Officers-Powers.

J. M., secretary to the said Company." The bill was not honoured: Held, on demurrer to a plea, that J. M. was personally liable to P. under the Joint Stock Companies' Act, 1856: (19 & 20 Vict. c. 47, 8. 31.) Penrose v. Martyr, E. B. & E. 499.

See DIRECTORS.

POWERS.

Of directors-Assignment of the business of one Company to another.] The S. F. Insurance Company was started in 1849. Under its deed of settlement the directors had power to purchase the goodwill or business of any other Insurance Company. The Port of L. Company had been established in 1847. Their deed contained no powers to the directors to sell the business, but provided a mode of dissolving the Company. In 1849 a sale or transfer of the business of the latter Company to the former was negotiated, and though no sufficient proof of execution by the Port of L. Company was given, yet the transfer actually took place, and the S. F. Company covenanted to indemnify the Port of L. Company against all claims. The S. F. Company received for premiums due to the Port of L. Company at the time of the transfer 1,5417. 4s. 5d., and paid, in respect of debts of the same Company, 11,1967. 16s. 11d.: Held (reversing the judgment of the Lords Justices, but on grounds not raised before them), that the sale was void by the 7 & 8 Vict. c. 110, 8. 29, one at least of the directors negotiating being interested. Law of partnership in regard to Joint Stock Companies explained. Per Lord Wensleydale. Ernest, app., Nicholls, resp., 3 Jur. (N.S.) 918, in Dom. Proc.; 30 L. J. 45.

Change of name-Right to sue on bond.] The 12th section of the Limited Liability Act, 18 & 19 Vict. c. 133, enacts that no alteration made by virtue of this act in the name of any Company shall prejudice or affect any right which previously to such alteration has accrued to such Company, &c., but every such Company shall be entitled to all such remedies as they would have been entitled to if no such alteration had been made: Held, that the rights of a Company which had obtained a certificate of complete registration with Limited Liability under the above act, against a surety on a bond entered into with them for the faithful service of a clerk or agent, in respect of defalcations since the date of such certificate, remained unaffected by their change of name. Groux's Improved Soap Company v. Cooper, 8 C. B. (N.S.) 800.

Power to draw and accept bills.] Where directors of a Joint Stock Company are authorized by its deed of settlement to draw or accept bills of exchange, a proviso in the deed that such bills shall be so made or accepted, &c., as to be binding on the Company and on the shareholders, to the extent of the respective shares held by them in the capital stock of the Company and no further, is repugnant and void, and the bills drawn or accepted by the directors in conformity with the provisions of the Joint Stock Companies Act, 7 & 8 Vict. c. 110, s. 45, bind the Company; and in an action by the payee (it

Powers.

not being proved that he had actual notice of the provision in the deed) it was held that he was entitled to recover. Gordon v. Sea Fire and Life Assurance Society, 26 L. J. 202, Ex.

Issue of debentures for payment of debts-Increase of capital.] A Joint Stock Company was registered and incorporated under the 19 & 20 Vict. c. 47. It had a memorandum, but no articles of association. It was empowered to raise money at interest on deben. tures for payment of debts contracted in the due working of the Company. A bill was filed, by shareholders, to restrain the directors from issuing debentures or other securities whereby the stock and assets of the Company might be charged or made liable for the payment of any money borrowed for the use of the Company, and also from borrowing money on debentures. A motion for an injunction was refused by one of the Vice-Chancellors, on the ground that the directors had power to do what they proposed, and on appeal the decision was affirmed, and a demurrer, which had been put in pending the appeal, was ordered to stand over, without prejudice, all questions being reserved to the hearing of the cause. Bryon v. Metropolitan Saloon Omnibus Company (Limited), 27 L. J. 685, Ch., on appeal; 32 L. T. 5.

Borrowing on debentures.] By a Company's deed of settlement power was given to a meeting of two-thirds in number and value of the shareholders to authorise the directors to borrow on debentures. The directors raised money on debentures upon the resolution of a meeting at which the requisite number of shareholders was not present. The debentures were issued to persons actually present at the meeting, and the money raised was applied in payment of the debts of the Company. Interest was duly paid on the loans for two years. Held, that the original issue of debentures was invalid, but that the subsequent acquiescence of the Company had cured their invalidity, and they could not now be disputed. Re The Magdalena Steam Navigation Company, 6 Jur. (N.S.) 975, Ch. ; 3 L. T. (N.S.) 147.

Incorporation by Act of Parliament.] A Company incorporated by Act of Parliament cannot exercise its powers, or apply its capital, except in strict conformity with the act. Attorney-General v. Great Northern Railway Company, 1 D. & S. 154.

Scrip Company-Registration.] A Joint Stock Company whose shares are represented to be transferable by delivery, is not necessarily illegal at common law. Re The Mexican and South American Company, ex parte Aston, 27 Beav. 474.

Foreign Company-Increase of capital-Preferential shares.] A Company, incorporated in a foreign country according to its laws and to be carried on there, was under the control of a body of trustees in London. By the constitution of the Company half the shares were preferential shares in respect to dividends, the other half not. There was power given to the holders of two-thirds of the stock to increase the capital, this power to be exercised by vote at a special meeting

Powers.

of the Company. A large proportion of the capital was held by British subjects. The affairs of the Company were such as to require that further capital should be raised, and the directors proposed a resolution that 800 ordinary shares should be converted into preferential shares, and the resolution was carried at a meeting of the Company. A shareholder of ordinary shares filed a bill, and obtained an injunction to restrain the execution of the object of the resolution. The directors then obtained a resolution "that they should take the necessary steps abroad for increasing the preferential capital," whereupon the present bill was filed by the same shareholder, and one of the Vice-Chancellors granted an injunction to restrain such proceedings. Held, on appeal, that considering the domicil and purposes of the Company an injunction ought not to issue, there appearing on the face of the bill no equity to restrain the managers in the foreign country from making an application to the legislature there. Bill v. The Sierra Nevada Lake Water and Mining Company, 29 L. J. 176 Ch., on appeal; 6 Jur. (N.S.) 184; 1 L. T, (N.S.) 256.

Contracts made by the directors under seal.] Primâ facie all corporate bodies are bound by contracts under their common seal; but this prima facie power to contract cannot be insisted on as to matters where, from the nature of the corporate body or the object of its incorporation, it is expressly or implicitly, "by reasonable inference," prohibited from contracting. A contract as to such matters is ultra vires. Where a contract between two Companies proves to be one by which one of the contracting parties will gain considerable advantages at the expense of the other, while the other will receive no corresponding benefit, whether such contract is or not legally valid, equity will not aid in enforcing it by a degree for specific performance. A private Act of Parliament authorized one railway Company to accept a lease of another railway, the directors of the first Company then entered into an agreement with the directors of a third Company, the stipulations of which were to be performed "during the continuance " of such lease. No lease within the provisions of the act was ever granted. The agreement appeared to be, if legally valid, at least unfair to the shareholders of one of the Companies: Held, that equity would not enforce it by a decree for specific performance. Shrewsbury and Birmingham Railway Company (Directors of) v. North Western Railway Company (Directors of), 6 Ho. L. Ca. 113; 26 L. J. 482, Ch.; 3 Jur. (N.S.) 775.

Debentures fraudulently issued.] Debentures under the common seal of a Joint Stock Company incorporated under 7 & 8 Vict. c. 110, were given to P. in July, 1854, in pursuance of an arrangement made between P. and the chairman of the directors, which was a fraud on the Company. These debentures were afterwards bought by L. in the market in the ordinary course of business. The transfer to L. was registered in the books of the Company, and interest was paid to July, 1855, inclusive, but the matter was not made known to the shareholders till December in that year, when an investigation of the affairs of the Company took place, in consequence of which the directors resigned, and the further payment of interest was refused. Held, that L., though a purchaser bonâ fide

Powers-Practice.

for value without notice, yet being only the purchaser of a chose in action not assignable at law, must take it subject to the equities attaching to it; and that, under the above circumstances, neither the registration nor the payment of interest had the effect of a confirmation of L.'s title, and that he ought to be restrained from suing at law upon the debentures. Athenæum Life Assurance Society v. Pooley, 3 De Gex & J. 294.

Excess of statutory powers-Injunction.] Where there has been an excess of the statutory powers, but no injury has been occasioned to any individual, and there is none which is imminent or of irreparable consequence, the Attorney-General alone can obtain an injunction to restrain the exorbitance. There is a presumption of intention that the plans and sections referred to in an act conferring powers over the property of individuals should be adhered to. An occasional flooding of lands, caused by a proper execution of parliamentary powers, is within the 68th section of the Lands Clauses Act. Effect of delay on suit for injunction. Ware v. Regents' Canal Company, 3 De Gex & J. 212.

Taking tolls-Equality clause.] A Company, entitled to take tolls in return for a public service, is not bound, independently of express enactment, to exact the same tolls from all persons alike, but is at liberty to remit the tolls, or any portion of them, to particular persons at its pleasure and discretion. The Hungerford Market Company v. The City Steamboat Company, 30 L. J. 25, Q. B.; 7 Jur. (N.S.) 67; 3 L. T. (N.S.) 732.

See AMALGAMATION.

PRACTICE.

Proceedings for disregarding Act of Parliament must be by Attorney-General.] No one but the Attorney-General, on behalf of the public, has the right to proceed against a Company for disregarding the provisions of the Act of Parliament. Ware v. The Regent's Canal Company, 5 Jur. (N.S.) 25 Ch.

False representation in prospectus.] An action for a false representation is maintainable, although the statements may be capable of being so construed as not to be absolutely untrue to the letter. In such a case the way in which they were intended to be, and would be, ordinarily understood may be properly left to the jury. Clarke v. Dickson, 33 L. T. 136, C. P.

Certificate of deputy registrar.] The certificate of the registration of a Joint Stock Company, under the hand of the assistant registrar, is admissible in evidence, without any allegation in the certificate, or proof, aliunde, of the absence of the registrar, although, by sect. 19 of the stat. 7 & 8 Vict. c. 110, the assistant registrar is only empowered to act in the absence of his principal. Baker v. Cave, 26 L. J. 190, Ex,

Practice-Preference Share.

Security for costs-20 & 21 Vict. c. 14, s. 24.] The court will not require from a Limited Company security to be given for costs at the instance of a defendant who alleges that the plaintiffs are insolvent, since the solvency or insolvency of the plaintiffs can only be ascertained on the accounts being taken. Caillaud's Patent Tanning Company (Limited) v. Caillaud, 28 L. J. 357, Ch.; 5 Jur. (N.S.) 259; 33 L. T. 71.

Costs of action by creditor.] A creditor of a Joint Stock Company (limited) commenced an action against one of the shareholders. A petition for winding up was then presented, and notice given to the creditor of such petition, but the creditor continued proceedings in the action until the advertisement appeared for a creditor's representative: Held, that the creditor was entitled to his costs of action up to the period of advertisement. Re The Welsh Potosi Mining Company, Ex parte Tobin, 28 L. J. 44, Ch.; 4 Jur. (N.S.) 1,093.

Notice to individual director-Notice to trustee-Construction of notice-Priority of deeds.] Notice to one of the directors of a bank of a prior unregistered deed is not notice to the board of directors so as to bind the shareholders, where such director has not communicated his knowledge, and the existence of the prior unregistered deed has been fraudulently concealed, said director himself being a party to the fraud. Re Burmester, 9 Ir. Ch. R. 41.

Statute of Limitations-Acquiescence-Shareholders.] If a Company does not discover, and has not the means of discovering, the correctness of entries in a succession of accounts rendered by their agent, they are not after the decease of the agent precluded by lapse of time, or by certain shareholders omitting, against opposition, to press for explanations previously asked, from showing that such entries are not only erroneous but fraudulent. Where the accounts of an agent acting for a Company have been improperly kept or mystified, and not duly rendered and explained when asked for, the court will direct them to be taken through a period of twenty-five years, though accounts sent in had been acted on, and though shareholders who asked for further information and explanations on such accounts did not persevere to obtain them. The manner in which the court will direct the accounts to be taken. Stainton v. Carron Company, 27 L. J. 89, Ch. ; 3 Jur. (N.S.) 1,235; 30 L. T. 299. See EXECUTION, POWERS.

PREFERENCE SHARE.

Priority as to dividend.] The stock in the Great Northern Railway Company consisted of ordinary and preference stock, the latter being created in pursuance of different Acts of Parliament, and entitling the holders to preference dividends at different rates per cent. per annum. An officer of the Company, from time to time, during a period of some years, fraudulently issued fictitious stock of both kinds, which amounted in the whole to 220,000l. before the fraud was discovered. It not being possible to distinguish the genuine from the fictitious stock, an Act of Parliament was obtained in 1857,