of the names and residences of all persons becoming or ceasing to be shareholders, and of all changes of name which may take place among them, whether by marriage or otherwise.(u) A registration of the name and business of the company is also required to be made annually.(v) The documents thus registered may be inspected by any person upon the payment of a fee of 1s., and he may require certified copies from the registrar on payment of a fee not exceeding 6d. for each folio.(w) It will be remembered that it is probable that large alterations as to the publication of accounts will be made in consequence of the recommendations of the select committee. 20. When a shareholder has executed the deed of settlement, or some deed referring to it, which is in effect the same thing,(x) and paid up all calls, and been registered at the registry office,-then, and not until then, he is entitled to the privileges of a shareholder, and may attend and vote at all general meetings of the company, either in person or by proxy. Until he has been thus registered as a shareholder, and until the complete registration of the company, he is not entitled to sell or mortgage his shares; and, as we have seen, every contract to that effect is void, and subjects the parties to it to a penalty.(y) [*129] 21. Contracts entered into by the company, with some unimportant exceptions, must be in writing, and signed by at least two of the directors, and sealed with the common seal, or signed by some officer expressly authorised by a minute or resolution of the directors applying to the particular case, otherwise they are void except as against the company,(*) the requisition of these formalities not being intended to limit the liability of the company in ordinary transactions. (a) The exceptions are contracts for the purchase of any article the consideration for which does not exceed 50%., or for any service for a period not exceeding six months, and the consideration for which does not exceed 501. Bills of exchange and promissory notes are also, of course, within the exception, being, by their nature, unsealed documents; but they cannot be issued at all by the directors, unless authorised by the deed of settlement or a byelaw, in which case they must be made or accepted (as the case may be) by two directors, and expressed to be so made on behalf of the company, and countersigned by the secretary or other appointed officer.(b) 22. The incorporation of the company, according to the provisions of the Act, has not the same effect as a charter in restricting the liability of the shareholder, but every judgment or decree is to be enforced in the (u) Sect. 11. This would include the policy holders in a mutual office. Sect. 14. (w) Sect. 16. Straffon's Executors' Case, 1 De Gex, M. & G. 576. Sect. 26. (z) Sect. 44. Smith v. The Hull Glass Company, 8 C. B. 668. As to what is a contract. on behalf of the company, and that a security given to it and to trustees on its behalf, and which is binding, whether executed by the company or no, is not within the section. See The British Empire Mutual Life Assurance Company v. Browne, 16 Jur. 1157. C. B. (b) As to such bills of exchange and promissory notes, see Thompson v. The Universal Salvage Company, 1 Exch. 694; Allen v. The Sea Assurance Company, 19 L. J., C. P. 305; Thompson v. The Wesleyan Newspaper Association, 19 L. J., C. P. 114. first instance against the property of the company; and after due diligence has been used in enforcing execution against its effects, [*130] execution may be issued, by leave of the Court, against any shareholder or former shareholder, upon motion or summons for a rule to show cause, without any suggestion or scire facias; but no such motion is to be made, or summons granted, until ten days' notice shall have been given to the person sought to be charged thereby.(c) Every person against whom execution shall have been issued may recover against the company, and is also entitled, as in ordinary partnerships, to contribution from the several other persons against whom excution might have also been issued.(d) 23. No execution, however, can be issued against any former shareholder after the expiration of three years after he shall have ceased to be a shareholder; and to be liable, he must have been such when the contract was entered into, or while such contract was unsatisfied, or at the time that the judgment or decree was obtained ;(e) but the liability of a person disposing of his shares will remain until a return of the transfer shall have been made to the registrar,(f) and this return the transferror can compel the company to make, and if his request is neglected by the directors, may make it himself.(g) 24. Immediately after a contract for the sale of shares the vendor will be entitled to be indemnified by the purchaser, although he will remain liable to those who may have claims upon the company; but neither such lastly-mentioned persons nor the company itself, in making calls can enforce this equity for their own benefit, since a trust can only be enforced at the instance of the parties to it. (h) 25. Complete registration does not preclude a joint stock company from obtaining a private Act giving additional *powers, and [*131] modifying any sections of the public Act which may be inconsistent with its lawful constitution. Thus, in 1852, the British Empire Mutual Life Assurance Company obtained an Act, relieving it from compliance with the 11th, 12th, 13th, 14th, and 26th sections, which are obviously inapplicable to a mutual insurance office, and granting additional powers of investing its funds and holding real estate which may have been in mortgage to it, and have been foreclosed for a limited time, until an opportunity of sale.(i) 26. Having thus seen in what manner insurance companies may be established, we may, lastly, consider in what manner they may be dissolved. Their constitution rendering them unaffected by the acts or incapacities of individual members, it would seem that there are but three modes of dissolution: (1.) by the consent of the whole body; (2.) by virtue of some special provision for that purpose inserted in the deed ;(3.) 'by the interposition of the Court, aided by the Joint-Stock Companies Winding-up Acts. When a particular course of proceeding is pointed out for winding up a concern, this is the method to be adopted, and is as Sect. 68. (d) Sect. 67. (e) Sect. 60. (f) Sect. 13. (g) Sect. 12. Phene v. Gillan, 5 Hare, 1; The Newry Railway Company v. Moss, 14 Beav. 69; Cape's Case, 17 Jur. 355. (L. C. and L. J. J.) (i) 15 Vict. 53. (Local and Personal.) binding upon the members as any other stipulation. (k) Where, also, an effort is made by the partners of an insolvent concern to settle their affairs without the interposition of the Court, it will suspend its proceedings in a proper case to give them the opportunity of so doing.(7) When the company becomes unable to meet its engagements, and it is absolutely necessary to seek the assistance of a Court of Equity, it may be presumed that in future the Joint-Stock companies Winding-up Acts(m) will, in all cases, be put into operation, since without their assistance the dissolution is rendered all but impracticable by the necessity of bringing all persons interested before it, unless, indeed, it be ultimately [*132] decided that the Chancery Amendment Act, 15 & 16 Vict. c. 86, (see section 49,) has rendered this unnecessary, by enabling Courts of Equity to deal with such cases without the intervention of those Acts.(n) It has been considered that an ordinary suit for the winding up of a partnership implies a complete settlement of all the rights and liabilities arising between the partners; and the rule of the Court, recognised in other cases, of allowing absent members to be represented by others in the same interest, does not apply.(0) The operation of the Winding-up Acts is, on the contrary, to vest the entire estate of the company in a trustee, under the name of the official manager, who is thereupon taken to represent all parties interested, and then to administer the estate much in the form of an ordinary administration suit. 27. Life offices, whether incorporated or not, are within the Acts, and several have been already wound up under them. (p) They apply (g) in cases when an act of bankruptcy has been committed by the company, or proceedings are taken for the recovery of money due by it against a contributory, and he is not in due time indemnified by the company; or if it has been dissolved or has ceased to carry on business, or is carrying on business only for the purpose of winding up its affairs; or by the 8th clause, if any matter or thing shall be shown which, in the opinion of the Court, shall render it equitable that the company shall be dissolved. This latter clause, however, has been considered to have a restricted interpretation, only extending to other cases the test of insolvency, defined by the preceding part of the [*133] section, and not giving any particular member a right to seek the interference of the Court, on the ground that the capital is insufficient to meet the contingent liabilities of the concern, so long as it continues to carry on its business, and there is no proof of actual insolvency or incompetency to meet its engagements.(r) When a company is brought within the Act, the Court will grapple with the most difficult questions. The circumstance that the policies granted by it are still in force, and that the liabilities arising upon them cannot be settled for many years, is not 74. (k) Crawshay v. Collins, 2 Russ. 342. Re The Monmouthshire and Glamorganshire Banking Company, 15 Beav. (m) 11 & 12 Vict. c. 45; 12 & 13 Vict. c. 108. (n) See Clements v. Bowes, (V. C. K.,) 23 June, 1853, Jurist, pt. 1, p. 249. Richardson v. Hastings, 7 Beav. 323. (P) Ex parte Dee, 3 De Gex & S. 116. Ex parte Spackman, 1 Mac. & Gor. 170. (g) 11 & 12 Vict. c. 45, s. 5. As to what is insolvency, see Sugd. a bar to its operations ;(s) and when a company, which had been ordered to be wound up, had previously sold its business at a premium to another company, and by the terms of the deed of settlement the profits were to be divided in certain proportions between the shareholders and policy holders, the Court, considering the latter entitled to participate, undertook to adjust the respective claims upon the surplus.(t) 28. A popular notion appears to have got abroad, that an insurance company, however insolvent, will always be able to find some solvent company willing to take a transfer of its business. Assuming, however, that it can do so on paying over a sufficient sum to counterbalance the excess of its liabilities, and that the consent of the shareholders and policy holders can be obtained, it would seem that unless such a proceeding is contemplated by the deed of settlement, an Act of Parliament will always be desirable, if not absolutely necessary, since a variety of collateral contracts will be, as it were, unhinged by an *attempted [*134] transfer of them to a new company. For example, covenants to insure in the transferring office, to keep policies effected with it in force, would seem to be rendered void by the transfer, and insufficient to compel the payment of premiums to the other company.(u) [*135] *CHAPTER VIII. CONCERNING CHARTERS OF INCORPORATION AND THE CONSTRUCTION OF DEEDS OF SETTLEMENT, and of PRIVATE ACTS OF PARLIAMENT; AMENDING THE SAME, AND GIVING SPECIAL POWERS TO INSURANCE COMPANIES, AND HEREIN OF THE PARTNERSHIP RIGHTS OF THE MEMBERS INTER SE. 1. AN Act of Incorporation, or charter, obtained by a company, operates as its deed of settlement, the provisions of which it is bound to pursue; but it is so even more strictly than an unincorporated company by its deed, for not even the unanimous consent of all the members can alter the terms upon which it has been constituted, or give validity to an Act beyond their scope. (a) It will, however, be entitled to make byelaws for its regulation, either in accordance with any special power conferred upon it, authorising the calling of general meetings, or, in the absence of any such power, by the inherent right of every corporation to make bye-laws, so that they are not inconsistent either with the law of the land, or its special Act or charter. 2. The provisions of deeds of settlement may be divided into two Ex parte Dee, 3 De G. & S. 116. (t) In re The London and Westminster Mutual Life Assurance Company, 14 Jur. 929. For the form of an order for winding up the affairs of a bankrupt joint-stock company, see In re The Forth Marine Insurance Company, 3 Mont. D. & De G. 335. (u) Atkinson v. Gylby, 2 L. J., Chanc. 848. (V. C. K.) (a) Grant on Corporations, 73. classes: first, those which relate to the constitution of the company, and are, so to speak, the primary conditions of its institution and continuance. These are binding upon the whole body, and cannot be varied except with the consent of every individual member, or by virtue of an express power, applicable to the case in question, and authorising the alteration, which is generally carried into effect by the resolutions of one or more ordinary or extraordinary general meetings of the members. Secondly, those which relate to the administration of the affairs of the *partnership, and the alteration and modification of which are either expressly provided for, or are consistent with the general [*136] scope of the deed and object proposed. The latter may be varied with the consent of the majority of the partners at one or more general meetings of shareholders, or to be called in manner appointed by the provisions of the deed; or, in the absence of any provision should such a case occur, after notice to the whole body. 3. Premising that the question as to which of the two classes any particular provision belongs can only be decided with any certainty after an inspection of the particular instrument, we may state that there are certain provisions which may be usually assumed to belong to the first class, as being of primary importance. Such is that which defines the nature of the business. Thus when a joint stock company was formed for the purpose of effecting fire and life insurances, Lord Eldon held that it could not, without the consent of all the members (of whom the plaintiff was one), be extended to marine insurances; and that notwitstanding the other partners offered to indemnify the dissenting partner. "The Court," said his lordship, "could restrain particular members from engaging other members in projects in which they had not consented to be engaged, assented to, empowered, or acquiesced in expressly or tacitly, 80 as to make it not equitable that they should seek to constrain them."(b) And by the extension of the same principle, incorporated companies, who are possessed of funds for objects distinctly defined by Act of Parliament, will be prevented at the instance of a single member from applying them to any other purpose, however advantageous or profitable it may appear to the company or to individual members of it.(c) In like manner, the method of distributing the *profits and the determi nation of the individual interests of the respective members is a [*137] primary article of the constitution, (d) as is also the amount of the capital, the style and term of duration of the partnership, as well as the mode agreed upon for keeping and rendering the accounts, and the general scheme for the management of the concern. (e) 4. In ordinary partnerships very considerable powers of determining and varying the mode in which the business is to be conducted, are considered to be vested in the majority of the partners acting bona fide after (6) Natusch v. Irving, Gow. Partnership, App. 407; Simpson v. Denison, 10 Hare, 51. (c) Munt v. The Shrewsbury and Chester Railway Company, 13 Beav. 5, and see Colman v. The Eastern Counties Railway Company, 11 Beav. 1; Cohen v. Wilkinson, 12 Beav. 125-128. (d) Collyer on Partnership, 113. (e) Davies v. Hawkins, 3 Maule & Sel. 488. |