 
ceedings under  s.  165.     In  re  Gold  Co.,  12  C.  D.  77.     See  Form  629. 

Taxation  of  costs.     See  Form  703. 

Inspection  under  s.  156  of  the  Act. 

Applications  for  liberty  to  inspect  the  books  and  papers  under  this  section, 
are  not  uncommon,  see  Form  619,  snpra. 

Proceedings  against  directors  and  others  under  s.  165,  by  no  means  uncom- 
mon, see  In  re  Gold  Co.,  12  C.  D.  77,  and  Forms  634  et  seq. 

In  reo-ard  to  s.  161,  see  infra,  introduction  to  "Reconstruction." 

Adjusting  the  rights  of  contributories.  Occasionally  application  is  made  to 
the  Court  to  determine  the  rights  of  contributories  in  the  surplus  assets.  See 
In  re  Eclipse  Gold  Mining  Co.,  17  Eq.  491 ;  and  In  re  Anglesea  Colliery  Co.,  2  Eq. 
379,  in  which  case  the  application  was  by  petitions. 

Unclaimed  dividends.  Sometimes  before  the  final  meeting  is  held,  the  liqui- 
dator pays  any  unclaimed  dividends  into  Court,  and  obtains  an  order  as  in 
Form  671. 


VOLUNTARY.  543 

Staying  the  winding  up :  Upon  an  application  to  the  Court  under  s.  138,  the    Form  708. 
power  given  by  s.  89  of  staying  proceedings  in  the  winding  up  may  be  exer- 
cised.     See   further,   supra,  p.  38i.     The   application   is  usually   by   petition. 
South  Barrule  Slate   Quarry  Co.,  8  Eq.  6S8  ;    Bog   Mining   Co.,  L.  J.  Notes  of 
Cases,  1875,  48,  and  see  supra,  "  Petitions." 

Upon  the  applicon  of  the  above-named  co  l)y  sinnnioiis  dated  the  Form  709. 
7th  of  April,  1877,  and  upon  liearing  the  solors  for  the  ap])licaiits,  and  Order  giving 
upon  reading  the  London  Gazette  of  the  loth  of  April,  1.S77,  publishing  general  Uberty 
notice  of  a  general  meeting  of  the  members  of  the  sd  co  held  on  the 
Kith  of  March,  1877,  at  which  it  was  resolved  that  the  sd  co  should  be 
wound  up  voluntarily,  and  also  appointing  ]\Iessrs.  L.  &  D.  liqs  of  the 
sd  CO,  and  passing  certain  other  s]iecial  resolutions,  and  notices  of  an 
extraordinary  general  meeting  of  the  members  of  the  sd  co  held  on  the 
C.th  of  April,  1S77,  conhrming  such  resolutions.  It  is  ordered  that 
the  sd  liqs  or  any  contribs  of  the  sd  co  may  from  time  to  time  apply  to 
this  Ct  to  determine  any  question  arising  in  the  winding  up  of  the  sd 
CO,  and  to  exercise  as  respects  the  enforcing  of  calls  or  in  respect  of  any 
other  matter  all  or  any  of  the  powers  which  this  Ct  could  or  might 
exercise  if  thesd  co  was  being  wound  up  by  the  sd  Ct :  Axd  it  is 
ORDERED  that  such  proceedings  be  taken  for  the  ppose  of  ascertaining 
and  adjudicating  upon  the  debts  of  and  claims  upon  the  sd  co  as  the 
judge  shall  direct.  Argentine  Tramways  Co.,  Hall,  V.-C,  17  App.,  1877. 
A.  687. 

An  order  giving  liberty  to  apply  as  above,  is  sometimes  made  on  the  applica- 
tion of  the  liqiiidator.  The  object  is  to  facilitate  applications  to  the  Court  by 
avoiding  the  necessity  of  taking  out  an  originating  summons,  wlienever  appli- 
cation by  summons  has  to  be  made.  Where  such  an  order  has  been  made, 
application  can  be  made  by  ordinary  summons.  Possibly  there  may  be  some 
doubt  as  to  the  jurisdiction  to  make  the  order.  The  following  order  goes  still 
further,  for  it  gives  creditors  liberty  to  apply. 

Upon  the  a^jplicon  of  the  above-named  co,  &c.,  and  upon  hearing  the  Form  710. 
solors  for  the  applicants,  and  upon  reading  the  London,  (razeite  of  the  Another  order 
4th  of  Jan,  187(1,  containing,  &c.     It  is  ordered  that  the  sd  liqs  or  any  giving  general 
contribs  or  creditors  of  the  sd  co  may  apply  to  this  Ct  to  determine  any  ;,ppi,? 
question  arising  in  the  winding-up  of  the  sdco,  and  to  exercise  as  respects 
the  enforcing  of  calls  or  in  respect  of  any  other  matter  all  or  any  of  the 
])owers  which  the  Ct  could  or  might  exercise  if  the  sd  co  was  l^eing 
wound  up  by  the  sd  Ct.     And  it  is  farther  ordered  that  an  inquiry  be 
forthwith  made  whether  there  is  any  debt  of  the  sd  co  remaining  unpaid. 
London  and  Asiatic,  <£t.,  Co.,  Malius,  V.-C,  12  Dec,  187().     B,  lOiio. 

The Co,  Limtd. 

Notice  is  hby  given  in  psuance  of  section  142  of  the  Cos  Act,  1862,  that          °^ 
a  general  meeting  of  the  members  of  the  above-named  co  will  be  held  at  Notice  con- 
on day  the of at o'clock  in  the  afternoon,  for  meetlg^"'"' 


544 


WINDING-UP. 


Form  711.  the  ppose  of  liaA'ing  an  account  laid  before  them  showing  the  manner  in 
which  the  winding-up  has  been  conducted,  and  the  ppty  of  the  co  dis- 
posed of,  and  of  hearing  any  explanation  that  may  be  given  by  the 
li(|,  and  also  of  determining  by  extraordinary  resolution  the  manner  in 
which  the  books,  accounts  and  documts  of  the  co  and  of  the  liq  thereof 
shall  be  disposed  of. 

Dated  the day  of .  A.  D.,  Liquidatm'. 

See  section  11-2  of  the  Act  as  to  the  final  meeting.  The  meeting  must  be 
convened  by  advertisement  as  above  in  the  Gazette,  one  month  at  least  before 
the  meeting.  And  where  the  meeting  is  to  dispose  of  the  books^,  &c.,  notice  to 
the  same  effect  must  also  be  given  to  the  members  of  the  company,  by  post  or 
otherwise,  as  provided  by  the  articles  thereof,  for  iinder  section  155  of  the  Act, 
the  books,  &c.,  are  to  be  disposed  of  as  the  company,  by  an  extraordinary  reso- 
lution (see  sections  129,  129)  directs. 

The  notice  for  insertion  in  the  Gazette  must  be  signed  by  the  liquidator.  If 
the  signature  is  attested  by  a  solicitor  whose  name  is  in  the  law  list,  that  may 
be  sufficient,  but  sometimes  the  Gazette  requires  a  duplicate  to  be  verified  by 
the  statutory  declaration  of  some  person  who  will  state  that  he  was  present  on 
the day  of ,  and  saw \t}ie  liquidator^  sign  the  notice  hereto  an- 
nexed, and  that  the  signature set  and  subscribed  to  the  said  notice  as  the 

attesting  witness  to  the  said  signature  is  of  the  proper  handwriting  of  the 
declarant. 

At  the  meeting  the  liquidator  will  present  the  account  referred  to  in  the 
notice,  and  will  give  any  requisite  explanations  ;  and  resolutions  will  be  passed 
for  the  adoi^tion  thereof,  and  as  to  the  books,  e.  g. — 

1.  That  the  account  submitted  to  this  meeting,  and  showing  the  manner  in 

which  the  winding  up  has  been  conducted  and  the  property  of  the  com- 
pany disposed  of,  be  received  and  adopted. 

2.  That  the  books,  accounts,  and  documents  of  the  company,  and  of  the  liqui- 

dator thereof,  be  retained  by  the  said  liquidator,  he  iindertaking  to 
destroy  the  same  upon  the  dissolution  of  the  company,  or,  handed  over 
to the  purchaser  of  the  company's  [leasehold  property]. 


The 


Co,  Limtd. 


Form  712.       To  the  Eegistrar  of  Joint-Stock  Cos. 
Notice  to  ^  ^^o  ^^  inform  you  that  a  meeting  of  the  above-named  co  was  duly 

registrar  of       held  ou  the day  of for  the  ppose  of  having  an  account  laid 

na  meeting.    |j^^yj^.g  tj^gji^  showing  the  manner  in  which  the  winding-up  of  the  co  has 
l^een  conducted  and  the  ppty  of  the  co  disposed  of,  and  the  same  was 
done  accordingly. 
Dated,  &c. 

,  Liquidator. 

Section  1 13  of  the  Act  requires  the  liquidator  to  make  a  return  to  the  Eegis- 
trar of  Joint  Stock  Companies  as  above,  and  provides  that  on  the  expiration  of 
three  months  from  the  registration  of  the  return,  the  company  shall  be  deemed 
to  be  dissolved.  Default  in  making  the  return  subjects  the  liquidator  to  a 
penalty  of  5Z. 

Where  a  company  is  wound  up  voluntarily,  it  is  of  great  importance  to  all 
parties  that  it  should  be  duly  dissolved  in  manner  before  mentioned,  for  until 
dissolution  it  continues  to  exist,  and  accordingly  forgotten  liabilities  may  be 
discovered  and  disputes  revived,  and  the  conduct  of  the  liquidator  impeached. 
Hundi-eds  of  dissolutions  take  i^lace  every  year. 


UNDER    SUPERVISION.  545 

When  the  company  has  been  dissolved  as  aforesaid,  the  court  will  not  make  a   Form    713. 
winding-up  order,  even  upon  the  iietition  of  a  creditor  who  has  been  excluded. 
Pinto  Silver  Mining  Co.,  8  C.  D.  273  ;  Westhoiirne  Grove  Drapery  Co.,  W.  N.  1878, 
195.     But  in  a  case  of  fraud  it  might  be  possible  to  set  aside  the  dissolution. 
London  and  Caledonian  Co.,  11  C.  D.  140. 

Until  the  expiration  of  the  thi-ee  months,  application  can  be  made  to  the 
court,  and  a  winding-up  order  may  be  made.     CrooJchaven  Mining  Co.,  3  Eq.  09. 


WINDING  UP   UNDER  SUPERVISION. 

Supervision  Orders. 
Upox  the  peton,  kc.     This  Ct  doth  order  that  the  vohuitary  winding-  Form  713. 
lip  of  the  sd  CO  be  continued,  but  subject  to  the  supervision  of  this  Ct,  Supervision 
and  any  of  tlie  proceedings  under  the  sd  Tokmtary  winding  up  may  be  oi'<^ler. 
adopted  as  the  judge  shall  think  fit :  And  the  creditors,  contribs,  and 
liqs  of  the  sd  co,  and  all  other  persons  interested,  arc  to  be  at  libty  to 
apply  to  the  judge  at  chambers  as  there  may  be  occasion.     And  it  is 
ordered  that  the  costs  of  the  petr  and  of  the  sd  co  and  liqs  of  and 
relating  to  this  peton,  be  taxed  by  the  taxing  master  and  pd  out  of  the 
assets  of  the  co. 

Upon  the  peton  of  the  Credit  Foncier,  Limtd,  creditors  of  the  above-  Form  714. 


named  co,  &c.,  This  Ct  doth  order  that  the  voluntary  winding  up  of  the  Another, 
above-named  co  be  continued,  but  subject  to  the  supervision  of  the  Ct,  appointing 
and  any  of  the  proceedings  in  the  voluntary  winding  up  may  be  adopted 
as  the  judge  shall  think  proper  :  And  the  respondent  H.  M.  C,  one  of 
the  present  liqs  of  the  sd  co,  by  his  counsel  at  bar,  desiring  to  resign  his 

ofi&ce  of  liq  :  This  Ct  doth  order  that  J.  E.  H.  of ,  be  appointed  liq, 

in  the  stead  of  the  sd  H.  ]\I.  C.  and  to  act  in  conjunction  v\"ith  C.  T.  M. 
the  continuing  liq.  And  it  is  ordered  that  the  petrs  and  the  sd  Hester  & 
Co.,  Limtd.,  and  the  liqs  thereof,  and  the  respondents,  the  shareholders, 
be  allowed  their  costs  of  and  relating  to  this  applicon,  out  of  the  assets 
of  the  CO,  such  costs  to  be  taxed  by  the  taxing-master,  who  is  to  allow 
to  the  respondents,  shareholders,  such  costs  as  they  might  properly  have 
incurred  and  would  have  incurred  by  employing  one  solor.  The  petrs  to 
be  at  libty  to  appear  before  the  judge  as  creditors  in  all  proceedings 
relating  to  the  winding  up  at  the  expense  of  Hester  &  Co.,  Limtd. 
And  it  is  ordered,  that  the  retiring  liq  be  at  libty  to  make  any  appli- 
con in  respect  of  his  remuneration  (if  any),  as  such  liq,  as  lie  may  be 
advised.  Hester  Si-  Co.,  Limtd.,  Bacon,  V.-C,  11  May,  187G.  A.  815. 
As  to  giving  notice  of  winding-vip  order,  see  supra.  Form  423. 

Effect  of  Supervision  Order. 

Section  151  of  the  Act  provides  as  follows : 

Where  an  order  is  made  for  a  winding  up  subject  to  the  supervision  of  the 
court,  the  liquidators  appointed  to  conduct  such  winding  up  may,  subject  to  any 

N  N 


546 


WINDING-UP 


Porm  714.  restrictions  imposed  by  the  court,  exercise  all  their  powers  without  the  sanction 
■ or  intervention  of  the  court,  in  the  same  manner  as  if  the  company  were  being- 
wound  tip  altogether  vokxntarily  ;  but  save  as  aforesaid,  any  order  made  by  the 
court  for  a  winding  up  subject  to  the  supervision  of  the  court,  shall  for  all 
piirposes,  including  the  stay  of  actions,  suits,  and  other  proceedings,  be  deemed 
to  be  an  order  of  the  court  for  winding  up  the  company  by  the  court,  and  shall 
confer  full  authority  on  the  court  to  make  calls  or  to  enforce  calls  made  by  the 
liquidators,  and  to  exercise  all  other  powers  which  it  might  have  exercised  if  an 
order  had  been  made  for  winding  up  the  company  altogether  by  the  court,  and 
in  the  construction  of  the  provisions  whereby  the  coiu't  is  empowered  to  direct 
any  act  or  thing  to  be  done  to  or  in  favour  of  the  official  liquidators,  the  ex- 
pression "  official  liquidators,"  shall  be  deemed  to  mean  the  liquidators  con- 
ducting the  winding-  up  subject  to  the  supervision  of  the  court. 

It  is  very  rarely  that  any  restrictions  are  imposed  on  the  liquidators.  Where 
no  restriction  is  imposed,  the  liquidator  may  proceed  with  the  winding  uj),  just 
as  if  a  supervision  order  had  not  been  made.  If  it  becomes  desirable  to  apply 
to  the  court  in  regard  to  any  matter,  the  liquidator  can  make  application  ac- 
cordingly, but  he  may  find  that  he  can  complete  the  winding-  up  without  any 
application.  However,  the  practice  in  regard  to  the  conduct  of  a  winding  up 
under  supervision  varies  considerably.  In  some  cases,  especially  where  the 
assets  are  considerable,  and  the  pai-ties  interested  numeroiis,  the  liquidator 
scarcely  takes  any  step  without  the  sanction  of  the  court ;  in  others  he  never 
applies  excei)t  in  case  of  necessity.  In  many  cases  a  middle  course  is  adopted, 
and  the  sanction  or  powers  of  the  court  are  only  invoked  in  important  matters. 

Applications  are  very  commonly  made  by  the  liquidators — 

To  restrain  proceedings.     See  note  following  Form  573. 

To  enforce  the  payment  of  calls  and  other  moneys  due  from  contributories  : 
supra.  Form  520. 

For  liberty  to  sell  or  concur  in  sales :  siq^ra,  Form  467. 

As  to  compromises  :  Form  628  et  seq. 

For  examination  of  directors  and  others  under  section  115  of  the  Act:  see 
note  following  Form  615  et  seq. 

To  recover  money  from  directors  and  others  under  section  165  of  the  Act : 
sujjra,  Form  621,  et  seq. 

By  contributories  to  rectify  the  list  of  contributories,  supra.  Form  500  ;  for 
inspection.  Form  605,  and  for  other  purposes. 

By  creditors,  as  regards  disputed  debts  and  claims  :  siqyra,  Form  522,  et  seq . ; 
for  declarations  of  rights.  Form  55 1 ;  and  for  liberty  to  bring  actions  and  take 
proceedings  :  Form  593  et  seq.,  and  Form  70 Ij  infra. 


Order  for  ap- 
pointment of 
liquidators. 


Liqiddafo7's. 
Porm  715.  Upon  the  peton  [credilors':  siiprrvision  order']  :  And  order  that  a  proper 
person  or  persons  he  appointed  liq  or  hqs  of  the  sd  co  withont  prejudice 
to  any  apphcon  by  those  appointed  by  the  general  meeting  for  tlieir 
appointmt  as  such  hqs.  Ballycummislc  Cojjjwr  MiniiKj  Co..,  j\I.  R.,  3104  A. 
15  Dec,  187^5. 

Unless  otherwise  provided  by  the  supervision  order,  the  voluntary  liquidators 
remain  in  office,  but  sometimes  the  court  removes  them  and  appoints  others,  or 
appoints  additional  liquidators.  This  is  done  under  section  111  of  the  Act,  and 
under  sections  93  and  150.  It  seems,  however,  that  a  voluntary  liquidator  can 
only  be  removed  for  "  due  cause."  See  supra,  p.  4-17 ;  Oxford  Building  Soc,  40 
L.  T.  495. 


Form  716. 

Liquidator  to 
give  security. 


Upon,  &c.  \_svpprvi$wn  or(hr~\  ;  And  order  that  E.  the  \\({  of  tlie  sd  co 
appointed  under  the  sd  vohintary  winding  up  })e  continued  as  such  liq 


UNDER    SUPERYISIOX.  547 

on  his  giving  security  to  ])c  approved  Iiy  the  judge.     Great  Western  iyc,   Form  716. 
Laundrij  Co.,  ^l.  R.,  2(J  July,  187«.     A.  1471.  ^ 

The  Court  seldom  requires  securitj'  from  a  liqiticlator  where  the  company  has 
not  required  it,  see  European  Bank,  19  W.  E.  268. 


Solor. 

Upon  the  applicon  of  M.,  one  of  the  liqs  of  the  above-named  co,  &c.,   Form  717. 
Order  that  Mr.  C,  the  present  solor  of  the  liqs,  be  discharged  from  Oi^r asto^  ^ 
being  such  solor.  And  this  Ct  doth  hby  appoint  j\Ir.  P.  the  official  appointing 
solor  to  be  the  solor  of  the  sd  liqs  in  the  place  of  the  sd  C,  And  ^°]|[i'j°J."i*°_ 
it  is  ordered  that  the  sd  C.  do  within  14  days  after  the  service  of  this 
order  upon  him,  deliver  up  upon  oath  to  the  sd  P.,  all  papers  in  his 
possession  relating  to  the  winding  up  of  the  sd  co,  but  this  order  is  to  be 
without  prejudice  to  any  claim  the  sd  C.  may  make  for  paymt  of  his 
costs,  And  it  is  ordered  that  the  costs  of  this  applicon  be  costs  in  the 
winding  up.    Hester  &  Co.,  Bacon,  V.-C,  G  June,  1878.     A.  1230. 

The  liquidator  has  jjower  under  ss.  193  (7)  and  97,  to  appoint  a  solicitor. 
Where  there  are  two  liquidators,  and  they  cannot  agree  as  to  the  appointment 
of  a  solicitor,  it  is  doubtful  whether  the  Court  can  appoint  one  for  them.  It 
is  true  that  an  order  was  made  by  Bacon,  V.-C,  as  above  ;  but  in  the  Colonial 
Trusts  Corporation,  Dec,  1S78,  Jessel,  M.E.,  considered  that  he  had  no  juris- 
diction to  make  such  an  order.  See  order  subseqi^ently  made  in  that  case, 
infra.  Form  708. 

Restraining  Actions,  &c. 

Section  148  of  the  Act  of  1862  provides  that  a  petition  for  a  siipervision  order 
shall,  for  the  pur^Doses  of  giving  jurisdiction  to  the  Court  over  suits  and  actions, 
be  deemed  a  petition  for  winding  up  the  company  by  the  Court.  Accordingly 
upon  the  presentation  of  the  petition,  application  can  at  once  be  made  ex  parte 
to  stay  or  restrain  actions  or  proceedings  as  in  the  case  of  a  petition  for  a 
compulsory  winding  up.     See  supra,  p.  489. 


Liberty 'to  bring  or  continvc  Actions  against  Co. 

Where  a  supervision  order  has  been  made,  s.  87  {sx<,pra,  p.  494]  by  virtue  of 
s.  151  applies,  and  accordingly  no  action  or  proceeding  can  be  commenced  or 
proceeded  with  against  the  company  except  with  the  leave  of  the  Court.  The 
application  for  leave  is  generally  made  by  summons.  See  further.  Form  59.3, 
et  seq. 

The  following  is  an  example  of  an  order : — 

Upon  the  appHcon  of  E.,  a  creditor  of  the  above-named  co,  and  upon  Form  718. 
hearing  the  solors  for  the  applicant  and  for  S.  and  W,  the  voluntary  liqs  £:, 
of  the  sd  CO,  and  upon  reading  an  order  dated,  &c.,  for  continuing  the  bring  actiou. 
volmitaiy  winding  up  of  the  sd  co  under  supervision  and  an  aflFt,  &c.,  It 
is  ordered  that  the  sd  E.  be  at  libty  to  bring  an  action  against  the  above 
CO  on  behalf  of  himself  and  all  other  the  holders  of  mtge  debentures  to 
the  extent  of  60,000 Z.  issued  by  the  sd  co  for  the  j)poi5e  of  enforcing  and 

N    N    2 


648  WINDING-UP 

Form  718.  realising  the  security.   Hawne  Collieries  Co,,  Malins,  Y.-C,  11  July,  1877. 
A.  1414. 

If  after  a  supervision  order  any  proceeding  against  the  company,  e.g.,&  sale, 
distress,  or  execution  is  taken  without  the  sanction  of  the  Court,  application 
can  be  made  to  the  Court  to  restrain  the  same,  as  in  the  case  of  a  compulsory 
winding  up,  see  supra,  p.  489. 

Creditors. 

If  the  liquidator  has  not  previously  to  the  supervision  order  issued  the  usual 
notices  to  creditors  he  should  do  so  immediately  after  the  order.  The  form 
will  be  the  same  as  in  a  purely  voluntary  winding  up.  See  Form  591.  But  in 
many  cases  it  is  considered  desirable  to  have  the  debts  and  claims  adjudicated 
on  by  the  Court,  and  in  such  cases  the  form  of  advertisement  is  generally 
settled  by  the  chief  clerk.  In  these  cases  application  should  be  made  by 
summons  for  an  order  as  in  Form  593,  and  the  advertisement  will  be  as  in 
Form  20  in  the  Schedule  to  the  Eules,  using  the  word  liquidator  instead  of 
official  liquidator. 

Adjiulication : — In  due  course  the  liquidator  will  consider  the  claims  sent  in, 
and  make  out  the  list  of  creditors  as  in  the  case  of  a  purely  voluntary  winding 
up.  If  necessary  he  can  apply  to  the  Court  to  adjudicate  upon  any  disputed 
claims,  as  in  a  voluntary  winding  up,  and  a  claimant  can  also  apply  to  the 
Court  as  in  the  case  of  a  compulsory  winding  up. 

Where  the  Court  adjudicates  generally  on  the  debts  and  claims,  the  pro- 
cedure will  be  the  same  as  in  a  compulsory  winding  up.     See  su])ra,  p.  468. 

Dividends : — Where  the  Court  has  adjudicated  on  the  debts  and  claims,  it  is 
usual  to  apply  for  liberty  to  declare  dividends,  as  in  a  compulsory  winding  up  : 
but  otherwise  the  liquidator  acts  as  in  a  i^urely  voluntary  winding  up. 

Contrils. 

Settling  the  List : — Where  a  supervision  order  has  been  made,  the  liquidator 
usually  makes  out  and  settles  the  list,  as  in  a  voluntary  winding  uj).  However, 
in  a  good  many  cases  application  is  made  to  the  Court  to  settle  the  list. 
Applications  by  contributories  to  rectify  the  list  are  common. 

Calls : — Sometimes,  and  esiDecially  when  the  Court  has  settled  the  list  of 
contributories,  application  is  made  to  the  Court  to  make  calls,  but  in  general, 
the  liquidator  makes  the  calls  himself,  and  merely  applies  to  the  Court,  where 
necessary,  to  enforce  payment.  For  orders  for  calls,  see  Volunteer  Co-o}).  Co., 
M.  E.,  22  July,  1877.     B.  1422. 

Dividends : — The  liquidators  generally  declare  dividends  without  any  appli- 
cation to  the  Court. 


Accounts  of  Liq. 

It  is  not  uncommon  to  apply  to  the  Court  for  liberty  to  pass  and  vouch  the 
accounts.  The  procedure  is  the  same  as  in  a  compiilsory  winding  up.  Sux>ra, 
p.  439. 

Form  719.  Upon  the  applicon  of  C,  the  liq  of  co,  and  upon  hearing-  the  solors 
for  the  applicants  and  for  D.,  the  person  appointed  to  represent  the 
creditors,  and  upon  reading  an  order  dated  18  July,  1876,  the  affirmation 

of  the  sd  C.  filed,  &c.,  Order  that  the  sum  of  1.  be  allowed  the  sd 

liq  for  his  services  as  liq  from  the  1st  July,  1876,  to  the  31st  March, 


Order  as  to 
remuneration 
of  liquidators 


UNDER    SUPERVISION.  549 

1877,  both  inclusive,  auci  that  ho  be  at  libty  to  retain  the  same  out  of   Form  719. 
the  assets  of  the  scl  bank.     And  order  that  the  costs  of  this  apphcon  be 
costs  in  the  winding-up.     Oriental  Commercial  Banlc,  Bacon,  V.-C,  18 
App.  1877.     B.  G78. 

The  Court  is  sometimes  asked  to  fix  the  remuneration  of  the  liquidators  as 
above.     It  has  jurisdiction  imder  ss.  93, 151 ;  and  see  Cannan's  Claim,  7  Eq.  102. 

Moreover,  where  a  voluntary  liquidator  has  been  appointed  at  a  specified 
remuneration,  the  Court  after  a  supervision  order  has  power  to  increase  it  in  a 
proper  case.     Re  Northern  Comities  Bank,  Chitty,  J.,  at  Chambers,  15  Mar.  1883. 

Upon  the  appHcon  of  L.,  tlie  h'q  of  co,  by  summons  dated  15  June,  Form  720. 
1877,  and  upon  hearing  the  solor  for  the  sd  hq  and  for  N.,  a  debenture-  Z     ~.      Z 
holder  of  co,  and  upon  reading,  &c.,  and  an  order  dated  6  Nov.  1875,  It  costs, 
is  ordered  \_Hsiuil  order  for  taxation  of  li<fs  costs,  <&€.'],  And  order  that 
such  costs,  charges,  and  expenses  when  so  taxed,  be  pd  out  of   the 
assets  of  the  sd  co.     Neivsjiaper  Co.,  M.  R.,  22  June,  1877.    B.  1143. 

See  also  order  in  In  re  Brentwood  Brick  Co.,  15  Nov.,  1878.  A.  2089.  Where 
the  costs  were  directed  to  be  taxed  "  for  the  purpose  of  being  paid  out  of  the 
assets  of  the  comjjany,  as  and  when  may  be  hereafter  ordered." 

Sometimes  the  liquidator's  costs,  &c.,  ai-e  taxed  in  the  winding  iip,  but  very 
commonly  he  pays  them  without  taxation,  upon  an  undertaking-  from  the 
solicitor  as  mentioned  in  note  to  Form  G89. 


Upon  the  applicon  of ,  being  the  committee  appointed  by  the  porm  721. 

general  body  of  creditors  to  represent  them  in  the  winding  up  of  the 


T'iiiT-»  ■     I       ■    •        ^•  ni      Order  removing 

above-named  co,  &c.,  It  is  ordered  that  13.,  one  of  the  joint  liqs  of  the  liquidator, 
sd  CO,  be  and  he  is  hby  removed  from  such  ofHce,  and  the  sd  K.,  the 
other  joint  liq,  be  continued,  and  he  is  hby  appointed  sole  liq  of  the  sd 
CO  :  And  it  is  ordered  that  the  applicants  and  the  sd  B.  &  K.  be  allowed 
their  costs  of  and  relating  to  this  applicon  out  of  the  assets  of  the  sd  co 
[to  be  taxed].  Colonial  Trusts  Corjwration,  M.  R.  11)  Dec.  1878.  A. 
2303. 

In  the  above  case  the  liquidators  could  not  agree  as  to  the  appointment  of  a 
solicitor,  and  accordingly  one  of  them  was  removed  on  the  application  of  the 
committee.     See  further  as  to  removal  of  liquidator,  supra,  p.  447. 


Ap2)licons  to  the  Ct. 

The  supervision  order  gives  liberty  to  the  creditors,  contributories,  and 
liquidators  of  the  company,  and  to  all  other  persons  to  apply  at  chambers. 
Application  can  accordingly  be  made  by  ordinary  summons  [Form  3G8],  as  in 
the  case  of  a  compulsory  winding  up.  It  will  be  observed  that  creditors  can 
apply ;  this  is  one  of  the  chief  distinctions  between  a  winding  up  purely 
voluntary,  and  one  under  supervision.  In  the  former,  creditors  have  no  power 
to  apply. 

A  considei'able  number  of  orders  made  in  cases  where  the  winding  up  was 
under  supervision  will  be  found  among  the  forms  relating  to  compulsory 
winding  up  given  above. 


550 


WINDING  UP. 


Dissohdlon. 


Form  722.  Upon  the  applicoii  of  the  above-iiamcd  c;),  &c.,  and  it  appearing  that 
Liberty  to  calf  the  affairs  of  the  sd  co  are  fully  wound  up,  It  is  ordered  that  the  liqs  of 
fiual  meeting,    the  sd  CO  do  make  up  an  account  and  call  a  general  meeting  of  the 

mcmhers  of  the  sd  co,  as  provided  by  sec.  142  of  the  above-mentd  Act. 

Imperial  Mercaniile  Credit  Assoc,  Limtch,  Bacon,  Y.-C,  22  j\Iar.  1878. 

In  most  cases  the  liquidator  calls  the  final  meeting,  and  procures  the  dis- 
solution as  in  the  case  of  a  purely  voluntary  winding  up,  but  occasionally 
application  is  made  to  the  Court  for  an  order  as  above.  As  to  the  mode  of 
effecting  the  dissolution^  see  sxiigra.  Form  C97. 


EECONSTKUCTION. 


INTRODUCTORY    NOTES. 

There  are  three  modes  of  reconstructiug  a  company  formed  under 
the  Companies  Act,  18G2  ; 

1.  By  Special  Act  of  Parliament.  See  further  "  Special  Acts," 
infra. 

2.  By  means  of  a  sale  sanctioned  by  the  Court  under  the  Joint  Stock 
Companies  An-angement  Act,  1870.  See  further  "  Ai-rangements," 
■infra. 

3.  By  means  of  a  voluntary  ^vinding  up  and  a  proceeding  under  s.  IGl 
of  the  Act  of  18G2. 

In  this  division  of  the  work  reconstruction  under  s.  IGl  will  be  ex- 
clusively dealt  with.     That  section  provides  as  follows  : 

"  Where  any  company  is  j^roposed  to  be  or  is  in  coiu'se  of  being  wound  np 
altogether  voluntarily^  and  the  whole  or  a  portion  of  its  business  or  propei'ty 
is  proposed  to  be  transferred  or  sold  to  another  company,  the  liquidators  of  the 
first-mentioned  company  may,  with  the  sanction  of  a  special  resolution  of  the 
company  by  whom  they  were  appointed,  conferring  either  a  general  authority 
on  the  liquidators,  or  an  authority  in  respect  of  any  particular  arrangement, 
receive  in  compensation  or  part  compensation  for  stich  transfer  or  sale,  shares, 
policies,  or  other  like  interests  in  such  other  company,  for  the  purpose  of  dis- 
tribution among  the  members  of  the  company  being  woumd  up,  or  may  enter 
into  any  other  arrangement  whereby  the  members  of  the  company  being  wound 
up  may,  in  lieu  of  receiving  cash,  shares,  policies,  or  other  like  interests,  or  in 
addition  thereto,  participate  in  the  profits  of,  or  receive  any  other  benefit 
from  the  purchasing  company  ;  and  any  sale  made  or  arrangement  entered 
into  by  the  liquidators  in  pursuance  of  this  section  shall  be  binding  on  the 
members  of  the  company  being  wound  up  ;  subject  to  this  proviso,  that  if  any 
member  of  the  company  woiind  uj)  who  has  not  voted  in  favoiu'  of  the  special 
resolution  passed  by  the  company  of  which  he  is  a  member,  at  either  of  the 
meetings  held  for  passing  the  same,  expresses  his  dissent  from  any  such  special 
resolution  in  writing  addressed  to  the  liquidators,  or  one  of  them,  and  left  at 
the  registered  office  of  ^the  company  not  later  than  seven  days  after  the  date 
of  the  meeting  at  which  such  special  resolution  was  passed,  such  dissentient 
member  may  require  the  liquidators  to  do  one  of  the  following  things,  as  the 
liquidators  may  prefer ;  that  is  to  say,  either  to  abstain  from  carrying  such 
resolution  into  effect,  or  to  purchase  the  interest  held  by  such  dissentient 
member  at  a  price  to  be  determined  in  manner  hereinafter  mentioned,  siich 
purchase-money  to  be  paid  before  the  company  is  dissolved,  and  to  be  raised 
by  the  liquidators  in  such  manner  as  may  be  determined  by  sjiecial  resolution : 
no  special  resolution  shall  be  deemed  invalid  for  the  purposes  of  this  section 
by  reason  that  it  is  passed  antecedently  to  or  concurrently  with  any  resolution, 
for  winding  up  the  company,  or  for  appointing  liquidators  ;  but  if  an  order  be 


552 


EECONSTEUCTION. 


made  within  a  year  for  winding  iip  the  company  by  or  subject  to  the  supervi- 
sion of  the  Court,  such  resolution  shall  not  be  of  any  validity  unless  it  is 
sanctioned  by  the  Court." 

The  price  t(j  be  paid  to  dissentients  is  to  be  determined  in  accordance 
with  Section  102  of  the  Act,  Avhich  is  as  follows  : 

Section  162.  "The  price  to  be  paid  for  the  purchase  of  the  interest  of  any  dissentient 

member  may  be  determined  by  agreement ;  but  if  the  parties  disjjute  about 
the  same,  such  dispute  shall  be  settled  by  arbitration,  and  for  the  purposes  of 
such  arbitration  the  provisions  of  The  Companies  Claiises  Consolidation  Act, 
1845,  with  respect  to  the  settlement  of  disputes  by  arbitration,  shall  be  incor- 
porated with  this  Act ;  and  in  the  construction  of  such  provisions  this  Act  shall 
be  deemed  to  be  the  special  Act,  and  '  the  company '  shall  mean  the  company 
that  is  being  wou.nd  up,  and  any  appointment  by  the  said  incorporated  pro- 
visions directed  to  be  made  under  the  hand  of  the  secretary,  or  any  two  of 
the  directors  may  be  made  under  the  hand  of  the  liquidator,  if  only  one,  or  any 
two  or  more  of  the  liquidators,  if  more  than  one." 


Keeonstruc- 
tions  common. 


Examples. 


Mode  in  vliicli 

reconstruction 

effected. 

Case  A. 


A  reconstrnction  nnder  Section  161  above,  has  now  become  a  matter 
of  ordinary  occnrrence,  and  may  be  resorted  to  with  advantage  in  a 
variety  of  cases,  of  which  the  following-  are  examples  : — 

A.  Where  the  company  desires  to  do  something  nltra  vires,  e.g.: — 
(1.)  To  engage  in  some  bnsiness  or  do  some  thing  not  within  the 

objects  set  forth  in  its  memorandum  of  association.  See  supra, 
p.  50. 

(2.)  To  issue  preference  shares,  there  being  no  power  in  the  memoran- 
dum or  articles  to  do  so.     See  supra,  p.  195. 

(3.)  To  issue  preference  shares,  having  a  priority  o\'er  preference 
shares  already  issued,  notwithstanding  the  holders  of  such 
last-mentioned  shares,  or  some  of  them,  refuse  to  consent. 
[See  si(j)ra,  p.  IDG.] 

B.  Where  a  company  desires,  without  submitting  to  the  stringent 
conditions  prescribed  by  the  Companies  Acts,  18G7  and  1S77,  upon  a 
reduction  of  capital,  to  carry  into  effect  any  arrangement  which  would 
amount  to  a  reduction  of  capital,  e.g.: — 

(1.)  To  divide  part  of  its  paid-up  capital,  either  in  cash  or  in  specie, 
among  its  members. 

(2.)  To  reduce  the  liability  on  its  shares  which  are  only  in  part 
paid  up. 

(3.)  To  extinguish  all  further  liability  on  such  shares. 

(4.)  To  return  capital,  ])ut  with  power  to  call  it  up  again. 

The  mode  in  which  the  reconstruction  is  carried  into  effect  is  as 
follows  : — 

In  case  A.  (1). 

Let  it  be  supposed  that  the  capital  of  the  existing  company  is 
100,000/.,  divided  into  10,000  shares  of  10/.  each,  that  its  object  is 
to  work  a  particular  patent  for  the  manufacture  of  steel,  and  that  it 
desires  to  ha^e  power  to  acquire  and  work  other  patents  for  the  like 
purpose. 


INTEODUCTOHY   NOTES.  553 

The   directors  having  satisfied  themselves  that   a   reconstruction    is  Preliminary 
expedient,  will  suggest  it   at   a  general  meeting  and  procnre  a  resolu-  ^  *^^^^'  ■ 
tion  in  favour  of  it   to  be  passed,  or,  as  is  sometimes  done,  they  will 
issue  a    circular  to  the  members   or   to  the  largest  holders  of  shares 
seeking  their  approval  of  the  plan. 

If  the  plan  is  favourably  received,  the  memorandum  and  articles  of  New  company. 
a  new  company  will  be  prepared.  Tlie  objects  of  such  company  will 
be  to  acquire  and  undertake  the  property  and  liabilities  of  the  old 
company,  and  to  ac(iuire  and  work  any  patents  for  the  manufacture 
of  steel  and  such  other  objects  as  may  be  deemed  expedient.  The 
capital  will  be  the  same  as  that  of  the  old  company.  The  articles 
will  authorise  the  directors  to  purchase  and  undertake  all  or  any  part 
of  the  property  and  liabilities  of  the  old  company  upon  the  terms  of  an 
agreement  therein  referred  to. 

Probably  by  the  articles  all,  or  some,  of  the  directors  of  the  old 
company  will  be  appointed  directors  of  the  new  company. 

Notice  will  then  be  issued  by  the  directors  of  the  old  company  con-  Issue  of  notice. 
vening  an  extraordinary  meeting  of  that  company  to  consider  certain 
resolutions  which  will  be  given  in  the  notice. 

If  the  resolutions  are  passed  by  the  requisite  majority  at  the  first 
meeting,  a  second  one  Avill  be  called  to  confirm  them,  so  that  they  may 
become  special  resolutions.     See  siqrm,  p.  212. 

And  if  they  are  duly  confinned,  the  new  company  will  be  at  once  in-  Special  reso- 
corporated,  and  the  liquidators  of  the  old  company  and  the  directors  of  ^^  '°'^' 
the  new  company  will  execute  the  agreement  mentioned  in  the  resolu- ^'^^*' ^y  ^"^1^"* 
tions. 

The  agi'eement  will  provide  for  the  sale  of  all  the  property  of  the  old  Agreement. 
company  to  the  new  company,  in  consideration  of  tlie  new  company 
undertaking  the  debts  and  liabilities  of  the  old  company,  paying  the 
costs  of  winding  it  up,  providing  tlie  funds  necessary  to  purchase  the 
interest  of  any  dissentient  members,  and  allotting  to  every  assenting 
member  of  the  old  company  one  share  in  the  new  company  in  respect  of 
each  share  held  by  him  in  the  old  company. 

If  the  matter  has  been  properly  managed,  the  cliaiices  are  that  there  Dissentients, 
will  be  but  few  dissentient  members  (if  any).     The  funds  to  pay  them 
will  be  provided  by  the  new  company  by  l)orrowing  or  otherwise. 

The  property  of  the  old  company  Avill  be  in  due  course  made  over  to  Campletion  of 
the  new  company,  which  will  allot  its  shares  as  provided  by  tlie  agree-  ^^^^• 
ment. 

The  debts  and  liabilities  of  the  old  company  (if  it  has  any)  Avill  be  got 
rid  of  as  soon  as  possible.  Many  of  the  creditors  will  probably  agi-ec  to 
accept  the  liability  of  the  new  instead  of  the  old  company  ;  the  rest  will 
be  paid. 

As  soon  as  may  be  the  liquidators  hold  the  final  meeting  (Section  142  Dissolution  of 
of  the  Act),  and  make  the  proper  return  to  the  registrar  (Section  143  of  °^*^  c°™P''^°y- 
the  Act),  and  at  the  expiration  of  three  months  therefrom  the  old  com- 
pany is  ipso  facto  dissolved. 


554 


EECONSTEUCTION. 


General  or 
particular 
authority  to 
liquidators. 


Variations  in 
arransemeut. 


New  company 
commonly 
takes  the  old 
name. 


Section  ICl,  it  ■will  be  observed,  authorises  a  sale  sanctioned  by  a 
special  resolution  conferring  "  citlwr  a  general  authority  on  the  liqui- 
dators, or  an  authority  in  respect  of  any  particular  arrangement." 
Sonietinies  a  general  authority  is  given  ;  but  in  most  cases  it  is  limited 
to  a  sale  on  the  terms  of  a  particular  agreement.  Instead  of  a  draft 
agreement,  as  above,  it  is  not  uncommon  to  have  a  provisional  agree- 
ment made  lietween  one  person  on  behalf  of  the  old  company  and 
another  on  behalf  of  the  intended  new  company.  In  such  case  the 
resolution  will  authorise  the  liquidators  to  "  adopt "  the  agreement. 

Of  course  the  arrangement  must  vary  according  to  the  circumstances 
of  the  company,  and  the  object  of  the  reconstruction. 

Thus  in  cases  A.  (2)  and  (3),  supra,  p.  552  : — 

Care  will  be  taken  that  the  articles  of  the  new  company  contain  full 
power  to  issue  preference  shares,  or  the  capital  of  the  new  company  will 
consist  in  part  of  preference  shares. 

In  case  B.  (1)  : — 

Suppose  that  the  shares  in  the  old  company  are  20/.  fully  paid  up, 
and  that  it  is  desired  to  return  10/.,  the  agreement  will  provide  that  the 
new  company  shall,  in  exchange  for  each  share  in  the  old  company, 
allot  one  fully  paid-up  10/.  share  in  the  new  company,  and  pay  the  sum 
of  lu/.  in  cash. 

Or  suppose  that  the  object  of  the  reconstruction  is  to  divide  in  specie 
some  assets  of  doubtful  value,  e.(j.,  debentures  of  some  other  company. 
The  new  company  will,  as  the  considerati<jn  for  the  sale,  agree  to  allot 
shares  to  the  members  of  the  old  company,  and  to  divide  the  deben- 
tures among  them  pro  rata. 

In  case  B.  (2)  : — 

Suppose  the  shares  in  the  old  company  are  2o/.  with  10/.  paid  up,  and 
it  is  desired  to  reduce  the  liability  to  5/.  In  such  case,  one  15/.  share 
in  the  new  company,  with  lo/.  credited  as  paid  up,  will  be  allotted  in 
exchange  for  each  share  in  the  old  company. 

In  case  B.  (3)  : — 

Suppose  the  shares  in  the  old  company  to  be  10/.  with  7/.  paid  up, 
and  that  it  is  desired  to  extinguish  all  further  liability.  The  object  will 
l)e  attained  by  allotting  one  fully  paid  up  7/.  share  in  the  new  company 
in  exchange  for  each  10/.  share  in  the  old  company. 

In  case  B.  (4)  : — 

Suppose  the  shares  in  the  old  company  are  lu/.  fully  paid  up,  and  that 
it  is  desired  to  retm-n  5/.  per  share,  but  with  power  to  call  it  up  again. 
In  such  case  the  new  company  will  allot  one  of  its  10/.  shares  credited 
with  5/.  paid  up,  and  will  pay  hi.  in  cash  in  respect  of  each  10/.  share 
in  the  old  company. 

In  cases  of  reconstruction  the  new  company  very  commonly  takes  the 
name  of  the  old  one.  This  is  effected  under  Section  20  of  the  Act. 
See  supra,  \).  (j-i.  Immediately  after  the  special  resolution  to  wind  nji, 
&c.,  ])as  been  passed  l)y  the  old  company,  the  liquidators  sign  the  i)roper 
consent  to  the   registration  of  the   new  company  by  the  same  name. 


INTEODUCTORY    NOTES. 


555 


Supra,  p.  219.  The  new  company  is  registered  by  the  old  name  the 
same  or  next  day,  tlie  agreement  is  forthwith  executed  and  the  new 
company  commences  business,  thus  avoiding  any  stoppage.  Sometimes 
the  name  is  slightly  varied,  and  sometimes  a  perfectly  different  one  is 
chosen  for  the  new  company. 

It   will  be  observed  that  Section   IGl   only  authorises  a  sale  to  a  Sale  must  he 
companij.     Hence  a  sale   to   an    individual,   who   is   to   form  a   new  *°  compauy. 
company,  and  make  such  profit  as   he  can  out  of  the  transaction,  is 
not  valid.     Bird  v.  UircVs  Patent  Hctraye  Co.,  9  Ch.  358.     See  Form 
333,  supra. 

But  an  agreement  with  some  person  purporting  to  act  on  behalf  of  an 
intended  company,  fcir  a  sale  to  him  as  such  agent  or  to  the  company 
may  be  valid.     In  re  Hester  d;  Co.,  44  L.  J.  N.  S.  757. 

Section  IGl  does  not  rc({uire  that  the  sale  should  be  made  to  a  com-  it  may  be  to 
pany  registered  under  the    Act  of   18G2.      The  sale  may  be  to  any  ^^'^''^^S'^ '^°'"" 
com})any,  English  or  foreign.     In  re  Irrhjation  Co.  of  France,  Ex  parte 
Fox,  G  Ch.  183. 

An  agreement  adopted  by  the  liquidators  of  a  company  pursuant  to  Liquidators 
the  direction  of  the  company  given  jjy  virtue  of  Section  IGl  is  valid.  "!^y '^® 
SoutJtall  V.  British  Mutual  Life  Assur.  Soc,  11  Eq.  65  ;  G  Ch.  614.  adopt  agree- 

The  agreement  may  provide  for  the  allotment  of  the  shares,  «tc.,  to  '°*^"*- 
the  memljers  of  the  company  being  wound  up  directhj.     See  In  re  City  Agreement 
and  County  Investment  Co.,  13  C.  Div.  475.  Hbtment 

A  sale  under  s.  161  may  be  made  in  consideration  of  shares  that  of  shares  to 
are  only  in  part  credited  as  paid  up.  In  re  City  and  County  Investment  dji-e^tlT*' 
Co.,  13  C.  Div.  475  ;  Imjierial  Mercantile  Credit  Association,  12  Eq.  504  ; 
Hester  &  Co.,  44  L.  J.  757.  But  in  such  case  the  liquidator  should 
take  care  that  the  shares  are  not  allotted  to  him  but  to  the  shareholders 
directly,  otherwise  he  may  be  involved  in  lialnlities  which  he  never  con- 
templated.    Dyetfs  case,  43  L.  T.  85. 

The  question  whether  upon  a  sale  under  s.  IGl   the  members  can  Mode  of 
by  special  resolution  determine  the  mode  in  which  the  shares  forming  ^^I'^ti'i^jntion. 
the  consideration  for  the  sale  shall,  as  between  different  classes  of  mem- 
bers, be  distributed  cannot  be  regarded  as  settled. 

Previously  to  the  decision  of  the  Master  of  the  Eolls  in  Paget  v.  Griffith, 
5  C.  D.  894,  it  was  very  generally  thought  that  the  members  could  so 
determine,  and  many  reconstructions  were  effected  on  that  footing.  For 
example  where  the  capital  of  a  company  was  divided  into  different  classes 
of  shares,  e.g.,  jireference  and  ordinary,  it  was  not  uncommon  to  recon- 
struct with  a  view  {inter  alia)  to  converting  all  the  shares  into  shares  of 
uniform  character.  For  this  purpose  the  relative  value  of  the  shares  in 
the  old  company  (as  a  going  concern)  was  approximately  ascertained, 
and  the  agreement  provided  for  the  allotment  of  the  shares  in  the  new 
company  accordingly,  e.g.,  two  for  every  preference,  and  one  for  every 
ordinary  share.  So,  too,  when  there  were  different  classes  of  shares,  and 
the  company  desired  to  reconstruct  {e.g.,  to  extend  its  powers),  it  was  not 
uncommon    to  adopt  a   scheme   under  which  the    capital   of  the  new 


556 


EECONSTEUCTION. 


company  was  similarly  divided,  and  the  memljers  placed  as  far  as  possible 
in  the  same  position  in  the  new  as  in  the  old  company. 

The  notion  was  that  any  arrangement  approved  by  special  resolution 
was  valid,  even  though  it  might  give  a  particular  class  of  shareholders 
less  than  they  would  have  got  if  the  sale  had  ])een  for  cash  ;  for  it  was 
considered  chat  dissentients  were  sufficiently  protected  hy  being  enabled 
to  claim  the  value  of  their  interests  as  provided  by  s.  IGl. 

However,  in  Griffith  v.  Paget,  (5  C.  D.  894  :  G  C.  D.  514),  the  Master 
of  the  Rolls  was  of  opinion  that  this  could  not  have  been  the  intention 
of  the  Legislature,  because  there  might  Ijc  lunatics,  infants,  persons 
beyond  the  seas,  and  others  unable  to  dissent  in  the  prescribed  manner. 
And  if  this  be  so,  it  follows  that  such  arrangements  as  those  above- 
mentioned  cannot  be  carried  out  except  with  the  consent  of  every  member 
of  the  prejudiced  class. 

No  doubt  if  s.  161  enables  the  members  to  determine  the  mode  of 
distribution,  the  position  of  lunatics  and  others  may  be  prejudiced,  but 
the  same  result  might,  it  would  seem,  ensue  upon  a  sale  undoubtedly 
valid,  e.g.,  in  consideration  of  shares  only  in  part  paid  up.  Such  shares 
might  be  quite  unmarketable  and  yet  a  lunatic  might  not  be  able  to 
dissent.  jNIoreover,  in  Re  City  and  County  Investment  Co.,  13  C.  D. 
475,  it  was  held  by  the  Court  of  Appeal  (Jessel,  M.  R.,  &  James  & 
Baggallay,  L.JJ.)  that  where  a  sale  has  been  made  under  s.  IGl,  it  is,  in 
the  absence  of  fraud,  yalid,  even  as  against  creditors,  unless  a  winding- 
up  order  is  made  within  a  year.  Yet  there  might  in  such  case  be 
lunatic  and  other  creditors  who  could  not  apply  for  a  winding-up  order 
within  the  year,  and  yet  might  be  seriously  prejudiced.  AVhy  should 
the  legislature  be  supposed  to  regard  more  carefully  the  interests  of 
lunatic  members  than  those  of  lunatic  creditors  ? 

It  is  submitted  that  it  would  not  be  unreasonable  to  assume  that  the 
legislature  (considering  that  the  rights  of  a  inembcr  who  might  think 
himself  prejudiced  l)y  a  sale  were  sufficiently  protected  by  giving  him 
power  to  insist  on  his  interest  being  purchased)  did  intend  l)y  s.  IGl  to 
enable  the  majority  to  sell  and  to  authorise  the  distril)ution  of  the 
shares,  &c.,  on  any  terms  they  thought  fit,  and  that  the  possibility 
of  there  being  lunatics  and  others  incapable  of  dissenting  may  be  re- 
garded as  a  caxus  onmsKs. 

To  meet  the  difficulty  a  clause  as  above,  p.  1G7,  CI.  155,  is  now 
Tcry  commonly  inserted.  ^Moreover,  where  the  reconstruction  is  carried 
out  under  the  direction  of  the  Court  it  appears  to  be  considered  that  the 
Court  is  not  so  fettered,  and  accordingly  it  may  sometimes  be  deemed 
expedient  to  take  a  supervision  order. 
Time  to  By  s.  IGl  of  the  Act  meml)ers  who  dissent  from  the  special  resolution 

are  allowed  seven  days  from  the  date  of  the  meeting  at  which  it  was 
passed,  i.e.,  the  second  meeting,  within  which  they  must  give  notice  of 
dissent.     For  form  of  notice,  see  wfra,  p.  5G4. 

The  notice  of  dissent  should  not  merely  express  dissent  but  should 
also  refpiire  the  liquidators  either  to  abstain  from  carrying  the  resolution 


dissent. 


INTRODUCTORY    NOTES. 


557 


into  effect  or  to  purchase  the  member's  interest.  In  re  Uaion  Banlc  of 
Kingston-iqwn-HnU,  lo  C.  1).  808. 

If  a  dissentient  member   fails  to  give  sucli  notice,  lie  must  either  Failure  to 
acce])t  the  benefit  offered  him  by  the  reconstruction,  i.e.,  he  must  become  ^'.^*^  ^^^^<^^  of 

*^  .  "^  .  .  '  dissent. 

an  assenting  member,  or  else  he  entirely  loses  his  beneficial  interest  in 

that  company  ;  for  although  he  will  remain  entitled  to  his  shares  in 

that  company,  yet  they  are  shares  in  a  mere  husk,  for  the  whole  of  the 

assets  of  the  old  company  are  made  over  to  the  new  company. 

It  was  at  one  time  contended  that  if  a  dissentient  member  did  not  Dissentient 

express  his  dissent  Anthin  the  prescribed  period  he  was  bound  by  the  ^^°*  bound  to 

,  ,,  ,11  ,,..  take  shares  in 

sale  or  arrangement,  and  was  consequently  under  an  obligation  to  accept  new  company. 

any  shares  or  other  interest  in  the  purchasing  company,  which  were 
there])y  to  be  allotted  to  him  ;  but  this  notion  was  very  soon  exploded, 
and  it  is  now  settled  that  the  provision  in  .Section  Kil,  that  the  sale 
shall  l^e  binding,  merely  means  that  a  diss'jntieiit  meml>er  cannot 
impeach  the  sale.  He  must  either  assent  or  dissent  in  the  prescribed 
manner,  or  simply  lose.  Loss  case,  13  AV.  R.  88o  ;  34  L.  J.  Ch.  Go9  ; 
Hitjffs  case,  2  H.  &  M.  G.37  ;  Jlartiiis  case,  2  H.  &  ]\I.  G(il) ;  Fox's  case, 
<)  Ch.  183  ;  Soutliall  v.  British  Mutual  Life  Assurance  Soc,  0  Ch.  G14. 
But  see  Griffith  v.  Paget,  o  C.  D.  894  ;  G  C.  T).  oU. 

Where  any  question  arises  as  to  whether  a  memljcr  has  dissented  in 
time,  application  can  be  made  to  the  Court  to  decide  the  point  under  s. 
138  of  the  Act:  Re  Union  Bank  of  King sfon-upon- Hall,  13  C.  L).  8(i8.  In 
the  case  last  mentioned,  the  application  was  by  motion,  but  the  following- 
order  was  made  in  a  similar  case  upon  an  application  by  summons  : — 

Upon  the  application  of and ,  the  liquidators  of  the  above-named  Order  on 

comxDany,  that  the  Court  might  determine  whether  F.  of ,  was  a  member  summons  as  to 

of  the  company  who  had  in  manner  mentioned  in  s.  161  of  the  Companies  Act,  dissentient. 

18G2,  expressed  his  dissent  from  the  special  resohition  i^assed  by  the  company 

on  the  2Gth  of  June  last,  and  confirmed  on  the   13th  July  last,  in  wi-itino- 

addressed  to  the  liquidators  of  the  said  company  or  one  of  them,  and  left  at 

the  registered  office  of  the  comi^any  not  later  than  7  days  after  the  date  of  the 

meeting  at  which  such  special  resolution  was  passed,  and  that  in  case  the  Court 

should  decide  that  the  said  F.  has  so  expressed  his  dissent,  the  applicants,  as 

such  liquidators  as  aforesaid,  might  have   11  days'  notice,  from  the  date  of 

such  decision,  to  appoint  an  arbitrator  consequent  upon  the  notice  of  the  said 

F.,  dated  the  27th  Dec.  1877,  and  that  the  said  F.  might  be  ordered  to  pay  the 

costs  of  such  application,  and  upon  hearing  the  solicitors  for  the  applicants 

and  for  the  said  F.,  and  upon  reading,  &c.,  the  judge  being  of  opinion  that  the 

shareholder  F.  is  not  a  dissentient,  within  the  meaning  of  the  said  section,  doth 

order  that  the  said  F.  pay  to  the  applicants  their  costs  of  and  consequent  of  the 

application  [to  be  taxed].     Direct  United  States  Cable  Co.,  M.  E.,  2G  Feb.  1878. 

A.  579. 

A  member  who  has  duly  dissented  is  entitled  to  have  the  purchase- Payment  to 
money  for  his  interest  paid  to  him  ;  and,  when  it  has  been  ascertained,  'l'*^*entient. 
he  has  aright  of  action  against  the  company.   Be  Rosaz  v.  Angh-Balian 
Banlc,  4  Q.  B.  4G2. 

The  price  to  be  paid  to  dissentients  is  in  default  of  agreement  to  be  ^.rbitration. 
ascertained  by  arbitration,  but   if  the    articles  contain  provisions  for 


558 


EECONSTEUCTION. 


luterest. 


"Whence  fund 
to  jjay  dis- 
sentients to 
come. 


Security  of 
dissentients 
must  be 
regarded. 


Notice  callinf 
meetings  to 
pass  special 
resolution. 


arbitration,  it  is  not  necessary  to  resort  to  the  Companies  Clauses  Con- 
solidation Act,  184:5,  as  provided  by  Section  162  of  the  Act  of  1802  : 
the  arbitration  should  proceed  in  accordance  "with  the  articles.     S.  C. 

No  interest  is  payable  upon  the  purchase  money  until  the  amount  has 
been  ascertained  and  a  demand  for  payment  made.  In  re  United  States 
Cable  Co.,  48  L.  J.  (165. 

A  dissentient  member  whose  interest  has  been  purchased  under  s.  1(»1 
does  not  thereliy  escape  from  liability  towards  the  creditors  of  the  com- 
pany which  is  being-  wound  up.     Vining's  case,  C  Ch.  GOl. 

But  it  would  seem  that  if  a  winding-up  order  is  not  made  within 
a  year,  the  members  of  the  sellina:  company  cease  to  be  under  any 
liability  to  the  creditors.  In  re  City  and  Cotinti/  Lwestnient  Co.y 
13  C.  D.  475. 

As  to  the  source  from  whence  the  funds  to  pay  dissentient  members  are 
to  come  :  according  to  the  above  plan  the  new  company  is  bound  by  the 
agreement  to  provide  them.  It  is  necessary  to  impose  this  obligation 
on  the  new  company  because,  by  the  agreement,  the  old  company  is  to 
sell  atl  its  property. 

A  mode  of  reconstruction  sometimes  adopted  is  to  provide  by  the 
agreement  for  the  allotment  of  the  share  consideration  to  the  liquidators 
or  their  nominees,  instead  of  to  the  members  directly,  and  not  to  insert 
any  provision  requiring  the  new  company  to  pay  the  dissentients.  The 
special  resolution  of  the  old  company  in  such  case,  besides  sanctioning- 
the  agreement,  will  direct  the  liquidators  of  the  old  company  to  raise  the 
funds  to  pay  dissentients  by  the  sale  of  a  sufficient  number  of  the  shares 
in  the  new  company  to  be  allotted  pursuant  to  the  agreement,  and  to 
distrilmte  the  residue  of  such  shares  among  the  assenting  members. 
But  the  former  is  the  most  convenient  plan.  The  result  in  either  case 
is  the  same. 

Care  should  be  taken  so  to  frame  the  agreement  that  dissentient  mem- 
bers shall  have  sufficient  security  for  the  payment  of  the  purchase-money 
for  their  interests  ;  otherwise  there  will  be  risk  of  legal  proceedings. 
See  infra,  Form  723,  cl.  8,  and  In  re  Hester  &  Co.,  44  L.  J.  N.  S.  757  ; 
W.  K,  1875,  179. 

"\'\Tiere  the  selling  company  has  uncalled  capital  it  would  seem  from 
the  above  case  that  such  a  clause  is  unnecessary.  It  may,  however,  be 
doubted  how  far  this  is  consistent  with  the  principles  laid  down  in  Clinch 
V,  Financial  Corporation,  4  Ch.  120,  and  infra,  p.  577. 

The  validity  of  a  special  resolution  sanctioning  a  sale  or  arrangement 
under  Section  IGl,  essentially  depends  on  the  sufficiency  of  the  notices 
given  convening  the  meetings.  They  ought  to  give  the  members  either 
direct  or  indirect  notice  that  the  transaction  is  to  be  effected  under  Sec- 
tion IGl.  Imperial  Bctnk  of  China,  ^-c,  v.  Banlc  of  Hindustan,  <{r.,  (>' 
Eq.  91  ;  Fox.s  Case,  G  Ch.  17G.  A  notice  which  states  {^inter  alia)  that 
a  resolution  is  to  be  proposed  authorising  the  liquidators  to  sell  the  assets 
to  another  company  and  to  accept  comjwnsation  in  shares  is  probably 
sufficient ;  but  the  usual  plan  now  is  to  refer  expressly  to  Section  IGl. 


INTROUUCTOEY    XOTES. 


159 


This  precludes  all  doubt.     Of  course,  the  refereuce  to  Section  IGl  may 
be  either  in  the  notice  or  in  the  accompanying-  circular  (if  any). 

The  agi'eement  with  the  new  company  must,  if  it  provides  for  the  As  to  filing 
issue  of  paid  up  shares,  be  filed  pursuant  to  the  25th  Section  of  the  Com-  '''s^'^*^'"^^*- 
panics  Act,  1807.     See  supra,  p.  11. 

It  is  also  not  unusual,  and  seems  expedient,  to  file  subsequent  agree- 
ments between  the  new  company  and  the  members  of  the  old  company 
to  whom  shares  are  allotted  specifying  the  shares  allotted. 

However,  it  may  be  expedient  to  file  a  subsequent  agreement  to  identify 
the  shares  allotted  to  each  member  of  the  old  company.  See  supra, 
p.  12. 

The  liquidators,  in  a  winding,  up  for  the  purpose  of  reconstruction,  Kemnneration 
generally  act  without  remuneration,  or  for  a  small  fee.  °^  liquidators. 

A  comjiany  cannot,  by  an  alteration  in  its  articles,  made  in  conteni-  Alteiatiou  of 
plation  of  a  winding  u})  and  proceeding  under  Section  IGl  of  the  Act,  aeroo-ation  of 
deprive  dissentient  members  of  the  right  given  them  by  that  Section.  Hglits  of  dis- 
Ex  parte  Fox,  ()  Ch.  ITC.     There  seems,  however,  no  reason  why  the  ^^'^*^'*^'^*^' 
rights  of  dissentient  members,  luider  Section  IGl,  should  not  be  restricted 
by  the  articles  as  originally  framed.     See  supra,  p.  IGG. 

Where  the  special  resolution  sanctioning  an  agreement  for  a  sale  under  Confirmation 
Section  IGl  is  invalid  for  want  of  proper  notice,  the  transaction  can,  ^gyQl^Jtio'il 
nevertheless,  be  confirmed.     Fox's  Case,  G  Ch.  17G.     In  order  to  effect 
this,  the  liquidators  must  call  the  necessary  meetings  and  procure  the 
members  to  pass  proper  special  resolutions. 

It  will  be  remembered  that  Section  IGl  provides  that  if  an  order  be  Order  to  wind 
made  within  a  year  for  the  winding  up  the  company  by  or  subject  to  "!'• 
the  supervision  of  the  Court,  the  resolution  shall  not  be  of  any  validity 
unless  sanctioned  by  the  Court. 

Any  company  not  formed  or  ix'gistcred  under  the  Act  of  1862,  but  Company  may 
which  is  capable  of  being  registered  under  that  Act,  mav  effect  a  recon-  i"eg|«ter  with 

'■  ^        ,       ^       ^  ^  a  view  to  re- 

struction  under  Section  IGL     In  order  to  do  this  it  will  register  under  construction. 
the  Act,  and  the  reconstruction  may  then  be  carried  into  effect  as  abo^e 
mentioned.     It  is  no  objection  that  the  registration  was  made  expressly 
with  a  view'  to  winding  up  and  selling  under  Section  IGl.     Souihall  v. 
British  Mutual  Life  Assurajice  Socipty,  G  Ch.  G14,  C.  A. 

Section  IGl  is  only  applicable  in  a  purely  voluntary  winding  up.  Re  Reconstruction 
Haforcl  Hotel,  W.  N.,  1868,  8G.  But  in  a\vinding  up  by  or  under  the  j^"  '^j^'J^Jj.^s  "i> 
supervision  of  the  Court  a  reconstruction  may  be  effected  by  a  sale  under 
Section  95  of  the  Act  to  a  new  company,  for  under  that  Section  the 
Court  has  powers  at  least  as  extensive  as  those  conferred  by  Section  IGl 
on  a  liquidator.  In  re  Agra  and  3Iasterman''s  Bank,  12  Eq.  409  ;  15 
"W.  R.  554;  Imperial  Mercantile  Credit  Association,  12  Eq.  504; 
Cambricm  Co.,  38  L.  T.  1G4.  AYhere  a  company  gets  into  difiiculties  a 
reconstruction  and  an  arrangement  with  creditors  under  the  Act  of  1870 
are  not  uncommonly  effected  at  the  same  time.  See  infra,  "Arrange- 
ments. 


FOEMS. 


Form  723.  AGREEMT  between  Liqs  of  Old  Co  and  New  Co  with  a  view  to  the 
Recoxstruction  of  the  Old  Co. 


Agreement 
with  a  view  to 
reconstruction. 

Parties. 


Eecitals. 


Agreement 
for  sale. 


AN  AGREEMT  made  the day  of 

(hereinafter  called  the  old  co)  and 


between  the  A.  Co,  Limtd 

and ,  the  liqs  thereof,  of 

the  one  pt,  and  the  A.  Co,  Limtd  (hereinafter  called  the  new  co)  of  the 
other  pt. 

AYhas  the  old  co  was  incorporated  in  the  year under  the  Cos 

Acts,  18G2  and  18G7,  with  a  nominal  capital  of  1 00,000/.,  divided  into 
]  0,0(10  shares  of  10/.  each  ;  Axu  whas  the  whole  of  the  sd  shares  have 
been  issued  and  the  sum  of  5/.  per  share  stands  credited  iu  the  books  of 
the  old  CO  as  having  been  pd  up  thereon  ;  Axd  w^has  by  special  resolu- 
tion of  the  old  CO  passed  and  confirmed  at  extraordinary  general  meet- 
ings thereof,  held  respively  the day  of  and  the day  of 

,  it  was  resolved  (1)  That  the  co  should  l^e  wound  up  voluntarily 

and  that  the  said and  should  be  and  they  were  thereby  ap- 
pointed liqs  for  the  pposes  of  such  winding  up.  (2)  That  the  sd  liqs 
should  be  aud  they  were  thereby  authorised  to  consent  to  the  registra- 
tion of  a  new  co  to  be  named  The Co,  Limtd,  with  a  memorandum 

and  articles  of  association  as  therein  mentd  ;  and  {?>)  That  the  draft 
agreemt  in  the  resolution  referred  to  (being  the  draft  of  these  presents) 
sliould  be  and  the  same  was  thereby  approved,  and  that  the  sd  liqs  should 
be  and  they  were  thereby  authorised  to  enter  into  an  agreemt  with  such 
new  CO  (when  incorporated)  in  the  terms  of  the  sd  draft  and  to  carry  the 
same  into  eifect  :  Axd  whas,  pursuant  to  the  resolution  afsd,  the  new 
CO  has  since  been  incorporated  uuder  the  Cos  Acts,  18G2  to  1880,  with 
a  nominal  capital  of  50,00(»/.,  divided  into  10,000  shares  of  5/.  each  : 
AxD  WHAS  by  the  articles  of  association  of  the  new  co,  it  is  provided 
that  the  same  co  shall  forthwith  execute  the  agreemt  therein  referred  to, 
being  these  presents  :  Noav  it  is  hereby  agreed  as  follows  : 

1 .  The  old  co  and  its  liqs  shall  sell,  and  the  new  co  shall  pchase :  all 
and  singular  the  goods,  chattels,  monies,  credits,  debts,  bills,  notes,  and 
things  in  action  of  the  old  co,  and  the  undertaking,  business,  and  good- 
will thereof,  with  the  full  benefit  of  all  contracts  and  agrecmts,  and  of 
all  securities  in  respect  of  the  sd  things  in  action,  to  which  the  old  co  is 
cntled,  and  all  other  the  real  and  ]wrsonal  ppty  of  the  old  co  whatsoever 
and  wheresoever  ;  subject  nevertheless  as  to  all  the  sd  premes  to  the 


FORMS.  561 

several  mtges,  charges,  liens,  and  incumbrances  affecting  the  same  or  any  Form  723. 
pt  thereof. 

2.  As  a  pt  of  the  conson  for  the  sd  sale  the  new  co  shall  pay,  satisfy,  New  company 
and  discharge  all  the  debts,  liabilities,  and  obligations  of  the  old  co  &crof'oUl  ^' 
whatsoever,   and   shall   adopt,   perform,  and    fulfil   all   contracts    and  company, 
engagemts  now  binding  on  it,  and  shall  at  all  times  keep  the  old  co,  its 

liqs,  and  contribs,  indemnified  against  such  debts,  liabilities,  obligations, 
contracts,  and  engagemts  and  against  all  actions,  proceedings,  costs, 
damages,  claims,  and  demands  in  respect  thereof. 

3.  As  a  further  pt  of  the  conson  of  the  sd  sale,  the  new  co  shall  pay  New  company 

,  .      ,.  ,  •!       •    J         to  pay  costs 

and  at  all  times  hereafter  keep  the  old  co,  its  liqs,  and  contribs,  mdem-  <,£  binding  up 

nified  against  all  the  costs  and  expenses  of  and  incident  to  the  winding  old  company. 

up  of  the  old  CO,  and  of  carrying  the  sd  sale  into  effect. 

4.  As  the  residue  of  the  conson  for  the  sd  sale  every  member  of  the  ^l^^u'es  m  new 

•     1111       1  •  1    1  J.     company  to 

old  CO  shall,  in  respect  of  each  share  therein  held  by  him,  be  entled  to  be  allotted  to 

require  the  new  co  to  allot  to  him,  or  to  his  nominee  or  nominees,  one  members  of 

^  .  ,         old  company. 

5L  share  in  the  new  co  with  the  sum  of  oZ.  credited  as  having  been  pd  up 

thereon,  and  any  member  of  the  old  co  who  shall  take  the  benefits  by 
this  clause  offered  to  him,  shall  accept  the  same  in  full  satisfon  and  dis- 
charge of  all  claims  and  demands  in  respect  of  his  interest  in  the  assets 
of  the  old  CO. 

Suppose  the  shares  in  the  old  company  to  be  lOL,  fully  paid-up,  and  that  it 
is  desired  to  return  5L  per  share  to  the  members.  In  such  case^  if  the  new 
company  is  to  have  power  to  call  up  the  amount  again,  the  clause  will  provide, 
that  every  member,  &c.,  shall  be  entitled,  &c.,  "  to  require  the  new  company  to 
pay  to  him  the  sum  of  5L  in  cash,  and  to  allot  to  him  or  to  his  nominee  or 
nominees  one  101.  share  in  the  new  company,  with  the  sum  of  ol.  credited  as 
having  been  paid  up  thereon."  If  the  new  company  is  not  to  have  power  to 
call  up  the  51.  again,  the  shares  will  be  ol.  each,  and  will  be  allotted  as  fully 
paid  up.  Of  course,  instead  of  casli,  debentures  or  other  securities  may  be 
issued. 

Sometimes  where  the  shares  in  the  selling  company  are  not  all  paid  up,  the 
latter  part  of  Clause  4  above  runs  thus  :  "  With  the  same  amoimt  credited  as 
paid  up  thereon  as  stands  credited  in  the  books  of  the  old  company  as  having 
been  paid  up  on  the  share  in  respect  whereof  the  same  is  allotted." 

And  sometimes  the  claiise  is  expressed  thus :  "  As  the  residue  of  the  con- 
sideration for  the  said  sale,  the  new  company  shall  allot  shares  in  the 

capital  of  the  new  company  in  such  manner  as  the  liquidators  of  the  old  com- 
pany shall  direct,  to  the  intent  that  such  shares  shall  be  divided  as  nearly  as 
may  be  among  the  members  or  contributories  of  the  old  company,  according  to 
their  rights  and  intei-ests  in  the  assets  of  that  company." 

Where  the  agreement  provides  for  the  allotment  of  the  shares  to  the  liqui- 
dators, and  such  shares  are  only  to  be  in  part  credited  as  paid  up,  it  may  be 
•well  to  insert  a  clause  providing  that  "The  liquidators  of  the  old  comimny 
shall  not  be  bound  to  accept  an  allotment  of  any  of  the  shares  mentioned  in 

clause hereof,  which  they  shall  not  reqmre  for  allotment  to  the  members 

of  the  old  company,  in  accordance  with  that  clause,"  or  to  provide  that  the 
allotment  shall  be  made  "  upon  the  request  "  of  the  liquidator.  Unless  this  is 
done,  it  may  be  contended  that  the  liquidator  is  bound  personally  to  take  the 
shares,  and  this  might  involve  him  in  liabilities.     Dijett's  case,  43  L.  T.  85. 

Griffith  v.  Paget,  5  C.  D.  894,  should  be  borne  in  mind.     See  supra,  p.  556. 

O  O 


5G:2 


EECONSTEUCTION. 


Form  723. 


Provision  for 
payment  of 
ilissentients. 


Delivery. 


5.  If  the  liqs  of  the  old  co  shall,  in  order  to  carry  the  sd  sale  into 
effect,  have  occasion  to  pchase  the  interest  of  any  member  of  the  old  co, 
then  and  in  every  or  any  such  case  the  new  co  shall  be  relieved  from  the 
oblig-ation  imposed  on  it  by  Clause  4  hereof  as  regards  such  member,  bun 
shall  pay  to  the  liqs  for  the  pposc  of  effecting  such  pchase  such  sum  as, 
by  arbitration  between  the  old  co  and  such  member,  or  by  agreemt  made 
with  the  sanction  of  the  new  co  between  him  and  the  liqs  of  the  old  co, 
shall  l)e  determined  to  be  the  price  payable  in  respect  of  such  pchase. 
Title  acceptea.  G.  The  new  CO  shall  accept,  without  investigation,  such  title  as  the 
old  CO  has  to  all  the  real  and  personal  ppty  and  premes  agreed  to  be  hby 
sold. 

7.  The  old  co  and  its  li(|S  shall,  as  soon  as  conveniently  may  be  (but 
without  prejudice  to  Clause  8  hereof),  execute  and  do,  at  the  expense  of 
the  new  co,  all  such  assurances  and  things  as  shall  be  reasonably  re- 
quired by  the  new  co  for  vesting  in  it  the  sd  ppty  agreed  to  be  hby  sold, 
or  any  pt  thereof,  and  giving  to  it  the  full  benefit  of  this  agreemt  ;  and 
in  the  meantime  (subject  as  afsd),  the  old  co  shall  stand  possessed  of  the 
ppty  agreed  to  be  hby  sold  in  trust  for  the  new  co,  and  it  shall  be  lawful 
for  that  CO  in  the  name  or  names  of  the  old  co  or  its  liqs,  but  keeping 
them  indemnified  against  all  costs  and  damages  which  might  arise 
thereby,  to  bring,  take,  and  defend  actions  and  proceedings,  and  to  do 
all  other  things  which  shall  be  necessary  or  expedient  for  obtaining  the 
full  benefit  of  the  sd  sale. 

8.  Provided  always  that  the  old  co  and  its  liqs  shall  have  a  lien  upon 
the  whole  of  the  ppty  agreed  to  be  hby  sold  for  all  monies  (if  any) 
payable  by  the  new  co  under  Clause  5  hereof,  and  until  the  same  shall 
have  been  pd  the  sd  liqs  shall  be  at  libty  to  retain  possession  of  all  or  any 
pt  of  the  sd  ppty,  and  thereout  at  their  discretion  to  raise  and  pay  such 
monies  or  any  pt  thereof. 

As  to  this  clause,  see  siqna,  p.  558. 


Lien  in  favour 
of  dissentients, 


Powei'  t(, 
rescind. 


9.  Notwithstanding  anything  herein  contd,  if,  in  order  to  carry  the  sd 
sale  into  effect,  it  would  be  necessary  for  the  liqs  to  pchase  the  interests 

of  members  holding  more  than  shares  in  the  old  co,  the  new  co 

shall  be  at  libty  by  notice  in  Avriting,  addressed  to  the  liqs  of  the  old  co 
and  left  at  the  registered  office  of  that  co,  to  rescind  this  agreemt. 

Tliis  clause  is  not  at  all  unusual.  There  might  hapjjen  to  be  so  many  dis- 
sentient members  of  the  old  company  that  the  new  company  could  not  find  the 
means  to  pay  them  off,  and  in  such  case  it  is  convenient  to  give  a  power  of 
rescission. 


Agreement 
not  to  operate 
as  conveyance. 


10.  These  presents  are  intended  to  operate  as  an  agreemt  only,  and 
not  as  a  conveyance,  transfer,  or  assigumt. 

This  clause  is  frequently  used  in  svich  agreements  presumably  in  order  to 
prevent  any  doubt  whether  the  instrument  is  liable  to  ad  valorem  duty  as  a 
conveyance  or  transfer  of  any  part  of  the  property.  See  Tilsley,  188  et  seq. 
But  it  seems  clear  that  such  an  agreement  covild  not  be  held  a  conveyance 
-within  the  Stamp  Act,  1870.     See  supra,  p.  G. 


FORMS.  563 

An  arbitration  clause  is  sometimes  inserted,  although  some  doubt  has  been   Form  723. 

felt  as  to  its  validity.     However,  in  Southall  v.  British  Midual  Life  Assurance  ~' " 

Soc,  6  Ch.  G14,  James,  L.  J.,  was  of  opinion  that  an  arbitration  clause  did  not 
invalidate  an  agreement  for  a  sale  pursuant  to  s.  161  of  the  Act,  and  Hel- 
lish, L.  J.,  concurred. 

11.  Until  the  dissolution  of  the  old  eo,  the  new  co  shall,  at  its  own 
expense,  produce  and  show  at  such  times,  and  to  such  persons,  and  in 
such  places  as  the  liq  for  the  time  being  of  the  old  co  shall  require,  all 
the  books,  documts,  and  papers  of  the  old  co  agreed  to  be  hbj  sold. 

A  clause  as  above  is  sometimes  inserted  and  appears  desii'able.  Silber  Co., 
12  C.  D.  717. 

Tn  witness  whereof  the  sd  cos  have  caused  their  respire  common 
seals  to  be  hereunto  afhxed,  and  the  sd  liqs  have  respivelj  set  their 
hands  hto,  the  day  and  year  first  above  written. 

The  resolutions  in  the  above  case  would  be  as  follows : 

(1.)  That  the  co  be  wound  up  voluntarily,  and  that  A.  B.  and  C.  D.   Form  724. 
be,  and  they  are  hby  appointed  liqs  for  the  ppose  of  such  ^vinding  up.       p     ,  ,  •    I     ' 

(2.)  That  the  sd  liqs  be  and  they  are  hby  authorised  to  consent  to  the  with  a  view 
registration  of  a  new'  co,  to  be  named  The  A.  Co,  Limtd,  with  a  memo-  *°  ^'®™"" 

®  ....  stniction. 

randum  and  articles  of  association  which  have  already  been  prepared 
with  the  privity  and  approval  of  the  directors  of  this  co. 

(3.)  That  the  draft  agreemt  submitted  to  this  meeting  and  expressed 

to  be  made  between  this  co  and  its  liqs  of  the  one  pt,  and  The Co, 

Limtd,  of  the  other  pt,  be,  and  the  same  is  hby  approved,  and  that  the 
sd  liqs  be,  and  they  are  hby  authorised  to  enter  into  an  agreemt  with 
such  new  co  (when  incorj)orated)  in  the  terms  of  the  sd  draft,  and  to 
carry  the  same  into  effect. 

In  some  cases  it  is  thought  expedient  to  frame  the  first  resolution  thus  : 
"  That  it  is  desirable  to  reconstruct  the  company,  and  that,  ^vith  a  view 
thei-eto,  the  company  be  wound  up,  &c."  [as  above]. 

Where  the  new  company  is  not  to  bear  the  same  name  as  the  old  company, 
resolution  (2)  can  be  varied.  Sometimes  it  is  resolved  "that  the  liquidators  be 
authorised  to  consent  to  any  variation  in  the  terms  of  the  agreement  which 
they  may  think  fit,"  and  occasionally  "  the  liquidators  are  authorised  to  trans- 
fer or  sell  the  whole  or  any  part  of  this  company's  business  and  property  to 
any  other  company,  and  to  receive,  in  compensation  or  part  comj^ensation  for 
such  transfer  or  sale,  shares  in  such  company,  or  to  enter  into  any  other  ar- 
rangement whereby  the  members  of  this  company  may,  in  lieu  of  receiving 
cash,  shares,  or  other  like  interests,  or,  in  addition  thereto,  participate  in  the 
profits  of  or  receive  any  other  benefit  from  such  other  company." 

Sometimes  the  authority  is  "  to  make  or  enter  into  any  such  sale  or  ari-ano-e- 
ment  as  is  contemplated  by  s.  161  of  the  Companies  Act,  1862,  and  in  particular 

to  enter  into  an  agreement  with  The Company  Limited,  for  the  sale  to 

that  company  of  this  company's  business  and  assets  upon  the  terms  set  forth  in 
the  draft  agreement  submitted  to  the  meeting." 

The  following  is  an  example  of  the  form  of  notice  to  be  used  where  a  member 
dissents  pursuant  to  s.  161  of  the  Act. 

o  o  2 


564  RECONSTEUCTION. 

Form  725.       In  the  matter  of  the  Companies  Act,  18(!2. 

Notice  of  And  in  the  matter  of  The Co,  Limtd. 

dissent  pur-  To and ,  the  liqs  of  the  above-named  co. 

s.  161,  Take  notice  that  I  dissent  from  the  special  resolutions  of  the  co 

passed  and  confirmed  at  general  meetings  thereof,  held  respively  on  the 

day  of and day  of .    And  I  hby  require  you  either 

to  abstain  from  carrying  such  resolution  into  effect,  or  to  pchase  the 
interest  in  the  sd  co  held  by  me,  at  a  price  to  be  determined  in  accord- 
ance with  Section  102  of  the  above-mentd  Act. 

Dated,  &c.  A.  B.  of . 

See  Union  Bank  of  Kingston,  13  C.  D.  808 ;  Anglo-Italian  Bank  v.  De  Rosaz, 
L.  E.  2  Q.  B.  452 ;  De  Rosaz  v.  Anglo-Italian  Bank,  L.  E.  4  Q.  B.  462,  and 
supra,  pp.  556,  557. 

Form  726.  AGREEMT    for    Reconstruction  sanctioned  by  the   Ct   in  the 
Winding-up  of  The  Imperial  Mercantile  Credit  Association. 

The  following  is  a,  copy  of  an  agreement  which  was  sanctioned  by  the  Court 
of  Chancery.  See  In  re  Imperial  Mercantile  Credit  Association,  12  Eq.  504.  It 
was  framed  with  the  greatest  care,  and  has  since  served  as  the  basis  of  many 
other  reconstruction  agreements. 

Parties.  ARTICLES  OF  AGREEMT  under  seal  made  the  19th  day  of  July, 

1871,  between  Sir  W.  J.,  of  ,  W.  M.,  of  ,  F.  F.,  of  ,  and 

A.  C.  S.,  of ,  of  the  one  pt,  and  the  Imperial  Credit  Co,  Limtd,  of 

Kecitals.  the  other  pt :  Whas  the  Imperial  Mercantile  Credit  Association,  Limtd 

(hereinafter  called  the  old  co),  has  a  nominal  capital  of  5,000,000/., 
divided  into  100,000  shares  of  50/.  each  :  And  whas  a  special  resolu- 
tion for  the  voluntary  winding-up  of  the  old  co  was  passed  and  confirmed 
at  general  meetings  thereof,  held  respively  on  the  28th  day  of  May  and 
the  l-lth  day  of  June,  18GG  ;  And,  by  an  order  of  his  Honour  the  then 
Vice-Chancellor  Wood,  made  on  the  2Gth  day  of  June,  1800,  it  was 
ordered  that  the  sd  voluntary  winding-up  should  be  continued,  but  sub- 
ject to  the  supervision  of  the  High  Ct  of  Chancery  :  And  whas  by  calls 
made  partly  before  and  partly  under  the  sd  winding-up,  the  shares  in 
the  old  CO  have  been  called  up  to  the  amount  of  27/.  lOs.  in  all,  leaving 
22/.  10s.  per  share  still  uncalled  thereon  :  And  whas  by  means  of  such 
calls,  of  the  assets  realised,  and  of  temporary  loans  made  to  the  old  co  or 
its  liqs,  the  debts  proved  against  or  admitted  by  the  old  co,  other  than 
those  due  in  respect  of  such  loans,  have  all  been  paid,  except  so  far  as 
any  of  the  creditors  of  the  old  co  have  omitted  to  receive  any  of  the  in- 
stalmts  which,  however,  are  lying  ready  to  be  pd  them  :  And  whas  the 
old  CO  is  under  a  liability  to  provide  certain  sums  of  money  for  the  com- 
pletion of  certain  railway  works  in  which  it  is  interested  :  And  avhas  at 
the  sd  meeting  of  the  sd  shareholders  of  the  old  co,  held  on  the  14th  day 
of  June,  1800,  a  committee  was  appointed  for  the  ppose  of  assisting  and 
advising  the  liqs  in  the  administration  of  the  estate  of  the  old  co  ;  and 
such  committee  is  now  composed  of  the  parties  hto  of  the  former  pt : 
And  whas  by  a  circular  addressed  to  the  sd  shareholders,  and  dated  the 


FOEMS. 


565 


Gtli  day  of  July,  1870,  the  sd  committee  proposed  the  formation  of  a  Form  726. 
new  CO,  which  should  take  over  the  assets  of  the  old  co  remaining  un-  "" 

realised,  according  to  a  plan  explained  in  the  sd  circular  :  And  whas 
by  a  resolution  passed  unanimously  at  a  meeting  of  the  sd  shareholders, 
held  on  the  4th  day  of  July,  1870,  the  sd  plan  was  approved  of,  subject 
to  such  modifications  in  the  details  as  the  sd  committee  might  sanction  ; 
And  a  very  large  number  of  the  sd  shareholders  also  individually  signi- 
fied their  approval  of  the  same  plan,  subject  to  such  modifications  as 
afsd  :  And  whas,  after  applicon  had  been  made  to  the  High  Ct  of 
Chancery  for  its  sanction  of  an  agreemt  intended  to  carry  the  sd  plan 
into  ettect,  certain  modifications  were  made  in  that  agreemt,  which, 
as  so  modified,  was  approved  by  a  special  resolution  of  the  old  co, 
passed  and  confirmed  at  general  meetings  thereof,  held  respively  on 
the  12th  and  31st  days  of  May,  1871  :  And  whas  upon  the  further 
hearing  of  the  sd  applicon  on  the  12th  day  of  June,  1871,  the  Vice- 
Chancellor  Bacon,  to  whose  branch  of  the  High  Ct  of  Chancery  the 
winding-up  of  the  old  co  is  attached,  approved  of  the  sd  agreemt  as  so 
modified  :  And  whas  the  Imperial  Credit  Co,  Limtd  (hereinafter  called 
the  newco),  has  since  been  incorporated  under  the  Companies  Acts,  18G2 
and  1867  ;  and  the  parties  hto  of  the  former  part,  acting  so  far  as  they 
lawfully  may  on  behalf  of  the  old  co,  have  entered  into  this  agreemt, 
the  terms  of  which  correspond  with  those  of  the  sd  agTcemt  so  approved 
as  afsd,  and  intend  to  apply  for  the  sanction  of  the  High  Ct  of  Chancery 
to  be  formally  given  it  :  Xow  these  presents  witness  that  it  is  hby 
mutually  agreed  as  follows  : — 

1.  The  parties  hto  of  the  former  pt  do  not  in  any  case  personally  The  agreement 
undertake  any  liability  hereunder,  nor  shall  the  new  co  be  bound  hby  ^^  conditional, 
further  than  as  this  agreemt,  either  as  it  now  stands  or  with  any  modifi- 
cations, shall  by  the  High  Ct  of  Chancery  be  sanctioned  and  ordered  to 

be  carried  into  effect  by  the  liqs  of  the  old  co. 

2.  Subject  to  the  foregoing  condition  as  to  the  binding  force  of  this  Agreement  to 
agremt,  the  old  co  shall  sell  to  the  new  co  which  shall  pchase  :  All  and  ^^^• 
singular  the  real  and  personal,  and  heritable  or  moveable,  ppty,  eflFects, 

and  things  in  action  belonging  to  the  old  co,  of  what  nature  or  kind 
soever,  and  wheresoever  situate  or  recoverable,  together  with  the  full 
benefit  of  all  securities,  real  or  personal,  heritable  or  moveable,  held  by 
the  old  CO  for  any  of  the  said  things  in  action  ;  such  sale  expressly  in- 
cluding all  cash  balances  in  the  hands  of  the  old  co  or  of  its  liqs,  or  at 
the  credit  of  any  banking  account  of  the  sd  liqs,  all  arrears  of  calls  on 
the  shares  of  the  old  co  up  to  the  said  amount  of  27/.  K's.  per  share,  and 
all  sums  of  money  recoverable  on  the  ground  of  misfeasance  or  breach 
of  trust  (a)  from  any  directors  of  the  old  co  or  other  persons,  whether 
the  same  be  or  not  the  subject  of  any  Chancery  suit  now  pending,  but 
saying  and  reserving  to  the  old  co  its  uncalled  share  capital,  and  to  the 
sd  liqs  the  power  in  the  meantime  before  this  agreemt  shall  have  become 
binding  on  them,  at  their  discretion,  to  realise  for  the  ultuuate  benefit  of 
the  old  or  new  co,  as  the  case  may  be,  all  or  any  pt  of  the  ppty,  effects, 


566 


EECONSTEUCTION. 


Form  726.  and  things  in  action  liby  agreed  to  be  sold,  or  the  securities  for  the 
'-  same. 

(a)  Where,  upon  a  reconstruction,  the  old  company  had  transferred  to  the 
new  one  all  its  "  property,  estates,  and  effects,  with  the  appurtenances,"  includ- 
ing a  mortgage,  "  with  the  benefit  of  all  securities  "  for  the  amount  due,  it  was 
held  that  a  right  of  action  which  the  old  company  had  against  one  of  its 
directors  for  breach  of  trust,  in  respect  of  the  mortgage,  did  not  pass  to  the 
new  company.  Neiv  WesUninster  Brewery  v.  Hannah,  W.  N.  1876,  215  ;  affirmed 
on  appeal.  But  see  Parkgate  Wagon  Co.,  17  C.  Div.  234,  where  very  similar  words 
were  held  to  pass  a  claim  against  the  directors. 


Delivei'y. 


Debts  of  old 
company  to 
be  paid  by 
new  one. 


Costs  of  wind- 
ing up  of  old 
company. 

Account  to  be 
kept  of  pro- 
ceeds of 
realisation. 


3.  The  old  co  and  its  liqs,  immediately  on  this  agreemt  becoming 
binding  on  them,  shall  deliver  to  the  new  co  all  such  pts  of  the  sd 
ppty,  effects,  things  in  action,  and  securities  as  shall  be  capable  of 
delivery,  and  they  shall,  at  the  cost  of  the  new  co,  execute  and  do  all 
such  conveyances,  assignmts,  power  of  attorney,  instrumts,  and  things, 
as  the  new  co  shall  from  time  to  time  reasonably  require  for  carrying 
the  sd  sale  into  effect,  either  as  to  the  whole  or  as  to  any  pt  or  pts  of 
the  ppty,  effects,  things  in  action,  and  securities,  herein  comprised,  the 
same  to  be  settled,  in  case  of  difference,  by  and  in  the  chambers  of  the 
judge  to  whose  branch  of  the  [High  Ct  of  Chancery]  the  winding  up  of 
the  old  CO  is  attached  ;  and,  in  the  meantime,  it  shall  be  lawful  for  the 
new  CO,  in  the  name  or  names  of  the  old  co,  or  its  liqs,  but  keeping 
them  indemnified  against  all  costs  and  damages  which  might  arise 
thereby,  to  bring  and  defend  actions  and  suits,  and  do  all  other  things, 
either  in  England  or  elsewhere,  which  shall  be  necessary  or  expedient  for 
obtaining  the  full  benefit  of  the  sd  sale. 

4.  As  a  pt  of  the  conson  for  the  sd  sale,  the  new  co  shall  satisfy  all  the 
outstanding  debts  and  liabilities  of  the  old  co  (including  the  temporary 
loans  afsd) ;  as  to  the  sd  loans,  by  paying  the  same  according  to  the 
tenns  on  which  they  have  been  respively  granted  ;  as  to  any  instahnts 
which  any  creditors  of  the  old  co  may  have  omitted  to  receive,  by  paying 
the  same  when  and  as  the  same  shall  be  duly  demanded  ;  as  to  such 
debts  (if  any)  of  the  old  co  as  have  not  yet  been  established,  by  paying 
the  same  when  and  as  they  shall  be  duly  established  ;  and  as  to  all 
liabilities  of  the  old  co  to  provide  any  sums  of  money  for  the  completion 
of  any  railway  or  other  works,  and  all  such  other  liabilities  (if  any)  of 
the  old  CO  as  have  not  yet  been  converted  into  debts,  by  discharging  the 
same  when  and  as  they  shall  mature  ;  And  the  new  co  shall  at  all  times 
keep  the  old  co  and  its  liqs  indemnified  against  the  loans,  debts,  and 
liabilities  hby  agreed  to  be  satisfied  by  the  new  co,  and  against  all  costs, 
charges,  and  expenses  in  respect  thereof. 

5.  As  a  further  pt  of  the  sd  conson  the  new  co  shall  pay,  and  at  all 
times  keep  the  old  co  and  its  li(js  indemnified  against  all  the  costs  and 
expenses,  whether  past  or  future,  of  the  winding  up  of  the  old  co. 

6.  The  amount  of  all  monies  which  shall  be  received  by  the  new  co 
from  the  sale  or  getting  in  of  or  otherwise  from  or  on  account  of  any  and 
every  the  ppty,  effects,  and  things  in  action  hby  agreed  to  be  sold, 


FORMS.  5(57 

together  with  interest  at  the  rate  from  time  to  time  allowed  by  the  Form  726, 

London  and  Westminster  Bank  on  deposits,  to  be  computed  according 

to  the  practice  adopted  by  the  London  joint-stock  banks  with  cuiTent 

accounts,  on  the  minimum  credit  balance,  during  each  calendar  month 

of  the  account  by  the  present  clause  directed,  shall  be  carried  to  the 

credit  of  an  account  to  be  kept  by  the  new  co,  l)ut  without  prejudice  to 

the  right  of  the  new  co,  as  o^viiers,  to  manage,  sell,  get  in,  compound, 

release,  and  otherwise  act  at  its  absolute  discretion  with  relation  to  the 

sd  ppty,  effects,  and  things  in  action  hby  agreed  to  be  sold,  nor  shall  the 

new  CO  be  under  any  obligation  to  preserve,  set  apart,  or  specifically 

account  for,  any  monies  of  which  the  amount  shall  be  carried  to  the 

credit  of  the  sd  account,  but  the  applicon  of  the  credit  balance  of  such 

account  as  hereinafter  declared  shall  only  create  a  liability  on  the  pt  of 

the  new  co  in  the  natm-e  of  a  personal  liability  to  credit  or  pay  the 

amount  so  to  be  api:)lied. 

7.  On  the  debit  side  of  the  account  directed  by  the  last  preceding  what  items 
clause,  there  shall  be  entered  all  monies  pd  by  the  new  co   under  ^'^ 'f,®."*^rf' 

on  debit  side 

Clauses  4  and  5  hereoi,  and  all  costs,  charges,  and  expenses  mcuiTed  by  of  acrouut. 
the  new  co  in  or  incidental  to  managing  and  realising  the  assets  hereby 
agreed  to  be  sold,  including  such  fair  proportion  of  the  salaries  pd 
by  the  new  co,  and  of  their  office  and  other  expenses,  as  may  be  properly 
attributable  to  such  realisation  ;  and  in  case  the  new  co  shall  deem  it 
advisable  for  the  completion  of  any  railway  or  other  works  in  which  the 
old  CO  is  interested,  or  otherwise  for  the  improvemt  of  any  assets  hby 
agreed  to  be  sold,  to  make  any  advances  or  investmts  which  the  old  co  is 
now  under  liability  to  make,  then  the  amount  of  every  such  advance  or 
investmt  shall  be  debited,  and  the  rej)aymt  thereof  or  the  returns  there- 
from shall  be  credited,  in  the  sd  account  as  if  the  old  co  had  been  under 
liability  to  make  the  same  ;  and  on  all  monies  debited  in  the  sd  account 
interest  shall  also  be  debited,  until  the  repaymt  thereof  by  means  of  the 
sd  account,  at  the  rate  of  5  p.  c.  p.  a.  or  such  higher  rate  as  may  be 
1  p,  c.  above  the  minimum  rate  of  discount  at  the  Bank  of  England  for 
the  time  being. 

8.  Subject  to  reasonable  provision  being  made  for  contingencies  in  Provision  of 
respect  of  paymts  which  may  subsequently  have  to  be  debited  with  the  peno^icai 
sd  account,  the   credit   balance  of  the  sd  account  (hereinafter  called  among 
the  surplus)  shall,   from   time   to  time,  as  the  residue  of  the  conson  members  of 
for    the    sd   sale,    l)e    divided  and    pd  among    and    to    the    contribs 

entled  to  participate,  and  in  the  proportions  in  which  they  shall  be 
entled  to  participate  in  the  assets  of  the  old  co  remaining  after  paymt  of 
its  debts. 

9.  Nevertheless,  every  such  contributory  shall  be  entled  to  require  Option  to 
the  new  co  to  allot  to  him  one  of  its  shares,  of  the  nominal  amount  contnimtones 

'  _  _  to  take  sJiares 

of  10/.  for  each  share  in  the  old  co  in  respect  of  which  he  is  entled  to  in  new  com- 
participate  in  the  surplus,  and  from  time  to  time  to  credit  towards  the  P^"-'- 
nominal  amount  of  the  share  so  to  be  allotted,  until  it  shall  be  thereby 
pd  up  to  the  amount  of  11  10s.,  all  that  proportion  of  the  surplus  to 


568 


EECONSTEUCTION. 


Form  726 


Footing  on 
which  shares 
to  be  taken. 


Shares  in  new 
company 
allotted  to 
members  of 
old  one  to  be 
deemed  in 
part  paid  up. 


Issue  of  liqui- 
dation certifi- 
cates to 
assenting 
members. 


Assenting 
members  to 
sign  acknow- 
ledgment and 
discharge. 


How  long 
shares  of  new 
company  to  be 
reserved. 


Assenting 
contributories 
liound  l)y  pro- 
ceedings in 
liquidation. 


which  in  respect  of  the  corresponding  share  of  the  old  co  he  may  be 
'  entled,  except  so  far  as  such  proportion  shall  arise  from  periodical  income 
produced  by  any  assets  hby  agreed  to  be  sold,  or  hj  any  such  advances 
or  investmts  as  are  hinbefore  permitted  to  be  made  for  the  improvemt  of 
assets  hby  agreed  to  be  sold. 

10.  The  acceptance  of  any  share  in  the  new  co  on  the  footing  of  the 
last  preceding  clause,  shall  give  to  the  new  co  the  right  of  receiving, 
from  time  to  time,  for  its  own  benefit,  and  distributing  by  way  of  divi- 
dend on  its  share  capital,  so  much  of  that  proportion  of  the  surplus  to 
which,  in  respect  of  the  corresponding  share  in  the  old  co,  the  acceptor 
may  be  entled,  as  shall  arise  from  such  j^eriodical  income  as  afsd,  and 
this  as  well  after  as  before  the  share  so  accepted  shall  have  been  pd  up  to 
the  amount  of  71.  lO.s. 

11.  The  assets  hby  agreed  to  be  sold,  being  of  a  value  far  exceeding' 
7/.  li)s.  per  share,  every  share  in  the  new  co  accepted  on  the  footing 
of  Clause  9  hereof  shall,  immediately,  be  deemed  to  be  pd  up  thereby  to 
the  amount  of  7/.  10s.,  for  all  pposes  of  dividend  and  other^^^se,  except 
the  actual  paying  it  up  to  that  amount  out  of  the  acceptor's  jiroportiou 
of  the  surplus,  pursuant  to  the  sd  Clause  9  ;  and  the  certificate  to  be 
given,  pending  such  actual  paying  up,  for  shares  in  the  new  co,  accepted 
as  afsd,  shall  accordingly  describe  them  as  pd  up  to  the  amount  of 
71.  10s.,  pursuant  to  and  subject  to  this  agreemt. 

12.  To  those  contribs  of  the  old  co  who  shall  accept  shares  in 
the  new  co  on  the  footing  of  Clause  1)  hereof,  the  new  co  shall  give 
certificates,  to  be  called  "deferred  liquidon  certificates, "  and  to  be 
transferable  by  indorsemt,  expressing  the  right  of  those  contribs  or 
of  the  holders  to  receive  from  the  new  co,  in  cash,  the  proper  proportion 
of  the  surplus,  so  far  as  the  same  shall  not  arise  from  such  periodical 
income  as  afsd,  and  subject  to  the  previous  paymt  thereout  of  71.  lOs.  per 
share  on  the  corresponding  share  in  the  new  co. 

13.  Every  contriby,  on  receiving  his  certificate  of  shares  in  the 
new  CO,  with  corresponding  deferred  liquidon  certificates,  shall  sign  and 
give  to  the  liqs  of  the  old  co  an  acknowledgmt  that  the  same  are  in  full 
discharge  of  his  proportional  interest  in  the  assets  hby  agreed  to  be 
sold. 

14.  The  new  co  shall  not  be  bound  to  reserve  any  of  its  shares  for 
allotmt  to  contribs,  pursuant  to  Clause  1)  hereof,  after  the  expiration  of 
one  calendar  month  from  the  date  of  the  sanction  of  the  Ct  being; 
given  to  this  agreemt  ;  but  so  long  as  any  such  shares  remain,  the  direc- 
tor's of  the  new  co  may  at  their  discretion,  allot  them  on  the  terms  of  the 
sd  clause,  but  always  on  condition  of  the  applicant  paying  up  on  them  to 
the  new  co  the  same  amount  which  would  have  been  pd  up  on  them  if 
they  had  been  claimed  at  first. 

15.  Every  contriby  of  the  old  co  who  shall  acce})t  shares  in 
the  new  co,  shall  be  bound  by  all  paymts  and  allowances  already 
passed  by  the  sd  committee  in  respect  of  the  expenses  of  the  liquidon, 
and  also  by  all  accomits  of  the  surplus  which  shall  from  time  to  time  be 


FOEMS.  569 

settled  between  the  new  co  and  the  liqs  of  the  old  co,  and  all  questions  Form  726. 
between  any  such  persons  and  the  new  co,  Avhich  shall  not  be  capable  of 
being-  determined  by  any  accounts  so  settled,  shall  be  decided  on  the 
applicon  of  either  party  by  tlie  judge  to  whose  Ijranch  of  the  High  Ct 
of  Chancery  the  winding  up  of  the  old  co  is  attached,  or,  if  such  method 
cannot  be  resorted  to,  by  arbitration  pursuant  to  the  articles  of  associa- 
tion of  the  new  co. 

10.  Those  contribs  of  the   old  co   who  sliall   not   accept   shares   in  Dissentients 
the  new  co  on  the  footing  of  Clause  9  hereof,  shall  have  the  option  of  ™^J^g^"^^ 
giving  notice  to  the  liqs,  not  later  than  seven  days  after  the  date  of  the  iiccording^to 
order  sanctioning  this  agreemt,  to  have  the  price  of  their  respive  interests  ^^jg^^^^. 
settled  by  arbitration  in  manner  provided  by  the  lG2nd  section  of  the 
Companies  Act,  18G2,  and  the  amount  of  such  value  shall  be  pd  by  the 
new  CO  to  such  contribs  respively,  within  one  calendar  month  after  the 
award  of  the  arbitrators. 

17.  Those  contribs  of  the  old  co  who  shall  require  an  arbitration  under  Dissentients 
the  preceding  clause  shall  be  indemnified  by  the  new  co  from  all  liability  j°fjej.^'^'^  ^"^' 
as  contribs  of  the  old  co. 

18.  Those   contribs  of   the   old  co   who  shall  not  accept  shares  in  Provision  as 

,,  .  1  •,      ,•  1     11    1  i_i     •  •  to  dissentients 

the  new  co,  or  require  an  arbitration,  shall  have  their  respive  propor-  ^^,-^^^  f^^  ^^ 
tional  interests  in  the  assets  of  the  old  co  pd  to  them  in  cash,  as  the  give  due 
same  shall  ft'om  time  to  time  be  realised  by  the  new  co.  dissent. 

11).  Those  contribs  of  the  old  co  who  shall  come  under  the  terms  ^g  to  taking 
of  Clause  IS  hereof,  shall  be  entled  to  have  the  accounts  of  the  assets  of 'Accounts. 
the  old  CO  taken  in  the  winding  up  thereof  as  against  the  liqs  of  the  old 
co  and  the  new  co  considered  as  in  the  nature  of  a  liq  of  the  old  co  : 
Provided  always  that  any  such  advance  or  investmt  as  is  provided 
for  l)y  Clause  7  hereof  shall,  as  between  the  new  co  and  the  last- 
mentd  contribs,  be  treated  as  made  l)y  the  new  co  on  account  of  the 
old  CO. 

20.  Those  contribs  of  the  old  co  who  shall  not  accept  arbitration  whidi  con- 
under  Clause  IG  hereof,  and  Avho  shall  not  signity  to  the  liqs  their  *"^'^^*°^'f  *° 

'  .  come  under 

acceptance  of  shares  in  the  new  co  within  one  calendar  month  after  the  clause  is. 
sanction  of  the  Ct  has  been  given  to  this  agreemt,  shall  be  deemed  to 
come  under  the  terms  of  Clause  18  hereof. 

21.  Notwithstanding   anything    herein    coutd,   if   defaidt    shall    be  Lien  in  favour 
made  by  the  new  co  in  the  due  paymt  of  any  such  loan  or  debt,  or  the  tients^Tc. 
due  discharge  of  any  such  liability  or  paymt,  as  in  Clauses  4,  5,  IC,  17, 

and  IS  hereof  respively  mentd,  then,  and  so  often  as  the  same  shall 
happen,  the  liqs  of  the  old  co  shall  immediately  acquire  and  enforce  a 
lien  or  charge  on  all  such  of  the  ppty,  eflFects,  and  things  in  action  hby 
agreed  to  be  sold  as  shall  not  have  been  preA-iously  realised  or  converted 
into  money  by  the  new  co,  and  all  securities  for  the  same  respively,  for 
the  amount,  and  in  trust  for  the  paymt  or  discharge  of  the  loan  or  debt, 
liability  or  paymt,  with  respect  to  which  such  default  shall  have  been 
made,  and  all  costs,  charges,  and  expenses  occasioned  by  such  default  ; 
but,  save  as  afsd,  neither  the  ordinary  lien  of  vendors,  nor  any  other  lien 


570 


RECONSTRUCTION. 


Form  726.   or  charge,  shall  exist  in  i^wonr  of  the  old  co  or  its  creditors,  on  any  ppty, 
effects,  things  in  action,  or  secnrities  herein  comprised. 

As  to  lien,  see  In  re  Albert  Life  Assiirance  Co.,  Ex  parte  Western  Life  Assur- 
ance Co.,  11  Eq.  IGl,  and  notes  to  Mackreth  v.  Symons,  White  &  Tudor,  L.  C. 
Eq.  289. 


Sureties. 


How  powers 
of  liquidatoi'.s 
to  be  exer- 
cised. 

New  company 
to  covenant 
with  creditors 
of  old  one. 


22.  This  agrecmt  shall  not  prejudice  the  rights  of  any  creditor  of  the 
old  CO  as  against  any  surety  or  person  not  bound  by  the  order  of  the 
High  Ct  of  Chancery  sanctioning  it. 

2;].  All  powers  hby  given  to  the  liqs  of  the  old  co  shall  be  excerciseable 
by  any  one  or  more  of  them,  whate\"er  may  be  their  number,  unless  it  be 
otherwise  expressed  in  the  resolution  or  order  appointing  them. 

24.  The  obligations  of  the  new  co  under  Clause  4  hereof  shall  be 
undertaken  by  it,  as  well  towards  the  rcspive  creditors  of  tjie  old  co,  and 
the  other  persons  in  whose  favour  the  liabilities  mentd  in  the  sd  clause 
exist,  as  towards  the  old  co  itself ;  and  immediately  after  the  sanction 
of  this  agreemt  by  the  High  Ct  of  Chancery,  the  new  co  shall  execute  a 
deed,  to  be  settled  by  the  Judge  iu  Chambers,  by  which  it  shall  covenant 
both  with  the  sd  creditors  and  other  persons  in  respect  of  the  obligations 
expressed  in  the  sd  Clause  4,  and  with  the  old  co  and  its  liqs,  for  general 
performance  by  it  of  this  agreemt. 

Ix  WITNESS  whereof  the  parties  hto  of  the  former  pt  have  hereunto 
set  their  hands  and  seals,  and  the  sd  Imperial  Credit  Co,  Limtd,  hath 
hereunto  affixed  its  common  seal,  the  day  and  year  first  above  written. 

In  tlie  case  of  the  reconstruction  of  the  Southport  and  West  Lancashire  Banlc- 
'iiig  Co.,  Limited,  which  suspended  payment  in  1881,  and  (a  supervision  order 
having  been  made  16  May,  1881),  was  reconstructed  with  the  sanction  of  the 
Court  (Jessel,  M.  E.),  31  July,  1881,  a  scheme  somewhat  similar  to  the  above 
was  adopted.  The  provisional  agreement  was  based  on  the  above,  and  provided 
for  the  making  over  of  the  assets  and  liabilities  to  a  new  company.  The  fol- 
lowing clauses  may  be  mentioned. 

5.  As  a  further  part  of  the  consideration  for  the  said  sale  and  transfer  every 
shareholder  of  the  old  company  shall,  in  respect  of  each  share  therein  held  by 
him,  be  entitled  at  any  time  within  1-4  days  after  this  agreement  shall  have 
T>een  sanctioned  by  the  Covirt,  to  reqxiire  the  new  company  to  allot  to  him  one 
ordinary  ol.  share  in  the  new  company,  but  no  sum  of  money  shall  be  deemed 
to  have  been  paid  up  thereon,  and  any  shareholder  who  accepts,  &c.  [accepts  in 
full  satisfaction^. 

6.  The  new  company  shall  forthwith  open  a  separate  account,  and  to  the 
credit  of  such  account  shall  place  the  sum  of  20,000 J.  as  the  value  of  the  bank 
premises  and  furniture  at  S.  [&c.],  and  also  shall  place  as  and  when  received 
the  amount  of  all  monies  which  shall  be  received  by  this  new  comjiany  from 
the  sale  or  getting  in  of  or  otherwise  from  or  on  account  of  any  and  every  the 
property,  effects,  and  things  in  action  hereby  agreed  to  be  sold  other  than  the 
bank  premises  and  furniture  aforesaid,  but  the  i^rovisions  aforesaid  shall  be 
wholly  without  prejudice  to,  and  the  new  company  shall  have  the  right  as 
owners  [supra,  p.  oij6,  CI.  G]. 

7.  Si  8.  Closely  following  Clause  7,  supra,  p.  5G7. 

i).  Subject  to  reasonable  provision  being  made  in  respect  of  j^ayments  which 
may  subsequently  have  to  be  debited  to  the  said  account,  the  credit  balance,  if 
any,  of  the  said  account,  shall  from  time  to  time,  as  the  residue  of  the  consi- 


FOR^IS.  57-[ 

deration  for  the  said  sale  and  transfer,  be  divided,  paid,  or  credited  among  and   Form  726 
to  the  holders  for  the  time  being  of  such  of  the  ordinary  shares  in  the  new  com- 
pany as  shall  be  issued  under  Clause  5  hereof,  rateably  by  way  of  actual  dis- 
tribution in  cash,  or  by  way  of  credit  against  calls,  as  the  new  company  may 
in  all  respects  determine. 

Clause  5  is  noticeable  as  limiting  the  time  for  applications.  Queiy,  however, 
whether  it  is  not  fairer  to  limit  the  time  as  from  the  receipt  of  notice  of  the 
sanction  of  the  Com-t  having  been  given.     See  Form  728,  infra. 

As  regards  Clause  9  of  the  agreement,  query  whether  a  supplemental  con- 
tract showing  which  shares  were  allotted  on  the  footing  of  Clause  5  ought  not 
to  have  been  filed. 


AMALGAMATION. 


Meaning  of 
"word  amalga- 
mation in  26 
&  27  Vict. 
c.  92. 


Meaning  of 
word  in  fol- 
lowing pages. 


Advantages  of 
amalgama- 
tion. 


INTRODUCTORY  NOTES. 

The  word  "  amalgamation "  is  used  in  several  senses.  In  Parlia- 
mentary language,  and  particularly  in  reference  to  railway  companies,  it 
is  commonly  used  in  the  technical  sense  given  to  it  by  Part  V.  of  the 
Railway  Clauses  Act,  18G3  (20  &  27  Vict.  c.  1)2).  8ee  further  siqnri, 
p.  87. 

In  the  following  pages  the  words  "amalgamation"  and  "amalgamate" 
are  used  indiscriminately  to  describe  two  operations  : — 

(a.)  The  transfer  of  all  or  some  part  of  the  assets  and  liabilities  of 
one  or  more  than  one  existing  company  to  another  existing 
company,  of  which  all  the  members  of  the  transferring  company 
or  companies  become,  or  have  the  right  of  becoming,  members ; 

(h.)  The  transfer  of  all  or  some  part  of  the  assets  and  liabilities  of 
two  or  more  existing  companies  to  a  new  company,  of  which 
all  the  members  of  the  transferring  companies  become,  or  have 
the  right  of  becoming,  members. 

It  will  be  observed  that  (b)  excludes  a  reconstruction  as  already  de- 
scribed \_siq)ra,  p.  552  et  seq.'],  which  is  the  transfer  of  the  assets  of  a 
single  existing  company  to  a  new  company. 

The  word  "  amalgamation "  as  used  in  these  pages,  moreover,  gene- 
rally involves  the  notion  of  the  dissolution  of  the  transferring  company 
or  companies. 

A  large  company  is  generally  in  a  much  better  position  to  carry  on 
business  successfully  than  a  small  one.  The  expense  of  management  in 
a  small  company  is  relatively  much  more  burdensome  than  in  a  large 
one,  and  in  order  to  keep  it  down  a  small  company  is,  very  commonly, 
obliged  to  employ  directors  and  other  officers  and  agents  of  inferior 
business  capacity.  Again,  the  shares  of  a  small  company  are,  not  un- 
commonly, unsaleable,  except  perhaps  in  a  local  market  where  the 
demand  may  be  limited  and  uncertain.  This  places  a  small  company  at 
a  disadvantage  :  it  may,  and  often  does,  find  considerable  difficulty  in 
placing  its  original  capital,  and  still  greater  in  raising  any  further  share 
capital.  And  not  only  has  a  small  company  difficulty  in  placing  share 
capital,  but  it  has  little  or  no  chance  of  borrowing  on  debentures. 

Hence  it  is  that  the  amalgamation  of  small  undertakings  is  making 
considerable  progress  at  the  present  day.     Moreover,  there  is  in  many 


INTRODUCTORY    NOTES.  573 

cases  another  great  inducement  to  amalgamation,  namely  the  desire  to 
terminate  competition.  However  good  competition  may  be  for  the 
pubhc,  it  is  very  often  ruinous  to  the  parties  engaged  in  it. 

An  amalgamation  may  be  effected  : — 

(1.)  By  special  Act  of  Parliament.     This  mode  is  not  very  often  By  special 
adopted  by  companies  formed  under  the  Acts  of  1802  and  18G7.     See  ■'^*^*- 
Private  Acts,  infra. 

(2.)  Under  section  ](U  of  the  Companies  Act,  18(i2.     This  is  the  Under  section 
mode  now  generally  and  successfully  adopted.  ■'^^^• 

{?}.)  Possibly  under  a  power  contained  in  the  memorandum  and  Under  power 
articles,  but  in  practice  this  mode  is  now  seldom  or  never  adopted,  and  ^^  ^'^'^'icles. 
it  will  therefore  not  be  necessary  in  this  work  to  describe  the  course 
of  proceeding,  or  to  dwell  on  the  legal  and  practical  difficulties  which 
are  likely  to  result  from  its  adoption.  Sec  supra,  p.  87.  It  may, 
however,  be  here  observed  that  where  the  company  has  power  to 
dispose  of  its  undertaking,  as  in  Form  39,  and  there  is  a  power 
to  divide  assets  in  specie  [_siq)ra,  p.  IGG],  it  may  be  practicable  to 
effect  under  those  powers  what  in  effect  will  be  an  amalgamation, 
e.(j.,  sell  for  shares,  and  then  wind  up  and  divide  in  specie.  And  where 
a  company  has  power  to  make  arrangements  for  union  of  interests  it  may 
be  possible  to  make  an  arrangement  (without  immediate  liquidation) 
which  will  eventually  result  in  an  amalgamation,  e.g.,  (1)  form  a  new- 
company  with  powers  sufficiently  wide  to  authorise  it  to  acquire  the 
.undertaking  of  the  old  company  and  any  of  the  shares  in  that  company, 
and  to  make  any  arrangement  for  union  of  interests,  &c.  ;  (2)  let  the 
two  companies  make  a  permanent  arrangement  for  union  of  interests,  « 
which  will  in  effect  vest  the  management  of  the  affiiirs  of  the  old 
company  in  the  directors  of  the  new^  company ;  (3)  let  the  new"  company 
oflFer  to  exchange  its  shares  on  favoural)le  terms  for  shares  in  the  old 
company,  and  (4)  when  all  the  shares  have  been  exchanged,  the  new 
company  will  have  the  old  one  wound  up  and  take  to  its  assets  in  specie. 
See  Doman's  Case,  8  C.  Di v.  2 1 . 


Amalgamation    under   Section   IGl    {supra,   p.  5.j])   of  the  Companies 

Act,  18G2. 

There  are  two  modes  of  effecting  au  amalgamation  under  Section  161  Two  modes  of 
of  the  Act  of  ]  802.      Thus  : —  effecting  amal- 

ia.)  Company  A.  and  Company  B.  desire    to  amalgamate.      Com- Ser'sTction 
pany  A.  passes  a  special   resolution  to  wind  up,  appointing  ^^^• 
liquidators,  and  directing  them  to  sell  the  assets  to  Company  B.  ^'^^^^  ''"'^' 
in  consideration  of  shares  in  that  company  to  be  allotted  to 
the  members  of  Company  A.     The  liquidators  act  accordingly, 
and  Company  A.  is  then  dissolved. 

(&.)  Company  A.  and  Company  B.  desire  to  amalgamate.    Company  C.  Mode  (h). 
is  formed  to  acquire  their  assets  and  liabilities,  and  to  carry  on 
the  amalgamated  business.     Each  of  the  old  companies  then 


574 


AMALGAMATION. 


When  above 

modes 

adopted. 


Proceedings 
on  amalgama- 
tion. 

Mode  {a). 


Terms. 


Agreement. 


Mode  (//}. 


l)asses  a  special  resolution  as  in  the  last  case,  the  liqiiidatoi's 
carry  the  sale  into  effect,  and  the  old  companies  are  then 
dissolved. 

jNIode  (a)  can  only  be  adopted  where  one  of  the  companies  desiring  to 
amalgamate  has  power  to  acquire  the  property  and  liabilities  of  the 
other  or  others.     See  supra,  p.  82. 

Mode  (&),  on  the  other  hand,  is  available  in  every  case,  and  is  often 
adopted  even  where  there  is  an  ample  power  to  purchase,  for  the  cir- 
cumstances of  the  companies,  or  the  terms  of  the  amalgamation,  very 
commonly  render  the  establishment  of  a  new  company  necessary. 

It  may  be  convenient  here  to  follow  closely  the  course  of  proceedings 
upon  an  amalgamation  in  accordance  with  these  two  modes.  And  first, 
as  to  mode  («)• 

We  will  suppose  that  Company  A.  and  Company  B.  desire  to  amalga- 
mate ;  that  the  directors  of  Company  B.  have  full  power  to  purchase 
the  assets  of  Company  A. ;  and  that  there  are  sufficient  unallotted  shares 
of  Company  B.  at  the  disposal  of  the  directors  thereof. 

The  first  thing  is  for  the  directors  of  the  two  companies  to  arrange 
the  terms  on  which  the  sale  is  to  be  made.  They  must  settle  whether 
the  consideration  is  to  consist  exclusively  of  shares,  or  partly  of  shares 
and  partly  of  cash,  whether  the  shares  are  to  be  fully  or  partly  paid  up, 
whether  Company  B.  or  the  liquidator  of  Company  A.  is  to  purchase  the 
interests  of  dissentients  and  satisfy  the  debts  of  Company  A.,  whether 
any  of  the  directors  of  Company  A.  are  to  become  directors  of  Com- 
pany B.,  and  whether  Company  B,  is  to  compensate  any  of  the  officers 
of  Company  A.  for  loss  of  office,  and  so  forth. 

When  the  terms  are  settled  they  will  be  embodied  in  a  conditional 
agreement.  See  infra.  Xotice  of  the  arrangement  is  then  given  to 
the  members  of  Company  A.  by  the  directors  thereof,  and  meetings 
called  to  pass  a  special  resolution  to  wind  up,  appointing  a  liquidator 
and  directing  him  to  adopt  the  agreement.  The  special  resolution 
having  been  passed,  the  liquidator  adopts  the  agreement  and  carries  it 
into  effect.  Company  B.  will  allot  the  shares  as  provided  by  the  agree- 
ment ;  the  dissentients  will  be  satisfied  as  arranged.  The  debts  of 
Company  A.  will  be  paid  and  liquidated  by  Company  B.  or  the  liqui- 
dators of  Company  A.  according  to  the  arrangement.  As  soon  as  may 
be  Company  A.  will  be  dissolved. 

It  Avill  be  ol)served  that  the  proceedings  are  very  similar  to  those 
upon  a  reconstruction.     See  supra,  p.  552. 

If  the  amalgamation  is  to  be  effected  by  a  sale  to  a  new  company 
according  to  mode  (b),  the  terms  of  amalgamation  will  be  settled  be- 
tween the  directors  of  the  companies  proposing  to  amalgamate,  and 
embodied  in  an  agreement  made  with  some  person  on  behalf  of  the 
intended  new  company.  Each  of  the  single  companies  then  passes  a 
special  resolution  as  above,  and  the  subsequent  course  will  be  the  same 
as  above  upon  amalgamation  according  to  mode  (a). 

An  amalgamation  according  to  mode  (b)  closely  resembles  a  recou- 


INTRODUCTORY    NOTES.  575 

structiou  by  means  of  Section  IGl,  except  that  it   involves  the  reei in- 
struction of  two  or  more  companies  instead  of  one.     See  supra,  p.  .j5l\ 

In  e\'ery  case  of  amal^-amation,  the  question  arises  whether  the  delfts.  How  debts  of 
costs  of  windino-  up  the  sellin"-  companv,  and  the  oblio-ation  of  satisfviufr  t'^^'^femng 

01  r^  I       .  1  o  .0  coin  pan  J-  to  be 

the  dissentient  members  of  that  com})any,  are  to  l)e  borne  l)y  the  pur-  pai.l. 
chasin<>-  company,  or  not.  The  chief  advanta<i-e  of  throwing  the  liurden 
on  the  purchasing  company  is  that  the  members  of  the  selling  coinpany, 
who  will  be  called  on  to  sanction  the  arrangement  by  special  resolution, 
are  more  likely  to  do  so  if  they  know  precisely  how  many  shares  in  the 
purchasing  company  they  are  to  receive,  but  this  cannot  be  if  the  selling 
company  is  to  bear  the  burden.  On  the  other  hand,  the  purchasing- 
party  may  not  be  willing  to  accept  a  burden  which  is  more  or  less  inde- 
finite :  it  may  prefer  to  ijurchase  the  assets  for  a  fixed  sum. 

However,  in  practice  the  biuxlen  is  almost  always  thnjwn  on  the  pur- 
chasing company. 

Where  the  burden  of  paying  the  debts,  costs  of  winding  up,  and  oljli-  Where  trans- 
gation  of  satisfying  dissentient  members  of  the  selling  company  or  com-  pam-To^n^'it-^ 
panics  is  not  to  be  thrown  on  the  purchasing  company,  the  agreement  own  debts. 
with  the  pm'chasing  company  will  be  for  the  sale  of  the  assets  in  con- 
sideration of  a  definite  number  of  shares  in  the  purchasing  company  to 
be  allotted  to  the  liquidators  of  the  selling  company  or  as  they  direct, 
and  the  special  resolution  of  the  latter  company,  besides  providing  for 
the  winding-up,  appointment  of  liquidators,  and  adoption  of  the  agree- 
ment, Avill  direct  the  liquidators  to  sell  so  many  of  the  shares  as  may  be 
necessary  to  pay  the  debts,  costs  of  winding-up,  and  to  satisfy  dissen- 
tients, and  to  apply  the  proceeds   accordingly,  and  to   distribute  the 
remaining  shares  among  the  members.     Sometimes  the  agreement  pro- 
vides for  the  retention  by  the  selling  company  of  sufficient  funds  to  pciy 
its  creditors. 

In  some  cases  the  directors  of  a  company  can  only  acquire  the  assets  When  special 
of  another  company  with  the  sanction  of  their  own  company  in  general  ^^f°ch  gj  V 
meeting  or  by  special  resolution  ;  and  where  this  is  the  case  as  regards  a  company  ° 
company  to  which  a  sale  by  way  of  amalgamation  is  proposed  to  be  made  ^'^'^^^^^^T- 
under  Section  1()1,  the  necessary  sanction  must  be  obtained  ;  and  it 
ought  to  be  obtained  before  the  selling  company  is  called  on  to  pass  the 
special  resolution  for  winding  up,  &c.,  for  it  woidd  be  a  serious  mishap 
for  the  latter  company  if,  after  the  passing  of  the  resolution  to  wind  up, 
the  agreement  fell  through.     The  only  course  wotdd  be  to  reconstruct  or 
to  apply  to  the  coiu-t  to  stay  the  liquidation. 

It  is  very  common,  upon  an  amalgamation,  to  provide  that  some  of  As  to  appoint- 
the  directors  of  the  selling  companv  shall  become  directors  of  the  pur-  ™<3iit  of 

^  J.       ..  .        .  '■  directors  of 

chasing  company.     Where  the  amalgamation  is  effected  by  means  of  the  selling  com- 
formation  of  and  sale  to  a  new  coinpany,  this  is  provided  for  bv  the  P'^°^  *°  ^% 

.„    ,  ,     .  ,  .     .       '  directors  of 

articles  of  the  new  company  ;  but  if  the  sale  is  to  be  to  an  existmg  com-  jiurchasing 
pany,  it  is  generally  necessary  to  obtain  the  sanction  of  the  agreement  by  ' '^'nn'ju^v- 
special  resolution  of  that  company  ;  for  the  power  of  appointing  directors 


576 


AMALGAMATION. 


Sanction 
if  new  shares 
have  to  be 
created. 

Compensation 
to  officers  of 
selling  com- 
pany. 


^Notices  prior 
to  special  re- 
solution 
should  be 
.sufficient. 


Usual  form  of 
notice. 


Objects  of 
purchasing  may 
be  more  ex- 
tensive than 
those  of 
.selling  com- 
pany. 

What  com- 
panies can 
amalgamate 
under  section 
161. 


As  to  name  of 
amalgamated 
company. 


is  almost  always  vested  in  the  company  in  general  meeting.  See  Stace 
and  Worth's  case,  4  Ch.  G85,  and  James  v.  Eve,  L.  R.  0  H.  li. 
33.5. 

8o,  too,  it  may  be  necessary  to  get  the  sanction  of  a  special  resolution 
of  the  purchasing  company  where  the  agreement  involves  the  creation  of 
new  shares  by  that  company. 

Upon  an  amalgamation  it  is  by  no  means  uncommon  to  provide  for 
compensation  to  such  of  the  directors  or  other  officers  of  the  selling  com- 
pany as  are  not  to  take  office  under  the  purchasing  company.  Xor  is 
there  any  objection  to  such  an  arrangement  provided  there  is  no  conceal- 
ment. Southall  V.  British  Mutual  Life  Ass.  Soc,  C  Ch.  CU.  Nor  is  it 
necessary  to  call  attention  to  the  matter  provided  that  the  members  are 
given  an  opportunity  of  ascertaining  the  terms.     Ibid. 

The  notices  calling  general  meetings  to  pass  the  special  resolutions 
should  be  sufficiently  explicit.  They  should  be  accompanied  by  a  circular 
showing  the  nature  of  the  plan,  and,  if  no  previous  communication  on 
the  subject  has  been  made  to  the  members,  the  advantages  or  necessity 
which  should  induce  its  adoption. 

The  notices  ought  to  contain  some  reference,  direct  or  indirect,  to 
Section  IGl  of  the  Act,  particularly  if  the  memorandum  or  articles  con- 
tain a  power  "  to  amalgamate."  See  the  case  of  the  Impei-ial  Bank  of 
China,  &c.,  v.  Banh  of  Hindustan,  ^-c,  G  Eq.  t)l.  See  also  Fox's  case, 
G  Ch.  17G. 

As  the  validity  of  the  resolutions  depends  on  the  sufficiency  of  the 
notices,  it  is  a  serious  mistake  not  to  render  them  sufficient  beyond  dis- 
pute, and  it  is  now  usual  to  refer  expressly  to  Section  161.  See  also 
sup-a,  p.  558. 

Upon  an  amalgamation  effi;cted  under  Section  161  of  the  Act,  it  is 
no  objection  that  the  objects  of  the  purchasing  company  are  more  exten- 
sive than  those  of  the  selling  company,  Southall  v.  British  Mutual  Life 
Assurance  Societij,  11  Eq.  65  ;  nor,  indeed,  that  they  are  entirely 
different. 

Any  company  capable  of  being  registered  under  the  Act  of  1862  (see 
Part  VII.  of  the  Act)  may  effect  a  reconstruction  or  amalgamation 
under  Section  161.  It  will  register  and  immediately  resolve  on  a  volun- 
tary winding-up  and  sale.  Section  180  of  the  Act  provides  that  such  a 
registration  shall  not  be  invalid  by  reason  that  it  has  taken  place  with  a 
view  to  the  company  being  wound  up,  and  it  has  been  decided  that 
registration  Avith  a  view  to  winding  up  and  selling  under  Section  161  is 
not  open  to  objection.  Southall  v.  British  Mutual  Life  Assurance 
Society,  11  Eq.  65. 

If  it  be  desired  that  the  purchasing  company  should  assume  the 
name  of  the  selling  company,  or  part  of  it,  the  agreement  will  provide 
accordingly,  and  the  change  will  be  made,  with  the  consent  of  the 
Board  of  Trade  and  of  the  liquidators,  under  Sections  13  and  20 
respectively  of  the  Act.  This  has  been  done  in  various  cases,  and  may 
be  effected  in  a  few  days. 


INTEODUCTORY    NOTES.  577 

An  amalgamation  with  a  foreign  company  may  be  effected  under  Sec-  Amalgamation 

,•         ,^,         ci  with  foreijni 

tion  IGl.     .See  supra,  p.  000.  company. 

An  agreement  for  sale   adopted  by  the   Hqnidators  pursuant  to   a 
direction  of  the  company  is  valid.     Sec  supra,  p.  555. 

The  agreement  may  provide  for  the  allotment  of  the  shares  to  the 
liquidators,  or  to  the  members  directly.     See  supra,  p.  55. 

As  to  dissentients,  see  svpra,  p.  55G  ct  seq.  Dissentients. 

As  to  their  right  of  action  for  purchase-money,  see  siqrra,  p.  557. 

As  to  arbitration,  see  supra,  p.  557. 

As  to  the  rights  of  dissentients  being  restricted  by  the  articles,  see 
svpra,  p.  16G. 

An  agreement  in  a  winding  up  to  sell  the  assets  in  consideration  of  G{^ncli  v. 
shares,  coupled  with  a  provision  that  if  the  realised  value  should  not  Corporation, 
amount  to  a  fixed  sum,  the  deficiency  should  be  made  good  by  a  call  Invalid  agree- 
on  the  members  of  the  selling  company,  is  not  such  a  sale  as  can  be 
made  under  Section  101.  Even  if  the  call  was  to  be  made  on  the 
assenting  members  only,  it  is  considered  that  such  a  sale  would  be 
invalid.  "  It  is  sufficient  to  say  that,  in  my  opinion,  the  liquidators 
of  a  company  would  have  no  right  to  place  a  shareholder  of  a  com- 
pany in  this  position,  that  he  must  either  dissent  altogether  from  the 
arrangement,  and  be  subject  to  have  his  share  taken  from  him  at  a 
valuation,  or  else  come  in  under  the  arrangement,  and  thus  be  forced 
to  subject  himself  to  the  liability  of  guaranteeing  the  sufficiency  of 
the  assets."  Per  Lord  Cairns,  L.  C,  Clinch  v.  Financial  Corjmration, 
4  Ch.  120.  Form  212,  svpra.  The  property  to  be  sold  under  Sec- 
tion ICl  is  the  assets  of  the  company,  exclusive  of  its  uncalled  capital 
<if  any).     S.  C. 

Upon  a  sale  under  Section  IGl  the  members  of  the  selling  company  rremium  for 
cannot  be  called  on  to  pay  a  premium  for  the  allotment  to  them  of  the  ^  ^^'^^' 
shares  in  the  purchasing  company.     TmperiaJ  Bank  of  China,  dr.,  v. 
Bank  of  Hindustan,  Chhm,  and  Japan,  G  Eq.  01  ;  1  Ch.  389. 

But  a  sale  may  be  made  in  consideration  of  shares  Avhich  are  to  be  ^'^J*j  ^ "i'  Partly 
deemed  only  in  part  paid  up.     In  re,  City  and  County  Investment  Co.,  valid. 
13  C.  Div.  475  ;  Imperial  Mercantile  Credit  Association,  12  Eq.  504  ; 
Hester  &  Co.,  44  L.  J.  Ch.  757  ;  or  in  consideration  of  deferred  or 
preference  shares. 

As  to  altering  articles  of  association  with  a  view  to  deprive  dissen- 
tients of  their  rights  under  Section  IGl,  see  supra,  p.  559. 

As  to  validity  of  sale  to  a  trustee  for  the  new  company,  see  supra, 
p.  559. 

As  to  necessity  and  mode  of  securing  payment  of  dissentients,  see 
supra,  p.  559. 

As  to  the  amalgamation  and  transfer  of  the  business  of  life  assurance  Amalgama- 
companies,  see  the  Life  Assurance  Companies  Act,  1870  (33  &  34  Yict.  *^°"  °^  ^'^'^ 
c.  Gl),  ss.  14,  15;  Buckley,  534.     Under  the  Act  last  mentioned,  the  companie«. 
sanction  of  the  court  must  be  obtained  to  any  transfer  or  amalgamation. 
See  further,  supra,  p.  374. 

P   P 


AMALGAMATION 


Form  727.       AGREEMT  with  a  view  to  an  Amalc4amation  with  au  existing-  Co. 


Agreement 
with  a  view  to 
amalgamation. 


Parties:. 


Eecitals, 


Coudition. 


Sale. 


Part  coii- 
sidei-atioii. 


Compensation 
to  officers  of 
A.  Comiiany. 


In  the  following  case  a  company  A.  and  company  B.  C.  are  desirous  of 
amalgamating  :  the  directors  of  the  latter  have  full  power  to  acquire  the  assets 
of  the  former,  and  there  is  a  sufficient  number  of  unissued  shares  in  the  B. 
company  for  the  purposes  of  the  agreement. 

The  agreement  will  be  as  follows : — 

AN  AGREEMT  made  the day  of ,  between  N.,  of ,  on 

behaK  of  the  A.  Co,  Limtd,  (hereinafter  called  the  A.  Co)  of  the  one  pt, 
and  the  B.  C.  Co,  Limtd  (hereinafter  called  the  B.  Co)  of  the  other  pt. 
Whas  (recite  incoiyoraUon  of  A.  Co :  capital  40,000?.  in  20/.  sMres,  ivith 
101.  pd  vp :  all  the  shares  issued  and fnlhj  pd  vp) :  And  whas  the  B. 

Co  was  incorporated  in  the  year  under  the  Cos  Acts,  18C2  and 

18G7  :  And  whas  the  nominal  capital  of  the  B.  Co  is  60,000?.,  divided 
into  6,000  shares  of  10?.  each,  whereof  3,000  and  no  more  have  been 
issued  and  now  stand  credited  in  the  books  of  the  B.  Co  as  having  been 
fully  pd  up  :  And  whas  it  is  intended  to  procure  the  A.  Co  to  pass 
special  resolutions  for  a  voluntary  winding  up,  appointing  liqs,  and 
directing  them  to  adopt  and  carry  into  effect  this  agreemt  : 

Now  IT  is  hby  agreed  as  follows  : 

1.  This  agreemt  is  conditional  on  the  adoption  hereof  before  the 

day  of next,  by  the  liqs  of  the  A.  Co,  with  the  sanction  of  a  special 

resolution  of  that  co. 

2.  The  A.'  Co  shall  sell  and  the  B.  Co  shall  pchase  all  and  singular 
[sM^;ra,  Form  723,  cl.  1.] 

3.  As  a  pt  of  the  conson  for  the  sd  sale  the  B.  Co  shall  pay,  satisfy,. 
and  discharge  all  the  de))ts,  liabilities,  and  engagemts  of  the  A.  Co  now 
or  at  the  time  of  such  adoption  as  afsd  binding  on  it,  and  shall  at  all 
times  keep  the  A.  Co,  &c.  [si/pra,  Form  723,  cl.  2. J 

4.  As  a  further  pt  [supra,  Form  723,  cl.  3.] 

5.  As  a  farther  pt  of  the  conson  for  the  sd  sale  the  B.  Co  shall, 
within  three  months  li'om  the  adoption  hereof  by  the  liqs  of  the  old  co 

with  such  sanction  as  afsd  pay  to the  sum  of  ?.,  to the 

sum  of  ?.,  and  to  and  the  sum  of  ?.  apiece,  such 

sums  to  be  accepted  by  the  sd  persons  in  full  discharge  of  all  claims  by 


FORMS.  579 

them  respively  upon  the  A.  Co  for  loss  of    office  occasioned  ])y  the   Form  727. 
winding-up  thereof. 

6.  As  the  residue  of  the  conson  for  the  sd  sale  the  B.  Co  shall  allot  to  Allotment  of 
or  to  the  nominee  or  nominees  of  every  memher  of  the  A.  Co  who  shall  •'^^'''^^''• 
require  the  B.  Co  so  to  do,  one  of  its  20/.  shares,  with  the  sum  of  10/. 
credited  as  pd  up  thereon  in  respect  of  every  20/.  share  in  the  A.  Co 

held  by  him. 

7.  If  the  liqs  [supra,  Form  723,  cl.  5]. 

8.  The  B,  Co  shall  accept  [supra,  Form  723,  cl.  G]. 

•J.  The  sale  agTeed  to  be  hby  made  shall  take  effect  as  from  the  date  ^iJ^^h'^JJ  *" 
hereof,  and  until  the  completion  thereof,  the  A.  Co  shall  stand  possessed 
of  the  ppty  agreed  to  be  hby  sold,  and  shall  carry  on  its  business  in 
trust  for  the  B.  Co. 

10.  The  A.  Co  and  its  liqs  shall  as  soon  as  conveniently  may  be  after  Completion, 
the  adoption  hereof  by  the  sd  liqs  in  manner  afsd  (but  without  preju- 
dice to  clause  11  hereof)  execute  [siqnrr,  Form  723,  cl.  7]. 

11.  Provided  always  [supra,  Form  723,  cl.  8]. 

12.  If  this  agreemt  shall  not  before  the  day  of next  be  Power  to 

rescind. 

adopted  by  the  li(is  of  the  A.  Co  with  the  sanction  of  a  special  resolution 
of  that  CO,  either  of  the  parties  hto  may,  upon  giving  one  week's  notice 
in  writing  to  the  other,  rescind  the  same. 

13.  "\Mien  and  so  soon  as  this  agreemt  shall  liaA'e  become  binding  Discharge  of 
on  the  A.  Co  and  the  liqs  thereof,  the  sd  N.  shall  Ijc  discharged  from  all 
liabihty  in  respect  thereof.     [See  supra,  p.  3.] 

14.  Notwithstanding  anything  [supra,  Form  723,  cl.  1).] 

15.  These  presents  [sujmf.  Form  723,  cl.  Kt.] 

IX  WITNESS,  &C, 

In  incorporating  the  clauses  above  i-eferred  to,  they  must  be  modified 
by  substituting  "  A."  and  "  B."  for  the  words  "  old "  and  "  new "  where 
necessary. 

The  resolutions  to  be  passed  by  the  A.  company  may  be  as  follows  : — 

1.  That  it  is  expedient  to  effect  an  amalgamation  of  this  co  Avith  the  Form  728, 
B.  C.  Co,  Limtd,  and  that  with  a  view  thereto  this  co  be  wound  up  Resolution  for 

voluntarily,  and  that  and  Ije  and  they  are  hby  appointed  amalgamation. 

liqs  for  the  ppose  of  such  winding  up. 

2.  That  the  conditional  agreemt  submitted  to  this  meeting  be  and  the 
same  is  hby  approved,  and  that  the  liqs  be  and  they  are  hby  authorised 
to  adopt  the  sd  agreemt  and  carry  the  same  into  effect. 

AGREEMT  by  Liq  with  a  view  to   Amalgamation   with  an      Form  729. 

existing  Co.  Agreement  for 

The  following  is  another  mode  in  which  such  an  amalgamation  as  that  above  jQ„i:„j, 
(p.  573)  contemplated  may  be  carried  into  effect.     See  further,  sui:)ra,  p.  59G, 
et  seq. 

AN  AGREEMT  made  the  day  of  ,  between  and  Parties. 

,  the  liqs  of  the  A.  Co  Limtd  (hereinafter  called  the  A.  Co)  of  the 

p  p  2 


580 


AMALGAMATION. 


Recitals. 


Form  729.  first  pt,  the  A.  Co  of  the  second  pt,  and  the  B.  0.  Co  Limtd  (hereinafter 

called  the  B.  Co)  of  the  thh'd  pt. 

Whas,  &c.  (  .    ,  ,  ..  ,  .„_ 

.  c        (  same  as  first  two  recitals,  supra,  p.  o/9. 

And  whas,  &c.    J  -^  »     ^     '  i 

And  whas  by  special  resolution  of  the  A,  Co,  passed  and  con- 
firmed at  general  meetings  thereof,  held  respively  on  the   day  of 

and day  of ,  it  was  resolved  that  the  old  co  be  wound  up 

voluntarily,  and  that  the  sd and  be  and  they  were  thereljy 

appointed  liqs  for  the  pposes  of  such  winding  up,  and  it  was  resolved 
that  the  draft  agreemt  in  the  sd  resolution  mentd,  being  the  draft  of 
these  presents,  be  and  the  same  was  thereby  approved,  and  that  the  sd 
liqs  be  and  they  were  thereby  authorised  to  enter  into  an  agreemt  with 
the  B.  C.  Co  in  the  terms  of  the  sd  draft,  and  to  carry  the  same  into 
effect  :  Now  it  is  hby  agreed  as  follows  :— 

1.  The  A.  Co  and  its  liqs  shall  sell,  and  the  B.  C.  Co  shah  pchase. 
[Supra,  p.  579,  cl.  2.] 


Agreement 
for  sale. 


2. 

3. 
4. 
5. 
6. 

7. 


[Ibid.,  Clauses  3  and  4,  mutatis  mutandis.'] 


[IMd.,  Clause  5,  mutatis  mutandis.] 
[Ibid.,  mutatis  mutandis.'] 


As  a  pt. 

As  a  further  pt. 

As  a  further  pt. 

As  the  residue 

If  the  liqs 

The  B.  C.  Co  shall  accept  [Ihid.,  mvtatis  mutandis.] 

8    The  A  Co  ) 

*  *  \  [Ihid.,  Clauses  10  and  11,  mutatis  mutandis.] 

0.  Provided  always  J 

10.  These  presents.      [Su^ira,  p.  502.] 

In  witness  whereof  the  sd  and have  hereunto  set  their 

hands,  and  the  respive  common  seals  of  the  sd  companies  parties  hto, 
have  been  hereunto  affixed  the  day  and  year  first  above  written. 


the  amalga- 
mation of  two 
companies 
with  a  third. 


Form  730.       1.  That  it  is  expedient  to  effect  an  amalgamation  of  this  co  with  the 
Resolution  for  ^-  ^'0,  Limtd,  and  with  the  B.  Co,  Limtd. 

2.  That  the  following  draft   agreemts,  submitted  to  this  meeting, 
namely  : — 

(a.)  A  draft  agreemt  dated,  &c.,  and  expressed  to  be  made  between 
N.  on  Ijchalf  of  the  A.  Co,  Limtd,  of  the  one  pt,  and  this  co  of 
the  other  pt : 
(b.)  A  draft  agreemt,  dated,  &c.,  and  expressed  to  be  made  between 
E.  on  behalf  of  the  B.  Co,  Limtd,  of  the  one  pt,  and  this  co  of 
the  other  pt  : 
be  and  they  are  hby  approved,  and  that  the  directors  be  and  they  are 
hby  authorised  to  execute  agreemts  in  the  terms  of  the  sd  drafts 
respively,  and  to  carry  the  same  into  effect. 

3.  That  the  capital  of  this  co  be  increased  to /.  by  the  creation 

of new  shares  of 1,  each. 

4.  That  the  directors  be  and  they  are  hby  authorised,  upon  the  adop- 
tion of  the  sd  first  mentd  agreemt  by  the  liqs  of  the  A.  Co,  Limtd,  with 


FOEMS.  581 

the  sanction  of  a  special  resolution  of  that  co,  to  appoint and ,  Form  730. 

two  of  the  present  directors  of  the  sd  co,  to  be  directors  of  this  co. 

5.  That.  [Similar  resolution  as  to  B.  Co.^ 

G.  That  the  following  clause  be  substituted  for  Clause  of  the 

articles  of  association  of  this  co,  namely  :  "  The  numl)er  of  directors  of 
the  CO  shall  not  exceed  twelve,  and  shall  not  be  less  than  seven." 

In  the  above  case  three  companies.  A.,  B.,  and  C,  desire  to  amalgamate. 
The  transaction  is  to  be  effected  by  the  winding-up  of  A.  and  B.,  and  sale  to  C, 
which  is  to  carry  on  the  amalgamated  business.  Company  C.  has  issued  all  its 
shares,  and  the  capital  must  therefore  be  increased  in  order  to  effect  the 
amalgamation.  One  of  the  terms  of  the  arrangement  is  that  two  of  the 
directors  of  each  of  the  A.  and  B.  companies  shall  be  appointed  directors  of 
the  0.  company.  In  such  a  case  one  mode  of  effecting  the  transaction  is  as 
follows  : — 

Two  draft  agreements  between  the  A.  and  B.  companies,  respectively,  and 
the  C.  company  will  be  prepared.  They  will  be  in  the  form  of  that  given, 
supra,  p.  578,  nmtatis  mutandis. 

These  drafts  will  be  submitted  to  the  C.  company,  which  will  pass  the  above 
special  resolutions. 

The  A.  and  B.  companies  will  then  pass  special  resolutions  as  above,  p.  580, 
and  the  liquidators  will  in  due  course  adopt  the  agreements,  which  will  be 
carried  into  effect. 

The  clause  in  the  agreements  as  to  the  appointment  of  the  directors  will  be 
as  follows  : — 

"  Upon  the  adoption  of  this  agreement  by  the  liquidators  of  the  [A.]  Com- 
pany, with  the  sanction  of  a  special  resolution  of  that  company, and , 

two  of  the  present  directors  thereof,  shall  be  appointed  directors  of  the  C. 
company." 

This  clause  can  of  course  be  modified  so  as  to  enable  the  A.  company  in 
general  meeting  to  select  the  two  directors,  or  to  enable  the  directors  of  that 
company  to  do  so. 


That,     {^Amalgamation  exj)edienl,  supra,  p.  .")S.]  Form  731. 

1.  That,  &c.     [  ^Yiml  np  a?id  apjmntmt  of  li'^-^.]  Resolution  for 

2.  That  the  sd  liqs  be  and  they  are  hby  authorised  to  consent  to  the  amalgamation 
registration  of  a  new  co  to  be  named  "  The  A.  and  B.  Co,  Limtd,"  with  j°  the  forma- 
a  memorandum  and  articles  of  association,  which  have  been  already  tion  of  a  new 
prepared  with  the  privity  and  approval  of  the  directors  of  this  co.  company. 

3.  That  the  draft  agreemt  expressed  to  be  made  between  the  liqs  of 
this  CO  of  the  first  pt,  this  co  of  the  second  pt,  the  liqs  of  the  B.  Co, 
Limtd,  of  the  third  pt,  the  B.  Co,  Limtd,  of  the  fourth  pt,  and  the  A. 
and  B.  Co,  Limtd,  of  the  fifth  pt,  be  and  the  same  is  hljy  approved,  and 
that  the  sd  liqs  be  and  they  are  hljy  directed  to  enter  into  an  agreemt  on 
behalf  of  this  co  in  the  terms  of  the  sd  draft,  and  to  cany  the  same  into 
effect. 

In  this  case  Company  A.  and  Company  B.  desire  to  amalgamate,  and  for 
divers  reasons  it  is  necessary  to  effect  this  by  the  formation  of  a  new  company 
to  absorb  the  old  ones,  supra,  p.  573. 

An  agreement,  expressed  to  be  made  between  the  A.  and  B.  Companies  and 
the  liquidators  thereof  respectively,  and  the  new  company  will  be  prepared,  or 
there  may  be  two  separate  agreements  each  similar  to  that,  supra,  p.  578. 


582  AMALGAMATION. 

Form  731.        Each  of  the  A.  and  B.  Companies  will  then  pass  a   second  resolution  as 
above. 

Immediately  after  the  passing  of  the  resolutions  the  liquidators  will  sign  the 
proper  consent  authoi-ising  the  registration  of  the  A.  and  B.  Company,  which 
will  be  forthwith  incorporated.     For  Form  of  Consent,  see  supra,  p.  219. 

The  primary  object  of  the  A.  and  B.  Company,  as  set  forth  in  the  memo- 
randum, will  be  : — 

"  To  purchase  or  otherwise  acquire,  and  to  undertake  all  or  any  part  of 
the  business,  property,  assets,  and  liabilities  of  the  following  companies, 
namely : 

The  A.  Company,  Limited. 
The  B.  Company,  Limited, 
or   either  of  them,   upon   such   terms   and   conditions,  and  subject  to   such 
stipulations  as  may  be  agreed  on." 

The  memorandum  will  also  contain  all  requisite  objects  for  carrying  on  the 
amalgamated  business. 

The  articles  will  authorise  the  directors  to  execute  the  agreement,  supra, 
p.  115. 

As  soon  as  may  be  after  the  registration  of  the  new  company,  the  agreement 
will  be  executed  by  all  parties,  and  carried  into  effect. 


AKEANGEMENTS. 


INTRODUCTORY   NOTES. 

By  s.  2  of  the  Joint  Stock  Companies  Arrangement  Act,  1870  (;3o  &  The  yVctct 
34  Vict,  c.  104),  it  is  provided  that—  1870. 

''  "  Where  any  compromise  or  arrangement  shall  be  proposed  between  a  com- 
pany which  is,  at  the  time  of  the  passing  of  the  Act  or  afterwards,  in  the  course 
of  being  wound  up  either  voluntarily  or  by  or  under  the  supervision  of  the 
Court,  under  the  Companies  Acts  18G2  and  1867,  or  either  of  them,  and  the 
creditors  of  sucli  company,  or  any  class  of  such  creditors,  it  shall  be  lawful  for 
the  Court,  in  addition  to  any  other  of  its  powers,  on  the  application  in  a  s\un- 
mary  way  of  any  creditor  or  the  liquidator,  to  order  that  a  meeting  of  such 
creditors  or  class  of  creditors  shall  be  summoned  in  such  manner  as  the  Court 
shall  direct ;  and  if  a  majority  in  number  representing  three-fourths  in  value 
of  such  creditors  or  class  of  creditors  present,  either  in  person  or  by  pi'oxy  at 
such  meeting  shall  agree  to  any  arrangement  or  compromise,  such  arrangement 
or  compromise  shall,  if  sanctioned  by  an  order  of  the  Court,  be  binding  on  all 
such  creditors  or  class  of  creditors,  as  the  case  may  be,  and  also  on  the  liqui- 
dator and  contributories  of  the  said  company." 

Previously  to  this  Act  (10  August,  1870),  the  majority  of  the  credi-  Prior  hw. 
tors  of  a  company  which  was  being  wound  up  by  the  court  had  no 
power  to  bind  the  minority  to  accept  any  composition  or  arrangement. 
Albert  Life  Assurance  Co.,  6  Ch.  381.  And  although  the  majority  of 
the  creditors  of  a  company  in  voluntarij  liquidation  liad  such  a  power, 
under  s.  13G  of  the  Act  of  18G2,  the  power  given  by  the  Act  of  1870 
can,  in  most  cases,  be  more  readily  and  effectually  exercised. 

The  Act  of  1870  has  been  very  liberally  construed,  and  aiTangements  Usual  amange- 
under  its  provisions  are  frequent.    There  are  four  kinds  commonly  made  ^lents. 
(that  is  to  say)  — 

1 .  An  arrangement  providing  that  the  creditors  shall  accept  a  com- 
position ;  the  winding  up  to  be  continued  and  the  company  dissolved  in 
due  course. 

2.  An  arrangement  providing  for  the  sale  of  the  assets  of  the  com- 
pany to  some  person  who  undertakes  to  pay  the  creditors  a  composition 
and  also  the  costs  of  the  winding  up.  The  company  to  be  dissolved  in 
due  course. 

3.  An  arrangement  under  which  the  creditors  agree  to  accept  a  com- 
position, or  to  give  time,  or  accept  payment  in  shares  or  debentures :  the 
winding  up  to  be  stayed  and  the  company  to  resume  business. 


584 


AEEANGEMENTS. 


"What  majority 
sufficient. 


Different 
classes. 


Secure 
creditors. 


Debentures 
' '  to  bearer. 


Bonn  fides. 


Sciieme  which 
is  unfair  will 
not  be  siinc- 
tioned. 


Staying  tlie 
winding  u^i. 


4.  An  arrangement  under  which  a  new  company  is  to  be  formed  and 
to  take  over  assets  of  the  old  company  :  the  creditors  of  old  company  to 
accept  benefits  from  new  company,  e.g.,  debentures,  shares  or  composi- 
tion, in  satisftiction  of  their  claims  on  the  old  company  ;  the  members 
of  the  old  company  to  receive  shares  in  the  new  company  ;  the  old  com- 
pany to  be  dissolved  in  due  course. 

The  approval  of  three-fourths  in  value  of  the  crditors  present  at  the 
meeting  in  person  or  by  proxy  is  sufficient  although  they  may  not  be 
three-fourths  of  the  total  value,  Bessemer  Steel  Co.,  1  C.  D.  251.  Those 
who  are  not  present  either  in  person  or  by  proxy  are  not  taken  into 
account. 

When  there  are  different  classes  of  creditors  it  is  usual  [_hifra,  pp.  592, 
597,  G02]  and,  as  it  would  seem,  only  right  to  call  a  meeting  of  each 
class.  See,  however,  a  doubt  on  this  point  expressed  by  Brett,  L.  J.,  in 
Dynevor  Dvffryn  Co.,  11  C.  Div.  (105. 

Secured  creditors,  e.g.,  the  holders  of  mortgage  debentures,  are  credi- 
tors within  the  meaning  of  the  Act,  and  accordingly  may  be  bound  by 
an  arrangement  approved  by  the  requisite  majority.  In  re  Dynevor 
Duffryn  Co.,  iihi  siqnxt,  and  the  Forms,  infra,  p.  589,  ef  seq. 

And  even  where  the  company  has  sold  its  interest  in  the  property  upon 
which  the  mortgage  del)entures  are  secured  the  holders  thereof  are  cre- 
ditors within  the  meaning  of  the  Act.  In  re  Mammoth  Coi)i)ero])olis  of 
Utah,  Limd.,  Ct.  of  Appeal,  4  Aug.  1879.     See  infra,  p.  GOO. 

Where  a  meeting  of  the  holders  of  debentures  "  to  l^earer  "  is  held 
with  a  view  to  an  arrangement  those  only  are  entitled  to  vote  who 
produce  their  debenture  thereat.  In  re  Wedywood  Coal  Co.,  G  C.  D, 
027. 

The  court  will  not  sanction  an  arrangement  aj)proved  by  the  statutory 
majority  if  it  can  be  shown  that  the  resolution  was  not  passed  hona  fide 
in  the  interest  of  the  creditors,  e.  y.,  when  the  resolution  is  carried  by  the 
votes  of  the  persons  whose  interests  are  adverse  to  those  of  the  creditors 
as  such.  8.  C.  and  see  p.  007,  infra.  And  see  the  Bankruptcy  cases, 
supra,  p.  50. 

Xor  as  a  general  rule  will  the  court  sanction  an  arrangement  which 
would  prejudice  a  creditor  whose  rights  would  have  been  preferential 
if  the  winding  up  were  to  proceed  in  ordinary  course,  e.y.,  a  creditor 
Avho,  having  been  deceived  or  unfairly  delayed  by  the  company, 
would,  in  the  absence  of  the  arrangement,  have  been  allowed  to  issue 
execution  notwithstanding  a  winding-up  order.  In  re  RicJtards,  11 
C.  D.  G7G. 

An  arrangement  cannot  be  sanctioned  where  it  is  impossible  to  esti- 
mate the  amounts  of  the  claims  of  individual  creditors.  In  re  Albert 
Life  Assurance  Co.,  0  Ch.  381. 

An  arrangement  under  the  Act  of  1870  generally  involves  the  exer- 
cise by  the  court  of  some  of  the  powers  vested  in  it  by  the  Companies 
Act,  1862.  Thus,  where  it  is  part  of  the  arrangement  that  the  winding 
up  is  to  be  stayed,  the  order  is  made  under  s.  89  of  the  Act.     And 


INTEODUCTOEY    NOTES.  585 

■where  the  arrangement  provides  for  tlio  sale  of  the  assets  to  some  in- 
dividual or  company,  the  sale  is  generally  eflected  under  s.  1)5  of  the 
Act.     See  sitpra,  p.  559. 

But  it  was  settled  long  since  that  the  court  has  power  under  s.  95  of  ^'^^^^l^'''^^'' 
the  Act  to  sanction  such  a  sale.     Agra  &  Mastermcurs  Banlc,  15  W.  E. " " 
554.   And  this  power  can  be  exercised  not  only  in  a  compulsory  winding 
up,  but  also  (under  s.  151)  where  the  winding  up  is  under  supervision, 
and  (under  s.  138)  where  it  is  purely  voluntary. 

If  the  sale  is  made  under  s.  KU  a  special  resolution,  involving  two 
meetings  of  the  members,  is  requisite,  and  moreover  dissentient  members 
have  rights  [supra,  p.  557]  which  may  impede  the  reconstruction. 
But  where  the  sale  is  under  s.  95  the  court  merely  requires  the  reso- 
hition  of  a  single  meeting  of  contributories  and  can  deal  with  dis- 
sentients in  a  much  more  summary  way  than  allowed  by  s.  KU. 
Accordingly  it  seems  desiraljle,  where  an  arrangement  for  reconstruc- 
tion under  the  Act  of  1870  is  proposed,  to  proceed  under  s.  95  and  not 
under  s.  IGl. 

The  Act  of  1870  does  not  expressly  require  the  arrangement  to  be  A«  to  meeting 

.,  •        1      ,    -,_  •  1  J.        1  J.    •  1    ot  contnbu- 

approved  by  a  meetmg  of  contributories,  but  it  is  usual  to  oijtain  sucn  ^^^-^^^^ 
approval  unless  the  an-angemeut  merely  provides  for  the  payment  of  a 
composition.     In  consulting  the  wishes  of  the  contributories,  the  coiu't 
has  regard  to  ss.  91,  13G,  149,  159,  and  IGO  of  the  Act. 

It  is  doubtful  whether  an  arrangement  once  approved  by  meetings  of  Modification 
creditors  or  contributories  can  be  modified  l)y  the  court  or  otherwise  °  ^^'  ^'^^  " 
without  the  aj^proval  of  further  meetings.  Dijnevor  Co.,  11  C.  Div.  GIO. 
In  some  cases  it  has  been  part  of  tlie  arrangement  that  the  liquidator  or 
some  other  person  shall  have  power  to  agTce  to  modifications,  but  it 
would  seem  that  such  a  power  is  of  doubtful  validity.  S.  C.  In  several 
cases  the  court  has  directed  new  meetings  to  be  held  to  consider  modifi- 
cations, see  infra,  p.  GOi. 

An  arrangement   with  the   debenture   holders   of  a    company   may  Trustees  for 

QGuGntnrG 

provide   for   the   concurrence   of  the   trustees    (if   any)    for    the    de-  ijoi^igrs  bound. 
bentiu-e  holders,  or  for  the  modification  of  the  trusts  of  the  covering 
deed ;  and  where  the  arrangement  does  not  contain  any  such  provision 
an  action  can  be  brought  and  judgment  obtained  accordingly. 

Where  a  company  is  being  wound  up  it  not  uncommonly  happens  As  to  staying 
that  an  action  by  debenture  holders  is  pending.     See  infra,  p.  593.     In  '^g,jg"ture 
such  cases  any  arrangement  with  the  debenture  holders  should  provide  holders. 
for  the  costs  of  the  action  and  for  staying  further  proceedings  therein, 
and  the  order  sanctioning  it  should  be  made  in  the  action  as  well  as  in 
the  winding  up. 

As  to  procedure  :—  Procedure. 

In  most  cases,  the  best  course  of  procedure  is  as  follows  : 

1.  Prepare  the  arrangement. 

2.  Apply  to  the  Court  by  summons  or  motion  to  convene  the  requisite 
meetings. 

3.  Hold  the  meetings  and  pass  the  necessary  resolutions. 


586 


Advertise- 
ment. 


ARRANGEMENTS. 

4.  Apply  to  the  Court  by  petition  stating  the  circumstances  and  obtain 
an  order  sanctioning  the  arrangement. 

5.  It  will  be  observed  that  the  application  to  the  Court  may  be  made 
by  any  creditor  or  l)y  the  liquidator.  It  is  usually  made  l)y  the 
liquidator. 

The  arrangement  is  sometimes  set  forth  in  a  document  intituled 
"  Scheme  of  arrangement,"  and  is  sometimes  embodied  in  an  agreement 
expressed  to  be  made  subject  to  the  sanction  of  the  Court.  Where  the 
arrangement  provides  for  a  sale  of  the  assets  to  an  existing  person,  a 
provisional  agreement  is  generally  desirable,  but  where  the  sale  is  to  be 
to  a  new  company  the  best  plan  is  to  submit  the  arrangement  to  the 
meetings  and  the  court  in  the  form  of  a  scheme,  and  when  the  sanction 
of  the  Com-t  has  been  given  the  new  company  is  registered  and  forthwith 
enters  into  an  agreement  Avith  the  liquidator  to  carry  out  the  scheme. 
This  agreement  should  contain  explanatory  recitals,  and  if  the  scheme 
provides  for  the  allotment  of  paid-uj)  shares  it  will  1)0  filed  pursuant  to 
s.  25  of  the  Act  of  1867. 

The  summons  for  liberty  to  call  the  meetings  can  easily  be  framed 
from  the  orders  given  infra,  p.  594,  et  seq. 

The  advertisement  will  run  thus  : 

In  the  High  Court  of  Justice^  Chancery  Division,  V.-C. .     In  the  matter 

of  the  Joint  Stock  Companies  Arrangement  Act,  1870,  and  in  the  matter  of  the 

Companies   Acts,  1802   and  1867,  and   in   the   matter   of  the Company, 

Limited.     Notice   is   hei-eby  given   that   his   lordship,  Mr.  Justice  ,  has 

directed  a  meeting  of  the  contributories  [or  the  creditors  or  the  creditors  other 
than  the  holders  of  the  debentures  secured  by  an  indenture,  &c.,  or  the  credi- 
tors of  the  above-named  company  being  the  holders  of  debentures  of  the  com- 
pany secured  by,  &c.]  of  the  above-named  company  to  be  summoned  pursuant 
to  the  above  statutes  for  the  purpose  of  ascertaining  their  wishes.  [Here  state 
object,  e.g. :  as  to  the  reconstruction  of  the  company.]     And  that  such  meeting 

will  be  held  on day,  the day  of ,  at o'clock  in  the noon, 

at in  the  county  of at  which  time  and  place  all  the  aforesaid  contri- 
butories [or  as  the  case  may  be']  are  requested  to  attend.  The  said  judge  has 
appointed of to  act  as  chairman  of  such  meeting. 

Dated,  &c.  [official]  liquidator. 


Petition. 


Title. 


And  see  the  other  forms  of  advertis'jment  below. 

The  petition  should  state  the  formation  of  the  company,  the  winding- 
up  proceedings,  the  position  of  affairs  so  fiu'  as  may  be  necessary  to 
explain  the  scheme  and  enable  the  Court  to  form  a  judgment  as  to  the 
expediency  of  sanctioning  it,  and  the  result  of  the  meetings,  and  will 
pray  for  the  sanction  of  the  Court.  It  should  be  served  on  the  company 
and  any  other  necessary  parties,  e.f/.,  the  trnstees  for  debenture  holders, 
and  should  be  verified  by  affidavit.  It  is  not  usual  to  give  notice  by 
advertisement  of  the  day  fixed  for  hearing  of  the  petition. 

Application  to  the  Court  with  regard  to  arrangements  under  the  Act 
of  1870  should  be  intituled  in  the  matter  of  the  Acts  of  1802  and  1867, 
and  of  the  Joint  Stock  Companies  Arrangement  xVct,  1877,  and  of  the 


INTRODUCTORY  NOTES.  587 

particular  company.  In  re  Barluston  Coal  &  Iron  Co.,  W.  X.  1877, 
1.39.  And  notices  convening  meetings  should  be  intituled  in  like 
manner. 

The  following  pages  contain  the  particulars  of  some  of  the  arrange- 
ments which  have  been  sanctioned  by  the  Coiu't. 

It  is  singular  that  cases  of  arrangement  under  the  Act  of  1870  are 
rarely  reported,  although  they  often  present  features  of  considerable 
interest,  and  not  uncommonly  affect  property  of  great  value. 


AEKANGEMENTS. 


The  Accidental  Death  Insurance  Co,  Limtd. 

Arrangemt  wuler  ivldch  Creditors  to  accrpt  Composiiion.  Winding  u})  to 
continue. 

This  company  was  being  wound  tip  undex-  supervision.  An  arrangement 
having  been  proposed^  tlie  following  order  was  made  on  application  by  sum- 
naons  : 

Form  732.  Upon  the  applicon  of  W.,  G.,  L.,  respively  creditors  of  the  above- 
Order  for  named  co,  and  upon  hearing  the  solors  for  the  applicant,  and  for  the  sd 
meeting.  p,-,^  j^jj(j  upon  reading,  &c.,  It  is  ordered  that  H.  the  sd  off.  liq.  do  forth- 

with smumon  a  meeting  of  the  creditors  of  the  co  pursuant  to  the 
provisions  of  the  Joint  Stock  Companies  Arrangemt  Act,  1870,  for  the 
ppose  of  ascertaining  whether  a  majority  representing  three-fourths  in 
value  of  the  creditors  present  thereof  in  person  or  by  proxy  are  willing 
to  assent  to  a  compromise  or  arrangemt  which  has  been  proposed  between 
the  contribs  of  the  co  and  its  creditors  for  the  final  settlemt  of  all  the 
claims  of  the  latter  by  paymt  of  a  further  dividend  of  3s.  6d  in  the 
pound  within  one  calendar  month  after  the  date  of  the  order  sanctioning 
such  compromise  or  arrangemt :  And  it  is  ordered  that  such  meeting  be 
held  at  the  Cannon  Street  Hotel,  in  the  City  of  London,  on  Wednesday, 
the  15th  of  May,  1878,  at  11  o'clock  in  the  forenoon  :  And  the  judge 
liby  directs  that  H.  tlie  liq  of  the  sd  co  be  chairman  of  such  meeting. 
Accidental  Death  Inmrance  Co.,  M.  E.,  2  May,  1878.    A.  884. 

The  meeting  was  held  and  the  arrangement  approved,  and  subsequently  an 
order  was  made  by  the  Master  of  the  Eolls  (30  Mar.  1878)  sanctioning  it.  Eeg. 
Lib.  A.  lilt. 

Gaudet  Freres  Steamship  Co,  Limtd. 

Arrangemt  providing  for  the  sale  of  the  tvliole  assets  to  a  creditor  ,h&  paijing 
a  composition  to  unsecured  creditors  and  the  costs  of  the  ivinding  up. 
Winding  iip  to  continue. 

This  company  was  being  wound  up  compulsorily ;  it  was  insolvent,  and  the 
whole  of  the  assets  were  claimed  by  L.,  to  whom  mortgage  debentures  had  been 
issued.  An  arrangement  was  proposed  and  approved  by  a  meeting  of  creditors^ 
and  the  subjoined  order  was  made  by  Malins,  V.-C. 

Form  733,  Upon  the  applicon  of  the  off.  liq.,  &c.,  Order  that  the  arrangemt  or 
Order  compromise  coutd  in  and  provided  fur  by  an  agreemt  dated  18  Feb., 


FORMS.  589 

1878,  made  between  the  sd  co  of  tlie  first  pt,  C.  [ihe  off.  liq.']  of  the   Form  733. 
second  pt,  and  L.  of  the  third  pt  (being-  exhibit  D.  to  the  sd  aff't  of  C.  sanctioning 
filed,  &c.)  whereby  the  sd  co  and  the  sd  C.  agreed  with  the  sd  L.  to  sell  t*ie  sale, 
to  him  all  the  assets  of  the  co  in  England  and  in  France  in  conson  of  the 
sd  L.  paying  to  the  creditors  of  the  sd  co  who  have  been  duly  certified 
as  such  the  sum  of  Gd.  in  the  pound  as  composition  and  in  discharge  of 
their  respive  debts,  and  paying  the  whole  of  the  costs,  charges,  and 
expenses  of  the  liquidon  of  the  sd  co,  and  in  and  by  a  resolution  of  the 
sd  creditors  passed  at  a  meeting  of  the  creditors  of  the  sd  co  held  15  July, 
1878,  be  sanctioned  by  the  Ct,  and  the  same  is  hby  declared  to  be  bind- 
ing on  all  the  creditors  of  the  sd  co,  also  on  the  liqs  and  contribs  thereof. 
GamM  Frercs,  dr.,  Co.,  Malins,  V.-C,  24  July,  1878.     A.  1489. 

In  this  case  it  will  be  observed  that  the  sanction  of  the  Coiu't  was  obtained 
on  summons.  The  circumstances  in  which  the  order  was  made  are  more  fully 
stated  in  Re  Gandet,  4-c.,  Co.,  12  C.  D.  882  ;  -1.8  L.  J.  Ch.  SIB. 

See  another  similar  case.  Re  Parkgate  Wagon  Co.,  17  C.  D.'234;  and  see  Bes- 
semer Co.,  1  C  D.  251. 

Sometimes  an  arrangement  of  this  kind  is  carried  out  vvfithout  proceeding 
under  the  Act  of  1870.  Thus,  in  the  winding  up  of  the  Trimsaran  Coal,  Iron, 
1^  Steel  Co.,  the  property  was  subject  to  mortgages  for  20,000L,  and  to  deben- 
tures for  about  25,000L,  and  the  M.  E.  sanctioned  (3  Aug.  187C)  a  sale  to  ti'us- 
tees  for  the  debenture-holders  of  the  assets  of  the  company,  subject  to  the 
mortgages  and  debentures  for  such  a  sum  as  would  cover  the  costs,  charges, 
and  expenses  of  the  official  liquidator,  and  be  sufficient  to  pay  the  creditors  of 
the  company,  other  than  the  mortgagees  and  debenture-holders,  sums  equal  to 
10s.  in  the  pound  iipon  the  amount  of  their  respective  debts. 

The  Western  of  Canada  Oil,  Lands  and  Works  Go.  Limtd. 

Arrangemt  for  croatmi  of  deJmitures  io  iale  'prior itij  over  eHstiiiij  deben- 
tures, imid-up  ffJiares  to  he  issued  to  the  delenture  liolders,  new  hoard 
of  directors  to  he  eJrded,  winding  vp  to  he  stayed  except  for  certain 
purposes. 

The  company  was  being  wound  up  compulsorily,  and  the  following  scheme 
was  proposed  : 

Scheme  for  the  reconstruction  of  the  Western  of  Canada  Oil,  Lands 
and  Works  Co.  Limtd. 

1.  Tlie  liq  shall  continue  the  liquidon  for  the  following  pposes  :  Form  734. 

{a.)  The  determination  of  the  question  whether  the  shares  now  stand-  p^^rtial 

ing  in  the  name  of  John  Walker  in  the  books  of  the  co  are  or  continuance  of 
are  not  to  be  deemed  to  any  and  what  extent  pd  up,  and  the  ^'"^^^  ^  '°"" 
making  and  collection  of  any  calls  in  respect  of  such  of  the  sd 
shares  as  shall  appear  not  to  have  been  fully  pd  up.     [See 
Carting's  case,  1  C.  D.  115.] 

(5.)  The  determination  of  the  question  whether  any  and  what  pro- 
ceedings ought  to  be  taken  against  John  Walker  the  vendor  to 
the  co  of  its  ppty  in  Canada  and  its  manager  there,  as  against 
Thomas  Henry  Smallman  its  secretary  there,  or  against  any 
other  person  or  persons,  to  recover  the  price  pd  for  the  sd  ppty 


590 


AEEANGEMENTS. 


Form   734 


When  to  be 
stayed. 


What  may  he 
done. 


Powers  of  new 
hoard. 


Duti 


or  any  and  what  pt  of  it,  or  to  obtain  damages,  compensation, 
or  accounts,  or  any  and  what  relief  in  respect  of  the  sale 
thereof,  or  in  respect  of  the  managemt  of  the  co's  business  in 
Canada,  or  for  any  other  ppose,  and  the  institution  and  carry- 
ing on  of  such  proceedings  accordingly. 

(c.)  Generally  the  realisation  and  collection  of  the  assets  of  the  co 
except  the  ppty  comprised  in  the  indre  of  trust  or  covering 
deed  of  12  Xov.  1872,  and  thereby  made  a  security  for  the 
repaymt  of  the  200,000?.  of  original  debentures  already  issued 
by  the  co  and  in  this  scheme  referred  to  as  "  A  "  deben- 
tures. 

(d.)  The  paymt  of  the  debts  of  the  co  other  than  those  secured  by  the 
"  A  "  debentures. 

(<?.)  The  paymt  of  all  the  costs  of  the  winding  up  including  therein  all 
the  costs,  charges  and  expenses  of  or  connected  with  or  arising 
out  of  this  scheme  of  reconstruction  whether  the  same  shall  be 
ultimately  carried  into  effect  or  not. 

2.  When  the  above  matters  are  completed  all  further  proceedings  in 
the  liquidon  shall  be  stayed  on  the  liq's  application,  and  the  ppty  and 
assets  of  the  co  in  his  hands  shall  be  handed  over  to  the  new  board  of 
directors  to  be  appointed  as  next  hereinafter  provided. 

3.  Notwithstanding  the  pendency  of  the  liquidon  of  the  co  for  the 
pposes  afsd  the  following  acts  may  be  done  and  j)roceedings  taken,  that 
is  to  say — 

A  general  meeting  of  tlie  co  shall  be  called  for  the  following  pposes, 
namely  : 

1.  The  election  of  a  new  board  of  directors,  for  which  ppose  all  or  any 

of  the  existing  directors  may  be  remo^'cd  from  office  by  the  sd 
meeting.  The  new  board  of  directors  to  be  appointed  from 
among  members  eligible  for  the  appointmt  other  than  the  re- 
moved directors  (if  any)  and 

2.  The  sanctioning  by  special  resolution  the  issue  of  new  shares  to 

holders  of  "  A  "  debentures  as  hereinafter  provided. 

4.  The  new  board  of  directors  when  appointed  shall  have  and  perform 
all  the  powers  and  duties  vested  in  the  directors  by  the  articles  of  asso- 
ciation of  the  CO,  l)ut  nevertheless  (until  the  completion  of  the  liquidon 
as  afsd)  only  to  such  an  extent  and  in  such  a  manner  as  not  to  interfere 
Avitli  the  continuation  of  the  liquidon  as  afsd. 

5.  The  new  board  of  directors  shall  as  speedily  as  possible  after  their 
appointmt  do  and  carry  out  the  following  acts,  arrangemts  and  proceed- 
ings. 

(a.)  They  shall  borrow  on  behalf  of  the  co  a  sum  or  sums  of  money 
not  exceeding  .S0,000/.  by  the  additional  debentures  (herein 
referred  to  as  B  debentures),  securing  the  repaymt  of  the 
money  borrowed  with  interest  at  12  p.  c,  and  charging  the 
same  Avitli  interest  at  that  rate  on  the  ppty  of  the  co  comprised 
in  the  sd  covering  deed  of  the  12th  of  November,  1872,  in 


FOEMS.  591 

priority  to  the  sd  "  A"  del)entures  and  to  aii  other  charges   Form  734. 
and  all  principal  monies -or  interest  thereby  secured,  and  they 
may  if  they  see  fit  offer  all  or  any  of  the  sd  "  B  "  debentures 
in  the  first  place  to  the  holders  of  "  A  "  debentures,  or  to  any 
of  them. 

(i.)  They  sliall  affix  the  co's  seal  to  an  indre  of  trust  or  covering  deed 
■whereby  the  repaymt  ^Jf/r/  jmssu  of  the  principal  money  and 
interest  secured  by  the  sd  "  B  "  debentures  shall  be  secured  by 
way  of  trust  mortgage  or  charge  on  all  the  ppty  of  the  co  com- 
prised in  the  sd  covering  deed  of  the  12tli  of  November,  1872, 
in  priority  to  the  sd  "A  "  debentures  and  the  principal  money 
and  interest  thereby  secured.  The  trustees  of  the  sd  covering 
deed  of  the  12th  of  Xovember,  1872,  shall  also  be  parties  to 
the  sd  new  covering  deed  for  the  ppose  of  postponing  the  sd 
"  A  "  debentures  and  the  sd  security  for  the  same. 

(c.)  They  shall  at  the  same  time  that  they  issue  the  sd  "  B  "  deben- 
tures affix  the  co's  seal  to  the  sd  second  covering  deed,  offer 
and  (if  accepted)  issue  to  the  holder  of  every  "  A  "  debenture 
a  new  fully  pd-up  share  on  the  co  of  30/.,  to  be  taken  in  full 
discharge  of  the  bonus  of  oi»/.  payable  to  him  under  the  sd 
debenture,  and  also  of  all  interest  which  may  at  the  time  of 
issuing  the  sd  share  ])e  due  upon  the  "A  "  debenture  in  respect 
of  whicli  it  shall  be  issued  and  such  "  A  "  debenture  shall  be  a 
security  only  for  100/.  and  interest  thereon  at  the  rate  of  12/. 
p.  c.  p.  a.  from  the  time  of  the  issue  of  the  sd  share.  The  sd 
new  shares  shall  Ijc  called  and  are  herein  referred  to  as  "  B  " 
shares. 

(d.)  They  shall  at  or  Ijefore  the  issue  of  the  sd  "  B  "  shares  affix  the 
co's  seal  to  a  contract  in  -N^Titing  between  the  co  and  all  the 
holders  of  A  debentures  who  shall  accept  B  shares  as  afsd  in 
discharge  of  the  sd  bonus  of  30/.  per  debenture  to  which  they 
are  entled,  agreeing  that  the  sd  B  shares  are  and  shall  be 
deemed  to  be  fully  pd  up,  and  shall  duly  file  the  sd  contract 
with  the  Registrar  of  Joint  Stock  Companies. 

(e.)  The  holders  of  B  sliares  shall  have  the  exclusive  right  of  voting 
at  all  meetings  of  the  co  for  the  terra  of  10  years  from  the  issue 
of  B  shares  or  the  paymt  of  the  sd  B  and  A  debentures  which- 
ever shall  first  happen,  at  the  expiration  of  which  time  or  the 
happening  of  which  event  the  sd  exclusive  right  shall  cease, 
and  all  holders  of  shares  in  the  co  shall  vote  according  to  the 
niimber  of  sliares  held  by  them.  T\lth  this  exception  the  sd 
B  shares  shall  for  all  pposes  (except  as  to  amount)  rank  with 
the  existing  shares  in  the  co  which  shall  hereinafter  be  called 
and  are  herein  referred  to  as  A  shares,  and  the  holders  of  the 
sd  B  shares  shall  in  addition  to  the  temporary  exclusive  right 
of  voting  as  afsd  have  all  powers,  rights  and  privileges  in  con- 
nection with  the  CO  as  if  they  were  holders  of  a  corresponding 


.92 


AERANGEMENTS. 


Form,  734.  number  of  "  A  "  shares  in  the  co  with  307.  per  share  pd  up 

thereon. 

(/)  The  new  board  of  directors  shall  out  of  the  moneys  to  be  raised 
by  the  issue  of  the  sd  "  B  "  debentures  in  the  first  place  pay  all 
the  expenses  of  and  connected  with  their  issue,  aud  in  the  next 
place  pay  over  to  the  liq  such  a  sum  as  he  shall  at  the  time 
require  to  enable  him  completely  to  pay  or  settle  the  then  out- 
standing debts  and  liabilities  of  the  co  other  than  the  sums 
secured  by  the  said  A  and  B  debentures  and  the  costs  of  the 
winding  up  including  the  costs,  charges  and  expenses  of  this 
scheme  and  of  the  committee  of  debenture  holders,  including 
therein  the  costs  and  charges  of  the  bill  in  Chancery  filed  by 
Mr.  Louth,  and  the  receivership  thereunder,  and  shall  stand 
possessed  of  the  residue  of  the  same  money  to  be  raised  by  the 
issue  of  the  sd  B  debentures  for  the  general  pposes  of  the 
reconstructed  co. 

{g!)  The  future  profits  of  the  reconstructed  co  shall  for  the  pposes 
of  interest  and  dividends  be  applied  first  in  paymt  of  interest 
at  12  p.  c.  on  the  sd  A  debentures  ^^an'^^ass?/,  next  in  paymt  of 
dividends  at  1 2  p.  c.  on  all  shares  in  the  co  both  A  and  B  pari 
2JC(ssv,  and  the  residue  (if  any)  shall  be  divided  equally  between 
the  holders  of  debentures  "  A  "  or  "  B  "  and  the  shareholders 
(whether  of  A  or  B  shares)  2iari  passu,  the  sd  debenture  holders 
taking  their  share  thereof  by  way  of  bonus  and  not  in  discharge 
pro  fanto  of  the  principal  money  due  on  their  debentures  re- 
spively. 

C.  In  all  other  respects  the  new  board  of  directors  shall  carry  on  and 
manage  the  business  and  property  of  the  co  in  accordance  with  the 
articles  of  association. 

A  petition  seeking  the  sanction  of  the  Court  was  presented  by  L.  E.  &  T. 
and  an  order  sanctioning  the  scheme  was  made  by  Jessel,  M.  E.  See  W.  N. 
1874,  148. 


General 
provision. 


Form  735. 


The  Landore  Siemens  Steel  Co,  Limtd. 

"  Arrangcmt  for  2^(iyint  of  unsecured  crcdHors  in  full;  dehenture  Jioldcrs 
to  (jive  time ;  trust  deed  to  he  modified ;  action  and  winding  up  to  he 
stayed. 
A  siipervision  order  had  been  made  and  tlie  following  scheme  was  proposed : 

Time  to  be  1.  That  the  time  for  the  paymt  of  the  principal  of  the  debentures 

given  by  amountinsT  to  148,9007.  created  and  issued  by  the  co  for  the  term  of  five 

holders  of  ^  '  n  -,        -,  ^   •    ^      ^ 

five-year  years  and  secured  by  the  trusts  of  a  deed,  &c,  which  became  due  and 

debentures.       payable  on  1  Jan.  1870,  be  extended  to  ]  Jan.  1884. 
And  by  2.  That  the  time  for  the  paymt  of  the  principal  of  the  debentures 

holders  of        amounting  to  ,51,100/.  created  and  issued  for  the  term  of  seven  years, 
debentures       secured  l)y  the  same  deed  and  fixlling  due  1  Jan.  1881,  be  extended  to 
1  Jan.  1884. 


POEMS.  593 

3.  That  tlie  rate  of  interest  on  all  the  sd  debentures  be  henceforth,  Form  735. 
from  and  after  1  Jan.  1870,  and  during  such  extended  terms  respivelj',  interest  ou 
reduced  from  6  p.  c.  p.  a.  to  4  p.  c.  p.  a.  payalile  half-yearly  on  5  July  debentures 
and  5  Jan.,  and  that  the  co  do  issue  to  the  registered  holders  of  the  sd 
debentures  warrants  for  such  interest  expressed  to  l)e  payable  to  bearer. 

4.  Time   for  paymt  of  certain  deferred  warrants  already  issued  in 
respect  of  arrears  of  interest  postponed. 

5.  That  (S.  one  of  the  del^enture  holders  and  a  creditor  for  cash  ad-  interest  on 
vanced  to  the  co  under  the  agreemt  of  2  May,   1877,  being  present  'o*'^  reduced, 
nnd  hby  consenting)  the  interest  payable  to  him  from  1  Jan.  1879,  on 

the  amount  so  due  to  him  for  cash  advances  be  at  the  rate  of  4  p.  c. 

p.  a.  instead  of  6  p.  c.  p.  a.,  while  the  rate  of  interest  payable  on  the 

<lcl)entures  is  4  p.  c.  p.  a. 

n.  That  in  addition  to  the  powders  conferred  on  the  trustees  for  the  Additional 

debenture  holders  by  the  trust  deed  of  21  Ap.  1874,  the  trustees  or  ro^'crs  given 

•^    .  -^  '  to  trustees  tor 

trustee  for  the  time  bemg  thereof  be  empowered  (with  the  concurrence  dei)enture 

of  the  provisional  or  other  off.  liqs.  of  co  during  the  continuance  of  the  l^'^^^^rs. 
winding  up  proceedings  and  afterwards  wnth  the  concurrence  of  the  co 
and  subject  to  the  consent  of  any  other  person  or  persons  w^hose  consent 
may  be  requisite  as  lessors  or  otherwise)  to  let  on  lease,  or  otherwise,  or 
to  surrender,  release,  or  otherwise  dispose  of  or  to  concur  in  letting,  sur- 
rendering, releasing,  or  otherwise  disposing  of  all  or  any  of  the  collieries 
confirmed  in  the  sd  trust  deed  at  such  times  and  upon  such  terms,  and 
either  gratuitously  or  otherwise,  as  to  the  sd  trustees  or  trustee  may  seem 
expedient,  and  to  enter  into  or  concur  in  any  arrangemt  or  agreemt  for 
that  purpose. 

7.  That  (regard  being  pd  to  the  order   of  20   Jan.  1879,  and  the  As  to  payment 
directtion  in  the  winding  up  order  for  continuing  the  first-mentd  order,  °^  *|?'^° 

the  sd  8.  in  respect  of  his  sd  advances  and  interest  hby  consent- 
ing) the  sd  liqs  shall  l)e  at  libty,  notwithstanding  any  prior  or  other 
right  or  claim  of  any  of  the  debenture  holders,  to  apply  and  continue  to 
apply  the  proceeds  of  all  book  debts  existing  at  the  time  of  the  presen- 
tation of  the  peton  to  wind  up,  or  subsequently  accruing  during  the 
winding  up  (so  far  as  not  already  received  and  expended)  in  or  towards 
the  discharge  of  the  trade  debts  of  co,  wdiether  owing  at  the  presenta- 
tion of  peton  or  subsequently  incurred  during  the  winding  up. 

8.  That  the  action  of  T.  E.  and  E.  H.  against  the  sd  trustees  and  the 
CO  (1879,  R.  Xo.  15)  be  discontinued. 

9.  That  all  necessary  and  proper  steps  be  taken  as  speedily  as  may  Ijc  Winding  up 
for  staying  all  further  proceedings  under  or  in  relation  to  the  winding  *°  ^'^  stayed. 
up  of  the  CO,  and  that  the  trustees  or  trustee  under  the  sd  trust  deed  do 

concur  therein  and  consent  thereto  on  behalf  of  the  debenture  holders. 

10.  That  so  soon  as  the  proceedings  in  the  winding  up  shall  be  stayed  Trustees  to 
as  afsd,  the  trustees  be  authorised  to  withdraw  from  and  to  deliver  up  posge"sio„ 
possession  to  the  co  of  all  the  ppty  of  the  co  now  in  their  hands  or  under 

their  control :  Provided  nevertheless  that  the  same  be  held  by  the  co 
subject  to  the  trusts  of  the  sd  deed  of  21  Ap.  1874,  in  the  same  manner 

Q  Q 


594 


AERANGEMENTS. 


Form  735.    as  the  co  held  the  same  prior  to  the  trustees  entering  upon  and  taking- 
"       possession  thereof. 

11.  As  to  applying  half  the  net  profits  to  redemption  of  debentures. 

The  scheme  having  been  prepared,  an  order  (25  Feb.  1879)  was  made  by 
Malins,  Y.-C,  on  the  application  of  the  provisional  official  liquidators  in  the 
winding  up  as  follows : 

Form  736.  Let  the  ajoplicants  as  such  prcA".  off.  liqs.  be  at  libty  pursuant  to  the 
Order  for  provisions  of  the  Companies  Acts  and  of  the  J,  8.  Companies  Arrange- 
meeting.  ment  Act,  1870,  to  convene  a  meeting  of  the  del)cnture  holders  of  the 

CO,  to  Itc  held  at  the Hotel  on  Thursday,  3  Ap.  1871),  at  two  o'clock 

in  the  afternoon,  for  the  ppose  of  considering  a  scheme  of  compromise 
or  arrangemt  to  be  made  between  the  debenture  holders  and  the  co, 
and  of  passing  such  resolutions  thereon  as  such  meeting  may  deem  fit^ 
and  let  one  of  the  debenture  holders  present  at  such  meeting  act  as  the 
chairman  thereof,  and  let  14  days  previous  notice  of  such  meeting  be 
given  to  each  of  the  debenture  holders,  or  in  case  of  any  one  or  more 
debenture  or  debentm-es  being  jointly  held  by  two  or  more  persons,  then 
to  the  joint  holder  whose  name  is  first  on  the  register  of  debenture 
holders  ;  such  notice  to  be  sent  through  the  post.    Reg.  Lib.  B.  333. 

The  meeting  was  held  and  the  scheme  approved,  and  a  i>etition  intituled  in 
the  matter  of  the  Acts  of  1862  and  1867  and  of  the  company,  and  of  the  Act  of 
1870,  and  in  the  action  was  then  presented  by  the  provisional  official  liqui- 
dators.    The  petition  stated ; 

Form  737.       1.  Formation  of  co,  objects,  &c. 

Petition.  2.  Capital  increased,  and  now  amounts  to  80U,000?.  in  7,000  ordinary 

shares  (of  which  5,997  issued)  and  1,000  preference  shares  of  100?  each.. 
Ordinary  shares  converted  into  stock. 

3.  Resolution  of  directors  to  create  debentures  not  exceeding  3.50,00o/.^ 
to  be  secured  by  deed  as  a  first  charge  on  co's  ppty.  148,900/'.. 
5-year  debentures  falling  due  1  Jan.  1879,  and  51,100?.  7-year  deben- 
tures falling  due  1  Jan.  1881  issued. 

4.  Parlars  of  the  trust  deed  for  securing  the  debentm-es. 
5  and  6.  Petr  S.  holds  31,700/.  debentures. 

7.  Under  agreemt  of  2  May,  1877,  S.  had  made  cash  advances  to  co^. 
114,8407.  at  G  p.  c.  p.  a.,  and  to  be  a  charge  on  the  ppty. 

8.  The  trade  liabilities  of  the  co  (exclusive  of  amounts  due  to  deben- 
tm'e  holders  and  S.  and  small  unsecured  overdraft  due  to  l)ankers  of  co) 
amounted  on  31  Dec.  1878  to  25,406?.,  or  thereabouts,  and  amount  due 
to  CO  on  same  day  from  trade  debtors  after  allowing  for  doubtfiil  or  bad 
debts  amounted  to  28,337?.,  or  thereabouts. 

9.  The  CO  being  unable  to  pay  the  interest  on  the  debentures  ou 
1  Jan.  1879,  the  trustees  of  deed  took  possession  of  the  assets. 

10.  The  only  ppty  of  co  exempt  ft'om  trust  deed  was  the  book  debts 
and  certain  mining  i)pty  in  Spain, 

11.  2  Jan.  1879,  winding  up  peton  presented,  and  petrs  appointed 
prov.  off.  liqs.,  S.  undertaking  to  carry  on  the  business. 


FOEMS.  595 

12.  Order  of  20  Jan.  1870,  giving  liqs  libty  to  apply  assets  iu  dis-  Form  737. 
charge  of  trade  debts  so  far  as  necessary  to  keep  business  going  [Reg, 

Lib.     B.  71.] 

13.  24  Jan.  1879,  winding  up  order,  and  7  Jan,  1879,  petrs  appointed 
off,  liqs, 

14.  23,142/.  received  iu  respect  of  book  debts  and  21,170/',  trade 
debts  pd  thereout, 

15.  Order  of  25  Feb,  1870,  to  convene  meeting  of  debenture  holders. 

16.  Notices  sent  (particulars  stated).  Endorsed  upon  each  notice  so 
sent  was  a  printed  copy  of  the  sd  scheme  of  arrangemt. 

17.  Meeting  held,  Petr  C.  elected  chairman.  Holders  of  133,300/, 
debentures  present  in  person  or  by  proxy,  Parlars  of  scheme  taken  as 
read  and  resolution  of  approval  carried.  All  present  voting  in  favour  of 
resolution,  except  holders  of  4,000/,  debentures  who  remained  neutral. 

18.  The  scheme  so  adopted  was  in  the  terms  following  : — {sdling  it  out.) 
19  and  20.  Assent  of  further  debenture  holders.     21.  Parlars  of  the 

action  [&//  dcdentnre  holders  on  hclialf,  &c.,  to  have  trusts  of  covering  deed 
administered']. 

22.  It  will  be  for  the  benefit  of  the  co  and  also  of  the  debenture 
holders  generally  that  the  sd  arrangemt  should  be  sanctioned  by  the  Ct. 
The  powers  conferred  by  the  trust  deed  of  21  Ap,  1874,  caunot  be 
effectively  employed  for  the  ppose  of  realising  their  security  in  conse- 
quence of  the  prevailing  depression  of  trade  which  would  render  it 
difficult  if  not  impossible  for  the  trustees  to  lease  or  dispose  of  the  ppty. 
Trustees  still  in  possession,  but  liqs  have  continued  working  with 
following  result,  &c. 

23.  There  is  a  good  prospect  of  the  co's  trade  becoming  again  remu- 
nerative, &c. 

24.  Except  the  debenture  holders  the  only  creditors  of  co  are  your 
petr  S,  for  sd  114,840/.,  and  other  creditors  for  4,230/. 

Your  petrs  therefore  pray : 

1.  That  the  arrangemt  stated  in  the  18th  paragraph  of  this  peton 

may  be  sanctioned  by  the  Ct,  and  may  be  ordered  to  be  caiTied 
into  effect  by  the  trustees  of  the  indre  of  21  Ap.  1874. 

2.  That  \_2yr0ceedings  in  action  mag  he  staged]. 

3.  That  [libtg  for  petrs  to  ^wg  costs].     4,  That  subject  as  afsd,  all 

further  proceedings  in  the  winding  up  bo  stayed,  except  for  the 
ppose  of  giving  effect  to  the  order  to  be  made  on  this  peton. 
5.  Further  or  other  order. 

The  petition  was  served  on  the  trustees,  tlie  i^laintiffs  in  tlie  action,  and  ther 
company,  and  came  on  for  hearing  on  10  July,  1879,  when  an  order  was  made 
by  Malins,  V.-C,  as  follows  : 

Let  the  scheme  of  compromise  or  arrangemt  between  the  co  and  the  Form  738. 

debenture  holders  pursuant  to  33  &  34  Yict.  c.  104,  adopted  at  the  TTl 

.  11111  '  r  Order  sane- 

meeting  of  the  debenture  holders  held  3  April,  1879,  as  in  the  peton  tioning 

mentd,  be  sanctioned,  and  let  the  same  be  carried  into  effect  by  the  ^^^^'^''• 

Q  Q  2 


596 


ARRANGEMENT?. 


Form  738.  trustees  of  the  iiidrc  of  21  Ap.  1874,  the  terms  of  which  compromise  or 
arrangemt  are  as  follows,  &c.,  and  stay  all  further  proceedings  in  the 
action  except  so  far  as  may  be  necessary  for  carrying  this  order  into 
effect,  and  let  the  petrs  pay  the  costs  as  between  solor  and  client  of  [_tli(' 
trustees']  and  of  \_the  co]  and  of  the  sd  several  stock  holders  and  deljen- 
ture  holders  [_tvho  appeared^  and  of  \_plts  in  action^  of  and  incidental  to 
this  applicon,  and  the  costs,  charges,  and  expenses  as  between  solor  and 
client  of  the  petrs  and  of  \_the  trustees']  and  of  [^tlie  co]  incurred  in  or 
relating  to  the  winding  up  and  the  costs,  &c,,  as  between,  &c.,  of  \_fJu' 
pits  in  action']  and  of  \_the  trustees]  and  of  [ro]  of  and  incidental  to  the 
sd  action.  And  refer  it  to  the  taxing  master  to  tax  the  sd  costs.  And 
order  for  paymt  to  solors  when  taxed.  And  subject  as  afsd,  let  all 
further  proceedings  in  the  winding  up  of  the  co  be  stayed,  except  for  the 
ppose  of  giving  effect  to  this  order.     Reg.  Lib.  1870.     B.  3082. 

The  Dynevor,  Duffryn,  and  Neath  Abbey  Collieries  Co,  Limtd. 

Arrangemt  for  tease  of  ro\?  undertalcinu  and  modification  of  trust  deed  for 
securing  debentures.     Winding  vj)  continued. 

The  company  was  formed  in  1874,  and  had  issued  debentures  to  the  extent 
of  210,0001.,  secured  by  an  assignment  of  the  company's  undertaking  to  two 
triistees.  In  June,  1878,  a  resolution  for  a  voluntary  winding  iip  was  passed, 
and  the  trustees  were  appointed  liquidators.  In  August  a  meeting  of  the  com- 
pany's creditors  was  convened,  piu-suant  to  an  order  of  Malins,  V.-C,  for  the 
purpose  of  considering  an  arrangement  embodied  in  an  agreement.  The  agree- 
ment was  made  between  the  trustees  of  the  first  part,  the  company  of  the 
second  part,  and  M.  of  the  third  part ;  and  its  principal  provisions  were  as 
follows  : 

That  a  lease  of  the  company's  business  should  be  granted  to  M.  for  21  years, 
at  a  dead  or  minimum  rent  of  5,000J.  and  certain  royalties ;  that  the  lessee 
should  take  all  the  liabilities  of  the  leases  under  which  the  company  held  the 
mines ;  and  that  the  lease  should  include  the  plant  and  machinery  belonging 
to  the  company  ;  and  the  lessee  agreed  to  have  10,000L  ready  to  be  expended 
as  capital  at  the  commencement  of  the  lease,  and  to  expend  so  much  of  that 
sum  as  should  be  required  in  working  the  mines,  and  that  he  would  indemnify 
the  company  and  the  triistees  and  the  secured  creditors  of  the  company  against 
all  liabilities  up  to  the  date  of  the  lease,  other  than  the  monies  secured  by  the 
deed  of  trust,  for  the  benefit  of  the  debenture  holders  ;  and  it  was  agreed  that 
the  liquidators  should  assign  to  the  lessee  all  the  assets  of  the  company.  The 
agreement  was  expressed  to  be  made  subject  to  the  sanction  of  the  Court,  and 
to  its  being  executed  as  an  arrangement  with  creditors  under  the  Act  of  1870. 

The  agreement  was  approved  at  the  meeting  of  debenture  holders,  and  ujion 
summons  taken  out  by  the  trustees,  was  confirmed  by  Malins,  V.-C.  Shortly 
afterwards  the  arrangement  was  approved  at  a  meeting  of  members  of  the  com- 
pany in  accordance  with  s.  IGO  of  the  Act  of  1862. 

A  dissentient  debenture  holder  appealed  from  the  order  of  the  Vice-Chancel- 
loFj  but  the  appeal  was  dismissed.     The  case  is  reported  in  11  C.  D.  605. 


FORMS.  597 

Form  739. 

The  Northampton  Coal  and  Iron  Co,  Limtd.  

ArnDtgcmlfor  reconstruction  hy  sale  to  new  co :  dehenture  holders  to  accept 
debentures,  and  unsecured  creditors  composition. 

The  company  was  being  wound  up  under  supervision.  Meetings  were  called 
pursuant  to  the  following  order  : 

"  Upon  the  applicon  of  V.  J.  P.,  the  liq  of  the  above-named  co,  and  Order  for 
upon  hearing  the  solors  of  the  sd  liq,  and  upon  reading  an  order  dated  ^^^  ^^°' 
4  Aug.  187G  [supervision  order^,  and  an  afft,  &o.  It  is  ordered  that  the 
sd  liq  be  at  libty  to  call  a  meeting  or  meetings  of  the  creditors  and 
debenture  holders  of  the  sd  co  for  the  ppose  of  considering  a  scheme  of 
compromise  or  arrangemt  to  be  made  between  such  creditors  and  deben- 
ture holders  and  the  co,  and  that  the  sd  liq  be  the  chairman  of  such 
meeting  or  [meetings."  Kortham2)ton  Coal,  &c.,  Co.,  Malins,  V.-C,  at 
Chambers,  8  August,  187G.     B.  1433. 

And  resolutions  having  been  passed  approving  of  the  proposed  arrangement, 
an  order  sanctioning  the  same  was  obtained  on  summons.  The  order  was  as 
follows : 

"  Upon  the  applicon  of  F.  J,  P.,  the  liq  of  the  above-named  co,  and  Form  740. 
upon  hearing  the  solor  for  the  sd  liq,  and  upon  reading  an  order  dated  Onier  con- 
the  .sth  August,  1870  [calling  meeting,  see  supra'\.     It  is  ordered  that  the  firming 
scheme  of  compromise  or  ari'angemt,  pursuant  to  33  &  34  Vict.  c.  104, 
resolved  upon  at  the  meetings  of  the  shareholders  and  debenture  holders 

of  the  above-named  co,  held  at  the Hotel,  at •,  on  the  23rd  day 

of  August,  187G,  and  duly  confirmed  by  the  shareholders  of  the  sd  co  at 
a  meeting  of  shareholders  held  on  Monday,  the  11th  day  of  September, 

187G,  at  the  offices  of  the  co  situate  at ,  be  sanctioned  and  carried 

into  effect,  which  sd  resolutions  are  as  follows,  that  is  to  say, 

"  (1.)  That  J.  T.  P.,  the  liq  of  this  co,  be,  and  he  is  hby  authorised 
to  sell  to  a  new  co  to  be  formed  for  the  ppose  of  acquiring  the 
same,  all  the  ppty  of  this  co,  subject  to  the  debts  and  liabili- 
ties thereof,  in  conson  of  8,000  shares  of  10/.  each  in  such  new 
co,  with  Gl.  per  share  credited  as  pd  up  thereon,  such  shares 
to  be  divided  among  the  shareholders  of  this  co  in  the 
proportion  of  one  share  in  such  new  co  for  each  share  now 
held  in  this  co. 
"  (2.)  That  the  debenture  holders  of  this  co  accept  in  satisfon  and 
discharge  of  their  claims  against  such  co  perpetual  debentures 
to  the  same  amount  respively  in  a  new  co  intended  to  be 
formed  for  the  ppose  of  acquiring  the  assets  and  ppty  of  this 
CO,  bearing  interest  at  4/.  105.  p.  c.  p.  a.  from  the  30th  day  of 
March,  187G. 
"  (3.)  a.  That  a  composition  of  125.  in  the  pound  be  accepted  in 
satisfon  of  the  debts  due  to  the  creditors  of  this  co  (other 
than  the  debenture  holders).     I.  And  that  such  composition  be 


598  AERANGEMENTS. 

Form  740  payable  by  three  iiistalmts  at  three,  six,  and  nine  months 

vespively  from  the  date  of  the  confirmation  of  these  resohitions 
by  the  Ct."  Nortluimjjlon  Coal,  4'C.,  Co.,  Malins,  V.-C,  at 
Chambers,  12  Sep.  187G.     B.  1508. 

Llanrwst  Lead  Mining  Co,  Limtd. 

Arranffcml  for  reconstruction :   creditors   to  accept   liahilitij  of  jwir  ro  .- 
members  to  ham  parti//  pd  sluires  in  new  co. 

Porm  741.  i.  A  new  co  shall  be  incorporated  under  "  The  Companies  Acts,  1862 
Scheme  of  to  1880,"  as  a  CO  limtd  by  shares.  The  name  of  such  co  (hereinafter 
leconstractiou.  j-gferred  to  as  the  new  co)  shall  be  "  The  C.  Co,  Limtd,"  or  if  any 
difficulty  arises  as  to  registering  under  that  name,  then  such  other  name 
as  the  liq  of  the  Llanrwst  Lead  Mining  Co,  Limtd  (hereinafter  referred 
to  as  the  old  co),  shall  select.  The  nominal  capital  of  the  new  co  shall 
he  75,000^.,  divided  into  37,500  shares  of  21.  each.  The  objects  of  the 
new  CO  shall  include  the  acquisition  and  undertaking  of  all  or  any  of  the 
assets  and  liabilities  of  the  old  co.  The  memorandum  and  articles  of 
association  of  the  new  co  shall  be  in  the  form  of  the  drafts  which  have 
already  been  approved  by  the  liq  of  the  old  co. 

This  scheme  may  be  compared  with  the  bankruptcy  schemes.     Siqyra,  p.  15, 
et  seq. 

2.  The  liq  shall  be  at  libty  to  sell  to  the  new  co  the  whole  of  the 
assets  of  the  old  co  for  the  consons  following  (that  is  to  say) : — 

(a.)  The  new  co  to  allot  to,  or  to  the  nominee  or  nominees  of  each 
member  of  the  old  co,  who  (within  six  weeks  after  being  served 
with  such  a  notice  as  is  meutd  in  Clause  3  hereof)  shall  require 
the  new  co  so  to  do,  one  2/.  share  in  the  new  co,  with  the  sum 
of  11.  10s.  credited  as  pd  up  thereon  in  respect  of  each  21.  share 
in  the  old  co  held  by  him, 

(h.)  The  new  co  to  undertake,  pay,  satisfy,  and  discharge  all  the  debts 
and  liabilities  of  the  old  co,  and  all  the  costs,  charges,  and 
expenses  of  and  incident  to  the  winding  up  and  dissolution  of 
the  old  CO  (including  any  that  have  been  or  shall  be  incurred 
in  relation  to  this  scheme  and  to  the  sd  sale)  and  to  indemnify 
the  old  co,  its  liq,  and  contribs  from  and  against  all  actions,  pro- 
ceedings, claims,  and  demands  in  respect  thereof. 

3.  The  agreemt  for  such  sale  as  afsd  shall  contain  provisions  to  the 
following  effect,  namely  : — 

(a.)  That  the  new  co  shall  within  fourteen  days  after  the  execution  l^y 
it  of  the  agreemt  give  notice  in  WTiting  to  each  member  of  the 
old  co  stating  the  numl)er  of  shares  in  the  new  co  which  he  is 
entled  (pursuant  to  this  scheme)  to  have  allotted  to  him  or  his 
nominee  or  nominees,  and  the  period  within  which  an  applicou 
in  writing  for  the  allotmt  of  such  shares  must  be  sent  to  the 
new  CO. 

(b.)  Tliat  the  old  co  .shall  forthwith  deliver  to  the  new  co  all  such  pts 


FOR^rS.  599 

of  the  assets  of  the  old  co  as  shall  be  capable  of  delivery,  and   Form  741. 

shall  execute  and  do  all  such  assurances  and  things  as  the  new 

CO  shall  reasonably  require  for  carrying  the  sale  into  effect, 

either  as  to  the  whole  or  any  pt  or  pts  of  the  assets  agi-eedto  be 

sold,  the  same  to  be  settled  in  case  of  difference  by  the  judge 

to  whose  Ct  the  winding  up  of  the  old  co  is  for  tlic  time  Toeing 

attached. 

{c.)  That  as  regards  any  of  the  outstanding  assets  of  the  old  co  which 
shall  not  for  the  time  being  have  been  assigned  to  the  new  co, 
the  li<]  of  the  old  co  shall,  at  the  request  and  expense  of  the 
new  CO,  collect,  get  in,  and  realize  the  same  or  any  pt  thereof, 
and  for  that  ppose  take  all  the  requisite  proceedings  in  the 
winding  up  of  the  old  co  or  otherwise  ;  and 

{(I.)  Such  other  jirovisions  as  the  liq  of  the  old  co  shall  think 
expedient. 

4.  If  the  new  co  shall  within  one  month  after  this  scheme  shall  have 
been  sanctioned  by  the  Ct  enter  into  an  agreemt  with  the  old  co  and  its 
liq  to  pchase  the  assets  of  the  old  co  for  the  consons  afsd,  the  old  co  shall 
from  thenceforth  stand  and  be  released  from  all  its  debts  and  liabilities 
so  undertaken  by  the  new  co,  and  the  creditors  and  other  persons  to 
whom  such  debts  are  due,  or  in  whose  ftivour  such  liabilities  exist,  shall 
Jiccept  the  lial)ility  of  the  new  co  instead  of  the  liability  of  the  old  co. 

5.  Nothing  in  this  scheme  contd  shall  be  deemed  to  prejudice  any 
existing  security,  lien,  or  charge,  upon  the  assets  of  the  old  co  or  any  pt 
thereof. 

0.  The  winding  up  of  the  old  co  shall  be  completed  and  the  dissolution 
thereof  shall  be  effected  with  all  convenient  speed. 

7.  The  li(|  of  the  old  co  shall  take  all  such  proceedings  and  do  all  such 
things  as  may  be  necessary,  or,  in  his  opinion,  convenient  for  carrying 
this  scheme  into  effect. 

The  above  scheme  Avas  sanctioned  by  Hall,  V.-C,  on  petition.  May,  1881. 
The  following  is  the  notice  of  the  meetinj^s  : — 

In  the  High  Ct  of  Justice.  Form  742. 

Chanceiy  Div.  Notice  of 

In  the  matter  of  the  Companies  Acts,  1862  and  18G7.        meetings. 
And  in  the  matter  of  the   Llanrwst   Lead  Mining  Co. 

Limtd. 
And  in  the   matter  of  tlie  Joint  Stock  Companies   Ar- 
rangemt  Act,  1870. 
Notice  is  hereby  given  that  his  Lordship  [the  V.-C.  Sir  C.  H.]  has 
directed  meetings  of  the  creditors  and  contribs  of  the  above-named  co  to 
be  summoned  pursuant  to  the  above  statutes  for  the  ppose  of  ascertain- 
ing their  wishes  as  to  the  reconstruction  of   the  co  pursuant  to  the 

.scheme  a  copy  of  Avhich  can  be  seen  at  the  office  of  Mr. ,  No.  — , 

Street,  London,  E.C.,  the  solor  for  the  liq,  and  that  such  meetings 

will   respively   be   held  on  the  itth  day  of  May,  1881,  at  2  o'clock  in 


600  ARRANGEMENTS. 

Form  742.   the  afternoon  for  the  creditors,  and  at  3  o'clock  in  tlie  afternoon  for  the 

contribs,  at  tlie Tavern, Street,  in  the  City  of  London,  at 

which  times  and  place  all  the  afsd  creditors  and  contribs  are  requested  to 

attend.     The  sd  judge  has  appointed  Mr. ,  of ,  the  voluntary 

liq  of  the  sd  co  to  act  as  chairman  of  each  of  the  sd  meetings.     Dated 
this  21st  day  of  April,  1881. 

Liq. 


Form  743. 

Petition  to 

confirm 

scheme. 


The  petition  of  the  liquidator  was  aa  follows  : — 

1.  The  object  of  this  peton  is  to  obtain  the  sanction  of  the  Ct  to  a 
■  scheme  of  arrangemt  by  way  of  reconstruction  whereby  the  assets  and 

liabilities  of  the  above-named  co  are  to  be  transferred  to  a  new  co. 

2.  [^Incorporation  of  CO :  nominal  capital^.  3.  [Objects  of  co^.  4.  [Co. 
purchased  mines.^ 

5,  6  and  7.  [Particulars  of  shares  issued.] 

8.  [Large  expenditure  on  machinery,  &c.~\ 

9.  In  the  course  of  its  business  the  co  incurred  divers  debts  and 
liabilities. 

10.  Owing  to  the  low  price  of  lead  and  the  expenditure  required  to 
carry  on  the  working  of  the  sd  mine,  the  co  became  embarrassed,  and, 
in  the  months  of  July  and  August,  1880,  actions  were  commenced  by 
several  of  the  creditors  of  the  co  to  enforce  paymt  of  the  debts  due  to 
them. 

11.  [Extraordinary  resolution  to  wind  up,  passed  10  August,  1880, 
get  appointed  liquidator.]     12.  [Supervision  order,  '.)th  Avgust,  1880.] 

1 3.  [Particulars  as  to  co's  indebtedness.'] 

14.  The  ppty  of  the  co  is  considered  likely  to  prove  very  valuable,  and 
a  large  number  of  the  creditors  and  contribs  of  the  co  Ijeing  anxious  that 
its  business  should  be  carried  on,  and  the  co  reconstructed  for  that  ppose, 
your  petr  caused  a  scheme  of  arrangemt  to  be  prepared. 

15.  Such  scheme  of  arrangemt  was  in  the  following  terms  : — [here 
it  was  set  out.] 

16.  The  sd  scheme  was  submitted  to  his  Lordship  the  Vice-Chancel- 
lor Hall,  at  chambers,  and  by  an  order  of  his  Lordship  made  in  cham- 
bers on  the  12th  day  of  April,  1881,  in  the  above  matters,  it  was  ordered 
that  your  petr  should  be  at  libty  to  convene  separate  meetings  of  the 
creditors  and  contribs  of  the  co  for  the  ppose  of  considering  a  scheme  of 
arrangemt  to  be  made  between  such  creditors  and  contribs  and  the  co 
(being  tlie  scheme  hinbefore  set  forth),  and  that  at  least  ten  days  l)cfore 
the  day  appointed  for  such  meetings  an  advertisemt  convening  the  same, 
and  stating  that  a  copy  of  the  scheme  could  be  seen  at  the  office  of  your 
petr's  solor,  should  be  inserted  once  in  the  London  Gazette,  the  Times, 
the  ^Standard,  and  the  Baili/  News,  and,  in  addition,  that  a  circular 
letter  sbould  be  sent  to  each  of  the  creditors  and  contribs  of  the  ca 
whose  addresses  were  known  to  your  petr,  and  at  such  meetings  the 
creditors  and  contribs  should  be  at  libty  to  vote  in  person  or  by  proxy. 


FORMS.  601 

and  that  your  petr  should  be  the  chairniiin  of  such  meetings,  and  should  Form  743. 
report  the  result  thereof  to  the  judge. 

17.  On  the  Dth  day  of  May,  1881,  a  meetmg  of  the  creditors  of  the  co, 
duly  convened  in  accordance  with  the  last-stated  order  (a  copy  of  the  sd 
scheme  of  arrangemt  as  set  forth  in  paragraph  15  of  this  peton  having 
been  annexed  to  the  notices  convening  the  meeting),  was  held  at  the 
Guildhall  Tavern,  Greshara  Street,  London,  and  your  petr  took  the  chair 
at  such  meeting. 

18.  The  sd  meeting  was  attended  either  personally  or  by  proxy  by 

51  creditors,  to  whom 1,  is  due.     The  sd  scheme  of  arrangemt  was 

taken  as  read,  and  it  was  unanimously  resolved  by  the  creditors  so  pre- 
sent either  personally  or  by  proxy,  that  they  approved  of  the  proposal 
and  scheme  for  the  construction  of  the  co  as  sul)mitted  by  the  sd  liq 
(being  the  sd  scheme  of  arrangemt),  and  wished  the  same  to  be  adopted 

andcamed  into  effect. 

19.  On  the  same  Dth  day  of  May,  1881,  a  meeting  of  the  contribs 
[  £t.,  as  in  2}aragraj)h  17]. 

20.  The  sd  meeting  was  attended  either  personally  or  by  proxy  by 

189  contribs,  holding ordinary  and preference  shares.    The  sd 

scheme  was  then  and  there  read  to  all  the  contribs  who  were  personally 
present  at  the  sd  meeting,  and  it  was  resolved  by  the  contribs  so  present 
either  personally  or  by  proxy,  that  they  approved  of  the  proposal  and 
scheme  for  the  reconstruction  of  the  co  as  submitted  by  the  liq  (being 
the  sd  scheme  of  arrangemt),  and  wished  the  same  to  l)e  adopted  and 
carried  into  effect. 

21.  All  the  contribs  so  present  as  afsd,  except  3,  who  hold  160  ordi- 
nary shares,  voted  in  favour  of  such  last-mentd  resolution. 

22.  No  objection  has  been  made  to  carrying  out  the  sd  scheme  of 
arrangemt. 

23.  It  will  in  the  opinion  of  your  petr  be  much  for  the  benefit  of  the 
CO  that  the  sd  scheme  of  arrangemt  should  be  sanctioned  by  this  Honour- 
able Ct,  and  that  your  petr  should  ])e  authorized  to  carry  the  same  into 
effect. 

Your  petr  therefore  humbly  prays  as  follows  : — 

1 .  That  the  sd  scheme  of  arrangemt  may  be  sanctioned  by  this  Hon- 

ourable Ct  so  as  to  be  binding  on  all  the  creditors  and  contribs  of 
the  old  CO  and  on  yom*  petr  as  the  liq  thereof. 

2.  Or  that  such  other  order  may  1)0  made  in  the  premcs  as  to  thivS 

Honourable  Ct  shall  seem  meet. 
And  your  petr  will  ever  pray,  &c. 

Nolo.     It  is  not  intended  to  serve  this  peton  on  any  person. 

Hughes's  Locomotive  Co,  Limtd. 

In  the  Higli  Ct  of  Justice,  Chancery  Division,  Mr.  Justice  Fry.     In  Form  744. 
the  matter  of  the  Companies  Acts,  18G2  to  1880,  and  in  the  matter  of  j^otice  of 
Hughes's  Locomotive  and  Tramways  Engine  Works,  Limtd.     Notice  is  meeting.s  to 


<;02 


AEEANGEMENTS. 


■consider 
scheme. 


Form  744.  liljy  given  that  the  Honoura])]e  ^Ii-.  Justice  Fry  has  directed  a  meetino; 
of  the  creditors  of  the  ahove-named  co  to  he  summoned  under  the  pro- 
visions of  the  Joint  Stock  Companies  Arrangements  i\.ct,  1870,  for  tJic 
pposc  of  ascertaining  the  wishes  of  the  different  classes  of  creditors  as 
to  a  scheme  of  arrangemt  of  the  affairs  of  the  co  the  outline  whereof  is 
as  follows : — 

(1.)  That  a  limtd  co  be  formed  to  acquire  the  ppty  and  effects  com- 
prised in  the  parlars  and  according  to  the  conditions  of  sale  as  offered 
at  the  mart  on  the  21st  September  last.  The  capital  to  be  50,000/.  in 
50,000  preference  shares  of  1/.,  and  10,000/.  in  10,000  ordinary  shares 
of  1/.  each. 

(2.)  The  preference  shares  to  be  entled  to  a  cumulative  preference 
dividend  at  the  rate  of  7  p.  c,  and  to  constitute  a  first  charge  over  the 
assets  in  the  event  of  liquidon. 

(;5.)  The  price  to  be  pd  by  the  new  co  to  be  such  a  sum  in  preference 
shares  as  is  sufficient  to  satisfy  at  par  all  the  creditors  of  the  co,  and 
such  a  sum  in  cash  as  will  satisfy  the  costs  and  7,500  ordinary  shares. 

(4.)  7,500  of  the  preference  shares  to  be  issued  for  working  capital 
and  other  cash  requiremts  and  offered  for  subscription  rateably  in  the 
'first  instance  to  the  shareholders  and  creditors,  each  subscriber  to  l)c 
■entled  l)y  way  of  bonus  to  one  ordinary  share  for  each  preference  share. 
The  bonus  shares  to  be  provided  l)y  the  liq.  Thus  a  subscriber  for  100/. 
will  receive  100  fully  pd-up  preference  shares,  and,  by  way  of  bonus, 
loO  fully  pd-up  ordinary  shares.  The  draft  contract  of  sale  and  the 
memorandum  and  articles  of  association  of  the  proposed  cc  will  be  sub- 
mitted for  the  conson  of  the  meeting. 

And  that  such  meeting  will  be  held  on  Thursday  the  12th  day  of 

January,  1882,  at  12  o'clock  at  noon,  at  No.  4, Buildings,  in  the 

city  of  London,  at  which  time  and  place  all  the  creditors  of  the  al)ove- 
named  co  are  requested  to  attend.     The  sd  judge  has  appointed  Mr. 

to  act  as  chairman  of  such  meeting.     And  further  take  notice  that 

if  a  majority  in  number  representing  three-fourths  in  value  of  the  dif- 
ferent classes  of  creditors  present  either  in  person  or  by  proxy  at  such 
meeting  do  agree  to  the  sd  scheme  of  arrangemt  in  the  above  or  any 
modified  form  such  scheme  will  if  sanctioned  by  the  order  of  this  Hon- 
ourable Ct  be  binding  on  all  classes  of  creditors  and  also  on  the  liq  and 
coutribs  of  the  above-named  co.  Dated  this  23rd  day  of  December, 
18H1. 

E.  W.  Walker,  Chief  Clerk. 

The  above  scheme  was  sanctioned  on  petition  by  Fry,  J.,  2  Ap.  1882. 


Form  745. 


Notice  of 
meetings. 


In  the  High  Ct  of  Justice,  Chancery  Division,  Mr.  Justice  Chitty. 
In  the  matter  of  the  Companies  Acts,  1862  and  1867,  and  in  the  matter 
of  the  Joint-Stock  Companies  Arrangements  Act,  1870,  and  in  the  matter 
<if  the  Victorine  Gold  Mining  Co,  Limtd,  Notice  is  hby  given  that 
pursuant  to  the  directions  of  ]\[r.  Justice  Chitty,  a  meeting  of  the  mtgc 
debenture  holders  of  the  al)ove-namcd  co  will  be  held  on  Thursday  the 


FORMS.  G03 

5th  day  of  April,  1883,  at  1  o'clock  p.m.,  at  the  Cannon  Street  Hotel,      orm  745. 

Cannon  Street,  in  the  city  of  London,  for  the  ppose  of  ascertaining 

their  wishes  as  to  a  certain  agreemt  intended  to  be  made  between  the 

sd  CO  and  its  liqs  of  the  one  pt,  and  a  proposed  new  co  of  the   other 

pt,  and  as  to  the  scheme  of  an-angemt  set  forth  in  the  schedule  to  the 

sd  agreemt  and  for  the  ppose  of  ascertaining  whether  they  agree  to  an 

arrangemt  for  compromise  of  their  claims  against  the  co  npon  the  terms 

of  the  sd  agreemt  and  scheme,  at  which  time  and  place  all  the  mtge 

debenture  holders  of  the  sd  co  are  requested  to  attend.     A  copy  of  the 

sd  agreemt  and  scheme  of  arrangemt  may  be  seen  at  the  offices  of  j\Ir. 

■ , Buildings,  in  the  city  of  London,  between   the  hours  of 

eleven  and  two  o'clock  on  each  week  day  prior  to  the  day  of  meeting, 
exce])t  the  23rd  and  2Gth  March.  The  sd  judge  has  appointed  R.. 
fiiiling  him,  G.,  to  act  as  chairman  of  the  meeting.  Dated  the  15th  day 
of  March,  1883. 

R 

G 


Liqs,  M St.  Buildings,  M st.,  E.C. 


The  Darlastun  Coal  and  h'on  Co,  Limtd. 

Arrangemt  fur  reconstruction  ly  sale  to  new  co :  debenture  holders  and 
other  creditors  to  accejit  shares :  winding  up  continued. 

*  The  company  was  being  wound  up  compulsorily,  and  there  was  an  action 
pending  for  the  atbninistration  of  the  tnists  of  a  deed  for  securing  debentures. 
A  petition  was  presented  by  the  liquidator  to  obtain  the  sanction  of  the  Court 
to  a  scheme  of  reconstruction.  The  petition  was  intituled  in  the  action,  and  in 
the  Acts  of  1862  and  1867.  The  scheme  i^rovided,  among  other  things,  that 
the  debenture  holders  and  unsecured  creditors  should  accept  fully  paid-iip 
shares  in  the  new  company,  in  satisfaction  of  their  debts.  The  Master  of  the 
EoUs  directed  that  meetings  of  the  debenture  holders,  the  unsecured  creditors, 
and  the  shareholders  should  be  held,  and  that  the  petition  should  be  amended 
by  intituling  it  in  the  Act  of  1870.  W.  N.  1877,  139.  And  the  scheme  having 
been  approved  thereat,  an  order  was  made  sanctioning  the  same.  W.  N.  1877, 
165. 


The  Xorth  Western,  kc.  Co,  Limtd. 
Scheme  for  reconstruction  :  debenture  holders  tale  shares  in  new  co 

1.  The  X,  W.  Cu,  Limtd,  hereinafter  called  the  "okl  co, 
wound  up. 

2.  A  new  co  shall  be  incorporated  pursuant  to  the  "  Companies  Acts, 
1862  to  1880,"  as  a  co  limtd  by  shares  with  a  memorandum  and  articles 
of  association,  in  the  form  identified  by  the  signature  of  J.  W.  Hawkins, 
Esq.,  the  chief  clerk  of  Mr.  Justice  Chitty,  with  power  to  acquire  the 
undertaking  and  assets  of  the  old  co,  and  with  a  nominal  capital  of 
1,1:10,0007.  consisting  of  07.  p.  c.  first  preference  shares  or  first  pre- 
ference stock  of  the  nominal  amount  of  000,000/.  and  51.  p.  c.  second 
preference  shares  or  second  preference  stock  of  the  nominal  amount  of 
310,000/.,  and  ordinary  shares  of  the  nominal  amount  of  .jO0,0O0/.,  and 

N 


shall  be  Form  746. 


604-  AEEANGEMENTS. 

Porm  746.   witli  power  for  the  directors  without  the  consent  of  an}^  general  meeting- 
'  to  borrow  on  the  security  of  debentures  or  otherwise  any  sum  not  ex- 

ceeding 400,000/. 

The  scheme  as  orijjfinally  framed  provided  that  the  memorandum  and  articles 
shoukl  be  in  a  form  approved  by  the  liquidators;  they  could  not  agree,  and 
accordingly  new  meetings  were  held,  and  the  scheme  passed  in  this  form. 

3,  The  dividends  on  the  sd  first  preference  sliares  or  stock,  and  second 
preference  shares  or  stock,  respively,  shall  not  be  cumulative  Ijut  shall  be 
payable  only  out  of  the  profits  of  each  year,  and  in  the  event  of  the 
new  CO  being  wound  up,  the  surplus  assets  thereof  shall  be  applied  in  the 
first  place  in  paying  to  the  holders  of  the  first  preference  shares  the 
amount  credited  as  pd  up  thereon,  and  in  the  next  place  in  paying  to 
the  holders  of  the  second  preference  shares  of  the  amount  pd  up  thereon, 
and  the  residue  (if  any)  shall  l)e  divided  among  the  holders  of  ordinary 
shares. 

4.  The  new  co  shall  with  all  convenient  speed  make  arrangemts  for 
providing,  by  means  of  the  exercising  of  the  borrowing  powers  of  the 
new  CO,  the  funds  necessary  for  completing  the  authorized  line  of  rail- 
Avay  of  the  old  co  between and  — - — . 

;").  The  liqs  of  the  old  co  shall  for  the  consons  hereinafter  appearing 
sell  to  the  new  co  all  and  singular  the  concession,  lands,  railways,  build- 
ings, rolling-stock,  plant,  chattels,  moneys,  and  things  in  action  of  the 
old  CO,  and  the  undertaking  and  business  thereof,  with  the  full  benefit  of 
all  contracts  and  agreemts,  and  of  all  securities  to  which  the  old  co  is 
entled,  and  all  other  the  real  and  personal  ppty  of  the  old  co  whatsoever 
and  wheresoever,  free  from  such  of  the  liabilities  of  the  old  co  as  are  in- 
tended to  be  provided  for  by  means  of  preference  shares  in  the  new  co 
as  hereinafter  mentd  but  subject  to  ah  other  liabilities  of  the  old  co. 

(I.  Every  holder  of  a  debenture  or  debentures  of  the  old  co  shall  be 
entled  to  receive  first  preference  shares  or  stock  in  the  new  co  credited 
as  fully  pd  up  equal  in  nominal  value  to  the  principal  moneys  owing 
upon  such  debenture  or  debentures,  and  the  shares  to  be  issued  as  afsd 
shall  be  entled  to  the  sd  preferential  dividend  of  (!/.  p.  c.  p.  a.  from  the 
1st  day  of  January,  1882. 

7.  Every  holder  of  a  debenture  or  debentures  of  the  old  co  shall  also 
be  entled  to  receive  second  i)reference  shares  or  stock  in  the  new  co 
credited  as  fully  pd  up  equal  in  nominal  value  to  the  amount  of  interest 
due  upon  the  debenture  or  debentures  held  by  him,  calculated  up  to  the 
31st  day  of  December,  1881,  after  deducting  therefrom  such  sum  (if 
any)  as  shall  be  necessary  in  order  to  reduce  the  sd  amount  of  interest  to 
a  nuiltiple  of  1/.,  and  the  shares  to  be  issued  as  afsd  shall  be  entled  to 
the  said  preferential  dividend  of  57.  p.  c.  p.  a.  from  the  1st  day  of 
January,  1882. 

8.  The  holders  of  debentures  of  the  old  co  shall  accept  the  provisions 
to  be  made  for  them  as  afsd  in  satisfou  of  all  claims  upon  the  sd  de- 
bentures and  shall  deliver  up  such  debentures  to  the  liqs  of  the  o'd  co. 


FORMS. 


605 


9.  Each  of  the  directors  of  the  old  co  shall  l)e  entled  to  receive  5/.  p.c.  Form,  746. 
second  iDrefereiice  shares  in  the  new  co  credited  as  fully  pd  u])  equal 

in  nominal  value  to  three-fourths  of  the  amount  owing  to  him  by 
the  old  CO  on  the  30th  day  of  June,  1881,  after  deducting  therefrom 
such  sum,  if  any,  as  shall  be  necessary  in  order  to  reduce  the  sd  three- 
fourths  to  a  multi])le  of  1/.,  and  the  new  co  shall  pay  to  each  of  the  sd 
directors  in  cash  the  remaining  one-fourth  of  the  amount  owing  to  Imn 
as  afsd,  together  with  such  sum,  if  any,  as  shall  have  been  deducted 
from  the  sd  three-fourths  for  the  ppose  afsd,  and  the  directors  shall 
respively  accept  the  sd  shares  and  cash  in  satisfon  of  all  claims  on 
the  old  CO. 

10.  Every  registered  shareholder  of  the  old  co  shall  be  entled  to 
receive  ordinary  shares  in  the  new  co  credited  as  fully  jxl  up,  equal  in 
nominal  value  to  the  amount  credited  as  pd  on  the  shares  held  l)y  him 
in  the  old  co. 

11.  The  new  co  shall  indemnify  the  old  co  and  the  liqs  against  all 
claims,  demands,  and  proceedings  in  respect  of  any  contracts  or  engage- 
nits  in  relation  to  the  undertaking  or  business  of  the  old  co,  and  against 
all  debts  and  lialiilities  of  the  old  co,  including  an  agreemt  dated  the 
:>rd  day  of  February,  188o,  and  made  between  the  old  co  of  the  one 

pt,  and  "W.   ^Y.   Isl.   of  of   the    other  pt,  but    excepting    from 

such  debts  and  liabilities  the  moneys  owing  on  or  secured  by  the  deben- 
tures of  the  old  CO,  and  so  much  of  the  respive  amounts  owing  to  the 
respive  directors  of  the  old  co  as  is  not  to  be  pd  in  cash  as  hinbefore 
provided,  and  shall  also  pay  the  costs  of  winding  up  the  old  co,  and  the 
costs  of  the  committee  of  debenture  holders  of  the  old  co,  and  such  re- 
muneration to  the  members  of  the  sd  committee  as  the  liqs  shall  award, 
and  shall  provide  the  moneys  (if  any)  which  may  be  required  for  any  of 
the  powers  or  pposes  authorised  by  s.  KJl  of  the  "Companies  Act, 
1802,"  or  otherwise  connected  with  the  carrying  out  of  the  scheme. 

The  above  scheme  was  sanctioned  by  Chitty,  J.,  22  Ap.  1882.  The  order  to 
convene  the  meetings  was  made  Mar.  9,  1882.  The  reference  to  s.  161^  in  the 
last  clause  of  the  scheme,  seems  scarcely  correct,  as  the  winding-up  was  under 
supervision  order,  July  2,  1881. 

The  Mammoth  Copperopolis  of  Utah,  Limtd. 

Arrangcmt  under  which  dehenture  holders  fo  eiccejd  dehentures  of 
another  co. 

The  company  was  formed  in  1871.  It  had  issued  debentures  to  the  extent  of 
20,000L  The  debentures  were  payable  to  bearer,  and  were  secured  by  a  trust 
deed  comprising  the  company's  mine  in  Utah.  The  company  having  got  into 
difiiculties,  its  interest  in  the  mine  (subject  to  the  trust  deed)  was  seized  in 
execution  by  American  creditors  and  sold. 

The  property  subsequently  became,  and  at  the  date  of  the  scheme  was 
(subject  as  aforesaid)  vested  in  the  British  Tintic  Mining  Company,  Limited. 
In  187G,  a  compulsory  winding-up  order  was  made,  and  an  official  liquidator 
appointed. 

In   December,  1S78,  a   scheme  of    arrangement  was  projjosed,   and   on  the 


600 


ARRANGEMENTS. 


Form  746.    application  of  two  of  the  debentui*e  holders,  it  was  ordered  bj  Hall,  V.-C, 

11  Dec.   1878,  that  a  meeting  of  the  debenture  holders  should  be  summoned 

xuider  the  Act  of  1870,  by  advertisement  in  the  London  Gazette,  Times,  and 
Daily  Telegraph,  for  the  consideration  and  apiDroval  or  rejection  by  them  of  the 
scheme,  and  that  notice  should  be  given  to  the  official  liquidator,  and  that  he 
shovild  be  at  liberty  to  attend  the  meeting,  and  that  K.,  one  of  the  applicants,, 
should  take  the  chair,  or  in  his  absence,  a  debenture  holder  to  be  chosen  by  the 
meeting,  and  that  the  chairman  shoiild  report  the  result. 

The  scheme  provided,  inter  alia,  that  the  trustees  should  be  at  liberty  to  sell 
the  mine  to  a  company,  to  be  formed  with  a  nominal  capital  of  75,000L,  and 
with  a  debentvire  issue  of  GO,OOOL,  bearing  interest  at  15  per  cent,  per  annum ^ 
and  that  the  debenture  holders  should  accept,  in  satisfaction  of  the  principal 
and  interest  due  to  them,  debentures  of  such  company  for  an  equal  amount, 
and  that  certain  paid-up  shares  in  the  new  company  should  be  issued  to  them, 
and  that  the  trustees  should  give  effect  to  the  scheme. 

In  due  course  the  meeting  was  held,  and  resolutions  approving  of  the  scheme 
were  carried  by  a  large  majority.  A  summons  was  then  taken  out  to  obtain 
the  sanction  of  the  Court,  and  the  following  order  was  made  : — 


Order 

sanctionin, 

.scheme. 


Form  747.  llpoii  tlic  applicon  of  K.  and  S.  (on  behalf  of  themselves  and  all 
other  tlic  debcntui'e  holders  of  the  above  co),  &.(-.,  The  judge  doth  hby 
sanction  the  scheme  of  compromise  or  arrangemt  resolved  upon  at  the- 
meeting  of  the  sd  debenture  holders  duly  holden  pursuant  to  [Act  of 
1870  and  order  of  14  Dec.  1878],  on  7  Feb.  1871),  and  contd  in  the 
resolutions  under-written  which  were  passed  at  such  meeting  and  in  the- 
agreemt  therein  referred  to,  And  let  such  arraugemt  be  binding  on  all 
the  debenture  holders  secured  by  the  sd  indre  of  19  Aug.  1873,  And  let 
such  deed  (if  any)  as  may  be  necessary  or  expedient  for  the  ppose  of 
releasing  the  co  and  the  assets  thereof  fi'om  all  claims  in  respect  of  the- 
sd  debentures  be  executed  by  all  necessary  parties,  and  let  the  sd  K.  and' 
S.  be  appointed  to  execute  the  same  on  behalf  of  all  the  sd  debenture- 
holders. 


E,ESOLrTION.S. 

1.  That  this  meeting  approves  of  the  arrangemt  proposed  and  em- 
bodied in  the  agreemt,  &c.,  and  declares  that  it  is  expedient  that  the 
debenture  holders  secured  by  the  indre  of  10  May,  187:3,  be  compelled 
to  exchange  their  debentures  under  the  provisions  of  the  sd  arrangemt 
for  debentures  of  the  British  Tintic  Mining  Co,  Limtd,  on  or  before 
'^0  June,  1879,  and  to  release  the  M.  Co.  and  the  assets  thereof  fi-om  all 
claims  in  respect  of  the  sd  debentures. 

2.  That  this  meeting  desires  the  sd  agreemt  and  resolution  to  l)e 
sanctioned  by  the  Ct. 

And  costs  of  oflF.  liq.  to  be  allowed  out  of  assets.  Mammoth  Cop- 
'peropolis  of  Utah,  Hall,  V.-C,  14  May,  1879.     B.  1003. 

A  motion  was  subsequently  made  to  the  Vice-Chancellor,  on  behalf  of  one  of 
the  dissentient  debenture  holders,  to  discharge  or  vary  the  order.  The  motion 
was  heard  on  19th  June,  1879,  and  it  was  contended  on  the  applicant's 
behalf,  that  as  the  company's  intei-est  in  the  mine  had  been  sold,  the  debenture 
holders  were  not  a  class  of  creditors  within  the  meaning  of  the  Act  of  1870,. 


For.MS.  001 

that  in  so  far  as  tlie  scheme  provided  for  the  issue  to  the  debenture  holders  of  Foi'lll  747. 
debentures  of  another  company,  it  Avas  not  within  the  scope  of  the  Act,  and 
that  the  majority  was  not  acting;  60 /(■■'  fide.  In  giving-  judgment,  the  V.-C, 
after  disposing  of  a  suggestion  that  s.  10  of  the  Judicature  Act,  1875,  affected 
the  question,  said  :  "  Then  it  is  said  that  this  case  is  not  within  the  provisions 
of  the  Act  of  1870  by  reason  of  this,  that  the  class  of  creditors  or  alleged  class 
of  creditors  are  persons  who  are  debenture  holders  of  the  company  having  also 
a  security  for  their  debentures  on  certain  property  which  belonged  to  the  com- 
pany, and  was  vested  iii  trustees  upon  ordinary  trusts  for  securing  the  deben- 
ture holders.  And  so  far  there  would  have  been  no  objection  ;  it  could  not  have 
been  said  they  were  not  a  class  of  creditors  within  the  provisions  of  the 
Arrangement  Act.  But  then  it  is  said  that  the  equity  of  redemption  of  the 
projDerty  upon  which  the  secruuty  is  created — that  is,  the  projDerty  subject  to  the 
debentures — has  been  transferred  to  somebody  else  as  it  happened  in  this  parti- 
cular case,  though  unimportant  for  the  purposes  of  the  argument,  to  anothei- 
company.  That  being  so,  it  is  said  you  are  not  secui'ed  creditors ;  that  is 
secured  niwn  projjerty  of  the  company ;  because  the  property  on  which  the 
security  exists  has  passed  to  somebody  else  and  is  no  longer  theirs.  Biit  I  do- 
not  find  that  the  clause  of  the  Act  of  Parliament  under  which  this  scheme  is 
submitted  contains  any  such  limitation  with  reference  to  the  class  of  creditors 
as  is  suggested  by  that  argumant.  They  do  not  cease  to  be  a  class  of  creditors 
within  the  meaning  of  that  section  by  reason  of  the  transfer  of  the  property, 
which  is  the  subject  of  their  security,  to  somebody  else.  I  cannot  appreciate  oi'- 
realize  the  meaning  of  that  argument.  It  seems  to  me,  therefore,  the  case  is 
plainly  one  in  which  it  is  competent  for  there  to  be  a  scheme  which  the  court 
can  approve,  if  it  does  approve  of  it,  notwithstanding  that  circumstance  of  the 
transfer  of  the  equity  of  redemption.  Then,  that  being  so,  it  is  said  that  if  it 
could  be  done,  still,  the  property  being  transferred  to  another  company,  what 
you  are  going  to  give  us  now  under  this  scheme,  is  a  mere  debenture  of  another 
company  in  lieu  of  an  existing  debenture  upon  this  company,  which  debenture  of 
this  company  is  secured  by  the  security  of  a  trust  deed,  and  that  is  not  a  thing 
within  the  scope  and  power  of  any  scheme  to  l^e  made  under  the  provisions  of 
the  Act  of  Parliament.  But  there  is  nothing  in  that  clause  authorising  the 
scheme  which  says  that  the  siibstituted  liability  of  another  company  for  the 
liability  of  the  company  being  wound  up  shall  not  be  sufficient  for  the  purpose 
of  complying  with  and  being  within  the  scope  and  operation  of  a  scheme  of 
arrangement  within  the  provisions  of  the  Act.  Therefore,  I  do  not  see  that 
unless  it  were  made  out,  as  it  might  no  doubt  be  made  out,  that  the  scheme  was 
not  a  bondj  fide  one,  that  it  was  one  entered  into  and  sanctioned  by  a  majority 
for  a  dishonest  and  unfair  purpose,  that  the  vote  did  not  record  the  intei'ests  of 
the  required  majority,  that  there  were  adverse  or  other  interests  in  favour  of  it, 
against  their  being  considered  the  fair  interests  of  the  class — unless  that  were 
made  out,  I  do  not  see  why  the  substituted  debenture  should  not  be  quite  suffi- 
cient for  the  purpose  of  supporting  this  scheme." 

His  lordshijD  then  proceeded  to  consider  the  contention  that  the  majority  was 
not  acting  bond  fide,  and  on  the  evidence  came  to  the  conclusion  that  there  was 
no  foundation  for  that  contention.  Accordingly  the  motion  was  disuussed  with 
costs.  From  this  order  there  was  an  appeal,  but  the  Court  of  Appeal  held  that 
the  scheme  was  within  the  j^rovisions  of  the  Act,  and  (4  August,  1879)  affirmed 
the  order  with  costs  to  be  paid  by  the  appellants. 


For  order  directing  meeting  to  be  convened  to  consider  scheme  embodied  in    yorm  748 
deed,  and  "  that  an  advertisement  convening  such  meeting,  and  stating  that     - 
siich  deed  can  be  seen  at  tha  office  of  the  applicants'  solicitors,  and  copies  of  it 
procured,  be  inserted  once  in  each  of  the  following  jiapers,  namely,  London 
Gazette,  Times,  Standard  [and  txco  local  'pax>ers\,  and  that  in  addition  to  such 
advertisement,  a  circular  letter  be  addressed  to  all  the  known  unsecured  ore- 


608 


ARPvAXGEMENTS. 


Form  748.    ditors  of  the  CO.,  and  S.  [one  of  the  applicanis']  to  be  chairman  and  report  result : 
see  Richards  cf  Co.,  Fry,  J.,  21  May,  1878.     B.  964. 


Form  749.        In  the  case  of  the  Wedgwood  Coal  and  Iron  Company,  Limited,  the  following 
form  of  advertisement  was  used. 

In  the  High  Court  of  Justice,  Chancery  Division.  Vice-Chancellor  Malins. 
In  the  matter,  &c.  Notice  is  hereby  given  that  the  Vice-Chancellor  Malins  has 
directed  a  meeting  of  the  debenture  holders  of  the  above-named  company  to 
be  summoned  pursuant  to  the  above-named  statutes,  for  the  purpose  of  ascer- 
taining their  wishes  as  to  the  scheme  (a  print  whereof  initialed  Ijy  Mr.  F.  C. 
can  be  inspected  at  the  office  of  the  liquidator  as  below)  for  reconstruction  of 
the  said  company,  and  that  such  meeting  will  be  held  on  Thursday  the  18th  day 

of  December,  1879,  at  two  of  the  clock  in  the  afternoon  at  the  Coffee 

House,  Gresham  Street,  in  the  city  of  London,  at  which  time  and  place  all  the 
debenture  holders  of  the  company  are  requested  to  attend.  The  said  judge  has 
appointed  Mr.  F.  B.  S.  of  • — • —  Cannon  Street,  in  the  city  of  London,  public 
accountant,  the  liquidator  of  the  above  named  company,  to  act  as  chairman  of 
such  meeting. 

Dated  this  5th  day  of  December,  1879. 

F.  B.  S.,  Liquidator, Cannon  Street, 

London,  E.C. 

Proposed  resolution  to  lie  put  to  the  meeting  of  debenture  holders,  to  be  held 

on  the  18th  December,  1879,  at  the Coffee  House,  Gresham  Street,  in  the 

city  of  London. 

Eesolved — That  the  debenture  holders  of  the  above-named  Wedgwood  Coal 
and  Iron  Company,  Limited,  do  hereby  approve  and  adopt  the  scheme  for  the 
reconstruction  of  the  above-named  company,  a  print  of  which  is  hereto  annexed, 
and  that  an  application  be  forthwith  made  to  the  Chancery  Division  of  the 
High  Court  of  Justice  for  its  sanction  to  the  said  scheme. 

N.B. — The  debenture  holders  will  not  be  entitled  to  vote  unless  they  produce 
to  the  liquidator  their  debentures  before  or  at  the  meeting. 

F.  B.  S. 


SPECIAL    ACTS. 


INTEODUCTOEY    NOTES. 

Companies  incorporated  under  the  Companies  Act,  18G2,  occasion-  Application  by 
ally  find  it  necessary  to  apply  for  Special  Acts  of  Parliament.  under  the  Act 

Of  those  which  so  apply  a  considerable  number  are  companies  formed  of  1862. 
to  carry  on  gas  or  water  works,  for  such  companies  generally  require 
parliamentary  powers  in  order  to  caiiy  on  business  in  the  most  effective 
manner,  and  although  in  some  cases  a  provisional  order  of  the  Board  of 
Trade,  made  mider  the  Gas  and  Water  Facilities  Acts  [st/p'a,  p.  105], 
and  duly  confirmed  by  Parliament,  may  be  sufficient ;  there  are  many 
cases  where  such  an  order  cannot  be  obtained  or  where  an  application  to 
Parliament  in  the  ordinary  way  is  deemed  preferable. 

But  application  by  companies  other  than  gas  and  water,  arc  hj  no  Instance.s. 
means  uncommon,  especially  in  the  following  cases  : 

(a.)  Where  it  is  desired  to  obtain  compulsory  powers  for  the  acquisi- 
tion of  land  or  power  to  acquire  land  from  persons  who  can 
only  sell  under  the  Lands  Clauses  Consolidation  Act,  1845. 
See  Forms  738,  739,  740,  infra, 
{b.)  Where  it  is  desired  to  obtain  general  powers  to  open  roads  and 

streets,  e.g.,  for  the  purpose  of  laying  tubes,  pipes,  or  wires. 
(c.)  Where  a  company  desires  to  acquire   special  privileges,  e.g.,  an 
exclusive  right  to  establisli  a  market  or  a  corn  exchange.     See 
Form  640a,  infra, 
(d.)  Where  a  company  desires  to  obtain  an  extension  of  its  objects. 

See  Forms  (!41  and  G42,  infra, 
(e.)  Where  a  company  desires  to  create  preference  shares  ranking  in 
priority  to  existing  preference  shares,  or  to  issue  debeutm-es 
ranking  in  priority  to  existing  debentures,  and  is  unable  to  do 
it  except  with  the  authority  of  Parhament.     See  Forms  740, 
74C. 
(/.)  Where  a  company  desires  to  capitalize  arrears  of  preference  divi- 
dend, or  to  obtain  power  to  reduce  its  capital  without  proceed- 
ing under  the  Acts  of  1867  and  1877.     See  Form  743,  744. 
(g.)  Where  two  or  more  companies  desire   to  amalgamate  without 

winding  up.     See  Forms  743,  744, 
Where  a  company  incorporated  under  the  Act  of  1802  applies  to  Re-iucor- 
Parliament  for  a  private  Act  it  is  very  common  to  take  the  opportunity  i'o™ti°"- 
of  procuring  the  dissolution  of  the  company  and  the  re-incoriooratiou  of 

K  R 


610 


SPECIAL  ACTS. 


As  to  injunc- 
tions restrain- 
ing applica- 
tions. 


As  to  injune 
tions  to 
restrain  appli- 
cation of 
company's 
funds  in  jiro- 
moting  bill. 


its  members  as  a  company  subject  to  the  provisioDS  of  the  Companies 
Clauses  ConsoHclation  Act,  1845.     See  Forms  750,  751,  infra. 

By  this  means  the  company,  among  other  advantages,  gets  rid  of  the 
word  "  limited  "  as  part  of  its  name,  ceases  to  be  liable  to  make  the 
retmms  required  by  the  Act  of  1862,  and  obtains  the  credit  attaching  to 
a  company  incorporated  by  special  Act  of  Parliament.  It  must,  however, 
be  borne  in  mind  that  in  becoming  subject  to  the  Act  of  1845  the  com- 
pany loses  much  of  the  freedom  which  a  company  subject  to  the  Act  of 
1862  enjoys  :  its  power  to  increase  its  capital  at  pleasure  is  lost ;  its 
powers  of  borrowing  are  strictly  limited,  and  its  regulations  are  only 
alterable  by  Parliament.  As  already  mentioned  \_sirpra,  j).  88],  some 
companies  are  formed  expressly  with  a  view  to  applying  to  Parliament 
for  an  Act  of  dissolution  and  re-incorporation. 

"Where  an  apj)lication  to  Parliament  is  contemplated  it  must  be  con- . 
sidered  whether  there  is  any  danger  of  the  application  being  impeded 
by  injunction.  Primd  facie  every  person  (including  a  company)  has  a 
right  to  apply  to  Parliament  upon  any  subject  he  pleases,  but  the  High 
Court  of  Justice,  by  virtue  of  the  jurisdiction  m  personam  inherited  by 
it  from  the  Court  of  Chancery,  can  in  a  proper  case  restrain  a  person 
from  making  or  proceeding  with  an  application  to  Parliament.  Never- 
theless to  justify  such  an  interference  a  very  special  case  must  be  made 
out,  and  it  has  been  said  that  it  is  difficult  to  conceive  or  define  what 
are  the  cases  in  which  it  will  be  proper  for  the  Court  to  exercise  the 
jurisdiction.  See  further  Steele  v.  North  Metropolitan  Ry.  Co.,  2  Ch. 
237 ;  In  re  London,  Chatham  and  Dover  Co.,  5  Ch,  671  ;  Telford  v. 
Metropolitan  Bd.  of  Works,  13  Eq.  575.  In  these  circumstances  there  is 
rarely  any  danger  of  an  inj miction  being  granted  to  restrain  the  applica- 
tion. 

Although  however  the  Court  will  not,  except  as  before  mentioned, 
restrain  a  company  from  applying  to  Parliament,  it  will,  even  at  the 
instance  of  a  single  dissentient  member,  restrain  the  application  of  the 
funds  of  a  company  in  defraying  the  expenses  of  obtaining  an  Act  alter- 
ing in  any  way  the  constitution  of  the  company.  Munt  v.  Shrewsbury 
and  Chester  Bail.  Co.,  13  Beav.  1  ;  Simpson  v.  Denison,  10  Ha.  51  ; 
Vance  v.  East  Lane.  Rail.  Co.,  3  K.  «fc  J.  50  ;  Mathias  v,  Wilts  and 
Berks  Canal  Co.,  W.  N.  1880,  91  ;  Caledonian  Co.  v.  Solivay  Junction 
Co.,  32  W.  E.  173  ;  49  L.  T.  526.  In  the  case  last  mentioned  the 
Court  refused  to  restrain  the  company  from  applying  to  Parliament,  but 
the  company  had  to  give  an  undertaking  not  to  apply  any  of  its  funds 
in  promoting  the  bill. 

Accordingly  if  with  the  approval  of  the  majority  of  the  members  the 
company's  name  is  to  be  used  in  applying  to  Parliament  for  an  Act  to 
alter  the  constitution  of  the  company,  those  who  use  it  must  be  prepared 
themselves  to  undertake  the  expenses.  If  the  bill  becomes  law  the  usual 
[infra,  p.  621]  clause  will  have  been  inserted  requiring  the  company  to 
pay  the  expenses,  but  if  it  does  not  become  law  the  expenses  cannot  be 
paid  out  of  the  company's  funds.     The  directors  very  commonly  under- 


INTEODUCTOEY   NOTES.  Oil 

take  the  risk  in  such  a  case,  or  if  necessary  a  guarantee  fund  is  sub- 
scribed by  those  members  who  support  the  application. 

Of  course  the  Court  will  not  restrain  the  application  of  the  funds  in  Power  ia 
promoting  such  a  bill  where  the  memorandum  of  association  of  the  com-  ™^'"°''^"  ""^• 
pany  gives  the  requisite  power.  See  supra,  p.  88.  And  this  being  so 
it  is  desirable,  where  a  company  is  to  be  registered  under  the  Act  of 
1862  and  an  application  to  Parliament  is  in  contemplation,  or  is  even 
remotely  probable,  to  give  ample  powers  by  the  memorandum  of  associa- 
tion. 

The  procedure  in  regard  to  private  bills  is  described  in  Sir  Thomas  Procedure  in 
Erskine  May's  work  on  Parliamentary  Practice,  where  full  information  Parliament, 
on  the  subject  will   be  found.     It  may  however  be  convenient  here  to 
give  a  brief  outline  of  the  procedure  in  the  case  of  a  bill  promoted  by  a 
company  registered  under  the  Act  of  18G2,  and  in  so  doing  the  wiiter 
begs  to  acknowledge  his  obligations  to  the  work  above  referred  to. 

AVhere  it  is  desired  to  obtain  a  private  Act  it  is  necessary  to  comply  Preliminaiy 
with  certain  preliminary  conditions  imposed  by  the  standing  orders  of  '^^^  '  ^'^^^' 
each  of  the  Houses  of  Parliament,  for  although  indulgence  is  sometimes 
granted  where  these  orders  have  not  been  complied  with,  it  is  only  to  be 
obtained  in  special  cases. 

The  following  are  short  particulars  of  some  of  the  principal  standing 
orders  which  a  company  applying  for  an  Act  has  to  comply  with  : — 
(«.)  Where  it  is  intended  to  apply  for  leave  to  bring  in  a  bill  for  in- 
coi-porating,  regulating,  or  giving  powers  to  a  company,  and 
also  in  most  other  cases  where  bills  are  proinoted  by  companies 
formed  under  the  Act  of  18G2,  notices  containing  the  prescribed 
particulars  have  to  be  advertised  in  the  Gazette  and  sometimes 
in  local  papers  in  the  months  of  October  or  November  imme- 
diately preceding  the  application  for  the  bill. 
(&.)  On  or  before  the  15th  of  December  immediately  preceding  the 
application  for  a  bill  by  which  any  lands  or  houses  are  intended 
to  be  taken,  and  also  in  certain  other  cases,  application  in  writ- 
ing has  to  be  made  to  the  owners,  lessees  and  occupiers  in  the 
prescribed  manner,  and  lists  of  such  persons  containing  various 
particulars  must  be  made  out. 
(f.)  In  certain  cases,  e.g.,  where  any  lands  or  houses  are  intended  to 
be  taken,  plans,  books  of  reference  and  sections  have  to  be  de- 
posited with  the  Clerk  of  the  Peace  for  the  county  on  or  before 
the  30th  of  November  immediately  preceding  the  application 
for  the  bill. 
{d.)  On  or  before  the  21st  of  December  the  petition  for  leave  to  bring 
in  the  bill  with  a  declaration  in  the  prescribed  form  and  a 
printed  copy  of  the  bill  annexed  must  be  deposited  in  the  pri- 
vate bill  office.  The  petition  should  be  superscribed  "  To  the 
honourable  the  Commons  of  the  United  Kingdom  of  Great 
Britain  and  Ireland  in  Parliament  assembled,"  and  in  the  case 
of  a  company  must  be  under  its  common  seal. 

R  B  2 


6J3 


SPECIAL    ACTS. 


Memorials 

where 

Standing 

Orders  not 

complied 

with. 

Examination. 


Presentation 
ol'  the  petition. 


First  rcadin:r. 


{e.)  On  or  before  the  Slst  of  December  the  estimates,  declarationB, 
and  lists  of  owners,  lessees  and  occupiers  which  are  required  in 
certain  cases  must  be  deposited. 
(/.)  As  respects  bills  for  the  incorporation  of  joint  stock  companies, 
certain  other  documents  must  be  deposited  on  or  before  Hist 
December. 
"When  the  time  for  depositin<>-  documents   and  complying  with  the 
other  preliminary  conditions  has  expired,  persons  who  desire  to  oppose 
the  bill  can  deposit  in  the  private  bill  ofhce  memorials  complaining  of 
non-compliance  with  any  of  the  standing  orders. 

In  due  course  the  petitiDU  comes  on  for  examination.  The  examina- 
tion is  made  by  one  of  the  Examiners.  These  persons  are  officers  of 
the  House  of  Commons  and  as  such  are  called  "  The  Examiners  of 
Petitions  for  Private  Bills,"  and  they  are  also  officers  of  the  House  of 
Lords,  and  as  such  are  called"  The  Examiners  of  Standing  Orders  for 
Private  Bills,"  and  accordingly  the  examiner  ascertains  on  behalf  of  each 
House  whether  the  standing  orders  of  that  House  have  been  com- 
plied with  by  the  promoters  of  the  bill.  The  examination  of  petitions 
commences  on  and  after  18th  January. 

Upon  the  examination  the  petitioners  and  the  memorialists  (if  any) 
will  be  heard,  and  the  examiner  having  given  his  decision  certifies  by 
indorsement  on  the  petition  whether  the  standing  orders  have  or  have 
not  been  complied  with. 

The  next  step  is  to  present  the  petition  to  the  House  :  this  must  be 
done  by  a  member,  and  if  the  standing  orders  have  been  complied 
with,  the  bill  is  at  once  ordered  to  be  brought  in.  If  the  standing- 
orders  have  not  been  complied  with,  the  petition  will  be  referred  to 
the  Standing  Orders  Committee,  Avho  will  consider  the  circumstances, 
and  if  they  report  that  indulgence  should  be  granted,  either  condi- 
tionally or  unconditionally,  liberty  will  be  given  to  bring  in  the  bill 
accordingly. 

The  bill  is  presented  by  being  deposited  in  the  private  bill  office,  and 
the  names  of  the  members  ordered  to  prepare  and  bring  in  the  bill  are 
printed  on  the  back. 

The  bill  when  brought  in  mil  be  read  a  first  time,  and  will  then,  if 
necessary,  lie  referred  to  the  examiner  in  accordance  with  the  following 
standing  order  (G3)  of  the  House  of  Commons  : — 

Every  bill  originating  in  this  House,  and  empowering  or  requii-ing  any 
company  ....  formed  or  registered  under  ttie  Companies  Act,  1862,  .... 
to  do  any  act  not  authorised  by  the  memorandum  and  articles  of  association  of 
such  company  ....  shall,  after  the  first  reading  thereof,  be  referred  to  the 
examiners,  who  shall  report  as  to  compliance  or  non-compliance  with  the  fol- 
lowing order : — 

In  the  case  of  a  company  formed  or  registered  under  the  Companies  Act, 
1862  :  The  bill,  as  introduced  or  jn'oposed  to  be  introduced  in  this  House,  shall 
be  approved  by  a  special  resolution  of  the  company. 


A  copy  of  such  special  resolution 
Bill  Office. 


shall  be  deposited  in  the  Pi-ivate 


INTEODUCTORY    NOTES.  613 

The  special  resolution  required  by   this   standing  order   is   usually  When  special 
passed  in  the  month  of  November  or  December  immediately  preceding  [,^„°a"iy "" 
the  application,  and  is  in  most  cases  as  follows  :  passed. 

"  That  the  bill  submitted  to  this  meeting,  intituled  '  A  bill  intituled  an  Act 
to,  &c./  be  and  the  same  is  hereby  approved,  subject  to  such  additions,  altera- 
tions, or  variations  as  Parliament  may  thiuk  iit  to  make  therein  and  the  direc- 
tors shall  sanction." 

Standing  Order  75  of  the  House  of  Commons  provides  that —  What  members 

entitled  to  be 

In  case  any  propietor,  shareholder,  or  member  of  or  in  any  company beard  by 

shall  by  himself  or  any  person  authorised  to  act  for  him  in  that  behalf,  have  examiner, 
dissented  at  any  meetino^  called  in  pursuance  of  Standing  Oi'ders  62  to  66,  such 
proprietor,  shareholder,  or  member  shall  be  permitted  to  be  heard  by  the  exa- 
miner of  petitions,  on  the  compliance  with  such  Standing  Order,  by  himself,  his 
agents,  or  witnesses,  on  a  memorial  addressed  to  the  examiner,  such  memorial 
having  been  duly  deposited  in  the  Private  Bill  Office. 

If  the  examiner  reports  that  the  order  has  been  complied  with,  the  Examiner's 
l)ill  will  in  due  course  be  read  a  second  time,  and  referred  to  a  com-  report. 
mittee,  who  will  hear  the  parties  interested,  and  consider  the  bill  in  ,.ff|"*    „   , 

'  i  '  reading  and 

detail.  committee. 

Persons  who  desire  to  oppose  the  bill  can  present  petitions  against  it  Opposition 
by  depositing  the  same  in  the  private  bill  oifice,  within  ten  days  after  ^°  committee, 
the  first  reading.     Sometimes  liberty  is  given  to  present  a  petition  after 
the  expiration  of  the  prescribed  period. 

AYhether  a  petitioner  is  or  is  not  entitled  to  be  heard  against  a  bill,  Lor  us  sian 
is  in  many  cases  a  question  of  great  nicety.  The  rules  on  the  subject 
will  be  found  in  May's  Parliamentary  Practice,  p.  817,  et  seq.,  and  in 
.Smethurst  on  Locus  standi,  and  it  will  be  sufficient  here  to  say  that  a 
locus  standi  is  allowed  to  owners,  lessees  and  occupiers  of  land  proposed 
to  be  compulsorily  taken,  and  also,  subject  to  various  qualifying  ruies 
and  exceptions,  to  all  persons  whose  interests  might  be  prejudiced  or 
affected  by  the  bill. 

As  regards  shareholders,  it  is  provided  by  Standing  Order  131  of  the  Loms  standi 
House  of  Commons  that :—  ^  ^  of  share- 

Jioldere. 
Where  a  bill  is  promoted  by  an  incorporated  company,  the  shareholders  of 
such  company  shall  not  be  entitled  to  be  heard  before  the  committee  against 
such  bill,  unless  their  interests,  as  affected  thereby,  shall  be  distinct  from  the 
general  interests  of  such  company. 

But  this  order  is  qualified  by  Standing  Order  132,  which  provides 
that  :— 

In  case  any  proprietor,  shareholder,  or  member  of  or  in  any  company,  asso- 
ciation, or  copartnership  shall,  by  himself  or  any  person  authorised  to  act  for 
him  in  that  behalf,  have  dissented  at  any  meeting  called  in  pursuance  of 
Standing  Orders  62  to  66,  or  at  any  meeting  called  in  jiiirsuance  of  any  similar 
standing  order  of  the  House  of  Lords,  such  proprietor,  shareholder,  or  member 
shall  be  permitted  to  be  heard  by  the  committee  on  the  bill  on  a  petition  pre- 
sented to  the  House,  such  petition  having  been  duly  deposited  in  the  Private 
Bill  Office. 


614 


SPECIAL   ACTS. 


EefereoB. 
Committee. 


Report. 
Third  reading. 


House  of 
Lords. 


Wharncliflfe 
order. 


With  regard  to  Standing  Order  131,  it  may  be  mentioned  that  the 
holders  of  preference  shares,  or  of  stock  of  a  special  character,  are  some- 
times allowed  a  locus  standi  on  the  ground  that  their  interests  are 
distinct. 

All  questions  of  locus  standi  are  decided  by  the  Court  of  Referees. 

"With  regard  to  the  committee  : 

It  lies  with  the  promoters  to  prove  to  the  satisfaction  of  the  com- 
mittee the  preamble  and  the  propriety  of  the  provisions  contained  in 
the  bill.  The  promoters  of  the  bill  and  such  of  the  petitioners  (if  any) 
against  it  as  have  been  allow^ed  a  locus  standi  will  be  heard  by  their 
counsel  or  agents ;  if  necessary,  witnesses  will  be  examined  and  cross- 
examined  ;  and  if  requisite,  amendments  will  be  made.  In  due  course 
the  committee  will  report  the  bill  to  the  House. 

The  bill  subsequently  comes  on  for  third  reading,  preparatory  to  its 
being  sent  to  the  House  of  Lords.  When  the  bill  has  been  read  a 
third  time  it  goes  to  the  House  of  Lords,  and  after  being  read  there  a 
first  time,  it  is  referred  to  the  Standing  Orders  Committee,  before  whom 
compliance  witli  such  standing  orders  as  have  not  been  previously 
inquired  into,  is  proved.  At  this  stage  also,  Standing  Order  65  of  the 
House  of  Lords  must  be  borne  in  mind.     It  is  as  follows  : 


In  the  case  of  every  bill  brought  from  the  House  of  Commons^  iu  which  pro- 
visions have  been  inserted  in  that  House  empowering  or  requiring  any  company 
....  formed  or  registered,  under  the  Companies  Act,  1862,  ....  to  do  any 
act  not  authorised  by  the  memorandum  and  articles  of  association  ....  the 
examiner  shall  report  as  to  compliance  and  non-compliance  with  the  following- 
requirements  : — 

In  the  case  of  a  company  formed  or  registered  under  the  Companies  Act, 
1862,  the  bill,  as  iiitroduced  or  proposed  to  be  introduced  into  this  House,  shall 
be  approved  by  a  special  resolution  of  the  company. 

A  copy  of  such  special  resolution  ....  shall  be  deposited  in  the  office  of  the 
Clerk  of  Parliaments.  Provided  always  that  if  by  the  terms  of  such  special 
resolution  the  bill  ....  as  introduced  or  proposed  to  be  introduced  into  the 
House  of  Commons,  shall  have  been  approved  ....  subject  to  such  additions, 
alterations,  and  variations  as  Parliament  may  think  fit  to  make  therein,  then 
it  shall  not  be  necessary  for  the  purposes  of  this  order  to  obtain  any  further 
approval  or  consent  in  respect  of  any  provisions  inserted  in  the  bill  in  the 
House  of  Lords :  Provided,  nevertheless,  that  it  shall  be  competent  for  the 
committee  on  the  bill,  if  they  think  fit,  having  regard  to  the  nature  and  effect 
of  such  provisions,  to  require  any  further  evidence  of  the  approval  and  consent 
to  such  provisions  on  the  part  of  the  shareholders  or  members  of  the  com- 
pany  


In  most  cases  the  special  resolution  having  been  passed  as  above 
[p.  filS],  a  second  special  resolution  is  not  necessary  under  the  above 
order,  but  when,  for  any  reason,  such  a  resolution  is  necessary,  it  is 
usually  passed  immediately  after  the  third  reading  of  the  bill  in  the 
House  of  Commons. 

There  is  a  standing  order  of  the  House  of  Lords  similar  to  Order  75 
of    the    House  of  Commons,  supra,   j).  013,    under   which   dissentient 


INTEODUCTORY  NOTES.  615 

members  will  be  heard  by  the  examiner  as  to  compliance  with  the  above 
order. 

When  the  examiner  has  certified  comphance  with  Order  65,  tlie  1)ill 
will  come  on  in  due  course  for  the  second  reading,  and  if  read  a  second  Second 
time,  will  be  referred  to  a  committee  which,  in  the  case  of  an  opposed  'heading, 
bill,  consists  of  five  members. 

The  committee  examines  the  provisions  of  the  bill,  makes  amend-  Committee. 
]nents,  and  hears,  by  their  counsel  or  agents,  the  parties  interested. 

Every  petition  praying  to  be  heard  against  the  bill  is  to  be  presented 
by  being  deposited  in  the  private  bill  office  within  seven  days  after  the 
day  on  which  the  bill  has  been  read  a  second  time.  A  petitioner  who 
has  not  opposed  in  the  other  House  is  not  thereby  precluded  from 
opposing  the  bill  in  the  House  of  Lords.  There  is  a  standing  order  of 
the  House  of  Lords  (10.5),  similar  to  Standing  Order  132  of  the  House 
of  Commons,  supra,  p.  613.  And,  accordingly,  any  dissentient  member 
of  the  company  will  be  heard  by  the  committee. 

In  due  course  the  committee  will  report  the  bill  to  the  House,  and 
having  been  read  a  third  time  and  passed,  it  will  either  be  returned  to  Third  reading, 
the  Commons  with   amendments,  or   a  message  will   be  sent   to   the 
Commons  that  it  has  been  agreed  to  without  amendment. 

Shortly  after  the  bill  has  been  agreed  to  by  both  Houses,  the  royal  Royal  assent, 
assent  will  be  given,  and  thereupon  the  bill  becomes  an  Act  of  Parlia- 
ment. 

Lastly,  it  may  here  be  observed,  that  in  the  foregoing  outline  of 
procedure,  it  has  been  assumed  that  the  bill  originates  in  the  House  of 
Commons. 

The  following  forms  are  given  as  examples  of  some  of  the  different  As  to  the 
kinds  of  Special  Acts  which  companies  formed  under  the  Act  of  1862  °™'^' 
from  time  to  time  obtain. 


SPECIAL  ACTS, 


The  Portishead  District  Water  Act,   1875. 
Form  750.  Ad  dissolving  and  re-incorporatimj  a  water-works  co  formed  under  tM 

Reconstruction  -^^^  ^f  1862. 

Act. 

Acts  such  as  this  are  frequently  obtained  by  water,  gas,  and  other  companies. 

See  further,  swpra,  p.  88. 

Recitals.  Whas  in  the  year   1874  certain  persons  formed  themselves  into  a 

Water  Co  under  the  name  of  The  Portishead  District  Waterworks  Co 
(Limtd),  in  this  Act  called  "  the  limtd  co,"  for  the  ppose  of  supplying 
water  to  and  within  the  parishes,  townships,  and  extra-parochial  and 
other  places  of  Portishead,  &c.,  in  the  county  of  Somerset,  and  such 
CO  was  duly  registered  under  "The  Companies  Act,  1862  :" 

And  whas  the  present  share  capital  of  the  limtd  co  consists  of  32,000?., 
divided  into  3,200  shares  of  10?.  each,  and  the  co  have  not  borrowed 
any  money  on  mtge  : 

And  whas  it  is  expedient  that  the  limtd  co  should  be  dissolved  and 
re-incorporated,  and  that  the  co  so  to  be  incorporated  (in  this  Act 
called  "  the  co  ")  be  authorised  to  supply  with  water  the  parishes  and 
places  afsd,  and  to  make  and  maintain  the  reservoir  and  other  works 
hereinafter  mentd,  and  that  other  powers  be  given  and  provisions  made 
with  respect  to  their  undertaking  : 

And  whas  plans  and  sections  showing  the  lines  and  levels  of  the 
reservoir  authorised  by  this  Act,  and  also  books  of  reference  containing 
the  names  of  the  owners  and  lessees,  or  reputed  owners  and  lessees,  and 
of  the  occupiers  of  the  lands  required  or  which  may  be  taken  for  the 
pposes  or  under  the  powers  of  this  Act,  were  duly  deposited  with  the 
clerk  of  the  peace  for  the  county  of  Somerset,  and  are  hereinafter 
respively  referred  to  as  the  deposited  plans,  sections,  and  books  of 
reference  : 

And  whas  the  objects  afsd  cannot  be  efiected  without  the  authority 
of  Parliamt : 

May  it  therefore  please  your  Majesty  that  it  may  be  enacted  ;  and  be 
it  enacted  by  the  Queen's  most  Excellent  Majesty,  by  and  with  the 
advice  and  consent  of  the  Lords  Spiritual  and  Temporal,  and  Commons, 
in  this  present  Parhamt  assembled,  and  by  the  authority  of  the  same, 
us  follows  ;  (that  is  to  say,) 


FOEMS. 


G17 


1.  This  Act  may  be  cited  as   the  Portislicad  District  Water  Act,  Form  750. 

^^'^^'-  .  Short  title. 

2.  "The  Companies  Chiuses  Consolidation  Act,  1845,"  Parts  I.,  II.,  provisions  of 
and  III.  of  "The  Companies  Clauses  Act,  1803,"  "The  Lands  Clauses  certain 
Consolidation  Acts,  1845, 18(J(»,  and  18(i0,"  and  "  The  "Waterworks  Clauses  incorporated. 
Acts,  1847  and  1803,"  are  (except  where  expressly  varied  by  this  Act) 
incorporated  with  and  form  part  of  this  Act. 

3.  In  this  Act  the  several  words  and  expressions  to  which  meanings  interpretation 
are  assigned  by  the  Acts  wholly  or  partially  incorporated  herewith  have  '^^  term?. 
the  same  respive  meanings,  unless  there  be  something  in  the  subject 

or  context  repugnant  to  such  construction  :  the  expression  "  Ct  of 
competent  jurisdiction,"  or  any  other  like  expression  in  this  Act  or  any 
Act  incorporated  herewith,  shall  be  read  and  have  effect  as  if  the  debt 
or  demand  with  respect  to  which  the  expression  is  used  were  a  common 
simple  contract  debt,  and  not  a  debt  or  demand  created  by  statute  ;  and 
the  expression  "  superior  Cts  "  shall  include  county  Cts  in  all  cases  where 
the  amount  of  the  debt  or  demand  is  within  the  jurisdiction  for  the 
time  being  of  county  Cts. 

4.  The  limits  of  this  Act   shall  l)e  the  parishes,  townships,   extra-  Limits  of  Act, 
parochial  and  other  places  of,  &c.,  in  the  county  of  Somerset. 

5.  From  and    after  the  passing  of  this  Act  the  hmtd  co  shall  be  Incorporation 
dissolved,  and  the  several  persons  and  corporations  who  immediately     ^*'"^P^'^>  • 
before  the  passing  of  this  Act  were  members  of  that  co  and  all  other 

persons  and  corporations  who  have  subscribed  to  or  who  shall  hereafter 
become  proprietors  in  the  undertaking  of  the  co,  and  their  exs,  ads, 
successors,  and  assigns  respively,  shall  be  and  they  are  hby  united 
into  a  CO  for  the  ppose  hereinafter  mentd,  and  shall  be  incorporated  by 
the  name  of  the  Portishead  District  Water  Co,  and  by  that  name  shall 
be  a  body  coi'porate,  with  peii^etual  succession  and  a  common  seal,  mth 
power  to  pchase,  take,  hold,  and  dispose  of  land  and  other  ppty  for  the 
pposes  of  this  Act. 

6.  The  CO  shall  be  established  for  the  ppose  of  maintaining  and  from  General  pui-- 

time  to  time  renewing,  extending,  and  enlarging  the  existing  works  of  po^esof  the 
°  °  c     c  n  company. 

the  limtd  co,  and  for  making  and  maintaining  the  reservoir  and  works 
by  this  Act  authorised,  and  for  supplying  Avater  by  meter  or  othenvise 
to  and  within  the  limits  of  this  Act,  and  for  selling  or  letting  on  hire 
meters  and  other  materials  necessary  or  desirable  for  such  supply,  and 
for  other  the  pposes  of  this  Act. 

7.  Subject  to  the  provisions  of  this  Act,  all  the  undertaking,  lands,  Present  pro- 
works,   erections,   buildings,   rights,   and   easemts   which   immediately  \^.^^^  ^^ 

„     '  -p,..  T-ii-T  limited  corn- 

before  the  passing  of  this  Act  were  vested  m  the  limtd  co  or  any  person  pany  vested 

in  trust  for  them,  or  to  which  the  limtd  co  were  in  anywise  entled, '°  company 

..  'ii-  incorporated 

and  all  mams,  pipes,  plant,  stock,  meters,  eiiects,  matters,  and  things  by  this  Act. 
which  have  been  by  them  pchsed,  provided,  laid  down,  or  erected,  or 
which  immediately  before  the  passing  of  this  Act  were  the  ppty  of  the 
limtd  CO,  and  all  moneys,  securities,   credits,  eflTects,  and  other  ppty 
whatsoever  which  immediately  before  the  passing  of  this  Act  belonged 


618  SPECIAL    ACTS. 

Porm  750.  to  the  limtd  co  or  to  any  trustee  ou  their  behalf,  and  tlie  benefit  of  all 

contracts  and  engagemts  entered  into  by  or  on  behalf  of  the  limtd  co, 

and  immediately  before  the  passing  of  this  Act  in  force,  shall  be  and 

the  same  are  hby  vested  in  the  co  to  the  same  extent  and  for  the  same 

estate  and  interest  as  the  same  were  previously  to  the  passing  of  this 

Act  vested  in  the  limtd  co  or  any  trustee  on  their  behalf,   and  may 

according  to  the  provisions  of  this  Act  be  held  and  enjoyed,  sued  for 

and  recovered,  maintained,  altei'od,  discontinued,  removed,  dealt  with, 

and  disposed  of  by  the  co  as  they  think  fit. 

Memorandum        8.  Subject  to  the  provisions  of  this  Act,  the  memorandum  and  articles 

^"s  1  ti  n'^of*  ^^  association  of  the  limtd  co  shall,  as  to  any   prospective   operation 

tlic  limited       thereof,    be   wholly  void,   and   the  co   and  the  shareholders  shall   be 

be"votd^wit]i-  ^^G^^pted  fi'om  all  the  provisions,  restrictions,  and  requiremts  of  any  Act 

out  prejudice    which  applied  to  the  limtd  co  and  the  members  thereof  as  such,  but 

HntecedenT  *' "^  nothing  in  this  Act  contd  shall  release  or  discharge  any  person  from  any 

breaches  liability  or  obligation  in  respect  of  any  breach  of  the  provisions  of  the  sd 

thereot  memorandum  or  articles  of  association  incurred  before  the  passing  of  this 

Act,  but  such  liability  or  obligation  in  respect  of  any  such  breach  shall 

continue,  and,  save  as  in  this  Act  otherwise  provided,  may  be  enforced 

by  or  on  behalf  of  the  co  as  nearly  as  may  be  in  like  manner  as  the  same 

might  have  been  enforced  by  or  on  behalf  of  the  limtd  co  if  this  Act  had 

not  been  passed. 

Nothing  to  f).  Except  as  is  by  this  Act  otherwise  expressly  provided,  everything 

lights  and        before  the  passing  of  this  Act  done  or  suffered  by  or  with  reference  to 

liabilities.         the  limtd  CO,  or  the  members  thereof  as  such,  shall  be  as  valid  as  if  the 

CO  had  not  been  incorporated,  and  the  sd  memorandum  and  articles  of 

association  had  not  been  avoided  by  this  Act,  and  such  incorporation 

and  avoidance  and  this  Act  respively  shall  accordingly  be  subject  and 

without  prejudice  to  everything  so  done  or  suffered,  and  to  all  rights, 

liabilities,  claims,  and  demands,  both  present  and  future,  which,  if  the 

CO  were   not   incorporated,   and   the   sd  memorandum  and  articles  of 

association  were  not  avoided  by  this  Act,  and  this  Act  were  not  passed, 

would  be  incident  to  or  consequent  on  any  and  every  thing  so  done  or 

suffered,  and  with  respect  to   all   such   rights,  liabilities,  claims,  and 

demands,  the  co  and  its  shareholders  and  ppty  shall  to  all  intents  and 

pposes  represent  the  limtd  co  and  the  members  thereof  as  such,  and  the 

ppty  of  the  limtd  co,  as  the  case  may  be,  and  the  generality  of  this 

enactmt  shall  not  be  restricted  by  any  of  the  other  clauses  and  provisions 

of  this  Act. 

Contract*  10,  Except   as   is    by    this   Act    otherwise    specially    provided,    all 

prior  to  Act  to        ,  ,  .  i      i  j^        .      i        i 

be  binding.       pchases,  sales,  conveyances,  grants,  assurances,  deeds,  contracts,  bonds, 

and  agreemts  entered  into  or  made  before  the  passing  of  this  Act,  by, 

to,  or  with  the  limtd  co,  or  any  trustees  or  persons  acting  on  behalf  of 

the  limtd  co,  or  by,  to,  or  with  any  other  person  to  whose  rights  and 

liabilities  they  have  succeeded  and  now  in  force,  shall  be  as  binding  and 

(jf  as  full  force  and  effect  in  every  respect  against  or  in  favour  of  the  co, 

and  may  be  enforced  as  fully  and  effectually,  as  if,  instead  of  the  limtd 


POEMS.  619 

CO  or  the  trustees  or  persons  acting  on  behalf  of  the  limtd  co,  the  co  had  Form  750. 
been  a  party  thereto. 

11.  Nothing  in  this  Act  contd  shall  release,  discharge,  or  suspend  Actions,  &c., 
any  action,  suit,  or  other  proceeding  at  law  or  in  equity  which  was  pend-  ^'^ 

ing  by  or  against  the  limtd  co,  or  any  member  thereof,  in  relation  to  the 
affairs  of  the  limtd  co,  or  to  which  the  limtd  co,  or  any  member  thereof, 
in  relation  to  such  affairs,  were  parties  immediately  before  the  passmg  of 
this  Act ;  but  such  action,  suit,  or  other  proceeding  may  be  maintained, 
prosecuted,  or  continued  by  or  in  favour  of  or  against  the  co  (as  the  case 
may  be)  in  the  same  manner  and  as  effectually  and  advantageously  as 
the  same  might  have  been  maintained,  prosecuted,  or  continued  by  or  in 
favour  of  or  against  the  limtd  co,  or  any  member  thereof,  as  if  this  Act 
had  not  been  passed,  the  co  and  the  shareholders  therein  being  in 
reference  to  the  matters  afsd  in  all  respects  substituted  for  the  limtd  co 
and  its  members  respively. 

12.  Every  trustee  or  other  person  in  whom  or  in  whose  name  any  Trustees  of 
lands,  works,  buildings,  easemts,  rights,  ppty,  or  effects  belonging  to  the  '^y  ^^  ^e 
limtd  co  were  vested  immediately  before  the  passing  of  this  Act,  and  who  indemnified, 
(being  authorised  so  to  do)  entered  into  any  bond,  covenant,  contract,  or 
engagemt  in  respect  of  the  same,  or  otherwise,  on  behalf  of  the  limtd  co, 

shall  be  indemnified  out  of  the  funds  and  ppty  of  the  co  against  all 
liability  (including  costs,  charges,  and  expenses)  which  he  may  sustain  or 
incur  or  be  put  to  by  reason  of  his  having  entered  into  such  bond, 
covenant,  contract,  or  engagemt, 

13.  From  and  after  the  joassing  of  this  Act,  and  except  as  is  by  this  Company 
Act  otherwise  expressly  provided,  the  co  shall  in  all  respects  be  subject  ii°abmtie^  of 
to  and  shall  discharge  all  obKgations  and  liabilities  to  which  the  limtd  co,  limited  com- 
immediately  l)eforc  the  passing  of  this  Act,  were   subject,   and   shall  ^*'^"^' 
indemnify  the  members,  directors,  officers,  and  servants  of  the  limtd  co, 

and  their  respive  representatives,  from  all  such  obligations  and  liabilities, 
and  from  all  expenses  and  costs  in  that  behalf. 

14.  All  water  rates  or  rents,  meter  rents,  and  sums  of  money  which,  Recovery  of 
immediately  before  the  passing  of  this  Act,  were  due  or  accruing  to  the  ^^f^'^^  ^' 
limtd  CO,  shall  be  payable  to  and  may  be  collected  and  recovered  by  the 

co  in  like  manner  as  if  they  had  become  payable  for  the  like  matters 
supplied  or  done  under  this  Act. 

15.  All  persons  who,  inunediately  before  the  passing  of  this  Act,  owed  As  to  payment 
any  money  to  the  limtd  co,  or  to  any  person  on  their  behalf,  shall  pay  ^^^^^Yvi^^ 
the  same,  with  all  interest  (if  any)  due  or  accruing  upon  the  same,  to  the  of  Act. 

CO,  and  all  debts  and  moneys  which,  immediately  before  the  passing  of 
this  Act,  were  due  or  recoverable  from  the  limtd  co,  or  for  the  paymt  of 
which  the  limtd  co  were,  or,  but  for  this  Act,  would  be  liable,  shall  be 
pd,  with  all  interest  (if  any)  due  or  accruing  upon  the  same,  by  or  be 
recoverable  from  the  co. 

IG,  Notwithstanding    the   avoidance   of  the   sd    memorandum  and  Certificates, 
articles  of  association,  all  certificates  (until  cancelled  under  the  powers  ^°-:  *?  ^^f' 
of  this  Act),  sales,  transfers,  and  dispositions  heretofore  made  or  executed 


620 


SPECIAL    ACTS. 


Form  750. 


Books,  &c., 

continued 

evidence. 


Officers  to 
continue  until 
removed. 


Present 
registers  of 
members  to  be 
continued. 


Capital. 


Vesting  of 
old  shares  in 
present  share- 
holders. 


Company  sljall 
call  in  and 
cancel  existing 
share  certifi- 
cates and 
issue  new 
certificates  in 
lieu  thereof.' 


under  them  for  and  with  respect  to  any  shares  in  the  limtd  co  shall 
remain  in  full  force,  and  continue  and  be  available  in  all  respects  as  if 
they  had  not  been  avoided. 

17.  All  documts,  books,  and  wi'itings  which,  if  the  sd  dissolution  and 
avoidance  had  not  taken  place,  would  have  been  receivable  in  evidence, 
shall  be  admitted  as  evidence  in  all  Cts  of  law  and  equity  and  elsewhere, 
notwithstanding  such  dissolution  and  avoidance. 

18.  All  officers  and  servants  of  the  limtd  co  who  were  in  office  imme- 
diately before  the  passing  of  this  Act  shall  hold  and  enjoy  their  respive 
offices  and  employmts,  together  with  the  salaries  and  emolumts  there- 
unto annexed,  until  they  shall  resign  the  same  or  be  removed  therefrom 
by  the  co,  and  shall  be  subject  and  liable  to  the  like  conditions,  obliga- 
tions, pains,  and  penalties,  and  to  the  like  powers  of  removal,  and  to  the 
like  rules,  restrictions,  and  regulations  in  all  respects  whatsoe\er  as  if 
they  had  been  appointed  under  this  Act. 

19.  The  books  kept  by  the  limtd  co  for  entering  the  names  and  desig- 
nations of  the  members  thereof,  with  the  numbers  of  their  shares,  and 
the  proper  distinguishing  nmnber  of  such  shares,  shall  and  may  continue 
to  be  kept  for  the  same  purpose  by  the  co,  and  shall,  until  some  other 
register  of  shareholders  shall  be  provided  by  the  co,  be  taken  and  consi- 
dered as  the  register  of  shareholders  required  to  be  kept  by  the  Companies 
Clauses  Consolidation  Act,  1845. 

20.  The  capital  of  the  co  shall  be  48,000/.,  whereof  32,000/.  is  in 
this  Act  called  tlic  original  capital,  and  10,000/.  is  in  this  Act  called  the 
additional  capital,  and  shall  be  raised  in  manner  hereinafter  mentd,  and 
the  original  capital  shall  be  divided  into  3,200  shares  of  10/.  each,  which 
shares  are  in  this  Act  called  the  "  old  shares,"  and  the  co  may  convert 
into  stock  the  whole  or  any  pt  of  their  original  or  additional  capital 
when  fully  pd  up. 

21.  The  old  shares  shall  be  vested  in  the  several  persons  who  immedi- 
ately before  the  passing  oP  this  Act  were  the  registered  members  of  the 
limtd  CO,  share  for  share,  in  substitution  for  the  existing  shares  of  the 
limtd  CO,  and  every  share  so  vested  shall  be  subject  to  the  same  liability 
for  calls,  and  subject  and  liable  to  the  same  trusts,  powers,  provisions, 
declarations,  agreemts,  charges,  liens,  and  incumbrances  as  immediately 
before  the  passing  of  this  Act  aifectcd  the  share  for  which  the  same  is 
substituted,  and  so  as  to  give  effect  to  and  not  revoke  any  testamentary 
disposition  of  or  affecting  the  same. 

22.  The  CO  shall  call  in  and  cancel  the  existing  certificates  of  shares 
in  the  limtd  co,  and  issue  in  lieu  thereof  certificates  in  the  form  and 
under  the  conditions  prescribed  by  the  Companies  Clauses  Consolidation 
Act,  1845,  but  the  holders  of  such  existing  certificates  of  shares  shall 
not  be  entled  to  any  certificates  of  proprietorship  under  this  Act  until 
they  sliall  have  delivered  up  to  the  co  to  be  cancelled  the  certificates 
of  proj)rietorship  issued  to  them  before  the  passing  of  this  Act,  or  shall 
have  proved  to  the  reasonable  satisfon  of  the  co  the  loss  or  destruction 
thereof. 


FOllMS.  621 

23 — !)0.  ^^Miscdlaneuus iyrovisions.'\  Form  750. 

1)1.  All  costs,  charges,  and  expenses  of  and  incident  to  the  preparing  Expenses  of 
Tor,  obtaining,  and  passing  of  this  Act,  or  otherwise  in  relation  thereto,  Act- 
si  i  all  be  pd  by  the  co. 

The  above  Act  is  set  out  rather  fully,  becaiise  it  contains  many  of  the  common 
furm  claiises  which  are  referred  to  in  the  subsequent  forms. 

The  Brighton  Aquarium  and   Improvements  Act,  1869, 
32  &  33  Vict.  c.  88. 

Act  dissolving  and  re-incorporatiny  a  co  formed  under  llic  Act  of  1862,     Form  751. 
cind  conferring  various  jmivers.  Reconstruction 

Act.     Compal- 
This  is  another  example  of  an  Act  for   the   reconstruction   of   a  company  sory  powers, 
formed  under  the  Act  of  1862.     This  Act  may  be  compared  with  that  of  the 
Scarborough  Aquarium  Company  [38  &  .39  A'ict.  c.  149],  in  which  case  the  neces- 
•sary  powers  were  obtained  without  re-incorporating  the  company. 

The  Act  recites  (1)  that  the  construction  of  a  marine  aquarium  on  a 
large  scale  would  be  of  considerable  public  utility,  as  well  as  afford  an 
agreeable  resort  and  place  of  recreation  to  the  inhabitants  of  and  visitors 
to  Brighton  ;  and  the  registration  of  Tlic  Brighton  Marine  Aquarium 
Co,  Limtd,  in  1868,  pursuant  to  the  Act  of  18G2  :  (2)  that  it  is  expe- 
dient that  the  co  should  be  authorised  to  construct  a  new  road  and  sea 
wall  from  the  eastern  end  of  the  Grand  Junction  Road  at  Brighton  to 
the  north  end  of  the  Chain  Pier  at  Brighton,  and  to  make  the  improve- 
rats  delineated  on  certain  plans  hereinafter  described  as  the  amended 
deposited  plans  ;  and,  inasmuch  as  such  new  road  and  sea  wall  would  be 
a  great  public  improvemt  to  Brighton,  it  is  expedient  that  the  corpora- 
tion of  the  town  of  Brighton  should  be  empowered  to  contribute  towards 
the  cost  of  such  construction  such  sum  or  sums  of  money  and  afford  such 
other  aid  as  they  think  fit,  and  to  borrow  the  money  necessary  for  that 
purpose  :  (3)  that  it  is  expedient  for  the  ppose  afsd  that  the  Bright- 
helmstone  Suspension  Pier  Co  and  the  Corporation  should  be  severally 
and  respively  empowered  from  time  to  time  to  contract  with  the  co  for 
gTanting  to  the  co  certain  estates  and  interests  in  or  right  or  easemts  in 
or  over  certain  portions  of  the  land  belonging  to  the  Brighthelmstone 
Suspension  Pier  Co  and  the  Corporation  respively  and  upon  such  terms 
as  they  the  contracting  parties  may  agree  upon,  and  to  execute  all  such 
deeds  and  to  do  all  such  acts  as  may  be  necessary  or  expedient  for 
giving  effect  to  contracts  :  (4)  that  plans  and  sections  with  -a  book 
of  reference  have  been  deposited,  &c.  :  (5)  that  some  of  the  objects  afsd 
cannot  be  effected  without  the  authority  of  Parliamt :  It  was  therefore 
enacted — 

1.  \_Short  title.']  2,  \_Incorporation  of  General  Acts.']  3.  [Inlerpre- 
iation  of  terms.] 

-t  to  12.     \_Usual  Reconstruction  (JIauscs,  supra,  Form  750.] 

13.  Subject  to  the  provisions  of  this  Act,  the  co  may  make  and  main-  Power  to  make 
tain  the  roads  and  other  works  shown  on  the  amended  deposited  plans,  ^'l'^'^"'^™  ^^ 


622 


SPECIAL    ACTS. 


Form  751. 

to  construct 
works. 


Company  to 
constract  the 
new  road 
and  sea  wall 
to  the  satis 
faction  of  the 
corporation. 


Company  to 
complete  the 
new  road  and 
sea  wall  within 
two  years. 

The  new  road 
when  com- 
pleted may  be 
dedicated  to 
the  use  of 
the  public. 

Powers  for 
compulsory 


in  the  lines  and  according  to  the  levels  and  within  the  limits  of  devia- 
tion shown  on  the  amended  deposited  plans  and  sections,  and  may 
excavate,  construct,  arch  over,  or  otherwise  cover  in  caverns,  buildings, 
tanks,  tunnels,  and  air  shafts  necessary  for  the  pposc  of  their  under- 
taking, together  with  all  proper  works  and  conveniences  connected- 
therewith  ;  and  for  any  of  the  pposes  afsd  may  enter  upon,  take, 
appropriate,  and  use  such  of  the  lands  delineated  on  the  amended  depo- 
sited plans  and  described  in  the  deposited  book  of  reference  as  may  be 
necessary  :  and  the  co  may  erect  upon  the  eastern,  western,  and  southern 
boundaries  of  the  aquarium  site  a  dwarf  wall  three  feet  six  inches  in 
height,  and  an  ojien  iron  fence  on  the  top  of  such  wall  two  feet  six  inches 
in  height,  making  together  six  feet,  and  the  southern  boundary  of  the 
aquarium  site  shall  be  next  to  the  north  side  of  the  new  road  to  be  con- 
structed under  the  powers  of  this  Act :  Provided  always,  that  it  shall 
not  be  lawful  for  the  co  to  acquire,  otherwise  than  by  agreemt,  any 
lands  belonging  to  the  corporation  ;  but  the  lands  which  may  be  set 
apart  by  the  corporation,  or  privileges  or  rights  over  the  same  which  the 
corporation  may  grant  for  the  pposes  of  the  co,  shall  be  so  set  apart  or 
granted  subject  to  such  conditions  as  the  corporation  and  the  co  may 
agree  on,  but  without  pecuniary  paymt  other  than  a  nominal  rent :  Pro- 
vided also,  that  so  far  as  regards  any  deviation  fi'om  the  amended  depo- 
sited plans  and  sections,  although  within  the  limits  of  deviation  shown 
thereon,  the  same  shall  only  be  made  with  the  consent  of  the  corporation, 
by  writing  under  their  common  seal :  Provided  also,  that  the  co  shall 
not  acquire  any  land  seaward  of  the  toe  of  the  sea  wall. 

14.  The  CO  shall  construct  the  new  road  shown  on  the  amended  de- 
posited plans,  from  the  eastern  boundary  of  the  sd  Grand  Junction  Road 
marked  0  on  that  amended  deposited  plan,  which  shows  the  ground  plan 
to  and  across  the  north  end  of  the  Chain  Pier,  so  as  to  extend  to  and 
communicate,  free  fi'om  all  obstructions,  with  the  lands  lying  to  the 
eastward  of  the  Chain  Pier  Co's  lands,  and  shall  protect  the  sd  new  road 
on  the  south  side  thereof  by  a  sea  wall  as  far  eastward  as  the  west  side 
of  the  Chain  Pier,  and  such  new  road  shall  consist  of  a  carriage  road 
and  footway,  which  shall  be  together  not  less  than  sixty  feet  wide,  and 
the  sd  nevy  road  and  sea  wall  shall  be  constructed  according  to  plans  to 
be  approved  by  the  corporation  under  their  corporate  seal,  and  shall  be 
completed  in  all  respects  to  the  satisfon  of  the  corporation. 

15.  The  sd  new  road  and  sea  wall  shall  be  completed  within  two  years 
from  the  passing  of  this  Act,  or  such  extended  time  (if  any)  as  the  cor- 
poration may  under  seal  agree  on. 

IC.  So  soon  as  the  sd  new  road  is  completed  to  the  satisfon  of  the  corpo- 
ration they  may  declare  the  same  to  be  thenceforth  dedicated  for  the  use 
of  the  public,  free  from  all  toll  or  charge  for  the  use  of  the  same,  and 
the  same  shall  thenceforth  be  a  publ.c  highway,  subject  to  the  provisions 
in  the  next  section  as  to  the  repair  thereof. 

17  to  37.  [Miscellaneous p'ovisions.] 

ns.  The  powers  of  the  co  for  the  compulsory  pchasc  of  lands  shall 


FOEMS.  623 

not  be  exercised  after  the  period  of  two  years  from  the  passing  of  this  Form  751. 

-^^^-  purchases 

ol).  [Period for  completion  of  tcorhs.']  limited. 

40.  Nothing  in  this  Act  contd  shall  be  held  or  construed  to  prevent  Companj-  may 
the  CO  from  making  such  alterations,  additions,  or  improvemts  in  the  ^^^^  &c^Tii 
aquarium  or  any  ornamental  grounds  connected  therewith  as  they  from  aquarium, 
time  to  time  think  fit,  but  the  provisions  and  restrictions  of  this  Act 

with  respect  to  elevation  of  buildings,  use  thereof,  and  nuisance  shall  be 
applicable  thereto  :  Provided  nevertheless,  that  the  co  shall  not  make 
such  alterations,  additions,  or  improvemts  except  on  the  space  and 
within  the  limits  shown  on  the  amended  deposited  plans  without  the 
consent  of  the  corporation  under  seal  first  had  and  obtained. 

41.  \_Power  to  enter  into  agreemts  v:ith  corporation  in  regard  to  certain 
matters.'] 

42.  The  aquarium  and  other  the  works  and  ppty  of  the  co  shall  be  Protection  of 
deemed  public  within  the  meaning  and  for  the  pposes  of  the  Acts  from 

time  to  time  in  force  with  respect  to  malicious  injuries  to  public  ppty. 

43.  In  addition  to  any  byelaws  which  may  be  made  by  the  co  pursuant  Tower  to 
to  the  provisions  contd  in  any  of  the  Acts  wholly  or  partially  incorpo-  i.^^,.j. 
rated  herewith,  it  shall  be  lawful  for  the  co  from  time  to  time  to  make 
byelaws  and  regulations  for  the  convenient  inspection  of  the  aquarium 

and  other  works  of  the  co  by  the  public,  for  the  protection  of  the  works 
and  ppty  of  the  co,  for  preventing  the  smoking  of  tobacco  in,  under,  or 
upon  any  part  of  the  works  of  the  co  ;  and  for  such  pposes  so  much  of 
"  The  Harbour,  Docks,  and  Piers  Clauses  Act,  1847,"  as  has  relation  to 
byelaws  to  be  made  by  the  undertakers,  except  so  much  of  section  eighty- 
three  as  states  the  objects  for  which  byelaws  may  be  made,  shall  be  in- 
corporated with  this  Act. 

44.  to  50.  [Further  miscellaneous  clauses.] 

The  Crystal  Palace  Go's  Act,  1877,  40  &  41  Vict.  c.  117. 

Act  dissolving  a7id  re-incoyyorating  a  co  incorjwrated  hj  royal  charter,  Form  752.. 
and  conferring  poiver  to  issue  ineference  stock  taJwig  piioritg  over  Act  for 

existing  stock.  reconstruction. 

Pre-preference 

The  necessity  for  an  Act  empowering  a  company  formed  under  the  Act  of  ^''°^'^' 
1862  to  create  pre-preferential  capital  occasionally  arises,  but  in  most  cases  the 
power  can  more  readily  be  obtained  by  a  reconstruction  [supra,  p.  551  et  seq.'], 
or  a  perpetual  debenture  stock  can  be  created,  which  of  course  takes  priority 
over  all  shares,  whether  preference  or  ordinary. 

The  Act  recites  (1)  the  formation  of  the  co  under  a  deed  of  settlemt 
of  28  May  1852,  and  charters  of  28  January  1853,  and  22  December 
1855,  and  that  Acts  of  Parliamt  relating  to  the  co,  and  bearing  its 
name,  have  been  passed,  and  the  sd  Acts  are  set  forth  in  a  schedule  to 
this  Act  :  (2)  that  co  possessed  of  large  estate,  whereon  the  Crystal 
Palace  has  been  erected,  and  is  surrounded  by  gardens  and  ornamental 
grounds,  and  the  co  are  also  possessed  of  freehold  or  other  interests  in 


624 


SPECIAL    ACTS. 


Porm  752.  lands,  &c.  :  (3)  that  it  is  couvenient  that  the  deed  of  settlemt  and  flic 
charters  should  be  annulled,  and  that  the  co  should  be  re-incorporaicd 
under  the  Companies  Clauses  Consolidation  Act,  1845,  and  the  Acts 
amending  that  Act,  and  that  the  powers  herein  contd  be  conferred  U]juu 
the  CO  :  (4)  that  whas  the  capital  stock  of  the  co  noAV  consists  of  the  fol- 
loAving  sums,  namely,  a  sum  of  1,002,G7.5/.  ordinary  stock,  a  sum  of 
1(;0,39.5/.  preference  stock,  and  a  sum  of  :527,000/.  Crystal  Palace  deben- 
ture stock,  which  forms  the  first  charu,-e  upon  the  undertaking  of  the  co : 
(5)  that  the  sd  debenture  stock  is  eutled  to  interest  or  dividend  at  the 
rate  of  six  p.  c,  and  the  sd  preference  stock  is  entled  to  dividend  at  the 
rate  of  seven  p.  c.  p.  a.,  such  interest  and  dividend  amounting  in  the 
aggregate  to  30,848Z.  per  annum,  and  the  revenue  of  the  co  applicable 
to  the  paymt  of  dividend  npon  the  ordinary  stock  of  the  co  has  been 
insufficient  to  admit  of  any  such  dividend  during  the  past  two  years  : 
((■>)  that  by  the  sd  deed  of  settlemt  (section  10.5)  powers  were  reserved 
for  the  absolute  dissolution  of  the  co,  and  in  the  case  of  a  dissolution 
the  directors  are  required  and  empowered  to  call  in,  sell,  dispose  of,  and 
convert  into  money  all  such  pts  of  the  estate  and  eflFects  of  the  co  (both 
real  and  personal)  as  shall  not  then  consist  of  money,  and  it  is  also  pro- 
vided that  the  surplus  estate  and  eflects  (if  any)  of  the  co  shall  be 
divided,  after  paymt  of  all  just  demands  upon  the  co,  among  the  share- 
holders in  proportion  to  their  respive  shares  :  (7)  that  unless  some 
arrangemt  can  be  effected  for  redeeming  the  sd  debenture  and  prefer- 
ence stocks  on  terms  affording  to  the  ordinary  stockholders  a  prospect  of 
increased  dividend,  it  is  apprehended  that  attempts  may  be  made  to  dis- 
solve the  co  in  order  that  their  ppty  may  be  realised  and  divided  among 
the  shareholders  :  (8)  that  it  is  believed  that,  with  the  object  of  pre- 
serving or  adapting  the  Crystal  Palace  to  })poses  of  general  utility,  a  new 
debenture  stock  may  be  subscribed  for  at  a  low  rate  of  interest,  which 
the  CO  will  be  wilhng  to  create,  provided  the  debenture  and  preference 
stockholders  of  the  co  will  consent  to  the  redemption  of  their  respive 
stock  out  of  money  raised  in  that  manner  :  (9)  that  it  is  desired  by  the 
holders  of  the  ordinary  stock  of  the  co  that  the  amount  thereof  should 
be  divided  into  two  classes  of  stock  in  the  manner  hereinafter  described : 
(10)  that  it  is  also  expedient  that  the  co  should  have  power  to  transfer 
or  demise  its  undertaking,  or  any  specific  portions  thereof,  from  time  to 
time,  with  such  consent  and  restrictions  as  hereinafter  are  prescribed  : 
and  (11)  that  the  pposes  of  this  Act  cannot  be  effected  without  the 
authority  of  Parliamt :  It  was  therefore  enacted  : — 

1.  [_Shorf  UUp.'\  2.  [^Incorjwration  of  general  Ads.']  3.  \^Interpreia- 
tian  clause.']  4.  [^Deed  of  settlemt  and  charters  to  he  void  without  preju- 
dice to  remedies  for  antecedent  hreaches  tharenf]  ,5.  [Act  not  to  authorise 
admission  by  paymt  on  the  Lord's  Day.] 

6.  Notwithstanding  the  avoidance  of  the  sd  deed  of  settlemt  and 
charter  and  supplemental  charter,  the  co  shall  remain  as  from  the  grant 
of  the  charter  of  incorporation,  and  continue  incorporated  thereunder 
until  the  passing  of  this  Act,  and  thenceforth  under  "The  Companies 


Company  to 

continue 

incorporated. 


FORMS.  02  5 

Clauses  Consolidation  Act,  1845,"  and  the  Acts  amending  the  same,  by  Form  752 
the  name  of  the  "  Crystal  Palace  Co,"  for  the  ppose  of  maintaining  the 
Crystal  Palace,  &c. 

7.  Notwithstanding  such  avoidance,  the  co  shall  remain  and  be  seised  Company  to 
aiid  possessed  of  and  entled  to  all  the  estates,  moneys,  ppty,  effects,  |^°™y "j  ^ 
claims,  and  demands  whatsoever,  of  or  to  which  the  co  were  by  virtue  of  their  pro- 
the  annulled  deed  of  settlemt  or   charters,  or  otherwise   immediately  ^'^^'^^'• 
before  the  passing  of  this  Act,  seised,  possessed,  or  in  any  way  entled 

at  law  or  in  equity,  subject  to  all  the  liabilities,  contracts,  debts  and 
obligations  respectively  affecting  the  same  immediately  before  the  pass- 
ing of  this  Act. 

8.  [All  2Jc^i(ises,  sales,  conveyances,  leases,  d-c,  to  remain  in  force.} 
0.  [Actions  not  to  abate.}  10.  [Debts  due  to  and  by  the  co  to  be  iid  to 
and  by  tlie  co.}  11.  [Present  officers  to  continue.']  12.  [Books  to  re- 
main evidence.} 

13.  It  shall  be  lawful  for  the  co  from  time  to  time,  with  the  consent  Providing  for 
of  three-fifths  in  value  of  the  stockholders  (entled  to  vote  at  ordinary  of'^ijebenture 
meetings)  being  present  in  person  or  by  proxy  at  any  general  meeting  and  preference 
or  meetings  of  the  co  duly  convened  with  notice  of  the  matter,  to  pass  a  '^   '^^' 
resolution  offering  to  redeem  the  debenture  stock  of  the  co  by  paymt  of 
cash  to  the  holders  of  such  stock,  at  such  rate  as  the  directors  may  there- 
after determine,  or  as  may  be  defined  by  such  resolution,  and  every  such 
resolution  shall  name  a  time  and  place  at  w^hich  the  redemption  of  the 
debenture  stock  shall  take  effect  and  be  completed  if  accepted  by  the 
proportion  of  the  debenture  stockholders,  and  pursuant  to  the  provisions 
hereinafter  specified  : 

1.  The  directors  of  the  co  shall,  with  all  convenient  despatch  after  Meeting  of 

the  passing  of  any  such  resolution  as  afsd  relating  to  the  .stocklioWCTs 
redemption  of  the  debenture  stock,  summon  a  special  meeting  to  consider 
of  the  debenture  stockholders  of  the  co  to  consider  and  resolve  redemption 
upon  the  same  ;  and  such  meeting  shall  be  called  by  an  adver- 
tisement pubhshed  once  in  each  of  two  consecutive  weeks 
in  one  or  more  London  daily  newspapers,  and  by  a  circular 
addressed  to  each  person  appearing  from  the  books  of  the  co 
to  be  a  registered  holder  of  debenture  stock  ;  and  such  circular 
shall  set  forth  a  copy  of  the  resolution  pursuant  to  which  the 
offer  of  redemption  is  made,  and  state  the  rate  or  price  at  which 
it  shall  have  been  determined  to  offer  to  redeem  the  debentm-e 
stock ;  and  such  circular  shall  be  sent  by  post  addressed  to  or 
left  at  the  last  known  or  usual  place  of  abode  of  each  such 
person  at  least  ten  clear  days  before  the  day  fixed  for  the  holding 
of  such  meeting,  and  a  statutory  declon  of  the  secretary  or  other 
officer  of  the  co  that  such  circular  has  been  issued  as  afsd  shall 
be  sufficient  evidence  thereof. 

2.  At  any  meeting  of  the  debenture  stockholders  summoned  as  afsd,  Piocedure  at 

-,  ■,  1  1     1  -I  ,    •  1  ^11  nieeting  oi 

the  debenture  stockholders  present  m  person  or  by  proxy  shall  debenture 
proceed  to  elect  a  debenture  stockholder  to  preside  at  such  stockholders. 

s  s 


626 


SPECIAL    ACTS. 


Form  752. 


Offer  may  be 
declined. 

Offer  may  be 
accepted. 


Providing  for 
redemption  of 
preference 
atock. 


Power  to 
create  new 
debenture 
stock. 


New  debenture 
stockholders 
m.ny  be  em- 
[)Owcred  to 


meetiug,  and  if  more  than  one-foiu'th  in  number  and  value  of 
the  debenture  stockholders  then  present  in  person  or  by  proxy 
determine  against  the  redemption  of  the  debenture  stock  upon 
the  terms  so  offered  to  them,  such  offer  shall  be  deemed  to  be 
absolutely  declined,  and  shall  be  of  no  effect. 

3.  If  at  any  such  meeting  not  less  than  three-fourths  in  number  and 

value  of  the  debenture  stockholders  then  present  in  person  or  by 
proxy  determine  that  the  redemption  of  the  debentm'e  stock  shall 
be  effected  upon  the  terms  specified  in  the  circular  summoning 
such  meeting,  then  all  the  debenture  stock  of  the  co  subsisting 
at  the  passing  of  this  Act  shall  be  redeemed  upon  those  terms 
and  at  the  place  named  in  the  preceding  resolution  offering  to 
redeem  the  debenture  stock,  and  at  the  time  therein  named,  or 
as  soon  thereafter  as  may  be  convenient,  each  debenture  stock- 
holder shall  deliver  up  the  certificate  of  his  debenture  stock  for 
cancellation,  and  shall  be  entled  to  receive  instead  thereof,  on 
pro\ing  his  title  thereto  to  the  satisfon  of  the  directors,  the  sum 
of  cash  to  which  he  may  be  entled  pursuant  to  such  circular  ; 
and  as  from  the  delivery  of  each  certificate  of  debenture  stock 
in  manner  afsd  such  certificate  shall  be  deemed  to  be  cancelled, 
and  the  debenture  stock  represented  thereby  shall  be  deemed 
to  be  extinguished,  and  as  fi'om  the  time  so  named  interest 
or  dividend  shall  cease  to  be  payable  on  the  debenture  stock 
of  the  CO  subsisting  at  the  passing  of  this  Act. 

4.  The  provisions    of  this  enactmt  in  reference   to  debenture  stock 

and  the  holders  thereof  shall  apply  and  have  effect  in  like 
manner  (midafis  mutandis)  in  reference  to  the  preference  stock  of 
the  CO  subsisting  at  the  passing  of  this  Act  and  the  holders  thereof. 

14.  In  order  to  raise  the  money  for  redeeming  the  debenture  stock 
and  preference  stock  subsisting  at  the  passing  of  this  Act,  or  either  of 
them,  as  in  this  Act  provided,  but  not  until  the  redemption  of  such 
stock  or  stocks  shall  have  been  accepted  as  in  this  Act  provided,  the 
CO  may  create  and  issue  a  stock,  to  be  called  Crystal  Palace  New 
Debenture  Stock,  of  an  amount  sufficient  to  enable  them  to  effect  the 
redemption  of  the  stocks  or  stock  to  be  redeemed  as  afsd,  and  such 
new  debenture  stock  shall  be  entled  to  dividend  at  such  rate,  not 
exceeding  four  p.  c.  p.  a.,  and  to  such  other  special  rights  and  privileges 
(if  any)  as  the  co  may,  by  the  resolution  creating  the  same,  determine, 
and  the  dividend  on  such  new  stock,  if  created  for  the  ppose  of  redeem- 
ing the  debenture  stock  or  the  debenture  and  preference  stocks  sub- 
sisting at  the  passing  of  this  Act,  shall  be  a  first  charge  upon  the 
revenue  of  the  co,  and  if  created  for  the  ppose  of  redeeming  the  pre- 
ference stock  alone  shall  be  a  charge  upon  such  revenue  next  after  the 
debenture  stock  subsisting  at  the  passing  of  this  Act. 

15.  The  CO  may  by  resolution  attach  to  the  new  debenture  stock  a 
condition  that  the  holders  thereof  may  elect  a  director  or  directors  of 
the  CO,  and  (if  they  think  fit)  define  the  qualification  of  the  director  or 


rOEMS.  G27 

directors  so  to  be  elected,  and  the  number  of  the  directors  of  the  co  Form  752. 
shall  be  deemed  to  be  increased  by  such  director  or  directors.  appoint 

16.  The  CO  may  also  from  time  to  time  resolve  that  all  or  part  of  directors, 
the  annual  sum  by  which  the  interest  or  dividend  of  the  stock  or  stocks  Application  of 

SU.D1  sftvcd,  oy 

I'cdeemed  shall  exceed  that  of  the  new   debenture    stock   created   for  redemption, 
such  redemption  shall  be  applied  to  any  pposes  in  connexion  with  the 
Crystal  Palace,  and  such  annual  sum  shall  be  appropriated  and  applied 
accordingly, 

17.  From  and  after  the  passing  of  this  Act,  the  ordinary  capital  stock  Ordinary 

09.111  till 

of  the  CO,  amounting  to  1,002,675/.,  shall  be  divided  in  the  manner 
hereinafter  provided  ;  that  is  to  say,  one  fifth  part  thereof,  namely, 
200,535?.,  shall  be  designated  "  A  stock,"  and  the  proprietors  thereof 
shall  (subject  to  the  paymt  of  dividend  on  the  debenture  and  preference 
stocks  of  the  co  subsisting  at  the  passing  of  this  Act,  and  to  the 
paymt  of  dividend  upon  Crystal  Palace  new  debenture  stock,  if  and 
when  created)  be  entled  to  an  annual  dividend  at  the  rate  of  seven 
and  a  half  p.  c.  out  of  the  divisible  profits  of  the  year,  but  no  deficiency 
of  dividend  on  such  "  A  stock  "  in  any  one  year  shall  be  made  good 
out  of  the  profits  of  the  co  accruing  in  any  subsequent  year,  and  the 
remaining  four-fifths,  namely,  802,140/.,  shall  be  called  "  B  redeemable 
stock." 

18.  \_Gancelling  of  existing  certificates.'] 

19.  There  shall  be  put  (by  endorsemt  or  otherwise)  upon  each  cer-  Certificates  of 
tificate  of  "  1\  redeemable  stock  "  a  statemt  that  the  same  is  not  entled  ^bie  stock"'"  to 
to  share  in  the  divisible  profits  of  the  co,  but  is  redeemable  out  of  surplus  contain  notice 
profits  upon  the  terms  of  "  The  Crystal  Palace  Co's  Act,  1877."  Lue!'"*'  ° 

20.  [Applicori  of  revenue.]     21.  \^MetJiod  of  redeeming  B  stock.] 

22.  The  proprietors  of  "  A  stock  "  shall  have  the  same  voting  power  As  to  votes 

after  the  passing  of  this  Act  as  the  holders  of  ordinary  stock,  represented  ^l  proprietors 

^  °  *'  '      '^  of  sued  shares, 

by  such  "  A  stock,"  would  have  been  entled  to  if  this  Act  had  not  been 

passed  ;  that  is  to  say,  the  proprietor  of  every  one  pound  of  "  A  stock  " 

shall  be  entled  to  one  vote  in  respect  thereof.     The  proprietors  of  "  B 

redeemable  stock"  shall  not  be  entled  to  vote  in  respect  thereof  at  any 

meeting  of  the  co. 

23.  {^Receipt  in  case  of  persons  not  sui  juris.] 

24.  Save  as  in  this  Act  expressly  provided,  nothing  in  this  Act  con-  Maintaining 
tained  shall  prejudice  or  affect  the  debenture  or  preference  stocks  of  the  preference^ 
co,  or  the  rights  of  the  proprietors  thereof  respively.  stocks. 

25.  [When  first  orcUnarii  meeting  to  he  held.]  26.  {_Numher  of  direc- 
tors.] 27.  [Qualification  of  directors.]  28.  [Present  directors  and  auditors 
continued  in  ofiice.] 

29.  The  CO  may,  subject  to  the  provisions  hereinafter  contd,  authorise  Transfer  of 
the  directors  to  sell  and  transfer  absolutely,  or  to  demise  from  time  to  ^ndertakin;,'. 
time  for  any  term  or  terms  of  years,  The  Crystal  Palace  or  the  lands 
thereof,  or  any  pt  thereof,  or  any  interest  therein  or  in  any  pt  thereof,  to 
any  person  or  body,  either  for  a  gross  sum  or  for  a  rentcharge,  or  in 
conson  wholly  or  in  pt  of  fully  pd  up  shares  in  the  capital  of  any  co  to 

s  s  2 


628 


SPECIAL    ACTS. 


Form  752.  whom  the  co  may  agree  to  make  such  sale,  transfer,  or  demise,  or  to 
admit  any  person  or  body  to  a  limtd  interest  in  the  Palace  or  the  lands 
thereof,  or  any  pt  thereof  ;  and  the  following  conditions,  amongst  others, 
shall  apply  to  any  such  sale,  transfer,  or  demise  : 

(«.)  A  resolution  conferring  such  authority  shall  be  reduced  into 
writing,  and  shall  be  twice  read  and  put  to  the  vote,  and  shall 
be  carried  each  time  by  a  majority  of  at  least  two-thirds  in 
value  of  the  stockholders  present  in  person  or  by  proxy  at  any 
ordinary  or  special  meeting  of  the  co,  and  being  entled  to  vote 
thereat,  and  shall  be  confirmed  by  a  like  majority  at  a  subse- 
quent ordinary  or  special  meeting  to  be  held  after  the  expiration 
of  fourteen  days,  but  before  the  expiration  of  two  calendar 
months  next  after  the  meeting  at  which  such  first  resolution 
shall  have  been  passed : 

(&.)  Every  such  sale,  transfer,  or  demise  shall  be  subject  to  such  terms 
and  conditions,  if  any,  as  shall  be  expressed  by  both  or  cither  of 
the  resolutions  passed  at  such  meetings  : 

(c.)  Every  such  sale,  transfer,  or  demise  shall  be  subject  to  a  primary 
lien  on  the  pt  of  proprietors  of  the  debenture  stock  of  the  co  : 

(d.)  All  rent  reserved  and  pd  in  conson  of  such  demise  shall  lie 
applied  in  the  manner  hinbefore  directed  with  respect  to  th 
revenue  of  the  co  : 

(e.)  Every  such  demise  shall  contain  covenants  for  the  maintenance 
and  repair  of  the  premes,  and  also  a  power  of  re-entry  by  the 
CO  in  case  of  non-paymt  of  rent. 

30.  [Expenses  of  Act.'] 

The  schedule  contd  the  titles  of  the  Acts  relating  to  the  co. 


The  Hailsham  Cattle  Market  Act,  1871,  34  Tict.  c.  1. 

Form  753.  Act  for  dissolvhKj  and  re-incorporcding  co,  limtd,  for  continuing  and  holding 
Cattle  Market  ^*  cattle  market,  and  for  other  eposes. 

Act. 


Form  754. 

Act  extending 
objects. 


The  Telegeaph  Construction  and  Maintenance  Co  (Limtd) 
Act,  1883,  40  Yict.  c.  15. 

Act  extending  the  objects  of  a  co  formed  under  the  Act  o/18G2. 

The  Act  recites :  that  the  co  was  established  under  a  memorandum  of 
association  bearing  date  the  Gth  day  of  April,  18G4,  and  by  Clause  3  of 
such  memorandum  the  objects  for  which  the  co  was  established  were 
defined  as  follows,  namely  : — &c.  :  And  that  doubts  have  arisen  whether 
the  sd  objects  include  the  construction,  laying  down,  maintenance,  pur- 
chasing, hiring,  letting,  selling,  working,  and  use  of  works  and  ap^xiratus 
for  the  production,  transmission,  and  use  of  electric,  magnetic,  or  other 
force  and  matters  incidental  thereto,  and  it  is  expedient  that  the  sd 
memorandum  should  Ijc  amended  so  as  to  include  such  objects,  but  that 


FOEMS. 


G29 


()l)jcct  cannot   be   effected  without  the  authority  of  Paiiiamt :  It  was  Form  754. 
therefore  enacted :  _  ' 

1.  IShort  title.'] 

2.  The  third  clause  of  the  memorandum  of  association  of  the  co  is  Amendment 
hby  cancelled  and  the  followino-  clause  shall  l)c  substituted  therefor,  that  °/  tnemoran- 

•'  °  '  dum  ot 

is  to  say  :  (;J)  The  objects,  &c.  association. 

3.  After  the  passing  of  this  Act  the  powers  and  constitution  of  the  Powers  of 
CO  shall  be  the  same  as  if  the  objects  mentd  in  the  last  preceding  section  )^-,°™|j^'Y  *" 
had  been  included  in  the  memorandum  of  association  bearing  date  the  as  if  objects 
Cth  day  of  April,  1864,  but  nothing  in  this  Act  contd  shall  aflFect  the  oriiinll" 
validity  or  invahdity  of  anything  done  or  pending  before  or  at  the  passing  included  in 

of  this  Act.  '  memonvn- 

dum  of 

4.  The  CO  shall  forward  to  the  Registrar  of  Joint  Stock  Companies  a  association. 
printed  copy  of  this  Act,  and  it  shall  be  recorded  by  him,  and  if  such  A-ct  to  be 
copy  is  not  so  forwarded  within  three  months  from  the  passing  of  this  ^^°^^*®^^'  • 
Act,  the  CO  shall  incur  a  penalty  not  exceeding  10/.  for  every  day  after 

the  expiration  of  those  three  months  during  which  the  copy  is  omitted  to 
be  forwarded,  and  every  director  and  manager  of  the  co  who  knowingly 
and  wilfully  authorises  or  permits  such  default  shall  incur  the  like 
penalty,  and  every  penalty  under  this  section  shall  be  recoverable  sum- 
marily. 

5.  \_Saving  rigid s  of  Postmaster-General.'] 
G.  \_Expenses  of  Ad.] 

The  Standard  Bank  of  British  South  Africa,  Limtd,  Act, 
1881,  44  &  45  Yict.  c.  120. 

Ad  ejdending  the  objects  of  a  co  formed  under  the  Act  of  1SG2.  Form  755. 

The  Act  recites  that  the  co  was  established  under  a  memorandum  of  ^c*  extending 
association,  dated  13  October,  18G2,  whereby  the  objects  for  which  the 
CO  is  established,  include  "  the  transacting  in  the  colonies  of  the  Cape  of 
"  Good  Hope,  British  KaflFraria  and  Natal,  and  in  any  other  colonies  or 
"  settlemts  in  that  part  of  Africa,  south  of  the  23rd  parallel  of  southern 
"  latitude,  and  where  British  supremacy  has  been  or  may  at  any  time 
"  time  hereafter  be  proclaimed,  and  under  the  general  superintendence 
"  and  control,  and  in  co-operation  with  a  principal  establishmt  in 
"  London,  every  kind  of  banking  business"  and  other  business  therein 
described  :  And  that  doubts  have  arisen  as  to  whether  the  sd  objects 
permit  the  carrying  on  of  the  sd  business  of  the  sd  co  in  territories 
wherein  there  has  been  proclamation  of,  but  not  the  continuance  of 
British  supremacy,  and  it  is  desirable  that  the  co  should  have  extended 
powers  for  transacting  its  sd  business  in  the  colonies  of  the  Cape  of 
Good  Hope,  and  Natal,  and  in  any  other  colonies,  settlemts,  or  territo- 
ries, or  lands  situate  in  Africa  as  herein  defined  ;  but  the  same  cannot 
be  effected  without  the  authority  of  Parliamt  :  It  was  therefore 
enacted  : — 

1.  IShort  title.] 


630 


SPECIAL    ACTS. 


Form  755.  2.  Notwithstanding  any  clause,  matter,  or  thing  in  the  memorandum 
Extension  f  °^  association  of  the  sd  co  contd,  the  objects  for  which  the  co  is  estab- 
powers.  lished  may  include  the  transacting  of  its  sd  business  in  the  colonies  of 

the  Cape  of  Good  Hope,  and  Natal,  and  in  any  colonies  or  settlemts,  or 
territories,  or  lands  whatsoever  in  any  part  of  Afiica  as  hereinafter 
defined,  and  whether  British  supremacy  has  or  has  not  been  there  pro- 
claimed ;  and  it  shall  be  lawful  for  the  sd  co  to  carry  on  its  business 
accordingly. 
Interpreta-  g^  The  word  "  Africa  "  in  the  memorandum  of  association  of  the  sd 

CO  and  in  this  Act  shall  mean  and  shall  be  deemed  to  include  all  territories 
or  lands  situate  between  the  equator  and  the  thirty-fifth  parallel  of  south 
latitude  and  between  the  sixty-fifth  parallel  of  east  longitude  and  the 
twentieth  parallel  of  west  longitude. 
Expenses  of  4,  The  costs,  charges,  and  expenses  of  applying  for,  obtaining,  and 

passing  this  Act  shall  be  pd  by  the  sd  co. 

The  New  Zealand  and  Australian  Land  Company  Limited, 
Act,  1877,  40  &  41  Yict.  c.  95. 

Form  756.  Act  for  amalijainaUng  two  conijjcmies  formed  under  the  Ad  o/18G2,  ly  the 
^^^ZJ       .J  ^  formation  of  a  new  co  under  the  same  Act. 

Act.  This  is  an  admirable  example  of  an  amalgamation  Act.     The  most  noticeable 

features  are  (a)  that  the  amalgamation  is  to  take  effect  on  the  registration  of  a 
new  company  under  the  Act  of  1862,  so  that  the  amalgamated  company  remains 
under  that  Act ;  (6)  that  the  Act  is  to  operate  both  at  home  and  abroad ;  (c) 
that  dissentient  shareholders  are  given  a  right  to  retire  and  claim  payment  of 
the  value  of  their  shares ;  (d)  that  debenture  holders  are  empowered  to  claim 
payment  in  cash  ;  (e)  that  remedies  of  creditors  in  New  Zealand  are  carefully 
preserved. 

The  Act  recites  :  (1)  that  the  Canterbury  Co  was  incorporated  28 
April,  1865,  under  the  Act  of  18C2,  as  a  co  limtd  by  shares,  having  its 
registered  office  at  Glasgow,  and  that  the  objects  of  that  co  w-ere  the 
pchase  of  lands  in  New  Zealand,  &c.  :  (2)  that  the  authorised  capital  of 
the  co  is  500,000/.  in  5,000  shares  of  lOOZ.  each,  all  of  which  shares  have 
been  issued  and  are  fully  pd  up  :  (3)  tliat  co  empowered  to  borrow  by 
its  articles  :  (4)  certain  special  resolutions  authorising  the  borrowing  of 
money  and  the  issue  of  debentures  :  (5)  that  the  co,  in  psuance  of  the 
articles  of  association  and  the  special  resolutions  before  recited,  have 
acquired  the  properties  of  the  New  Zealand  and  Otago  Agricultural  and 
Land  Investmt  Association,  Limtd,  and  have  issued  debentures  purport- 
ing to  secure  in  all  the  sum  of  313,509/.  7s.  bd.  :  (G)  that  the  New 
Zealand  Co  was  incorporated  8  March,  18G2,  under  the  Companies  Act, 
1862,  as  a  co  limtd  by  shares,  having  its  registered  office  at  Glasgow, 
and  the  objects  of  that  co,  as  defined  in  the  memorandum  of  association, 
were  the  pchase  of  lands,  &c.  :  (7)  that  the  authorised  capital  of  the 
New  Zealand  Co  is  2,000,000/.  in  20,000  shares  of  100/.  each,  of  which 
18,946  issued  and  1,184,125/.  (being  62/.  per  share)  pd  up  :  (8)  power 
in  articles  to  borrow  :  (9)  special  resolution  to  issue  debentures  :  (10) 
mtges  for  390,000/.  to  certain  persons  who  by  a  deed  of  trust  contempo- 


FOKMS.  031 

raneous  with  those  indi-es  of  mtge  the  mto;ees  declared  themselves  trus-  Form  756. 
tees  for  the  debenture  holders  by  whom  the  amounts  intended  to  be 
secured  were  actually  advanced  :  (11)  that  the  New  Zealand  Co  issued, 
as  pt  of  the  transactions  intended  to  be  carried  out  by  the  last-mentd 
indres  of  mtge  and  declon  of  trust,  mtge  debentures  for  the  sum  of 
S88,400/. :  (12)  special  resolution,  for  reduction  of  capital  of  New  Zea- 
land Co  not  yet  confirmed  :  (1.3)  further  resolution  as  to  borrowing  : 
(14)  that  in  pursuance  of  the  special  resolution  last  mentd  the  New  Zea- 
land Co  have  issued  further  debentures  representing  an  amount  of 
120,350/.  or  thereabouts,  and  the  total  amount  borrowed  as  afsd,  exclu- 
sive of  the  sd  sum  of  388,400/.  (or  so  much  thereof  as  now  remains 
unpaid),  does  not  exceed  the  amount  of  the  unpaid  subscribed  capital  of 
that  CO  :  (1 5)  that  the  two  companies  have  been  in  operation  for  many  years, 
and  they  are  respively  possessed  of  large  estates,  funds,  and  ppty,  real 
and  personal,  which  are  estimated  to  be  of  nearly  equal  value  in  propor- 
tion to  the  amount  of  pd-up  capital  in  the  respive  companies  :  (16)  that  the 
operations  of  the  two  companies  are  to  a  large  extent  carried  on  in  the  same 
districts  and  with  similar  objects,  and  their  interests  are  in  a  great 
measure  identical  :  (17)  that  it  is  intended  that  a  co  to  be  called  the 
New  Zealand  and  Australian  Land  Co,  Limtd,  shall  be  formed  and 
registered  under  the  Companies  Acts,  18G2  and  1867,  with  a  memorandum 
of  association  in  the  form  set  forth  in  the  schedule  to  this  Act,  with 
relative  articles  of  association,  to  the  intent  that  the  two  companies  may 
be  amalgamated,  and  that  the  shareholders  in  the  two  companies  may 
become  shareholders  in  the  co  so  to  be  incorporated  :  (18)  that  share- 
holders in  each  of  the  two  companies,  being  registered  holders  of  more 
than  three-fourths  in  value  of  the  shares  in  the  two  companies  respively, 
have  in  writing  expressed  their  intention  of  exchanging  the  shares 
held  by  them  for  shares  or  stock  of  equivalent  amounts  in  the  co  to  be 
registered  as  afsd  :  (19)  that  it  is  expedient  that  the  two  companies  be 
authorised  to  amalgamate  their  undertakings  without  the  necessity  of 
liquidating  their  affairs  under  the  Companies  Act,  1862,  but  with  such 
reservation  of  the  rights  of  the  creditors  of  the  New  Zealand  Co  as 
against  the  uncalled  capital  of  that  co  as  is  hereinafter  provided  for  : 
and  (20)  that  the  objects  of  this  Act  cannot  be  effected  without  the 
authority  of  Parliamt :  It  was  therefore  enacted — 

1.  Short  title. — Act  to  commence  and  take  effect  as  at  and  from 
the  day  of  the  registration  of  the  memorandum  of  association  of  the 
CO  which  is  intended  to  be  formed  by  the  amalgamation  of  the  two 
companies,  which  period  is  hereinafter  referred  to  as  "  the  time  of 
amalgamation." 

2.  Notwithstanding  the  definition  of  "  the  time  of  amalgamation  "  Accounts  of 
hinbefore  contained,  the  profits  and  losses  of  the  two  companies,  as  date^from  ** 
appearing  in  the  accounts  of  the  two  companies,  as  from  the  31  March,  3lst  March, 
187 1 ;,  shall  for  pposes  of  dividend  and  for  all  other  matters  of  account 

be  deemed  the  profits  and  losses  of  the  co. 

3.  [Intei'pretafio/i  of  terms.^ 


63-2 


SPECIAL    ACTS. 


Form  756. 

Dissolution  of 
the  two  com- 
panies. 


Primary  lia- 
bility of  tlie 
company  not 
to  be  affected 
by  continuing 
liability  of  the 
New  Zealand 
Company. 


4.  At  and  from  the  time  of  amalgamation  the  two  companies  shall, 
~  subject  to  the  provisions  of  this  Act,  be  and  the  same  are  hljy  dis- 
solved, and  this  Act  shall  be  reported  to  the  Registrar  of  Joint  Stock 
Companies  for  Scotland,  who  shall  make  a  minute  accordingly  in  his 
books  of  the  dissolution  of  the  two  companies,  in  the  same  manner  as 
if  this  Act  were  an  order  of  the  Court  made  in  psuance  of  the  111th 
section  of  the  Companies  Act,  1802. 

5.  \_3Iemorandmn  and  articles  of  association  of  the  two  companies  to  he 
void,  without  prejudice  to  remedies  for  previous  'breaches.'] 

G.  All  the  ppty  of  the  two  companies,  whether  in  Xew  Zealand  or 
elsewhere,  and  all  their  rights,  subject  to  the  debentures,  kc,  vested  in 
the  CO.  The  production  of  a  copy  of  this  Act  purporting  to  be  printed 
by  the  Queen's  printers,  and  of  a  certificate  of  the  Registrar  of  Joint 
Stock  Companies  for  Scotland  of  the  registration  of  the  memorandum 
of  association  of  the  co  (which  certificate  he  is  hby  required  to  give), 
shall  be  conclusive  evidence  of  the  vesting  of  the  undertakings  and 
ppty  of  the  two  companies  respively  by  way  of  amalgamation  in  the 
CO  under  this  section,  whether  the  same  be  situated  in  N"ew  Zealand, 
Victoria,  Queensland,  New  South  Wales,  or  any  other  pt  of  Her 
Majesty's  dominions  ;  and  a  minute  of  the  production  of  such  copy  of 
this  Act  and  of  such  certificate,  or  of  a  notarial  copy  thereof,  shall  be 
a  sufficient  record  of  such  vesting  by  way  of  amalgamation  as  may  be 
required  to  be  made  in  any  office  for  the  registration  of  deeds,  land 
register,  or  transfer  records  in  New  Zealand,  Victoria,  Queensland,  New 
South  Wales,  or  any  other  pt  of  Her  Majesty's  dominions. 

7.  \_The  two  companies  to  subsist  for  certain  'pposes,  e.g.,  to  e.rccvie  any 
deeds  requisite.']  8.  [jVothing  to  affect  pirevious  rights  and  liabilities.] 
9.  [Debts  and  claims  of  the  two  companies  reserved.] 

10.  The  liability  of  the  co  created  by  the  two  last  preceding  sections 
shall  not  be  affected  by  the  reservation  of  the  rights  of  the  creditors  of 
the  New  Zealand  Co,  as  against  the  uncaUed  capital  of  that  co  herein- 
after contd,  but  the  assets  of  the  co  shall  be  deemed  the  primary 
fund  for  the  paymt  of  all  liabilities,  claims  and  demands,  debts  and 
moneys  due,  as  well  from  the  New  Zealand  Co  as  from  the  Canterbury 
Co,  at  the  time  of  amalgamation  ;  and  the  reservation  of  the  rights  of 
the  creditors  of  the  New^  Zealand  Co,  as  against  the  uncalled  capital  of 
that  CO,  shall  be  deemed  a  collateral  and  additional  security  for  the 
paymt  of  the  liabilities,  claims  and  demands,  debts  and  moneys  due 
from  the  New  Zealand  Co  at  the  time  of  amalgamation. 

11.  \_All  deeds,  conveyances,  S,-c.,  to  he  valid  and  of  fall  force.] 

12.  [Causes  and  rights  of  action  reserved.]  13.  \_AcMons  not  to  abate.] 
14.  [Submissions  and  awards  relating  to  the  two  companies  not  to  he 
affected.]  15.  [Officers  of  the  two  companies  to  he  accountable  for  books, 
&c.]  k;.  [Officers,  &c.,  of  the  two  companies  to  he  officers,  A;c.,  of  the 
CO.]  17.  [Books,  &c.,  to  he  evidence.]  18.  [Certificates,  <ir.,  to  remain 
in  force.]  19,  [Present  register  of  members  to  he  continued.]  20.  General 
saving  of  rights  and  claims.] 


FORMS. 


033 


21.  The  production  of  a  copy  of  this  Act  purporting  to  he  priuted  hv  Form  756. 
the  Queen's  printers  sliall  be  a  sufficient  authority  to  the  Registrar  of  company  may ^ 
Joint  Stock  Companies  for  Scotland  to  register  the  co  by  the  name  be  registered 
of  the  "  Xew  Zealand  and  Australian  Land  Co  Liratd,"  notwithstanding  ifew^^aiaml 
the  provisions  of  the  2oth  section  of  the  Companies  Act,  18G2.  &c.,  Land 

22.  The   shares,   both   ordinary   and   preference,   issued  in   lieu    or  ^°™P^°y- 
satisfon  of  shares  in  the  two  companies  respively  shall  be  deemed  to  be  jeemed  a  con- 
paid  up  in  accordance  with  the  provisions  in  that  behalf  contd  in  the  tract  made  in 
memorandum  of  association  of  the  co  set  forth  in  the  schedule  hto,  and  j^g^ti^n  2^\f'^ 
this  Act  shall  he  deemed  a  contract,  determining  that  such  shares  shall  tlio  Oompanies 
be  so  held  within  the  25th  section  of  the  Companies  Act,  IHiiT,  and  a  '^  '     '  ' 
copy  of  this  Act  purporting  to  be  printed  l)y  the  Queen's  printers  shall 
accordingly  be  filed  with  the  Registrar  of  Joint  Stock  Companies  for 
Scotland,  at  or  before  the  issue  of  such  shares,  and  such  Registrar  is 

hby  required,  npon  request  and  paymt  of  the  usual  fees,  to  file  the  same 
accordingly. 

23.  ISharelioIders  in  ilie  Itco  coijijjanies  io  hecome  sliareholders  in  the 
co.'\  24.  \_S1iarps  of  co  to  he  subject  to  the  same  trusts,  &c.,  as  sJmres  of 
the  two  companies.'] 

2;j.  Notwithstanding  the  amalgamation,   separate  registers  may   be  Separate 
kept  of  the  several  shares,  mtge  debentures,  debentures,  and  bonds  of  {^q^J!*^,^''  Ytl. 
the  two  companies  respively.  shares,  &c.  of 

20.  \_Co.  to  issue  new  certificates,  and  may  require  old  certificates  to  jg  t'le  two  com- 
exchanr/ed.] 

27.  Nothing  in  this  Act  contd  shall  prevent  or  restrain  the  co,  if  Conversion  of 
they  think  fit,  from  converting  under  the  provisions  of  the  Companies  st^J^.^  ^^  ° 
Act,  1802,  their  capital  into  stock. 

28.  If  any  person  or  corporation  holding  shares  in  either  of  the  two  Riglit  of/lis- 
companies  at  the  time  of  amalgamation  shall,  within  twelve  calendar  jj^l^^jg^j^^j^^^"^^*^' 
months  of  the  time  of  amalgamation,  leave  at  the  registered  office  of  the  either  of  the 
CO  a  notice  in  writing  expressing  his  unwillingness  to  become  a  share-  paniesTo  be 
holder  .in  the  co,  such  dissentient  shareholder  may  at  any  time  within  paid  out. 
such  twelve  calendar  months  require  the  co  to  pchase  the  interest  held 

by  him  at  a  price  to  be  determined  in  manner  hereinafter  raentd,  and 
the  CO  shall,  within  GO  days  of  receiving  such  requisition,  comply  with 
such  request,  and  the  share  and  interest  so  purchased  shall  be  dealt  with 
in  such  manner  as  the  directors  may  determine. 

29.  The  price  to  be  pd  for  the  pchase  of  the  interest  of  any  such  dis-  ^lo^^e  of 
sentient  shareholder  as  afsd  may  be  determined  hj  agreemt,  but  if  the  price™^°"^° 
parties  differ  with  respect  to  the  same  such  difference  shall  be  settled  by 
arbitration,  according  to  the  provisions  of  the  Companies  Clauses  Con- 
solidation (Scotland)  Act,  1840,  Avith  respect  to  the  settlemt  of  disputes 

by  arbitration. 

30.  The  debts  and  liabilities  of  the  two  companies  respively  which  are  Providing  f  >r 
secured  on  mtge   debentures,    debentures,   or  bonds,   and  are   subsist-  cTebentoe/Tf' 
ing  at  the  time  of  amalgamation,  shall  be  a  charge  on  the  assets  and  dissolved 
undertaking  of  the  co,  if  and  so  far  as  the  same  constituted  a  charge  on  '^°™i^^^'^'^- 


634 


SPECIAL    ACTS. 


Form  756. 


Power  to 
borrow. 


Right  of 
debenture 
holders  of 
two  com- 
l)anies  to  be 
paid  in  cash. 


Remedies  of 
creditors  of 
New  Zealand 
Company 
against  un- 
called capital 
of  that  com- 
pany. 


Inspection  of 
register  of 
members  of 
New  Zealand 
Company. 


This  Act  not 
to  prevent 


the  assets  or  undertaking  of  the  co  by  which  the  same  were  originally- 
incurred,  but  not  further  or  otherwise,  and  such  mtge  debentures, 
debentures,  or  bonds  shall  be  as  valid  and  effectual  in  relation  to  the  co 
as  if  they  had  been  granted  by  the  co  instead  of  by  the  two  companies 
respively,  and  shall  retain  a  like  priority  of  charge  (in  all  cases  where 
they  operate  as  a  charge)  on  the  undertakings  of  the  two  companies 
respively,  with  all  the  rights,  privileges,  and  remedies  belonging  to  or 
incident  to  such  mortgage  debentures,  debentures,  or  bonds  respively, 
and  for  the  pposes  of  such  priority,  rights,  privileges,  and  remedies,  the 
undertaking  of  each  of  the  two  companies  respively,  so  loug  as  any  of 
their  mtge  debentures,  debentures,  or  bonds  subsist,  shall  be  deemed  a 
separate  undertaking. 

31.  Any  sum  to  be  borrowed  by  the  co  shall  be  postponed  to  the 
mtge  debentures  and  debentures  of  the  two  companies  respively  sub- 
sisting at  the  time  of  amalgamation. 

32.  In  case  any  holder  of  a  debenture  or  mtge  debenture  of  either 
of  the  two  companies  shall,  within  twelve  calendar  months  of  the  time 
of  amalgamation,  leave  at  the  registered  office  of  the  co  a  notice  in 
writing  expressing  his  desire  to  be  pd  the  principal  and  interest  due  to 
him  upon  such  debenture,  and  shall  deliver  up  such  debenture  to  the  co, 
accompanied  by  such  evidence  of  his  ownership  thereof  as  the  directors 
shall  reasonably  require,  the  co  shall,  within  sixty  days  after  the  date  on 
which  such  notice  shall  be  delivered,  and  upon  the  debenture  being  can- 
celled, pay  to  the  holder  of  such  debenture  or  mtge  debenture  the  priu- 
cipal  and  interest  due  on  such  debenture  or  mtge  debenture  up  to  the 
time  of  paymt. 

33.  In  the  event  of  the  co  being  wound  up  while  any  liability,  claim, 
demand,  debt,  or  money  which  shall  be  due  from  the  New  Zealand  Co 
at  the  time  of  amalgamation  shall  remain  unsatisfied,  then,  notwithstand- 
ing the  dissolution  of  the  New  Zealand  Co  and  its  amalgamation  with 
the  Canterbury  Co  under  the  provisions  of  this  Act,  every  person  who 
at  the  time  of  amalgamation  shall  be  a  present  or  past  member  of  the 
New  Zealand  Co  shall  be  liable  to  contribute  towards  paymt  of  the  debts 
and  liabilities  of  the  New  Zealand  Co  remaining  unsatisfied  at  the  time 
of  the  winding  up  of  the  co,  in  the  same  manner  and  with  the  same 
qualifications  as  if  the  New  Zealand  Co  had  been  wound  up  under  the 
Companies  Act,  18G2,  by  virtue  of  an  order  made  on  a  peton  presented  at 
the  time  of  amalgamation. 

34.  The  register  of  members  of  the  New  Zealand  Co,  showing  the 
names  of  the  persons  entered  on  such  register  at  the  time  of  amalgama- 
tion, shall  ])0  preserved  by  the  co  safe,  unaltered,  and  undefaced,  and 
shall  be  open  to  inspection  in  manner  provided  by  the  32nd  section  of 
the  Companies  Act,  1862,  aud  the  penalties  for  refusing  inspection  or 
copies  thereof  prescribed  by  that  section  shall  if  and  when  incurred  be 
pd  by  the  co. 

35.  Nothing  in  this  Act  contd  shaU  be  deemed  to  prevent  the  co  from 
modifying  its  memorandum  of  association,  in  conformity  with  the  pro- 


FORMS.  635 

visions  of  the  Companies  Acts,  18G2  and  1867,  or  any  statutory  modifi-  Form  756. 
cation  thereof,  or  to  interfere  with  the  operation  of  the  provisions  in  the  alteration  of 
table  marked  (A.)  in  the  First  Schedule  to  the  Companies  Act,  18G2,  if  memorandum 
no  articles  of  association  are  registered  by  the  co  in  conformity  with  the  association! 
provisions  of  section  14  of  the  Companies  Act,  1862,  or  to  prevent  the  co 
registering  articles  of  association,  in  conformity  with  that  section,  or  to 
prevent  the  co  from  altering  all  or  any  of  the  regulations  of  the  co  contd 
in  the  articles  of  association,  or  in  the  sd  table  marked  (A.)  in  the  First 
Schedule  to  the  Companies  Act,  18C2,  in  conformity  with  section  50  of 
that  Act  or  any  statutory  modification  thereof. 

36.  \_Ex2m1ses  of  Ad.'] 

37.  This  Act  shall  be  deemed  and  taken  to  be  a  Public  Act,  and  shall  '^^^^  ^^*  *° 

extend  to  the 

be  judicially  taken  notice  of  as  such  by  all  judges,  justices,  and  others  colonies  and 

in  the  United  Kingdom  and  in  the  sd  colonies,  and  their  dependencies,  ^° '^*^  judicially 

?  -^  taken  notice 

Without  being  specially  pleaded.  of. 

The  schedule  contains  the  memorandum  of  association  of  the  new  co. 


The  Baexet  District  Gas  axd  Water  Act,  1872,  35  &  36 
Vict.  c.  189. 

Act  for  armilgamaUnfj  three  com2)anies  1)])  dissolving  and  re-incor-         Form  757. 

iwrating  them.  Another 

Amalgamation 
This  was  an  Act  for  tlie  amalgamation  of  three  companies.      Of  these^,  one  Act. 
was  incorporated  by  Act,  and  the  others  were  limited  companies.     The  fol- 
lowing is  an  epitome  of  the  Act : 

1.  Short  title.  2.  Incorporation  of  General  Acts.  3.  Interpretation  Epitome  of 
Clause.  4.  Limits  as  to  gas.  5.  Limits  as  to  water.  6.  Schedules  ^ ' 
to  be  deemed  pt  of  Act.  7  and  8.  Dissolution  of  the  three  companies 
and  incorporation  of  members  as  a  new  co.  9.  Pt  V.  of  the  Railway 
Clauses  Act,  1863  \_relating  to  amalgamation']  to  operate  as  if  the  three 
companies  were  railway  companies,  and  as  if  the  resjsive  memorandums 
and  articles  of  the  two  limtd  companies  were  special  Acts.  10.  As  to 
moneys  due  to  or  from  the  three  companies  on  revenue  account.  11. 
Expenses  of  amalgamation.  12.  Indemnity  to  trustees.  13.  Arrangemts 
as  to  share  capital  of  the  three  companies  specified  in  schedules  to  have 
effect.  14.  Continuance  of  trusts  of  stock,  &c.  15.  Xew  certificates. 
16  to  39.  Subdivision  of  shares,  borrowing,  directors,  &c.  40.  Power  to 
pchase  certain  lands  by  agreemt.  41.  As  to  construction  of  gas  works. 
42  to  70.  Miscellaneous  provisions  as  to  supply  of  gas  and  water,  rents, 
&c.     71.  Costs  of  Act.     Schedules. 


630 


SPECIAL    ACTS. 


Form  758. 

Modifying 
regulations, 
.  and  authorising 
return  of 
capital. 


Interpretation. 


Division  of 
capital  of 
Company 
into  shares  of 
jtlO  each. 


The  Colonial  Co  (Lbitd)  Act,  1881,  44  Yict.  c.  10. 

Act  suMividing  sluires ;  authorising  conversion  into  frcference  and  ordi- 
narg,  authorising  rppagmt  of  cajjitccl  ^jr?  in  advance  of  calls  and 
modifging  regulations. 

The  Act  recites  :  incorporations  of  co  under  the  Companies  Act,  1802, 
with  a  capital  of  2,000,000/.,  divided  into  4o,0()0  shares  of  507.  each  : 
And  that  36,819  shares  have  been  issued,  of  which  7,300  have  been  for- 
feited for  non-paymt  of  calls  or  otherwise,  and  on  the  remaining  29,510 
of  the  sd  shares  the  sum  of  20/.  has  been  called  up  and  pd,  and  on  GOO  of 
such  shares  the  sum  of  29/.  10,s.  has  been  pd  in  advance  of  calls,  and  on 
73  of  such  shares  the  sum  of  11/.  has  been  pd  in  advance  of  calls,  so  that 
the  pd-up  capital  is  680,883/.  and  the  unissued  capital  is  159,050/.  : 
And  that  the  co  have  not  power  to  issue  any  pt  of  their  original  capital 
as  preference  shares,  and  doubts  are  entertained  as  to  the  extent  of  their 
power  to  cancel  shares :  And  that  it  is  expedient  to  make  such  provision 
as  is  in  the  Act  contd  for  the  conversion  of  the  existing  shares  in  the  co 
into  shares  of  smaller  amount,  and  to  authorise  the  co  to  issue  preference 
shares,  and  to  remove  such  doubts  as  afsd :  And  that,  owing  to  the 
nature  of  the  co's  business,  the  amount  of  profit  in  one  year  as  compared 
with  another  is  subject  to  considerable  fluctuation,  and  it  is  frequently 
difficult  to  estimate  the  amount  of  profit  available  for  dividend  in  any 
given  year,  and  it  is  therefore  expedient  that  the  dividend  upon 
preference  capital  of  the  co  should  be  cumulative,  and  not  contingent 
upon  the  profits  of  each  year :  And  that  these  objects  cannot  be  attained 
without  the  authority  of  Parliamt :  And  that  a  copy  of  the  bill  for  this 
Act  has  been  sent  to  every  member  of  the  co,  and  members  holding 
28,172  shares  out  of  the  whole  number  of  29,519  shares  issued  and  not 
forfeited,  have  signified  their  assent  to  the  promotion  of  the  bill,  and  no 
memlier  has  signified  dissent :  It  was  therefore  enacted  and  be  it  enacted 
by  the  Queen's  most  Excellent  Majesty  by  and  with  the  advice  and 
consent  of  the  Lords  Spiritual  and  Temporal  and  Commons  in  this 
present  Parliamt  assembled,  and  by  the  authority  of  the  same,  as 
follows  : — 

1.  \_Short  title.'] 

2.  In  this  Act — 

The  expression  "  the  directors  "  means  the  directors  of  the  co,  and 
includes  any  managing  director  or  directors  or  committee  to  whom 
the  powers  by  this  Act  conferred  on  the  directors  may  be  delegated 
by  the  directors  ; 

The  expression  "  share  "  or  "  shares  "  means  a  share  or  shares  in  the 
capital  of  the  co. 

3.  Every  50/.  share  in  the  co  is  hby  divided  into  five  shares,  each  of 
the  nominal  amount  of  10/.,  and  the  memorandum  of  association  of  the 
CO  is  hby  altered  accordingly,  and  five  of  such  shares  of  10/.  eacli  are 
hby  substituted  for  each  50/.  share,  and  as  regards  every  50/.  share  issued 


FOEMS.  637 

and  not  forfeited  l^efore  the  passing  of  this  Act,  the  sum  of  4/.  shall  be  Form  758. 

deemed  to  have  been  pd  up  on  each  of  the  10/.  shares  sul)stituted  for  such 

ij()l.  share,  and  any  moneys  which  have  l)een  pd  beyond  2(i/.  on  any  507. 

share  shall  be  divided  into  fifths,  and  one  such  fifth  shall  be  deemed  to 

have  lieen  pd  in  advance  on  each  of  the  10/.  shares  substituted  for  such 

^0/.  share. 

4.  Consequent  alteration  of  register  and  books  to  be  made. 

5.  In  the  case  of  each  50/.  share  for  which  five  10/.  shares  are  snbsti-  Saving  of 
tuted  by  this  Act,  such  five   10/.  shares  shall  (whether  or  not  converted  rivhtsTn 
as  hereinafter  provided)  to  all  intents  and  pposes  represent  such  50/.  respect  of 
share,  and  be  subject  and  liable  to  the  same  trusts,  power,  provisions, 
declarations,  agreemts,  charges,  liens,  and  incumbrances  as  immediately 
before  the  passing  of  this  Act  affected  such  50/.  share,  and  so  as  to  give 

effect  to  and  not  to  defeat  or  prejudice  any  testamentary  or  other  disposi- 
tion of  or  affecting  the  same. 

0.  Subject  to  the  provisions  of  this  Act  the  directors  may  from  time  Po'^'ei- to 
to  time  agree  with  any  holder  of  not  less  than  five  10/.  shares,  with  not 
less  than  4/.  pd  thereon,  that,  in  conson  of  the  paymt  hereinafter  mentd 
any  set  or  sets  of  five  of  such  shares  shall  be  converted  into  two  10/. 
ordinary  shares  fully  pd  up,  and  bearing  dividend  on  the  full  amount  pd 
up,  and  three  lo/.  preference  shares  bearing  such  preferential  dividend  as 
hereinafter  mentd. 

7.  (1)  Xot  more  than  one-half  of  the  10/.  shares  for  the  time  being  Provisions  as 
issued  shall  be  converted  under  the  powers  of  this  Act : 

(2 )  The  option  of  conversion  shall  be  offered  (as  from  time  to  time 
the  directors  may  think  expedient)  by  notice  to  the  members  of  the 
CO  holding  at  least  one  set  of  five  ordinary  shares  not  fully  paid  up  in 
proportion  (omitting  fi-actions)  to  the  number  of  such  shares  held  by 
each  member  respively  : 

Provided  that  no  offer  shall  he  made  to  any  member  who  according 
to  such  proportion  would  not  be  entled  to  an  offer  to  convert  at  least  one 
set  of  five  shares  : 

(3)  A  member  who  does  not  within  one  month  after  receipt  of 
such  notice,  or  such  other  period  as  may  be  specified  in  the  notice, 
signify  in  writing  his  acceptance  of  the  offer  made  by  the  directors, 
shall  be  deemed  to  have  refused  the  same,  and  thereupon  the  option 
offered  to  such  member  may  be  offered  to  any  member  or  members  of 
the  CO,  at  the  discretion  of  the  directors  ;  and  wdiere  any  member  accepts 
the  offer  of  the  directors  as  to  some,  but  not  all  of  the  shares  included 
therein,  the  option  as  to  the  balance  may  be  similarly  offered  at  the 
discretion  of  the  directors  : 

(4)  There  shall  be  pd  to  the  co  in  respect  of  every  set  of  five  shares 
converted  under  the  powers  of  this  Act  at  the  time  of  acceptance  of  the 
•option  of  conversion,  or  at  such  other  time  or  times  as  may  be  fixed  by 
the  directors,  such  sum  as  will  suffice  to  pay  up  in  full  two  of  the  shares 
converted,  and  such  additional  sum  (if  any)  by  way  of  premium,  as  the 
directors  may  in  the  notice  giving  the  option  of  conversion  have  fixed, 


638 


SPECIAL    ACTS. 


Form  758. 


Further  pro- 
visions in 
case  of  mem- 
bers who 
have  paiel 
moneys  in 
advance  of 
calls. 


Dividend  on 

preference 

shares. 


Power  of 
directors  to 
accept  pay- 
ment in  full 
of  preference 
.shares. 

As  to  future 
issues  of 
.^harcs. 


which  sum  or  sums  may  be  recovered  by  the  co  in  Kke  manner  as  a 
call  duly  made  on  the  holder  of  such  shares  : 

(5)  On  paymt  to  the  co  of  the  sum  or  sums  required  to  be  pd  in 
Issuance  of  this  section,  every  set  of  five  shares  not  fidly  paid  up  in 
respect  of  which  such  paymt  has  been  made  shall  he  converted  into  two 
10?.  ordinary  shares  fully  pd  up,  and  bearing  dividend  on  the  full  amount 
pd  up,  and  three  107.  preference  shares  bearing  such  preferential  divi- 
dend as  hereinafter  mentd,  and  with  such  sum  pd  up  thereon  as  was 
pd  up  at  the  time  of  conversion  on  the  shares  converted  into  such 
preference  shares. 

8.  (1)  Where  any  member  of  the  co  has  before  the  passing  of  this 
Act  pd  any  sum  or  sums  in  advance  of  calls  on  all  or  some  of  his  shares, 
the  directors  may,  if  they  see  fit,  at  any  time  within  six  months  after 
the  passing  of  this  Act,  return  to  him  the  moneys  so  pd  in  advance  of 
calls  : 

(2)  If  the  directors  see  fit  to  exercise  the  power  afsd,  then  any  such 
member  shall  be  entled  (notwithstanding  any  other  provision  of  this 
Act)  to  have  any  set  or  sets  of  five  of  his  shares  (not  exceeding  one- 
half  of  his  shares  on  which  a  sum  or  sums  has  or  have  been  pd  in 
advance  of  calls  as  afsd)  converted  into  two  ordinary  shares  fully  pd  up, 
and  three  preference  shares  fully  pd  up,  on  his  applicon  within 
fourteen  days  after  receipt  of  notice  by  him  of  the  directors'  intention 
to  exercise  the  power  afsd,  and  on  paymt  of  such  sum  as  will  suffice  to 
pay  up  in  full  every  set  of  five  shares  so  converted  : 

(3)  Every  such  sum  may  be  deducted  by  the  directors  from  the 
moneys  payable  to  any  member  by  them  under  this  section. 

9.  Power  to  issue  new  share  certificates,  &c.,  for  pposes  of  con- 
version. 

10.  The  holders  of  the  preference  shares  under  the  foregoing  pro- 
visions of  this  Act  shall  be  entled  to  a  preferential  dividend  of  six 
p.  c.  p.  a.  on  the  amount  for  the  time  being  pd  up  on  the  preference 
shares  held  by  them  respively,  with  the  right  to  resort  to  the  net  profits 
of  any  subsequent  year  to  make  up  any  deficiency  in  such  dividend  in 
any  preceding  year,  but  such  dividend  shall  in  no  case  carry  interest  as 
against  the  co. 

11.  The  directors  may  from  time  to  time  as  they  think  expedient  in 
the  interests  of  the  co  accept  paymt  fi"om  any  holder  of  preference 
shares  in  the  co  of  the  amount  for  the  time  being  unpaid  on  all  or  any 
of  such  shares,  or  of  any  pt  of  such  amount. 

12.  Subject  to  the  foregoing  provisions  of  and  so  as  not  to  affect  any 
preference  given  by  this  Act,  any  shares  issued  subsequently  to  the  pass- 
ing of  this  Act  may  with  the  sanction  of  a  special  resolution  be  issued 
with  such  preferential  right  to  dividend  and  at  a  premium  or  otherwise 
as  the  directors  may  from  time  to  time  in  the  interests  of  the  co  think 
expedient. 

13.  100  forfeited  shares  to  be  cancelled. 

14.  No  call  shall  exceed  the  sum  of  one  pound  per  share,  and  article 


FOEMS.  G39 

nine   of    the   articles   of    association   of  the  co   is  hereby  altered  ac-  Form  758. 
cordinglj.  Limiting 

15.  Any  notice  required  to  be  given  for  any  of  the  pposcs  of  this  Act  ^mKiuntof 
may  be  given  in  manner  prescribed  by  the  regulations  of  the  co,  and  the  ,. 
regulations  of  the  co  with  respect  to  notices  shall  apply  as  if  they  were 
herein  enacted. 

IG.  Article  forty-nine  of  the  articles  of  association  of  the  co  is  hereby  Votes  to 
cancelled,  and  every  member  of  the  co  who  has  been  duly  registered  at  "^^^^^  e^cli 

sii^rGiiolciGr 

least  three  months  previously  to  any  meeting  shall  at  any  poll  have  one  i.^  entitled, 
vote  in  respect  of  each  entire  amount  of  twenty  pounds  of  capital  whether 
ordinary  or  preference  or  partly  ordinary  and  partly  preference  of  the  co 
then  actually  pd  up  on  shares  standing  in  his  name  either  in  paymt  of 
calls  made  or  in  advance  beyond  the  sums  actually  called  for  or  otherwise 
under  the  provisions  of  this  Act. 

17.  The  words  "  Five  hundred  shares  whetiicr  ordinary  or  preference  Qualification 
or  partly  ordinary  and  partly  preference  "  are  liliy  substituted  for  the 

words  "  One  hundred  shares "  in  article  fifty-eight  of  the  articles  of 
association  of  the  co. 

18.  The  memorandum  and  articles  of  association  of  the  co  shall,  save  General 
so  far  as  they  are  expressly  altered  Ijy  this  Act  and  Avithout  prejudice  to  '"'^^"^°- 
the  powers  of  alteration  given  by  the  Companies  Acts,  18G2  to  1880, 
continue  in  full  force  and  effect. 

19.  [Costs  of  Act] 

The  Tasmania^  Main  Line  Eailway  Act,  1877,  40  &  41  Yict. 

c.  92. 

Act  autliorismg  a  co  formed  under  the  Act  of  1862  to  create  dehetifures  Form  759. 


raiiking  in  priority  to  existing  debentures.  Power  to 

This  is  an  interesting  example  of  the  mode  in  which  Parliament  occasionally  . 
enables  a  company,  with  the  consent  of  a  large  majority  of  the  parties  inter- 
ested, to  create  a  charge  taking  priority  over  inciimbrances  already  existing. 

The  Act  recites  :  (1)  the  formation  of  the  co  in  187u  under  the  Com- 
panies Acts,  18G2  and  18G7  :  (2)  that  by  a  contract  dated  15  August, 
1871,  l)etween  the  Governor  of  the  sd  Colony  of  Tasmania  of  the  one 
pt  and  the  co  of  the  other,  the  co  agreed  to  construct,  work,  and  main- 
tain a  railway  between  Hobart  Town  and  Launcestou,  and  by  the  sd 
contract  the  sd  governor  guaranteed  to  the  co  interest  at  the  rate  of  5 
p.  c.  p.  a.  upon  the  money  actually  expended  in  and  for  the  pposes  of  the 
construction  of  the  sd  railway,  up  to  and  not  exceeding  G50,000?,  during 
the  period  of  construction  therein  mentd,  and  for  a  period  of  thirty 
years  from  the  opening  of  the  entire  line  for  traffic,  subject  as  therein 
mentd  :  (3)  that  by  the  memorandum  and  articles  the  capital  of  the  co 
was  fixed  at  1,000,000/.  in  100,000  shares  of  10/.  each,  and  the  directors 
of  the  CO  were  authorised  to  raise  and  borrow  with  the  approval  of 
general  meeting :  (4)  that  the  directors  had  issued  perpetual  debenture 
bonds  payable  to  bearer  to  the  amount  of  G 50,000/.,  bearing  interest  at 


640 


SPECIAL    ACTS. 


Form  759. 


Power  to 
debenture 
bond  and 
.stock  holders 
and  company 
to  make 
agreement. 


5  p.  c.  p.  a.,  the  paymt  of  ■which  interest  was  made  a  first  charge  on  the 
■  whole  earnings  and  revenue  to  arise  from  the  railway,  including  the 
interest  guaranteed  to  the  co  by  the  Governor  of  Tasmania  as  afsd  ;  and 
that  subsequently  the  directors  issued  debenture  stock  to  the  amount 
of  50,000/.,  bearing  interest  at  the  rate  of  6  p.  c.  p.  a.,  but  without  pre- 
judice to  the  debenture  bonds  above  referred  to  :  (5)  that  the  co  have 
constructed  the  railway  and  the  same  is  now  being  worked,  but  the 
Governmt  of  Tasmania  have  refused  to  pay  the  interest  provided  for 
Ijy  the  recited  contract,  on  the  ground  that  the  railway  has  not  been 
constructed  and  is  not  being  worked  in  accordance  therewith,  and  that 
the  CO  have  therefore  been  unable  to  j)ay  interest  on  the  debenture 
bonds  :  (6)  that  it  is  expedient  in  order  to  enable  the  co  to  do  certain 
farther  works  on  the  railway,  and  to  discharge  certain  liabilities,  that 
they  should  be  empowered  to  raise  further  money,  to  an  amount  not 
exceeding  100,000/.,  Ijut  the  same  can  only  be  raised  on  the  security  of  a 
portion  of  the  interest  guaranteed  by  the  sd  Govemmt,  and  now  pay- 
al)le  to  the  holders  of  the  debenture  bonds  created  as  afsd  :  (7)  that  it 
is  expedient  that  with  the  consent  of  the  holders  of  the  last-mentd 
bonds,  to  be  signified  as  hereinafter  prescribed,  the  co  should  be  em- 
powered to  attach  to  a  further  amount  of  debenture  bonds  or  stock,  not 
exceeding  lnO,000/.,  a  preferential  interest  as  hereinafter  jDrovided,  and 
that  the  interest  now  jjayable  on  the  existing  debenture  bonds  should  be 
reduced  to  the  extent  hereinafter  mentioned  :  (8)  that  it  is  expedient 
that  with  the  consent  of  a  sufficient  majority  of  the  holders  of  the  sd 
existing  debenture  bonds  and  debenture  stock  the  paymt  of  the  interest 
now  overdue  thereon,  and  of  that  which  shall  become  due  during  a 
certain  period,  should  be  delayed,  and  the  coming  due  of  the  principal 
which  has  been  caused  by  the  non-paymt  of  the  interest  should  be 
Avaived  :  (0)  that  the  greater  portion  of  the  capital  expended  in  the  con- 
struction of  the  railway  has  beeii  raised  by  means  of  the  debenture 
bonds  and  the  debenture  stock,  and  it  is  expedient  that  the  holders  of 
debenture  bonds  and  debenture  stock  of  the  co  should,  as  hereinafter 
mentd,  be  empowered  to  vote  at  all  meetings  of  the  shareholders  of  the 
CO,  and  should  be  eligible  as  directors  of  the  co :  and  (10)  that  the 
pposes  afsd  cannot  1)C  effected  without  the  authority  of  Parliamt :  It  was 
therefore  enacted  as  follows  : 

1.  [_SJwrt  title  of  Act.] 

2.  Any  agrecmt  to  carry  into  effect  the  pposes  of  this  Act  must  be  in 
writing  and  must — 

First,  be  approved  by  the  votes  of  three-fourths  in  amount  of  such  of 
the  holders  of  the  co's  perpetual  debenture  bonds  for  ()50,000/. 
and  G  p.  c.  debenture  stock  for  50,000/.  (voting  together)  as  shall 
be  present  in  person  or  by  proxy  at  a  general  meeting  of  such 
holders,  to  be  convened  by  the  Board  of  the  co  by  one  week's 
previous  notice  by  advertisemt  in  the  Times,  Daibj  News,  and 
Standard  newspapers,  or  at  any  adjournmt  thereof : 

Second,  be  duly  signed  by  or  on  behalf  of  the  co,  and  by  the  holders 


FOEMS.  641 

of  not  less  than  three-fourths  in  amount  of  the  sd  perpetual  Form  759. 
debentm-e  bonds  for  050,000/.,  and  by  the  holders  of  not  less  than 
three-fourths    in   amount   of  the   sd   G   p.   c.  debenture  stock 
for  50,000/.,  or  by  the  duly  authorised  agents  of  such  holders 
respively. 
3.  An  agreemt  approved  and  executed,  as  in  the  preceding  section  Provisions 
mentd,  may  provide  for  all  or  any  of  the  things  hereinafter  in  this  °  ^^ggy^g^t^ 
section  mentd,  with,  under,  and  subject  to  such  terms,  provisions,  con- 
ditions, and  limitations  as  may  be  contd  in  the  sd  agreemt,  and  such 
determination,  subject  as  afsd,  shall  be  binding  upon  and  enure  to 
the  benefit  of  the  co,  and  all  persons  now  or  hereafter  holders  of  or 
interested  in  the  sd  perpetual  debenture  bonds  and  G  p.  c.  debenture 
stock,  whether  they  shall  have  executed  the  sd  agreemt  or  not ;  that  is 
to  say, 

(A.)  That  from  and  after  any  day  to  be  named  in  the  sd  agreemt,  the  Reduction  of 
interest  payable  on  the  sd  G50,000/.  perpetual  debenture  bonds  J^^^i^^g.^ture'' 
shall  be  reduced  from  such  date  and  for  such  period,  on  such  bonds. 
conditions  and  to  such  rates,  as  may  be  prescribed  in  such 
agreemt,  such  reduction  of  interest  not  being  more  than  1?. 
per  100/.  per  annum  : 
(B.)  That  the  co  may  fi'om  time  to  time  issue,  on  such  terms  as  they  Issue  of 
shall  think  fit,  such  further  amount  or  amounts  of  debenture  ^^^0^^^  of 
bonds  or  debenture  stock,  perpetual  or  not,  as  the  directors  of  debenture 
the  CO  shall  think  fit,  not  exceeding  in  the  whole  100,000/.,  ^^^^^_ 
and  may  attach  thereto  such  a  rate  of  interest,  subject  as  here- 
inafter mentd,  as  they  shall  think  fit,  and  that  the  principal 
and  interest  of  the  sd  bonds  shall,  if  and  so  far  as  so  deter- 
mined by  the  sd  agTeemt,  be  secured  by  a  first  mtge  or  charge 
upon  the  co's  railway,   rolling  stock,  plant,  machinery,  and 
other  accessories  thereof,  upon  such  terms  and  conditions  as 
the  CO  may  agree  upon  with  the  persons  advancing  the  money ; 
and  if  so  determined  and  agreed,  the  sd  mtge  or  charge  may 
include  the  whole  or  any  pt  of  the  earnings  and  revenue  to 
arise  from  the  railway,  including  the  interest  guaranteed  by 
the    sd   Governmt    as  afsd ;    provided    that   the    aggregate 
amount  of  the  interest  so  attached  shall  not  exceed  a  sum 
equal  to  the  aggregate  amount  of  the  reduction  in  the  interest 
payable  to  the  holders  of  the  perpetual  debenture  bonds  for 
G50,000/.  so  determined  as  afsd,  and  any  such  mtge  and  charge 
shall  take  effect  according  to  the  tenor  thereof,  in  priority  to 
the  rights  of  all  the  holders  of  or  persons  interested  in  the  sd 
perpetual  debenture  bonds  and  G  p.  c.  debenture  stock  : 
(c.)  That  there  shall  be  cut  off  and  deposited  in  the  hands  of  trustees  Funding  of 
the  coupons  now  due  and  unpaid  on  the  sd  perpetual  debenture  gxll^ting  °" 
bonds,  and  those  to  become  due  during  such  period  as  shall  be  debenture 
prescribed  by  the  sd  agreemt,  not  being  longer  than  to  the  end 
of  1878,  and  that  the  same,  and  the  interest  now  due  and  to 
T  T 


642 


SPECIAL    ACTS. 


Form  759. 


Scheme  of 
distribution. 


Application  of 
special  capital. 


Eight  of 
debentiuc 
holders  to 
vote  and  to 
be  elected  as 
directors. 


Saving  rights 
of  Government 
of  Tasmania. 


1)ecome  due  for  the  corresponding  period  on  the  sd  G  p.  c.  de- 
benture stock,  shall  not  be  payable  for  such  period  as  may  be 
so  determined,  not  later  than  the  last-nicntd  date,  and  that  the 
falling-  due  of  the  principal  of  the  sd  per])etual  debentures  and 
C  p.  c.  delientiire  stock  occasioned  l)y  the  nonpajnit  of  the 
coupons  and  interest  already  due  shall  be  suspended  for  such 
time  as  may  be  so  determined  : 
(d.)  That  the  scheme  of  distribution  of  the  proceeds  of  sale  of  the 
railway  or  other  ppty  of  the  co  contd  in  the  first  schedule  to 
this  Act  shall  take  effect. 
4.  The  capital  to  which  any  special  interest  shall  be  assigned  under 
the  last  preceding  section  shall  be  expended  only  upon  completing  the 
railway  (if  and  so  far  as  the  same  has  not  been  so  completed)  in  accord- 
ance with,  and  in  or  towards  satisfon  of,  the  contract  between  the  Tas- 
manian  Governmt  and  the  co,  and  in  such  other  expenditure  upon  the 
railway  and  its  equipmt,  and  in  discharging  the  liabilities  of  the  co,  as 
the  board  of  the  co  shall  think  desirable. 

T).  If  and  so  soon  as  an  agreemt  shall  be  approved  and  executed,  as 
mentd  in  section  2,  the  provisions  in  the  second  schedule  hto  for  giving 
votes  to  the  debenture  holders,  and  making  them  eligible  as  directors, 
shall  become  aud  be  pt  of  the  regulations  of  the  co,  and  a  copy  of  them 
shall  thereupon  be  filed  l)y  the  board  of  the  co  with  the  Registrar  of 
Joint  8tock  Companies,  and  such  filing  shall  )je  conclusive  evidence 
that  the  sd  agreemt  has  come  into  force. 

G.  Nothing  contd  in  this  Act  shall  lirejudice,  limit,  or  interfere  "vvith 
any  of  the  rights,  powers,  privileges,  or  interests  of  the  GoA'ermnt  of 
Tasmania  under  the  contract  in  this  Act  recited,  or  otherwise  however. 
7.  [As  io  costs  of  the  Act.^ 

The  first  schedule  contains  provisions  for  distributing  the  proceeds  of 
sale  ;  and  the  second  schedule  contains  a  series  of  clauses  purporting  to 
alter  the  articles  of  the  co  so  as  to  give  the  deljcnture  holders  votes,  &c. 


T]iE  London  Tkamways  Co,  Limtd  (Pchase)  Act,  1873,  3G  &  37 

Vict.  c.  204. 


Form  760.  Act  cmthorisimj  two  iramway  companks  mcorporcdcd  hj  special  Act  to  sell 
their  uncleitaJchujs  to  a  co  formed  viider  the  Act  of  1862. 


Transfer  of 
imdcrtakin; 


Acts  providing'  for  the  sale  or  transfer  of  the  undertaking  of  a  company 
incorporated  by  special  Act  to  a  company  formed  under  tlie  Act  of  18G2j  are  by 
no  means  uncommon. 


INDEX. 

Note. — The  italics  refer  to  the  Precedents:  the  rest  to  the  notes. 


ACCIDENT  COMPANY, 

ohjccts  of,  90,  91 
xmlkics,  313,  317,  320 

ACCOUNTS, 

clauses  in  memorandum  as  to,  78 
clatoscs  in  articles  as  to,  160,  179 
clauses  in  articles  as  to  audit  of,  137 
of  off.  liq.,  form  of  439 

(tffidavit  vcrifijing,  440 

certificates  of  allowance,  442 

ACCOUNTS  AND  INQUIRIES, 

in  action  by  debenture  holders,  403 
where  trust  deeds,  407  ct  seq. 

ACTIONS, 

by  debenture  holders,  orders  in,  403 

liberty  to  bring  and  proceed  with  after  winding-up  order  as  to,  494 

orders  c/iving,  495  et  seq. 
liberty  to  off.  liq.  to  bring  and  defend,  457,  458 
•  on  behalf '  when  allowable,  364,  367 
2)oweriii  articles  for  directors  to  bring,  154 
restraining  and  staying  in  winding  up  as  to,  489 
security  for  costs,  orders  as  to,  403 
transfer  after  winding-up  order  as  to,  493 

orders  for  transfer,  494 
ultret  vires  proceedings  to  restrain,  394  et  seq. 
vjrits  in  various,  338 

ACTS  OF  PARLIAMENT, 

power  ill  memorandum  to  apply  for,  87,  88 
See  also  "Special  Acts." 

ADJOURNMENT, 

clause  in  articles  as  to,  137 

ADJUSTMENT, 

rights  of  contributories,  166,  189 

ADMINISTRATORS, 

clause  in  articles  as  to,  127 

ADOPTION, 

agcnfs  liability  on  contract  to  be  discharged  o)?,  11 
clauses  in  articles  as  to  adopting  contract,  115 

effect  of  such  clauses  as  to,  115 
contract  by  cornxmny  effecting,  30,  31 
'power  in  monorandum  to  effect,  85 
preliminary  contract  as  to,  1 
when  company  bound  by  adoption,  115,  188 
of  acts  of  promoters,  188 


6U  INDEX. 


ADVERTISEMENT, 

for  claims  of  debenture  holders,  407 

of  ineeting  of  debenture  holders,  414 

of  meetings  in  winding  up,  515 

of  meetings  to  consider  Arrangement,  588,  594,  599,  601,  602,  607 

of  order  a,p2)ointini  off.  liq.,  434 

of  resolutions  to  wind  iq),  529 

winding-uj)  order,  432 

AFFIDAVITS, 

compromise,  with  a  view  to,  511 

fitness  of  off',  liq.,  433 

formal  parts  of ,  418 

'proving  debts  in  winding  -up,  470  et  scq. 

verifying  accounts  of  off.  liq.,  440,  442 

us  to  off.  liq.^s  remuneration,  445,  446 

AGENTS, 

appointment  of,  as  to,  61 

power  to  sub-delegate,  148 
contracting  for  compan}',  authority  of,  4 
for  intended  company,  liabilitj'  of,  3 
proviso  limiting  liability  of,  3 
liability  on  adoption,  5 

AGEEEMENT  [Sec  also  Contracts.] 
adoption  of,  by  compa7iy,  30,  31 
adoption  of,  mode,  30,  115 
arbitration  clause  in,  21 
business,  for,  sale  of,  25 
business,  for  sale  of  to  pirivate  company,  338 
completion,  8 
completion  abroad,  28,  33 
conditional  on  approval  of  Court,  55 
debejitures,  to  issue,  27 
filing,  as  to,  3,  10 

inspection  of  premises,  clause  as  to,  28 
inanager,  appointinff,  57 
mines,  for  sale  of,  28 
notices  as  to  service  of,  30 
jmtent,  for  sale  of,  16 
sale,  for,  forms  of,  9  et  scq 
seal  not  requisite,  3 
secretary  appointing,  58 
ship,  for  sale  of,  32 
signature  for  co.,  4 
syndicate,  56 
preliminary  as  to,  1 
'preliminary,  forms  of,  9  et  scq. 
promoter,  by,  to  form  company,  34 
rescission,  power  in  contract,  8 
various  forms  [See  Table  of  Contents]. 

ALLOTMENT  OF  SHARES, 

2}0wer  of  directors  in  articles,  116 

notice  of,  210 

efiect  of  notice  of,  247 

ALTERATION, 

of  articles  of  association, 

power  to  eHect,  193 

resolutions  for,  ib. 
of  name,  201 

AMALGAMATION, 

meaning  o'  word,  572 
modes  of  effecting,  573 
power  in  memoraMdum,  87 
advantages  of,  572 
agreements  on,  jiractice  as  to,  74 


I^fDEX.  615 


AUALGAliATlO^— continued. 
debts  on,  provision  for,  575 
directors  of  amalgamated  co.,  as  to,  SiFo 
compensation  to  officers  on,  576 
notices,  sufficiency  of,  576 
what  companies  can  effect,  576 
name  of  amalgamated  co. ,  as  to,  576 
invalid  agreement  for,  as  to,  577 
dissentients,  as  to,  577 
ngrcemciits  on,  578,  580 
resolutions  on,  580,  581 
special  Acts  for,  627  et  scq. 
clause  in  numorandwin,  as  to,  87 
■injunction  restraining  invalid,  396 

AMBIGUOUS  STATEMENTS 
in  prospectus,  as  to,  232,  235 

"AND  REDUCED," 

orders  dispensing  vntk  nvord^,  378 

APPEALS, 

liherty  to  off.  liq.,  462 

notice  of  motion  on,  519 

orders  on,  462,  521 

o^rder  allowing  off.  liq.'s  costs  of,  517 

practice  on,  520 

steujing  proceedings  pendA>ig,  522 

APPLICATION, 

fo'r  shares,  letters  of,  246 

as  to  withdrawal,  247 

for  debentures,  277 

when  applicant  bound  by,  247 

APPOINTMENT, 

of  rnamtgcr,  agreement  as  to,  57 
if  secretary,  agreement  as  to,  58 
of  officers,  mode  of  effecting,  60 

AQUARIUil  COMPANY, 

special  Acts  o/",  621 

ARBITRATION, 

clause  in  agreement,  21 
effect  of,  22,  23 
clause  in  articles  as  to,  165 
poioer  of  directors  in  regard  to,  131 
liherty  in  winding  up  to  refer  to,  459 
liberty  to  proceed  with  in  winding  up,  459 
on  reconstruction  as  to,  552,  564 
valuation,  when  an,  25 

ARRANGEMENTS  UNDER  THE  ACT  OF  1870, 

sanction  of  court  requisite,  583 

nature  of  those  commonly  sanctioned,  583 

staying  winding  up,  may  provide  for,  583 

new  company,  may  provide  for,  584 

meetings  with  a  view  to,  585 

majority,  what  sufficient,  583 
different  classes  of  creditors,  as  to,  584 

secured  creditors,  may  be  bound,  584 

debenture  holders,  as  to,  584 

rights  of  members  on,  585 

sale  to  new  company,  as  to,  584 

modification  of,  as  to,  585 

procedure,  best  course  of,  585 

advertisement  of  meetings,  588  et  seq. 

petition,  how  to  be  framed,  594,  600 


646  INDEX. 

ARRANGEMENTS  UNDER  THE  ACT  OF  lS70—conthuml 
applications,  how  to  be  intituled,  588 

for  sail-  of  assets  to  2Kr so  lis  paying  a  composition,  <Lc.,  588 

for  staying  winding  up,  creation  of  nciv  first  charge  debentures,  t£r.,  £89 

for  staying  winding  up,  debenture  holders  to  give  time,  <i-c. ,  589,  592 

composition  with  creditors,  588 

orders  in  regard  to — 

meetings,  to  convene,  699  et  seq. 

sanctioning  scheme,  594 

for  debenture  holders  to  accept  debentures  of  another  co.,  606 
whether  within  the  Act,  607 

advertisements  of  meetings,  597,  601 

for  lease  of  tmdertaking,  d;c.,  596 

for  reconstruction  by  sale  of  assets  to  ncio  co.,  597,  598,  60D,  607 
jyetitions  to  satiction,  594,  595 
notices  of  meetings,  599,  601,  602 

ARTICLES  OF  ASSOCIATION, 
Table  A.,  when  it  applies.  111 
form  adopting,  172 
advantages  of,  111 
when  necessary,  ibid. 
alteration  as  to  effecting,  193 
contract,  not  a,  within  s.  25  of  Act  of  1S67,  12 
copy,  members  entitled  to,  72 
foriii  of,  usual.,  114 

guarantee,  suitable  for  company  limited,  by  guarantee,  174 
registration  of,  63 
execution,  mode  of,  93 
effect  of,  112 

cannot  authorise  ultra  vires  act,  112 
as  to  agreement  not  to  alter,  339  ct  seq. 
notice  of  contents,  members  have,  115,  241 
miscellaneous  clauses,  180  et  seq. 
of  private  company,  339,  352 

ARTIZANS'  DWELLINGS, 

objects  of  CO.,  101 

ASSURANCE, 

sale  of  business  of  life,  53 

ATTORNIES, 

poivcr  to  apipoint,  154,  186 

AUDIT 

of  accounts  of  company,  clause  in  articles,  161 
certificates  of,  162 


BALANCE  SHEET, 

clause  in  articles  as  to,  161,  351 
necessary  before  dividend,  169 

BANKING  COilPANY, 

objects  of,  92 

BANKRUPTCY, 

representation  ofcomixiny  in,  154 
of  shareholder,  as  to,  127 
liberty  for  off.  liq.  to  proceed  in,  457,  465 
to  go  in  and  prove,  388 
scJtcmes  of  arrangement  for  sale  of  assets  to  co.,  45,  50 
when  feasible,  50 

BEARER, 

share  warrants  to,  128 
debentures  to,  250,  265 
coupons  to,  263 


INDEX.  C17 

BILLS  OF  EXCHANGE, 

what  companies  power  to  accept,  86 
iKncer  to  accept  in  memorandum,  86 
liberty  to  off.  liq.  to  accept,  4.88 
memorandum  on,  488 

BILL  IN  PARLIAMENT, 

poiccr  to  2"'omoie,  88 

when  company  may  promote,  ibid.     Sec  also  brEClAL  Acts. 

BILL  OF  SALE, 

debenture  may  be  a,  261 
trust  deed,  whether  a,  261,  279 

BOARD  OF  TRADE,  ,   ,  t  •    •.  t      f     -cj 

associationsregistered  without J:he  word  'Limited,   as  to,  /S 

licence  to  omit  icord  '  limited,' j 9 
objects  of  some  associedions,  106  cl  seq. 

BOILER  INSURANCE, 

jjolicy,  325 

BONUS  SHARES, 

as  to  issue,  40,  48 

BOOKS, 

where  to  be  kept,  161_ 
access  to  bi/  vendors,  27,  563 
orders  for  delivery  to  off.  liq.,  448 
orders  for  destruction  on  dissolution,  52^ 

BORROWING, 

power  in  mciiwrandum,  83 
claiises  in  articles  as  to,  131 
in  action  by  debenture  holders,  412 
in  winding  wp,  451 
directors'  poicer,  260 
excessive  as  to,  131 

BREACH  OF  TRUST, 

order  in  actions  against  directors,  .j9y 
orders  against  directors  under  s.  165,  500 

BREWERY  COMPANY, 

objects  of,  97 

directors  accountable  for,  145,  399,  509 

BUILDING  COMPANY, 

objects  of,  101 

BUSINESS,  .    „,    .^n 

agreements  for  sale  of  going,  i,  24,  5bU 

commencing,  time  tor,  116 

power  to  acquire,  82 

poicer  to  sell,  82 

purchase  of,  clauses  in  articles  as  to,  180 

vendor  not  to  carry  on  in  competition,  9 

YE-LAWS, 

power  for  directors  to  make,  15o 
power  in  Acts  for  company  to  maJce,  623 


CALLS,  .         .,      ,,« 

clauses  as  to  in  artu-les,  118 
mode  of  making,  99,  118 


Ci8  INDEX. 


CALLS — contimicd. 
notice  of,  211 
enforcing,  mode  of,  118 
payment  in  advance,  120 
in  winding  up,  as  to,  461 
orders  enforcing,  in  winding  up,  467,  53 

CANCELLATION" 

of  agreement,  provisoes  for,  12,  505 
of  capital,  power  to  effect,  131 

jjetition  to  effect,  370 

resolutions  to  effect,  199 
stamps,  mode  of,  5 

CAPITAL, 

increase,  clauses  in  articles  as  to,  129,  208 
increase  of,  notice  of,  217 
increase,  fees  on,  73 
memorandum,  as  to  specifying  in,  70 
reduction,  jJOiver  in  articles,  131 
reduction,  resolutions  as  to,  199 
procedure  in  regard  to,  371 
uncalled,  mortgage  of,  132,  260 
uncalled,  debenture  charging,  264 

CASH, 

meaning  of,  in  s.  25  of  Act  of  1867,  12 

CERTIFICATE 

of  incorporation, 

when  to  be  granted,  64 

effect,  70 

form,  227 
of  title  to  shares, 

object  of,  223 

law  relating  to,  223 

clauses  as  to,  in  articles,  117 

forms  of  225  et  scq. 
by  debenture  trustees,  269 
in  respect  of  ore,  19 
auditors,  162 
chief  clerk's, 

in  debenture  action,  415 

that  off',  liq.  has  given  security,  437 

of  allovMiice  of  off.  liq.'s  accounts  441 

that  winding  up  complete,  442 
ijrovisional,  of  debentures,  277 

CHAIRMAN, 

clauses  in  articles  as  to,  149 
declaration  by,  as  to,  192 

CHAMBER  OF  COMMERCE, 

as  to  registration  of,  without  the  word  "limited,"  78 
objects  of,  108 

CHOSE  IN  ACTION, 

rules  as  to  assignment  of,  248  ct  seq. 

CLUB, 

objects  of,  106 

licence,  whether  requisite,  106 

COAL  AND  IRON  COMPANY, 
oljects  of,  103 

COFFEE  TAVERN  COMPANY, 

objects  of,  98 


INDEX.  649 

COLLIERY, 

sale  to  company  iu  baukniptcy,  45 

€OLOXLVL, 

loa'ii  and  agency  (■onipany,  ohjcds,  94 
register,  as  to,  186 

COLONISATION  COMPANY, 
objects  of,  102 

COMMENCING  BUSINESS, 

time  for,  116 

COMMISSION, 

to  directors,  prospectus  should  disclose,  237 
clause  in  articles  as  to,  155 

COMMITTEES, 

poivcr  for  directors  to  appoint,  150 
appoinfiHcnt  in  iciiulin/j  up,  484 

COMMON  SEAL, 

clause  in  articles  as  to,  156 

COMPANY, 

incorporation,  Iioav  effected,  64 

is  a  person  distinct  from  members,  336 

C03IPETIT10N, 

vendor  not  to  compete  vMli  company,  9 

COMPOSITION, 

with  creditors  of  company,  as  to,  588  et  serj. 
nrra/iujcmcnts  providAng for,  588  et  seq. 

COMPROMISE, 

directors'  poiccr  of,  154 
action  against  directors,  394 
in  winding  up, 

practice  as  to,  511 

affidavit  of  contributory,  512 

orders  confirming,  ibid.,  394,  513 

COMPULSORY  RETIREMENT, 

provision  in  articles  of  private  conipany,  343 

CONCESSION, 

arjro-rtient  by  promoter  to  'pjurclwse,  32,  43 
judgment  setting}  asidx  sale  of,  388 

CONDITIONAL 

agreement,  55 

CONSENT, 

by  Hi.  to  registration  of  coiapa.ny,  v:itli  name  of  liquidating  company,  249 

CONSOLIDATION  OF  SHARES, 

clanse  in  articles  as  to,  131 
resolution  for,  198 

CONSTRUCTION, 

as  to  interest  dming,  89 
railway  contract,  43 

CONSTRUCTIYE  TRUSTEE, 

nature  of,  239 
limitation,  239 


650  INDEX. 


CONTRACT, 

(if  ado'ption,  30,  31 

adoption,  mode  of  effecting,  2,  115 

agent,  by,  when  binding  on  company,  3 

clause  in  articles  as  ^o,  116 

consideration,  wliether  the  word  '  contract '  imports,  1 1 

paid-up  shares,  as  to  tiling,  3,  11 

result  of  not  filing,  13 

ordr,-  to  rectify  -register,  icherc  contract  not  duly  filed,  401 
jjoicer  in  memorandum  to  enter  into,  85 
preliminary,  1 

prospectus,  as  to  specifying  in,  242 
■rescission,  2)0wcr  of,  in  contract,  10 
seal,  when  to  be  imder,  5 
not  iinder  seal,  testimonium  clause,  5 
stamps,  5 
supplemental,  1 
valuation,  for  sale  at  a,  26 
verbal,  when  binding  on  companj',  4 

CONTRACT  AND  FINANCIAL  COMPANY, 
objects  of,  92,  193 

CONTRIBUTION, 

by  parties  to  breach  of  trust,  16S 

C0NTRIBUT0RIE8, 

calls  Oil,  as  to,  464  et  scq. 
practice,  as  to,  461 
costs  in  disputed  cases,  as  to,  461 
debts  of,  enforcimj  jjayment,  467 
detective  to  discover,  liberty  to  employ,  464 
d/ivideiuls  to,  orders  for,  465 
liberty  to  attend,  483 
meetings  in  winding  up,  as  to,  515 
settling  the  list,  practice  as  to,  461 
sunwions  to  vary  certificate,  462 
orders  rectifying  list,  462 
summons  to  strike  name  of  list,  391 

CONA^ERSION, 

of  business  into  private  company,  32 

CONVEYANCE 

on  sale,  duty  on,  336 
agreement  may  be,  6 
hy  liquidator,  537 

CO-OPERATIVE  STORES, 

objects  of,  99 

COTTON-SPINNERS, 

objects,  97 

COSTS, 

of  forming  company,  agreement  as  to,  29 
security  for,  orders  against  company,  403 
of  winding-np  petition,  as  to,  516 
ordered  to  be  paid  by  ojjlcial  liq.,  116,  519,  520 
official  liq.'s,  in  winding  up,  as  to,  516 

order  for  taxedion,  517 

ajfidarit  as  to  costs  received  on  compromises,  518 

certificates  of  taxing  master,  518 

order  gioiiig  liberty  to  jMy,  459 

COUNCIL, 

provisions  as  to,  in  articles,  177 


INDEX.  651 


COUNTY  COUKT, 

reference  of  wiiuUng  up  to.  All 
restraining  action  in,  490 

COUPON, 

to  dcbentiiri',  forms  of,  264 
effect  of,  255 

CREDITORS, 

'petition  resfrained  icJierc  claim  disputed,  402 
in  Avinding  up — 

(iffidm-its  2}roving  debts,  469  ci  seq. 
cerlifieede  of  chief  clerk  (is  to,  474 
del.)ts  incnrred  by  off.  iiq. 
(iffidcivit  as  to,  477 
orders  ((s  to  payment,  47S 
dividends  to,  476 
liberty  to  bring  actions,  495 

orders  giving,  496 
lihertj]  to  attend,  483 
lihertij  to  'prove  after  time  expired,  475 
meetings  in  winding  up,  as  to,  515 
order  varyi'iig  certificate,  474 
representative,  as  to  appointing,  484 
'restraining  proceedings  bg,  490  ct  seq. 
practice  as  to  restraining,  489 
secured,  as  to,  480 
orders  declaring  rights,  479  ct  seq. 

s%iimnons  to  ad'mit,  473 
comprromises  ivith,  514 
Crown  debts  to  he  -paid,  478 

CROSS  EXAMINATION 

on  affidavits,  practice  as  to,  501 

CROWN,  .       .    ,.  ,_„ 

order  for  payment,  debts  due  to,  tn  tomding  vp,  47b 

CUMULATIVE  DIVIDEND, 

meaning  of  term,  181 


DEBENTURES, 

advertisements  as  to,  407,  414 

liberty  to  bri-ng  action  after  poinding  up  order,  49^ 

as  to  borrowing  in  such  actions,  412 

as  to  sales  in  sucli  actions,  410 

as  to  receivers  and  managers  in  actions  by  hoiders,  409 

action  on  lielialf,  232 

'  to  bearer,'  as  to,  250  et  sec[. 

form  of,  264 
to  bearer  with  power  to  register,  255 

form  of,  264 
Bills  of  Sale  Act,  as  to,  261 
bonus  shares,  as  to,  40 
certificate  as  to,  in  action,  315 

charging  uncalled  capital,  as  to,  260  ■  4.     o^- 

as  to  condition  accelerating  time  for  payment  ni  certain  events,  24. 
conditions  usual,  2.65 

contract  to  accept,  29  •/••/■  ^  a 

contract  to  issue  2)aid-iip  shares  in  satisfaction  oj,  40 

coupons,  as  to  form  of,  264 

nature  of,  255 

as  to  directors'  power  to  issue,  260 

covenant  limiting  issue,  274 

discount,  issuing  at,  as  to,  261 

discount,  issuing  at,  261 

drawings,  'redeemable  by,  270 

exchange,  2}rovision  as  to,  268,  269 

floating  security,  25S 


^oH  INDEX. 


DEBENTURES— coH(!iJiHC(Z.  _ 

foreign  land,  as  to  charging,  257 

forms,  ordinar}',  as  to,  264  ct  seq. 

form,  disadvantage  of  the  old,  248 

ifKarcmtecd,  269 

interest  after  default,  265 

improvements  in  form,  249 

meetings  of  holders,  in  actions,  407,  414 

power  in  deed  to  convene,  294 
mortgage  debentures,  as  to,  258  et  seq. 
■tiiortfjagc  debentures,  form,  of,  264 
mortgage,  without  trust  deed,  258  ct  seq. 
negotiable,  whether  by  law  merchant,  254 
negotiability,  how  far  characteristics  can  be  annexed,  250  et  seq. 
order,  payable,  to,  271 
orders  in  action  by  holders, 

declarations  of  charge,  404 — 416 

accounts  and  inquiries,  404  et  seq. 

tvhere  trust  deed,  404 

liberty  to  attend  in  xoiiuling  np,  483 

sale  out  of  court,  406 

sales,  410 

receivers  and  matutgers,  405,  408 

bonvtving  by  receiver,  412 

attorney,  receiver  to  (tppoint,  413 

meeting  of  holders,  414 

advertisement  for  meeting,  414 

advertisement  for  claims,  407 

for  'payment  of  dividend,  415 

/o'/'  distribution  of  cash,  415 
order  for  off.  liq.  tx>  co?icur  in  sales  by  trustees,  455 
order  declaring  rights  of,  in  winding  up,  480  et  seq. 
perpetual,  273 
advantages  of,  274 
jtower  to  issue,  company's,  259 

directors',  260 
pa/ri  passu  clause,  258 
patents,  as  to  charging,  256 

'private  Act  authorising  creation  of  debenticres  to  be  co  first  charge,  G39 
'pros^Kctus  of,  278 
provisional  certificate,  277 

provisions  in  tritst  deeds  as  to  'meetings  of  debenture  holders,  294 
poiccr  to  holder  to  excJiange,  268 
register  of,  132,  262 
to  'registered  holder,'  as  to,  255  et  seq. 
'to  registered  holder,^ form  of,  272 
registration  of  bill  of  sale,  261 
resolutions  as  to  isstir,  202 
secured  by  trust  deed,  form  of,  264 
ships  as  to  charging,  256 
as  to  stamps  on,  263 
trust  deed,  secured  by,  as  to,  283  et  seq. 
trust  deed  for  securing,  283 
nncalled  capital,  260 
tcrit  in  action,  364 

DEBENTURE  STOCK, 

jrrospectus  of,  278 
certificate  of  title  to,  279 
practice  as  to  issue,  279 
conditions  of  issue,  280 

DEED  OF  SETTLE:\IENT, 

of  private  eo  III  puny,  352 

DEFERRED  SHARES, 

clauses  in  articles  as  to,  180  et  seq. 
vendors  to  fucve,  19 

DEFINITIONS, 

clause  in  articles  as  to,  IH 


INDEX.  653 


DELEGATION, 

directors,  jwiccr  of,  148 

DEPOSIT, 

company,  what  is  a,  S3 

receipt  of  money  on,  ])oivcr  as  to,  83 

on  foi-matiou  of  life  assurance  company,  90 

DETECTIVE, 

llhirty  to  employ,  to  discover  contrihutori<:s,  464 

DIRECTORS, 

appointment  by  articles,  as  to,  141 
breach  of  trust,  orders  in  action  for,  315 
clauses  in  articles,  as  to,  141  ct  seq. 
commission  on  profits,  184 
contracting  with  company,  as  to,  144 
delegating  power  to  contract,  4 
disclosure,  how  to  make,  "241 
dividends  out  of  capital,  liability  of,  171 
(jcneral  iwwers  of,  in  articles,  151 
effect  of,  ibid. 
liability  for  loss,  168 
liability  on  contract  for  company,  5 
liability  in  respect  of  prospectus,  233  cl  sej-p 
indemnity,  clause  as  to,  167 
injunction  against  exclusion,  395 
'laanagiwi,  clauses  in  articles  as  to,  147 
may  lend  to  company,  131 
wdcr  against,  fm-  breach  of  trust,  399,  507 
wdcr  compromising  action  against,  394 

powers  of,  151 
povxr  for  directors  to  appoint,  141,  349 
'jjoiver'in  articles  to  contract  with  compamj,^  144 
prospectus  should  disclose  commission,  277 
jjroceedings  of,  148 

proxy,  voting  by,  351 

qualification  of,  as  to,  142,  144 

qualification  shares,  order  to  refund  monies  rcccuxd  from  promoters,  M^ 

removal,  as  to,  147 
remuneration,  as  to,  143 

remuneration,  clauses  as  to,  143 

resignation,  as  to,  142 

resolution  without  meeting,  150 

rotation  of,  clauses  in  articles  as  to,  145  _ 

sureties,  orders  as  to,  in  poinding  ^tp,  417 

vacate  office,  in  what  events,  144 

DISCHARGE 

of  official  Uquidalor,  447 

DISCLOSURE 

by  promoter  and  directors,  how  to  be  made,  241 

DISCOUNT, 

contract  to  issue  shares  at  a,  39 
debentures,  as  to  issuing  at,  132,  151 

DISCOVERY, 

under  s.  115,  505 
in  winding  up,  498 

DISPUTED  DEBT, 

restraining  vnndincj- up  petition,  402 

DISSENTIENT  ,.-,    r  a  .   ^««    / 

member,  rights  of,  on  sale  under  s.  161  of  Act,  556  ct  sc<i. 


65i  INDEX. 


DISSOLUTION  ORDERS, 
practice  as  to,  52 i 
orders  for,  525  ct  scq. 
order  to  destroy  books  on,  525 
orders  for  division  of  ccssets  on,  526 
unclaimed  dividends,  order  as  to,  526 

DISTRESS, 

as  to  injunction  restraiuiiig,  493 

orders  restraining,  493 

lihrrtij  to  levy  in  windhuj  up.  496 

DISTRIBUTION 

of  assets  in  specie,  clause  as  to,  166 

DIVIDENDS, 

da  use  in  articles  as  to,  157 

(jiiarantec  agreement,  18,  41 

injunction  restraining 2}^''y''^i(^''it  out  of  capiUd,  365,  3D8 

jiind  out  of  capital,  directors  ordered  to  repay,  509 

])iiyaljle  only  out  of  profits,  171 

out  of  capital  ultra  vires,  169 

lialiility  of  directors,  171 

'uyirrants,  form  of,  218 

in  specie,  as  to,  158 

DIVISION  OF  SHARES, 

clause  in  articles  as  to,  131 
resolutions  to  effect,  199 

DOCK  COMPANY, 

objects  of,  97 

DOCUMENTS, 

discovery  and  inspection,  499 
inspection  under  s.  156  of  Act,  500 

orders  for,  499  ei  seq. 
notices  to  irroducc,  503 
notices  to  admit,  603 

DAVELLINGS  COMPANY 
objects  of ,  101 


ELECTRIC  LIGHT, 

objects  of  comjjany,  196 

engineer,  agreement  a.pipoiiitlng,  59 

ENGINEER, 

objects  of  comimny,  97 

EQUITIES, 

when  company  cannot  set  up  against  debenture  holder,  250 

ESTOPPEL, 

the  doctrine  of,  252 

by  issue  of  certificate,  13,  223 

EVIDENCE, 

on  winding-up  petition,  419 
in  winding  up,  501 
time  to  flic,  463,  473 

EXAMINATION  UNDER  s.  115  OF  ACT, 

summons  to  attend,  505 
practice  as  to,  504 
urders  appointing  coxtrdiiicrs,  506 
orders  to  attend,  506 


INDEX.  655 


EXCHANGE, 

objects  of  companij,  105,  109 

EXECUTIOX, 

restraining,  491 
stajdug,  520 

EXECUTORS, 

transfer  of  shares  by,  as  to,  127 

EXPULSION, 

clause  cts  to,  ill  arliclcs,  179,  343 
law  as  to,  ibid. 

EXTRAORDINARY  GENERAL  MEETINGS, 

clauses  in  articles  as  to,  133,  212,  ct  seq_, 

EXTRAORDINARY  RESOLUTION, 

nature  of,  529 

notice  before,  191 

for  irtiidiiig  uj>,  notice,  529 


FIDUCIARY  AGENT, 

profit  by,  rule  as  to,  145 

FILING, 

contract  as  to  paid-up  shares,  10,  15   31 

FINANCIAL  COMPANY, 

objects  o/i  92 

FIRE  INSURANCE  COMPANY 

objects  of,  91 
policy  of,  309 

FLOATING  SECURITY, 
nature  of,  258 
debentures  declared  a,  265 

FOREIGN  LAND, 

debentures  charging,  as  to,  256 

FOREIGN  MANAGEMENT 

clauses  as  to,  185 

FOREIGN  REGISTRATION, 

jiower  as  to,  86 

FOREIGN  SEALS  ACT, 

clccuses  as  to,  186 

FORFEITURE  OF  SHARES, 

clauses  in  articles  as  to,  121 

notices  as  to,  211 

right  of  directors,  122 

order  for  rectification  of  register  tvlicrc  forfeiture  improper,  401 

injunction  restraining,  394 

FOSS  V.  HARDOTTLE, 
the  rule  in,  367 

FOUNDERS'  SHARES, 

agreement  as  to  issue,  36 
promoters  sometimes  take,  33 
clauses  in  articles  as  to,  183,  189 


656  INDEX. 

FRAUD 

in  prospectus,  233,  286 

FUTURE  CALLS, 

validity  of  mortgage  of,  261 


GAIN, 

what  companies  arc  formed  for,  91 

GAS  WORKS  COMPANY, 

objects  of,  105 

GAZETTE, 

notices  of  winding  up  in,  as  to,  432,  52^^ 
forms  of,  529 

GENERAL  MEETINGS, 

clauses  in  articles  a^  to,  132 
must  be  held  every  year,  133 
notice  after  requisition,  215 
notices  as  to,  134,  212  et  seq. 
quorum,  as  to,  135 
proceedings  at,  clauses  as  to^  135 

GENERAL  WORDS, 

effect  of,  68 

as  to  excluding  cjusclcm  gencrh  construction,  84 

GOODWILL, 

what  passes  by,  25 

GUARANTEE, 

comjiany  limited  bj',  as  to,  69 

company,  memorandum  of,  76 

dcbentiores  secured  by,  269 

law  society  limited  by,  77 

when  memorandum  to  contain,  69 

objects  of  comjmny,  91,  92 

of  i)rotits  by  vendor,  validitj'  of,  IS 

vendor  (jives,  18,  41 

power  for  company  to  give,  82,  83 

of  profits,  clause  as  to,  IS 

security  of  off.  liq.,  435 

policy,  328 


HANDS, 

show  of,  as  to,  136 

HIDE  AND  SKIN, 

objects  of  company,  198 

HOTEL  COMPANY, 

objects  of,  100 


IMPLIED  CONTRACT 
to  carry  on  business,  61 

INCOME  BOND, 
form  of,  275 

INCOME  TAX, 

how  assessed,  219 

INCORPORATION, 

certificate  evidence  of  reojularitv,  7> 


INDEX.  657 


INCREASE, 

capital,  fees  on,  73 
claicies  ill  artklcs  as  to,  129 

notice,  of,  217 

rcsoltttioiis  for,  191  it  «'/. 
under  Act  on 879,  208 

INDEMNITY, 

directors,  clauses  as  to,  167 
to  directors,  power  to  <jive,  155 

INFANT, 

subscriber  of  mcmoranduin,  71 
transfer  of  shares  of,  as  to,  127 

INJUNCTION, 

restraining  the  advertising  of  a  person  as  directoi',  244 
actions  and  prGceediiujs,  as  to,  489 
application  to  Parliament,  610 
imitation  of  i/ompany's  name,  64 
amalgamation,  396 
exclusion  of  director,  61,  395 
forfeiture  of  shares,  394 
holding  of  meeting  cd  proper  time,  395 
infringement  of  preference  sluircholder^  riejhts,  397 
rnvnlid  sale  under  s.  161,  397 
notice  of  motion  to  disi^harge,  493 
2)ayment  of  dividend  out  of  capital,  398 
2mrchasc  of  companif  s  ovm  shares,  398 
rejection  of  votes,  395 
winding-up  petition,  402 

INSPECTION, 

mines,  clause  as  to,  28 
contract  offered  for,  241 
order  in  windiiig  up,  499 

INSTALMENTS 

on  shares,  pajjmtnt  o/',116 

INSURANCE, 

marine,  objects  of  compoinj,  90 

INTEREST 

on  calls  in  arrear,  119 
during  construction,  89,  171 

INTERNAL  AFFAIRS 

of  company,  rules  as  to  non-interference  in,  367 

INVENTION, 

sale  of  patented,  17 

INVESTMENT, 

in  memorandum.,  power  of,  83 
objects  of  compoMg,  95 

ISSUE, 

meaning  of,  in  s.  25  of  Act  of  1867,  13 


JOINT  HOLDERS  OF  SHARES, 
liability  of,  117 

JUDGMENT.     >S'cc  Orders. 

JUDGMENT  CREDITOR, 

wiiuling-up petition  oJ\  375 

U  U 


658  INDEX. 

LANCASTER  TALATINE  COURT, 
petition  in,  383 

LAND, 

limited  right  to  liold  in  certain  cases,  81 

LAND  COMPANY, 

objects  of,  80 

LANDLORD, 

distress  in  winding  up,  497 

LAW  SOCIETY, 

articles  of,  174 
memorandum  of,  79 
objects  of,  107 

LEASE, 

off.  liq.  libciitj  to  grant,  458 

LENDING  MONEY, 

jiower,  83 

LETTERS  PATENT, 

agrechient  for  sale  of  16 

LIABILITY 

of  person  contracting  for  intended  company,  2 

proviso  limiting,  3 

of  agent,  clause  cliscJiarging,  9 

of  person  signing  contract  '  for  '  company,  5 

clai'sc  in  mcinora7idam,  69 

LIBRARY  COMPANY, 

objects  of,  100 

LICENCE. 

patented  invention,  as  to,  17 
lijnited,  to  omit  word,  advantages,  79 
form  of,  80 

LIEN, 

clauses  in  articles  as  to,  122 

of  solicitors,  none  on  debenture  trust  deed  iu  certain  c;i.se.>.  202 

on  company's  books,  448,  516 

LIFE  ASSURANCE  COMPANY, 
amalgamation  of.  as  to,  374 
agreement  for  sale  of  business,  53 
deposit  re(iuisite  on  registration,  89 
objects  of,  89 

pefifioyi  ■iijwn  transfer  of  business,  374 
transfer  of  business,  law  as  to,  ibid, 
reducing  contract,  as  to,  375 

LIMITATION, 

period  as  regards  promoters,  239 

'LIMITED,' 

licence  to  omit  from  name,  79 
form  of  licence,  80 
objects  if  societies,  106 

LIQUIDATED  DAMAGES, 

clause  as  to,  in  contract,  9 

LIQUIDATOR, 

conveyance  by,  537 

LOAN  AGENCY, 

objects  of  co7n])a}ty,  9i 


INDEX.  059 


LOAN  cli:d, 

objects  of  compa  luj,  100 

LOCAL  BOARDS, 

jwwcr  to  appoint,  185 

LONDON  GAZETTE, 
as  to  notices  in,  529 

LONDON  STOCK  EXCHANGE, 

rules  of,  116,  217 

LOSSES, 

cJanses  in  articles,  165 
cancelling  lost  capital,  170,  200 


MAJORITY, 

rights  of,  367 

fraud  on  part  of,  ibid. 

MANAGEK, 

agreement  appointinc^,  58 
clauses  in  articles  as  to,  185 
Jinn  to  act  as,  349 

MANAGING  DIRECTOR, 

clauses  in  articles  as  to,  147 

MARINE  INSURANCE  COMPANY, 
objects  of,  90 
2)olicies  of,  330,  331 

MARRIED  WOMEN, 
transfer  of  shares,  126 

MECHANICAL  ENGINEERS, 

objects,  97 

agreement  for  sale  of  business,  7 

3IEETINGS, 

ill  winding  up,  as  to,  515 

ill  actions  of  debenture  holders,  413 

rlai/.se-^  in  articles  as  to,  133 

of  delienture  holders,  tmst  deed,  294 

MEMBERS, 

annual  return  of,  113 

MEMORANDUM, 

what  sufficient  to  bind  companj'  under  Statute  of  Frauds,  5 

MEMORANDUM!  OF  ASSOCIATION, 

agreement  that  s/iares  taken  by  vendor  to  be  deemed  2M id  up,  31 

common  forms  for  vsc  in,  75  et  seq. 

capital  as  to  stating,  69 

copy  of,  members  entitled  to,  72 

efiect  of  subscription,  71 

execution  and  stamping  of,  64 

forms  of,  75,  <t  seq. 

liability  of  subscriber,  71 

of  limited  company,  of,  as'to,  62,  75 

of  company  limited  by  guarantee,  76 

objects,  as  to  statements  in,  66 

registration  of,  63 

registration  of,  effect  of,  64 

infant  subscribers,  71 

of  unlimited  company,  of,  as  to,  81 

■writing,  may  be  in,  70 

u  u  2 


6G0  INDEX. 


MINES, 

sale  of,  agreement  for,  28 

MINING  COMPANY, 

objects  of,  102 

MINORITY, 

when  court  will  interfere  at  suit  of,  305 

MINUTES 

ufproceccliiujs,  as  to,  150 
provisions  of  Act  as  to,  ibid. 

MISFEASANCE, 

orders  under  s.  165  in  respect  of,  507  et  seq. 

MISREPRESENTAT I  ON 

in  prospectus,  liability  of  directors,  233 

MORTGAGE  DEBENTURE  ACT, 

references  to,  68 

MORTGAGE  DEBENTURES, 
Act  as  to  issue,  83 
law  as  to,  259  et  seq. 
the  different  kinds,  255,  264 

MORTGAGES, 

at/reenient  by  company  to  undertake,  26 

order  as  to,  in  lainding  u}),  480  ct  seq. 

rights  of,  in  winding  up,  481 

poxeer  in  memorandum  as  to,  83 

■provisions  in  articles  as  to,  131 

register  of,  as  to,  132 

of  uncalled  capital  clause  in  articles,  132 

MOTION, 

■notice  of ,  for mal  parts,  418 

MUTUAL  INSURANCE  COMPANY, 

objects  of,  91 


NAME  OF  COMPANY, 

cliange,  mode  of  eftectiug,  65 

consent  by  liq.  to  'registration  by  compamfs  name,  249 

as  to  taking  name  of  company  in  course  of  dissolution,  65 

not  to  be  identical  with  existing,  64 

injunction  to  restrain  imitation,  65 

'limited,'  licence  to  omit,  65 

form  of  licence,  79 
memorandum,  to  be  specified  in,  64 
■resoliUion  to  change,  201 
'  royal '  not  allowed,  65 

NEGOTIABLE  INSTRUMENTS, 

what  companies  power  to  issue,  86 

how  far  debentures  can  be  made,  250  et  seq. 

NEWSPAPER, 

objects  of  company,  98 

NOMINEES, 

paid-up  shares,  issuing  to,  11 

NON-DISCLOSURE, 

repudiating  shares  for,  230,  234 


INDEX.  661 


l^OTICE  OF  REGULATIONS, 
who  deemed  to  have,  187 

NOTICES, 

to  admit  documents,  503 

f'fjrecincnt  as  to  service,  30 

allot idcitl  of  shares,  210 

authentication  of,  163 

of  call,  211 

clauses  in  articles  as  to,  163,  179 

to  company,  how  to  be  given,  163 

eijuitable  right  in  shares  as  to,  117 

of  motion,  furiiial  parts  of,  418 

Oil  forfeiture  of  shares,  121 

of  general  inecting,  clause  as  to,  134 

increase  of  capital,  217 

h)j  'laembers  convening  meeting,  215 

iniscellaneous  forms  of,  210  et  scq. 

office,  sitnatioH  of,  216 

productioib  of  documents,  503 

to  registrar  of  Joint  Stock  Companies,  216  ct  seq. 

special  resolution  of,  217 

time,  computation  of,  in,  rer/ard  to,  165 

NUMBERS  OF  SHARES, 

as  to  stating  in  contract,  12 


OBJECTS, 

clauses,  82  et  scq.     And  sec  Tablk  OF  CoNTKXT.s,  "  Memoranda. 

memorandum  to  state,  66 

general  words,  \ise  of,  in  stating,  67 

present  mode  of  stating,  66 

interpretation,  68 

power  to  extend  invalid,  68 

ultra  vires,  what  is,  66 

sjKcial  Acts  e;rtending,  628,  629 

OFFICE, 

memorandum  to  state  situation,  62,  66 
jtoticc  of  situation,  216 

OFFICERS, 

as  to  appointing,  60 

as  to  compensation  on  dismissal,  61 

OFFICIAL  LI(,)., 

accounts  of,  fomi,  439 

order  directing,  433 

suuvmons  to  proceed  on,  439 

affidavit  verifijlng,  440 

summons  for  time  to  leave,  442 

certificates  of  allowance  of,  441 

liberty  for  executors  to  attend  taking,  442 

liberty  for  surety  to  attend  taking,  443 

liberty  to  issue  attachment  for  not  bringing  in,  443 
advertisement  of  time  to  appoint,  432 
advertisement  of  appointment,  434 
affidavit  of  fitness,  433 
appointing,  orders,  433,  434 
borrou:ing,  orders  as  to,  451  ct  seq. 
carrying  on  the  business, 

orders  as  to,  449  ct  seq. 

'monthly  accounts,  449 

local  banking  account,  449 
costs  of,  as  to,  516 
taxation  orders,  516,  517 


G62  INDEX. 

OFFICIAL  TAQ.—coaUiiucd. 
dtschanjc  of,  442 
accept  bills,  488 
proceed  in  bankncpfcy,  465 
i-eeeiver  in  action,  Avlien  appointed,  409 
liberty  to 

ajipuiut  aaciits  abroad,  458 

power  of  attorney,  to  execute,  459 

debtors,  sue,  457 

defend  action,  458 

inventory,  to  have  made,  457 

lease,  (J runt,  458 

■nuuuKjer,  to  continue,  456 

office,  to  take,  456 

tciuler  for  property,  455 

sue,  promoters,  393 

sales,  to  effect,  453 

surveyor,  to  ernpjloy,  456 

valuable,  return,  460 
removal, 

orders  fm;  417 

practice  as  to,  ibid. 
resignation, 

order  on,  447 
remuneration, 

summons  as  to,  443 

regulation  of,  443 

priority  of,  444 

payments  on  account,  447 

affidavit  as  to,  445 

order  to  assess,  446 

ord,er  for  monthly  alloioance,  447 

order  for  payment,  447 
security  of,  as  to,  434 

summons  to  settle,  434 

bond  of  guarantee  company,  435 

certificate  as  to,  437 

orders  reducing,  438 

practice  as  to  reducing,  438 

order  enforcing,  439 

as  to  vacating,  438 
solicitors  of,  as  to  appointment,  434 

OPINION, 

as  to  stating  in  prospectus,  244 

ORDERS.     Sec  p.  386  et  seq. 

in  actions  by  debenture  holders,  404  ct  seq. 

and  Sec  under  "  Debknturks." 
against  directors  for  breach  of  trust,  399 

on  compromise  in  action  against  directors  for  recovery  of  secret  profits,  394 
corifir^niag  reduction  of  capital,  373 
directors  to  refund  secret  jjrofits,  391,  393 
liberty  for  liq.  to  sue  pivmoters,  393 
jrromoters  to  refund  secret  proft,  390 
rectifying  register,  400 
rescinding  contracts  to  talcc  sJmres,  390 
setting  aside  sale  of  concession,  391 
setting  aside  sale  of  mines,  390 
restraining  dividend  out  of  capital,  398 
protecting  preference  shares,  397 
restraining  winding-iip  2>ctition,  402 

ORDINARY  GENERAL  MEETINGS, 

clauses  in  a.rticlcs  as  to,  133  et  seq. 

OUTGOINGS, 

ojiportioiiment,  11 


INDEX.  663 


PAID-UP  SHARES, 

luuus  oil,  to  debenture  holders,  40 
validity  of  coutiact  to  issue  by  way  of  bonus,  40 
contract  as  to,  filing,  10 
contreict  to  rcetify  mistake,  4 
supplemental  contraet  as  to,  37 
contraet  to  issue  in  satisfaction  of  debt,  37 
■oi'der  to  reetlfy  register  cind  file  contract,  401 
contract  as  to,  result  of  not  filing,  13 
contract  as  to,  when  to  be  filed,  10 
tiicraorandum,  taken  by,  to  he  deemed,  32 
nominees,  issue  to,  11 
sub'contrccct  as  to  issue,  37 
vendors  to  hold  for  certain  period,  28 

FARI  PASSU  CLAUSE, 
as  to  insertion,  258 
by  deed  of  settlement,  357 

PARTNERSHIP, 

jmivcrfor  compa,nij  to  go  into,  82 

PATENTS, 

objects  of  company  to  work,  85,  97 
agreement  for  sale  of,  16 
new  law  as  to,  17 

PERPETUAL  DEBENTURES, 

nature  of,  258 
form  of,  273 

PETITIONS, 

costs  of  order  in  vjinding  up  to  pay,  425,  426 

reduetimi  of  capital,  369,  370 

to  sanction  arrangciaents,  594,  600 

to  stay  loimling  up,  384 

transfer,  orders  for,  427 

winding  up,  compulsory,  375  et  seq. 

under  supervision,  381 

to  Palatine  Court,  383 

to  Stannaries,  383 

ivinding  up,  orders  on,  420  et  seq. 

life  assurance,  reduction  of  contracts  as  to,  375 

life  assurance,  transfer  of  business,  374 

injimction  to  restrain  toinding  up,  402 

ivinding  tq),  order  for  transfer,  427 

PLACING  SHARES, 

power  to  remunerate,  83 

PLATE  GLASS, 

jwlicy  insuring,  327 

POLICIES, 

life,  skeleton  form,  296 

life,  miscellanrous,  297,  298 

for  wife  and  children,  298 

as  to  chari,'ing  assets  with  policies,  297 

life,  conditions  as  to — 

misrepresentation,  301 

indi.spictabilify,  301 

error  a.s  to  age,  302 

la2)se,  302 

rencical  after  la'pse,  302 

usual  provisions  as  to,  303 

not  forfeitable,  303 

reccij)ts  for  2rreviiu7ns,  303 

residence  and  travel,  303 

occupation,  304 

military  and,  naval  proceedings,  304 

forfeiture  of  premiums,  307 


GOl  INDEX. 


POLICIES— co/((;«iM«Z. 

payment  intu  Gourt,  307 

application  of  bonuses,  condition,  307 

limit  of  time  for  claim,  308 

surrender,  conditions  as  to,  308 

Jire  insurance,  309 

h.azardous  occupations,  as  to,  305 

travel  fj-ccdom  from  restriction,  305 

suicide,  us  to,  306 

instalments,  premiums  hy,  306 

jyroof  of  death  as  to,  306 

trustee's  receipts  as  to,  307 

power  for  trnstecs  to  surrender,  307 
accident,  ordinary,  313 
railway  accident,  317 
marine  accident,  317 
employer's  liahiJity,  317 
live  stock,  320 
Jiorsc  insurance,  322 
transit  insurance,  323 
So//fr,  325 
yyA^/<;  //;r^s^s,  327 
hail,  327 

guarantee  of  honesty,  328 
marine,  330,  331 
unlimited  company,  of,  300 

etlect  of  provisions,  301 

POLL, 

clause  2/;.  articles,  136 
?noc?c  oftakiny,  137 

POWER  OF  ATTORNEY, 

liberty  to  company  to  execute,  459 

lit^uidators  to  execute,  459 
receivers,  413 

POWERS  OF  DIRECTORS, 

adoption  of  ayrcemenf,  as  to,  115 
allotment  of  shares,  116 
commenciny  business,  116 
ycneral,  in  articles,  151 

eti'ect  of,  iftiV/. 
specific,  clause  in  articles  conferring^  152  ci  se^'. 

advantages  of,  i&z<?. 

PRE-EMPTION 

of  shares,  right  given  to  members,  341  ei  scj. 

PREFERENCE  SHARES, 

clauses  in  articles  as  to,  130 

cumulative  dividend,  as  to,  181 

injunction  protecting,  397 

power  in  articles  to  create,  110 

power  to  create,  what  sufficient,  195 

resolutions  creating,  196 

riglits  of  holders,  181 

statements  as  to,  in  articles,  181 

vendors  to  allow  to  ordinary  shares  a,  preference,  19 

clause  giving  jirrfercnce  in  whuling  up,  189,  196 

mentioning  in  memorandum,  as  to,  70 

redemptiou,  as  to,  183 

infringing  riglits  of,  193 

iiijunetiort  tu  protect,  397 

PRELIMINARY  CONTRACT, 
nature  of,  1, 

proceedings  with  a  view  to,  1 
forms  of,  7  et  seq. 
clause  i/i  articles  as  to,  115 


INDEX.  665 


PEELIMINAllY  EXPENSES, 
agreement  to  })ay,  34,  35 
2)0wer  for  directors  to  pay,  153 

PRIVATE  COMPANIES, 
nature  of,  334 

iiulucemciits  to  formatiou,  334,  335 
the  two  plans,  335 
conversion  of  business  into,  335 
two  plans  of  formation,  337 
(ujrccmcnt  for  sale  to,  338 
articles  of  association  of  339,  352 
deed  of  settlement  of,  352 
comindsory  retirement  clauses,  344 
forfeiture  for  comjKtition,  347 
restriction  of  issue  of  shares,  340 
as  to  directors,  347,  348 
as  to  managing  directors,  348 
managers,  349 

jwwer  to  aiiimint  and  remove  directors,  349 
director's'  rejntineration,  350 
instruction  of  directors  for,  350 
alteration,  350 
rotation,  350 
voting  hy  2>ro.vy,  350 
limitations  of  liability,  354 
members  no  power  to  bind,  354 
second  plan  as  to  s.  25  of  Act  of  1867,  357 
7viU  giving  'power  to  form,  358 

PROFIT, 

guarantee  hj  vendor,  18 
slmra  to  manager,  60 
ascertaining  for  dividends  as  to,  169 
share  to  jwliey-holders,  297 

PROFIT  DEr.ENTUHES, 

nature  of,  275 
form  of,  ibid. 

PROMOTERS, 

who  are,  237 

vendor,  clause  in  agreement  as  to,  20 
preliminary  expenses,  agreement  to  pay,  34 
vendor  at  liberty  to  remunerate,  20 
remuneration  of,  33 

points  to  be  borne  in  mind,  33 
clause  as  to  remuneration,  188 
when  entitled  to  payment,  188 
founders,  shares  to,  34 
concrssiiiii,  agreement  for  sale  of,  32 
syndieiitr  agreement,  56 

nature  of,  57 
company  instead  of  syndicate  to  eftect,  93 
liability  on  prospectus,  237 
fiduciary  character  and  consequences,  239 
liberty  to  of.  liq.  to  sue,  394 
orders  in  actions  against,  390 — 393 

PROMOTION, 

power  in  memorandum,  83,  86 

PROSPECTUS, 

advertising,  agreement  as  to,  34 
ambiguous  statements  in,  231,  235 
contracts  must  specify,  242 
careless  language  in,  danger  of,  231 
of  debentures,  276 
as  to  disclosure  by,  241 


CCG  INDEX. 


TROaVECTV^—contuiual. 

disclosure  how  to  be  made  by,  241 

form  of,  245 

liability  of  company  in  respect  of,  231 

liability  (jf  directors  in  respect  of,  233 

liabib'ty  t)l'  promoters  for,  237 

liability  of  vendor  in  respect  of,  240 

as  to  misrepresentations  in,  387 

opinion,  as  to  stating  in,  244 

as  to  stating  company's  objects  in,  245 

preparation  of,  228 

may  give  a  light  to  rejjudiatc  shares,  230 

som-ce  of  information  should  be  stated  in,  244 

Stock  Exchange,  rules  as  to,  245 

rROYISIONAL  CERTIFICATE, 

of  debentures,  278 

PROVISIONAL  OFFICIAL  LIQUIDATORS, 

motion  or  summons  for  cqjpointmcnt,  428 
jiractice  as  to  appointment,  428 
orders  ajijwintinr/,  429  ct  seq. 
inrrymg  on  business,  orders,  429 
occount,  order  to  bring  in,  431 
costs,  taxation  of,  order,  430 
discJiarging,  orders,  430 

TROVISIONAL  ORDERS  OF  BOARD  OF  TRADE, 
electric  light,  96 
gasworks,  as  to,  105 
waterworks,  as  to,  105 
power  to  apply  for,  87 

PROXIES, 

cl((uscs  in  articles,  as  to,  138 
as  to  stamping,  140 

PUBLIC  HALL  COMPANY, 

objects  of,99 

PUBLIC  WORKS, 

objects  of  company,  93 

concession  agreement  to  transfer,  43 

construction  contract,  43 


QUALIFICATION 

of  directors, 

clauses  in  articles  as  to,  142 

cases  as  to,  ib. 
share  wari'ants,  when,  128 

QUORUM, 

of  general  meeting,  clause  in  articles  as  to,    3 
if  meeting  of  directors,  148 
course  where  none  possible,  191 


RACE  COURSE, 

objects  of  company,  99 

RAILWAY  COMPANY, 

objects  of  foreign,  104 

RATES, 

order  for  'iHujment  in  winding  up,  478 


INDEX.  667 


RATIFICATION, 

ddusrs  as  to,  til  articles,  115 
ividract,  of,  by  company,  30 
mode  of  etfectinj:^,  by  company,  30 
of  acts  of  promoters,  188 
ultra  vires  act,  none  of,  66 

RECEIPTS, 

jwiacr  of  directors  to  give,  154 

RECEIVERS  AND  JIANAGERS. 

in  actions  by  debenture  liolders,  408 
orders  ajrpointiiig  in  action,  405,  408  ct  seq. 
liberty  to  borrow,  412 
liberty  to  call  viectings,  413 

RECITALS, 

that  memorandum  and  articles  have  been  prepared,  7 

tliat  vendor  entitled  to  patents,  16 

as  to  formation  of  comjiaay,  7 

in  trust  deed  for  securing  debentures,  283 

in  reconstruction  agreements,  559 

in  amalgamation  agreements,  578 

in  conveyance  by  liquidator,  537 

in  special  Acts,  616 

RECONSTRUCTION, 

modes  of  effecting,  551 

cases  in  which  expedient,  552 

procedure,  course  of,  553  et  seq. 

new  company  generally  takes  name  of  old,  554 

sale  must  be  to  a  company,  555 

or  to  agent  for  intended  co. ,  555 

may  be  to  foreign  co.,  555 
agreement  may  provide  for  direct  allotment  of  shares  to  members,  555 
distribution  of  shares  on,  as  to,  555 
dissentients,  rights  of,  552,  556,  557 

summons  to  determine,  557 

funds  to  pay,  whence  to  come,  558 

security  for,  as  to,  558 
notices,  how  to  be  framed,  558 
agreement,  as  to  filing,  559 
remuneration  of  liqs.,  as  to,  559 
articles  qualifying  rights  of  dissentients,  as  to,  559 
invalid  resolutions,  as  to  confirming,  559 
company  not  formed  under  Act  of  1862,  may  effect,  559 
where  compulsory  or  supervision  order  has  been  made,  559 
agreements  on,  560  ct  seq. 
dissentients,  notice  by,  564 
shares,  part  paid  up  may  be  accepted,  555 
injunction  rcMraining  invalid  sale  under  s,  161,  396 
imder  arrangement  Act,  597  ct  seq. 

RECTIFICATION  OF  REGISTER, 
orders  for,  3f  8,  l)?0  9-^  ^ 

practice  as  to,  j?0|N3H      //^yp 

REDEMPTION  OF  SHARES, 

clause  in  articles,  183 

REDUCTION  OF  CAPITAL, 

advertisement  of  order,  373 

clauses  in  articles,  as  to,  131 

orders  confirming,  372 

orders  dispensing  with  uvrds  ^'and  reduced,"  373 

petitions,  as  to,  369,  370 

practice,  371 

form  of  minutes,  ZT 2 

resolutions  as  to,  199  ct  seq. 


608  INDEX. 

EEGLSTEE, 

of  mortgages,  262 

of  dehcnture  holders,  272 

REGISTER  OF  MEMBERS, 

rectification  of,  practice  as  to,  400 
orders  rectifi/iiu/,  400  et  seq. 
of  mortgages  to  be  kept,  262 

REGISTERED  OFFICE, 

memorandum  to  state  situation,  62 
notice  of  situation,  66 

REGISTRAR, 

annual  return  of  members  to,  216 

REGISTRATION, 

of  documents,  fees  payable  on,  73 

REGISTRATION  OF  EXISTING  COMPANIES, 

forms  for  use  in,  206 

under  the  Act  of  1879,  forms  on,  208 

REMUNERATION, 

of  directors,  as  to,  143 

clauses  as  to,  ibid. 

of  official  liq.,  as  to,  443  et  seq, 

if  promoter,  clauses  in  articles  as  to,  164 

promoters  of,  as  to,  188 

REMOVAL, 

of  official  liqs.,  orders  on,  447 

RENT, 

order  for  payment  in  vAnditig  up,  477 
liberty  in  winding  iip,  to  dAstrainfor,  496 

REQUISITION 

for  general  meeting,  clause  as  to,  133 
form  of,  215 

RESCISSION, 

power  of,  in  preliminary  contract,  10,  31,  562 

RESERVE  FUND, 

power  to  establish,  153 

RESIGNATION 

(f  directors,  clause  in  articles,  142 
of  directors,  as  to,  142 
of  offi.  liqs.,  orders  on,  447 

RESOLUTION 

of  directors,  when  to  he  eciuivalent  to  resolution  of  general  meeting,  150 

special,  nature  of,  190 

extraordinary,  nature  of,  191 
for  registration  of  existing  company,  206 
under  Act  of  1879,  208 

various  forms  of,  193  et  seq. 
for  winding  up,  529 

RETIREMENT, 

compulsory,  of  members,  179 

RETROSPECTIVE, 

operation  of  Act,  357 

RETURN 

of  meuibcrs  to  registrar,  133 
of  capital,  as  to  effecting,  371 


INDEX.  G69 


REVIVOR 

of  petition,  424 

ROTATION  OF  DIllKCTORS, 

clautics  hi  aiiicles  us  to,  145 

'ROYAL,' 

as  to  use  in  name,  65 


SALE, 

agrcirnicnts  for,  7  ct  scq. 
power  of,  in  memoranda  in,  82,  84 
lib  actions  by  debenture  holders,  410 
ill  vjindiiiif  lip,  452  ct  scq. 

SALE  UNDER  s.  161  OF  ACT, 
clause  in  articles  as  to,  166 

SCHE]»IE  OF  ARRAN(iEMENT, 

under  the  Act  of  1870,  588  et  scq. 
under  the  Banknqitni  Act,  45,  50 

SCHOOL  COMPANY, 

objects  of,  ion 

SCOTLAND,  ^  »  .   rA^ 

order  for  examination  in,  under  s.  127  of  Act,  o07 

SCRIP  CERTIFICATES, 

as  to,  277 

SEAL, 

contract  under,  wliutlier  a  deed,  3 
clause  in  articles  as  to,  156 

SECRECY, 

clause  as  to,  181 

SECRETARY, 

agreement  appointing,  58 
clause  ill  articles  as  to,  156 

SECURITY 

of  official  liquidator,  434 

SECURITY  FOR  COSTS, 

(Hjiiipany  may  be  called  ou  for,  403 
orders  for,  403 

SERVANTS, 

dismissal,  43 

SERVICE 

of 'petition,  orders,  421  .     .  ,.    •       ao'    aqu 

vf  suiiivionscs,  ci-c,  ill  winding  up,  in  and  out  of  jurisdiction,  48o,  480 
perfsonal,  specific  performance  of,  not  enforced,  43 

SET-OFF, 

as  to  contributory,  467 
as  to  creditor,  469 

SHARES, 

application  for,  246 

clause  in  articles  as  to  allotrnenf,  116 

when  contract  to  take  binding,  247 

discount,  issue  at,  38 

instahiients  to  be  paid,  116 


*>70  INDEX. 

SHARES— coniimicd. 

(nests  not  to  be  recognised,  117 
certijimtcs  of,  225 

injunction  restraining  ultra  y'vces forfeiture,  394 
injunction  restraining  ultra  vires  purchase,  398 
preference,  ponrr  to  issue,  129,  181 
jiower  to  take  in  other  comjmnies,  86 
purchase  of  company's  own,  88,  116 
rescission  of  fraudxdent  contract,  386 

SHARE  WARRANTS, 

clauses  in  articles  as  to,  128 
resolution  as  to  conditions  cf  issue,  203 
stamp  on,  203 
form  of,  226 

SHERIFF, 

iirdcrs  resin  lining  sales  by,  491 

SHIPOWNER  COMPANY, 

objects  of,  103 
agreement  for  sale  to,  32 

SHOW  OF  HANDS, 

as  to  taking,  136 

SOCIETY, 

objects  of,  174 

SOLICITORS, 

clause  in  articles  as  lo,  156 

no  lien  on  debenture  deed  of,  acting  for  all  parties,  262 

of  off.  liq.  as  to  appointment,  434 

orders  on,  to  deliver  company''s  books  to  off.  liq.,  516 

SPECIAL  AC'i'S, 

power  in  memorandum  to  apply  for,  88 

cases  in  which  companies  apply  for,  88,  609 

for  re-incorporation,  as  to,  609 

injunctions  to  restrain  application  for,  when  gi'anted,  610 

procedure  in  applying  for,  609  ct  seq. 

first  charge  drbentare  stock,  authorising  issue,  623 

'xtendAng  objects,  629 

irnuilgamation  for,  630 

authorising  the   issue  of  debentures  ranking  in  2)riorify  Id  rreisfing  incum^ 

branccs,  639 
giving  special  2wwcrs  to  Aqimnum  Company,  621 
authorising  transfer  of  tramways  to  com2)any,  642 

SPECIAL  EXAMINER, 

orders  appointing,  502  et  seq. 

with  interpreter,  ibid, 
iinlerfor  u'itness  to  attend,  503 

SPECIAL  RESOLUTION, 

alteration  of  articles  by,  193 

whether  amendment  permissible,  213 

lopy,  member  entitled  to,  113 

as  to  increase  of  capital,  194 

nature  of,  190 

notice  to  be  given  to  Registrar,  207 

form  of  notice  Id  llegislrar,  217 

notices  of  'meetings,  212 

preferen(;e  shares,  as  to  creation  of,  198 

for  tviniling  up,  notices,  529 

SPECIE, 

dirisidii  of  assets  in,  87,  166 


INDEX.  671 


SPINNING  COMPANY, 

objects  of,  97 

STAMPS, 

cancellation  of  adhesive,  5 

on  conveyance,  336 

on  debentures,  as  to,  263 

on  registration  of  documents,  73 

STANNARIES, 

jjcfidoii  in,  for  viiuling  V}),  383 

STATIONERS, 

objects  of,  98 

STATUTORY  DECLARATION, 

on  registrafioii  of  existing  cowpany,  207 

STAYING  AC^TIONS,  522 

STAYING  AVINDING  UP, 

petition  for,  384 
orders  for,  522,  593 

STOCK, 

conversion  of  shares  into,  clauses  in  articles  as  to,  128 
resolution  to  convert  slmres  into,  198 

STOCK  EXCHANGE, 

as  to  rules,  247 
copy  of  rules,  184 

SUBDIVISION  OF  SHARES, 

clause  in  articles  as  to,  131 
resolutions  for,  198 
law  as  to,  198 

SUBSCRIBEl.', 

memorandum  of,  liability  of,  71 

SUMjMONS, 

formal  parts  (f,  or(linar)j,  417 
originating,  541 
inlscethi nfi-iv.s,  417  et  seq. 

SUPERVISION. 

Sec  WlNDIXfi    Ul>   UNDER   SUPERVISION. 

SUPPLEMENTAL  CONTRACT, 

adopting  preliminary  contract,  1,  30 

SURRENDER  OF  SHARES, 

clause  in  articles  as  to,  153 

SYNDICATE, 

agreement,  56 
company,  as  to,  93 


TABLE  A, 

when  it  applies,  111 

articles  adopting  in  part,  172 

special  resolution  that  it  shall  no  longer  apply,  194 

TESTIMONIUM  CLAUSE, 

M'here  contract  not  under  soal,  5 

TRADE  PROTECTION, 

objects  cfsocicfJifor,  108 


G72  INDEX. 


TRAI^tWAYS, 

objects  of  comiKinij,  105 

TRANSFER, 

of  petition,  ordci",  427 
of  actions,  493,  494 

TRANSFER  OF  SHARES, 

chinscs  in  (irtidcs  as  to,  123 

ibiiu  of,  124 

]irivate  coiiipanj',  iu,  as  to,  341,  355 

liglits  of  members  as  to,  123 

riyJit  vf  jirr-etitptioii  to  /iicmbcrs,  341 

closing,  books,  12(5 

TRANSMISSION  OF  SHARES, 
clauses  ill  articles  as  to,  127,  343 

TRUST  DEED 

/(;/•  securing  clebcnturcs,  283 
reference  in  debenture  to,  268 
as  to  securing  debenture  stock,  279 
order  to  carry  into  execution,  364 

TRUSTEE 

for  intended  company,  liability  of,  2 
power  for  company  to  be,  84 

TRUSTEE  RELIEF  ACT, 

as  to  paying  policy  moneys  into  Court  under,  307 

TRUSTS 

not  to  be  recognised,  117 


ULTRA    VIBES', 
cases  of,  66 

alteration  of  articles,  193 
ratiKcation  of,  not  possible,  66 
actions  on  behalf  in  case  of,  364,  367 
writs  in  actions,  364 
orders  to  restrain,  396  et  scq. 

UNCALLED  CARITAL, 

as  to  debentures  charging,  260 
clause  in  articles  as  to  charging,  132 

UNCLAIMED  DIVIDENDS, 

in  iri ruling- up,  order  as  to,  523 
practice  as  to,  524 

UNDERTAKING, 

mortgage  of  the,  as  to,  258 

UNLIMITED  COMPANY, 
memorandum  as  to,  63 
form  of,  81 
registration  under  Part  VII.  of  Act  of  1862,  207 


VACANCIES, 

directors  inaij  act  nolicitJistandi/Kj,  91 
director's,  fllinrj  up,  143,  147 

VALUATION, 
aale  at  a,  26 
when  sale  at  a,  enforceable,  26 


INDEX.  673 


VENDORS, 

sfiares  postponed  as  regards  dividnuh,  19 
shairs  to  hold  for  certain 'period,  28 
subscribing  memorandum,  72 

VOTES  OF  MEMBERS, 

clauses  in  articles  as  to,  137 
rights  in  regard  to,  137 
wjnndion  against  refusal,  394 


WAREHOUSEMAN, 

agreement  for  sale  of  business,  24 

WARRANT, 

share  to  bearer,  128 
dividend,  219 

WATERWORKS  COMPANY, 

objects  of,  96 

WINDING  UP  (COMPULSORY), 

advertising  the  order,  432 

a^nending  petition,  order,  422 

actions  and  proceedings,  as  to  staying  and  restraining,  489 

orders,  490  et  seq. 
order  for  transfer  of  action,  493 
actions,  liberty  to  creditors  to  bring,  494 

orders  giving,  495  ct  seq. 
advertisement  of  petition,  419 
affidavit,  farmed  facts  of ,  418 
affi,davit  in  support  of  jieMtion,  420 
affidavit  of  service  ofjietition,  420 
affidavits  with  a  vicio  to  com2)ro7nise,  511 
affidavit  in  support  ofj)etition,  420 
appeals,  as  to,  520 
bank,  local,  451 

books,  orders  enforcing  delivery  of,  448 
borroicing,  orders  authorising  liq,,  430,  451 
calls,  orders  as  to,  465  et  seq. 

practice  as  to,  464 
carrying  on  business, 
orders  as  to,  449 
practice  as  to,  428 
eases  where  orders  commonly  made,  428 
clauses  in  articles  as  to,  166 
co7npro/nise,  affidavit  with  a  view  to,  511 
form  of  agreement  as  to,  513 
orders  confirming,  513,  514 
concurrent  petitions,  426 
contributories,  liberty  to  attend,  483 
contributories,  practice  as  to,  461 
list  of  contributories,  orders  as  to,  462 

adjusting  rights  of,  166 
costs  of2)etition,  order,  423,  425,  426,  516 
costs  of  off.  liq.  taxation  and  payment,  516 
costs,  security  for,  403 
county  court,  reference  to,  427 
cross-examination  on  affidavits,  notice,  501 

practice  as  to,  501 
crown  debts,  oi-der  for  payment,  479 
creditors,  practice  as  to,  475 

affidavits  by,  jnvving  debts,  469,  470,  471 

certificede  of,  474 

dividends  to,  475 

inquiry  what  securities  given.  453,  482 

landlord,  liberty  to  distrain,  496 

liberty  to  attend,  483 

liberty  to  prove  after  time  eo'inrcd,  475 

order  varying  certificate,  476 

X  X 


674  INDEX. 

WINDING  UP  (COMPULSORY)— t"o)i</n/(e(?. 
creditors,  practice  as  to  — 
secured,  as  to,  480 

secured,  declaration,  of  ■rights,  481 

summons  by,  to  admit,  473 

liberty  to  proceed,  495 
debts  incurred  by  off.  liq., 

affidavit  as  to,  477 

orders  for  payment,  477,  478 
debts  enforci7ig  payment  in,  467 
discovery  and  inspection  of  documents,  as  to,  498 

orders  for,  498,  499 
dismissal  of  company's  servants,  61 
dismissal  of  2Ktition,  order  for,  423 
dissolution  orders,  524 
distress,  liberty  to  levy,  497 
distribution  of  assets  in,  166 
distribution  in  specie,  166 
dividends  unclaimed,  order  as  to,  523 
examination  under  s.  115,  504 
executions,  orders  restraining,  491 

jiractice  as  to,  489 
injunction  restraining  2)Tesentation  of  petition,  402 
inspectio7i  under  s.  156  of  Act,  499 
liberty  to  attend,  483,  484 
lien,  solicitor's,  516 

meetings  of  creditors  and  contributories,  as  to,  515 
misfeasance,  order  as  to,  507 
mortgagees,  orders  as  to,  480  et  scq. 
motion,  notice  of,  418 
notice  of  jietition,  419 

official  liquidator,  sec  Official  Liquiuatoii. 
order  as  to  service  of  summonses,  &e. 

within  thejiirisdic/tini,  485 

02U  of  the  jurisdiction,  486 

substituted,  488 
petition  for,  by  judgment  creditor,  375 
policy  holder,  377 
debenture  holder,  378 
siinple  contract  creditor,  379 
camjiion/  itself,  380 
in  Palatine  Court,  383 
in  Stannaries,  483 
proceedings  under  s.  165  for  misfeasance,  &c., 
practice,  507 

orders  against  directors,  507  el  seq. 
provisional    liquidators,    orders   as  to,    428   ct   scq.,    and    sec    PftOVisiONAL 

Official  Liquidators. 
removal  of  goods,  order  restraining,  492 
I'ent,  order  to  i)ay,  477 
rates,  478 

revivor  of  picHHon,  order  for,  424 
sales  of  property, 

orders  as  to,  455 

conditional  contracts,  orders  confinning,  410,  455 

off.  lifi.  to  concur  in  sale  by  trustees  for  debenture  holders, 
sales  by  execution  creditors,  restraining,  as  to,  455 
secured  creditors,  as  to,  480 
security  for  costs,  403 
solicitor  of  otf.  licp,  434 
service  of  petition,  421 
service  of  summons,  d-c,  485 
standing  over  of2}ctition,  order  as  to,  422 

practice  as  to,  423 
staying,  order,  522 
special  examiners,  orders  as  to,  501 
summon.^  to  proceed,  417 
transfer  of  petition,  427 
withdrawal  of  petition,  practice  as  to,  423 
withdrawal  of  j)ctition,  order  for,  423 


INDEX.  675 


WINDING  UP  (UNDER  SUPERVISION), 

accounts  of  liq.,  as  to,  548 

actions  restraining,  as  to,  547 

actions,  &c.,  liberty  to  bring  and  take,  547 

advertising,  order,  as  to,  432 

applications  to  court,  practice  as  to,  492 

contributories,  practice  as  to,  548 

cofitti  of  liq.,  order  to  tax,  549 

practice  as  to,  ibid. 
creditors,  practice  as  to,  548 
dissolution,  order  to  convene  final  meeting,  550 

practice  as  to,  550 
liqtoidators,  orders  as  to,  546 
liquidcdor,  removed,  546,  549 
liquidator,  remuneration  of,  548 
remunerfdion.  of  liq.,  548 
orders  for,  545 

efiect  of,  546 
practice  in,  ibid. 
restraining  actions,  as  to,  547 
solicitor  of  liq.,  order  as  to,  ibid. 

WINDING  UP  (VOLUNTARY), 

accounts  of  liq.,  order  as  to,  482 

practice  as  to,  482 
actions  and  proceedings,  as  to  restraining,  535 
applications  under  s.  138,  as  to,  541,  542 . 

oreler  giving  liberty  to  apply,  443 
ccdls,formof,  531 

7iotic(;  of,  532 

orders  enforcing,  532,  533 
compromises,  practice  as  to,  531 
contributories  as  to,  530,  531 

notice  as  to  settling  list,  530 

enforcing  payvicnt  of  debts  due  from,  533 
conveya'iice  by  liq.,  form  of,  537 

practice  as  to,  538 
costs  of  liq.  summons  to  tax,  539 

practice  as  to,  539 
creditors  as  to,  536 

sicmmons  to  adjudicate,  536 

order  for  inquiry  as  to,  Ibid, 

dividends  to,  ibid. 
dissolution  proceedings,  544 

notice  of  final  meeting,  543 

notice  to  registrar.  544 

books,  as  to  disposal  of,  ibid. 

\w  order  for  winding  up,  after,  545 
extraordinary  resolution  for, 

Avhat  notice  requisite,  529 

form  of  notice,  528 
liquidators,  as  to  resolutions  appointing,  528 

resolutions  apimnting,  528,  563 
liquidator,  accounts  of,  as  to,  539 
liquidator,  removal  of,  540 
liquidator''' s  remimeration,  538 
liqtiidcdor,  taxation  of  costs,  539 
meetings,  in  course  of,  54 
motion,  notice  of,  in,  541 

practice  as  to  applications  by,  541,  542 
notices  with  a  view  to,  527  ct  scq. 
remuneration  of  liq.,  resohdions,  538 

practice  as  to,  539 
removal  of  liq.  order-^for,  540 
resolutions  with  a  vicvj  to,  528,  563 
sales  Ijy  liquidator,  as  to,  537 

order  for,  455,  542 
summons  on,  531 

practice  as  to  applications  by,  531 
summons,  order  giving  liberty  to  ap)ply,  543 


676  INDEX. 


WITNESS, 

order  to  attend,  503 
notice  to  produce,  501,  503 
cross-examining,  501 

WITNESSES, 

cross-exaniination  of,  as  to,  501,  503 
notice  to  produce,  ibid. 
order  to  attend,  503 

WRITS, 

shares,  rescission  of  contract,  361 
rescission  and  damages,  361 
shares,  misrejrrescntations,  damages,  362 
shares,  fraud ,  daiimgcs,  362 
to  set  aside  fraudidc id  assignment  of  mines,  362 
to  recover  bribe  from  directors,  363 

promoters,  ibid, 
debentures,  to  enforce,  364 
ultra  vires  agixement,  ibid, 
ultra  vires  resolutions,  365 
dividend  out  of  capital,  restraining,  ibid, 
exchuling  director,  injunctions,  366 


THE    END. 


BRADBURY,    AONKW,   &  CO.,   PRINTERS,   WHITEKICIARS. 


"THE    COMPANIES'   ACTS,    1862   to    1883." 


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Dividend  Warrants,  Cheques,  Receipts,  dc, 

Prepared,    Engraved   and    Printed   in    the   best    style. 

SEALS  Designed,  Engraved  and  Fitted  to  any  Description  of  Press 

for  Embossing. 

Boxes  and  Locking  Apparatus  supplied  for  same. 

COMPANIES'    REGISTERS    AND    ACCOUNT    BOOKS 

Prepared  on  short  notice. 
ANNUAL     AND     OTHER     RETURNS     FILED. 


CHARLES  DO  UBBLE  begs  to  state  tluit  his  Original  Agency  Office 
is  still  at  14,  SERJEANTS'  INN,  TEMPLE,  LONDON,  ivhere 
information  and  assistance  resjiecting  Puhlic  Companies  can  he  obtained. 

Y  Y 


Fee  Stamp  «HBm  Distributor 


BY  SPECIAL   APPOINTMENT. 

THE   COMPANIES   ACTS,    1862    to    1883. 

RICHARD    JORDAN, 

§1)  S^ittljoritn  of  tbe  Jlcgvstrar, 

Publisher  of  Forms  for  the  Iiworporation   of  Public 

Companies,  Registration  Agent,  Law  and  Public 

Companies'  Stationer,  &c., 

120,  CHANCERY   LANE,  LONDON. 

Memorandums    and   Articles    of   Association,   Special 
Resolutions,  and  other  Documents 

Printed  in  proper  form,  Stamped  and  Registered. 

ALL   THE   AUTHORISED   FORMS   FOR   ANNUAL 
AND  OTHER  RETURNS. 


Registers  of  Members,  Registers  of  Transfers,  and  all  other 
Companies'  Books  kept  in  stock  or  prepared  to  order. 

COMMON    SEALS 

Engraved   by    Skilled   Workmen,   and   fitted    to    Lever  or 
Screw    Presses. 


Share  and  Stock  Certipcates,  Share  Warrants,  Debentures, 
Cheques,  do.,  Engraved  and  Printed  in  the  best  style. 

RiciiAiii)  Jordan,  having  had  many  years'  practical  experience  in 
matters  connected  with  the  Formation,  Management,  and  Winding-up  of 
Public  Companies,  will  be  happy  to  render  assistance  to  Solicitors  in  the 
preparation  of  Prospectuses,  Memorandums  and  Articles  of  Association, 
Agreements,  and  other  Documents. 


TRADE    MARKS,    DESIGNS,    AND   COPYRIGHTS    REGISTERED. 

jViuv   Beady,  8th   Edithm,  2s.  M.,  j>o.<if  free. 
A  HANDY  I'.OOK  OF  TRACTICAL  INSTRUCTIONS  FOR  THE  FORMATION 
AND   MANAGEMENT    OF    JOINT   STOCK    CO.MPANIES.      Bv  Richaud 

.lOUDAN. 


/ 


STEVENS  AND  SONS,  119,  CHANCERY  LANE,  LONDON,  W.C. 


Geare  on  the  Investment  of  Trust  Funds. — By  Edward 

ARUNDEL  GEARE,  Esq.,  Barrister-at-Law.  BoualUmo.  1886.  Price  7.'<.  Gd.  doth. 

The     Tithe     Acts ;   incliidlng    the     recent    Act    for   the 

Limitation  and  Redemption  of  Extraordinary  Tithes,  with  an  Introduction  and 
Observations.     By  T.  H.  BOLTON,  Solicitor.    Punjnl  l2mo.     188G.    Price  6s.  doth. 

Chitty's  Archhold's  Practice  of  the  Queen's  Bench  Division 

of  the  High  Court  of  Justice,  and  on  Appeal  therefrom,  to  the  Court  of  Appeal  and 
House  of  Lords  in  Civil  Proceedings.  Fourteenth  Edition.  ByT.  WILLES  CHITTY 
assistedbyJ.  St.  L.LESLIE,  Esqrs.,  Barristers-at-Law.  2  Vols.  Demy  8vo.  ISSo' 
Price  81.  13s.  Gd.  cloth.  ^ 

Chitty's  Forms  of  Practical  Proceedings  in  the  Queen's 

Bench  Division  of  the  High  .Court  of  Justice:  with.  Notes  containing  the 
Statutes,  Rules  and  Cases  relating  thereto.  Twelfth  Edition.  By  THOS 
WILLES  CHITTY,  Esq.,  Barrister-at-Law.    Demy  8vo.    1883.  Price  11. 18s.  doth. 

Blackburn's  Contract  of  Sale— A  Treatise  on  the  effect  of 

the  Contract  of  Sale  on  the  Legal  Rights  of  Property  and  Possession  in  Goods, 
^^f^^J^^^'^^^^erehandise.  By  LORD  BLACKBURN.  Second  Edition.  By  J.  c! 
GRAHAM,  Esq.,  Barrister-at-Law.     Eo7jal  8vo.     1885.     Price  11.  Is.  cloth. 

Palmer's  Company  Precedents — For   use   in  relation   to 

Companies  subject  to  the  Companies  Acts,  1862  to  1883.  Arranged  as  follows  :— 
Agreements,  Memoranda  and  Articles  of  Association,  Resolutions,  Notices,  Certifi- 
cates, Prospectus,  Debentures,  Policies,  Private  Companies,  Writs,  Petitions,  Judg- 
ments  and  Orders,  Reconstruction,  Amalgamation,  Arrangements,  Special  Acts. 
With  Copious  Notes.  Third  Edition.  By  FRANCIS  BEAUFORT  PALMER 
Esq.,  Barnster-at-Law.     Poyal  Svo.     1884.     Price  11.  Us.  cloth. 

Ellis'  Guide  to  the  House  Tax  Acts,  for  the  use  of  the 

Payer  of   Inhabited  House  Duty  in  England.     By  ARTHUR  M.  ELLIS    LL  B 

(Loud.),  Solicitor.     Pioyall2t)io.     1885.     Price  Gs.  cloth.  ' 

Ellis'  (Guide  to  the  Income  Tax  Acts.— For  the  use  of  the 

Er^gpsh  Income  Tax  Payer.  Seco7id  Edition.  By  ARTHUR  M.  ELLIS  LL  B 
(Lisu*-),  Solicitor.    Royal  12mo.    1886.    Price  7s.  6d.  cloth. 

Smith-«^^Eeal  and  Personal  Property. — A  Compendium  of 

the- Law  of  Real  and  Personal  Property,  primarily  connected  with  Convevauciiio' 
pe,si|yed  as  a  second  book  for  Students,  and  as  a  digest  of  the  most  useful  learuinc^ 
for  Practitioners.  By  JOSIAH  W.  SMITH,  B.C.L.,  Q.C.  Sixth  Edition.  By  the 
Author  and  J.  TRUSTRAM,  LL.M.,  Barrister-at-Law.  2  Vols.  Svo.  1884 
Price  21.  2s.  cloth. 
"We  think  this  edition  excellently  done."— Lmv  Students'  Journal. 

Gierke   and   Humphry's   Concise   Treatise   on  the    Law 

relating  to  Sales  of  Land.  By  AUBREY  ST.  JOHN  CLERKE  and  HUGH  M 
HUMPHRY,  Esqrs.,  Barristers-at-Law.     Pwyal  Svo.     1885.     Price  11.  os.  cloth. 

Sebastian  on  the  Law   of  Trade  Marks.— The   Law   of 

Trade  Marks  and  their  Begistration,  and  matters  connected  therewith,  includiiio-  a 
chnptcr  on  Goodwill.  Together  with  The  Patents,  Designs  and  Trade  Marks  Act 
1883,  &c.  Second  Edition.  By  LEWIS  BOYD  SEBAfeTIAN,  Esq.,  Barrister-at- 
Law.    Demy  Svo.    1884.    Price  11.  Is.  cloth. 

The  Pocket  Law  Lexicon— Explaining  Technical  Words, 

Phrases  and  Maxims  of  the  English,  Scotch  and  Roman  Law,  to  which  is  added  a 
complete  List  of  Law  Reports,  with  their  Abbreviations.     Second  Edition.     Revised 
and  Enlarged.     By  HENRY  G.  RAWSON,  B.A.,   of  the  Inner  Temple,   Esq., 
Barnster-at-Law.      Fcap.  Svo.     1884.     Price  6s.  Gd.  limp  binding. 
A  wonderful  Uttle  legal  Dmtioimry. "—Indennav.r's  Liw  Students'  Journal. 

Wharton's  Law  Lexicon.— Forming    an   Epitome    of   the 

Law  of  England,  and  containing  full  explanations  of  the  Technical  Terms  and  Phrases 
thereof,  both  Ancient  and  Modern,  including  the  various  Legal  Tenivs  used  in  Com- 
mercial Business.  Together  with  a  Translation  of  the  Latin  Jlaxims  and  Selected 
^l^les  from  the  Civil,  Scotch,  and  Indian  Law.  The  Seventh  Edition.  By  J.  M. 
LELY,  Esq.,  M.A.,  Barrister-at-Law.     Super-Royal  Svo.    1883.    Price  11. 18s.  cloth. , 

AP  Standard  Laiv  Worf:s  are  kept  in  stock,  in  law  calf  and  other  bimlincjs. 


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