or any other power, can be sued individually (o); nor is he liable to an execution, or other process; and the directors are entitled to be indemnified out of the capital of the company for all losses incurred by them as directors. (Id., s. 100, post, App., 104).

The money to be raised by subscriptions, loans, or otherwise, must be applied, first, in paying the costs of the special act; secondly, in carrying the purposes of the company into execution. (Id., s. 65, post, App., 97).

Previously to every ordinary meeting at which a dividend Dividends. is intended to be declared, a scheme must be prepared by the directors, shewing the profits of the company, and apportioning the same among the shareholders; and such scheme being exhibited at the meeting, a dividend may be declared accordingly. (Id., s. 120, post, App., 107). No dividend may be made, whereby the capital stock will be, in any degree, reduced. Provided that the word "dividend" shall not be construed to apply to a return of any portion of the capital stock, with the consent of all the mortgagees and bond creditors of the company, due notice being given for that purpose at an extraordinary meeting to be convened for that object. (Id., s. 121, post, App., 107). Before the profits

(0) It will be prudent for directors to make all contracts "as directors." In Dewers v. Pike, (Mur. & Hurl. 131), the defendant, a director of the West Cork Mining Company, ordered goods of the plaintiffs, and signed his name "P., director of W. C. M. Company," intimating at the time that the goods were for the company. The company were incorporated by act of Parliament, and in the act was a clause enabling the company to sue and be sued in respect of contracts made by any individual director, on behalf of the company. It was de

cided, that the defendant was liable
in his private capacity; and per
Parke, B.-"I dare say the defendant
intended to act on behalf of the com-
pany. He ought, however, to have
used clear words; no doubt the plain-
tiffs had an option to sue him." See
also Burrell v. Jones, 3 B. & Ald. 47.
When a party is not liable in his indi-
vidual capacity, see Tyrrell v. Wool-
ley, 1 Man. & G. 809; and the rule
laid down by Vice-Chancellor Wig-
ram in Wilson v. Goodman, 4 Hare,
62.

Meetings of shareholders.

are apportioned, the directors may set aside a sum to meet contingencies, or for enlarging, repairing, or improving the works. (Id., s. 122, post, App., 107). No dividend is payable in respect of any share until the calls payable on all shares held by the owner thereof are paid. (Id., s. 123, post, App., 108).

From the foregoing statement of the powers which are entrusted to the directors of a railway company, it will be seen that the general superintendance and management of the affairs of the company, belong to them; but it must not be forgotten, that it is always competent to the shareholders to call a general meeting of the company (p), and the majority of the shareholders may, at such meeting, control and regulate the future proceedings of the directors (q).

It will be proper, at this place, to state the mode in which such meetings are held. The stat. 8 Vict. c. 16, provides, that two meetings of shareholders, called "ordinary meetings," shall be held every year. (Sect. 66, post, App., 97). And no matters, except such as are appointed by that or the special act to be done at an ordinary meeting, can be transacted without notice. (Id., s. 67, post, App., 98). Every general meeting of shareholders, other than an ordinary meeting, is called "an extraordinary meeting," and may be convened by the directors as they think fit. (Id., s. 68, post, App., 98). But only such business as was mentioned in the notice which convened the meeting can be entered upon. (Id., s. 69, post, App., 98). A certain number of shareholders (r) may also require an extraordinary meeting to be held, by sending a requisition to the directors, who are thereupon required to convene the meeting; or, on their

(p) See 8 Vict. c. 16, s. 70, post, Appendix, 98.

(q) See 8 Vict. c. 16, s. 90, post, Appendix, 102.

(r) If, from any circumstances, an

exact compliance with the terms of the statute is impossible, it seems that these and similar provisions will be considered as directory only. (See Foss v. Harbottle, 2 Hare, 496).

default, the requisitionists may call such meeting. (Id., s. 70, post, App. 98). Fourteen days' notice of all meetings, ordinary and extraordinary, must be given. (Id., s. 71, post, App. 98). And at every such meeting there must be present, personally or by proxy, the prescribed quorum of the company; and, if no quorum be prescribed in the special act, then shareholders holding in the aggregate not less than one-twentieth of the capital of the company, and being in number not less than one for every five hundred pounds, of such required proportion of capital, unless such number would be more than twenty: in which case twenty shareholders, holding not less than one-twentieth of the capital of the company, shall be the quorum. And if within one hour the quorum be not present, no business, except declaring a dividend, can be transacted, and such meeting must (except it be to appoint directors) be adjourned sine die. (Id., s. 72, post, App. 98). The act provides for the appointment of the chairman at all meetings. (Id., s. 73, post, App. 99). The shareholders at any meeting can proceed only with respect to the matters for which the meeting was convened, and such meeting may be adjourned. (Id., s. 74, post, App. 99).

At all general meetings, every shareholder may vote according to the prescribed scale of voting; and if no scale shall be prescribed by the special act, every shareholder has one vote for every share up to ten, and an additional vote for every five shares, beyond the first ten shares, and an additional vote for every ten shares held by him, beyond the first hundred shares, if he has paid up all calls on the shares held by him. (Id., s. 75, post, App. 99). Votes may be given personally, or by proxies, being shareholders, and a form of proxy is given in the act (s). The chairman of the

meeting has a casting vote, if there be an equality of votes. (Id., s. 76, post, App. 99). Instruments (t) appointing a proxy must be transmitted to the secretary before the prescribed period, and, if no period be prescribed, forty

eight hours before the meeting is held. (Id., s. 77, post, App. 99). If shares are held jointly, the person whose name stands first in the register of shareholders is entitled to vote. (Id., s. 78, post, App. 99). The committee of lunatics, and the guardian of minors, may vote. (Id., s. 79, post, App. 99). Whenever a particular majority of votes is required, such majority need only be proved, in the event of a poll; in other cases, a declaration by the chairman, and an entry made in the book of proceedings, is sufficient. (Id., s. 80, post, App. 99).

The result, therefore, seems to be, that the supreme control of the affairs of the company is vested in the shareholders, who have power at general meetings, due notice having been given of the purpose of such meetings, to originate proceedings, for any purpose within the scope of the company's powers; and also to control the directors in any acts which they may have originated (u). On the other hand, the acts of the directors are valid, provided they are such as fall within the scope of their authority, until the shareholders interfere, by entering into resolutions, at a general meeting, duly called, pursuant to the provisions of the statute (v).

If, therefore, the shareholders of a company are dissatisfied with the proceedings of the directors, the proper course is to convene a general meeting of shareholders, and thus submit the proceedings of the directors to the decision of the governing body.

In a late case, Foss v. Harbottle (w), certain shareholders of an incorporated company, who were dissatisfied with the conduct of the directors, neglected to summon a general meeting of the shareholders, which they might have done,

(u) Foss v. Harbottle, 2 Hare, 492.

(r) See 8 Vict. c. 16, s. 90, post, Appendix 101.

(w) 2 Hare, 461; and see The Thames Haven and Railway Company v. Hall, 3 Railway Cases, 441.