MINUTES. 112. The directors shall cause minutes to be duly entered in books provided for the purpose (a) Of all appointments of officers. (b) of the names of the directors present at each meeting of the directors and of any committee of directors. (c) Of all orders made by the directors and committees of directors. (d) Of all resolutions and proceedings of general meetings and of meetings of the directors and committees. And any such minutes of any meeting of the directors, or of any committee, or of the company, if purporting to be signed by the chairman of such meeting, or by the chairman of the next succeeding meeting, shall be receivable as prima facie evidence of the matters stated in such minutes. The above clause is sometimes inserted and may possibly be useful as a reminder, but, if brevity is desired it can be omitted, for Section 67 of the Act sufficiently provides for these matters. The section is as follows: "Every company under this Act shall cause minutes of all resolutions and proceedings of general meetings of the company, and of the directors or managers of the company, in cases where there are directors or managers, to be duly entered in books to be from time to time provided for the purpose; and any such minute as aforesaid, if purporting to be signed by the chairman of the meeting at which such resolutions were passed, or proceedings had, or by the chairman of the next succeeding meeting, shall be received as evidence in all legal proceedings; and until the contrary is proved every general meeting of the company or meeting of directors or managers in respect of the proceedings of which minutes have been so made shall he deemed to have been duly held and convened, and all resolutions passed thereat or proceedings had to have been duly passed and had, and all appointments of directors, managers, or liquidators shall be deemed to be valid, and all acts done by such directors, managers, or liquidators shall be valid, notwithstanding any defect that may afterwards be discovered in their appointments or quali. fications." Even apart from the Act the clause would appear to be effectual as against any member of the company although of course not against strangers. See Roney's Case, 12 W. R. 816, 994; 4 D. J. & S. 426. POWERS OF DIRECTORS. 113. The management of the business and the control of the company shall be vested in the directors, who, in addition to the powers and authorities by these presents expressly conferred upon them, may exercise all such powers and do all such acts and things as may be exercised or done by the company and are not hereby or by the statutes expressly directed or required Prec. I. Minutes to be made. General powers of company vested in directors. Prec. I to be exercised or done by the company in general meeting, but subject nevertheless to any regulations from time to time made by the company in general meeting; provided that no regulation shall invalidate any prior act of the directors which would have been valid if such regulation had not been made. The above clause is usual. If it is desired to limit the authority of the directors, express provision is accordingly made, but subject thereto, the general powers of the company are almost always given to the directors. See and compare Clause 55 of Table A. And such a general delegation is valid and effectual. Thus In re Patent File Co., 6 Ch., the articles authorised the borrowing of money with the sanction of an extraordinary meeting of the company; they also contained a clause substantially the same as above. The directors overdrew the company's banking account, and being required by the bank to give security, deposited title deeds of property belonging to the company. It was held in the winding-up of the company, that the mortgage was valid. James, L.J., said (inter alia,) that it was "plain that, under these articles, the directors can do anything which the company could do, unless it is an act which they are specially prohibited from doing. I can find nothing in the memorandum or articles to prevent the directors from making the best terms they can with a creditor of the company by selling or pledging part of the property of the company." And Mellish, L.J., said (inter alia,) "The articles give to the directors the whole powers of the company, subject to the provisions of the articles and of the Companies Act, 1862, and I cannot find anything either in the Act or the articles to prohibit their making a mortgage by deposit. ... There being nothing in the articles to prohibit the giving of such security, I am of opinion that the company can give it as well for a past debt as a future one." See also Collie's Claim, 12 Eq. 246. So also In re Anglo-Danubian, &c., Co., 20 Eq. 339, the articles contained express power to borrow (Clause 29), and also (Clause 66), a general delegation of powers as above. The question was, whether the directors had power to issue debentures at a discount. Jessel, M.R., held that they could: "There is nothing in these articles to limit the amount of interest, the directors might give 10 per cent., 20 per cent., or 30 per cent., and they might give that interest by way of discount. If, therefore, I went on the mere words of the 29th Clause, I should hold this was within their powers. ¡But, looking to the 66th Clause, I cannot have any possible doubt. The directors can do anything the company can do; and as there are no regulations prescribed by the articles or the company under the 66th Clause, they may borrow on any terms they think fit." The above clause is substantially the same as Clause 55 of Table A., and Clause 90 of the Companies Clauses Consolidation Act, 1845. In the recent case of Hampson v. Price's Patent Candle Co., L. J. 45 Ch. 437; 34 L. T. 711; 24 W. N. 754, it was held that the last-mentioned clause warranted directors in granting out of the funds of the company gratuities to the workmen employed. See also Godefroi & Shortt, p. 72. As to when the court will and when it will not interfere in the internal management of a company, see the rule in Foss v. Harbottle, infra, Miscellaneous Clauses, note to Form 17. Prec. I. powers given 114. In furtherance, and not in limitation of, and without prejudice to the general powers conferred or implied in the last Specific preceding clause, and of the other powers conferred by these presents, it is hereby expressly declared that the directors shall be entrusted with, and exercise and perform the following powers and duties : From what is said in the note to Clause 113, it seems that the subsections of this clause, or many of them, might without danger be omitted. Nevertheless, it is usual expressly to confer all, or some of the powers contained in them, and reasons for doing so are not wanting, e.g., 1. Directors like, as far as possible, to have express authority, for where express authority is given by the articles the company cannot complain that an act of the directors pursuant thereto is ultra vires. Thus where the articles authorised the directors to pay 6,000l. to the promoters of the company it was held, on demurrer, that payment without taxation was not improper. Croskey v. Bank of Wales, 4 Giff. 314; 9 Jur. N. S. 595. So where the articles authorised the directors to acquire a specific business" upon such terms and under such stipulations as to guarantee or otherwise as may be agreed upon," it was held that they were under no obligation to consult the company in general meeting before making the purchase, although the business was insolvent and the purchase would involve undertaking vast liabilities. Overend & Gurney Co. v. Gibbs, L. R. 5 H. L. 480. See also Blakely Ordnance Co., 3 Ch. 159; Bank of Turkey v. Ottoman Bank, 14 W. R. 819; Eley v. Positive, &c., Soc., 1 Ex. Div. 88. 2. It relieves the directors from responsibility, for in the absence of fraud or crassa negligentia, they will not be under any personal liability to the company, even though in the exercise of the powers entrusted to them they are guilty of imprudence and want of judgment which result in a great loss to the company. Overend & Gurney Co. v. Gibbs, ubi supra. 3. Mortgagees, vendors, and other persons dealing with a company like to see the powers of the directors in black and white. to directors. (1.) They may take such steps as they think fit to carry into May carry effect the said agreement of the day of If Clause 3, supra, p. 143, is inserted this should be omitted. (2.) They may pay the costs, charges, and expenses, preliminary and incidental to the promotion, formation, establishment, and registration of the company. Such a power will not give a promoter a right of action, in respect of preliminary expenses, against the company. Melhado v. Porto Allegre Ry. Co., 9 C. P. 503; at any rate if he is not a party to the articles. Eley v. Positive, &c., Soc., 1 Ex. Div. 88. See also Croskey v. Bank of Wales, 4 Giff. 318, cited supra. agreement into effect. May pay preexpenses. liminary (3.) They may, at their discretion, pay for any property or May pay for Prec. I. property in debentures, &c. May secure contracts by mortgage. May appoint officers, &c. May restrict right to transfer shares. May appoint trustees. rights acquired by, or services rendered to, the company, either wholly or partially in cash or in shares, bonds, debentures, or other securities of the company, and any such shares may be issued either as fully paid up or with such amount credited as paid up thereon as may be agreed upon, and any such bonds, debentures, or other securities may be either specifically charged upon all or any part of the property of the company and its uncalled capital, or not so charged. Debentures issued by a company under a general power of borrowing in part discharge of existing liabilities are valid. Inns of Court Hotel Co., 6 Eq. 82. See also opinion of Blackburn, J., in Webb v. Herne Bay Commiss., 5 L. R. Q. B. 654. If paid-up shares are issued under the above power, a contract in relation thereto may be necessary under Section 25 of the Act of 1867. See further, supra, p. 6. (4.) They may secure the fulfilment of any contracts or (5.) They may appoint, and at their discretion remove or It is sometimes found expedient to place a restriction on the right of (7.) They may appoint any person or persons to accept and hold in trust for the company any property belonging to the company, or in which it is interested, and (8.) They may institute, conduct, defend, compound, or Prec. I. May bring and defend actions, &c. arbitration. (9.) They may refer any claims or demands by or against May refer to the company to arbitration, and observe and perform the awards. As to arbitration, see further, supra, p. 33, and infra, p. 194. (10.) They may make and give receipts, releases, and other May give discharges, for money payable to the company, and for receipts. the claims and demands of the company. And such receipts will be effectual even though the acting directors are not directors de jure. Mahoney v. East Holyford Mining Co., 7 H. L. 869. See infra, Miscellaneous Clauses, notes to Form 42. (11.) They may act on behalf of the company in all matters May act for relating to bankrupts and insolvents. [11a. They may establish branch offices, and appoint agents, for the transaction of the business of the company, either in the United Kingdom or elsewhere, upon such terms and with such power and authorities as the directors think expedient.] The above is sometimes inserted. company in bankruptcy. May establish branch offices and appoint agents. monies. (12.) They may invest any of the monies of the company May invest not immediately required for the purposes thereof, upon such securities and in such manner as they may think fit, and they may, from time to time, vary or realise such investments. A power to invest in securities does not warrant an application for a number of shares in a proposed company with a view to promoting it. Joint-Stock Discount Co. v. Brown, 3 Eq. 139; 8 Eq. 381. See also supra, p. 107. |