CHAPTER V. Part III. of secretary. The Secretary and His Duties. "A SECRETARY is a mere servant, his position is that he is to do what he is told, and no person can assume that he has any authority to represent anything at all." This statement of the Legal position law was made by Lord Esher in Barnett v. South London &c. Co., 18 Q.B.D. 815, and was expressly approved by the House of Lords in George Whitchurch Ltd. v. Cavanagh, 1902, A.C. 117. But in each of these cases it was sought to charge the company with liability for representations by a secretary which he had no authority to make. The secretary of a company is an officer within the meaning of Sec. 254 of 1903: McKay's case, 2 C.D. 1; and a secretary, as such, has many statutory duties to perform, the breach or omission of which may render him liable to heavy penalties. The relation between a company and its secretary is that of master and servant; see Mair v. Himalaya Tea Co., L.R. 1 Eq. 411. The contract for service may be evidenced by the resolution of the directors making the appointment. Where the engagement is for more than a year it should be by an express contract in writing, though a minute signed by the chairman may be sufficient to satisfy the Statute of Frauds: Jones v. Victoria Graving Dock Co., 2 Q.B.D. 314. A provision in the Articles that a particular person shall be the secretary of the company does not amount to a contract to employ; see p. 78 supra, Art. 115, n. Where one acts as secretary of two companies it is not true as a general proposition that a fact which comes to his knowledge as secretary of one company is notice to him as secretary of the other company from the mere existence of the common relationship. In order to make it notice it must be shown that it was his duty to the first company to communicate his knowledge to the second company: Deep Sea Fisheries Co., 1902, 1 Ch. 507. A secretary may, like any other servant, be dismissed for good cause, and in the case of wrongful dismissal he may bring an action for damages, or, if the company is being wound-up, he may prove for the amount of his claim. The Secretary and His Duties. Speaking generally, the duties of a company's secretary Part III. are to convene meetings in accordance with the instructions Chap. 5. of the directors and the Articles of Association, to attend meetings and keep a record of proceedings and make proper minutes thereof, and, under the instructions of the board, to issue all notices, attend to correspondence and keep the company's books, and make all returns and give all notices required by statute. Statutory Duties. duties. The attention of companies' secretaries is directed to the Statutory statutory duties of directors at p. 207 et seq, supra. A careful secretary will see that his company's directors duly comply with the various provisions of the Acts to be observed by them. There are various sections of the Act of 1903 which expressly affect secretaries : 1. By Sec. 50 a penalty is imposed on any officer who conceals the name of any creditor, &c., entitled to object to a reduction of capital. 2. Section 65 imposes a penalty on a secretary issuing an unstamped share warrant. 3. By Sec. 97 a secretary failing to make a return of allotments, &c., is liable to penalties. 4. Section 128 imposes personal liability on any officer of a company omitting the company's name from notices, advertisements, cheques, bills of exchange, &c. The omission of the word “Limited” from a cheque, bill of exchange, promissory note, or order for money or goods will render a secretary signing the same personally liable thereon: Penrose v. Martyr, E.B. & E. 499. 5. By Sec. 129 (2) every officer of the company omitting to enter a mortgage in the register required by that section is liable to the penalties thereby imposed. 6. By Sec. 143 any officer refusing to produce books and documents, &c., to an inspector appointed by the Court is liable to penalties; and see also Sec. 94. 7. The secretary is an officer of the company within the meaning of Sec. 254, and is liable for misfeasance. He may be liable to repay moneys paid to his private clerk and misappropriated by him: Mutual Aid &c. Society, 49 L.T. 530. He may be liable to repay moneys paid as dividends out of a capital as the result of a balance sheet negligently prepared by him: Municipal &c. Co. v. Pollington, 63 L.T. 238. Books Required. The books required to be kept by the Companies Act are:— Books required. Part III. Books required. The Secretary and His Duties. 2. The annual list and summary as required by Sec. 101 of 1903; see p. 176 supra. 3. A register of mortgages (including debentures which operate as a charge on the assets): Sec. 129 of 1903, and see p. 232 supra. 4. A minute book of the proceedings of general meetings and of directors' meetings: Sec. 154 of 1903; see Art. 130, p. 81 supra. It is the more convenient plan to keep the minutes of general meetings and of directors' meetings in separate books. Sometimes a separate register of transfers is kept by companies with large capital, but the share register may be made to show all particulars to which reference may at any time be desired. All transfers should be numbered consecutively as received, and filed together. The share certificates when printed should be bound in a book with counterfoils, on which should be entered all particulars of the corresponding certificate; the counterfoil should be initialled by the directors who sign the certificate, and should embody a receipt to be signed by the person to whom the certificate is delivered. A seal book is also important, and should be ruled in columns showing particulars of the document sealed, date of resolution to seal, date of sealing and the initials of the directors in whose presence the seal was affixed. It is also advisable to keep a register containing particulars of all documents which come into the possession or custody of the company, with a column for the signature of the person to whom any document is delivered, so that there may be no difficulty in tracing the same. An application and allotment book may also be kept, in which particulars of all applications for shares are recorded and numbered, and date and particulars of allotment. All applications for allotment should be numbered consecutively as received and filed together. A guard book is probably the most convenient form of file for applications for shares and for transfers. A careful record should be kept of all notices of allotment in a separate press copy book, in which should be entered accurate particulars of the date and hour when notices were posted. The Secretary and His Duties. It will be found convenient to keep an agenda book for the Part III. use of the chairman, so that he may note on the page opposite Chap. 5. the agenda how each matter has been dealt with and any other business transacted. A directors' attendance book is sometimes also kept, in which every director signs his name, thus showing unquestionably the meetings attended by him. The account books required will depend on the nature and extent of the company's business. The following is an example of how the minutes of a meeting should be kept : the The (second) ordinary meeting of the members of "The Company, Limited," was held on 19 at the registered office of the company, No. Lambton Quay, in the City of Wellington. [It may be of use sometimes to state the names of members present, although it is not necessary to do so.] the Mr. was voted to the chair. The notice convening the meeting was read by the secretary. The minutes of the first ordinary meeting of the company, held on day of were read by the secretary, confirmed by the meeting, and signed by the chairman. Books required. The report of the directors and the accounts and balance sheet for the year ending the last having been previously day of circulated among members, it was unanimously resolved that they be The following resolutions were passed :— seconded by Mr. "That the report of the directors and the accounts and balance Upon the motion, &c.— "That in accordance with the recommendation of the directors a Upon the motion, &c.— 19 "That Messrs. A.B. and C.D., the retiring directors, be and they Upon the motion, &c.— Mr. "That Messrs. be and they are hereby appointed auditors of the company for the ensuing year at a fee of "That the remuneration of the directors be increased from the sum of day of An amendment was moved by Mr. and seconded by Mr. "That the figures £300' be substituted for the figures Part III. First meeting of directors. The Secretary and His Duties. The amendment was put to the meeting and negatived, and the resolution as moved was then put to the meeting. A show of hands was called for, and the chairman declared the resolution to be carried. A poll was then duly demanded, and was ordered by the chairman to be taken then and there, and Messrs. were appointed scrutineers. They reported as follows: The chairman thereupon declared the resolution to be carried. E.F., Chairman. It will be found convenient to number the minutes. Any alteration made by the confirming meeting in the minutes as recorded should be initialled by the chairman of the confirming meeting, and indeed it is advisable that any alterations or interlineations made in the course of copying should be similarly initialled. For the purposes of Sec. 154 of 1903 it is not necessary that the minutes should be confirmed by a subsequent meeting before being signed by the chairman. It is highly irregular for a secretary to alter the minutes. Cawley, 42 C.D. 209, Lord Esher said : In In re "The secretary, either in consequence of some supposed power vested in him, or of some idea of his own, some time afterwards inserted in the minutes of the meeting certain dates as the dates of calls. In my opinion, that was the most dangerous thing that could well be done. Minutes of board meetings are kept in order that the shareholders of the company may know exactly what their directors have been doing, and any shareholder looking at these minutes as they now stand would suppose that the dates were agreed upon at the meeting, and were then filled in, whereas in truth no dates were agreed on by the directors at all. The dates formed no part of the resolution, and yet here is the entry made as if they formed part of the resolution then passed. I trust I shall never again see or hear of the secretary of a company, whether under superior directions or otherwise, altering minutes of meetings, either by striking out anything or adding anything." First Meeting of Directors. A secretary's duties will probably commence with the first meeting of directors, although his formal appointment will not be made till that meeting. It would seem from London &c. Land Co., 31 C.D. 223, that one director may convene the first meeting. It will be safer, however, that the first meeting should be convened by a majority of the directors if they have been appointed (either by the Articles or by the subscribers of the Memorandum; see pp. 194 and 195 supra). If no directors have been appointed, it may be well that the first meeting of subscribers be convened by a |