PAGE 105. note (b). See Harrison v. Mexican Ry. Co., 19 Eq. 358. 106. add to Imp. Land Co. of Marseilles, and the other cases in note (b). "Brunton's claim, 19 Eq. 302." 115. add to note (a). "The cases before V.-C. Malins of Featherstone v. Cooke, 21 W. R. 835; and Trade Auxiliary Co. v. Vickers ib., 837 can scarcely (it is conceived) be supported." 119. the view urged in the text that the personal liability of directors to their shareholders depends on the law of agency derives confirmation from the language of Lord Cairns and L. J. James, in the case of Parker v. McKenna, 10 Ch. 96. In that case directors of a banking company were compelled to refund profits improperly made by them on certain dealings with a new issue of shares of the bank; and the judgment was founded not on any doctrines of trusteeship, but simply on the well-established principle that an agent shall not make a surreptitious profit out of his agency. Lord Cairns said, (p. 118) Now, the rule as I understand it as to agents, 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 an agent, be allowed to put himself into a position in which his interest and his duty will be in conflict. If Stock had bought these shares and paid for them and become the absolute owner of them, the directors were as free as any person in the market to go to Stock and to become the purchasers from him of those shares. The agency in that case would have been over, and there would have been no longer any conflict between interest and duty. Here the agency has not terminated. The Court will not inquire and is not in a position to ascertain whether the bank has lost or not lost by the acts of the directors. All that the Court has to do is to examine whether a profit has been made by an agent without the knowledge of his principal, in the course and execution of his agency, and the Court finds, in my opinion, that these agents in the course of their agency have made a profit, and for that profit they must in my opinion, account to their principal." PAGE Lord Justice James said, (p. 124), "I do not think it is necessary, but it appears to me very important that we should concur in laying down again and again the general principle that in this Court no agent, in the course of his agency in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal; that this rule is an inflexible rule, and must be applied inexorably by this Court, which is not entitled in my judgment to receive evidence, or suggestion or argument, as to whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that." See also Ottoman Bank v. Farley, 17 W. R. 761. 124. note (c). The House of Lords has now conclusively decided in the case of Ashbury, &c., Company v. Riche (W. N. 19th June, 1875), after a division of opinion in the Courts below, that a contract beyond the scope and objects of a company as defined by its memorandum of association under the Act of 1862, cannot by any attempted subsequent ratification of the shareholders, even though unanimous, be made legally binding on the company. 306. add to note to s. 79. "The petition must allege facts which justify a winding-up order; it is not enough for a sufficient case to be made out in evidence." Wear Engine Works Co., 10 Ch. 188. 309. add to note to sub-sec. (1) of s. 80. "Omission to pay a debt within the three weeks is not neglect within the meaning of this sub-sec., unless there is no reasonable cause for the omission; and where the debt was bona fide disputed, and the creditor's petition was in the opinion of the Court only presented to put pressure on the company, the petition was dismissed by the M. R. with costs. London and Paris Banking Corporation, 19 Eq. 444.” 311. in last line add "and see Steam Stoker Co., 19 Eq. 416." PAGE 313. add to note on s. 82. "On a winding-up petition being presented by a shareholder, the secretary of the company filed an affidavit in opposition, and being called on in crossexamination before a special examiner to produce the books of the company refused to do so. The V.-C. made an order that the company by their secretary should produce on his cross-examination the books and papers which they had notice to produce. Held, on appeal, that the order was right both in form and substance." Emma Mining Co., 10 Ch. 194. 331. note to s. 101. Barnett's case is now reported, 19 Eq. 449. |