Business at meetings and adjournments. Votes of shareholders. Manner of voting. Regulations as to proxies. say, the chairman of the directors, or in his absence the deputy chairman (if any), or in the absence of the chairman and deputy chairman some one of the directors of the company to be chosen for that purpose by the meeting, or in the absence of the chairman and deputy chairman and of all the directors, any shareholder to be chosen for that purpose by a majority of the shareholders present at such meeting. LXXIV. The shareholders present at any such meeting shall proceed in the execution of the powers of the company with respect to the matters for which such meeting shall have been convened, and those only; and every such meeting may be adjourned from time to time and from place to place; and no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which such adjournment took place. LXXV. At all general meetings of the company every shareholder shall be entitled to vote according to the prescribed scale of voting, and where no scale shall be prescribed every shareholder shall have one vote for every share up to ten, and he shall have an additional vote for every five shares beyond the first ten shares held by him up to one hundred, and an additional vote for every ten shares held by him beyond the first hundred shares: provided always, that no shareholder shall be entitled to vote at any meeting unless he shall have paid all the calls then due upon the shares held by him. LXXVI. The votes may be given either personally or by proxies, being shareholders authorized by writing according to the form in the schedule (F.) to this act annexed, or in a form to the like effect, under the hand of the shareholder nominating such proxy, or if such shareholder be a corporation, then under their common seal; and every proposition at any such meeting shall be determined by the majority of votes of the parties present, including proxies, the chairman of the meeting being entitled to vote, not only as a principal and proxy, but to have a casting vote if there be an equality of votes. LXXVII. No person shall be entitled to vote as a proxy unless the instrument appointing such proxy have been transmitted to the secretary of the company the prescribed period, or, if no period be prescribed, not less than forty-eight hours before the time appointed for holding the meeting at which such proxy is to be used. By the Stamp Act, 1870 (33 & 34 Vict. c. 97), a stamp of one penny, either impressed or affixed, must be upon every proxy paper. And the stamp, if adhesive, must be effectually cancelled at the time of execution by writing the name or initials of the voter or his firm, together with the true date of his so writing, otherwise the proxy will be deemed null and void. It cannot be stamped after execution, and every proxy paper must specify the day upon which the meeting is to be held, at which it is intended to be used. The proxy will only be available at such meeting or any adjournment thereof. It may be made out in the name of one or more persons to vote as proxy (34 Vict. c. 4, s. 4). shareholders. LXXVIII. If several persons be jointly entitled to a share, Votes of joint the person whose name stands first in the register of shareholders as one of the holders of such share shall, for the purpose of voting at any meeting, be deemed the sole proprietor thereof; and on all occasions the vote of such firstnamed shareholder, either in person or by proxy, shall be allowed as the vote in respect of such share, without proof of the concurrence of the other holders thereof. All intimations of votes by others than the first named on the register may be treated as null and void, although expressly contrary to the vote of the person whose name stands first on the register of shareholders. lunatics and LXXIX. If any shareholder be a lunatic or idiot, such Votes of lunatic or idiot may vote by his committee; and if any share- minors, &c. holder be a minor he may vote by his guardian or any one of his guardians; and every such vote may be given either in person or by proxy. particular votes only required in the event of a poll being de manded. LXXX. Whenever in this or the special act the consent of Proof of a any particular majority of votes at any meeting of the com- majority of pany is required in order to authorize any proceeding of the company, such particular majority shall only be required to be proved in the event of a poll being demanded at such meeting; and if such poll be not demanded, then a declaration by the chairman that the resolution authorizing such proceeding has been carried, and an entry to that effect in the book of proceedings of the company, shall be sufficient authority for such proceeding, without proof of the number or proportion of votes recorded in favour of or against the same. As to an absolute majority at a meeting, see Rawlinson's Municipal Corporation Acts, 6th ed., pp. 40, 41 (notes), where all the cases are collected. See also The Queen v. Overseers of Christchurch, 26 L. J., M. C. 68; 7 E. & B. 409, where it was held that a majority must be a majority Number of directors. Power to vary the number of directors. of the whole meeting: so where thirty-five vestrymen were present at a meeting and sixteen voted one way and eleven the other, while eight abstained from voting, this was not an actual majority of those assembled. And with respect to the appointment and rotation of directors, be it enacted as follows: LXXXI. The number of directors shall be the prescribed number. This section is directory. The remaining directors upon any vacancy are not bound at once to fill it up, either by themselves or by the company, if there exist any good reason for delay. Directors are trustees for and agents of the company, and have all the authority given to partners at common law. They will be personally liable for any transaction which the body of shareholders could not sanetion, and their private interest, when in conflict with their duty as directors, must yield. Cameron's Coalbrook Steam Coal and Railway Co., Ex parte Bennett, 18 Beav. 339; Carter v. Horne, 1 Eq. Abr. 7; Fawcett v. Whitehouse, 1 Russ. & M. 132; Benson v. Heathorn, 1 Y. & Coll. C. C. 326; Davidson v. Tulloch, 6 Jur., N. S. 543, H. L. Directors are in the position not of servants but of managers of the company. Apart, therefore, from contract or agreement they cannot claim remuneration for their services according to their value. Dunstan v. Imperial Gas Light Co., 3 B. & Ad. 125. There is no general presumption that their fees are to be paid out of profits only. Where the articles of a company provided that the directors might yearly distribute among themselves, as remuneration for their services, such sum as should be equal to one-tenth part of the profits of the company for the last preceding year, provided always that there should be yearly distributed among such shareholders as such remuneration a sum which should not be less than 100 yearly for each director, and no profits were ever made by the company: held, reversing the decision of the Master of the Rolls, that the distribution of 100. per annum to each director out of capital was not illegal. The Lundy Granite Co., Harvey Lewis's case, 26 L. T. 673. Directors are the agents of the company. Charitable Corporation v. Sutton, 2 Atk. 400. The company itself can only act through its directors. Ferguson v. Wilson, L. R., 2 Ch. 77, 89. When a director enters into a contract with a company, he will be disqualified, but it does not follow that the contract is void. Directors have no power to bind the company except within the limits of its act or deed of settlement. But the company will be liable for deeds of its directors not authorized by a special general meeting, although such meeting should have been called to authorize borrowing money, the borrowing power being, however, within the powers of the company. Agar v. Athenæum Life Assurance Society, 27 L. J., C. P. 95; Spackman v. Evans, L. R., 3 H. L. 171, 244. But if any acts of directors are tainted with fraud they will not be binding on the company. Directors do not appear to lose their qualification by mortgaging their shares (Cumming v. Prescott, 2 Y. & C. 488), or by non-attendance or bankruptcy. See Phelps v. Lyle, 10 Ad. & E. 113. As to directors of gas and water companies being members of a local board of health, and voting on any question in which the company is interested, see Public Health Act, 1875, Schedule II., sect. 64. Proprietors, shareholders, or members of any company or concern, may be and continue as members of a local board; but must not vote on any question in which the company is interested, except by special dispensation from the local government board. LXXXII. Where the company shall be authorized by the special act to increase or to reduce the number of the directors, it shall be lawful for the company, from time to time, in general meeting, after due notice for that purpose, to increase or reduce the number of the directors within the prescribed limits, if any, and to determine the order of rotation in which such reduced or increased number shall go out of office, and what number shall be a quorum at their meetings. directors. LXXXIII. The directors appointed by the special act shall, Election of unless thereby otherwise provided, continue in office until the first ordinary meeting to be held in the year next after that in which the special act shall have passed; and at such meeting the shareholders present, personally or by proxy, may either continue in office the directors appointed by the special act, or any number of them, or may elect a new body of directors, or directors to supply the places of those not continued in office, the directors appointed by the special act being eligible as members of such new body; and at the first ordinary meeting to be held every year thereafter the shareholders present, personally or by proxy, shall elect persons to supply the places of the directors then retiring from office, agreeably to the provisions hereinafter contained; and the several persons elected at any such meeting, being neither removed nor disqualified, nor having resigned, shall continue to be directors until others are elected in their stead, as hereinafter mentioned. directors con LXXXIV. If at any meeting at which an election of Existing directors ought to take place the prescribed quorum shall not tinued on be present within one hour from the time appointed for the failure of meeting for meeting no election of directors shall be made, but such election of meeting shall stand adjourned to the following day at the directors. same time and place; and if at the meeting so adjourned the prescribed quorum be not present within one hour from the time appointed for the meeting, the existing directors shall continue to act and retain their powers until new directors be appointed at the first ordinary meeting of the following year. LXXXV. No person shall be capable of being a director Qualification unless he be a shareholder, nor unless he be possessed of the prescribed number, if any, of shares; and no person holding an office or place of trust or profit under the company, or interested in any contract with the company, shall be capable of being a director; and no director shall be capable of accepting any other office or place of trust or profit under of directors. Cases in which the company, or of being interested in any contract with the company, during the time he shall be a director. Any contract would not be avoided because entered into by the company with a director, but the director would be incapable of continuing a director. See Foster v. Oxford, Worcester and Wolverhampton Railway Co., 22 L. J., C. P. 99; 13 C. B. 200; 17 Jur. 167; 20 L. T. 224; Aberdeen Railway Co. v. Blaikie, 23 L. T. 315. Bills receipted by the defendant held to be evidence of his being concerned in a contract with a board: defendant held to be disqualified thereby. Nicholson v. Fields, 31 L. J., Ex. 233; 7 H. & N. 810. See Woolley v. Kay, 25 L. J., Ex. 351; 1 H. & N. 307; 27 L. T. 205. LXXXVI. If any of the directors at any time subsequently to his election accept or continue to hold any other office or place of trust or profit under the company, or be either directly or indirectly concerned in any contract with the company, or participate in any manner in the profits of any work to be done for the company, or if such director at any time cease to be a holder of the prescribed number of shares in the company, then in any of the cases aforesaid the office of such director shall become vacant, and thenceforth he shall cease from voting or acting as a director. But the bankers or treasurers of the company may be directors. Sheffield and Manchester Railway Co. v. Woodcock, 7 M. & W. 574; 2 Rail. Cas. 522. By 1 & 2 Vict. c. 106, no spiritual person holding any preferment, or licensed to perform the duties of any ecclesiastical office, can be a director of any trading company, such as gas and water companies. LXXXVII. Provided always, that no person, being a shareholder or member of any incorporated joint stock company, shall be disqualified or prevented from acting as a director by reason of any contract entered into between such joint stock company and the company incorporated by the special act; but no such director, being a shareholder or member of such joint stock company, shall vote on any question as to any contract with such joint stock company. LXXXVIII. The directors appointed by the special act, and continued in office as aforesaid, or the directors elected to supply the places of those retiring as aforesaid, shall, subject to the provision hereinbefore contained for increasing or reducing the number of directors, retire from office at the times and in the proportions following, the individuals to retire being in each instance determined by ballot among the directors, unless they shall otherwise agree; (that is to say,) At the end of the first year after the first election of directors the prescribed number, and if no number be |