PART III.

Digest of Selected Decisions

IN CONNECTION WITH THE

FORMATION AND OPERATIONS

OF

LAND INVESTMENT COMPANIES,

AND

Companies for Local Improvements,

UNDER THE COMPANIES' ACTS, 1862-1880.

DIGEST

OF

SELECTED DECISIONS.

AGENTS.

(See DIRECTORS, PROMOTERS, and VENDORS.)

1. A gratuity given to an agent without the knowledge of his principal vitiates the contract.

The agent is liable to account to his principal for any gratuity which he may so receive, or any profit which he may derive.

The principle adopted in Hay's Case (L. R. 10 Ch. App. 593), that all the remuneration which the agent of a purchaser receives secretly from the Vendor is received for the benefit of the purchaser, was acted upon in 1875 by the Court of Appeal in McKay's Case (L. R. 2 Ch. Div. 1).

2. Any surreptitious dealing between one principal to a contract and the agent of the other principal is a fraud in equity, and entitles that principal to have the contract rescinded, and to refuse to proceed with it

in any shape.-Panama Telegraph Co. v. India Rubber Co., 1875; L. R. 10 Ch. App. 515; 32 L. T. (N. s.) 328; 23 W. R. 583.

3.-Payments to an Agent.-A person, owing money to an agent and knowing him to be an agent, must pay in such a manner as to facilitate the moneys reaching the principal's hands, and cannot pay by a settlement of accounts between himself and the agent.-Pearson v. Scott, 1878, Fry, J.; 38 L. T. (N. s.) 747; Sweeting v. Pearce, 7 C. B. (N. s.) 484.

4.-Commission-Corrupt Bargain.-In the case of a person being employed by both parties to a contract, without such fact being known, it has been held that the bargain was corrupt, and that he could not recover his commissions.-Harrington v. Victoria Graving Dock Co., 1878; L. R. 3 Q. B. D. 549; 47 L. J., Q. B., 594; 39 L. T. (N. s.) 120.

5.-Where commission was promised to an agent for negotiating a loan on mortgage, which was not carried out in consequence of defect of title, it was held by the Court of Appeal, that the agent, having procured a good contract for a loan, was entitled to be paid his commission.-Fisher v. Drewett, 1878, Ct. of App.; 39 L. T. (N. s.) 253; 48 L. J., Exch., 22. (Kelly, C. B., affirmed.)

AGREEMENT.

Between Vendor and Purchaser.

(See CONTRACTS, PROMOTERS.)

Where the parties have come to a final agreement relative to the sale of an estate, and one of the terms is that such agreement shall be embodied in a formal contract, the agreement may be enforced even though such formal contract has not been executed.-Rossiter v. Miller, 1878, H. of Lords; L. R. 3 App. Cas. 1124; 39 L. T. (N. s.) 173. (Judgment of Ct. of App. reversed.)

ARTICLES OF ASSOCIATION.

Alterations in the Articles of Association cannot be prohibited by the Articles.

1.-No company can contract itself out of the power of altering its articles of association, which is given by section 50 of the Companies Act, 1862; and, therefore, a clause in its articles exempting some of them from the operation of that section is of no effect.

2.-A company's power may, however, be restricted by its memorandum of association. By section 50 the alterations are "subject to the provisions of [the] Act,