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919.

1ST DIV. rests on the authority of the case of Alexander v. Simpson (43 Ch. D. 139), referred to by the of Scot reporter. Counsel for the petitioners conceded Orkney that that case was directly in point. The soundand ness of the decision was not challenged. It Steam appears to have regulated the practice since it Hon Co. was pronounced in 1889, save where the difficulty Ltd Peti has been surmounted by a clause in the articles tioners. of association. That is not the case here. I November 26, am, therefore, constrained to hold that this objection, too, is substantial. The result is, I fear, that the whole procedure to which these objections relate must be gone through again, due regard being paid to the statutory requirements. I reach this result with regret; for as the reporter observes, "the procedure in the petition itself has been regular, and the steps taken by the company have probably been such as to enable the shareholders to understand the position of affairs and the effect of the resolutions submitted at the meetings." But although this may be so, we cannot overlook the failure in this case to follow closely the provisions of the Act of Parliament.

Lord Mackenzie.-It is always with regret that the Court feels compelled to insist on a due observance of what, in one view of it, may be represented as a formal matter. But I think, in dealing with the body of legislation embodied in the Companies Act, the only way to deal with the matter is to require that due observance be paid to the provisions of the statute.

Of the three points mentioned by the reporter, the last seems to me to be fatal to the contention of the petitioners here. It was conceded that the case of Alexander v. Simpson (1889, 43 Ch. D. 139) could not be challenged. It appears to me conclusive on the matter, and the attempt which was made by Mr Macmillan to distinguish this case on the ground of specialty was not successful.

The second point mentioned by the reporter also seems to me to be not matter of form but matter of substance. If, as the reporter points out, a reference had been made in the notice calling the later meeting to the print of the memorandum and the articles formerly sent to the shareholders, or if information had been given them that the memorandum and articles to be submitted at these meetings were copies of those previously sent, then it might have been possible to get over the difficulty that the notice given by the advertisement did not contain the terms of the memorandum and articles. Unfortunately that was not done, and, therefore, I think that point is also fatal.

In regard to the first point, the view I take, after considering what was decided by Swinfen Eady J. in the Penarth Pontoon Company's case ([1911] W.N. 240), is that the attention of the shareholders does require to be directed to the point that certain procedure prescribed by the

Act must be observed in order that the conditions which Parliament has attached to a special resolution may be complied with. It is, in my opinion, essential, if sound general practice is to be followed, as the reporter points out, that some information must be given to the shareholders that the resolution proposed is, when passed and confirmed, to be a special resolution. Accordingly, in the result, I come to the same conclusion as your Lordship.

Lord Skerrington.-I concur in the course which your Lordships consider ought to be followed. I desire to note that nothing in our decision to-day will compel anybody to describe a "special resolution as an extraordinary resolution," and that nothing which we decide to-day will throw any light upon the question whether the decision of the Court of Appeal in Alexander v. Simpson (43 Ch. D. 139) ought or ought not to be followed in Scotland. Counsel for the petitioners admitted that that decision was conclusive, unless he could shew that it did not apply, which he was unable to do.

As

Lord Cullen.-I am of the same opinion. regards the first point, I am not disposed to question the soundness of the view that in the notice calling the first meeting the resolution intended to be proposed does not fall to be denominated an "extraordinary resolution." Under reference, however, to subsections (3) and (4) of section 69, I think it will be worthy of the consideration of the petitioners, in their renewed proceedings, whether the notice should not state that it is intended to propose the resolution as a "special resolution."

As regards the second point, it is clear that the notice sent did no more than state the form of the resolution, and gave no information as to its substance and practical import. I am unable to see how this defect can be regarded as cured by the fact that, at a previous stage and for a different purpose, the shareholders had been put in possession of the means of knowledge.

As regards the third point, the decision in the case of Alexander v. Simpson (43 Ch. D. 139), referred to by the reporter, has not been challenged by the petitioners, and I am of opinion that they have not succeeded in distinguishing that case from the present one.

Counsel for Petitioners, Macmillan, K.C., Cooper; Agents, Macpherson & Mackay, S.S.C., Alex. Wilson, Advocate, Aberdeen.

M. D.

lar Div. of 19th February 1919. The pursuer still adheres to her refusal to accept the said tender.

Murphy V. Smith.

1919.

In these circumstances the pursuer submits that the defenders' tender has never been accepted by or November 28, on behalf of her. Alternatively, and in the event of the pursuer's said agents' letter of 24th January 1919 being held to constitute an acceptance on her behalf of the said tender, it is submitted that the pursuer was and still is entitled to withdraw her acceptance, and that the same is no longer binding on her."

Thereafter the pursuer was admitted to the benefit of the Poor's Roll, and the defender presented a second note to the Lord President asking for a proof of the averments in their first note and the pursuer's answers.

In this note the defenders further averred,

inter alia:

The defenders deny the pursuer's statement in the note to the effect that she did not authorise the acceptance of the defenders' tender, as also her averments that the letter written by her solicitors to the defenders' solicitors does not constitute an acceptance of the defenders' tender. The tender was considered House on 23rd January 1919 at which the pursuer was present. No definite decision was then come to, but later on the same day at a meeting with her then agents Messrs Rainy & Cameron, W.S., the pursuer decided to accept the tender and authorised her agents to intimate her acceptance to the defenders' agents. The pursuer's letter of 24th January 1919 was not received by her then agents until after the tender had been accepted as authorised by her.

at a consultation with counsel in the Parliament

The case was heard before the First Division on 27th and 28th November 1919.

Argued for the Defenders: The defenders were entitled to an opportunity of proving their averment that the settlement of the action was authorised by the pursuer The defenders had no duty or interest to apportion the amount of their tender amongst the pursuer and her children. Even if they had such an interest, the apportionment was a matter subsequent to the settlement of the action for a slump payment, and the absence of an apportionment from the terms of settlement could not vitiate the settlement. Further, the defenders were en titled to assume that the pursuer would distribute the damages pro rata according to the conclusion of the summons. Settlements were always favoured by the Courts. The following authorities were referred to: Jaffray v. Simpson, 1835, 13 S. 1122; Dumbreck v. Stevenson, 1861, 4 Macq. 86; Love v. Marshall, 1872, 10 M. 795; Jack v. North British Railway Co., 1886, 14 R. 263; Murray's Trs. v. Bloxsom's Trs., 1887, 15 R. 233; Dewar v. Ainslie, 1892, 20 R. 203; Gow v. Henry, 1899, 2 F. 48; Anderson v. Dick, 1901, 4 F. 68.

Argued for the Pursuer: There was no final and binding settlement. Even on the assumption that the proposed settlement was competent, it was not complete. It remained to apportion the damages and frame a joint minute embodying

a result

that apportionment. If parties came to terms and agreed that those terms should be put in writing, there was at that stage, before the writing, no final and binding settlement. A group of claims by a pursuer acting in more than one capacity could not be settled by a slump sum. Just as the claims must be separately made in the summons, so they must be separately discharged in a settlement of the action. If a writing, like the letter of the pursuer's agents here, was susceptible of two constructions, one of which led to objectionable in law, and the other did not, the Court would prefer the construction which led to an unobjectionable result. Here the letter ought not to be construed as a final acceptance of the tender, because the pursuer could not competently settle the action for a slump sum. The following authorities were cited: M'Phail v. Caledonian Railway Co., 1903, 5 F. 306; Van Laun & Co. v. Neilson Reid & Co., 1904, 6 F. 644, per the Lord President (Kinross) at p. 650, and Lord Kinnear at p. 652; Gray v. Caledonian Railway (o., 1912 S.C. 339; Gordon's Exrs. v. Gordon, 1918, I SL.T. 407; Winn v. Bull, 1877, 7 Ch. D. 29; Glegg on Reparation, p. 82.

On 28th November 1919 the Court refused the prayer of the second note for the defenders.

The Lord President.-I am of opinion that there was no concluded agreement to settle this action, because there remained over for consideration the question of allocation or apportionment of the sum tendered.

On the 20th January 1919 the defender tendered a sum of £150 in full of the conclusions of this summons; and, when we turn to the summons, we find that it concludes for payment of a sum to the pursuer as an individual and for payment to her as tutrix of her five pupil children of five separate and distinct sums, one payable t each. That was, I am satisfied, the correct form which the conclusions of the summons in such a case as this ought to take, for, as Lord Kinnear observed in the case of Gray v. Caledonian Railway Company (1912 S.C. 339), the pursuer in such an action as this "cannot be allowed to sue for one lump sum in respect of six separate injuries to six different people. The question of the injury done to each child is a separate and distinct question from the injury done to the other children. . . . . It is clear enough that each child has a separate case for separate injury done to itself; and the fact that the father," the mother as here-"as administrator-in-law, is entitled to recover the damages for each of his children does not make the six children into one pursuer.'

Accordingly, there was a very important question to be settled, namely, how the £150 was to be apportioned between the pursuer herself and the pursuer as tutrix for each of the five children. It may possibly be that the

defender had no duty to see to the apportionment of the sum; but the defender certainly had an interest and a right to see to the apportionment of that sum, for, until it was apportioned, there was and could be no settlement of this action.

In so saying I am not to be held as gainsaying the doctrine that an action can be effectually settled although the parties may be at issue as to the meaning of the terms of the settlement. The parties here are not at issue as to the meaning of the terms of the settlement, for they have not fixed one of the terms or even so much as considered it. Nor am I to be held as contradicting the view that the mother of the pupil children here could grant a valid discharge of the sums paid to the pupil children, nor that failure to execute a joint minute, although. as here, a joint minute was in contemplation, would affect the settlement.

In the present instance, the joint minute would no doubt have contained the apportionment, and it had, therefore, a very important function to perform, and left a space of time in which either party might resile from the bargain. In holding that there was only an interim and not a concluded agreement settling this action, I think we are not disregarding or going contrary to any of the authorities cited to us for the reasons I have given.

Lord Mackenzie.-I concur in thinking that this case has not been settled and that, there fore, the action must be allowed to proceed. Whatever the pursuer may have intended upon the state of facts as represented by the defenders in the case, I think that, if it is attempted to be argued that what she did was a settlement, then what she did was ultra vires, because she could not settle this case without finally determining in the agreement to settle the answer to be returned to six separate questions: (1) how much was to be paid to her in name of her claim for £750; how much was to be paid to her daughter Agnes in name of her claim for £90; how much to William for his claim for £105; how much to Mary for her claim for £150; how much to Charles for his claim for £200, and how much to Francis for his claim for £250.

Now, all those questions are left unanswered; and, accordingly, it is of no avail for the defenders to have recourse to those cases in which,

undoubtedly, there was an agreement which completely settled the case, although the terms of the settlement might require to be cleared up in a subsequent action. In the present case, I am unable to see how, there being a division of interest between the position of the mother in her individual capacity and as tutrix and administratrix for her pupil children, she could settle without the intervention of some third party, namely, an independent curator ad litem to protect the interests of the pupils, nor how

she could settle the question of apportionment 1sT DIV. with a lump sum.

Murphy That all goes, I think, to shew that what was v. Smith. effected by the acceptance of the tender of £150 November 28, and expenses in full of the conclusions of the summons, was not sufficient to settle the case.

Lord Skerrington. I have always regretted that Lord Young's view (Gow v. Henry, 2 F. 48 at p. 52) did not prevail, to the effect that, when an action is in Court, it should, in the ordinary case, be settled only by a joint minute to which the authority of the Court has been interponed. I must assume, however, in deference to the authorities, that an extra-judicial settlement of an action is valid, provided there has been consensus in idem for the purpose of bringing the litigation to an end.

Ön principle, it seems to me too clear for argument that there was no effectual consent on the part of the pursuer to settle for a slump sum of £150 her individual claim and the separate claims which she put forward as guardian of her five children. No authority was quoted in support of the view that a person in a fiduciary capacity can compromise for a slump sum his individual claim and those of various beneficiaries whom he represents.

I apply to the letter from the solicitors for the pursuer, dated 24th January 1919, the ordinary rule of construction to the effect that, when a writing is susceptible of two meanings, one of which will lead to a legal result and the other of which will lead to an illegality, that construction ought to be preferred which the law will countenance and to which it will give effect. The letter requests that there should be sent a draft of a joint minute for disposal of the action. Obviously, what would have to be inserted in that minute in order that the case might be taken out of Court would be an apportionment of the £150. The defenders were entitled to scrutinise that apportionment and, if there appeared any suspicious circumstance in connection with it, they would have been entitled to bring it under the notice of the Court.

In these circumstances, it seems to me that there was no concluded bargain until the joint minute had been adjusted and approved of by the Court.

Lord Cullen.-I think that the letter of the pursuer's agents was intended to conclude on her behalf a de presenti agreement to settle the action in question. I am unable to read the document as meaning that there was to be a further period of bargaining before a settle ment was reached, the vehicle of which further bargaining was to be the joint minute. I think, however, that for the reasons which your Lordships have already stated, the settlement was

1919.