prescribed one-third of such directors, to be determined At the end of the second year the prescribed number, and At the end of the third year the prescribed number, and if no number be prescribed the remainder of such directors, shall go out of office: And in each instance the places of the retiring directors shall be supplied by an equal number of qualified shareholders; and at the first ordinary meeting in every subsequent year the prescribed number, and if no number be prescribed onethird of the directors, being those who have been longest in office, shall go out of office, and their places shall be supplied in like manner; nevertheless every director so retiring from office may be re-elected immediately or at any future time, and after such re-election shall, with reference to the going out by rotation, be considered as a new director: provided always, that if the prescribed number of directors be some number not divisible by three, and the number of directors to retire be not prescribed, the directors shall in each case determine what number of directors, as nearly one-third as may be, shall go out of office, so that the whole number shall go out of office in three years. occasional office of direc tors. LXXXIX. If any director die, or resign, or become dis- Supply of qualified or incompetent to act as a director, or cease to be vacancies in a director by any other cause than that of going out of office by rotation as aforesaid, the remaining directors, if they think proper so to do, may elect in his place some other shareholder, duly qualified to be a director; and the shareholder so elected to fill up any such vacancy shall continue in office as a director so long only as the person in whose place he shall have been elected would have been entitled to continue if he had remained in office. And with respect to the powers of the directors, and the powers of the company to be exercised only in general meeting, be it enacted as follows: XC. The directors shall have the management and superintendence of the affairs of the company, and they may lawfully Powers of the be exercised by company to the directors. Powers of the company not by the directors. exercise all the powers of the company, except as to such matters as are directed by this or the special act to be transacted by a general meeting of the company, but all the powers so to be exercised shall be exercised in accordance with and subject to the provisions of this and the special act; and the exercise of all such powers shall be subject also to the control and regulation of any general meeting specially convened for the purpose, but not so as to render invalid any act done by the directors prior to any resolution passed by such general meeting. The directors must act in accordance with and subject to the provisions of their special act, and must confine their proceedings to what is contemplated by the act itself. They cannot deal in matters not ordinarily within the scope of the business of similar companies, or go to parliament for increased powers and pledge the funds of the company for that purpose; neither can they issue new shares for the purpose; but if it be necessary to expend the moneys of the company in order to protect their property, this is within their powers, and they may oppose a bill in par liament, and use the moneys of the company for that purpose. The directors of a company fill a double character. They are (1) agents of the company; and (2) trustees for the shareholders of the powers com mitted to them. In the first character, that of agents, their personal liability in a suit upon a contract made by them must be governed by the ordinary law of principal and agent. The directors cannot, therefore, be brought into court as personally liable upon a proceeding which simply alleges that the company has violated a contract that they have entered into. In that state of things it is not the agent but the principal that is the person liable. But a shareholder may sustain a bill against directors personally where he charges them as trustees, and seeks redress against them for a breach of duty to the company of which he is a member. For in that case the allegation of the shareholder in fact is, that the company has done no wrong whatever; that it is the executive that has committed the wrong; and that the shareholder files the bill to protect the company against the unlawful acts of the directors. Buckley's Law and Practice under the Companies Acts, 2nd ed. p. 421. A director who, knowing the improper character of a proposed transaction, contents himself with protesting and then does nothing more, stands by no means in a better position than his fellows. Joint Stock Discount Co. v. Brown, L. R., 8 Eq. 381-402. An appointment by directors of one of their own number to a salaried office is not void, but it may be of such a nature as to make all the parties to it liable for a breach of trust. Eales v. Cumberland Black Lead Mining Co., 30 L. J., Ex. 141; 6 H. & N. 481; 3 L. T., N. S. 861. XCI. Except as otherwise provided by the special act, the to be exercised following powers of the company, (that is to say,) the choice and removal of the directors, except as hereinbefore mentioned, and the increasing or reducing of their number where authorized by the special act, the choice of auditors, the determination as to the remuneration of the directors, auditors, treasurer, and secretary, the determination as to the amount of money to be borrowed on mortgage, the determination as to the augmentation of capital, and the declaration of dividends, shall be exercised only at a general meeting of the company. And with respect to the proceedings and liabilities of the directors, be it enacted as follows: directors. XCII. The directors shall hold meetings at such times as Meetings of they shall appoint for the purpose, and they may meet and adjourn as they think proper from time to time and from place to place; and at any time any two of the directors may require the secretary to call a meeting of the directors, and in order to constitute a meeting of directors there shall be present at the least the prescribed quorum, and when no quorum shall be prescribed there shall be present at least one-third of the directors; and all questions at any such meeting shall be determined by the majority of votes of the directors present, and in case of an equal division of votes the chairman shall have a casting vote in addition to his vote as one of the directors. Where by a special act of parliament forming a company, K., by his own desire, was named a director, and it was provided that the qualification of a director should be twenty-five shares in the company, and K. signed the bill in parliament, but never applied for nor had allotted to him any shares in the company: held, in the winding-up, that K. was a contributory to the extent of twenty-five shares. In re The North Kent Railway Extension Co., Kincaid's case, 40 L. J., Ch. 19; 23 L. T. 460. Directors exercising the powers here conferred upon them must act together and as a board. The prescribed quorum in a company being three, the secretary affixed the seal of the company to a bond after having obtained the written authority of two directors at a private interview, and at another private interview the verbal promise of a third to sign the authority. The company being sued upon the bond: held, that the seal of the company was affixed without lawful authority, and that the company were therefore not liable on the bond. D'Arcy v. Tamar Kitt, Hill and Carlington Railway Co., L. R., 2 Eq. 158. But as to validity in equity where the requisite number of directors concur, although not all assembled together in one place, see Collie's Claim, L. R., 12 Eq. 246, 258; 40 L. J., Ch. 567; 19 W. R. 1022; cf. In re Exmouth Docks Co., L. R., 17 Eq. 181; 43 L. J., Ch. 110; 29 L. T. 573; 22 W. R. 104. directors. XCIII. At the first meeting of directors held after the Permanent passing of the special act, and at the first meeting of the chairman of directors held after each annual appointment of directors, the directors present at such meeting shall choose one of the directors to act as chairman of the directors for the year following such choice, and shall also, if they think fit, choose another director to act as deputy chairman for the same period; and if the chairman or deputy chairman die or resign, or cease to be a director, or otherwise become Occasional chairman of directors. Committees of directors. Powers of committees. Meetings of committees. Contracts by committee or disqualified to act, the directors present at the meeting next after the occurrence of such vacancy shall choose some other of the directors to fill such vacancy; and every such chairman or deputy chairman so elected as last aforesaid shall continue in office so long only as the person in whose place he may be so elected would have been entitled to continue if such death, resignation, removal, or disqualification had not happened. XCIV. If at any meeting of the directors neither the chairman nor deputy chairman be present, the directors present shall choose some one of their number to be chairman of such meeting. XCV. It shall be lawful for the directors to appoint one or more committees, consisting of such number of directors as they think fit, within the prescribed limits, if any, and they may grant to such committees respectively power on behalf of the company to do any acts relating to the affairs of the company which the directors could lawfully do, and which they shall from time to time think proper to entrust to them. Where a board constituted by an act of parliament are authorized to delegate any of their powers to a committee, the powers so conferred upon the committee must be exercised by them acting in concert; and it is not competent to the committee to apportion among themselves the duties so delegated to them; and one of them acting alone, pursuant to such apportionment, cannot justify his acts under the act of parliament. Cook v. Ward, 2 C. P. Div. 255. XCVI. The said committees may meet from time to time, and may adjourn from place to place, as they think proper for carrying into effect the purposes of their appointment; and no such committee shall exercise the powers intrusted to them except at a meeting at which there shall be present the prescribed quorum, or if no quorum be prescribed then a quorum to be fixed for that purpose by the general body of directors; and at all meetings of the committees one of the members present shall be appointed chairman; and all questions at any meeting of the committee shall be determined by a majority of votes of the members present, and in case of an equal division of votes the chairman shall have a casting vote in addition to his vote as a member of the committee. XCVII. The power which may be granted to any such comdirectors how mittee to make contracts, as well as the power of the directors to make contracts on behalf of the company, may lawfully be to be entered exercised as follows; (that is to say,) With respect to any contract which, if made between private persons, would be by law required to be in writing and under seal, such committee or the directors may make such contract on behalf of the company in writing, and under the common seal of the company, and in the same manner may vary or discharge the same: With respect to 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, then such committee or the directors may make such contract on behalf of the company in writing, signed by such committee or any two of them, or any two of the directors, and in the same manner may vary or discharge the same: With respect to any contract which, if made between private persons, would by law be valid although made by parol only, and not reduced into writing, such committee or the directors may make such contract on behalf of the company by parol only without writing, and in the same manner may vary or discharge the same: 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; and on any default in the execution of any such contract, either by the company or any other party thereto, such actions or suits may be brought, either by or against the company, as might be brought had the same contracts been made between private persons only. All signatures of directors should clearly appear to be written as such by adding the word "directors," or it may be held that the signatures are in their private capacity and not binding on the company. Except as before stated, ante, p. 8, gas and water companies, incorporated by act of parliament, cannot contract except in the modes and upon the conditions specified either in the special act or the general act to which it is subject, such as this act. Homersham v. Wolverhampton Waterworks Co., 6 Exch. 137; 30 L. J., Ex. 193; 6 Rail. Cas. 790. into. to be entered XCVIII. The directors shall cause notes, minutes, or copies, Proceedings as the case may require, of all appointments made or con- in a book, and tracts entered into by the directors, and of the orders and to be evidence. |