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yet this cannot have the effect of discharging him from his engagement as a subscriber, and its incidental obligations, at least where it is done without the consent of the rest of the subscribers (ƒ).
SUB-SECT. 2.-Of the General Assemblies of the
320. There are several points that here present themselves for consideration. 1st, as to the mode of convening meetings; 2ndly, as to the time; 3dly, as to the persons entitled to vote; 4thly, as to the mode of voting; 5thly, as to the number of proprietors requisite to constitute a valid meeting; 6thly, as to the powers of general assemblies. With regard to the five first points, it may be remarked that the requisites of the company's act in the above respects are intended to operate as so many safeguards for the interests of the general body of the proprietors, and therefore they must be observed in all essential respects, (h) in order to give validity to a meeting. (i) Primâ facie, however, a compliance with the above requisites is to be presumed; and therefore it lies upon the company, if they seek to
(f) Kidwelly Canal Company v. Raby, 2 Price, 93. (g) As to the provisions of the Companies Clauses Consolidation Act on this point, see act, ss. 66-80, post, App.
(h) As to how far provisions of act touching the holding of special general meetings imperative or only directory, so as to admit of being dispensed with under particular exigencies of the society, see Foss v. Harbottle, 2 Hare, 495.
(i) See ante, pp. 70, 71.
avail themselves of any irregularity in those respects, to give strict proof of the same. (k)
321. A meeting is not to be deemed invalid, although, to make up the requisite number of shareholders, the votes of certain parties must be taken into account, who have taken shares for the benefit of the company, and upon a secret understanding that they are to be exonerated from all personal liability in respect of them.(1)
322. 6thly. Of the powers(m) of general meetings. 1st. In the general assembly of subscribers is vested the entire legislative power; 2ndly, the appointment of directors; 3rdly, the supreme control and management of the affairs of the company generally; and 4thly, the power of ascertaining and determining who are legitimate members of the company, &c. As necessarily incident to the above power of appointing directors, they must likewise, it is conceived, be taken to have that of removing any director for reasonable cause, and this without any express grant conferring on them such power.(n)
323. From this brief sketch of the powers of a general meeting, it would seem to follow that ordinarily, where the subscribers are dissatisfied with the management of the company's concerns, or the conduct of the governing body, the proper tribunal to which to appeal in the first instance is a general
(k) See ante, p. 71.
(1) See ante, p. 41.
(m) As to what powers of Company not exercisable by di rectors under Companies Clauses Consolidation Act, see act, s. 91, post, App.
(n) 2 Kyd on Corporations, 50.
meeting. (0) Though, if the company is in such a state of disorganization as virtually amounts to a (p) dissolution of the company, or the dissentient parties, after making all due efforts on their part to set the proprietors in motion, and to procure a meeting to be convened, cannot succeed in so doing, that may justify them in carrying the matter into a court of justice.
SUB-SECT. 3. Of the Directors. (q)
324. We have to treat in the next place, of the executive council or directors of the company, and herein, 1st, of the mode of their appointment; 2nd, of their qualification; 3rd, of their number; 4th, of their tenure of office; 5th, of their remuneration; 6th, of their powers, duties, and responsibilities.
(0) See judgment of Tindal, C. J. in London and Brighton Railway Company v. Wilson, 6 Bing. N. C. 139; and of Denman, C. J. in Reg. v. Eastern Counties Railway Company, 10 A. & E. 549. In the case of the alleged misconduct of a director of an insurance company, the court refused to interfere by continuing an injunction; the deed by which the company was constituted giving the plaintiffs, who were directors, powers of regulation, of which they had not availed themselves. Ellison v. Bignold, 2 J. & W. 503.
(p) See judgment of Vice-Chancellor in Foss v. Harbottle, 2 Hare, 461.
(q) As to the provisions of the Companies Clauses Consolidation Act (8 Vict. c. 16) on the subject of the proceedings of the directors of railway companies, and more particularly of the manner of their entering into contracts on behalf of the Company, and of the effect of any informality in their appointment, &c. as such, see act, ss. 92-99, post, App.
325. 1st. As to the mode of appointing directors. (r) The usual provision on this head is, that they shall be chosen by the proprietors at a general meeting of the company. If, pending his term of service, a director dies, resigns, or otherwise vacates his office, or ceases to be a director, the remaining directors usually have a power given them of supplying the vacancy.
326. 2dly. A railway act usually requires that a party, in order to be eligible (s) for a director, shall be possessed of a certain number of shares in the undertaking, and also that he shall not hold any office or place of trust under, or be concerned in any contract with, the company. This latter branch of the clause only applies to contracts made with the company in the execution of their undertaking. It does not therefore preclude from being directors of a railway company the members of a banking company, who are the bankers and treasurers of the railway company.(t)
327. 3rdly. Of the number (u) of the directors. The statute itself usually prescribes what this shall be; to guard against casual vacancies in the body, it
(r) As to provisions of Companies Clauses Consolidation Act (8 Vict. c. 16,) on this head, see ss. 83, 84, post, App.
(s) As to provisions of Companies Clauses Consolidation Act (8 Vict. c. 16) on this head, see act, s. 85-87, post, App.
(t) The Sheffield, Ashton-under-Lyne and Manchester Railway Company v. Woodcock, 2 Railw. Cas. 522; S. C. 7 M. & W.574.
(u) As to provisions of Companies Clauses Consolidation Act (8 Vict. c. 16) on this head, see act, ss. 81, 82, 89, post, App.
also gives a power to the remaining directors to fill up all such vacancies as they occur. The provision thus made for a certain number of directors is however, it should seem, to be construed as matter of direction only, and not of condition, as something which affects only the internal regulation and management of the affairs of the company and not its external concerns. (q) Supposing therefore a party were dissatisfied with the proceedings of the company because there were not the full number of directors, possibly it might be competent for him to move for a mandamus to compel the directors to supply the vacancies, but semble, it would afford no answer, in the mouth of a shareholder, to an action brought by the company, on a claim duly vested in them.(q)
328. 4thly. Of the tenure of office.(r) The act usually provides for the directors retiring by rotation. This rotation is so contrived as to secure to each a certain definite period of service. Pending this period, however, a director may, it is conceived, be removed for an offence against his official duty, or generally for any cause that shows him to be incapable or unfit to execute the office of a director.(s) So likewise, where, by the constitution of the company, a qualification is necessary, in order to enable persons to act as directors, a party may cease to
(q) See judgment of Maule, J. in The Thames Haven Dock and Railway Company v. Rose, 3 Railw. Cas. 177; S. C. 4 M. & Gr. 552. See also Benson v. Hadfield, 4 Hare, 32.
(r) As to provisions of Companies Clauses Consolidation Act (8 Vict. c. 16) on this head, see act, ss. 86, 88, post, App. (s) See 2 Kyd on Corp. 50 et seq.