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.

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be a director by the loss of the qualification, (s) as for instance, where the qualification consists in a party's being owner of a certain number of shares; bankruptcy would necessarily operate to determine his character of director, (inasmuch as it would deprive him of his shares,) though a mere equitable mortgage of shares would not, it seems, have this effect.(t)

329. 5thly. Of the remuneration(u) of the directors. In general, the act constituting the company makes no express provision for the remuneration of the directors, but leaves it entirely in the discretion of the company. In such a case a director can claim no recompense for his service, unless by virtue of some contract or resolution of the company under their common seal. A mere vote of remuneration, not under the common seal, amounts to no more than an announcement to the directors for the time being, that a certain gratuity shall be given to them in proportion to the quantum of attendance. It cannot, consequently in general be construed to vest in the directors any right to such remuneration as against the company, but leaves it a mere matter of favour or compliment.(x)

(s) Phelps v. Lyle, 10 A. & E. 116, judgment of Lord Denman, C. J. and Littledale and Patteson, Js. ; see also Wilson v. Wilson, 6 Scott, 540, where, under provisions of company's deed of settlement, director held incapable to act, having absconded to America, under circumstances evidencing intention of not returning, so as to admit of the company's filling up his place.

(t) Cumming v. Prescott, 2 Y. & Coll. 496.

(u) See as to this point Companies Clauses Consolidation Act (8 Vict. c.16, s. 91), post, App.

(x) Dunston v. The Imperial Gas Light Company, 3 B. & Ad.

330. 6thly. Of the powers, (e) duties, and responsibilities of the directors, and herein, 1st, of their powers. According to the usual provisions of a railway act, the directors are intrusted with the general powers of management necessary for carrying into effect the design of the company's institution, and for the due conduct of the affairs of the company, saving of course such as are specially reserved to the general assemblies of the company. Powers so extensive would clearly authorize the directors to contract for the performance of works, or for the supply of goods so far as the purposes of the railway may require; or again, to appoint officers and servants, and allow them a proper recompense (though these two latter powers are in general expressly given by statute). So likewise they may make calls, and, where they are authorized by a prior resolution of the company, mortgage or charge the undertaking and tolls, or grant an annuity by way of retiring pension to an officer of the company entitled to a salary, but wishing to retire on account of ill health. (f) But the powers of the directors would not, it is conceived, (g) extend to the raising money by way of loan, or to the accepting, drawing, or indorsing bills in the name of the company, such

(e) As to the powers of directors under the Companies Clauses Consolidation Act, (8 Vict. c. 16,) see act, ss. 90, 91, post, App.

(f) Clarke v. The Imperial Gas Company, 4 B. & Ad. 324. (g) See stat. 7 & 8 Vict. c. 85, sects. 19, 20, 21, post, Appendix, with respect to loan notes, &c.; the 19th sect. expressly prohibits the future issuing of loan notes, &c. otherwise than under the provisions of some act.

modes of dealing being in general clearly unnecessary for the management of the concerns of the company.

331. Effect of mortgage. (h) Assuming the directors to be called on by a resolution of a general meeting to exercise the above power of mortgaging, a question naturally suggests itself as to the effect of such mortgage, and the rights that the mortgagee acquires under it. This must of course depend on the particular form of the instrument, which is usually prescribed by the act. A mortgage of the undertaking and tolls cannot, it seems, be construed to include the land of the company. (i) It follows that, under such a security, the mortgagee has no equity to restrain other parties from using their legal remedies against such land. (k)

332. Of the duties of the directors. (1) The employment of a director is of a mixed nature; it partakes of the nature of a public office, but at the same time is not an employment that affects the public government. Directors therefore are most properly agents to those who employ them in this trust, and empower them to superintend the affairs of the corporation. Consequently, if a person choose to accept the office, he is bound to exercise it with fidelity and reasonable diligence, and it is no excuse

(h) As to power of mortgaging under the Companies Clauses Consolidation Act, (8 Vict. c. 16,) see act, s. 38, post, App. (i) Doe d. Myatt v. The St. Helen's and Runcorn Gap Railway Company, 2 A. & E. N. S. 364; S. C. 2 Railw. Cas. 756. (k) Perkins v. Pritchard, 3 Railw. Cas. 95; S. C. nom. Perkins v. Deptford Pier Company, 13 Sim. 277.

(1) As to duty of making calls, see post, Sect. 4, Sub-sect. 3.

to say that he has no benefit from it, and that it is merely honorary. (m)

333. Of the liabilities of the directors. These may be regarded in two lights; (1st,) as regards the company; and (2nd,) as regards the world in general. (1st,) where the acts of directors are within their authority, even though they be attended with bad consequences, it is difficult to determine that these are breaches of trust. But if they can be fixed with acts of omission or commission, there it may be otherwise. To instance, in non-attendance; if some directors are guilty of gross non-attendance, and leave the management entirely to others, they may thereby render themselves guilty of the breaches of trust that are committed by those others. (n) And where there appears to be supine negligence in all, by which a gross complicated loss happens, all may be held guilty.(o) A fortiori, where directors are guilty of any gross and positive acts of misfeasance, such as a misapplication of the funds of the company to their own private purposes, or of otherwise confederating together to obtain some private good at the expense of the company, they are liable to make good the loss which the company sustain in consequence. (p) So, if parties connive (m) Charitable Corporation v. Sutton, 2 Atk. 400. (n) Ibid.

(0) Ibid. But where a bill is filed for relief in respect of a fraud, alleged to have been committed by several persons, it is not necessary that all the persons charged with the fraud should be made defendants; Seddon v. Connell, 10 Sim. 79.

(p) Ibid.; see also Foss v. Harbottle, 2 Hare, 461; Att. Gen. v. Wilson, Cr. & Ph. 1. So for making false entries and returns in corporate books, semble, an action would lie against them at the suit of the company; see Imperial Gas Company v. Clarke, 7 Bing. 95.